As filed with the Securities and Exchange Commission on August 7, 1997


                                                         REGISTRATION NO. 333-
================================================================================


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

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

                                   FORM S-8
                            REGISTRATION STATEMENT
                                    UNDER
                          THE SECURITIES ACT OF 1933

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

                         BIO-TECHNOLOGY GENERAL CORP.

            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


          DELAWARE                                          13-3033811        
 -------------------------------                     ----------------------
 (STATE OR OTHER JURISDICTION OF                        (I.R.S. EMPLOYER     
 INCORPORATION OR ORGANIZATION)                        IDENTIFICATION NO.)  
                                                     


                70 WOOD AVENUE SOUTH, ISELIN, NEW JERSEY 08830
             ---------------------------------------------------
             (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES (ZIP CODE))


                         BIO-TECHNOLOGY GENERAL CORP.
              -------------------------------------------------
              1997 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
                           (FULL TITLE OF THE PLAN)


                                   SIM FASS
         ------------------------------------------------------------
         CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT
                         BIO-TECHNOLOGY GENERAL CORP.


                70 WOOD AVENUE SOUTH, ISELIN, NEW JERSEY 08830
                -----------------------------------------------
                   (NAME AND ADDRESS OF AGENT FOR SERVICE)

 TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE:  (908) 632-8800
                                                              -----------------

                       CALCULATION OF REGISTRATION FEE

                                             PROPOSED                
                                             MAXIMUM      PROPOSED    
                                             OFFERING     MAXIMUM  
                                              PRICE      AGGREGATE   AMOUNT OF  
    TITLE OF SECURITIES      AMOUNT TO BE      PER        OFFERING  REGISTRATION
      TO BE REGISTERED       REGISTERED(1)   SHARE(2)      PRICE        FEE
    -------------------      -------------   ---------   ---------- ------------
Common Stock, par value of                   
$.01 per share ............  500,000 shares   $12.91     $6,455,000  $1,957.00
                                             

(1)   This registration statement shall also cover any additional indeterminable
      number of shares as may be required pursuant to the Bio-Technology General
      Corp. 1997 Stock Option Plan for Non-Employee Directors in the event of a
      stock dividend, stock split, recapitalization or other similar change in
      the Common Stock.

(2)   The price is estimated pursuant to Rule 457(h) of the Securities Act of
      1933, as amended (the "Act") solely for the purpose of calculating the
      registration fee and is $12.91, the average of the high and low prices of
      Bio-Technology General Corp. Common Stock as reported on The Nasdaq Stock
      Market on August 5, 1997.

      In addition, pursuant to Rule 416(c) under the Act, this registration
statement also covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.

================================================================================
<PAGE>


PROSPECTUS

                                 500,000 SHARES

                          BIO-TECHNOLOGY GENERAL CORP.

                                  COMMON STOCK

                     UNDER THE BIO-TECHNOLOGY GENERAL CORP.
                             1997 STOCK OPTION PLAN
                           FOR NON-EMPLOYEE DIRECTORS

     This Prospectus relates to the offer and sale of up to 500,000 shares (the
"Shares") of Common Stock, par value $0.01 per share (the "Common Stock"), of
Bio-Technology General Corp. ("BTG" or the "Company"). The Shares are being
offered for sale by certain stockholders of the Company (the "Selling
Stockholders") who acquired such Shares pursuant to the Company's 1997 Stock
Option Plan for Non-Employee Directors (the "Plan"). See "Selling Stockholders."
The Company's Common Stock is traded on the Nasdaq Stock Market's National
Market (the "Nasdaq National Market") under the symbol "BTGC." On August 6,
1997, the closing price of the Common Stock, as reported in the consolidated
reporting system, was $12.9375 per share.

     The Company will not receive any of the proceeds from sales of the Shares
by the Selling Stockholders. The Shares may be offered from time to time by the
Selling Stockholders (and their donees and pledgees) through ordinary brokerage
transactions, in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. See "Plan of
Distribution."

     The Selling Stockholders may be deemed to be "Underwriters" as defined in
the Securities Act of 1933, as amended (the "Securities Act"). If any
broker-dealers are used to effect sales, any commissions paid to broker-dealers
and, if broker-dealers purchase any of the Shares as principals, any profits
received by such broker-dealers on the resale of the Shares, may be deemed to be
underwriting discounts or commissions under the Securities Act. In addition, any
profits realized by the Selling Stockholders may be deemed to be underwriting
commissions. All costs, expenses and fees in connection with the registration of
the Shares will be borne by the Company. Brokerage commissions, if any,
attributable to the sale of the Shares will be borne by the Selling Stockholders
(or their donees and pledgees).

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

         SEE "RISK FACTORS", WHICH BEGINS ON PAGE 6 OF THIS PROSPECTUS, FOR
   CERTAIN INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

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

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

                 The date of this Prospectus is August 7, 1997


<PAGE>


                            AVAILABLE INFORMATION

     The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Proxy statements, reports
and other information concerning the Company can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and the regional offices
of the Commission located at Seven World Trade Center, 13th Floor, New York, New
York 10048, and 500 West Madison Street, Chicago, Illinois 60661, and copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and its public
reference facilities in New York, New York and Chicago, Illinois, at prescribed
rates. Copies of such information may also be inspected at the reading room of
the library of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006. The Commission maintains a World Wide Web
site on the Internet at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding the Company and other
registrants that file electronically with the Commission.

     This Prospectus constitutes a part of a Registration Statement on Form S-8
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock, reference is
hereby made to the Registration Statement. Statements contained herein
concerning the provisions of any contract, agreement or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract, agreement or other document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference. Copies of the Registration
Statement together with exhibits may be inspected at the offices of the
Commission as indicated above without charge and copies thereof may be obtained
therefrom upon payment of a prescribed fee.

     Private Securities Litigation Reform Act Safe Harbor Statement. This
Prospectus (including the documents incorporated by reference herein) contains
certain forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) and information relating to BTG that
are based on the beliefs of the management of BTG, as well as assumptions made
by and information currently available to the management of BTG. When used in
this Prospectus, the words "estimate," "project," "believe," "anticipate,"
"intend," "expect" and similar expressions are intended to identify
forward-looking statements. Such statements reflect the current views of BTG
with respect to future events and are subject to risks and uncertainties that
could cause actual results to differ materially from those contemplated in such
forward-looking statements, including those discussed under "Risk Factors."
Readers are cautioned not to place undue reliance on these forward-looking
statements, which

                                      -2-

<PAGE>

speak only as of the date hereof. BTG does not undertake any obligation to
publicly release any revisions to these forward looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     The information in the following documents filed by BTG with the Commission
(File No. 0-15313) pursuant to the Exchange Act is incorporated by reference in
this Prospectus:

     (a)  The Registrant's Annual Report on Form 10-K for the fiscal year ended
          December 31, 1996.

     (b)  The Registrant's Quarterly Report on Form 10-Q for the quarter ended
          March 31, 1997.

     (c)  The Registrant's Form 8-A dated July 25, 1983, as amended by Amendment
          No. 1 to Form 8-A dated September 29, 1983 and Amendment No. 2 to Form
          8-A dated October 1, 1986.

     All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the securities
offered hereby shall be deemed incorporated by reference into this Prospectus
and to be a part hereof from the date of the filing of such documents or
reports. The information relating to the Company in this Prospectus should be
read together with the information in the documents incorporated by reference.

     Any statement contained in a document incorporated by reference herein,
unless otherwise indicated therein, speaks as of the date of the document. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for all purposes to the extent that a
statement contained in this Prospectus modifies or replaces such statement.

     The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any or all of the documents
described above, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents. Requests should be
addressed to: Bio-Technology General Corp., 70 Wood Avenue South, Iselin, New
Jersey 08830, Attention: President (Tel. No. (908) 632-8800). The Company
furnishes its stockholders with an annual report containing audited financial
statements. In addition, the Company may furnish such other reports as may be
authorized, from time to time, by the Board of Directors.


                                      -3-

<PAGE>


                                   THE COMPANY

     Bio-Technology General Corp. ("BTG" or the "Company") is engaged in the
research, development, manufacture and marketing of biopharmaceutical products.
The Company has emerged as one of the few profitable publicly-traded
biopharmaceutical companies in the United States. Through a combination of
internal research and development, acquisitions, collaborative relationships and
licensing arrangements, BTG has developed a portfolio of therapeutic products,
including five products that have received regulatory approval for sale, of
which four are currently being marketed, four products in clinical trials and
three products in pre-clinical development. The Company distributes its products
on a worldwide basis through a direct sales force in the United States and
Israel and through third-party license and distribution relationships elsewhere.
The Company seeks both broad markets for its products as well as specialized
markets where it can seek Orphan Drug status and potential marketing
exclusivity.

     The Company's approved products include Bio-Tropin(TM) (human growth
hormone), which is currently being marketed in Japan and in several countries in
Europe, Latin America and the Far East for the treatment of growth hormone
deficiency in children; Oxandrin(R) (oxandrolone) for the treatment of weight
loss due to severe trauma, chronic infection, extensive surgery or unknown
pathophysiology, which is primarily marketed in the United States and which to
date has been primarily used to treat weight loss in AIDS patients; BioLon(TM)
(sodium hyaluronate), which is currently marketed in several countries in North
and Latin America, Europe, Asia, Africa and the Far East for the protection of
the corneal endothelium during ophthalmic implant surgery; Delatestryl(R)
(injectable testosterone), which is currently marketed in the United States for
hypogonadism and delayed puberty; and Silkis(R), a vitamin D derivative, which
is currently approved in two European countries for the topical treatment of
recalcitrant psoriasis.

     The Company's principal products in registration, advanced stages of
development and clinical testing include a higher dosage formulation of Oxandrin
for AIDS cachexia; Oxandrin for the treatment of Turner syndrome and
malnutrition in persons suffering form alcoholic hepatitis; Androtest-SL(R)
(sublingual testosterone) for the treatment of hypogonadism; Bio-Hep-B(TM), a
third generation vaccine against hepatitis-B virus; OxSODrol(TM) (human
superoxide dismutase) for the treatment of bronchopulmonary dysplasia in
premature infants; and Imagex(TM), a clot-imaging agent. BTG's current
pre-clinical research focus is on cardiovascular drugs, principally BioFlow(TM),
an anti-reocclusion agent, and Factorex(TM), an anti-coagulant, as well as on a
recombinant form of insulin.

     The Company's primary objective is to become a leading biopharmaceutical
company focused on developing and commercializing a broad spectrum of
therapeutic products on a worldwide basis. To achieve this objective, the
Company is: (i) expanding acceptance of approved products by seeking broader
application within their current regulatory approvals; (ii) developing new
formulations for approved products by pursuing new dosages, formulations, and
delivery systems which will be easier to use and may provide additional
proprietary protection; (iii) continuing to develop novel and 

                                      -4-


<PAGE>

innovative products through internal research and development; (iv) expanding
sales and marketing capabilities, both in the United States, where the Company
utilizes a direct sales force, and outside the United States, where the Company
will continue to establish relationships with marketing partners worldwide; and
(v) acquiring complementary technologies and products that enable the Company to
broaden its product line and leverage its distribution network.

     The Company was incorporated in Delaware in 1980. The Company's
headquarters are located at 70 Wood Avenue South, Iselin, New Jersey. The
Company's overall administration, licensing, human clinical studies, marketing
activities, quality assurance and regulatory affairs are primarily coordinated
at the Company's headquarters. Pre-clinical studies, research and development
activities and manufacturing of the Company's genetically engineered products
are primarily carried out through its wholly-owned subsidiary in Rehovot,
Israel. The Company's telephone number is 908-632-8800.

                                      -5-


<PAGE>




                                  RISK FACTORS

     In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the shares
of Common Stock offered by this Prospectus. This Prospectus contains, in
addition to historical information, forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ materially.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed below, as well as those discussed elsewhere in this
Prospectus.

     Dependence on Oxandrin. A substantial portion of the increase in the
Company's revenues in 1996 and the first quarter of 1997 resulted from
increasing sales of Oxandrin, which the Company relaunched in the United States
during December 1995. There can be no assurance that such sales increases will
continue. A substantial number of users of Oxandrin are patients with AIDS and
as more successful treatments for this disease, such as protease inhibitors, are
developed, the need to use Oxandrin by these patients may be reduced. Although
the Company is working to expand the use of Oxandrin to treat other conditions
covered by the product's current United States Food and Drug Administration
("FDA") approval, such as the treatment of weight loss suffered by burn victims
and persons suffering from chronic obstructive pulmonary disease and cancer,
there can be no assurance that the Company will be successful in its efforts.
Additionally, there are no patents covering Oxandrin, and there can be no
assurance that others will not introduce an oxandrolone product.

     Dependence on Third-Party Suppliers. The Company is dependent on third
parties for the manufacture of Oxandrin and Delatestryl and the filling and
vialing of its Bio-Tropin product. Although the Company is a party to an
exclusive supply arrangement with G.D. Searle & Company Limited ("Searle"), and
an alternative exclusive supply agreement with Societa Prodotti Antibiotici
S.p.A. ("SPA"), covering the supply of Oxandrin to BTG through at least the year
2003, there can be no assurance that Searle will continue to, or that SPA will
be able to, provide the Company with sufficient supplies of Oxandrin to satisfy
its future needs. Bristol-Myers Squibb Company ("Bristol") has manufactured
Delatestryl for the Company pursuant to an agreement which expired in March
1997. Although Bristol has continued to honor the Company's purchase orders to
date, there can be no assurance that Bristol will continue to do so or that the
Company's supply requirements will be satisfied. In addition, the Company is
dependent on Dr. Madaus GmbH ("Dr. Madaus") to fill and vial the Company's
Bio-Tropin product. Any failure of Searle and SPA, Bristol or Dr. Madaus to
fulfill its obligations to the Company could have a material adverse effect on
the business, results of operations and financial condition of the Company.
There can be no assurance that the Company would be able to find an alternative
supplier for any of Searle and SPA, Bristol or Dr. Madaus if they were unable or
unwilling to fulfill their obligations to the Company.

