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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1999

[_] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934
For the transition period from to

_____________

Commission file number 0-27914

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

_____________
Delaware 34-1697351
-------- ----------
(State of incorporation) (I.R.S. Employer Identification No.)

2950 Wilderness Place
Boulder, Colorado 80301
(Address of principal executive offices)

Registrant's telephone number: (303) 449-6500

_____________

Check whether the registrant: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes X No _____
-----

The number of shares of the registrant's common stock, par value $0.01 per
share, outstanding as of August 10, 1999 was 9,227,889.

RIBOZYME PHARMACEUTICALS, INC.
INDEX TO FORM 10-Q

PART 1 - FINANCIAL INFORMATION PAGE
----

Item 1. Financial Statements

Condensed Balance Sheets as of June 30, 1999 (unaudited) and
December 31, 1998.............................................. 3

Condensed Statements of Operations - Three and Six Months Ended
June 30, 1999 and 1998 (unaudited)............................. 4

Condensed Statements of Cash Flows - Six Months Ended
June 30, 1999 and 1998 (unaudited)............................. 5

Notes to Condensed Financial Statements (unaudited)............ 6

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................... 7

Item 3. Quantitative and Qualitative Disclosures About Market Risk..... 13

PART II - OTHER INFORMATION

Item 2. Changes in Securities.......................................... 14
Item 4. Submission of Matters to a Vote of Security Holders............ 14
Item 6. Exhibits and Reports on Form 8-K............................... 15

SIGNATURES............................................................... 16

Exhibit Index............................................................ 17

PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS

RIBOZYME PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS

ASSETS
------

June 30, December 31,
1999 1998
---- ----
(unaudited)

Current assets
- --------------
Cash and cash equivalents $ 11,264,609 $ 6,511,512
Securities available-for-sale 1,000,136
Accounts receivable 2,375,143 1,163,388
Accounts receivable-related parties 218,794 2,735,193
Prepaid expenses and other current assets 527,136 203,232
------------ ------------
Total current assets 15,385,818 10,613,325

Property, plant and equipment at cost,
net of accumulated depreciation 4,064,803 4,222,194

Notes receivable-related parties 172,750 162,466
Patent costs, net 3,004,634 2,905,575
Investment in Atugen Biotechnology GmbH 161,891 860,216
Other assets 456,590 460,515
------------ ------------

Total assets $ 23,246,486 $ 19,224,291
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities
- -------------------
Accounts payable-trade $ 632,364 $ 750,514
Accrued expenses 353,528 396,143
Deferred revenue, current portion-related parties 400,000 400,000
Current portion of long-term debt 427,930 498,179
------------ ------------
Total current liabilities 1,813,822 2,044,836

Deferred revenue, long-term portion-related parties 1,400,000 1,600,000
Long-term debt 74,864 200,455
Convertible debt-related parties 6,551,675 4,344,612

Stockholders' equity
- --------------------
Preferred stock 0 -
Common stock 92,279 91,815
Additional paid-in capital 92,166,532 84,434,213
Deferred compensation and other (69,013) (69,149)
Accumulated deficit (78,783,673) (73,422,491)
------------ ------------
Total stockholders' equity 13,406,125 11,034,388
------------ ------------

Total liabilities and stockholders' equity $ 23,246,486 $ 19,224,291
============ ============

See notes to condensed financial statements

RIBOZYME PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

Three months ended Six months ended
June 30, June 30,
------------------------ ----------------------
1999 1998 1999 1998
---- ---- ---- ----

Revenue
Collaborative agreements $ 2,175,738 $ 752,175 $ 3,876,973 $ 1,492,175
Other income - - - 25,045
----------- ----------- ----------- -----------
Total revenues 2,175,738 752,175 3,876,973 1,517,220

Expenses
Research and development 3,624,690 4,580,880 7,385,123 9,581,750
General and administrative 537,038 514,632 1,096,334 981,837
----------- ----------- ----------- -----------
Total expenses 4,161,728 5,095,512 8,481,457 10,563,587

Operating loss (1,985,990) (4,343,337) (4,604,484) (9,046,367)

