1
     As Filed With the Securities and Exchange Commission on October 9, 1997
                                                      Registration No. 333-_____

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington. D.C. 20549

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

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

             Delaware                                 93-0979187
   (State or other jurisdiction          (I.R.S. Employer Identification No.)
 of incorporation or organization)

                 157 Technology Drive, Irvine, California 92618
                                 (714) 788-6700
           (Name, address, including zip code, and telephone number,
        including area code of registrant's principal executive offices)

         Alvin J. Glasky, Ph.D., President and Chief Executive Officer
                              157 Technology Drive
                            Irvine, California 92618
           (Name, address, including zip code, and telephone number,
                   including area code of agent for service)

                                   Copies to:
                             C. Craig Carlson, Esq.
                              Robert E. Rich, Esq.
                            Matthew P. Thullen, Esq.
          Stradling, Yocca, Carlson & Rauth, a Professional Corporation
      660 Newport Center Drive, Suite 1600, Newport Beach, California 92660

         Approximate date of commencement of proposed sale to public: As soon as
practicable 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 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
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 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. [ ]


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                         CALCULATION OF REGISTRATION FEE



                                                  Proposed maximum   Proposed maximum        Amount of
    Title of securities          Amount to be      offering price       aggregate           registration
     to be registered             registered        per share (1)    offering price(1)          fee    
- -----------------------------    ------------     -----------------  -----------------     --------------
                                                                                      
  Common Stock, par value
 $.001 per share, issuable
     upon exercise of
 Representatives' Warrants          250,000             $13.56         $3,390,000           $1,027.27

   Common Stock Purchase
  Warrants issuable upon
exercise of Representatives'
         Warrants                   250,000             $ 5.56         $1,390,000           $  421.21
                                    -------             ------         ----------           ---------
           Total                                                                            $1,448.48
                                                                                            =========


(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1933, as amended, on the basis of the
average of the high and low reported sale prices of the Registrant's Common
Stock and Common Stock Purchase Warrants on October 8, 1997, as reported on the
Nasdaq National Market.

        THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.


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PROSPECTUS

                              NEOTHERAPEUTICS, INC.

                         250,000 SHARES OF COMMON STOCK

                     250,000 COMMON STOCK PURCHASE WARRANTS

         NeoTherapeutics, Inc., a Delaware corporation (the "Company"), is
hereby registering for possible future resale by certain persons (the "Selling
Stockholders") from time to time (i) 250,000 shares (the "Shares") of the
Company's common stock, $.001 par value (the "Common Stock") and (ii) 250,000
Common Stock Purchase Warrants (the "Resale Warrants"). Each Common Stock
Purchase Warrant entitles the holder thereof to purchase one share of Common
Stock at an exercise price of $11.40 (the "Warrants"). None of the Shares or the
Resale Warrants is outstanding as of the date of this Prospectus. The Shares and
the Resale Warrants are issuable upon exercise by the Selling Stockholders of
warrants currently held by them (the "Representatives' Warrants"). Each
Representatives' Warrant (which entitles the holder thereof to purchase one
share of Common Stock and one Warrant) may be exercised at any time on or before
September 25, 2001 at an exercise price of $9.12. None of the Shares or the
Resale Warrants may be sold hereunder until the related Representatives' Warrant
is exercised and the exercise price is paid to the Company by the Selling
Stockholder.

         At the time of issuance of the Representatives' Warrants, the Company
granted registration rights with respect to the underlying Shares and the Resale
Warrants. Pursuant to the terms of these registration rights, the Company is
obligated to pay all fees and expenses incurred by it incident to this offering
(estimated to be $16,425). The Company intends to keep the Registration
Statement, of which this Prospectus is a part, effective for a period of no
later than September 26, 2001. The Company will not receive any proceeds from
the sale of the Shares or the Resale Warrants. See "Selling Stockholders."

         The Selling Stockholders may offer, pursuant to this Prospectus, the
Shares and the Resale Warrants to purchasers from time to time in transactions
in the Nasdaq National Market, in negotiated transactions, or otherwise, or by a
combination of these methods, at fixed prices that may be changed, at market
prices prevailing at the time of the sale, at prices related to such market
prices or at negotiated prices. The Selling Stockholders may effect these
transactions by selling the Shares or the Resale Warrants to or through
broker-dealers, who may receive compensation in the form of discounts or
commissions from the Selling Stockholders or from the purchasers of the Shares
or the Resale Warrants for whom the broker-dealers may act as an agent or to
whom they may sell as a principal, or both. The Selling Stockholders and such
brokers-dealers may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933 (the "Securities Act"), in connection with such sales.
See "Plan of Distribution."

         The Common Stock and the Warrants are listed for quotation on the
Nasdaq National Market under the symbols "NEOT" and "NEOTW," respectively. On
October 2, 1997, the closing sales prices of the Common Stock and the Warrants
were $13.88 and $5.06, respectively.

             THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF
                 RISK. SEE "RISK FACTORS" COMMENCING ON PAGE 4.

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

               This date of this Prospectus is ___________, 1997.

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                                TABLE OF CONTENTS



                                                                                            PAGE
                                                                                            ----
                                                                                         
Available Information......................................................................    2
Incorporation of Certain Documents by Reference............................................    2
The Company................................................................................    3
Risk Factors...............................................................................    4
Use of Proceeds............................................................................    8
Selling Securityholders....................................................................    9
Plan of Distribution.......................................................................   10
Description of Securities..................................................................   11
Legal Matters..............................................................................   12
Experts....................................................................................   12
Limitation on Liability and Disclosure of Commission Position on Indemnification For            
     Securities Act Liabilities............................................................   13


        No person is authorized to give any information or to make any
representations, other than those contained or incorporated by reference in this
Prospectus, in connection with the offering described herein, and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company or the Selling Stockholders or any underwriters,
brokers or agents. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, nor shall there be any sale of these securities
by any person in any jurisdiction in which it is unlawful for such person to
make such offer, solicitation or sale. Neither the delivery of this Prospectus
nor any sale made hereunder shall under any circumstances create an implication
that the information contained herein is correct as of any time subsequent to
the date hereof.