     Dependence on Third-Party Licensees. The Company has derived, and expects
to continue to derive over the next several years, revenues from existing and
new licensing, research and development and marketing agreements. These
agreements typically provide the Company's licensees with certain rights,
subject to an obligation to pay royalties to the Company based on any future
product sales or to purchase product from the Company, to manufacture and market
specified products developed using the Company's proprietary technology. Certain
of these agreements provide for funding by licensees of research activities
performed on their behalf by the Company. Continued funding and participation by
these licensees will depend not only on the timely achievement of milestones,
which cannot be assured, but also on each licensee's own financial, competitive,
marketing and strategic considerations. Such considerations include the relative
advantages, including patent and proprietary positions, of alternate products
being marketed or developed by others. Furthermore, the amounts of any payments
to be received by the Company under its license agreements from the sale of
products by licensees will be dependent on the extent to which its licensees
devote resources to the development and commercialization of the products.
Although 

                                      -6-


<PAGE>

the Company believes its licensees have an economic motivation to commercialize
their products, the Company has no effective control over the licensees'
commercialization efforts.

     Risk of Pending Patent Litigation. To date, the Company has been, or
currently is, party to several administrative and legal proceedings relating to
its technologies, products and patents and the patents of others. On March 16,
1993, Genentech, Inc. ("Genentech") filed a complaint with the United States
International Trade Commission (the "ITC") alleging, among other things, that
BTG's importation of its human growth hormone ("hGH") into the United States
violates Section 337 of the Tariff Act of 1930 because of the existence of
certain claims in U.S. patents of Genentech. Genentech sought an immediate
investigation and an order that BTG cease and desist from importing hGH into the
United States. The trial on the Genentech complaint was held in April 1994. In
January 1995, the ITC issued a final decision dismissing the complaint with
prejudice as a sanction for Genentech's conduct which resulted in an incomplete
record and violated the due process rights of BTG and Novo-Nordisk A/S, another
respondent in the proceeding. The ITC also found no violation by BTG of Section
337 of the Tariff Act of 1930. Genentech appealed the ITC decision to the United
States Court of Appeals for the Federal Circuit (the "CAFC"). The appeal was
heard on December 4, 1995, and a decision is pending. During 1993 and 1994, BTG
incurred total legal fees of approximately $4.2 million relating to the ITC
proceeding.

     On December 1, 1994, Genentech filed a lawsuit against BTG in the United
States District Court for the District of Delaware alleging that BTG's
importation of hGH infringed two Genentech process patents. In January 1995, BTG
commenced an action against Genentech in the United States District Court for
the Southern District of New York seeking, among other things, declaratory
judgments as to the non-infringement, invalidity and unenforceability of such
Genentech patents as well as damages resulting from Genentech's actions in the
ITC proceedings. The Delaware action was consolidated with the New York action,
and in August 1995 the United States District Court for the Southern District of
New York granted a preliminary injunction prohibiting the commercial
introduction in the U.S. of BTG's hGH. In April 1996 the CAFC rejected BTG's
appeal of the grant of the preliminary injunction. In May 1996 the CAFC rejected
BTG's request for a rehearing and a rehearing en banc. BTG filed a petition for
a writ of certiorari with the U.S. Supreme Court, which was denied in October
1996. BTG is now precluded from marketing and distributing its human growth
hormone in the United States pending the outcome of the patent infringement
action. Although BTG believes that it does not infringe any valid Genentech
patent, there can be no assurance that BTG will not be found to be infringing
Genentech's patents. If BTG is ultimately found by the district court to
infringe one or more claims in Genentech's U.S. patents, it likely will be
precluded from selling its hGH in the United States during the life of these
Genentech patents. The Company is currently evaluating its options in light of
the district court and CAFC decisions. During 1995, the Company incurred total
legal fees relating to this litigation of approximately $824,000, which amount
was initially capitalized but subsequently written off in the first quarter of
1996 following the CAFC decision.

     In September 1993, JCR Pharmaceuticals Co., Ltd. ("JCR"), the Company's
exclusive distributor of hGH in Japan, received a letter from attorneys
representing Genentech and its licensee, Kabi Pharmacia AV, claiming that JCR's
sale of the Company's hGH infringed certain Genentech patents and patent
applications and demanding that JCR cease the sale of the Company's hGH in
Japan. During 1994, JCR and BTG filed oppositions to two Genentech patent
applications in Japan that were first published for opposition in the first half
of 1994. BTG was informed in 1997 that its and JCR's oppositions were denied.
Although the Company does not believe that it is infringing or has ever
infringed any valid Genentech patent or patent application, there can be no
assurance that BTG's hGH will not be found to infringe certain Genentech patents
in Japan. If the Company's hGH is found to infringe certain Genentech patents in
Japan, JCR and/or the Company may be obliged to pay damages, and would need to
obtain a license from Genentech in order to continue sales of hGH in Japan.
There can be

                                      -7-


<PAGE>

no assurance that such a license will be granted by Genentech, or that JCR will
not be required to stop selling the Company's hGH in Japan. Sales of hGH to JCR
in 1996 and the first quarter of 1997 were approximately $12.9 million and $4.7
million, respectively, representing 32% and 33%, respectively, of the Company's
total product sales in those periods and 71% and 69%, respectively, of the
Company's total hGH product sales in those periods.

     During 1991, BTG received notification from the U.S. Patent Office Board of
Patent Appeals and Interferences (the "Patent Office") of the declaration of an
interference between an issued patent assigned to BTG covering a method for
producing enzymatically active human copper/zinc superoxide dismutase ("SOD") in
bacteria and a pending application of Chiron Corp. ("Chiron") which claims an
earlier filing date. While BTG is vigorously defending its patent, it cannot
predict the outcome of such interference. However, should BTG's patent be
disallowed and a corresponding patent be issued to Chiron, BTG's present method
of producing enzymatically active human copper/zinc SOD in bacteria may need to
be altered, which may or may not be possible; alternatively, BTG could seek a
license to market under Chiron's patent, which may or may not be available.
Subsequent to the interference being declared, Chiron was issued a U.S. patent
for the bacterially produced form of recombinant human copper/zinc SOD. BTG is
seeking to have the Patent Office either expand the scope of the existing
interference action or declare a separate interference to determine that BTG
rather than Chiron should hold the patent for the bacterially produced form of
recombinant human copper/zinc SOD on the basis that BTG scientists, not Chiron
scientists, invented the method for producing recombinant human copper/zinc SOD
in bacteria. Unless BTG is able to prevail in this effort or to obtain a license
from Chiron, BTG may be unable to commercialize its OxSODrol product in the
United States. This matter is currently under consideration by the Patent
Office. In addition, the Israeli Patent Office has accepted a Chiron patent
application covering a DNA construct having certain specified functions for
expression of active copper/zinc SOD and a method for production of active
copper/zinc SOD in a microorganism harboring this construct. BTG is opposing the
grant of this patent; however, there can be no assurance that this opposition
will be successful. If the opposition is unsuccessful, BTG may be precluded from
manufacturing OxSODrol in Israel. In March 1993, the Patent Office issued a
patent exclusively licensed to BTG containing broad claims for the gene encoding
human copper/zinc SOD, related recombinant expression vectors and genetically
engineered cells containing the gene. BTG believes that Chiron could not
commercialize its yeast-produced SOD product in the United States without
infringing this patent. However, the issuance of this patent does not assure
BTG's ability to commercialize its OxSODrol product.

     In September 1991, the Company received a letter from Biogen, Inc.
("Biogen") stating that it believed that the Company's recombinant surface
antigen of the hepatitis-B virus, which is an active ingredient of the Company's
Bio-Hep-B vaccine, or the Company's intermediates for the process of making such
antigen, falls within the claims of one or more of Biogen's patents and/or
patent applications. To date, the Company's activities with respect to its
Bio-Hep-B vaccine have been limited to research and clinical evaluations, which
activities the Company believes do not infringe Biogen's patent rights. The
Company has also made inquiries of Biogen and SmithKline Beecham (the exclusive
licensee of all of Biogen's hepatitis-B patents except those in Japan)
requesting that the Company be granted a license to the Biogen patents; however,
such efforts have not been successful to date.

     In January 1992, Bio-Technology General (Israel) Ltd., the Company's
wholly-owned Israeli subsidiary ("BTG-Israel"), filed an application in the
Israeli Patent Office for a compulsory license to manufacture BTG's Bio-Hep-B
vaccine under Biogen's Israeli patent. In September 1995 the Registrar ruled in
an interlocutory decision that BTG-Israel is entitled to a compulsory license to
the Biogen patent. Biogen's appeal of the interlocutory decision was rejected.
In late 1996, the Israeli Registrar of Patents (the "Registrar") set the terms
of the license, including royalties to be paid by BTG to Biogen. This decision
(and consequently the license) was to come into effect in December 1996. Biogen
appealed the Registrar's decision 

                                      -8-

<PAGE>

to the District Court of Tel Aviv, Israel. With its appeal Biogen also moved for
a stay of the license, which was granted ex parte pending hearings with both
parties. Following hearings which took place in December 1996, the motion was
denied in January 1997; however, the ex parte stay was left in force pending
Biogen's appeal to the Supreme Court and maintained by the Supreme Court pending
the decision by the District Court on the merits of Biogen's appeal. The
District Court heard the appeal in early March 1997, and in June 1997 the
District Court denied Biogen's appeal and subsequent motion for a stay pending
Biogen's appeal of the District Court decision on the merits. Biogen has the
right to appeal the District Court's decision to the Israeli Supreme Court. The
compulsory license is now effective and allows BTG-Israel to produce the vaccine
in Israel upon receipt of regulatory approval and to export the vaccine to
countries in which neither Biogen nor others have been granted a blocking
patent. There can be no assurance that the compulsory license will not be
subsequently overturned by the Israel Patent Office or by a court. If the
compulsory license is overturned, BTG may not be able to manufacture or sell its
Bio-Hep-B vaccine in Israel or to export such product from Israel unless the
patent expires or is revoked.

     In August 1992, Biogen sued BTG-Israel for allegedly infringing its Israeli
patent (which is the subject of the compulsory license) by virtue of its
preparation of BTG's Bio-Hep-B vaccine for use in clinical trials, and applied
for an interlocutory injunction restraining BTG-Israel from continuing research
and development activities and clinical trials. In June 1993, the District Court
of Tel Aviv, Israel denied Biogen's application for an interlocutory injunction
in connection with research and development and clinical trials, but enjoined
BTG-Israel from commercial marketing of its Bio-Hep-B vaccine unless permitted
by Biogen or its exclusive licensee, until a compulsory license is obtained, or
until the patent expires or is revoked. These proceedings are continuing. There
can be no assurance that the outcome of these proceedings will be favorable to
BTG, and the Company cannot predict what effect it may have on the compulsory
license or on the ability of BTG to successfully commercialize and market the
Bio-Hep-B vaccine. An outcome unfavorable to BTG may adversely affect the
ability of BTG to commercialize and market the Bio-Hep-B vaccine.

     The Company has been advised by Scitech Medical Products, Pte., Ltd.
("Scitech"), its Bio-Hep-B licensee in certain countries in the Far East, that
in April 1993 Biogen initiated suit against Scitech in Singapore asserting that
Scitech's conduct of clinical trials in Singapore with respect to the Company's
hepatitis-B vaccine constitutes infringement of Biogen's patent rights in
Singapore and claiming rights in the data obtained by Scitech through its
clinical trials in Singapore and that an interlocutory hearing was held in
September 1993, although to date no final decision has been rendered. Biogen's
Singapore patent rights are based on the registration of its corresponding UK
patents, and the validity of patents in Singapore depends on the validity of the
corresponding UK patents. Biogen's broad U.K. patent (on which Singapore
registration is based) was invalidated by the U.K. Court of Appeals in October
1994, which decision was upheld by the House of Lords in October 1996. Biogen is
currently attempting to have amended claims allowed. Additionally, three claims
of a narrower UK patent were upheld. The Company believes that none of these
claims will affect commercialization of the Company's vaccine, although there
can be no assurance of this. The Company is aware that certain other patents
have been granted or are pending that may prevent the Company from selling its
vaccine in the United States, Europe and certain other countries. The Company's
failure to obtain any needed license, or a determination that its vaccine
infringes the patent rights of Biogen or others, would substantially limit, if
not prohibit, the commercialization of the Bio-Hep-B vaccine in those countries
in which Biogen or others have a patent until such patent is revoked or expires.
The ability of the Company to secure any necessary licenses or sublicenses to
these patents or applications cannot be predicted.

     Three patent applications of Genentech in Israel which cover general
methods relating to genetically engineered products and to human growth hormone
were accepted in 1983 (two)

                                      -9-


<PAGE>


and 1985 (one). BTG is opposing the grant of these patents. One of these three
Israeli applications corresponds to the two U.S. patents which are the subject
of the complaint asserted by Genentech against BTG in the United States District
Court in Delaware (subsequently consolidated with related proceedings in New
York). Additionally, in 1984 an Israeli patent application of Biogen which
relates to expression vectors was accepted; BTG is opposing the grant of this
patent. There can be no assurance that BTG will be successful in its opposition
to the grant of these patents. If BTG is unsuccessful in its opposition in
Israel, then BTG may be unable to manufacture its products in Israel.

