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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, 2001

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

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Commission file number 0-27914

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

_______________

Delaware 34-1697351
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(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 6, 2001 was 16,882,683.

RIBOZYME PHARMACEUTICALS, INC.
INDEX TO FORM 10-Q

PAGE
----

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Balance Sheets as of June 30, 2001 (unaudited) and
December 31, 2000....................................................................... 3

Condensed Statements of Operations - Three and Six Months Ended
June 30, 2001 and 2000 (unaudited)...................................................... 4

Condensed Statements of Cash Flows - Six Months Ended
June 30, 2001 and 2000 (unaudited)...................................................... 5

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

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................................... 8

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..................................... 15
Item 6. Exhibits and Reports on Form 8-K ....................................................... 16

SIGNATURES....................................................................................... 17

Exhibit Index.................................................................................... 18

PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS

RIBOZYME PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS

ASSETS
------

June 30, December 31,
2001 2000
---- ----
(unaudited)

Current assets
Cash and cash equivalents $ 18,541,726 $ 32,170,518
Securities available-for-sale 32,858,819 32,304,162
Accounts receivable 3,675,273 1,278,161
Accounts receivable-joint venture 1,246,787 1,972,788
Accounts receivable-related parties 462,815 344,934
Prepaid expenses and other current assets 643,683 277,623
------------- -------------
Total current assets 57,429,103 68,348,186

Property, plant and equipment, net 3,755,922 3,566,366

Notes receivable-related parties 658,000 214,750
Deferred patent costs, net 5,197,111 4,858,036
Investment in joint venture 4,910,288 6,373,545
Other assets 736,208 536,110
------------- -------------

Total assets $ 72,686,632 $ 83,896,993
============= =============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities
- -------------------
Accounts payable-trade $ 1,743,787 $ 1,085,197
Accrued expenses 1,319,536 1,860,813
Deferred revenue, current portion-related parties 400,000 400,000
------------- -------------
Total current liabilities 3,463,323 3,346,010

Deferred revenue, long-term portion-related parties 600,008 800,006
Convertible debt-joint venture 6,231,445 2,743,213
Convertible debt 3,100,000 1,013,333

Stockholders' equity
- --------------------
Preferred stock 120 120
Accreted preferred stock dividend 1,098,400 716,456
Common stock 168,785 162,615
Additional paid-in capital 180,246,894 175,099,769
Deferred compensation and other 1,288 (19,900)
Accumulated deficit (122,223,631) (99,964,629)
------------- -------------
Total stockholders' equity 59,291,856 75,994,431
------------- -------------

Total liabilities and stockholders' equity $ 72,686,632 $ 83,896,993
============= =============

See notes to condensed financial statements

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

Three months ended Six months ended
June 30, June 30,
--------------------------- ----------------------------
2001 2000 2001 2000
---- ---- ---- ----

Revenue
Collaborative agreements $ 1,014,233 $ 2,666,037 $ 1,550,537 $ 5,205,608
Collaborative agreements-joint venture 1,106,560 959,752 2,409,073 1,932,002
Collaborative agreements-related parties 269,638 255,180 548,083 613,225
------------ ------------ ------------ ------------
Total revenues 2,390,431 3,880,969 4,507,693 7,750,835

Expenses
Research and development 10,005,072 3,922,072 21,142,831 8,786,907
General and administrative 1,079,968 1,058,306 2,101,763 2,097,176
------------ ------------ ------------ ------------
Total expenses 11,085,040 4,980,378 23,244,594 10,884,083

------------ ------------ ------------ ------------
Operating loss (8,694,609) (1,099,409) (18,736,901) (3,133,248)

Other income (expense)
Interest income 596,304 913,735 1,473,764 1,161,424
Interest expense (188,633) 46,931 (295,446) (91,108)
Other income 43,718 - 46,450
Equity in loss of
unconsolidated affiliate (2,103,421) (1,786,033) (4,746,868) (3,583,859)
------------ ------------ ------------ ------------
Total other income (expense) (1,652,032) (825,367) (3,522,100) (2,513,543)

------------ ------------ ------------ ------------
Net loss (10,346,641) (1,924,776) (22,259,002) (5,646,791)

Accretion of dividends on preferred stock 190,677 - 381,944 -

------------ ------------ ------------ ------------
Net loss applicable to common stock $(10,537,318) $ (1,924,776) $(22,640,946) $ (5,646,791)
============ ============ ============ ============