                              AVAILABLE INFORMATION

        The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") as a "small
business issuer" as defined under Regulation S-B promulgated under the
Securities Act. In accordance with the Exchange Act, the Company files reports,
proxy statements and other information with the Commission. Such reports, proxy
statements and other information may be inspected and copied at, and copies of
such materials can be obtained at prescribed rates from, the Public Reference
Branch of the Commission located at 450 Fifth Street, N.W., Washington, D.C. and
at the Commission's Pacific Regional Office located at 5670 Wilshire Boulevard,
11th Floor, Los Angeles, California, the Commission's Northeast Regional Office
located at 7 World Trade Center Suite 1300, New York, New York and at the
Commission's Midwest Regional Office located at Citicorp Center, 500 W. Madison
Street Suite 1400, Chicago, Illinois. In addition, the Company has filed the
registration statement and other filings pursuant to the Exchange Act with the
Commission through its Electronic Data Gathering, Analysis and Retrieval
("EDGAR") system, and such filings are publicly available through the
Commission's site on the World Wide Web on the Internet, located at
http://www.sec.gov.

        This Prospectus does not contain all of the information set forth in the
Registration Statement of which this Prospectus is a part and which the Company
has filed with the Commission. For further information with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement, including the exhibits filed as a part thereof, copies of which can
be inspected at, or obtained at prescribed rates from, the Public Reference
Section of the Commission at the address set forth above. Additional updating
information with respect to the Company may be provided in the future by means
of appendices or supplements to this Prospectus.

         The Company's securities are quoted on the Nasdaq National Market
(symbol: NEOT, NEOTW). Reports and other information concerning the Company may
be inspected at the National Association of Securities Dealers, Inc. at 1735 K
Street, N.W., Washington, D.C. 20006.

                       INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

        The documents listed below have been filed by the Company with the
Commission under the Exchange Act and are incorporated by reference herein:



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        a.     The Company's Annual Report on Form 10-KSB for the fiscal year
               ended December 31, 1996, filed with the Commission on March 31,
               1997, including the amendment thereto filed on May 6, 1997.

        b.     The Company's Quarterly Reports on Form 10-QSB for the quarter
               ended March 31, 1997, filed with the Commission on May 15, 1997,
               and for the quarter ended June 30, 1997, filed with the
               Commission on August 14, 1997.

        c.     The Company's Current Report on Form 8-K filed June 27, 1997.

        d.     The Company's Current Report on Form 8-K filed August 1, 1997.

        e.     The definitive Proxy Statement of the Company filed pursuant to
               Section 14 of the Exchange Act in connection with the 1997 Annual
               Meeting of Shareholders of the Company.

        All documents filed by the Company pursuant to Section 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Prospectus and to be part hereof from the date of filing such documents.

        Any statement contained in a document incorporated or deemed to be
incorporated by reference herein 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 also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.

        The Company will provide, without charge, to each person to whom a copy
of this Prospectus is delivered, upon written or oral request of such person, a
copy of any and all of the information that has been or may be incorporated by
reference herein (other than exhibits to such documents unless such exhibits are
specifically incorporated by reference into such documents). Such requests
should be directed to NeoTherapeutics, Inc., Attention: Chief Financial Officer,
157 Technology Drive, Irvine, California 92618, telephone number (714) 788-6700.

                                   THE COMPANY

        NeoTherapeutics is a development stage biopharmaceutical company engaged
in the discovery and development of novel therapeutic drugs intended to treat
neurodegenerative diseases and conditions, such as memory deficits associated
with Alzheimer's disease and aging, stroke, spinal cord injuries and Parkinson's
disease. The Company's initial product candidate, AIT-082, and its other
compounds under development are based on the Company's patented technology. This
technology uses small synthetic molecules to create non-toxic compounds,
intended to be administered orally or by injection, that are capable of passing
through the blood-brain barrier to rapidly act upon specific target cells in
specific locations in the central nervous system, including the brain. Animal
and laboratory tests have shown that the Company's AIT-082 compound appears to
selectively increase the production of certain neurotrophins, a type of large
protein, in the hippocampus and frontal cortex, which are the areas of the brain
implicated in memory. These neurotrophins regulate nerve cell growth and
function. The Company's technology has been developed to capitalize on the
beneficial effects of these proteins, which have been widely acknowledged to be
closely involved in the early formation and differentiation of the central
nervous system.

        The Representatives' Warrants were issued by the Company in connection
with its September 1996 public offering as compensation to the managing
underwriters of the public offering.

        The Company was incorporated in Colorado in December 1987 and
reincorporated in Delaware in June 1997. The Company's wholly-owned subsidiary,
Advanced Immunotherapeutics, Inc. ("AIT"), was incorporated as a California
corporation in June 1987. All references to the "Company" and "NeoTherapeutics"
refer to NeoTherapeutics and AIT. The Company's executive offices are located at
157 Technology Drive, Irvine, California 92618. Its telephone number is (714)
788-6700.



                                       3
   6

                                  RISK FACTORS

    The purchase of the shares of Common Stock and Warrants offered hereby
involves a high degree of risk. In addition to the other information set forth
elsewhere in this Prospectus, the following factors relating to the Company and
this offering should be considered when evaluating an investment in the Common
Stock and Warrants offered hereby.

    This Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1993 and Section 21E of the Securities
Exchange Act of 1934. The Company's actual results may differ materially from
the results projected in the forward-looking statements. Factors that might
cause such a difference include, but are not limited to, the following:

HISTORY OF OPERATING LOSSES; FUTURE PROFITABILITY UNCERTAIN

    The Company is a development stage biopharmaceutical company. From its
inception in 1987 through June 30, 1997, the Company incurred losses of
approximately $8.1 million, substantially all of which consisted of research and
development and general and administrative expenses. The Company has not
generated any revenues from product sales to date, and there can be no assurance
that revenues from product sales will ever be achieved. Moreover, even if the
Company eventually generates revenues from product sales, the Company
nevertheless expects to incur significant operating losses over the next several
years. The Company's ability to achieve profitable operations in the future will
depend in large part on completing development of its products, obtaining
regulatory approvals for such products and bringing several of these products to
market. The likelihood of the long-term success of the Company must be
considered in light of the expenses, difficulties and delays frequently
encountered in the development and commercialization of new pharmaceutical
products, competitive factors in the marketplace as well as the burdensome
regulatory environment in which the Company operates. There can be no assurance
that the Company will ever achieve significant revenues or profitable
operations.