Other income (expense)
Interest income 112,720 167,666 202,935 379,995
Interest expense (149,217) (240,586) (261,308) (410,223)
Equity in loss of
unconsolidated affiliate (203,701) - (698,325) -
----------- ----------- ----------- -----------
Total other income (expense) (240,198) (72,920) (756,698) (30,228)

Net loss $(2,226,188) $(4,416,257) $(5,361,182) $(9,076,595)
=========== =========== =========== ===========

Net loss per share $ (0.24) $ (0.49) $ (0.58) $ (1.03)

Shares used in computing
net loss per share 9,213,717 9,049,656 9,197,993 8,830,197
=========== =========== =========== ===========

See notes to condensed financial statements

RIBOZYME PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

Six months ended
June 30,
----------------------------
1999 1998
---- ----

Operating Activities
Net loss $(5,361,182) $(9,076,595)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 817,263 914,509
Equity in loss of unconsolidated affiliate 698,325 --
Compensation for forgiveness of notes
receivable-related parties 67,466 92,466
Compensation related to sales of stock 25,620 19,178
Expense related to warrant repricing 42,221 --
Gain on sale of investment in corporate partner -- (25,045)
Accrued interest included in convertible debt 207,063 126,718
Changes in operating assets and liabilities:
Accounts receivable 1,304,644 (226,631)
Prepaid expenses and other (304,467) 19,985
Other assets 3,925 (166,427)
Accounts payable (118,150) 165,814
Accrued expenses (42,615) (167,348)
Deferred license revenue (200,000) --
----------- -----------
Net cash used in operating activities (2,859,887) (8,323,376)

Investing activities
Additions to property, plant and equipment (608,174) (640,055)
Additions to deferred patent costs (150,757) (235,405)
Net purchases of securities available-for-sale (1,000,000) (995,320)
Sale of investment in corporate partner -- 275,045
Transfer of restricted cash -- 45,145
Loan repayments-related parties -- 1,875
Loan advances-related parties (97,187) (10,000)
----------- -----------
Net cash used in investing activities (1,856,118) (1,558,715)

Financing activities
Net proceeds from sale of common and preferred stock 7,664,942 2,638,121
Payments under loan facilities (195,840) (627,764)
Borrowings under loan facilities 2,000,000 2,000,000
----------- -----------
Net cash provided by financing activities 9,469,102 4,010,357

Net increase (decrease) in cash and cash equivalents 4,753,097 (5,871,734)
Cash and cash equivalents at beginning of period 6,511,512 15,302,775
----------- -----------
Cash and cash equivalents at end of period $11,264,609 $ 9,431,041
=========== ===========

See notes to condensed financial statements.

RIBOZYME PHARMACEUTICALS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)

Note 1: Basis of Presentation

The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not 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 three and six-month periods ending
June 30, 1999 are not necessarily indicative of the results that may be expected
for the year ended December 31, 1999. For further information, refer to the
financial statements and footnotes thereto included in our annual report on Form
10-K/A for the year ended December 31, 1998.

Note 2: Collaboration with Eli Lilly and Company

In March 1999, we entered into a collaboration with Eli Lilly and Company
to conduct research, development and commercialization of HEPTAZYME, our
ribozyme for the treatment of Hepatitis C virus infection. Under the terms of
the agreement, we will receive approximately $1.7 million in 1999 in research
revenues to fund research and other expenses. In addition, in April 1999, Lilly
purchased five shares of our Series L preferred stock for $7.5 million. We may
receive success fees related to various development milestones and royalties on
future sales of products developed related to the collaboration. Lilly will
receive the exclusive worldwide commercialization rights to products that result
from this collaboration, including the HEPTAZYME product. We have retained
certain rights to manufacture HEPTAZYME products resulting from the
collaboration.

Note 3: July 1999 Public Offering

In July 1999, we completed a public offering of 1.8 million shares of our
common stock at $3.50 per share. Gross proceeds were $6.3 million and net
proceeds are estimated at $5.5 million after deducting placement agency fees and
expenses.

Note 4: Comprehensive Income

Comprehensive income for the three and six month periods ended June 30,
1999 and 1998 were immaterial for reporting purposes.