Net loss per share (basic and diluted) $ (0.64) $ (0.13) $ (1.38) $ (0.42)

Shares used in computing
net loss per share 16,533,073 15,009,834 16,413,033 13,442,457
============ ============ ============ ============

See notes to condensed financial statements

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

Six months ended
June 30,
-------------------------------
2001 2000
---- ----

Operating Activities
Net loss $(22,259,002) $ (5,646,791)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 926,290 873,198
Equity in loss of unconsolidated affiliate 4,746,868 3,583,859
Compensation for forgiveness of notes
receivable-related parties 69,187 79,466
Compensation related common stock and options - 1,351,138
Expense related to issuance of warrants 103,050 -
Expense related to issuance of common stock 275,000 -
Revenue recognized for stock received in licensing agreement (205,442) -
Gain on disposal of equipment (40,987) -
Accrued interest included in convertible debt 295,446 86,667
Changes in operating assets and liabilities:
Accounts receivable (1,788,992) (1,763,788)
Prepaid expenses and other (178,497) (223,741)
Other assets 5,344 (6,344)
Accounts payable 658,590 (494,729)
Accrued expenses (541,277) 94,469
Deferred license revenue (199,998) (199,997)
------------ ------------
Net cash used in operating activities (18,134,420) (2,266,593)

Investing activities
Additions to property, plant and equipment (995,077) (324,140)
Additions to deferred patent costs (418,858) (174,099)
Net sales (purchases) of securities available-for-sale (533,470) 201,081
Investment in unconsolidated affiliate (3,283,610) (12,015,000)
Loan advances-related parties (700,000) -
------------ ------------
Net cash used in investing activities (5,931,015) (12,312,158)

Financing activities
Net proceeds from sale of common and preferred stock 5,157,190 70,384,548
Payments under loan facilities - (7,025,591)
Borrowings under loan facilities 5,279,453 1,000,000
------------ ------------
Net cash provided by financing activities 10,436,643 64,358,957
------------ ------------
Net (decrease) increase in cash and cash equivalents (13,628,792) 49,780,206
Cash and cash equivalents at beginning of period 32,170,518 9,749,822
------------ ------------
Cash and cash equivalents at end of period $ 18,541,726 $ 59,530,028
============ ============

See notes to condensed financial statements.

RIBOZYME PHARMACEUTICALS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)

Note 1: Basis of Presentation

The accompanying unaudited condensed financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States 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, 2001 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2001. For further
information, refer to the financial statements and footnotes thereto included in
our annual report on Form 10-K for the year ended December 31, 2000.

Certain amounts in the 2000 financial statements have been reclassified in
order to conform with the 2001 presentation.

Note 2: Medizyme Pharmaceuticals, Ltd.

In January 2000, the Company formed a joint venture with Elan Corporation
for the development and commercialization of HERZYME, the Company's product to
treat breast and other cancers. As part of this arrangement, the Company
licensed HERZYME and Elan licensed its MEDIPAD(R) drug delivery technology to
the joint venture, Medizyme Pharmaceuticals, Ltd. The MEDIPAD(R) system is a
disposable continuous subcutaneous drug delivery system that allows a patient to
administer the drug at home. We filed an Investigational New Drug (IND) for
HERZYME in Canada in February 2001, which was approved in April 2001.

Initial funding of Medizyme included $12.0 million from the Company and
$3.0 million from Elan. Estimated funding for Medizyme will require
approximately $15.0 million in additional operating and development costs and,
therefore, Elan has provided the Company with a $12.0 million credit facility on
a draw-down basis for the Company to use, if desired, to fund the Company's
portion of Medizyme operating costs over a 30-month period. The debt carries a
12% rate and may ultimately be converted into the Company's common stock at a
50% premium to the average price of the common stock for the 60 trading days
prior to the time of the applicable draw down on the credit facility.

While the Company owns 80.1% of the outstanding stock of Medizyme, Elan and
its subsidiaries have retained significant minority investor rights that are
considered "participating rights", therefore the Company accounts for its
investment in Medizyme under the equity method of accounting. During the three
and six-month periods ended June 30, 2001, the Company recognized $1.1 million
and $2.4 million, respectively, in contract revenues for research and
development activities performed for Medizyme. This amount is included in the
Company's revenues as Collaborative agreements-joint venture for the related
periods.

