<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

(Mark One)

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002
                               -------------

                                       OR

[_]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

 For the transition period from ________________ to __________________

Commission File Number:  0-10736
                         -------

                                MGI PHARMA, INC.
                                ----------------
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                                              <C>
                        Minnesota                                                41-1364647
-------------------------------------------------------     -----------------------------------------------------
    (State or other jurisdiction of incorporation or               (I.R.S. employer identification number)
                     organization)

              5775 West Old Shakopee Road
                       Suite 100
              Bloomington, Minnesota 55437                                      (952) 346-4700
-------------------------------------------------------     -----------------------------------------------------
 (Address of principal executive offices and zip code)         (Registrant's telephone number, including area code)
</TABLE>

Indicate by check mark, whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

Yes  X   No ___
    ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

       Common Stock, $.01 par value                  25,163,883 shares
 ---------------------------------------    ------------------------------------
                   (Class)                     (Outstanding at July 31, 2002)

<PAGE>

                                MGI PHARMA, INC.

                                 FORM 10-Q INDEX

<TABLE>
<CAPTION>
                                                                          Page
                                                                         Number
                                                                         ------
<S>                                                                         <C>
PART I.        FINANCIAL INFORMATION

     Item 1. Financial Statements (Unaudited)

                    Balance Sheets - December 31, 2001
                    and June 30, 2002                                       3

                    Statements of Operations - Three Months and
                    Six Months Ended June 30, 2001 and 2002                 5

                    Statements of Cash Flows - Six Months
                    Ended June 30, 2001 and 2002                            6

                    Notes to Financial Statements                           7

     Item 2. Management's Discussion and Analysis of
                    Financial Condition and Results of Operations          13

     Item 3. Quantitative and Qualitative Disclosure About Market Risk     16

PART II.       OTHER INFORMATION

     Item 4. Submission of Matters to a Vote of Security Holders           17

     Item 5. Other Information                                             17

     Item 6. Exhibits and Reports on Form 8-K                              18

SIGNATURES                                                                 19
</TABLE>

                                       2

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                                MGI PHARMA, INC.

                                 BALANCE SHEETS

                                   (unaudited)

<TABLE>
<CAPTION>
                                                                          December 31,             June 30,
                                                                             2001                    2002
                                                                     --------------------     ------------------
<S>                                                                  <C>                      <C>
ASSETS
------

Current assets:
  Cash and cash equivalents                                          $         40,699,408     $      28,364,175
  Cash  - restricted                                                            4,000,000                    --
  Short-term marketable investments                                            30,006,144            25,942,873
  Receivables, less allowances of
    $117,397 and $149,225                                                       1,829,654             3,875,669
  Inventories                                                                   1,500,054             1,714,450
  Prepaid expenses                                                                246,739               589,376
                                                                     --------------------     -----------------

     Total current assets                                                      78,281,999            60,486,543

Equipment and furniture, at cost
  less accumulated depreciation of
  $1,322,559 and $1,686,216                                                     3,325,334             3,190,630

Long-term marketable investments                                                3,006,928                    --

Long-term equity investments                                                    6,800,000             6,800,000

Intangible assets, at cost
  less accumulated amortization of
  $1,280,476 and $1,871,466                                                     5,811,394             5,220,404

Other assets                                                                      442,368               461,439
                                                                     --------------------     -----------------

Total assets                                                         $         97,668,023     $      76,159,016
                                                                     ====================     =================
</TABLE>

(Continued)

                                        3

<PAGE>

BALANCE SHEETS
(Unaudited)
Page 2

<TABLE>
<CAPTION>
                                                              December 31,             June 30,
                                                                  2001                   2002
                                                            -----------------     ------------------
<S>                                                         <C>                   <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:
  Accounts payable                                          $       1,674,412     $        1,229,314
  Accrued expenses                                                 12,609,838              8,594,009
  Deferred revenue                                                    794,383                794,383
  Other current liabilities                                            21,857                  6,740
                                                            -----------------     ------------------

     Total current liabilities                                     15,100,490             10,624,446
                                                            -----------------     ------------------

Noncurrent liabilities:
  Long-term deposit payable                                         3,750,000              4,300,000
  Deferred revenue                                                  9,828,223              9,431,031
  Other noncurrent liabilities                                         54,599                 82,157
                                                            -----------------     ------------------

     Total noncurrent liabilities                                  13,632,822             13,813,188
                                                            -----------------     ------------------

     Total liabilities                                             28,733,312             24,437,634
                                                            -----------------     ------------------

Stockholders' equity:
  Preferred stock, 10,000,000
    authorized and unissued shares                                         --                     --
  Common stock, $.01 par value,
    70,000,000 authorized shares,
    25,005,050 and 25,151,475
    issued shares                                                     250,051                251,515
  Additional paid-in capital                                      192,060,653            193,633,512
  Accumulated deficit                                            (123,375,993)          (141,922,611)
  Unearned compensation - restricted shares                                --               (241,034)
                                                            -----------------     ------------------

     Total stockholders' equity                                    68,934,711             51,721,382
                                                            -----------------     ------------------

Total liabilities and
  stockholders' equity                                      $      97,668,023     $       76,159,016
                                                            =================     ==================
</TABLE>

_____________________________________
See accompanying notes to financial statements.

                                        4

<PAGE>

                                MGI PHARMA, INC.

                            STATEMENTS OF OPERATIONS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                       Three Months Ended                       Six Months Ended
                                                             June 30,                                June 30,
                                                 --------------------------------        --------------------------------
                                                     2001                2002                2001                2002
                                                 ------------        ------------        ------------        ------------
<S>                                              <C>                 <C>                 <C>                 <C>
Revenues:
  Sales                                          $ 10,161,386        $  4,648,717        $ 17,145,494        $  9,951,490
  Licensing                                           850,902           1,038,511           1,442,571           1,537,610
                                                 ------------        ------------        ------------        ------------
                                                   11,012,288           5,687,228          18,588,065          11,489,100
                                                 ------------        ------------        ------------        ------------

Costs and Expenses:
  Cost of sales                                     1,031,483             756,500           1,820,836           1,442,329
  Selling, general and administrative               7,282,846           7,340,354          13,775,621          14,510,680
  Research and development                         18,189,689           9,791,732          21,743,507          14,054,394
  Amortization of intangible assets                   295,495             295,494             590,989             590,989
                                                 ------------        ------------        ------------        ------------
                                                   26,799,513          18,184,080          37,930,953          30,598,392
                                                 ------------        ------------        ------------        ------------

Loss from operations                              (15,787,225)        (12,496,852)        (19,342,888)        (19,109,292)

Interest income                                       377,640             242,804             813,806             562,674
                                                 ------------        ------------        ------------        ------------

Net loss                                         $(15,409,585)       $(12,254,048)       $(18,529,082)       $(18,546,618)
                                                 ============        ============        ============        ============

Net loss per common share:
           Basic                                 $      (0.81)       $      (0.49)       $      (1.04)       $      (0.74)

           Assuming dilution                     $      (0.81)       $      (0.49)       $      (1.04)       $      (0.74)


Weighted average number of
common shares outstanding:
           Basic                                   18,987,549          25,063,258          17,766,891          25,048,686

           Assuming dilution                       18,987,549          25,063,258          17,766,891          25,048,686
</TABLE>









_______________________________________________

See accompanying notes to financial statements.

                                        5

<PAGE>

                                MGI PHARMA, INC.

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                        Six Months Ended June 30,
                                                      ----------------------------
                                                          2001            2002
                                                      ------------    ------------
<S>                                                   <C>             <C>
OPERATING ACTIVITIES:
Net loss                                              $(18,529,082)   $(18,546,618)
Adjustments for non-cash items:
  Stock issuance for palonostreon license                2,999,992              --
  Depreciation and intangible amortization                 918,757       1,021,572
  Benefit plan contribution                                166,269         230,783
  Stock option term modification                                --         214,744
  Noncash consulting payments                               61,200           5,000
  Other                                                     25,414          32,175
Change in operating assets and liabilities:
  Receivables                                           (3,041,400)     (2,046,015)
  Inventories                                             (156,922)       (214,396)
  Prepaid expenses                                       5,309,984        (342,637)
  Accounts payable and accrued expenses                    755,505      (2,757,031)
  Deferred revenue                                         305,933        (397,192)
  Other current liabilities                                (17,433)        (15,117)
                                                      ------------    ------------

Net cash used in operating activities                  (11,201,783)    (22,814,732)
                                                      ------------    ------------

INVESTING ACTIVITIES:
  Purchase of investments                              (19,566,338)     (4,923,608)
  Maturity of investments                               21,253,159      11,993,807
  Acquisition of Hexalen(R) capsules                    (2,400,000)     (1,200,000)
  Purchase of equipment and furniture                   (1,233,368)       (296,669)
  Other                                                        (66)        (19,071)
                                                      ------------    ------------

Net cash provided by (used in) investing activities     (1,946,613)      5,554,459
                                                      ------------    ------------

FINANCING ACTIVITIES:
  Net proceeds from stock issuance                      29,168,655              --
  Restricted cash                                       (6,000,000)      4,000,000
  Receipt of deposit payable                             1,100,000         550,000
  Issuance of shares under stock
    plans                                                  380,189         375,040
                                                      ------------    ------------
Net cash provided by financing activities               24,648,844       4,925,040
                                                      ------------    ------------
Increase (decrease) in cash and
  cash equivalents                                      11,500,448     (12,335,233)

Cash and cash equivalents at
  beginning of period                                   11,031,714      40,699,408
                                                      ------------    ------------

Cash and cash equivalents at
  end of period                                       $ 22,532,162    $ 28,364,175
                                                      ============    ============

Supplemental disclosure of cash information:
  Cash paid for income taxes                          $      1,000    $      5,500
</TABLE>

------------
See accompanying notes to financial statements.