     The Company has also initiated proceedings in Israel and Europe to oppose
the grant to several of its competitors of patents relating to vector systems,
and may oppose corresponding patents in other jurisdictions. Additionally,
during 1991 and 1992, proceedings were initiated in Israel to oppose the grant
of patents relating to the OxSODrol and Bio-Flow products, respectively.
Although the outcome of the proceedings cannot be predicted with certainty and
will likely not be determined for several years, the Company believes that the
outcome will be favorable, although there can be no assurance of this. The
Company is aware of patent applications filed by, or patents issued to, other
entities with respect to technology potentially useful to the Company and, in
some cases, related to products and processes being developed by the Company.
The Company cannot presently assess the effect, if any, that these patents may
have on its operations. The extent to which efforts by other researchers have or
will result in patents and the extent to which the issuance of patents to others
would have a materially adverse effect on the Company or would force the Company
to obtain licenses from others are currently unknown.

     In 1986, the Company licensed from the U.S. Department of Commerce a U.S.
patent relating to the sublingual delivery of sex steroids, in which the drug is
absorbed into the bloodstream through the mucosal membrane under the tongue.
Subsequently the Company licensed from the U.S. Department of Commerce one claim
of a related U.S. patent, which patent is currently the subject of an
interference action by Janssen, a division of Johnson & Johnson. The Company is
currently in negotiations to secure a license to Janssen's patents and
technology, although there can be no assurance it will be able to obtain a
license on reasonable terms or at all. If Janssen is successful in this
interference action and BTG is unable to obtain a license, BTG may be prohibited
from commercializing Androtest-SL.

     Uncertainty of Protection of Patents and Proprietary Technology. The
Company has developed patentable technology and proprietary know-how and has
acquired from various universities and institutions certain basic technologies,
as to which either patents have been issued or patent applications are pending.
There can be no assurance that patent applications will result in issued
patents, that the claims allowed in such issued patents will be sufficiently
broad to protect the Company's proprietary rights or that patents will not be
challenged, circumvented or invalidated or that rights granted pursuant to such
patents will provide competitive advantages to the Company. The Company's
success depends in part on its ability to continue to obtain patent protection
in the United States and other countries for its technologies and the products,
if any, resulting from such technologies. Patent applications in the United
States are maintained in secrecy until a patent issues, and the Company cannot
be certain that others have not filed patent applications for technology covered
by the Company's pending applications or that the Company was the first to file
patent applications for such technology. The Company also relies on trade
secrets, proprietary know-how and technological innovation which it seeks to
protect with confidentiality agreements with its employees, consultants and
licensees. There can be no assurance that these agreements will not be breached,
that the Company will have adequate remedies for any breach or that BTG's trade
secrets and proprietary know-how will not otherwise become known or be
independently discovered by competitors.

                                      -10-

<PAGE>



     BTG's commercial success will also depend in part on the Company not
infringing patents or proprietary rights of third parties. A number of companies
and research and academic institutions have developed technologies, filed patent
applications or received patents on various technologies that relate to the
Company's business, and such entities may file applications for or be issued
patents in the future with respect to technology potentially necessary or useful
to BTG. Some of these technologies, applications or patents may conflict with
the Company's technologies and existing or future patents, if any, or patent
applications. Such conflict could limit the scope of patents that BTG has
obtained or may obtain in the future or result in patent applications failing to
issue as patents. In addition, if third parties obtain patents which cover the
Company's activities, there can be no assurance that BTG would be able to
license such patents on reasonable terms, or at all, or be able to license or
develop alternative technology. As more patents are issued to third parties, the
risk that the Company's products and activities may give rise to claims that
they infringe the patents of others increases.

     The Company expects that administrative hearings, litigation or both will
be necessary to determine the validity and scope of its and others' proprietary
or biotechnology patents. Such administrative proceedings or litigation have to
date required, and may in the future require, a significant commitment of the
Company's resources. Any such commitment may divert resources from other areas
of the Company.

     Limited Manufacturing Capacity and Experience. The Company has limited
commercial scale manufacturing capacity and experience. While it is expected
that the Company's manufacturing facilities will allow the Company to satisfy
its current and anticipated near-term requirements, the Company will need a
larger facility within the next several years to meet anticipated increases in
demand for its products. The Company is required to obtain regulatory approval
for all of its commercial manufacturing processes and facilities, and to date
the Company has been able to obtain such approvals. Any failure to receive, or a
substantial delay in obtaining, regulatory approval for its manufacturing
processes and facilities could have a material adverse effect on the Company.

     The manufacture of the Company's products involves a number of technical
steps and requires meeting stringent quality control specifications imposed by
governmental regulatory bodies and by the Company itself. Further, such products
can only be manufactured in facilities approved by the applicable regulatory
authorities. As a result, the Company may not be able to quickly and efficiently
replace its manufacturing capacity in the event that it is unable to manufacture
its products at its facilities. In the event of a natural disaster, equipment
failure, strike, war or other difficulty, BTG may be unable to manufacture its
products in a manner necessary to fulfill demand. BTG's inability to fulfill
demand may permit its licensees and distributors to terminate their agreements,
seek alternate suppliers or manufacture the products themselves. Additionally,
if the Company does not receive regulatory approval for its new facility, it
would likely be unable to meet the anticipated increased demands for its
products, which would have a material adverse effect on BTG's business, results
of operations and financial condition. The Company is dependent on third parties
to manufacture all or a portion of certain of its products. See "-- Dependence
on Third-Party Suppliers."

     Limited Marketing Capability and Experience. The Company established a
sales and marketing force in the United States during the second half of 1995 to
promote distribution of Oxandrin and other BTG products in the United States.
With respect to territories outside the United States, the Company does not yet
have an established sales force and relies on third parties to market its
products. There can be no assurance that the Company's marketing strategy will
be successful. The Company's ability to market its products successfully in the
future will be dependent on a number of factors, many of which are not within
its control.

                                      -11-

<PAGE>



     Limited Commercial Products. The Company's principal activities since its
formation in 1980 have been the research and development of products with
commercial potential. Commercialization of the Company's products is subject to
successful clinical testing and governmental approvals, the timing of which is
not within the control of the Company and has taken and may continue to take
longer than anticipated. Acceptance by the medical community of the Company's
products is also necessary for their successful commercialization.

     Historical Operating Losses. Prior to 1995, the Company's revenues were not
sufficient to offset the expenses incurred in its research, development and
production activities. At March 31, 1997, the Company had an accumulated deficit
of approximately $65.2 million. To the extent the Company is unable to sustain
its recent profitability, its ability to continue its operations will depend
upon its ability to secure additional funds from other sources. Revenue has in
the past and may in the immediate future continue to display significant
variations due to the level of sales of existing products, the introduction of
new products and new research and development contracts and licensing
arrangements, the completion or termination of those contracts and arrangements,
the timing and amounts of milestone payments and the timing of regulatory
approvals of products. The Company's profitability will be dependent on its
success in developing, obtaining regulatory approvals for and effectively
marketing its products. The annual cash flows of the Company have fluctuated
significantly due to the impact of net income and losses, capital spending,
working capital requirements and issuances of Common Stock and other financings.
The Company expects that cash flow in the near future will be primarily
determined by the levels of net income (loss) less depreciation and
amortization, and financings, if any, undertaken by the Company.

     Capital Needs. The development and commercialization of products requires a
substantial amount of funds. The Company's cash requirements are currently
satisfied primarily through product sales. Historically, cash requirements were
satisfied primarily through (i) product sales; (ii) funding of projects through
collaborative research and development arrangements; (iii) contract fees; (iv)
government of Israel funding of a portion of certain research and development
projects; and (v) equity and debt financings. There can be no assurance that
these financing alternatives will be available in the future to satisfy the
Company's cash requirements. The Company believes that its remaining cash
resources, together with anticipated product sales, scheduled payments to be
made to BTG under its current agreements with pharmaceutical partners and third
parties and continued funding from the Chief Scientist of the State of Israel
(the "Chief Scientist") at current levels, will be sufficient to fund the
Company's ongoing operations for the foreseeable future. There can, however, be
no assurance that product sales will occur as anticipated, that scheduled
payments will be made by third parties, that current agreements will not be
canceled, that the Chief Scientist will continue to provide funding at current
levels, or that unanticipated events requiring the expenditure of funds will not
occur.

     The satisfaction of the Company's future cash requirements will depend in
large part on the status of commercialization of the Company's products, the
Company's ability to enter into additional research and development and
licensing arrangements, and the Company's ability to obtain additional equity
investments, if necessary. There can be no assurance that the Company will be
able to obtain additional funds or, if such funds are available, that such
funding will be on favorable terms. If additional funds are raised by issuing
equity securities of the Company, dilution to existing stockholders may result.
In addition, the indentures under which the Company's debt securities were
issued limit the ability of the Company to satisfy its cash requirements through
borrowings or the issuance of debt securities. The Company continues to seek
additional collaborative research and development and licensing arrangements in
order to provide revenue from sales of certain products and funding for a
portion of the research and development expenses relating to the products
covered, although there can be no assurance that the Company will be able to
obtain such agreements. If adequate funds are not available, BTG may be required
to significantly curtail one or more of

                                      -12-


<PAGE>

its commercialization efforts or research and development programs or obtain
funds through arrangements with collaborative partners or others on less
favorable terms than might otherwise be available.

     Effect of Governmental Regulation. The Company is subject to regulation by
numerous governmental authorities in the United States and other countries. All
of the Company's products, manufacturing processes and facilities require
governmental licensing or approval prior to commercial use. The approval process
applicable to products of the type being developed by the Company usually takes
five to seven years from the commencement of human clinical trials and typically
requires substantial expenditures. The Company and its licensees may encounter
significant delays or excessive costs in their respective efforts to secure
necessary approvals or licenses. Before obtaining regulatory approval for the
commercial sale of its products, the Company is required to conduct preclinical
and clinical trials which demonstrate that the product is safe and efficacious
for the treatment of the target disease. The results from preclinical animal
studies and early clinical trials may not be predictive of results that will be
obtained in large scale testing. A number of biotechnology companies have
recently suffered significant setbacks in advanced clinical trials, even after
experiencing promising results in preclinical and early human testing.
Additionally, the rate of completion of clinical trials is dependent upon a
number of factors, many of which are outside the Company's control, including
the rate of patient enrollment. Patient enrollment is a function of several
factors, including the size of the patient population and the proximity of
patients to clinical sites. Delays in patient enrollment could result in
increased costs and delays in completion of the clinical trials. In addition,
preclinical and clinical trials must meet regulatory and institutional
requirements. Data obtained from preclinical and clinical activities are
susceptible to varying interpretations which could delay, limit or prevent
regulatory approval. In addition, the Company and its partners may encounter
delays or rejections based upon changes in the policies of regulatory
authorities.

     Future United States or foreign legislative or administrative acts could
also prevent or delay regulatory approval of the Company's or its licensees'
products. Failure to obtain requisite governmental approvals, or failure to
obtain approvals of the scope requested, could delay or preclude the Company or
its licensees from marketing their products, could limit the commercial use of
the products and could also allow competitors time to introduce competing
products ahead of product introduction by the Company and thereby have a
material adverse effect on the Company's results of operations, liquidity and
financial condition. Even after regulatory approval is obtained, use of the
products could reveal side effects that, if serious, could result in suspension
of existing approvals and delays in obtaining approvals in other jurisdictions.

     Regulation by governmental authorities in the United States and other
countries is a significant factor affecting the timing of the commercialization
of the Company's products and its ongoing research and development activities.
The timing of regulatory approvals is not within the Company's control. To date,
the length of time required to obtain regulatory approval of
genetically-engineered products has been significantly longer than expected,
both for the Company and the biotechnology industry in general. These delays
have had, and if they continue could have, a material adverse effect on the
results of operations and financial condition of the Company. The Company
believes that these delays have in the past negatively impacted its ability to
attract funding and that, as a result, the terms of such financings have been
less favorable to the Company than they might otherwise have been had the
Company's product revenues provided sufficient funds to finance the large costs
of taking a product from discovery through commercialization. As a result, the
Company has had to license the commercialization of many of its products to
third parties in exchange for research funding and royalties on product sales;
this will result in lower revenues than if BTG had commercialized the products
on its own.

                                      -13-


<PAGE>

     Failure to comply with applicable regulatory requirements can, among other
things, result in fines, suspension of regulatory approvals, product recalls,
seizure of products, imposition of operating restrictions and criminal
prosecutions. Further, FDA policy or similar policies of regulatory agencies in
other countries may change and additional governmental requirements may be
established that could prevent or delay regulatory approval of the Company's
products.