The unaudited results of operations of Medizyme for the six-month period
ended June 30, 2001 are as follows (in thousands):

Revenue $ --

Research and development 1,376
License fee 1,250
------------
Net loss $ 2,626
============

Note 3: Archemix agreement

In May 2001, the Company announced the formation of a strategic alliance
with Archemix Corporation, a Massachusetts privately held biotechnology company,
that will allow both companies to capitalize on reciprocal intellectual property
in the field of proteomics and molecular diagnostics. Under the terms of the
agreement, Archemix received licenses and sublicenses to the Company's
intellectual property covering the allosteric ribozyme technology for use in
detecting proteins in connection with drug development and in a wide range of
molecular detection applications. In exchange for the licenses, the Company
received an equity position in Archemix, a seat on Archemix's Board of Directors
and a seat on the Scientific Advisory Board. In addition, the Company received a
license to Archemix's intellectual property covering allosteric ribozymes for
use in molecular diagnostic applications.

Note 4: Changes in Equity.

Since December 31, 2001, the following changes have occurred in equity:

. Pursuant to an amendment to a Chiron Corporation collaborative research,
development and commercialization agreement dated March 20, 2001, we issued
38,920 shares of our common stock to Chiron Corporation in exchange to
reacquire all rights to develop any product containing or utilizing an HIV
target.

. Pursuant to an agreement dated January 2000, between the Company and Elan
Corporation, plc, Elan purchased 500,500 shares of the Company's common stock
for $5.0 million in May 2001. The shares were purchased at a 30% premium to
the average closing price for a 45-day period prior to April 4, 2001.

. On April 30, 2001, employees of the Company purchased 40,928 shares of the
Company's common stock through the Company's Employee Stock Purchase Plan.

. As of June 30, 2001, a total of 36,700 shares have been purchased through the
Company's Stock Option Plan.

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

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 and retain
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 Form S-3 registration statement which
was filed with the U.S. Securities and Exchange Commission on July 27, 2001
(File No. 333-66092), a copy of which is available from us upon request.

Overview of our Business

We are developing a new class of drugs based on engineered molecules
called "ribozymes." Ribozymes are a form of ribonucleic acid which have the
ability to cleave RNA, including mRNA and viral RNA thereby selectively inhibit
protein production and viral replication. Because many human diseases result
from abnormal protein production, ribozymes are expected to be useful in
developing pharmaceutical candidates for a broad range of human diseases. We are
currently in clinical development and preclinical testing for four product
candidates and expect to begin preclinical testing on one additional product
candidate by the end of 2001.

We are developing ANGIOZYME, our lead product candidate for the
treatment of solid tumor cancers, in collaboration with Chiron Corporation.
During the first two quarters of 2001, we initiated Phase II clinical trials in
metastatic breast and colorectal cancer. Over the next few quarters, we
anticipate initiating additional Phase II clinical trials in metastatic renal,
melanoma and lung cancers. Also, we expect to initiate a Phase II clinical trial
around the end of 2001 for HEPTAZYME, our product candidate for the treatment of
chronic Hepatitis C. In addition, in 2000 we formed a joint venture with Elan to
develop HERZYME, a treatment for breast and other cancers. We recently filed an
Investigational New Drug application, an IND, for HERZYME in Canada and we
expect to begin a Phase I clinical trial during the third quarter of 2001.
HepBzyme, for the treatment of Hepatitis B, is in pre-clinical testing. We
expect to file an IND for HepBzyme in 2002.

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 generating any revenues in the
foreseeable future. Revenue recorded from our collaborative agreements consists
of:

. Up-front revenue. Up-front non-refundable fees are fully recognized
upon signing an agreement and are related to the value of the research
at that point in time. Up-front revenue may also include a
reimbursement to us of recent expenses related to product development
which we incurred.

. 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, pro-rated 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.

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. As of June 30, 2001, all revenues that have
been recognized are earned, and no further obligation exists for recognized
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 have not been profitable since inception and have an accumulated
deficit of $122.2 million as of June 30, 2001. Losses have resulted primarily
from our research and development programs. We expect to incur additional losses
as ANGIOZYME, HEPTAZYME, HERZYME and HepBzyme and other potential product
candidates advance through development and commercialization. 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 collaboration
agreement. In some instances, we may forfeit milestone payments if we fail to
accomplish a predetermined 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 transferred our target discovery and validation technology
to Atugen in exchange for a substantial equity interest. We will continue our
existing target discovery and validation agreements with our collaborators by
subcontracting to Atugen the services to be performed. We currently own 31.6% of
Atugen and will record our share of any future profits. In 1999, we completely
expensed our investment in Atugen.