                                        6

<PAGE>

                                MGI PHARMA, INC.

                          NOTES TO FINANCIAL STATEMENTS

                                   (Unaudited)

(1)   Basis of Presentation

We are an oncology-focused pharmaceutical company that acquires, develops and
commercializes proprietary products that address unmet needs of cancer patients.
We focus our direct sales efforts solely within the United States and create
alliances with other pharmaceutical or biotechnology companies for the
commercialization of our products in other countries.

We promote products directly to physician specialists in the United States using
our own sales force. These products include our Salagen(R) Tablets (pilocarpine
hydrochloride), Hexalen(R) (altretamine) capsules and Didronel(R) (etidronate
disodium) I.V. Infusion. Salagen Tablets are approved in the United States for
two indications: the symptoms of dry mouth associated with radiation treatment
in head and neck cancer patients and the symptoms of dry mouth associated with
Sjogren's syndrome, an autoimmune disease that damages the salivary glands.
Sales of Salagen Tablets in the United States accounted for 85 percent of our
product sales during the first half of 2002. Hexalen capsules, which we began
selling after we acquired the product from MedImmune, Inc. in November 2000, is
an orally administered chemotherapeutic agent approved in the United States for
treatment of refractory ovarian cancer patients. Didronel I.V. Infusion is
approved for the treatment of hypercalcemia (elevated blood calcium) in
late-stage cancer patients. We rely on third parties to manufacture our
commercialized and development stage products.

In April 2001, we obtained the exclusive U.S. and Canadian license and
distribution rights to palonosetron, a cancer supportive care product candidate
for the prevention of chemotherapy-induced nausea and vomiting. We recently
announced achievement of the primary end point for the palonosetron pivotal
trials program. Submission of the New Drug Application to the United States Food
and Drug Administration is expected near the end of the third quarter of 2002.
Our product development efforts also include preclinical and clinical trials for
irofulven, the lead product candidate in our novel family of proprietary cancer
therapy compounds called the acylfulvenes. We are also developing MG98 and other
inhibitors of DNA methyltransferase for North American markets. DNA
methyltransferase is an enzyme that has been associated with uncontrolled tumor
growth. We also provide ongoing clinical support of Salagen Tablets.

The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information. Accordingly, they do not include all of the
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal, recurring adjustments) considered necessary for fair presentation
have been included. Interim results may not be indicative of annual results.
Certain prior year amounts have been reclassified to conform with the current
year presentation. For further information, refer to the financial statements
and footnotes included in the Company's report on Form 10-K for the year ended
December 31, 2001.

                                       7

<PAGE>

(2)   Loss Per Common Share

Loss per share for the three-month and six-month periods ended June 30, 2001 and
2002 is based on weighted average shares outstanding as summarized in the
following table:

Three months ended June 30                              2001            2002
                                                   -------------   -------------

Weighted-average shares - basic                       18,987,549      25,063,258
Effect of dilutive stock options                              --              --
                                                   -------------   -------------
Weighted-average shares - assuming dilution           18,987,549      25,063,258
                                                   =============   =============


Six months ended June 30                                2001            2002
                                                   -------------   -------------

Weighted-average shares - basic                       17,766,891      25,048,686
Effect of dilutive stock options                              --              --
                                                   -------------   -------------
Weighted-average shares - assuming dilution           17,766,891      25,048,686
                                                   =============   =============

For loss periods, basic and diluted share amounts are identical, as the effect
of potentially dilutive common stock is anti-dilutive. The total number of
options excluded from the calculation of potentially dilutive securities because
their inclusion would have been anti-dilutive were 3,492,859 and 4,121,122 for
2001 and 2002, respectively.

(3)   Investments

Because we have the intent and ability to hold our investments to maturity, they
are considered held-to-maturity investments. As such, they are stated at
amortized cost, which approximates estimated fair value. Short-term investments
at December 31, 2001 and June 30, 2002 are summarized in the following table:

                                            2001             2002
                                      --------------    --------------
Medium-term notes                        $16,107,596       $12,945,143
Commercial paper                          13,898,548         9,954,275
Certificates of deposit                           --         3,043,455
                                      --------------    --------------
                                         $30,006,144       $25,942,873
                                      ==============    ==============

Long-term marketable investments at December 31, 2001, consist of certificates
of deposit that mature in January 2003.

                                       8

<PAGE>

(4)   Inventories

Inventories at December 31, 2001 and June 30, 2002 are summarized as follows:

                                                  2001              2002
                                              -------------    --------------
Raw materials and supplies                       $   50,458        $  116,951
Work in process                                     445,429           483,026
Finished products                                 1,004,167         1,114,473
                                              -------------    --------------
                                                 $1,500,054        $1,714,450
                                              =============    ==============

Inventories are stated at the lower of cost or market. Cost is determined on a
first-in, first-out basis.

(5)   Accrued Expenses

Accrued expenses at December 31, 2001 and June 30, 2002 are summarized in the
following table:

                                                            2001          2002
                                                        -----------   ----------
Product development commitments                         $ 4,503,281   $2,619,463
Bonuses                                                   1,774,916    1,109,655
Severance payments                                               --    1,076,300
Product return accrual                                      963,430    1,009,756
Lease accrual                                               983,271      565,135
Hexalen(R) capsules business purchase obligation          1,200,000           --
Other accrued expenses                                    3,184,940    2,213,700
                                                        -----------   ----------
                                                        $12,609,838   $8,594,009
                                                        ===========   ==========



(6)   Stock Incentive Plans

Under stock incentive plans, designated persons (including officers, directors,
employees and consultants) are granted rights to acquire our common stock. These
rights include stock options and other equity rights.

At June 30, 2002, 5,616,779 shares of common stock remain reserved for issuance,
of which 1,495,657 remain available for grant. Options to purchase 4,121,122
shares of common stock were outstanding, of which 1,846,266 were exercisable.
Options outstanding had a weighted average exercise price of $11.59 per share.

                                       9

<PAGE>

(7)  Stockholders' Equity

Changes in selected stockholders' equity accounts for the six months ended June
30, 2002 were as follows:


<TABLE>
<CAPTION>
                                                                                     Unearned
                                          Common Stock               Additional    compensation -
                                    ----------------------------       paid-in       restricted
                                       Shares         Par value        capital          stock
                                    ------------    ------------    ------------    ------------
<S>                                   <C>           <C>             <C>             <C>
Balance at December 31, 2001          25,005,050    $    250,051    $192,060,653    $          0
Exercise of stock options                 15,175             152          87,388              --
Employee retirement savings
  plan contribution                       47,390             474         734,205              --
Employee stock purchase plan              47,837             478         287,022              --
Stock option term modification                --              --         214,744              --
Restricted stock issuance                 35,487             355         244,505        (244,860)
Amortization of restricted stock
  to compensation expense                     --              --              --           3,826
Other issuances                              536               5           4,995              --
                                    ------------    ------------    ------------    ------------
Balance at June 30, 2002              25,151,475    $    251,515    $193,633,512       ($241,034)
                                    ============    ============    ============    ============
</TABLE>

At June 30, 2002, 100,000 shares remain registered for sale from shelf
registration statements that were filed for 5 million shares with the Securities
and Exchange Commission. These remaining shares pertain to an option that we
granted to Ramius Securities to purchase 100,000 shares of our common stock at
prices ranging from $16.95 to $24.72 per share. This option, which expires on
February 28, 2003, relates to a financing facility with Ramius Securities, LLC,
and Ramius Capital Group, LLC.

On June 24, 2002, we issued 35,487 shares of restricted common stock to certain
non-executive officer employees. One-half of these shares vest in one year, and
the remainder of these shares vest in two years, given continued employment
through the vesting dates. We recognize compensation expense for the market
value ($6.90 per share) of the shares at the date of grant over the vesting
periods.

                                       10

<PAGE>

(8)  Leases

We lease office space under noncancellable lease agreements that contain renewal
options and require us to pay operating costs, including property taxes,
insurance and maintenance. In January 2001, we executed a lease agreement for
new office space, beginning in May 2001. At June 30, 2002, we have an accrual of
$565,135 for lease obligations for the former office space in excess of
estimated sublease rental income. Future minimum lease payments under
noncancellable leases, including both the current and former office spaces, are
as follows:

Remainder of 2002            $  795,000
2003                          1,601,000
2004                          1,622,000
2005                          1,498,000
2006                          1,229,000
Thereafter                    1,776,000
Less Sublease Income           (502,022)
                            -----------
                             $8,018,978
                            ===========

(9)  Licensing Arrangements

In April 2001, MGI obtained the exclusive North American license and
distribution rights for palonosetron, from HELSINN Healthcare SA. Palonosetron,
a 5-HT3 antagonist with an extended half-life and strong binding affinity for
the target receptor, is in development for the prevention of
chemotherapy-induced nausea and vomiting. Submission of a new drug application
to the United States Food and Drug Administration is planned near the end of the
third quarter of 2002. The $11 million in upfront payments made by MGI were
funded using the $5 million deposit made upon the execution of the letter of
intent in October 2000, $3 million in cash paid in April 2001, and $3 million of
MGI's common shares delivered in April 2001. An additional $2 million milestone
was paid in October 2001, and a $4 million milestone payment was paid from
restricted cash in April 2002. Milestone payments aggregating to $21 million
will become payable upon achievement of the following development objectives:
$10 million upon filing a new drug application in the United States (MGI can
elect to pay up to one-half of this milestone by using shares of MGI common
stock instead of cash), and $11 million upon receiving marketing approval for
palonosetron in the United States. Helsinn will continue to fund and conduct all
development of palonosetron.

