<PAGE>

   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 30, 1998
 
                                                    REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            ------------------------
 
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933

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

                                   IgX CORP.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                         <C>                                         <C>
                 DELAWARE                                      2836                                     33-0505269
     (STATE OR OTHER JURISDICTION OF               (PRIMARY STANDARD INDUSTRIAL                      (I.R.S. EMPLOYER
      INCORPORATION OR ORGANIZATION)               CLASSIFICATION CODE NUMBER)                     IDENTIFICATION NO.)
</TABLE>
 
                            ------------------------
 
                             ONE SPRINGFIELD AVENUE
                            SUMMIT, NEW JERSEY 07960
                                 (908) 598-4663
              (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
       INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

                            ------------------------
 
                                ALBERT J. HENRY
                      CHAIRMAN AND CHIEF EXECUTIVE OFFICER
                             ONE SPRINGFIELD AVENUE
                            SUMMIT, NEW JERSEY 07960
                                 (908) 598-4663
           (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                   INCLUDING AREA CODE, OF AGENT FOR SERVICE)

                            ------------------------
 
                                   Copies to:
 
<TABLE>
<S>                                      <C>
         SETH I. TRUWIT, ESQ.                    DENNIS N. BERMAN, ESQ.
     EPSTEIN BECKER & GREEN, P.C.             SONNENSCHEIN NATH & ROSENTHAL
            250 PARK AVENUE                    1221 AVENUE OF THE AMERICAS
       NEW YORK, NEW YORK 10177                 NEW YORK, NEW YORK 10020
            (212) 351-4500                           (212) 768-6700
</TABLE>
 
                            ------------------------
 
     APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
 
     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, 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, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
 
     If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
 
     If this Form is a post effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
 
     If delivery of the Prospectus is expected to be made pursuant to Rule 434,
check the following box. / /

                            ------------------------
 
                        CALCULATION OF REGISTRATION FEE


<TABLE>
<CAPTION>
                                                     PROPOSED
                                                 MAXIMUM OFFERING     PROPOSED MAXIMUM
  TITLE OF SECURITIES BEING      AMOUNT TO BE        PRICE PER           AGGREGATE            AMOUNT OF
          REGISTERED              REGISTERED         SHARE(1)        OFFERING PRICE(1)    REGISTRATION FEE
<S>                              <C>             <C>                 <C>                  <C>
Common Stock, $.001 par
value.........................   2,645,000(2)         $10.00            $26,450,000            $7,803
Representative's Warrants.....     230,000(3)         $.0001                $23                  (3)
Common Stock underlying the
Representative's Warrants.....     230,000(4)         $12.00             $2,760,000             $815
Total.........................                                                                 $8,618
</TABLE>
 
(1) Estimated solely for purposes of calculating the registration fee pursuant
    to Rule 457.
 
(2) Includes 345,000 shares of Common Stock that the Underwriters have the
    option to purchase to cover over-allotments, if any.
 
(3) No fee due pursuant to Rule 457(g).
 
(4) Pursuant to Rule 416, the Registration Statement also covers such additional
    shares of Common Stock as may be issued as a result of the anti-dilution
    provisions of the Representative's Warrants.

                            ------------------------
 
     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 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

                SUBJECT TO COMPLETION, DATED SEPTEMBER 29, 1998
 
PROSPECTUS
--------------------------------------------------------------------------------
 
                                2,300,000 SHARES
 
                                   IgX CORP.

                                  COMMON STOCK
--------------------------------------------------------------------------------
 
IgX Corp. ("IgX" or the "Company") hereby offers 2,300,000 shares of its common
stock, par value $.001 per share (the "Common Stock"). Prior to this offering
(the "Offering"), there has been no public market for the Common Stock, and
there can be no assurance that a public market for the Common Stock will develop
after completion of this Offering, or if developed, that it will be sustained.
It is presently anticipated that the initial public offering price will be
between $8.00 and $10.00 per share. See "Underwriting" for information regarding
the factors to be considered in determining the initial public offering price.
Application will be made to include the Common Stock on the Nasdaq National
Market under the symbol "IGXC."
 
--------------------------------------------------------------------------------
 
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK AND IMMEDIATE AND
SUBSTANTIAL DILUTION. SEE "RISK FACTORS" BEGINNING ON PAGE 8 AND "DILUTION."

--------------------------------------------------------------------------------
 
   NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
  COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON
       THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION
                    TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
<TABLE>
<CAPTION>
                                          PRICE TO                UNDERWRITING              PROCEEDS TO
                                           PUBLIC                 DISCOUNT(1)                COMPANY(2)
<S>                               <C>                       <C>                       <C>
Per Share.......................             $                         $                         $
Total(3)........................             $                         $                         $
</TABLE>
 
(1) Does not include compensation payable to Josephthal & Co. Inc., as
    representative of the several Underwriters (the "Representative"), in the
    form of a non-accountable expense allowance and a financial advisor's fee.
    In addition, see "Underwriting" for information concerning indemnification
    and contribution arrangements with, and other compensation payable to, the
    Underwriters.
 
(2) Before deducting estimated expenses of $1,114,000, including the
    Representative's non-accountable expense allowance and financial advisor's
    fee.
 
(3) The Company has granted the Underwriters an option (the "Over-Allotment
    Option"), exercisable for a period of 45 days after the date of this
    Prospectus, to purchase up to an additional 345,000 shares of Common Stock
    upon the same terms and conditions set forth above, solely to cover
    over-allotments, if any. If the Over-Allotment Option is exercised in full,
    the total Price to Public, Underwriting Discount and Proceeds to Company
    will be $     , $       and $      , respectively. See "Underwriting."

--------------------------------------------------------------------------------
 
The shares of Common Stock are offered by the Underwriters, subject to prior
sale, when, as and if delivered to and accepted by the Underwriters and subject
to the approval of certain legal matters by their counsel and to certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify the
Offering without notice and to reject any order in whole or in part. It is
expected that delivery of the shares of Common Stock offered hereby will be made
against payment on or about             , 1998 at the offices of Josephthal &
Co. Inc., New York, New York.
 
                             JOSEPHTHAL & CO. INC.
 
The date of this Prospectus is              , 1998.

<PAGE>

     CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING PURCHASES OF THE COMMON STOCK TO STABILIZE ITS MARKET PRICE, PURCHASES
OF THE COMMON STOCK TO COVER SOME OR ALL OF A SHORT POSITION IN THE COMMON STOCK
MAINTAINED BY THE UNDERWRITERS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
 
     The Company will furnish its stockholders with annual reports containing
audited financial statements certified by an independent public accounting firm
and will make available quarterly reports containing unaudited financial
statements for the first three quarters of each fiscal year.
 
                                       2

<PAGE>

                               PROSPECTUS SUMMARY
 
     The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and Consolidated Financial
Statements and Notes thereto appearing elsewhere in this Prospectus. Except as
otherwise noted, all information in this Prospectus assumes no exercise of the
Over-Allotment Option or of the Representative's Warrants to purchase 230,000
shares of Common Stock from the Company and reflects the conversion of all
outstanding shares of preferred stock into an aggregate of 4,854,066 shares of
Common Stock effective upon the closing of this Offering. See "Underwriting"
and, for a description of the outstanding shares of preferred stock, see Notes
to Consolidated Financial Statements.
 
     This Prospectus includes forward-looking statements which involve known and
unknown risks and uncertainties or other factors that may cause actual results,
performance or achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Factors that might cause such differences include,
but are not limited to, those discussed under the heading "Risk Factors." An
investment in the securities offered hereby involves a high degree of risk. See
"Risk Factors."
 
                                  THE COMPANY
 
     IgX Corp. ("IgX" or the "Company") is a development stage company
developing drugs principally for the treatment of infectious diseases of the
human gastrointestinal ("GI") tract for which there is a significant medical
need for improved therapies. The Company's initial three drug candidates seek to
treat human GI tract infections caused by specific parasites or bacteria (types
of pathogens) with immunoglobulin (a type of antibody) produced by hens. This is
an example of passive immunity, using an antibody produced by one individual or
animal to treat another. Specifically, these drug candidates consist of
proprietary, low lipid (fat), polyclonal antibodies derived from egg yolks of
hens. The hens are injected with an amount of pathogen-specific antigens
(foreign substances) necessary to cause the hens to produce an increased level
of antibodies to that pathogen ("Avian Technology"). The Company's lead product
candidate, IGX-CPL3, is seeking to offer a treatment for cryptosporidial
diarrhea, focusing on HIV-advanced patients (as defined below) where the Company
believes no effective treatment currently exists. The two other Avian
Technology-based drug candidates currently under development, IGX-CDL3 and
IGX-HPL3, may offer valuable alternatives to traditional antibiotic treatments
at a time where there is an increasing development of drug resistance to
antibiotics. The Company believes that the Avian Technology may be applied to
the development of other drug candidates to treat additional GI tract
infections. The Avian Technology has been developed in collaboration with
Charles R. Sterling, Ph.D. and his colleagues at the University of Arizona.
Further, in August 1998, the Company organized a majority-owned subsidiary, IgX
Oxford Hepatitis Corp. ("IgX Oxford"), which is seeking to develop a drug
candidate using a proprietary compound, N-nonyl-deoxynojirimycin
("N-nonyl-DNJ"), licensed to it exclusively from Monsanto Company ("Monsanto"),
to treat another infectious disease, Hepatitis B, for which there also is a
significant medical need for improved therapy. N-nonyl-DNJ seeks to prevent the
secretion of the Hepatitis B virus from the infected cells. The mechanism of
action is that N-nonyl-DNJ prevents the sugars of one of the Hepatitis B virus
antigens from being correctly biosynthesized, so that the virus does not form,
as evidenced in animal studies described in the May 1998 edition of Nature
Medicine, a referee journal.
 
                                       3

<PAGE>
 
    The following chart illustrates the disease indications and various stages
of research and development of the Company's initial drug candidates:
 
<TABLE>
<CAPTION>
DRUG CANDIDATE                  DISEASE INDICATION                    STAGE OF RESEARCH AND DEVELOPMENT
--------------------  ---------------------------------------  ------------------------------------------------
Avian Technology-based
<S>                   <C>                                      <C>
  IGX-CPL3            Cryptosporidial diarrhea,                European Union ("EU")-reviewed protocol,
                      focusing on HIV-advanced patients        Phase III double-blind, placebo controlled
                                                               multicenter trial in South Africa commenced
                                                               January 1998. Expanded trial in Mexico in July
                                                               1998 pursuant to the same protocol. U.S.
                                                               Phase I/II trial of earlier high lipid
                                                               formulation for AIDS related cryptosporidial
                                                               diarrhea completed in November 1995.

  IGX-CDL3            Clostridium difficile-associated         Animal studies.
                      diarrhea and related complications
                      arising from antibiotic therapy

  IGX-HPL3            Peptic ulcers due to Helicobacter        Research.
                      pylori infections

N-nonyl-DNJ*          Hepatitis B                              Animal studies.
  -------------------------------------------------------------------------------------------------------------
* Being developed by IgX's majority-owned subsidiary, IgX Oxford.
</TABLE>
 
IGX-CPL3
 
     The Company's lead Avian Technology-based drug candidate, IGX-CPL3, is
designed to treat diarrhea caused by Cryptosporidium parvum ("C. parvum"), a
parasite often found in municipal drinking water. IGX-CPL3 is seeking to treat
Cryptosporidial diarrhea in patients infected with the human immunodeficiency
virus ("HIV"), the retrovirus responsible for Acquired Immune Deficiency
Syndrome ("AIDS"), who have CD-4 blood cell counts below 180 ("HIV-advanced
patients"). Cryptosporidial diarrhea can be chronic or life-threatening in
HIV-advanced patients.
 
     In November 1995, the Company completed a U.S. Phase I/II clinical trial at
New York Hospital-Cornell Medical Center in New York City to determine the
safety and preliminary efficacy of IGX-CP, an earlier high lipid, liquid
formulation of the IGX-CPL3 drug candidate, for AIDS-related cryptosporidial
diarrhea. IGX-CP for the trial was produced at the Company's Tucson, Arizona
pilot production facility. The trial was an open-label, ascending dose, pilot
study of two dose levels of IGX-CP, in which 16 of the 24 patients enrolled were
evaluable, having completed at least 2 weeks of treatment under either dose
level. The data, measured at the end of 3 and 6 weeks of treatment, suggested
that both dose levels were safe for administration to AIDS patients. In
addition, at least 60% of the total evaluable patients at the end of 3 and 6
weeks of treatment showed a decrease in daily frequency of bowel movements and
daily frequency of liquid stools, two of the trial's three primary efficacy
points. While daily frequency of bowel movements and daily frequency of liquid
stools decreased in only 40% and 20%, respectively, of the patients treated at
the high dose level at the end of 6 weeks, the Company attributes this decline
to the high lipid content of IGX-CP, which induced some diarrhea. The third
primary end point of the trial was stool oocyst quantitation, which measures the
density of the parasites in the stool and 25% of the evaluable patients met this
end point. The Company believes that stool oocyst quantitation is not a
significant measure of efficacy because it does not directly measure parasitic
volume. By contrast, the Company believes that bowel movement frequency is an
absolute measure of C. parvum, and its reduction in the trial evidenced a
corresponding reduction in C. parvum.
 
     Following the conclusion of the Phase I/II trial, the Company reformulated
IGX-CP to reduce the lipid content by approximately 50%, and to produce it as a
powder. During 1996 and 1997, the Company tested the reformulated drug
candidate, IGX-CPL3, in mice, and those animal studies demonstrated a reduction
in C. parvum counts. Based upon these animal studies, the Company believes that
IGX-CPL3 at the high dose level utilized in the Phase I/II trial should be more
effective than the prior formulation of the drug candidate, and the current
Phase III trial uses such high dose level. There can be no assurance that
IGX-CPL3 will be more effective than or as effective as the prior formulation of
such drug candidate.
 
     Since the late 1995 introduction of combination drug therapy, including
protease inhibitors, to treat HIV-positive patients, the number of HIV-positive
patients in the U.S. and portions of Europe who have chronic or life-threatening
cryptosporidial diarrhea has been significantly reduced. As a result, during
1996 and 1997 the
 
                                       4

<PAGE>

Company refocused its marketing strategy of IGX-CPL3, seeking to obtain
regulatory approval to market IGX-CPL3 as a treatment for cryptosporidial
diarrhea in HIV-advanced patients in countries where combination drug therapy is
not widely available. Similarly, the Company decided that its clinical trials
should be conducted in those countries that would facilitate patient enrollment.
U.S. regulations prohibit the exportation of biologics for use in foreign
clinical trials. Accordingly, during 1996, the Company, through its wholly-owned
subsidiary, IgX Limited, built a pilot production facility in Ireland to support
the production of IGX-CPL3 and other Avian Technology-based drug candidates for
use in clinical trials outside the U.S.
 
     In January, 1998, the Company commenced a double-blind, placebo-controlled,
randomized multicenter Phase III clinical trial in South Africa pursuant to an
EU-reviewed protocol. In July 1998, the Company expanded the trial to Mexico
using the same protocol. The Company expects to enroll 135 HIV-advanced patients
with cryptosporidial diarrhea to be treated for a minimum of four weeks with
IGX-CPL3, a low lipid formulation, at the high dose level used in the
Phase I/II trial. It is anticipated that at least 90 patients will complete the
trial. The trial's primary efficacy end-point is the patient's percentage
reduction in weekly stool frequency. At September 15, 1998, the Company had
screened over 450 patients based upon the trial's inclusion and exclusion
criteria and enrolled a total of 40 patients at 14 sites in South Africa and
Mexico, 26 of whom (all treated in South Africa) have completed the trial. The
Company anticipates that the trial will be completed in the first half of 1999.
If the trial is successful, IgX intends to apply for marketing approval of
IGX-CPL3 in the EU and certain South American countries to treat cryptosporidial
diarrhea in HIV-advanced patients and may apply for similar approval in the U.S.
 
     The approximate reported number of HIV-advanced patients who have
cryptosporidial-based diarrhea is 14,500 in the EU and 700,000 in South America.
If the current Phase III clinical trial for IGX-CPL3 is successful and
establishes its safety and efficacy in treating cryptosporidial diarrhea in
HIV-advanced patients, IgX believes that it will have demonstrated the principle
that Avian Technology-based drug candidates may treat infectious diseases of the
human GI tract. There can be no assurance that the Phase III clinical trial for
IGX-CPL3 will demonstrate any efficacy or safety or that it will be completed
successfully and in a timely manner. Furthermore, there can be no assurance as
to the timing of EU and other foreign or domestic regulatory filings or if or
when any of those regulatory authorities will approve IGX-CPL3 for sale.
Additionally, there can be no assurance that IGX-CPL3, if and when regulatory
approvals are received, will achieve market acceptance.
 
     The Company also plans to conduct clinical trials to determine the safety
and efficacy of using IGX-CPL3 to treat cryptosporidial diarrhea in patients
with a healthy immune system ("immunocompetent"). While cryptosporidial diarrhea
in immunocompetent patients is generally neither chronic nor life-threatening,
to the Company's knowledge, no effective treatment currently exists. The Company
expects to file an IND application with the U.S. Food and Drug Administration
(the "FDA") by the end of the first quarter of 1999 to commence a U.S. Phase I
clinical trial of IGX-CPL3 to treat cryptosporidial diarrhea in immunocompetent
children. The Company also expects to file an IND application to test IGX-CPL3
in immunocompetent adults later in 1999. The approximate reported number of
immunocompetent patients infected with cryptosporidial diarrhea annually is
600,000 in the U.S., 1.1 million in Europe, and 4.6 million in South America.
There can be no assurance as to the timing of the filing of these IND
applications, the timing or outcome of the FDA's review of any such
applications, or, if and when such review is completed, the timing or outcome of
the related clinical trials.
 
IGX-CDL3
 
     The Company's second Avian Technology-based drug candidate, IGX-CDL3, is a
proposed treatment for Clostridium difficile ("C. difficile")-associated
diarrhea and related complications arising from antibiotic therapy prescribed to
patients in hospitals and long-term health care institutions.
C. difficile-associated diarrhea is currently treated with antibiotics but their
efficacy has been reduced due to increasing development of drug resistance to
these antibiotics. Currently, the Company is testing IGX-CDL3 in hamsters. IgX
anticipates completing those studies in the fourth quarter of 1998. If such
studies are successful, as to which there can be no assurance, the Company
intends to submit an IND application to the FDA to commence a U.S. Phase I/II
clinical trial of IGX-CDL3 as a treatment for C. difficile-associated diarrhea
and related complications. Annually, approximately 2.3 million patients in the
U.S., approximately 4 million patients in the EU and approximately 194,000
patients in South America have C. difficile-associated diarrhea.
 
                                       5

<PAGE>

IGX-HPL3
 
     The Company's third Avian Technology-based product candidate, IGX-HPL3,
seeks to treat peptic ulcers caused by the bacteria Helicobacter pylori
("H. pylori"). H. pylori has been implicated as a cause of peptic ulcer disease
and chronic gastritis. There also appears to be a strong statistical association
between H. pylori and gastric carcinoma and types of lymphoma. Ulcers caused by
H. pylori are currently treated with certain antibiotics but their efficacy has
been reduced slightly due to an increasing development of drug resistance to
these antibiotics. The Company anticipates commencing animal studies for
IGX-HPL3 in mice by the end of 1998. Each year approximately 4 million new
incidences of ulcers or other complications arising from H. pylori are reported
in the U.S.
 
N-NONYL-DNJ
 
     In September 1998, IgX Oxford acquired an exclusive worldwide license from
Monsanto to commercialize N-nonyl-DNJ, a glucosidase inhibitor, as a treatment
for Hepatitis B. N-nonyl-DNJ seeks to prevent the secretion of the Hepatitis B
virus from the infected cells. The mechanism of action is that N-nonyl-DNJ
prevents the sugars of one of the Hepatitis B virus antigens from being
correctly biosynthesized, so that the virus does not form, as evidenced in
animal studies described in the May 1998 edition of Nature Medicine, a referee
journal. While alpha interferon and antivirals are currently available to treat
Hepatitis B, these therapies have a limited clinical success rate, high
recidivism rate and significant undesirable side effects. To date, Monsanto has
sponsored research and animal studies on N-nonyl-DNJ at Oxford University
("Oxford") in Oxford, England and Thomas Jefferson University ("TJU") in
Philadelphia, Pennsylvania. The results of these woodchuck animal studies,
published in the May 1998 edition of Nature Medicine, showed a reduction of the
enveloped Hepatitis B virus correlated with the dosing level of N-nonyl-DNJ in
the serum of the treated animals. IgX has agreed to fund IgX Oxford with up to
$2 million. Such funds are anticipated to be used to conduct further animal
studies relating to N-nonyl-DNJ at Oxford and TJU, which are necessary to
determine whether an IND application to conduct a Phase I human clinical trial
is appropriate. These animal studies are anticipated to be completed by the end
of the first half of 1999. If they are successful, as to which there can be no
assurance, IgX Oxford anticipates filing an IND application with the FDA.
Monsanto has retained certain exclusive rights of first refusal to license for
further development and/or commercialize N-nonyl-DNJ. Approximately 350 million
people worldwide are chronically infected with the Hepatitis B virus, which is
usually fatal in approximately 20-40% of the chronically infected population if
untreated.
 
     The Company's strategy is to develop products both independently and
through strategic partnerships with large pharmaceutical companies, under which
the Company will seek financial, preclinical and clinical trial, manufacturing
and marketing assistance while retaining parallel manufacturing and/or marketing
rights for the products. In addition to the IgX Oxford joint venture, in August
1998 IgX entered into strategic partnerships with Laboratorios Sintofarma S.A.
("Sintofarma"), a Brazilian company currently responsible for the manufacturing
and marketing of 26 pharmaceutical products in South America, and Gador S.A.
("Gador"), the second largest manufacturer and distributor of pharmaceutical
products in Argentina based on both unit volume and sales. These agreements
relate to the development and commercialization of the Company's Avian
Technology-based drug candidates in South America, Latin America and Mexico.
Under its agreement with the Company, Sintofarma agreed to pay for clinical
trials in Brazil of the Company's Avian Technology-based drug candidates
currently under development (IGX-CPL3, IGX-CDL3 and IGX-HPL3), and to form a
Brazilian joint venture entity with the Company to manufacture Avian
Technology-based drug candidates for sale in Brazil and elsewhere. The joint
venture entity to be formed ("Sintofarma IgX Biotech, Ltda"), which is expected
to be owned 40% by IgX and 60% by Sintofarma, will manufacture all Avian
Technology-based drugs for commercial sale, if and when any such drug candidates
are approved for sale in Brazil. Under the strategic partnership, IgX granted
Sintofarma an exclusive license to distribute and market IGX-CPL3 and IGX-CDL3
in Brazil, if and when approved for sale, and Sintofarma will pay IgX a royalty
to be agreed upon ranging from 10% to 16.6% of net sales. Sintofarma and Gador
also have rights of first negotiation for similar licenses on other Avian
Technology-based drug candidates. Under its agreement with the Company, Gador
agreed to manage the process of seeking regulatory approval to commercialize
IGX-CPL3 and IGX-CDL3 in all countries in South America, except Brazil, as well
as Latin America and Mexico. IgX also granted Gador the exclusive distribution
and marketing rights to IGX-CPL3 and IGX-CDL3 in those countries if and when
approved for sale, for which Gador will pay IgX a royalty of 10% of net sales.
In addition, Gador will purchase the ingredients for IGX-CPL3 and IGX-CDL3 from
IgX or its designee (including Sintofarma IgX Biotech, Ltda) at a cost of up to
20% of the net sales of drugs sold by Gador.
 
     The Company was incorporated in Delaware in 1992. In addition to its
majority equity interest in IgX Oxford, IgX has one wholly-owned subsidiary, IgX
Limited, which is organized under the laws of the Republic of Ireland and
operates a pilot production facility. The Company's principal executive offices
are located at One Springfield Avenue, Summit, New Jersey 07960 and its
telephone number is (908) 598-4663.
 
                                       6
<PAGE>

                                  THE OFFERING
 
<TABLE>
<S>                                              <C>
Common Stock offered by the Company............  2,300,000 shares

Common Stock to be outstanding after the
  Offering.....................................  8,966,643 shares(1)

Use of proceeds................................  Clinical development, research programs and general corporate
                                                 purposes, including working capital.

Proposed Nasdaq National Market symbol.........  IGXC
</TABLE>
 
------------------
(1) Based on the number of shares of Common Stock outstanding on September 28,
    1998. Excludes 825,857 shares of Common Stock issuable upon exercise of
    options outstanding on such date, which had a weighted average exercise
    price of $1.51 per share. Also excludes 600,000 shares available for future
    grant under the Company's 1998 Stock Option Plan. See "Management--Stock
    Option Plans."
 
                      SUMMARY CONSOLIDATED FINANCIAL DATA
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                        FEBRUARY 11,
                                                                                           1992
                                                                                        (INCEPTION)
                                                     DECEMBER 31,                           TO              JUNE 30,
                                 ----------------------------------------------------   DECEMBER 31,   -------------------
                                   1993       1994       1995       1996       1997        1997          1997       1998
                                 --------   --------   --------   --------   --------   ------------   --------   --------
<S>                              <C>        <C>        <C>        <C>        <C>        <C>            <C>        <C>
CONSOLIDATED STATEMENT OF
  OPERATIONS DATA:
Operating expenses:
  Research and development.....  $    176   $    330   $    475   $  1,136   $  3,426     $  5,800     $  1,874   $  1,577
  General and administrative...        80        281        718      1,119      1,733        4,095          521      1,911
Net interest expense...........        23         64        144        207        373          811          164        147
Net loss.......................      (279)      (675)    (1,337)    (2,467)    (5,555)     (10,734)      (2,576)    (3,640)
Basic and diluted loss per
  share........................  $  (0.80)  $  (1.52)  $  (1.88)  $  (3.48)  $  (7.82)                 $  (3.63)  $  (5.13)
                                 --------   --------   --------   --------   --------                  --------   --------
                                 --------   --------   --------   --------   --------                  --------   --------
Weighted average shares
  outstanding used for basic
  and diluted loss per
  share(1).....................   350,030    444,715    710,030    710,030    710,030                   710,030    710,030
                                 --------   --------   --------   --------   --------                  --------   --------
                                 --------   --------   --------   --------   --------                  --------   --------
 
<CAPTION>
                                 FEBRUARY 11,
                                    1992
                                 (INCEPTION)
                                     TO
                                  JUNE 30,
                                    1998
                                 ------------
<S>                              <C>
CONSOLIDATED STATEMENT OF
  OPERATIONS DATA:
Operating expenses:
  Research and development.....    $  7,377
  General and administrative...       6,006
Net interest expense...........         958
Net loss.......................     (14,374)
Basic and diluted loss per
  share........................
Weighted average shares
  outstanding used for basic
  and diluted loss per
  share(1).....................
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                                JUNE 30, 1998
                                                                                ---------------------------------------------
                                                                                                               PRO FORMA
                                                                                ACTUAL     PRO FORMA(2)(3)    AS ADJUSTED(4)
                                                                                -------    ---------------    ---------------
<S>                                                                             <C>        <C>                <C>
CONSOLIDATED BALANCE SHEET DATA:
  Cash.......................................................................     2,543          2,543             20,680
  Working capital............................................................     1,284          1,624             19,761
  Total assets...............................................................     3,654          3,654             21,791
  Total liabilities..........................................................     5,498          1,013              1,013
  Deficit accumulated during development stage...............................   (14,374)       (16,039)           (16,039)
  Total (capital deficiency) stockholders' equity............................    (1,844)         2,641             20,779
</TABLE>
 
------------------
(1) See Note 2 of the Notes to the Consolidated Financial Statements for an
    explanation of the method used to determine the number of shares to compute
    basic and diluted loss per share.
 
(2) Gives effect to the September 1998 conversion of all notes payable to
    stockholders of the Company into 719,281 shares of Common Stock at $7.00 per
    share.
 
(3) Deficit accumulated during development stage reflects the recognition into
    expense of $550, representing the unamortized portion of the discount
    associated with the $1,000 promissory note issued to NEGF II, L.P., and a
    $1,115 loss on conversion of notes payable to stockholders into 719,281
    shares of Common Stock at $7.00 per share assuming conversion at June 30,
    1998.
 
(4) Gives effect to the sale of the shares of Common Stock offered hereby, at an
    assumed initial offering price of $9.00 per share, and the application of
    the estimated net proceeds therefrom, after deducting underwriting discount
    and estimated offering expenses. See "Use of Proceeds" and "Capitalization."
 
                                       7

<PAGE>

                                  RISK FACTORS
 
     This Prospectus contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. All such forward-looking
statements involve known and unknown risks and uncertainties or other factors
which may cause actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. In addition to
statements which explicitly describe such risks and uncertainties, investors are
urged to consider statements labeled with the terms "believes," "belief,"
"expects," "plans," "anticipates," or "intends" to be uncertain and
forward-looking. An investment in the shares of Common Stock offered hereby
involves a high degree of risk. Prospective investors should carefully consider
the following risk factors, in addition to the other information set forth in
this Prospectus, in connection with an investment in the shares of Common Stock
offered hereby. All cautionary statements made in this Prospectus should be read
as being applicable to all related forward-looking statements wherever they
appear in this Prospectus.
 
     Early Stage of Development; Accumulated Deficit; Substantial Doubt about
the Company's Ability to Continue as a Going Concern; and Expectation of Future
Losses.  IgX has generated no revenues to date and has experienced significant
losses in each year since its inception. At June 30, 1998, the Company had an
accumulated deficit of approximately $14.4 million since its inception in
February 1992. These losses have resulted primarily from expenses associated
with the Company's research and development activities, including preclinical
and clinical trials, and general and administrative expenses. The Company's
financial statements have been prepared assuming that the Company will continue
as a going concern. The auditors' report states that the Company is a
development stage enterprise and has suffered recurring losses and net cash
outflows from operations since inception that raise substantial doubt about the
Company's ability to continue as a going concern. The Company is dependent upon
capital infusions from existing and/or new investors to fund operations. See
"Consolidated Financial Statements." The Company expects cumulative losses to
increase significantly as the Company continues to expand its reseach and
development, clinical trials, and manufacturing and marketing activities. The
Company's ability to achieve profitable operations is dependent on successfully
commercializing its Avian Technology-based drug candidates. There can be no
assurance that the Company's Avian Technology-based drug candidate development
efforts or its other drug candidate development efforts will be successfully
completed, that clinical trials will be successful, that regulatory approvals
will be obtained in a timely manner, if at all, that its drug candidates can be
manufactured at an acceptable cost and with acceptable quality, that any
approved drugs can be successfully marketed or that the Company will achieve
profitability. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Business."
 
     Uncertainty of Technology.  The Company's proposed business strategy is
based principally upon the application of the Company's Avian Technology
platform, which encompasses various elements from the fields of biotechnology
and pharmaceutical chemistry, and the application of these technologies to the
discovery and development of pharmaceuticals for the treatment of infections of
the human GI tract. This strategy is subject to the risks inherent in the
development of new drugs using new and emerging technologies. There can be no
assurance that unforeseen problems will not develop with these technologies or
applications, that the Company will be able to address successfully
technological challenges it encounters in its research and development programs
or that commercially feasible drugs will ultimately be developed by the Company.
See "Risk Factors--Competition" and "Business-Competition."
 
     Unproven Safety and Effectiveness of Drug Candidates; Uncertainties Related
to Clinical Trials.  The Company's drug candidates will require additional
research and development, extensive clinical testing and regulatory approval
prior to any commercial sales. The Company cannot predict if or when any of its
drug candidates under development will be commercialized. The Company currently
has only one drug candidate, IGX-CPL3, in human clinical trials. The Company
will be required to successfully complete clinical trials to demonstrate the
safety and efficacy of IGX-CPL3 as a treatment for cryptosporidial diarrhea in
HIV-advanced patients, currently in a Phase III clinical trial in South Africa
and Mexico, prior to seeking EU or other foreign regulatory approval or FDA
approval. In addition, there can be no assurance that the FDA will accept data
obtained from any foreign clinical trials. Further, there can be no assurance
that any clinical trial will be successful, that it will be completed in a
timely manner or that additional clinical trials will not be required. Although
there were no clinically significant adverse effects from IGX-CP in the
Phase I/II clinical trial which
 
                                       8

<PAGE>

was completed in November 1995, there can be no assurance that serious side
effects from IGX-CPL3 will not be reported as the Phase III clinical trial
proceeds. The results from early clinical trials may not be predictive of
results that will be obtained in large scale clinical trials, as a number of
companies have suffered significant setbacks in advanced clinical trials, even
after promising results in earlier trials.
 
     There can be no assurance that the Phase III clinical trial for IGX-CPL3
will demonstrate any safety and efficacy or will be completed successfully in a
timely manner, if at all. There also can be no assurance that clinical trials
for the Company's other drug candidates will be commenced, or if commenced, that
they will demonstrate safety and efficacy or will be completed successfully in a
timely manner, if at all. The rate of completion of the Company's clinical
trials is dependent upon, among other things, the rate of patient enrollment.
Patient enrollment is a result of many factors, including the size of the
patient population, the nature of the clinical protocol under which the
particular drug candidate will be studied, the proximity of the patient to a
clinical site, the eligibility criteria for the study, the availability of
alternative treatments and cultural views on treatment. Delays in planned
patient enrollment may result in increased costs, regulatory filing delays,
abandonment of drug development efforts or any of the foregoing. Furthermore,
the Company, the EU, other foreign regulatory authorities or the FDA may suspend
or terminate clinical trials at any time. Failure to complete successfully any
of its clinical trials on a timely basis, or at all, would have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Business--Government Regulation."
 
     Extensive Government Regulation; No Assurance of Regulatory Approval.  The
Company is subject to extensive governmental regulatory requirements and a
lengthy approval process for its drug candidates. The development and commercial
use of the Company's drug candidates will be regulated by numerous federal,
state and local governmental authorities in the U.S., including the FDA, and
comparable foreign regulatory agencies abroad. Further, the nature of the
Company's research and development and manufacturing processes require testing
on certain laboratory animals. Accordingly, the Company is subject to extensive
federal, state and local laws, rules, regulations and policies governing the use
of and care for laboratory animals. Although the Company believes it is in
compliance with all such laws and maintains policies and procedures to ensure
that it remains in compliance, there can be no assurance that accidents will not
happen that would expose the Company to legal risk and/or financial loss.
Furthermore, there can be no assurance that current laws will not be changed or
that new laws will not be passed that force the Company to change its policies
and procedures, an event which could impose significant costs on the Company.
 
     The U.S. and foreign regulatory approval processes for the Company's drug
candidates, including required preclinical studies and clinical trials, are
lengthy and expensive. The Company has only limited experience in conducting
clinical trials, filing or pursuing applications necessary to gain regulatory
approvals. Preclinical testing of the Company's drug candidates in the U.S. is
subject to current Good Laboratory Practices ("GLP") as prescribed by the FDA
and the manufacture of any drug candidates developed by the Company will be
subject to current Good Manufacturing Practices ("GMP") as prescribed by the FDA
as well as comparable foreign practices. There can be no assurance that the
necessary foreign regulatory and FDA clearances and subsequent approvals will be
obtained in a timely manner, if at all. There can be no assurance as to the
length of the clinical trial period or the number of patients that will be
required to be tested in the clinical trials in order to establish the safety
and efficacy of IGX-CPL3 or any future drug candidates of the Company. The
Company may encounter unanticipated delays or significant costs in its efforts
to secure necessary foreign or FDA approvals. There can be no assurance, even
after the performance of clinical trials and the passage of time and the
expenditure of such resources, that regulatory approval will be obtained for any
of the drug candidates that may be developed by the Company. The Company's
analysis of data obtained from preclinical and clinical activities is subject to
confirmation and interpretation by regulatory authorities which could delay,
limit or prevent EU, other foreign agency or FDA regulatory approval.
 
     The Company and its strategic partners are subject to numerous and varying
foreign regulatory requirements governing the design and conduct of preclinical
and clinical trials and the manufacturing and marketing of its drug candidates.
The Phase III clinical trial of IGX-CPL3 is being conducted in South Africa
under an EU-reviewed protocol. The Company expanded the Phase III clinical trial
in Mexico in July 1998 under the same protocol. If the trial is successful, the
Company intends to file for marketing approval of IGX-CPL3 to treat
cryptosporidial diarrhea in HIV-advanced patients in the EU and certain South
American countries. Approval of a
 
                                       9

<PAGE>

drug candidate by applicable regulatory authorities of foreign countries must be
obtained prior to the commencement of marketing the drugs in those countries.
The time required to obtain such approval may be longer or shorter than that
required for FDA approval discussed below. The foreign regulatory approval
process may include all of the risks associated with obtaining FDA approval set
forth below, and there can be no assurance that foreign regulatory approvals
will be obtained on a timely basis, if at all. There can be no assurance that
the EU regulatory authorities will in fact accept the data from that portion of
the clinical trial conducted in Mexico.
 
     The Company also may apply for FDA approval of IGX-CPL3 to treat
cryptosporidial diarrhea in HIV-advanced patients. The current Phase III
clinical trial in South Africa and Mexico is based upon a protocol that has not
been approved by the FDA. If such trial is successful, there can be no assurance
that the FDA will in fact accept the data obtained from such trial in connection
with seeking FDA approval of IGX-CPL3. Even if regulatory approvals are
obtained, they may include significant limitations on the indicated uses for
which a drug may be marketed. A marketed drug also is subject to continual FDA
and other regulatory agency review and regulation. Later discovery of previously
unknown problems or failure to comply with the applicable regulatory
requirements may result in restrictions on the marketing of a drug or withdrawal
of the drug from the market, as well as possible civil or criminal sanctions. In
addition, if marketing approval is obtained, the FDA may require post-marketing
testing and surveillance programs to monitor the drug's efficacy and side
effects. Results of these post-marketing programs may prevent or limit the
further marketing of the monitored drug. See "Business--Government Regulation."
 
     Uncertainty Regarding Patents and Proprietary Rights.  The Company and the
University of Arizona (the "University") have entered into research agreements
(the "Research Agreements") under which the Company has funded research
undertaken by the University. As a result of certain research, the Company and
the University have entered into license agreements (the "Licenses") under which
the Company is granted certain exclusive, worldwide, royalty-bearing licenses to
commercialize the inventions set forth in the University's one issued patent and
several patent applications relating to aspects of Avian Technology utilized by
the Company in exchange for royalty payments by the Company. However, the
Licenses do not provide the Company with rights to license from the University
inventions relating to Avian Technology where the related research has not been
funded by the Company. See "Business--Research and Development."
 
     The Licenses presently pertain to one issued U.S. patent, two continuation
applications pending in the U.S., three other patent applications pending in the
U.S. (as well as three corresponding foreign applications) and one provisional
patent application pending in the U.S. The issued U.S. patent (No. 5,753,228),
which issued on May 19, 1998 and will expire on May 19, 2015, relates to a
method for treating parasitosis by the enteral administration of hyperimmune hen
egg yolk antibodies.
 
     The Company believes that its ability to compete effectively will depend in
large part on obtaining and maintaining access to patent and intellectual
property protection on technologies utilized in its business (particularly with
respect to aspects of Avian Technology licensed from the University). Pursuant
to its rights and obligations under the Research Agreements and the License
Agreements, the Company and the University pursue patent protection in the U.S.
and certain foreign jurisdictions for certain technologies believed to be
proprietary to the University and advantageous for the University and the
Company. The Company's ability to compete effectively will depend in large part
on the ability of the University to obtain and maintain a proprietary interest
in such technologies which are licensed to the Company. The University may
terminate any License on 90 days' notice upon any breach or default by the
Company under the License or upon the bankruptcy or insolvency or receivership
of the business of the Company. Upon termination of any License, all rights
granted thereunder revert back to the University and, in such event, the
University reserves the right to terminate all of the other Licenses. Any such
termination would have a material adverse effect on the Company's business,
financial condition and results of operations, or could result in cessation of
the Company's business.
 
      Under the license agreement between IgX Oxford and Monsanto, either party
may terminate the license agreement upon an event of default, including
bankruptcy or insolvency of the other party or a material breach of the license
agreement that is not cured within 30 days of notice of the breach. Monsanto
also may terminate the license agreement if IgX Oxford shall have failed to give
notice on or before September 1, 2000 of its intent to commence a Phase I
clinical for N-nonyl-DNJ as a treatment for the Hepatitis B virus, which notice
triggers
 
                                       10

<PAGE>

Monsanto's initial right of first refusal described herein or if IgX Oxford
shall have failed to provide the notice required to trigger Monsanto's second
right of first refusal described herein. Further, Monsanto can terminate the
license agreement if IgX Oxford fails to commercialize N-nonyl-DNJ as a
treatment for the Hepatitis B virus in at least one of the "Major Markets"
(United States, the EU, Japan or the People's Republic of China) prior to
September 1, 2004; alternatively, Monsanto has the option in such event to
obtain an exclusive license from IgX Oxford for N-nonyl-DNJ as a treatment for
the Hepatitis B virus in any such Major Market that it has so failed to
commercialize such product. Finally, Monsanto may terminate the license
agreement if IgX defaults under its obligations to fund IgX Oxford with up to $2
million as described in this Prospectus and fails to cure that default within 30
days notice. Any termination of the license agreement between IgX Oxford and
Monsanto could have a material adverse effect on the Company's business,
financial condition and results of operations.
 
     The patent and intellectual property positions of pharmaceutical and
biotechnology companies, including the Company, are uncertain and involve
complex legal and factual questions for which important legal principles are
largely unresolved. A number of pharmaceutical companies, biotechnology
companies, universities and research institutions, many of whom have
substantially greater resources than the Company and have made substantial
investments and may be further along in development in technologies competitive
with those utilized by the Company, have filed patent applications or received
patents relating to treatments and technologies which are similar to or
competitive with those of interest to the Company.
 
     Since a United States patent application is maintained under conditions of
confidentiality while the application is pending in the United States Patent and
Trademark Office (the "PTO"), the Company is unable to determine the inventions
being claimed in pending patent applications filed by its competitors in the
PTO. In addition, patents issued and applications pending which relate to the
Company's areas of interest are numerous, and there can be no assurance that the
Company is aware of all potentially competitive or conflicting patents (either
pending or issued) or other intellectual property rights. The existence of such
other patents, patent applications and rights could result in a significant
reduction of the coverage of rights held or to be held by the Company (i.e.,
rights held under the Licenses) and the Company's ability to realize any
significant patent protection with respect to such rights.
 
     Furthermore, while the Company holds rights (under the Licenses) to one
issued U.S. patent and several pending applications in the U.S. and
internationally, there can be no assurance that any of the pending applications
will result in the issuance of any patents, that such applications will have
priority over the applications of others, that, if issued, any patents to which
the Company holds rights might offer protection against competitors with similar
technologies or that the Company will not require additional rights to conduct
its business. There can also be no assurance that any patent, if issued or
following issuance, will not be challenged, invalidated or circumvented, or that
the rights created thereunder would afford the Company a competitive advantage.
 
     The commercial success of the Company also depends in large part on the
Company neither infringing valid, enforceable patents or proprietary rights of
third parties, nor breaching any licenses that may relate to the Company's
business. In this regard, the Company is aware of certain third-party patents
and competitive proprietary technologies that may relate to its business.
Specifically, the Company is aware of certain intellectual property rights
belonging to third parties that could be interpreted to compromise the Company's
freedom to practice and/or obtain rights to patent protection with respect to
certain aspects of the Company's technologies in the areas of the treatment of
infections with hen egg antibodies and the formulation of lipid-reduced
preparations. In the event of an unfavorable interpretation of third party
intellectual property rights (including the third party intellectual property
rights of which the Company is aware), the Company may be required to obtain
licenses from such third parties. There can be no assurance that any such
licenses would be available to the Company upon reasonably acceptable terms, if
at all. If the Company were so required to obtain licenses from such parties,
and if the Company were unable to obtain such licenses on reasonably acceptable
terms or the Company were unable to practice, develop and exploit such
technologies, the Company's technologies and business could be materially and
adversely affected. There can also be no assurance that the Company does not or
will not infringe other patents, intellectual property or proprietary rights of
third parties (including patents and rights which may issue or arise in the
future). Any legal action or threat against the Company claiming damages or
seeking to enjoin commercial activities relating to the Company's business
affected by third-party rights, in addition to
 
                                       11

<PAGE>

subjecting the Company to potential litigation and liability for damages, may
require the Company to obtain licenses in order to continue to pursue its
business. There can be no assurances that the Company would prevail in any such
action or that any license (including licenses proposed by third parties)
required under any third party rights would be made available on commercially
acceptable terms, if at all. The Company could also face significant costs and
loss of time by management and key employees as a result of any litigation
relating to such third party rights.
 
     Certain underlying aspects of the technologies utilized and pursued by the
Company and the University may already be and have been in existence in the
scientific community in certain embodiments. There are United States and foreign
patents and patent applications held by third parties in the Company's
commercial areas of interest and the Company believes that there may be
significant litigation in the Company's industry and commercial areas of
interest regarding patent and other intellectual property rights. If the Company
becomes involved in such litigation, it could consume a substantial portion of
the Company's managerial and financial resources, which could have a material
adverse effect on the Company. Additionally, the defense and prosecution of
patent interference proceedings before the PTO or other related administrative
or court proceedings could result in substantial expense to the Company and
significant diversion of effort by the Company's technical and managerial
personnel. There can be no assurance that the Company will not in the future
become involved in PTO interference proceedings or other litigation to determine
the priority of inventions. In addition, laws of certain foreign countries do
not protect intellectual property to the same extent as laws in the United
States, which may subject the Company to additional difficulties in protecting
its intellectual property in foreign countries.
 
     The Company uses intellectual property owned by others and licensed to the
Company. Disputes may arise as to the ownership rights in such intellectual
property and related technology. The Company may also rely on certain
technologies to which it does not have exclusive rights or which may not be
patentable or proprietary and thus may be available to competitors.
 
     There can be no assurance that the steps taken by the Company, the
University or Monsanto to protect intellectual property and proprietary rights
will be adequate to prevent misappropriation or that others will not develop
competitive technologies or products. Furthermore, there can be no assurance
that others will not independently develop products that are similar or superior
to those proposed for development or commercialization by the Company, duplicate
any of the technologies utilized by the Company or design around any patent or
other intellectual property rights held by the Company.
 
     The Company's commercial success and ability to compete effectively will
also depend upon the unpatented trade secrets and confidential information of
the Company and its licensors (such as the University), especially where patent
protection is not believed to be appropriate or obtainable. In this regard, the
Company relies upon trade secrets, technical know-how and continuing inventions
of the Company and its licensors to develop and maintain the Company's
competitive position. There can be no assurance that the Company can obtain or
maintain meaningful protection of such trade secrets or know how or that the
Company will be capable of obtaining or maintaining protection for its rights to
such trade secrets or know how. The Company attempts to protect its trade
secrets and technologies utilized by it in part through confidentiality
agreements with its employees, consultants and certain contractors. There can be
no assurance, however, that these agreements will not be breached or terminated,
that licensors utilizing similar agreements with their employees, consultants
and contractors will not suffer from the breach or termination of such
agreements, that the Company would have adequate remedies for any breach or that
trade secrets or know-how utilized by the Company will not otherwise become
known or be independently discovered by competitors. See "Business--Patents and
Proprietary Rights."
 
     Dependence on Strategic Partners.  The Company is dependent on strategic
partners including Sintofarma and Gador for support in drug research and
development and the regulatory approval process, manufacturing, marketing and
distribution of its drug candidates abroad and in the U.S., if and when they are
approved for marketing by the EU, other foreign regulatory agencies and the FDA.
The Company's receipt of royalties from strategic partners, if any, will be
affected by the level of efforts and financial resources of its partners. There
can be no assurance that the Company's partners will devote the resources
necessary to complete research and development, and commence manufacturing and
marketing, of the drug candidates in their respective territories,
 
                                       12

<PAGE>

or that they will successfully market such drugs. Strategic partners may pursue
alternative drug candidates and technologies which may compete with the
Company's drug candidates and technologies. There can be no assurance that any
particular partner will have sufficient financial resources to assist the
Company in drug research and development, the regulatory approval process,
manufacturing, marketing and distribution of its drug candidates abroad and in
the U.S. There can be no assurance that any strategic partner will commercialize
the Company's drug candidates.
 
     IgX has recently entered into two strategic partnerships with respect to
the development and commercialization of its Avian Technology-based drug
candidates in South America, Latin America and Mexico. In addition, the Company
also recently entered into a joint venture for the potential treatment of the
Hepatitis B virus infection. See "Business--Strategic Partnerships" There can be
no assurance that these strategic partnerships and joint ventures, or that any
future strategic partnership, will lead to the development or commercialization
of current or future drug candidates, nor that future partnerships, if entered
into, will be on terms favorable to the Company or will be successful. If the
Company were unable to enter into strategic partnerships with capable partners
on commercially reasonable terms, or if existing arrangements were terminated,
the development and commercialization of future drug candidates would be delayed
and possibly postponed indefinitely. See "Business--Strategic Partnerships" and
"--Manufacturing."
 
     Uncertainty of Market Acceptance of Avian Technology and Drugs.  The
commercial success of the Company's drug candidates, if and when approved for
marketing by the EU, other foreign agencies and the FDA, will depend on their
acceptance by the medical community and third-party payors as safe and
cost-effective. Market acceptance will depend on the ability of the Company and
its strategic partners to educate the medical community and third-party payors
about the benefits of the Avian Technology embodied in the Company's initial
drug candidates compared to other available treatments for GI tract diseases,
such as antibiotics and vaccines. The Company's Avian Technology represents a
new approach to treating GI tract diseases and market acceptance of the
Company's drug candidates is critical to the Company's success. There can be no
assurance that the Company's drug candidates will gain market acceptance if
approved for marketing by the EU, other foreign agencies or the FDA. Failure to
achieve market acceptance would have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--IgX
Strategy" and "--Competition."
 
     Uncertainty of Adequate Reimbursement.  The Company expects that sales
volumes and prices of its drug candidates will be dependent in large measure on
the availability of reimbursement from governmental and other third-party
payors, including health insurance companies. The Company believes that
reimbursement in the future will be subject to increased restrictions in the
U.S. and in foreign markets. The Company believes that the overall escalating
cost of medical drugs and services has led to, and will continue to lead to,
increased pressures on the health care industry, both foreign and domestic, to
reduce the cost of drugs and services, including any drugs offered by the
Company. There can be no assurance, in either the U.S. or foreign markets, that
governmental and other third party reimbursement and coverage will be available
or adequate, that current reimbursement amounts will not be decreased in the
future or that future legislation, regulation, or reimbursement policies of
governmental and other third-party payors will not otherwise adversely affect
the demand for the Company's drug candidates or its ability to sell its drug
candidates on a profitable basis. The unavailability or inadequacy of
governmental and other third-party payor coverage or reimbursement could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business--Reimbursement."
 
     Intense Competition.  The pharmaceutical industry is subject to intense
competition. The Company has many competitors, including pharmaceutical,
biotechnology and chemical companies, a number of which are actively developing
and marketing drugs that could compete with the Company's drug candidates. IgX
is aware of direct competition from companies with drugs and drug candidates
designed to use immune mechanisms to treat infections and also potential
competition from companies developing new antibiotics and other anti-infective
substances. Several companies are or have been developing milk-derived drugs for
treating or preventing cryptosporidial diarrhea; others are developing vaccines
designed to elicit active immune defenses against H. pylori or C. difficile. In
addition, certain companies are developing drug candidates that seek to treat
Hepatitis B. Numerous pharmaceutical, biotechnology and chemical companies,
academic institutions, governmental agencies and other public and private
research organizations are conducting research and
 
                                       13

<PAGE>

development of new drugs which will address the same diseases IgX seeks to
address. Many of these competitors have substantially greater financial, human
and other resources and greater expertise in research and development,
manufacturing, marketing and distribution than the Company. Some of these
competitors may be further along in clinical trials of their drug candidates
than the Company. Such companies may succeed in developing technologies and
drugs that are more effective or less costly than any of those that may be
developed by the Company and may be more successful in developing, manufacturing
and marketing drugs. There can be no assurance that the Company will be able to
compete successfully in the future, that developments by others will not render
the Company's drug candidates non-competitive or that the Company's customers
will not choose to use competing technologies or drugs. See
"Business--Competition."
 
     Risk of Technological Obsolescence.  The pharmaceutical industry is subject
to rapid technological change. Numerous pharmaceutical, biotechnology and
chemical companies, academic institutions, governmental agencies and other
public and private research organizations are conducting research and
development of new products which will address the same diseases IgX seeks to
address. There can be no assurance that developments by others will not render
the Company's drug candidates obsolete.
 
     Quarterly Fluctuations in Operating Results.  The Company's results of
operations have varied and will continue to vary significantly from quarter to
quarter and depend on, among other factors: the timing of royalties, if any,
received from strategic partners; the formation of new strategic partnerships by
the Company; the timing of expenditures in connection with research and
development activities, including clinical trials, and further developing the
Company's manufacturing capabilities; the timing of drug candidate introductions
and associated launch, marketing and sales activities if and when any of the
Company's drug candidates is approved; and the timing and extent of any drug
candidate acceptance for different indications and geographical areas of the
world. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
 
     Future Capital Needs; Uncertainty of Additional Funding.  Since inception,
the Company has funded its operations primarily through private sales of debt
and equity securities. The Company believes that the proceeds of this Offering,
together with existing cash and cash equivalents, will be sufficient to fund its
operations through December, 2000. The Company believes that it will need to
raise substantial additional funds for research, development and other expenses,
through equity or debt financings, strategic partnerships or otherwise, prior to
commercialization of any of its drug candidates other than IGX-CPL3 as a
treatment of cryptosporidial diarrhea in HIV-advanced patients. Depending on the
success of its current Phase III clinical trial and the timing of governmental
regulatory approvals, if any, the Company also may need to raise additional
funds prior to commercialization of IGX-CPL3 as a treatment for cryptosporidial
diarrhea in HIV-advanced patients. The Company's future liquidity and capital
requirements will depend upon numerous factors, including the following: the
progress and scope of clinical trials; the timing and costs of filing any future
regulatory submissions; the timing and costs required to receive EU, U.S. and
other foreign governmental approvals; the cost of filing, prosecuting, defending
and enforcing patent claims and other intellectual property rights; the cost and
timing of establishing any FDA-approved or foreign government approved
full-scale manufacturing facilities; the extent to which the Company's drug
candidates gain market acceptance; the timing and costs of any drug candidate
introductions; the extent of the Company's ongoing research and development
programs; and, if necessary once any regulatory approvals are received, if at
all, the costs of developing marketing and distribution capabilities. There can
be no assurance that additional financing will be available on terms acceptable
to the Company, or at all. The Company's inability to fund its capital
requirements would have a material adverse effect on the Company's business,
financial condition and results of operations. If adequate funds are not
available, the Company may be required to curtail its operations significantly
or to obtain funds by entering into arrangements with strategic partners or
others that may require the Company to relinquish rights to certain of its
technologies, drug candidates, or potential markets. To the extent that
additional capital is raised through the sale of equity or securities
convertible into equity, the issuance of such securities could result in
dilution to the Company's existing stockholders. Future investors may be granted
rights that are superior to those held by the holders of Common Stock. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
 
     Limited Manufacturing Capability.  To date, the Company has been able to
produce sufficient quantities of its drug candidates for development and
clinical trials from its pilot production facilities in Arizona and Ireland. The
Company does not have full-scale manufacturing capability for any of its drug
candidates. The Company
 
                                       14

<PAGE>

intends to continue to utilize its pilot production facilities for continuing
research and development, including preclinical and clinical trials. Under its
strategic partnership with Sintofarma, the Company and Sintofarma have agreed to
form a joint venture entity, IgX Sintofarma, to own and operate a manufacturing
facility in Brazil initially for pilot production of sufficient quantities of
its drug candidates for clinical trials in Brazil and for full-scale production
for the Company's Avian Technology-based products, if and when approved for
sale. The future Brazilian facility is anticipated to be an FDA-approved
facility. See "Risk Factors--Dependence on Strategic Partnerships" for a
discussion of certain risks relating to the Company's reliance on Sintofarma. In
addition, if the existing Phase III clinical trial of IGX-CPL3 is successful,
the Company may develop its own FDA-approved full-scale manufacturing facility,
in Ireland or elsewhere. If the Company elects to build such a facility in
Ireland, it may seek Irish government financing. There can be no assurance that
such financing will be available or, if available, that the terms of such
financing will be satisfactory to the Company. Such development would require
significant expenditures of capital and significant devotion of management
attention and resources. The Company would be required to hire and train
sufficient personnel and comply with the extensive regulations applicable to
such a facility. There is no assurance that IgX, either directly or through any
of its strategic partnerships, will be able to establish a manufacturing
facility that complies with current GMP requirements sufficient for full-scale
commercial manufacturing. See "Business--Strategic Partnerships" and
"--Manufacturing."
 
     Potential Product Liability Exposure and Insurance.  The clinical testing,
manufacturing and marketing of the Company's drug candidates may expose the
Company to product liability claims, and there can be no assurance that the
Company will not experience material product liability losses in the future. IgX
Limited currently has limited product liability insurance in the amount of
approximately $7.5 million (or Irish pounds 5 million) per occurrence for the
use of IgX's drug candidates in clinical trials, but there can be no assurance
that such coverage limits will be adequate, that such coverage will continue to
be available on terms acceptable to IgX Limited or that such coverage will be
adequate for liabilities actually incurred. The Company does not currently have
product liability insurance coverage for the commercial sale of its drug
candidates but intends to obtain such coverage if and when its drug candidates
are commercialized. However, there can be no assurance that the Company will be
able to obtain adequate additional product liability insurance coverage on
acceptable terms, if at all. A successful claim brought against the Company in
excess of available insurance coverage, or any claim or product recall that
results in significant adverse publicity against the Company, may have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business--Product Liability Insurance."
 
     Animal Rights Activists.  The current and future activities of the Company
involve animals and products derived from animals. The utilization of animals in
research and development and drug candidate commercialization is subject to
increasing focus by animal rights activists. It is the Company's policy to
implement immunization and procurement practices that do not interfere with the
normal animal health and production practices used by the dairy and poultry
industries. The Company, however, may be adversely affected by the activities of
animal rights groups and other organizations that have protested various animal
research and development programs.
 
     Dependence Upon Key Personnel.  The Company's business and operating
results depend in significant part upon the continued contributions of its key
technical and senior management personnel, many of whom would be difficult to
replace and certain of whom perform important functions for the Company beyond
those functions suggested by their respective job title or description. The
Company's business and operating results also depend in significant part upon
its ability to attract and retain qualified management, scientific and technical
personnel. Competition for such personnel is intense, and there can be no
assurance that the Company will be successful in attracting or retaining such
personnel. Although the Company maintains a $3 million key man insurance policy
on the life of Albert J. Henry, its Chairman and Chief Executive Officer, the
loss of Mr. Henry, or a key employee, the failure of any key employee to perform
in his or her current position, or the Company's inability to attract and retain
skilled employees, as needed, could have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Management--Executive Officers and Directors."
 
     International Operations; Currency Fluctuations.  The Company's operating
expenses are incurred in several international currencies, since it is
headquartered in the U.S. and owns properties and participates in
 
                                       15

<PAGE>

operations abroad. Such operations abroad are subject to certain risks,
including government regulation, export and import license requirements, risks
of tariffs or trade barriers and political and economic instability.
 
     The Company expects that any drug candidate, if and when approved for sale,
will be marketed internationally and priced in the currency of the country in
which it is sold. Accordingly, the prices of such products in local currency
will vary as the value of the U.S. dollar fluctuates against such local
currencies. In addition, any royalty payment to be made to IgX or its affiliate
companies by Sintofarma or Gador is denominated in the currency of the country
where sales are made. There can be no assurance that there will not be increases
in the value of the U.S. dollar against such currencies, reducing the U.S.
dollar return to IgX on the sales of products. Furthermore, there can be no
assurance that significant fluctuations in foreign currency values will not
occur that will create sufficient differences in the relative prices of the
products in different countries, such that IgX will find it necessary to reduce
its prices in certain local currencies in order to bring the relative cost of
any of its products into a competitive price range. The Company does not
currently engage in foreign currency hedging transactions. However, as the
Company continues to expand its international operations, exposures to gains and
losses on foreign currency transactions may increase, and the Company may
consider engaging in such hedging transactions to limit its exposure to
potential losses from foreign currency transactions.
 
     No Prior Public Market; Possible Volatility of Share Price.  Prior to this
Offering, there has been no prior public market for the Common Stock, and there
can be no assurance that an active public trading market will develop or be
sustained after this Offering. The initial public offering price will be
determined through negotiations between the Company and the Representative based
on several factors and may not be indicative of the market price of the Common
Stock after this Offering. The market prices of the capital stock of
biotechnology companies have historically been volatile, and the market price of
the shares of Common Stock may be highly volatile. The market price of the
shares of the Common Stock may be significantly affected by factors such as
actual or anticipated fluctuations in the Company's operating results,
announcements of results of clinical trials, status of regulatory submissions
and regulatory approvals, if at all, technological innovations, new drugs, drug
candidates or new contracts by the Company or its competitors, developments with
respect to patents or proprietary rights, conditions and trends in the
pharmaceutical and biotechnology industries, adoption of new accounting
standards affecting such industries, changes in financial estimates by
securities analysts, general market conditions and other factors. In addition,
the stock market has from time to time experienced significant price and volume
fluctuations that have particularly affected the market prices for the common
stock of development stage companies. These broad market fluctuations may
adversely affect the market price of the Common Stock. In the past, following
periods of volatility in the market price of a particular company's securities,
class action securities litigation has often been brought against that company.
Such litigation, if brought against the Company, could result in substantial
costs and a diversion of management's attention and resources. There can be no
assurance that the market price of the Common Stock will not decline below the
initial public offering price. See "Underwriting."
 
     Anti-Takeover Effect of Certain Charter and By-law Provisions and Delaware
Law.  The Company's Amended and Restated Certificate of Incorporation (the
"Restated Certificate") authorizes the Board of Directors to issue, without
stockholder approval, up to 5,000,000 shares of preferred stock ("Preferred
Stock") with voting, conversion and other rights and preferences that could
adversely affect the voting power or other rights of the holders of Common
Stock. The issuance of Preferred Stock or of rights to purchase Preferred Stock
could be used to discourage an unsolicited acquisition proposal. In addition,
the possible issuance of Preferred Stock could discourage a proxy contest, make
more difficult the acquisition of a substantial block of the Company's Common
Stock or limit the price that investors might be willing to pay for shares of
the Company's Common Stock. The Restated Certificate also provides for staggered
terms for the members of the Board of Directors. A staggered Board of Directors
and certain provisions of the Company's By-laws (the "By-laws") and of Delaware
law applicable to the Company could delay or make more difficult a merger,
tender offer or proxy contest involving the Company. The Company, for example,
will be subject to Section 203 of the General Corporate Law of Delaware which,
subject to certain exceptions, restricts certain transactions and business
combinations between a corporation and a stockholder owning 15% or more of the
corporation's outstanding voting stock (an "interested stockholder") for a
period of three years from the date the stockholder becomes an interested
stockholder. In addition shareholder action may not be taken by written consent
and Directors of the Company may only be terminated for cause. These provisions
may have the effect of delaying or preventing a
 
                                       16

<PAGE>

change of control of the Company without action by the stockholders and,
therefore, could adversely affect the price of the Common Stock. See
"Management," "Description of Capital Stock--Preferred Stock" and
"--Anti-Takeover Measures."
 
     Control by Directors, Officers and Principal Stockholders.  Upon completion
of this Offering, the present directors, executive officers and principal
stockholders of the Company and their affiliates will beneficially own
approximately 69.8% of the outstanding Common Stock of the Company. As a result,
these stockholders will be able to effectively control all corporate actions
requiring stockholder approval, including the election of directors and approval
of significant corporate transactions such as a merger of the Company or the
sale of all or substantially all of the Company's assets. Such concentration of
ownership may have the effect of delaying or preventing a change in control of
the Company. See "Principal Stockholders."
 
     Shares Eligible for Future Sale; Registration Rights.  Future sales of
substantial amounts of Common Stock in the public market following this Offering
could adversely affect the market price of the Common Stock. Upon completion of
this Offering, the Company will have 8,966,643 shares of Common Stock
outstanding, assuming no exercise of options and warrants outstanding on
September 28, 1998. Of these shares, the 2,300,000 shares sold in this Offering
(plus any additional shares sold upon exercise of the Over-Allotment Option)
will be freely tradeable without restriction under the Securities Act except any
such shares which may be held by "affiliates" of the Company, as defined in
Rule 144 under the Securities Act. The Company's officers, directors and
existing stockholders, holding an aggregate of 6,666,643 shares, have agreed,
subject to certain limited exceptions, not to offer to sell, sell, transfer,
assign, hypothecate, pledge or otherwise dispose of any of the shares held by
them as of the date of this Prospectus for nine months after the date of this
Prospectus (the "lock-up period") without the prior written consent of the
Representative. After the nine month period, all of such shares of Common Stock
(plus approximately 159,589 shares issuable upon exercise of vested options)
will be eligible for immediate sale in the public market subject to compliance
with Rule 144 under the Securities Act. The holders of 4,854,066 shares of
Common Stock have the right in certain circumstances to demand that the Company
to register their shares under the Securities Act for resale to the public
beginning one year after the effective date of the Registration Statement. In
addition, if the Company proposes to register any of its securities under the
Securities Act, for its own account, such holders are entitled to exercise their
"piggyback rights" to include their shares in such registration beginning nine
months after the effective date of the Registration Statement.
 
     No prediction can be made as to the effect, if any, that market sales of
additional shares or the availability of such additional shares for sale will
have on the market price of the Common Stock. Nevertheless, sales of substantial
amounts of Common Stock in the public market, or the perception that such sales
may occur, could have an adverse impact on the market price for the Common Stock
or impair the Company's ability to raise additional capital through an offering
of its equity securities. In addition, approximately nine months after the date
of this Prospectus, the Company expects to file a registration statement on Form
S-8 registering a total of approximately 1,425,857 shares of Common Stock
reserved for issuance under the Company's stock option plans, 825,857 of which
shares are subject to outstanding options. See "Management--Director
Compensation," "--Stock Option Plans," "Description of Capital Stock," "Shares
Eligible for Future Sale--Registration Rights" and "Underwriting."
 
     Immediate and Substantial Dilution.  Purchasers of the shares of Common
Stock offered hereby will experience immediate and substantial dilution of
approximately $6.58 per share in the per-share net tangible book value of their
investment from the assumed $9.00 per share initial public offering price.
Additional dilution will occur upon exercise of outstanding options. See
"Dilution" and "Shares Eligible for Future Sale."
 
     Potential Adverse Effect of Representative's Warrants.  At the consummation
of this Offering, the Company will sell to the Representative for nominal
consideration the Representative's Warrants to purchase 230,000 shares of Common
Stock (the "Representative's Warrants"). The Representative's Warrants will be
exercisable for a period of four years commencing one year from the date of this
Prospectus at an exercise price equal to 120% of the initial public offering
price per share of Common Stock. For the term of the Representative's Warrants,
the holders thereof will have, at nominal cost, the opportunity to profit from a
rise in the market price of the Common Stock without assuming the risk of
ownership, with a resulting dilution in the interest of other security holders.
As long as the Representative's Warrants remain unexercised, the Company's
 
                                       17

<PAGE>

ability to obtain additional capital might be adversely affected. Moreover, the
holders of the Representative's Warrants may be expected to exercise such
Warrants at a time when the Company would, in all likelihood, be able to obtain
any needed capital through a new offering of its securities on terms more
favorable than those provided by the Representative's Warrants. See
"Underwriting."
 
     Year 2000 Risk.  In common with users of computers around the world, IgX is
investigating whether and to what extent the date change from 1999 to 2000 may
affect its information systems. The Company expects to implement the systems and
programming changes necessary to address year 2000 issues with respect to its
internal systems without significant expense. Nevertheless, there can be no
assurance that the Company's systems will not be affected by the date change
from 1999 to 2000, or that the cost of any remedial actions, if necessary, will
not have a material adverse effect on its business, financial condition and
results of operations. The Company also relies, directly and indirectly, on
external systems of business enterprises such as strategic partners, suppliers,
financial organizations, research facilities and governmental entities, both
domestic and international, for accurate exchange of data. Even if the internal
systems of the Company are not materially affected by the year 2000 computer
programming issue, the Company could be affected by disruptions in the operation
of the enterprises with which the Company interacts.
 
     Absence of Dividends.  To date, the Company has neither declared nor paid
any cash dividends on shares of its Common Stock and it does not anticipate
paying any cash dividends in the foreseeable future. See "Dividend Policy."
 
                                USE OF PROCEEDS
 
     The net proceeds to the Company from the sale of the 2,300,000 shares of
Common Stock offered hereby are estimated to be $18.1 million ($21.0 million if
the Over-Allotment Option is exercised in full), after deducting the
underwriting discount and other estimated expenses of this Offering, based on an
assumed initial public offering price of $9.00 per share.
 
     The Company expects to use the net proceeds of this Offering for further
research and development and animal studies on Avian Technology-based drug
candidates, clinical development, including the manufacture of drug candidates
for use in any trials (not otherwise funded by its strategic partners) and
approximately $2.0 million to fund IgX Oxford. The balance of the net proceeds
of this Offering will be used for working capital and general corporate
purposes. Exact allocation of the net proceeds and the timing of such
expenditures will depend on various factors, including the results of further
animal studies, timing of the Company's and IgX Oxford's human clinical trials
and regulatory filings.
 
     Pending the use of the net proceeds of this Offering, the Company will
invest the funds in short-term interest bearing, investment grade securities.
 
                                DIVIDEND POLICY
 
     To date, the Company has neither declared nor paid any cash dividends on
shares of its Common Stock and it does not anticipate declaring or paying any
cash dividends in the foreseeable future.
 
                                       18

<PAGE>

                                    DILUTION
 
     Purchasers will experience immediate dilution in net tangible book value of
their Common Stock from the assumed initial public offering price. As of
June 30, 1998, the Company had a negative net tangible book value of
approximately $1.8 million, or $2.60 per share of Common Stock. Net tangible
book value per share represents the amount of total tangible assets, less total
liabilities, divided by the number of shares of Common Stock then outstanding.
Giving effect to (i) the conversion of all indebtedness owed to stockholders of
the Company ($5.0 million of principal and accrued interest at June 30, 1998)
into 719,281 shares of Common Stock, and (ii) the conversion of the outstanding
shares of preferred stock into 4,854,066 shares of Common Stock upon
consummation of this Offering, the pro forma net tangible book value as of June
30, 1998 would be approximately $2.6 million or $0.42 per share. After giving
effect to the sale of 2,300,000 shares of Common Stock offered hereby (at an
assumed initial public offering price of $9.00 per share and after deducting the
underwriting discount and other estimated expenses of this Offering), the pro
forma net tangible book value of the Company as of June 30, 1998 would have been
$20.8 million, or $2.42 per share of Common Stock. This represents an immediate
increase in pro forma net tangible book value of $2.00 per share to existing
investors and an immediate dilution of $6.58 per share of to new investors
purchasing shares of Common Stock in the Offering. The following table
illustrates this per share dilution:
 
<TABLE>
<S>                                                                                       <C>      <C>
Assumed initial offering price per share...............................................            $9.00
  Pro forma net tangible book value per share before the Offering......................   $0.42
  Increase per share attributable to new investors.....................................    2.00
                                                                                          -----
Pro forma net tangible book value per share after the Offering.........................             2.42
                                                                                                   -----
Dilution in pro forma net tangible book value per share to new investors(1)............            $6.58
                                                                                                   -----
                                                                                                   -----
</TABLE>
 
------------------
(1) Does not give effect to the exercise of (i) 825,857 shares subject to
    options to purchase shares of Common Stock outstanding as of September 28,
    1998 at a weighted average exercise price of $1.51 per share and (ii) a
    warrant on September 25, 1998, issued to an existing stockholder, into
    370,000 shares of Common Stock.
 
     If the Over-Allotment Option is exercised in full, the pro forma net
tangible book value per share of the Common Stock after this Offering would be
$2.64 per share, which would result in dilution to new investors in this
Offering of $6.36 per share.
 
      The following table sets forth as of June 30, 1998, after giving pro forma
effect to (i) the conversion of all indebtedness owed to stockholders of the
Company ($5.0 million of principal and accrued interest at June 30, 1998), into
719,281 shares of Common Stock, and (ii) the conversion of the outstanding
shares of preferred stock into 4,854,066 shares of Common Stock upon
consummation of this Offering, the number of shares of Common Stock purchased
from the Company, the total consideration paid and the average price per share
paid by the existing stockholders and the new investors (before deducting the
underwriting discount and estimated Offering expenses):
 
<TABLE>
<CAPTION>
                                                 SHARES PURCHASED        TOTAL CONSIDERATION       AVERAGE
                                               --------------------     ----------------------     PRICE PAID
                                                NUMBER      PERCENT       AMOUNT       PERCENT     PER SHARE
                                               ---------    -------     -----------    -------     ----------
<S>                                            <C>          <C>         <C>            <C>         <C>
Existing stockholders.......................   6,283,377      73.20%    $17,013,497      45.11%      $ 2.71
New investors...............................   2,300,000      26.80      20,700,000      54.89       $ 9.00
                                               ---------    -------     -----------    -------
    Total (1)...............................   8,583,377     100.00%    $37,713,497     100.00%
                                               ---------    -------     -----------    -------
                                               ---------    -------     -----------    -------
</TABLE>
 
------------------
(1) Does not give effect to the exercise of (i) 825,857 shares subject to
    options to purchase shares of Common Stock outstanding as of September 28,
    1998 at a weighted average exercise price of $1.51 per share and (ii) a
    warrant on September 25, 1998, issued to an existing stockholder, into
    370,000 shares of Common Stock. See "Management--Stock Option Plan" and
    "Description of Capital Stock."
 