TECHNOLOGICAL UNCERTAINTY; EARLY STAGE OF PRODUCT DEVELOPMENT; NO ASSURANCE OF
REGULATORY APPROVALS

    The Company's proposed products are in the pre-clinical stage of development
and will require significant further research, development, clinical testing and
regulatory clearances. The Company has no products available for sale and does
not expect to have any products resulting from its research efforts commercially
available for at least several years. As of September 26, 1997, one of the
Company's proposed products, AIT-082, has been the subject of two clinical
studies in Alzheimer's patients in Canada. The United States Food and Drug
Administration ("FDA") has approved the Company's Investigational New Drug
Application ("IND") for testing AIT-082 in the United States. The Company has
commenced one Phase I study for AIT-082 in the United States under the auspices
of the National Institute on Aging ("NIA") and the Alzheimer's Disease
Cooperative Study ("ADCS"), a consortium of approximately 35 United States
clinical centers which receives funding from the NIA. The Company's proposed
products are subject to the risks of failure inherent in the development of
products based on innovative technologies. These risks include the possibilities
that some or all of the proposed products could be found to be ineffective or
toxic, or otherwise fail to receive necessary regulatory clearances, that the
proposed products, although effective, will be uneconomical to manufacture or
market, that third parties may now or in the future hold proprietary rights that
preclude the Company from marketing them, or that third parties will market a
superior or equivalent product. Accordingly, the Company is unable to predict
whether its research and development activities will result in any commercially
viable products or applications. Furthermore, due to the extended testing and
regulatory review process required before marketing clearance can be obtained,
the Company does not expect to be able to commercialize any therapeutic drug for
at least several years, either directly or through any potential corporate
partners or licensees. There can be no assurance that the Company's proposed
products will prove to be safe or effective in humans or will receive regulatory
approvals that are required for commercial sale. The Company's primary area of
therapeutic focus, disorders of the central nervous system ("CNS"), is not
thoroughly understood and there can be no assurance that the products the
Company is seeking to develop will prove to be safe and effective in treating
CNS disorders or any other diseases.



                                       4
   7

NEED FOR ADDITIONAL FUNDING; UNCERTAINTY OF ACCESS TO CAPITAL

    The Company will require substantial funds for further development of its
potential products and to commercialize any products that may be developed. The
Company's capital requirements depend on numerous factors, including the
progress of its research and development programs, the progress of pre-clinical
and clinical testing, the time and cost involved in obtaining regulatory
approvals, the cost of filing, prosecuting, defending and enforcing patent
claims and other intellectual property rights, competing technological and
market developments and the ability of the Company to establish collaborative
arrangements. The Company has no current anticipated sources of additional
funding. The Company believes that its existing capital resources will be
sufficient to satisfy its current and projected funding requirements for the
next 12 months. The Company anticipates that after the next 12 months, it may
require substantial additional capital. Moreover, if the Company experiences
unanticipated cash requirements during the next 12 months, the Company could
require additional capital to fund its operations, continue research and
development programs as well as to continue the pre-clinical and clinical
testing of its potential products and to commercialize any products that may be
developed. The Company may seek such additional funding through public or
private financings or collaborative or other arrangements with third parties.
There can be no assurance that additional funds will be available on acceptable
terms, if at all. The Company may receive additional funds upon the exercise
from time to time of the Warrants and other outstanding warrants and stock
options, but there can be no assurance that any such warrants or stock options
will be exercised or that the amounts received will be sufficient for the
Company's purposes. If additional funds are raised by issuing equity securities,
further substantial dilution to existing stockholders may result. If adequate
funds are not available, the Company may be required to delay, scale back or
eliminate one or more of its development programs, or to obtain funds by
entering into arrangements with collaborative partners or others that may
require the Company to relinquish rights to certain of its products or
technologies that the Company would not otherwise relinquish.

DEPENDENCE ON THIRD PARTIES FOR CLINICAL TESTING, MANUFACTURING AND MARKETING

    The Company does not have the resources and, except with respect to its
AIT-082 compound, does not presently intend to conduct later-stage human
clinical trials itself or to manufacture any of its proposed products for
commercial sale. The Company therefore presently intends to seek larger
pharmaceutical company partners to conduct such activities for most or all of
its proposed products. In connection with its efforts to secure corporate
partners, the Company will seek to retain certain co-marketing rights to certain
of its proposed products, so that it may promote such products to selected
medical specialists while its corporate partner promotes these products to the
general medical market. There can be no assurance that the Company will be able
to enter into any such partnering arrangements on this or any other basis. In
addition, there can be no assurance that either the Company or its prospective
corporate partners can successfully introduce its proposed products, that they
will achieve acceptance by patients, health care providers and insurance
companies, or that they can be manufactured and marketed at prices that would
permit the Company to operate profitably.

    The NIA and the National Institute for Mental Health ("NIMH") have agreed to
fund the production of the Company's AIT-082 compound for animal toxicity
studies and early human clinical trials. In addition, the ADCS has agreed to
fund and conduct two Phase I human clinical trials of AIT-082 and has commenced
one such Phase I study. Should any of the NIA, NIMH or the ADCS withdraw such
support, the Company would be forced to use a portion of its capital to fund
such clinical trials.