Our revenues are denominated in U.S. dollars, therefore, we have not been
exposed to foreign currency translation risks and have not engaged in any
hedging instruments.

Results of Operations

Three and Six Months Ended June 30, 2001 and 2000

Revenues. Generally, revenue fluctuations result from changes in the
number of funded research projects as well as the timing and completion of
contract milestones. Our revenues are split into three categories: (i)
Collaborative agreements, (ii) Collaborative agreements-joint venture, and (iii)
Collaborative agreements-related parties. Collaborative agreement revenues
currently includes revenues recorded from Chiron. Chiron revenues are related to
our joint collaboration on ANGIOZYME. Collaborative agreements-joint venture
includes revenues from Medizyme, our joint venture with Elan. Collaborative
agreements-related parties, includes revenues recorded from Atugen.

Collectively, collaborative revenues decreased to $2.4 million and $4.5
million for the three and six months ended June 30, 2001, from $3.9 million and
$7.8 million for the corresponding periods in

2000. The decrease of $1.5 million for the quarter ending June 30, 2001 was
primarily due to a $1.0 million milestone payment from Eli Lilly and Company
received in June 2000 as a result of meeting a clinical development milestone
with HEPTAZYME. The Lilly collaboration was terminated in the third quarter of
2000 when we repurchased the rights to HEPTAZYME. In addition, Lilly revenues
for the quarter ending June 30, 2000 were approximately $861,000, which due to
the termination of the collaboration last year, are not included in the period
ending June 30, 2001. Revenues from Chiron increased by $211,000 compared to the
same period last year due to timing of research conducted. Revenues from Chiron
and Atugen are expected to fluctuate due to timing of research and, in Atugen's
case, scaling back of business development and administrative services provided.

The decrease of $3.3 million for the six-month period ending June 30,
2001 compared to the same period in 2000, was primarily due to $3.0 million
recorded from Lilly in 2000. The 2000 Lilly revenues include the $1.0 million
milestone payment referenced above, as well as a $500,000 milestone payment
received in the first quarter of 2000, and $1.5 million in research revenues. In
addition, revenues recorded from Atugen decreased to $548,000 from $613,000 for
the six-month period ending June 30, 2001 from the corresponding period ended in
2000. The decrease is due to a reduction of the management and administrative
services that we provide because Atugen no longer requires the extensive
services needed in 2000.

Expenses. Research and development expenses increased to $10.0 million
and $21.1 million for the three and six months ended June 30, 2001, compared to
$3.9 million and $8.8 million for the corresponding periods in 2000. The
increase of $6.1 million for the three-month period ending June 30, 2001
compared to the same period in 2000, was primarily due to $6.1 million of
expense we incurred for third party manufacturing costs for ANGIOZYME and
HEPTAZYME to support our current and planned clinical trials. In addition, the
increase of $12.3 million for the six-month period ending June 30, 2001 compared
to the same period in 2000, was primarily due to a total of $12.3 million
incurred in third party manufacturing expenses during the first half of 2001. We
expect research and development expenses, including pre-clinical studies,
clinical trials and manufacturing expenses, to continue to increase as we expand
our development programs for ANGIOZYME, HEPTAZYME and HERZYME.

General and administrative expenses remained stable at $1.1 million and
$2.1 million for the three and six-months ended June 30, 2001, respectively,
compared to the corresponding periods in 2000. However, on-going expenses have
increased by $483,000 and $886,000, for the three and six-month periods ended
June 30, 2001, respectively. Expenses during the three and six-month periods
ending June 30, 2000 included $461,000 and $881,000, respectively, for non-cash
compensation expense recorded for performance stock options that vested during
the periods. The increases in 2001 are the result of increased expenses
necessary to manage and support our expanding product 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, business development efforts and patent
protection.