                                       19

<PAGE>

                                 CAPITALIZATION
 
The following table sets forth, at June 30, 1998, (i) the actual capitalization
of the Company, (ii) the pro forma capitalization after giving effect to
(A) the conversion of all indebtedness owed to stockholders of the Company
($5.0 million of principal and accrued interest at June 30, 1998) into 719,281
shares of Common Stock and (B) the conversion of the outstanding shares of
preferred stock into 4,854,066 shares of Common Stock upon consummation of this
Offering, and (iii) the pro forma capitalization as adjusted to give effect to
the sale of 2,300,000 shares of Common Stock offered by the Company at an
assumed initial offering price of $9.00 per share and the application of the
estimated net proceeds therefrom after deducting the underwriting discount and
other estimated expenses of the Offering. This table should be read in
conjunction with the Consolidated Financial Statements of the Company and the
Notes thereto included elsewhere in this Prospectus.
 
<TABLE>
<CAPTION>
                                                                                           JUNE 30, 1998
                                                                             -----------------------------------------
                                                                                (AMOUNTS IN THOUSANDS EXCEPT SHARE
                                                                                      AND PER SHARE AMOUNTS)
                                                                                                         PRO FORMA
                                                                             ACTUAL     PRO FORMA(1)    AS ADJUSTED(2)
                                                                             -------    ------------    --------------
<S>                                                                          <C>        <C>             <C>
  Notes payable to stockholders...........................................   $ 4,485            --               --
Capital deficiency:
  Series B preferred stock ($0.001 par value; 1,874,999 shares authorized;
    1,154,065 shares issued and outstanding, actual; none issued and
    outstanding, pro forma and pro forma as adjusted).....................         1            --               --
  Series A preferred stock ($0.001 par value; 3,700,001 shares authorized,
    issued and outstanding, actual; none issued and outstanding, pro forma
    and pro forma as adjusted)............................................         4            --               --
  Common stock ($0.001 par value; 15,000,000 shares authorized; 710,030
    shares issued and outstanding, actual; 6,283,377 shares issued and
    outstanding, pro forma; 8,583,377 shares issued and outstanding, pro
    forma as adjusted)....................................................         1      $      6         $      9
Additional paid-in capital................................................    12,925        19,075           37,209
Cumulative translation adjustment.........................................      (401)         (401)            (401)
Deficit accumulated during development stage(3)...........................   (14,374)      (16,039)         (16,039)
                                                                             -------      --------         --------
  Total (capital deficiency) stockholders' equity.........................    (1,844)        2,641           20,778
                                                                             -------      --------         --------
    Total capitalization..................................................   $ 2,641      $  2,641         $ 20,778
                                                                             -------      --------         --------
                                                                             -------      --------         --------
</TABLE>
 
------------------
(1) Gives effect to the September 1998 conversion of all notes payable to
    stockholders of the Company into 719,281 shares of Common Stock at $7.00 per
    share, assuming conversion at June 30, 1998.
(2) Gives effect to the sale of the shares of Common Stock offered hereby, at an
    assumed initial offering price of $9.00 per share and the application of the
    estimated net proceeds thereon, after deducting the underwriting discount
    and estimated offering expenses.
(3) Gives effect to the recognition into expense of $550 representing the
    unamortized portion of the discount associated with the $1,000 promissory
    note issued to NEGF II, L.P., and a $1,115 loss on conversion of notes
    payable to stockholders into 719,281 shares of Common Stock at $7.00 per
    share, as described in note (1) above.
 
                                       20

<PAGE>

                      SELECTED CONSOLIDATED FINANCIAL DATA
               (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
 
     The following selected consolidated financial data for each of the years in
the three-year period ended December 31, 1997 are derived from, and are
qualified by reference to, the audited Consolidated Financial Statements
included elsewhere herein. The following selected financial data for each year
in the two-year period ended December 31, 1994 are derived from, and are
qualified by reference to, the Company's audited financial statements not
included herein. The selected consolidated financial data for the six-month
periods ended June 30, 1997 and 1998 are derived from the unaudited financial
statements of the Company included elsewhere herein and, in the opinion of
management, include all adjustments, consisting of normal recurring accruals
necessary for a fair presentation of the data presented. The results for the six
months ended June 30, 1998 are not indicative of results for the full year. The
information presented below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Financial Statements included elsewhere herein.
<TABLE>
<CAPTION>
                                                                                                 FEBRUARY 11,
                                                                                                    1992
                                                                                                 (INCEPTION)
                                                              DECEMBER 31,                           TO              JUNE 30,
                                          ----------------------------------------------------   DECEMBER 31,   -------------------
                                            1993       1994       1995       1996       1997        1997          1997       1998
                                          --------   --------   --------   --------   --------   ------------   --------   --------
<S>                                       <C>        <C>        <C>        <C>        <C>        <C>            <C>        <C>
CONSOLIDATED STATEMENT OF OPERATIONS
  DATA:
Operating expenses:
  Research and development..............  $    176   $    330   $    475   $  1,136   $  3,426     $  5,800     $  1,874   $  1,577
  General and administrative............        80        281        718      1,119      1,733        4,095          521      1,911
                                          --------   --------   --------   --------   --------     --------     --------   --------
Total operating expenses................       256        611      1,193      2,255      5,159        9,895        2,395      3,488
Net interest expense....................        23         64        144        207        373          811          164        147
                                          --------   --------   --------   --------   --------     --------     --------   --------
Net loss before income taxes............      (279)      (675)    (1,337)    (2,462)    (5,532)     (10,706)      (2,559)    (3,635)
Income taxes............................        --         --         --          5         23           28           17          5
                                          --------   --------   --------   --------   --------     --------     --------   --------
Net loss................................  $   (279)  $   (675)  $ (1,337)  $ (2,467)  $ (5,555)    $(10,734)    $ (2,576)  $ (3,640)
                                          --------   --------   --------   --------   --------     --------     --------   --------
                                          --------   --------   --------   --------   --------     --------     --------   --------
Basic and diluted loss per share........  $  (0.80)  $  (1.52)  $  (1.88)  $  (3.48)  $  (7.82)                 $  (3.63)  $  (5.13)
                                          --------   --------   --------   --------   --------                  --------   --------
                                          --------   --------   --------   --------   --------                  --------   --------
Weighted average shares outstanding used
  for basic and diluted loss per
  share.................................   350,030    444,715    710,030    710,030    710,030                   710,030    710,030
                                          --------   --------   --------   --------   --------                  --------   --------
                                          --------   --------   --------   --------   --------                  --------   --------
BALANCE SHEET DATA (AT PERIOD END):
Cash....................................       171         61         86      4,257      1,973                                2,543
Working capital (deficiency)............      (356)    (1,035)    (2,741)     3,312        628                                1,284
Total assets............................       212        103        493      5,891      3,308                                3,654
Total liabilities.......................       540      1,104      2,831      6,190      5,075                                5,498
Capital deficiency......................      (329)    (1,001)    (2,338)      (299)    (1,768)                              (1,844)
 
<CAPTION>
                                          FEBRUARY 11,
                                             1992
                                          (INCEPTION)
                                              TO
                                           JUNE 30,
                                             1998
                                          ------------
<S>                                       <C>
CONSOLIDATED STATEMENT OF OPERATIONS
  DATA:
Operating expenses:
  Research and development..............    $  7,377
  General and administrative............       6,006
                                            --------
Total operating expenses................      13,383
Net interest expense....................         958
                                            --------
Net loss before income taxes............     (14,341)
Income taxes............................          33
                                            --------
Net loss................................    $(14,374)
                                            --------
                                            --------
Basic and diluted loss per share........
Weighted average shares outstanding used
  for basic and diluted loss per
  share.................................
BALANCE SHEET DATA (AT PERIOD END):
Cash....................................
Working capital (deficiency)............
Total assets............................
Total liabilities.......................
Capital deficiency......................
</TABLE>
 
                                       21

<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                       (ALL DOLLAR AMOUNTS IN THOUSANDS)
 
     The following discussion and analysis should be read in conjunction with
"Selected Consolidated Financial Data" and the Consolidated Financial Statements
and Notes thereto included elsewhere in this Prospectus. Except for the
historical information contained herein, the discussion in this Prospectus
contains certain forward-looking statements that involve risks and
uncertainties, such as statements of the Company's plans, objectives,
expectations and intentions. The cautionary statements made in this Prospectus
should be read as being applicable to all related forward-looking statements
wherever they appear in this Prospectus. The Company's actual results could
differ materially from those discussed here. Factors that could cause or
contribute to such differences include those discussed in "Risk Factors," as
well as those discussed elsewhere herein.
 
OVERVIEW
 
     The Company is a development stage enterprise developing drugs principally
for the treatment of infectious diseases of the human GI tract for which there
is a significant medical need for improved therapies. Since its inception in
February 1992, the Company's efforts have been principally devoted to research
and development and raising capital. To date, the Company has not generated any
revenues and has not commercialized any products. From inception to June 30,
1998, the Company has incurred cumulative losses of $14,374, which includes
non-cash charges of approximately $435 related to stock option compensation
expense. These losses were primarily the result of expenditures related to
research and development, general and administrative activities and interest
expense on stockholder loans.
 
     The Company's initial three drug candidates seek to treat human GI tract
infections caused by specific parasites or bacteria (types of pathogens) with
proprietary, low lipid (fat), polyclonal antibodies derived from egg yolks of
hens. The hens are injected with an amount of pathogen-specific antigens
(foreign substances) necessary to cause the hens to produce an increased level
of antibodies to that pathogen ("Avian Technology"). The Company's lead product
candidate, IGX-CPL3, is designed to offer a treatment for cryptosporidial
diarrhea, focusing on HIV-advanced patients where the Company believes no
effective treatment currently exists. The two other Avian Technology-based drug
candidates currently under development, IGX-CDL3 and IGX-HPL3, may offer
valuable alternatives to traditional antibiotic treatments for certain GI tract
infections at a time where there is an increasing development of drug resistance
to antibiotics. The Company believes that the Avian Technology may be applied to
the development of other drug candidates to treat additional GI tract
infections. The Avian Technology has been developed in collaboration with
Charles R. Sterling, Ph.D. and his colleagues at the University of Arizona.
 
     The Company's strategy is to develop products both independently and
through strategic partnerships with large pharmaceutical companies, under which
the Company will seek financial, preclinical and clinical trial, manufacturing
and marketing assistance while retaining parallel manufacturing and/or marketing
rights for the products. In August 1998, the Company organized a majority-owned
subsidiary, IgX Oxford, which is seeking to develop a drug candidate using a
proprietary compound (N-nonyl-DNJ), licensed to it exclusively from Monsanto, to
treat Hepatitis B, for which there also is a significant medical need for
improved therapy. N-nonyl-DNJ seeks to prevent the secretion of the Hepatitis B
virus from the infected cells. In addition to IgX Oxford, in August 1998, IgX
entered into strategic partnerships with Sintofarma, a Brazilian company
currently responsible for the manufacturing and marketing of 26 pharmaceutical
products in Argentina based on both unit volume and sales, and Gador, the second
largest manufacturer and distributor of pharmaceutical products in Argentina.
These agreements relate to the development and commercialization of the
Company's Avian Technology-based drug candidates in South America, Latin America
and Mexico. Each agreement requires IgX and the other party to make certain
contributions and stipulates that IgX will receive a royalty from any eventual
sale of specified products by the other party. To date, no revenue has been
generated from any of these agreements.
 
     The Company is not expected to have any commercially available drugs for
the foreseeable future and expects to continue to incur substantial research and
development costs in the future from ongoing research and development programs
and manufacturing of drug candidates for use in preclinical testing and clinical
trials. The Company also expects that general and administrative costs,
including regulatory costs, and the creation of a marketing and sales
organization, if warranted, will increase in the future. Accordingly, the
Company expects to incur increasing operating losses for the foreseeable future.
There can be no assurance that the Company will ever achieve profitable
operations.
 
                                       22

<PAGE>

RESULTS OF OPERATIONS
 
SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997
 
     Research and development expenses were $1,577 and $1,874 for the six months
ended June 30, 1998 and 1997, respectively, representing a decrease of $297,or
approximately 16%. This decrease was due to the higher costs incurred during the
six months ended June 30, 1997 related to locating sites to conduct Phase III
clinical trials of IGX-CPL3 and costs incurred to obtain regulatory approvals to
conduct these trials. This decrease was partially offset by an increase in
patent applications and related costs on behalf of the University of Arizona.
 
     General and administrative expenses were $1,911 and $521 for the six months
ended June 30, 1998 and 1997, respectively. This represents an increase of
approximately $1,390, or 267%. This higher level of expense was the result of
several factors, including the opening of the New Jersey and London offices
during the latter half of 1997 for which there were expenses during the first
half of 1998 compared to none during the same period in 1997. Further, there
were increases in consulting costs related to market analysis and research
during 1998, and non-cash compensation expense was recognized on certain stock
option grants made during 1998.
 
     Net interest expense was $146 and $165 for the six months ended June 30,
1998 and 1997, respectively. The decrease of approximately 12% reflects the
reduction in the average principal amount of notes payable to stockholders
through the conversion of approximately $2.0 million of such indebtedness into
shares of the Company's Series B Convertible Preferred Stock during December
1997.
 
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996
 
     Research and development expenses were $3,426 and $1,136 for the years
ended December 31, 1997 and 1996, respectively, representing an increase of
approximately $2,290, or 202%. This increase was a result of investments in
research and development funding for the Company's pilot production facility in
Ireland, which commenced during the latter part of 1996; and the cost incurred
in 1997 related to locating sites to conduct Phase III clinical trials of
IGX-CPL3. During 1997, the Company also entered into sponsored university
research agreements with the University, thereby increasing research and
development costs.
 
     General and administrative expenses were $1,733 during 1997 compared to
$1,119 during 1996, representing an increase of $614, or 55%. This increase was
the result of the opening of the New Jersey and London offices in 1997 and the
costs incurred in the Company's executive search efforts during 1997.
 
     Net interest expense was $372 and $207 for the years ended December 31,
1997 and 1996, respectively, representing an increase of $165, or 80%. This
increase was attributable to the fact that 1997 included a full year of interest
expense on loans received by the Company from its principal stockholder during
1996.
 
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
 
     Research and development expenses were $1,136 for the year ended
December 31, 1996, representing a $661 increase over the research and
development expenses of $475 for the year ended December 31, 1995. This increase
was the direct result of additional costs incurred related to the establishment
of the Irish pilot production facility during 1996.
 
     General and administrative expenses were $1,119 and $718 for the years
ended December 31, 1996 and 1995, respectively, representing an increase of
$401, or 56%. This increase was also the direct result of additional costs
incurred to establish an Irish administrative office of the Company.
 
     Net interest expense was $207 and $144 for the years ended December 31,
1996 and 1995, respectively. The increase of approximately $63, or 44%,
reflected an increase in the average balance due on loans to the principal
stockholder during 1996.
 
INCOME TAXES
 
     The Company has reported losses for tax purposes and, therefore, has not
paid any federal or state income taxes in the U.S. since inception. The Company
accounts for U.S. income taxes under Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes." Realization of deferred income tax
assets is dependent on future events and earnings, if any, the timing and extent
of which are uncertain. Deferred tax assets at June 30, 1998 and at
December 31, 1997 and 1996 of $3,532; $2,724; and $1,722, respectively, have
been reduced to the estimated amount realizable, or zero. The reduction to zero
is due to a valuation allowance based on management's assessment as to the
Company's history of losses and uncertainty about future recoverability. At June
30, 1998, the Company had net operating loss carryforwards of approximately
$13,000 available to offset future taxable income. These amounts, subject to
certain limitations, will begin to expire at various dates from
 
                                       23

<PAGE>

2007 through 2018 for U.S. income tax purposes. These loss carryforwards are
subject to limitation on future years utilization should certain ownership
changes occur.
 
     The provision for income taxes for the years ended December 31, 1996 and
1997 and the six months ended June 30, 1998 primarily relates to the Irish tax
on interest income earned on bank accounts in the Republic of Ireland.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     The Company has accumulated a deficit during its development stage of
$14,374 as of June 30, 1998 and has used cash amounting to $11,357 in the
aggregate to fund operations from inception through June 30, 1998, including
over $7,000 related to research and development of technology and new drug
candidates. As of June 30, 1998, the Company was committed to fund approximately
$390 under sponsored research agreements with certain universities. To date, the
Company has satisfied its cash requirements primarily through obtaining loans
from stockholders and the issuances of preferred and common stock in private
placement transactions. At June 30, 1998 the Company had $2,543 in cash and
$1,284 in working capital. Net cash used in operating activities for the six
months ended June 30, 1998 and 1997 was approximately $3,360 and $2,372,
respectively. Net cash used in investing activities for the six months ended
June 30, 1998 and 1997 was approximately $26 and $163. For the six months ended
June 30, 1998, cash of approximately $3,950 was provided by financing
activities, of which approximately $2,950 was provided from the issuance of
Series B Preferred Stock. There was no cash provided by financing activities for
the six months ended June 30, 1997. The Company believes that the proceeds from
this Offering, together with existing cash and cash equivalents, will be
sufficient to fund its operations through December 2000.
 
     Net cash used in operating activities for the years ended December 31, 1997
and 1996 was $4,501 and $1,372, respectively. For the years ended December 31,
1997 and 1996, net cash used in investing activities was $151 and $1,038,
respectively. Net cash provided by financing activities for the years ended
December 31, 1997 and 1996 was $2,554 and $6,875, respectively.
 
     As a means of raising capital, the Company and its subsidiary have from
time to time received loans in the form of promissory notes from stockholders,
principally from Henry Venture II Limited, the Chairman of which Albert J. Henry
is also Chairman and Chief Executive Officer of the Company. The notes are
unsecured and bear interest at a stated rate of 9% per annum. From the Company's
inception to date, no amounts of principal or accrued interest have been repaid.
However, from time to time, portions of the amounts due have been canceled in
exchange for issuance of preferred stock of the Company. The amount of notes
canceled corresponds to the value of the preferred stock issued upon
cancellation of the notes. A reconciliation of the total proceeds received from
the issuance of notes payable to stockholders to the balance of these notes
payable at June 30, 1998 is as follows:
 
<TABLE>
<CAPTION>
                                                                                         INCEPTION
                                                                                    (FEBRUARY 11, 1992)
                                                                                          THROUGH
                                                                                  ------------------------
                                                                                  DECEMBER 31,    JUNE 30,
                                                                                     1997           1998
                                                                                  ------------    --------
<S>                                                                               <C>             <C>
Cumulative proceeds from issuance of notes payable to stockholders.............     $  9,352      $ 10,351
Cumulative interest accrued on notes payable to stockholders...................          693           856
                                                                                    --------      --------
                                                                                      10,045        11,207
Less: notes payable to Henry Venture II Limited canceled and exchanged for:
  Series B mandatorily redeemable convertible preferred stock*.................       (2,086)       (2,086)
  Series C mandatorily redeemable convertible preferred stock*.................       (2,086)       (2,086)
  Series B convertible preferred stock.........................................       (2,000)       (2,000)
                                                                                    --------      --------
                                                                                       3,873         5,035 **
Less unamortized discount on note payable to NEGF II, L.P......................           --           550
                                                                                    --------      --------
Notes payable to stockholders..................................................     $  3,873      $  4,485
                                                                                    --------      --------
                                                                                    --------      --------
</TABLE>
 
------------------
 * These securities were, in turn, canceled during 1996 in exchange for issuance
   of Series A convertible preferred stock.
 
** In September 1998, these notes were converted into 732,547 shares of Common
   Stock of the Company at $7.00 per share.
 
                                       24

<PAGE>

     Interest expense amounted to $162, $470 and $231 for the six months ended
June 30, 1998 and for the years ended December 31, 1997 and 1996, respectively.
At June 30, 1998, the balance due to stockholders under the promissory notes,
including accrued and unpaid interest, amounted to $5,035. Of this balance, $341
is payable upon demand and has been recorded as a current liability.
 
     During September 1998, the Company entered into an agreement with Henry
Venture II Limited and NEGF II, L.P. to cancel the outstanding balance of all
notes payable to stockholders in exchange for 732,547 shares of Common Stock of
the Company, at a conversion price of $7.00 per share. The cancellation of the
notes payable to stockholders will require the Company to recognize a loss of
approximately $527, representing the unamortized portion of the debt discount,
on the early extinguishment of the notes payable NEGF II, L.P., for the quarter
ending September 30, 1998. In addition, as a result of this exchange at a price
per share below the expected initial public offering price of this Offering, the
Company will be required to recognize an additional charge of approximately
$1,100 million as a loss on extinguishment of notes payable to stockholders for
the quarter ending September 30, 1998.
 
     The Company's principal source of liquidity consists of cash of
approximately $2,543 at June 30, 1998. The Company expects that its capital
requirements will increase substantially in future periods as the Company funds
its current and anticipated research and development programs, including
preclinical and clinical trials, and investments in property, plant and
equipment to enhance manufacturing capabilities. As of June 30, 1998, the
Company had outstanding commitments of $390 to fund sponsored university
research agreements as well as $2,000 million to further research at IgX Oxford.
The Company's future capital requirements will depend on many factors, including
the progress and results of the Company's research and development programs and
clinical trials, the time and costs required to gain regulatory approvals, if at
all, costs of conducting research, costs of filing patents on behalf of
organizations collaborating in the Company-sponsored research, costs of
maintaining existing licenses and obtaining new licenses to use the Avian
Technology and other technologies, the status of competing products and the
market acceptance of the Company's products, if and when approved. The Company
believes that the existing cash balances, along with the net proceeds from this
initial public offering will be sufficient to meet the Company's strategic
objectives, including anticipated cash needs for working capital, for a
reasonable period of time. However, there can be no assurance that the Company
will be able to obtain sufficient funds to continue the development of, and if
successful, commence the manufacture and sale of its drug candidates, if and
when approved by the applicable regulatory agencies. The Company's forecast of
the period of time through which its financial resources will be adequate to
support its operations is a forward-looking statement that involves risks and
uncertainties, and actual results could differ significantly.
 
     In order to meet its long-term financing requirements, the Company may be
required to raise additional funds through public or private financing of
securities, strategic partnerships or other arrangements. The Company has
recently signed certain agreements with strategic partners and is engaged in
preliminary discussions with several other potential strategic partners.
However, there can be no assurance that the Company will benefit from strategic
relationships and/or be able to obtain additional financing. There can be no
assurance that such additional financing, if needed, will be available on terms
attractive to the Company, or at all. The Company's ability to raise additional
financing may be dependent on many factors beyond the Company's control,
including the state of capital markets and the rate of progress on the Company's
clinical trials. Furthermore, any additional equity financing may be dilutive to
stockholders, and debt financing, if available, may involve restrictive
covenants. Future strategic partnerships, if necessary to raise additional
funds, may require the Company to relinquish its rights to certain of its
intellectual property. Any of these events could adversely impact the Company's
ability to commercialize its drug candidates. Refer to "Risk Factors--Future
Capital Needs; Uncertainty of Additional Financing." Also refer to Note 2 of the
Consolidated Financial Statements.
 
     Cash requirements for the Company may vary materially from those now
planned due to the results of research and development activities, results of
clinical testing, changes in focus and direction of the Company's research and
development programs, manufacturing processes, competitive and technological
advances, the FDA and other regulatory entities' approval processes, changes in
the Company's marketing and distribution strategies and other factors.
 
                                       25

<PAGE>

YEAR 2000 RISK
 
     In common with users of computers around the world, IgX is investigating
whether and to what extent the date change from 1999 to 2000 may affect its
information systems. The Company expects to implement the systems and
programming changes necessary to address year 2000 issues with respect to its
internal systems without significant expense. Nevertheless, there can be no
assurance that the Company's systems will not be affected by the date change
from 1999 to 2000, or that the cost of any remedial actions, if necessary will
not have a material adverse effect on its business, financial condition and
results of operations. The Company also relies, directly and indirectly, on
external systems of business enterprises such as stragetic partners, suppliers,
financial organizations, research facilities and governmental entities, both
domestic and international, for accurate exchange of data. Even if the internal
systems of the Company are not materially affected by the year 2000 computer
programming issue, the Company could be affected by disruptions in the operation
of the enterprises with which the Company interacts.
 
                                       26

<PAGE>

                                    BUSINESS
 
OVERVIEW
 
     IgX is a development stage company developing drugs principally for the
treatment of infectious diseases of the human GI tract for which there is a
significant medical need for improved therapies. The Company's initial three
drug candidates seek to treat human GI tract infections caused by specific
parasites or bacteria (types of pathogens) with immunoglobulin (a type of
antibody) produced by hens. This is an example of passive immunity, using an
antibody produced by one individual or animal to treat or prevent infections in
another ("passive immunity"). Specifically, these drug candidates consist of
proprietary, low lipid (fat), polyclonal antibodies derived from egg yolks of
hens. The hens are injected with an amount of pathogen-specific antigens
(foreign substances) necessary to cause the hens to produce an increased level
of antibodies to that pathogen ("Avian Technology"). The Company's lead product
candidate, IGX-CPL3, is designed to offer a treatment for cryptosporidial
diarrhea, initially focusing on HIV-advanced patients where the Company believes
no effective treatment currently exists. The two other Avian Technology-based
drug candidates currently under development, IGX-CDL3 and IGX-HPL3, may offer
valuable alternatives to traditional antibiotic treatments at a time where there
is an increasing development of drug resistance to antibiotics. The Company
believes that the Avian Technology may be applied to the development of other
drug candidates to treat additional GI tract infections. The Avian Technology
has been developed in collaboration with Charles R. Sterling, Ph.D. and his
colleagues at the University of Arizona. Further, in August 1998 the Company
organized a majority-owned subsidiary, IgX Oxford, which is seeking to develop a
drug candidate using a proprietary compound, N-nonyl-DNJ, licensed to it
exclusively from Monsanto, to treat another infectious disease, Hepatitis B, for
which there also is a significant medical need for improved therapy. N-nonyl-DNJ
seeks to prevent the secretion of the Hepatitis B virus from the infected cells.
The mechanism of action is that N-nonyl-DNJ prevents the sugars of one of the
Hepatitis B virus antigens from being correctly biosynthesized, so that the
virus does not form, as evidenced in animal studies described in the May 1998
edition of Nature Medicine a referee journal.
 
     The Company's strategy is to develop products both independently and
through strategic partnerships with large pharmaceutical companies, under which
the Company will seek financial, preclinical and clinical trial, manufacturing
and marketing assistance while retaining parallel manufacturing and/or marketing
rights for the products. In addition to the IgX Oxford joint venture, in August
1998 IgX entered into strategic partnerships with Sintofarma, a Brazilian
company currently responsible for the manufacturing and marketing of 26
pharmaceutical products in South America, and Gador, the second largest
manufacturer and distributor of pharmaceutical products in Argentina based on
both unit volume and sales. These agreements relate to the development and
commercialization of the Company's Avian Technology-based drug candidates in
South America, Latin America and Mexico. See "Business--Strategic Partnerships."
 
AVIAN TECHNOLOGY
 
     Background.  Antibiotics and vaccines (active immunizations) are currently
the most common therapies for the treatment and prevention of infections. While
both of these therapies have demonstrated effectiveness in certain infections,
the Company believes both have significant limitations for the treatment of GI
tract infections. Pathogens are becoming increasingly resistant to antibiotics.
The overuse and misuse of antibiotics induce antibiotic resistant pathogens, and
occasionally results in the onset of serious, and sometimes fatal, secondary
infections. Vaccines generate an immune response against various pathogens and
usually take several weeks or more before they can provide that immunity.
Additionally, a person may require repeated vaccinations to raise the
concentration of antibodies in the body to levels high enough to prevent or
counteract infection. For many of the GI tract diseases the Company is seeking
to address, this delay in effectiveness may be unacceptable, because it may
permit progression of the disease to severe or even fatal stages. In addition,
vaccines are not currently available for the majority of GI tract infections
that are the focus of IgX's initial drug candidates. For these reasons, the
Company believes that new therapeutic approaches for treating and preventing GI
tract infections are needed.
 
                                       27

<PAGE>

     One alternative to antibiotics and vaccines is passive immunity. Passive
immunity consists of using antibodies produced by one individual or animal to
treat or prevent infection in another. Such antibodies can be administered by
injection for systemic infections or orally for GI tract infections. Breast
feeding is the most familiar example of passive immunity delivered to the GI
tract with the mother providing natural protective antibodies to her infant
through her milk.
 
     The Company believes that the advantages of passive immunity for treating
or preventing GI tract infections are numerous. The Company believes that orally
delivered antibodies may provide immediate treatment of existing infections and
rapid temporary immunity against developing infection. The orally delivered
antibodies go directly to the site of infection in the GI tract rather than
through the blood-stream. The antibodies are polyclonal, meaning that they bind
to many different surface features of a pathogen, and thus, the Company
believes, are less likely to permit the development of resistant pathogens. The
antibodies may not disrupt the GI tract's natural bacterial flora, which is
necessary for normal digestion and intestinal function. As a result of these
advantages, passive immunity can be used for both acute treatment as well as a
prophylaxis to prevent the onset of infection or for long-term prevention of
disease.
 
     Description of Avian Technology.  Avian Technology is based upon the
principle of passive immunity, i.e., utilizing hen-derived egg yolks containing
an increased level of antibodies to treat human GI tract infections.
Specifically, the Avian Technology involves the immunization of hens with
pathogen-specific antigens. The antibodies are produced by the hens and
concentrated in the egg yolks. The antibody-rich egg yolks are collected and
processed by the Company. At least 50% of the lipids from the egg yolks are
currently extracted by precipitation, leaving the antibodies in a liquid form.
This liquid is then concentrated by cross flow filtration and freeze dried
(lyophilized) to produce a polyclonal antibody drug candidate in powder form.
 
     The Avian Technology is used to develop drug candidates to treat bacterial
and parasitic infections. For bacterial infections, the polyclonal antibodies
are directed to binding sites on either the surface of the bacteria or to
bacterial products, such as toxins or enzymes. Antibodies which are directed to
bacterial surface sites interfere with bacterial adhesion and attachment in the
host, and prevent bacteria from colonizing host tissues. In animal studies,
polyclonal antibodies, which bind to toxins or enzymes, interfere with receptors
and neutralize the bacteria or bacterial products.
 
     The Company believes that infections due to C. parvum may be treated in a
similar manner. In animal studies, the polyclonal antibodies bind to parasites
as they move from cell to cell in the GI tract. In animal studies, these
antibodies recognize multiple binding sites on the target parasite and have
multiple potential mechanisms of action including the neutralization of toxins.
Due to the polyclonal antibody, the parasite is prevented from invading a cell
and, as a result, subsequently dies and is swept from the intestine, as
evidenced in animal studies. The reproductive cycle of the parasite is thus
interrupted, and the infection should terminate over time. However, there can be
no assurance that the polyclonal antibodies will cause the infection to
terminate.
 
     IGX-CPL3 is in the form of stable powder concentrate with a shelf life
exceeding eighteen months and it is anticipated that other Avian
Technology-based drug candidates developed by IgX will be produced in a similar
form. The Company believes that the Avian Technology-based drug candidates may
be formulated into various forms, including tablets, capsules and sterile
liquids.
 
IgX OXFORD TECHNOLOGY
 
     The Company believes N-nonyl-DNJ acts on the host liver cell infected with
Hepatitis B to inhibit the utilization of an enzyme which is a key component in
the production of envelope proteins. Without these envelope proteins, the
Hepatitis B virus should not produce its protective shell necessary to survive.
This therapeutic approach differs from traditional therapies in that it acts on
the host liver cells as opposed to the virus. The Company believes that in doing
so, it could be an effective antiviral that may overcome some potential clinical
obstacles to successful therapeutic intervention such as the development of drug
resistant mutations of the Hepatitis B virus.
 
                                       28

<PAGE>

IgX STRATEGY
 
     IgX's objective is to develop and rapidly commercialize pharmaceutical
products that principally seek to treat and prevent infections of the human GI
tract. The Company is pursuing this objective using the following strategies:
 
     o Leverage Avian Technology.  IgX is seeking to leverage the core Avian
       Technology based on hyperimmune egg yolk immunoglobulin to develop a
       portfolio of orally delivered polyclonal antibody drug candidates that
       would treat diseases of the GI tract. IgX believes that this technology
       could be used to develop individual drug candidates for additional
       separate infections of the GI tract. Production of such drug candidates
       would be based on similar manufacturing processes. The technology
       employed in the development of IGX-CPL3 is similar to that which IgX is
       seeking to use to develop two other drug candidates, IGX-CDL3 and
       IGX-HPL3.
 
     o Demonstrate principle of Avian Technology with cryptosporidial diarrhea
       HIV-advanced patients.  IgX is initially seeking to develop IGX-CPL3 to
       treat cryptosporidial diarrhea in HIV-advanced patients. If the current
       Phase III clinical trial for IGX-CPL3 is successful and establishes its
       efficacy in treating cryptosporidial diarrhea in HIV-advanced patients,
       IgX believes that it will have demonstrated the principle that Avian
       Technology-based drug candidates may treat certain infectious diseases of
       the human GI tract. There can be no assurance that the clinical trial
       will be successful or that it will demonstrate the principle that Avian
       Technology-based drug candidates may treat certain infectious diseases of
       the human GI tract.
 
     o Develop manufacturing capability in the EU, South America and the
       U.S.  IgX intends to maintain control of its proprietary manufacturing
       processes by maintaining rights to the manufacture of bulk materials
       required for the commercialization of its drug candidates. IgX Limited
       has built a GMP pilot production facility in Granard, County Longford,
       Ireland to support the existing Phase III clinical trial of IGX-CPL3 in
       South Africa and Mexico. The Company maintains a second pilot production
       facility in Tucson, Arizona to provide Avian Technology-based drug
       candidates for animal studies at the University of Arizona and any U.S.
       clinical trials. Under its strategic partnership with Sintofarma, the
       Company and Sintofarma have agreed to form a joint venture that expects
       to own and operate a manufacturing facility in Brazil for pilot
       production for clinical trials in Brazil and for full-scale production
       for the Company's Avian Technology-based drug candidates for sale in
       Brazil and elsewhere, if and when approved for sale. The Brazilian
       facility is anticipated to be an FDA-approved facility and Sintofarma has
       agreed to bear all costs of manufacture other than the supply of the
       pathogen-specific antigens for the hyperimmunization process. If the
       existing Phase III clinical trial of IGX-CPL3 is successful, IgX also may
       elect to build a full-scale manufacturing facility in Ireland or
       elsewhere. The Company believes that through the Sintofarma strategic
       partnership, future strategic partnerships or directly, it will be able
       to meet its long term production needs of the Avian Technology-based drug
       candidates and drugs, if and when approved for sale.
 
     o Leverage Strategic Partnerships.  The Company's strategy is to develop
       products both independently and through strategic partnerships with
       larger pharmaceutical companies, under which the Company will seek
       financial, preclinical and clinical trial, manufacturing and marketing
       assistance while retaining parallel manufacturing and/or marketing rights
       for the drug candidates. IgX has recently entered into strategic
       partnerships with Sintofarma and Gador. These agreements relate to the
       development and commercialization of the Company's Avian Technology-based
       drug candidates in South America, Latin America and Mexico. In addition,
       in August 1998, the Company entered into a joint venture with Monsanto
       and several other parties to organize IgX Oxford, a majority-owned
       subsidiary of the Company. IgX Oxford seeks to develop N-nonyl-DNJ,
       licensed to it exclusively from Monsanto, to treat Hepatitis B. See
       "Business--Strategic Partnerships."
 
                                       29

<PAGE>

DRUG CANDIDATES UNDER RESEARCH AND DEVELOPMENT
 
     The following chart illustrates the disease indications and various stages
of research and development of the Company's initial drug candidates:
 
<TABLE>
<CAPTION>
DRUG CANDIDATE                  DISEASE INDICATION                    STAGE OF RESEARCH AND DEVELOPMENT
--------------------  ---------------------------------------  ------------------------------------------------
 
Avian Technology-based
<S>                   <C>                                      <C>
 
IGX-CPL3              Cryptosporidial diarrhea, focusing on    European Union ("EU")-reviewed protocol,
                      HIV-advanced patients                    Phase III double-blind, placebo controlled
                                                               multicenter trial in South Africa commenced
                                                               January 1998. Expanded trial in Mexico in July
                                                               1998 pursuant to the same protocol. U.S.
                                                               Phase I/II trial of earlier high lipid
                                                               formulation for AIDS related cryptosporidial
                                                               diarrhea completed in November 1995.
 
IGX-CDL3              Clostridium difficile-associated         Animal studies.
                      diarrhea and related complications
                      arising from antibiotic therapy
 
IGX-HPL3              Peptic ulcers due to Helicobacter        Research.
                      pylori infections
 
N-nonyl-DNJ*          Hepatitis B                              Animal studies.
---------------------------------------------------------------------------------------------------------------
* Being developed by IgX's majority-owned subsidiary, IgX Oxford.
</TABLE>
 
  IGX-CPL3
 
     The Company's lead Avian Technology-based drug candidate, IGX-CPL3, is
designed to treat diarrhea caused by C. parvum, a parasite often found in
municipal drinking water. IGX-CPL3 is initially seeking to treat Cryptosporidial
diarrhea in HIV-advanced patients. Cryptosporidial diarrhea can be chronic or
life-threatening in HIV-advanced patients. The parasite C. parvum is a major
cause of uncontrollable diarrhea in approximately 20% of AIDS patients which
results in profound weight loss, malnutrition, dehydration, and in some cases
death. HIV-advanced patients with cryptosporidial diarrhea often require
hospitalization for administration of intravenous fluids and nutrition. Unless
triple drug therapy reverses an HIV-advanced patient's immunologic defects,
cryptosporidiosis usually continues in a persistent or relapsing fashion for the
duration of the patient's life. This requires maintenance therapy for those
patients.
 
     In November 1995, the Company completed a U.S. Phase I/II clinical trial at
New York Hospital-Cornell Medical Center in New York City to determine the
safety and preliminary efficacy of IGX-CP, an earlier high lipid, liquid
formulation of the IGX-CPL3 drug candidate, for AIDS-related cryptosporidial
diarrhea. IGX-CP for the trial was produced at the Company's Tucson, Arizona
pilot production facility. The trial was an open-label, ascending dose, pilot
study of two dose levels of IGX-CP, in which 16 of the 24 patients enrolled were
evaluable, having completed at least 2 weeks of treatment under either dose
level. The data, measured at the end of 3 and 6 weeks of treatment, suggested
that both dose levels were safe for administration to AIDS patients. In
addition, at least 60% of the total evaluable patients at the end of 3 and 6
weeks of treatment showed a decrease in daily frequency of bowel movements and
daily frequency of liquid stools, two of the trial's three primary efficacy
points. While daily frequency of bowel movements and daily frequency of liquid
stools decreased in only 40% and 20%, respectively, of the patients treated at
the high dose level at the end of 6 weeks, the Company attributes this decline
to the high lipid content of IGX-CP, which induced some diarrhea. The third
primary end point of the trial was stool oocyst quantitation, which measures the
density of the parasites in the stool and 25% of the evaluable patients met this
end point. The Company believes that stool oocyst quantitation is not a
significant measure of efficacy because it does not directly measure parasitic
volume. By contrast, the Company believes that bowel movement frequency is an
absolute measure of C. parvum, and its reduction in the trial evidenced a
corresponding reduction in C. parvum.
 
                                       30

<PAGE>

     Following the conclusion of the Phase I/II trial, the Company reformulated
IGX-CP to reduce the lipid content by approximately 50%, and to produce it as a
powder. During 1996 and 1997, the Company tested the reformulated drug
candidate, IGX-CPL3, in mice, and those animal studies demonstrated a reduction
in C. parvum counts. Based upon these animal studies, the Company believes that
IGX-CPL3 at the high dose level utilized in the Phase I/II trial should be more
effective than the prior formulation of the drug candidate, and the current
Phase III trial uses such high dose level. There can be no assurance that
IGX-CPL3 will be more effective than or as effective as the prior formulation of
such drug candidate.
 
     Since the late 1995 introduction of combination drug therapy, including
protease inhibitors, to treat HIV-advanced patients, the number of HIV-advanced
patients in the U.S. and portions of Europe who have chronic or life-threatening
cryptosporidial diarrhea has been significantly reduced. As a result, during
1996 and 1997 the Company refocused its marketing strategy of IGX-CPL3, seeking
to obtain regulatory approval to market IGX-CPL3 as a treatment for
cryptosporidial diarrhea in HIV-advanced patients in countries where combination
drug therapy is not widely available. Similarly, the Company decided that its
clinical trials should be conducted in those countries that would facilitate
patient enrollment. U.S. regulations prohibit the exportation of biologics for
use in foreign clinical trials. Accordingly, during 1996, the Company, through
its wholly-owned subsidiary, IgX Limited, built a pilot production facility in
Ireland to support the production of IGX-CPL3 and other Avian Technology-based
drug candidates for use in clinical trials outside the U.S.
 
     In January, 1998, the Company commenced a double-blind, placebo-controlled,
randomized multicenter Phase III clinical trial in South Africa pursuant to an
EU-reviewed protocol. In July 1998, the Company expanded the trial to Mexico
using the same protocol. The trial is being conducted through two clinical
research organizations, LCG Bioscience Limited and PRSI International. The
Company expects to enroll 135 HIV-advanced patients with cryptosporidial
diarrhea to be treated with IGX-CPL3, a low lipid formulation, at the high dose
level used in the Phase I/II trial. The trial protocol provides for an initial
four-week treatment consisting of five oral doses of IGX-CPL3 or placebo per
day. The trial's primary efficacy end point is the patient's percentage
reduction in weekly stool frequency. Patients whose stool frequency has not
decreased during this four week period will then be treated with open-label
IGX-CPL3 and omeprazole orally, or IGX-CPL3 alone by naso-duodenal tube or
percutaneous gastrostomy (if already fashioned), for a further four weeks. It is
anticipated that at least 90 patients will complete the trial. At September 15,
1998, the Company had screened over 450 patients based upon the trial's
inclusion and exclusion criteria and enrolled a total of 40 patients at 14 sites
in South Africa and Mexico, 26 of whom (all treated in South Africa) have
completed the trial. The Company anticipates that the trial will be completed in
the first half of 1999. If the trial is successful, IgX intends to apply for
marketing approval of IGX-CPL3 in the EU and certain South American countries to
treat cryptosporidial diarrhea in HIV-advanced patients and may apply for
similar approval in the U.S. The approximate reported number of HIV-advanced
patients who have cryptosporidial-based diarrhea is 14,500 in the EU and 700,000
in South America. If the current Phase III clinical trial for IGX-CPL3 is
successful and establishes its safety and efficacy in treating cryptosporidial
diarrhea in HIV-advanced patients, IgX believes that it will have demonstrated
the principle that Avian Technology-based drug candidates may treat certain
infectious diseases of the human GI tract. There can be no assurance that the
Phase III clinical trial for IGX-CPL3 will demonstrate any efficacy or safety or
that it will be completed successfully in a timely manner. Furthermore, there
can be no assurance as to the timing of EU and other foreign or domestic
regulatory filings or if or when any of those regulatory authorities will
approve IGX-CPL3 for sale. Additionally, there can be no assurance that
IGX-CPL3, if and when regulatory approvals are received, will achieve market
acceptance.
 
     The Company also plans to conduct clinical trials to determine the safety
and preliminary efficacy of using IGX-CPL3 to treat cryptosporidial diarrhea in
immunocompetent patients. While cryptosporidial diarrhea in immunocompetent
patients is generally neither chronic nor life-threatening, to the Company's
knowledge, no effective treatment currently exists. The Company expects to file
an IND application with the FDA by the end of the first quarter of 1999 to
commence a U.S. Phase I clinical trial of IGX-CPL3 to treat cryptosporidial
diarrhea in immunocompetent children. The Company also expects to file an IND
application to test IGX-CPL3 in immunocompetent adults later in 1999. The
approximate reported number of immunocompetent patients infected with
cryptosporidial diarrhea annually is 600,000 in the U.S., 1.1 million in Europe,
and 4.6 million in South America. There can be no assurance as to the timing of
the filing of these IND applications, the timing or outcome of the FDA's review
of any such applications, or, if and when such review is completed, the timing
or outcome of the related clinical trials.
 
                                       31

<PAGE>

  IGX-CDL3
 
     The Company's second Avian Technology-based drug candidate, IGX-CDL3, is a
proposed treatment for C. difficile-associated diarrhea and related
complications arising from the use of antibiotic therapy prescribed to patients
in hospitals and long-term health care institutions. Annually, approximately
2.3 million patients in the U.S., approximately 4.0 million patients in the EU
and approximately 194,000 patients in South America have
C. difficile-associated diarrhea.
 
     C. difficile occurs when the antibiotics used in traditional antibiotic
therapy for other numerous diseases alter the homeostasis of the GI tract's
normal bacterial flora and foster the subsequent overgrowth of certain
disease-causing bacteria. Currently, the first stage of treatment for
C. difficile-associated diarrhea involves the discontinuation of the causal
antibiotic therapy, if possible, and often the initiation of different
antibiotics to treat the C. difficile infection. Discontinuation of the causal
antibiotic may result in inadequate treatment of the underlying infection.
 
     C. difficile-associated diarrhea is currently treated with antibiotics but
the efficacy of the antibodies has been reduced due to increasing development of
drug resistance to these antibiotics. The Company believes that IGX-CDL3 may
prevent and treat C. difficile-associated diarrhea without the complications
associated with antibiotic treatment. However, there can be no assurance that
IGX-CDL3 will effectively prevent and treat C. difficile-associated diarrhea
without the complications associated with antibiotic treatment. Currently, the
Company is testing IGX-CDL3 in hamsters. IgX anticipates completing those
studies in the fourth quarter of 1998. If such studies are successful, as to
which there can be no assurance, the Company intends to submit an IND
application to the FDA to commence a U.S. Phase I/II clinical trial of IGX-CDL3
as a treatment for C. difficile-associated diarrhea and related complications.
 
  IGX-HPL3
 
     The Company's third Avian Technology-based product candidate, IGX-HPL3,
seeks to treat peptic ulcers caused by the bacteria, H. pylori. H. pylori has
been implicated as a cause of peptic ulcer disease and chronic gastritis. There
also appears to be a strong statistical association between H. pylori and
gastric carcinoma and types of lymphoma. Ulcers caused by H. pylori are
currently treated with certain antibiotics but their efficacy has been reduced
slightly due to an increasing development of drug resistance to these
antibiotics. The Company anticipates commencing animal studies for IGX-HPL3 in
mice by the end of 1998. Each year approximately 4 million new incidences of
ulcers or other complications arising from H. pylori are reported in the U.S.
 
     Persistent H. pylori infections lead to a high relapse rate of ulcer
disease after conventional ulcer treatment regimens (e.g. acid-suppressing
agents). Since the discovery of the relationship between H. pylori infections
and ulcers, a major trend in ulcer treatment has been the increased use of
antibacterial "combination therapy" (a combination of several antibiotics,
bismuth, and inhibitors of gastric acid production) instead of, or in addition
to, conventional ulcer therapies. While current combination therapy shows an
efficacy in approximately 80 to 85% of patients, recent articles have shown the
development of resistance to current combination therapy. This combination
therapy is also somewhat difficult and prolonged for patients, while the
Company's drug candidate intends to be a monotherapy of shorter duration. In
addition, IgX's drug candidate may not develop the drug-resistance exhibited by
current therapeutics.
 
  N-nonyl-DNJ
 
     In September 1998, IgX Oxford acquired an exclusive worldwide license from
Monsanto to commercialize N-nonyl-DNJ, a glucosidase inhibitor, as a treatment
for Hepatitis B. N-nonyl-DNJ seeks to prevent the secretion of the Hepatitis B
virus from the infected cells. The mechanism of action is that N-nonyl DNJ
prevents the sugars of one of the Hepatitis B virus antigens from being
correctly biosynthesized, so that the virus does not form, as evidenced in
animal studies described in the May 1998 edition of Nature Medicine, a referee
journal. While alpha interferon and antivirals are currently available to treat
Hepatitis B, these therapies have a limited clinical success rate, high
recidivism rate and significant undesirable side effects. To date, Monsanto has
sponsored research and animal studies on N-nonyl-DNJ at Oxford University
("Oxford") in Oxford, England and Thomas Jefferson University ("TJU") in
Philadelphia, Pennsylvania. The results of these woodchuck animal studies,
published in the May 1998 edition of Nature Medicine, showed a reduction of the
enveloped Hepatitis B virus correlated with the dosing level of N-nonyl-DNJ in
the serum of the treated animals. IgX has agreed to fund IgX Oxford with up
 
                                       32

<PAGE>

to $2 million. Such funds are anticipated to be used to conduct further animal
studies relating to N-nonyl-DNJ at Oxford and TJU, which are necessary to
determine whether an IND application to conduct a Phase I human clinical trial
is appropriate. These animal studies are anticipated to be completed by the end
of the first half of 1999. If they are successful, as to which there can be no
assurance, IgX Oxford anticipates filing an IND application with the FDA.
Monsanto has retained certain exclusive rights of first refusal to license for
further development and/or commercialize N-nonyl-DNJ. Approximately 350 million
people worldwide are chronically infected with Hepatitis B virus, which is
usually fatal in approximately 20-40% of the chronically infected population if
untreated.
 
RESEARCH AND DEVELOPMENT
 
     The Company has sponsored university research relating to the Avian
Technology principally at the University of Arizona under separate Research
Agreements relating to particular aspects of the Avian Technology. Under these
Research Agreements, the Company funds the research and development work at the
University for a specific time period. At June 30, 1998, the Company had
research funding commitments of $334,000 to the University under three separate
Research Agreements, for continuing research on IGX-CPL3, IGX-CDL3 and IGX-HPL3,
through March 31, 1999, December 31, 1998 and July 31, 1999, respectively. The
Research Agreements (and any remaining funding commitments) may be terminated by
the Company on 60 to 90 days' written notice. Under the Research Agreements with
the University (including those for previous Avian Technology research), the
Company obtained an exclusive option to license any invention derived from such
research (except that the University retains the right to use the invention for
teaching and research). The option is exercisable within six months of
notification by the University of the discovery of any such invention or such
longer period as the University may agree. By exercising these options, the
Company currently has five Licenses with the University covering certain aspects
of the Avian Technology. The terms and conditions of these Licenses are
substantially similar and are summarized under "Business--Patents and
Proprietary Rights." Since 1992, the Company has funded an aggregate of $2.4
million of research and development on the Avian Technology, of which $2.3
million has been received by the University. Research and development expenses
were $1,577,000 for the six months ended June 30, 1998, and $3,426,000,
$1,136,000 and $475,000 for the years ended December 31, 1997, 1996 and 1995,
respectively.
 
     The Company has a close working relationship with the scientists at the
University of Arizona, and Company management and the scientists at the
University of Arizona Company management and scientists at the University of
Arizona review the progress of the research work weekly under the sponsored
research agreements. Nine scientists, 4 of whom have Ph.D degrees, and 4
technicians employed by the University of Arizona are working on the Company's
sponsored research under the supervision of Charles R. Sterling Ph.D., the Head
of Department of Veterinary Science at the University of Arizona and the
Company's Director of Research and chairman of the Company's Scientific Advisory
Board. By utilizing the significant resources of the University of Arizona,
including its equipment, its laboratory facilities for synthesis, analyses,
pharmacology, toxicology, in vitro and in vivo animal studies and its animal
facilities, the Company believes that it has accomplished significantly more in
the research and development of its licensed compounds than it would have been
able to do so on its own, without substantially greater need for capital.
 
     With respect to the Company's research and development efforts for the
treatment of Hepatitis B, IgX has agreed to fund up to $2 million to IgX Oxford.
See "--Drug Candidates under Research and Development--
N-nonyl-DNJ."
 
                                       33

<PAGE>

STRATEGIC PARTNERSHIPS
 
     The Company's strategy is to develop products both independently and
through strategic partnerships with large pharmaceutical companies, under which
the Company will seek financial, preclinical and clinical trial, manufacturing
and marketing assistance while retaining parallel manufacturing and/or marketing
rights for the products.
 
     In August 1998, IgX entered into strategic partnerships with Sintofarma, a
Brazilian company currently responsible for manufacturing and marketing 26
pharmaceutical products in South America, and Gador, the second largest
manufacturer and distributor of pharmaceutical products in Argentina based on
both unit volume and sales. These agreements relate to the development and
commercialization of the Company's Avian Technology-based drug candidates in
South America, Latin America and Mexico. Under its agreement with the Company,
Sintofarma has agreed to pay for clinical trials in Brazil of the Company's
Avian Technology-based drug candidates currently under development (IGX-CPL3,
IGX-CDL3 and IGX-HPL3), and to form a Brazilian joint venture entity with the
Company to manufacture Avian Technology-based drug candidates for sale in Brazil
and elsewhere. The joint venture entity ("Sintofarma IgX Biotech, Ltda"), which
is expected to be owned 40% by IgX and 60% by Sintofarma, will manufacture all
Avian Technology-based drugs for commercial sale, if and when any such drug
candidates are approved for sale. Under this strategic partnership, IgX granted
Sintofarma an exclusive license to distribute and market IGX-CPL3 and IGX-CDL3
in Brazil, if and when approved for sale, for a royalty to be agreed upon
ranging from 10% to 16.6% of net sales. Sintofarma and Gador also have rights of
first negotiation for similar licenses on other Avian Technology-based drug
candidates. Under its agreement with the Company, Gador agreed to manage the
process to obtain regulatory approval to commercialize IGX-CPL3 and IGX-CDL3 in
all countries in South America, except Brazil, as well as Latin America and
Mexico. IgX also has granted Gador the exclusive distribution and marketing
rights to IGX-CPL3 and IGX-CDL3 in those countries if and when approved for
sale, for which Gador will pay IgX a royalty of 10% of net sales. In addition,
Gador will purchase the ingredients for IGX-CPL3 and IGX-CDL3 from IgX or its
designee (including Sintofarma IgX Biotech, Ltda) at a cost of up to 20% of the
net sales of drugs sold by Gador.
 
     In August 1998, the Company formed a joint venture, IgX Oxford, a
majority-owned subsidiary of the Company, with Monsanto and several other
parties. IgX Oxford seeks to develop a drug candidate using a proprietary
compound, N-nonyl-DNJ, licensed to it exclusively from Monsanto, to treat the
infectious disease, Hepatitis B, for which there also is a significant medical
need for improved therapy. N-nonly-DNJ seeks to prevent the secretion of the
Hepatitis B virus from the infected cells. The mechanism of action is that
N-nonyl-DNJ prevents the sugars of one of the Hepatitis B virus antigens from
being correctly synthesized, so that the virus does not form, as evidenced in
animal studies described in the May 1998 colition of the Nature Medicine, a
referee journal. To date, Monsanto has sponsored research and animal studies on
N-nonyl-DNJ at Oxford and TJU. The results of these woodchuck animal studies,
published in the May 1998 edition of Nature Medicine, showed a reduction of the
enveloped Hepatitis B virus correlated with the dosing level of N-nonyl-DNJ in
the serum of the treated animals. IgX has agreed to the funding of IgX Oxford to
conduct further animal studies relating to N-nonyl-DNJ at Oxford and TJU, which
are necessary to determine whether an IND application to conduct a Phase I human
clinical trial is appropriate. TJU, Raymond A. Dwek, Timothy Block, Ph.D.,
Baruch Blumberg, Ph.D., Hepatitis B Foundation and Monsanto own in the aggregate
the remaining 40% of the outstanding capital stock of IgX Oxford (on a
fully-diluted basis). Monsanto holds its ownership through a warrant to purchase
for nominal consideration that number of shares that would result in its owning
approximately 12.5% of the outstanding capital stock (assuming no other further
issuances of capital stock). Professor Dwek and Dr. Blumberg are directors of
the Company and Professors Dwek and Block have been the principal investigators
of the research conducted on N-nonyl-DNJ at Oxford.
 
     The license agreement between IgX Oxford and Monsanto is for a term that
commenced September 1, 1998 and expires on the later of September 1, 2013, or
the expiration of all royalty obligations thereunder, unless terminated earlier
as provided in the license agreement. Under the license agreement, Monsanto is
entitled to (i) a royalty of 1.5% of the net sales of any drugs incorporating
N-nonyl-DNJ sold by IgX Oxford or any sublicensee for use in the treatment of
Hepatitus B virus and (ii) 25% of any compensation paid to IgX Oxford, other
than royalties measured by net sales, as consideration for any sublicense or
assignment of the Monsanto license agreement. The royalty payments are fully
payable on net sales of a product where a valid patent of Monsanto relating to
N-nonyl-DNJ as a treatment of the Hepatitus B virus is pending or issued or
where IgX Oxford has substantial market exclusivity and only during the life of
such patent or or the duration of the market exclusivity. Monsanto also has
retained certain exclusive rights of first refusal to license N-nonyl-DNJ for
further development and/or commercialization. Its initial right of first refusal
is exercisable prior to the commencement of a Phase I clinical trial involving
N-nonyl-DNJ as a treatment for the Hepatitis B virus. A second right of first
refusal is exercisable at the end of any subsequent Phase II clinical trial
unless IgX Oxford has previously entered
 
                                       34

<PAGE>

into a similar agreement with a third party on terms no less favorable in the
aggregate to such third party than those offered to Monsanto in the initial
right of first refusal. If Monsanto exercises its right of first refusal, any
such development and license agreement with Monsanto would cover the clinical
development, registration and marketing of the drug candidate. Monsanto would
then be obligated to reimburse IgX Oxford for all costs incurred in the
development of the drug candidate, and pay a fee equal to the net present value
of the license, milestone payments based upon continuing development and
successful commercialization, if any, of the drug candidate by Monsanto, and
royalties based upon a percentage of net sales of the drug. Under its existing
license agreement with IgX Oxford, Monsanto also has a substantially similar
right of first refusal for other drug candidates developed by IgX Oxford using
any of the compound provided by Monsanto to IgX Oxford upon signing the license
agreement in September 1998. Monsanto also has similar rights of first refusal
with respect to the use of N-nonyl-DNJ for any application unrelated to
Hepatitis B.
 
      Under the license agreement between IgX Oxford and Monsanto, either party
may terminate the license agreement upon an event of default, including
bankruptcy or insolvency of the other party or a material breach of the license
agreement that is not cured within 30 days of notice of the breach. IgX Oxford,
at its option, may also terminate the license agreement on a country-by-country
basis (a) at any time it unilaterally determines to discontinue development or
marketing of N-nonyl-DNJ, (b) immediately if the manufacture, use, sale or
distribution of N-nonyl-DNJ, as a treatment for the Hepatitis B virus is
determined in a final judicial or adminstrative order or decision to infringe
the patent rights of a third party or if upon the advice of patent counsel, IgX
Oxford determines that any such infringement in any Major Market (as defined
below is unavoidable, and (c) immediately if N-nonyl-DNJ as a treatement for the
Hepatitis B virus is deemed unmarketable. Monsanto also may terminate the
license agreement if IgX Oxford shall have failed to give notice on or before
September 1, 2000 of its intent to commence a Phase I clinical for N-nonyl-DNJ
as a treatment for the Hepatitis B virus, which notice triggers Monsanto's
initial right of first refusal decribed above or if IgX Oxford shall have failed
to provide the notice required to trigger Monsanto's second right of first
refusal described above. Further, Monsanto can terminate the license agreement
if IgX Oxford fails to commercialize N-nonyl-DNJ as a treatment for the Hepatits
B virus in at least one of the "Major Markets" (United States the EU, Japan or
the People's Republic of China) prior to September 1, 2004, alternately,
Monsanto has the option in such event to obtain an exclusive license from IgX
Oxford for N-nonyl-DNJ as a treatment for the Hepatitis B virus in any such
Major Market that IgX Oxford has so failed to commercialize such product.
Finally, Monsanto may terminate the license agreement if lgX defaults under its
obligations to fund lgX Oxford with up to $2 million as described in this
Prospectus and fails to cure that default within 30 days notice. Any termination
of the license agreement between lgX Oxford and Monsanto could have a material
adverse affect on the Company's business, financial condition and results of
operations.
 
MANUFACTURING
 
     To date, the Company has been able to produce sufficient quantities of its
drug candidates for development and clinical trials from its pilot production
facilities in Arizona and Ireland. The Company produced IGX-CP at its pilot
production facility in Tucson, Arizona to support its U.S. Phase I/II clinical
trial at New York Hospital-Cornell Medical Center in New York City to determine
the safety and preliminary efficacy of IGX-CP for AIDS-related cryptosporidial
diarrhea. During 1996 and 1997 the Company refocused its regulatory strategy of
IGX-CPL3, seeking to obtain regulatory approval to market IGX-CPL3 as a
treatment for cryptosporidial diarrhea in HIV-advanced patients in countries
where combination drug therapy is not widely available. Similarly, the Company
decided that its clinical trials should be conducted in those countries that
would facilitate patient enrollment. U.S. regulations prohibit the exportation
of biologics for use in foreign clinical trials. Accordingly, during 1996, the
Company, through its wholly-owned subsidiary, IgX Limited, built a pilot
production facility in Ireland to support the production of IGX-CPL3 and other
Avian Technology-based drug candidates for use in clinical trials outside the
U.S.
 
     The Company intends to continue to utilize its pilot production facilities
for continuing research and development, including preclinical testing and
clinical trials. Under its strategic partnership with Sintofarma, the Company
and Sintofarma have agreed to jointly own and operate a manufacturing facility
in Brazil for pilot production for clinical trials in Brazil and for full-scale
production for the Company's Avian Technology-based products for sale in Brazil
and elsewhere, if and when approved for sale. The Brazilian facility is
anticipated to be an FDA-approved facility and Sintofarma has agreed to bear all
costs of manufacture other than the supply of the pathogen-specific antigens for
the hyperimmunization process. In addition, if the existing Phase III clinical
trial of IGX-CPL3 is successful, the Company may develop its own FDA-approved
full-scale manufacturing capability, in Ireland or elsewhere. If the Company
elects to build such a facility in Ireland, it may seek Irish
 
                                       35
<PAGE>
government financing. The Company believes that through the Sintofarma strategic
partnership, future strategic partnerships or directly it will be able to meet
its long term production needs of the Avian Technology-based drug candidates and
drugs, if and when approved for sale. See "Risk Factors--Manufacturing and
Dependence on Strategic Partners".
 
PATENTS AND PROPRIETARY RIGHTS
 
     The Company and the University of Arizona (the "University") have entered
into research agreements (the "Research Agreements") under which the Company has
funded research undertaken by the University. As a result of certain research,
the Company and the University have entered into license agreements (the
"Licenses") under which the Company is granted certain exclusive (other than the
University's right to use the invention for teaching and research), worldwide,
royalty-bearing licenses to inventions set forth in the University's one issued
patent and patent applications relating to aspects of Avian Technology utilized
by the Company in exchange for royalty payments by the Company. See
"Business--Research and Development." However, the Licenses do not provide the
Company with rights to license from the University inventions relating to Avian
Technology where the related research has not been funded by the Company.
 
     The Licenses presently pertain to one issued U.S. patent, two continuation
applications pending in the U.S., three other patent applications pending in the
U.S. (as well as three corresponding foreign applications) and one provisional
patent application pending in the U.S. The issued U.S. patent (No. 5,753,228),
which issued on May 19, 1998 and will expire on May 19, 2015, relates to a
method for treating parasitosis by the enteral administration of hyperimmune hen
egg yolk antibodies. One of the three pending patent applications refers to hen
egg yolk antibodies to C. difficile antigens and use in therapy for
pseudomembranous colitis. Another of the three pending patent applications
refers to the hen egg yolk antibodies to H. pylori and methods of use.
 
     Under the Licenses, IgX must use its best efforts to produce and sell the
licensed drug candidate, and has agreed to pay the University royalties equal to
5% of the net sales price of the licensed product. The royalties payable to the
University are reduced by an amount of royalties actually paid by IgX to any
non-affiliated third party in connection with the licensing of additional patent
rights or know-how necessary to make, use or sell the applicable drug, provided
that the royalties payable to the University will not be less than 3% of the net
sales price.
 
     The Company believes that its ability to compete effectively will depend in
large part on obtaining and maintaining access to patent and intellectual
property protection on technologies utilized in its business (particularly with
respect to aspects of Avian Technology licensed from the University). Pursuant
to its rights and obligations under the Research Agreements and the License
Agreements, the Company and the University pursue patent protection in the U.S.
and certain foreign jurisdictions for certain technologies believed to be
proprietary to the University and advantageous for the University and the
Company. The Company's ability to compete effectively will depend in large part
on the ability of the University to obtain and maintain a proprietary interest
in such technologies which are licensed to the Company. The University may
terminate any Licenses on 90 days' notice upon any breach or default by the
Company under the License or upon the bankruptcy or involvency or receivership
of the business of the Company. Upon termination of any License, all rights
granted thereunder revert back to the University and, in such event, the
University reserves the right to terminate all the other Licenses. Any such
termination would have a material adverse effect on the Company's business,
financial condition and results of operations, or could result in cessation of
the Company's business.
 
     The patent and intellectual property positions of pharmaceutical and
biotechnology companies, including the Company, are uncertain and involve
complex legal and factual questions for which important legal principles are
largely unresolved. A number of pharmaceutical companies, biotechnology
companies, universities and research institutions, many of whom have
substantially greater resources than the Company and have made substantial
investments and may be further along in development in technologies competitive
with those utilized by the Company, have filed patent applications or received
patents relating to treatments and technologies which are similar to or
competitive with those of interest to the Company.
 
     Since a United States patent application is maintained under conditions of
confidentiality while the application is pending in the United States Patent and
Trademark Office (the "PTO"), the Company is unable to determine the inventions
being claimed in pending patent applications filed by its competitors in the
PTO. In addition, patents issued and applications pending which relate to the
Company's areas of interest are numerous, and there can be no assurance that the
Company is aware of all potentially competitive or conflicting patents (either
pending or issued) or other intellectual property rights. The existence of such
other patents, patent applications and rights could result in a significant
reduction of the coverage of rights held or to be held by the Company (i.e.,
rights held under the Licenses) and the Company's ability to realize any
significant patent protection with respect to such rights.
 
                                       36
<PAGE>

     Furthermore, while the Company holds rights (under the Licenses) to one
issued U.S. patent and several pending applications in the U.S. and
internationally, there can be no assurance that any of the pending applications
will result in the issuance of any patents, that such applications will have
priority over the applications of others, that, if issued, any patents to which
the Company holds rights might offer protection against competitors with similar
technologies or that the Company will not require additional rights to conduct
its business. There can also be no assurance that any patent, if issued or
following issuance, will not be challenged, invalidated or circumvented, or that
the rights created thereunder would afford the Company a competitive advantage.
 
     The commercial success of the Company also depends in large part on the
Company neither infringing valid, enforceable patents or proprietary rights of
third parties, nor breaching any licenses that may relate to the Company's
business. In this regard, the Company is aware of certain third-party patents
and competitive proprietary technologies that may relate to its business.
Specifically, the Company is aware of certain intellectual property rights
belonging to third parties that could be interpreted to compromise the Company's
freedom to practice and/or obtain rights to patent protection with respect to
certain aspects of the Company's technologies in the areas of the treatment of
infections with hen egg antibodies and the formulation of lipid-reduced
preparations. In the event of an unfavorable interpretation of third party
intellectual property rights (including the third party intellectual property
rights of which the Company is aware), the Company may be required to obtain
licenses from such third parties. There can be no assurance that any such
licenses would be available to the Company upon reasonably acceptable terms, if
at all. If the Company were so required to obtain licenses from such parties,
and if the Company were unable to obtain such licenses on reasonably acceptable
terms or the Company were unable to practice, develop and exploit such
technologies, the Company's technologies and business could be materially and
adversely affected. There can also be no assurance that the Company does not or
will not infringe other patents, intellectual property or proprietary rights of
third parties (including patents and rights which may issue or arise in the
future). Any legal action or threat against the Company claiming damages or
seeking to enjoin commercial activities relating to the Company's business
affected by third-party rights, in addition to subjecting the Company to
potential litigation and liability for damages, may require the Company to
obtain licenses in order to continue to pursue its business. There can be no
assurances that the Company would prevail in any such action or that any license
(including licenses proposed by third parties) required under any third party
rights would be made available on commercially acceptable terms, if at all. The
Company could also face significant costs and loss of time by management and key
employees as a result of any litigation relating to such third party rights.
 
     Certain underlying aspects of the technologies utilized and pursued by the
Company and the University may already be and have been in existence in the
scientific community in certain embodiments. There are United States and foreign
patents and patent applications held by third parties in the Company's
commercial areas of interest and the Company believes that there may be
significant litigation in the Company's industry and commercial areas of
interest regarding patent and other intellectual property rights. If the Company
becomes involved in such litigation, it could consume a substantial portion of
the Company's managerial and financial resources, which could have a material
adverse effect on the Company. Additionally, the defense and prosecution of
patent interference proceedings before the PTO or other related administrative
or court proceedings could result in substantial expense to the Company and
significant diversion of effort by the Company's technical and managerial
personnel. There can be no assurance that the Company will not in the future
become involved in PTO interference proceedings or other litigation to determine
the priority of inventions. In addition, laws of certain foreign countries do
not protect intellectual property to the same extent as laws in the United
States, which may subject the Company to additional difficulties in protecting
its intellectual property in foreign countries.
 
     The Company uses intellectual property owned by others and licensed to the
Company. Disputes may arise as to the ownership rights in such intellectual
property and related technology. The Company may also rely on certain
technologies to which it does not have exclusive rights or which may not be
patentable or proprietary and thus may be available to competitors.
 
     There can be no assurance that the steps taken by the Company, the
University, or Monsanto to protect intellectual property and proprietary rights
will be adequate to prevent misappropriation or that others will not develop
competitive technologies or products. Furthermore, there can be no assurance
that others will not independently develop products that are similar or superior
to those proposed for development or commercialization by the Company, duplicate
any of the technologies utilized by the Company or design around any patent or
other intellectual property rights held by the Company.
 
                                       37
<PAGE>

     The Company's commercial success and ability to compete effectively will
also depend upon the unpatented trade secrets and confidential information of
the Company and its licensors (such as the University), especially where patent
protection is not believed to be appropriate or obtainable. In this regard, the
Company relies upon trade secrets, technical know-how and continuing inventions
of the Company and its licensors to develop and maintain the Company's
competitive position. There can be no assurance that the Company can obtain or
maintain meaningful protection of such trade secrets or know how or that the
Company will be capable of obtaining or maintaining protection for its rights to
such trade secrets or know how. The Company attempts to protect its trade
secrets and technologies utilized by it in part through confidentiality
agreements with its employees, consultants and certain contractors. There can be
no assurance, however, that these agreements will not be breached or terminated,
that licensors utilizing similar agreements with their employees, consultants
and contractors will not suffer from the breach or termination of such
agreements, that the Company would have adequate remedies for any breach or that
trade secrets or know how utilized by the Company will not otherwise become
known or be independently discovered by competitors.
 
COMPETITION
 
     The pharmaceutical industry is subject to intense competition and rapid
technological change. Numerous pharmaceutical, biotechnology and chemical
companies, academic institutions, governmental agencies and other public and
private research organizations are conducting research and developing new drug
candidates designed to use immune mechanisms to treat infections. Further
competition is expected from companies developing new antibiotics and other
anti-infective substances.
 
     Several companies are or have been developing products for treating or
preventing cryptosporidial diarrhea. Certain of those companies are attempting
to use antibody products developed from milk of dairy cows to prevent and treat
gastrointestinal diseases. IgX believes that the Avian Technology is superior to
the bovine products for two reasons: (i) the Avian Technology provides a more
stable source of cryptosporidium hyperimmune and (ii) the antibody activity
achieved by IgX is superior to those developed through bovine processes. Using a
different technology, Shaman Pharmaceuticals Inc. also competes with IgX's drug
candidate, IGX-CPL3, for the treatment of diarrhea. Shaman has developed a
product derived from an extract of the croton plant found in Latin America and
seeks to treat the underlying cellular mechanism for diarrhea by blocking
chloride secretion but does not treat the infection. IGX-CPL3 by contrast seeks
to eradicate the C. parvum parasite by providing polyclonal antibodies specific
to C. parvum that bind to the pathogen and prevent the parasite from attaching
to and invading intestinal epithelial cells. The Company believes these
antibodies should bind to the parasite when it moves from cell to cell following
its reproductive cycle. As the parasite should be prevented from invading a
cell, it should die and be swept from the intestine. The reproductive cycle of
the parasite should thus be interrupted and the infection should terminate over
time.
 
     The Company is aware of direct competition with respect to its C. difficile
diarrhea drug candidate. Ophidian Pharmaceuticals Inc. has developed a passive
antibody formulation that neutralizes a disease causing toxin secreted by C.
difficile during infection of the human GI tract. Ophidian uses a recombinant
protein technology from hens eggs. Ophidian has recently reported the completion
of a Phase I clinical trial. IgX believes that the Ophidian drug candidate is
inferior to IGX-CDL3 because it seeks to treat the resultant toxins of C.
difficile while IGX-CDL3 seeks to attack the bacteria directly before it is able
to create toxins. In addition, the Ophidian drug candidate is produced through a
process of laboratory test tube centrifuge. Ophidian, to the Company's
knowledge, has not succeeded at producing the drug candidate in commercially
viable quantities and to date, has no manufacturing facility.
 