LACK OF OPERATING EXPERIENCE

    To date, the Company has engaged exclusively in the development of
pharmaceutical technology and products. Although members of the Company's
management have substantial experience in pharmaceutical company operations, the
Company has no experience in manufacturing or procuring products in commercial
quantities or marketing pharmaceutical products and has only limited experience
in negotiating, setting up and maintaining strategic relationships, conducting
clinical trials and other later-stage phases of the regulatory approval process.
There can be no assurance that the Company will successfully engage in any of
these activities with respect to AIT-082 or any other products which it may
choose to distribute. In the event the Company decides to establish a
commercial-scale manufacturing facility for AIT-082, the Company will require
substantial additional funds and personnel and will be required to comply with
extensive regulations applicable to such a facility. The Company presently
intends to establish its own sales and marketing capabilities to market its
AIT-082 compound in the United States once it is 



                                       5
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certain of obtaining FDA approval of AIT-082. There can be no assurance that the
Company will be able to develop adequate manufacturing or marketing capabilities
either on its own or through third parties.

NEED TO COMPLY WITH GOVERNMENTAL REGULATION AND TO OBTAIN PRODUCT APPROVALS

    The testing, manufacturing, labeling, distribution, marketing and
advertising of products such as the Company's proposed products and its ongoing
research and development activities are subject to extensive regulation by
governmental regulatory authorities in the United States and other countries.
The FDA and comparable agencies in foreign countries impose substantial
requirements on the introduction of new pharmaceutical products through lengthy
and detailed clinical testing procedures, sampling activities and other costly
and time consuming compliance procedures. The Company's proprietary compounds
require substantial clinical trials and FDA review as new drugs. The Company
cannot predict with certainty when it might submit many of its proprietary
products currently under development for regulatory review. Once the Company
submits its potential products for review, there can be no assurance that FDA or
other regulatory approvals for any pharmaceutical products developed by the
Company will be granted on a timely basis or at all. A delay in obtaining or
failure to obtain such approvals would have a material adverse effect on the
Company's business and results of operations. Failure to comply with regulatory
requirements could subject the Company to regulatory or judicial enforcement
actions, including, but not limited to, product recalls or seizures,
injunctions, civil penalties, criminal prosecution, refusals to approve new
products and withdrawal of existing approvals, as well as potentially enhanced
product liability exposure. Sales of the Company's products outside the United
States will be subject to regulatory requirements governing clinical trials and
marketing approval. These requirements vary widely from country to country and
could delay introduction of the Company's products in those countries.

DEPENDENCE ON  KEY PERSONNEL

    The Company's success is dependent on its key management and scientific
personnel, especially Dr. Alvin Glasky, the loss of whose services could
significantly delay the achievement of the Company's planned development
objectives. Although the Company has obtained key man life insurance on Dr.
Glasky in the face amount of $2 million, there can be no assurance that the
proceeds of such policy will be sufficient to compensate the Company for any
disruptions resulting from the loss of Dr. Glasky's services. Achievement of the
Company's business objectives will require substantial additional expertise in
such areas as finance, manufacturing and marketing, among others. Competition
for qualified personnel among pharmaceutical companies is intense, and the loss
of key personnel, or the inability to attract and retain the additional, highly
skilled personnel required for the expansion of the Company's activities, could
have a material adverse effect on the Company's business and results of
operations.

UNCERTAINTY REGARDING PATENTS AND PROPRIETARY RIGHTS

    The Company actively pursues a policy of seeking patent protection for its
proprietary products and technologies. The Company owns two United States
patents and currently has two United States patent applications on file. In
addition, corresponding patent applications with respect to the Company's United
States patents and pending United States applications have been filed in a
number of foreign jurisdictions. However, there can be no assurance that the
Company's patents will provide it with significant protection against
competitors. Litigation could be necessary to protect the Company's patents, and
there can be no assurance that the Company will have the financial or personnel
resources necessary to pursue such litigation or otherwise to protect its patent
rights. In addition to pursuing patent protection in appropriate cases, the
Company also relies on trade secret protection for its unpatented proprietary
technology. However, trade secrets are difficult to protect. There can be no
assurance that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to the Company's
trade secrets, that such trade secrets will not be disclosed or that the Company
can effectively protect its rights to unpatented trade secrets. The Company
pursues a policy of having its employees and consultants execute proprietary
information agreements upon commencement of employment or consulting
relationships with the Company, which agreements provide that all confidential
information developed or made known to the individual during the course of the
relationship shall be kept confidential except in specified circumstances. There
can be no assurance, however, that these agreements will provide meaningful
protection for the Company's trade secrets or other proprietary information.



                                       6
   9

    Furthermore, there can be no assurance that claims against the Company will
not be raised in the future based on patents held by others or that, if raised,
such claims will not be successful. Such claims, if brought, could seek damages
as well as an injunction prohibiting clinical testing, manufacturing and
marketing of the affected product. If any such actions are successful, in
addition to any potential liability for damages, the Company could be required
to obtain a license in order to continue to manufacture or market the affected
product. There can be no assurance that the Company would prevail in any such
action or that any license required under any such patent would be made
available under acceptable terms, if at all. There has been, and the Company
believes that there will continue to be, significant litigation in the
pharmaceutical industry regarding patent and other intellectual property rights.
If the Company becomes involved in any litigation, it could consume a
substantial portion of the Company's financial and personnel resources
regardless of the outcome of such litigation.

COMPETITION

    Competition in the area of pharmaceutical products is intense. There are
many companies, both public and private, including well-known pharmaceutical
companies, that are engaged in the development of products for certain of the
applications being pursued by the Company. The Company's probable larger
competitors include Amgen, Inc., Chiron Corp., Bristol-Myers Squibb Company,
Glaxo Wellcome PLC, Regeneron Pharmaceuticals, Inc., Cephalon, Inc., Hoechst
Marion Roussel Ltd. and Pfizer, Inc., among others. In addition, Warner-Lambert
Co. is currently marketing a drug, tacrine, which has been approved by the FDA
for treatment of Alzheimer's disease, under the name Cognex(R). Another drug,
which has recently been approved by the FDA for treatment of Alzheimer's
disease, is being marketed by Pfizer, Inc. under the name of Aricept(R). Most of
these companies have substantially greater financial, research and development,
manufacturing and marketing experience and resources than the Company and
represent substantial long-term competition for the Company. In addition, there
are numerous other companies that are also in the process of developing products
for the treatment of diseases and disorders for which the Company is developing
products. Such companies may succeed in developing pharmaceutical products that
are more effective or less costly than any products that may be developed by the
Company.