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

Overview of our Business

Ribozyme Pharmaceuticals was founded to commercialize products and services
based upon the significant potential of "ribozymes," a discovery of Professor
Thomas R. Cech for which he shared a Nobel Prize. Our primary business focus is
to use our technology to develop a new class of drugs consisting of ribozymes to
treat or prevent human disease. We are in various stages of clinical trials and
preclinical development for two lead product candidates: ANGIOZYME for the
treatment of solid tumor cancers and HEPTAZYME for the treatment of Hepatitis C.
Chiron Corporation is our collaborator for the development and commercialization
of ANGIOZYME and Eli Lilly and Company is our collaborator for the development
and commercialization of HEPTAZYME. We have gene function identification and
target validation agreements with Schering AG, Roche Bioscience and
GlaxoWellcome. In addition, we have existing gene function identification and
target validation agreements with Chiron and Parke-Davis which are substantially
complete, but we may be obligated to perform additional work.

We recently completed Phase Ib clinical trials in cancer patients for our
most advanced product candidate, ANGIOZYME and expect to commence Phase II
trials before the end of 1999. We expect to file an Investigational New Drug
application for our second product candidate, HEPTAZYME, in the fourth quarter
of 1999 and commence clinical trials in 2000. To date, we have committed
substantially all our resources to our research and product development
programs.

We have not generated any revenues from product sales, nor do we anticipate
any in the foreseeable future. Revenue recorded from our collaborative
agreements consists of:

. Research revenue. Typically research revenue is based on the fully
burdened cost of a researcher working on a collaboration. Rates are
billed per employee, per year, prorated for time worked on a project.
This revenue is typically invoiced on a quarterly basis, either up
front or in arrears. Revenue is recognized ratably over the period,
with the balance reflected as deferred revenue until earned. The
revenue is typically recurring over the term of a collaboration.

. License revenue. License revenue is recognized ratably over the term
of the license. Payments received in advance are recorded as deferred
revenue until earned.

. Milestone revenue. Milestone revenue is recognized in full when the
related milestone performance goal is achieved. Milestone revenue is
typically not consistent or recurring in nature.

. Up front revenue. Up front revenue is fully recognized upon signing a
collaboration and is related to the value of the research at that
point in time. Up front revenue may also be a reimbursement to us of
recent expenses we incurred related to product development.

Our revenue has consisted primarily of research revenue payments from our
collaborators. All revenues are either deferred as a liability or recognized
upon satisfying revenue criteria. We have no further research commitments from
our collaborators that have provided us with recognized revenues. As of June
30, 1999, all revenues recognized have been earned and no other obligations
exist for this revenue. We depend upon funding from external financing and
corporate collaborations for our research and product development programs and
expect to do so for the foreseeable future.

We expect to commit significant additional resources conducting clinical
trials for ANGIOZYME , as well as for clinical trials for other potential
product candidates. In addition, although we believe our existing manufacturing
facilities and those available from contract manufacturers will be satisfactory
for the manufacture of our current product candidates through clinical trials,
we will need to commit significant resources in order to support manufacturing
on a commercial scale.

We have not been profitable since inception and have an accumulated
deficit of $78.8 million as of June 30, 1999. Losses have resulted primarily
from our research and development programs. We anticipate incurring additional
losses as ANGIOZYME and HEPTAZYME advance through clinical development. In
addition, future milestone payments under some of our collaborations are
contingent upon our meeting particular research or development goals. The amount
and timing of future milestone payments are contingent upon the terms of each
agreement. Milestone performance criteria is specific to each agreement and
based on our future performance. In some instances, we may forfeit milestone
payments if we fail to accomplish a goal within a certain time frame.
Therefore, we are subject to significant variation in the timing and amount of
our revenues and results of operations from period to period.

In 1998, we announced the formation of a new company, Atugen Biotechnology
GmbH, in Berlin, Germany that utilizes our proprietary ribozyme and related
technologies as a continuation of our target validation and discovery business.
The formation of Atugen took place through private sector investments and
funding commitments from the German government as part of its initiative to
encourage new biotechnology investments in Germany. In 1998, we transferred our
gene identification and target validation technology to Atugen in exchange for a
substantial equity interest. We plan to have an on-going business relationship
with Atugen.