     The Company also encounters competition with respect to its drug candidate
IGX-HPL3. Astra Merck Inc. is currently in Phase III studies of its drug
candidate Perprozole, and Eisai Co., Ltd has entered the Japanese market with
its product Rabeprazole sodium. Both products are antiulcer agents used together
with antibiotics to eradicate H. pylori. The Company believes that the Astra and
Eisai drug candidates are inferior to IGX-HPL3 because they are indirect
approaches to the eradication of the H. pylori bacteria. Perprozole and
Rabeprazole sodium seek to limit the acid present in the bowel thereby creating
a hostile environment for H. pylori. The Company believes that IGX-HPL3 by
contrast, seeks to act by blocking the urease receptors on H. pylori, thereby
creating an acid-rich environment which may kill the pathogen. In addition, AMBI
Inc. is conducting Phase III studies for its drug candidate, Nisin, an
antibiotic which seeks to eradicate H. pylori through triple drug therapy. The
Company believes that IGX-HPL3 is superior to Nisin because recent articles have
shown the development of resistance to current triple drug therapy. Triple drug
therapy is also somewhat difficult and prolonged for patients, while the
Company's drug candidate intends to be a monotherapy of shorter duration. In
addition, the
 
                                       38
<PAGE>
Company believes that its drug candidate should not develop the drug-resistance
exhibited by current therapeutics.
 
     The Company anticipates competition for IgX Oxford from certain companies
with drugs already on the market as well as companies developing drug candidates
which seek to treat Hepatitis B.
 
     Many of these competitors have substantially greater financial, human and
other resources and greater expertise in research and development,
manufacturing, marketing and distribution than the Company and may represent
significant competition for the Company. Such companies may succeed in
developing technologies and products that are more effective or less costly than
any of those that may be developed by the Company, and such companies may be
more successful than the Company in developing, manufacturing and marketing
products. In addition, some companies may be further along in their clinical
development as compared to the drug candidates of the Company. There can be no
assurance that the Company will be able to compete successfully in the future or
that developments by others will not render the Company's drug candidates
obsolete or non-competitive or that the Company's customers will not choose to
use competing technologies or products.
 
     Any drug candidate developed by the Company that gains regulatory clearance
or approval will have to compete for market acceptance and market share. An
important factor of such competition may be the timing of market introduction of
competitive products. Accordingly, the relative speed with which the Company can
develop drug candidates, gain regulatory approval and reimbursement acceptance
and supply commercial quantities of the product to the market are expected to be
important competitive factors. Although the Company believes that it is the
first in the U.S. to have initiated an FDA-approved human clinical trial of an
Avian Technology-based polyclonal antibody, there can be no assurance that the
Company will be first to market such a technology or to market such a technology
effectively.
 
GOVERNMENT REGULATION
 
  United States
 
     IgX's drug candidates are classified as human biological drugs and their
research, development and marketing are subject to substantial regulation by the
FDA as well as state and local entities. The Federal Food, Drug and Cosmetic
Act, the Public Health Service Act and other federal statutes govern the
testing, manufacture, safety, effectiveness, approval, storage, recordkeeping,
labeling, advertising and promotion of the Company's drug candidates.
Noncompliance with applicable statutory and regulatory requirements may result
in fines, recall or seizure of products, refusal to permit the Company to enter
into government supply contracts, refusal to approve Product Licensing
Applications ("PLA"), suspension or revocation of product licenses previously
granted and criminal prosecution.
 
     The process required by the FDA before the Company's drug candidates may be
marketed in the U.S. generally involves the following: (1) conducting
appropriate preclinical laboratory and animal tests; (2) the submission to the
FDA of an application for an IND which must be approved prior to approval to
conduct human clinical trials; (3) conducting adequate and well-controlled human
clinical trials to establish the safety and efficacy of the biologic; (4) the
submission of a PLA for approval of a biologic drug candidate; and (5) obtaining
FDA approval of and issuance of a license pertaining to a PLA prior to any
commercial sale or shipment of the drug or biologic. In addition to obtaining
FDA approval for each indication to be treated with each drug candidate, drug
manufacturing establishments must be registered with and approved by the FDA,
and manufacturers of biologics must also submit and obtain approval of an
Establishment License Application ("ELA") prior to commercial distribution of an
approved biologic. Manufacturing establishments are subject to regular
inspections by the FDA. All manufacturing facilities, production, testing and
packaging operations and recordkeeping practices must comply with current GMP
regulations, among other requirements.
 
     Preclinical Studies.  Preclinical studies are conducted in the laboratory
and in animal models to gain preliminary information on biochemical and
pharmacological properties of the investigational drug or biologic and to
identify any significant safety problems. The results of these studies are
submitted to the FDA as part of an IND application. Testing of previously
unapproved new drugs and biologics in humans may not commence until the IND
becomes effective.
 
     IND Application.  The IND application notifies the FDA of the sponsor's
investigational plan for the drug candidate or biologic and provides brief
descriptions of the chemical structure of the compound, the known
pharmacological and toxicological effects of the compound, and known information
relating to the compound's safety and effectiveness in humans, including
possible risks and anticipated side effects. An IND is effective in 30 days
unless the FDA objects. An IND that is effective authorizes a sponsor to conduct
human clinical studies (Phase I or Phase I/II) in order to demonstrate relative
safety and efficacy of the drug candidate in support of an ELA/PLA. Any
 
                                       39
<PAGE>

time prior to or following the commencement of clinical trials under an IND, the
FDA may determine that human subjects are or would be exposed to an unreasonable
and significant risk of injury by participating in the trial and may delay
initiation of or suspend an ongoing trial. There is no certainty that the
submission of an IND application will result in FDA authorization to commence
trials or that authorization of one phase of trials will result in authorization
of other phases or that the performance of any clinical trials will result in
FDA approval of any drug candidate.
 
     Clinical Studies.  Human clinical studies are typically conducted in three
phases, which may overlap, and are designed to collect additional data relating
to the safety, dosing and side effects of the proposed drug candidate and to the
drug candidate's efficacy in comparison with placebos or any currently accepted
therapy. Phase I clinical studies are generally performed in selected patients
with a disease or disorder to attempt to establish an initial data base
cataloguing tolerance, safety and dosing of the drug candidate. Phase II
clinical studies are generally performed in small numbers of carefully selected
patients and are used to obtain statistical evidence of the preliminary efficacy
and safety of the drug candidate and dosing regimen. Phase III consists of
expanded large-scale studies of patients with the target disease or disorder, to
obtain statistical evidence of the efficacy and safety of the proposed drug
candidate, dosing regimen in a broader patient population, overall risk-benefit
relationship and product labeling. These studies may include investigation of
the effects in subpopulations of patients, such as the elderly, women or certain
racial groups.
 
     When patients are studied, Phase I and II studies may be combined. Phase
I/II clinical studies are designed to establish initial data regarding the
tolerance, safety and dosing of the investigational drug or biologic, and to
obtain preliminary efficacy data in patients with the specific diseases. The
combination of different phases encourages the use of larger sample sizes and
may result in more reliable statistical results in the earlier phases.
Subsequent to the Phase I and II studies, pivotal Phase III studies are required
to be carried out with larger numbers of patients with the target disease or
disorder. These pivotal studies may be either Phase II or Phase III. Additional
clinical trials beyond the pivotal studies are sometimes required for licensing.
 
     Product Licensing Application.  Upon successful completion of clinical
testing, the PLA and ELA are filed with the FDA. These applications include,
among other things, details of the manufacturing and testing processes, proposed
packaging, labeling and results of preclinical studies and clinical trials
which, taken together, demonstrate that the drug candidate or biologic is safe,
pure, potent and effective. FDA approval of the applications is required before
the new drug candidate may be marketed. There can be no assurance that the FDA
will act favorably or quickly in reviewing submitted applications, and
significant difficulties or costs may be encountered by the Company in its
efforts to obtain FDA novel biological drug candidates. The FDA may grant
marketing approval, require additional testing or information or deny the
applications. The clinical trials may take three to five years or more to
complete, may be very costly, and there are no assurances that the clinical data
obtained will demonstrate to the FDA that the drug candidate is safe and
effective. The FDA may require the Company to perform additional human testing.
There can be no assurance that the FDA will ever accept the Company's data as
being sufficient to demonstrate the drug candidate's safety, purity, potency or
efficacy.
 
     Even after FDA approval of a PLA has been obtained, further studies are
generally required to provide additional data on safety or to gain approval for
the use of a drug as a treatment in a clinical indication other than those for
which the drug was initially tested. The FDA may also require post-marketing
testing and surveillance programs to monitor a drug's effects. Significant side
effects may prevent or limit the further marketing of the drug, or move the FDA
to withdraw its approval, if any, to market the drug, either temporarily, for
example, by ordering a drug recall, or permanently, by withdrawing the ELA or
PLA approval. Continued compliance with all FDA requirements and the conditions
in an approved application, including product specification, manufacturing
process, labeling and promotional materials and record keeping and reporting
requirements, is necessary for all drugs.
 
  International
 
     Sales of biologics outside the U.S. are subject to foreign regulatory
requirements that may vary widely from country to country. Approval of a product
by regulatory authorities of foreign countries comparable to the FDA must be
obtained prior to the commencement of marketing the products in those countries.
The time required to obtain such approval may be longer or shorter than that
required for FDA approval discussed above. The foreign regulatory approval
process may include all of the risks associated with obtaining FDA approval set
forth above, and there can be no assurance that foreign regulatory approvals
will be obtained on a timely basis, if at all.
 
  EU
 
     In 1995, the European Medicines Evaluation Agency ("EMEA") instituted a new
centralized drug-approval process for the member states of the European Union
(EU). The member states currently include Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland (Republic of), Italy, Luxembourg, the
 
                                       40

<PAGE>

Netherlands, Portugal, Spain, Sweden and the United Kingdom. This centralized
process supplements the traditional decentralized approach and allows for a
single central evaluation and approval that is binding in all EU member
countries. Similar to the FDA process, the safety, efficacy and quality of a
biologic drug candidate must be demonstrated according to criteria under EU law
and extensive preclinical and human clinical trials are likely to be required.
The results of all preclinical, development/manufacturing and Phase I, II and
III clinical trial data may be submitted to the EMEA, the counterpart of the
FDA, to seek approval for a Marketing Approval Application ("MAA"), which is the
equivalent of the PLA. The MAA is assigned to a "rapporteur" and/or "co-
rapporteur", an individual who coordinates the assessment of the application by
a team of experts in the preclinical, product manufacturing and clinical areas.
An overview of the results of the assessment is then presented to the Committee
on Proprietary Medicinal Products ("CPMP"). The CPMP, which is comprised of two
members from each of the member states of the European Union, evaluates both the
MAA and the rapporteur's recommendations and forms an opinion on the approval or
rejection of the MAA. This opinion is then referred to the European Commission,
and the European Council if appropriate, for a final decision. Approval of the
MAA by the European Commission and European Council, if appropriate, permits
product marketing within all countries of the European Union. This MAA procedure
takes a minimum of 300 days from submission of the application, excluding the
time taken by the applicant to respond to questions raised by the CPMP.
 
     In addition to the centralized EU regulatory process, national laws of each
EU member states govern clinical trials, good manufacturing practices,
reimbursement and pricing, advertising and promotion and other matters. Thus,
even if a drug candidate receives EU Marketing approval, it is not available for
sale until the foregoing items are complete.
 
     The Company is currently engaged in a Phase III clinical trial to test the
efficacy of IGX-CPL3 in treating cryptosporidial diarrhea in HIV-advanced
patients. The trial is being conducted in South Africa and Mexico. If the trial
is successful, IgX intends to apply for marketing approval of IGX-CPL3 in the EU
and certain South American countries to treat cryptosporidial diarrhea in
HIV-advanced patients and may apply for similar approval in the U.S.
 
REIMBURSEMENT
 
     The Company expects that sales volumes and prices of its drug candidates
will be dependent in large measure on the availability of reimbursement from
governmental and other third-party payors, including health insurance companies.
The Company believes that reimbursement in the future will be subject to
increased restrictions both in the U.S. and in foreign markets. The Company
believes that the overall escalating cost of medical drugs and services has led
to, and will continue to lead to, increased pressures on the health care
industry, both foreign and domestic, to reduce the cost of drugs and services,
including any drug candidates which may be offered by the Company. There can be
no assurance that, in either the U.S. or foreign markets, governmental and other
third-party reimbursement and coverage will be available or adequate, that
current reimbursement amounts will not be decreased in the future or that future
legislation, regulation, or reimbursement policies of governmental and other
third-party payors will not otherwise adversely affect the demand for the
Company's drug candidates or its ability to sell its drug candidates on a
profitable basis. The unavailability or inadequacy of governmental and other
third-party payor coverage or reimbursement could have a material adverse effect
on the Company's business, financial condition and results of operations.
 
PRODUCT LIABILITY INSURANCE
 
     The clinical and commercial development of pharmaceuticals, including those
being developed by the Company, may entail exposure to product liability claims.
While the Company has never been subject to any liability claims stemming from
the manufacture of, or preclinical or clinical trials of, its drug candidates,
there can be no assurance that it will not be subject to such claims in the
future. While IgX Limited currently has product liability insurance coverage in
an amount of approximately $7.5 million (or Irish pounds 5 million) per
occurrence for the use of IGX-CPL3 in the Company's Phase III clinical trial,
there can be no assurance that such coverage limits will be adequate nor that a
successful product liability lawsuit would not have a material adverse effect on
the Company. The Company does not have product liability insurance coverage for
the commercial sale of its drug candidates but intends to obtain such coverage
if and when its drug candidates are commercialized however, regulatory bodies,
there can be no assurance that sufficient product liability insurance will be
available on terms acceptable to the Company or at all. See "Risk
Factors--Potential Product Liability Exposure and Insurance."
 
                                       41

<PAGE>

FACILITIES
 
     IgX's executive offices are located in Summit, New Jersey in       square
feet of leased office space. The Company leases a pilot production facility in
Tucson, Arizona which is responsible for developing drug candidates used in
research and development. In addition, through its wholly owned subsidiary, IgX
Limited, the Company owns a pilot production facility in Granard, Ireland. The
Company believes that its current facilities are adequate to meet its
requirements for the foreseeable future. Under its strategic partnership with
Sintofarma, the Company and Sintofarma have agreed to jointly build and own a
manufacturing facility in Brazil initially for pilot production of sufficient
quantities of its drug candidates for clinical trials in Brazil and for
full-scale production for the Company's Avian Technology-based products, if and
when approved for sale in Brazil. The future Brazilian facility is anticipated
to be an FDA-approved facility.
 
EMPLOYEES
 
     As of September 15, 1998 the Company employed 31 persons on a full-time
basis, of which 8 were involved in research and development, 16 in manufacturing
its drug candidate for clinical trial and 7 in administration and business
development. The Company believes that its relations are good with its
employees. None of the Company's employees is a party to a collective bargaining
agreement. See "Management--Executive Officers and Directors."
 
                                       42

<PAGE>

                                   MANAGEMENT
 
EXECUTIVE OFFICERS AND DIRECTORS
 
     The following table sets forth certain information regarding the executive
officers and directors of the Company:
 
<TABLE>
<CAPTION>
NAME                                    AGE   POSITION
-------------------------------------   ---   ---------------------------------------------------------
<S>                                     <C>   <C>
Albert J. Henry(1)...................   60    Chairman of the Board, Chief Executive Officer, Director
Carroll "Bo" Allen...................   53    Senior Vice President, Business Development and Marketing
Robert L. Renfroe....................   64    Senior Vice President, Operations, Managing Director IgX
                                              Limited
Vitaliano A. Cama, DVM...............   38    Vice President, Research and Development
Charles R. Sterling, Ph.D............   52    Director of Research
Tony Geoghegan.......................   40    Chief Financial Officer
Annette Fernandez, Ph.D..............   29    Assistant Vice President, Clinical Affairs
Baruch Blumberg, Ph.D................   73    Director
Raymond A. Dwek......................   56    Director
Donald H. Picker, Ph.D.(1)(2)(3).....
                                              Director
Edwin Snape, Ph.D.(1)................   58    Director
Randolph C. Steer, MD, Ph.D.(2)......   48    Director
</TABLE>
 
------------------
(1) Member of Executive Committee.
(2) Member of Compensation Committee.
(3) Member of Audit Committee.
 
     Albert J. Henry.  Mr. Henry has been Chairman of the Board of IgX since its
inception in February 1992 and its Chief Executive Officer since May 1998.
Mr. Henry also served as Chief Executive Officer of the Company from February
1992 until April 1997. Since 1983, Mr. Henry served as Chairman and Chief
Executive Officer of Henry & Co., venture capital firm, and of Henry Venture II
Limited, an Isle of Man venture capital fund and a principal stockholder of IgX.
From 1983 to 1993, Mr. Henry also served as Chairman and Chief Executive Officer
of the Henry Venture Fund Limited, a Cayman Island investment company. From
December, 1994 to December 1996 Mr. Henry was Vice Chairman and a Director of
IVAC Medical Systems, Inc., which designs, manufactures and sells electronic
instrumentation to administer intravenous therapy. From 1977 to 1982, Mr. Henry
was Chief Financial Officer, Director and Chairman, Executive Committee of IMED
Corporation, which invented, designed, manufactured and sold the first
electronic, volumetric infusion pump used to administer intravenous therapy. For
more than 5 years prior thereto, Mr. Henry was Chairman of Henry & Associates,
New York, a Wall Street securities research and venture capital firm and for 5
years was a lending officer at First National City Bank, a predecessor to
Citibank N.A. He holds a Masters in Business Administration, Finance and
Marketing, from Kellogg Graduate School of Management, Northwestern University
and a Bachelor of Science in Civil and Mechanical Engineering from Bradley
University. Mr. Henry is also adjunct professor of finance at Kellogg.
 
     Carroll "Bo" Allen.  Mr. Allen has been the Company's Senior Vice
President, Business Development and Marketing since July 1997 and served as a
Director from July 1997 to August 1998. For one year prior to joining IgX,
Mr. Allen was Senior Vice President of Marketing & Business Development in
Kimeragen, a gene repair company. From March 1994 to March 1996 Mr. Allen served
as Vice President of Business Development for CoCensys, Inc. a biopharmaceutical
company. From 1989 to 1994, Mr. Allen served as Product Director at Ciba-Geigy
Pharmaceuticals. Prior to that, from 1978 to 1989, Mr. Allen worked in the
marketing division of Sandoz Pharmaceuticals and Boehringer Ingelheim.
Mr. Allen received his Masters of Science in Biology from University of
Tennessee and a Bachelor of Science in Biology from Middle Tennessee State
University.
 
                                       43

<PAGE>

     Robert L. Renfroe.  Mr. Renfroe has been IgX's Senior Vice President,
Operations since April 1994 and Managing Director of IgX Limited since 1996. He
is responsible for management of the IgX Limited pilot production plant in
Ireland. From 1988 to 1994, Mr. Renfroe was Managing Partner of CIW, Inc., an
engineering, design and capital equipment provider to the electronic and
chemical industries. Mr. Renfroe was General Manager--Ireland and Vice President
of Operations of IMED Corporation, from 1980 to 1987. He holds a Masters of
Business from University of London and a Bachelor of Science in Electrical
Engineering from University of California.
 
     Vitaliano A. Cama, DVM.  Dr. Cama has served as Vice President, Research
and Development of the Company since January 1997 and for five years prior
thereto held a similar position in the Company. Dr. Cama is a co-inventor with
Dr. Sterling of the IgX Avian Technology. Since 1988 he has also been a research
associate in the Department of Veterinary Science at the University of Arizona.
During 1988 he was also a member of the Scientific Committee for the IX
Panamerican Congress of Veterinary Sciences. Prior to 1988, from in 1988
Dr. Cama was a research associate at Asociacion Benefica PRISMA and Department
of Microbiology, Universidad Peruana Cayetano Heredia in Lima, Peru. From 1986
to 1987 Dr. Cama was a teaching assistant at the Avian Pathology Laboratory.
From 1983 to 1985 he served as a teaching assistant in the Department of Animal
Production, School of Veterinary Medicine, Universidad Nacional Mayor de San
Marcos, in Lima, Peru. From 1982 to 1987 he was also a supervisor of AVI-VET
poultry farms in Lima, Peru. He holds a Doctor of Veterinary Medicine degree and
a Bachelor of Veterinary Sciences degree from the Universidad Nacional Mayor de
San Marcos in Lima, Peru and completed post-doctoral work at the University of
Arizona from 1988-1991 in immunoparasitology.
 
     Charles R. Sterling, Ph.D.  Dr. Sterling has been Director of Research and
Chairman of the Scientific Advisory Board of the Company since 1992.
Dr. Sterling is a co-inventor with Dr. Cama of the Avian Technology. Since 1983,
Dr. Sterling has been a professor at the University of Arizona having served as
the Head, Department of Veterinary Science since 1990. Dr. Sterling was also
Associate Professor, Department of Immunology and Microbiology, and Assistant
Professor, Department of Comparative Medicine, Wayne State University School of
Medicine, Detroit, Michigan from 1974 to 1983. Dr. Sterling's laboratory at
University of Arizona developed the leading diagnostic test for C. parvum and
Giardia. He was a postdoctoral fellow in Pathology, Case Western Reserve
University School of Medicine, Cleveland, Ohio, and received his Ph.D. from
Wayne State University and Bachelor of Science from Syracuse University.
 
     Tony Geoghegan.  Mr. Geoghegan has been the Company's Chief Financial
Officer since May 1998 and its Controller since September 1996. From August 1993
to August 1996 Mr. Geoghegan was Group Financial Controller of Aall Trust &
Banking Corporation Limited in the Cayman Islands. For 7 years prior thereto, he
was employed in the audit practice in the Dublin and Grand Cayman offices of
Coopers & Lybrand. Mr. Geoghegan has a Business Studies degree from Trinity
College, Dublin, and is a Fellow of the Institute of Chartered Accountants in
Ireland.
 
     Annette Fernandez, Ph.D.  Dr. Fernandez has been Assistant Vice President,
Clinical Affairs of the Company since December 1997. From August 1996 to
November 1997, after completing her education, Dr. Fernandez was the Assistant
Director of Technology Assessment & PharmacoEconomic Services (TAPES) Institute
of Excellence at the Jefferson Health System in Philadelphia, Pennsylvania.
Dr. Fernandez holds a Ph.D. from the University of Utah and a B.Pharm. from
Bombay University.
 
     Baruch Blumberg, Ph.D.  Baruch S. Blumberg has been a Director of the
Company since September 1998. Dr. Blumberg has been a Distinguished Scientist at
Fox Chase Cancer Center, Philadelphia since 1989, and a University Professor of
Medicine and Anthropology at the University of Pennsylvania, since 1977. He was
Master of Balliol College, Oxford University, from 1989 to 1994 and Associate
Director for Clinical Research at Fox Chase Cancer Center from 1964 to 1989. He
was awarded the Nobel Prize in 1976 for "discoveries concerning new mechanisms
for the origin and dissemination of infectious diseases" and specifically, for
the discovery of the Hepatitis B virus. He was on the staff of the National
Institutes of Health, Bethesda, MD, from 1957 to 1964. He earned an M.D. degree
from the College of Physicians and Surgeons, Columbia University, New York, in
1951, and a Ph.D. (D. Phil.) in Biochemistry from Oxford University in 1957.
 
     Raymond Allen Dwek, MA, MSc, D.Phil, DSc, C Chem, FRSC, FRS.  Professor
Dwek has been a Director of the Company since August 1998. In 1988 he was, as
founding scientist, instrumental in the foundation of Oxford Glycosciences plc
("OGS"), which is a minority shareholder in IgX Oxford. Professor Dwek has
served
 
                                       44

<PAGE>

as a non-executive Director of OGS and its predecessor, Oxford Glycosciences
Limited since 1988 and has been a member of its Scientific Advisory Board since
1997. Since 1988, Professor Dwek has been director of the Glycobiology
Institute, Professor of Glycobiology at the University of Oxford and
Professorial Fellow of Exeter College, Oxford, Professor of Glycobiology. Since
1996 Professor Dwek has been the Associate Head of the Department of
Biochemistry at the University of Oxford. In 1988 Professor Dwek was elected a
Fellow of the Royal Society of London and since 1988 he has been a member of the
European Molecular Biology Organisation and is Chairman of its Scientific
Advisory board. Professor Dwek received his Bachelor of Science in Chemistry and
his Master of Science in Physical Chemistry from Manchester University. He
received a Doctorate in Physical Chemistry at Oxford University.
 
     Donald H. Picker, Ph.D.  Dr. Picker has been a Director of the Company
since September 1998. Since 1996, Dr. Picker has been President and Chief
Operating Officer of LXR Biotechnology Inc., a drug development company. From
March 1996 until June 1996, Dr. Picker was Chief Operating Officer and Executive
Vice President at Corvas, a biopharmaceutical firm. Prior to that, from 1991
until 1996, he was Vice President of Research and Development at Genta, a
biopharmaceutical firm. From 1983 to 1991 he was Vice President Research and
Development for Johnson Matthey, Inc., where he developed platinum anticancer
drugs, including Paraplatin, a worldwide leading anticancer drug. Dr. Picker
received his Ph.D. in organic chemistry from State University of New York at
Albany, and received his Bachelor of Science degree in chemistry from the
Brooklyn Polytechnic Institute.
 
     Edwin Snape, Ph.D.  Dr. Snape has been a Director of the Company as well as
Chairman, Executive Committee for Corporate Development since January 1998.
Since 1995, Dr. Snape has been one of four principals in New England Partners, a
private equity firm headquartered in Boston, and has primary responsibility for
its healthcare investments. Dr. Snape is a partner of New England Partners II,
L.P. an affiliate of New England Partners, which is the general partner of NEGF
II, L.P., a principal stockholder of IgX. Dr. Snape has been a General Partner
of several venture capital partnerships since 1983, and was a Managing General
Partner of Vista III, L.P. from August 1986 to 1998. From March 1997 until
October 1997, Dr. Snape served as one of Vista's designees on the Board of
Directors of Superior Air Parts, a wholesaler of aircraft parts, in which Vista
then owned a majority of the outstanding equity. In July 1997, Superior Air
Parts filed for Bankruptcy protection under Chapter 11, and thereafter
reorganized. Dr. Snape holds a Doctorate of Science and Bachelor of Science
degrees in Metallurgy from Leeds University in England.
 
     Randolph C. Steer, M.D., Ph.D.  Dr. Steer has been a Director of the
Company since 1996 and a member of the Scientific Advisory Board since 1993.
Since 1989 Dr. Steer has been an independent regulatory and business development
consultant. He has a broad background in the commercial development of drugs,
biologics and medical devices. From 1985 to 1989 he served as Chairman of ATC
International, a pharmaceutical regulatory, marketing and publishing firm. From
1984 to 1985 he was the Medical Director at Ciba-Geigy Pharmaceuticals and from
1982 to 1984 he held a position in the Research and Development division of
Marion Laboratories. Dr. Steer is a member of the board of directors of Techne
Corporation, a manufacturer of cellular biologic reagents and BioCryst
Pharmaceuticals, a drug design and development company. Dr. Steer received his
MD degree from Mayo Medical School, Ph.D. from the University of Minnesota, and
completed residency and subspecialty training in clinical and chemical pathology
at the University of Minnesota Hospitals.
 
     The Company's Board of Directors is divided into three classes, each of
which will serve a term of three years, with one class being elected each year.
Each of the Company's directors has been elected to serve until his successor
has been elected and duly qualified. The terms of Donald Picker and Raymond Dwek
will expire at the annual meeting of stockholders in 1999; the terms of Baruch
Blumberg and Randolph Steer will expire at the annual meeting of stockholders in
2000; and the terms of Albert J. Henry and Edwin Snape will expire at the annual
meeting of stockholders in 2001. The Restated Certificate provides that
Directors may be removed only for cause by a majority of stockholders. See
"Description of Capital Stock--Anti-Takeover Measures."
 
     The Company has agreed, at the election of the Representative, to nominate
and use its best efforts at any time through June 14, 2003 to elect a designee
of the Representative to the Board of Directors or, at the Representative's
option, as an attendee at the meetings of the Board of Directors and has agreed
to reimburse any such designee for expenses incurred in attending Board
meetings.
 
     Under the Investors' Rights Agreement dated December 24, 1997 by and among
the Company and certain investors, including NEGF II, L.P., a principal
stockholder of the Company, the Company has agreed, for so long
 
                                       45

<PAGE>

as NEGF II, L.P. owns not less than 207,940 shares of Common Stock, to use its
best efforts to cause and maintain the election of Edwin Snape, Ph.D., a partner
of the general partner of NEGF II, L.P. or another designee of NEGF II, L.P., to
the Board. Dr. Snape has served as a Director of the Company pursuant to the
Investors' Rights Agreement since December 1997.
 
     The Company has entered into indemnification agreements with each of the
Directors of the Company, under which the Company has agreed to indemnify and
hold harmless each Director to the fullest extent permitted by law for losses
incurred by reasons of acts or omissions in his capacity as a Director of the
Company.
 
     The Company is the beneficiary of a $3 million "keyman" life insurance
policy on the life of Mr. Albert J. Henry.
 
BOARD COMMITTEES
 
     The Company has Audit, Compensation and Executive Committees of the Board
of Directors. The Audit Committee consists of Donald H. Picker. The primary
function of the Audit Committee is to assist the Board of Directors in the
discharge of its duties and responsibilities by providing the Board with an
independent review of the financial condition of the Company and of the
Company's financial controls and financial reporting systems. The Audit
Committee also reviews the general scope of the Company's annual audit, the fee
charged by the Company's independent accountants and other matters relating to
internal control systems.
 
     The Compensation Committee of the Board of Directors determines salaries,
incentives and other forms of compensation to be paid to all executive officers
of the Company, including the Chief Executive Officer. The Compensation
Committee's duties include the administration of the Company's Amended and
Restated 1993 Stock Option Plan. The Compensation Committee consists of Randolph
C. Steer, Chairman and Donald H. Picker.
 
     The Executive Committee consists of Albert J. Henry, Chairman, Edwin Snape
and Donald Picker. The primary function of the Executive Committee is to assist
the Board of Directors in evaluating acquisitions of clinical materials and
overseeing general business matters.
 
SCIENTIFIC ADVISORY BOARD
 
     The Company's Scientific Advisory Board consists of individuals with
expertise in various fields who advise the Company concerning long-term
scientific planning, research and development. Members of the Scientific
Advisory Board also evaluate the Company's research program, recommend personnel
to the Company and advise the Company on technology matters. While the
Scientific Advisory Board has not met collectively, its members have been
available individually to advise the Company on specific scientific and
technical issues. Scientific Advisory Board members are compensated $1,500 per
meeting and reimbursed for out-of-pocket expenses. In addition, each member will
receive nonstatutory stock options to purchase 10,000 shares of common stock
under the 1998 Stock Option Plan which vest over a period of three years. The
Company has entered into confidentiality agreements with the members of the
Scientific Advisory Board.
 
     No member of the Scientific Advisory Board is employed by the Company, and
members may have other commitments to or consulting or advisory contracts with
their employers or other entities that may conflict or compete with their
obligations to the Company. Accordingly, such persons are expected to devote
only a small portion of their time to the Company.
 
     Charles R. Sterling, Ph.D. acts as the Chairman of the Scientific Advisory
Board and Dr. Steer is also a member of the Scientific Advisory Board. The other
members of the Scientific Advisory Board are Dr. Robert Fekety, Dr. Robert
Gilman, Dr. Richard Guerrant, Dr. Gerald Keusch, Dr. Willis Maddrey, Dr. Matilde
Parente, Dr. Julie Parsonnet, Dr. Cynthia Sears, Dr. David N. Taylor, Dr. Reno
Vlahcevic and Dr. Christine Wanke.
 
     Robert Fekety, M.D.  Dr. Fekety has been a Professor Emeritus of
Epidemiology at the University of Michigan, School of Public Health since 1995.
Prior to that, from 1985 to 1995, he held the position of Professor of
Epidemiology at the same University. Dr. Fekety received his Medical Degree from
Yale Medical School and a bachelors of Arts from Wesleyan Universtiy.
 
     Robert Gilman, M.D.  Dr. Gilman is a Professor in the Department of Health
at John Hopkins University. He is a Director of the NIH-CIDR Program Project and
a Director of Summer Institute of Tropical Medicine and Health. Dr. Gilman has
authored approximately 160 scientific publications in peer reviewed journals and
seven text-books. His area of specialty is tropical disease and hygiene with an
emphasis in C. parvum and cyclospora.
 
                                       46

<PAGE>

     Richard L. Guerrant, M.D.  Since 1990, Dr. Gerrant has been a Professor of
International Medicine at the University of Virginia and Head of its Division of
Geographic and International Medicine since 1981. Dr. Guerrant has been the
Director of the Office of International Health at the University of Virginia
since 1995. Dr. Guerrant received his Medical Degree from the University of
Virginia School of Medicine, and his Bachelor of Schiece degree from Davidson
College.
 
     Gerald T. Keusch M.D.  Dr. Keusch is a Professor at the New England Medical
Center, Division of Infectious Disease. He is also a member of its Editorial
Board. He has authored numerous scientific publications in peer reviewed
journals on the impact of nutrition on immunity with a special emphasis on
C. parvum, Rotavirus and enteric toxins.
 
     Willis Maddrey, M.D.  Dr. Maddrey is Executive Vice President for Clinical
Affairs and a Professor of Internal Medicine at The University of Texas
Southwestern. He is also a member of the Michigan Quarterly Review. Dr. Maddrey
is the past President of the American College of Physicians and the American
Association of the Study of Liver Disease, as well as the Vice President of the
American Gastroenterological Association. He is an honorary fellow of the Royal
College of Physicians, London, the Royal College of Physicians, Glasgow and the
Royal Australasian College of Physicians and Surgeons. He is on numerous boards
of directors including Wellspan Health Care System and Southwestern Health Care
Systems. Dr. Maddrey's expertise is in hepatology, gastroenterology and
regulatory compliance.
 
     Matilde Parente, M.D.  Dr. Parente is Vice President of the Desert AIDS
Project and a Member of the Board of Councillors of the Riverside County Medical
Association in California. She is a diplomate of the American Board of Pathology
with certification in the specialties of Anatomic and Clinical Pathology and is
a Fellow of the College of American Pathologists.
 
     Julie Parsonnet, M.D.
 
     Cynthia Sears, M.D.  Dr. Sears is an Associate Professor of Medicine,
Division of Infectious Diseases and Gastroenterology at Johns Hopkins
University. She has authored approximately 16 scientific publications in peer
reviewed journals with an emphasis on enteric pathogens, specifically
C. parvum, Bacteriolides and E. coli.
 
     David N. Taylor, M.D.
 
     Z. Reno Vlahcevic, M.D.  Dr. Vlahcevic has been a Professor of Medicine at
the Virginia Commonwealth University, Medical College since 1974. He is also an
Associate Chairman for Research, Department of Internal Medicine at Virginia
Commonwealth. Dr. Vlahcevic received his Medical Degree from the Medical School
of the University, Zagreb in Croatia.
 
     Christine A. Wanke M.D.  Dr. Wanke is an Assistant Professor of Medicine at
Tufts University School of Medicine. From 1981 through 1998, Dr. Wanke was an
Assistant Professor of Medicine at Harvard Medical School. She received her
Medical Doctorate degree from the University of Wisconsin School of Medicine,
and her Bachelor of Science degree in South Asian Studies from University of
Wisconsin.
 
DIRECTOR COMPENSATION
 
     Directors who are not full-time employees of the Company are reimbursed
their out-of-pocket expenses and receive a fee of $1,500 per board meeting
attended and, upon their initial election and each subsequent reelection to the
Board, options to purchase 20,000 shares of Common Stock at the fair market
value of the Common Stock on the date of the grant. See "Stock Option Plans"
below.
 
                                       47

<PAGE>

     The following table sets forth certain compensation paid or earned with
respect to the Company's fiscal year ended December 31, 1997 for each of the
Chief Executive Officers of the Company during 1997 and the other executive
officers of the Company whose salary and bonus for that fiscal year exceeded
$100,000 (together, the "Named Executive Officers"):
 
                SUMMARY COMPENSATION TABLE FOR 1997 FISCAL YEAR
 
<TABLE>
<CAPTION>
                                                                                             LONG-TERM
                                                                                            COMPENSATION
                                                                                            ------------
                                                                           ANNUAL            NUMBER OF
                                                                        COMPENSATION        SECURITIES
                                                                     ------------------     UNDERLYING
                                                                     SALARY      BONUS        OPTION
NAME AND PRINCIPAL POSITION                                            ($)        ($)           (#)
------------------------------------------------------------------   -------    -------     ------------
<S>                                                                  <C>        <C>         <C>
Albert J. Henry
  Chairman and Chief Executive Officer............................        --         --              --

Craig R. Rennie
  Chief Executive Officer, President(1)...........................   177,000         --         200,000

Carroll W. Allen
  Senior Vice President,
  Business Development and Research...............................    76,000     52,000         125,000(2)

Robert L. Renfroe
  Senior Vice President, Operations
  Managing Director IgX Limited...................................   110,000         --              --
</TABLE>
 
------------------
(1) Due to office closure, Mr. Rennie's employment ceased as of May 12, 1998.
    Compensation was paid in Pounds Sterling, with amounts stated in US$ at an
    exchange rate of US$1 = pounds .6079 on December 31, 1997.
(2) Mr. Allen's stock options were rescinded in January 1998.
 
     The following table sets forth certain information regarding options
granted during the fiscal year ended December 31, 1997 by the Company to the
Named Executive Officers.
 
                       OPTION GRANTS IN LAST FISCAL YEAR
 
<TABLE>
<CAPTION>
                                                                                      POTENTIAL REALIZABLE
                                                                                     VALUE AT ASSUMED ANNUAL
                         NUMBER OF       PERCENT OF                                   RATES OF STOCK PRICE
                         SECURITIES    TOTAL OPTIONS                                 APPRECIATION FOR OPTION
                         UNDERLYING      GRANTED TO      EXERCISE OR                          TERMS
                          OPTIONS       EMPLOYEES IN     BASE PRICE     EXPIRATION    -----------------------
NAME                      GRANTED       FISCAL YEAR        ($/SH)          DATE        5%($)        10%($)
----------------------   ----------    -------------    -----------    -----------   ---------     ---------
<S>                      <C>           <C>              <C>            <C>           <C>           <C>
Craig R. Rennie.......      200,000(1)      61.5%           5.00        4/1/2007     1,932,000     3,669,000
Carroll W. Allen......      125,000(2)      38.5%           5.00        6/15/2007    1,208,000     2,293,000
</TABLE>
 
------------------
(1) These options terminated in May 1998.
(2) These options were rescinded in January 1998.
 
     The following table sets forth certain information concerning the number
and value of securities underlying exercisable and unexercisable stock options
held by the Named Executive Officers as of December 31, 1997:
 
                       1997 FISCAL YEAR END OPTION VALUES
 
<TABLE>
<CAPTION>
                                                       NUMBER OF UNEXERCISED            VALUE OF UNEXERCISED
                                                       OPTIONS AT FISCAL YEAR         IN-THE-MONEY OPTIONS AT
                                                               END(#)                  FISCAL YEAR END($)(1)
                                                    ----------------------------    ----------------------------
NAME                                                EXERCISABLE    UNEXERCISABLE    EXERCISABLE    UNEXERCISABLE
-------------------------------------------------   -----------    -------------    -----------    -------------
<S>                                                 <C>            <C>              <C>            <C>
Craig R. Rennie(2)...............................      50,000         150,000         200,000          600,000
Carroll W. Allen(3)..............................      37,500         112,500         175,000          525,000
Robert L. Renfroe................................      20,924          62,772         167,000          502,000
</TABLE>
                                              (Footnotes on next page)
 
                                       48

<PAGE>

(Footnotes from previous page)

------------------
(1) Based on the assumed $9.00 per share initial public offering price of the
    Common Stock offered hereby minus the applicable exercise price.
(2) Mr. Rennie's options terminated in September 1998.
(3) Mr. Allen's options were rescinded in January 1998.
                            ------------------------
 
     In January 1998, the Company granted a five-year-stock option to
Mr. Renfroe to purchase 50,000 shares of Common Stock at $1.00 per share. The
options become first exercisable at the rate 25% of the underlying shares
subject to the option, commencing January 1999.
 
EMPLOYMENT AGREEMENTS
 
     Albert J. Henry serves as Chief Executive Officer of the Company without
compensation and is subject to an agreement containing certain non-competition
and confidentiality provisions.
 
     Robert L. Renfroe is employed by IgX Limited ("Limited") under an
employment agreement that commenced December 1, 1996 and expires December 31,
1998 (the "Renfroe Employment Agreement"). Under the Renfroe Employment
Agreement, Mr. Renfroe receives an annual base salary of $110,000 and benefits
generally offered to Limited's employees. The Renfroe Employment Agreement
provides that the employment of Mr. Renfroe may be terminated by Limited with or
without "Cause." "Cause" is defined as a determination by a majority of the
Board of Directors of Limited that Mr. Renfroe has engaged in conduct not
appropriate for an employee of Limited. If Mr. Renfroe's employment is
terminated without cause, Limited must provide him with at least 30 days' prior
written notice. If the Phase III clinical trial for IGX-CPL3 is terminated by
Limited during the Pilot Plant Period or Manufacturing Plant Period (as such
terms are defined in the Renfroe Employment Agreement), Limited must pay
Mr. Renfroe a severance payment equal to twelve months of his annual base
salary, plus all applicable benefits. The agreement also contains a provision
prohibiting Mr. Renfroe from competing with Limited for three years from the
termination of employment. Pursuant to the Renfroe Employment Agreement,
Mr. Renfroe holds options to purchase 83,696 shares of Common Stock at an
exercise price of $1.00 per share. These options (which were originally issued
under a Limited stock option plan and subsequently assumed by the Company) are
exercisable at the rate of 25% per year over a four-year period, commencing
October 1, 1997, one year following the date of grant.
 
     Carroll "Bo" Allen is employed by the Company under an employment agreement
originally entered into with Limited and amended and assumed by the Company that
commenced June 1, 1997 and expires May 31, 1999 (the "Allen Employment
Agreement"). Under the Allen Employment Agreement, Mr. Allen receives an annual
base salary of $160,000, a cash incentive bonus (up to fifty percent of base
salary for each twelve-month period), a signing bonus of $40,000 available at
the rate of $10,000 per year and benefits generally offered to the Company's
employees.
 
     The Allen Employment Agreement provides that the employment of Mr. Allen
may be terminated by IgX with or without "Cause". "Cause" is defined as
(i) Mr. Allen's conviction of a felony; (ii) any neglect or breach of duty by
Mr. Allen, or any failure by Mr. Allen to perform to the reasonable satisfaction
of the Board, such duties as may be delegated to Mr. Allen from time to time;
(iii) Mr. Allen otherwise materially breaches any provision of the Allen
Employment Agreement; or (iv) a determination by a majority of the Board acting
in good faith that Mr. Allen has engaged in conduct not appropriate of an
employee. If Mr. Allen's employment is terminated without Cause and if he
executes a written release, the Company must pay Mr. Allen liquidated damages in
an amount equal to the amount of Mr. Allen's base salary for the remainder of
the initial two year employment term. In addition, if the Company terminates
Mr. Allen's employment without Cause, IgX must provide him with at least
60 days' prior written notice. If Mr. Allen's employment is terminated due to
his death and/or permanent disability, the Company must pay to Mr. Allen's
executor or representative an amount equal to Mr. Allen's base salary accrued
through the date of termination, plus a pro rata share of any annual bonus to
which Mr. Allen would otherwise be entitled for the year in which death or
permanent disability occurs. The agreement also contains a provision prohibiting
Mr. Allen from competing without written release with IgX during his employment
with the Company.
 
     Craig R. Rennie was employed by IgX Limited under an employment agreement
that commenced April 1, 1997 and would expire March 31, 1999 (the "Rennie
Employment Agreement"). Under the Rennie Employment
 
                                       49

<PAGE>

Agreement, Mr. Rennie would receive an annual base salary of $230,301
(pounds 140,000), a cash incentive bonus (up to fifty percent of base salary for
each twelve-month period), and benefits generally offered to Limited's
employees. In addition, pursuant to the Rennie Employment Agreement, Mr. Rennie
was issued options to purchase 200,000 shares of Limited's Common Stock at an
exercise price of $5.00 per share. These options were issued under the Limited's
1996 Stock Option Plan and are exercisable at the rate of 25% per year over a
four-year period, commencing April 1, 1997.
 
     The Rennie Employment Agreement provides that the employment of Mr. Rennie
may be terminated by Limited with or without "Cause". "Cause" is defined as
(i) Mr. Rennie's conviction of a felony; (ii) any neglect or breach of duty by
Mr. Rennie, or any failure by Mr. Rennie to perform to the reasonable
satisfaction of the Board, such duties as may be delegated to Mr. Rennie from
time to time; (iii) Mr. Rennie otherwise materially breaches any provision of
the Rennie Employment Agreement; or (iv) a determination by a majority of the
Board acting in good faith, that Mr. Rennie has engaged in conduct not
appropriate of an employee. If Mr. Rennie's employment is terminated without
Cause and if he executes a written release, the Company must pay Mr. Rennie
liquidated damages in an amount equal to the amount of Mr. Rennie's base salary
for the remainder of the initial two year employment term. In addition, if
Limited terminates Mr. Rennie's employment without Cause, Limited must provide
him with at least one year's prior written notice after the initial employment
term of two years has occurred. If Mr. Rennie's employment is terminated due to
his death and/or permanent disability, the Company must pay to Mr. Rennie's
executor or representative an amount equal to Mr. Rennie's base salary accrued
through the date of termination, plus a pro rata share of any annual bonus to
which Mr. Rennie would otherwise be entitled for the year in which death or
permanent disability occurs. The Rennie Employment Agreement also contains a
provision prohibiting Mr. Rennie from competing with Limited during the period
of the Rennie Employment Agreement.
 
     Due to an office closure, Mr. Rennie's employment with Limited ceased
effective May 12, 1998. According to a termination agreement between Limited and
Craig Rennie entered into in September 1998, Mr. Rennie received a termination
payment in the amount of approximately $141,142 (British pounds 85,800) and all
of Mr. Rennie's outstanding options were cancelled. The termination letter
requires Mr. Rennie to maintain as confidential, all information he acquired
through his employment with Limited. By its terms, the termination letter is a
full and final settlement of any claim which Mr. Rennie may have arising out of
his employment with Limited.
 
STOCK OPTION PLANS
 
     1993 Stock Option Plan.  The Company's initial Stock Option Plan was
adopted in 1993 and subsequently amended (as amended, the "1993 Stock Option
Plan"). The 1993 Stock Option Plan was designed to attract and retain key
employees of, consultants of, and directors to the Company and to enable them to
participate in the long-term growth of the Company. The 1993 Stock Option Plan
provided for the grant of stock options (incentive and nonstatutory). As of
September 25, 1998, options to purchase an aggregate of 825,857 shares of Common
Stock had been granted under the 1993 Stock Option Plan, of which options to
purchase 159,589 shares were exercisable as of such date. Options to purchase
360,000 shares had been exercised prior to that date. In September, 1998, in
light of the Board's adoption of the 1998 Stock Option Plan, the Compensation
Committee determined that no further grants would be made under the 1993 Stock
Option Plan.
 
     1998 Stock Option Plan.  The Company's 1998 Stock Option Plan was adopted
in September 1998 (the "1998 Stock Option Plan"). The 1998 Stock Option Plan is
designed to attract and retain key employees of, consultants of, and directors
to the Company and to enable them to participate in the long-term growth of the
Company. The 1998 Stock Option Plan provides for the grant of stock options
(incentive and nonstatutory) for the purchase of up to an aggregate of 600,000
shares of Common Stock, subject to adjustment for stock-splits and similar
capital changes. Awards under the 1998 Stock Option Plan can be granted to
officers, employees, non-employee directors, consultants and other individuals
as determined by the committee of the Board of Directors which administers the
1998 Stock Option Plan, each of whose members is a "non-employee director"
within the meaning of Rule 16b-3 under the Securities Act. The Compensation
Committee of the Board of Directors administers the 1998 Stock Option Plan. The
Compensation Committee selects the participants and establishes the terms and
conditions of each option granted under the 1998 Stock Option Plan, including
the exercise price, the number of shares subject to options and the time at
which such options become exercisable. The exercise price of all "incentive
stock options" within the meaning of Section 422 of the Code granted under the
Stock Option Plan must be at least equal to 100% of the fair market value of the
shares underlying the option on the  

                                       50

<PAGE>

date of grant and the exercise price of any nonstatutory option must be at least
85% of the fair market value of the shares underlying the option on the date of
grant. The term of any incentive stock option granted under the 1998 Stock
Option Plan may not exceed ten years. As of September 28, 1998, no options to
purchase shares of Common Stock had been granted under the 1998 Stock Option
Plan.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     Prior to the establishment of the Compensation Committee in September 1998,
the Board of Directors of the Company was responsible for determining salaries,
incentives and other forms of compensation for directors, officers and other
employees of the Company. See "Management--Stock Option Plans." Albert J. Henry
and Carroll W. Allen, the Chairman of the Board and Chief Executive Officer of
the Company and the Senior Vice President, Business Development and Marketing,
respectively, served as Board members during 1997 and participated in
deliberations of the Board concerning executive officer compensation.
 
                              CERTAIN TRANSACTIONS
 
     IgX Corp. (the "Company") was organized by Albert J. Henry, Chairman and
Chief Executive Officer of the Company, in February 1992 to conduct research and
development of drug candidates for the treatment of various infections.
 
     To fund the Company's operations, Henry Venture II Limited ("Henry
Venture"), a venture capital fund of which Mr. Henry is the Chairman and Chief
Executive Officer, purchased 350,030 shares of Common Stock for an aggregate
purchase price of approximately $350 (or $0.001 per share) in July 1992. In
August 1992 Henry Venture and another principal shareholder of the Company, IX
Limited, purchased 350,000 and 20,000 shares, respectively, of Series A
Preferred Stock for an aggregate purchase price of $370,000 (or $1.00 per
share). During September 1993, the Board of Directors of the Company effected a
10-for-1 stock split of the Series A Preferred Stock. From the period September
1992 through July 1996, the Company and IgX Limited obtained unsecured loans
from Henry Venture an existing stockholder, totalling $4,023,000, which bore
interest at 9% per annum, in the form of promissory notes (the "Original
Notes"). During August 1996, Henry Venture was issued 2,086,096 shares of Series
B mandatory redeemable convertible preferred stock (the "Series B Redeemable")
and 2,086,096 shares of Series C mandatory redeemable convertible preferred
stock (the "Series C Redeemable") of IgX Limited in exchange for the
cancellation of the Original Notes along with accrued and unpaid interest
thereupon of $149,192. Further, in August 1996, in consideration of the
cancellation of Series B Redeemable and Series C Redeemable, the Company issued
one additional share of Series A Preferred of IgX Limited to Henry Venture.
 
     In September 1994, IX Limited exercised options to purchase 360,000 shares
of Common Stock at $.01 per share under a stock option granted in 1993.
 
     In September 1995, the Company consummated a reorganization, under which
the Company became a wholly owned subsidiary of a newly organized corporation,
IgX Limited, formed under the laws of the Republic of Ireland. The
reorganization was effected to attempt to take advantage of certain Irish tax
benefits and government grants relating to IgX Limited's pilot production
facility in Ireland. In connection with this reorganization, all of the
outstanding capital stock (and securities convertible or exercisable into such
capital stock) of the Company was exchanged for shares of IgX Limited on a share
for share basis.
 
     In addition, from November 1996 to December 1997, Henry Venture loaned IgX
Limited an aggregate principal amount of $5,328,546 with interest accrued
thereon at 9% per annum (the "1996/1997 Henry Venture Notes"). The first
promissory note in the amount of $3,544,312 at December 31, 1997, which includes
$544,312 of accrued and unpaid interest through December 31, 1997, bears
interest at a rate of 9% per annum and is payable in full on December 31, 2001.
The second promissory note issued was in the amount of $328,546, representing
the remaining balance, also bears interest at 9% per annum, and is payable in
full on demand.
 
     In December 1997, as a condition to another venture capital financing, a
further reorganization was effected by which IgX Limited became the wholly owned
subsidiary of the Company, again with all of the outstanding capital stock (and
securities convertible or exercisable into such capital stock) of IgX Limited
being exchanged for shares of the Company on a share for share basis and with
the Company assuming all outstanding indebtedness due to Henry Venture from IgX
Limited.
 
     Further, in December 1997, the Company sold an aggregate of 748,582 shares
of Series B Preferred Stock for $4,799,982 (or $6.4121 per share), to six
investors, including Henry Venture and NEGF II, L.P., principal  
 
                                       51

<PAGE>

stockholders of the Company, which purchased 311,910 and 155,955 shares,
respectively. To effect payment for its shares of Series B Preferred Stock,
Henry Venture exchanged indebtedness of approximately $1,999,998 under the
1996/1997 Henry Venture Notes, and concurrently restructured the remaining
indebtedness into two promissory notes: one in the principal amount of
$3,544,311 (including interest) due December 31, 2001 with interest accruing
from the date thereof at 9% per annum, and the other note in the principal
amount of $328,548 payable on demand, together with interest accruing thereon at
9% per annum.
 
     In February 1998, the Company sold an additional 155,955 shares of 
Series B Preferred Stock for $999,999 to NEGF II, L.P., a principal stockholder
of the Company.
 
     In May 1998, NEGF II, L.P. loaned the Company the principal amount of
$1,000,000, due May 6, 2008, with interest accruing thereon at 9% per annum. The
indebtedness is subject to prepayment upon the occurrence of certain conditions,
including the consummation of this Offering. In connection with this financing,
the Company issued NEGF II, L.P. warrants to purchase 370,000 shares of Common
Stock of the Company at an exercise price of $0.01 per share. The warrant was
exercised on September 25, 1998.
 
     See "Management--Stock Option Plans" for options granted to executive
officers and directors.
 
     On September 25, 1998, Henry Venture converted the 1996/1997 Henry Venture
Notes (aggregating $4,092,815 of principal and accrued interest) into
584,688 shares of Common Stock at $7.00 per share. Concurrently NEGF II, L.P.
converted the $1,000,000 promissory note issued to it by the Company in May 1998
(aggregating $1,035,014 of principal and accrued interest) into 147,859 shares
of Common Stock also at $7.00 per share.
 
                                       52

<PAGE>

                             PRINCIPAL STOCKHOLDERS
 
     The following table sets forth as of September 28, 1998, giving pro forma
effect to the conversion of all outstanding preferred stock into 4,854,066
shares of Common Stock to be effective upon the closing of this Offering,
information with respect to the beneficial ownership of the Common Stock before
this Offering after giving effect to the conversion of Preferred Stock and as
adjusted to reflect the sale of the Common Stock offered hereby by (i) each
person known by the Company to own beneficially five percent or more of the
outstanding Common Stock, (ii) each director of the Company, (iii) each person
named in the Summary Compensation Table under "Management--Executive
Compensation," and (iv) all executive officers and directors as a group,
together with their respective percentage ownership of such shares:
 
<TABLE>
<CAPTION>
                                                           NUMBER OF SHARES            PERCENT BENEFICIALLY OWNED
                                                             BENEFICIALLY      ------------------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER                           OWNED(1)         BEFORE OFFERING        AFTER OFFERING
--------------------------------------------------------   ----------------    -----------------    ---------------------
<S>                                                        <C>                 <C>                  <C>
Henry Venture II Limited ...............................       4,746,629              71.2%                  52.9%
  100 Market Street
  Douglas, IM99 1TT
  Isle of Man

NEGF II, L.P. ..........................................         829,769              11.8%                   8.9%
  One Boston Place
  Suite 2100
  Boston, MA 02108

IX Limited .............................................         642,684               9.5%                   7.1%
  Les Nicolles House
  Les Nicolles
  St. Martin, Guernsey
  Channel Islands GY4 6UQ

Baruch Blumberg, Ph.D...................................              --                --                     --

Raymond A. Dwek, Ph.D...................................              --                --                     --

Donald H. Picker, Ph.D..................................              --                --                     --

Albert J. Henry(2)......................................              --                --                     --

Edwin Snape, Ph.D.(3)...................................              --                --                     --

Randolph C. Steer, M.D., Ph.D...........................          37,500                 *                      *

Robert Renfroe..........................................          41,848                 *                      *

Carroll "Bo" Allen......................................              --                --                     --

Craig S. Rennie (4).....................................              --                --                     --

All executive officers and directors as as a group
  (12 persons)..........................................          79,348               1.2%                     *
</TABLE>
 
------------------
* less than 1%
 
(1) A person is deemed to be the beneficial owner of Common Stock that can be
    acquired within 60 days from September 28, 1998 upon the exercise of
    options, and that person's options are assumed to have been exercised (and
    the underlying shares of Common Stock outstanding) in determining such
    person's percentage ownership. Accordingly, the following shares issuable
    upon exercise of options have been included in the shares beneficially owned
    by the following persons: IX Limited--82,684 shares; Randolph Steer--37,500
    shares; and Robert Renfroe--41,848 shares.
 
(2) Does not include shares held by Henry Venture II Limited, for which
    Mr. Henry serves as Chairman and Chief Executive Officer. Mr. Henry
    disclaims beneficial ownership of such shares.
 
(3) Does not include shares held by NEGF II, L.P. Dr. Snape is a partner of New
    England Partners II, L.P., which is the general partner of NEGF II, L.P.
    Dr. Snape disclaims beneficial ownership of such shares.
 
(4) Due to an office closure, Mr. Rennie's employment ceased on May 12, 1998.
 
                                       53

<PAGE>

                          DESCRIPTION OF CAPITAL STOCK
 
     After giving pro forma effect to the conversion of the outstanding
preferred stock into 4,854,066 shares of Common Stock upon consummation of this
Offering, the authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $0.001 par value per share, of which 6,666,643 shares
were issued and outstanding and held by nine holders of record as of September
28, 1998 and 5,000,000 shares of Preferred Stock, $0.001 par value per share,
none of which were outstanding as of such date. Immediately following the
closing of this Offering, the Company will file an amendment to the Company's
Restated Certificate eliminating the currently authorized Series A and Series B
Preferred Stock.
 
     The following summary of certain provisions of the Common Stock and
Preferred Stock does not purport to be complete and is subject to, and qualified
in its entirety by, (i) the provisions of the Company's Restated Certificate and
By-laws (each as included as exhibits to the Registration Statement) and
(ii) the provisions of applicable law.
 
COMMON STOCK
 
     Holders of Common Stock are entitled to one vote per share on matters to be
voted upon by the stockholders. There are no cumulative voting rights. Holders
of Common Stock are entitled to receive dividends if, as and when declared by
the Board of Directors out of funds legally available therefor. See "Dividend
Policy." Upon the liquidation, dissolution or winding up of the Company, holders
of Common Stock are entitled to share ratably in the assets of the Company
available for distribution to its stockholders, subject to the preferential
rights of any then outstanding shares of Preferred Stock. No shares of Preferred
Stock will be outstanding immediately following the closing of this Offering.
All the outstanding shares of Common Stock are, and the Common Stock to be
outstanding upon completion of this Offering will be, fully paid, validly
issued, and nonassessable.
 
PREFERRED STOCK
 
     The Company's Board of Directors will have the authority to issue up to
5,000,000 shares of Preferred Stock in one or more series and to fix the
relative rights, preferences, privileges, qualifications, limitations and
restrictions thereof, including dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption, redemption prices, liquidation
preferences, sinking fund terms and the number of shares constituting any series
or the designation of such series, without further vote or action by the
stockholders. The Company believes that the power to issue Preferred Stock will
provide flexibility in connection with possible corporate transactions. The
issuance of Preferred Stock could adversely affect the voting power of the
holders of Common Stock and restrict their rights to receive payment upon
liquidation and could have the effect of delaying, deferring or preventing a
change-in-control of the Company. See "Description of Capital
Stock--Anti-Takeover Measures." The Company has no present plans to issue any
shares of Preferred Stock.
 
ANTI-TAKEOVER MEASURES
 
     In addition to the Board of Directors' ability to issue shares of Preferred
Stock, the Restated Certificate and the By-laws contain several other provisions
that are commonly considered to discourage unsolicited takeover bids. The
Restated Certificate includes a provision classifying the Board of Directors
into three classes with staggered three-year terms. A Director may be removed
only for cause by the holders of a majority of the outstanding shares of capital
stock entitled to vote, voting together as a single class. For purposes of the
Restated Certificate, "cause" means an act or acts by an individual involving
the commission of a felony, willful misconduct, fraud, embezzlement, dishonesty,
breach of fiduciary duty or violation or breach of a written employment or
consulting agreement or of the Company's policy as described in a Company manual
or handbook, any of which acts cause the Company material damage. Any amendment
to the Restated Certificate relating to Board composition requires the
affirmative vote of the holders of at least two-thirds (2/3) of the combined
voting power of the then outstanding shares of stock entitled to vote generally
in the election of directors, voting together as a single class. The By-laws
include a provision prohibiting stockholder action by written consent except as
otherwise provided by law. Under the Restated Certificate and By-laws, the Board
of Directors may enlarge the size of the Board and fill any vacancies on the
Board.
 
                                       54

<PAGE>

     Upon the consummation of the Offering, the Company will be subject to the
provisions of Section 203 of the Delaware General Corporation Law, a law
regulating corporate takeovers (the "Anti-Takeover Law"). In certain
circumstances, the Anti-Takeover Law prevents certain Delaware corporations,
including those whose securities are listed on the Nasdaq National Market, from
engaging in a "business combination" (which includes a merger or sale of more
than ten percent of the corporation's assets) with an "interested stockholder"
(a stockholder who owns 15% or more of the corporation's outstanding voting
stock) for three years following the date on which such stockholder became an
"interested stockholder" subject to certain exceptions, unless the transaction
is approved by the board of directors and authorized by the affirmative vote of
at least 66 2/3% of the outstanding voting stock of the corporation at the time
the transaction commenced (excluding shares held by the interested stockholder).
The statutory ban does not apply if, upon consummation of the transaction in
which any person becomes an interested stockholder, the interested stockholder
owns at least 85% of the outstanding voting stock of the corporation (excluding
shares held by persons who are both directors and officers or by certain
employee stock plans). A Delaware corporation subject to the Anti-Takeover Law
may "opt out" of the Anti-Takeover Law with an express provision either in its
certificate of incorporation or by-laws resulting from a stockholders' amendment
approved by at least a majority of the outstanding voting shares; such an
amendment is effective following expiration of twelve months from adoption. The
Company has not "opted out" of the Anti-Takeover Law.
 
     The foregoing provisions of the Restated Certificate and By-laws and
Delaware law could have the effect of discouraging others from attempting
hostile takeovers of the Company and, as a consequence, they may also inhibit
temporary fluctuations in the market price of the Common Stock that might result
from actual or rumored hostile takeover attempts. Such provisions may also have
the effect of preventing changes in the management of the Company. It is
possible that such provisions could make it more difficult to accomplish
transactions which stockholders may otherwise deem to be in their best
interests.
 
TRANSFER AGENT
 
     The transfer agent and registrar for the Common Stock is Continental Stock
Transfer and Trust Company, 26 Broadway, New York, New York 10004.
 
                        SHARES ELIGIBLE FOR FUTURE SALE
 
     Upon completion of this Offering, the Company will have 8,966,643 shares of
Common Stock outstanding. Of these shares, the 2,300,000 shares sold in this
Offering will be freely transferable, without restriction or further
registration under the Securities Act, except for shares purchased by
"affiliates" of the Company as that term is defined in Rule 144 under the
Securities Act.
 
     The remaining 6,666,643 outstanding shares of Common Stock are owned by
existing stockholders and are deemed "restricted securities" under Rule 144, in
that such shares were issued and sold by the Company in private transactions not
involving a public offering. These may not be resold, except pursuant to an
effective registration statement or an applicable exemption from registration.
All of the stockholders of the Company have agreed to enter into nine-month
lock-up agreements described below. At the end of such nine-month period, all
such shares of Common Stock will be eligible for sale under Rule 144.
 
     In general, under Rule 144, as currently in effect, a person (or persons
whose shares are aggregated), including an affiliate of the Company, who has
beneficially owned restricted securities for at least one year from the later of
the date such restricted securities were acquired from the Company and (if
applicable) the date they were acquired from an affiliate, is entitled to sell,
within any three-month period, a number of shares that does not exceed the
greater of 1% of the then outstanding shares of Common Stock or the average
weekly trading volume in the public market during the four calendar weeks
preceding such sale. Sales under Rule 144 are also subject to certain
requirements as to the manner and notice of such sales and the availability of
current public information concerning the Company. Affiliates may sell shares
not constituting restricted securities in accordance with the foregoing volume
limitations and other requirements but without regard to the one-year holding
period.
 
                                       55

<PAGE>

     All of the Company's stockholders have agreed that they will not, without
the prior written consent of the Representatives, offer to sell, sell, transfer,
assign, hypothecate, pledge or otherwise dispose of any securities issued by the
Company, including without limitation any options, warrants or other securities
convertible into or exercisable or exchangeable for shares of Common Stock
during the nine-month period following the effective date of the Registration
Statement. In addition, all of the Company's shareholders have waived their
right to require the Company to file with the Commission a registration
statement under the Securities Act to register any of the foregoing securities
for one year from the effective date of the Registration Statement.
 
     The Company plans to file a registration statement on Form S-8 under the
Securities Act to register approximately 1,425,857 shares of Common Stock
issuable under the Stock Option Plans, nine months after the date of this
Prospectus. Upon registration, such shares will be eligible for immediate resale
upon exercise, subject, in the case of affiliates, to the volume, manner of sale
and notice requirements of Rule 144.
 
     No prediction can be made as to the effect, if any, that market sales of
additional shares or the availability of such additional shares for sale will
have on the market price of the Common Stock. Nevertheless, sales of substantial
amounts of Common Stock in the public market, or the perception that such sales
may occur, could have an adverse impact on the market price for the Common Stock
or impair the Company's ability to raise additional capital through an offering
of its equity securities. See "Risk Factors--Shares Eligible for Future Sale;
Registration Rights" and "--Immediate and Substantial Dilution."
 
REGISTRATION RIGHTS
 
     The holders of all shares of Common Stock (the "Registrable Shares") are
entitled to certain rights with respect to registration of the Registrable
Shares under the Securities Act. If the Company proposes to register any of its
securities under the Securities Act, either for its own account or for the
account of other security holders, such holders are entitled to notice of such
registration and are entitled to exercise their "piggyback rights" to include
such Registrable Shares in the registration. The rights are subject to certain
conditions and limitations, among them, the right of the underwriters of a
registered offering to limit the number of shares included in such registration.
Commencing six months after the date of this Prospectus, holders of Registrable
Shares benefiting from these rights may also exercise "demand rights" and
require the Company to file at its expense a registration statement under the
Securities Act with respect to their shares of Common Stock and, subject to
certain conditions and limitations, the Company is required to use its best
efforts to effect such registration. Furthermore, such holders may, subject to
certain conditions and limitations, require the Company to file additional
registration statements on Form S-3 with respect to such Registrable Shares. The
holders of Registrable Shares have waived their right to exercise piggyback
rights for a period of nine months from the date of this Prospectus and demand
rights for a period of twelve months from the date of this Prospectus.
 
                                       56

<PAGE>

                                  UNDERWRITING
 
     The Underwriters named below (the "Underwriters"), for whom Josephthal &
Co. Inc. is acting as the Representative, have severally agreed, subject to the
terms and conditions of the Underwriting Agreement (the "Underwriting
Agreement"), to purchase from the Company and the Company has agreed to sell to
the Underwriters on a firm commitment basis the respective number of shares of
Common Stock set forth below opposite their names:
 
<TABLE>
<CAPTION>
UNDERWRITER                                                                                        NUMBER OF SHARES
------------------------------------------------------------------------------------------------   ----------------
<S>                                                                                                <C>
Josephthal & Co. Inc............................................................................
 
Total...........................................................................................       2,300,000
</TABLE>
 
     The Underwriters are committed to purchase all of the shares of Common
Stock offered hereby if any of such shares are purchased. The Underwriting
Agreement provides that the obligations of the several Underwriters are subject
to the conditions precedent specified therein.
 
     The Company has been advised by the Representative that the Underwriters
initially propose to offer the shares of Common Stock to the public at the
initial public offering price set forth on the cover page of this Prospectus and
to certain dealers at such price less concessions of not in excess of $      per
share of Common Stock. Such dealers may re-allow a concession not in excess of
$      per share of Common Stock to other dealers. After the commencement of the
Offering, the public offering price, concession and reallowance may be changed.
 
     The Representative has advised the Company that it does not anticipate
sales to discretionary accounts by the Underwriters to exceed five percent of
the total number of shares of Common Stock offered hereby.
 
     The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Underwriters may be required to make in connection with this
Offering. The Company has also agreed to pay to the Representative an expense
allowance on a non-accountable basis equal to one percent (1%) of the gross
proceeds of this Offering and a financial advisor's fee equal to one percent
(1%) of the gross proceeds of this Offering, none of which has been paid to
date.
 
     The Underwriters have been granted an option by the Company, exercisable
within 45 days of the date of this Prospectus, to purchase up to an additional
345,000 shares of Common Stock at the initial public offering price per share of
Common Stock offered hereby, less underwriting discounts, the non-accountable
expense allowance and the financial advisor's fee. Such option may be exercised
only for the purpose of covering over-allotments, if any, incurred in the sale
of the shares offered hereby. To the extent such option is exercised, in whole
or in part, each Underwriter will have a firm commitment, subject to certain
conditions, to purchase the number of the additional shares of Common Stock
proportionate to its initial commitment.
 
     In connection with this Offering, the Company has agreed to sell to the
Representative, for nominal consideration, the Representative's Warrants to
purchase from the Company 230,000 shares of Common Stock. The Representative's
Warrants are initially exercisable for shares of Common Stock at a price per
share equal to 120% of the initial public offering price per share of Common
Stock for a period of four (4) years commencing one (1) year from the date of
this Prospectus and are restricted from sale, transfer, assignment, or
hypothecation for a period of twelve (12) months from the date hereof, except to
officers of the Representative. The
 
                                       57

<PAGE>

Representative's Warrants also provide for adjustment in the number of shares of
Common Stock issuable upon the exercise thereof as a result of certain
subdivisions or combinations of the Common Stock. The Representative's Warrants
grant to the holders thereof certain rights of registration for the securities
issuable upon exercise of the Representative's Warrants. See "Description of
Capital Stock--Registration Rights."
 
     The foregoing is a summary of the principal terms of the agreements
described above and does not purport to be complete. Reference is made to a copy
of each such agreement which are filed as exhibits to the Registration
Statement. See "Additional Information."
 
     The Company has also agreed, for a period of five years from the date of
this Prospectus, if so requested by the Representative, to nominate and use its
best efforts to elect a designee of the Representative as a director of the
Company or, at the Representative's option, as an attendee at the meetings of
the Company's Board of Directors and such designee will be reimbursed his
expenses for attendance at meetings of the Board of Directors. The
Representative has not yet exercised its right to designate such a person.
 
     All of the Company's officers, directors and existing stockholders have
agreed not to, directly or indirectly, offer to sell, sell, transfer, assign,
hypothecate, pledge or otherwise dispose of any securities of the Company owned
by them for a period of nine months following the date of this Prospectus,
without the prior written consent of the Representative. An appropriate legend
shall be marked on the face of the certificates representing all of such
securities.
 
     Prior to this Offering, there has been no public market for the Common
Stock. Consequently, the initial public offering price of the Common Stock will
be determined by negotiations between the Company and the Representative. Among
the factors to be considered in determining the offering price will be, in
addition to prevailing market conditions, the history of and prospects for the
industry in which the Company competes, an assessment of the Company's
management, the prospects of the Company, its capital structure and such other
factors that are deemed relevant. The initial offering price does not
necessarily bear any relationship to the assets, net worth or other established
criteria of value.
 
     In connection with this Offering, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Such transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M, pursuant to which such persons may bid for or
purchase Common Stock for the purpose of stabilizing its market price. The
Underwriters also may create a short position for the account of the
Underwriters by selling more Common Stock in connection with the Offering than
they are committed to purchase from the Company, and in such case may purchase
Common Stock in the open market following completion of the Offering to cover
all or a portion of such short position. The Underwriters may also cover all or
a portion of such short position, up to 345,000 shares of Common Stock, by
exercising the Over-Allotment Option. In addition, the Representative may impose
"penalty bids" under contractual arrangements with the Underwriters, whereby it
may reclaim from an Underwriter (or dealer participating in the Offering) for
the account of other Underwriters, the selling concession with respect to Common
Stock that is distributed in the Offering but subsequently purchased for the
account of the Underwriters in the open market. Any of the transactions
described in this paragraph may result in the maintenance of the price of the
Common Stock at a level above that which might otherwise prevail in the open
market. None of the transactions described in this paragraph is required, and,
if they are undertaken, they may be discontinued at any time.
 
                                 LEGAL MATTERS
 
     The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Epstein Becker & Green, P.C., New York, New York.
Certain legal matters will be passed upon for the Underwriters by Sonnenschein
Nath & Rosenthal, New York, New York.
 
                                       58

<PAGE>

                                    EXPERTS
 
     The financial statements as of December 31, 1996 and 1997 and for each of
the three years in the period ended December 31, 1997 included in this
Prospectus have been so included in reliance on the report (which contains an
explanatory paragraph relating to the Company's ability to continue as a going
concern as described in Note 2 to the financial statements) of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
 
                             ADDITIONAL INFORMATION
 
     The Company has filed with the Commission a Registration Statement on Form
S-1 (the "Registration Statement") under the Securities Act, with respect to the
shares of Common Stock offered hereby. This Prospectus does not contain all of
the information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and the
Common Stock offered hereby, reference is made to the Registration Statement and
the exhibits and schedules thereto. All statements made in this Prospectus
regarding the contents of any contract, agreement or other document filed as an
exhibit to the Registration Statement are qualified by reference to the copy of
such document filed as an exhibit to the Registration Statement. A copy of the
Registration Statement may be inspected without charge at the offices of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or
any part thereof may be obtained from the Commission upon the payment of certain
fees prescribed by the Commission. Such reports and other information can also
be reviewed through the Commission's Web site (http://www.sec.gov).
 
     Statements made in this Prospectus as to the contents of any contract,
agreement or other document referred to are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference.
 