    Factors affecting competition in the pharmaceutical industry vary depending
on the extent to which the competitor is able to achieve a competitive advantage
based on proprietary technology. If the Company is able to establish and
maintain a significant proprietary position with respect to its products,
competition will likely depend primarily on the effectiveness of the product and
the number, gravity and severity of its unwanted side effects as compared to
alternative products.

    The industry in which the Company competes is characterized by extensive
research and development efforts and rapid technological progress. Although the
Company believes that its proprietary position may give it a competitive
advantage with respect to its proposed drugs, new developments are expected to
continue and there can be no assurance that discoveries by others will not
render the Company's potential products noncompetitive. The Company's
competitive position also depends on its ability to attract and retain qualified
scientific and other personnel, develop effective proprietary products,
implement development and marketing plans, obtain patent protection and secure
adequate capital resources. There can be no assurance that the Company will be
able to successfully attract or retain such personnel.

RISK OF PRODUCT LIABILITY

    Although the Company currently carries product liability insurance, there
can be no assurance that the amounts of such coverage will be sufficient to
protect the Company, nor can there be any assurance that the Company will be
able to obtain or maintain additional insurance on acceptable terms for its
clinical and commercial activities or that such additional insurance would be
sufficient to cover any potential product liability claim or recall. Failure to
maintain sufficient coverage could have a material adverse effect on the
Company's business and results of operations.

USE OF HAZARDOUS MATERIALS

    The Company's research and development efforts involve the use of hazardous
materials. The Company is subject to federal, state and local laws and
regulations governing the storage, use and disposal of such materials and
certain waste products. Although the Company believes that its safety procedures
for handling and disposing of such materials comply with the standards
prescribed by federal, state and local regulations, the risk of accidental



                                       7
   10

contamination or injury from these materials cannot be completely eliminated. In
the event of an accident, the Company could be held liable for any damages that
result and any such liability could exceed the resources of the Company. The
Company may incur substantial costs to comply with environmental regulations if
the Company develops its own commercial manufacturing facility.

POSSIBLE VOLATILITY  OF STOCK PRICE

    The stock market from time to time experiences significant price and volume
fluctuations that are unrelated to the operating performance of particular
companies. These broad market fluctuations may adversely affect the market price
of the Company's Common Stock and/or Warrants. In addition, the market price of
the Common Stock and/or Warrants is likely to be highly volatile. Factors such
as fluctuations in the Company's results of operations, timing and announcements
of technological innovations or new products by the Company or its competitors,
FDA and foreign regulatory actions, developments with respect to patents and
proprietary rights, public concern as to the safety of products developed by the
Company or others, changes in health care policy in the United States and in
foreign countries, changes in stock market analyst recommendations regarding the
Company, the pharmaceutical industry generally and general market conditions
each may have a significant adverse effect on the market price of the Common
Stock and/or Warrants. In addition, it is likely that during at least some
future quarterly periods, the Company's results of operations will fail to meet
the expectations of stock market analysts and investors and, in such event, the
market price of the Company's Common Stock and/or Warrants could be materially
and adversely affected.

CONTROL BY DIRECTORS AND EXECUTIVE OFFICERS

    The Company's directors and executive officers beneficially own in the
aggregate approximately 27.5% of the Company's outstanding Common Stock. These
stockholders, if acting together, would be able to control substantially all
matters requiring approval by the stockholders of the Company, including the
election of directors and the approval of mergers or other business combination
transactions. Such concentration of ownership could discourage or prevent a
change of control of the Company.

EFFECT OF CERTAIN CHARTER AND BYLAWS PROVISIONS

    Certain provisions of the Company's Certificate of Incorporation and Bylaws
may have the effect of making it more difficult for a third party to acquire, or
of discouraging a third party from attempting to acquire, control of the
Company. Such provisions could limit the price that certain investors might be
willing to pay in the future for shares of Common Stock. These provisions may
make it more difficult for stockholders to take certain corporate actions and
could have the effect of delaying or preventing a change in control of the
Company

                                 USE OF PROCEEDS

        The proceeds from the sale of each of the Shares and the Resale Warrants
will belong to the Selling Stockholders. The Company will not receive any
proceeds from such sales.



                                       8
   11

                                   SELLING SECURITYHOLDERS

COMMON STOCK



                                    Shares Owned      Shares Being    Shares Owned
                                  Before Offering(1)   Offered(2)    After Offering
                                 --------------------- ----------   -----------------
        Name                     Number(3)  Percent(3)              Number    Percent
- --------------------             --------   ----------              ------    -------
                                                                
Paulson Investment 
Company, Inc.(4)                   266,982     4.7%     173,000     93,982     1.6%

Chester L.F. Paulson(5)            128,000     2.3%      18,000    110,000     1.9%

Michael Golden                      19,000        *      19,000          0        *

Ben Lichtenberg                     19,000        *      19,000          0        *

M. Lorraine Maxfield                 9,000        *       9,000          0        *

Michael Silverman                    5,000        *       5,000          0        *

Steven D. Schwantz                   4,000        *       4,000          0        *

Lewis Maniloff                       3,000        *       3,000          0        *
                                   -------     ---      -------    -------     --- 
TOTAL                              453,982     7.9%     250,000    203,982     3.6%


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

(1)     Includes, or consists of, shares of Common Stock issuable upon exercise
        of the Representatives' Warrants. The Representatives' Warrants, which
        contain certain registration rights, were transferred to the persons
        named in the table in 1997. Each of such persons was an officer or
        otherwise affiliated with the either Paulson Investment Company, Inc. or
        First Colonial Securities Group, Inc. (which acted as the managing
        underwriters of the Company's September 1996 public offering) at the
        time of the September 1996 public offering. Pursuant to the terms of the
        Representatives' Warrants, the Company is obligated to pay the fees and
        expenses incurred by it incident to the offering of the Shares and the
        Resale Warrants. None of the Shares stated in the table as Shares Being
        Offered will be sold in this offering unless the Representatives'
        Warrants are first exercised and the related exercise price is paid to
        the Company.