Interest income. Interest income decreased to $596,000 for the
three-months ended June 30, 2001 compared to $914,000 for the corresponding
period in 2000. The decrease is due to lower average balances in our cash, cash
equivalents and securities available-for-sale as compared to the same periods in
2000. Cash and equivalent balances were higher in 2000 because of our public
offering completed in April 2000 that resulted in $52.7 million net proceeds.
Interest income increased to $1.5 million for the six-months ended June 30, 2001
compared to $1.2 million for the corresponding period in 2000. The increase is
because the public offering was completed in April 2000 and therefore cash
balances and the resulting interest income from the proceeds was not included in
the first quarter of 2000. Interest income

generally fluctuates as a result of the average amount of cash available for
investment and prevailing interest rates.

Interest expense. Interest expense increased to $189,000 and $295,000
for the three and six-month periods ending June 30, 2001, compared to income of
$47,000 and expense of $91,000, respectively, for the corresponding periods in
2000. The recorded income during the second quarter 2000 is due to our repayment
of $6.9 million to Schering AG on our loan. At Schering AG's option, the
remaining balance of $997,000 was converted into 42,435 shares of our common
stock in June 2000. However, subsequently we borrowed an additional $1.0 million
from Schering AG in each of October 2000, January 2001 and April 2001, as well
as $6.0 million from Elan related to our joint venture, therefore, interest
expense increased during the three and six-month periods ended June 30, 2001.
Interest expense is expected to continue to increase in the future as we arrange
for additional financing for operations.

Equity in loss of unconsolidated affiliate. Equity in loss of
unconsolidated affiliate was $2.1 million and $4.7 million for the three and six
month periods ending June 30, 2001, respectively, compared to $1.8 million and
$3.6 million for the corresponding periods in 2000. The expense is our 80.1%
share of Medizyme's first and second quarter expenses. While we own 80.1% of the
outstanding common stock of Medizyme, Elan has retained significant minority
investor rights that are considered "participating rights" as defined in EITF
96-16 Investors Accounting for an Investee When the Investor Owns a Majority of
the Voting Stock but the Minority Shareholder or Shareholders Have Certain
Approval or Veto Rights. Therefore, we do not consolidate the operations of
Medizyme, but instead account for our investment in Medizyme under the equity
method. The increases in the losses recognized are due to Medizyme's increases
in expenses related to the development of HERZYME. Medizyme's 2001 expenses
include $1.25 million amortized expense in each quarter for payment of a $15.0
million license fee paid to Elan in January 2000, as well as $1.9 million and
$1.2 million we invoiced in the first and second quarters, respectively, for
research we conducted on HERZYME.

Liquidity and Capital Resources

Since our inception, we have financed our operations through sales of
equity securities in public offerings, private placements of preferred and
common stock, funds received under our collaborative agreements and financing
under equipment and tenant improvement loans. From inception through June 30,
2001, we have received approximately:

. $29.0 million in net proceeds from private placements;
. $89.2 million in net proceeds from public offerings;
. $108.0 million from our collaborations; and
. $9.8 million from equipment financing.

We had cash, cash equivalents and securities available-for-sale of
$51.4 million at June 30, 2001 compared with $64.5 million at December 31, 2000.
The $13.1 million decrease in cash, cash equivalents and securities available-
for-sale is primarily the result of $18.1 million used for operations, net of
revenues of $4.5 million; $1.4 million used for investments in equipment,
leasehold improvements and patents; $700,000 in loans to executives; $3.3
million invested in our joint venture; $5.2 million received in proceeds from
equity transactions and $5.3 million received in proceeds from debt facilities.

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

Accounts receivable at June 30, 2001 were $5.4 million compared to $3.6
million at December 31, 2000. Accounts receivable at June 30, 2001 included
$463,000 due from Atugen for administrative services and patent expenses, $1.2
million due from Medizyme for research support for HERZYME and $3.2 million due
from Chiron for reimbursement of ANGIOZYME fourth quarter expenses, as well as
$500,000 due from miscellaneous other sources.

Total additions for property, plant and equipment for the six months
ended June 30, 2001 were $995,000, most of which were financed through our
existing equipment loan facility with Schering AG. We anticipate future
property, plant and equipment needs to be financed through additional credit
facilities yet to be determined.