     Uncertainty of Health Care Reimbursement. The Company's ability to
successfully commercialize human therapeutic products may depend in part on the
extent to which reimbursement for the cost of such products and related
treatment will be available from government health administration authorities,
private health coverage insurers and other organizations. Significant
uncertainty exists as to the reimbursement status of newly approved health care
products, and there can be no assurance that adequate third-party coverage will
be available for the Company to maintain price levels sufficient for realization
of an appropriate return on its investment in product development. Government
and other third-party payors are increasingly attempting to contain health care
costs by limiting both coverage and the level of reimbursement for new
therapeutic products approved for marketing by the FDA and by refusing, in some
cases, to provide any coverage for use of approved products for disease
indications for which the FDA has not granted marketing approval. If adequate
coverage and reimbursement levels are not provided by government and third-party
payors for use of the Company's health care products, the market acceptance of
these products would be adversely affected. In addition, in recent years a
number of federal and state health care reform proposals have been introduced to
contain health care costs. There can be no assurance as to the ultimate content,
timing or effect of any health care reform legislation, nor is it possible at
this time to estimate the impact of potential legislation on the Company.
Regulatory approval of prices is also required in most countries outside the
United States. In particular, certain European countries will condition their
approval of a product on the agreement of the seller not to sell the product for
more than a certain price in that country. There can be no assurance that the
establishment of a price in one European country will not have the practical
effect of requiring the Company's marketing partners to sell the product in
other European countries at no higher than such price. Because BTG generally
supplies product to its marketing partners for a specified percentage of net
sales, there can be no assurance that the resulting prices would be sufficient
to generate an acceptable return on the Company's investment in its products or
even cover the Company's manufacturing costs for such product.

     Risk of Technical Obsolescence; Highly Competitive Industry. Biotechnology
has undergone rapid and significant technological change. The Company expects
that this technology will continue to develop rapidly, and the Company's future
success will depend, in large part, on its ability to maintain a competitive
position. Rapid technological development may result in products or processes
becoming obsolete before marketing of these products or before the Company
recovers a significant portion of the research, development and
commercialization expenses incurred with respect to those products. Numerous
companies, including well-known pharmaceutical and biotechnology companies, are
engaged in the business of researching and developing products similar to those
of the Company. Many of these companies have substantially greater capital
resources and larger research and development staffs and facilities than the
Company. Such companies may succeed in their research, developing on a more
timely basis products that may be more effective than any which may be developed
by the Company. These companies may also be more successful than the Company in
the production and marketing of such products.

     Retention of Key Personnel. The Company is dependent upon the efforts of
its officers and scientists and other employees. The loss of certain of these
key employees could materially and adversely affect the Company's business.
There is a great deal of competition for the limited number of scientists with
expertise in the area of the Company's operations. The 

                                      -14-

<PAGE>


business of the Company is dependent upon its ability to attract and retain
qualified research and managerial personnel. The Company does not maintain, and
has no current intention of obtaining, "key man" life insurance on any of its
employees.

     Risk of Operations in Israel. The Company's primary research, development
and production operations are at this time conducted in Israel and can be
affected by economic, military and political conditions in that country and in
the Middle East in general. The Company manages its Israeli operations with the
object of protecting against any material net financial loss in U.S. dollars
from the impact of Israeli inflation and currency devaluations on its non-U.S.
dollar assets and liabilities. The Bank of Israel's monetary policy has been to
manage the exchange rate while allowing the Consumer Price Index to rise by
approximately 14% in 1994, 8% in 1995, 11% in 1996 and 2% in the first quarter
of 1997. For those expenses linked to the Israeli Shekel, such as salaries and
rent, this resulted in corresponding increases in these costs in U.S. dollars.
In 1994, 1995, 1996 and the three months ended March 31, 1997, the Shekel was
devalued by approximately 1%, 4%, 4% and 5%, respectively, against the U.S.
dollar. Because of the insignificant devaluation of the Shekel against the U.S.
dollar in 1994, 1995 and 1996 despite the annual rate of increase in the
Consumer Price Index, BTG's cost of local goods and services, to the extent
linked in whole or in part to the Consumer Price Index, increased in U.S. dollar
terms. To the extent that expenses in Shekels exceed BTG's revenues in Shekels
(which to date have consisted primarily of research funding from the Chief
Scientist and product sales in Israel), the devaluations of Israeli currency
have been and will continue to be a benefit to BTG's financial condition.
However, should BTG's revenues in Shekels exceed its expenses in Shekels in any
material respect, the devaluation of the Shekel will adversely affect BTG's
financial condition. Further, to the extent the devaluation of the Shekel with
respect to the U.S. dollar does not substantially offset the increase in the
costs of local goods and services in Israel, BTG's financial results will be
adversely affected as local expenses measured in U.S. dollars will increase.
There can be no assurance that the government of Israel will continue to devalue
the Shekel from time to time to offset the effects of inflation in Israel.

     Risk of Product Liability. The testing and marketing of the Company's
products entail risk of product liability. Although the Company has so far been
able to obtain indemnification from pharmaceutical companies commercializing its
products, there can be no assurance that other such companies will agree in the
future to indemnify the Company for other of the Company's products or that such
companies will, if obligated to do so, have adequate resources to fulfill their
indemnity agreements. Further, to the extent the Company elects to test or
market products independently, it will bear the risk of product liability
directly. The Company presently has $10,000,000 of product liability insurance
coverage in place. Any successful product liability claim made against the
Company could substantially reduce or eliminate any stockholders' equity the
Company may have and could have a significant adverse impact on the future of
the Company.

     Volatility of Share Price. The market prices for securities of
biotechnology companies, including the Company, have been volatile, and it is
likely that the price of the Common Stock will fluctuate in the future. Factors
such as announcements of technological innovations or new commercial products by
the Company or its competitors, announcements by the Company or its competitors
of results in preclinical testing and clinical trials, governmental regulation,
patent or proprietary rights developments, public concern as to the safety or
other implications of biotechnology products, changes in earnings estimates and
recommendations by securities analysts, and market conditions in general may
have a significant impact on the market price of the Common Stock. In addition,
the market price of the Common Stock could be adversely affected by future
exercises of outstanding warrants and options. At June 30, 1997, options and
warrants to purchase an aggregate of approximately 5,600,519 shares and
4,706,549 shares, respectively, of Common Stock were outstanding. Substantially
all of these options and warrants have exercise prices below the current market
price of the Common Stock.

                                      -15-

<PAGE>

Additionally, substantially all of the shares of Common Stock issuable upon
exercise of these outstanding options and warrants have been registered for
resale under the Securities Act of 1933, as amended, and, accordingly, when
issued will be freely tradable without restriction. In addition, the Company may
issue additional stock, warrants and/or options to raise capital in the future.
The Company may also issue additional securities in connection with its employee
benefit plans. During the terms of such options and warrants, the holders
thereof are given the opportunity to profit from a rise in the market price of
the Common Stock. The exercise of such options and warrants may have an adverse
effect on the market value of the Common Stock. The existence of such options
and warrants may adversely affect the terms on which the Company can obtain
additional equity financing. To the extent the exercise prices of such options
and warrants are less than the net tangible book value of the Common Stock at
the time such options and warrants are exercised, the Company's stockholders
will experience an immediate dilution in the net tangible book value of their
investment. Further, the future sale of a substantial number of shares of Common
Stock by existing stockholders and option and warrant holders may have an
adverse impact on the market price of the Common Stock.

     Absence of Dividends. No dividends have been paid on the Common Stock to
date and the Company does not anticipate paying dividends in the foreseeable
future. The indenture under which the Company's Series B 11% Senior Secured
Convertible Notes due October 15, 1998 were issued prohibits the payment of cash
dividends on the Common Stock.

     Certain Anti-Takeover Effects. The Company's Board of Directors has the
authority to issue up to 4,000,000 shares of Preferred Stock and to determine
the price, rights, preferences and privileges of those shares without any
further vote or action by the Company's stockholders. The rights of the holders
of Common Stock will be subject to, and may be adversely affected by, the rights
of the holders of any Preferred Stock that may be issued in the future. While
the Company has no present intention to issue shares of Preferred Stock, any
such issuance, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. In addition, the Company is subject to the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law, which
prohibits the Company from engaging in a "business combination" with an
"interested stockholder" (defined generally as a person owning 15% or more of
the corporation's outstanding voting stock) for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
The application of Section 203 could have the effect of delaying or preventing a
change of control of the Company.

                                 USE OF PROCEEDS

     The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders.

                             SELLING STOCKHOLDERS

      The Company will supplement this Prospectus from time to time to include
certain information concerning the security ownership of the Selling
Stockholders and the position, office or other material relationship which a
Selling Stockholder has had within the past three years with the Company or any
of its predecessors or affiliates.

                                      -16-

<PAGE>


                              PLAN OF DISTRIBUTION

     The Company is registering the Shares on behalf of the Selling
Stockholders. All costs, expenses and fees in connection with the registration
of the Shares offered hereby will be borne by the Company. Brokerage
commissions, if any, attributable to the sale of Shares will be borne by the
Selling Stockholders (or their donees or pledgees).

     Sales of Shares may be effected from time to time in transactions (which
may include block transactions) on the Nasdaq National Market, in negotiated
transactions, or a combination of such methods of sale, at fixed prices which
may be changed, at market prices prevailing at the time of sale, or at
negotiated prices. The Selling Stockholders have advised the Company that they
have not entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities. The
Selling Stockholders may effect such transactions by selling Common Stock
directly to purchasers or to or through broker-dealers which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholder and/or the
purchasers of Common Stock for whom such broker-dealers may act as agents or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). The Selling
Stockholders and any broker-dealers that act in connection with the sale of the
Common Stock might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act and any commission received by them and any profit
on the resale of the shares of Common Stock as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. The Selling
Stockholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act. Liabilities
under the federal securities laws cannot be waived.

     Because the Selling Stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the Selling Stockholders
will be subject to prospectus delivery requirements under the Securities Act.
Furthermore, in the event of a "distribution" of the Shares, such Selling
Stockholder, any selling broker or dealer and any "affiliated purchasers" may be
subject to Rule 10b-6 under the Exchange Act, which Rule would prohibit, with
certain exceptions, any such person from bidding for or purchasing any security
which is the subject of such distribution until his participation in that
distribution is completed. In addition, Rule 10b-7 under the Exchange Act
prohibits any "stabilizing bid" or "stabilizing purchase" for the purpose of
pegging, fixing or stabilizing the price of Common Stock in connection with this
offering.

     The Selling Stockholders may be entitled under agreements entered into with
the Company to indemnification against liabilities under the Securities Act.

                                  LEGAL MATTERS

     Legal matters relating to the Common Stock have been passed upon for the
Company by Fulbright & Jaworski L.L.P., New York, New York 10103. Partners and
Of Counsel of Fulbright & Jaworski L.L.P., as of July 15, 1997, beneficially
owned an aggregate of 4,800 shares of the Company's Common Stock.

                                      -17-

<PAGE>


                                   EXPERTS

      The audited financial statements incorporated by reference in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.


<PAGE>


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

                               TABLE OF CONTENTS

                                                                           PAGE
                                                                           ----
Available Information ...................................................     2
Incorporation of Certain Documents by Reference..........................     3
The Company..............................................................     4
Risk Factors.............................................................     6
Use of Proceeds..........................................................    16
Selling Stockholders.....................................................    16
Plan of Distribution.....................................................    17
Legal Matters............................................................    17
Experts..................................................................    18


                                    500,000
                                     Shares
                     
                     
                     
                     
                     
                                 BIO-TECHNOLOGY
                                 GENERAL CORP.
                     
                     
                     
                     
                     
                                  Common Stock
                     
                     
                     
                     
                                   ---------
                     
                                   PROSPECTUS
                     
                                   ---------
                     
                     
                     
                                August 7, 1997
                     
                     

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



<PAGE>


                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE

     The following documents heretofore filed by Bio-Technology General Corp.
("Registrant") (File No. 0-15313) with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:

          (i)  The Registrant's Annual Report on Form 10-K for the fiscal year
               ended December 31, 1996.

          (ii) The Registrant's Quarterly Report on Form 10-Q for the quarter
               ended March 31, 1997.

          (iii) The Registrant's Form 8-A dated July 25, 1983, as amended by
               Amendment No. 1 to Form 8-A dated September 29, 1983 and
               Amendment No. 2 to Form 8-A dated October 1, 1986.

     In addition, all documents filed by Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934 subsequent to the
date of this filing and prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated herein by
reference and to be a part thereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
hereof to the extent that a statement contained in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute part of this registration statement.

ITEM 4. DESCRIPTION OF SECURITIES

     Not Applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL

     Not Applicable.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Section 145(a) of the General Corporation Law of Delaware provides that a
Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation), by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, judgments, fines 

                                      II-1


<PAGE>

and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.

     Section 145(b) provides that a Delaware corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted under similar standards, except that no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the corporation unless and
only to the extent that the court in which such action or suit was brought shall
determine that despite the adjudication of liability, such person is fairly and
reasonably entitled to be indemnified for such expenses which the court shall
deem proper.

     Section 145 further provides that to the extent a director, officer,
employee or agent of a corporation has been successful in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) or in the
defense of any claim, issue or matter therein, he shall be indemnified against
expenses actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the
corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him or incurred by him in any
such capacity or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liabilities under
such Section 145.

     The Registrant's By-laws provide that the Registrant shall indemnify
certain persons, including officers, directors, employees and agents, within the
limitations permitted by Section 145 of the General Corporation Law of the State
of Delaware. The Registrant has also entered into indemnification agreements
with its current directors and executive officers. Reference is made to the
By-laws and Form of Indemnity Agreement filed as exhibits 3(b) and 10(o),
respectively, to the Registrant's Annual Report on Form 10-K.

     The Registrant maintains a policy of insurance under which the directors
and officers of the Registrant are insured, subject to the limits of the policy,
against certain losses arising from claims made against such directors and
officers by reason of any acts or omissions covered under such policy in their
respective capacities as directors and officers.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED

     Not Applicable.

                                     -II-2

<PAGE>

ITEM 8. EXHIBITS

     (a) See Index to Exhibits.