     The Company intends to distribute to its stockholders annual reports
containing financial statements audited by its independent auditors and will
make available copies of quarterly reports for the first three quarters of each
fiscal year containing unaudited financial information.
 
                                       59

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                                                         PAGE
                                                                                                      ----------
<S>                                                                                                   <C>
Report of Independent Accountants..................................................................      F-2
Consolidated Balance Sheet.........................................................................      F-3
Consolidated Statement of Operations...............................................................      F-4
Consolidated Statement of Capital Deficiency.......................................................      F-5
Consolidated Statement.............................................................................      F-6
Notes to Consolidated Financial Statements.........................................................   F-7 - F-17
</TABLE>
 
                                      F-1

<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders of
IgX Corp.
 
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of capital deficiency and of cash flows
present fairly, in all material respects, the financial position of IgX Corp.
and subsidiary (the "Company") (a development stage company) at December 31,
1996 and 1997, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1997 and for the period from
inception (February 11, 1992) through December 31, 1997, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
 
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is a development stage enterprise and has
suffered recurring losses and net cash outflows from operations since inception
that raise substantial doubt about its ability to continue as a going concern.
As such, the Company is dependent upon capital infusions from existing and/or
new investors to fund operations. Management's plans with regard to these
matters are also described in Note 2. The accompanying financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
 
                                            PRICEWATERHOUSECOOPERS LLP
 
Stamford, Connecticut
September 14, 1998
 
                                      F-2
<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
 
<TABLE>
<CAPTION>

                                                                                                     PRO FORMA
                                                             DECEMBER 31,                             JUNE 30,
                                                      --------------------------      JUNE 30,          1998
                                                         1996           1997            1998         (NOTE 12)
                                                      ----------    ------------    ------------    ------------
                                                                                     (UNAUDITED)     (UNAUDITED)
<S>                                                   <C>           <C>             <C>             <C>
                      ASSETS
Current assets:
  Cash.............................................   $4,256,990    $  1,973,025    $  2,543,188    $  2,543,188
  Prepaid and other current assets.................      168,888         185,704          94,168          94,168
                                                      ----------    ------------    ------------    ------------
Total current assets...............................    4,425,878       2,158,729       2,637,356       2,637,356
  Property and equipment, net (Note 4).............    1,464,705       1,149,028       1,016,423       1,016,423
                                                      ----------    ------------    ------------    ------------
Total assets.......................................   $5,890,583    $  3,307,757    $  3,653,779    $  3,653,779
                                                      ----------    ------------    ------------    ------------
                                                      ----------    ------------    ------------    ------------
        LIABILITIES AND CAPITAL DEFICIENCY
Current liabilities:
  Notes payable to stockholders (Note 6)...........   $  225,000    $    328,546    $    340,866              --
  Accounts payable and accrued expenses............      884,443       1,178,111       1,011,970    $  1,011,970
  Income taxes payable (Note 10)...................        5,000          24,388             586             586
                                                      ----------    ------------    ------------    ------------
Total current liabilities..........................    1,114,443       1,531,045       1,353,422       1,012,556
Long term liabilities
  Notes payable to stockholders (Note 6)...........    5,075,107       3,544,312       4,144,107              --
                                                      ----------    ------------    ------------    ------------
Total liabilities..................................    6,189,550       5,075,357       5,497,529       1,012,556
                                                      ----------    ------------    ------------    ------------
Commitments and contingencies (Note 11)............           --              --              --              --
Capital deficiency (Note 7):
  Series B preferred stock ($0.001 par value;
     1,874,999 shares authorized; none issued and
     outstanding in 1996, 748,582 shares and
     1,154,065 shares issued and outstanding in
     1997 and 1998, respectively, pro forma none
     issued and outstanding) (liquidation
     preference of $4,799,982 and $7,399,980 at
     December 31, 1997 and June 30, 1998,
     respectively).................................           --             749           1,154              --
  Series A preferred stock ($0.001 par value;
     3,700,001 shares authorized, issued and
     outstanding, pro forma none issued and
     outstanding) (liquidation preference of
     $5,778,009, $6,383,042 and $6,708,917 at
     December 31, 1996 and 1997 and June 30, 1998,
     respectively).................................        3,700           3,700           3,700              --
  Common stock ($0.001 par value; 15,000,000 shares
     authorized; 710,030 shares issued and
     outstanding, pro forma 6,283,377 shares issued
     and outstanding)..............................          710             710             710           6,283
  Additional paid-in capital.......................    4,913,635       9,712,871      12,925,779      19,074,919
  Preferred stock subscription receivable..........           --        (350,000)             --              --
  Cumulative translation adjustment................      (37,656)       (401,339)       (401,045)       (401,045)
  Deficit accumulated during development stage.....   (5,179,356)    (10,734,291)    (14,374,048)    (16,038,934)
                                                      ----------    ------------    ------------    ------------
Total (capital deficiency) stockholders' equity....     (298,967)     (1,767,600)     (1,843,750)      2,641,223
                                                      ----------    ------------    ------------    ------------
Total liabilities and (capital deficiency)
  stockholders' equity.............................   $5,890,583    $  3,307,757    $  3,653,779    $  3,653,779
                                                      ----------    ------------    ------------    ------------
                                                      ----------    ------------    ------------    ------------
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.

                                      F-3

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                  FEBRUARY 11, 
                                                                                     1992                SIX MONTHS ENDED
                                              YEAR ENDED DECEMBER 31,            (INCEPTION) TO              JUNE 30,
                                     -----------------------------------------    DECEMBER  31,    --------------------------
                                        1995           1996           1997            1997            1997           1998
                                     -----------    -----------    -----------   --------------    -----------    -----------
                                                                                                   (UNAUDITED)    (UNAUDITED)
<S>                                  <C>            <C>            <C>            <C>             <C>            <C>
OPERATING EXPENSES:
  Research and development........   $   475,282    $ 1,136,203    $ 3,426,235    $  5,799,780    $ 1,873,822    $ 1,577,384
  General and administrative......       717,937      1,119,485      1,732,788       4,095,245        520,878      1,911,009
                                     -----------    -----------    -----------    ------------    -----------    -----------
TOTAL OPERATING EXPENSES..........     1,193,219      2,255,688      5,159,023       9,895,025      2,394,700      3,488,393
                                     -----------    -----------    -----------    ------------    -----------    -----------
  Interest income.................         4,124         24,222         97,498         131,652         54,804         15,651
  Interest expense................      (147,769)      (230,976)      (469,957)       (942,465)      (219,558)      (162,115)
                                     -----------    -----------    -----------    ------------    -----------    -----------
NET INTEREST EXPENSE..............      (143,645)      (206,754)      (372,459)       (810,813)      (164,754)      (146,464)
                                     -----------    -----------    -----------    ------------    -----------    -----------
NET LOSS BEFORE INCOME TAXES......    (1,336,864)    (2,462,442)    (5,531,482)    (10,705,838)    (2,559,454)    (3,634,857)
Income taxes......................            --          5,000         23,453          28,453         17,000          4,900
                                     -----------    -----------    -----------    ------------    -----------    -----------
NET LOSS..........................   $(1,336,864)   $(2,467,442)   $(5,554,935)   $(10,734,291)   $(2,576,454)   $(3,639,757)
                                     -----------    -----------    -----------    ------------    -----------    -----------
                                     -----------    -----------    -----------    ------------    -----------    -----------
Basic and diluted loss per share
  (Note 9)........................   $     (1.88)   $     (3.48)   $     (7.82)                   $     (3.63)   $     (5.13)
                                     -----------    -----------    -----------                    -----------    -----------
                                     -----------    -----------    -----------                    -----------    -----------
Weighted average shares
  outstanding used for basic and
  diluted loss per share..........       710,030        710,030        710,030                        710,030        710,030
                                     -----------    -----------    -----------                    -----------    -----------
                                     -----------    -----------    -----------                    -----------    -----------
 
<CAPTION>
                                     FEBRUARY 11,
                                        1992
                                     (INCEPTION)
                                         TO
                                    -------------
                                     (UNAUDITED)
<S>                                 <C>
OPERATING EXPENSES:
  Research and development........  $  7,377,164
  General and administrative......     6,006,254
                                    ------------
TOTAL OPERATING EXPENSES..........    13,383,418
                                    ------------
  Interest income.................       147,303
  Interest expense................    (1,104,580)
                                    ------------
NET INTEREST EXPENSE..............      (957,277)
                                    ------------
NET LOSS BEFORE INCOME TAXES......   (14,340,695)
Income taxes......................        33,353
                                    ------------
NET LOSS..........................  $(14,374,048)
                                    ------------
                                    ------------
Basic and diluted loss per share
  (Note 9)........................
Weighted average shares
  outstanding used for basic and
  diluted loss per share..........
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.

                                      F-4

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)
                  CONSOLIDATED STATEMENT OF CAPITAL DEFICIENCY
<TABLE>
<CAPTION>
                                   MANDATORY REDEEMABLE CONVERTIBLE
                                 PREFERRED STOCK (SEE NOTES 6 AND 7)
                            ----------------------------------------------
                                                                             SERIES B CONVERTIBLE    SERIES A CONVERTIBLE
                                   SERIES B                SERIES C            PREFERRED STOCK         PREFERRED STOCK
                            ----------------------  ----------------------  ----------------------  ----------------------
                              SHARES    PAR VALUE     SHARES    PAR VALUE     SHARES    PAR VALUE     SHARES    PAR VALUE
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
<S>                         <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
Balance at January 1,
 1995......................         --          --          --          --          --          --   3,700,000      $3,700
Net loss...................                                                         --          --          --          --
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Balance at December 31,
 1995......................         --          --          --          --          --          --   3,700,000       3,700
Issuance of mandatory
 redeemable Preferred
 Stock.....................  2,086,096  $2,086,096   2,086,096  $2,086,096          --          --          --          --
Redemption of mandatory
 redeemable preferred stock
 in exchange for Series A
 Preferred Stock........... (2,086,096) (2,086,096) (2,086,096) (2,086,096)         --          --           1          --
Non-cash compensation based
 on fair value of stock
 options granted...........         --          --          --          --          --          --          --          --
Cumulative translation
 adjustment................                                                         --          --          --          --
Net loss...................                                                         --          --          --          --
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Balance at December 31,
 1996......................         --          --          --          --          --          --   3,700,001       3,700
Issuance of Series B
 Convertible Preferred
 Stock.....................         --          --          --          --     748,582        $749          --          --
Cumulative translation
 adjustment................         --          --          --          --          --          --          --          --
Net loss...................                                                         --          --          --          --
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Balance at December 31,
 1997......................         --          --          --          --     748,582         749   3,700,001       3,700
Issuance of Series B
 Convertible Preferred
 Stock.....................         --          --          --          --     405,483         405          --          --
Issuance of warrant with
 Promissory Note to NEGF
 II, L.P...................         --          --          --          --          --          --                      --
Non-cash compensation based
 on fair value of stock
 options granted...........         --          --          --          --          --          --                      --
Cumulative translation
 adjustment................         --          --          --          --          --          --          --          --
Net loss...................         --          --          --          --          --          --          --          --
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Balance at June 30, 1998
 (unaudited)...............         --          --          --          --   1,154,065      $1,154   3,700,001      $3,700
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
 
<CAPTION>
                                                                                                 DEFICIT
                                                                   PREFERRED                   ACCUMULATED
                                  COMMON STOCK       ADDITIONAL      STOCK         OTHER          DURING        TOTAL
                             ----------------------    PAID-IN    SUBSCRIPTION  COMPREHENSIVE  DEVELOPMENT     CAPITAL
                               SHARES    PAR VALUE     CAPITAL    RECEIVABLE    INCOME (LOSS)     STAGE      DEFICIENCY
                             ----------  ----------  -----------  ------------  -------------  ------------  -----------
<S>                         <C>          <C>         <C>          <C>           <C>            <C>           <C>
Balance at January 1,
 1995......................     710,030        $710   $  369,543           --             --   $ (1,375,050) $(1,001,097)
Net loss...................          --          --           --           --             --     (1,336,864)  (1,336,864)
                             ----------  ----------  -----------   ----------    -----------   ------------  -----------
Balance at December 31,
 1995......................     710,030         710      369,543           --             --     (2,711,914)  (2,337,961)
Issuance of mandatory
 redeemable Preferred
 Stock.....................          --          --           --           --             --             --    4,172,192
Redemption of mandatory
 redeemable preferred stock
 in exchange for Series A
 Preferred Stock...........          --          --    4,172,192           --             --             --           --
Non-cash compensation based
 on fair value of stock
 options granted...........          --          --      371,900           --             --             --      371,900
Cumulative translation
 adjustment................          --          --           --           --      $ (37,656)            --      (37,656)
Net loss...................          --          --           --           --             --     (2,467,442)  (2,467,442)
                             ----------  ----------  -----------   ----------    -----------   ------------  -----------
Balance at December 31,
 1996......................     710,030         710    4,913,635           --        (37,656)    (5,179,356)    (298,967)
Issuance of Series B
 Convertible Preferred
 Stock.....................          --          --    4,799,236    $(350,000)            --             --    4,449,985
Cumulative translation
 adjustment................          --          --           --           --       (363,683)            --     (363,683)
Net loss...................          --          --           --           --             --     (5,554,935)  (5,554,935)
                             ----------  ----------  -----------   ----------    -----------   ------------  -----------
Balance at December 31,
 1997......................     710,030         710    9,712,871     (350,000)      (401,339)   (10,734,291)  (1,767,600)
Issuance of Series B
 Convertible Preferred
 Stock.....................          --          --    2,599,585      350,000             --             --    2,949,990
Issuance of warrant with
 Promissory Note to NEGF
 II, L.P...................          --          --      550,000           --             --             --      550,000
Non-cash compensation based
 on fair value of stock
 options granted...........          --          --       63,323           --             --             --       63,323
Cumulative translation
 adjustment................          --          --           --           --            294             --          294
Net loss...................          --          --           --           --             --     (3,639,757)  (3,639,757)
                             ----------  ----------  -----------   ----------    -----------   ------------  -----------
Balance at June 30, 1998
 (unaudited)...............     710,030        $710  $12,925,779     $     --      $(401,045)  $(14,374,048) $(1,843,750)
                             ----------  ----------  -----------   ----------    -----------   ------------  -----------
                             ----------  ----------  -----------   ----------    -----------   ------------  -----------
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-5

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                  FEBRUARY 11,         
                                                                                      1992             SIX MONTHS ENDED    
                                              YEAR ENDED DECEMBER 31,            (INCEPTION) TO           JUNE 30,
                                     -----------------------------------------    DECEMBER 31,    --------------------------
                                        1995           1996           1997            1997            1997           1998
                                     -----------    -----------    -----------   --------------    -----------    -----------
                                                                                                  (UNAUDITED)    (UNAUDITED)
<S>                                  <C>            <C>            <C>            <C>             <C>            <C>
Cash flows from operating
  activities:
  Net loss........................   $(1,336,864)   $(2,467,442)   $(5,554,935)   $(10,734,291)   $(2,576,454)   $(3,639,757)
  Adjustments to reconcile net
    loss to net cash used in
    operating activities:
    Depreciation..................        29,843         88,328        290,015         412,108         61,181        148,380
    Loss on disposal of property
      and equipment...............            --             --         17,890          17,890             --             --
    Accrued interest on notes
      payable to stockholders.....       147,769        113,824        341,272         693,502        218,433        162,115
    Non-cash compensation
      expense.....................            --        371,900             --         371,900             --         63,323
  Changes in assets and
    liabilities:
      Prepaid and other current
        assets....................         4,542       (147,458)       (40,213)       (191,591)        48,632         91,294
      Accounts payable and accrued
        expenses..................       289,297        663,985        423,701       1,407,673       (118,751)      (159,714)
      Income taxes payable........            --          4,445         21,314          25,759         (4,612)       (25,759)
                                     -----------    -----------    -----------    ------------    -----------    -----------
Net cash used in operating
  activities......................      (865,413)    (1,372,418)    (4,500,956)     (7,997,050)    (2,371,571)    (3,360,118)
                                     -----------    -----------    -----------    ------------    -----------    -----------
Cash flows from investing
  activities:
  Proceeds from disposal of
    property and equipment........            --             --         66,063          66,063             --             --
  Purchase of property and
    equipment.....................      (399,275)    (1,037,701)      (217,346)     (1,691,935)      (163,048)       (26,175)
                                     -----------    -----------    -----------    ------------    -----------    -----------
Net cash used in investing
  activities......................      (399,275)    (1,037,701)      (151,283)     (1,625,872)      (163,048)       (26,175)
                                     -----------    -----------    -----------    ------------    -----------    -----------
Cash flows from financing
  activities:
  Proceeds from issuance of notes
    payable to stockholders (see
    Note 6).......................     1,290,000      6,875,000        103,546       9,351,546             --      1,000,000
  Proceeds from issuance of
    preferred stock...............            --             --      2,449,987       2,719,990             --      2,599,996
  Collection of stock subscription
    receivable....................            --             --             --              --             --        350,000
  Exercise of stock options.......            --             --             --           3,600             --             --
                                     -----------    -----------    -----------    ------------    -----------    -----------
Net cash provided by financing
  activities......................     1,290,000      6,875,000      2,553,533      12,075,136             --      3,949,996
                                     -----------    -----------    -----------    ------------    -----------    -----------
Effect of exchange rates on
  cash............................            --       (293,930)      (185,259)       (479,189)      (148,601)         6,460
                                     -----------    -----------    -----------    ------------    -----------    -----------
Net increase (decrease) in cash...        25,312      4,170,951     (2,283,965)      1,973,025     (2,683,220)       570,163
Cash at beginning of period.......        60,727         86,039      4,256,990              --      4,256,990      1,973,025
                                     -----------    -----------    -----------    ------------    -----------    -----------
Cash at end of period.............   $    86,039    $ 4,256,990    $ 1,973,025    $  1,973,025    $ 1,573,770    $ 2,543,188
                                     -----------    -----------    -----------    ------------    -----------    -----------
                                     -----------    -----------    -----------    ------------    -----------    -----------
 
<CAPTION>
                                    FEBRUARY 11,
                                        1992
                                    (INCEPTION)
                                         TO
                                    ------------
                                    (UNAUDITED)
<S>                                  <C>
Cash flows from operating
  activities:
  Net loss........................  $(14,374,048)
  Adjustments to reconcile net
    loss to net cash used in
    operating activities:
    Depreciation..................       560,488
    Loss on disposal of property
      and equipment...............        17,890
    Accrued interest on notes
      payable to stockholders.....       855,617
    Non-cash compensation
      expense.....................       435,223
  Changes in assets and
    liabilities:
      Prepaid and other current
        assets....................      (100,297)
      Accounts payable and accrued
        expenses..................     1,247,959
      Income taxes payable........            --
                                    ------------
Net cash used in operating
  activities......................   (11,357,168)
                                    ------------
Cash flows from investing
  activities:
  Proceeds from disposal of
    property and equipment........        66,063
  Purchase of property and
    equipment.....................    (1,718,110)
                                    ------------
Net cash used in investing
  activities......................    (1,652,047)
                                    ------------
Cash flows from financing
  activities:
  Proceeds from issuance of notes
    payable to stockholders (see
    Note 6).......................    10,351,546
  Proceeds from issuance of
    preferred stock...............     5,319,986
  Collection of stock subscription
    receivable....................       350,000
  Exercise of stock options.......         3,600
                                    ------------
Net cash provided by financing
  activities......................    16,025,132
                                    ------------
Effect of exchange rates on
  cash............................      (472,729)
                                    ------------
Net increase (decrease) in cash...     2,543,188
Cash at beginning of period.......            --
                                    ------------
Cash at end of period.............  $  2,543,188
                                    ------------
                                    ------------
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.

                                      F-6

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
1. ORGANIZATION AND BUSINESS
 
     IgX Corp. (the "Company") was incorporated in the State of Delaware on
February 11, 1992. The Company is a development stage enterprise developing
drugs principally for the treatment of infectious diseases of the human
gastrointestinal (GI) tract. The Company maintains two pilot production
facilities for use in conducting clinical trials, one outside the U.S. and one
in the U.S. The Company's strategy is to develop products both independently and
through strategic partnerships with large pharmaceutical companies, under which
the Company will seek financial, preclinical and clinical trial, marketing and
manufacturing assistance while retaining parallel manufacturing and/or marketing
rights for the products.
 
     The Company's primary activities since inception have consisted of research
and development and raising capital. The Company relies primarily on a
university to provide the personnel and other resources necessary to develop
technologies through its sponsored research agreements with the university (see
Note 4).
 
     In 1995, the Company became a wholly-owned subsidiary of a newly-formed
corporation, IgX Limited, which is registered under the laws of the Republic of
Ireland, as a result of a series of transactions in which the Company's
stockholders exchanged their common and preferred stock for ordinary and
preference shares of IgX Limited. In December 1997, as a condition to receiving
an equity infusion from a U.S. investor, the aforementioned series of
transactions was reversed such that IgX Limited became a wholly-owned subsidiary
of the Company. The above transactions involved the same parties, affected the
capital structure of IgX Corp. and IgX Limited in legal form only, and thus have
no effect on reported amounts on a consolidated basis.
 
2. BASIS OF PREPARATION
 
     Since inception, the Company has suffered recurring losses and net cash
outflows from operations. The Company expects to continue to incur substantial
additional losses to complete the development and testing of its drug
candidates, and does not expect to complete the development stage and begin
commercialization of its products for the foreseeable future. Management is
actively pursuing various options, which include entering into strategic
partnerships with large pharmaceutical companies. Certain such agreements for
strategic partnerships have been executed (see Note 12). Since its inception,
the Company has funded operations through issuing debt and equity securities to
its principal investors. It is management's intention to continue to fund the
operations of the Company through additional debt or preferred stock issuances
in order to meet its strategic objectives. Management is also actively pursuing
other financing options, which include securing additional equity financing
through an initial public offering, and believes that sufficient funding will be
available to meet its planned business objectives including anticipated cash
needs for working capital, for a reasonable period of time. However, there can
be no assurance that the Company will be able to obtain sufficient funds to
continue the development of, and if successful, to commence the manufacture and
sale of its drug candidates, if and when approved by the applicable regulatory
agencies. As a result of the foregoing, there exists substantial doubt about the
Company's ability continue as a going concern. These financial statements do not
include any adjustments relating to the recoverability of the carrying amounts
of recorded assets or the amount of liabilities that might result from the
outcome of this uncertainty.
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
USE OF SIGNIFICANT ESTIMATES
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
 
                                      F-7

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

CONSOLIDATION
 
     These consolidated financial statements include the accounts of the Company
and IgX Limited, a wholly-owned subsidiary, which is registered under the laws
of the Republic of Ireland. All intercompany transactions are eliminated in
consolidation.
 
PROPERTY AND EQUIPMENT
 
     Property and equipment are recorded at cost and depreciated using the
straight-line method over the estimated useful lives of the respective assets,
as follows: buildings and improvements over 5 years; research equipment over 5
to 10 years; and office furniture and equipment over 5 years.
 
IMPAIRMENT OF LONG-LIVED ASSETS
 
     The Company accounts for the impairment and disposition of long-lived
assets in accordance with Statement of Financial Accounting Standards ("SFAS")
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of ("FAS 121"). In accordance with FAS 121, the Company
periodically assesses whether any events or changes in circumstances have
occurred that would indicate that the carrying amount of a long-lived asset may
not be recoverable. If such an event or change in circumstances occurs, the
Company evaluates whether the carrying amount of such assets is recoverable by
comparing the net book value of the assets to estimated future undiscounted cash
flows attributable to such assets. If it is determined that the carrying amount
may not recoverable, the Company recognizes an impairment loss equal to the
excess of the net carrying amount of the asset over its fair value.
 
COMPREHENSIVE INCOME/(LOSS)
 
     Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." This standard requires that the total changes in capital
resulting from revenue, expenses and gains and losses, including those which do
not affect deficit accumulated during development stage, be reported.
Accordingly, comprehensive income (loss), which is comprised of net loss and the
change in cumulative translation adjustments, was ($2,505,098), ($5,918,618) and
($3,639,463) for the years ended December 31, 1996 and 1997 and the six months
ended June 30, 1998.
 
RESEARCH AND DEVELOPMENT
 
     Research and development costs are expensed as incurred and include, among
other costs, those related to the production of experimental drugs, including
payroll costs, sponsored third party research costs and costs incurred for
conducting clinical trials.
 
INCOME TAXES
 
     Income taxes are accounted for under the asset and liability method
prescribed by SFAS No. 109, "Accounting for Income Taxes." Deferred income taxes
are recorded for temporary differences between financial statement carrying
amounts and the tax bases of assets and liabilities. Deferred tax assets and
liabilities reflect the tax rates expected to be in effect for the years in
which the differences are expected to reverse. A valuation allowance is provided
if it is more likely than not that some or all of the deferred tax asset will
not be realized.
 
NET LOSS PER COMMON SHARE
 
     Effective December 31, 1997, the Company adopted SFAS No. 128, "Earnings
per Share" ("FAS 128"), which requires presentation of basic earnings per share
("Basic EPS") and diluted earnings per share ("Diluted EPS") by all entities
that have publicly traded common stock or potential common stock (options,
warrants,
 
                                      F-8

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

convertible securities or contingent stock arrangements). FAS 128 also requires
presentation of earnings per share by an entity that has made a filing or is in
the process of filing with a regulatory agency in preparation for the sale of
securities in a public market.
 
     Basic EPS is computed by dividing income (loss) available to common
stockholders by the weighted average number of common shares outstanding during
the period. Diluted EPS gives effect to all dilutive potential common shares
outstanding during the period. The computation of Diluted EPS does not assume
conversion, exercise or contingent exercise of securities that would have an
antidilutive effect on earnings. Refer to Note 9 for methodology for determining
net loss per share.
 
INTERIM FINANCIAL DATA (UNAUDITED)
 
     The unaudited financial data as of and for the six months ended June 30,
1998 and 1997 have been prepared by management and include all adjustments which
in management's opinion are necessary to present fairly the Company's financial
condition, results of operations and cash flows. The results of operations for
the six months ended June 30, 1998 are not necessarily indicative of the
operating results to be expected for the year ended December 31, 1998.
 
FOREIGN CURRENCY TRANSLATION
 
     Assets and liabilities of IgX Limited are translated into U.S. dollars at
the prevailing exchange rates in effect at the end of the reporting period.
Income statement accounts are translated at a weighted average of exchange rates
which were in effect during the period. Translation adjustments that arise from
translating the foreign subsidiary's financial statements from local currency to
U.S. dollars are recorded in the cumulative translation adjustment component of
capital deficiency.
 
FINANCIAL INSTRUMENTS
 
     The carrying values of accounts payable and accrued expenses approximate
their fair values.
 
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 
     In June 1997, the FASB issued SFAS No.131, "Disclosures about Segments of
an Enterprise and Related Information" ("FAS 131"), which is effective for
fiscal years beginning after December 15, 1997 for annual reporting purposes and
for interim periods thereafter. The statement requires that public companies
report certain information, including segment revenues, reported profit and loss
and assets, about operating segments in their annual and interim financial
statements. The statement also requires that public companies report certain
information about their products and services, the geographic areas in which
they operate, and their major customers. FAS 131 is not expected to materially
affect the presentation and disclosure in the Companys financial statements.
 
                                      F-9

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
4. PROPERTY AND EQUIPMENT
 
<TABLE>
<CAPTION>
                                                                                     DECEMBER 31,
                                                                               ------------------------
                                                                                  1996          1997
                                                                               ----------    ----------
<S>                                                                            <C>           <C>
Land........................................................................   $    9,000    $    9,000
Buildings and improvements..................................................    1,070,683       846,985
Research equipment..........................................................      481,512       609,066
Office furniture and equipment..............................................       27,417        74,038
                                                                               ----------    ----------
                                                                                1,588,612     1,539,089
Less--accumulated depreciation..............................................     (123,907)     (390,061)
                                                                               ----------    ----------
Property and equipment, net.................................................   $1,464,705    $1,149,028
                                                                               ----------    ----------
                                                                               ----------    ----------
</TABLE>
 
5. SPONSORED RESEARCH AGREEMENTS
 
     The Company has sponsored research primarily at the University of Arizona
(the "University") and has entered into separate research agreements with the
University for the development of each drug candidate using particular aspects
of its licensed technology. Under these agreements, the Company is required to
fund the research and development work of the laboratory for a specific period
of time, usually in one year to eighteen-month increments. From inception
through June 30, 1998, the Company has funded approximately $2.4 million in
research through these activities. The following is a summary of amounts the
Company is required to fund under these sponsored research agreements.
 
<TABLE>
<S>                                                                            <C>          
Commitments as of December 31, 1997.........................................   $  174,000
Commitments as of June 30, 1998.............................................   $  390,000
</TABLE>
 
     The patentable discoveries, inventions and other intellectual property
developed as a result of such research are property of the University. The
Company incurs the cost of coordinating and filing the applicable patent
applications on behalf of the University and records these costs as incurred in
research and development expense.
 
     In addition, the Company maintains license agreements with the University
which, among other things, give the Company the option for six months to acquire
an exclusive royalty-bearing license to use the intellectual property underlying
a drug candidate. The term of the license agreement is generally 20 years
effective from the first commercial sale of a product and is renewable for two
consecutive 10-year periods. The license agreements require the Company to begin
paying the University up to 5% of the net sales price of all licensed products
when and if they are sold.
 
6. RELATED PARTY TRANSACTIONS
 
NOTES PAYABLE TO STOCKHOLDERS
 
     As a means of raising capital, the Company and its subsidiary have from
time to time received loans in the form of promissory notes from stockholders,
principally from Henry Venture II Limited, the Chairman of which is Albert J.
Henry, who is also the Chairman and Chief Executive Officer of the Company. The
notes are unsecured and bear interest at a stated rate of 9% per annum. From the
Company's inception to date, no amounts of principal or accrued interest have
been repaid. However, from time to time, portions of the amounts due have been
canceled in exchange for issuance of preferred stock of the Company. The amount
of notes canceled corresponds to the value of the preferred stock issued upon
cancellation of the notes. A reconciliation of the total
 
                                      F-10

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
6. RELATED PARTY TRANSACTIONS--(CONTINUED)

proceeds received from the issuance of notes payable to stockholders to the
balance of these notes payable at June 30, 1998 is as follows:
 
<TABLE>
<CAPTION>
                                                                                     INCEPTION
                                                                                (FEBRUARY 11, 1992)
                                                                                      THROUGH
                                                                            ---------------------------
                                                                            DECEMBER 31,     JUNE 30,
                                                                                1997           1998
                                                                            ------------    -----------
<S>                                                                         <C>             <C>
Cumulative proceeds from issuance of notes payable to stockholders.......   $  9,351,546    $10,351,546
Cumulative interest accrued on notes payable to stockholders.............        693,502        855,617
                                                                            ------------    -----------
                                                                              10,045,048     11,207,163
Less: notes payable to Henry Venture II Limited canceled and exchanged
  for:
  IgX Limited Series B mandatorily redeemable convertible preferred
     stock...............................................................     (2,086,096)    (2,086,096)*
  IgX Limited Series C mandatorily redeemable convertible preferred
     stock...............................................................     (2,086,096)    (2,086,096)*
  IgX Corp. Series B convertible preferred stock.........................     (1,999,998)    (1,999,998)
                                                                            ------------    -----------
                                                                               3,872,858      5,034,973
Less--unamortized discount on note payable to NEGF II, L.P...............        --            (550,000)
                                                                            ------------    -----------
Notes payable to stockholders............................................   $  3,872,858    $ 4,484,973
                                                                            ------------    -----------
                                                                            ------------    -----------
</TABLE>
 
------------------
* As noted below, these stock issuances were, in turn, subsequently canceled in
  exchange for issuance of Series A convertible preferred stock.
 
     Notes payable to stockholders consisted of the following:
 
<TABLE>
<CAPTION>
                                                                       DECEMBER 31,
                                                                 ------------------------     JUNE 30,
                                                                    1996          1997          1998
                                                                 ----------    ----------    ----------
<S>                                                              <C>           <C>           <C>
Notes payable to Henry Venture II Limited,
  9% per annum, due on demand.................................   $  225,000    $  328,546    $  340,866
 
Notes payable to Henry Venture II Limited
  9% per annum, due December 31, 2001.........................    5,075,107     3,544,312     3,694,107
 
Note payable to NEGF II, L.P.,
  9% per annum, due May 6, 2008...............................       --            --         1,000,000
 
Less--unamortized discount on note payable to NEGF II, L.P....       --            --          (550,000)
                                                                 ----------    ----------    ----------
 
     Total....................................................    5,300,107     3,872,858     4,484,973
 
Less--current maturities......................................      225,000       328,546       340,866
                                                                 ----------    ----------    ----------
 
Notes payable to stockholders--long term portion..............    5,075,107     3,544,312     4,144,107
                                                                 ----------    ----------    ----------
                                                                 ----------    ----------    ----------
</TABLE>
 
     From the period November 1996 to December 1997, IgX Limited obtained
unsecured loans totaling $5,328,546, which bore interest at 9% per annum, in the
form of promissory notes (the "Notes") from Henry Venture II Limited. Accrued
and unpaid interest totaled $544,312 through December 1997. In December 1997,
the Company entered into a novation agreement to transfer the liability for
amounts due from IgX Limited to IgX
 
                                      F-11

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
6. RELATED PARTY TRANSACTIONS--(CONTINUED)

Corp. in exchange for cancellation of the Notes due the stockholder from IgX
Limited. Under this agreement, Henry Venture II Limited agreed to cancel
$1,999,998 of amounts due in exchange for 311,910 shares of the Company's Series
B convertible preferred stock (the "Series B Preferred") (see Note 7). Further,
the Company issued two unsecured promissory notes to Henry Venture II Limited
for the remaining balances under the Notes, plus accrued and unpaid interest to
the date of the novation.
 
     The first promissory note in the amount of $3,544,312 at December 31, 1997,
which includes $544,312 of accrued and unpaid interest at December 31, 1997,
bears interest at a rate of 9% per annum and is payable in full on December 31,
2001. As such, this portion has been classified as long-term. The second
promissory note issued was in the amount of $328,546, representing the remaining
balance, also bears interest at 9% per annum, is payable in full on demand and,
as such, is included in current liabilities.
 
     In May 1998, the Company issued a $1,000,000 unsecured promissory note (the
"$1,000,000 Note") which bears interest at a rate of 9% per annum to NEGF II,
L.P., a holder of Series B Preferred (see Note 7). The $1,000,000 Note, together
with all accrued and unpaid interest, is payable upon the earlier of: (i) the
closing of an initial public offering of the Company, (ii) a merger,
consolidation, reorganization or sale of all or substantially all of the assets
of the Company, (iii) any other event, which, in the judgement of the Board of
Directors, would allow the Company to pay all indebtedness under the $1,000,000
Note, or (iv) May 6, 2008 (see also Note 12).
 
WARRANT ATTACHED TO PROMISSORY NOTE
 
     As a condition for the $1,000,000 Note, NEGF II, L.P. received from the
Company a warrant to purchase up to 370,000 shares of common stock at an
exercise price of $0.01 per share. The warrant is exercisable at any time for a
period of ten years from the date of issuance. The fair value of the warrant,
using the Black-Scholes option-pricing model, approximates $1.7 million. This
value has been allocated to the $1,000,000 Note and the Series B Preferred in
proportion to the relative amounts of debt and equity financing provided to the
Company by NEGF II, L.P. The portion allocated to the $1,000,000 Note has been
reflected as a discount on the $1,000,000 Note, and is being accreted to
interest expense over the stated term of the $1,000,000 Note. The portion
allocated to the Series B Preferred is effectively a discount on the price per
share for the $2,000,000 paid for the Series B Preferred by NEGF II, L.P. The
appropriate waivers have been obtained from all other Preferred stockholders
waiving their rights to any conversion price adjustment provisions contained in
the applicable stockholder agreements and certificate of incorporation.
 
MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK
 
     From the period September 1992 through July 1996, the Company obtained
unsecured loans from Henry Venture II Limited, an existing stockholder, totaling
$4,023,000, which bore interest at 9% per annum, in the form of promissory notes
(the "Original Notes"). During August 1996, Henry Venture II Limited was issued
2,086,096 shares each of Series B mandatory redeemable convertible preferred
stock (the "Series B Redeemable") and Series C mandatory redeemable convertible
preferred stock (the "Series C Redeemable") of IgX Limited in exchange for the
cancellation of the Original Notes along with accrued and unpaid interest
thereupon of $149,192. During August 1996, the Series B and C Redeemable shares
were canceled in exchange for one share of Series A convertible preferred stock
("Series A Preferred") (see Note 7).
 
7. CAPITAL DEFICIENCY
 
SERIES A CONVERTIBLE PREFERRED STOCK
 
     In August 1992, the Company issued 370,000 shares of Series A Preferred at
$1.00 per share providing proceeds of $370,000. During September 1993, the Board
of Directors of the Company effected a 10-for-1 stock split of the Series A
Preferred. Further, in August 1996, in consideration for the cancellation of
Series B
 
                                      F-12

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
7. CAPITAL DEFICIENCY--(CONTINUED)

Redeemable and Series C Redeemable, the Company issued one additional share of
Series A Preferred to an existing holder of Series A Preferred. After giving
effect to the stock split and the issuance of the additional share, there were a
total of 3,700,001 shares of Series A Preferred issued and outstanding. Each
Series A Preferred share can be converted into common stock, at the option of
the holder, at an initial conversion rate of one to one, subject to adjustment
from time to time based on the consideration paid for additional stock issued
and options granted by the Company. The Series A Preferred will automatically
convert into common stock upon the consummation of a public offering of the
Company's common stock with a per share price as defined in the certificate of
incorporation. There is no established dividend rate on the Series A Preferred.
However, the holders of Series A Preferred are entitled to receive preference to
a declaration or payment of any dividend on the common stock of the Company in
amounts equal to that paid to other outstanding shares of the Company. In the
event of a voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, the Series A Preferred stockholders are entitled to
receive a liquidation preference equal to $1.23 for each outstanding share of
the Series A Preferred plus a preferential amount equal to 10% of the original
issue price for each twelve month period outstanding from the date of issuance
to date of distribution.
 
     The holders of Series A Preferred are entitled to vote on all matters in
which holders of common stock have the right to vote.
 
SERIES B CONVERTIBLE PREFERRED STOCK
 
     In December 1997, the Company issued 436,672 shares of Series B Preferred
at $6.41 per share providing proceeds of $2,799,984. In addition, the Company
issued 311,910 shares of Series B Preferred to an existing common stockholder in
exchange for the cancellation of a promissory note due the common stockholder
(see Note 6). Each Series B Preferred share can be converted into common stock,
at the option of the holder, at an initial conversion rate of one to one,
subject to adjustment from time to time based on the consideration paid for
additional stock issued and options granted by the Company. The holders of
Series B Preferred are also entitled to anti-dilution provisions in the event
the Company were to issue additional shares of common stock for less than
specified amounts and prior to certain dates, as defined in the applicable
agreement. The Series B Preferred will automatically convert into common stock
upon the consummation of a public offering of the Company's common stock with a
per share price as defined in the certificate of incorporation. There is no
established dividend rate on the Series B Preferred. However, the holders of
Series B Preferred are entitled to receive preference to any declaration or
payment of any dividend on the common stock of the Company in amounts equal to
that paid to other outstanding shares of the Company. In the event of a
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Company, the Series B Preferred stockholders are entitled to receive a
liquidation preference equal to the original issue price of $6.41 for each
outstanding share of the Series B Preferred.
 
     The holders of Series B Preferred are entitled to vote on all matters which
holders of common stock have the right to vote.
 
8. STOCK-BASED COMPENSATION
 
1993 STOCK OPTION PLAN
 
     During 1993, the Company implemented its 1993 Stock Option Plan (the 1993
Plan), whereby incentive and nonqualified options to purchase shares of the
Company common stock may be granted to key employees, officers, directors and
consultants. The vesting and exercise periods for options granted under the 1993
Plan are determined by a committee of the Board of Directors.
 
                                      F-13

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
8. STOCK-BASED COMPENSATION--(CONTINUED)

     The 1993 Plan stipulates that no option may be exercisable after ten years
from the date of grant. The fair market value of the Company's common stock is
determined by the Board of Directors from time to time. Options granted under
the 1993 Plan generally vest in equal installments over a period of four years.
 
     The following table summarizes activity regarding stock options for the
years ended December 31, 1996 and 1997, and the six months ended June 30, 1998:
 
<TABLE>
<CAPTION>
                                                                                                JUNE 30, 1998
                                             DECEMBER 31, 1996       DECEMBER 31, 1997           (UNAUDITED)
                                            -------------------    ---------------------    ---------------------
                                                       AVERAGE                  AVERAGE                  AVERAGE
                                                       EXERCISE                 EXERCISE                 EXERCISE
                                            SHARES      PRICE       SHARES       PRICE       SHARES       PRICE
                                            -------    --------    ---------    --------    ---------    --------
<S>                                         <C>        <C>         <C>          <C>         <C>          <C>
Outstanding at beginning of period.......        --         --       753,357     $ 1.08     1,078,357     $ 2.26
Granted..................................   753,357     $ 1.08       325,000     $ 5.00        77,500     $ 1.26
Forfeited................................        --         --            --         --       415,000     $ 4.13
                                            -------     ------     ---------     ------     ---------
Outstanding at end of period.............   753,357     $ 1.08     1,078,357     $ 2.26       740,857     $ 1.11
</TABLE>
 
<TABLE>
<CAPTION>
                                                                  OPTIONS OUTSTANDING
                                                            -------------------------------
                                                                NUMBER                              NUMBER
                                                             OUTSTANDING         AVERAGE         EXERCISABLE
                                                            AT DECEMBER 31,     REMAINING       AT DECEMBER 31,
EXERCISE PRICES                                                  1997          LIFE (YEARS)          1997
---------------------------------------------------------   ---------------    ------------    ---------------
<S>                                                         <C>                <C>             <C>
$1.00....................................................       738,357             3.1            176,839
$5.00....................................................       340,000             3.0             85,000
</TABLE>
 
<TABLE>
<CAPTION>
                                                                 OPTIONS OUTSTANDING
                                                                     (UNAUDITED)
                                                           --------------------------------        NUMBER
                                                               NUMBER            AVERAGE          EXERCISABLE
                                                             OUTSTANDING        REMAINING      AT JUNE 30, 1998
EXERCISE PRICES                                            AT JUNE 30, 1998    LIFE (YEARS)       (UNAUDITED)
--------------------------------------------------------   ----------------    ------------    ----------------
<S>                                                        <C>                 <C>             <C>
$1.00...................................................        720,857             3.2             155,839
$5.00...................................................         20,000             4.8               3,750
</TABLE>
 
     The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees," and related interpretations in accounting for
its 1993 Plan. During the years ended December 31, 1996 and 1997, the Company
was not required to recognize compensation expense for options granted to
employees. For the six months ended June 30, 1998, the Company was required to
recognize compensation expense in the amount of $18,323 for options granted to
employees. Compensation expense recorded for stock options granted to
consultants based on the estimated fair value of the stock options amounted to
$371,900 and $45,000, respectively, in 1996 and the six months ended June 30,
1998. Options were not granted to consultants during 1995 and 1997; thus no
compensation expense was recorded in these years.
 
     Had compensation costs for option grants to employees been determined based
upon the fair value at the date of grant for awards under the 1993 Plan
consistent with the methodology prescribed under SFAS No. 123, "Accounting for
Stock Based Compensation," the Company's net loss would not have been affected
for any of the periods presented.
 
                                      F-14

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
8. STOCK-BASED COMPENSATION--(CONTINUED)

     The fair value of the options granted to employees during the years ended
December 31, 1996 and 1997 and the six months ended June 30, 1998 has been
determined on the date of the respective grant using the Black-Scholes
option-pricing model based on the following weighted average assumptions:
 
<TABLE>
<CAPTION>
                                                                             1996       1997       1998
                                                                            -------    -------    -------
<S>                                                                         <C>        <C>        <C>
Dividend yield...........................................................   None       None       None
Weighted average risk free interest rate on date of grant................   6.50       6.29       5.61
Forfeitures..............................................................   None       None       None
Expected life............................................................   5 years    5 years    5 years
</TABLE>
 
1998 STOCK OPTION PLAN
 
     In September 1998, the Company adopted its 1998 Stock Incentive Plan (the
"1998 Plan"), whereby incentive and nonqualified stock options to purchase
shares of the Company's common stock may be granted to employees, outside
directors and consultants. The vesting and exercise periods of options granted
under the 1998 Plan are to be determined by a committee of the Board of
Directors.
 
     The 1998 Plan stipulates that the exercise price of incentive stock options
will not be less than the fair market value at the date of grant or in the case
of nonqualified stock options less than 85% of the fair market value at the date
of grant. The exercise period of options granted shall not exceed 10 years
(5 years in the case of incentive options granted to individuals owning 10% or
more of the voting stock of the Company) from the date of grant and shall vest
at a rate specified from time to time by the Board of Directors.
 
     On a combined basis, the 1993 Plan and the 1998 Plan allow the Company to
issue an aggregate of up to 1,425,857 shares of common stock of the Company.
 
9. NET LOSS PER SHARE
 
     Basic EPS and Diluted EPS for the years ended December 31, 1995, 1996 and
1997 and for the six months ended June 30, 1997 and 1998 have been computed by
dividing the net loss for each respective period by the weighted average shares
outstanding during that period. All outstanding stock options and warrants have
been excluded from the computation of Diluted EPS as they are antidilutive.
Common stock issuable upon conversion of the Series A Preferred and Series B
Preferred have also been excluded from the computation of Diluted EPS as they
are antidilutive.
 
10. INCOME TAXES
 
     The Company has incurred losses since inception which have generated net
operating loss carryforwards on a consolidated basis of approximately
$13 million at June 30, 1998 which are available to offset future taxable
income. The net operating loss carryforwards will expire in 2007 through 2018.
These loss carryforwards are subject to limitation on future years utilization
should certain ownership changes occur.
 
     The net operating loss carryforwards and other temporary differences,
arising primarily from depreciation, result in a deferred tax asset at
December 31, 1996 and 1997 and June 30, 1998 of $1,721,750, $2,724,292 and
$3,532,167, respectively. In consideration of the Company's accumulated losses
and uncertainty of its ability to utilize this deferred asset in the future, the
Company has recorded a valuation allowance of equal amounts on such dates to
fully offset the net deferred tax asset and bring its carrying amount to zero
for all periods presented.
 
     For the years ended December 31, 1995, 1996 and 1997 and the six months
ended June 30, 1998, the Company's effective tax rate differs from the federal
statutory rate principally due to net operating losses and other temporary
differences for which no benefit was recorded.
 
                                      F-15

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
10. INCOME TAXES--(CONTINUED)

     The provision for income taxes of $5,000, $23,453 and $4,900 for the years
ended December 31, 1996 and 1997 and the six months ended June 30, 1998,
respectively, primarily relates to the Irish tax on interest earned on bank
deposits located in the Republic of Ireland.
 
11. COMMITMENTS AND CONTINGENCIES
 
EMPLOYMENT AGREEMENTS
 
     The Company has an employment agreement with a managing director of IgX
Limited in Ireland which expires in November 2000. Under the terms of the
agreement, the employee is to receive an annual base salary of $110,000. Upon
execution of the agreement, the Company granted the employee options to purchase
83,696 shares of the Company's common stock at an exercise price of $1.00 per
share. The agreement also contains a non-compete provision which extends for a
period of three years from the termination of the agreement.
 
     In June 1997, the Company entered into an employment agreement with another
executive which expires in May 1999. Under the terms of the agreement, the
employee is to receive minimum annual compensation of $160,000, with a bonus of
up to 50% of the minimum compensation.
 
LEASES
 
     Future minimum payments under non-cancelable operating leases, which
primarily relate to office space, a pilot production facility and office
equipment, with initial or remaining terms of one year or more, consist of the
following at December 31, 1997:
 
<TABLE>
<CAPTION>
YEAR
----------------------------------------------------------------------------------
<S>                                                                                  <C>
1998..............................................................................   $ 92,000
1999..............................................................................     32,000
2000..............................................................................     19,000
2001..............................................................................     11,000
                                                                                     --------
                                                                                     $154,000
                                                                                     --------
                                                                                     --------
</TABLE>
 
     Rent expense amounted to $9,859, $27,731, $ 68,121, and $38,078 for the
years ended December 31, 1995, 1996 and 1997 and the six months ended June 30,
1998, respectively.
 
     Refer to Note 5 for commitments under sponsored research agreements.
 
12. SUBSEQUENT EVENTS
 
STRATEGIC PARTNERSHIPS
 
  IgX Oxford
 
     In August 1998, the Company obtained a majority interest in a corporation
newly formed in collaboration with the Glycobiology Institute of Oxford
University and Thomas Jefferson University which has, in turn, obtained an
exclusive worldwide license from the Monsanto Company ("Monsanto") to certain
intellectual property to be used in developing drug candidates for the treatment
of Hepatitis B.
 
     The Company has agreed to fund the corporation with up to $2 million to
complete animal studies to determine whether the preparation of an
Investigational New Drug Application ("IND") application to conduct human
clinical trials is appropriate.
 
                                      F-16

<PAGE>

                                   IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
12. SUBSEQUENT EVENTS--(CONTINUED)

  IgX/Sintofarma
 
     In August 1998, the Company signed a manufacturing and license agreement
with Laboratorios Sintofarma S. A. ("Sintofarma"). Under the terms of this
agreement, the Company and Sintofarma have agreed to form a joint venture under
which the Company will grant to the joint venture the rights to the licensed
technology underlying three of its drug candidates, while Sintofarma will be
responsible to bear all costs of manufacturing drug candidates for use in
clinical trials, and for marketing the products in Brazil, if clinical trials
are successful.
 
  Gador license agreement
 
     During August 1998, the Company entered into a license and supply agreement
with Gador S. A. ("Gador"). Under the terms of the agreement, the Company will
license to Gador all of the Company's rights to the technology underlying two of
its drug candidates in order to enable Gador to manufacture and market the
products throughout South America, except Brazil, as well as Central America and
Mexico if clinical trials are successful. The Company will supply the
ingredients necessary for production and will receive a royalty of 10% of net
sales of any product produced and sold by Gador. Gador has also agreed to remit
to IgX or its designee a percentage of net sales in order for IgX to partially
or fully recover the cost of the ingredients.
 
EXERCISE OF WARRANT (UNAUDITED)
 
     During September 1998, NEGF II, L.P., an existing stockholder, exercised a
warrant to purchase 370,000 shares of common stock of the Company. Net proceeds
to the Company from the exercise of this warrant amounted to $3,700. Refer to
Note 6 for further description of the warrant, its valuation and classification
as of June 30, 1998.
 
CANCELLATION OF NOTES PAYABLE TO STOCKHOLDERS (UNAUDITED)
 
      During September 1998, the Company entered into an agreement with Henry
Venture II Limited and NEGF II, L.P. to cancel the outstanding balance of all
notes payable to stockholders in exchange for 732,547 shares of common stock of
the Company, representing a conversion price of $7.00 per share. The
cancellation of the notes payable to stockholders will require the Company to
recognize a charge of approximately $527,000, representing the unamortized
portion of the debt discount, on the early extinguishment of the note payable to
NEGF II, L.P., for the quarter ending September 30, 1998. In addition, as a
result of this exchange at a price per share below the expected offering price
of the Company's anticipated IPO, the Company is expected to recognize an
additional charge of approximately $1.1 million as loss on extinguishment of
notes payable to stockholders for the quarter ending September 30, 1998.
 
     The effects of the transactions with Henry Venture II Limited and NEGF II,
L.P. have been reflected in the "Pro forma June 30, 1998" column of the
Consolidated Balance Sheet.
 
INITIAL PUBLIC OFFERING AND PRO FORMA PRESENTATION (UNAUDITED)
 
     In September 1998, the Board of Directors of the Company authorized
management to pursue an underwritten sale of shares of the Company's common
stock in an initial public offering ("IPO") pursuant to the Securities Act of
1933.
 
     Upon the closing of the IPO, all outstanding shares of Series A and B
Preferred will automatically convert into common stock. The effects of this
conversion to the Company's equity have been reflected in the unaudited "Pro
Forma June 30, 1998" column in the Consolidated Balance Sheet.
 
                                      F-17

<PAGE>

            ------------------------------------------------------
            ------------------------------------------------------
 
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE OF THIS PROSPECTUS.

                            ------------------------
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                   PAGE
                                                   ----
<S>                                                <C>
Prospectus Summary..............................      3
Risk Factors....................................      8
Use of Proceeds.................................     18
Dividend Policy.................................     18
Dilution........................................     19
Capitalization..................................     20
Selected Consolidated Financial Data............     21
Management's Discussion and Analysis of
  Financial Condition and Results of
  Operations....................................     22
Business........................................     27
Management......................................     43
Certain Transactions............................     51
Principal Stockholders..........................     53
Description of Capital Stock....................     54
Shares Eligible for Future Sale.................     55
Underwriting....................................     57
Legal Matters...................................     58
Experts.........................................     59
Additional Information..........................     59
Index to Consolidated Financial Statements......    F-1
</TABLE>
 
                            ------------------------
 
     UNTIL               , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE SHARES OF COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.


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


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


                                2,300,000 SHARES


                                     [LOGO]

                                   IgX CORP.

                                  COMMON STOCK

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

                                   PROSPECTUS

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


                             JOSEPHTHAL & CO. INC.



                                          , 1998

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

<PAGE>

                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
     The estimated expenses of this Offering are as follows:
 
<TABLE>
<S>                                                            <C>
S.E.C. Registration Fee.....................................   $    8,618
N.A.S.D. Filing Fee.........................................        3,421
Nasdaq National Market Qualification Fee....................       72,875
Representative's non-accountable expense allowance and
  financial advisor's fee...................................      414,000(1)
Accounting Fees.............................................      175,000
Legal Fees and Expenses.....................................      225,000
Blue Sky Qualification Fees and Expenses....................       25,000
Printing and Engraving......................................      100,000
Transfer Agent's Fees and Expenses..........................        5,000
Miscellaneous Expenses......................................       85,086
                                                               ----------
     Total..................................................   $1,114,000
                                                               ----------
                                                               ----------
</TABLE>
 
------------------
(1) Assuming an initial public offering price of $9.00 per share.
 
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
     Section 145 of the Delaware General Corporation Law grants corporations the
power to indemnify their directors, officers, employees and agents in accordance
with the provisions thereof, Article X of Registrant's Amended and Restated
Certificate of Incorporation and Article VII of Registrant's Bylaws provide for
indemnification of Registrant's directors, officers, agents and employees to the
full extent permissible under Section 145 of the Delaware General Corporation
Law. The Registrant has also entered into indemnification agreements with its
directors under which it has agreed to indemnify the directors to the fullest
extent permitted by Section 145 of the Delaware General Corporation Law.
 
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
 
     In September 1995, Registrant consummated a reorganization, under which
Registrant became a wholly owned subsidiary of a newly organized corporation,
IgX Limited, formed under the laws of the Republic of Ireland. The
reorganization was effected to attempt to take advantage of certain Irish tax
benefits and government grants relating to IgX Limited's pilot production
facility in Ireland. In connection with this reorganization, all of the
outstanding capital stock (and securities convertible or exercisable into such
capital stock) of Registrant were exchanged for shares of IgX Limited on a share
for share basis.
 
     From the period September 1995 through July 1996, IgX Limited obtained
unsecured loans from Henry Venture II Limited ("Henry Venture"), an existing
stockholder, totalling $2,340,000, which bore interest at 9% per annum, in the
form of promissory notes (the "Original Notes"). During August 1996, Henry
Venture was issued 2,086,096 shares of Series B mandatory redeemable convertible
preferred stock (the "Series B Redeemable") and 2,086,096 shares of Series C
mandatory redeemable convertible preferred stock (the "Series C Redeemable") of
IgX Limited in exchange for the cancellation of the Original Notes and other
notes in the aggregate principal amount of $1,683,000 issued prior to September
1995, along with accrued and unpaid interest thereupon of $149,192. Further, in
August 1996, in consideration of the cancellation of Series B Redeemable and
Series C Redeemable, IgX Limited issued one additional share of Series A
Preferred of IgX Limited to Henry Venture.
 
                                      II-1

<PAGE>

     In addition, from November 1996 to December 1997, Henry Venture loaned IgX
Limited an aggregate principal amount of $5,328,546 with interest accrued
thereon at 9% per annum (the "1996/1997 Henry Venture Notes"). The first
promissory note in the amount of $3,544,312 at December 31, 1997, which includes
$544,312 of accrued and unpaid interest through December 31, 1997, bears
interest at a rate of 9% per annum and is payable in full on December 31, 2001.
The second promissory note issued was in the amount of $328,546, representing
the remaining balance, also bears interest at 9% per annum, and is payable in
full on demand.
 
     In December 1997, as a condition to another venture capital financing, a
further reorganization was effected by which IgX Limited became the wholly owned
subsidiary of Registrant, again with all of the outstanding capital stock (and
securities convertible or exercisable into such capital stock) of IgX Limited
being exchanged for shares of Registrant on a share for share basis and with
Registrant assuming all outstanding indebtedness due to Henry Venture from IgX
Limited.
 
     Further, in December 1997, Registrant sold an aggregate of 748,582 shares
of Series B Preferred Stock for $4,799,983 (or $6.4121 per share), to the
following investors for the number of shares set forth below opposite their
respective names:
 
<TABLE>
<CAPTION>
                                                                                  NUMBER OF
                                                                                  SHARES OF
                                                                                  SERIES B
NAME OF STOCKHOLDER                                                              PREFERRED STOCK
------------------------------------------------------------------------------   ---------------
<S>                                                                              <C>
Henry Venture II Limited......................................................       311,910
NEGF II, L.P..................................................................       155,955
English and Scottish plc......................................................       155,955
Meriken Nominees..............................................................       109,168
Morton I. Kamien..............................................................         7,797
Lloyd E. Shefsky..............................................................         7,797
</TABLE>
 
     To effect payment for its shares of Series B Preferred Stock, Henry Venture
exchanged indebtedness of approximately $1,999,998 under the 1996/1997 Henry
Venture Notes, and concurrently restructured the remaining indebtedness into two
promissory notes: one in the principal amount of $3,544,311 (including interest)
due December 31, 2001 with interest accruing from the date thereof at 9% per
annum, and the other note in the principal amount of $328,548 payable on demand,
together with interest accruing thereon at 9% per annum.
 
     In February 1998, Registrant sold an additional 155,955 shares of Series B
Preferred Stock for $999,999 (or $6.4121 per share) to NEGF II, L.P., a
principal stockholder of Registrant and 54,584 shares for $350,000 to Meriken
Nominees.
 
     In May 1998, NEGF II, L.P. loaned Registrant the principal amount of
$1,000,000, due May 6, 2008, with interest accruing thereon at 9% per annum. The
indebtedness is subject to prepayment upon the occurrence of certain conditions,
including the consummation of this Offering. In connection with this financing,
Registrant issued NEGF II, L.P. warrants to purchase 370,000 shares of Common
Stock of Registrant at an exercise price of $0.01 per share. The warrant was
exercised on September 25, 1998.
 
     In May 1998, Registrant sold 249,528 shares of Series B Preferred Stock for
a total of $1,599,998 (or $6.4121 per share) to the following investors for the
number of shares set forth below opposite their respective name:
 
<TABLE>
<CAPTION>
                                                                                  NUMBER OF
                                                                                  SHARES OF
                                                                                  SERIES B
NAME OF STOCKHOLDER                                                              PREFERRED STOCK
------------------------------------------------------------------------------   ---------------
<S>                                                                              <C>
English and Scottish plc......................................................       155,955
Zorn Nominees Limited.........................................................        23,393
Meriken Nominees..............................................................        31,191
Sundial International Fund Ltd................................................        38,989
</TABLE>
 
     On September 25, 1998, Henry Venture converted the 1996/1997 Henry Venture
Notes (aggregating $4,092,815 of principal and accrued interest) into
584,688 shares of Common Stock at $7.00 per share. Concurrently NEGF II, L.P.
converted the $1,000,000 promissory note issued to it by Registrant in May 1998
 
                                      II-2

<PAGE>

(aggregating $1,035,014 of principal and accrued interest) into 147,859 shares
of Common Stock also at $7.00 per share.
 
     From January 1, 1996 through December 1996, IgX Limited granted under its
Stock Option Plan 738,357 options at $1.00 per share to 11 holders and 15,000
options at $5.00 per share to one holder.
 
     In 1997, IgX Limited granted under its Stock Option Plan 325,000 options at
$5.00 per share to 2 holders.
 
     In December 1997, Registrant assumed the outstanding options under the IgX
Limited Stock Option Plan as part of the corporate reorganization referred to
above.
 
     In January 1998, Registrant granted under its 1993 Stock Option Plan 72,500
options at $1.00 per share to 4 holders and 5,000 options at $5.00 per share to
one holder.
 
     In August 1998, Registrant granted under its 1993 Stock Option Plan 40,000
options at $5.00 per share to 2 holders.
 
     In August 1998, Registrant granted under its 1993 Stock Option Plan 40,000
options at $5.00 per share to 2 holders.
 
     The foregoing transactions of Registrant were exempt from registration
under the Securities Act of 1933, as amended, under Sections 3(a)(9) and 4(2)
thereunder and Regulation D and Rule 701 under said Act, and all stock
certificates issued in connection therewith were legended to reflect their
restricted status.
 
ITEM 16. EXHIBITS
 
     (a) Exhibits:
 
<TABLE>
<S>      <C>   <C>
 1        --   Form of Underwriting Agreement. In September 1998, Registrant granted under its 1993 Stock
               Option Plan 45,000 options at $5.00 per share to holders.
 3.1      --   Amended and Restated Certificate of Incorporation of Registrant dated December 24, 1997.
 3.1a     --   Certificate of Amendment of Amended and Restated Certificate of Incorporation of Registrant
               filed January 6, 1998.
 3.1b     --   Certificate of Amendment of Amended and Restated Certificate of Incorporation of Registrant
               filed September 29, 1998.
 3.1c     --   Form of Amended and Restated Certificate of Incorporation of Registrant to be filed
               immediately following the closing of the offering.
 3.2      --   Amended and Restated Bylaws of Registrant.
 4.1      --   Form of specimen Common Stock Certificate of Registrant.*
 4.2      --   IgX Investors' Rights Agreement, dated December 24, 1997, by and among Registrant and
               certain investors, as amended by Amendment dated September   , 1998.
 4.3      --   Stock Purchase Warrant, dated May 6, 1998, between Registrant and NEGF II, L.P.
 4.4      --   Form of Lock-up Agreement.*
 4.5      --   Waiver of Anti-dilution Rights relating to issuance of May 1998 warrants with respect to
               Series A and Series B Preferred Stock.
 4.6      --   Waivers of Anti-dilution Rights relating to the initial public offering with respect to
               Series B Preferred Stock.
 4.7      --   Waivers of Registration Rights.
 4.8      --   Form of Representative's Warrants.
 4.9      --   Promissory Notes for NEGF note and Henry Venture Notes and agreement to convert debt into
               equity.
</TABLE>
 
                                      II-3

<PAGE>

<TABLE>
<S>      <C>   <C>
 4.10     --   Certificate of Incorporation of IgX Oxford Hepatitis, Corp. together with an Amendment
               thereto filed on August 17, 1998 and on Certificate of Designation of Preferred Stock.
 4.11     --   Warrant issued to Monsanto Company to purchase shares of IgX Oxford Hepatitis, Corp.
 5        --   Opinion of Epstein Becker & Green, P.C., as to legality of the securities being offered
               hereby.*
10.1      --   Amended and Restated 1993 Stock Option Plan of Registrant, as amended.
10.2      --   License Agreement, dated May 27, 1992 between University of Arizona and the Registrant.
10.2a     --   First Amendment to License Agreement of May 27, 1992, dated August 9, 1993 between
               University of Arizona and the Registrant.
10.2b     --   Second Amendment to License Agreement of May 27, 1992 dated September 18, 1998 between
               University of Arizona and the Registrant.
10.3      --   License Agreement, dated June 19, 1992 between University of Arizona and the Registrant.
10.4      --   License Agreement, dated July 1, 1996 between University of Arizona and the Registrant.
10.4a     --   First Amendment to License Agreement of July 1, 1996 dated September 18, 1998 between
               University of Arizona and the Registrant.
10.5      --   License Agreement, dated November 1, 1996 between University of Arizona and the Registrant.
10.6      --   License Agreement, dated August 25, 1998 between University of Arizona and the Registrant.
10.7      --   License Agreement dated September 18, 1998 between University of Arizona and the
               Registrant.
10.8      --   Letter Agreement dated September 18, 1998 between the Arizona Board of Regents, Charles
               Sterling, Vitaliano Cama, Michael Riggs, J. Glenn Songer and the Registrant.
10.9      --   Research Agreement, dated June 1, 1992 between University of Arizona and the Registrant
               (F. Javier Enriquez).*
10.10     --   Research Agreement, dated June 1, 1992 between University of Arizona and the Registrant
               (Charles R. Sterling).*
10.11     --   Research Agreement, dated March 12, 1993 between University of Arizona and the Registrant.*
10.12     --   Research Agreement, dated July 1, 1996 between University of Arizona and the Registrant.
10.13     --   Research Agreement, dated November 1, 1996 between University of Arizona and the
               Registrant.
10.14     --   Research Agreement, dated August 17, 1998 between IgX Oxford Hepatitis Corp. And the
               Registrant.
10.15     --   Heads of Agreement dated August 6, 1998 between Laboratorios Sintofarma S.A. and the
               Registrant.
10.16     --   Heads of a License and Supply Agreement dated August 7, 1998 between Gador S.A. and the
               Registrant.
10.17     --   1998 Stock Option Plan of Registrant.
10.18     --   Development and License Agreement between IgX Oxford Hepatitis Corp. and Monsanto Company.
10.19     --   Form of Indemnification Agreement with Directors of Registrant.
</TABLE>
 
                                      II-4

<PAGE>

<TABLE>
<S>      <C>   <C>
10.20     --   Employment Agreement between Registrant and Carroll Allen.
10.21     --   Employment Agreement between Registrant and Robert Renfroe.
10.22     --   Employment Agreement between Registrant and Craig R. Rennie.
10.22a    --   Severance Agreement between Registrant and Craig R. Rennie.
10.23     --   Real Estate Leases.*
21        --   Subsidiaries*
23.1      --   Consent of PricewaterhouseCoopers LLP (included on Page II-8)
23.2      --   Consent of Epstein Becker & Green, P.C. (included in Exhibit 5)*
24        --   Power of Attorney (included on Page II-7).
27        --   Financial Data Schedule.
</TABLE>
 
------------------
*To be filed by amendment.
 
     (b) Financial Statement Schedules:
 
     Schedules have been omitted for the reason that they are not required or
are not applicable or because the required information is included in the
financial statements or the notes thereto.
 
ITEM 17. UNDERTAKINGS.
 
     Registrant hereby undertakes to provide to the Underwriters at the closing
specified in the Underwriting Agreement certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
 
     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Registrant
pursuant to the foregoing provisions, or otherwise, Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant for expenses
incurred or paid by a director, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
 
     Registrant hereby further undertakes:
 
     (1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
 
           (i)  To include any prospectus required by Section 10(a)(3) of the
                Securities Act;
 
           (ii) To reflect in the prospectus any facts or events arising after
                the effective date of the registration statement (or the most
                recent post-effective amendment thereof) which, individually or
                in the aggregate, represent a fundamental change in the
                information set forth in the registration statement.
                Notwithstanding the foregoing, any increase or decrease in
                volume of securities offered (if the total dollar value of
                securities offered would not exceed that which was registered)
                and any deviation from the low or high end of the estimated
                maximum offering range may be reflected in the form of
                prospectus filed with the Commission pursuant to Rule 424
                (b) if, in the aggregate, the changes in volume and price
                represent no more than 20 percent change in the maximum
                aggregate offering price set forth in the "Calculation of
                Registration Fee" table in the effective registration statement.
 
             (iii) To include any material information with respect to the plan
                   of distribution not previously disclosed in the registration
                   statement or any material change to such information in the
                   registration statement.
 
                                      II-5

<PAGE>

     (2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
 
     (3) To remove from registration by means of a post-effective amendment any
securities being registered which remain unsold at the termination of the
offering.
 
     (4) That, for purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
 
     (5) That, for purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement for the securities offered in the
registration statement, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering of these securities.
 
                                      II-6

<PAGE>

                               POWER OF ATTORNEY
 
     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint ALBERT J. HENRY and EDWIN SNAPE, PH.D.,
and each of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent for him and in his name, place and stead, in any and
all capacities, to sign any or all amendments to this Registration Statement and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same, as fully, for all
intents and purposes, as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
 
                                   SIGNATURES
 
     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, REGISTRANT HAS
DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW
YORK, ON THE 29TH DAY OF SEPTEMBER 1998.
 
                                          IGX CORP.
 
                                          By:      /s/ ALBERT J. HENRY
                                              ----------------------------------
                                                       Albert J. Henry
                                                   Chairman of the Board
 
     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
 
<TABLE>
<CAPTION>
                SIGNATURE                                      TITLE                             DATE
------------------------------------------  -------------------------------------------   -------------------
<S>                                         <C>                                           <C>
           /s/ ALBERT J. HENRY              Chairman of the Board, Chief Executive         September 29, 1998
------------------------------------------  Officer and Director (Principal Executive
             Albert J. Henry                Officer)

            /s/ TONY GEOGHEGAN              Chief Financial Officer (Principal             September 29, 1998
------------------------------------------  Financial and Accounting Officer)
              Tony Geoghegan

        /s/ BARUCH BLUMBERG, PH.D.          Director                                       September 29, 1998
------------------------------------------
          Baruch Blumberg, Ph.D.

           /s/ RAYMOND A. DWEK              Director                                       September 29, 1998
------------------------------------------
             Raymond A. Dwek

        /s/ DONALD H. PICKER PH.D.          Director                                       September 29, 1998
------------------------------------------
          Donald H. Picker Ph.D.

          /s/ EDWIN SNAPE, PHD.             Director                                       September 29, 1998
------------------------------------------
            Edwin Snape, PhD.

     /s/ RANDOLPH C. STEER, MD, PH.D.       Director                                       September 29, 1998
------------------------------------------
       Randolph C. Steer, MD, Ph.D.
</TABLE>
 
                                      II-7

<PAGE>

                        CONSENT OF INDEPENDENT AUDITORS
 
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated September 14, 1998
relating to the consolidated financial statements of IgX Corp., which appears in
such Prospectus. We also consent to the references to us under the headings
"Experts" in such Prospectus.
 