(2)     Includes only shares of Common Stock issuable on exercise of the
        Representatives' Warrants, and assumes that all shares of Common Stock
        offered hereby are sold.

(3)     Does not include shares of Common Stock issuable upon exercise of the
        Warrants listed for such securityholder in the table set forth below
        under "Selling Securityholders--Warrants."

(4)     Does not include amounts owned by Chester L.F. Paulson, who is the
        chairman of Paulson Investment Company, Inc. Includes 93,982 shares of
        Common Stock held by Paulson Investment Company, Inc. in inventory
        trading accounts. Includes 12,000 shares of Common Stock issuable upon
        exercise of Representatives' Warrants as to which Paulson Investment
        Company, Inc. disclaims beneficial ownership.

(5)     Does not include amounts owned by Paulson Investment Company, Inc.
        Shares owned by Paulson Investment Company, Inc. may be deemed to be
        beneficially owned by Mr. Paulson, who disclaims such beneficial 
        ownership.



                                       9
   12

WARRANTS



                                                       Warrants 
                                    Warrants Owned       Being       Warrants Owned
                                  Before Offering(1)   Offered(2)    After Offering
                                 --------------------- ----------   -----------------
        Name                     Number(3)  Percent(3)              Number    Percent
- --------------------             --------   ----------              ------    -------
                                                                
Paulson Investment 
Company, Inc.(3)                   181,579     6.7%     173,000      8,573        *

Michael Golden                      19,000        *      19,000          0        *

Ben Lichtenberg(4)                  19,000        *      19,000          0        *

Chester L.F. Paulson                18,000        *      18,000          0        *

M. Lorraine Maxfield                 9,000        *       9,000          0        *

Michael Silverman                    5,000        *       5,000          0        *

Steven D. Schwantz                   4,000        *       4,000          0        *

Lewis Maniloff                       3,000        *       3,000          0        *
                                   -------     ---      -------      -----         
TOTAL                              258,579     8.8%     250,000      8,573        *


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

(1)     Includes, or consists of, Warrants issuable upon exercise of the
        Representatives' Warrants. The Representatives' Warrants, which contain
        certain registration rights, were transferred to the persons named in
        the table in 1997. Each of such persons was an officer or otherwise
        affiliated with the either Paulson Investment Company, Inc. or First
        Colonial Securities Group, Inc. (which acted as the managing
        underwriters of the Company's September 1996 public offering) at the
        time of the September 1996 public offering. Pursuant to the terms of the
        Representatives' Warrants, the Company is obligated to pay the fees and
        expenses incurred by it incident to the offering of the Shares and the
        Resale Warrants. None of the Resale Warrants stated in the table as
        Warrants Being Offered will be sold in this offering unless the
        Representatives' Warrants are first exercised and the related exercise
        price is paid to the Company.

(2)     Includes only Warrants issuable on exercise of the Representatives'
        Warrants, and assumes that all Warrants offered hereby are sold.

(3)     Does not include amounts owned by Chester L.F. Paulson, who is the
        chairman of Paulson Investment Company, Inc. Includes 8,572 Warrants
        held by Paulson Investment Company, Inc. in inventory trading accounts.
        Includes 12,000 Warrants issuable upon exercise of Representatives'
        Warrants as to which Paulson Investment Company, Inc. disclaims
        beneficial ownership.

(4)     Does not include amounts held in the name of Paulson Investment Company,
        Inc. Warrants held by Paulson Investment Company, Inc. may be deemed to
        be beneficially owned by Mr. Paulson, who disclaims such beneficial 
        ownership.

                              PLAN OF DISTRIBUTION

        The Company has been advised by each Selling Stockholder that the
Selling Stockholders may sell the Shares and the Resale Warrants from time to
time in transactions on the Nasdaq National Market, in negotiated transactions,
or otherwise, or by a combination of these methods, at fixed prices which may be
changed, at market prices at the time of sale, at prices related to market
prices or at negotiated prices. The Selling Stockholders may effect these
transactions by selling the Shares or 



                                       10
   13

the Resale Warrants to or through broker-dealers, who may receive compensation
in the form of discounts, concessions or commissions from the Selling
Stockholders or the purchasers of the Shares or the Resale Warrants for whom the
broker-dealer may act as an agent or to whom they may sell the Shares or Resale
Warrants as a principal, or both. The compensation to a particular broker-dealer
may be in excess of customary commissions.

        Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Shares or the Resale Warrants may not
simultaneously engage in market making activities with respect to such
securities for a period beginning when such person becomes a distribution
participant and ending upon such person's completion of participation in a
distribution, including stabilization activities in the Common Stock or Warrants
to effect syndicate covering transactions, to impose penalty bids or to effect
passive market making bids. In addition and without limiting the foregoing, in
connection with transactions in the Shares or the Resale Warrants, the Selling
Stockholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Rule 10b-5
and, insofar as the Selling Stockholders are distribution participants,
Regulation M and Rules 100, 101, 102, 103, 104 and 105 thereof. All of the
foregoing may affect the marketability of the Shares and the Resale Warrants.

        The Selling Stockholders and broker-dealers who act in connection with
the sale of the Shares and the Resale Warrants may be deemed to be
"underwriters" within the meaning of the Securities Act, and any commissions
received by such broker-dealers and profits on any resale of the Shares and the
Resale Warrants as a principal may be deemed to be underwriting discounts and
commissions under the Securities Act.

                            DESCRIPTION OF SECURITIES

        As of the date of this Prospectus, the authorized capital stock of the
Company consists of 25 million shares of Common Stock, par value $.001 per
share, and 5 million shares of Preferred Stock, par value $.001 per share.

COMMON STOCK

        Holders of Common Stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Stockholders do not have rights to
cumulate their votes in the election of directors under the Company's
Certificate of Incorporation, or the provisions of the Delaware General
Corporation Law and the Company's management does not presently intend to extend
cumulative voting rights to stockholders. However, under Section 2115 of the
California Corporations Code, specific provisions of the California General
Corporation Law, including mandatory cumulative voting rights of stockholders,
are made applicable to "pseudo-California" corporations incorporated under laws
of other states which meet certain tests. The tests are (i) that the average of
specified property, payroll and sales factors (generally relating to the extent
of activities in California) exceed 50% on a consolidated basis during the
corporation's latest full income year, and (ii) that more than one-half of the
corporation's outstanding voting securities are held of record by persons having
addresses in California. The Company will likely meet such tests as of the end
of its current fiscal year.