                                       11

<PAGE>

(10) Research and Development Expense

Research and development expense for the three-month and six-month periods ended
June 30, 2001 and 2002 consist of the following:

Three months ended June 30           2001           2002
                                  -----------    -----------
License fees                      $13,016,250    $ 4,000,000
Other research and development      5,173,439      5,791,732
                                  -----------    -----------
                                  $18,189,689    $ 9,791,732
                                  ===========    ===========


Six months ended June 30                 2001           2002
                                  -----------    -----------
License fees                      $13,016,250    $ 4,000,000
Other research and development      8,727,257     10,054,394
                                  -----------    -----------
                                  $21,743,507    $14,054,394
                                  ===========    ===========

(11) Intangible Assets

Intangible assets represent the $7,091,870 excess of the $7.2 million purchase
price over the $108,130 fair value of the net assets related to the acquisition
of the business associated with the product Hexalen capsules. Amortization is
recognized as the greater of the amount computed on a straight-line basis over
six years, which is the estimated commercial life of Hexalen capsules, or in
proportion to the actual product contribution compared to the estimated product
contribution over the estimated commercial life of Hexalen capsules. Under the
straight-line method, amortization will be $1,181,978 per year in 2002 through
2005, and $1,083,482 in 2006.

(12) Reduction in Workforce

To reduce costs, we reduced our workforce by approximately 10 percent, or 19
positions, in the second quarter of 2002. We recognized total expense of
$1,291,044 for this reduction, consisting of $1,076,300 for severance payments,
and $214,744 for extending the terms of selected stock options awards. The total
expense was allocated as follows: $775,278 to research and development expense
and $515,766 to selling, general and administrative expense based on the
positions held by the terminated employees. Accruals related to severance will
be completely paid by the end of the second quarter of 2003.

                                       12

<PAGE>

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of
Operations

Cautionary Statement

This document contains forward-looking statements within the meaning of federal
securities laws that may include statements regarding intent, belief or current
expectations of the company and its management. These forward-looking statements
are not guarantees of future performance and involve a number of risks and
uncertainties that may cause the company's actual results to differ materially
from the results discussed in these statements. Factors that might affect our
results include, but are not limited to, the ability of palonosetron, irofulven,
or our other product candidates to be proven safe and effective in humans, to
receive marketing authorizations from regulatory authorities and to ultimately
compete successfully with other therapies, continued sales of Salagen(R)
Tablets, development or acquisition of additional products, reliance on contract
manufacturing, changes in strategic alliances, continued access to capital, and
other risks and uncertainties detailed from time to time in the Company's
filings with the Securities and Exchange Commission, including Exhibit 99 to
this form 10-Q. We do not intend to update any of the forward-looking statements
after the date of this Form 10-Q to conform them to actual results.

Overview

We are an oncology-focused pharmaceutical company that acquires, develops and
commercializes proprietary products that address unmet needs of cancer patients.
We focus our direct sales efforts solely within the United States and create
alliances with other pharmaceutical or biotechnology companies for the
commercialization of our products in other countries.

We promote products directly to physician specialists in the United States using
our own sales force. These products include our Salagen(R) Tablets (pilocarpine
hydrochloride), Hexalen(R) (altretamine) capsules and Didronel(R) (etidronate
disodium) I.V. Infusion. Salagen Tablets are approved in the United States for
two indications: the symptoms of dry mouth associated with radiation treatment
in head and neck cancer patients and the symptoms of dry mouth associated with
Sjogren's syndrome, an autoimmune disease that damages the salivary glands.
Sales of Salagen Tablets in the United States accounted for 85 percent of our
product sales during the first half of 2002. Hexalen capsules, which we began
selling after we acquired the product from MedImmune, Inc. in November 2000, is
an orally administered chemotherapeutic agent approved in the United States for
treatment of refractory ovarian cancer patients. Didronel I.V. Infusion is
approved for the treatment of hypercalcemia (elevated blood calcium) in
late-stage cancer patients. We rely on third parties to manufacture our
commercialized and development stage products.

In April 2001, we obtained the exclusive U.S. and Canadian license and
distribution rights to palonosetron, a cancer supportive care product candidate
for the prevention of chemotherapy-induced nausea and vomiting. We recently
announced achievement of the primary end point for the palonosetron pivotal
trials program. Submission of the New Drug Application to the United States Food
and Drug Administration is expected near the end of the third quarter of 2002.
Our product development efforts also include preclinical and clinical trials for
irofulven, the lead product candidate in our novel family of proprietary cancer
therapy compounds called the acylfulvenes. We are also developing MG98 and other
inhibitors of DNA methyltransferase for North American markets. DNA
methyltransferase is an enzyme that has been associated with uncontrolled tumor
growth. We also provide ongoing clinical support of Salagen Tablets.

                                       13

<PAGE>

Results of Operations

Revenues

Sales: Sales revenue decreased 54 percent from $10,161,386 in the second quarter
of 2001, to $4,648,717 in the second quarter of 2002, and decreased 42 percent
from $17,145,494 in the first half of 2001, to $9,951,490 in the first half of
2002. The decreases in sales revenue reflect decreased revenue from Salagen
Tablets, resulting from a decrease in stocking of inventory by wholesalers and
retail pharmacies, which were partially offset by an increase in selling price
and a continued increase in patient demand. Beginning in the second quarter of
2001 and continuing throughout the rest of 2001, a substantial increase in
wholesale distributor inventories occurred. A reduction in this distributor
channel inventory throughout the first half of 2002 has resulted in decreased
sales while Salagen Tablets prescriptions continue to grow. As is common in the
pharmaceutical industry, our domestic sales are made to pharmaceutical
wholesalers for further distribution through pharmacies to the ultimate
consumers of our products. Sales of Salagen Tablets in the United States
provided 89 percent and 85 percent of our sales revenue in the first half of
2001 and 2002, respectively. We expect sales revenue for all of our products in
2002 to be within the range of $25 million to $27 million.

Licensing: Licensing revenue increased 22 percent from $850,902 in the second
quarter of 2001 to $1,038,511 in the second quarter of 2002, and increased seven
percent from $1,442,571 in the first half of 2001 to $1,537,610 in the first
half of 2002. Licensing revenue is a combination of deferred revenue
amortization from multiple element arrangements and from royalties that are
recognized when the related sales occur. The increases from 2001 to 2002 reflect
increased royalties from our license relationship with Novartis Ophthalmics AG
for the development and commercialization of Salagen Tablets in Europe, and
increased royalties on herbicide resistant crop technology from our former
agricultural business, partially reduced by decreased royalties related to a
Lyme disease vaccine for dogs. Future licensing revenue will fluctuate from
quarter to quarter depending on the level of recurring royalty generating
activities and changes in amortization of deferred revenue, including the
initiation or termination of licensing arrangements. We expect licensing revenue
for 2002 to be approximately $3 million.

Costs and Expenses

Cost of sales: Cost of sales as a percent of sales was 10 percent for the second
quarter of 2001 and 16 percent for the second quarter of 2002. Cost of sales as
a percent of sales was 11 percent for the first half of 2001 and 14 percent for
the first half of 2002. The increases result from increases in production costs
and changes in our product mix. We believe that cost of sales, as a percent of
product sales for our marketed products for 2002, will range from 10 to 15
percent.

Selling, general and administrative: Selling, general and administrative
expenses increased one percent from $7,282,846 in the second quarter of 2001 to
$7,340,354 in the second quarter of 2002, and increased 5 percent from
$13,775,621 in the first half of 2001 to $14,510,680 in the first half of 2002.
The increases resulted from increased selling expenses, and $515,766 in expense
related to a reduction in our workforce of 10 general and administrative
positions in the second quarter of 2002. Accrued expenses related to the
reduction in our workforce will be paid by the end of the second quarter of
2003. The increases in these expenses were offset by decreases in product
promotion costs, recruiting and relocation costs, and facility costs. Promotion
costs decreased from 2001 due to our initiating promotion of Hexalen and Mylocel
in 2001. Facility costs decreased from 2001due to an accrual made in the second
quarter of 2001 of $559,000 for lease obligations for the former office space in
excess of estimated sublease rental income, and physical move costs in 2001
related to our move to a new office location in June 2001. We expect selling,
general and administrative expense for 2002 to be approximately $30 million.

                                       14

<PAGE>

Research and development: Research and development expense decreased 46 percent
from $18,189,689 in the second quarter of 2001 to $9,791,732 in the second
quarter of 2002, and decreased 35 percent from $21,743,507 in the first half of
2001 to $14,054,394 in the first half of 2002. Both decreases reflect
variability in licensing expense. In conjunction with the license of
palonosetron, we expensed $13 million for the initiation of the license in the
second quarter of 2001, and $4 million for the achievement of the pre-NDA
meeting milestone in the second quarter of 2002. Exclusive of licensing
payments, research and development expense increased 12 percent from $5,173,439
in the second quarter of 2001 to $5,791,732 in the second quarter of 2002, and
increased 15 percent from $8,727,257 in the first half of 2001 to $10,054,394 in
the first half of 2002. These increases reflect expense of $775,278 in the
second quarter of 2002 related to a reduction in our workforce of 9 research and
development positions. Accrued expenses related to the reduction in our
workforce will be paid by the end of the second quarter of 2003. The increase
from the first half of 2001 to the first half of 2002 also reflects increased
expenses related to our development efforts, including palonosetron, which we
licensed from Helsinn in April 2001, and irofulven.

In April 2002, we stopped our Phase 3 trial of irofulven in advanced-stage,
gemcitabine-refractory pancreatic cancer patients. We will continue our broad
development program for irofulven aimed at other tumor targets. We are
conducting a series of clinical trials that are at varying stages of completion.
These trials are designed to evaluate the efficacy and safety of irofulven
administered as a single chemotherapy agent and in combination with marketed
chemotherapy agents for the treatment of patients with solid tumor cancers who
are generally refractory to current therapies.