We expect to continue our existing gene identification and target
validation agreements with our collaborators by subcontracting services to
Atugen. Atugen will enter into future gene identification and target validation
agreements directly with collaborators, but we retain rights to use the
technology internally, and to develop oligonucleotides as therapeutic agents
against targets validated by Atugen. In 1998, we received a one-time license fee
from Atugen for the exclusive rights to our gene identification and target
validation technology. In our on-going relationship with Atugen, we will receive
payments for:

. management and administrative services we provide,
. oligonucleotides and other chemicals, and
. prosecution of relevant patents.

In addition, we retain exclusive rights to oligonucleotide therapeutic agents
against targets validated by Atugen. Atugen will be reimbursed for any
subcontracting services it provides to us on a full time equivalent basis.

Results of Operations

Three and Six Months Ended June 30, 1999 and 1998

Revenues. Generally, revenue fluctuations result from changes in the number
of funded research projects as well as the timing and completion of contract
milestones. Collaborative revenues increased to $2.2 million and $3.9 million
for the three and six months ended June 30, 1999, from $752,000 and $1.5 million
for the corresponding periods in 1998. The increase is primarily due to $1.1
million and

$2.2 million in revenues recorded for the three and six months ended June 30,
1999, respectively, from Chiron related to joint product development of
ANGIOZYME. According to our agreement with Chiron, we share equally with Chiron
in the clinical trial costs of ANGIOZYME. We paid for virtually all of the
development expenses related to ANGIOZYME which were incurred during the first
half of 1999. Chiron then reimbursed us for half of the costs. Revenue recorded
from Chiron relates to research and development expenses already incurred and no
further obligation exists between us and Chiron related to revenues recognized.
Future Chiron revenues related to the joint development of ANGIOZYME will vary
and will depend on the stage of clinical development. In addition, we recorded
$427,000 and $1.0 million in revenues for the three and six months ended June
30, 1999, in connection with our service agreement with Atugen. Atugen pays for
research reagents and management and administrative services that we provide.
Atugen revenues are earned and recognized as the products and services are
provided. Also during the quarter ended June 30, 1999, we recorded revenues of
$608,000 from Lilly for funding of research and development expenses related to
joint product development of HEPTAZYME.

In January of 1998, we recorded as other income a gain of $25,000 from
the sale of stock in a corporate partner. The privately held stock, which was
purchased by the Company in the first quarter of 1996 for $250,000, was sold
back to the corporate partner in January 1998.

Expenses. Research and development expenses decreased to $3.6 million and
$7.4 million for the three and six months ended June 30, 1999, compared to $4.6
million and $9.6 million, respectively, for the corresponding periods in 1998.
The decrease was primarily due to transferring our gene identification and
target validation business to Atugen. In January 1999, Atugen USA, a wholly-
owned subsidiary of Atugen, was incorporated and subsequently all gene
identification and target validation expenses previously charged to us were
transferred to Atugen USA. Expenses of approximately $751,000 and $1.5 million
were recorded by Atugen USA for the three and six months ended June 30, 1999,
which included payroll, facility and general expenses for approximately fifteen
employees transferred to Atugen USA. Expenses for the approximately fifteen
employees transferred to Atugen USA were included in our 1998 expenses but were
not included in the 1999 amount. However, we expect research and development
expenses to increase from current levels as we expand our development programs
for ANGIOZYME and HEPTAZYME, including pre-clinical studies and clinical trials.

General and administrative expenses increased slightly to $537,000 and $1.1
million, for the three and six months ended June 30, 1999, compared to $515,000
and $982,000, respectively, for the corresponding periods in 1998. The increase
is primarily the result of increased staffing and associated expenses necessary
to manage and support our expanding operations and business development efforts.
We expect general and administrative expenses to continue to increase as a
result of increasing legal and other professional fees in connection with the
overall scale-up of our operations and business development efforts.