ITEM 9. UNDERTAKINGS

     (a) The undersigned Registrant hereby undertakes:

          (1) To file, during any period in which offers or sales are being
     made, a post-effective amendment to this registration statement:

               (i) To include any prospectus required by Section 10(a)(3) of the
          Securities Act of 1933;

               (ii) To reflect in the prospectus any facts or events arising
          after the effective date of the registration statement (or the most
          recent post-effective amendment thereof) which, individually or in the
          aggregate, represent a fundamental change in the information set forth
          herein;

               (iii) To include any material information with respect to the
          plan of distribution not previously disclosed herein or any material
          change to such information in this registration statement;

     Provided, however, That paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated herein by
reference;

            (2) That, for the purpose of determining any liability under the
      Securities Act of 1933, each such post-effective amendment shall be deemed
      to be a new registration statement relating to the securities offered
      therein, and the offering of such securities at that time shall be deemed
      to be the initial bona fide offering thereof; and

            (3) To remove from registration by means of a post-effective
      amendment any of the securities being registered which remain unsold at
      the termination of the offering.

     (b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to SectionE15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in 

                                     -II-3


<PAGE>


the Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

                                      II-4


<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Iselin, State of New Jersey, on August 6, 1997.

                                    Bio-Technology General Corp.

                                    By: /s/ SIM FASS
                                        ----------------------------------------
                                        (Sim Fass, Chairman of the Board,
                                        Chief Executive Officer and President)

                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints SIM FASS and YEHUDA STERNLICHT, or either
of them, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same with all
exhibits thereto and all documents in connection therewith, with the Securities
and Exchange Commission, granting said attorney-in-fact and agent and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.



                                      II-5
<PAGE>


     Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>

Signature                     Title                                      Date
---------                     -----                                      ----
<S>                           <C>                                       <C>
/s/ SIM FASS                  Chairman of the Board, President,
----------------------        CEO, and Treasurer            
(Sim Fass)                    (Principal Executive Officer)             August 6, 1997
                              

/s/ HERBERT J. CONRAD         Director                                  August 6, 1997
---------------------
(Herbert J. Conrad)

/s/ MOSES MARX                Director                                  August 6, 1997
---------------------
(Moses Marx)

/s/ ALLAN ROSENFIELD          Director                                  August 6, 1997
---------------------
(Allan Rosenfield)

/s/ DAVID TENDLER             Director                                  August 6, 1997
---------------------
(David Tendler)

/s/ VIRGIL THOMPSON           Director                                  August 6, 1997
---------------------
(Virgil Thompson)

/s/ DAN TOLKOWSKY             Director                                  August 6, 1997
----------------------
(Dan Tolkowsky)

/s/ FAYE WATTLETON            Director                                  August 6, 1997
----------------------
(Faye Wattleton)

/s/ HERBERT WEISSBACH         Director                                  August 6, 1997
----------------------
(Herbert Weissbach)

/s/ YEHUDA STERNLICHT         Vice President_Finance and                August 6, 1997
----------------------        Chief Financial Officer 
(Yehuda Sternlicht)           (Principal Financial and
                              Accounting Officer)     
                              

</TABLE>

                                      II-6

<PAGE>


                                INDEX TO EXHIBITS

EXHIBIT NO.
-----------

4(a)           The Bio-Technology General Corp. 1997 Stock Option Plan for 
               Non-Employee Directors                                      
               
5              Opinion of Fulbright & Jaworski L.L.P. 
               
23(a)          Consent of Arthur Andersen L.L.P.

23(b)          Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5)

24             Power of attorney authorizing representatives to sign this       
               Registration Statement and any and all amendments (including     
               post-effective amendments) to this Registration Statement on     
               behalf of Bio-Technology General Corp. and certain directors and 
               officers thereof (included on signature page).                   

                                      II-7
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 89517}]
{"company-data": {"conformed-name": "BIO TECHNOLOGY GENERAL CORP", "cik": "0000722104", "assigned-sic": "2833", "irs-number": "133033811", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-33075", "film-number": "97653126"}, "business-address": {"street1": "70 WOOD AVE S", "city": "ISELIN", "state": "NJ", "zip": "08830", "phone": "9086328800"}, "mail-address": {"street1": "70 WOOD AVENUE SOUTH", "city": "ISELIN", "state": "NJ", "zip": "08830"}}
As filed with the Securities and Exchange Commission on August 7, 1997

                                                         REGISTRATION NO. 333-
================================================================================

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

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

                                   FORM S-8
                            REGISTRATION STATEMENT
                                    UNDER
                          THE SECURITIES ACT OF 1933

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

                         BIO-TECHNOLOGY GENERAL CORP.

            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

          DELAWARE                                          13-3033811        
 -------------------------------                     ----------------------
 (STATE OR OTHER JURISDICTION OF                        (I.R.S. EMPLOYER     
 INCORPORATION OR ORGANIZATION)                        IDENTIFICATION NO.)  
                                                     

                70 WOOD AVENUE SOUTH, ISELIN, NEW JERSEY 08830
             ---------------------------------------------------
             (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES (ZIP CODE))

                         BIO-TECHNOLOGY GENERAL CORP.
              -------------------------------------------------
              1997 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
                           (FULL TITLE OF THE PLAN)

                                   SIM FASS
         ------------------------------------------------------------
         CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT
                         BIO-TECHNOLOGY GENERAL CORP.

                70 WOOD AVENUE SOUTH, ISELIN, NEW JERSEY 08830
                -----------------------------------------------
                   (NAME AND ADDRESS OF AGENT FOR SERVICE)

 TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE:  (908) 632-8800
                                                              -----------------

                       CALCULATION OF REGISTRATION FEE

                                             PROPOSED                
                                             MAXIMUM      PROPOSED    
                                             OFFERING     MAXIMUM  
                                              PRICE      AGGREGATE   AMOUNT OF  
    TITLE OF SECURITIES      AMOUNT TO BE      PER        OFFERING  REGISTRATION
      TO BE REGISTERED       REGISTERED(1)   SHARE(2)      PRICE        FEE
    -------------------      -------------   ---------   ---------- ------------
Common Stock, par value of                   
$.01 per share ............  500,000 shares   $12.91     $6,455,000  $1,957.00
                                             

(1)   This registration statement shall also cover any additional indeterminable
      number of shares as may be required pursuant to the Bio-Technology General
      Corp. 1997 Stock Option Plan for Non-Employee Directors in the event of a
      stock dividend, stock split, recapitalization or other similar change in
      the Common Stock.

(2)   The price is estimated pursuant to Rule 457(h) of the Securities Act of
      1933, as amended (the "Act") solely for the purpose of calculating the
      registration fee and is $12.91, the average of the high and low prices of
      Bio-Technology General Corp. Common Stock as reported on The Nasdaq Stock
      Market on August 5, 1997.

      In addition, pursuant to Rule 416(c) under the Act, this registration
statement also covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.

================================================================================
PROSPECTUS

                                 500,000 SHARES

                          BIO-TECHNOLOGY GENERAL CORP.

                                  COMMON STOCK

                     UNDER THE BIO-TECHNOLOGY GENERAL CORP.
                             1997 STOCK OPTION PLAN
                           FOR NON-EMPLOYEE DIRECTORS

     This Prospectus relates to the offer and sale of up to 500,000 shares (the
"Shares") of Common Stock, par value $0.01 per share (the "Common Stock"), of
Bio-Technology General Corp. ("BTG" or the "Company"). The Shares are being
offered for sale by certain stockholders of the Company (the "Selling
Stockholders") who acquired such Shares pursuant to the Company's 1997 Stock
Option Plan for Non-Employee Directors (the "Plan"). See "Selling Stockholders."
The Company's Common Stock is traded on the Nasdaq Stock Market's National
Market (the "Nasdaq National Market") under the symbol "BTGC." On August 6,
1997, the closing price of the Common Stock, as reported in the consolidated
reporting system, was $12.9375 per share.

     The Company will not receive any of the proceeds from sales of the Shares
by the Selling Stockholders. The Shares may be offered from time to time by the
Selling Stockholders (and their donees and pledgees) through ordinary brokerage
transactions, in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. See "Plan of
Distribution."

     The Selling Stockholders may be deemed to be "Underwriters" as defined in
the Securities Act of 1933, as amended (the "Securities Act"). If any
broker-dealers are used to effect sales, any commissions paid to broker-dealers
and, if broker-dealers purchase any of the Shares as principals, any profits
received by such broker-dealers on the resale of the Shares, may be deemed to be
underwriting discounts or commissions under the Securities Act. In addition, any
profits realized by the Selling Stockholders may be deemed to be underwriting
commissions. All costs, expenses and fees in connection with the registration of
the Shares will be borne by the Company. Brokerage commissions, if any,
attributable to the sale of the Shares will be borne by the Selling Stockholders
(or their donees and pledgees).

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

         SEE "RISK FACTORS", WHICH BEGINS ON PAGE 6 OF THIS PROSPECTUS, FOR
   CERTAIN INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

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

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

                 The date of this Prospectus is August 7, 1997
AVAILABLE INFORMATION

     The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Proxy statements, reports
and other information concerning the Company can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and the regional offices
of the Commission located at Seven World Trade Center, 13th Floor, New York, New
York 10048, and 500 West Madison Street, Chicago, Illinois 60661, and copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and its public
reference facilities in New York, New York and Chicago, Illinois, at prescribed
rates. Copies of such information may also be inspected at the reading room of
the library of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006. The Commission maintains a World Wide Web
site on the Internet at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding the Company and other
registrants that file electronically with the Commission.

     This Prospectus constitutes a part of a Registration Statement on Form S-8
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock, reference is
hereby made to the Registration Statement. Statements contained herein
concerning the provisions of any contract, agreement or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract, agreement or other document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference. Copies of the Registration
Statement together with exhibits may be inspected at the offices of the
Commission as indicated above without charge and copies thereof may be obtained
therefrom upon payment of a prescribed fee.

     Private Securities Litigation Reform Act Safe Harbor Statement. This
Prospectus (including the documents incorporated by reference herein) contains
certain forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) and information relating to BTG that
are based on the beliefs of the management of BTG, as well as assumptions made
by and information currently available to the management of BTG. When used in
this Prospectus, the words "estimate," "project," "believe," "anticipate,"
"intend," "expect" and similar expressions are intended to identify
forward-looking statements. Such statements reflect the current views of BTG
with respect to future events and are subject to risks and uncertainties that
could cause actual results to differ materially from those contemplated in such
forward-looking statements, including those discussed under "Risk Factors."
Readers are cautioned not to place undue reliance on these forward-looking
statements, which

                                      -2-
speak only as of the date hereof. BTG does not undertake any obligation to
publicly release any revisions to these forward looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     The information in the following documents filed by BTG with the Commission
(File No. 0-15313) pursuant to the Exchange Act is incorporated by reference in
this Prospectus:

     (a)  The Registrant's Annual Report on Form 10-K for the fiscal year ended
          December 31, 1996.

     (b)  The Registrant's Quarterly Report on Form 10-Q for the quarter ended
          March 31, 1997.

     (c)  The Registrant's Form 8-A dated July 25, 1983, as amended by Amendment
          No. 1 to Form 8-A dated September 29, 1983 and Amendment No. 2 to Form
          8-A dated October 1, 1986.

     All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the securities
offered hereby shall be deemed incorporated by reference into this Prospectus
and to be a part hereof from the date of the filing of such documents or
reports. The information relating to the Company in this Prospectus should be
read together with the information in the documents incorporated by reference.

     Any statement contained in a document incorporated by reference herein,
unless otherwise indicated therein, speaks as of the date of the document. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for all purposes to the extent that a
statement contained in this Prospectus modifies or replaces such statement.

     The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any or all of the documents
described above, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents. Requests should be
addressed to: Bio-Technology General Corp., 70 Wood Avenue South, Iselin, New
Jersey 08830, Attention: President (Tel. No. (908) 632-8800). The Company
furnishes its stockholders with an annual report containing audited financial
statements. In addition, the Company may furnish such other reports as may be
authorized, from time to time, by the Board of Directors.

                                      -3-
THE COMPANY

     Bio-Technology General Corp. ("BTG" or the "Company") is engaged in the
research, development, manufacture and marketing of biopharmaceutical products.
The Company has emerged as one of the few profitable publicly-traded
biopharmaceutical companies in the United States. Through a combination of
internal research and development, acquisitions, collaborative relationships and
licensing arrangements, BTG has developed a portfolio of therapeutic products,
including five products that have received regulatory approval for sale, of
which four are currently being marketed, four products in clinical trials and
three products in pre-clinical development. The Company distributes its products
on a worldwide basis through a direct sales force in the United States and
Israel and through third-party license and distribution relationships elsewhere.
The Company seeks both broad markets for its products as well as specialized
markets where it can seek Orphan Drug status and potential marketing
exclusivity.

     The Company's approved products include Bio-Tropin(TM) (human growth
hormone), which is currently being marketed in Japan and in several countries in
Europe, Latin America and the Far East for the treatment of growth hormone
deficiency in children; Oxandrin(R) (oxandrolone) for the treatment of weight
loss due to severe trauma, chronic infection, extensive surgery or unknown
pathophysiology, which is primarily marketed in the United States and which to
date has been primarily used to treat weight loss in AIDS patients; BioLon(TM)
(sodium hyaluronate), which is currently marketed in several countries in North
and Latin America, Europe, Asia, Africa and the Far East for the protection of
the corneal endothelium during ophthalmic implant surgery; Delatestryl(R)
(injectable testosterone), which is currently marketed in the United States for
hypogonadism and delayed puberty; and Silkis(R), a vitamin D derivative, which
is currently approved in two European countries for the topical treatment of
recalcitrant psoriasis.