We expect research and development expense for 2002 to be approximately $33
million, which includes $14 million of expected non-recurring license payments
related to the achievement of palonosetron development milestones.

Tax expense: There is no provision for tax expense in the first half of 2001 or
the first half of 2002, given our annual net loss of $35 million in 2001, and
our projected annual net loss of approximately $36 million to $38 million in
2002. Our ability to achieve profitable operations is dependent upon our
successful launch of palonosetron, and therefore, we continue to maintain a
valuation allowance against our deferred tax asset.

Interest Income

Interest income decreased 36 percent from $377,640 in the second quarter of 2001
to $242,804 in the second quarter of 2002, and decreased 31 percent from
$813,806 in the first half of 2001 to $562,674 in the first half of 2002. The
decreases result from lower investment yields, partially offset by increases in
the average amount of funds available for investment. Funds available for
investment in 2002 increased as a result of the sales of stock in the second and
fourth quarters of 2001. Interest income for 2002 will fluctuate depending on
the timing of cashflows and changes in interest rates for marketable securities.

Net Loss

We had a net loss of $15,409,585 for the second quarter of 2001, and a net loss
of $12,254,048 for the second quarter of 2002. We had a net loss of $18,529,082
for the first half of 2001, and a net loss of $18,546,618 for the first half of
2002. The decreased net loss from the second quarter of 2001 to the second
quarter of 2002 reflects a 48 percent decrease in revenues from 2001 to 2002,
and a 32 percent decrease in costs and expenses from 2001 to 2002. The
relatively unchanged net loss from the first half of 2001 to the first half of
2002 reflects a 38 percent decrease in revenue from 2001 to 2002, and a 19
percent decrease in costs and expenses from 2001 to 2002. The decreases in costs
and expenses for both the three-month and six-month periods primarily resulted
from variability in licensing expense. In conjunction with

                                       15

<PAGE>

the license of palonosetron, we expensed $13 million in the second quarter of
2001, and $4 million in the second quarter of 2002. During the next several
years, we expect to direct our efforts towards activities intended to grow
long-term revenues, including the continued development and launch of
palonosetron and continued development of irofulven and other product
candidates. Increased spending on these initiatives will likely result in
substantial net losses until after our launch of palonosetron. We expect our net
loss for 2002 to be within the range of $36 million to $38 million.

Liquidity and Capital Resources

At June 30, 2002, we had cash and marketable investments of $54,307,048 and
working capital of $49,862,097, compared with $77,712,480 and $63,181,509,
respectively, at December 31, 2001. For the six-month period ended June 30,
2002, we received $550,000 in cash as a deposit from one of our international
partners, and $375,040 in cash from issuance of shares under stock award plans.
We used $22,814,732 of cash to fund our operating activities, including
$4,000,000 of restricted cash for payment of a palonosetron milestone. We also
paid the final installment of $1,200,000 related to the acquisition of
Hexalen(R) Capsules, and purchased $296,669 in equipment and furniture.

Significant cash payments for 2002 will be required to fund operating activities
and pay up to $10 million upon filing of the new drug application for
palonosetron, expected in the second half of 2002. Substantial amounts of
capital are required for pharmaceutical development and commercialization
efforts. For continued development and commercialization of our product
candidates and marketed products, and the acquisition and development of
additional product candidates, we plan to utilize cash provided from product
sales, collaborative arrangements and existing liquid assets. We will seek other
sources of funding, including additional equity or debt issuances as
appropriate. We expect cash use for 2002 to range from $33 million to $35
million, which includes cash required to fund operating activities. We have no
arrangements or covenants that would trigger acceleration of our lease
obligations or long-term liabilities.

Our liquidity is affected by a variety of factors, including sales of our
products, the pace of our research and development programs, the in-licensing of
new products and our ability to raise additional debt or equity capital. As
identified in our risk factors, adverse changes that affect our continued access
to the capital markets, continued development and expansion of our product
candidates, and future demand for our marketed products would affect our
longer-term liquidity. We believe we have sufficient liquidity and capital
resources to fund all known cash requirements for the next 12 months. Our future
noncancellable significant contractual commitments are summarized in the
following table:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                               2002            2003          2004          2005           2006        Thereafter
                               ----            ----          ----          ----           ----        ----------
-------------------------------------------------------------------------------------------------------------------
<S>                          <C>           <C>            <C>           <C>            <C>            <C>
Lease Payments               $795,000      $1,601,000     $1,622,000    $1,498,000     $1,229,000     $1,776,000
-------------------------------------------------------------------------------------------------------------------
</TABLE>

Item 3.

Quantitative and Qualitative Disclosure About Market Risk

Our operations are not subject to risks of material foreign currency
fluctuations, nor do we use derivative financial instruments in our investment
practices. We place our marketable investments in instruments that meet high
credit quality standards, as specified in our investment policy guidelines. We
do not expect material losses with respect to our investment portfolio or
exposure to market risks associated with interest rates. The impact on our net
loss as a result of a one percent change in short-term interest rates would have
an effect of approximately $543,000 over a twelve-month period, based on our
cash, cash equivalents and marketable investment balances at June 30, 2002.

                                       16

<PAGE>

                                MGI PHARMA, INC.

                           PART II - OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

The Company held its Annual Meeting of Shareholders on May 14, 2002, and
sufficient favorable votes were cast to approve all management proposals as
follows:

         Election of management's entire slate of six directors by the following
         vote tallies:

                                                    For                Withhold

         Charles N. Blitzer                      19,583,647           2,827,599
         Andrew J. Ferrara                       21,703,154             708,092
         Hugh E. Miller                          21,700,258             710,098
         Lee J. Schroeder                        21,694,784             716,462
         David B. Sharrock                       21,696,854             714,392
         Arthur Weaver                           21,698,304             712,942


         Amendment of the Company's Restated Articles of Incorporation to
         increase the authorized common stock by 40,000,000 shares and eliminate
         the cumulative preferred stock by a vote of 12,528,993 for, 1,746,003
         against, 76,853 abstaining, and 8,059,397 broker nonvotes.

         Amendment of the Company's 1997 Stock Incentive Plan to extend the
         terms of the plan through May 31, 2005 and to increase the number of
         shares available for awards granted under the plan by 2,000,000 shares
         by a vote of 10,441,775 for, 3,777,392 against, 132,682 abstaining, and
         8,059,397 broker nonvotes.

         Amendment of the Company's Amended and Restated Stock Purchase Plan to
         increase the number of shares which may be purchased under the plan by
         200,000 shares by a vote of 13,175,891 for, 1,066,066 against, 109,892
         abstaining and 8,059,397 broker nonvotes.

         Ratification of the independent auditors by a vote of 21,923,279 for,
         410,006 against, 77,961 abstaining, and 0 broker nonvotes.

Item 5. Other Information

In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company is hereby filing cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in forward looking statements of the
Company made by, or on behalf of the Company. See Exhibit 99 to this report.

                                       17

<PAGE>

Item 6. Exhibits and Reports on Form 8-K

(a)      LISTING OF EXHIBITS:

     Exhibit Number             Description

         3.1               Second Amended and Restated Articles of Incorporation
                           of MGI PHARMA, INC.

         10.1              Amended and Restated Employee Stock Purchase Plan

         10.2              1997 Stock Incentive Plan

         99.1              Cautionary Statements

         99.2              Certification of Charles N. Blitzer Pursuant to 18
                           U.S.C.(S)1350, as adopted pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002

         99.3              Certification of William C. Brown Pursuant to 18
                           U.S.C.(S).1350, as adopted pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002


(b)      REPORTS ON FORM 8-K


         The Company filed a report on Form 8-K on April 17, 2002 to report
         under Item 5, and in press releases filed as exhibits thereto, the
         following:

                  On April 17, 2002, the Company reported its earning for the
         quarter ended March 31, 2002.

                  On April 17, 2002, the Company and HELSINN HEALTHCARE SA
                  announced that preliminary analysis of the pivotal Phase 3
                  trials of their investigational agent palonosetron shows that
                  palonosetron met the 24-hour complete response primary
                  efficacy endpoint. In addition, the complete response rate for
                  the 24-120 hour (days 2 through 5) time period favored
                  palonosetron over the comparator agents, which are currently
                  marketed 5-HT3 antagonists. The companies confirmed that
                  submission of the New Drug Application for palonosetron in the
                  United States is planned to occur in the third quarter of
                  2002.

                  On April 17, 2002, the Company announced that it had stopped
                  its Phase 3 trial of irofulven in advanced-stage,
                  gemcitabine-refractory pancreatic cancer patients. The Company
                  indicated that it will continue its broad development program
                  aimed at other tumor targets.

                                       18

<PAGE>

                                   SIGNATURES

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


                                    MGI PHARMA, INC.


Date:  August 1, 2002               By: /s/ William C. Brown
                                       -----------------------------------
                                    William C. Brown,
                                    Chief Financial Officer and Secretary
                                    (principal financial and accounting officer)

                                       19

<PAGE>

                                MGI PHARMA, INC.