Other income (expense). Interest income decreased to $113,000 and
$203,000 for the three and six months ended June 30, 1999 compared to $168,000
and $380,000 for the corresponding periods in 1998. The decrease is due to
lower average balances in our cash and cash equivalents and securities
available-for-sale during the second quarter of 1999, as compared to the same
quarter in 1998. Interest income generally fluctuates as a result of the average
amount of cash available for investment and prevailing interest rates.

Interest expense decreased to $149,000 and $261,000 for the three and six
months ended June 30, 1999, compared to $241,000 and $410,000, respectively, for
the corresponding periods in 1998. The

decrease is attributable to the payoff of a loan for tenant improvements and
equipment in December 1998. However, interest expense is expected to increase
in the future as we arrange for additional financing for operations.

Equity in loss of unconsolidated affiliate was $203,000 for the three
month period ended June 30, 1999. No expense was required or recorded in the
corresponding period in 1998. The expense is in connection with our initial
cash investment of $2.0 million and the subsequent transfer of our gene
identification and target validation technology to Atugen in 1998. At June 30,
1999, we owned 83.2% of Atugen's outstanding common stock and, as a result, we
recorded our share of Atugen's second quarter net loss, resulting in equity in
loss of unconsolidated affiliate of $203,000. At June 30, 1999, our remaining
net investment in Atugen was $162,000, which we expect to eliminate entirely
during the remainder of 1999 as we share further in Atugen's anticipated losses.

Liquidity and Capital Resources

Since inception, we have financed our operations through public offerings
in April 1996, October 1997 and July 1999, private placements of preferred
stock, loans from financial institutions and funds received under our
collaborative agreements with a number of corporate partners. From inception
through June 30, 1999, we have received approximately:

. $29.0 million in net proceeds from private placements,
. $31.1 million in net proceeds from public offerings,
. $52.6 million from our collaborations, and
. $9.8 million in equipment financing.

We had cash, cash equivalents and securities available-for-sale of $12.3
million at June 30, 1999, compared to $6.5 million at December 31, 1998. The
$5.8 million increase in cash, cash equivalents and securities available-for-
sale is primarily the result of $2.8 million used for operations, $759,000 used
for investments in equipment and patents, and $293,000 in loan payments and loan
advances, offset by proceeds from the Lilly preferred stock placement of $7.5
million, proceeds from other equity transactions of $165,000 and loan proceeds
of $2.0 million.

We invest our cash, cash equivalents and securities available-for-sale in
interest-bearing investment grade securities.

Schering AG made a $2.5 million equity investment in us in May 1997 in
exchange for 212,766 shares of common stock and made an additional equity
investment of $2.5 million for 465,117 shares in April 1998. Separately,
Schering AG provided loans of $2.0 million in each of 1997 and 1998. In
addition, we received $1.0 million on this loan facility in each of January 1999
and June 1999. Schering AG will continue to provide loans of up to $2.0 million
annually for each of the next two years, provided that the collaboration is
continued, at Schering AG's option, in each of those years. Amounts not used in
any calendar year may be carried forward to future years. According to the
terms of our agreement with Schering AG, 50% of any borrowings on the line of
credit must be collateralized by equipment purchases. The loans, which carry an
interest rate of 8.0% per annum, are immediately convertible into equity at the
option of Schering AG. At June 30, 1999, the outstanding borrowings of $6.6
million were convertible into approximately 1.5 million shares of our common
stock. Principal and interest payments are deferred until maturity of the loans
which is April 2004. We may earn success fees upon product development
milestones and will manufacture synthetic ribozyme products and receive
royalties on sales

of products resulting from the collaboration. Schering AG may terminate the
research collaboration at any time by paying us termination fees.

In March 1999, we entered into a collaboration with Eli Lilly and Company
pursuant to which Lilly was granted the exclusive worldwide right to develop and
commercialize HEPTAZYME and any other ribozyme drug for the treatment of
Hepatitis C infection. If Lilly abandons or does not diligently pursue the
development of HEPTAZYME or another ribozyme drug for the treatment of Hepatitis
C infection, all rights to HEPTAZYME and such other ribozymes revert to us,
subject to the right of Lilly to receive royalty payments, if applicable, on the
sale of products developed by us or our third-party collaborators. Lilly may
terminate the collaboration at any time by giving us ninety days' notice.