     The Company's principal products in registration, advanced stages of
development and clinical testing include a higher dosage formulation of Oxandrin
for AIDS cachexia; Oxandrin for the treatment of Turner syndrome and
malnutrition in persons suffering form alcoholic hepatitis; Androtest-SL(R)
(sublingual testosterone) for the treatment of hypogonadism; Bio-Hep-B(TM), a
third generation vaccine against hepatitis-B virus; OxSODrol(TM) (human
superoxide dismutase) for the treatment of bronchopulmonary dysplasia in
premature infants; and Imagex(TM), a clot-imaging agent. BTG's current
pre-clinical research focus is on cardiovascular drugs, principally BioFlow(TM),
an anti-reocclusion agent, and Factorex(TM), an anti-coagulant, as well as on a
recombinant form of insulin.

     The Company's primary objective is to become a leading biopharmaceutical
company focused on developing and commercializing a broad spectrum of
therapeutic products on a worldwide basis. To achieve this objective, the
Company is: (i) expanding acceptance of approved products by seeking broader
application within their current regulatory approvals; (ii) developing new
formulations for approved products by pursuing new dosages, formulations, and
delivery systems which will be easier to use and may provide additional
proprietary protection; (iii) continuing to develop novel and 

                                      -4-
innovative products through internal research and development; (iv) expanding
sales and marketing capabilities, both in the United States, where the Company
utilizes a direct sales force, and outside the United States, where the Company
will continue to establish relationships with marketing partners worldwide; and
(v) acquiring complementary technologies and products that enable the Company to
broaden its product line and leverage its distribution network.

     The Company was incorporated in Delaware in 1980. The Company's
headquarters are located at 70 Wood Avenue South, Iselin, New Jersey. The
Company's overall administration, licensing, human clinical studies, marketing
activities, quality assurance and regulatory affairs are primarily coordinated
at the Company's headquarters. Pre-clinical studies, research and development
activities and manufacturing of the Company's genetically engineered products
are primarily carried out through its wholly-owned subsidiary in Rehovot,
Israel. The Company's telephone number is 908-632-8800.

                                      -5-
RISK FACTORS

     In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the shares
of Common Stock offered by this Prospectus. This Prospectus contains, in
addition to historical information, forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ materially.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed below, as well as those discussed elsewhere in this
Prospectus.

     Dependence on Oxandrin. A substantial portion of the increase in the
Company's revenues in 1996 and the first quarter of 1997 resulted from
increasing sales of Oxandrin, which the Company relaunched in the United States
during December 1995. There can be no assurance that such sales increases will
continue. A substantial number of users of Oxandrin are patients with AIDS and
as more successful treatments for this disease, such as protease inhibitors, are
developed, the need to use Oxandrin by these patients may be reduced. Although
the Company is working to expand the use of Oxandrin to treat other conditions
covered by the product's current United States Food and Drug Administration
("FDA") approval, such as the treatment of weight loss suffered by burn victims
and persons suffering from chronic obstructive pulmonary disease and cancer,
there can be no assurance that the Company will be successful in its efforts.
Additionally, there are no patents covering Oxandrin, and there can be no
assurance that others will not introduce an oxandrolone product.

     Dependence on Third-Party Suppliers. The Company is dependent on third
parties for the manufacture of Oxandrin and Delatestryl and the filling and
vialing of its Bio-Tropin product. Although the Company is a party to an
exclusive supply arrangement with G.D. Searle & Company Limited ("Searle"), and
an alternative exclusive supply agreement with Societa Prodotti Antibiotici
S.p.A. ("SPA"), covering the supply of Oxandrin to BTG through at least the year
2003, there can be no assurance that Searle will continue to, or that SPA will
be able to, provide the Company with sufficient supplies of Oxandrin to satisfy
its future needs. Bristol-Myers Squibb Company ("Bristol") has manufactured
Delatestryl for the Company pursuant to an agreement which expired in March
1997. Although Bristol has continued to honor the Company's purchase orders to
date, there can be no assurance that Bristol will continue to do so or that the
Company's supply requirements will be satisfied. In addition, the Company is
dependent on Dr. Madaus GmbH ("Dr. Madaus") to fill and vial the Company's
Bio-Tropin product. Any failure of Searle and SPA, Bristol or Dr. Madaus to
fulfill its obligations to the Company could have a material adverse effect on
the business, results of operations and financial condition of the Company.
There can be no assurance that the Company would be able to find an alternative
supplier for any of Searle and SPA, Bristol or Dr. Madaus if they were unable or
unwilling to fulfill their obligations to the Company.

     Dependence on Third-Party Licensees. The Company has derived, and expects
to continue to derive over the next several years, revenues from existing and
new licensing, research and development and marketing agreements. These
agreements typically provide the Company's licensees with certain rights,
subject to an obligation to pay royalties to the Company based on any future
product sales or to purchase product from the Company, to manufacture and market
specified products developed using the Company's proprietary technology. Certain
of these agreements provide for funding by licensees of research activities
performed on their behalf by the Company. Continued funding and participation by
these licensees will depend not only on the timely achievement of milestones,
which cannot be assured, but also on each licensee's own financial, competitive,
marketing and strategic considerations. Such considerations include the relative
advantages, including patent and proprietary positions, of alternate products
being marketed or developed by others. Furthermore, the amounts of any payments
to be received by the Company under its license agreements from the sale of
products by licensees will be dependent on the extent to which its licensees
devote resources to the development and commercialization of the products.
Although 

                                      -6-
the Company believes its licensees have an economic motivation to commercialize
their products, the Company has no effective control over the licensees'
commercialization efforts.

     Risk of Pending Patent Litigation. To date, the Company has been, or
currently is, party to several administrative and legal proceedings relating to
its technologies, products and patents and the patents of others. On March 16,
1993, Genentech, Inc. ("Genentech") filed a complaint with the United States
International Trade Commission (the "ITC") alleging, among other things, that
BTG's importation of its human growth hormone ("hGH") into the United States
violates Section 337 of the Tariff Act of 1930 because of the existence of
certain claims in U.S. patents of Genentech. Genentech sought an immediate
investigation and an order that BTG cease and desist from importing hGH into the
United States. The trial on the Genentech complaint was held in April 1994. In
January 1995, the ITC issued a final decision dismissing the complaint with
prejudice as a sanction for Genentech's conduct which resulted in an incomplete
record and violated the due process rights of BTG and Novo-Nordisk A/S, another
respondent in the proceeding. The ITC also found no violation by BTG of Section
337 of the Tariff Act of 1930. Genentech appealed the ITC decision to the United
States Court of Appeals for the Federal Circuit (the "CAFC"). The appeal was
heard on December 4, 1995, and a decision is pending. During 1993 and 1994, BTG
incurred total legal fees of approximately $4.2 million relating to the ITC
proceeding.

     On December 1, 1994, Genentech filed a lawsuit against BTG in the United
States District Court for the District of Delaware alleging that BTG's
importation of hGH infringed two Genentech process patents. In January 1995, BTG
commenced an action against Genentech in the United States District Court for
the Southern District of New York seeking, among other things, declaratory
judgments as to the non-infringement, invalidity and unenforceability of such
Genentech patents as well as damages resulting from Genentech's actions in the
ITC proceedings. The Delaware action was consolidated with the New York action,
and in August 1995 the United States District Court for the Southern District of
New York granted a preliminary injunction prohibiting the commercial
introduction in the U.S. of BTG's hGH. In April 1996 the CAFC rejected BTG's
appeal of the grant of the preliminary injunction. In May 1996 the CAFC rejected
BTG's request for a rehearing and a rehearing en banc. BTG filed a petition for
a writ of certiorari with the U.S. Supreme Court, which was denied in October
1996. BTG is now precluded from marketing and distributing its human growth
hormone in the United States pending the outcome of the patent infringement
action. Although BTG believes that it does not infringe any valid Genentech
patent, there can be no assurance that BTG will not be found to be infringing
Genentech's patents. If BTG is ultimately found by the district court to
infringe one or more claims in Genentech's U.S. patents, it likely will be
precluded from selling its hGH in the United States during the life of these
Genentech patents. The Company is currently evaluating its options in light of
the district court and CAFC decisions. During 1995, the Company incurred total
legal fees relating to this litigation of approximately $824,000, which amount
was initially capitalized but subsequently written off in the first quarter of
1996 following the CAFC decision.

     In September 1993, JCR Pharmaceuticals Co., Ltd. ("JCR"), the Company's
exclusive distributor of hGH in Japan, received a letter from attorneys
representing Genentech and its licensee, Kabi Pharmacia AV, claiming that JCR's
sale of the Company's hGH infringed certain Genentech patents and patent
applications and demanding that JCR cease the sale of the Company's hGH in
Japan. During 1994, JCR and BTG filed oppositions to two Genentech patent
applications in Japan that were first published for opposition in the first half
of 1994. BTG was informed in 1997 that its and JCR's oppositions were denied.
Although the Company does not believe that it is infringing or has ever
infringed any valid Genentech patent or patent application, there can be no
assurance that BTG's hGH will not be found to infringe certain Genentech patents
in Japan. If the Company's hGH is found to infringe certain Genentech patents in
Japan, JCR and/or the Company may be obliged to pay damages, and would need to
obtain a license from Genentech in order to continue sales of hGH in Japan.
There can be

                                      -7-
no assurance that such a license will be granted by Genentech, or that JCR will
not be required to stop selling the Company's hGH in Japan. Sales of hGH to JCR
in 1996 and the first quarter of 1997 were approximately $12.9 million and $4.7
million, respectively, representing 32% and 33%, respectively, of the Company's
total product sales in those periods and 71% and 69%, respectively, of the
Company's total hGH product sales in those periods.

     During 1991, BTG received notification from the U.S. Patent Office Board of
Patent Appeals and Interferences (the "Patent Office") of the declaration of an
interference between an issued patent assigned to BTG covering a method for
producing enzymatically active human copper/zinc superoxide dismutase ("SOD") in
bacteria and a pending application of Chiron Corp. ("Chiron") which claims an
earlier filing date. While BTG is vigorously defending its patent, it cannot
predict the outcome of such interference. However, should BTG's patent be
disallowed and a corresponding patent be issued to Chiron, BTG's present method
of producing enzymatically active human copper/zinc SOD in bacteria may need to
be altered, which may or may not be possible; alternatively, BTG could seek a
license to market under Chiron's patent, which may or may not be available.
Subsequent to the interference being declared, Chiron was issued a U.S. patent
for the bacterially produced form of recombinant human copper/zinc SOD. BTG is
seeking to have the Patent Office either expand the scope of the existing
interference action or declare a separate interference to determine that BTG
rather than Chiron should hold the patent for the bacterially produced form of
recombinant human copper/zinc SOD on the basis that BTG scientists, not Chiron
scientists, invented the method for producing recombinant human copper/zinc SOD
in bacteria. Unless BTG is able to prevail in this effort or to obtain a license
from Chiron, BTG may be unable to commercialize its OxSODrol product in the
United States. This matter is currently under consideration by the Patent
Office. In addition, the Israeli Patent Office has accepted a Chiron patent
application covering a DNA construct having certain specified functions for
expression of active copper/zinc SOD and a method for production of active
copper/zinc SOD in a microorganism harboring this construct. BTG is opposing the
grant of this patent; however, there can be no assurance that this opposition
will be successful. If the opposition is unsuccessful, BTG may be precluded from
manufacturing OxSODrol in Israel. In March 1993, the Patent Office issued a
patent exclusively licensed to BTG containing broad claims for the gene encoding
human copper/zinc SOD, related recombinant expression vectors and genetically
engineered cells containing the gene. BTG believes that Chiron could not
commercialize its yeast-produced SOD product in the United States without
infringing this patent. However, the issuance of this patent does not assure
BTG's ability to commercialize its OxSODrol product.

     In September 1991, the Company received a letter from Biogen, Inc.
("Biogen") stating that it believed that the Company's recombinant surface
antigen of the hepatitis-B virus, which is an active ingredient of the Company's
Bio-Hep-B vaccine, or the Company's intermediates for the process of making such
antigen, falls within the claims of one or more of Biogen's patents and/or
patent applications. To date, the Company's activities with respect to its
Bio-Hep-B vaccine have been limited to research and clinical evaluations, which
activities the Company believes do not infringe Biogen's patent rights. The
Company has also made inquiries of Biogen and SmithKline Beecham (the exclusive
licensee of all of Biogen's hepatitis-B patents except those in Japan)
requesting that the Company be granted a license to the Biogen patents; however,
such efforts have not been successful to date.

     In January 1992, Bio-Technology General (Israel) Ltd., the Company's
wholly-owned Israeli subsidiary ("BTG-Israel"), filed an application in the
Israeli Patent Office for a compulsory license to manufacture BTG's Bio-Hep-B
vaccine under Biogen's Israeli patent. In September 1995 the Registrar ruled in
an interlocutory decision that BTG-Israel is entitled to a compulsory license to
the Biogen patent. Biogen's appeal of the interlocutory decision was rejected.
In late 1996, the Israeli Registrar of Patents (the "Registrar") set the terms
of the license, including royalties to be paid by BTG to Biogen. This decision
(and consequently the license) was to come into effect in December 1996. Biogen
appealed the Registrar's decision 

                                      -8-
to the District Court of Tel Aviv, Israel. With its appeal Biogen also moved for
a stay of the license, which was granted ex parte pending hearings with both
parties. Following hearings which took place in December 1996, the motion was
denied in January 1997; however, the ex parte stay was left in force pending
Biogen's appeal to the Supreme Court and maintained by the Supreme Court pending
the decision by the District Court on the merits of Biogen's appeal. The
District Court heard the appeal in early March 1997, and in June 1997 the
District Court denied Biogen's appeal and subsequent motion for a stay pending
Biogen's appeal of the District Court decision on the merits. Biogen has the
right to appeal the District Court's decision to the Israeli Supreme Court. The
compulsory license is now effective and allows BTG-Israel to produce the vaccine
in Israel upon receipt of regulatory approval and to export the vaccine to
countries in which neither Biogen nor others have been granted a blocking
patent. There can be no assurance that the compulsory license will not be
subsequently overturned by the Israel Patent Office or by a court. If the
compulsory license is overturned, BTG may not be able to manufacture or sell its
Bio-Hep-B vaccine in Israel or to export such product from Israel unless the
patent expires or is revoked.