                          Quarterly Report on Form 10-Q
                                     for the
                           Quarter Ended June 30, 2002

                                  EXHIBIT INDEX

       Exhibit
        Number                   Description


         3.1               Second Amended and Restated Articles of Incorporation
                           of MGI PHARMA, INC.

         10.1              Amended and Restated Employee Stock Purchase Plan

         10.2              1997 Stock Incentive Plan

         99.1              Cautionary Statements

         99.2              Certification of Charles N. Blitzer Pursuant to 18
                           U.S.C.(S)1350, as adopted pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002

         99.3              Certification of William C. Brown Pursuant to 18
                           U.S.C.(S)1350, as adopted pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002
[{"type": "10-Q", "sequence": "1", "filename": "d10q.txt", "description": "FORM 10-Q", "secsgml_size_bytes": 57888}]
{"company-data": {"conformed-name": "MGI PHARMA INC", "cik": "0000702131", "assigned-sic": "2834", "irs-number": "411364647", "state-of-incorporation": "MN", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-10736", "film-number": "02719904"}, "business-address": {"street1": "6300 WEST OLD SHAKOPEE RD", "street2": "SUITE 110", "city": "BLOOMINGTON", "state": "MN", "zip": "55438", "phone": "6129357335"}, "mail-address": {"street1": "OPUS CENTER", "street2": "9900 BREN ROAD EAST SUITE 300E", "city": "MINNEAPOLIS", "state": "MN", "zip": "55343"}, "former-company": {"former-conformed-name": "MOLECULAR GENETICS INC", "date-changed": "19900812"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

(Mark One)

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002
                               -------------

                                       OR

[_]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

 For the transition period from ________________ to __________________

Commission File Number:  0-10736
                         -------

                                MGI PHARMA, INC.
                                ----------------
             (Exact name of registrant as specified in its charter)
Minnesota                                                41-1364647
-------------------------------------------------------     -----------------------------------------------------
    (State or other jurisdiction of incorporation or               (I.R.S. employer identification number)
                     organization)

              5775 West Old Shakopee Road
                       Suite 100
              Bloomington, Minnesota 55437                                      (952) 346-4700
-------------------------------------------------------     -----------------------------------------------------
 (Address of principal executive offices and zip code)         (Registrant's telephone number, including area code)
Indicate by check mark, whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

Yes  X   No ___
    ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

       Common Stock, $.01 par value                  25,163,883 shares
 ---------------------------------------    ------------------------------------
                   (Class)                     (Outstanding at July 31, 2002)
MGI PHARMA, INC.

                                 FORM 10-Q INDEX
Page
                                                                         Number
                                                                         ------
PART I.        FINANCIAL INFORMATION

     Item 1. Financial Statements (Unaudited)

                    Balance Sheets - December 31, 2001
                    and June 30, 2002                                       3

                    Statements of Operations - Three Months and
                    Six Months Ended June 30, 2001 and 2002                 5

                    Statements of Cash Flows - Six Months
                    Ended June 30, 2001 and 2002                            6

                    Notes to Financial Statements                           7

     Item 2. Management's Discussion and Analysis of
                    Financial Condition and Results of Operations          13

     Item 3. Quantitative and Qualitative Disclosure About Market Risk     16

PART II.       OTHER INFORMATION

     Item 4. Submission of Matters to a Vote of Security Holders           17

     Item 5. Other Information                                             17

     Item 6. Exhibits and Reports on Form 8-K                              18

SIGNATURES                                                                 19
2
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                                MGI PHARMA, INC.

                                 BALANCE SHEETS

                                   (unaudited)
December 31,             June 30,
                                                                             2001                    2002
                                                                     --------------------     ------------------
ASSETS
------

Current assets:
  Cash and cash equivalents                                          $         40,699,408     $      28,364,175
  Cash  - restricted                                                            4,000,000                    --
  Short-term marketable investments                                            30,006,144            25,942,873
  Receivables, less allowances of
    $117,397 and $149,225                                                       1,829,654             3,875,669
  Inventories                                                                   1,500,054             1,714,450
  Prepaid expenses                                                                246,739               589,376
                                                                     --------------------     -----------------

     Total current assets                                                      78,281,999            60,486,543

Equipment and furniture, at cost
  less accumulated depreciation of
  $1,322,559 and $1,686,216                                                     3,325,334             3,190,630

Long-term marketable investments                                                3,006,928                    --

Long-term equity investments                                                    6,800,000             6,800,000

Intangible assets, at cost
  less accumulated amortization of
  $1,280,476 and $1,871,466                                                     5,811,394             5,220,404

Other assets                                                                      442,368               461,439
                                                                     --------------------     -----------------

Total assets                                                         $         97,668,023     $      76,159,016
                                                                     ====================     =================
(Continued)

                                        3
BALANCE SHEETS
(Unaudited)
Page 2
December 31,             June 30,
                                                                  2001                   2002
                                                            -----------------     ------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:
  Accounts payable                                          $       1,674,412     $        1,229,314
  Accrued expenses                                                 12,609,838              8,594,009
  Deferred revenue                                                    794,383                794,383
  Other current liabilities                                            21,857                  6,740
                                                            -----------------     ------------------

     Total current liabilities                                     15,100,490             10,624,446
                                                            -----------------     ------------------

Noncurrent liabilities:
  Long-term deposit payable                                         3,750,000              4,300,000
  Deferred revenue                                                  9,828,223              9,431,031
  Other noncurrent liabilities                                         54,599                 82,157
                                                            -----------------     ------------------

     Total noncurrent liabilities                                  13,632,822             13,813,188
                                                            -----------------     ------------------

     Total liabilities                                             28,733,312             24,437,634
                                                            -----------------     ------------------

Stockholders' equity:
  Preferred stock, 10,000,000
    authorized and unissued shares                                         --                     --
  Common stock, $.01 par value,
    70,000,000 authorized shares,
    25,005,050 and 25,151,475
    issued shares                                                     250,051                251,515
  Additional paid-in capital                                      192,060,653            193,633,512
  Accumulated deficit                                            (123,375,993)          (141,922,611)
  Unearned compensation - restricted shares                                --               (241,034)
                                                            -----------------     ------------------

     Total stockholders' equity                                    68,934,711             51,721,382
                                                            -----------------     ------------------

Total liabilities and
  stockholders' equity                                      $      97,668,023     $       76,159,016
                                                            =================     ==================
_____________________________________
See accompanying notes to financial statements.

                                        4
MGI PHARMA, INC.

                            STATEMENTS OF OPERATIONS

                                   (Unaudited)
Three Months Ended                       Six Months Ended
                                                             June 30,                                June 30,
                                                 --------------------------------        --------------------------------
                                                     2001                2002                2001                2002
                                                 ------------        ------------        ------------        ------------
Revenues:
  Sales                                          $ 10,161,386        $  4,648,717        $ 17,145,494        $  9,951,490
  Licensing                                           850,902           1,038,511           1,442,571           1,537,610
                                                 ------------        ------------        ------------        ------------
                                                   11,012,288           5,687,228          18,588,065          11,489,100
                                                 ------------        ------------        ------------        ------------

Costs and Expenses:
  Cost of sales                                     1,031,483             756,500           1,820,836           1,442,329
  Selling, general and administrative               7,282,846           7,340,354          13,775,621          14,510,680
  Research and development                         18,189,689           9,791,732          21,743,507          14,054,394
  Amortization of intangible assets                   295,495             295,494             590,989             590,989
                                                 ------------        ------------        ------------        ------------
                                                   26,799,513          18,184,080          37,930,953          30,598,392
                                                 ------------        ------------        ------------        ------------

Loss from operations                              (15,787,225)        (12,496,852)        (19,342,888)        (19,109,292)

Interest income                                       377,640             242,804             813,806             562,674
                                                 ------------        ------------        ------------        ------------

Net loss                                         $(15,409,585)       $(12,254,048)       $(18,529,082)       $(18,546,618)
                                                 ============        ============        ============        ============

Net loss per common share:
           Basic                                 $      (0.81)       $      (0.49)       $      (1.04)       $      (0.74)

           Assuming dilution                     $      (0.81)       $      (0.49)       $      (1.04)       $      (0.74)

Weighted average number of
common shares outstanding:
           Basic                                   18,987,549          25,063,258          17,766,891          25,048,686

           Assuming dilution                       18,987,549          25,063,258          17,766,891          25,048,686
_______________________________________________

See accompanying notes to financial statements.

                                        5
MGI PHARMA, INC.

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)
Six Months Ended June 30,
                                                      ----------------------------
                                                          2001            2002
                                                      ------------    ------------
OPERATING ACTIVITIES:
Net loss                                              $(18,529,082)   $(18,546,618)
Adjustments for non-cash items:
  Stock issuance for palonostreon license                2,999,992              --
  Depreciation and intangible amortization                 918,757       1,021,572
  Benefit plan contribution                                166,269         230,783
  Stock option term modification                                --         214,744
  Noncash consulting payments                               61,200           5,000
  Other                                                     25,414          32,175
Change in operating assets and liabilities:
  Receivables                                           (3,041,400)     (2,046,015)
  Inventories                                             (156,922)       (214,396)
  Prepaid expenses                                       5,309,984        (342,637)
  Accounts payable and accrued expenses                    755,505      (2,757,031)
  Deferred revenue                                         305,933        (397,192)
  Other current liabilities                                (17,433)        (15,117)
                                                      ------------    ------------

Net cash used in operating activities                  (11,201,783)    (22,814,732)
                                                      ------------    ------------

INVESTING ACTIVITIES:
  Purchase of investments                              (19,566,338)     (4,923,608)
  Maturity of investments                               21,253,159      11,993,807
  Acquisition of Hexalen(R) capsules                    (2,400,000)     (1,200,000)
  Purchase of equipment and furniture                   (1,233,368)       (296,669)
  Other                                                        (66)        (19,071)
                                                      ------------    ------------

Net cash provided by (used in) investing activities     (1,946,613)      5,554,459
                                                      ------------    ------------

FINANCING ACTIVITIES:
  Net proceeds from stock issuance                      29,168,655              --
  Restricted cash                                       (6,000,000)      4,000,000
  Receipt of deposit payable                             1,100,000         550,000
  Issuance of shares under stock
    plans                                                  380,189         375,040
                                                      ------------    ------------
Net cash provided by financing activities               24,648,844       4,925,040
                                                      ------------    ------------
Increase (decrease) in cash and
  cash equivalents                                      11,500,448     (12,335,233)

Cash and cash equivalents at
  beginning of period                                   11,031,714      40,699,408
                                                      ------------    ------------

Cash and cash equivalents at
  end of period                                       $ 22,532,162    $ 28,364,175
                                                      ============    ============

Supplemental disclosure of cash information:
  Cash paid for income taxes                          $      1,000    $      5,500
------------
See accompanying notes to financial statements.