On April 30, 1999 we issued five shares of our Series L preferred stock to
Lilly for $7.5 million in cash. Each share of Series L preferred stock:

. has a $1.5 million face value,
. has liquidation preference over our common stock,
. has no voting rights, except as may be required under Delaware law,
and
. is convertible into shares of our common stock based upon milestones
related to the development and commercialization of HEPTAZYME.

Lilly will pay us $9.2 million in 1999, which includes $1.7 million of funding
for research, payable in three equal installments, and $7.5 million equity
investment made by Lilly in April 1999. Including development milestones, which
we will be entitled to receive if a commercial product is offered for sale in
the United States, Europe and Japan, we could receive as much as $38 million
prior to commercialization including the $9.2 million set forth above. In
addition we will be entitled to royalties on the sale of products developed
pursuant to the collaborations. We could also realize increased revenues from
product manufacturing and research.

Subsequent to the end of the second quarter, in July 1999 we completed a
public offering of 1.8 million shares of our common stock at $3.50 per share.
Gross proceeds were $6.3 million and net proceeds are estimated at $5.5 million
after deducting placement agency fees and expenses.

Total additions for property, plant and equipment for the six months ended
June 30, 1999 were $608,000, all of which were financed through our existing
loan facility from Schering AG.

We anticipate that our existing financial resources, the equity investment
from Lilly, proceeds from the July 1999 public offering and expected revenues
from our collaborations should be adequate to satisfy our anticipated capital
requirements through early-2001. We expect to incur substantial additional
research and development costs, including costs related to:

. costs related to our research, drug discovery and development
programs,
. preclinical and clinical trials of our products, if developed,
. prosecuting and enforcing patent claims,
. general administrative and legal items, and
. manufacturing and marketing of products, if any.

We may raise additional capital through public or private financing, as
well as collaborative relationships, borrowings and other as yet undetermined
sources. We cannot assure you that funds will be available on favorable terms,
if at all. If we raise additional funds by issuing equity securities, the

holdings of existing stockholders will be further diluted. In addition, future
collaborative relationships may not successfully reduce our funding requirements
which may require us to relinquish or reduce rights to our technologies or
products.

Year 2000 Affect on Computer Systems

Year 2000 issues result from the inability of some computer programs or
computerized equipment to accurately calculate, store or use a date subsequent
to December 31, 1999. The erroneous date can be interpreted in a number of
different ways; typically the year 2000 is represented as the year 1900. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices or engage in similar normal business.

Based on our evaluations and remediation efforts, we do not anticipate that
we will incur any significant costs relating to the assessment and remediation
of year 2000 issues. To date, we estimate that we have spent approximately
$30,000 in reviewing and remediating year 2000 issues and that total
expenditures incurred in completing our review and remediation efforts will not
exceed $60,000. These expenditures are budgeted as part of our operating
expenses. However, expenditures for year 2000 remediation efforts may exceed
this amount if unforeseen complications arise. Also, we or our vendors,
suppliers and corporate partners may not be able to successfully identify and
remedy all potential year 2000 problems.

We have developed and are implementing a contingency plan including the
following:

. maintaining all data in hard copy that is generated or collected by
our vendors, suppliers and collaborators so any loss of data due to
year 2000 problems could be re-entered manually,
. maintaining all of our accounting records in hard copy so that we can
continue to manually pay vendors, employees, consultants and
collaborators in the event that our accounting software or other
computer programs or systems malfunction,
. maintaining hard copies of all scientific and business related
electronic data,
. archiving critical business paperwork,
. scheduling manufacturing campaigns not to extend or overlap the year
2000 time change, and
. upgrading security systems.

We are continuing to review these requirements in order to complete our
contingency plan for noncritical business functions.

We do not believe that we will have to modify or replace any significant
portions of our computer applications in order for our computer systems to
continue to function properly in the year 2000. However, a "worst case"
scenario may include the temporary interruption of research, development and
business if we need to upgrade or replace computer systems.