        Subject to preferences that may be applicable to the holders of
outstanding shares of Preferred Stock, if any, the holders of Common Stock are
entitled to receive such lawful dividends as may be declared by the Board of
Directors. In the event of liquidation, dissolution or winding up of the
Company, and subject to the rights of the holders of outstanding shares of
Preferred Stock, if any, the holders of shares of Common Stock shall be entitled
to receive pro rata all of the remaining assets of the Company available for
distribution to its stockholders. There are no redemption or sinking fund
provisions applicable to the Common Stock. All outstanding shares of Common
Stock are fully paid and nonassessable, and shares of Common Stock to be issued
pursuant to this offering shall be fully paid and nonassessable.

WARRANTS

        Each Warrant will entitle the holder to purchase one share of Common
Stock at a price of $11.40 per share. The Warrants will, subject to certain
conditions, be exercisable at any time on or before September 25, 2001, unless
earlier redeemed. The outstanding Warrants are redeemable by the Company, at a
price of $0.25 per Warrant, upon 30 days' written notice, if the closing bid
price (as defined in the Warrant Agreement described below) per share of the
Common Stock for the 20 consecutive trading days immediately preceding the date
notice of redemption is given 



                                       11
   14

equals or exceeds $22.80. If the Company gives notice of its intention to
redeem, a holder would be forced either to exercise his or her Warrant before
the date specified in the redemption notice or accept the redemption price.

        The terms and conditions of the Warrants are governed by the provisions
of the Warrant Agreement between the Company and U.S. Stock Transfer
Corporation, as Warrant Agent (the "Warrant Agent"). The shares of Common Stock
underlying the Warrants, when issued upon exercise of a Warrant, will be fully
paid and nonassessable, and the Company will pay any transfer tax incurred as a
result of the issuance of Common Stock to the holder upon its exercise.

        The Warrants contain provisions that protect the holders against
dilution by adjustment of the exercise price. Such adjustments will occur in the
event, among others, of a merger, stock split or reverse stock split, stock
dividend or recapitalization. The Company is not required to issue fractional
shares upon the exercise of a Warrant. The holder of a Warrant will not possess
any rights as a shareholder of the Company until such holder exercises the
Warrant.

        A Warrant may be exercised upon surrender of the Warrant Certificate on
or before the expiration date of the Warrant at the offices of the Warrant
Agent, with the form of "Election To Purchase" on the reverse side of the
Warrant Certificate completed and executed as indicated, accompanied by payment
of the exercise price (by certified or bank check payable to the order of the
Company) for the number of shares with respect to which the Warrant is being
exercised.

        For a holder to exercise the Warrants, there must be a current
registration statement in effect with the Securities and Exchange Commission and
qualification in effect under applicable state securities laws (or applicable
exemptions from state qualification requirements) with respect to the issuance
of Common Stock (or other securities) underlying the Warrants. The Company has
agreed to use all commercially reasonable efforts to cause a registration
statement with respect to such securities under the Securities Act to be filed
and to become and remain effective in anticipation of and prior to the exercise
of the Warrants and to take such other actions under the laws of various states
as may be required to cause the sale of Common Stock (or other securities) upon
exercise of Warrants to be lawful. If a current registration statement is not in
effect at the time a Warrant is exercised, the Company may at its option redeem
the Warrant by paying to the holder cash equal to the difference between the
market price of the Common Stock on the exercise date and the exercise price of
the Warrant. The Company will not be required to honor the exercise of Warrants
if, in the opinion of the Company's Board of Directors upon advice of counsel,
the sale of securities upon exercise would be unlawful.

        For the life of the Warrants, the holders thereof have the opportunity
to profit from a rise in the market price of the Common Stock without assuming
the risk of ownership of the shares of Common Stock issuable upon the exercise
of the Warrants. The Warrant holders may be expected to exercise their Warrants
at a time when the Company would, in all likelihood, be able to obtain any
needed capital by an offering of Common Stock on terms more favorable than those
provided for by the Warrants. Furthermore, the terms on which the Company could
obtain additional capital during the life of the Warrants may be adversely
affected.

                                  LEGAL MATTERS

        The validity of the issuance of the shares of Common Stock and Warrants
offered hereby will be passed upon for the Company by Stradling, Yocca, Carlson
& Rauth, a Professional Corporation, Newport Beach, California.

                                     EXPERTS

        The audited consolidated financial statements of the Company
incorporated by reference in this registration statement have been audited by
Arthur Andersen LLP, independent public accounts, as indicated in their report
with respect thereto, and are included herein in reliance upon the authority of
said firm as experts in giving said reports. Reference is made to said report
which states that the Company is in the development stage, as described in Note
1 to the consolidated financial statements.



                                       12
   15

                     LIMITATION ON LIABILITY AND DISCLOSURE
                    OF COMMISSION POSITION ON INDEMNIFICATION
                         FOR SECURITIES ACT LIABILITIES

        The by-laws of the Company provide for indemnification of the Company's
directors and officers to the fullest extent permitted by law. Insofar as
indemnification for liabilities under the Securities Act may be permitted to
directors, officers or controlling persons of the Company pursuant to the
Company's Certificate of Incorporation, as amended, by-laws and the Delaware
General Corporation Law (the "DGCL"), the Company has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in such Act and is therefore unenforceable.


                                       13
   16

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

                         250,000 SHARES OF COMMON STOCK

                     250,000 COMMON STOCK PURCHASE WARRANTS


                              NEOTHERAPEUTICS, INC.


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

                                   PROSPECTUS

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


                               _________ __, 1997


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

   17

                                     PART II
                   INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 14.  Other Expenses of Issuance and Distribution

        The following sets forth the costs and expenses, all of which shall be
borne by the Registrant, in connection with the offering of the securities
pursuant to this Registration Statement:


                                                                      
Registration Fee................................................. $    1,425
Accounting Fees and Expenses..................................... $    5,000*
Legal Fees and Expenses.......................................... $   10,000*

       Total..................................................... $   16,425


        * Estimated

Item 15.  Indemnification of Directors and Officers.