                                          /S/ PRICEWATERHOUSECOOPERS LLP
 
Stamford, Connecticut
September 29, 1998
 
                                      II-8

<PAGE>

                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
 EXHIBIT                                                                                                    SEQUENTIAL
  NUMBER     DESCRIPTION                                                                                     PAGE NO.
----------   --------------------------------------------------------------------------------------------   -----------
<S>          <C>   <C>                                                                                      <C>
    1         --   Form of Underwriting Agreement.
    3.1       --   Amended and Restated Certificate of Incorporation of Registrant dated December 24,
                   1997.
    3.1a      --   Certificate of Amendment of Amended and Restated Certificate of Incorporation of
                   Registrant filed January 6, 1998.
    3.1b      --   Certificate of Amendment of Amended and Restated Certificate of Incorporation of
                   Registrant filed September 29, 1998.
    3.1c      --   Form of Amended and Restated Certificate of Incorporation of Registrant to be filed
                   immediately following the closing of the offering.
    3.2       --   Amended and Restated Bylaws of Registrant.
    4.1       --   Form of specimen Common Stock Certificate of Registrant.*
    4.2       --   IgX Investors' Rights Agreement, dated December 24, 1997, by and among Registrant and
                   certain investors, as amended by Amendment dated September   , 1998.
    4.3       --   Stock Purchase Warrant, dated May 6, 1998, between Registrant and NEGF II, L.P.
    4.4       --   Form of Lock-up Agreement.*
    4.5       --   Waiver of Anti-dilution Rights relating to issuance of May 1998 warrants with respect
                   to Series A and Series B Preferred Stock.
    4.6       --   Waivers of Anti-dilution Rights relating to the initial public offering with respect
                   to Series B Preferred Stock.
    4.7       --   Waivers of Registration Rights.
    4.8       --   Form of Representative's Warrants.
    4.9       --   Promissory Notes for NEGF note and Henry Venture Notes and agreement to convert debt
                   into equity.
    4.10      --   Certificate of Incorporation of IgX Oxford Hepatitis, Corp., filed August 4, 1998 together 
                   with an Amendment thereto filed on August 17, 1998 and a Certificate of Designation of 
                   Preferred Stock.
    4.11      --   Warrant issued to Monsanto Company to purchase shares of IgX Oxford Hepatitis, Corp.
    5         --   Opinion of Epstein Becker & Green, P.C., as to legality of the securities being
                   offered hereby.*
   10.1       --   Amended and Restated 1993 Stock Option Plan of Registrant, as amended.
   10.2       --   License Agreement, dated May 27, 1992 between University of Arizona and the Registrant.
   10.2a      --   First Amendment to License Agreement of May 27, 1992, dated August 9, 1993 between
                   University of Arizona and the Registrant.
   10.2b      --   Second Amendment to License Agreement of May 27, 1992 dated September 18, 1998
                   between University of Arizona and the Registrant.
   10.3       --   License Agreement, dated June 19, 1992 between University of Arizona and the
                   Registrant.
   10.4       --   License Agreement, dated July 1, 1996 between University of Arizona and the
                   Registrant.
   10.4a      --   First Amendment to License Agreement of July 1, 1996 dated September 18, 1998 between
                   University of Arizona and the Registrant.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
 EXHIBIT                                                                                                    SEQUENTIAL
  NUMBER     DESCRIPTION                                                                                     PAGE NO.
----------   --------------------------------------------------------------------------------------------   -----------
<S>          <C>   <C>                                                                                      <C>
   10.5       --   License Agreement, dated November 1, 1996 between University of Arizona and the
                   Registrant.
   10.6       --   License Agreement, dated August 25, 1998 between University of Arizona and the
                   Registrant.
   10.7       --   License Agreement dated September 18, 1998 between University of Arizona and the
                   Registrant.
   10.8       --   Letter Agreement dated September 18, 1998 between the Arizona Board of Regents,
                   Charles Sterling, Vitaliano Cama, Michael Riggs, J. Glenn Songer and the Registrant.
   10.9       --   Research Agreement, dated June 1, 1992 between University of Arizona and the
                   Registrant (F. Javier Enriquez).*
   10.10      --   Research Agreement, dated June 1, 1992 between University of Arizona and the
                   Registrant (Charles R. Sterling).*
   10.11      --   Research Agreement, dated March 12, 1993 between University of Arizona and the
                   Registrant.*
   10.12      --   Research Agreement, dated July 1, 1996 between University of Arizona and the
                   Registrant.
   10.13      --   Research Agreement, dated November 1, 1996 between University of Arizona and the
                   Registrant.
   10.14      --   Research Agreement, dated August 17, 1998 between IgX Oxford Hepatitis Corp. And the
                   Registrant.
   10.15      --   Heads of Agreement dated August 6, 1998 between Laboratorios Sintofarma S.A. and the
                   Registrant.
   10.16      --   Heads of a License and Supply Agreement dated August 7, 1998 between Gador S.A. and
                   the Registrant.
   10.17      --   1998 Stock Option Plan of Registrant.
   10.18      --   Development and License Agreement between IgX Oxford Hepatitis Corp. and Monsanto
                   Company.
   10.19      --   Form of Indemnification Agreement with Directors of Registrant.
   10.20      --   Employment Agreement between Registrant and Carroll Allen.
   10.21      --   Employment Agreement between Registrant and Robert Renfroe.
   10.22      --   Employment Agreement between Registrant and Craig R. Rennie.
   10.22a     --   Severance Agreement between Registrant and Craig R. Rennie.
   10.23      --   Real Estate Leases.*
   21         --   Subsidiaries*
   23.1       --   Consent of PricewaterhouseCoopers LLP (included on Page II-8)
   23.2       --   Consent of Epstein Becker & Green, P.C. (included in Exhibit 5)*
   24         --   Power of Attorney (included on Page II-7).
   27         --   Financial Data Schedule.
</TABLE>
 
------------------
*To be filed by amendment.
[{"type": "S-1", "sequence": "1", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 408130}]
{"company-data": {"conformed-name": "IGX CORP/DE", "cik": "0001070936", "assigned-sic": "", "irs-number": "330505269", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-64829", "film-number": "98718426"}, "business-address": {"street1": "ONE SPRINGFIELD AVE", "city": "SUMMIT", "state": "NJ", "zip": "07960", "phone": "9085984663"}, "mail-address": {"street1": "ONE SPRINGFIELD AVE", "city": "SUMMIT", "state": "NJ", "zip": "07960"}}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 30, 1998
 
                                                    REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            ------------------------
 
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933

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

                                   IgX CORP.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE                                      2836                                     33-0505269
     (STATE OR OTHER JURISDICTION OF               (PRIMARY STANDARD INDUSTRIAL                      (I.R.S. EMPLOYER
      INCORPORATION OR ORGANIZATION)               CLASSIFICATION CODE NUMBER)                     IDENTIFICATION NO.)
------------------------
 
                             ONE SPRINGFIELD AVENUE
                            SUMMIT, NEW JERSEY 07960
                                 (908) 598-4663
              (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
       INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

                            ------------------------
 
                                ALBERT J. HENRY
                      CHAIRMAN AND CHIEF EXECUTIVE OFFICER
                             ONE SPRINGFIELD AVENUE
                            SUMMIT, NEW JERSEY 07960
                                 (908) 598-4663
           (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                   INCLUDING AREA CODE, OF AGENT FOR SERVICE)

                            ------------------------
 
                                   Copies to:
SETH I. TRUWIT, ESQ.                    DENNIS N. BERMAN, ESQ.
     EPSTEIN BECKER & GREEN, P.C.             SONNENSCHEIN NATH & ROSENTHAL
            250 PARK AVENUE                    1221 AVENUE OF THE AMERICAS
       NEW YORK, NEW YORK 10177                 NEW YORK, NEW YORK 10020
            (212) 351-4500                           (212) 768-6700
------------------------
 
     APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
 
     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, 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, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
 
     If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
 
     If this Form is a post effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
 
     If delivery of the Prospectus is expected to be made pursuant to Rule 434,
check the following box. / /

                            ------------------------
 
                        CALCULATION OF REGISTRATION FEE
PROPOSED
                                                 MAXIMUM OFFERING     PROPOSED MAXIMUM
  TITLE OF SECURITIES BEING      AMOUNT TO BE        PRICE PER           AGGREGATE            AMOUNT OF
          REGISTERED              REGISTERED         SHARE(1)        OFFERING PRICE(1)    REGISTRATION FEE
Common Stock, $.001 par
value.........................   2,645,000(2)         $10.00            $26,450,000            $7,803
Representative's Warrants.....     230,000(3)         $.0001                $23                  (3)
Common Stock underlying the
Representative's Warrants.....     230,000(4)         $12.00             $2,760,000             $815
Total.........................                                                                 $8,618
(1) Estimated solely for purposes of calculating the registration fee pursuant
    to Rule 457.
 
(2) Includes 345,000 shares of Common Stock that the Underwriters have the
    option to purchase to cover over-allotments, if any.
 
(3) No fee due pursuant to Rule 457(g).
 
(4) Pursuant to Rule 416, the Registration Statement also covers such additional
    shares of Common Stock as may be issued as a result of the anti-dilution
    provisions of the Representative's Warrants.

                            ------------------------
 
     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 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

                SUBJECT TO COMPLETION, DATED SEPTEMBER 29, 1998
 
PROSPECTUS
--------------------------------------------------------------------------------
 
                                2,300,000 SHARES
 
                                   IgX CORP.

                                  COMMON STOCK
--------------------------------------------------------------------------------
 
IgX Corp. ("IgX" or the "Company") hereby offers 2,300,000 shares of its common
stock, par value $.001 per share (the "Common Stock"). Prior to this offering
(the "Offering"), there has been no public market for the Common Stock, and
there can be no assurance that a public market for the Common Stock will develop
after completion of this Offering, or if developed, that it will be sustained.
It is presently anticipated that the initial public offering price will be
between $8.00 and $10.00 per share. See "Underwriting" for information regarding
the factors to be considered in determining the initial public offering price.
Application will be made to include the Common Stock on the Nasdaq National
Market under the symbol "IGXC."
 
--------------------------------------------------------------------------------
 
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK AND IMMEDIATE AND
SUBSTANTIAL DILUTION. SEE "RISK FACTORS" BEGINNING ON PAGE 8 AND "DILUTION."

--------------------------------------------------------------------------------
 
   NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
  COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON
       THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION
                    TO THE CONTRARY IS A CRIMINAL OFFENSE.
PRICE TO                UNDERWRITING              PROCEEDS TO
                                           PUBLIC                 DISCOUNT(1)                COMPANY(2)
Per Share.......................             $                         $                         $
Total(3)........................             $                         $                         $
(1) Does not include compensation payable to Josephthal & Co. Inc., as
    representative of the several Underwriters (the "Representative"), in the
    form of a non-accountable expense allowance and a financial advisor's fee.
    In addition, see "Underwriting" for information concerning indemnification
    and contribution arrangements with, and other compensation payable to, the
    Underwriters.
 
(2) Before deducting estimated expenses of $1,114,000, including the
    Representative's non-accountable expense allowance and financial advisor's
    fee.
 
(3) The Company has granted the Underwriters an option (the "Over-Allotment
    Option"), exercisable for a period of 45 days after the date of this
    Prospectus, to purchase up to an additional 345,000 shares of Common Stock
    upon the same terms and conditions set forth above, solely to cover
    over-allotments, if any. If the Over-Allotment Option is exercised in full,
    the total Price to Public, Underwriting Discount and Proceeds to Company
    will be $     , $       and $      , respectively. See "Underwriting."

--------------------------------------------------------------------------------
 
The shares of Common Stock are offered by the Underwriters, subject to prior
sale, when, as and if delivered to and accepted by the Underwriters and subject
to the approval of certain legal matters by their counsel and to certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify the
Offering without notice and to reject any order in whole or in part. It is
expected that delivery of the shares of Common Stock offered hereby will be made
against payment on or about             , 1998 at the offices of Josephthal &
Co. Inc., New York, New York.
 
                             JOSEPHTHAL & CO. INC.
 
The date of this Prospectus is              , 1998.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING PURCHASES OF THE COMMON STOCK TO STABILIZE ITS MARKET PRICE, PURCHASES
OF THE COMMON STOCK TO COVER SOME OR ALL OF A SHORT POSITION IN THE COMMON STOCK
MAINTAINED BY THE UNDERWRITERS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
 
     The Company will furnish its stockholders with annual reports containing
audited financial statements certified by an independent public accounting firm
and will make available quarterly reports containing unaudited financial
statements for the first three quarters of each fiscal year.
 
                                       2
PROSPECTUS SUMMARY
 
     The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and Consolidated Financial
Statements and Notes thereto appearing elsewhere in this Prospectus. Except as
otherwise noted, all information in this Prospectus assumes no exercise of the
Over-Allotment Option or of the Representative's Warrants to purchase 230,000
shares of Common Stock from the Company and reflects the conversion of all
outstanding shares of preferred stock into an aggregate of 4,854,066 shares of
Common Stock effective upon the closing of this Offering. See "Underwriting"
and, for a description of the outstanding shares of preferred stock, see Notes
to Consolidated Financial Statements.
 
     This Prospectus includes forward-looking statements which involve known and
unknown risks and uncertainties or other factors that may cause actual results,
performance or achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Factors that might cause such differences include,
but are not limited to, those discussed under the heading "Risk Factors." An
investment in the securities offered hereby involves a high degree of risk. See
"Risk Factors."
 
                                  THE COMPANY
 
     IgX Corp. ("IgX" or the "Company") is a development stage company
developing drugs principally for the treatment of infectious diseases of the
human gastrointestinal ("GI") tract for which there is a significant medical
need for improved therapies. The Company's initial three drug candidates seek to
treat human GI tract infections caused by specific parasites or bacteria (types
of pathogens) with immunoglobulin (a type of antibody) produced by hens. This is
an example of passive immunity, using an antibody produced by one individual or
animal to treat another. Specifically, these drug candidates consist of
proprietary, low lipid (fat), polyclonal antibodies derived from egg yolks of
hens. The hens are injected with an amount of pathogen-specific antigens
(foreign substances) necessary to cause the hens to produce an increased level
of antibodies to that pathogen ("Avian Technology"). The Company's lead product
candidate, IGX-CPL3, is seeking to offer a treatment for cryptosporidial
diarrhea, focusing on HIV-advanced patients (as defined below) where the Company
believes no effective treatment currently exists. The two other Avian
Technology-based drug candidates currently under development, IGX-CDL3 and
IGX-HPL3, may offer valuable alternatives to traditional antibiotic treatments
at a time where there is an increasing development of drug resistance to
antibiotics. The Company believes that the Avian Technology may be applied to
the development of other drug candidates to treat additional GI tract
infections. The Avian Technology has been developed in collaboration with
Charles R. Sterling, Ph.D. and his colleagues at the University of Arizona.
Further, in August 1998, the Company organized a majority-owned subsidiary, IgX
Oxford Hepatitis Corp. ("IgX Oxford"), which is seeking to develop a drug
candidate using a proprietary compound, N-nonyl-deoxynojirimycin
("N-nonyl-DNJ"), licensed to it exclusively from Monsanto Company ("Monsanto"),
to treat another infectious disease, Hepatitis B, for which there also is a
significant medical need for improved therapy. N-nonyl-DNJ seeks to prevent the
secretion of the Hepatitis B virus from the infected cells. The mechanism of
action is that N-nonyl-DNJ prevents the sugars of one of the Hepatitis B virus
antigens from being correctly biosynthesized, so that the virus does not form,
as evidenced in animal studies described in the May 1998 edition of Nature
Medicine, a referee journal.
 
                                       3
The following chart illustrates the disease indications and various stages
of research and development of the Company's initial drug candidates:
DRUG CANDIDATE                  DISEASE INDICATION                    STAGE OF RESEARCH AND DEVELOPMENT
--------------------  ---------------------------------------  ------------------------------------------------
Avian Technology-based
IGX-CPL3            Cryptosporidial diarrhea,                European Union ("EU")-reviewed protocol,
                      focusing on HIV-advanced patients        Phase III double-blind, placebo controlled
                                                               multicenter trial in South Africa commenced
                                                               January 1998. Expanded trial in Mexico in July
                                                               1998 pursuant to the same protocol. U.S.
                                                               Phase I/II trial of earlier high lipid
                                                               formulation for AIDS related cryptosporidial
                                                               diarrhea completed in November 1995.

  IGX-CDL3            Clostridium difficile-associated         Animal studies.
                      diarrhea and related complications
                      arising from antibiotic therapy

  IGX-HPL3            Peptic ulcers due to Helicobacter        Research.
                      pylori infections

N-nonyl-DNJ*          Hepatitis B                              Animal studies.
  -------------------------------------------------------------------------------------------------------------
* Being developed by IgX's majority-owned subsidiary, IgX Oxford.
IGX-CPL3
 
     The Company's lead Avian Technology-based drug candidate, IGX-CPL3, is
designed to treat diarrhea caused by Cryptosporidium parvum ("C. parvum"), a
parasite often found in municipal drinking water. IGX-CPL3 is seeking to treat
Cryptosporidial diarrhea in patients infected with the human immunodeficiency
virus ("HIV"), the retrovirus responsible for Acquired Immune Deficiency
Syndrome ("AIDS"), who have CD-4 blood cell counts below 180 ("HIV-advanced
patients"). Cryptosporidial diarrhea can be chronic or life-threatening in
HIV-advanced patients.
 
     In November 1995, the Company completed a U.S. Phase I/II clinical trial at
New York Hospital-Cornell Medical Center in New York City to determine the
safety and preliminary efficacy of IGX-CP, an earlier high lipid, liquid
formulation of the IGX-CPL3 drug candidate, for AIDS-related cryptosporidial
diarrhea. IGX-CP for the trial was produced at the Company's Tucson, Arizona
pilot production facility. The trial was an open-label, ascending dose, pilot
study of two dose levels of IGX-CP, in which 16 of the 24 patients enrolled were
evaluable, having completed at least 2 weeks of treatment under either dose
level. The data, measured at the end of 3 and 6 weeks of treatment, suggested
that both dose levels were safe for administration to AIDS patients. In
addition, at least 60% of the total evaluable patients at the end of 3 and 6
weeks of treatment showed a decrease in daily frequency of bowel movements and
daily frequency of liquid stools, two of the trial's three primary efficacy
points. While daily frequency of bowel movements and daily frequency of liquid
stools decreased in only 40% and 20%, respectively, of the patients treated at
the high dose level at the end of 6 weeks, the Company attributes this decline
to the high lipid content of IGX-CP, which induced some diarrhea. The third
primary end point of the trial was stool oocyst quantitation, which measures the
density of the parasites in the stool and 25% of the evaluable patients met this
end point. The Company believes that stool oocyst quantitation is not a
significant measure of efficacy because it does not directly measure parasitic
volume. By contrast, the Company believes that bowel movement frequency is an
absolute measure of C. parvum, and its reduction in the trial evidenced a
corresponding reduction in C. parvum.
 
     Following the conclusion of the Phase I/II trial, the Company reformulated
IGX-CP to reduce the lipid content by approximately 50%, and to produce it as a
powder. During 1996 and 1997, the Company tested the reformulated drug
candidate, IGX-CPL3, in mice, and those animal studies demonstrated a reduction
in C. parvum counts. Based upon these animal studies, the Company believes that
IGX-CPL3 at the high dose level utilized in the Phase I/II trial should be more
effective than the prior formulation of the drug candidate, and the current
Phase III trial uses such high dose level. There can be no assurance that
IGX-CPL3 will be more effective than or as effective as the prior formulation of
such drug candidate.
 
     Since the late 1995 introduction of combination drug therapy, including
protease inhibitors, to treat HIV-positive patients, the number of HIV-positive
patients in the U.S. and portions of Europe who have chronic or life-threatening
cryptosporidial diarrhea has been significantly reduced. As a result, during
1996 and 1997 the
 
                                       4
Company refocused its marketing strategy of IGX-CPL3, seeking to obtain
regulatory approval to market IGX-CPL3 as a treatment for cryptosporidial
diarrhea in HIV-advanced patients in countries where combination drug therapy is
not widely available. Similarly, the Company decided that its clinical trials
should be conducted in those countries that would facilitate patient enrollment.
U.S. regulations prohibit the exportation of biologics for use in foreign
clinical trials. Accordingly, during 1996, the Company, through its wholly-owned
subsidiary, IgX Limited, built a pilot production facility in Ireland to support
the production of IGX-CPL3 and other Avian Technology-based drug candidates for
use in clinical trials outside the U.S.
 
     In January, 1998, the Company commenced a double-blind, placebo-controlled,
randomized multicenter Phase III clinical trial in South Africa pursuant to an
EU-reviewed protocol. In July 1998, the Company expanded the trial to Mexico
using the same protocol. The Company expects to enroll 135 HIV-advanced patients
with cryptosporidial diarrhea to be treated for a minimum of four weeks with
IGX-CPL3, a low lipid formulation, at the high dose level used in the
Phase I/II trial. It is anticipated that at least 90 patients will complete the
trial. The trial's primary efficacy end-point is the patient's percentage
reduction in weekly stool frequency. At September 15, 1998, the Company had
screened over 450 patients based upon the trial's inclusion and exclusion
criteria and enrolled a total of 40 patients at 14 sites in South Africa and
Mexico, 26 of whom (all treated in South Africa) have completed the trial. The
Company anticipates that the trial will be completed in the first half of 1999.
If the trial is successful, IgX intends to apply for marketing approval of
IGX-CPL3 in the EU and certain South American countries to treat cryptosporidial
diarrhea in HIV-advanced patients and may apply for similar approval in the U.S.
 
     The approximate reported number of HIV-advanced patients who have
cryptosporidial-based diarrhea is 14,500 in the EU and 700,000 in South America.
If the current Phase III clinical trial for IGX-CPL3 is successful and
establishes its safety and efficacy in treating cryptosporidial diarrhea in
HIV-advanced patients, IgX believes that it will have demonstrated the principle
that Avian Technology-based drug candidates may treat infectious diseases of the
human GI tract. There can be no assurance that the Phase III clinical trial for
IGX-CPL3 will demonstrate any efficacy or safety or that it will be completed
successfully and in a timely manner. Furthermore, there can be no assurance as
to the timing of EU and other foreign or domestic regulatory filings or if or
when any of those regulatory authorities will approve IGX-CPL3 for sale.
Additionally, there can be no assurance that IGX-CPL3, if and when regulatory
approvals are received, will achieve market acceptance.
 
     The Company also plans to conduct clinical trials to determine the safety
and efficacy of using IGX-CPL3 to treat cryptosporidial diarrhea in patients
with a healthy immune system ("immunocompetent"). While cryptosporidial diarrhea
in immunocompetent patients is generally neither chronic nor life-threatening,
to the Company's knowledge, no effective treatment currently exists. The Company
expects to file an IND application with the U.S. Food and Drug Administration
(the "FDA") by the end of the first quarter of 1999 to commence a U.S. Phase I
clinical trial of IGX-CPL3 to treat cryptosporidial diarrhea in immunocompetent
children. The Company also expects to file an IND application to test IGX-CPL3
in immunocompetent adults later in 1999. The approximate reported number of
immunocompetent patients infected with cryptosporidial diarrhea annually is
600,000 in the U.S., 1.1 million in Europe, and 4.6 million in South America.
There can be no assurance as to the timing of the filing of these IND
applications, the timing or outcome of the FDA's review of any such
applications, or, if and when such review is completed, the timing or outcome of
the related clinical trials.
 
IGX-CDL3
 
     The Company's second Avian Technology-based drug candidate, IGX-CDL3, is a
proposed treatment for Clostridium difficile ("C. difficile")-associated
diarrhea and related complications arising from antibiotic therapy prescribed to
patients in hospitals and long-term health care institutions.
C. difficile-associated diarrhea is currently treated with antibiotics but their
efficacy has been reduced due to increasing development of drug resistance to
these antibiotics. Currently, the Company is testing IGX-CDL3 in hamsters. IgX
anticipates completing those studies in the fourth quarter of 1998. If such
studies are successful, as to which there can be no assurance, the Company
intends to submit an IND application to the FDA to commence a U.S. Phase I/II
clinical trial of IGX-CDL3 as a treatment for C. difficile-associated diarrhea
and related complications. Annually, approximately 2.3 million patients in the
U.S., approximately 4 million patients in the EU and approximately 194,000
patients in South America have C. difficile-associated diarrhea.
 
                                       5
IGX-HPL3
 
     The Company's third Avian Technology-based product candidate, IGX-HPL3,
seeks to treat peptic ulcers caused by the bacteria Helicobacter pylori
("H. pylori"). H. pylori has been implicated as a cause of peptic ulcer disease
and chronic gastritis. There also appears to be a strong statistical association
between H. pylori and gastric carcinoma and types of lymphoma. Ulcers caused by
H. pylori are currently treated with certain antibiotics but their efficacy has
been reduced slightly due to an increasing development of drug resistance to
these antibiotics. The Company anticipates commencing animal studies for
IGX-HPL3 in mice by the end of 1998. Each year approximately 4 million new
incidences of ulcers or other complications arising from H. pylori are reported
in the U.S.
 
N-NONYL-DNJ
 
     In September 1998, IgX Oxford acquired an exclusive worldwide license from
Monsanto to commercialize N-nonyl-DNJ, a glucosidase inhibitor, as a treatment
for Hepatitis B. N-nonyl-DNJ seeks to prevent the secretion of the Hepatitis B
virus from the infected cells. The mechanism of action is that N-nonyl-DNJ
prevents the sugars of one of the Hepatitis B virus antigens from being
correctly biosynthesized, so that the virus does not form, as evidenced in
animal studies described in the May 1998 edition of Nature Medicine, a referee
journal. While alpha interferon and antivirals are currently available to treat
Hepatitis B, these therapies have a limited clinical success rate, high
recidivism rate and significant undesirable side effects. To date, Monsanto has
sponsored research and animal studies on N-nonyl-DNJ at Oxford University
("Oxford") in Oxford, England and Thomas Jefferson University ("TJU") in
Philadelphia, Pennsylvania. The results of these woodchuck animal studies,
published in the May 1998 edition of Nature Medicine, showed a reduction of the
enveloped Hepatitis B virus correlated with the dosing level of N-nonyl-DNJ in
the serum of the treated animals. IgX has agreed to fund IgX Oxford with up to
$2 million. Such funds are anticipated to be used to conduct further animal
studies relating to N-nonyl-DNJ at Oxford and TJU, which are necessary to
determine whether an IND application to conduct a Phase I human clinical trial
is appropriate. These animal studies are anticipated to be completed by the end
of the first half of 1999. If they are successful, as to which there can be no
assurance, IgX Oxford anticipates filing an IND application with the FDA.
Monsanto has retained certain exclusive rights of first refusal to license for
further development and/or commercialize N-nonyl-DNJ. Approximately 350 million
people worldwide are chronically infected with the Hepatitis B virus, which is
usually fatal in approximately 20-40% of the chronically infected population if
untreated.
 
     The Company's strategy is to develop products both independently and
through strategic partnerships with large pharmaceutical companies, under which
the Company will seek financial, preclinical and clinical trial, manufacturing
and marketing assistance while retaining parallel manufacturing and/or marketing
rights for the products. In addition to the IgX Oxford joint venture, in August
1998 IgX entered into strategic partnerships with Laboratorios Sintofarma S.A.
("Sintofarma"), a Brazilian company currently responsible for the manufacturing
and marketing of 26 pharmaceutical products in South America, and Gador S.A.
("Gador"), the second largest manufacturer and distributor of pharmaceutical
products in Argentina based on both unit volume and sales. These agreements
relate to the development and commercialization of the Company's Avian
Technology-based drug candidates in South America, Latin America and Mexico.
Under its agreement with the Company, Sintofarma agreed to pay for clinical
trials in Brazil of the Company's Avian Technology-based drug candidates
currently under development (IGX-CPL3, IGX-CDL3 and IGX-HPL3), and to form a
Brazilian joint venture entity with the Company to manufacture Avian
Technology-based drug candidates for sale in Brazil and elsewhere. The joint
venture entity to be formed ("Sintofarma IgX Biotech, Ltda"), which is expected
to be owned 40% by IgX and 60% by Sintofarma, will manufacture all Avian
Technology-based drugs for commercial sale, if and when any such drug candidates
are approved for sale in Brazil. Under the strategic partnership, IgX granted
Sintofarma an exclusive license to distribute and market IGX-CPL3 and IGX-CDL3
in Brazil, if and when approved for sale, and Sintofarma will pay IgX a royalty
to be agreed upon ranging from 10% to 16.6% of net sales. Sintofarma and Gador
also have rights of first negotiation for similar licenses on other Avian
Technology-based drug candidates. Under its agreement with the Company, Gador
agreed to manage the process of seeking regulatory approval to commercialize
IGX-CPL3 and IGX-CDL3 in all countries in South America, except Brazil, as well
as Latin America and Mexico. IgX also granted Gador the exclusive distribution
and marketing rights to IGX-CPL3 and IGX-CDL3 in those countries if and when
approved for sale, for which Gador will pay IgX a royalty of 10% of net sales.
In addition, Gador will purchase the ingredients for IGX-CPL3 and IGX-CDL3 from
IgX or its designee (including Sintofarma IgX Biotech, Ltda) at a cost of up to
20% of the net sales of drugs sold by Gador.
 
     The Company was incorporated in Delaware in 1992. In addition to its
majority equity interest in IgX Oxford, IgX has one wholly-owned subsidiary, IgX
Limited, which is organized under the laws of the Republic of Ireland and
operates a pilot production facility. The Company's principal executive offices
are located at One Springfield Avenue, Summit, New Jersey 07960 and its
telephone number is (908) 598-4663.
 
                                       6
THE OFFERING
Common Stock offered by the Company............  2,300,000 shares

Common Stock to be outstanding after the
  Offering.....................................  8,966,643 shares(1)

Use of proceeds................................  Clinical development, research programs and general corporate
                                                 purposes, including working capital.

Proposed Nasdaq National Market symbol.........  IGXC
------------------
(1) Based on the number of shares of Common Stock outstanding on September 28,
    1998. Excludes 825,857 shares of Common Stock issuable upon exercise of
    options outstanding on such date, which had a weighted average exercise
    price of $1.51 per share. Also excludes 600,000 shares available for future
    grant under the Company's 1998 Stock Option Plan. See "Management--Stock
    Option Plans."
 
                      SUMMARY CONSOLIDATED FINANCIAL DATA
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
FEBRUARY 11,
                                                                                           1992
                                                                                        (INCEPTION)
                                                     DECEMBER 31,                           TO              JUNE 30,
                                 ----------------------------------------------------   DECEMBER 31,   -------------------
                                   1993       1994       1995       1996       1997        1997          1997       1998
                                 --------   --------   --------   --------   --------   ------------   --------   --------
CONSOLIDATED STATEMENT OF
  OPERATIONS DATA:
Operating expenses:
  Research and development.....  $    176   $    330   $    475   $  1,136   $  3,426     $  5,800     $  1,874   $  1,577
  General and administrative...        80        281        718      1,119      1,733        4,095          521      1,911
Net interest expense...........        23         64        144        207        373          811          164        147
Net loss.......................      (279)      (675)    (1,337)    (2,467)    (5,555)     (10,734)      (2,576)    (3,640)
Basic and diluted loss per
  share........................  $  (0.80)  $  (1.52)  $  (1.88)  $  (3.48)  $  (7.82)                 $  (3.63)  $  (5.13)
                                 --------   --------   --------   --------   --------                  --------   --------
                                 --------   --------   --------   --------   --------                  --------   --------
Weighted average shares
  outstanding used for basic
  and diluted loss per
  share(1).....................   350,030    444,715    710,030    710,030    710,030                   710,030    710,030
                                 --------   --------   --------   --------   --------                  --------   --------
                                 --------   --------   --------   --------   --------                  --------   --------
FEBRUARY 11,
                                    1992
                                 (INCEPTION)
                                     TO
                                  JUNE 30,
                                    1998
                                 ------------
CONSOLIDATED STATEMENT OF
  OPERATIONS DATA:
Operating expenses:
  Research and development.....    $  7,377
  General and administrative...       6,006
Net interest expense...........         958
Net loss.......................     (14,374)
Basic and diluted loss per
  share........................
Weighted average shares
  outstanding used for basic
  and diluted loss per
  share(1).....................
JUNE 30, 1998
                                                                                ---------------------------------------------
                                                                                                               PRO FORMA
                                                                                ACTUAL     PRO FORMA(2)(3)    AS ADJUSTED(4)
                                                                                -------    ---------------    ---------------
CONSOLIDATED BALANCE SHEET DATA:
  Cash.......................................................................     2,543          2,543             20,680
  Working capital............................................................     1,284          1,624             19,761
  Total assets...............................................................     3,654          3,654             21,791
  Total liabilities..........................................................     5,498          1,013              1,013
  Deficit accumulated during development stage...............................   (14,374)       (16,039)           (16,039)
  Total (capital deficiency) stockholders' equity............................    (1,844)         2,641             20,779
------------------
(1) See Note 2 of the Notes to the Consolidated Financial Statements for an
    explanation of the method used to determine the number of shares to compute
    basic and diluted loss per share.
 
(2) Gives effect to the September 1998 conversion of all notes payable to
    stockholders of the Company into 719,281 shares of Common Stock at $7.00 per
    share.
 
(3) Deficit accumulated during development stage reflects the recognition into
    expense of $550, representing the unamortized portion of the discount
    associated with the $1,000 promissory note issued to NEGF II, L.P., and a
    $1,115 loss on conversion of notes payable to stockholders into 719,281
    shares of Common Stock at $7.00 per share assuming conversion at June 30,
    1998.
 
(4) Gives effect to the sale of the shares of Common Stock offered hereby, at an
    assumed initial offering price of $9.00 per share, and the application of
    the estimated net proceeds therefrom, after deducting underwriting discount
    and estimated offering expenses. See "Use of Proceeds" and "Capitalization."
 
                                       7
RISK FACTORS
 
     This Prospectus contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. All such forward-looking
statements involve known and unknown risks and uncertainties or other factors
which may cause actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. In addition to
statements which explicitly describe such risks and uncertainties, investors are
urged to consider statements labeled with the terms "believes," "belief,"
"expects," "plans," "anticipates," or "intends" to be uncertain and
forward-looking. An investment in the shares of Common Stock offered hereby
involves a high degree of risk. Prospective investors should carefully consider
the following risk factors, in addition to the other information set forth in
this Prospectus, in connection with an investment in the shares of Common Stock
offered hereby. All cautionary statements made in this Prospectus should be read
as being applicable to all related forward-looking statements wherever they
appear in this Prospectus.
 
     Early Stage of Development; Accumulated Deficit; Substantial Doubt about
the Company's Ability to Continue as a Going Concern; and Expectation of Future
Losses.  IgX has generated no revenues to date and has experienced significant
losses in each year since its inception. At June 30, 1998, the Company had an
accumulated deficit of approximately $14.4 million since its inception in
February 1992. These losses have resulted primarily from expenses associated
with the Company's research and development activities, including preclinical
and clinical trials, and general and administrative expenses. The Company's
financial statements have been prepared assuming that the Company will continue
as a going concern. The auditors' report states that the Company is a
development stage enterprise and has suffered recurring losses and net cash
outflows from operations since inception that raise substantial doubt about the
Company's ability to continue as a going concern. The Company is dependent upon
capital infusions from existing and/or new investors to fund operations. See
"Consolidated Financial Statements." The Company expects cumulative losses to
increase significantly as the Company continues to expand its reseach and
development, clinical trials, and manufacturing and marketing activities. The
Company's ability to achieve profitable operations is dependent on successfully
commercializing its Avian Technology-based drug candidates. There can be no
assurance that the Company's Avian Technology-based drug candidate development
efforts or its other drug candidate development efforts will be successfully
completed, that clinical trials will be successful, that regulatory approvals
will be obtained in a timely manner, if at all, that its drug candidates can be
manufactured at an acceptable cost and with acceptable quality, that any
approved drugs can be successfully marketed or that the Company will achieve
profitability. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Business."
 
     Uncertainty of Technology.  The Company's proposed business strategy is
based principally upon the application of the Company's Avian Technology
platform, which encompasses various elements from the fields of biotechnology
and pharmaceutical chemistry, and the application of these technologies to the
discovery and development of pharmaceuticals for the treatment of infections of
the human GI tract. This strategy is subject to the risks inherent in the
development of new drugs using new and emerging technologies. There can be no
assurance that unforeseen problems will not develop with these technologies or
applications, that the Company will be able to address successfully
technological challenges it encounters in its research and development programs
or that commercially feasible drugs will ultimately be developed by the Company.
See "Risk Factors--Competition" and "Business-Competition."
 
     Unproven Safety and Effectiveness of Drug Candidates; Uncertainties Related
to Clinical Trials.  The Company's drug candidates will require additional
research and development, extensive clinical testing and regulatory approval
prior to any commercial sales. The Company cannot predict if or when any of its
drug candidates under development will be commercialized. The Company currently
has only one drug candidate, IGX-CPL3, in human clinical trials. The Company
will be required to successfully complete clinical trials to demonstrate the
safety and efficacy of IGX-CPL3 as a treatment for cryptosporidial diarrhea in
HIV-advanced patients, currently in a Phase III clinical trial in South Africa
and Mexico, prior to seeking EU or other foreign regulatory approval or FDA
approval. In addition, there can be no assurance that the FDA will accept data
obtained from any foreign clinical trials. Further, there can be no assurance
that any clinical trial will be successful, that it will be completed in a
timely manner or that additional clinical trials will not be required. Although
there were no clinically significant adverse effects from IGX-CP in the
Phase I/II clinical trial which
 
                                       8
was completed in November 1995, there can be no assurance that serious side
effects from IGX-CPL3 will not be reported as the Phase III clinical trial
proceeds. The results from early clinical trials may not be predictive of
results that will be obtained in large scale clinical trials, as a number of
companies have suffered significant setbacks in advanced clinical trials, even
after promising results in earlier trials.
 
     There can be no assurance that the Phase III clinical trial for IGX-CPL3
will demonstrate any safety and efficacy or will be completed successfully in a
timely manner, if at all. There also can be no assurance that clinical trials
for the Company's other drug candidates will be commenced, or if commenced, that
they will demonstrate safety and efficacy or will be completed successfully in a
timely manner, if at all. The rate of completion of the Company's clinical
trials is dependent upon, among other things, the rate of patient enrollment.
Patient enrollment is a result of many factors, including the size of the
patient population, the nature of the clinical protocol under which the
particular drug candidate will be studied, the proximity of the patient to a
clinical site, the eligibility criteria for the study, the availability of
alternative treatments and cultural views on treatment. Delays in planned
patient enrollment may result in increased costs, regulatory filing delays,
abandonment of drug development efforts or any of the foregoing. Furthermore,
the Company, the EU, other foreign regulatory authorities or the FDA may suspend
or terminate clinical trials at any time. Failure to complete successfully any
of its clinical trials on a timely basis, or at all, would have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Business--Government Regulation."
 
     Extensive Government Regulation; No Assurance of Regulatory Approval.  The
Company is subject to extensive governmental regulatory requirements and a
lengthy approval process for its drug candidates. The development and commercial
use of the Company's drug candidates will be regulated by numerous federal,
state and local governmental authorities in the U.S., including the FDA, and
comparable foreign regulatory agencies abroad. Further, the nature of the
Company's research and development and manufacturing processes require testing
on certain laboratory animals. Accordingly, the Company is subject to extensive
federal, state and local laws, rules, regulations and policies governing the use
of and care for laboratory animals. Although the Company believes it is in
compliance with all such laws and maintains policies and procedures to ensure
that it remains in compliance, there can be no assurance that accidents will not
happen that would expose the Company to legal risk and/or financial loss.
Furthermore, there can be no assurance that current laws will not be changed or
that new laws will not be passed that force the Company to change its policies
and procedures, an event which could impose significant costs on the Company.
 
     The U.S. and foreign regulatory approval processes for the Company's drug
candidates, including required preclinical studies and clinical trials, are
lengthy and expensive. The Company has only limited experience in conducting
clinical trials, filing or pursuing applications necessary to gain regulatory
approvals. Preclinical testing of the Company's drug candidates in the U.S. is
subject to current Good Laboratory Practices ("GLP") as prescribed by the FDA
and the manufacture of any drug candidates developed by the Company will be
subject to current Good Manufacturing Practices ("GMP") as prescribed by the FDA
as well as comparable foreign practices. There can be no assurance that the
necessary foreign regulatory and FDA clearances and subsequent approvals will be
obtained in a timely manner, if at all. There can be no assurance as to the
length of the clinical trial period or the number of patients that will be
required to be tested in the clinical trials in order to establish the safety
and efficacy of IGX-CPL3 or any future drug candidates of the Company. The
Company may encounter unanticipated delays or significant costs in its efforts
to secure necessary foreign or FDA approvals. There can be no assurance, even
after the performance of clinical trials and the passage of time and the
expenditure of such resources, that regulatory approval will be obtained for any
of the drug candidates that may be developed by the Company. The Company's
analysis of data obtained from preclinical and clinical activities is subject to
confirmation and interpretation by regulatory authorities which could delay,
limit or prevent EU, other foreign agency or FDA regulatory approval.
 
     The Company and its strategic partners are subject to numerous and varying
foreign regulatory requirements governing the design and conduct of preclinical
and clinical trials and the manufacturing and marketing of its drug candidates.
The Phase III clinical trial of IGX-CPL3 is being conducted in South Africa
under an EU-reviewed protocol. The Company expanded the Phase III clinical trial
in Mexico in July 1998 under the same protocol. If the trial is successful, the
Company intends to file for marketing approval of IGX-CPL3 to treat
cryptosporidial diarrhea in HIV-advanced patients in the EU and certain South
American countries. Approval of a
 
                                       9
drug candidate by applicable regulatory authorities of foreign countries must be
obtained prior to the commencement of marketing the drugs in those countries.
The time required to obtain such approval may be longer or shorter than that
required for FDA approval discussed below. The foreign regulatory approval
process may include all of the risks associated with obtaining FDA approval set
forth below, and there can be no assurance that foreign regulatory approvals
will be obtained on a timely basis, if at all. There can be no assurance that
the EU regulatory authorities will in fact accept the data from that portion of
the clinical trial conducted in Mexico.
 
     The Company also may apply for FDA approval of IGX-CPL3 to treat
cryptosporidial diarrhea in HIV-advanced patients. The current Phase III
clinical trial in South Africa and Mexico is based upon a protocol that has not
been approved by the FDA. If such trial is successful, there can be no assurance
that the FDA will in fact accept the data obtained from such trial in connection
with seeking FDA approval of IGX-CPL3. Even if regulatory approvals are
obtained, they may include significant limitations on the indicated uses for
which a drug may be marketed. A marketed drug also is subject to continual FDA
and other regulatory agency review and regulation. Later discovery of previously
unknown problems or failure to comply with the applicable regulatory
requirements may result in restrictions on the marketing of a drug or withdrawal
of the drug from the market, as well as possible civil or criminal sanctions. In
addition, if marketing approval is obtained, the FDA may require post-marketing
testing and surveillance programs to monitor the drug's efficacy and side
effects. Results of these post-marketing programs may prevent or limit the
further marketing of the monitored drug. See "Business--Government Regulation."
 
     Uncertainty Regarding Patents and Proprietary Rights.  The Company and the
University of Arizona (the "University") have entered into research agreements
(the "Research Agreements") under which the Company has funded research
undertaken by the University. As a result of certain research, the Company and
the University have entered into license agreements (the "Licenses") under which
the Company is granted certain exclusive, worldwide, royalty-bearing licenses to
commercialize the inventions set forth in the University's one issued patent and
several patent applications relating to aspects of Avian Technology utilized by
the Company in exchange for royalty payments by the Company. However, the
Licenses do not provide the Company with rights to license from the University
inventions relating to Avian Technology where the related research has not been
funded by the Company. See "Business--Research and Development."
 
     The Licenses presently pertain to one issued U.S. patent, two continuation
applications pending in the U.S., three other patent applications pending in the
U.S. (as well as three corresponding foreign applications) and one provisional
patent application pending in the U.S. The issued U.S. patent (No. 5,753,228),
which issued on May 19, 1998 and will expire on May 19, 2015, relates to a
method for treating parasitosis by the enteral administration of hyperimmune hen
egg yolk antibodies.
 
     The Company believes that its ability to compete effectively will depend in
large part on obtaining and maintaining access to patent and intellectual
property protection on technologies utilized in its business (particularly with
respect to aspects of Avian Technology licensed from the University). Pursuant
to its rights and obligations under the Research Agreements and the License
Agreements, the Company and the University pursue patent protection in the U.S.
and certain foreign jurisdictions for certain technologies believed to be
proprietary to the University and advantageous for the University and the
Company. The Company's ability to compete effectively will depend in large part
on the ability of the University to obtain and maintain a proprietary interest
in such technologies which are licensed to the Company. The University may
terminate any License on 90 days' notice upon any breach or default by the
Company under the License or upon the bankruptcy or insolvency or receivership
of the business of the Company. Upon termination of any License, all rights
granted thereunder revert back to the University and, in such event, the
University reserves the right to terminate all of the other Licenses. Any such
termination would have a material adverse effect on the Company's business,
financial condition and results of operations, or could result in cessation of
the Company's business.
 
      Under the license agreement between IgX Oxford and Monsanto, either party
may terminate the license agreement upon an event of default, including
bankruptcy or insolvency of the other party or a material breach of the license
agreement that is not cured within 30 days of notice of the breach. Monsanto
also may terminate the license agreement if IgX Oxford shall have failed to give
notice on or before September 1, 2000 of its intent to commence a Phase I
clinical for N-nonyl-DNJ as a treatment for the Hepatitis B virus, which notice
triggers
 
                                       10
Monsanto's initial right of first refusal described herein or if IgX Oxford
shall have failed to provide the notice required to trigger Monsanto's second
right of first refusal described herein. Further, Monsanto can terminate the
license agreement if IgX Oxford fails to commercialize N-nonyl-DNJ as a
treatment for the Hepatitis B virus in at least one of the "Major Markets"
(United States, the EU, Japan or the People's Republic of China) prior to
September 1, 2004; alternatively, Monsanto has the option in such event to
obtain an exclusive license from IgX Oxford for N-nonyl-DNJ as a treatment for
the Hepatitis B virus in any such Major Market that it has so failed to
commercialize such product. Finally, Monsanto may terminate the license
agreement if IgX defaults under its obligations to fund IgX Oxford with up to $2
million as described in this Prospectus and fails to cure that default within 30
days notice. Any termination of the license agreement between IgX Oxford and
Monsanto could have a material adverse effect on the Company's business,
financial condition and results of operations.
 
     The patent and intellectual property positions of pharmaceutical and
biotechnology companies, including the Company, are uncertain and involve
complex legal and factual questions for which important legal principles are
largely unresolved. A number of pharmaceutical companies, biotechnology
companies, universities and research institutions, many of whom have
substantially greater resources than the Company and have made substantial
investments and may be further along in development in technologies competitive
with those utilized by the Company, have filed patent applications or received
patents relating to treatments and technologies which are similar to or
competitive with those of interest to the Company.
 
     Since a United States patent application is maintained under conditions of
confidentiality while the application is pending in the United States Patent and
Trademark Office (the "PTO"), the Company is unable to determine the inventions
being claimed in pending patent applications filed by its competitors in the
PTO. In addition, patents issued and applications pending which relate to the
Company's areas of interest are numerous, and there can be no assurance that the
Company is aware of all potentially competitive or conflicting patents (either
pending or issued) or other intellectual property rights. The existence of such
other patents, patent applications and rights could result in a significant
reduction of the coverage of rights held or to be held by the Company (i.e.,
rights held under the Licenses) and the Company's ability to realize any
significant patent protection with respect to such rights.
 
     Furthermore, while the Company holds rights (under the Licenses) to one
issued U.S. patent and several pending applications in the U.S. and
internationally, there can be no assurance that any of the pending applications
will result in the issuance of any patents, that such applications will have
priority over the applications of others, that, if issued, any patents to which
the Company holds rights might offer protection against competitors with similar
technologies or that the Company will not require additional rights to conduct
its business. There can also be no assurance that any patent, if issued or
following issuance, will not be challenged, invalidated or circumvented, or that
the rights created thereunder would afford the Company a competitive advantage.
 
     The commercial success of the Company also depends in large part on the
Company neither infringing valid, enforceable patents or proprietary rights of
third parties, nor breaching any licenses that may relate to the Company's
business. In this regard, the Company is aware of certain third-party patents
and competitive proprietary technologies that may relate to its business.
Specifically, the Company is aware of certain intellectual property rights
belonging to third parties that could be interpreted to compromise the Company's
freedom to practice and/or obtain rights to patent protection with respect to
certain aspects of the Company's technologies in the areas of the treatment of
infections with hen egg antibodies and the formulation of lipid-reduced
preparations. In the event of an unfavorable interpretation of third party
intellectual property rights (including the third party intellectual property
rights of which the Company is aware), the Company may be required to obtain
licenses from such third parties. There can be no assurance that any such
licenses would be available to the Company upon reasonably acceptable terms, if
at all. If the Company were so required to obtain licenses from such parties,
and if the Company were unable to obtain such licenses on reasonably acceptable
terms or the Company were unable to practice, develop and exploit such
technologies, the Company's technologies and business could be materially and
adversely affected. There can also be no assurance that the Company does not or
will not infringe other patents, intellectual property or proprietary rights of
third parties (including patents and rights which may issue or arise in the
future). Any legal action or threat against the Company claiming damages or
seeking to enjoin commercial activities relating to the Company's business
affected by third-party rights, in addition to
 
                                       11
subjecting the Company to potential litigation and liability for damages, may
require the Company to obtain licenses in order to continue to pursue its
business. There can be no assurances that the Company would prevail in any such
action or that any license (including licenses proposed by third parties)
required under any third party rights would be made available on commercially
acceptable terms, if at all. The Company could also face significant costs and
loss of time by management and key employees as a result of any litigation
relating to such third party rights.
 
     Certain underlying aspects of the technologies utilized and pursued by the
Company and the University may already be and have been in existence in the
scientific community in certain embodiments. There are United States and foreign
patents and patent applications held by third parties in the Company's
commercial areas of interest and the Company believes that there may be
significant litigation in the Company's industry and commercial areas of
interest regarding patent and other intellectual property rights. If the Company
becomes involved in such litigation, it could consume a substantial portion of
the Company's managerial and financial resources, which could have a material
adverse effect on the Company. Additionally, the defense and prosecution of
patent interference proceedings before the PTO or other related administrative
or court proceedings could result in substantial expense to the Company and
significant diversion of effort by the Company's technical and managerial
personnel. There can be no assurance that the Company will not in the future
become involved in PTO interference proceedings or other litigation to determine
the priority of inventions. In addition, laws of certain foreign countries do
not protect intellectual property to the same extent as laws in the United
States, which may subject the Company to additional difficulties in protecting
its intellectual property in foreign countries.
 
     The Company uses intellectual property owned by others and licensed to the
Company. Disputes may arise as to the ownership rights in such intellectual
property and related technology. The Company may also rely on certain
technologies to which it does not have exclusive rights or which may not be
patentable or proprietary and thus may be available to competitors.
 
     There can be no assurance that the steps taken by the Company, the
University or Monsanto to protect intellectual property and proprietary rights
will be adequate to prevent misappropriation or that others will not develop
competitive technologies or products. Furthermore, there can be no assurance
that others will not independently develop products that are similar or superior
to those proposed for development or commercialization by the Company, duplicate
any of the technologies utilized by the Company or design around any patent or
other intellectual property rights held by the Company.
 
     The Company's commercial success and ability to compete effectively will
also depend upon the unpatented trade secrets and confidential information of
the Company and its licensors (such as the University), especially where patent
protection is not believed to be appropriate or obtainable. In this regard, the
Company relies upon trade secrets, technical know-how and continuing inventions
of the Company and its licensors to develop and maintain the Company's
competitive position. There can be no assurance that the Company can obtain or
maintain meaningful protection of such trade secrets or know how or that the
Company will be capable of obtaining or maintaining protection for its rights to
such trade secrets or know how. The Company attempts to protect its trade
secrets and technologies utilized by it in part through confidentiality
agreements with its employees, consultants and certain contractors. There can be
no assurance, however, that these agreements will not be breached or terminated,
that licensors utilizing similar agreements with their employees, consultants
and contractors will not suffer from the breach or termination of such
agreements, that the Company would have adequate remedies for any breach or that
trade secrets or know-how utilized by the Company will not otherwise become
known or be independently discovered by competitors. See "Business--Patents and
Proprietary Rights."
 
     Dependence on Strategic Partners.  The Company is dependent on strategic
partners including Sintofarma and Gador for support in drug research and
development and the regulatory approval process, manufacturing, marketing and
distribution of its drug candidates abroad and in the U.S., if and when they are
approved for marketing by the EU, other foreign regulatory agencies and the FDA.
The Company's receipt of royalties from strategic partners, if any, will be
affected by the level of efforts and financial resources of its partners. There
can be no assurance that the Company's partners will devote the resources
necessary to complete research and development, and commence manufacturing and
marketing, of the drug candidates in their respective territories,
 
                                       12
or that they will successfully market such drugs. Strategic partners may pursue
alternative drug candidates and technologies which may compete with the
Company's drug candidates and technologies. There can be no assurance that any
particular partner will have sufficient financial resources to assist the
Company in drug research and development, the regulatory approval process,
manufacturing, marketing and distribution of its drug candidates abroad and in
the U.S. There can be no assurance that any strategic partner will commercialize
the Company's drug candidates.
 
     IgX has recently entered into two strategic partnerships with respect to
the development and commercialization of its Avian Technology-based drug
candidates in South America, Latin America and Mexico. In addition, the Company
also recently entered into a joint venture for the potential treatment of the
Hepatitis B virus infection. See "Business--Strategic Partnerships" There can be
no assurance that these strategic partnerships and joint ventures, or that any
future strategic partnership, will lead to the development or commercialization
of current or future drug candidates, nor that future partnerships, if entered
into, will be on terms favorable to the Company or will be successful. If the
Company were unable to enter into strategic partnerships with capable partners
on commercially reasonable terms, or if existing arrangements were terminated,
the development and commercialization of future drug candidates would be delayed
and possibly postponed indefinitely. See "Business--Strategic Partnerships" and
"--Manufacturing."
 
     Uncertainty of Market Acceptance of Avian Technology and Drugs.  The
commercial success of the Company's drug candidates, if and when approved for
marketing by the EU, other foreign agencies and the FDA, will depend on their
acceptance by the medical community and third-party payors as safe and
cost-effective. Market acceptance will depend on the ability of the Company and
its strategic partners to educate the medical community and third-party payors
about the benefits of the Avian Technology embodied in the Company's initial
drug candidates compared to other available treatments for GI tract diseases,
such as antibiotics and vaccines. The Company's Avian Technology represents a
new approach to treating GI tract diseases and market acceptance of the
Company's drug candidates is critical to the Company's success. There can be no
assurance that the Company's drug candidates will gain market acceptance if
approved for marketing by the EU, other foreign agencies or the FDA. Failure to
achieve market acceptance would have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--IgX
Strategy" and "--Competition."
 
     Uncertainty of Adequate Reimbursement.  The Company expects that sales
volumes and prices of its drug candidates will be dependent in large measure on
the availability of reimbursement from governmental and other third-party
payors, including health insurance companies. The Company believes that
reimbursement in the future will be subject to increased restrictions in the
U.S. and in foreign markets. The Company believes that the overall escalating
cost of medical drugs and services has led to, and will continue to lead to,
increased pressures on the health care industry, both foreign and domestic, to
reduce the cost of drugs and services, including any drugs offered by the
Company. There can be no assurance, in either the U.S. or foreign markets, that
governmental and other third party reimbursement and coverage will be available
or adequate, that current reimbursement amounts will not be decreased in the
future or that future legislation, regulation, or reimbursement policies of
governmental and other third-party payors will not otherwise adversely affect
the demand for the Company's drug candidates or its ability to sell its drug
candidates on a profitable basis. The unavailability or inadequacy of
governmental and other third-party payor coverage or reimbursement could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business--Reimbursement."
 
     Intense Competition.  The pharmaceutical industry is subject to intense
competition. The Company has many competitors, including pharmaceutical,
biotechnology and chemical companies, a number of which are actively developing
and marketing drugs that could compete with the Company's drug candidates. IgX
is aware of direct competition from companies with drugs and drug candidates
designed to use immune mechanisms to treat infections and also potential
competition from companies developing new antibiotics and other anti-infective
substances. Several companies are or have been developing milk-derived drugs for
treating or preventing cryptosporidial diarrhea; others are developing vaccines
designed to elicit active immune defenses against H. pylori or C. difficile. In
addition, certain companies are developing drug candidates that seek to treat
Hepatitis B. Numerous pharmaceutical, biotechnology and chemical companies,
academic institutions, governmental agencies and other public and private
research organizations are conducting research and
 
                                       13
development of new drugs which will address the same diseases IgX seeks to
address. Many of these competitors have substantially greater financial, human
and other resources and greater expertise in research and development,
manufacturing, marketing and distribution than the Company. Some of these
competitors may be further along in clinical trials of their drug candidates
than the Company. Such companies may succeed in developing technologies and
drugs that are more effective or less costly than any of those that may be
developed by the Company and may be more successful in developing, manufacturing
and marketing drugs. There can be no assurance that the Company will be able to
compete successfully in the future, that developments by others will not render
the Company's drug candidates non-competitive or that the Company's customers
will not choose to use competing technologies or drugs. See
"Business--Competition."
 
     Risk of Technological Obsolescence.  The pharmaceutical industry is subject
to rapid technological change. Numerous pharmaceutical, biotechnology and
chemical companies, academic institutions, governmental agencies and other
public and private research organizations are conducting research and
development of new products which will address the same diseases IgX seeks to
address. There can be no assurance that developments by others will not render
the Company's drug candidates obsolete.
 
     Quarterly Fluctuations in Operating Results.  The Company's results of
operations have varied and will continue to vary significantly from quarter to
quarter and depend on, among other factors: the timing of royalties, if any,
received from strategic partners; the formation of new strategic partnerships by
the Company; the timing of expenditures in connection with research and
development activities, including clinical trials, and further developing the
Company's manufacturing capabilities; the timing of drug candidate introductions
and associated launch, marketing and sales activities if and when any of the
Company's drug candidates is approved; and the timing and extent of any drug
candidate acceptance for different indications and geographical areas of the
world. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
 
     Future Capital Needs; Uncertainty of Additional Funding.  Since inception,
the Company has funded its operations primarily through private sales of debt
and equity securities. The Company believes that the proceeds of this Offering,
together with existing cash and cash equivalents, will be sufficient to fund its
operations through December, 2000. The Company believes that it will need to
raise substantial additional funds for research, development and other expenses,
through equity or debt financings, strategic partnerships or otherwise, prior to
commercialization of any of its drug candidates other than IGX-CPL3 as a
treatment of cryptosporidial diarrhea in HIV-advanced patients. Depending on the
success of its current Phase III clinical trial and the timing of governmental
regulatory approvals, if any, the Company also may need to raise additional
funds prior to commercialization of IGX-CPL3 as a treatment for cryptosporidial
diarrhea in HIV-advanced patients. The Company's future liquidity and capital
requirements will depend upon numerous factors, including the following: the
progress and scope of clinical trials; the timing and costs of filing any future
regulatory submissions; the timing and costs required to receive EU, U.S. and
other foreign governmental approvals; the cost of filing, prosecuting, defending
and enforcing patent claims and other intellectual property rights; the cost and
timing of establishing any FDA-approved or foreign government approved
full-scale manufacturing facilities; the extent to which the Company's drug
candidates gain market acceptance; the timing and costs of any drug candidate
introductions; the extent of the Company's ongoing research and development
programs; and, if necessary once any regulatory approvals are received, if at
all, the costs of developing marketing and distribution capabilities. There can
be no assurance that additional financing will be available on terms acceptable
to the Company, or at all. The Company's inability to fund its capital
requirements would have a material adverse effect on the Company's business,
financial condition and results of operations. If adequate funds are not
available, the Company may be required to curtail its operations significantly
or to obtain funds by entering into arrangements with strategic partners or
others that may require the Company to relinquish rights to certain of its
technologies, drug candidates, or potential markets. To the extent that
additional capital is raised through the sale of equity or securities
convertible into equity, the issuance of such securities could result in
dilution to the Company's existing stockholders. Future investors may be granted
rights that are superior to those held by the holders of Common Stock. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
 
     Limited Manufacturing Capability.  To date, the Company has been able to
produce sufficient quantities of its drug candidates for development and
clinical trials from its pilot production facilities in Arizona and Ireland. The
Company does not have full-scale manufacturing capability for any of its drug
candidates. The Company
 
                                       14
intends to continue to utilize its pilot production facilities for continuing
research and development, including preclinical and clinical trials. Under its
strategic partnership with Sintofarma, the Company and Sintofarma have agreed to
form a joint venture entity, IgX Sintofarma, to own and operate a manufacturing
facility in Brazil initially for pilot production of sufficient quantities of
its drug candidates for clinical trials in Brazil and for full-scale production
for the Company's Avian Technology-based products, if and when approved for
sale. The future Brazilian facility is anticipated to be an FDA-approved
facility. See "Risk Factors--Dependence on Strategic Partnerships" for a
discussion of certain risks relating to the Company's reliance on Sintofarma. In
addition, if the existing Phase III clinical trial of IGX-CPL3 is successful,
the Company may develop its own FDA-approved full-scale manufacturing facility,
in Ireland or elsewhere. If the Company elects to build such a facility in
Ireland, it may seek Irish government financing. There can be no assurance that
such financing will be available or, if available, that the terms of such
financing will be satisfactory to the Company. Such development would require
significant expenditures of capital and significant devotion of management
attention and resources. The Company would be required to hire and train
sufficient personnel and comply with the extensive regulations applicable to
such a facility. There is no assurance that IgX, either directly or through any
of its strategic partnerships, will be able to establish a manufacturing
facility that complies with current GMP requirements sufficient for full-scale
commercial manufacturing. See "Business--Strategic Partnerships" and
"--Manufacturing."
 
     Potential Product Liability Exposure and Insurance.  The clinical testing,
manufacturing and marketing of the Company's drug candidates may expose the
Company to product liability claims, and there can be no assurance that the
Company will not experience material product liability losses in the future. IgX
Limited currently has limited product liability insurance in the amount of
approximately $7.5 million (or Irish pounds 5 million) per occurrence for the
use of IgX's drug candidates in clinical trials, but there can be no assurance
that such coverage limits will be adequate, that such coverage will continue to
be available on terms acceptable to IgX Limited or that such coverage will be
adequate for liabilities actually incurred. The Company does not currently have
product liability insurance coverage for the commercial sale of its drug
candidates but intends to obtain such coverage if and when its drug candidates
are commercialized. However, there can be no assurance that the Company will be
able to obtain adequate additional product liability insurance coverage on
acceptable terms, if at all. A successful claim brought against the Company in
excess of available insurance coverage, or any claim or product recall that
results in significant adverse publicity against the Company, may have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business--Product Liability Insurance."
 
     Animal Rights Activists.  The current and future activities of the Company
involve animals and products derived from animals. The utilization of animals in
research and development and drug candidate commercialization is subject to
increasing focus by animal rights activists. It is the Company's policy to
implement immunization and procurement practices that do not interfere with the
normal animal health and production practices used by the dairy and poultry
industries. The Company, however, may be adversely affected by the activities of
animal rights groups and other organizations that have protested various animal
research and development programs.
 
     Dependence Upon Key Personnel.  The Company's business and operating
results depend in significant part upon the continued contributions of its key
technical and senior management personnel, many of whom would be difficult to
replace and certain of whom perform important functions for the Company beyond
those functions suggested by their respective job title or description. The
Company's business and operating results also depend in significant part upon
its ability to attract and retain qualified management, scientific and technical
personnel. Competition for such personnel is intense, and there can be no
assurance that the Company will be successful in attracting or retaining such
personnel. Although the Company maintains a $3 million key man insurance policy
on the life of Albert J. Henry, its Chairman and Chief Executive Officer, the
loss of Mr. Henry, or a key employee, the failure of any key employee to perform
in his or her current position, or the Company's inability to attract and retain
skilled employees, as needed, could have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Management--Executive Officers and Directors."
 
     International Operations; Currency Fluctuations.  The Company's operating
expenses are incurred in several international currencies, since it is
headquartered in the U.S. and owns properties and participates in
 
                                       15
operations abroad. Such operations abroad are subject to certain risks,
including government regulation, export and import license requirements, risks
of tariffs or trade barriers and political and economic instability.
 
     The Company expects that any drug candidate, if and when approved for sale,
will be marketed internationally and priced in the currency of the country in
which it is sold. Accordingly, the prices of such products in local currency
will vary as the value of the U.S. dollar fluctuates against such local
currencies. In addition, any royalty payment to be made to IgX or its affiliate
companies by Sintofarma or Gador is denominated in the currency of the country
where sales are made. There can be no assurance that there will not be increases
in the value of the U.S. dollar against such currencies, reducing the U.S.
dollar return to IgX on the sales of products. Furthermore, there can be no
assurance that significant fluctuations in foreign currency values will not
occur that will create sufficient differences in the relative prices of the
products in different countries, such that IgX will find it necessary to reduce
its prices in certain local currencies in order to bring the relative cost of
any of its products into a competitive price range. The Company does not
currently engage in foreign currency hedging transactions. However, as the
Company continues to expand its international operations, exposures to gains and
losses on foreign currency transactions may increase, and the Company may
consider engaging in such hedging transactions to limit its exposure to
potential losses from foreign currency transactions.
 
     No Prior Public Market; Possible Volatility of Share Price.  Prior to this
Offering, there has been no prior public market for the Common Stock, and there
can be no assurance that an active public trading market will develop or be
sustained after this Offering. The initial public offering price will be
determined through negotiations between the Company and the Representative based
on several factors and may not be indicative of the market price of the Common
Stock after this Offering. The market prices of the capital stock of
biotechnology companies have historically been volatile, and the market price of
the shares of Common Stock may be highly volatile. The market price of the
shares of the Common Stock may be significantly affected by factors such as
actual or anticipated fluctuations in the Company's operating results,
announcements of results of clinical trials, status of regulatory submissions
and regulatory approvals, if at all, technological innovations, new drugs, drug
candidates or new contracts by the Company or its competitors, developments with
respect to patents or proprietary rights, conditions and trends in the
pharmaceutical and biotechnology industries, adoption of new accounting
standards affecting such industries, changes in financial estimates by
securities analysts, general market conditions and other factors. In addition,
the stock market has from time to time experienced significant price and volume
fluctuations that have particularly affected the market prices for the common
stock of development stage companies. These broad market fluctuations may
adversely affect the market price of the Common Stock. In the past, following
periods of volatility in the market price of a particular company's securities,
class action securities litigation has often been brought against that company.
Such litigation, if brought against the Company, could result in substantial
costs and a diversion of management's attention and resources. There can be no
assurance that the market price of the Common Stock will not decline below the
initial public offering price. See "Underwriting."
 
     Anti-Takeover Effect of Certain Charter and By-law Provisions and Delaware
Law.  The Company's Amended and Restated Certificate of Incorporation (the
"Restated Certificate") authorizes the Board of Directors to issue, without
stockholder approval, up to 5,000,000 shares of preferred stock ("Preferred
Stock") with voting, conversion and other rights and preferences that could
adversely affect the voting power or other rights of the holders of Common
Stock. The issuance of Preferred Stock or of rights to purchase Preferred Stock
could be used to discourage an unsolicited acquisition proposal. In addition,
the possible issuance of Preferred Stock could discourage a proxy contest, make
more difficult the acquisition of a substantial block of the Company's Common
Stock or limit the price that investors might be willing to pay for shares of
the Company's Common Stock. The Restated Certificate also provides for staggered
terms for the members of the Board of Directors. A staggered Board of Directors
and certain provisions of the Company's By-laws (the "By-laws") and of Delaware
law applicable to the Company could delay or make more difficult a merger,
tender offer or proxy contest involving the Company. The Company, for example,
will be subject to Section 203 of the General Corporate Law of Delaware which,
subject to certain exceptions, restricts certain transactions and business
combinations between a corporation and a stockholder owning 15% or more of the
corporation's outstanding voting stock (an "interested stockholder") for a
period of three years from the date the stockholder becomes an interested
stockholder. In addition shareholder action may not be taken by written consent
and Directors of the Company may only be terminated for cause. These provisions
may have the effect of delaying or preventing a
 
                                       16
change of control of the Company without action by the stockholders and,
therefore, could adversely affect the price of the Common Stock. See
"Management," "Description of Capital Stock--Preferred Stock" and
"--Anti-Takeover Measures."
 
     Control by Directors, Officers and Principal Stockholders.  Upon completion
of this Offering, the present directors, executive officers and principal
stockholders of the Company and their affiliates will beneficially own
approximately 69.8% of the outstanding Common Stock of the Company. As a result,
these stockholders will be able to effectively control all corporate actions
requiring stockholder approval, including the election of directors and approval
of significant corporate transactions such as a merger of the Company or the
sale of all or substantially all of the Company's assets. Such concentration of
ownership may have the effect of delaying or preventing a change in control of
the Company. See "Principal Stockholders."
 
     Shares Eligible for Future Sale; Registration Rights.  Future sales of
substantial amounts of Common Stock in the public market following this Offering
could adversely affect the market price of the Common Stock. Upon completion of
this Offering, the Company will have 8,966,643 shares of Common Stock
outstanding, assuming no exercise of options and warrants outstanding on
September 28, 1998. Of these shares, the 2,300,000 shares sold in this Offering
(plus any additional shares sold upon exercise of the Over-Allotment Option)
will be freely tradeable without restriction under the Securities Act except any
such shares which may be held by "affiliates" of the Company, as defined in
Rule 144 under the Securities Act. The Company's officers, directors and
existing stockholders, holding an aggregate of 6,666,643 shares, have agreed,
subject to certain limited exceptions, not to offer to sell, sell, transfer,
assign, hypothecate, pledge or otherwise dispose of any of the shares held by
them as of the date of this Prospectus for nine months after the date of this
Prospectus (the "lock-up period") without the prior written consent of the
Representative. After the nine month period, all of such shares of Common Stock
(plus approximately 159,589 shares issuable upon exercise of vested options)
will be eligible for immediate sale in the public market subject to compliance
with Rule 144 under the Securities Act. The holders of 4,854,066 shares of
Common Stock have the right in certain circumstances to demand that the Company
to register their shares under the Securities Act for resale to the public
beginning one year after the effective date of the Registration Statement. In
addition, if the Company proposes to register any of its securities under the
Securities Act, for its own account, such holders are entitled to exercise their
"piggyback rights" to include their shares in such registration beginning nine
months after the effective date of the Registration Statement.
 
     No prediction can be made as to the effect, if any, that market sales of
additional shares or the availability of such additional shares for sale will
have on the market price of the Common Stock. Nevertheless, sales of substantial
amounts of Common Stock in the public market, or the perception that such sales
may occur, could have an adverse impact on the market price for the Common Stock
or impair the Company's ability to raise additional capital through an offering
of its equity securities. In addition, approximately nine months after the date
of this Prospectus, the Company expects to file a registration statement on Form
S-8 registering a total of approximately 1,425,857 shares of Common Stock
reserved for issuance under the Company's stock option plans, 825,857 of which
shares are subject to outstanding options. See "Management--Director
Compensation," "--Stock Option Plans," "Description of Capital Stock," "Shares
Eligible for Future Sale--Registration Rights" and "Underwriting."
 
     Immediate and Substantial Dilution.  Purchasers of the shares of Common
Stock offered hereby will experience immediate and substantial dilution of
approximately $6.58 per share in the per-share net tangible book value of their
investment from the assumed $9.00 per share initial public offering price.
Additional dilution will occur upon exercise of outstanding options. See
"Dilution" and "Shares Eligible for Future Sale."
 
     Potential Adverse Effect of Representative's Warrants.  At the consummation
of this Offering, the Company will sell to the Representative for nominal
consideration the Representative's Warrants to purchase 230,000 shares of Common
Stock (the "Representative's Warrants"). The Representative's Warrants will be
exercisable for a period of four years commencing one year from the date of this
Prospectus at an exercise price equal to 120% of the initial public offering
price per share of Common Stock. For the term of the Representative's Warrants,
the holders thereof will have, at nominal cost, the opportunity to profit from a
rise in the market price of the Common Stock without assuming the risk of
ownership, with a resulting dilution in the interest of other security holders.
As long as the Representative's Warrants remain unexercised, the Company's
 
                                       17
ability to obtain additional capital might be adversely affected. Moreover, the
holders of the Representative's Warrants may be expected to exercise such
Warrants at a time when the Company would, in all likelihood, be able to obtain
any needed capital through a new offering of its securities on terms more
favorable than those provided by the Representative's Warrants. See
"Underwriting."
 
     Year 2000 Risk.  In common with users of computers around the world, IgX is
investigating whether and to what extent the date change from 1999 to 2000 may
affect its information systems. The Company expects to implement the systems and
programming changes necessary to address year 2000 issues with respect to its
internal systems without significant expense. Nevertheless, there can be no
assurance that the Company's systems will not be affected by the date change
from 1999 to 2000, or that the cost of any remedial actions, if necessary, will
not have a material adverse effect on its business, financial condition and
results of operations. The Company also relies, directly and indirectly, on
external systems of business enterprises such as strategic partners, suppliers,
financial organizations, research facilities and governmental entities, both
domestic and international, for accurate exchange of data. Even if the internal
systems of the Company are not materially affected by the year 2000 computer
programming issue, the Company could be affected by disruptions in the operation
of the enterprises with which the Company interacts.
 
     Absence of Dividends.  To date, the Company has neither declared nor paid
any cash dividends on shares of its Common Stock and it does not anticipate
paying any cash dividends in the foreseeable future. See "Dividend Policy."
 
                                USE OF PROCEEDS
 
     The net proceeds to the Company from the sale of the 2,300,000 shares of
Common Stock offered hereby are estimated to be $18.1 million ($21.0 million if
the Over-Allotment Option is exercised in full), after deducting the
underwriting discount and other estimated expenses of this Offering, based on an
assumed initial public offering price of $9.00 per share.
 
     The Company expects to use the net proceeds of this Offering for further
research and development and animal studies on Avian Technology-based drug
candidates, clinical development, including the manufacture of drug candidates
for use in any trials (not otherwise funded by its strategic partners) and
approximately $2.0 million to fund IgX Oxford. The balance of the net proceeds
of this Offering will be used for working capital and general corporate
purposes. Exact allocation of the net proceeds and the timing of such
expenditures will depend on various factors, including the results of further
animal studies, timing of the Company's and IgX Oxford's human clinical trials
and regulatory filings.
 
     Pending the use of the net proceeds of this Offering, the Company will
invest the funds in short-term interest bearing, investment grade securities.
 
                                DIVIDEND POLICY
 
     To date, the Company has neither declared nor paid any cash dividends on
shares of its Common Stock and it does not anticipate declaring or paying any
cash dividends in the foreseeable future.
 
                                       18
DILUTION
 
     Purchasers will experience immediate dilution in net tangible book value of
their Common Stock from the assumed initial public offering price. As of
June 30, 1998, the Company had a negative net tangible book value of
approximately $1.8 million, or $2.60 per share of Common Stock. Net tangible
book value per share represents the amount of total tangible assets, less total
liabilities, divided by the number of shares of Common Stock then outstanding.
Giving effect to (i) the conversion of all indebtedness owed to stockholders of
the Company ($5.0 million of principal and accrued interest at June 30, 1998)
into 719,281 shares of Common Stock, and (ii) the conversion of the outstanding
shares of preferred stock into 4,854,066 shares of Common Stock upon
consummation of this Offering, the pro forma net tangible book value as of June
30, 1998 would be approximately $2.6 million or $0.42 per share. After giving
effect to the sale of 2,300,000 shares of Common Stock offered hereby (at an
assumed initial public offering price of $9.00 per share and after deducting the
underwriting discount and other estimated expenses of this Offering), the pro
forma net tangible book value of the Company as of June 30, 1998 would have been
$20.8 million, or $2.42 per share of Common Stock. This represents an immediate
increase in pro forma net tangible book value of $2.00 per share to existing
investors and an immediate dilution of $6.58 per share of to new investors
purchasing shares of Common Stock in the Offering. The following table
illustrates this per share dilution:
Assumed initial offering price per share...............................................            $9.00
  Pro forma net tangible book value per share before the Offering......................   $0.42
  Increase per share attributable to new investors.....................................    2.00
                                                                                          -----
Pro forma net tangible book value per share after the Offering.........................             2.42
                                                                                                   -----
Dilution in pro forma net tangible book value per share to new investors(1)............            $6.58
                                                                                                   -----
                                                                                                   -----
------------------
(1) Does not give effect to the exercise of (i) 825,857 shares subject to
    options to purchase shares of Common Stock outstanding as of September 28,
    1998 at a weighted average exercise price of $1.51 per share and (ii) a
    warrant on September 25, 1998, issued to an existing stockholder, into
    370,000 shares of Common Stock.
 