Forward-looking Statements

Statements in this Form 10-Q which are not strictly historical are
"forward-looking" statements which should be considered as subject to the many
uncertainties that exist in our operations and business

environment. These uncertainties, which include, among other things, the
following: general economic and business conditions; competition; technological
advances; ability to obtain rights to technology; ability to obtain and enforce
patents; ability to commercialize and manufacture products; ability to obtain
collaborators; ability to manufacture ribozymes in adequate amounts for its
collaborations and clinical trials; results of clinical studies; results of
research and development activities; business abilities and judgment of
personnel; availability of qualified personnel; changes in, or failure to comply
with, governmental regulations; ability to obtain adequate financing in the
future; and the like, are set forth in our 10-K/A for the year ended December
31, 1998 which is on file with the U.S. Securities and Exchange Commission, a
copy of which is available from us.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to information required regarding
quantitative and qualitative disclosures about market risk from the end of the
preceding fiscal year to the date of the most recent interim balance sheet.

PART II - OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES

Pursuant to a Purchase Agreement dated March 17, 1999 between Ribozyme
Pharmaceuticals, Inc., and Eli Lilly and Company, Ribozyme Pharmaceuticals, Inc.
issued 5 shares of its Series L preferred stock to Eli Lilly in exchange for
$7.5 million on April 30, 1999.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On May 21, 1999, we held our Annual Meeting of Shareholders. Matters voted
on and the results of such voting are as follows:

1. The election of six directors to hold office until the next Annual Meeting
of Shareholders or until their respective successors shall be elected and
qualified. The following persons were elected as our directors and received the
number of votes set forth below:

Director For Against
-------- --- -------

David T. Morgenthaler 6,590,046 284,123
Jeremy Curnock Cook 6,590,046 284,123
Anders P. Wiklund 6,590,046 284,123
Ralph E. Christoffersen 6,590,046 284,123
Anthony B. Evnin 6,590,046 284,123
David Ichikawa 6,590,046 284,123

2. To approve an increase in the number of options which may be granted under
our 1996 Stock Option Plan by 350,000 from 1,667,154 to 2,017,154.

Votes For - 6,112,821
Votes Against - 734,533
Votes Abstained - 26,815

3. To ratify the selection of Ernst & Young, LLP as our independent auditors
for 1999.

Votes For - 6,849,154
Votes Against - 17,745
Votes Abstained - 7,270

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

3(i) Amended and Restated Certificate of Incorporation (1)
3(ii) Restated Bylaws (2)
27 Financial Data Schedule

(b) Reports on Form 8-K

We filed reports on Form 8-K/A, dated May 28, 1999, June 9, 1999 and
June 16, 1999, which reported a Participation Agreement, as amended,
dated August 31, 1998, and related documents between Ribozyme
Pharmaceuticals, Inc. and Atugen Biotechnology, GmbH.
______
(1) Incorporated by reference from the Company's Registration Statement on Form
SB-2, file no. 333-34981, dated September 5, 1997.
(2) Incorporated by reference from the Company's Registration Statement on Form
SB-2, file no. 333-1908-D, dated April 11, 1996.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

RIBOZYME PHARMACEUTICALS, INC.

Dated: August 13, 1999 By: /s/ RALPH E. CHRISTOFFERSEN
--------------- ----------------------------
Ralph E. Christoffersen
President and Chief
Executive Officer

Dated: August 13, 1999 By: /s/ LAWRENCE E. BULLOCK
--------------- -----------------------
Lawrence E. Bullock
Vice President and Chief Financial
Officer (Principal Financial Officer and
Principal Accounting Officer)

Exhibit Index

Exhibit Exhibit
No. Description
--- -----------
3(i) Amended and Restated Certificate of Incorporation (1)
3(ii) Restated Bylaws (2)
27 Financial Data Schedule

_____
(1) Incorporated by reference from the Company's Registration Statement on Form
SB-2, file no. 333-34981, dated September 5, 1997.
(2) Incorporated by reference from the Company's Registration Statement on Form
SB-2, file no. 333-1908-D, dated April 11, 1996.