                                        6
MGI PHARMA, INC.

                          NOTES TO FINANCIAL STATEMENTS

                                   (Unaudited)

(1)   Basis of Presentation

We are an oncology-focused pharmaceutical company that acquires, develops and
commercializes proprietary products that address unmet needs of cancer patients.
We focus our direct sales efforts solely within the United States and create
alliances with other pharmaceutical or biotechnology companies for the
commercialization of our products in other countries.

We promote products directly to physician specialists in the United States using
our own sales force. These products include our Salagen(R) Tablets (pilocarpine
hydrochloride), Hexalen(R) (altretamine) capsules and Didronel(R) (etidronate
disodium) I.V. Infusion. Salagen Tablets are approved in the United States for
two indications: the symptoms of dry mouth associated with radiation treatment
in head and neck cancer patients and the symptoms of dry mouth associated with
Sjogren's syndrome, an autoimmune disease that damages the salivary glands.
Sales of Salagen Tablets in the United States accounted for 85 percent of our
product sales during the first half of 2002. Hexalen capsules, which we began
selling after we acquired the product from MedImmune, Inc. in November 2000, is
an orally administered chemotherapeutic agent approved in the United States for
treatment of refractory ovarian cancer patients. Didronel I.V. Infusion is
approved for the treatment of hypercalcemia (elevated blood calcium) in
late-stage cancer patients. We rely on third parties to manufacture our
commercialized and development stage products.

In April 2001, we obtained the exclusive U.S. and Canadian license and
distribution rights to palonosetron, a cancer supportive care product candidate
for the prevention of chemotherapy-induced nausea and vomiting. We recently
announced achievement of the primary end point for the palonosetron pivotal
trials program. Submission of the New Drug Application to the United States Food
and Drug Administration is expected near the end of the third quarter of 2002.
Our product development efforts also include preclinical and clinical trials for
irofulven, the lead product candidate in our novel family of proprietary cancer
therapy compounds called the acylfulvenes. We are also developing MG98 and other
inhibitors of DNA methyltransferase for North American markets. DNA
methyltransferase is an enzyme that has been associated with uncontrolled tumor
growth. We also provide ongoing clinical support of Salagen Tablets.

The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information. Accordingly, they do not include all of the
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal, recurring adjustments) considered necessary for fair presentation
have been included. Interim results may not be indicative of annual results.
Certain prior year amounts have been reclassified to conform with the current
year presentation. For further information, refer to the financial statements
and footnotes included in the Company's report on Form 10-K for the year ended
December 31, 2001.

                                       7
(2)   Loss Per Common Share

Loss per share for the three-month and six-month periods ended June 30, 2001 and
2002 is based on weighted average shares outstanding as summarized in the
following table:

Three months ended June 30                              2001            2002
                                                   -------------   -------------

Weighted-average shares - basic                       18,987,549      25,063,258
Effect of dilutive stock options                              --              --
                                                   -------------   -------------
Weighted-average shares - assuming dilution           18,987,549      25,063,258
                                                   =============   =============

Six months ended June 30                                2001            2002
                                                   -------------   -------------

Weighted-average shares - basic                       17,766,891      25,048,686
Effect of dilutive stock options                              --              --
                                                   -------------   -------------
Weighted-average shares - assuming dilution           17,766,891      25,048,686
                                                   =============   =============

For loss periods, basic and diluted share amounts are identical, as the effect
of potentially dilutive common stock is anti-dilutive. The total number of
options excluded from the calculation of potentially dilutive securities because
their inclusion would have been anti-dilutive were 3,492,859 and 4,121,122 for
2001 and 2002, respectively.

(3)   Investments

Because we have the intent and ability to hold our investments to maturity, they
are considered held-to-maturity investments. As such, they are stated at
amortized cost, which approximates estimated fair value. Short-term investments
at December 31, 2001 and June 30, 2002 are summarized in the following table:

                                            2001             2002
                                      --------------    --------------
Medium-term notes                        $16,107,596       $12,945,143
Commercial paper                          13,898,548         9,954,275
Certificates of deposit                           --         3,043,455
                                      --------------    --------------
                                         $30,006,144       $25,942,873
                                      ==============    ==============

Long-term marketable investments at December 31, 2001, consist of certificates
of deposit that mature in January 2003.

                                       8
(4)   Inventories

Inventories at December 31, 2001 and June 30, 2002 are summarized as follows:

                                                  2001              2002
                                              -------------    --------------
Raw materials and supplies                       $   50,458        $  116,951
Work in process                                     445,429           483,026
Finished products                                 1,004,167         1,114,473
                                              -------------    --------------
                                                 $1,500,054        $1,714,450
                                              =============    ==============

Inventories are stated at the lower of cost or market. Cost is determined on a
first-in, first-out basis.

(5)   Accrued Expenses

Accrued expenses at December 31, 2001 and June 30, 2002 are summarized in the
following table:

                                                            2001          2002
                                                        -----------   ----------
Product development commitments                         $ 4,503,281   $2,619,463
Bonuses                                                   1,774,916    1,109,655
Severance payments                                               --    1,076,300
Product return accrual                                      963,430    1,009,756
Lease accrual                                               983,271      565,135
Hexalen(R) capsules business purchase obligation          1,200,000           --
Other accrued expenses                                    3,184,940    2,213,700
                                                        -----------   ----------
                                                        $12,609,838   $8,594,009
                                                        ===========   ==========

(6)   Stock Incentive Plans

Under stock incentive plans, designated persons (including officers, directors,
employees and consultants) are granted rights to acquire our common stock. These
rights include stock options and other equity rights.

At June 30, 2002, 5,616,779 shares of common stock remain reserved for issuance,
of which 1,495,657 remain available for grant. Options to purchase 4,121,122
shares of common stock were outstanding, of which 1,846,266 were exercisable.
Options outstanding had a weighted average exercise price of $11.59 per share.

                                       9
(7)  Stockholders' Equity

Changes in selected stockholders' equity accounts for the six months ended June
30, 2002 were as follows:
Unearned
                                          Common Stock               Additional    compensation -
                                    ----------------------------       paid-in       restricted
                                       Shares         Par value        capital          stock
                                    ------------    ------------    ------------    ------------
Balance at December 31, 2001          25,005,050    $    250,051    $192,060,653    $          0
Exercise of stock options                 15,175             152          87,388              --
Employee retirement savings
  plan contribution                       47,390             474         734,205              --
Employee stock purchase plan              47,837             478         287,022              --
Stock option term modification                --              --         214,744              --
Restricted stock issuance                 35,487             355         244,505        (244,860)
Amortization of restricted stock
  to compensation expense                     --              --              --           3,826
Other issuances                              536               5           4,995              --
                                    ------------    ------------    ------------    ------------
Balance at June 30, 2002              25,151,475    $    251,515    $193,633,512       ($241,034)
                                    ============    ============    ============    ============
At June 30, 2002, 100,000 shares remain registered for sale from shelf
registration statements that were filed for 5 million shares with the Securities
and Exchange Commission. These remaining shares pertain to an option that we
granted to Ramius Securities to purchase 100,000 shares of our common stock at
prices ranging from $16.95 to $24.72 per share. This option, which expires on
February 28, 2003, relates to a financing facility with Ramius Securities, LLC,
and Ramius Capital Group, LLC.

On June 24, 2002, we issued 35,487 shares of restricted common stock to certain
non-executive officer employees. One-half of these shares vest in one year, and
the remainder of these shares vest in two years, given continued employment
through the vesting dates. We recognize compensation expense for the market
value ($6.90 per share) of the shares at the date of grant over the vesting
periods.

                                       10
(8)  Leases

We lease office space under noncancellable lease agreements that contain renewal
options and require us to pay operating costs, including property taxes,
insurance and maintenance. In January 2001, we executed a lease agreement for
new office space, beginning in May 2001. At June 30, 2002, we have an accrual of
$565,135 for lease obligations for the former office space in excess of
estimated sublease rental income. Future minimum lease payments under
noncancellable leases, including both the current and former office spaces, are
as follows:

Remainder of 2002            $  795,000
2003                          1,601,000
2004                          1,622,000
2005                          1,498,000
2006                          1,229,000
Thereafter                    1,776,000
Less Sublease Income           (502,022)
                            -----------
                             $8,018,978
                            ===========

(9)  Licensing Arrangements

In April 2001, MGI obtained the exclusive North American license and
distribution rights for palonosetron, from HELSINN Healthcare SA. Palonosetron,
a 5-HT3 antagonist with an extended half-life and strong binding affinity for
the target receptor, is in development for the prevention of
chemotherapy-induced nausea and vomiting. Submission of a new drug application
to the United States Food and Drug Administration is planned near the end of the
third quarter of 2002. The $11 million in upfront payments made by MGI were
funded using the $5 million deposit made upon the execution of the letter of
intent in October 2000, $3 million in cash paid in April 2001, and $3 million of
MGI's common shares delivered in April 2001. An additional $2 million milestone
was paid in October 2001, and a $4 million milestone payment was paid from
restricted cash in April 2002. Milestone payments aggregating to $21 million
will become payable upon achievement of the following development objectives:
$10 million upon filing a new drug application in the United States (MGI can
elect to pay up to one-half of this milestone by using shares of MGI common
stock instead of cash), and $11 million upon receiving marketing approval for
palonosetron in the United States. Helsinn will continue to fund and conduct all
development of palonosetron.