     If the Over-Allotment Option is exercised in full, the pro forma net
tangible book value per share of the Common Stock after this Offering would be
$2.64 per share, which would result in dilution to new investors in this
Offering of $6.36 per share.
 
      The following table sets forth as of June 30, 1998, after giving pro forma
effect to (i) the conversion of all indebtedness owed to stockholders of the
Company ($5.0 million of principal and accrued interest at June 30, 1998), into
719,281 shares of Common Stock, and (ii) the conversion of the outstanding
shares of preferred stock into 4,854,066 shares of Common Stock upon
consummation of this Offering, the number of shares of Common Stock purchased
from the Company, the total consideration paid and the average price per share
paid by the existing stockholders and the new investors (before deducting the
underwriting discount and estimated Offering expenses):
SHARES PURCHASED        TOTAL CONSIDERATION       AVERAGE
                                               --------------------     ----------------------     PRICE PAID
                                                NUMBER      PERCENT       AMOUNT       PERCENT     PER SHARE
                                               ---------    -------     -----------    -------     ----------
Existing stockholders.......................   6,283,377      73.20%    $17,013,497      45.11%      $ 2.71
New investors...............................   2,300,000      26.80      20,700,000      54.89       $ 9.00
                                               ---------    -------     -----------    -------
    Total (1)...............................   8,583,377     100.00%    $37,713,497     100.00%
                                               ---------    -------     -----------    -------
                                               ---------    -------     -----------    -------
------------------
(1) Does not give effect to the exercise of (i) 825,857 shares subject to
    options to purchase shares of Common Stock outstanding as of September 28,
    1998 at a weighted average exercise price of $1.51 per share and (ii) a
    warrant on September 25, 1998, issued to an existing stockholder, into
    370,000 shares of Common Stock. See "Management--Stock Option Plan" and
    "Description of Capital Stock."
 
                                       19
CAPITALIZATION
 
The following table sets forth, at June 30, 1998, (i) the actual capitalization
of the Company, (ii) the pro forma capitalization after giving effect to
(A) the conversion of all indebtedness owed to stockholders of the Company
($5.0 million of principal and accrued interest at June 30, 1998) into 719,281
shares of Common Stock and (B) the conversion of the outstanding shares of
preferred stock into 4,854,066 shares of Common Stock upon consummation of this
Offering, and (iii) the pro forma capitalization as adjusted to give effect to
the sale of 2,300,000 shares of Common Stock offered by the Company at an
assumed initial offering price of $9.00 per share and the application of the
estimated net proceeds therefrom after deducting the underwriting discount and
other estimated expenses of the Offering. This table should be read in
conjunction with the Consolidated Financial Statements of the Company and the
Notes thereto included elsewhere in this Prospectus.
JUNE 30, 1998
                                                                             -----------------------------------------
                                                                                (AMOUNTS IN THOUSANDS EXCEPT SHARE
                                                                                      AND PER SHARE AMOUNTS)
                                                                                                         PRO FORMA
                                                                             ACTUAL     PRO FORMA(1)    AS ADJUSTED(2)
                                                                             -------    ------------    --------------
Notes payable to stockholders...........................................   $ 4,485            --               --
Capital deficiency:
  Series B preferred stock ($0.001 par value; 1,874,999 shares authorized;
    1,154,065 shares issued and outstanding, actual; none issued and
    outstanding, pro forma and pro forma as adjusted).....................         1            --               --
  Series A preferred stock ($0.001 par value; 3,700,001 shares authorized,
    issued and outstanding, actual; none issued and outstanding, pro forma
    and pro forma as adjusted)............................................         4            --               --
  Common stock ($0.001 par value; 15,000,000 shares authorized; 710,030
    shares issued and outstanding, actual; 6,283,377 shares issued and
    outstanding, pro forma; 8,583,377 shares issued and outstanding, pro
    forma as adjusted)....................................................         1      $      6         $      9
Additional paid-in capital................................................    12,925        19,075           37,209
Cumulative translation adjustment.........................................      (401)         (401)            (401)
Deficit accumulated during development stage(3)...........................   (14,374)      (16,039)         (16,039)
                                                                             -------      --------         --------
  Total (capital deficiency) stockholders' equity.........................    (1,844)        2,641           20,778
                                                                             -------      --------         --------
    Total capitalization..................................................   $ 2,641      $  2,641         $ 20,778
                                                                             -------      --------         --------
                                                                             -------      --------         --------
------------------
(1) Gives effect to the September 1998 conversion of all notes payable to
    stockholders of the Company into 719,281 shares of Common Stock at $7.00 per
    share, assuming conversion at June 30, 1998.
(2) Gives effect to the sale of the shares of Common Stock offered hereby, at an
    assumed initial offering price of $9.00 per share and the application of the
    estimated net proceeds thereon, after deducting the underwriting discount
    and estimated offering expenses.
(3) Gives effect to the recognition into expense of $550 representing the
    unamortized portion of the discount associated with the $1,000 promissory
    note issued to NEGF II, L.P., and a $1,115 loss on conversion of notes
    payable to stockholders into 719,281 shares of Common Stock at $7.00 per
    share, as described in note (1) above.
 
                                       20
SELECTED CONSOLIDATED FINANCIAL DATA
               (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
 
     The following selected consolidated financial data for each of the years in
the three-year period ended December 31, 1997 are derived from, and are
qualified by reference to, the audited Consolidated Financial Statements
included elsewhere herein. The following selected financial data for each year
in the two-year period ended December 31, 1994 are derived from, and are
qualified by reference to, the Company's audited financial statements not
included herein. The selected consolidated financial data for the six-month
periods ended June 30, 1997 and 1998 are derived from the unaudited financial
statements of the Company included elsewhere herein and, in the opinion of
management, include all adjustments, consisting of normal recurring accruals
necessary for a fair presentation of the data presented. The results for the six
months ended June 30, 1998 are not indicative of results for the full year. The
information presented below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Financial Statements included elsewhere herein.
FEBRUARY 11,
                                                                                                    1992
                                                                                                 (INCEPTION)
                                                              DECEMBER 31,                           TO              JUNE 30,
                                          ----------------------------------------------------   DECEMBER 31,   -------------------
                                            1993       1994       1995       1996       1997        1997          1997       1998
                                          --------   --------   --------   --------   --------   ------------   --------   --------
CONSOLIDATED STATEMENT OF OPERATIONS
  DATA:
Operating expenses:
  Research and development..............  $    176   $    330   $    475   $  1,136   $  3,426     $  5,800     $  1,874   $  1,577
  General and administrative............        80        281        718      1,119      1,733        4,095          521      1,911
                                          --------   --------   --------   --------   --------     --------     --------   --------
Total operating expenses................       256        611      1,193      2,255      5,159        9,895        2,395      3,488
Net interest expense....................        23         64        144        207        373          811          164        147
                                          --------   --------   --------   --------   --------     --------     --------   --------
Net loss before income taxes............      (279)      (675)    (1,337)    (2,462)    (5,532)     (10,706)      (2,559)    (3,635)
Income taxes............................        --         --         --          5         23           28           17          5
                                          --------   --------   --------   --------   --------     --------     --------   --------
Net loss................................  $   (279)  $   (675)  $ (1,337)  $ (2,467)  $ (5,555)    $(10,734)    $ (2,576)  $ (3,640)
                                          --------   --------   --------   --------   --------     --------     --------   --------
                                          --------   --------   --------   --------   --------     --------     --------   --------
Basic and diluted loss per share........  $  (0.80)  $  (1.52)  $  (1.88)  $  (3.48)  $  (7.82)                 $  (3.63)  $  (5.13)
                                          --------   --------   --------   --------   --------                  --------   --------
                                          --------   --------   --------   --------   --------                  --------   --------
Weighted average shares outstanding used
  for basic and diluted loss per
  share.................................   350,030    444,715    710,030    710,030    710,030                   710,030    710,030
                                          --------   --------   --------   --------   --------                  --------   --------
                                          --------   --------   --------   --------   --------                  --------   --------
BALANCE SHEET DATA (AT PERIOD END):
Cash....................................       171         61         86      4,257      1,973                                2,543
Working capital (deficiency)............      (356)    (1,035)    (2,741)     3,312        628                                1,284
Total assets............................       212        103        493      5,891      3,308                                3,654
Total liabilities.......................       540      1,104      2,831      6,190      5,075                                5,498
Capital deficiency......................      (329)    (1,001)    (2,338)      (299)    (1,768)                              (1,844)
FEBRUARY 11,
                                             1992
                                          (INCEPTION)
                                              TO
                                           JUNE 30,
                                             1998
                                          ------------
CONSOLIDATED STATEMENT OF OPERATIONS
  DATA:
Operating expenses:
  Research and development..............    $  7,377
  General and administrative............       6,006
                                            --------
Total operating expenses................      13,383
Net interest expense....................         958
                                            --------
Net loss before income taxes............     (14,341)
Income taxes............................          33
                                            --------
Net loss................................    $(14,374)
                                            --------
                                            --------
Basic and diluted loss per share........
Weighted average shares outstanding used
  for basic and diluted loss per
  share.................................
BALANCE SHEET DATA (AT PERIOD END):
Cash....................................
Working capital (deficiency)............
Total assets............................
Total liabilities.......................
Capital deficiency......................
21
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                       (ALL DOLLAR AMOUNTS IN THOUSANDS)
 
     The following discussion and analysis should be read in conjunction with
"Selected Consolidated Financial Data" and the Consolidated Financial Statements
and Notes thereto included elsewhere in this Prospectus. Except for the
historical information contained herein, the discussion in this Prospectus
contains certain forward-looking statements that involve risks and
uncertainties, such as statements of the Company's plans, objectives,
expectations and intentions. The cautionary statements made in this Prospectus
should be read as being applicable to all related forward-looking statements
wherever they appear in this Prospectus. The Company's actual results could
differ materially from those discussed here. Factors that could cause or
contribute to such differences include those discussed in "Risk Factors," as
well as those discussed elsewhere herein.
 
OVERVIEW
 
     The Company is a development stage enterprise developing drugs principally
for the treatment of infectious diseases of the human GI tract for which there
is a significant medical need for improved therapies. Since its inception in
February 1992, the Company's efforts have been principally devoted to research
and development and raising capital. To date, the Company has not generated any
revenues and has not commercialized any products. From inception to June 30,
1998, the Company has incurred cumulative losses of $14,374, which includes
non-cash charges of approximately $435 related to stock option compensation
expense. These losses were primarily the result of expenditures related to
research and development, general and administrative activities and interest
expense on stockholder loans.
 
     The Company's initial three drug candidates seek to treat human GI tract
infections caused by specific parasites or bacteria (types of pathogens) with
proprietary, low lipid (fat), polyclonal antibodies derived from egg yolks of
hens. The hens are injected with an amount of pathogen-specific antigens
(foreign substances) necessary to cause the hens to produce an increased level
of antibodies to that pathogen ("Avian Technology"). The Company's lead product
candidate, IGX-CPL3, is designed to offer a treatment for cryptosporidial
diarrhea, focusing on HIV-advanced patients where the Company believes no
effective treatment currently exists. The two other Avian Technology-based drug
candidates currently under development, IGX-CDL3 and IGX-HPL3, may offer
valuable alternatives to traditional antibiotic treatments for certain GI tract
infections at a time where there is an increasing development of drug resistance
to antibiotics. The Company believes that the Avian Technology may be applied to
the development of other drug candidates to treat additional GI tract
infections. The Avian Technology has been developed in collaboration with
Charles R. Sterling, Ph.D. and his colleagues at the University of Arizona.
 
     The Company's strategy is to develop products both independently and
through strategic partnerships with large pharmaceutical companies, under which
the Company will seek financial, preclinical and clinical trial, manufacturing
and marketing assistance while retaining parallel manufacturing and/or marketing
rights for the products. In August 1998, the Company organized a majority-owned
subsidiary, IgX Oxford, which is seeking to develop a drug candidate using a
proprietary compound (N-nonyl-DNJ), licensed to it exclusively from Monsanto, to
treat Hepatitis B, for which there also is a significant medical need for
improved therapy. N-nonyl-DNJ seeks to prevent the secretion of the Hepatitis B
virus from the infected cells. In addition to IgX Oxford, in August 1998, IgX
entered into strategic partnerships with Sintofarma, a Brazilian company
currently responsible for the manufacturing and marketing of 26 pharmaceutical
products in Argentina based on both unit volume and sales, and Gador, the second
largest manufacturer and distributor of pharmaceutical products in Argentina.
These agreements relate to the development and commercialization of the
Company's Avian Technology-based drug candidates in South America, Latin America
and Mexico. Each agreement requires IgX and the other party to make certain
contributions and stipulates that IgX will receive a royalty from any eventual
sale of specified products by the other party. To date, no revenue has been
generated from any of these agreements.
 
     The Company is not expected to have any commercially available drugs for
the foreseeable future and expects to continue to incur substantial research and
development costs in the future from ongoing research and development programs
and manufacturing of drug candidates for use in preclinical testing and clinical
trials. The Company also expects that general and administrative costs,
including regulatory costs, and the creation of a marketing and sales
organization, if warranted, will increase in the future. Accordingly, the
Company expects to incur increasing operating losses for the foreseeable future.
There can be no assurance that the Company will ever achieve profitable
operations.
 
                                       22
RESULTS OF OPERATIONS
 
SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997
 
     Research and development expenses were $1,577 and $1,874 for the six months
ended June 30, 1998 and 1997, respectively, representing a decrease of $297,or
approximately 16%. This decrease was due to the higher costs incurred during the
six months ended June 30, 1997 related to locating sites to conduct Phase III
clinical trials of IGX-CPL3 and costs incurred to obtain regulatory approvals to
conduct these trials. This decrease was partially offset by an increase in
patent applications and related costs on behalf of the University of Arizona.
 
     General and administrative expenses were $1,911 and $521 for the six months
ended June 30, 1998 and 1997, respectively. This represents an increase of
approximately $1,390, or 267%. This higher level of expense was the result of
several factors, including the opening of the New Jersey and London offices
during the latter half of 1997 for which there were expenses during the first
half of 1998 compared to none during the same period in 1997. Further, there
were increases in consulting costs related to market analysis and research
during 1998, and non-cash compensation expense was recognized on certain stock
option grants made during 1998.
 
     Net interest expense was $146 and $165 for the six months ended June 30,
1998 and 1997, respectively. The decrease of approximately 12% reflects the
reduction in the average principal amount of notes payable to stockholders
through the conversion of approximately $2.0 million of such indebtedness into
shares of the Company's Series B Convertible Preferred Stock during December
1997.
 
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996
 
     Research and development expenses were $3,426 and $1,136 for the years
ended December 31, 1997 and 1996, respectively, representing an increase of
approximately $2,290, or 202%. This increase was a result of investments in
research and development funding for the Company's pilot production facility in
Ireland, which commenced during the latter part of 1996; and the cost incurred
in 1997 related to locating sites to conduct Phase III clinical trials of
IGX-CPL3. During 1997, the Company also entered into sponsored university
research agreements with the University, thereby increasing research and
development costs.
 
     General and administrative expenses were $1,733 during 1997 compared to
$1,119 during 1996, representing an increase of $614, or 55%. This increase was
the result of the opening of the New Jersey and London offices in 1997 and the
costs incurred in the Company's executive search efforts during 1997.
 
     Net interest expense was $372 and $207 for the years ended December 31,
1997 and 1996, respectively, representing an increase of $165, or 80%. This
increase was attributable to the fact that 1997 included a full year of interest
expense on loans received by the Company from its principal stockholder during
1996.
 
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
 
     Research and development expenses were $1,136 for the year ended
December 31, 1996, representing a $661 increase over the research and
development expenses of $475 for the year ended December 31, 1995. This increase
was the direct result of additional costs incurred related to the establishment
of the Irish pilot production facility during 1996.
 
     General and administrative expenses were $1,119 and $718 for the years
ended December 31, 1996 and 1995, respectively, representing an increase of
$401, or 56%. This increase was also the direct result of additional costs
incurred to establish an Irish administrative office of the Company.
 
     Net interest expense was $207 and $144 for the years ended December 31,
1996 and 1995, respectively. The increase of approximately $63, or 44%,
reflected an increase in the average balance due on loans to the principal
stockholder during 1996.
 
INCOME TAXES
 
     The Company has reported losses for tax purposes and, therefore, has not
paid any federal or state income taxes in the U.S. since inception. The Company
accounts for U.S. income taxes under Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes." Realization of deferred income tax
assets is dependent on future events and earnings, if any, the timing and extent
of which are uncertain. Deferred tax assets at June 30, 1998 and at
December 31, 1997 and 1996 of $3,532; $2,724; and $1,722, respectively, have
been reduced to the estimated amount realizable, or zero. The reduction to zero
is due to a valuation allowance based on management's assessment as to the
Company's history of losses and uncertainty about future recoverability. At June
30, 1998, the Company had net operating loss carryforwards of approximately
$13,000 available to offset future taxable income. These amounts, subject to
certain limitations, will begin to expire at various dates from
 
                                       23
2007 through 2018 for U.S. income tax purposes. These loss carryforwards are
subject to limitation on future years utilization should certain ownership
changes occur.
 
     The provision for income taxes for the years ended December 31, 1996 and
1997 and the six months ended June 30, 1998 primarily relates to the Irish tax
on interest income earned on bank accounts in the Republic of Ireland.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     The Company has accumulated a deficit during its development stage of
$14,374 as of June 30, 1998 and has used cash amounting to $11,357 in the
aggregate to fund operations from inception through June 30, 1998, including
over $7,000 related to research and development of technology and new drug
candidates. As of June 30, 1998, the Company was committed to fund approximately
$390 under sponsored research agreements with certain universities. To date, the
Company has satisfied its cash requirements primarily through obtaining loans
from stockholders and the issuances of preferred and common stock in private
placement transactions. At June 30, 1998 the Company had $2,543 in cash and
$1,284 in working capital. Net cash used in operating activities for the six
months ended June 30, 1998 and 1997 was approximately $3,360 and $2,372,
respectively. Net cash used in investing activities for the six months ended
June 30, 1998 and 1997 was approximately $26 and $163. For the six months ended
June 30, 1998, cash of approximately $3,950 was provided by financing
activities, of which approximately $2,950 was provided from the issuance of
Series B Preferred Stock. There was no cash provided by financing activities for
the six months ended June 30, 1997. The Company believes that the proceeds from
this Offering, together with existing cash and cash equivalents, will be
sufficient to fund its operations through December 2000.
 
     Net cash used in operating activities for the years ended December 31, 1997
and 1996 was $4,501 and $1,372, respectively. For the years ended December 31,
1997 and 1996, net cash used in investing activities was $151 and $1,038,
respectively. Net cash provided by financing activities for the years ended
December 31, 1997 and 1996 was $2,554 and $6,875, respectively.
 
     As a means of raising capital, the Company and its subsidiary have from
time to time received loans in the form of promissory notes from stockholders,
principally from Henry Venture II Limited, the Chairman of which Albert J. Henry
is also Chairman and Chief Executive Officer of the Company. The notes are
unsecured and bear interest at a stated rate of 9% per annum. From the Company's
inception to date, no amounts of principal or accrued interest have been repaid.
However, from time to time, portions of the amounts due have been canceled in
exchange for issuance of preferred stock of the Company. The amount of notes
canceled corresponds to the value of the preferred stock issued upon
cancellation of the notes. A reconciliation of the total proceeds received from
the issuance of notes payable to stockholders to the balance of these notes
payable at June 30, 1998 is as follows:
INCEPTION
                                                                                    (FEBRUARY 11, 1992)
                                                                                          THROUGH
                                                                                  ------------------------
                                                                                  DECEMBER 31,    JUNE 30,
                                                                                     1997           1998
                                                                                  ------------    --------
Cumulative proceeds from issuance of notes payable to stockholders.............     $  9,352      $ 10,351
Cumulative interest accrued on notes payable to stockholders...................          693           856
                                                                                    --------      --------
                                                                                      10,045        11,207
Less: notes payable to Henry Venture II Limited canceled and exchanged for:
  Series B mandatorily redeemable convertible preferred stock*.................       (2,086)       (2,086)
  Series C mandatorily redeemable convertible preferred stock*.................       (2,086)       (2,086)
  Series B convertible preferred stock.........................................       (2,000)       (2,000)
                                                                                    --------      --------
                                                                                       3,873         5,035 **
Less unamortized discount on note payable to NEGF II, L.P......................           --           550
                                                                                    --------      --------
Notes payable to stockholders..................................................     $  3,873      $  4,485
                                                                                    --------      --------
                                                                                    --------      --------
------------------
 * These securities were, in turn, canceled during 1996 in exchange for issuance
   of Series A convertible preferred stock.
 
** In September 1998, these notes were converted into 732,547 shares of Common
   Stock of the Company at $7.00 per share.
 
                                       24
Interest expense amounted to $162, $470 and $231 for the six months ended
June 30, 1998 and for the years ended December 31, 1997 and 1996, respectively.
At June 30, 1998, the balance due to stockholders under the promissory notes,
including accrued and unpaid interest, amounted to $5,035. Of this balance, $341
is payable upon demand and has been recorded as a current liability.
 
     During September 1998, the Company entered into an agreement with Henry
Venture II Limited and NEGF II, L.P. to cancel the outstanding balance of all
notes payable to stockholders in exchange for 732,547 shares of Common Stock of
the Company, at a conversion price of $7.00 per share. The cancellation of the
notes payable to stockholders will require the Company to recognize a loss of
approximately $527, representing the unamortized portion of the debt discount,
on the early extinguishment of the notes payable NEGF II, L.P., for the quarter
ending September 30, 1998. In addition, as a result of this exchange at a price
per share below the expected initial public offering price of this Offering, the
Company will be required to recognize an additional charge of approximately
$1,100 million as a loss on extinguishment of notes payable to stockholders for
the quarter ending September 30, 1998.
 
     The Company's principal source of liquidity consists of cash of
approximately $2,543 at June 30, 1998. The Company expects that its capital
requirements will increase substantially in future periods as the Company funds
its current and anticipated research and development programs, including
preclinical and clinical trials, and investments in property, plant and
equipment to enhance manufacturing capabilities. As of June 30, 1998, the
Company had outstanding commitments of $390 to fund sponsored university
research agreements as well as $2,000 million to further research at IgX Oxford.
The Company's future capital requirements will depend on many factors, including
the progress and results of the Company's research and development programs and
clinical trials, the time and costs required to gain regulatory approvals, if at
all, costs of conducting research, costs of filing patents on behalf of
organizations collaborating in the Company-sponsored research, costs of
maintaining existing licenses and obtaining new licenses to use the Avian
Technology and other technologies, the status of competing products and the
market acceptance of the Company's products, if and when approved. The Company
believes that the existing cash balances, along with the net proceeds from this
initial public offering will be sufficient to meet the Company's strategic
objectives, including anticipated cash needs for working capital, for a
reasonable period of time. However, there can be no assurance that the Company
will be able to obtain sufficient funds to continue the development of, and if
successful, commence the manufacture and sale of its drug candidates, if and
when approved by the applicable regulatory agencies. The Company's forecast of
the period of time through which its financial resources will be adequate to
support its operations is a forward-looking statement that involves risks and
uncertainties, and actual results could differ significantly.
 
     In order to meet its long-term financing requirements, the Company may be
required to raise additional funds through public or private financing of
securities, strategic partnerships or other arrangements. The Company has
recently signed certain agreements with strategic partners and is engaged in
preliminary discussions with several other potential strategic partners.
However, there can be no assurance that the Company will benefit from strategic
relationships and/or be able to obtain additional financing. There can be no
assurance that such additional financing, if needed, will be available on terms
attractive to the Company, or at all. The Company's ability to raise additional
financing may be dependent on many factors beyond the Company's control,
including the state of capital markets and the rate of progress on the Company's
clinical trials. Furthermore, any additional equity financing may be dilutive to
stockholders, and debt financing, if available, may involve restrictive
covenants. Future strategic partnerships, if necessary to raise additional
funds, may require the Company to relinquish its rights to certain of its
intellectual property. Any of these events could adversely impact the Company's
ability to commercialize its drug candidates. Refer to "Risk Factors--Future
Capital Needs; Uncertainty of Additional Financing." Also refer to Note 2 of the
Consolidated Financial Statements.
 
     Cash requirements for the Company may vary materially from those now
planned due to the results of research and development activities, results of
clinical testing, changes in focus and direction of the Company's research and
development programs, manufacturing processes, competitive and technological
advances, the FDA and other regulatory entities' approval processes, changes in
the Company's marketing and distribution strategies and other factors.
 
                                       25
YEAR 2000 RISK
 
     In common with users of computers around the world, IgX is investigating
whether and to what extent the date change from 1999 to 2000 may affect its
information systems. The Company expects to implement the systems and
programming changes necessary to address year 2000 issues with respect to its
internal systems without significant expense. Nevertheless, there can be no
assurance that the Company's systems will not be affected by the date change
from 1999 to 2000, or that the cost of any remedial actions, if necessary will
not have a material adverse effect on its business, financial condition and
results of operations. The Company also relies, directly and indirectly, on
external systems of business enterprises such as stragetic partners, suppliers,
financial organizations, research facilities and governmental entities, both
domestic and international, for accurate exchange of data. Even if the internal
systems of the Company are not materially affected by the year 2000 computer
programming issue, the Company could be affected by disruptions in the operation
of the enterprises with which the Company interacts.
 
                                       26
BUSINESS
 
OVERVIEW
 
     IgX is a development stage company developing drugs principally for the
treatment of infectious diseases of the human GI tract for which there is a
significant medical need for improved therapies. The Company's initial three
drug candidates seek to treat human GI tract infections caused by specific
parasites or bacteria (types of pathogens) with immunoglobulin (a type of
antibody) produced by hens. This is an example of passive immunity, using an
antibody produced by one individual or animal to treat or prevent infections in
another ("passive immunity"). Specifically, these drug candidates consist of
proprietary, low lipid (fat), polyclonal antibodies derived from egg yolks of
hens. The hens are injected with an amount of pathogen-specific antigens
(foreign substances) necessary to cause the hens to produce an increased level
of antibodies to that pathogen ("Avian Technology"). The Company's lead product
candidate, IGX-CPL3, is designed to offer a treatment for cryptosporidial
diarrhea, initially focusing on HIV-advanced patients where the Company believes
no effective treatment currently exists. The two other Avian Technology-based
drug candidates currently under development, IGX-CDL3 and IGX-HPL3, may offer
valuable alternatives to traditional antibiotic treatments at a time where there
is an increasing development of drug resistance to antibiotics. The Company
believes that the Avian Technology may be applied to the development of other
drug candidates to treat additional GI tract infections. The Avian Technology
has been developed in collaboration with Charles R. Sterling, Ph.D. and his
colleagues at the University of Arizona. Further, in August 1998 the Company
organized a majority-owned subsidiary, IgX Oxford, which is seeking to develop a
drug candidate using a proprietary compound, N-nonyl-DNJ, licensed to it
exclusively from Monsanto, to treat another infectious disease, Hepatitis B, for
which there also is a significant medical need for improved therapy. N-nonyl-DNJ
seeks to prevent the secretion of the Hepatitis B virus from the infected cells.
The mechanism of action is that N-nonyl-DNJ prevents the sugars of one of the
Hepatitis B virus antigens from being correctly biosynthesized, so that the
virus does not form, as evidenced in animal studies described in the May 1998
edition of Nature Medicine a referee journal.
 
     The Company's strategy is to develop products both independently and
through strategic partnerships with large pharmaceutical companies, under which
the Company will seek financial, preclinical and clinical trial, manufacturing
and marketing assistance while retaining parallel manufacturing and/or marketing
rights for the products. In addition to the IgX Oxford joint venture, in August
1998 IgX entered into strategic partnerships with Sintofarma, a Brazilian
company currently responsible for the manufacturing and marketing of 26
pharmaceutical products in South America, and Gador, the second largest
manufacturer and distributor of pharmaceutical products in Argentina based on
both unit volume and sales. These agreements relate to the development and
commercialization of the Company's Avian Technology-based drug candidates in
South America, Latin America and Mexico. See "Business--Strategic Partnerships."
 
AVIAN TECHNOLOGY
 
     Background.  Antibiotics and vaccines (active immunizations) are currently
the most common therapies for the treatment and prevention of infections. While
both of these therapies have demonstrated effectiveness in certain infections,
the Company believes both have significant limitations for the treatment of GI
tract infections. Pathogens are becoming increasingly resistant to antibiotics.
The overuse and misuse of antibiotics induce antibiotic resistant pathogens, and
occasionally results in the onset of serious, and sometimes fatal, secondary
infections. Vaccines generate an immune response against various pathogens and
usually take several weeks or more before they can provide that immunity.
Additionally, a person may require repeated vaccinations to raise the
concentration of antibodies in the body to levels high enough to prevent or
counteract infection. For many of the GI tract diseases the Company is seeking
to address, this delay in effectiveness may be unacceptable, because it may
permit progression of the disease to severe or even fatal stages. In addition,
vaccines are not currently available for the majority of GI tract infections
that are the focus of IgX's initial drug candidates. For these reasons, the
Company believes that new therapeutic approaches for treating and preventing GI
tract infections are needed.
 
                                       27
One alternative to antibiotics and vaccines is passive immunity. Passive
immunity consists of using antibodies produced by one individual or animal to
treat or prevent infection in another. Such antibodies can be administered by
injection for systemic infections or orally for GI tract infections. Breast
feeding is the most familiar example of passive immunity delivered to the GI
tract with the mother providing natural protective antibodies to her infant
through her milk.
 
     The Company believes that the advantages of passive immunity for treating
or preventing GI tract infections are numerous. The Company believes that orally
delivered antibodies may provide immediate treatment of existing infections and
rapid temporary immunity against developing infection. The orally delivered
antibodies go directly to the site of infection in the GI tract rather than
through the blood-stream. The antibodies are polyclonal, meaning that they bind
to many different surface features of a pathogen, and thus, the Company
believes, are less likely to permit the development of resistant pathogens. The
antibodies may not disrupt the GI tract's natural bacterial flora, which is
necessary for normal digestion and intestinal function. As a result of these
advantages, passive immunity can be used for both acute treatment as well as a
prophylaxis to prevent the onset of infection or for long-term prevention of
disease.
 
     Description of Avian Technology.  Avian Technology is based upon the
principle of passive immunity, i.e., utilizing hen-derived egg yolks containing
an increased level of antibodies to treat human GI tract infections.
Specifically, the Avian Technology involves the immunization of hens with
pathogen-specific antigens. The antibodies are produced by the hens and
concentrated in the egg yolks. The antibody-rich egg yolks are collected and
processed by the Company. At least 50% of the lipids from the egg yolks are
currently extracted by precipitation, leaving the antibodies in a liquid form.
This liquid is then concentrated by cross flow filtration and freeze dried
(lyophilized) to produce a polyclonal antibody drug candidate in powder form.
 
     The Avian Technology is used to develop drug candidates to treat bacterial
and parasitic infections. For bacterial infections, the polyclonal antibodies
are directed to binding sites on either the surface of the bacteria or to
bacterial products, such as toxins or enzymes. Antibodies which are directed to
bacterial surface sites interfere with bacterial adhesion and attachment in the
host, and prevent bacteria from colonizing host tissues. In animal studies,
polyclonal antibodies, which bind to toxins or enzymes, interfere with receptors
and neutralize the bacteria or bacterial products.
 
     The Company believes that infections due to C. parvum may be treated in a
similar manner. In animal studies, the polyclonal antibodies bind to parasites
as they move from cell to cell in the GI tract. In animal studies, these
antibodies recognize multiple binding sites on the target parasite and have
multiple potential mechanisms of action including the neutralization of toxins.
Due to the polyclonal antibody, the parasite is prevented from invading a cell
and, as a result, subsequently dies and is swept from the intestine, as
evidenced in animal studies. The reproductive cycle of the parasite is thus
interrupted, and the infection should terminate over time. However, there can be
no assurance that the polyclonal antibodies will cause the infection to
terminate.
 
     IGX-CPL3 is in the form of stable powder concentrate with a shelf life
exceeding eighteen months and it is anticipated that other Avian
Technology-based drug candidates developed by IgX will be produced in a similar
form. The Company believes that the Avian Technology-based drug candidates may
be formulated into various forms, including tablets, capsules and sterile
liquids.
 
IgX OXFORD TECHNOLOGY
 
     The Company believes N-nonyl-DNJ acts on the host liver cell infected with
Hepatitis B to inhibit the utilization of an enzyme which is a key component in
the production of envelope proteins. Without these envelope proteins, the
Hepatitis B virus should not produce its protective shell necessary to survive.
This therapeutic approach differs from traditional therapies in that it acts on
the host liver cells as opposed to the virus. The Company believes that in doing
so, it could be an effective antiviral that may overcome some potential clinical
obstacles to successful therapeutic intervention such as the development of drug
resistant mutations of the Hepatitis B virus.
 
                                       28
IgX STRATEGY
 
     IgX's objective is to develop and rapidly commercialize pharmaceutical
products that principally seek to treat and prevent infections of the human GI
tract. The Company is pursuing this objective using the following strategies:
 
     o Leverage Avian Technology.  IgX is seeking to leverage the core Avian
       Technology based on hyperimmune egg yolk immunoglobulin to develop a
       portfolio of orally delivered polyclonal antibody drug candidates that
       would treat diseases of the GI tract. IgX believes that this technology
       could be used to develop individual drug candidates for additional
       separate infections of the GI tract. Production of such drug candidates
       would be based on similar manufacturing processes. The technology
       employed in the development of IGX-CPL3 is similar to that which IgX is
       seeking to use to develop two other drug candidates, IGX-CDL3 and
       IGX-HPL3.
 
     o Demonstrate principle of Avian Technology with cryptosporidial diarrhea
       HIV-advanced patients.  IgX is initially seeking to develop IGX-CPL3 to
       treat cryptosporidial diarrhea in HIV-advanced patients. If the current
       Phase III clinical trial for IGX-CPL3 is successful and establishes its
       efficacy in treating cryptosporidial diarrhea in HIV-advanced patients,
       IgX believes that it will have demonstrated the principle that Avian
       Technology-based drug candidates may treat certain infectious diseases of
       the human GI tract. There can be no assurance that the clinical trial
       will be successful or that it will demonstrate the principle that Avian
       Technology-based drug candidates may treat certain infectious diseases of
       the human GI tract.
 
     o Develop manufacturing capability in the EU, South America and the
       U.S.  IgX intends to maintain control of its proprietary manufacturing
       processes by maintaining rights to the manufacture of bulk materials
       required for the commercialization of its drug candidates. IgX Limited
       has built a GMP pilot production facility in Granard, County Longford,
       Ireland to support the existing Phase III clinical trial of IGX-CPL3 in
       South Africa and Mexico. The Company maintains a second pilot production
       facility in Tucson, Arizona to provide Avian Technology-based drug
       candidates for animal studies at the University of Arizona and any U.S.
       clinical trials. Under its strategic partnership with Sintofarma, the
       Company and Sintofarma have agreed to form a joint venture that expects
       to own and operate a manufacturing facility in Brazil for pilot
       production for clinical trials in Brazil and for full-scale production
       for the Company's Avian Technology-based drug candidates for sale in
       Brazil and elsewhere, if and when approved for sale. The Brazilian
       facility is anticipated to be an FDA-approved facility and Sintofarma has
       agreed to bear all costs of manufacture other than the supply of the
       pathogen-specific antigens for the hyperimmunization process. If the
       existing Phase III clinical trial of IGX-CPL3 is successful, IgX also may
       elect to build a full-scale manufacturing facility in Ireland or
       elsewhere. The Company believes that through the Sintofarma strategic
       partnership, future strategic partnerships or directly, it will be able
       to meet its long term production needs of the Avian Technology-based drug
       candidates and drugs, if and when approved for sale.
 
     o Leverage Strategic Partnerships.  The Company's strategy is to develop
       products both independently and through strategic partnerships with
       larger pharmaceutical companies, under which the Company will seek
       financial, preclinical and clinical trial, manufacturing and marketing
       assistance while retaining parallel manufacturing and/or marketing rights
       for the drug candidates. IgX has recently entered into strategic
       partnerships with Sintofarma and Gador. These agreements relate to the
       development and commercialization of the Company's Avian Technology-based
       drug candidates in South America, Latin America and Mexico. In addition,
       in August 1998, the Company entered into a joint venture with Monsanto
       and several other parties to organize IgX Oxford, a majority-owned
       subsidiary of the Company. IgX Oxford seeks to develop N-nonyl-DNJ,
       licensed to it exclusively from Monsanto, to treat Hepatitis B. See
       "Business--Strategic Partnerships."
 
                                       29
DRUG CANDIDATES UNDER RESEARCH AND DEVELOPMENT
 
     The following chart illustrates the disease indications and various stages
of research and development of the Company's initial drug candidates:
DRUG CANDIDATE                  DISEASE INDICATION                    STAGE OF RESEARCH AND DEVELOPMENT
--------------------  ---------------------------------------  ------------------------------------------------
 
Avian Technology-based
IGX-CPL3              Cryptosporidial diarrhea, focusing on    European Union ("EU")-reviewed protocol,
                      HIV-advanced patients                    Phase III double-blind, placebo controlled
                                                               multicenter trial in South Africa commenced
                                                               January 1998. Expanded trial in Mexico in July
                                                               1998 pursuant to the same protocol. U.S.
                                                               Phase I/II trial of earlier high lipid
                                                               formulation for AIDS related cryptosporidial
                                                               diarrhea completed in November 1995.
 
IGX-CDL3              Clostridium difficile-associated         Animal studies.
                      diarrhea and related complications
                      arising from antibiotic therapy
 
IGX-HPL3              Peptic ulcers due to Helicobacter        Research.
                      pylori infections
 
N-nonyl-DNJ*          Hepatitis B                              Animal studies.
---------------------------------------------------------------------------------------------------------------
* Being developed by IgX's majority-owned subsidiary, IgX Oxford.
IGX-CPL3
 
     The Company's lead Avian Technology-based drug candidate, IGX-CPL3, is
designed to treat diarrhea caused by C. parvum, a parasite often found in
municipal drinking water. IGX-CPL3 is initially seeking to treat Cryptosporidial
diarrhea in HIV-advanced patients. Cryptosporidial diarrhea can be chronic or
life-threatening in HIV-advanced patients. The parasite C. parvum is a major
cause of uncontrollable diarrhea in approximately 20% of AIDS patients which
results in profound weight loss, malnutrition, dehydration, and in some cases
death. HIV-advanced patients with cryptosporidial diarrhea often require
hospitalization for administration of intravenous fluids and nutrition. Unless
triple drug therapy reverses an HIV-advanced patient's immunologic defects,
cryptosporidiosis usually continues in a persistent or relapsing fashion for the
duration of the patient's life. This requires maintenance therapy for those
patients.
 
     In November 1995, the Company completed a U.S. Phase I/II clinical trial at
New York Hospital-Cornell Medical Center in New York City to determine the
safety and preliminary efficacy of IGX-CP, an earlier high lipid, liquid
formulation of the IGX-CPL3 drug candidate, for AIDS-related cryptosporidial
diarrhea. IGX-CP for the trial was produced at the Company's Tucson, Arizona
pilot production facility. The trial was an open-label, ascending dose, pilot
study of two dose levels of IGX-CP, in which 16 of the 24 patients enrolled were
evaluable, having completed at least 2 weeks of treatment under either dose
level. The data, measured at the end of 3 and 6 weeks of treatment, suggested
that both dose levels were safe for administration to AIDS patients. In
addition, at least 60% of the total evaluable patients at the end of 3 and 6
weeks of treatment showed a decrease in daily frequency of bowel movements and
daily frequency of liquid stools, two of the trial's three primary efficacy
points. While daily frequency of bowel movements and daily frequency of liquid
stools decreased in only 40% and 20%, respectively, of the patients treated at
the high dose level at the end of 6 weeks, the Company attributes this decline
to the high lipid content of IGX-CP, which induced some diarrhea. The third
primary end point of the trial was stool oocyst quantitation, which measures the
density of the parasites in the stool and 25% of the evaluable patients met this
end point. The Company believes that stool oocyst quantitation is not a
significant measure of efficacy because it does not directly measure parasitic
volume. By contrast, the Company believes that bowel movement frequency is an
absolute measure of C. parvum, and its reduction in the trial evidenced a
corresponding reduction in C. parvum.
 
                                       30
Following the conclusion of the Phase I/II trial, the Company reformulated
IGX-CP to reduce the lipid content by approximately 50%, and to produce it as a
powder. During 1996 and 1997, the Company tested the reformulated drug
candidate, IGX-CPL3, in mice, and those animal studies demonstrated a reduction
in C. parvum counts. Based upon these animal studies, the Company believes that
IGX-CPL3 at the high dose level utilized in the Phase I/II trial should be more
effective than the prior formulation of the drug candidate, and the current
Phase III trial uses such high dose level. There can be no assurance that
IGX-CPL3 will be more effective than or as effective as the prior formulation of
such drug candidate.
 
     Since the late 1995 introduction of combination drug therapy, including
protease inhibitors, to treat HIV-advanced patients, the number of HIV-advanced
patients in the U.S. and portions of Europe who have chronic or life-threatening
cryptosporidial diarrhea has been significantly reduced. As a result, during
1996 and 1997 the Company refocused its marketing strategy of IGX-CPL3, seeking
to obtain regulatory approval to market IGX-CPL3 as a treatment for
cryptosporidial diarrhea in HIV-advanced patients in countries where combination
drug therapy is not widely available. Similarly, the Company decided that its
clinical trials should be conducted in those countries that would facilitate
patient enrollment. U.S. regulations prohibit the exportation of biologics for
use in foreign clinical trials. Accordingly, during 1996, the Company, through
its wholly-owned subsidiary, IgX Limited, built a pilot production facility in
Ireland to support the production of IGX-CPL3 and other Avian Technology-based
drug candidates for use in clinical trials outside the U.S.
 
     In January, 1998, the Company commenced a double-blind, placebo-controlled,
randomized multicenter Phase III clinical trial in South Africa pursuant to an
EU-reviewed protocol. In July 1998, the Company expanded the trial to Mexico
using the same protocol. The trial is being conducted through two clinical
research organizations, LCG Bioscience Limited and PRSI International. The
Company expects to enroll 135 HIV-advanced patients with cryptosporidial
diarrhea to be treated with IGX-CPL3, a low lipid formulation, at the high dose
level used in the Phase I/II trial. The trial protocol provides for an initial
four-week treatment consisting of five oral doses of IGX-CPL3 or placebo per
day. The trial's primary efficacy end point is the patient's percentage
reduction in weekly stool frequency. Patients whose stool frequency has not
decreased during this four week period will then be treated with open-label
IGX-CPL3 and omeprazole orally, or IGX-CPL3 alone by naso-duodenal tube or
percutaneous gastrostomy (if already fashioned), for a further four weeks. It is
anticipated that at least 90 patients will complete the trial. At September 15,
1998, the Company had screened over 450 patients based upon the trial's
inclusion and exclusion criteria and enrolled a total of 40 patients at 14 sites
in South Africa and Mexico, 26 of whom (all treated in South Africa) have
completed the trial. The Company anticipates that the trial will be completed in
the first half of 1999. If the trial is successful, IgX intends to apply for
marketing approval of IGX-CPL3 in the EU and certain South American countries to
treat cryptosporidial diarrhea in HIV-advanced patients and may apply for
similar approval in the U.S. The approximate reported number of HIV-advanced
patients who have cryptosporidial-based diarrhea is 14,500 in the EU and 700,000
in South America. If the current Phase III clinical trial for IGX-CPL3 is
successful and establishes its safety and efficacy in treating cryptosporidial
diarrhea in HIV-advanced patients, IgX believes that it will have demonstrated
the principle that Avian Technology-based drug candidates may treat certain
infectious diseases of the human GI tract. There can be no assurance that the
Phase III clinical trial for IGX-CPL3 will demonstrate any efficacy or safety or
that it will be completed successfully in a timely manner. Furthermore, there
can be no assurance as to the timing of EU and other foreign or domestic
regulatory filings or if or when any of those regulatory authorities will
approve IGX-CPL3 for sale. Additionally, there can be no assurance that
IGX-CPL3, if and when regulatory approvals are received, will achieve market
acceptance.
 
     The Company also plans to conduct clinical trials to determine the safety
and preliminary efficacy of using IGX-CPL3 to treat cryptosporidial diarrhea in
immunocompetent patients. While cryptosporidial diarrhea in immunocompetent
patients is generally neither chronic nor life-threatening, to the Company's
knowledge, no effective treatment currently exists. The Company expects to file
an IND application with the FDA by the end of the first quarter of 1999 to
commence a U.S. Phase I clinical trial of IGX-CPL3 to treat cryptosporidial
diarrhea in immunocompetent children. The Company also expects to file an IND
application to test IGX-CPL3 in immunocompetent adults later in 1999. The
approximate reported number of immunocompetent patients infected with
cryptosporidial diarrhea annually is 600,000 in the U.S., 1.1 million in Europe,
and 4.6 million in South America. There can be no assurance as to the timing of
the filing of these IND applications, the timing or outcome of the FDA's review
of any such applications, or, if and when such review is completed, the timing
or outcome of the related clinical trials.
 
                                       31
IGX-CDL3
 
     The Company's second Avian Technology-based drug candidate, IGX-CDL3, is a
proposed treatment for C. difficile-associated diarrhea and related
complications arising from the use of antibiotic therapy prescribed to patients
in hospitals and long-term health care institutions. Annually, approximately
2.3 million patients in the U.S., approximately 4.0 million patients in the EU
and approximately 194,000 patients in South America have
C. difficile-associated diarrhea.
 
     C. difficile occurs when the antibiotics used in traditional antibiotic
therapy for other numerous diseases alter the homeostasis of the GI tract's
normal bacterial flora and foster the subsequent overgrowth of certain
disease-causing bacteria. Currently, the first stage of treatment for
C. difficile-associated diarrhea involves the discontinuation of the causal
antibiotic therapy, if possible, and often the initiation of different
antibiotics to treat the C. difficile infection. Discontinuation of the causal
antibiotic may result in inadequate treatment of the underlying infection.
 
     C. difficile-associated diarrhea is currently treated with antibiotics but
the efficacy of the antibodies has been reduced due to increasing development of
drug resistance to these antibiotics. The Company believes that IGX-CDL3 may
prevent and treat C. difficile-associated diarrhea without the complications
associated with antibiotic treatment. However, there can be no assurance that
IGX-CDL3 will effectively prevent and treat C. difficile-associated diarrhea
without the complications associated with antibiotic treatment. Currently, the
Company is testing IGX-CDL3 in hamsters. IgX anticipates completing those
studies in the fourth quarter of 1998. If such studies are successful, as to
which there can be no assurance, the Company intends to submit an IND
application to the FDA to commence a U.S. Phase I/II clinical trial of IGX-CDL3
as a treatment for C. difficile-associated diarrhea and related complications.
 
  IGX-HPL3
 
     The Company's third Avian Technology-based product candidate, IGX-HPL3,
seeks to treat peptic ulcers caused by the bacteria, H. pylori. H. pylori has
been implicated as a cause of peptic ulcer disease and chronic gastritis. There
also appears to be a strong statistical association between H. pylori and
gastric carcinoma and types of lymphoma. Ulcers caused by H. pylori are
currently treated with certain antibiotics but their efficacy has been reduced
slightly due to an increasing development of drug resistance to these
antibiotics. The Company anticipates commencing animal studies for IGX-HPL3 in
mice by the end of 1998. Each year approximately 4 million new incidences of
ulcers or other complications arising from H. pylori are reported in the U.S.
 
     Persistent H. pylori infections lead to a high relapse rate of ulcer
disease after conventional ulcer treatment regimens (e.g. acid-suppressing
agents). Since the discovery of the relationship between H. pylori infections
and ulcers, a major trend in ulcer treatment has been the increased use of
antibacterial "combination therapy" (a combination of several antibiotics,
bismuth, and inhibitors of gastric acid production) instead of, or in addition
to, conventional ulcer therapies. While current combination therapy shows an
efficacy in approximately 80 to 85% of patients, recent articles have shown the
development of resistance to current combination therapy. This combination
therapy is also somewhat difficult and prolonged for patients, while the
Company's drug candidate intends to be a monotherapy of shorter duration. In
addition, IgX's drug candidate may not develop the drug-resistance exhibited by
current therapeutics.
 
  N-nonyl-DNJ
 
     In September 1998, IgX Oxford acquired an exclusive worldwide license from
Monsanto to commercialize N-nonyl-DNJ, a glucosidase inhibitor, as a treatment
for Hepatitis B. N-nonyl-DNJ seeks to prevent the secretion of the Hepatitis B
virus from the infected cells. The mechanism of action is that N-nonyl DNJ
prevents the sugars of one of the Hepatitis B virus antigens from being
correctly biosynthesized, so that the virus does not form, as evidenced in
animal studies described in the May 1998 edition of Nature Medicine, a referee
journal. While alpha interferon and antivirals are currently available to treat
Hepatitis B, these therapies have a limited clinical success rate, high
recidivism rate and significant undesirable side effects. To date, Monsanto has
sponsored research and animal studies on N-nonyl-DNJ at Oxford University
("Oxford") in Oxford, England and Thomas Jefferson University ("TJU") in
Philadelphia, Pennsylvania. The results of these woodchuck animal studies,
published in the May 1998 edition of Nature Medicine, showed a reduction of the
enveloped Hepatitis B virus correlated with the dosing level of N-nonyl-DNJ in
the serum of the treated animals. IgX has agreed to fund IgX Oxford with up
 
                                       32
to $2 million. Such funds are anticipated to be used to conduct further animal
studies relating to N-nonyl-DNJ at Oxford and TJU, which are necessary to
determine whether an IND application to conduct a Phase I human clinical trial
is appropriate. These animal studies are anticipated to be completed by the end
of the first half of 1999. If they are successful, as to which there can be no
assurance, IgX Oxford anticipates filing an IND application with the FDA.
Monsanto has retained certain exclusive rights of first refusal to license for
further development and/or commercialize N-nonyl-DNJ. Approximately 350 million
people worldwide are chronically infected with Hepatitis B virus, which is
usually fatal in approximately 20-40% of the chronically infected population if
untreated.
 
RESEARCH AND DEVELOPMENT
 
     The Company has sponsored university research relating to the Avian
Technology principally at the University of Arizona under separate Research
Agreements relating to particular aspects of the Avian Technology. Under these
Research Agreements, the Company funds the research and development work at the
University for a specific time period. At June 30, 1998, the Company had
research funding commitments of $334,000 to the University under three separate
Research Agreements, for continuing research on IGX-CPL3, IGX-CDL3 and IGX-HPL3,
through March 31, 1999, December 31, 1998 and July 31, 1999, respectively. The
Research Agreements (and any remaining funding commitments) may be terminated by
the Company on 60 to 90 days' written notice. Under the Research Agreements with
the University (including those for previous Avian Technology research), the
Company obtained an exclusive option to license any invention derived from such
research (except that the University retains the right to use the invention for
teaching and research). The option is exercisable within six months of
notification by the University of the discovery of any such invention or such
longer period as the University may agree. By exercising these options, the
Company currently has five Licenses with the University covering certain aspects
of the Avian Technology. The terms and conditions of these Licenses are
substantially similar and are summarized under "Business--Patents and
Proprietary Rights." Since 1992, the Company has funded an aggregate of $2.4
million of research and development on the Avian Technology, of which $2.3
million has been received by the University. Research and development expenses
were $1,577,000 for the six months ended June 30, 1998, and $3,426,000,
$1,136,000 and $475,000 for the years ended December 31, 1997, 1996 and 1995,
respectively.
 
     The Company has a close working relationship with the scientists at the
University of Arizona, and Company management and the scientists at the
University of Arizona Company management and scientists at the University of
Arizona review the progress of the research work weekly under the sponsored
research agreements. Nine scientists, 4 of whom have Ph.D degrees, and 4
technicians employed by the University of Arizona are working on the Company's
sponsored research under the supervision of Charles R. Sterling Ph.D., the Head
of Department of Veterinary Science at the University of Arizona and the
Company's Director of Research and chairman of the Company's Scientific Advisory
Board. By utilizing the significant resources of the University of Arizona,
including its equipment, its laboratory facilities for synthesis, analyses,
pharmacology, toxicology, in vitro and in vivo animal studies and its animal
facilities, the Company believes that it has accomplished significantly more in
the research and development of its licensed compounds than it would have been
able to do so on its own, without substantially greater need for capital.
 
     With respect to the Company's research and development efforts for the
treatment of Hepatitis B, IgX has agreed to fund up to $2 million to IgX Oxford.
See "--Drug Candidates under Research and Development--
N-nonyl-DNJ."
 
                                       33
STRATEGIC PARTNERSHIPS
 
     The Company's strategy is to develop products both independently and
through strategic partnerships with large pharmaceutical companies, under which
the Company will seek financial, preclinical and clinical trial, manufacturing
and marketing assistance while retaining parallel manufacturing and/or marketing
rights for the products.
 
     In August 1998, IgX entered into strategic partnerships with Sintofarma, a
Brazilian company currently responsible for manufacturing and marketing 26
pharmaceutical products in South America, and Gador, the second largest
manufacturer and distributor of pharmaceutical products in Argentina based on
both unit volume and sales. These agreements relate to the development and
commercialization of the Company's Avian Technology-based drug candidates in
South America, Latin America and Mexico. Under its agreement with the Company,
Sintofarma has agreed to pay for clinical trials in Brazil of the Company's
Avian Technology-based drug candidates currently under development (IGX-CPL3,
IGX-CDL3 and IGX-HPL3), and to form a Brazilian joint venture entity with the
Company to manufacture Avian Technology-based drug candidates for sale in Brazil
and elsewhere. The joint venture entity ("Sintofarma IgX Biotech, Ltda"), which
is expected to be owned 40% by IgX and 60% by Sintofarma, will manufacture all
Avian Technology-based drugs for commercial sale, if and when any such drug
candidates are approved for sale. Under this strategic partnership, IgX granted
Sintofarma an exclusive license to distribute and market IGX-CPL3 and IGX-CDL3
in Brazil, if and when approved for sale, for a royalty to be agreed upon
ranging from 10% to 16.6% of net sales. Sintofarma and Gador also have rights of
first negotiation for similar licenses on other Avian Technology-based drug
candidates. Under its agreement with the Company, Gador agreed to manage the
process to obtain regulatory approval to commercialize IGX-CPL3 and IGX-CDL3 in
all countries in South America, except Brazil, as well as Latin America and
Mexico. IgX also has granted Gador the exclusive distribution and marketing
rights to IGX-CPL3 and IGX-CDL3 in those countries if and when approved for
sale, for which Gador will pay IgX a royalty of 10% of net sales. In addition,
Gador will purchase the ingredients for IGX-CPL3 and IGX-CDL3 from IgX or its
designee (including Sintofarma IgX Biotech, Ltda) at a cost of up to 20% of the
net sales of drugs sold by Gador.
 
     In August 1998, the Company formed a joint venture, IgX Oxford, a
majority-owned subsidiary of the Company, with Monsanto and several other
parties. IgX Oxford seeks to develop a drug candidate using a proprietary
compound, N-nonyl-DNJ, licensed to it exclusively from Monsanto, to treat the
infectious disease, Hepatitis B, for which there also is a significant medical
need for improved therapy. N-nonly-DNJ seeks to prevent the secretion of the
Hepatitis B virus from the infected cells. The mechanism of action is that
N-nonyl-DNJ prevents the sugars of one of the Hepatitis B virus antigens from
being correctly synthesized, so that the virus does not form, as evidenced in
animal studies described in the May 1998 colition of the Nature Medicine, a
referee journal. To date, Monsanto has sponsored research and animal studies on
N-nonyl-DNJ at Oxford and TJU. The results of these woodchuck animal studies,
published in the May 1998 edition of Nature Medicine, showed a reduction of the
enveloped Hepatitis B virus correlated with the dosing level of N-nonyl-DNJ in
the serum of the treated animals. IgX has agreed to the funding of IgX Oxford to
conduct further animal studies relating to N-nonyl-DNJ at Oxford and TJU, which
are necessary to determine whether an IND application to conduct a Phase I human
clinical trial is appropriate. TJU, Raymond A. Dwek, Timothy Block, Ph.D.,
Baruch Blumberg, Ph.D., Hepatitis B Foundation and Monsanto own in the aggregate
the remaining 40% of the outstanding capital stock of IgX Oxford (on a
fully-diluted basis). Monsanto holds its ownership through a warrant to purchase
for nominal consideration that number of shares that would result in its owning
approximately 12.5% of the outstanding capital stock (assuming no other further
issuances of capital stock). Professor Dwek and Dr. Blumberg are directors of
the Company and Professors Dwek and Block have been the principal investigators
of the research conducted on N-nonyl-DNJ at Oxford.
 
     The license agreement between IgX Oxford and Monsanto is for a term that
commenced September 1, 1998 and expires on the later of September 1, 2013, or
the expiration of all royalty obligations thereunder, unless terminated earlier
as provided in the license agreement. Under the license agreement, Monsanto is
entitled to (i) a royalty of 1.5% of the net sales of any drugs incorporating
N-nonyl-DNJ sold by IgX Oxford or any sublicensee for use in the treatment of
Hepatitus B virus and (ii) 25% of any compensation paid to IgX Oxford, other
than royalties measured by net sales, as consideration for any sublicense or
assignment of the Monsanto license agreement. The royalty payments are fully
payable on net sales of a product where a valid patent of Monsanto relating to
N-nonyl-DNJ as a treatment of the Hepatitus B virus is pending or issued or
where IgX Oxford has substantial market exclusivity and only during the life of
such patent or or the duration of the market exclusivity. Monsanto also has
retained certain exclusive rights of first refusal to license N-nonyl-DNJ for
further development and/or commercialization. Its initial right of first refusal
is exercisable prior to the commencement of a Phase I clinical trial involving
N-nonyl-DNJ as a treatment for the Hepatitis B virus. A second right of first
refusal is exercisable at the end of any subsequent Phase II clinical trial
unless IgX Oxford has previously entered
 
                                       34
into a similar agreement with a third party on terms no less favorable in the
aggregate to such third party than those offered to Monsanto in the initial
right of first refusal. If Monsanto exercises its right of first refusal, any
such development and license agreement with Monsanto would cover the clinical
development, registration and marketing of the drug candidate. Monsanto would
then be obligated to reimburse IgX Oxford for all costs incurred in the
development of the drug candidate, and pay a fee equal to the net present value
of the license, milestone payments based upon continuing development and
successful commercialization, if any, of the drug candidate by Monsanto, and
royalties based upon a percentage of net sales of the drug. Under its existing
license agreement with IgX Oxford, Monsanto also has a substantially similar
right of first refusal for other drug candidates developed by IgX Oxford using
any of the compound provided by Monsanto to IgX Oxford upon signing the license
agreement in September 1998. Monsanto also has similar rights of first refusal
with respect to the use of N-nonyl-DNJ for any application unrelated to
Hepatitis B.
 
      Under the license agreement between IgX Oxford and Monsanto, either party
may terminate the license agreement upon an event of default, including
bankruptcy or insolvency of the other party or a material breach of the license
agreement that is not cured within 30 days of notice of the breach. IgX Oxford,
at its option, may also terminate the license agreement on a country-by-country
basis (a) at any time it unilaterally determines to discontinue development or
marketing of N-nonyl-DNJ, (b) immediately if the manufacture, use, sale or
distribution of N-nonyl-DNJ, as a treatment for the Hepatitis B virus is
determined in a final judicial or adminstrative order or decision to infringe
the patent rights of a third party or if upon the advice of patent counsel, IgX
Oxford determines that any such infringement in any Major Market (as defined
below is unavoidable, and (c) immediately if N-nonyl-DNJ as a treatement for the
Hepatitis B virus is deemed unmarketable. Monsanto also may terminate the
license agreement if IgX Oxford shall have failed to give notice on or before
September 1, 2000 of its intent to commence a Phase I clinical for N-nonyl-DNJ
as a treatment for the Hepatitis B virus, which notice triggers Monsanto's
initial right of first refusal decribed above or if IgX Oxford shall have failed
to provide the notice required to trigger Monsanto's second right of first
refusal described above. Further, Monsanto can terminate the license agreement
if IgX Oxford fails to commercialize N-nonyl-DNJ as a treatment for the Hepatits
B virus in at least one of the "Major Markets" (United States the EU, Japan or
the People's Republic of China) prior to September 1, 2004, alternately,
Monsanto has the option in such event to obtain an exclusive license from IgX
Oxford for N-nonyl-DNJ as a treatment for the Hepatitis B virus in any such
Major Market that IgX Oxford has so failed to commercialize such product.
Finally, Monsanto may terminate the license agreement if lgX defaults under its
obligations to fund lgX Oxford with up to $2 million as described in this
Prospectus and fails to cure that default within 30 days notice. Any termination
of the license agreement between lgX Oxford and Monsanto could have a material
adverse affect on the Company's business, financial condition and results of
operations.
 
MANUFACTURING
 
     To date, the Company has been able to produce sufficient quantities of its
drug candidates for development and clinical trials from its pilot production
facilities in Arizona and Ireland. The Company produced IGX-CP at its pilot
production facility in Tucson, Arizona to support its U.S. Phase I/II clinical
trial at New York Hospital-Cornell Medical Center in New York City to determine
the safety and preliminary efficacy of IGX-CP for AIDS-related cryptosporidial
diarrhea. During 1996 and 1997 the Company refocused its regulatory strategy of
IGX-CPL3, seeking to obtain regulatory approval to market IGX-CPL3 as a
treatment for cryptosporidial diarrhea in HIV-advanced patients in countries
where combination drug therapy is not widely available. Similarly, the Company
decided that its clinical trials should be conducted in those countries that
would facilitate patient enrollment. U.S. regulations prohibit the exportation
of biologics for use in foreign clinical trials. Accordingly, during 1996, the
Company, through its wholly-owned subsidiary, IgX Limited, built a pilot
production facility in Ireland to support the production of IGX-CPL3 and other
Avian Technology-based drug candidates for use in clinical trials outside the
U.S.
 
     The Company intends to continue to utilize its pilot production facilities
for continuing research and development, including preclinical testing and
clinical trials. Under its strategic partnership with Sintofarma, the Company
and Sintofarma have agreed to jointly own and operate a manufacturing facility
in Brazil for pilot production for clinical trials in Brazil and for full-scale
production for the Company's Avian Technology-based products for sale in Brazil
and elsewhere, if and when approved for sale. The Brazilian facility is
anticipated to be an FDA-approved facility and Sintofarma has agreed to bear all
costs of manufacture other than the supply of the pathogen-specific antigens for
the hyperimmunization process. In addition, if the existing Phase III clinical
trial of IGX-CPL3 is successful, the Company may develop its own FDA-approved
full-scale manufacturing capability, in Ireland or elsewhere. If the Company
elects to build such a facility in Ireland, it may seek Irish
 
                                       35
government financing. The Company believes that through the Sintofarma strategic
partnership, future strategic partnerships or directly it will be able to meet
its long term production needs of the Avian Technology-based drug candidates and
drugs, if and when approved for sale. See "Risk Factors--Manufacturing and
Dependence on Strategic Partners".
 
PATENTS AND PROPRIETARY RIGHTS
 
     The Company and the University of Arizona (the "University") have entered
into research agreements (the "Research Agreements") under which the Company has
funded research undertaken by the University. As a result of certain research,
the Company and the University have entered into license agreements (the
"Licenses") under which the Company is granted certain exclusive (other than the
University's right to use the invention for teaching and research), worldwide,
royalty-bearing licenses to inventions set forth in the University's one issued
patent and patent applications relating to aspects of Avian Technology utilized
by the Company in exchange for royalty payments by the Company. See
"Business--Research and Development." However, the Licenses do not provide the
Company with rights to license from the University inventions relating to Avian
Technology where the related research has not been funded by the Company.
 
     The Licenses presently pertain to one issued U.S. patent, two continuation
applications pending in the U.S., three other patent applications pending in the
U.S. (as well as three corresponding foreign applications) and one provisional
patent application pending in the U.S. The issued U.S. patent (No. 5,753,228),
which issued on May 19, 1998 and will expire on May 19, 2015, relates to a
method for treating parasitosis by the enteral administration of hyperimmune hen
egg yolk antibodies. One of the three pending patent applications refers to hen
egg yolk antibodies to C. difficile antigens and use in therapy for
pseudomembranous colitis. Another of the three pending patent applications
refers to the hen egg yolk antibodies to H. pylori and methods of use.
 
     Under the Licenses, IgX must use its best efforts to produce and sell the
licensed drug candidate, and has agreed to pay the University royalties equal to
5% of the net sales price of the licensed product. The royalties payable to the
University are reduced by an amount of royalties actually paid by IgX to any
non-affiliated third party in connection with the licensing of additional patent
rights or know-how necessary to make, use or sell the applicable drug, provided
that the royalties payable to the University will not be less than 3% of the net
sales price.
 
     The Company believes that its ability to compete effectively will depend in
large part on obtaining and maintaining access to patent and intellectual
property protection on technologies utilized in its business (particularly with
respect to aspects of Avian Technology licensed from the University). Pursuant
to its rights and obligations under the Research Agreements and the License
Agreements, the Company and the University pursue patent protection in the U.S.
and certain foreign jurisdictions for certain technologies believed to be
proprietary to the University and advantageous for the University and the
Company. The Company's ability to compete effectively will depend in large part
on the ability of the University to obtain and maintain a proprietary interest
in such technologies which are licensed to the Company. The University may
terminate any Licenses on 90 days' notice upon any breach or default by the
Company under the License or upon the bankruptcy or involvency or receivership
of the business of the Company. Upon termination of any License, all rights
granted thereunder revert back to the University and, in such event, the
University reserves the right to terminate all the other Licenses. Any such
termination would have a material adverse effect on the Company's business,
financial condition and results of operations, or could result in cessation of
the Company's business.
 
     The patent and intellectual property positions of pharmaceutical and
biotechnology companies, including the Company, are uncertain and involve
complex legal and factual questions for which important legal principles are
largely unresolved. A number of pharmaceutical companies, biotechnology
companies, universities and research institutions, many of whom have
substantially greater resources than the Company and have made substantial
investments and may be further along in development in technologies competitive
with those utilized by the Company, have filed patent applications or received
patents relating to treatments and technologies which are similar to or
competitive with those of interest to the Company.
 
     Since a United States patent application is maintained under conditions of
confidentiality while the application is pending in the United States Patent and
Trademark Office (the "PTO"), the Company is unable to determine the inventions
being claimed in pending patent applications filed by its competitors in the
PTO. In addition, patents issued and applications pending which relate to the
Company's areas of interest are numerous, and there can be no assurance that the
Company is aware of all potentially competitive or conflicting patents (either
pending or issued) or other intellectual property rights. The existence of such
other patents, patent applications and rights could result in a significant
reduction of the coverage of rights held or to be held by the Company (i.e.,
rights held under the Licenses) and the Company's ability to realize any
significant patent protection with respect to such rights.
 
                                       36
Furthermore, while the Company holds rights (under the Licenses) to one
issued U.S. patent and several pending applications in the U.S. and
internationally, there can be no assurance that any of the pending applications
will result in the issuance of any patents, that such applications will have
priority over the applications of others, that, if issued, any patents to which
the Company holds rights might offer protection against competitors with similar
technologies or that the Company will not require additional rights to conduct
its business. There can also be no assurance that any patent, if issued or
following issuance, will not be challenged, invalidated or circumvented, or that
the rights created thereunder would afford the Company a competitive advantage.
 
     The commercial success of the Company also depends in large part on the
Company neither infringing valid, enforceable patents or proprietary rights of
third parties, nor breaching any licenses that may relate to the Company's
business. In this regard, the Company is aware of certain third-party patents
and competitive proprietary technologies that may relate to its business.
Specifically, the Company is aware of certain intellectual property rights
belonging to third parties that could be interpreted to compromise the Company's
freedom to practice and/or obtain rights to patent protection with respect to
certain aspects of the Company's technologies in the areas of the treatment of
infections with hen egg antibodies and the formulation of lipid-reduced
preparations. In the event of an unfavorable interpretation of third party
intellectual property rights (including the third party intellectual property
rights of which the Company is aware), the Company may be required to obtain
licenses from such third parties. There can be no assurance that any such
licenses would be available to the Company upon reasonably acceptable terms, if
at all. If the Company were so required to obtain licenses from such parties,
and if the Company were unable to obtain such licenses on reasonably acceptable
terms or the Company were unable to practice, develop and exploit such
technologies, the Company's technologies and business could be materially and
adversely affected. There can also be no assurance that the Company does not or
will not infringe other patents, intellectual property or proprietary rights of
third parties (including patents and rights which may issue or arise in the
future). Any legal action or threat against the Company claiming damages or
seeking to enjoin commercial activities relating to the Company's business
affected by third-party rights, in addition to subjecting the Company to
potential litigation and liability for damages, may require the Company to
obtain licenses in order to continue to pursue its business. There can be no
assurances that the Company would prevail in any such action or that any license
(including licenses proposed by third parties) required under any third party
rights would be made available on commercially acceptable terms, if at all. The
Company could also face significant costs and loss of time by management and key
employees as a result of any litigation relating to such third party rights.
 
     Certain underlying aspects of the technologies utilized and pursued by the
Company and the University may already be and have been in existence in the
scientific community in certain embodiments. There are United States and foreign
patents and patent applications held by third parties in the Company's
commercial areas of interest and the Company believes that there may be
significant litigation in the Company's industry and commercial areas of
interest regarding patent and other intellectual property rights. If the Company
becomes involved in such litigation, it could consume a substantial portion of
the Company's managerial and financial resources, which could have a material
adverse effect on the Company. Additionally, the defense and prosecution of
patent interference proceedings before the PTO or other related administrative
or court proceedings could result in substantial expense to the Company and
significant diversion of effort by the Company's technical and managerial
personnel. There can be no assurance that the Company will not in the future
become involved in PTO interference proceedings or other litigation to determine
the priority of inventions. In addition, laws of certain foreign countries do
not protect intellectual property to the same extent as laws in the United
States, which may subject the Company to additional difficulties in protecting
its intellectual property in foreign countries.
 
     The Company uses intellectual property owned by others and licensed to the
Company. Disputes may arise as to the ownership rights in such intellectual
property and related technology. The Company may also rely on certain
technologies to which it does not have exclusive rights or which may not be
patentable or proprietary and thus may be available to competitors.
 
     There can be no assurance that the steps taken by the Company, the
University, or Monsanto to protect intellectual property and proprietary rights
will be adequate to prevent misappropriation or that others will not develop
competitive technologies or products. Furthermore, there can be no assurance
that others will not independently develop products that are similar or superior
to those proposed for development or commercialization by the Company, duplicate
any of the technologies utilized by the Company or design around any patent or
other intellectual property rights held by the Company.
 
                                       37
The Company's commercial success and ability to compete effectively will
also depend upon the unpatented trade secrets and confidential information of
the Company and its licensors (such as the University), especially where patent
protection is not believed to be appropriate or obtainable. In this regard, the
Company relies upon trade secrets, technical know-how and continuing inventions
of the Company and its licensors to develop and maintain the Company's
competitive position. There can be no assurance that the Company can obtain or
maintain meaningful protection of such trade secrets or know how or that the
Company will be capable of obtaining or maintaining protection for its rights to
such trade secrets or know how. The Company attempts to protect its trade
secrets and technologies utilized by it in part through confidentiality
agreements with its employees, consultants and certain contractors. There can be
no assurance, however, that these agreements will not be breached or terminated,
that licensors utilizing similar agreements with their employees, consultants
and contractors will not suffer from the breach or termination of such
agreements, that the Company would have adequate remedies for any breach or that
trade secrets or know how utilized by the Company will not otherwise become
known or be independently discovered by competitors.
 
COMPETITION
 
     The pharmaceutical industry is subject to intense competition and rapid
technological change. Numerous pharmaceutical, biotechnology and chemical
companies, academic institutions, governmental agencies and other public and
private research organizations are conducting research and developing new drug
candidates designed to use immune mechanisms to treat infections. Further
competition is expected from companies developing new antibiotics and other
anti-infective substances.
 
     Several companies are or have been developing products for treating or
preventing cryptosporidial diarrhea. Certain of those companies are attempting
to use antibody products developed from milk of dairy cows to prevent and treat
gastrointestinal diseases. IgX believes that the Avian Technology is superior to
the bovine products for two reasons: (i) the Avian Technology provides a more
stable source of cryptosporidium hyperimmune and (ii) the antibody activity
achieved by IgX is superior to those developed through bovine processes. Using a
different technology, Shaman Pharmaceuticals Inc. also competes with IgX's drug
candidate, IGX-CPL3, for the treatment of diarrhea. Shaman has developed a
product derived from an extract of the croton plant found in Latin America and
seeks to treat the underlying cellular mechanism for diarrhea by blocking
chloride secretion but does not treat the infection. IGX-CPL3 by contrast seeks
to eradicate the C. parvum parasite by providing polyclonal antibodies specific
to C. parvum that bind to the pathogen and prevent the parasite from attaching
to and invading intestinal epithelial cells. The Company believes these
antibodies should bind to the parasite when it moves from cell to cell following
its reproductive cycle. As the parasite should be prevented from invading a
cell, it should die and be swept from the intestine. The reproductive cycle of
the parasite should thus be interrupted and the infection should terminate over
time.
 
     The Company is aware of direct competition with respect to its C. difficile
diarrhea drug candidate. Ophidian Pharmaceuticals Inc. has developed a passive
antibody formulation that neutralizes a disease causing toxin secreted by C.
difficile during infection of the human GI tract. Ophidian uses a recombinant
protein technology from hens eggs. Ophidian has recently reported the completion
of a Phase I clinical trial. IgX believes that the Ophidian drug candidate is
inferior to IGX-CDL3 because it seeks to treat the resultant toxins of C.
difficile while IGX-CDL3 seeks to attack the bacteria directly before it is able
to create toxins. In addition, the Ophidian drug candidate is produced through a
process of laboratory test tube centrifuge. Ophidian, to the Company's
knowledge, has not succeeded at producing the drug candidate in commercially
viable quantities and to date, has no manufacturing facility.
 