In July 1994, we entered into an agreement with Chiron to collaborate
exclusively on up to five specific targets selected by Chiron. ANGIOZYME is
being developed in collaboration with Chiron and we share equally all
development costs and future profits with Chiron. Chiron has indicated its
desire not to participate in the Phase II clinical trials for renal cell cancer
and melanoma. Based upon discussions with Chiron, both parties have decided to
renegotiate the collaborative agreement. The ANGIOZYME breast and colorectal
clinical trials are ongoing and we expect that the development of ANGIOZYME will
continue. In March 2001, we issued 38,920 shares of our common stock to Chiron
in exchange to reacquire all rights to develop any product containing or
utilizing an HIV target. An expense of $275,000 was recorded during the period
ending March 31, 2001 in connection with the issuance of the stock. During the
six month period ended June 30, 2001, we recorded $1.4 million and $4.8 million
in revenues and reimbursement of expenses, respectively, from Chiron for costs
incurred for the clinical development of ANGIOZYME.

In April 1997 we entered into a purchase agreement with Schering AG and
Schering Berlin Venture Corporation ("SBVC"), an affiliate of Schering AG,
subsequently amended, as part of our target discovery and validation program.
SBVC made a $2.5 million equity investment in us in April 1997 in exchange for
212,766 shares of our common stock and made an additional equity investment of
$2.5 million for 465,117 shares of our common stock in April 1998. Separately,
Schering AG provided loans of $2.0 million in each of 1997, 1998, 1999, 2000 and
2001. We received our last draw down of $1.0 million from Schering AG in April
2001. The loans, which carry an interest rate of 8.0% per annum, are immediately
convertible into equity at the option of Schering AG. In April 2000, after the
completion of our public offering, we repaid $6.9 million of our outstanding
borrowings to Schering AG. In June 2000, Schering AG converted $997,000 of the
balance into 42,435 shares of our common stock at a conversion price of $23.50.
According to the terms of our agreement with Schering AG, 50.0% of any
borrowings on the line of credit must be collateralized by equipment purchases.
At June 30, 2001, we had $3.1 million in outstanding loans from Schering AG,
which was convertible into approximately 310,000 shares of our common stock.
Principal and interest payments are deferred until maturity of the loans in
April 2004. As a result of the Atugen formation in 1998, we now subcontract all
of our existing target discovery and validation programs to Atugen.

In January 2000, we completed a joint venture with Elan for the
development and commercialization of HERZYME, our potential product to treat
breast and other cancers. In accordance with the collaboration, we sold to Elan
our Series A Convertible Preferred Stock for $12.0 million and, in turn, used
those funds for initial funding of Medizyme. Also as part of the collaboration,
Elan purchased 641,026 shares of our common stock for a purchase price of $5.0
million. In addition, Elan purchased an additional 500,500 shares of common
stock for $5.0 million in May 2001, which was at a premium to the market price.
We have estimated that the development of HERZYME will require additional funds
of up to $15 million and, therefore, Elan has made available to us a credit
facility to fund our portion of Medizyme operating costs over a 30 month period.
At the end of June 2001, we utilized the credit facility and had borrowed $6.0
million. Elan may convert this debt into shares of our Series B Convertible
Preferred Stock in the future.

In November 2000, we signed an agreement with Acqua Wellington North
American Equities Fund Ltd. to set up an equity financing facility covering the
sale of up to $60 million of our common stock. Any sale of our common stock will
be made pursuant to a shelf registration we filed with the Securities and
Exchange Commission (SEC) covering the sale of up to 3 million shares of our
common stock. The shelf registration was declared effective by the SEC in
November 2000. We may sell the shares at our discretion and as market conditions
warrant at a small discount to market at the time of sale. We will control the
quantity and timing of each incremental sale of stock, if any. Proceeds from any
sale of stock will be used for general corporate purposes. As of this filing
date, we have not sold any shares of our common stock under the agreement with
Acqua Wellington.

On July 27, 2001, we filed a Form S-3 Registration Statement to
register an aggregate of $10,000,000 in proceeds from the sale of our common
stock, preferred stock and warrants for our common or preferred stock. As of
this filing date, we have not sold any shares of our common or preferred stock,
or warrants under this registration statement.

We anticipate that our existing financial resources and expected
revenues from our collaborations, should be sufficient to meet our anticipated
operating and capital requirements through 2002. We expect to incur substantial
additional costs, including:

. costs related to our research, drug discovery and development programs;

. preclinical studies and clinical trials of our products, if developed;

. prosecuting and enforcing patent claims; o general administrative and
legal items; and

. manufacturing and marketing of our products, if any.