        The by-laws of the Registrant provide for indemnification of the
Registrant's directors and officers to the fullest extent permitted by law.
Insofar as indemnification for liabilities under the Securities Act may be
permitted to directors, officers or controlling persons of the Registrant
pursuant to the Registrant's Certificate of Incorporation, by-laws and the
Delaware General Corporation Law (the "DGCL"), the Registrant has been informed
that in the opinion of the Commission such indemnification is against public
policy as expressed in such Act and is therefore unenforceable.

        Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may include a provision which eliminates or limits the personal
liability of a director 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 company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL,
relating to prohibited dividends or distributions or the repurchase or
redemption of stock or (iv) for any transaction from which the director derives
an improper personal benefit. The Registrant's Certificate of Incorporation
includes such a provision. As a result of this provision, the Registrant and its
stockholders may be unable to obtain monetary damages from a director for breach
of his or her duty of care.

Item 16.  Exhibits.

        4.1    Warrant Agreement entered into between the Registrant and U.S.
               Stock Transfer Corporation dated as of September 25, 1996. Filed
               as Exhibit 4.6 to the Registration Statement on Form SB-2 as
               amended (No. 333-05342-LA), and incorporated herein by reference.

        4.2    Form of Representatives' Warrant Agreement dated as of September
               25, 1996, entered into in connection with the public offering of
               the Registrant's securities on September 26, 1996. Filed as
               Exhibit 4.3 to the Registration Statement on Form SB-2 (No.
               333-05342-LA), and incorporated herein by reference.

        5      Opinion of Stradling, Yocca, Carlson & Rauth, a Professional
               Corporation.

        23.1   Consent of Stradling, Yocca, Carlson & Rauth, a Professional
               Corporation (included in Exhibit 5).

        23.2   Consent of Arthur Andersen LLP.

        24     Power of Attorney (included on the signature page to the
               Registration Statement - see page II-3).

Item 17.  Undertakings.



                                      II-1

   18

        (a)    The undersigned registrant hereby undertakes:

               (1) To file, during any period in which it offers or sells
               securities, a post-effective amendment to this registration
               statement to:

                      (iii) Include any additional or changed information on the
                      plan of distribution.

               (2) For determining liability under the Securities Act, treat
               each post-effective amendment as a new registration statement of
               the securities offered, and the offering of the securities at
               that time to be deemed the initial bona fide offering.

               (3) File a post-effective amendment to remove from registration
               any of the securities that remain unsold at the end of the
               offering.

        (e) Insofar as indemnification for liabilities arising under the
        Securities Act of 1933 may be permitted to directors, officers and
        controlling persons of the small business issuer pursuant to the
        foregoing provisions, or otherwise, the small business issuer has been
        advised that in the opinion of the Securities and Exchange Commission
        such indemnification is against public policy as expressed in the Act
        and is, therefore, unenforceable. In the event that a claim for
        indemnification against such liabilities (other than the payment by the
        small business issuer of expenses incurred or paid by a director,
        officer or controlling person of the small business issuer 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 small business issuer 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
        whether such indemnification by it is against public policy as expressed
        in the Act and will be governed by the final adjudication of such issue.



                                      II-2

   19



                                          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 Irvine, State of California, on the 8th day of
October, 1997.

                                 NEOTHERAPEUTICS, INC.

                                 By:    /s/ Alvin J. Glasky, Ph.D.
                                        ----------------------------------------
                                        Alvin J. Glasky, Ph.D.
                                        President and Chief Executive Officer

                                POWER OF ATTORNEY

        We, the undersigned officers and directors of NeoTherapeutics, Inc., do
hereby constitute and appoint Alvin J. Glasky, Ph.D. and Samuel Gulko or either
of them, our true and lawful attorneys-in-fact and agents, each with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite are necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each of said
attorney-in-fact and agents, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.

        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/ Alvin J. Glasky, Ph.D.             Chief Executive Officer,            October 8, 1997
- -----------------------------------    President and Director
Alvin J. Glasky, Ph.D.                 (principal executive officer)

/s/ Samuel Gulko                       Chief Financial Officer             October 8, 1997
- -----------------------------------    (principal financial and
Samuel Gulko                           accounting officer)

/s/ Mark J. Glasky                     Director                            October 8, 1997
- -----------------------------------   
Mark J. Glasky                        

/s/ Frank M. Meeks                     Director                            October 8, 1997
- -----------------------------------   
Frank M. Meeks                        

/s/ Paul H. Silverman, Ph.D., D.Sc.    Director                            October 8, 1997
- -----------------------------------   
Paul H. Silverman, Ph.D., D.Sc.       

/s/Carol O'Cleireacain, Ph.D.          Director                            October 8, 1997
- ----------------------------------- 
Carol O'Cleireacain, Ph.D.




                                      II-3

   20

                                  EXHIBIT INDEX



    Exhibit
     Number                        Description
     ------                        -----------
           
       4.1    Warrant Agreement entered into between the Registrant and U.S.
              Stock Transfer Corporation dated as of September 25, 1996. Filed
              as Exhibit 4.6 to the Registration Statement on Form SB-2 as
              amended (No. 333-05342-LA), and incorporated herein by reference.

       4.2    Form of Representatives' Warrant Agreement dated as of September
              25, 1996, entered into in connection with the public offering of
              the Registrant's securities on September 26, 1996. Filed as
              Exhibit 4.3 to the Registration Statement on Form SB-2 (No.
              333-05342-LA), and incorporated herein by reference.

         5    Opinion of Stradling, Yocca, Carlson & Rauth, a Professional
              Corporation

      23.1    Consent of Stradling, Yocca, Carlson & Rauth, a Professional
              Corporation (Included in Exhibit 5).

      23.2    Consent of Arthur Andersen, LLP.

      24      Power of Attorney (included on the signature page to the
              Registration Statement - see page II-3).