     The Company also encounters competition with respect to its drug candidate
IGX-HPL3. Astra Merck Inc. is currently in Phase III studies of its drug
candidate Perprozole, and Eisai Co., Ltd has entered the Japanese market with
its product Rabeprazole sodium. Both products are antiulcer agents used together
with antibiotics to eradicate H. pylori. The Company believes that the Astra and
Eisai drug candidates are inferior to IGX-HPL3 because they are indirect
approaches to the eradication of the H. pylori bacteria. Perprozole and
Rabeprazole sodium seek to limit the acid present in the bowel thereby creating
a hostile environment for H. pylori. The Company believes that IGX-HPL3 by
contrast, seeks to act by blocking the urease receptors on H. pylori, thereby
creating an acid-rich environment which may kill the pathogen. In addition, AMBI
Inc. is conducting Phase III studies for its drug candidate, Nisin, an
antibiotic which seeks to eradicate H. pylori through triple drug therapy. The
Company believes that IGX-HPL3 is superior to Nisin because recent articles have
shown the development of resistance to current triple drug therapy. Triple drug
therapy is also somewhat difficult and prolonged for patients, while the
Company's drug candidate intends to be a monotherapy of shorter duration. In
addition, the
 
                                       38
Company believes that its drug candidate should not develop the drug-resistance
exhibited by current therapeutics.
 
     The Company anticipates competition for IgX Oxford from certain companies
with drugs already on the market as well as companies developing drug candidates
which seek to treat Hepatitis B.
 
     Many of these competitors have substantially greater financial, human and
other resources and greater expertise in research and development,
manufacturing, marketing and distribution than the Company and may represent
significant competition for the Company. Such companies may succeed in
developing technologies and products that are more effective or less costly than
any of those that may be developed by the Company, and such companies may be
more successful than the Company in developing, manufacturing and marketing
products. In addition, some companies may be further along in their clinical
development as compared to the drug candidates of the Company. There can be no
assurance that the Company will be able to compete successfully in the future or
that developments by others will not render the Company's drug candidates
obsolete or non-competitive or that the Company's customers will not choose to
use competing technologies or products.
 
     Any drug candidate developed by the Company that gains regulatory clearance
or approval will have to compete for market acceptance and market share. An
important factor of such competition may be the timing of market introduction of
competitive products. Accordingly, the relative speed with which the Company can
develop drug candidates, gain regulatory approval and reimbursement acceptance
and supply commercial quantities of the product to the market are expected to be
important competitive factors. Although the Company believes that it is the
first in the U.S. to have initiated an FDA-approved human clinical trial of an
Avian Technology-based polyclonal antibody, there can be no assurance that the
Company will be first to market such a technology or to market such a technology
effectively.
 
GOVERNMENT REGULATION
 
  United States
 
     IgX's drug candidates are classified as human biological drugs and their
research, development and marketing are subject to substantial regulation by the
FDA as well as state and local entities. The Federal Food, Drug and Cosmetic
Act, the Public Health Service Act and other federal statutes govern the
testing, manufacture, safety, effectiveness, approval, storage, recordkeeping,
labeling, advertising and promotion of the Company's drug candidates.
Noncompliance with applicable statutory and regulatory requirements may result
in fines, recall or seizure of products, refusal to permit the Company to enter
into government supply contracts, refusal to approve Product Licensing
Applications ("PLA"), suspension or revocation of product licenses previously
granted and criminal prosecution.
 
     The process required by the FDA before the Company's drug candidates may be
marketed in the U.S. generally involves the following: (1) conducting
appropriate preclinical laboratory and animal tests; (2) the submission to the
FDA of an application for an IND which must be approved prior to approval to
conduct human clinical trials; (3) conducting adequate and well-controlled human
clinical trials to establish the safety and efficacy of the biologic; (4) the
submission of a PLA for approval of a biologic drug candidate; and (5) obtaining
FDA approval of and issuance of a license pertaining to a PLA prior to any
commercial sale or shipment of the drug or biologic. In addition to obtaining
FDA approval for each indication to be treated with each drug candidate, drug
manufacturing establishments must be registered with and approved by the FDA,
and manufacturers of biologics must also submit and obtain approval of an
Establishment License Application ("ELA") prior to commercial distribution of an
approved biologic. Manufacturing establishments are subject to regular
inspections by the FDA. All manufacturing facilities, production, testing and
packaging operations and recordkeeping practices must comply with current GMP
regulations, among other requirements.
 
     Preclinical Studies.  Preclinical studies are conducted in the laboratory
and in animal models to gain preliminary information on biochemical and
pharmacological properties of the investigational drug or biologic and to
identify any significant safety problems. The results of these studies are
submitted to the FDA as part of an IND application. Testing of previously
unapproved new drugs and biologics in humans may not commence until the IND
becomes effective.
 
     IND Application.  The IND application notifies the FDA of the sponsor's
investigational plan for the drug candidate or biologic and provides brief
descriptions of the chemical structure of the compound, the known
pharmacological and toxicological effects of the compound, and known information
relating to the compound's safety and effectiveness in humans, including
possible risks and anticipated side effects. An IND is effective in 30 days
unless the FDA objects. An IND that is effective authorizes a sponsor to conduct
human clinical studies (Phase I or Phase I/II) in order to demonstrate relative
safety and efficacy of the drug candidate in support of an ELA/PLA. Any
 
                                       39
time prior to or following the commencement of clinical trials under an IND, the
FDA may determine that human subjects are or would be exposed to an unreasonable
and significant risk of injury by participating in the trial and may delay
initiation of or suspend an ongoing trial. There is no certainty that the
submission of an IND application will result in FDA authorization to commence
trials or that authorization of one phase of trials will result in authorization
of other phases or that the performance of any clinical trials will result in
FDA approval of any drug candidate.
 
     Clinical Studies.  Human clinical studies are typically conducted in three
phases, which may overlap, and are designed to collect additional data relating
to the safety, dosing and side effects of the proposed drug candidate and to the
drug candidate's efficacy in comparison with placebos or any currently accepted
therapy. Phase I clinical studies are generally performed in selected patients
with a disease or disorder to attempt to establish an initial data base
cataloguing tolerance, safety and dosing of the drug candidate. Phase II
clinical studies are generally performed in small numbers of carefully selected
patients and are used to obtain statistical evidence of the preliminary efficacy
and safety of the drug candidate and dosing regimen. Phase III consists of
expanded large-scale studies of patients with the target disease or disorder, to
obtain statistical evidence of the efficacy and safety of the proposed drug
candidate, dosing regimen in a broader patient population, overall risk-benefit
relationship and product labeling. These studies may include investigation of
the effects in subpopulations of patients, such as the elderly, women or certain
racial groups.
 
     When patients are studied, Phase I and II studies may be combined. Phase
I/II clinical studies are designed to establish initial data regarding the
tolerance, safety and dosing of the investigational drug or biologic, and to
obtain preliminary efficacy data in patients with the specific diseases. The
combination of different phases encourages the use of larger sample sizes and
may result in more reliable statistical results in the earlier phases.
Subsequent to the Phase I and II studies, pivotal Phase III studies are required
to be carried out with larger numbers of patients with the target disease or
disorder. These pivotal studies may be either Phase II or Phase III. Additional
clinical trials beyond the pivotal studies are sometimes required for licensing.
 
     Product Licensing Application.  Upon successful completion of clinical
testing, the PLA and ELA are filed with the FDA. These applications include,
among other things, details of the manufacturing and testing processes, proposed
packaging, labeling and results of preclinical studies and clinical trials
which, taken together, demonstrate that the drug candidate or biologic is safe,
pure, potent and effective. FDA approval of the applications is required before
the new drug candidate may be marketed. There can be no assurance that the FDA
will act favorably or quickly in reviewing submitted applications, and
significant difficulties or costs may be encountered by the Company in its
efforts to obtain FDA novel biological drug candidates. The FDA may grant
marketing approval, require additional testing or information or deny the
applications. The clinical trials may take three to five years or more to
complete, may be very costly, and there are no assurances that the clinical data
obtained will demonstrate to the FDA that the drug candidate is safe and
effective. The FDA may require the Company to perform additional human testing.
There can be no assurance that the FDA will ever accept the Company's data as
being sufficient to demonstrate the drug candidate's safety, purity, potency or
efficacy.
 
     Even after FDA approval of a PLA has been obtained, further studies are
generally required to provide additional data on safety or to gain approval for
the use of a drug as a treatment in a clinical indication other than those for
which the drug was initially tested. The FDA may also require post-marketing
testing and surveillance programs to monitor a drug's effects. Significant side
effects may prevent or limit the further marketing of the drug, or move the FDA
to withdraw its approval, if any, to market the drug, either temporarily, for
example, by ordering a drug recall, or permanently, by withdrawing the ELA or
PLA approval. Continued compliance with all FDA requirements and the conditions
in an approved application, including product specification, manufacturing
process, labeling and promotional materials and record keeping and reporting
requirements, is necessary for all drugs.
 
  International
 
     Sales of biologics outside the U.S. are subject to foreign regulatory
requirements that may vary widely from country to country. Approval of a product
by regulatory authorities of foreign countries comparable to the FDA must be
obtained prior to the commencement of marketing the products in those countries.
The time required to obtain such approval may be longer or shorter than that
required for FDA approval discussed above. The foreign regulatory approval
process may include all of the risks associated with obtaining FDA approval set
forth above, and there can be no assurance that foreign regulatory approvals
will be obtained on a timely basis, if at all.
 
  EU
 
     In 1995, the European Medicines Evaluation Agency ("EMEA") instituted a new
centralized drug-approval process for the member states of the European Union
(EU). The member states currently include Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland (Republic of), Italy, Luxembourg, the
 
                                       40
Netherlands, Portugal, Spain, Sweden and the United Kingdom. This centralized
process supplements the traditional decentralized approach and allows for a
single central evaluation and approval that is binding in all EU member
countries. Similar to the FDA process, the safety, efficacy and quality of a
biologic drug candidate must be demonstrated according to criteria under EU law
and extensive preclinical and human clinical trials are likely to be required.
The results of all preclinical, development/manufacturing and Phase I, II and
III clinical trial data may be submitted to the EMEA, the counterpart of the
FDA, to seek approval for a Marketing Approval Application ("MAA"), which is the
equivalent of the PLA. The MAA is assigned to a "rapporteur" and/or "co-
rapporteur", an individual who coordinates the assessment of the application by
a team of experts in the preclinical, product manufacturing and clinical areas.
An overview of the results of the assessment is then presented to the Committee
on Proprietary Medicinal Products ("CPMP"). The CPMP, which is comprised of two
members from each of the member states of the European Union, evaluates both the
MAA and the rapporteur's recommendations and forms an opinion on the approval or
rejection of the MAA. This opinion is then referred to the European Commission,
and the European Council if appropriate, for a final decision. Approval of the
MAA by the European Commission and European Council, if appropriate, permits
product marketing within all countries of the European Union. This MAA procedure
takes a minimum of 300 days from submission of the application, excluding the
time taken by the applicant to respond to questions raised by the CPMP.
 
     In addition to the centralized EU regulatory process, national laws of each
EU member states govern clinical trials, good manufacturing practices,
reimbursement and pricing, advertising and promotion and other matters. Thus,
even if a drug candidate receives EU Marketing approval, it is not available for
sale until the foregoing items are complete.
 
     The Company is currently engaged in a Phase III clinical trial to test the
efficacy of IGX-CPL3 in treating cryptosporidial diarrhea in HIV-advanced
patients. The trial is being conducted in South Africa and Mexico. If the trial
is successful, IgX intends to apply for marketing approval of IGX-CPL3 in the EU
and certain South American countries to treat cryptosporidial diarrhea in
HIV-advanced patients and may apply for similar approval in the U.S.
 
REIMBURSEMENT
 
     The Company expects that sales volumes and prices of its drug candidates
will be dependent in large measure on the availability of reimbursement from
governmental and other third-party payors, including health insurance companies.
The Company believes that reimbursement in the future will be subject to
increased restrictions both in the U.S. and in foreign markets. The Company
believes that the overall escalating cost of medical drugs and services has led
to, and will continue to lead to, increased pressures on the health care
industry, both foreign and domestic, to reduce the cost of drugs and services,
including any drug candidates which may be offered by the Company. There can be
no assurance that, in either the U.S. or foreign markets, governmental and other
third-party reimbursement and coverage will be available or adequate, that
current reimbursement amounts will not be decreased in the future or that future
legislation, regulation, or reimbursement policies of governmental and other
third-party payors will not otherwise adversely affect the demand for the
Company's drug candidates or its ability to sell its drug candidates on a
profitable basis. The unavailability or inadequacy of governmental and other
third-party payor coverage or reimbursement could have a material adverse effect
on the Company's business, financial condition and results of operations.
 
PRODUCT LIABILITY INSURANCE
 
     The clinical and commercial development of pharmaceuticals, including those
being developed by the Company, may entail exposure to product liability claims.
While the Company has never been subject to any liability claims stemming from
the manufacture of, or preclinical or clinical trials of, its drug candidates,
there can be no assurance that it will not be subject to such claims in the
future. While IgX Limited currently has product liability insurance coverage in
an amount of approximately $7.5 million (or Irish pounds 5 million) per
occurrence for the use of IGX-CPL3 in the Company's Phase III clinical trial,
there can be no assurance that such coverage limits will be adequate nor that a
successful product liability lawsuit would not have a material adverse effect on
the Company. The Company does not have product liability insurance coverage for
the commercial sale of its drug candidates but intends to obtain such coverage
if and when its drug candidates are commercialized however, regulatory bodies,
there can be no assurance that sufficient product liability insurance will be
available on terms acceptable to the Company or at all. See "Risk
Factors--Potential Product Liability Exposure and Insurance."
 
                                       41
FACILITIES
 
     IgX's executive offices are located in Summit, New Jersey in       square
feet of leased office space. The Company leases a pilot production facility in
Tucson, Arizona which is responsible for developing drug candidates used in
research and development. In addition, through its wholly owned subsidiary, IgX
Limited, the Company owns a pilot production facility in Granard, Ireland. The
Company believes that its current facilities are adequate to meet its
requirements for the foreseeable future. Under its strategic partnership with
Sintofarma, the Company and Sintofarma have agreed to jointly build and own a
manufacturing facility in Brazil initially for pilot production of sufficient
quantities of its drug candidates for clinical trials in Brazil and for
full-scale production for the Company's Avian Technology-based products, if and
when approved for sale in Brazil. The future Brazilian facility is anticipated
to be an FDA-approved facility.
 
EMPLOYEES
 
     As of September 15, 1998 the Company employed 31 persons on a full-time
basis, of which 8 were involved in research and development, 16 in manufacturing
its drug candidate for clinical trial and 7 in administration and business
development. The Company believes that its relations are good with its
employees. None of the Company's employees is a party to a collective bargaining
agreement. See "Management--Executive Officers and Directors."
 
                                       42
MANAGEMENT
 
EXECUTIVE OFFICERS AND DIRECTORS
 
     The following table sets forth certain information regarding the executive
officers and directors of the Company:
NAME                                    AGE   POSITION
-------------------------------------   ---   ---------------------------------------------------------
Albert J. Henry(1)...................   60    Chairman of the Board, Chief Executive Officer, Director
Carroll "Bo" Allen...................   53    Senior Vice President, Business Development and Marketing
Robert L. Renfroe....................   64    Senior Vice President, Operations, Managing Director IgX
                                              Limited
Vitaliano A. Cama, DVM...............   38    Vice President, Research and Development
Charles R. Sterling, Ph.D............   52    Director of Research
Tony Geoghegan.......................   40    Chief Financial Officer
Annette Fernandez, Ph.D..............   29    Assistant Vice President, Clinical Affairs
Baruch Blumberg, Ph.D................   73    Director
Raymond A. Dwek......................   56    Director
Donald H. Picker, Ph.D.(1)(2)(3).....
                                              Director
Edwin Snape, Ph.D.(1)................   58    Director
Randolph C. Steer, MD, Ph.D.(2)......   48    Director
------------------
(1) Member of Executive Committee.
(2) Member of Compensation Committee.
(3) Member of Audit Committee.
 
     Albert J. Henry.  Mr. Henry has been Chairman of the Board of IgX since its
inception in February 1992 and its Chief Executive Officer since May 1998.
Mr. Henry also served as Chief Executive Officer of the Company from February
1992 until April 1997. Since 1983, Mr. Henry served as Chairman and Chief
Executive Officer of Henry & Co., venture capital firm, and of Henry Venture II
Limited, an Isle of Man venture capital fund and a principal stockholder of IgX.
From 1983 to 1993, Mr. Henry also served as Chairman and Chief Executive Officer
of the Henry Venture Fund Limited, a Cayman Island investment company. From
December, 1994 to December 1996 Mr. Henry was Vice Chairman and a Director of
IVAC Medical Systems, Inc., which designs, manufactures and sells electronic
instrumentation to administer intravenous therapy. From 1977 to 1982, Mr. Henry
was Chief Financial Officer, Director and Chairman, Executive Committee of IMED
Corporation, which invented, designed, manufactured and sold the first
electronic, volumetric infusion pump used to administer intravenous therapy. For
more than 5 years prior thereto, Mr. Henry was Chairman of Henry & Associates,
New York, a Wall Street securities research and venture capital firm and for 5
years was a lending officer at First National City Bank, a predecessor to
Citibank N.A. He holds a Masters in Business Administration, Finance and
Marketing, from Kellogg Graduate School of Management, Northwestern University
and a Bachelor of Science in Civil and Mechanical Engineering from Bradley
University. Mr. Henry is also adjunct professor of finance at Kellogg.
 
     Carroll "Bo" Allen.  Mr. Allen has been the Company's Senior Vice
President, Business Development and Marketing since July 1997 and served as a
Director from July 1997 to August 1998. For one year prior to joining IgX,
Mr. Allen was Senior Vice President of Marketing & Business Development in
Kimeragen, a gene repair company. From March 1994 to March 1996 Mr. Allen served
as Vice President of Business Development for CoCensys, Inc. a biopharmaceutical
company. From 1989 to 1994, Mr. Allen served as Product Director at Ciba-Geigy
Pharmaceuticals. Prior to that, from 1978 to 1989, Mr. Allen worked in the
marketing division of Sandoz Pharmaceuticals and Boehringer Ingelheim.
Mr. Allen received his Masters of Science in Biology from University of
Tennessee and a Bachelor of Science in Biology from Middle Tennessee State
University.
 
                                       43
Robert L. Renfroe.  Mr. Renfroe has been IgX's Senior Vice President,
Operations since April 1994 and Managing Director of IgX Limited since 1996. He
is responsible for management of the IgX Limited pilot production plant in
Ireland. From 1988 to 1994, Mr. Renfroe was Managing Partner of CIW, Inc., an
engineering, design and capital equipment provider to the electronic and
chemical industries. Mr. Renfroe was General Manager--Ireland and Vice President
of Operations of IMED Corporation, from 1980 to 1987. He holds a Masters of
Business from University of London and a Bachelor of Science in Electrical
Engineering from University of California.
 
     Vitaliano A. Cama, DVM.  Dr. Cama has served as Vice President, Research
and Development of the Company since January 1997 and for five years prior
thereto held a similar position in the Company. Dr. Cama is a co-inventor with
Dr. Sterling of the IgX Avian Technology. Since 1988 he has also been a research
associate in the Department of Veterinary Science at the University of Arizona.
During 1988 he was also a member of the Scientific Committee for the IX
Panamerican Congress of Veterinary Sciences. Prior to 1988, from in 1988
Dr. Cama was a research associate at Asociacion Benefica PRISMA and Department
of Microbiology, Universidad Peruana Cayetano Heredia in Lima, Peru. From 1986
to 1987 Dr. Cama was a teaching assistant at the Avian Pathology Laboratory.
From 1983 to 1985 he served as a teaching assistant in the Department of Animal
Production, School of Veterinary Medicine, Universidad Nacional Mayor de San
Marcos, in Lima, Peru. From 1982 to 1987 he was also a supervisor of AVI-VET
poultry farms in Lima, Peru. He holds a Doctor of Veterinary Medicine degree and
a Bachelor of Veterinary Sciences degree from the Universidad Nacional Mayor de
San Marcos in Lima, Peru and completed post-doctoral work at the University of
Arizona from 1988-1991 in immunoparasitology.
 
     Charles R. Sterling, Ph.D.  Dr. Sterling has been Director of Research and
Chairman of the Scientific Advisory Board of the Company since 1992.
Dr. Sterling is a co-inventor with Dr. Cama of the Avian Technology. Since 1983,
Dr. Sterling has been a professor at the University of Arizona having served as
the Head, Department of Veterinary Science since 1990. Dr. Sterling was also
Associate Professor, Department of Immunology and Microbiology, and Assistant
Professor, Department of Comparative Medicine, Wayne State University School of
Medicine, Detroit, Michigan from 1974 to 1983. Dr. Sterling's laboratory at
University of Arizona developed the leading diagnostic test for C. parvum and
Giardia. He was a postdoctoral fellow in Pathology, Case Western Reserve
University School of Medicine, Cleveland, Ohio, and received his Ph.D. from
Wayne State University and Bachelor of Science from Syracuse University.
 
     Tony Geoghegan.  Mr. Geoghegan has been the Company's Chief Financial
Officer since May 1998 and its Controller since September 1996. From August 1993
to August 1996 Mr. Geoghegan was Group Financial Controller of Aall Trust &
Banking Corporation Limited in the Cayman Islands. For 7 years prior thereto, he
was employed in the audit practice in the Dublin and Grand Cayman offices of
Coopers & Lybrand. Mr. Geoghegan has a Business Studies degree from Trinity
College, Dublin, and is a Fellow of the Institute of Chartered Accountants in
Ireland.
 
     Annette Fernandez, Ph.D.  Dr. Fernandez has been Assistant Vice President,
Clinical Affairs of the Company since December 1997. From August 1996 to
November 1997, after completing her education, Dr. Fernandez was the Assistant
Director of Technology Assessment & PharmacoEconomic Services (TAPES) Institute
of Excellence at the Jefferson Health System in Philadelphia, Pennsylvania.
Dr. Fernandez holds a Ph.D. from the University of Utah and a B.Pharm. from
Bombay University.
 
     Baruch Blumberg, Ph.D.  Baruch S. Blumberg has been a Director of the
Company since September 1998. Dr. Blumberg has been a Distinguished Scientist at
Fox Chase Cancer Center, Philadelphia since 1989, and a University Professor of
Medicine and Anthropology at the University of Pennsylvania, since 1977. He was
Master of Balliol College, Oxford University, from 1989 to 1994 and Associate
Director for Clinical Research at Fox Chase Cancer Center from 1964 to 1989. He
was awarded the Nobel Prize in 1976 for "discoveries concerning new mechanisms
for the origin and dissemination of infectious diseases" and specifically, for
the discovery of the Hepatitis B virus. He was on the staff of the National
Institutes of Health, Bethesda, MD, from 1957 to 1964. He earned an M.D. degree
from the College of Physicians and Surgeons, Columbia University, New York, in
1951, and a Ph.D. (D. Phil.) in Biochemistry from Oxford University in 1957.
 
     Raymond Allen Dwek, MA, MSc, D.Phil, DSc, C Chem, FRSC, FRS.  Professor
Dwek has been a Director of the Company since August 1998. In 1988 he was, as
founding scientist, instrumental in the foundation of Oxford Glycosciences plc
("OGS"), which is a minority shareholder in IgX Oxford. Professor Dwek has
served
 
                                       44
as a non-executive Director of OGS and its predecessor, Oxford Glycosciences
Limited since 1988 and has been a member of its Scientific Advisory Board since
1997. Since 1988, Professor Dwek has been director of the Glycobiology
Institute, Professor of Glycobiology at the University of Oxford and
Professorial Fellow of Exeter College, Oxford, Professor of Glycobiology. Since
1996 Professor Dwek has been the Associate Head of the Department of
Biochemistry at the University of Oxford. In 1988 Professor Dwek was elected a
Fellow of the Royal Society of London and since 1988 he has been a member of the
European Molecular Biology Organisation and is Chairman of its Scientific
Advisory board. Professor Dwek received his Bachelor of Science in Chemistry and
his Master of Science in Physical Chemistry from Manchester University. He
received a Doctorate in Physical Chemistry at Oxford University.
 
     Donald H. Picker, Ph.D.  Dr. Picker has been a Director of the Company
since September 1998. Since 1996, Dr. Picker has been President and Chief
Operating Officer of LXR Biotechnology Inc., a drug development company. From
March 1996 until June 1996, Dr. Picker was Chief Operating Officer and Executive
Vice President at Corvas, a biopharmaceutical firm. Prior to that, from 1991
until 1996, he was Vice President of Research and Development at Genta, a
biopharmaceutical firm. From 1983 to 1991 he was Vice President Research and
Development for Johnson Matthey, Inc., where he developed platinum anticancer
drugs, including Paraplatin, a worldwide leading anticancer drug. Dr. Picker
received his Ph.D. in organic chemistry from State University of New York at
Albany, and received his Bachelor of Science degree in chemistry from the
Brooklyn Polytechnic Institute.
 
     Edwin Snape, Ph.D.  Dr. Snape has been a Director of the Company as well as
Chairman, Executive Committee for Corporate Development since January 1998.
Since 1995, Dr. Snape has been one of four principals in New England Partners, a
private equity firm headquartered in Boston, and has primary responsibility for
its healthcare investments. Dr. Snape is a partner of New England Partners II,
L.P. an affiliate of New England Partners, which is the general partner of NEGF
II, L.P., a principal stockholder of IgX. Dr. Snape has been a General Partner
of several venture capital partnerships since 1983, and was a Managing General
Partner of Vista III, L.P. from August 1986 to 1998. From March 1997 until
October 1997, Dr. Snape served as one of Vista's designees on the Board of
Directors of Superior Air Parts, a wholesaler of aircraft parts, in which Vista
then owned a majority of the outstanding equity. In July 1997, Superior Air
Parts filed for Bankruptcy protection under Chapter 11, and thereafter
reorganized. Dr. Snape holds a Doctorate of Science and Bachelor of Science
degrees in Metallurgy from Leeds University in England.
 
     Randolph C. Steer, M.D., Ph.D.  Dr. Steer has been a Director of the
Company since 1996 and a member of the Scientific Advisory Board since 1993.
Since 1989 Dr. Steer has been an independent regulatory and business development
consultant. He has a broad background in the commercial development of drugs,
biologics and medical devices. From 1985 to 1989 he served as Chairman of ATC
International, a pharmaceutical regulatory, marketing and publishing firm. From
1984 to 1985 he was the Medical Director at Ciba-Geigy Pharmaceuticals and from
1982 to 1984 he held a position in the Research and Development division of
Marion Laboratories. Dr. Steer is a member of the board of directors of Techne
Corporation, a manufacturer of cellular biologic reagents and BioCryst
Pharmaceuticals, a drug design and development company. Dr. Steer received his
MD degree from Mayo Medical School, Ph.D. from the University of Minnesota, and
completed residency and subspecialty training in clinical and chemical pathology
at the University of Minnesota Hospitals.
 
     The Company's Board of Directors is divided into three classes, each of
which will serve a term of three years, with one class being elected each year.
Each of the Company's directors has been elected to serve until his successor
has been elected and duly qualified. The terms of Donald Picker and Raymond Dwek
will expire at the annual meeting of stockholders in 1999; the terms of Baruch
Blumberg and Randolph Steer will expire at the annual meeting of stockholders in
2000; and the terms of Albert J. Henry and Edwin Snape will expire at the annual
meeting of stockholders in 2001. The Restated Certificate provides that
Directors may be removed only for cause by a majority of stockholders. See
"Description of Capital Stock--Anti-Takeover Measures."
 
     The Company has agreed, at the election of the Representative, to nominate
and use its best efforts at any time through June 14, 2003 to elect a designee
of the Representative to the Board of Directors or, at the Representative's
option, as an attendee at the meetings of the Board of Directors and has agreed
to reimburse any such designee for expenses incurred in attending Board
meetings.
 
     Under the Investors' Rights Agreement dated December 24, 1997 by and among
the Company and certain investors, including NEGF II, L.P., a principal
stockholder of the Company, the Company has agreed, for so long
 
                                       45
as NEGF II, L.P. owns not less than 207,940 shares of Common Stock, to use its
best efforts to cause and maintain the election of Edwin Snape, Ph.D., a partner
of the general partner of NEGF II, L.P. or another designee of NEGF II, L.P., to
the Board. Dr. Snape has served as a Director of the Company pursuant to the
Investors' Rights Agreement since December 1997.
 
     The Company has entered into indemnification agreements with each of the
Directors of the Company, under which the Company has agreed to indemnify and
hold harmless each Director to the fullest extent permitted by law for losses
incurred by reasons of acts or omissions in his capacity as a Director of the
Company.
 
     The Company is the beneficiary of a $3 million "keyman" life insurance
policy on the life of Mr. Albert J. Henry.
 
BOARD COMMITTEES
 
     The Company has Audit, Compensation and Executive Committees of the Board
of Directors. The Audit Committee consists of Donald H. Picker. The primary
function of the Audit Committee is to assist the Board of Directors in the
discharge of its duties and responsibilities by providing the Board with an
independent review of the financial condition of the Company and of the
Company's financial controls and financial reporting systems. The Audit
Committee also reviews the general scope of the Company's annual audit, the fee
charged by the Company's independent accountants and other matters relating to
internal control systems.
 
     The Compensation Committee of the Board of Directors determines salaries,
incentives and other forms of compensation to be paid to all executive officers
of the Company, including the Chief Executive Officer. The Compensation
Committee's duties include the administration of the Company's Amended and
Restated 1993 Stock Option Plan. The Compensation Committee consists of Randolph
C. Steer, Chairman and Donald H. Picker.
 
     The Executive Committee consists of Albert J. Henry, Chairman, Edwin Snape
and Donald Picker. The primary function of the Executive Committee is to assist
the Board of Directors in evaluating acquisitions of clinical materials and
overseeing general business matters.
 
SCIENTIFIC ADVISORY BOARD
 
     The Company's Scientific Advisory Board consists of individuals with
expertise in various fields who advise the Company concerning long-term
scientific planning, research and development. Members of the Scientific
Advisory Board also evaluate the Company's research program, recommend personnel
to the Company and advise the Company on technology matters. While the
Scientific Advisory Board has not met collectively, its members have been
available individually to advise the Company on specific scientific and
technical issues. Scientific Advisory Board members are compensated $1,500 per
meeting and reimbursed for out-of-pocket expenses. In addition, each member will
receive nonstatutory stock options to purchase 10,000 shares of common stock
under the 1998 Stock Option Plan which vest over a period of three years. The
Company has entered into confidentiality agreements with the members of the
Scientific Advisory Board.
 
     No member of the Scientific Advisory Board is employed by the Company, and
members may have other commitments to or consulting or advisory contracts with
their employers or other entities that may conflict or compete with their
obligations to the Company. Accordingly, such persons are expected to devote
only a small portion of their time to the Company.
 
     Charles R. Sterling, Ph.D. acts as the Chairman of the Scientific Advisory
Board and Dr. Steer is also a member of the Scientific Advisory Board. The other
members of the Scientific Advisory Board are Dr. Robert Fekety, Dr. Robert
Gilman, Dr. Richard Guerrant, Dr. Gerald Keusch, Dr. Willis Maddrey, Dr. Matilde
Parente, Dr. Julie Parsonnet, Dr. Cynthia Sears, Dr. David N. Taylor, Dr. Reno
Vlahcevic and Dr. Christine Wanke.
 
     Robert Fekety, M.D.  Dr. Fekety has been a Professor Emeritus of
Epidemiology at the University of Michigan, School of Public Health since 1995.
Prior to that, from 1985 to 1995, he held the position of Professor of
Epidemiology at the same University. Dr. Fekety received his Medical Degree from
Yale Medical School and a bachelors of Arts from Wesleyan Universtiy.
 
     Robert Gilman, M.D.  Dr. Gilman is a Professor in the Department of Health
at John Hopkins University. He is a Director of the NIH-CIDR Program Project and
a Director of Summer Institute of Tropical Medicine and Health. Dr. Gilman has
authored approximately 160 scientific publications in peer reviewed journals and
seven text-books. His area of specialty is tropical disease and hygiene with an
emphasis in C. parvum and cyclospora.
 
                                       46
Richard L. Guerrant, M.D.  Since 1990, Dr. Gerrant has been a Professor of
International Medicine at the University of Virginia and Head of its Division of
Geographic and International Medicine since 1981. Dr. Guerrant has been the
Director of the Office of International Health at the University of Virginia
since 1995. Dr. Guerrant received his Medical Degree from the University of
Virginia School of Medicine, and his Bachelor of Schiece degree from Davidson
College.
 
     Gerald T. Keusch M.D.  Dr. Keusch is a Professor at the New England Medical
Center, Division of Infectious Disease. He is also a member of its Editorial
Board. He has authored numerous scientific publications in peer reviewed
journals on the impact of nutrition on immunity with a special emphasis on
C. parvum, Rotavirus and enteric toxins.
 
     Willis Maddrey, M.D.  Dr. Maddrey is Executive Vice President for Clinical
Affairs and a Professor of Internal Medicine at The University of Texas
Southwestern. He is also a member of the Michigan Quarterly Review. Dr. Maddrey
is the past President of the American College of Physicians and the American
Association of the Study of Liver Disease, as well as the Vice President of the
American Gastroenterological Association. He is an honorary fellow of the Royal
College of Physicians, London, the Royal College of Physicians, Glasgow and the
Royal Australasian College of Physicians and Surgeons. He is on numerous boards
of directors including Wellspan Health Care System and Southwestern Health Care
Systems. Dr. Maddrey's expertise is in hepatology, gastroenterology and
regulatory compliance.
 
     Matilde Parente, M.D.  Dr. Parente is Vice President of the Desert AIDS
Project and a Member of the Board of Councillors of the Riverside County Medical
Association in California. She is a diplomate of the American Board of Pathology
with certification in the specialties of Anatomic and Clinical Pathology and is
a Fellow of the College of American Pathologists.
 
     Julie Parsonnet, M.D.
 
     Cynthia Sears, M.D.  Dr. Sears is an Associate Professor of Medicine,
Division of Infectious Diseases and Gastroenterology at Johns Hopkins
University. She has authored approximately 16 scientific publications in peer
reviewed journals with an emphasis on enteric pathogens, specifically
C. parvum, Bacteriolides and E. coli.
 
     David N. Taylor, M.D.
 
     Z. Reno Vlahcevic, M.D.  Dr. Vlahcevic has been a Professor of Medicine at
the Virginia Commonwealth University, Medical College since 1974. He is also an
Associate Chairman for Research, Department of Internal Medicine at Virginia
Commonwealth. Dr. Vlahcevic received his Medical Degree from the Medical School
of the University, Zagreb in Croatia.
 
     Christine A. Wanke M.D.  Dr. Wanke is an Assistant Professor of Medicine at
Tufts University School of Medicine. From 1981 through 1998, Dr. Wanke was an
Assistant Professor of Medicine at Harvard Medical School. She received her
Medical Doctorate degree from the University of Wisconsin School of Medicine,
and her Bachelor of Science degree in South Asian Studies from University of
Wisconsin.
 
DIRECTOR COMPENSATION
 
     Directors who are not full-time employees of the Company are reimbursed
their out-of-pocket expenses and receive a fee of $1,500 per board meeting
attended and, upon their initial election and each subsequent reelection to the
Board, options to purchase 20,000 shares of Common Stock at the fair market
value of the Common Stock on the date of the grant. See "Stock Option Plans"
below.
 
                                       47
The following table sets forth certain compensation paid or earned with
respect to the Company's fiscal year ended December 31, 1997 for each of the
Chief Executive Officers of the Company during 1997 and the other executive
officers of the Company whose salary and bonus for that fiscal year exceeded
$100,000 (together, the "Named Executive Officers"):
 
                SUMMARY COMPENSATION TABLE FOR 1997 FISCAL YEAR
LONG-TERM
                                                                                            COMPENSATION
                                                                                            ------------
                                                                           ANNUAL            NUMBER OF
                                                                        COMPENSATION        SECURITIES
                                                                     ------------------     UNDERLYING
                                                                     SALARY      BONUS        OPTION
NAME AND PRINCIPAL POSITION                                            ($)        ($)           (#)
------------------------------------------------------------------   -------    -------     ------------
Albert J. Henry
  Chairman and Chief Executive Officer............................        --         --              --

Craig R. Rennie
  Chief Executive Officer, President(1)...........................   177,000         --         200,000

Carroll W. Allen
  Senior Vice President,
  Business Development and Research...............................    76,000     52,000         125,000(2)

Robert L. Renfroe
  Senior Vice President, Operations
  Managing Director IgX Limited...................................   110,000         --              --
------------------
(1) Due to office closure, Mr. Rennie's employment ceased as of May 12, 1998.
    Compensation was paid in Pounds Sterling, with amounts stated in US$ at an
    exchange rate of US$1 = pounds .6079 on December 31, 1997.
(2) Mr. Allen's stock options were rescinded in January 1998.
 
     The following table sets forth certain information regarding options
granted during the fiscal year ended December 31, 1997 by the Company to the
Named Executive Officers.
 
                       OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
                                                                                     VALUE AT ASSUMED ANNUAL
                         NUMBER OF       PERCENT OF                                   RATES OF STOCK PRICE
                         SECURITIES    TOTAL OPTIONS                                 APPRECIATION FOR OPTION
                         UNDERLYING      GRANTED TO      EXERCISE OR                          TERMS
                          OPTIONS       EMPLOYEES IN     BASE PRICE     EXPIRATION    -----------------------
NAME                      GRANTED       FISCAL YEAR        ($/SH)          DATE        5%($)        10%($)
----------------------   ----------    -------------    -----------    -----------   ---------     ---------
Craig R. Rennie.......      200,000(1)      61.5%           5.00        4/1/2007     1,932,000     3,669,000
Carroll W. Allen......      125,000(2)      38.5%           5.00        6/15/2007    1,208,000     2,293,000
------------------
(1) These options terminated in May 1998.
(2) These options were rescinded in January 1998.
 
     The following table sets forth certain information concerning the number
and value of securities underlying exercisable and unexercisable stock options
held by the Named Executive Officers as of December 31, 1997:
 
                       1997 FISCAL YEAR END OPTION VALUES
NUMBER OF UNEXERCISED            VALUE OF UNEXERCISED
                                                       OPTIONS AT FISCAL YEAR         IN-THE-MONEY OPTIONS AT
                                                               END(#)                  FISCAL YEAR END($)(1)
                                                    ----------------------------    ----------------------------
NAME                                                EXERCISABLE    UNEXERCISABLE    EXERCISABLE    UNEXERCISABLE
-------------------------------------------------   -----------    -------------    -----------    -------------
Craig R. Rennie(2)...............................      50,000         150,000         200,000          600,000
Carroll W. Allen(3)..............................      37,500         112,500         175,000          525,000
Robert L. Renfroe................................      20,924          62,772         167,000          502,000
(Footnotes on next page)
 
                                       48
(Footnotes from previous page)

------------------
(1) Based on the assumed $9.00 per share initial public offering price of the
    Common Stock offered hereby minus the applicable exercise price.
(2) Mr. Rennie's options terminated in September 1998.
(3) Mr. Allen's options were rescinded in January 1998.
                            ------------------------
 
     In January 1998, the Company granted a five-year-stock option to
Mr. Renfroe to purchase 50,000 shares of Common Stock at $1.00 per share. The
options become first exercisable at the rate 25% of the underlying shares
subject to the option, commencing January 1999.
 
EMPLOYMENT AGREEMENTS
 
     Albert J. Henry serves as Chief Executive Officer of the Company without
compensation and is subject to an agreement containing certain non-competition
and confidentiality provisions.
 
     Robert L. Renfroe is employed by IgX Limited ("Limited") under an
employment agreement that commenced December 1, 1996 and expires December 31,
1998 (the "Renfroe Employment Agreement"). Under the Renfroe Employment
Agreement, Mr. Renfroe receives an annual base salary of $110,000 and benefits
generally offered to Limited's employees. The Renfroe Employment Agreement
provides that the employment of Mr. Renfroe may be terminated by Limited with or
without "Cause." "Cause" is defined as a determination by a majority of the
Board of Directors of Limited that Mr. Renfroe has engaged in conduct not
appropriate for an employee of Limited. If Mr. Renfroe's employment is
terminated without cause, Limited must provide him with at least 30 days' prior
written notice. If the Phase III clinical trial for IGX-CPL3 is terminated by
Limited during the Pilot Plant Period or Manufacturing Plant Period (as such
terms are defined in the Renfroe Employment Agreement), Limited must pay
Mr. Renfroe a severance payment equal to twelve months of his annual base
salary, plus all applicable benefits. The agreement also contains a provision
prohibiting Mr. Renfroe from competing with Limited for three years from the
termination of employment. Pursuant to the Renfroe Employment Agreement,
Mr. Renfroe holds options to purchase 83,696 shares of Common Stock at an
exercise price of $1.00 per share. These options (which were originally issued
under a Limited stock option plan and subsequently assumed by the Company) are
exercisable at the rate of 25% per year over a four-year period, commencing
October 1, 1997, one year following the date of grant.
 
     Carroll "Bo" Allen is employed by the Company under an employment agreement
originally entered into with Limited and amended and assumed by the Company that
commenced June 1, 1997 and expires May 31, 1999 (the "Allen Employment
Agreement"). Under the Allen Employment Agreement, Mr. Allen receives an annual
base salary of $160,000, a cash incentive bonus (up to fifty percent of base
salary for each twelve-month period), a signing bonus of $40,000 available at
the rate of $10,000 per year and benefits generally offered to the Company's
employees.
 
     The Allen Employment Agreement provides that the employment of Mr. Allen
may be terminated by IgX with or without "Cause". "Cause" is defined as
(i) Mr. Allen's conviction of a felony; (ii) any neglect or breach of duty by
Mr. Allen, or any failure by Mr. Allen to perform to the reasonable satisfaction
of the Board, such duties as may be delegated to Mr. Allen from time to time;
(iii) Mr. Allen otherwise materially breaches any provision of the Allen
Employment Agreement; or (iv) a determination by a majority of the Board acting
in good faith that Mr. Allen has engaged in conduct not appropriate of an
employee. If Mr. Allen's employment is terminated without Cause and if he
executes a written release, the Company must pay Mr. Allen liquidated damages in
an amount equal to the amount of Mr. Allen's base salary for the remainder of
the initial two year employment term. In addition, if the Company terminates
Mr. Allen's employment without Cause, IgX must provide him with at least
60 days' prior written notice. If Mr. Allen's employment is terminated due to
his death and/or permanent disability, the Company must pay to Mr. Allen's
executor or representative an amount equal to Mr. Allen's base salary accrued
through the date of termination, plus a pro rata share of any annual bonus to
which Mr. Allen would otherwise be entitled for the year in which death or
permanent disability occurs. The agreement also contains a provision prohibiting
Mr. Allen from competing without written release with IgX during his employment
with the Company.
 
     Craig R. Rennie was employed by IgX Limited under an employment agreement
that commenced April 1, 1997 and would expire March 31, 1999 (the "Rennie
Employment Agreement"). Under the Rennie Employment
 
                                       49
Agreement, Mr. Rennie would receive an annual base salary of $230,301
(pounds 140,000), a cash incentive bonus (up to fifty percent of base salary for
each twelve-month period), and benefits generally offered to Limited's
employees. In addition, pursuant to the Rennie Employment Agreement, Mr. Rennie
was issued options to purchase 200,000 shares of Limited's Common Stock at an
exercise price of $5.00 per share. These options were issued under the Limited's
1996 Stock Option Plan and are exercisable at the rate of 25% per year over a
four-year period, commencing April 1, 1997.
 
     The Rennie Employment Agreement provides that the employment of Mr. Rennie
may be terminated by Limited with or without "Cause". "Cause" is defined as
(i) Mr. Rennie's conviction of a felony; (ii) any neglect or breach of duty by
Mr. Rennie, or any failure by Mr. Rennie to perform to the reasonable
satisfaction of the Board, such duties as may be delegated to Mr. Rennie from
time to time; (iii) Mr. Rennie otherwise materially breaches any provision of
the Rennie Employment Agreement; or (iv) a determination by a majority of the
Board acting in good faith, that Mr. Rennie has engaged in conduct not
appropriate of an employee. If Mr. Rennie's employment is terminated without
Cause and if he executes a written release, the Company must pay Mr. Rennie
liquidated damages in an amount equal to the amount of Mr. Rennie's base salary
for the remainder of the initial two year employment term. In addition, if
Limited terminates Mr. Rennie's employment without Cause, Limited must provide
him with at least one year's prior written notice after the initial employment
term of two years has occurred. If Mr. Rennie's employment is terminated due to
his death and/or permanent disability, the Company must pay to Mr. Rennie's
executor or representative an amount equal to Mr. Rennie's base salary accrued
through the date of termination, plus a pro rata share of any annual bonus to
which Mr. Rennie would otherwise be entitled for the year in which death or
permanent disability occurs. The Rennie Employment Agreement also contains a
provision prohibiting Mr. Rennie from competing with Limited during the period
of the Rennie Employment Agreement.
 
     Due to an office closure, Mr. Rennie's employment with Limited ceased
effective May 12, 1998. According to a termination agreement between Limited and
Craig Rennie entered into in September 1998, Mr. Rennie received a termination
payment in the amount of approximately $141,142 (British pounds 85,800) and all
of Mr. Rennie's outstanding options were cancelled. The termination letter
requires Mr. Rennie to maintain as confidential, all information he acquired
through his employment with Limited. By its terms, the termination letter is a
full and final settlement of any claim which Mr. Rennie may have arising out of
his employment with Limited.
 
STOCK OPTION PLANS
 
     1993 Stock Option Plan.  The Company's initial Stock Option Plan was
adopted in 1993 and subsequently amended (as amended, the "1993 Stock Option
Plan"). The 1993 Stock Option Plan was designed to attract and retain key
employees of, consultants of, and directors to the Company and to enable them to
participate in the long-term growth of the Company. The 1993 Stock Option Plan
provided for the grant of stock options (incentive and nonstatutory). As of
September 25, 1998, options to purchase an aggregate of 825,857 shares of Common
Stock had been granted under the 1993 Stock Option Plan, of which options to
purchase 159,589 shares were exercisable as of such date. Options to purchase
360,000 shares had been exercised prior to that date. In September, 1998, in
light of the Board's adoption of the 1998 Stock Option Plan, the Compensation
Committee determined that no further grants would be made under the 1993 Stock
Option Plan.
 
     1998 Stock Option Plan.  The Company's 1998 Stock Option Plan was adopted
in September 1998 (the "1998 Stock Option Plan"). The 1998 Stock Option Plan is
designed to attract and retain key employees of, consultants of, and directors
to the Company and to enable them to participate in the long-term growth of the
Company. The 1998 Stock Option Plan provides for the grant of stock options
(incentive and nonstatutory) for the purchase of up to an aggregate of 600,000
shares of Common Stock, subject to adjustment for stock-splits and similar
capital changes. Awards under the 1998 Stock Option Plan can be granted to
officers, employees, non-employee directors, consultants and other individuals
as determined by the committee of the Board of Directors which administers the
1998 Stock Option Plan, each of whose members is a "non-employee director"
within the meaning of Rule 16b-3 under the Securities Act. The Compensation
Committee of the Board of Directors administers the 1998 Stock Option Plan. The
Compensation Committee selects the participants and establishes the terms and
conditions of each option granted under the 1998 Stock Option Plan, including
the exercise price, the number of shares subject to options and the time at
which such options become exercisable. The exercise price of all "incentive
stock options" within the meaning of Section 422 of the Code granted under the
Stock Option Plan must be at least equal to 100% of the fair market value of the
shares underlying the option on the  

                                       50
date of grant and the exercise price of any nonstatutory option must be at least
85% of the fair market value of the shares underlying the option on the date of
grant. The term of any incentive stock option granted under the 1998 Stock
Option Plan may not exceed ten years. As of September 28, 1998, no options to
purchase shares of Common Stock had been granted under the 1998 Stock Option
Plan.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     Prior to the establishment of the Compensation Committee in September 1998,
the Board of Directors of the Company was responsible for determining salaries,
incentives and other forms of compensation for directors, officers and other
employees of the Company. See "Management--Stock Option Plans." Albert J. Henry
and Carroll W. Allen, the Chairman of the Board and Chief Executive Officer of
the Company and the Senior Vice President, Business Development and Marketing,
respectively, served as Board members during 1997 and participated in
deliberations of the Board concerning executive officer compensation.
 
                              CERTAIN TRANSACTIONS
 
     IgX Corp. (the "Company") was organized by Albert J. Henry, Chairman and
Chief Executive Officer of the Company, in February 1992 to conduct research and
development of drug candidates for the treatment of various infections.
 
     To fund the Company's operations, Henry Venture II Limited ("Henry
Venture"), a venture capital fund of which Mr. Henry is the Chairman and Chief
Executive Officer, purchased 350,030 shares of Common Stock for an aggregate
purchase price of approximately $350 (or $0.001 per share) in July 1992. In
August 1992 Henry Venture and another principal shareholder of the Company, IX
Limited, purchased 350,000 and 20,000 shares, respectively, of Series A
Preferred Stock for an aggregate purchase price of $370,000 (or $1.00 per
share). During September 1993, the Board of Directors of the Company effected a
10-for-1 stock split of the Series A Preferred Stock. From the period September
1992 through July 1996, the Company and IgX Limited obtained unsecured loans
from Henry Venture an existing stockholder, totalling $4,023,000, which bore
interest at 9% per annum, in the form of promissory notes (the "Original
Notes"). During August 1996, Henry Venture was issued 2,086,096 shares of Series
B mandatory redeemable convertible preferred stock (the "Series B Redeemable")
and 2,086,096 shares of Series C mandatory redeemable convertible preferred
stock (the "Series C Redeemable") of IgX Limited in exchange for the
cancellation of the Original Notes along with accrued and unpaid interest
thereupon of $149,192. Further, in August 1996, in consideration of the
cancellation of Series B Redeemable and Series C Redeemable, the Company issued
one additional share of Series A Preferred of IgX Limited to Henry Venture.
 
     In September 1994, IX Limited exercised options to purchase 360,000 shares
of Common Stock at $.01 per share under a stock option granted in 1993.
 
     In September 1995, the Company consummated a reorganization, under which
the Company became a wholly owned subsidiary of a newly organized corporation,
IgX Limited, formed under the laws of the Republic of Ireland. The
reorganization was effected to attempt to take advantage of certain Irish tax
benefits and government grants relating to IgX Limited's pilot production
facility in Ireland. In connection with this reorganization, all of the
outstanding capital stock (and securities convertible or exercisable into such
capital stock) of the Company was exchanged for shares of IgX Limited on a share
for share basis.
 
     In addition, from November 1996 to December 1997, Henry Venture loaned IgX
Limited an aggregate principal amount of $5,328,546 with interest accrued
thereon at 9% per annum (the "1996/1997 Henry Venture Notes"). The first
promissory note in the amount of $3,544,312 at December 31, 1997, which includes
$544,312 of accrued and unpaid interest through December 31, 1997, bears
interest at a rate of 9% per annum and is payable in full on December 31, 2001.
The second promissory note issued was in the amount of $328,546, representing
the remaining balance, also bears interest at 9% per annum, and is payable in
full on demand.
 
     In December 1997, as a condition to another venture capital financing, a
further reorganization was effected by which IgX Limited became the wholly owned
subsidiary of the Company, again with all of the outstanding capital stock (and
securities convertible or exercisable into such capital stock) of IgX Limited
being exchanged for shares of the Company on a share for share basis and with
the Company assuming all outstanding indebtedness due to Henry Venture from IgX
Limited.
 
     Further, in December 1997, the Company sold an aggregate of 748,582 shares
of Series B Preferred Stock for $4,799,982 (or $6.4121 per share), to six
investors, including Henry Venture and NEGF II, L.P., principal  
 
                                       51
stockholders of the Company, which purchased 311,910 and 155,955 shares,
respectively. To effect payment for its shares of Series B Preferred Stock,
Henry Venture exchanged indebtedness of approximately $1,999,998 under the
1996/1997 Henry Venture Notes, and concurrently restructured the remaining
indebtedness into two promissory notes: one in the principal amount of
$3,544,311 (including interest) due December 31, 2001 with interest accruing
from the date thereof at 9% per annum, and the other note in the principal
amount of $328,548 payable on demand, together with interest accruing thereon at
9% per annum.
 
     In February 1998, the Company sold an additional 155,955 shares of 
Series B Preferred Stock for $999,999 to NEGF II, L.P., a principal stockholder
of the Company.
 
     In May 1998, NEGF II, L.P. loaned the Company the principal amount of
$1,000,000, due May 6, 2008, with interest accruing thereon at 9% per annum. The
indebtedness is subject to prepayment upon the occurrence of certain conditions,
including the consummation of this Offering. In connection with this financing,
the Company issued NEGF II, L.P. warrants to purchase 370,000 shares of Common
Stock of the Company at an exercise price of $0.01 per share. The warrant was
exercised on September 25, 1998.
 
     See "Management--Stock Option Plans" for options granted to executive
officers and directors.
 
     On September 25, 1998, Henry Venture converted the 1996/1997 Henry Venture
Notes (aggregating $4,092,815 of principal and accrued interest) into
584,688 shares of Common Stock at $7.00 per share. Concurrently NEGF II, L.P.
converted the $1,000,000 promissory note issued to it by the Company in May 1998
(aggregating $1,035,014 of principal and accrued interest) into 147,859 shares
of Common Stock also at $7.00 per share.
 
                                       52
PRINCIPAL STOCKHOLDERS
 
     The following table sets forth as of September 28, 1998, giving pro forma
effect to the conversion of all outstanding preferred stock into 4,854,066
shares of Common Stock to be effective upon the closing of this Offering,
information with respect to the beneficial ownership of the Common Stock before
this Offering after giving effect to the conversion of Preferred Stock and as
adjusted to reflect the sale of the Common Stock offered hereby by (i) each
person known by the Company to own beneficially five percent or more of the
outstanding Common Stock, (ii) each director of the Company, (iii) each person
named in the Summary Compensation Table under "Management--Executive
Compensation," and (iv) all executive officers and directors as a group,
together with their respective percentage ownership of such shares:
NUMBER OF SHARES            PERCENT BENEFICIALLY OWNED
                                                             BENEFICIALLY      ------------------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER                           OWNED(1)         BEFORE OFFERING        AFTER OFFERING
--------------------------------------------------------   ----------------    -----------------    ---------------------
Henry Venture II Limited ...............................       4,746,629              71.2%                  52.9%
  100 Market Street
  Douglas, IM99 1TT
  Isle of Man

NEGF II, L.P. ..........................................         829,769              11.8%                   8.9%
  One Boston Place
  Suite 2100
  Boston, MA 02108

IX Limited .............................................         642,684               9.5%                   7.1%
  Les Nicolles House
  Les Nicolles
  St. Martin, Guernsey
  Channel Islands GY4 6UQ

Baruch Blumberg, Ph.D...................................              --                --                     --

Raymond A. Dwek, Ph.D...................................              --                --                     --

Donald H. Picker, Ph.D..................................              --                --                     --

Albert J. Henry(2)......................................              --                --                     --

Edwin Snape, Ph.D.(3)...................................              --                --                     --

Randolph C. Steer, M.D., Ph.D...........................          37,500                 *                      *

Robert Renfroe..........................................          41,848                 *                      *

Carroll "Bo" Allen......................................              --                --                     --

Craig S. Rennie (4).....................................              --                --                     --

All executive officers and directors as as a group
  (12 persons)..........................................          79,348               1.2%                     *
------------------
* less than 1%
 
(1) A person is deemed to be the beneficial owner of Common Stock that can be
    acquired within 60 days from September 28, 1998 upon the exercise of
    options, and that person's options are assumed to have been exercised (and
    the underlying shares of Common Stock outstanding) in determining such
    person's percentage ownership. Accordingly, the following shares issuable
    upon exercise of options have been included in the shares beneficially owned
    by the following persons: IX Limited--82,684 shares; Randolph Steer--37,500
    shares; and Robert Renfroe--41,848 shares.
 
(2) Does not include shares held by Henry Venture II Limited, for which
    Mr. Henry serves as Chairman and Chief Executive Officer. Mr. Henry
    disclaims beneficial ownership of such shares.
 
(3) Does not include shares held by NEGF II, L.P. Dr. Snape is a partner of New
    England Partners II, L.P., which is the general partner of NEGF II, L.P.
    Dr. Snape disclaims beneficial ownership of such shares.
 
(4) Due to an office closure, Mr. Rennie's employment ceased on May 12, 1998.
 
                                       53
DESCRIPTION OF CAPITAL STOCK
 
     After giving pro forma effect to the conversion of the outstanding
preferred stock into 4,854,066 shares of Common Stock upon consummation of this
Offering, the authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $0.001 par value per share, of which 6,666,643 shares
were issued and outstanding and held by nine holders of record as of September
28, 1998 and 5,000,000 shares of Preferred Stock, $0.001 par value per share,
none of which were outstanding as of such date. Immediately following the
closing of this Offering, the Company will file an amendment to the Company's
Restated Certificate eliminating the currently authorized Series A and Series B
Preferred Stock.
 
     The following summary of certain provisions of the Common Stock and
Preferred Stock does not purport to be complete and is subject to, and qualified
in its entirety by, (i) the provisions of the Company's Restated Certificate and
By-laws (each as included as exhibits to the Registration Statement) and
(ii) the provisions of applicable law.
 
COMMON STOCK
 
     Holders of Common Stock are entitled to one vote per share on matters to be
voted upon by the stockholders. There are no cumulative voting rights. Holders
of Common Stock are entitled to receive dividends if, as and when declared by
the Board of Directors out of funds legally available therefor. See "Dividend
Policy." Upon the liquidation, dissolution or winding up of the Company, holders
of Common Stock are entitled to share ratably in the assets of the Company
available for distribution to its stockholders, subject to the preferential
rights of any then outstanding shares of Preferred Stock. No shares of Preferred
Stock will be outstanding immediately following the closing of this Offering.
All the outstanding shares of Common Stock are, and the Common Stock to be
outstanding upon completion of this Offering will be, fully paid, validly
issued, and nonassessable.
 
PREFERRED STOCK
 
     The Company's Board of Directors will have the authority to issue up to
5,000,000 shares of Preferred Stock in one or more series and to fix the
relative rights, preferences, privileges, qualifications, limitations and
restrictions thereof, including dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption, redemption prices, liquidation
preferences, sinking fund terms and the number of shares constituting any series
or the designation of such series, without further vote or action by the
stockholders. The Company believes that the power to issue Preferred Stock will
provide flexibility in connection with possible corporate transactions. The
issuance of Preferred Stock could adversely affect the voting power of the
holders of Common Stock and restrict their rights to receive payment upon
liquidation and could have the effect of delaying, deferring or preventing a
change-in-control of the Company. See "Description of Capital
Stock--Anti-Takeover Measures." The Company has no present plans to issue any
shares of Preferred Stock.
 
ANTI-TAKEOVER MEASURES
 
     In addition to the Board of Directors' ability to issue shares of Preferred
Stock, the Restated Certificate and the By-laws contain several other provisions
that are commonly considered to discourage unsolicited takeover bids. The
Restated Certificate includes a provision classifying the Board of Directors
into three classes with staggered three-year terms. A Director may be removed
only for cause by the holders of a majority of the outstanding shares of capital
stock entitled to vote, voting together as a single class. For purposes of the
Restated Certificate, "cause" means an act or acts by an individual involving
the commission of a felony, willful misconduct, fraud, embezzlement, dishonesty,
breach of fiduciary duty or violation or breach of a written employment or
consulting agreement or of the Company's policy as described in a Company manual
or handbook, any of which acts cause the Company material damage. Any amendment
to the Restated Certificate relating to Board composition requires the
affirmative vote of the holders of at least two-thirds (2/3) of the combined
voting power of the then outstanding shares of stock entitled to vote generally
in the election of directors, voting together as a single class. The By-laws
include a provision prohibiting stockholder action by written consent except as
otherwise provided by law. Under the Restated Certificate and By-laws, the Board
of Directors may enlarge the size of the Board and fill any vacancies on the
Board.
 
                                       54
Upon the consummation of the Offering, the Company will be subject to the
provisions of Section 203 of the Delaware General Corporation Law, a law
regulating corporate takeovers (the "Anti-Takeover Law"). In certain
circumstances, the Anti-Takeover Law prevents certain Delaware corporations,
including those whose securities are listed on the Nasdaq National Market, from
engaging in a "business combination" (which includes a merger or sale of more
than ten percent of the corporation's assets) with an "interested stockholder"
(a stockholder who owns 15% or more of the corporation's outstanding voting
stock) for three years following the date on which such stockholder became an
"interested stockholder" subject to certain exceptions, unless the transaction
is approved by the board of directors and authorized by the affirmative vote of
at least 66 2/3% of the outstanding voting stock of the corporation at the time
the transaction commenced (excluding shares held by the interested stockholder).
The statutory ban does not apply if, upon consummation of the transaction in
which any person becomes an interested stockholder, the interested stockholder
owns at least 85% of the outstanding voting stock of the corporation (excluding
shares held by persons who are both directors and officers or by certain
employee stock plans). A Delaware corporation subject to the Anti-Takeover Law
may "opt out" of the Anti-Takeover Law with an express provision either in its
certificate of incorporation or by-laws resulting from a stockholders' amendment
approved by at least a majority of the outstanding voting shares; such an
amendment is effective following expiration of twelve months from adoption. The
Company has not "opted out" of the Anti-Takeover Law.
 
     The foregoing provisions of the Restated Certificate and By-laws and
Delaware law could have the effect of discouraging others from attempting
hostile takeovers of the Company and, as a consequence, they may also inhibit
temporary fluctuations in the market price of the Common Stock that might result
from actual or rumored hostile takeover attempts. Such provisions may also have
the effect of preventing changes in the management of the Company. It is
possible that such provisions could make it more difficult to accomplish
transactions which stockholders may otherwise deem to be in their best
interests.
 
TRANSFER AGENT
 
     The transfer agent and registrar for the Common Stock is Continental Stock
Transfer and Trust Company, 26 Broadway, New York, New York 10004.
 
                        SHARES ELIGIBLE FOR FUTURE SALE
 
     Upon completion of this Offering, the Company will have 8,966,643 shares of
Common Stock outstanding. Of these shares, the 2,300,000 shares sold in this
Offering will be freely transferable, without restriction or further
registration under the Securities Act, except for shares purchased by
"affiliates" of the Company as that term is defined in Rule 144 under the
Securities Act.
 
     The remaining 6,666,643 outstanding shares of Common Stock are owned by
existing stockholders and are deemed "restricted securities" under Rule 144, in
that such shares were issued and sold by the Company in private transactions not
involving a public offering. These may not be resold, except pursuant to an
effective registration statement or an applicable exemption from registration.
All of the stockholders of the Company have agreed to enter into nine-month
lock-up agreements described below. At the end of such nine-month period, all
such shares of Common Stock will be eligible for sale under Rule 144.
 
     In general, under Rule 144, as currently in effect, a person (or persons
whose shares are aggregated), including an affiliate of the Company, who has
beneficially owned restricted securities for at least one year from the later of
the date such restricted securities were acquired from the Company and (if
applicable) the date they were acquired from an affiliate, is entitled to sell,
within any three-month period, a number of shares that does not exceed the
greater of 1% of the then outstanding shares of Common Stock or the average
weekly trading volume in the public market during the four calendar weeks
preceding such sale. Sales under Rule 144 are also subject to certain
requirements as to the manner and notice of such sales and the availability of
current public information concerning the Company. Affiliates may sell shares
not constituting restricted securities in accordance with the foregoing volume
limitations and other requirements but without regard to the one-year holding
period.
 
                                       55
All of the Company's stockholders have agreed that they will not, without
the prior written consent of the Representatives, offer to sell, sell, transfer,
assign, hypothecate, pledge or otherwise dispose of any securities issued by the
Company, including without limitation any options, warrants or other securities
convertible into or exercisable or exchangeable for shares of Common Stock
during the nine-month period following the effective date of the Registration
Statement. In addition, all of the Company's shareholders have waived their
right to require the Company to file with the Commission a registration
statement under the Securities Act to register any of the foregoing securities
for one year from the effective date of the Registration Statement.
 
     The Company plans to file a registration statement on Form S-8 under the
Securities Act to register approximately 1,425,857 shares of Common Stock
issuable under the Stock Option Plans, nine months after the date of this
Prospectus. Upon registration, such shares will be eligible for immediate resale
upon exercise, subject, in the case of affiliates, to the volume, manner of sale
and notice requirements of Rule 144.
 
     No prediction can be made as to the effect, if any, that market sales of
additional shares or the availability of such additional shares for sale will
have on the market price of the Common Stock. Nevertheless, sales of substantial
amounts of Common Stock in the public market, or the perception that such sales
may occur, could have an adverse impact on the market price for the Common Stock
or impair the Company's ability to raise additional capital through an offering
of its equity securities. See "Risk Factors--Shares Eligible for Future Sale;
Registration Rights" and "--Immediate and Substantial Dilution."
 
REGISTRATION RIGHTS
 
     The holders of all shares of Common Stock (the "Registrable Shares") are
entitled to certain rights with respect to registration of the Registrable
Shares under the Securities Act. If the Company proposes to register any of its
securities under the Securities Act, either for its own account or for the
account of other security holders, such holders are entitled to notice of such
registration and are entitled to exercise their "piggyback rights" to include
such Registrable Shares in the registration. The rights are subject to certain
conditions and limitations, among them, the right of the underwriters of a
registered offering to limit the number of shares included in such registration.
Commencing six months after the date of this Prospectus, holders of Registrable
Shares benefiting from these rights may also exercise "demand rights" and
require the Company to file at its expense a registration statement under the
Securities Act with respect to their shares of Common Stock and, subject to
certain conditions and limitations, the Company is required to use its best
efforts to effect such registration. Furthermore, such holders may, subject to
certain conditions and limitations, require the Company to file additional
registration statements on Form S-3 with respect to such Registrable Shares. The
holders of Registrable Shares have waived their right to exercise piggyback
rights for a period of nine months from the date of this Prospectus and demand
rights for a period of twelve months from the date of this Prospectus.
 
                                       56
UNDERWRITING
 
     The Underwriters named below (the "Underwriters"), for whom Josephthal &
Co. Inc. is acting as the Representative, have severally agreed, subject to the
terms and conditions of the Underwriting Agreement (the "Underwriting
Agreement"), to purchase from the Company and the Company has agreed to sell to
the Underwriters on a firm commitment basis the respective number of shares of
Common Stock set forth below opposite their names:
UNDERWRITER                                                                                        NUMBER OF SHARES
------------------------------------------------------------------------------------------------   ----------------
Josephthal & Co. Inc............................................................................
 
Total...........................................................................................       2,300,000
The Underwriters are committed to purchase all of the shares of Common
Stock offered hereby if any of such shares are purchased. The Underwriting
Agreement provides that the obligations of the several Underwriters are subject
to the conditions precedent specified therein.
 
     The Company has been advised by the Representative that the Underwriters
initially propose to offer the shares of Common Stock to the public at the
initial public offering price set forth on the cover page of this Prospectus and
to certain dealers at such price less concessions of not in excess of $      per
share of Common Stock. Such dealers may re-allow a concession not in excess of
$      per share of Common Stock to other dealers. After the commencement of the
Offering, the public offering price, concession and reallowance may be changed.
 
     The Representative has advised the Company that it does not anticipate
sales to discretionary accounts by the Underwriters to exceed five percent of
the total number of shares of Common Stock offered hereby.
 
     The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Underwriters may be required to make in connection with this
Offering. The Company has also agreed to pay to the Representative an expense
allowance on a non-accountable basis equal to one percent (1%) of the gross
proceeds of this Offering and a financial advisor's fee equal to one percent
(1%) of the gross proceeds of this Offering, none of which has been paid to
date.
 
     The Underwriters have been granted an option by the Company, exercisable
within 45 days of the date of this Prospectus, to purchase up to an additional
345,000 shares of Common Stock at the initial public offering price per share of
Common Stock offered hereby, less underwriting discounts, the non-accountable
expense allowance and the financial advisor's fee. Such option may be exercised
only for the purpose of covering over-allotments, if any, incurred in the sale
of the shares offered hereby. To the extent such option is exercised, in whole
or in part, each Underwriter will have a firm commitment, subject to certain
conditions, to purchase the number of the additional shares of Common Stock
proportionate to its initial commitment.
 
     In connection with this Offering, the Company has agreed to sell to the
Representative, for nominal consideration, the Representative's Warrants to
purchase from the Company 230,000 shares of Common Stock. The Representative's
Warrants are initially exercisable for shares of Common Stock at a price per
share equal to 120% of the initial public offering price per share of Common
Stock for a period of four (4) years commencing one (1) year from the date of
this Prospectus and are restricted from sale, transfer, assignment, or
hypothecation for a period of twelve (12) months from the date hereof, except to
officers of the Representative. The
 
                                       57
Representative's Warrants also provide for adjustment in the number of shares of
Common Stock issuable upon the exercise thereof as a result of certain
subdivisions or combinations of the Common Stock. The Representative's Warrants
grant to the holders thereof certain rights of registration for the securities
issuable upon exercise of the Representative's Warrants. See "Description of
Capital Stock--Registration Rights."
 
     The foregoing is a summary of the principal terms of the agreements
described above and does not purport to be complete. Reference is made to a copy
of each such agreement which are filed as exhibits to the Registration
Statement. See "Additional Information."
 
     The Company has also agreed, for a period of five years from the date of
this Prospectus, if so requested by the Representative, to nominate and use its
best efforts to elect a designee of the Representative as a director of the
Company or, at the Representative's option, as an attendee at the meetings of
the Company's Board of Directors and such designee will be reimbursed his
expenses for attendance at meetings of the Board of Directors. The
Representative has not yet exercised its right to designate such a person.
 
     All of the Company's officers, directors and existing stockholders have
agreed not to, directly or indirectly, offer to sell, sell, transfer, assign,
hypothecate, pledge or otherwise dispose of any securities of the Company owned
by them for a period of nine months following the date of this Prospectus,
without the prior written consent of the Representative. An appropriate legend
shall be marked on the face of the certificates representing all of such
securities.
 
     Prior to this Offering, there has been no public market for the Common
Stock. Consequently, the initial public offering price of the Common Stock will
be determined by negotiations between the Company and the Representative. Among
the factors to be considered in determining the offering price will be, in
addition to prevailing market conditions, the history of and prospects for the
industry in which the Company competes, an assessment of the Company's
management, the prospects of the Company, its capital structure and such other
factors that are deemed relevant. The initial offering price does not
necessarily bear any relationship to the assets, net worth or other established
criteria of value.
 
     In connection with this Offering, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Such transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M, pursuant to which such persons may bid for or
purchase Common Stock for the purpose of stabilizing its market price. The
Underwriters also may create a short position for the account of the
Underwriters by selling more Common Stock in connection with the Offering than
they are committed to purchase from the Company, and in such case may purchase
Common Stock in the open market following completion of the Offering to cover
all or a portion of such short position. The Underwriters may also cover all or
a portion of such short position, up to 345,000 shares of Common Stock, by
exercising the Over-Allotment Option. In addition, the Representative may impose
"penalty bids" under contractual arrangements with the Underwriters, whereby it
may reclaim from an Underwriter (or dealer participating in the Offering) for
the account of other Underwriters, the selling concession with respect to Common
Stock that is distributed in the Offering but subsequently purchased for the
account of the Underwriters in the open market. Any of the transactions
described in this paragraph may result in the maintenance of the price of the
Common Stock at a level above that which might otherwise prevail in the open
market. None of the transactions described in this paragraph is required, and,
if they are undertaken, they may be discontinued at any time.
 
                                 LEGAL MATTERS
 
     The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Epstein Becker & Green, P.C., New York, New York.
Certain legal matters will be passed upon for the Underwriters by Sonnenschein
Nath & Rosenthal, New York, New York.
 
                                       58
EXPERTS
 
     The financial statements as of December 31, 1996 and 1997 and for each of
the three years in the period ended December 31, 1997 included in this
Prospectus have been so included in reliance on the report (which contains an
explanatory paragraph relating to the Company's ability to continue as a going
concern as described in Note 2 to the financial statements) of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
 
                             ADDITIONAL INFORMATION
 
     The Company has filed with the Commission a Registration Statement on Form
S-1 (the "Registration Statement") under the Securities Act, with respect to the
shares of Common Stock offered hereby. This Prospectus does not contain all of
the information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and the
Common Stock offered hereby, reference is made to the Registration Statement and
the exhibits and schedules thereto. All statements made in this Prospectus
regarding the contents of any contract, agreement or other document filed as an
exhibit to the Registration Statement are qualified by reference to the copy of
such document filed as an exhibit to the Registration Statement. A copy of the
Registration Statement may be inspected without charge at the offices of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or
any part thereof may be obtained from the Commission upon the payment of certain
fees prescribed by the Commission. Such reports and other information can also
be reviewed through the Commission's Web site (http://www.sec.gov).
 
     Statements made in this Prospectus as to the contents of any contract,
agreement or other document referred to are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference.
 
     The Company intends to distribute to its stockholders annual reports
containing financial statements audited by its independent auditors and will
make available copies of quarterly reports for the first three quarters of each
fiscal year containing unaudited financial information.
 