In the future we may raise additional capital through public or private
financing, as well as from new collaborative relationships, new credit
facilities and other sources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to changes in interest rates primarily from our
investments in certain short-term investments. We invest our excess cash in
highly liquid short-term investments that are typically held for the duration of
the term of the respective instrument. We do not utilize derivative financial
instruments, derivative commodity instruments or other market risk sensitive
instruments to manage exposure to interest rate changes. Accordingly, we believe
that, while the securities we hold are subject to changes in the financial
standing of the issuer of such securities, we are not subject to any material
risks arising from changes in interest rates, foreign currency exchange rates,
commodity prices, equity prices or other market changes that affect market risk
sensitive instruments.

PART II - OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES

Pursuant to an agreement dated January 2000, between Ribozyme
Pharmaceuticals and Elan Corporation, plc, Elan purchased 500,500 shares of our
common stock for $5.0 million in May 2001. The shares were purchased at a 30%
premium to the average closing price for a 45-day period prior to April 4, 2001.

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

On May 17, 2001, we held our Annual Meeting of Shareholders. Matters voted
on and the results of such voting are as follows:

1. The election of seven 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
-------- --- -------

Ralph E. Christoffersen 13,636,206 753,800
Jeremy Curnock Cook 13,781,706 608,300
John Groom 13,782,706 607,300
David Ichikawa 13,782,706 607,300
David T. Morgenthaler 13,774,989 615,017
Howard Robin 13,635,206 754,800
Samual Saks 13,782,206 607,800
Anders P. Wiklund 13,781,706 608,300

2. To approve the Company's 2001 Stock Option Plan which provides for the
issuance of up to 1,000,000 shares of the Company's common stock to
officers, employees and directors of, and consultants to, the Company.

Votes for 5,684,413
Votes Against 1,179,071
Votes Abstained 44,579

3. To approve an increase in the number of shares of the Company's common
stock which may be issued under the Employee Stock Purchase Plan by 300,000
to 600,000.

Votes for 6,516,989
Votes Against 360,965
Votes Abstained 30,109

4. To ratify the selection of Ernst & Young, LLP as our independent auditors
for the year ending December 31, 2001.

Votes for 14,339,066
Votes Against 25,225
Votes Abstained 21,915

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)
10.1 Employment Agreement dated May 29, 2001 between Marvin
Tancer and the Company.
10.2 Amendment to Employment Agreement dated April 30, 2001
between Lawrence Blatt and the Company.
10.3 Amendment to Employment Agreement dated April 30, 2001
between Lawrence E. Bullock and the Company.
10.4 Amendment to Employment Agreement dated April 30, 2001
between Ralph E. Christoffersen and the Company.
10.5 Amendment to Employment Agreement dated April 30, 2001
between J. Wayne Cowens and the Company.
10.6 Amendment to Employment Agreement dated April 30, 2001
between Alene A. Holzman and the Company.
10.7 Amendment to Employment Agreement dated April 30, 2001
between Nassim Usman and the Company.
10.8 Amendment to Employment Agreement dated April 30, 2001
between Fran Wincott and the Company.

(b) Reports on Form 8-K

No reports on Form 8-K were filed for the quarter ending June 30, 2001.

________________________________________________________________________________
(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 14, 2001 /s/ Howard W. Robin
--------------- -----------------------------------
Howard W. Robin
President and Chief
Executive Officer

Dated: August 14, 2001 By: /s/ Marvin Tancer
--------------- -----------------------------------
Marvin Tancer
Chief Financial Officer and Vice
President of Operations
(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)
10.1 Employment Agreement dated May 29, 2001 between Marvin Tancer and the
Company.
10.2 Amendment to Employment Agreement dated April 30, 2001 between
Lawrence Blatt and the Company.
10.3 Amendment to Employment Agreement dated April 30, 2001 between
Lawrence E. Bullock and the Company.
10.4 Amendment to Employment Agreement dated April 30, 2001 between Ralph
E. Christoffersen and the Company.
10.5 Amendment to Employment Agreement dated April 30, 2001 between J.
Wayne Cowens and the Company.
10.6 Amendment to Employment Agreement dated April 30, 2001 between Alene
A. Holzman and the Company.
10.7 Amendment to Employment Agreement dated April 30, 2001 between Nassim
Usman and the Company.
10.8 Amendment to Employment Agreement dated April 30, 2001 between Fran
Wincott and the Company.

_____
(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.