                                       11
(10) Research and Development Expense

Research and development expense for the three-month and six-month periods ended
June 30, 2001 and 2002 consist of the following:

Three months ended June 30           2001           2002
                                  -----------    -----------
License fees                      $13,016,250    $ 4,000,000
Other research and development      5,173,439      5,791,732
                                  -----------    -----------
                                  $18,189,689    $ 9,791,732
                                  ===========    ===========

Six months ended June 30                 2001           2002
                                  -----------    -----------
License fees                      $13,016,250    $ 4,000,000
Other research and development      8,727,257     10,054,394
                                  -----------    -----------
                                  $21,743,507    $14,054,394
                                  ===========    ===========

(11) Intangible Assets

Intangible assets represent the $7,091,870 excess of the $7.2 million purchase
price over the $108,130 fair value of the net assets related to the acquisition
of the business associated with the product Hexalen capsules. Amortization is
recognized as the greater of the amount computed on a straight-line basis over
six years, which is the estimated commercial life of Hexalen capsules, or in
proportion to the actual product contribution compared to the estimated product
contribution over the estimated commercial life of Hexalen capsules. Under the
straight-line method, amortization will be $1,181,978 per year in 2002 through
2005, and $1,083,482 in 2006.

(12) Reduction in Workforce

To reduce costs, we reduced our workforce by approximately 10 percent, or 19
positions, in the second quarter of 2002. We recognized total expense of
$1,291,044 for this reduction, consisting of $1,076,300 for severance payments,
and $214,744 for extending the terms of selected stock options awards. The total
expense was allocated as follows: $775,278 to research and development expense
and $515,766 to selling, general and administrative expense based on the
positions held by the terminated employees. Accruals related to severance will
be completely paid by the end of the second quarter of 2003.

                                       12
Item 2.

Management's Discussion and Analysis of Financial Condition and Results of
Operations

Cautionary Statement

This document contains forward-looking statements within the meaning of federal
securities laws that may include statements regarding intent, belief or current
expectations of the company and its management. These forward-looking statements
are not guarantees of future performance and involve a number of risks and
uncertainties that may cause the company's actual results to differ materially
from the results discussed in these statements. Factors that might affect our
results include, but are not limited to, the ability of palonosetron, irofulven,
or our other product candidates to be proven safe and effective in humans, to
receive marketing authorizations from regulatory authorities and to ultimately
compete successfully with other therapies, continued sales of Salagen(R)
Tablets, development or acquisition of additional products, reliance on contract
manufacturing, changes in strategic alliances, continued access to capital, and
other risks and uncertainties detailed from time to time in the Company's
filings with the Securities and Exchange Commission, including Exhibit 99 to
this form 10-Q. We do not intend to update any of the forward-looking statements
after the date of this Form 10-Q to conform them to actual results.

Overview

We are an oncology-focused pharmaceutical company that acquires, develops and
commercializes proprietary products that address unmet needs of cancer patients.
We focus our direct sales efforts solely within the United States and create
alliances with other pharmaceutical or biotechnology companies for the
commercialization of our products in other countries.

We promote products directly to physician specialists in the United States using
our own sales force. These products include our Salagen(R) Tablets (pilocarpine
hydrochloride), Hexalen(R) (altretamine) capsules and Didronel(R) (etidronate
disodium) I.V. Infusion. Salagen Tablets are approved in the United States for
two indications: the symptoms of dry mouth associated with radiation treatment
in head and neck cancer patients and the symptoms of dry mouth associated with
Sjogren's syndrome, an autoimmune disease that damages the salivary glands.
Sales of Salagen Tablets in the United States accounted for 85 percent of our
product sales during the first half of 2002. Hexalen capsules, which we began
selling after we acquired the product from MedImmune, Inc. in November 2000, is
an orally administered chemotherapeutic agent approved in the United States for
treatment of refractory ovarian cancer patients. Didronel I.V. Infusion is
approved for the treatment of hypercalcemia (elevated blood calcium) in
late-stage cancer patients. We rely on third parties to manufacture our
commercialized and development stage products.

In April 2001, we obtained the exclusive U.S. and Canadian license and
distribution rights to palonosetron, a cancer supportive care product candidate
for the prevention of chemotherapy-induced nausea and vomiting. We recently
announced achievement of the primary end point for the palonosetron pivotal
trials program. Submission of the New Drug Application to the United States Food
and Drug Administration is expected near the end of the third quarter of 2002.
Our product development efforts also include preclinical and clinical trials for
irofulven, the lead product candidate in our novel family of proprietary cancer
therapy compounds called the acylfulvenes. We are also developing MG98 and other
inhibitors of DNA methyltransferase for North American markets. DNA
methyltransferase is an enzyme that has been associated with uncontrolled tumor
growth. We also provide ongoing clinical support of Salagen Tablets.

                                       13
Results of Operations

Revenues

Sales: Sales revenue decreased 54 percent from $10,161,386 in the second quarter
of 2001, to $4,648,717 in the second quarter of 2002, and decreased 42 percent
from $17,145,494 in the first half of 2001, to $9,951,490 in the first half of
2002. The decreases in sales revenue reflect decreased revenue from Salagen
Tablets, resulting from a decrease in stocking of inventory by wholesalers and
retail pharmacies, which were partially offset by an increase in selling price
and a continued increase in patient demand. Beginning in the second quarter of
2001 and continuing throughout the rest of 2001, a substantial increase in
wholesale distributor inventories occurred. A reduction in this distributor
channel inventory throughout the first half of 2002 has resulted in decreased
sales while Salagen Tablets prescriptions continue to grow. As is common in the
pharmaceutical industry, our domestic sales are made to pharmaceutical
wholesalers for further distribution through pharmacies to the ultimate
consumers of our products. Sales of Salagen Tablets in the United States
provided 89 percent and 85 percent of our sales revenue in the first half of
2001 and 2002, respectively. We expect sales revenue for all of our products in
2002 to be within the range of $25 million to $27 million.

Licensing: Licensing revenue increased 22 percent from $850,902 in the second
quarter of 2001 to $1,038,511 in the second quarter of 2002, and increased seven
percent from $1,442,571 in the first half of 2001 to $1,537,610 in the first
half of 2002. Licensing revenue is a combination of deferred revenue
amortization from multiple element arrangements and from royalties that are
recognized when the related sales occur. The increases from 2001 to 2002 reflect
increased royalties from our license relationship with Novartis Ophthalmics AG
for the development and commercialization of Salagen Tablets in Europe, and
increased royalties on herbicide resistant crop technology from our former
agricultural business, partially reduced by decreased royalties related to a
Lyme disease vaccine for dogs. Future licensing revenue will fluctuate from
quarter to quarter depending on the level of recurring royalty generating
activities and changes in amortization of deferred revenue, including the
initiation or termination of licensing arrangements. We expect licensing revenue
for 2002 to be approximately $3 million.

Costs and Expenses

Cost of sales: Cost of sales as a percent of sales was 10 percent for the second
quarter of 2001 and 16 percent for the second quarter of 2002. Cost of sales as
a percent of sales was 11 percent for the first half of 2001 and 14 percent for
the first half of 2002. The increases result from increases in production costs
and changes in our product mix. We believe that cost of sales, as a percent of
product sales for our marketed products for 2002, will range from 10 to 15
percent.

Selling, general and administrative: Selling, general and administrative
expenses increased one percent from $7,282,846 in the second quarter of 2001 to
$7,340,354 in the second quarter of 2002, and increased 5 percent from
$13,775,621 in the first half of 2001 to $14,510,680 in the first half of 2002.
The increases resulted from increased selling expenses, and $515,766 in expense
related to a reduction in our workforce of 10 general and administrative
positions in the second quarter of 2002. Accrued expenses related to the
reduction in our workforce will be paid by the end of the second quarter of
2003. The increases in these expenses were offset by decreases in product
promotion costs, recruiting and relocation costs, and facility costs. Promotion
costs decreased from 2001 due to our initiating promotion of Hexalen and Mylocel
in 2001. Facility costs decreased from 2001due to an accrual made in the second
quarter of 2001 of $559,000 for lease obligations for the former office space in
excess of estimated sublease rental income, and physical move costs in 2001
related to our move to a new office location in June 2001. We expect selling,
general and administrative expense for 2002 to be approximately $30 million.

                                       14
Research and development: Research and development expense decreased 46 percent
from $18,189,689 in the second quarter of 2001 to $9,791,732 in the second
quarter of 2002, and decreased 35 percent from $21,743,507 in the first half of
2001 to $14,054,394 in the first half of 2002. Both decreases reflect
variability in licensing expense. In conjunction with the license of
palonosetron, we expensed $13 million for the initiation of the license in the
second quarter of 2001, and $4 million for the achievement of the pre-NDA
meeting milestone in the second quarter of 2002. Exclusive of licensing
payments, research and development expense increased 12 percent from $5,173,439
in the second quarter of 2001 to $5,791,732 in the second quarter of 2002, and
increased 15 percent from $8,727,257 in the first half of 2001 to $10,054,394 in
the first half of 2002. These increases reflect expense of $775,278 in the
second quarter of 2002 related to a reduction in our workforce of 9 research and
development positions. Accrued expenses related to the reduction in our
workforce will be paid by the end of the second quarter of 2003. The increase
from the first half of 2001 to the first half of 2002 also reflects increased
expenses related to our development efforts, including palonosetron, which we
licensed from Helsinn in April 2001, and irofulven.