                                       59
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)
                               TABLE OF CONTENTS
PAGE
                                                                                                      ----------
Report of Independent Accountants..................................................................      F-2
Consolidated Balance Sheet.........................................................................      F-3
Consolidated Statement of Operations...............................................................      F-4
Consolidated Statement of Capital Deficiency.......................................................      F-5
Consolidated Statement.............................................................................      F-6
Notes to Consolidated Financial Statements.........................................................   F-7 - F-17
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders of
IgX Corp.
 
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of capital deficiency and of cash flows
present fairly, in all material respects, the financial position of IgX Corp.
and subsidiary (the "Company") (a development stage company) at December 31,
1996 and 1997, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1997 and for the period from
inception (February 11, 1992) through December 31, 1997, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
 
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is a development stage enterprise and has
suffered recurring losses and net cash outflows from operations since inception
that raise substantial doubt about its ability to continue as a going concern.
As such, the Company is dependent upon capital infusions from existing and/or
new investors to fund operations. Management's plans with regard to these
matters are also described in Note 2. The accompanying financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
 
                                            PRICEWATERHOUSECOOPERS LLP
 
Stamford, Connecticut
September 14, 1998
 
                                      F-2
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
PRO FORMA
                                                             DECEMBER 31,                             JUNE 30,
                                                      --------------------------      JUNE 30,          1998
                                                         1996           1997            1998         (NOTE 12)
                                                      ----------    ------------    ------------    ------------
                                                                                     (UNAUDITED)     (UNAUDITED)
ASSETS
Current assets:
  Cash.............................................   $4,256,990    $  1,973,025    $  2,543,188    $  2,543,188
  Prepaid and other current assets.................      168,888         185,704          94,168          94,168
                                                      ----------    ------------    ------------    ------------
Total current assets...............................    4,425,878       2,158,729       2,637,356       2,637,356
  Property and equipment, net (Note 4).............    1,464,705       1,149,028       1,016,423       1,016,423
                                                      ----------    ------------    ------------    ------------
Total assets.......................................   $5,890,583    $  3,307,757    $  3,653,779    $  3,653,779
                                                      ----------    ------------    ------------    ------------
                                                      ----------    ------------    ------------    ------------
        LIABILITIES AND CAPITAL DEFICIENCY
Current liabilities:
  Notes payable to stockholders (Note 6)...........   $  225,000    $    328,546    $    340,866              --
  Accounts payable and accrued expenses............      884,443       1,178,111       1,011,970    $  1,011,970
  Income taxes payable (Note 10)...................        5,000          24,388             586             586
                                                      ----------    ------------    ------------    ------------
Total current liabilities..........................    1,114,443       1,531,045       1,353,422       1,012,556
Long term liabilities
  Notes payable to stockholders (Note 6)...........    5,075,107       3,544,312       4,144,107              --
                                                      ----------    ------------    ------------    ------------
Total liabilities..................................    6,189,550       5,075,357       5,497,529       1,012,556
                                                      ----------    ------------    ------------    ------------
Commitments and contingencies (Note 11)............           --              --              --              --
Capital deficiency (Note 7):
  Series B preferred stock ($0.001 par value;
     1,874,999 shares authorized; none issued and
     outstanding in 1996, 748,582 shares and
     1,154,065 shares issued and outstanding in
     1997 and 1998, respectively, pro forma none
     issued and outstanding) (liquidation
     preference of $4,799,982 and $7,399,980 at
     December 31, 1997 and June 30, 1998,
     respectively).................................           --             749           1,154              --
  Series A preferred stock ($0.001 par value;
     3,700,001 shares authorized, issued and
     outstanding, pro forma none issued and
     outstanding) (liquidation preference of
     $5,778,009, $6,383,042 and $6,708,917 at
     December 31, 1996 and 1997 and June 30, 1998,
     respectively).................................        3,700           3,700           3,700              --
  Common stock ($0.001 par value; 15,000,000 shares
     authorized; 710,030 shares issued and
     outstanding, pro forma 6,283,377 shares issued
     and outstanding)..............................          710             710             710           6,283
  Additional paid-in capital.......................    4,913,635       9,712,871      12,925,779      19,074,919
  Preferred stock subscription receivable..........           --        (350,000)             --              --
  Cumulative translation adjustment................      (37,656)       (401,339)       (401,045)       (401,045)
  Deficit accumulated during development stage.....   (5,179,356)    (10,734,291)    (14,374,048)    (16,038,934)
                                                      ----------    ------------    ------------    ------------
Total (capital deficiency) stockholders' equity....     (298,967)     (1,767,600)     (1,843,750)      2,641,223
                                                      ----------    ------------    ------------    ------------
Total liabilities and (capital deficiency)
  stockholders' equity.............................   $5,890,583    $  3,307,757    $  3,653,779    $  3,653,779
                                                      ----------    ------------    ------------    ------------
                                                      ----------    ------------    ------------    ------------
The accompanying notes are an integral part of these financial statements.

                                      F-3
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF OPERATIONS
FEBRUARY 11, 
                                                                                     1992                SIX MONTHS ENDED
                                              YEAR ENDED DECEMBER 31,            (INCEPTION) TO              JUNE 30,
                                     -----------------------------------------    DECEMBER  31,    --------------------------
                                        1995           1996           1997            1997            1997           1998
                                     -----------    -----------    -----------   --------------    -----------    -----------
                                                                                                   (UNAUDITED)    (UNAUDITED)
OPERATING EXPENSES:
  Research and development........   $   475,282    $ 1,136,203    $ 3,426,235    $  5,799,780    $ 1,873,822    $ 1,577,384
  General and administrative......       717,937      1,119,485      1,732,788       4,095,245        520,878      1,911,009
                                     -----------    -----------    -----------    ------------    -----------    -----------
TOTAL OPERATING EXPENSES..........     1,193,219      2,255,688      5,159,023       9,895,025      2,394,700      3,488,393
                                     -----------    -----------    -----------    ------------    -----------    -----------
  Interest income.................         4,124         24,222         97,498         131,652         54,804         15,651
  Interest expense................      (147,769)      (230,976)      (469,957)       (942,465)      (219,558)      (162,115)
                                     -----------    -----------    -----------    ------------    -----------    -----------
NET INTEREST EXPENSE..............      (143,645)      (206,754)      (372,459)       (810,813)      (164,754)      (146,464)
                                     -----------    -----------    -----------    ------------    -----------    -----------
NET LOSS BEFORE INCOME TAXES......    (1,336,864)    (2,462,442)    (5,531,482)    (10,705,838)    (2,559,454)    (3,634,857)
Income taxes......................            --          5,000         23,453          28,453         17,000          4,900
                                     -----------    -----------    -----------    ------------    -----------    -----------
NET LOSS..........................   $(1,336,864)   $(2,467,442)   $(5,554,935)   $(10,734,291)   $(2,576,454)   $(3,639,757)
                                     -----------    -----------    -----------    ------------    -----------    -----------
                                     -----------    -----------    -----------    ------------    -----------    -----------
Basic and diluted loss per share
  (Note 9)........................   $     (1.88)   $     (3.48)   $     (7.82)                   $     (3.63)   $     (5.13)
                                     -----------    -----------    -----------                    -----------    -----------
                                     -----------    -----------    -----------                    -----------    -----------
Weighted average shares
  outstanding used for basic and
  diluted loss per share..........       710,030        710,030        710,030                        710,030        710,030
                                     -----------    -----------    -----------                    -----------    -----------
                                     -----------    -----------    -----------                    -----------    -----------
FEBRUARY 11,
                                        1992
                                     (INCEPTION)
                                         TO
                                    -------------
                                     (UNAUDITED)
OPERATING EXPENSES:
  Research and development........  $  7,377,164
  General and administrative......     6,006,254
                                    ------------
TOTAL OPERATING EXPENSES..........    13,383,418
                                    ------------
  Interest income.................       147,303
  Interest expense................    (1,104,580)
                                    ------------
NET INTEREST EXPENSE..............      (957,277)
                                    ------------
NET LOSS BEFORE INCOME TAXES......   (14,340,695)
Income taxes......................        33,353
                                    ------------
NET LOSS..........................  $(14,374,048)
                                    ------------
                                    ------------
Basic and diluted loss per share
  (Note 9)........................
Weighted average shares
  outstanding used for basic and
  diluted loss per share..........
The accompanying notes are an integral part of these financial statements.

                                      F-4
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)
                  CONSOLIDATED STATEMENT OF CAPITAL DEFICIENCY
MANDATORY REDEEMABLE CONVERTIBLE
                                 PREFERRED STOCK (SEE NOTES 6 AND 7)
                            ----------------------------------------------
                                                                             SERIES B CONVERTIBLE    SERIES A CONVERTIBLE
                                   SERIES B                SERIES C            PREFERRED STOCK         PREFERRED STOCK
                            ----------------------  ----------------------  ----------------------  ----------------------
                              SHARES    PAR VALUE     SHARES    PAR VALUE     SHARES    PAR VALUE     SHARES    PAR VALUE
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Balance at January 1,
 1995......................         --          --          --          --          --          --   3,700,000      $3,700
Net loss...................                                                         --          --          --          --
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Balance at December 31,
 1995......................         --          --          --          --          --          --   3,700,000       3,700
Issuance of mandatory
 redeemable Preferred
 Stock.....................  2,086,096  $2,086,096   2,086,096  $2,086,096          --          --          --          --
Redemption of mandatory
 redeemable preferred stock
 in exchange for Series A
 Preferred Stock........... (2,086,096) (2,086,096) (2,086,096) (2,086,096)         --          --           1          --
Non-cash compensation based
 on fair value of stock
 options granted...........         --          --          --          --          --          --          --          --
Cumulative translation
 adjustment................                                                         --          --          --          --
Net loss...................                                                         --          --          --          --
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Balance at December 31,
 1996......................         --          --          --          --          --          --   3,700,001       3,700
Issuance of Series B
 Convertible Preferred
 Stock.....................         --          --          --          --     748,582        $749          --          --
Cumulative translation
 adjustment................         --          --          --          --          --          --          --          --
Net loss...................                                                         --          --          --          --
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Balance at December 31,
 1997......................         --          --          --          --     748,582         749   3,700,001       3,700
Issuance of Series B
 Convertible Preferred
 Stock.....................         --          --          --          --     405,483         405          --          --
Issuance of warrant with
 Promissory Note to NEGF
 II, L.P...................         --          --          --          --          --          --                      --
Non-cash compensation based
 on fair value of stock
 options granted...........         --          --          --          --          --          --                      --
Cumulative translation
 adjustment................         --          --          --          --          --          --          --          --
Net loss...................         --          --          --          --          --          --          --          --
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Balance at June 30, 1998
 (unaudited)...............         --          --          --          --   1,154,065      $1,154   3,700,001      $3,700
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
                            ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
DEFICIT
                                                                   PREFERRED                   ACCUMULATED
                                  COMMON STOCK       ADDITIONAL      STOCK         OTHER          DURING        TOTAL
                             ----------------------    PAID-IN    SUBSCRIPTION  COMPREHENSIVE  DEVELOPMENT     CAPITAL
                               SHARES    PAR VALUE     CAPITAL    RECEIVABLE    INCOME (LOSS)     STAGE      DEFICIENCY
                             ----------  ----------  -----------  ------------  -------------  ------------  -----------
Balance at January 1,
 1995......................     710,030        $710   $  369,543           --             --   $ (1,375,050) $(1,001,097)
Net loss...................          --          --           --           --             --     (1,336,864)  (1,336,864)
                             ----------  ----------  -----------   ----------    -----------   ------------  -----------
Balance at December 31,
 1995......................     710,030         710      369,543           --             --     (2,711,914)  (2,337,961)
Issuance of mandatory
 redeemable Preferred
 Stock.....................          --          --           --           --             --             --    4,172,192
Redemption of mandatory
 redeemable preferred stock
 in exchange for Series A
 Preferred Stock...........          --          --    4,172,192           --             --             --           --
Non-cash compensation based
 on fair value of stock
 options granted...........          --          --      371,900           --             --             --      371,900
Cumulative translation
 adjustment................          --          --           --           --      $ (37,656)            --      (37,656)
Net loss...................          --          --           --           --             --     (2,467,442)  (2,467,442)
                             ----------  ----------  -----------   ----------    -----------   ------------  -----------
Balance at December 31,
 1996......................     710,030         710    4,913,635           --        (37,656)    (5,179,356)    (298,967)
Issuance of Series B
 Convertible Preferred
 Stock.....................          --          --    4,799,236    $(350,000)            --             --    4,449,985
Cumulative translation
 adjustment................          --          --           --           --       (363,683)            --     (363,683)
Net loss...................          --          --           --           --             --     (5,554,935)  (5,554,935)
                             ----------  ----------  -----------   ----------    -----------   ------------  -----------
Balance at December 31,
 1997......................     710,030         710    9,712,871     (350,000)      (401,339)   (10,734,291)  (1,767,600)
Issuance of Series B
 Convertible Preferred
 Stock.....................          --          --    2,599,585      350,000             --             --    2,949,990
Issuance of warrant with
 Promissory Note to NEGF
 II, L.P...................          --          --      550,000           --             --             --      550,000
Non-cash compensation based
 on fair value of stock
 options granted...........          --          --       63,323           --             --             --       63,323
Cumulative translation
 adjustment................          --          --           --           --            294             --          294
Net loss...................          --          --           --           --             --     (3,639,757)  (3,639,757)
                             ----------  ----------  -----------   ----------    -----------   ------------  -----------
Balance at June 30, 1998
 (unaudited)...............     710,030        $710  $12,925,779     $     --      $(401,045)  $(14,374,048) $(1,843,750)
                             ----------  ----------  -----------   ----------    -----------   ------------  -----------
                             ----------  ----------  -----------   ----------    -----------   ------------  -----------
The accompanying notes are an integral part of these financial statements.
 
                                      F-5
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
FEBRUARY 11,         
                                                                                      1992             SIX MONTHS ENDED    
                                              YEAR ENDED DECEMBER 31,            (INCEPTION) TO           JUNE 30,
                                     -----------------------------------------    DECEMBER 31,    --------------------------
                                        1995           1996           1997            1997            1997           1998
                                     -----------    -----------    -----------   --------------    -----------    -----------
                                                                                                  (UNAUDITED)    (UNAUDITED)
Cash flows from operating
  activities:
  Net loss........................   $(1,336,864)   $(2,467,442)   $(5,554,935)   $(10,734,291)   $(2,576,454)   $(3,639,757)
  Adjustments to reconcile net
    loss to net cash used in
    operating activities:
    Depreciation..................        29,843         88,328        290,015         412,108         61,181        148,380
    Loss on disposal of property
      and equipment...............            --             --         17,890          17,890             --             --
    Accrued interest on notes
      payable to stockholders.....       147,769        113,824        341,272         693,502        218,433        162,115
    Non-cash compensation
      expense.....................            --        371,900             --         371,900             --         63,323
  Changes in assets and
    liabilities:
      Prepaid and other current
        assets....................         4,542       (147,458)       (40,213)       (191,591)        48,632         91,294
      Accounts payable and accrued
        expenses..................       289,297        663,985        423,701       1,407,673       (118,751)      (159,714)
      Income taxes payable........            --          4,445         21,314          25,759         (4,612)       (25,759)
                                     -----------    -----------    -----------    ------------    -----------    -----------
Net cash used in operating
  activities......................      (865,413)    (1,372,418)    (4,500,956)     (7,997,050)    (2,371,571)    (3,360,118)
                                     -----------    -----------    -----------    ------------    -----------    -----------
Cash flows from investing
  activities:
  Proceeds from disposal of
    property and equipment........            --             --         66,063          66,063             --             --
  Purchase of property and
    equipment.....................      (399,275)    (1,037,701)      (217,346)     (1,691,935)      (163,048)       (26,175)
                                     -----------    -----------    -----------    ------------    -----------    -----------
Net cash used in investing
  activities......................      (399,275)    (1,037,701)      (151,283)     (1,625,872)      (163,048)       (26,175)
                                     -----------    -----------    -----------    ------------    -----------    -----------
Cash flows from financing
  activities:
  Proceeds from issuance of notes
    payable to stockholders (see
    Note 6).......................     1,290,000      6,875,000        103,546       9,351,546             --      1,000,000
  Proceeds from issuance of
    preferred stock...............            --             --      2,449,987       2,719,990             --      2,599,996
  Collection of stock subscription
    receivable....................            --             --             --              --             --        350,000
  Exercise of stock options.......            --             --             --           3,600             --             --
                                     -----------    -----------    -----------    ------------    -----------    -----------
Net cash provided by financing
  activities......................     1,290,000      6,875,000      2,553,533      12,075,136             --      3,949,996
                                     -----------    -----------    -----------    ------------    -----------    -----------
Effect of exchange rates on
  cash............................            --       (293,930)      (185,259)       (479,189)      (148,601)         6,460
                                     -----------    -----------    -----------    ------------    -----------    -----------
Net increase (decrease) in cash...        25,312      4,170,951     (2,283,965)      1,973,025     (2,683,220)       570,163
Cash at beginning of period.......        60,727         86,039      4,256,990              --      4,256,990      1,973,025
                                     -----------    -----------    -----------    ------------    -----------    -----------
Cash at end of period.............   $    86,039    $ 4,256,990    $ 1,973,025    $  1,973,025    $ 1,573,770    $ 2,543,188
                                     -----------    -----------    -----------    ------------    -----------    -----------
                                     -----------    -----------    -----------    ------------    -----------    -----------
FEBRUARY 11,
                                        1992
                                    (INCEPTION)
                                         TO
                                    ------------
                                    (UNAUDITED)
Cash flows from operating
  activities:
  Net loss........................  $(14,374,048)
  Adjustments to reconcile net
    loss to net cash used in
    operating activities:
    Depreciation..................       560,488
    Loss on disposal of property
      and equipment...............        17,890
    Accrued interest on notes
      payable to stockholders.....       855,617
    Non-cash compensation
      expense.....................       435,223
  Changes in assets and
    liabilities:
      Prepaid and other current
        assets....................      (100,297)
      Accounts payable and accrued
        expenses..................     1,247,959
      Income taxes payable........            --
                                    ------------
Net cash used in operating
  activities......................   (11,357,168)
                                    ------------
Cash flows from investing
  activities:
  Proceeds from disposal of
    property and equipment........        66,063
  Purchase of property and
    equipment.....................    (1,718,110)
                                    ------------
Net cash used in investing
  activities......................    (1,652,047)
                                    ------------
Cash flows from financing
  activities:
  Proceeds from issuance of notes
    payable to stockholders (see
    Note 6).......................    10,351,546
  Proceeds from issuance of
    preferred stock...............     5,319,986
  Collection of stock subscription
    receivable....................       350,000
  Exercise of stock options.......         3,600
                                    ------------
Net cash provided by financing
  activities......................    16,025,132
                                    ------------
Effect of exchange rates on
  cash............................      (472,729)
                                    ------------
Net increase (decrease) in cash...     2,543,188
Cash at beginning of period.......            --
                                    ------------
Cash at end of period.............  $  2,543,188
                                    ------------
                                    ------------
The accompanying notes are an integral part of these financial statements.

                                      F-6
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
1. ORGANIZATION AND BUSINESS
 
     IgX Corp. (the "Company") was incorporated in the State of Delaware on
February 11, 1992. The Company is a development stage enterprise developing
drugs principally for the treatment of infectious diseases of the human
gastrointestinal (GI) tract. The Company maintains two pilot production
facilities for use in conducting clinical trials, one outside the U.S. and one
in the U.S. The Company's strategy is to develop products both independently and
through strategic partnerships with large pharmaceutical companies, under which
the Company will seek financial, preclinical and clinical trial, marketing and
manufacturing assistance while retaining parallel manufacturing and/or marketing
rights for the products.
 
     The Company's primary activities since inception have consisted of research
and development and raising capital. The Company relies primarily on a
university to provide the personnel and other resources necessary to develop
technologies through its sponsored research agreements with the university (see
Note 4).
 
     In 1995, the Company became a wholly-owned subsidiary of a newly-formed
corporation, IgX Limited, which is registered under the laws of the Republic of
Ireland, as a result of a series of transactions in which the Company's
stockholders exchanged their common and preferred stock for ordinary and
preference shares of IgX Limited. In December 1997, as a condition to receiving
an equity infusion from a U.S. investor, the aforementioned series of
transactions was reversed such that IgX Limited became a wholly-owned subsidiary
of the Company. The above transactions involved the same parties, affected the
capital structure of IgX Corp. and IgX Limited in legal form only, and thus have
no effect on reported amounts on a consolidated basis.
 
2. BASIS OF PREPARATION
 
     Since inception, the Company has suffered recurring losses and net cash
outflows from operations. The Company expects to continue to incur substantial
additional losses to complete the development and testing of its drug
candidates, and does not expect to complete the development stage and begin
commercialization of its products for the foreseeable future. Management is
actively pursuing various options, which include entering into strategic
partnerships with large pharmaceutical companies. Certain such agreements for
strategic partnerships have been executed (see Note 12). Since its inception,
the Company has funded operations through issuing debt and equity securities to
its principal investors. It is management's intention to continue to fund the
operations of the Company through additional debt or preferred stock issuances
in order to meet its strategic objectives. Management is also actively pursuing
other financing options, which include securing additional equity financing
through an initial public offering, and believes that sufficient funding will be
available to meet its planned business objectives including anticipated cash
needs for working capital, for a reasonable period of time. However, there can
be no assurance that the Company will be able to obtain sufficient funds to
continue the development of, and if successful, to commence the manufacture and
sale of its drug candidates, if and when approved by the applicable regulatory
agencies. As a result of the foregoing, there exists substantial doubt about the
Company's ability continue as a going concern. These financial statements do not
include any adjustments relating to the recoverability of the carrying amounts
of recorded assets or the amount of liabilities that might result from the
outcome of this uncertainty.
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
USE OF SIGNIFICANT ESTIMATES
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
 
                                      F-7
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

CONSOLIDATION
 
     These consolidated financial statements include the accounts of the Company
and IgX Limited, a wholly-owned subsidiary, which is registered under the laws
of the Republic of Ireland. All intercompany transactions are eliminated in
consolidation.
 
PROPERTY AND EQUIPMENT
 
     Property and equipment are recorded at cost and depreciated using the
straight-line method over the estimated useful lives of the respective assets,
as follows: buildings and improvements over 5 years; research equipment over 5
to 10 years; and office furniture and equipment over 5 years.
 
IMPAIRMENT OF LONG-LIVED ASSETS
 
     The Company accounts for the impairment and disposition of long-lived
assets in accordance with Statement of Financial Accounting Standards ("SFAS")
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of ("FAS 121"). In accordance with FAS 121, the Company
periodically assesses whether any events or changes in circumstances have
occurred that would indicate that the carrying amount of a long-lived asset may
not be recoverable. If such an event or change in circumstances occurs, the
Company evaluates whether the carrying amount of such assets is recoverable by
comparing the net book value of the assets to estimated future undiscounted cash
flows attributable to such assets. If it is determined that the carrying amount
may not recoverable, the Company recognizes an impairment loss equal to the
excess of the net carrying amount of the asset over its fair value.
 
COMPREHENSIVE INCOME/(LOSS)
 
     Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." This standard requires that the total changes in capital
resulting from revenue, expenses and gains and losses, including those which do
not affect deficit accumulated during development stage, be reported.
Accordingly, comprehensive income (loss), which is comprised of net loss and the
change in cumulative translation adjustments, was ($2,505,098), ($5,918,618) and
($3,639,463) for the years ended December 31, 1996 and 1997 and the six months
ended June 30, 1998.
 
RESEARCH AND DEVELOPMENT
 
     Research and development costs are expensed as incurred and include, among
other costs, those related to the production of experimental drugs, including
payroll costs, sponsored third party research costs and costs incurred for
conducting clinical trials.
 
INCOME TAXES
 
     Income taxes are accounted for under the asset and liability method
prescribed by SFAS No. 109, "Accounting for Income Taxes." Deferred income taxes
are recorded for temporary differences between financial statement carrying
amounts and the tax bases of assets and liabilities. Deferred tax assets and
liabilities reflect the tax rates expected to be in effect for the years in
which the differences are expected to reverse. A valuation allowance is provided
if it is more likely than not that some or all of the deferred tax asset will
not be realized.
 
NET LOSS PER COMMON SHARE
 
     Effective December 31, 1997, the Company adopted SFAS No. 128, "Earnings
per Share" ("FAS 128"), which requires presentation of basic earnings per share
("Basic EPS") and diluted earnings per share ("Diluted EPS") by all entities
that have publicly traded common stock or potential common stock (options,
warrants,
 
                                      F-8
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

convertible securities or contingent stock arrangements). FAS 128 also requires
presentation of earnings per share by an entity that has made a filing or is in
the process of filing with a regulatory agency in preparation for the sale of
securities in a public market.
 
     Basic EPS is computed by dividing income (loss) available to common
stockholders by the weighted average number of common shares outstanding during
the period. Diluted EPS gives effect to all dilutive potential common shares
outstanding during the period. The computation of Diluted EPS does not assume
conversion, exercise or contingent exercise of securities that would have an
antidilutive effect on earnings. Refer to Note 9 for methodology for determining
net loss per share.
 
INTERIM FINANCIAL DATA (UNAUDITED)
 
     The unaudited financial data as of and for the six months ended June 30,
1998 and 1997 have been prepared by management and include all adjustments which
in management's opinion are necessary to present fairly the Company's financial
condition, results of operations and cash flows. The results of operations for
the six months ended June 30, 1998 are not necessarily indicative of the
operating results to be expected for the year ended December 31, 1998.
 
FOREIGN CURRENCY TRANSLATION
 
     Assets and liabilities of IgX Limited are translated into U.S. dollars at
the prevailing exchange rates in effect at the end of the reporting period.
Income statement accounts are translated at a weighted average of exchange rates
which were in effect during the period. Translation adjustments that arise from
translating the foreign subsidiary's financial statements from local currency to
U.S. dollars are recorded in the cumulative translation adjustment component of
capital deficiency.
 
FINANCIAL INSTRUMENTS
 
     The carrying values of accounts payable and accrued expenses approximate
their fair values.
 
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 
     In June 1997, the FASB issued SFAS No.131, "Disclosures about Segments of
an Enterprise and Related Information" ("FAS 131"), which is effective for
fiscal years beginning after December 15, 1997 for annual reporting purposes and
for interim periods thereafter. The statement requires that public companies
report certain information, including segment revenues, reported profit and loss
and assets, about operating segments in their annual and interim financial
statements. The statement also requires that public companies report certain
information about their products and services, the geographic areas in which
they operate, and their major customers. FAS 131 is not expected to materially
affect the presentation and disclosure in the Companys financial statements.
 
                                      F-9
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
4. PROPERTY AND EQUIPMENT
DECEMBER 31,
                                                                               ------------------------
                                                                                  1996          1997
                                                                               ----------    ----------
Land........................................................................   $    9,000    $    9,000
Buildings and improvements..................................................    1,070,683       846,985
Research equipment..........................................................      481,512       609,066
Office furniture and equipment..............................................       27,417        74,038
                                                                               ----------    ----------
                                                                                1,588,612     1,539,089
Less--accumulated depreciation..............................................     (123,907)     (390,061)
                                                                               ----------    ----------
Property and equipment, net.................................................   $1,464,705    $1,149,028
                                                                               ----------    ----------
                                                                               ----------    ----------
5. SPONSORED RESEARCH AGREEMENTS
 
     The Company has sponsored research primarily at the University of Arizona
(the "University") and has entered into separate research agreements with the
University for the development of each drug candidate using particular aspects
of its licensed technology. Under these agreements, the Company is required to
fund the research and development work of the laboratory for a specific period
of time, usually in one year to eighteen-month increments. From inception
through June 30, 1998, the Company has funded approximately $2.4 million in
research through these activities. The following is a summary of amounts the
Company is required to fund under these sponsored research agreements.
Commitments as of December 31, 1997.........................................   $  174,000
Commitments as of June 30, 1998.............................................   $  390,000
The patentable discoveries, inventions and other intellectual property
developed as a result of such research are property of the University. The
Company incurs the cost of coordinating and filing the applicable patent
applications on behalf of the University and records these costs as incurred in
research and development expense.
 
     In addition, the Company maintains license agreements with the University
which, among other things, give the Company the option for six months to acquire
an exclusive royalty-bearing license to use the intellectual property underlying
a drug candidate. The term of the license agreement is generally 20 years
effective from the first commercial sale of a product and is renewable for two
consecutive 10-year periods. The license agreements require the Company to begin
paying the University up to 5% of the net sales price of all licensed products
when and if they are sold.
 
6. RELATED PARTY TRANSACTIONS
 
NOTES PAYABLE TO STOCKHOLDERS
 
     As a means of raising capital, the Company and its subsidiary have from
time to time received loans in the form of promissory notes from stockholders,
principally from Henry Venture II Limited, the Chairman of which is Albert J.
Henry, who is also the Chairman and Chief Executive Officer of the Company. The
notes are unsecured and bear interest at a stated rate of 9% per annum. From the
Company's inception to date, no amounts of principal or accrued interest have
been repaid. However, from time to time, portions of the amounts due have been
canceled in exchange for issuance of preferred stock of the Company. The amount
of notes canceled corresponds to the value of the preferred stock issued upon
cancellation of the notes. A reconciliation of the total
 
                                      F-10
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
6. RELATED PARTY TRANSACTIONS--(CONTINUED)

proceeds received from the issuance of notes payable to stockholders to the
balance of these notes payable at June 30, 1998 is as follows:
INCEPTION
                                                                                (FEBRUARY 11, 1992)
                                                                                      THROUGH
                                                                            ---------------------------
                                                                            DECEMBER 31,     JUNE 30,
                                                                                1997           1998
                                                                            ------------    -----------
Cumulative proceeds from issuance of notes payable to stockholders.......   $  9,351,546    $10,351,546
Cumulative interest accrued on notes payable to stockholders.............        693,502        855,617
                                                                            ------------    -----------
                                                                              10,045,048     11,207,163
Less: notes payable to Henry Venture II Limited canceled and exchanged
  for:
  IgX Limited Series B mandatorily redeemable convertible preferred
     stock...............................................................     (2,086,096)    (2,086,096)*
  IgX Limited Series C mandatorily redeemable convertible preferred
     stock...............................................................     (2,086,096)    (2,086,096)*
  IgX Corp. Series B convertible preferred stock.........................     (1,999,998)    (1,999,998)
                                                                            ------------    -----------
                                                                               3,872,858      5,034,973
Less--unamortized discount on note payable to NEGF II, L.P...............        --            (550,000)
                                                                            ------------    -----------
Notes payable to stockholders............................................   $  3,872,858    $ 4,484,973
                                                                            ------------    -----------
                                                                            ------------    -----------
------------------
* As noted below, these stock issuances were, in turn, subsequently canceled in
  exchange for issuance of Series A convertible preferred stock.
 
     Notes payable to stockholders consisted of the following:
DECEMBER 31,
                                                                 ------------------------     JUNE 30,
                                                                    1996          1997          1998
                                                                 ----------    ----------    ----------
Notes payable to Henry Venture II Limited,
  9% per annum, due on demand.................................   $  225,000    $  328,546    $  340,866
 
Notes payable to Henry Venture II Limited
  9% per annum, due December 31, 2001.........................    5,075,107     3,544,312     3,694,107
 
Note payable to NEGF II, L.P.,
  9% per annum, due May 6, 2008...............................       --            --         1,000,000
 
Less--unamortized discount on note payable to NEGF II, L.P....       --            --          (550,000)
                                                                 ----------    ----------    ----------
 
     Total....................................................    5,300,107     3,872,858     4,484,973
 
Less--current maturities......................................      225,000       328,546       340,866
                                                                 ----------    ----------    ----------
 
Notes payable to stockholders--long term portion..............    5,075,107     3,544,312     4,144,107
                                                                 ----------    ----------    ----------
                                                                 ----------    ----------    ----------
From the period November 1996 to December 1997, IgX Limited obtained
unsecured loans totaling $5,328,546, which bore interest at 9% per annum, in the
form of promissory notes (the "Notes") from Henry Venture II Limited. Accrued
and unpaid interest totaled $544,312 through December 1997. In December 1997,
the Company entered into a novation agreement to transfer the liability for
amounts due from IgX Limited to IgX
 
                                      F-11
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
6. RELATED PARTY TRANSACTIONS--(CONTINUED)

Corp. in exchange for cancellation of the Notes due the stockholder from IgX
Limited. Under this agreement, Henry Venture II Limited agreed to cancel
$1,999,998 of amounts due in exchange for 311,910 shares of the Company's Series
B convertible preferred stock (the "Series B Preferred") (see Note 7). Further,
the Company issued two unsecured promissory notes to Henry Venture II Limited
for the remaining balances under the Notes, plus accrued and unpaid interest to
the date of the novation.
 
     The first promissory note in the amount of $3,544,312 at December 31, 1997,
which includes $544,312 of accrued and unpaid interest at December 31, 1997,
bears interest at a rate of 9% per annum and is payable in full on December 31,
2001. As such, this portion has been classified as long-term. The second
promissory note issued was in the amount of $328,546, representing the remaining
balance, also bears interest at 9% per annum, is payable in full on demand and,
as such, is included in current liabilities.
 
     In May 1998, the Company issued a $1,000,000 unsecured promissory note (the
"$1,000,000 Note") which bears interest at a rate of 9% per annum to NEGF II,
L.P., a holder of Series B Preferred (see Note 7). The $1,000,000 Note, together
with all accrued and unpaid interest, is payable upon the earlier of: (i) the
closing of an initial public offering of the Company, (ii) a merger,
consolidation, reorganization or sale of all or substantially all of the assets
of the Company, (iii) any other event, which, in the judgement of the Board of
Directors, would allow the Company to pay all indebtedness under the $1,000,000
Note, or (iv) May 6, 2008 (see also Note 12).
 
WARRANT ATTACHED TO PROMISSORY NOTE
 
     As a condition for the $1,000,000 Note, NEGF II, L.P. received from the
Company a warrant to purchase up to 370,000 shares of common stock at an
exercise price of $0.01 per share. The warrant is exercisable at any time for a
period of ten years from the date of issuance. The fair value of the warrant,
using the Black-Scholes option-pricing model, approximates $1.7 million. This
value has been allocated to the $1,000,000 Note and the Series B Preferred in
proportion to the relative amounts of debt and equity financing provided to the
Company by NEGF II, L.P. The portion allocated to the $1,000,000 Note has been
reflected as a discount on the $1,000,000 Note, and is being accreted to
interest expense over the stated term of the $1,000,000 Note. The portion
allocated to the Series B Preferred is effectively a discount on the price per
share for the $2,000,000 paid for the Series B Preferred by NEGF II, L.P. The
appropriate waivers have been obtained from all other Preferred stockholders
waiving their rights to any conversion price adjustment provisions contained in
the applicable stockholder agreements and certificate of incorporation.
 
MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK
 
     From the period September 1992 through July 1996, the Company obtained
unsecured loans from Henry Venture II Limited, an existing stockholder, totaling
$4,023,000, which bore interest at 9% per annum, in the form of promissory notes
(the "Original Notes"). During August 1996, Henry Venture II Limited was issued
2,086,096 shares each of Series B mandatory redeemable convertible preferred
stock (the "Series B Redeemable") and Series C mandatory redeemable convertible
preferred stock (the "Series C Redeemable") of IgX Limited in exchange for the
cancellation of the Original Notes along with accrued and unpaid interest
thereupon of $149,192. During August 1996, the Series B and C Redeemable shares
were canceled in exchange for one share of Series A convertible preferred stock
("Series A Preferred") (see Note 7).
 
7. CAPITAL DEFICIENCY
 
SERIES A CONVERTIBLE PREFERRED STOCK
 
     In August 1992, the Company issued 370,000 shares of Series A Preferred at
$1.00 per share providing proceeds of $370,000. During September 1993, the Board
of Directors of the Company effected a 10-for-1 stock split of the Series A
Preferred. Further, in August 1996, in consideration for the cancellation of
Series B
 
                                      F-12
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
7. CAPITAL DEFICIENCY--(CONTINUED)

Redeemable and Series C Redeemable, the Company issued one additional share of
Series A Preferred to an existing holder of Series A Preferred. After giving
effect to the stock split and the issuance of the additional share, there were a
total of 3,700,001 shares of Series A Preferred issued and outstanding. Each
Series A Preferred share can be converted into common stock, at the option of
the holder, at an initial conversion rate of one to one, subject to adjustment
from time to time based on the consideration paid for additional stock issued
and options granted by the Company. The Series A Preferred will automatically
convert into common stock upon the consummation of a public offering of the
Company's common stock with a per share price as defined in the certificate of
incorporation. There is no established dividend rate on the Series A Preferred.
However, the holders of Series A Preferred are entitled to receive preference to
a declaration or payment of any dividend on the common stock of the Company in
amounts equal to that paid to other outstanding shares of the Company. In the
event of a voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, the Series A Preferred stockholders are entitled to
receive a liquidation preference equal to $1.23 for each outstanding share of
the Series A Preferred plus a preferential amount equal to 10% of the original
issue price for each twelve month period outstanding from the date of issuance
to date of distribution.
 
     The holders of Series A Preferred are entitled to vote on all matters in
which holders of common stock have the right to vote.
 
SERIES B CONVERTIBLE PREFERRED STOCK
 
     In December 1997, the Company issued 436,672 shares of Series B Preferred
at $6.41 per share providing proceeds of $2,799,984. In addition, the Company
issued 311,910 shares of Series B Preferred to an existing common stockholder in
exchange for the cancellation of a promissory note due the common stockholder
(see Note 6). Each Series B Preferred share can be converted into common stock,
at the option of the holder, at an initial conversion rate of one to one,
subject to adjustment from time to time based on the consideration paid for
additional stock issued and options granted by the Company. The holders of
Series B Preferred are also entitled to anti-dilution provisions in the event
the Company were to issue additional shares of common stock for less than
specified amounts and prior to certain dates, as defined in the applicable
agreement. The Series B Preferred will automatically convert into common stock
upon the consummation of a public offering of the Company's common stock with a
per share price as defined in the certificate of incorporation. There is no
established dividend rate on the Series B Preferred. However, the holders of
Series B Preferred are entitled to receive preference to any declaration or
payment of any dividend on the common stock of the Company in amounts equal to
that paid to other outstanding shares of the Company. In the event of a
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Company, the Series B Preferred stockholders are entitled to receive a
liquidation preference equal to the original issue price of $6.41 for each
outstanding share of the Series B Preferred.
 
     The holders of Series B Preferred are entitled to vote on all matters which
holders of common stock have the right to vote.
 
8. STOCK-BASED COMPENSATION
 
1993 STOCK OPTION PLAN
 
     During 1993, the Company implemented its 1993 Stock Option Plan (the 1993
Plan), whereby incentive and nonqualified options to purchase shares of the
Company common stock may be granted to key employees, officers, directors and
consultants. The vesting and exercise periods for options granted under the 1993
Plan are determined by a committee of the Board of Directors.
 
                                      F-13
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
8. STOCK-BASED COMPENSATION--(CONTINUED)

     The 1993 Plan stipulates that no option may be exercisable after ten years
from the date of grant. The fair market value of the Company's common stock is
determined by the Board of Directors from time to time. Options granted under
the 1993 Plan generally vest in equal installments over a period of four years.
 
     The following table summarizes activity regarding stock options for the
years ended December 31, 1996 and 1997, and the six months ended June 30, 1998:
JUNE 30, 1998
                                             DECEMBER 31, 1996       DECEMBER 31, 1997           (UNAUDITED)
                                            -------------------    ---------------------    ---------------------
                                                       AVERAGE                  AVERAGE                  AVERAGE
                                                       EXERCISE                 EXERCISE                 EXERCISE
                                            SHARES      PRICE       SHARES       PRICE       SHARES       PRICE
                                            -------    --------    ---------    --------    ---------    --------
Outstanding at beginning of period.......        --         --       753,357     $ 1.08     1,078,357     $ 2.26
Granted..................................   753,357     $ 1.08       325,000     $ 5.00        77,500     $ 1.26
Forfeited................................        --         --            --         --       415,000     $ 4.13
                                            -------     ------     ---------     ------     ---------
Outstanding at end of period.............   753,357     $ 1.08     1,078,357     $ 2.26       740,857     $ 1.11
OPTIONS OUTSTANDING
                                                            -------------------------------
                                                                NUMBER                              NUMBER
                                                             OUTSTANDING         AVERAGE         EXERCISABLE
                                                            AT DECEMBER 31,     REMAINING       AT DECEMBER 31,
EXERCISE PRICES                                                  1997          LIFE (YEARS)          1997
---------------------------------------------------------   ---------------    ------------    ---------------
$1.00....................................................       738,357             3.1            176,839
$5.00....................................................       340,000             3.0             85,000
OPTIONS OUTSTANDING
                                                                     (UNAUDITED)
                                                           --------------------------------        NUMBER
                                                               NUMBER            AVERAGE          EXERCISABLE
                                                             OUTSTANDING        REMAINING      AT JUNE 30, 1998
EXERCISE PRICES                                            AT JUNE 30, 1998    LIFE (YEARS)       (UNAUDITED)
--------------------------------------------------------   ----------------    ------------    ----------------
$1.00...................................................        720,857             3.2             155,839
$5.00...................................................         20,000             4.8               3,750
The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees," and related interpretations in accounting for
its 1993 Plan. During the years ended December 31, 1996 and 1997, the Company
was not required to recognize compensation expense for options granted to
employees. For the six months ended June 30, 1998, the Company was required to
recognize compensation expense in the amount of $18,323 for options granted to
employees. Compensation expense recorded for stock options granted to
consultants based on the estimated fair value of the stock options amounted to
$371,900 and $45,000, respectively, in 1996 and the six months ended June 30,
1998. Options were not granted to consultants during 1995 and 1997; thus no
compensation expense was recorded in these years.
 
     Had compensation costs for option grants to employees been determined based
upon the fair value at the date of grant for awards under the 1993 Plan
consistent with the methodology prescribed under SFAS No. 123, "Accounting for
Stock Based Compensation," the Company's net loss would not have been affected
for any of the periods presented.
 
                                      F-14
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
8. STOCK-BASED COMPENSATION--(CONTINUED)

     The fair value of the options granted to employees during the years ended
December 31, 1996 and 1997 and the six months ended June 30, 1998 has been
determined on the date of the respective grant using the Black-Scholes
option-pricing model based on the following weighted average assumptions:
1996       1997       1998
                                                                            -------    -------    -------
Dividend yield...........................................................   None       None       None
Weighted average risk free interest rate on date of grant................   6.50       6.29       5.61
Forfeitures..............................................................   None       None       None
Expected life............................................................   5 years    5 years    5 years
1998 STOCK OPTION PLAN
 
     In September 1998, the Company adopted its 1998 Stock Incentive Plan (the
"1998 Plan"), whereby incentive and nonqualified stock options to purchase
shares of the Company's common stock may be granted to employees, outside
directors and consultants. The vesting and exercise periods of options granted
under the 1998 Plan are to be determined by a committee of the Board of
Directors.
 
     The 1998 Plan stipulates that the exercise price of incentive stock options
will not be less than the fair market value at the date of grant or in the case
of nonqualified stock options less than 85% of the fair market value at the date
of grant. The exercise period of options granted shall not exceed 10 years
(5 years in the case of incentive options granted to individuals owning 10% or
more of the voting stock of the Company) from the date of grant and shall vest
at a rate specified from time to time by the Board of Directors.
 
     On a combined basis, the 1993 Plan and the 1998 Plan allow the Company to
issue an aggregate of up to 1,425,857 shares of common stock of the Company.
 
9. NET LOSS PER SHARE
 
     Basic EPS and Diluted EPS for the years ended December 31, 1995, 1996 and
1997 and for the six months ended June 30, 1997 and 1998 have been computed by
dividing the net loss for each respective period by the weighted average shares
outstanding during that period. All outstanding stock options and warrants have
been excluded from the computation of Diluted EPS as they are antidilutive.
Common stock issuable upon conversion of the Series A Preferred and Series B
Preferred have also been excluded from the computation of Diluted EPS as they
are antidilutive.
 
10. INCOME TAXES
 
     The Company has incurred losses since inception which have generated net
operating loss carryforwards on a consolidated basis of approximately
$13 million at June 30, 1998 which are available to offset future taxable
income. The net operating loss carryforwards will expire in 2007 through 2018.
These loss carryforwards are subject to limitation on future years utilization
should certain ownership changes occur.
 
     The net operating loss carryforwards and other temporary differences,
arising primarily from depreciation, result in a deferred tax asset at
December 31, 1996 and 1997 and June 30, 1998 of $1,721,750, $2,724,292 and
$3,532,167, respectively. In consideration of the Company's accumulated losses
and uncertainty of its ability to utilize this deferred asset in the future, the
Company has recorded a valuation allowance of equal amounts on such dates to
fully offset the net deferred tax asset and bring its carrying amount to zero
for all periods presented.
 
     For the years ended December 31, 1995, 1996 and 1997 and the six months
ended June 30, 1998, the Company's effective tax rate differs from the federal
statutory rate principally due to net operating losses and other temporary
differences for which no benefit was recorded.
 
                                      F-15
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
10. INCOME TAXES--(CONTINUED)

     The provision for income taxes of $5,000, $23,453 and $4,900 for the years
ended December 31, 1996 and 1997 and the six months ended June 30, 1998,
respectively, primarily relates to the Irish tax on interest earned on bank
deposits located in the Republic of Ireland.
 
11. COMMITMENTS AND CONTINGENCIES
 
EMPLOYMENT AGREEMENTS
 
     The Company has an employment agreement with a managing director of IgX
Limited in Ireland which expires in November 2000. Under the terms of the
agreement, the employee is to receive an annual base salary of $110,000. Upon
execution of the agreement, the Company granted the employee options to purchase
83,696 shares of the Company's common stock at an exercise price of $1.00 per
share. The agreement also contains a non-compete provision which extends for a
period of three years from the termination of the agreement.
 
     In June 1997, the Company entered into an employment agreement with another
executive which expires in May 1999. Under the terms of the agreement, the
employee is to receive minimum annual compensation of $160,000, with a bonus of
up to 50% of the minimum compensation.
 
LEASES
 
     Future minimum payments under non-cancelable operating leases, which
primarily relate to office space, a pilot production facility and office
equipment, with initial or remaining terms of one year or more, consist of the
following at December 31, 1997:
YEAR
----------------------------------------------------------------------------------
1998..............................................................................   $ 92,000
1999..............................................................................     32,000
2000..............................................................................     19,000
2001..............................................................................     11,000
                                                                                     --------
                                                                                     $154,000
                                                                                     --------
                                                                                     --------
Rent expense amounted to $9,859, $27,731, $ 68,121, and $38,078 for the
years ended December 31, 1995, 1996 and 1997 and the six months ended June 30,
1998, respectively.
 
     Refer to Note 5 for commitments under sponsored research agreements.
 
12. SUBSEQUENT EVENTS
 
STRATEGIC PARTNERSHIPS
 
  IgX Oxford
 
     In August 1998, the Company obtained a majority interest in a corporation
newly formed in collaboration with the Glycobiology Institute of Oxford
University and Thomas Jefferson University which has, in turn, obtained an
exclusive worldwide license from the Monsanto Company ("Monsanto") to certain
intellectual property to be used in developing drug candidates for the treatment
of Hepatitis B.
 
     The Company has agreed to fund the corporation with up to $2 million to
complete animal studies to determine whether the preparation of an
Investigational New Drug Application ("IND") application to conduct human
clinical trials is appropriate.
 
                                      F-16
IgX CORP.
                         (A DEVELOPMENT STAGE COMPANY)

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 (UNAUDITED WITH RESPECT TO THE SIX MONTH PERIODS ENDED JUNE 30, 1997 AND 1998)
 
12. SUBSEQUENT EVENTS--(CONTINUED)

  IgX/Sintofarma
 
     In August 1998, the Company signed a manufacturing and license agreement
with Laboratorios Sintofarma S. A. ("Sintofarma"). Under the terms of this
agreement, the Company and Sintofarma have agreed to form a joint venture under
which the Company will grant to the joint venture the rights to the licensed
technology underlying three of its drug candidates, while Sintofarma will be
responsible to bear all costs of manufacturing drug candidates for use in
clinical trials, and for marketing the products in Brazil, if clinical trials
are successful.
 
  Gador license agreement
 
     During August 1998, the Company entered into a license and supply agreement
with Gador S. A. ("Gador"). Under the terms of the agreement, the Company will
license to Gador all of the Company's rights to the technology underlying two of
its drug candidates in order to enable Gador to manufacture and market the
products throughout South America, except Brazil, as well as Central America and
Mexico if clinical trials are successful. The Company will supply the
ingredients necessary for production and will receive a royalty of 10% of net
sales of any product produced and sold by Gador. Gador has also agreed to remit
to IgX or its designee a percentage of net sales in order for IgX to partially
or fully recover the cost of the ingredients.
 
EXERCISE OF WARRANT (UNAUDITED)
 
     During September 1998, NEGF II, L.P., an existing stockholder, exercised a
warrant to purchase 370,000 shares of common stock of the Company. Net proceeds
to the Company from the exercise of this warrant amounted to $3,700. Refer to
Note 6 for further description of the warrant, its valuation and classification
as of June 30, 1998.
 
CANCELLATION OF NOTES PAYABLE TO STOCKHOLDERS (UNAUDITED)
 
      During September 1998, the Company entered into an agreement with Henry
Venture II Limited and NEGF II, L.P. to cancel the outstanding balance of all
notes payable to stockholders in exchange for 732,547 shares of common stock of
the Company, representing a conversion price of $7.00 per share. The
cancellation of the notes payable to stockholders will require the Company to
recognize a charge of approximately $527,000, representing the unamortized
portion of the debt discount, on the early extinguishment of the note payable to
NEGF II, L.P., for the quarter ending September 30, 1998. In addition, as a
result of this exchange at a price per share below the expected offering price
of the Company's anticipated IPO, the Company is expected to recognize an
additional charge of approximately $1.1 million as loss on extinguishment of
notes payable to stockholders for the quarter ending September 30, 1998.
 
     The effects of the transactions with Henry Venture II Limited and NEGF II,
L.P. have been reflected in the "Pro forma June 30, 1998" column of the
Consolidated Balance Sheet.
 
INITIAL PUBLIC OFFERING AND PRO FORMA PRESENTATION (UNAUDITED)
 
     In September 1998, the Board of Directors of the Company authorized
management to pursue an underwritten sale of shares of the Company's common
stock in an initial public offering ("IPO") pursuant to the Securities Act of
1933.
 
     Upon the closing of the IPO, all outstanding shares of Series A and B
Preferred will automatically convert into common stock. The effects of this
conversion to the Company's equity have been reflected in the unaudited "Pro
Forma June 30, 1998" column in the Consolidated Balance Sheet.
 
                                      F-17
------------------------------------------------------
            ------------------------------------------------------
 
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE OF THIS PROSPECTUS.

                            ------------------------
 
                               TABLE OF CONTENTS
PAGE
                                                   ----
Prospectus Summary..............................      3
Risk Factors....................................      8
Use of Proceeds.................................     18
Dividend Policy.................................     18
Dilution........................................     19
Capitalization..................................     20
Selected Consolidated Financial Data............     21
Management's Discussion and Analysis of
  Financial Condition and Results of
  Operations....................................     22
Business........................................     27
Management......................................     43
Certain Transactions............................     51
Principal Stockholders..........................     53
Description of Capital Stock....................     54
Shares Eligible for Future Sale.................     55
Underwriting....................................     57
Legal Matters...................................     58
Experts.........................................     59
Additional Information..........................     59
Index to Consolidated Financial Statements......    F-1
------------------------
 
     UNTIL               , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE SHARES OF COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

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

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

                                2,300,000 SHARES

                                     [LOGO]

                                   IgX CORP.

                                  COMMON STOCK

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

                                   PROSPECTUS

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

                             JOSEPHTHAL & CO. INC.

                                          , 1998

 
            ------------------------------------------------------
            ------------------------------------------------------
PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
     The estimated expenses of this Offering are as follows:
S.E.C. Registration Fee.....................................   $    8,618
N.A.S.D. Filing Fee.........................................        3,421
Nasdaq National Market Qualification Fee....................       72,875
Representative's non-accountable expense allowance and
  financial advisor's fee...................................      414,000(1)
Accounting Fees.............................................      175,000
Legal Fees and Expenses.....................................      225,000
Blue Sky Qualification Fees and Expenses....................       25,000
Printing and Engraving......................................      100,000
Transfer Agent's Fees and Expenses..........................        5,000
Miscellaneous Expenses......................................       85,086
                                                               ----------
     Total..................................................   $1,114,000
                                                               ----------
                                                               ----------
------------------
(1) Assuming an initial public offering price of $9.00 per share.
 
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
     Section 145 of the Delaware General Corporation Law grants corporations the
power to indemnify their directors, officers, employees and agents in accordance
with the provisions thereof, Article X of Registrant's Amended and Restated
Certificate of Incorporation and Article VII of Registrant's Bylaws provide for
indemnification of Registrant's directors, officers, agents and employees to the
full extent permissible under Section 145 of the Delaware General Corporation
Law. The Registrant has also entered into indemnification agreements with its
directors under which it has agreed to indemnify the directors to the fullest
extent permitted by Section 145 of the Delaware General Corporation Law.
 
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
 
     In September 1995, Registrant consummated a reorganization, under which
Registrant became a wholly owned subsidiary of a newly organized corporation,
IgX Limited, formed under the laws of the Republic of Ireland. The
reorganization was effected to attempt to take advantage of certain Irish tax
benefits and government grants relating to IgX Limited's pilot production
facility in Ireland. In connection with this reorganization, all of the
outstanding capital stock (and securities convertible or exercisable into such
capital stock) of Registrant were exchanged for shares of IgX Limited on a share
for share basis.
 
     From the period September 1995 through July 1996, IgX Limited obtained
unsecured loans from Henry Venture II Limited ("Henry Venture"), an existing
stockholder, totalling $2,340,000, which bore interest at 9% per annum, in the
form of promissory notes (the "Original Notes"). During August 1996, Henry
Venture was issued 2,086,096 shares of Series B mandatory redeemable convertible
preferred stock (the "Series B Redeemable") and 2,086,096 shares of Series C
mandatory redeemable convertible preferred stock (the "Series C Redeemable") of
IgX Limited in exchange for the cancellation of the Original Notes and other
notes in the aggregate principal amount of $1,683,000 issued prior to September
1995, along with accrued and unpaid interest thereupon of $149,192. Further, in
August 1996, in consideration of the cancellation of Series B Redeemable and
Series C Redeemable, IgX Limited issued one additional share of Series A
Preferred of IgX Limited to Henry Venture.
 
                                      II-1
In addition, from November 1996 to December 1997, Henry Venture loaned IgX
Limited an aggregate principal amount of $5,328,546 with interest accrued
thereon at 9% per annum (the "1996/1997 Henry Venture Notes"). The first
promissory note in the amount of $3,544,312 at December 31, 1997, which includes
$544,312 of accrued and unpaid interest through December 31, 1997, bears
interest at a rate of 9% per annum and is payable in full on December 31, 2001.
The second promissory note issued was in the amount of $328,546, representing
the remaining balance, also bears interest at 9% per annum, and is payable in
full on demand.
 
     In December 1997, as a condition to another venture capital financing, a
further reorganization was effected by which IgX Limited became the wholly owned
subsidiary of Registrant, again with all of the outstanding capital stock (and
securities convertible or exercisable into such capital stock) of IgX Limited
being exchanged for shares of Registrant on a share for share basis and with
Registrant assuming all outstanding indebtedness due to Henry Venture from IgX
Limited.
 
     Further, in December 1997, Registrant sold an aggregate of 748,582 shares
of Series B Preferred Stock for $4,799,983 (or $6.4121 per share), to the
following investors for the number of shares set forth below opposite their
respective names:
NUMBER OF
                                                                                  SHARES OF
                                                                                  SERIES B
NAME OF STOCKHOLDER                                                              PREFERRED STOCK
------------------------------------------------------------------------------   ---------------
Henry Venture II Limited......................................................       311,910
NEGF II, L.P..................................................................       155,955
English and Scottish plc......................................................       155,955
Meriken Nominees..............................................................       109,168
Morton I. Kamien..............................................................         7,797
Lloyd E. Shefsky..............................................................         7,797
To effect payment for its shares of Series B Preferred Stock, Henry Venture
exchanged indebtedness of approximately $1,999,998 under the 1996/1997 Henry
Venture Notes, and concurrently restructured the remaining indebtedness into two
promissory notes: one in the principal amount of $3,544,311 (including interest)
due December 31, 2001 with interest accruing from the date thereof at 9% per
annum, and the other note in the principal amount of $328,548 payable on demand,
together with interest accruing thereon at 9% per annum.
 
     In February 1998, Registrant sold an additional 155,955 shares of Series B
Preferred Stock for $999,999 (or $6.4121 per share) to NEGF II, L.P., a
principal stockholder of Registrant and 54,584 shares for $350,000 to Meriken
Nominees.
 
     In May 1998, NEGF II, L.P. loaned Registrant the principal amount of
$1,000,000, due May 6, 2008, with interest accruing thereon at 9% per annum. The
indebtedness is subject to prepayment upon the occurrence of certain conditions,
including the consummation of this Offering. In connection with this financing,
Registrant issued NEGF II, L.P. warrants to purchase 370,000 shares of Common
Stock of Registrant at an exercise price of $0.01 per share. The warrant was
exercised on September 25, 1998.
 
     In May 1998, Registrant sold 249,528 shares of Series B Preferred Stock for
a total of $1,599,998 (or $6.4121 per share) to the following investors for the
number of shares set forth below opposite their respective name:
NUMBER OF
                                                                                  SHARES OF
                                                                                  SERIES B
NAME OF STOCKHOLDER                                                              PREFERRED STOCK
------------------------------------------------------------------------------   ---------------
English and Scottish plc......................................................       155,955
Zorn Nominees Limited.........................................................        23,393
Meriken Nominees..............................................................        31,191
Sundial International Fund Ltd................................................        38,989
On September 25, 1998, Henry Venture converted the 1996/1997 Henry Venture
Notes (aggregating $4,092,815 of principal and accrued interest) into
584,688 shares of Common Stock at $7.00 per share. Concurrently NEGF II, L.P.
converted the $1,000,000 promissory note issued to it by Registrant in May 1998
 
                                      II-2
(aggregating $1,035,014 of principal and accrued interest) into 147,859 shares
of Common Stock also at $7.00 per share.
 
     From January 1, 1996 through December 1996, IgX Limited granted under its
Stock Option Plan 738,357 options at $1.00 per share to 11 holders and 15,000
options at $5.00 per share to one holder.
 
     In 1997, IgX Limited granted under its Stock Option Plan 325,000 options at
$5.00 per share to 2 holders.
 
     In December 1997, Registrant assumed the outstanding options under the IgX
Limited Stock Option Plan as part of the corporate reorganization referred to
above.
 
     In January 1998, Registrant granted under its 1993 Stock Option Plan 72,500
options at $1.00 per share to 4 holders and 5,000 options at $5.00 per share to
one holder.
 
     In August 1998, Registrant granted under its 1993 Stock Option Plan 40,000
options at $5.00 per share to 2 holders.
 
     In August 1998, Registrant granted under its 1993 Stock Option Plan 40,000
options at $5.00 per share to 2 holders.
 
     The foregoing transactions of Registrant were exempt from registration
under the Securities Act of 1933, as amended, under Sections 3(a)(9) and 4(2)
thereunder and Regulation D and Rule 701 under said Act, and all stock
certificates issued in connection therewith were legended to reflect their
restricted status.
 
ITEM 16. EXHIBITS
 
     (a) Exhibits:
1        --   Form of Underwriting Agreement. In September 1998, Registrant granted under its 1993 Stock
               Option Plan 45,000 options at $5.00 per share to holders.
 3.1      --   Amended and Restated Certificate of Incorporation of Registrant dated December 24, 1997.
 3.1a     --   Certificate of Amendment of Amended and Restated Certificate of Incorporation of Registrant
               filed January 6, 1998.
 3.1b     --   Certificate of Amendment of Amended and Restated Certificate of Incorporation of Registrant
               filed September 29, 1998.
 3.1c     --   Form of Amended and Restated Certificate of Incorporation of Registrant to be filed
               immediately following the closing of the offering.
 3.2      --   Amended and Restated Bylaws of Registrant.
 4.1      --   Form of specimen Common Stock Certificate of Registrant.*
 4.2      --   IgX Investors' Rights Agreement, dated December 24, 1997, by and among Registrant and
               certain investors, as amended by Amendment dated September   , 1998.
 4.3      --   Stock Purchase Warrant, dated May 6, 1998, between Registrant and NEGF II, L.P.
 4.4      --   Form of Lock-up Agreement.*
 4.5      --   Waiver of Anti-dilution Rights relating to issuance of May 1998 warrants with respect to
               Series A and Series B Preferred Stock.
 4.6      --   Waivers of Anti-dilution Rights relating to the initial public offering with respect to
               Series B Preferred Stock.
 4.7      --   Waivers of Registration Rights.
 4.8      --   Form of Representative's Warrants.
 4.9      --   Promissory Notes for NEGF note and Henry Venture Notes and agreement to convert debt into
               equity.
II-3
4.10     --   Certificate of Incorporation of IgX Oxford Hepatitis, Corp. together with an Amendment
               thereto filed on August 17, 1998 and on Certificate of Designation of Preferred Stock.
 4.11     --   Warrant issued to Monsanto Company to purchase shares of IgX Oxford Hepatitis, Corp.
 5        --   Opinion of Epstein Becker & Green, P.C., as to legality of the securities being offered
               hereby.*
10.1      --   Amended and Restated 1993 Stock Option Plan of Registrant, as amended.
10.2      --   License Agreement, dated May 27, 1992 between University of Arizona and the Registrant.
10.2a     --   First Amendment to License Agreement of May 27, 1992, dated August 9, 1993 between
               University of Arizona and the Registrant.
10.2b     --   Second Amendment to License Agreement of May 27, 1992 dated September 18, 1998 between
               University of Arizona and the Registrant.
10.3      --   License Agreement, dated June 19, 1992 between University of Arizona and the Registrant.
10.4      --   License Agreement, dated July 1, 1996 between University of Arizona and the Registrant.
10.4a     --   First Amendment to License Agreement of July 1, 1996 dated September 18, 1998 between
               University of Arizona and the Registrant.
10.5      --   License Agreement, dated November 1, 1996 between University of Arizona and the Registrant.
10.6      --   License Agreement, dated August 25, 1998 between University of Arizona and the Registrant.
10.7      --   License Agreement dated September 18, 1998 between University of Arizona and the
               Registrant.
10.8      --   Letter Agreement dated September 18, 1998 between the Arizona Board of Regents, Charles
               Sterling, Vitaliano Cama, Michael Riggs, J. Glenn Songer and the Registrant.
10.9      --   Research Agreement, dated June 1, 1992 between University of Arizona and the Registrant
               (F. Javier Enriquez).*
10.10     --   Research Agreement, dated June 1, 1992 between University of Arizona and the Registrant
               (Charles R. Sterling).*
10.11     --   Research Agreement, dated March 12, 1993 between University of Arizona and the Registrant.*
10.12     --   Research Agreement, dated July 1, 1996 between University of Arizona and the Registrant.
10.13     --   Research Agreement, dated November 1, 1996 between University of Arizona and the
               Registrant.
10.14     --   Research Agreement, dated August 17, 1998 between IgX Oxford Hepatitis Corp. And the
               Registrant.
10.15     --   Heads of Agreement dated August 6, 1998 between Laboratorios Sintofarma S.A. and the
               Registrant.
10.16     --   Heads of a License and Supply Agreement dated August 7, 1998 between Gador S.A. and the
               Registrant.
10.17     --   1998 Stock Option Plan of Registrant.
10.18     --   Development and License Agreement between IgX Oxford Hepatitis Corp. and Monsanto Company.
10.19     --   Form of Indemnification Agreement with Directors of Registrant.
II-4
10.20     --   Employment Agreement between Registrant and Carroll Allen.
10.21     --   Employment Agreement between Registrant and Robert Renfroe.
10.22     --   Employment Agreement between Registrant and Craig R. Rennie.
10.22a    --   Severance Agreement between Registrant and Craig R. Rennie.
10.23     --   Real Estate Leases.*
21        --   Subsidiaries*
23.1      --   Consent of PricewaterhouseCoopers LLP (included on Page II-8)
23.2      --   Consent of Epstein Becker & Green, P.C. (included in Exhibit 5)*
24        --   Power of Attorney (included on Page II-7).
27        --   Financial Data Schedule.
------------------
*To be filed by amendment.
 
     (b) Financial Statement Schedules:
 
     Schedules have been omitted for the reason that they are not required or
are not applicable or because the required information is included in the
financial statements or the notes thereto.
 
ITEM 17. UNDERTAKINGS.
 
     Registrant hereby undertakes to provide to the Underwriters at the closing
specified in the Underwriting Agreement certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
 
     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Registrant
pursuant to the foregoing provisions, or otherwise, Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant for expenses
incurred or paid by a director, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
 
     Registrant hereby further undertakes:
 
     (1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
 
           (i)  To include any prospectus required by Section 10(a)(3) of the
                Securities Act;
 
           (ii) To reflect in the prospectus any facts or events arising after
                the effective date of the registration statement (or the most
                recent post-effective amendment thereof) which, individually or
                in the aggregate, represent a fundamental change in the
                information set forth in the registration statement.
                Notwithstanding the foregoing, any increase or decrease in
                volume of securities offered (if the total dollar value of
                securities offered would not exceed that which was registered)
                and any deviation from the low or high end of the estimated
                maximum offering range may be reflected in the form of
                prospectus filed with the Commission pursuant to Rule 424
                (b) if, in the aggregate, the changes in volume and price
                represent no more than 20 percent change in the maximum
                aggregate offering price set forth in the "Calculation of
                Registration Fee" table in the effective registration statement.
 
             (iii) To include any material information with respect to the plan
                   of distribution not previously disclosed in the registration
                   statement or any material change to such information in the
                   registration statement.
 
                                      II-5
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
 
     (3) To remove from registration by means of a post-effective amendment any
securities being registered which remain unsold at the termination of the
offering.
 
     (4) That, for purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
 
     (5) That, for purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement for the securities offered in the
registration statement, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering of these securities.
 
                                      II-6
POWER OF ATTORNEY
 
     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint ALBERT J. HENRY and EDWIN SNAPE, PH.D.,
and each of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent for him and in his name, place and stead, in any and
all capacities, to sign any or all amendments to this Registration Statement and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same, as fully, for all
intents and purposes, as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
 
                                   SIGNATURES
 
     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, REGISTRANT HAS
DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW
YORK, ON THE 29TH DAY OF SEPTEMBER 1998.
 
                                          IGX CORP.
 
                                          By:      /s/ ALBERT J. HENRY
                                              ----------------------------------
                                                       Albert J. Henry
                                                   Chairman of the Board
 
     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE                                      TITLE                             DATE
------------------------------------------  -------------------------------------------   -------------------
/s/ ALBERT J. HENRY              Chairman of the Board, Chief Executive         September 29, 1998
------------------------------------------  Officer and Director (Principal Executive
             Albert J. Henry                Officer)

            /s/ TONY GEOGHEGAN              Chief Financial Officer (Principal             September 29, 1998
------------------------------------------  Financial and Accounting Officer)
              Tony Geoghegan

        /s/ BARUCH BLUMBERG, PH.D.          Director                                       September 29, 1998
------------------------------------------
          Baruch Blumberg, Ph.D.

           /s/ RAYMOND A. DWEK              Director                                       September 29, 1998
------------------------------------------
             Raymond A. Dwek

        /s/ DONALD H. PICKER PH.D.          Director                                       September 29, 1998
------------------------------------------
          Donald H. Picker Ph.D.

          /s/ EDWIN SNAPE, PHD.             Director                                       September 29, 1998
------------------------------------------
            Edwin Snape, PhD.

     /s/ RANDOLPH C. STEER, MD, PH.D.       Director                                       September 29, 1998
------------------------------------------
       Randolph C. Steer, MD, Ph.D.
II-7
CONSENT OF INDEPENDENT AUDITORS
 
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated September 14, 1998
relating to the consolidated financial statements of IgX Corp., which appears in
such Prospectus. We also consent to the references to us under the headings
"Experts" in such Prospectus.
 
                                          /S/ PRICEWATERHOUSECOOPERS LLP
 
Stamford, Connecticut
September 29, 1998
 
                                      II-8
EXHIBIT INDEX
EXHIBIT                                                                                                    SEQUENTIAL
  NUMBER     DESCRIPTION                                                                                     PAGE NO.
----------   --------------------------------------------------------------------------------------------   -----------
1         --   Form of Underwriting Agreement.
    3.1       --   Amended and Restated Certificate of Incorporation of Registrant dated December 24,
                   1997.
    3.1a      --   Certificate of Amendment of Amended and Restated Certificate of Incorporation of
                   Registrant filed January 6, 1998.
    3.1b      --   Certificate of Amendment of Amended and Restated Certificate of Incorporation of
                   Registrant filed September 29, 1998.
    3.1c      --   Form of Amended and Restated Certificate of Incorporation of Registrant to be filed
                   immediately following the closing of the offering.
    3.2       --   Amended and Restated Bylaws of Registrant.
    4.1       --   Form of specimen Common Stock Certificate of Registrant.*
    4.2       --   IgX Investors' Rights Agreement, dated December 24, 1997, by and among Registrant and
                   certain investors, as amended by Amendment dated September   , 1998.
    4.3       --   Stock Purchase Warrant, dated May 6, 1998, between Registrant and NEGF II, L.P.
    4.4       --   Form of Lock-up Agreement.*
    4.5       --   Waiver of Anti-dilution Rights relating to issuance of May 1998 warrants with respect
                   to Series A and Series B Preferred Stock.
    4.6       --   Waivers of Anti-dilution Rights relating to the initial public offering with respect
                   to Series B Preferred Stock.
    4.7       --   Waivers of Registration Rights.
    4.8       --   Form of Representative's Warrants.
    4.9       --   Promissory Notes for NEGF note and Henry Venture Notes and agreement to convert debt
                   into equity.
    4.10      --   Certificate of Incorporation of IgX Oxford Hepatitis, Corp., filed August 4, 1998 together 
                   with an Amendment thereto filed on August 17, 1998 and a Certificate of Designation of 
                   Preferred Stock.
    4.11      --   Warrant issued to Monsanto Company to purchase shares of IgX Oxford Hepatitis, Corp.
    5         --   Opinion of Epstein Becker & Green, P.C., as to legality of the securities being
                   offered hereby.*
   10.1       --   Amended and Restated 1993 Stock Option Plan of Registrant, as amended.
   10.2       --   License Agreement, dated May 27, 1992 between University of Arizona and the Registrant.
   10.2a      --   First Amendment to License Agreement of May 27, 1992, dated August 9, 1993 between
                   University of Arizona and the Registrant.
   10.2b      --   Second Amendment to License Agreement of May 27, 1992 dated September 18, 1998
                   between University of Arizona and the Registrant.
   10.3       --   License Agreement, dated June 19, 1992 between University of Arizona and the
                   Registrant.
   10.4       --   License Agreement, dated July 1, 1996 between University of Arizona and the
                   Registrant.
   10.4a      --   First Amendment to License Agreement of July 1, 1996 dated September 18, 1998 between
                   University of Arizona and the Registrant.
EXHIBIT                                                                                                    SEQUENTIAL
  NUMBER     DESCRIPTION                                                                                     PAGE NO.
----------   --------------------------------------------------------------------------------------------   -----------
10.5       --   License Agreement, dated November 1, 1996 between University of Arizona and the
                   Registrant.
   10.6       --   License Agreement, dated August 25, 1998 between University of Arizona and the
                   Registrant.
   10.7       --   License Agreement dated September 18, 1998 between University of Arizona and the
                   Registrant.
   10.8       --   Letter Agreement dated September 18, 1998 between the Arizona Board of Regents,
                   Charles Sterling, Vitaliano Cama, Michael Riggs, J. Glenn Songer and the Registrant.
   10.9       --   Research Agreement, dated June 1, 1992 between University of Arizona and the
                   Registrant (F. Javier Enriquez).*
   10.10      --   Research Agreement, dated June 1, 1992 between University of Arizona and the
                   Registrant (Charles R. Sterling).*
   10.11      --   Research Agreement, dated March 12, 1993 between University of Arizona and the
                   Registrant.*
   10.12      --   Research Agreement, dated July 1, 1996 between University of Arizona and the
                   Registrant.
   10.13      --   Research Agreement, dated November 1, 1996 between University of Arizona and the
                   Registrant.
   10.14      --   Research Agreement, dated August 17, 1998 between IgX Oxford Hepatitis Corp. And the
                   Registrant.
   10.15      --   Heads of Agreement dated August 6, 1998 between Laboratorios Sintofarma S.A. and the
                   Registrant.
   10.16      --   Heads of a License and Supply Agreement dated August 7, 1998 between Gador S.A. and
                   the Registrant.
   10.17      --   1998 Stock Option Plan of Registrant.
   10.18      --   Development and License Agreement between IgX Oxford Hepatitis Corp. and Monsanto
                   Company.
   10.19      --   Form of Indemnification Agreement with Directors of Registrant.
   10.20      --   Employment Agreement between Registrant and Carroll Allen.
   10.21      --   Employment Agreement between Registrant and Robert Renfroe.
   10.22      --   Employment Agreement between Registrant and Craig R. Rennie.
   10.22a     --   Severance Agreement between Registrant and Craig R. Rennie.
   10.23      --   Real Estate Leases.*
   21         --   Subsidiaries*
   23.1       --   Consent of PricewaterhouseCoopers LLP (included on Page II-8)
   23.2       --   Consent of Epstein Becker & Green, P.C. (included in Exhibit 5)*
   24         --   Power of Attorney (included on Page II-7).
   27         --   Financial Data Schedule.
------------------
*To be filed by amendment.