     In August 1992, Biogen sued BTG-Israel for allegedly infringing its Israeli
patent (which is the subject of the compulsory license) by virtue of its
preparation of BTG's Bio-Hep-B vaccine for use in clinical trials, and applied
for an interlocutory injunction restraining BTG-Israel from continuing research
and development activities and clinical trials. In June 1993, the District Court
of Tel Aviv, Israel denied Biogen's application for an interlocutory injunction
in connection with research and development and clinical trials, but enjoined
BTG-Israel from commercial marketing of its Bio-Hep-B vaccine unless permitted
by Biogen or its exclusive licensee, until a compulsory license is obtained, or
until the patent expires or is revoked. These proceedings are continuing. There
can be no assurance that the outcome of these proceedings will be favorable to
BTG, and the Company cannot predict what effect it may have on the compulsory
license or on the ability of BTG to successfully commercialize and market the
Bio-Hep-B vaccine. An outcome unfavorable to BTG may adversely affect the
ability of BTG to commercialize and market the Bio-Hep-B vaccine.

     The Company has been advised by Scitech Medical Products, Pte., Ltd.
("Scitech"), its Bio-Hep-B licensee in certain countries in the Far East, that
in April 1993 Biogen initiated suit against Scitech in Singapore asserting that
Scitech's conduct of clinical trials in Singapore with respect to the Company's
hepatitis-B vaccine constitutes infringement of Biogen's patent rights in
Singapore and claiming rights in the data obtained by Scitech through its
clinical trials in Singapore and that an interlocutory hearing was held in
September 1993, although to date no final decision has been rendered. Biogen's
Singapore patent rights are based on the registration of its corresponding UK
patents, and the validity of patents in Singapore depends on the validity of the
corresponding UK patents. Biogen's broad U.K. patent (on which Singapore
registration is based) was invalidated by the U.K. Court of Appeals in October
1994, which decision was upheld by the House of Lords in October 1996. Biogen is
currently attempting to have amended claims allowed. Additionally, three claims
of a narrower UK patent were upheld. The Company believes that none of these
claims will affect commercialization of the Company's vaccine, although there
can be no assurance of this. The Company is aware that certain other patents
have been granted or are pending that may prevent the Company from selling its
vaccine in the United States, Europe and certain other countries. The Company's
failure to obtain any needed license, or a determination that its vaccine
infringes the patent rights of Biogen or others, would substantially limit, if
not prohibit, the commercialization of the Bio-Hep-B vaccine in those countries
in which Biogen or others have a patent until such patent is revoked or expires.
The ability of the Company to secure any necessary licenses or sublicenses to
these patents or applications cannot be predicted.

     Three patent applications of Genentech in Israel which cover general
methods relating to genetically engineered products and to human growth hormone
were accepted in 1983 (two)

                                      -9-
and 1985 (one). BTG is opposing the grant of these patents. One of these three
Israeli applications corresponds to the two U.S. patents which are the subject
of the complaint asserted by Genentech against BTG in the United States District
Court in Delaware (subsequently consolidated with related proceedings in New
York). Additionally, in 1984 an Israeli patent application of Biogen which
relates to expression vectors was accepted; BTG is opposing the grant of this
patent. There can be no assurance that BTG will be successful in its opposition
to the grant of these patents. If BTG is unsuccessful in its opposition in
Israel, then BTG may be unable to manufacture its products in Israel.

     The Company has also initiated proceedings in Israel and Europe to oppose
the grant to several of its competitors of patents relating to vector systems,
and may oppose corresponding patents in other jurisdictions. Additionally,
during 1991 and 1992, proceedings were initiated in Israel to oppose the grant
of patents relating to the OxSODrol and Bio-Flow products, respectively.
Although the outcome of the proceedings cannot be predicted with certainty and
will likely not be determined for several years, the Company believes that the
outcome will be favorable, although there can be no assurance of this. The
Company is aware of patent applications filed by, or patents issued to, other
entities with respect to technology potentially useful to the Company and, in
some cases, related to products and processes being developed by the Company.
The Company cannot presently assess the effect, if any, that these patents may
have on its operations. The extent to which efforts by other researchers have or
will result in patents and the extent to which the issuance of patents to others
would have a materially adverse effect on the Company or would force the Company
to obtain licenses from others are currently unknown.

     In 1986, the Company licensed from the U.S. Department of Commerce a U.S.
patent relating to the sublingual delivery of sex steroids, in which the drug is
absorbed into the bloodstream through the mucosal membrane under the tongue.
Subsequently the Company licensed from the U.S. Department of Commerce one claim
of a related U.S. patent, which patent is currently the subject of an
interference action by Janssen, a division of Johnson & Johnson. The Company is
currently in negotiations to secure a license to Janssen's patents and
technology, although there can be no assurance it will be able to obtain a
license on reasonable terms or at all. If Janssen is successful in this
interference action and BTG is unable to obtain a license, BTG may be prohibited
from commercializing Androtest-SL.

     Uncertainty of Protection of Patents and Proprietary Technology. The
Company has developed patentable technology and proprietary know-how and has
acquired from various universities and institutions certain basic technologies,
as to which either patents have been issued or patent applications are pending.
There can be no assurance that patent applications will result in issued
patents, that the claims allowed in such issued patents will be sufficiently
broad to protect the Company's proprietary rights or that patents will not be
challenged, circumvented or invalidated or that rights granted pursuant to such
patents will provide competitive advantages to the Company. The Company's
success depends in part on its ability to continue to obtain patent protection
in the United States and other countries for its technologies and the products,
if any, resulting from such technologies. Patent applications in the United
States are maintained in secrecy until a patent issues, and the Company cannot
be certain that others have not filed patent applications for technology covered
by the Company's pending applications or that the Company was the first to file
patent applications for such technology. The Company also relies on trade
secrets, proprietary know-how and technological innovation which it seeks to
protect with confidentiality agreements with its employees, consultants and
licensees. There can be no assurance that these agreements will not be breached,
that the Company will have adequate remedies for any breach or that BTG's trade
secrets and proprietary know-how will not otherwise become known or be
independently discovered by competitors.

                                      -10-
BTG's commercial success will also depend in part on the Company not
infringing patents or proprietary rights of third parties. A number of companies
and research and academic institutions have developed technologies, filed patent
applications or received patents on various technologies that relate to the
Company's business, and such entities may file applications for or be issued
patents in the future with respect to technology potentially necessary or useful
to BTG. Some of these technologies, applications or patents may conflict with
the Company's technologies and existing or future patents, if any, or patent
applications. Such conflict could limit the scope of patents that BTG has
obtained or may obtain in the future or result in patent applications failing to
issue as patents. In addition, if third parties obtain patents which cover the
Company's activities, there can be no assurance that BTG would be able to
license such patents on reasonable terms, or at all, or be able to license or
develop alternative technology. As more patents are issued to third parties, the
risk that the Company's products and activities may give rise to claims that
they infringe the patents of others increases.

     The Company expects that administrative hearings, litigation or both will
be necessary to determine the validity and scope of its and others' proprietary
or biotechnology patents. Such administrative proceedings or litigation have to
date required, and may in the future require, a significant commitment of the
Company's resources. Any such commitment may divert resources from other areas
of the Company.

     Limited Manufacturing Capacity and Experience. The Company has limited
commercial scale manufacturing capacity and experience. While it is expected
that the Company's manufacturing facilities will allow the Company to satisfy
its current and anticipated near-term requirements, the Company will need a
larger facility within the next several years to meet anticipated increases in
demand for its products. The Company is required to obtain regulatory approval
for all of its commercial manufacturing processes and facilities, and to date
the Company has been able to obtain such approvals. Any failure to receive, or a
substantial delay in obtaining, regulatory approval for its manufacturing
processes and facilities could have a material adverse effect on the Company.

     The manufacture of the Company's products involves a number of technical
steps and requires meeting stringent quality control specifications imposed by
governmental regulatory bodies and by the Company itself. Further, such products
can only be manufactured in facilities approved by the applicable regulatory
authorities. As a result, the Company may not be able to quickly and efficiently
replace its manufacturing capacity in the event that it is unable to manufacture
its products at its facilities. In the event of a natural disaster, equipment
failure, strike, war or other difficulty, BTG may be unable to manufacture its
products in a manner necessary to fulfill demand. BTG's inability to fulfill
demand may permit its licensees and distributors to terminate their agreements,
seek alternate suppliers or manufacture the products themselves. Additionally,
if the Company does not receive regulatory approval for its new facility, it
would likely be unable to meet the anticipated increased demands for its
products, which would have a material adverse effect on BTG's business, results
of operations and financial condition. The Company is dependent on third parties
to manufacture all or a portion of certain of its products. See "-- Dependence
on Third-Party Suppliers."

     Limited Marketing Capability and Experience. The Company established a
sales and marketing force in the United States during the second half of 1995 to
promote distribution of Oxandrin and other BTG products in the United States.
With respect to territories outside the United States, the Company does not yet
have an established sales force and relies on third parties to market its
products. There can be no assurance that the Company's marketing strategy will
be successful. The Company's ability to market its products successfully in the
future will be dependent on a number of factors, many of which are not within
its control.

                                      -11-
Limited Commercial Products. The Company's principal activities since its
formation in 1980 have been the research and development of products with
commercial potential. Commercialization of the Company's products is subject to
successful clinical testing and governmental approvals, the timing of which is
not within the control of the Company and has taken and may continue to take
longer than anticipated. Acceptance by the medical community of the Company's
products is also necessary for their successful commercialization.

     Historical Operating Losses. Prior to 1995, the Company's revenues were not
sufficient to offset the expenses incurred in its research, development and
production activities. At March 31, 1997, the Company had an accumulated deficit
of approximately $65.2 million. To the extent the Company is unable to sustain
its recent profitability, its ability to continue its operations will depend
upon its ability to secure additional funds from other sources. Revenue has in
the past and may in the immediate future continue to display significant
variations due to the level of sales of existing products, the introduction of
new products and new research and development contracts and licensing
arrangements, the completion or termination of those contracts and arrangements,
the timing and amounts of milestone payments and the timing of regulatory
approvals of products. The Company's profitability will be dependent on its
success in developing, obtaining regulatory approvals for and effectively
marketing its products. The annual cash flows of the Company have fluctuated
significantly due to the impact of net income and losses, capital spending,
working capital requirements and issuances of Common Stock and other financings.
The Company expects that cash flow in the near future will be primarily
determined by the levels of net income (loss) less depreciation and
amortization, and financings, if any, undertaken by the Company.

     Capital Needs. The development and commercialization of products requires a
substantial amount of funds. The Company's cash requirements are currently
satisfied primarily through product sales. Historically, cash requirements were
satisfied primarily through (i) product sales; (ii) funding of projects through
collaborative research and development arrangements; (iii) contract fees; (iv)
government of Israel funding of a portion of certain research and development
projects; and (v) equity and debt financings. There can be no assurance that
these financing alternatives will be available in the future to satisfy the
Company's cash requirements. The Company believes that its remaining cash
resources, together with anticipated product sales, scheduled payments to be
made to BTG under its current agreements with pharmaceutical partners and third
parties and continued funding from the Chief Scientist of the State of Israel
(the "Chief Scientist") at current levels, will be sufficient to fund the
Company's ongoing operations for the foreseeable future. There can, however, be
no assurance that product sales will occur as anticipated, that scheduled
payments will be made by third parties, that current agreements will not be
canceled, that the Chief Scientist will continue to provide funding at current
levels, or that unanticipated events requiring the expenditure of funds will not
occur.

     The satisfaction of the Company's future cash requirements will depend in
large part on the status of commercialization of the Company's products, the
Company's ability to enter into additional research and development and
licensing arrangements, and the Company's ability to obtain additional equity
investments, if necessary. There can be no assurance that the Company will be
able to obtain additional funds or, if such funds are available, that such
funding will be on favorable terms. If additional funds are raised by issuing
equity securities of the Company, dilution to existing stockholders may result.
In addition, the indentures under which the Company's debt securities were
issued limit the ability of the Company to satisfy its cash requirements through
borrowings or the issuance of debt securities. The Company continues to seek
additional collaborative research and development and licensing arrangements in
order to provide revenue from sales of certain products and funding for a
portion of the research and development expenses relating to the products
covered, although there can be no assurance that the Company will be able to
obtain such agreements. If adequate funds are not available, BTG may be required
to significantly curtail one or more of

                                      -12-
its commercialization efforts or research and development programs or obtain
funds through arrangements with collaborative partners or others on less
favorable terms than might otherwise be available.