In April 2002, we stopped our Phase 3 trial of irofulven in advanced-stage,
gemcitabine-refractory pancreatic cancer patients. We will continue our broad
development program for irofulven aimed at other tumor targets. We are
conducting a series of clinical trials that are at varying stages of completion.
These trials are designed to evaluate the efficacy and safety of irofulven
administered as a single chemotherapy agent and in combination with marketed
chemotherapy agents for the treatment of patients with solid tumor cancers who
are generally refractory to current therapies.

We expect research and development expense for 2002 to be approximately $33
million, which includes $14 million of expected non-recurring license payments
related to the achievement of palonosetron development milestones.

Tax expense: There is no provision for tax expense in the first half of 2001 or
the first half of 2002, given our annual net loss of $35 million in 2001, and
our projected annual net loss of approximately $36 million to $38 million in
2002. Our ability to achieve profitable operations is dependent upon our
successful launch of palonosetron, and therefore, we continue to maintain a
valuation allowance against our deferred tax asset.

Interest Income

Interest income decreased 36 percent from $377,640 in the second quarter of 2001
to $242,804 in the second quarter of 2002, and decreased 31 percent from
$813,806 in the first half of 2001 to $562,674 in the first half of 2002. The
decreases result from lower investment yields, partially offset by increases in
the average amount of funds available for investment. Funds available for
investment in 2002 increased as a result of the sales of stock in the second and
fourth quarters of 2001. Interest income for 2002 will fluctuate depending on
the timing of cashflows and changes in interest rates for marketable securities.

Net Loss

We had a net loss of $15,409,585 for the second quarter of 2001, and a net loss
of $12,254,048 for the second quarter of 2002. We had a net loss of $18,529,082
for the first half of 2001, and a net loss of $18,546,618 for the first half of
2002. The decreased net loss from the second quarter of 2001 to the second
quarter of 2002 reflects a 48 percent decrease in revenues from 2001 to 2002,
and a 32 percent decrease in costs and expenses from 2001 to 2002. The
relatively unchanged net loss from the first half of 2001 to the first half of
2002 reflects a 38 percent decrease in revenue from 2001 to 2002, and a 19
percent decrease in costs and expenses from 2001 to 2002. The decreases in costs
and expenses for both the three-month and six-month periods primarily resulted
from variability in licensing expense. In conjunction with

                                       15
the license of palonosetron, we expensed $13 million in the second quarter of
2001, and $4 million in the second quarter of 2002. During the next several
years, we expect to direct our efforts towards activities intended to grow
long-term revenues, including the continued development and launch of
palonosetron and continued development of irofulven and other product
candidates. Increased spending on these initiatives will likely result in
substantial net losses until after our launch of palonosetron. We expect our net
loss for 2002 to be within the range of $36 million to $38 million.

Liquidity and Capital Resources

At June 30, 2002, we had cash and marketable investments of $54,307,048 and
working capital of $49,862,097, compared with $77,712,480 and $63,181,509,
respectively, at December 31, 2001. For the six-month period ended June 30,
2002, we received $550,000 in cash as a deposit from one of our international
partners, and $375,040 in cash from issuance of shares under stock award plans.
We used $22,814,732 of cash to fund our operating activities, including
$4,000,000 of restricted cash for payment of a palonosetron milestone. We also
paid the final installment of $1,200,000 related to the acquisition of
Hexalen(R) Capsules, and purchased $296,669 in equipment and furniture.

Significant cash payments for 2002 will be required to fund operating activities
and pay up to $10 million upon filing of the new drug application for
palonosetron, expected in the second half of 2002. Substantial amounts of
capital are required for pharmaceutical development and commercialization
efforts. For continued development and commercialization of our product
candidates and marketed products, and the acquisition and development of
additional product candidates, we plan to utilize cash provided from product
sales, collaborative arrangements and existing liquid assets. We will seek other
sources of funding, including additional equity or debt issuances as
appropriate. We expect cash use for 2002 to range from $33 million to $35
million, which includes cash required to fund operating activities. We have no
arrangements or covenants that would trigger acceleration of our lease
obligations or long-term liabilities.

Our liquidity is affected by a variety of factors, including sales of our
products, the pace of our research and development programs, the in-licensing of
new products and our ability to raise additional debt or equity capital. As
identified in our risk factors, adverse changes that affect our continued access
to the capital markets, continued development and expansion of our product
candidates, and future demand for our marketed products would affect our
longer-term liquidity. We believe we have sufficient liquidity and capital
resources to fund all known cash requirements for the next 12 months. Our future
noncancellable significant contractual commitments are summarized in the
following table:
-------------------------------------------------------------------------------------------------------------------
                               2002            2003          2004          2005           2006        Thereafter
                               ----            ----          ----          ----           ----        ----------
-------------------------------------------------------------------------------------------------------------------
Lease Payments               $795,000      $1,601,000     $1,622,000    $1,498,000     $1,229,000     $1,776,000
-------------------------------------------------------------------------------------------------------------------
Item 3.

Quantitative and Qualitative Disclosure About Market Risk

Our operations are not subject to risks of material foreign currency
fluctuations, nor do we use derivative financial instruments in our investment
practices. We place our marketable investments in instruments that meet high
credit quality standards, as specified in our investment policy guidelines. We
do not expect material losses with respect to our investment portfolio or
exposure to market risks associated with interest rates. The impact on our net
loss as a result of a one percent change in short-term interest rates would have
an effect of approximately $543,000 over a twelve-month period, based on our
cash, cash equivalents and marketable investment balances at June 30, 2002.

                                       16
MGI PHARMA, INC.

                           PART II - OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

The Company held its Annual Meeting of Shareholders on May 14, 2002, and
sufficient favorable votes were cast to approve all management proposals as
follows:

         Election of management's entire slate of six directors by the following
         vote tallies:

                                                    For                Withhold

         Charles N. Blitzer                      19,583,647           2,827,599
         Andrew J. Ferrara                       21,703,154             708,092
         Hugh E. Miller                          21,700,258             710,098
         Lee J. Schroeder                        21,694,784             716,462
         David B. Sharrock                       21,696,854             714,392
         Arthur Weaver                           21,698,304             712,942

         Amendment of the Company's Restated Articles of Incorporation to
         increase the authorized common stock by 40,000,000 shares and eliminate
         the cumulative preferred stock by a vote of 12,528,993 for, 1,746,003
         against, 76,853 abstaining, and 8,059,397 broker nonvotes.

         Amendment of the Company's 1997 Stock Incentive Plan to extend the
         terms of the plan through May 31, 2005 and to increase the number of
         shares available for awards granted under the plan by 2,000,000 shares
         by a vote of 10,441,775 for, 3,777,392 against, 132,682 abstaining, and
         8,059,397 broker nonvotes.

         Amendment of the Company's Amended and Restated Stock Purchase Plan to
         increase the number of shares which may be purchased under the plan by
         200,000 shares by a vote of 13,175,891 for, 1,066,066 against, 109,892
         abstaining and 8,059,397 broker nonvotes.

         Ratification of the independent auditors by a vote of 21,923,279 for,
         410,006 against, 77,961 abstaining, and 0 broker nonvotes.

Item 5. Other Information

In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company is hereby filing cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in forward looking statements of the
Company made by, or on behalf of the Company. See Exhibit 99 to this report.

                                       17
Item 6. Exhibits and Reports on Form 8-K

(a)      LISTING OF EXHIBITS:

     Exhibit Number             Description

         3.1               Second Amended and Restated Articles of Incorporation
                           of MGI PHARMA, INC.

         10.1              Amended and Restated Employee Stock Purchase Plan

         10.2              1997 Stock Incentive Plan

         99.1              Cautionary Statements

         99.2              Certification of Charles N. Blitzer Pursuant to 18
                           U.S.C.(S)1350, as adopted pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002

         99.3              Certification of William C. Brown Pursuant to 18
                           U.S.C.(S).1350, as adopted pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002

(b)      REPORTS ON FORM 8-K

         The Company filed a report on Form 8-K on April 17, 2002 to report
         under Item 5, and in press releases filed as exhibits thereto, the
         following:

                  On April 17, 2002, the Company reported its earning for the
         quarter ended March 31, 2002.

                  On April 17, 2002, the Company and HELSINN HEALTHCARE SA
                  announced that preliminary analysis of the pivotal Phase 3
                  trials of their investigational agent palonosetron shows that
                  palonosetron met the 24-hour complete response primary
                  efficacy endpoint. In addition, the complete response rate for
                  the 24-120 hour (days 2 through 5) time period favored
                  palonosetron over the comparator agents, which are currently
                  marketed 5-HT3 antagonists. The companies confirmed that
                  submission of the New Drug Application for palonosetron in the
                  United States is planned to occur in the third quarter of
                  2002.

                  On April 17, 2002, the Company announced that it had stopped
                  its Phase 3 trial of irofulven in advanced-stage,
                  gemcitabine-refractory pancreatic cancer patients. The Company
                  indicated that it will continue its broad development program
                  aimed at other tumor targets.

                                       18
SIGNATURES

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

                                    MGI PHARMA, INC.

Date:  August 1, 2002               By: /s/ William C. Brown
                                       -----------------------------------
                                    William C. Brown,
                                    Chief Financial Officer and Secretary
                                    (principal financial and accounting officer)

                                       19
MGI PHARMA, INC.

                          Quarterly Report on Form 10-Q
                                     for the
                           Quarter Ended June 30, 2002

                                  EXHIBIT INDEX

       Exhibit
        Number                   Description

         3.1               Second Amended and Restated Articles of Incorporation
                           of MGI PHARMA, INC.

         10.1              Amended and Restated Employee Stock Purchase Plan

         10.2              1997 Stock Incentive Plan

         99.1              Cautionary Statements

         99.2              Certification of Charles N. Blitzer Pursuant to 18
                           U.S.C.(S)1350, as adopted pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002

         99.3              Certification of William C. Brown Pursuant to 18
                           U.S.C.(S)1350, as adopted pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002