     Effect of Governmental Regulation. The Company is subject to regulation by
numerous governmental authorities in the United States and other countries. All
of the Company's products, manufacturing processes and facilities require
governmental licensing or approval prior to commercial use. The approval process
applicable to products of the type being developed by the Company usually takes
five to seven years from the commencement of human clinical trials and typically
requires substantial expenditures. The Company and its licensees may encounter
significant delays or excessive costs in their respective efforts to secure
necessary approvals or licenses. Before obtaining regulatory approval for the
commercial sale of its products, the Company is required to conduct preclinical
and clinical trials which demonstrate that the product is safe and efficacious
for the treatment of the target disease. The results from preclinical animal
studies and early clinical trials may not be predictive of results that will be
obtained in large scale testing. A number of biotechnology companies have
recently suffered significant setbacks in advanced clinical trials, even after
experiencing promising results in preclinical and early human testing.
Additionally, the rate of completion of clinical trials is dependent upon a
number of factors, many of which are outside the Company's control, including
the rate of patient enrollment. Patient enrollment is a function of several
factors, including the size of the patient population and the proximity of
patients to clinical sites. Delays in patient enrollment could result in
increased costs and delays in completion of the clinical trials. In addition,
preclinical and clinical trials must meet regulatory and institutional
requirements. Data obtained from preclinical and clinical activities are
susceptible to varying interpretations which could delay, limit or prevent
regulatory approval. In addition, the Company and its partners may encounter
delays or rejections based upon changes in the policies of regulatory
authorities.

     Future United States or foreign legislative or administrative acts could
also prevent or delay regulatory approval of the Company's or its licensees'
products. Failure to obtain requisite governmental approvals, or failure to
obtain approvals of the scope requested, could delay or preclude the Company or
its licensees from marketing their products, could limit the commercial use of
the products and could also allow competitors time to introduce competing
products ahead of product introduction by the Company and thereby have a
material adverse effect on the Company's results of operations, liquidity and
financial condition. Even after regulatory approval is obtained, use of the
products could reveal side effects that, if serious, could result in suspension
of existing approvals and delays in obtaining approvals in other jurisdictions.

     Regulation by governmental authorities in the United States and other
countries is a significant factor affecting the timing of the commercialization
of the Company's products and its ongoing research and development activities.
The timing of regulatory approvals is not within the Company's control. To date,
the length of time required to obtain regulatory approval of
genetically-engineered products has been significantly longer than expected,
both for the Company and the biotechnology industry in general. These delays
have had, and if they continue could have, a material adverse effect on the
results of operations and financial condition of the Company. The Company
believes that these delays have in the past negatively impacted its ability to
attract funding and that, as a result, the terms of such financings have been
less favorable to the Company than they might otherwise have been had the
Company's product revenues provided sufficient funds to finance the large costs
of taking a product from discovery through commercialization. As a result, the
Company has had to license the commercialization of many of its products to
third parties in exchange for research funding and royalties on product sales;
this will result in lower revenues than if BTG had commercialized the products
on its own.

                                      -13-
Failure to comply with applicable regulatory requirements can, among other
things, result in fines, suspension of regulatory approvals, product recalls,
seizure of products, imposition of operating restrictions and criminal
prosecutions. Further, FDA policy or similar policies of regulatory agencies in
other countries may change and additional governmental requirements may be
established that could prevent or delay regulatory approval of the Company's
products.

     Uncertainty of Health Care Reimbursement. The Company's ability to
successfully commercialize human therapeutic products may depend in part on the
extent to which reimbursement for the cost of such products and related
treatment will be available from government health administration authorities,
private health coverage insurers and other organizations. Significant
uncertainty exists as to the reimbursement status of newly approved health care
products, and there can be no assurance that adequate third-party coverage will
be available for the Company to maintain price levels sufficient for realization
of an appropriate return on its investment in product development. Government
and other third-party payors are increasingly attempting to contain health care
costs by limiting both coverage and the level of reimbursement for new
therapeutic products approved for marketing by the FDA and by refusing, in some
cases, to provide any coverage for use of approved products for disease
indications for which the FDA has not granted marketing approval. If adequate
coverage and reimbursement levels are not provided by government and third-party
payors for use of the Company's health care products, the market acceptance of
these products would be adversely affected. In addition, in recent years a
number of federal and state health care reform proposals have been introduced to
contain health care costs. There can be no assurance as to the ultimate content,
timing or effect of any health care reform legislation, nor is it possible at
this time to estimate the impact of potential legislation on the Company.
Regulatory approval of prices is also required in most countries outside the
United States. In particular, certain European countries will condition their
approval of a product on the agreement of the seller not to sell the product for
more than a certain price in that country. There can be no assurance that the
establishment of a price in one European country will not have the practical
effect of requiring the Company's marketing partners to sell the product in
other European countries at no higher than such price. Because BTG generally
supplies product to its marketing partners for a specified percentage of net
sales, there can be no assurance that the resulting prices would be sufficient
to generate an acceptable return on the Company's investment in its products or
even cover the Company's manufacturing costs for such product.

     Risk of Technical Obsolescence; Highly Competitive Industry. Biotechnology
has undergone rapid and significant technological change. The Company expects
that this technology will continue to develop rapidly, and the Company's future
success will depend, in large part, on its ability to maintain a competitive
position. Rapid technological development may result in products or processes
becoming obsolete before marketing of these products or before the Company
recovers a significant portion of the research, development and
commercialization expenses incurred with respect to those products. Numerous
companies, including well-known pharmaceutical and biotechnology companies, are
engaged in the business of researching and developing products similar to those
of the Company. Many of these companies have substantially greater capital
resources and larger research and development staffs and facilities than the
Company. Such companies may succeed in their research, developing on a more
timely basis products that may be more effective than any which may be developed
by the Company. These companies may also be more successful than the Company in
the production and marketing of such products.

     Retention of Key Personnel. The Company is dependent upon the efforts of
its officers and scientists and other employees. The loss of certain of these
key employees could materially and adversely affect the Company's business.
There is a great deal of competition for the limited number of scientists with
expertise in the area of the Company's operations. The 

                                      -14-
business of the Company is dependent upon its ability to attract and retain
qualified research and managerial personnel. The Company does not maintain, and
has no current intention of obtaining, "key man" life insurance on any of its
employees.

     Risk of Operations in Israel. The Company's primary research, development
and production operations are at this time conducted in Israel and can be
affected by economic, military and political conditions in that country and in
the Middle East in general. The Company manages its Israeli operations with the
object of protecting against any material net financial loss in U.S. dollars
from the impact of Israeli inflation and currency devaluations on its non-U.S.
dollar assets and liabilities. The Bank of Israel's monetary policy has been to
manage the exchange rate while allowing the Consumer Price Index to rise by
approximately 14% in 1994, 8% in 1995, 11% in 1996 and 2% in the first quarter
of 1997. For those expenses linked to the Israeli Shekel, such as salaries and
rent, this resulted in corresponding increases in these costs in U.S. dollars.
In 1994, 1995, 1996 and the three months ended March 31, 1997, the Shekel was
devalued by approximately 1%, 4%, 4% and 5%, respectively, against the U.S.
dollar. Because of the insignificant devaluation of the Shekel against the U.S.
dollar in 1994, 1995 and 1996 despite the annual rate of increase in the
Consumer Price Index, BTG's cost of local goods and services, to the extent
linked in whole or in part to the Consumer Price Index, increased in U.S. dollar
terms. To the extent that expenses in Shekels exceed BTG's revenues in Shekels
(which to date have consisted primarily of research funding from the Chief
Scientist and product sales in Israel), the devaluations of Israeli currency
have been and will continue to be a benefit to BTG's financial condition.
However, should BTG's revenues in Shekels exceed its expenses in Shekels in any
material respect, the devaluation of the Shekel will adversely affect BTG's
financial condition. Further, to the extent the devaluation of the Shekel with
respect to the U.S. dollar does not substantially offset the increase in the
costs of local goods and services in Israel, BTG's financial results will be
adversely affected as local expenses measured in U.S. dollars will increase.
There can be no assurance that the government of Israel will continue to devalue
the Shekel from time to time to offset the effects of inflation in Israel.

     Risk of Product Liability. The testing and marketing of the Company's
products entail risk of product liability. Although the Company has so far been
able to obtain indemnification from pharmaceutical companies commercializing its
products, there can be no assurance that other such companies will agree in the
future to indemnify the Company for other of the Company's products or that such
companies will, if obligated to do so, have adequate resources to fulfill their
indemnity agreements. Further, to the extent the Company elects to test or
market products independently, it will bear the risk of product liability
directly. The Company presently has $10,000,000 of product liability insurance
coverage in place. Any successful product liability claim made against the
Company could substantially reduce or eliminate any stockholders' equity the
Company may have and could have a significant adverse impact on the future of
the Company.

     Volatility of Share Price. The market prices for securities of
biotechnology companies, including the Company, have been volatile, and it is
likely that the price of the Common Stock will fluctuate in the future. Factors
such as announcements of technological innovations or new commercial products by
the Company or its competitors, announcements by the Company or its competitors
of results in preclinical testing and clinical trials, governmental regulation,
patent or proprietary rights developments, public concern as to the safety or
other implications of biotechnology products, changes in earnings estimates and
recommendations by securities analysts, and market conditions in general may
have a significant impact on the market price of the Common Stock. In addition,
the market price of the Common Stock could be adversely affected by future
exercises of outstanding warrants and options. At June 30, 1997, options and
warrants to purchase an aggregate of approximately 5,600,519 shares and
4,706,549 shares, respectively, of Common Stock were outstanding. Substantially
all of these options and warrants have exercise prices below the current market
price of the Common Stock.

                                      -15-
Additionally, substantially all of the shares of Common Stock issuable upon
exercise of these outstanding options and warrants have been registered for
resale under the Securities Act of 1933, as amended, and, accordingly, when
issued will be freely tradable without restriction. In addition, the Company may
issue additional stock, warrants and/or options to raise capital in the future.
The Company may also issue additional securities in connection with its employee
benefit plans. During the terms of such options and warrants, the holders
thereof are given the opportunity to profit from a rise in the market price of
the Common Stock. The exercise of such options and warrants may have an adverse
effect on the market value of the Common Stock. The existence of such options
and warrants may adversely affect the terms on which the Company can obtain
additional equity financing. To the extent the exercise prices of such options
and warrants are less than the net tangible book value of the Common Stock at
the time such options and warrants are exercised, the Company's stockholders
will experience an immediate dilution in the net tangible book value of their
investment. Further, the future sale of a substantial number of shares of Common
Stock by existing stockholders and option and warrant holders may have an
adverse impact on the market price of the Common Stock.

     Absence of Dividends. No dividends have been paid on the Common Stock to
date and the Company does not anticipate paying dividends in the foreseeable
future. The indenture under which the Company's Series B 11% Senior Secured
Convertible Notes due October 15, 1998 were issued prohibits the payment of cash
dividends on the Common Stock.

     Certain Anti-Takeover Effects. The Company's Board of Directors has the
authority to issue up to 4,000,000 shares of Preferred Stock and to determine
the price, rights, preferences and privileges of those shares without any
further vote or action by the Company's stockholders. The rights of the holders
of Common Stock will be subject to, and may be adversely affected by, the rights
of the holders of any Preferred Stock that may be issued in the future. While
the Company has no present intention to issue shares of Preferred Stock, any
such issuance, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. In addition, the Company is subject to the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law, which
prohibits the Company from engaging in a "business combination" with an
"interested stockholder" (defined generally as a person owning 15% or more of
the corporation's outstanding voting stock) for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
The application of Section 203 could have the effect of delaying or preventing a
change of control of the Company.

                                 USE OF PROCEEDS

     The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders.

                             SELLING STOCKHOLDERS

      The Company will supplement this Prospectus from time to time to include
certain information concerning the security ownership of the Selling
Stockholders and the position, office or other material relationship which a
Selling Stockholder has had within the past three years with the Company or any
of its predecessors or affiliates.

                                      -16-
PLAN OF DISTRIBUTION

     The Company is registering the Shares on behalf of the Selling
Stockholders. All costs, expenses and fees in connection with the registration
of the Shares offered hereby will be borne by the Company. Brokerage
commissions, if any, attributable to the sale of Shares will be borne by the
Selling Stockholders (or their donees or pledgees).

     Sales of Shares may be effected from time to time in transactions (which
may include block transactions) on the Nasdaq National Market, in negotiated
transactions, or a combination of such methods of sale, at fixed prices which
may be changed, at market prices prevailing at the time of sale, or at
negotiated prices. The Selling Stockholders have advised the Company that they
have not entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities. The
Selling Stockholders may effect such transactions by selling Common Stock
directly to purchasers or to or through broker-dealers which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholder and/or the
purchasers of Common Stock for whom such broker-dealers may act as agents or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). The Selling
Stockholders and any broker-dealers that act in connection with the sale of the
Common Stock might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act and any commission received by them and any profit
on the resale of the shares of Common Stock as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. The Selling
Stockholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act. Liabilities
under the federal securities laws cannot be waived.

     Because the Selling Stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the Selling Stockholders
will be subject to prospectus delivery requirements under the Securities Act.
Furthermore, in the event of a "distribution" of the Shares, such Selling
Stockholder, any selling broker or dealer and any "affiliated purchasers" may be
subject to Rule 10b-6 under the Exchange Act, which Rule would prohibit, with
certain exceptions, any such person from bidding for or purchasing any security
which is the subject of such distribution until his participation in that
distribution is completed. In addition, Rule 10b-7 under the Exchange Act
prohibits any "stabilizing bid" or "stabilizing purchase" for the purpose of
pegging, fixing or stabilizing the price of Common Stock in connection with this
offering.

     The Selling Stockholders may be entitled under agreements entered into with
the Company to indemnification against liabilities under the Securities Act.

                                  LEGAL MATTERS

     Legal matters relating to the Common Stock have been passed upon for the
Company by Fulbright & Jaworski L.L.P., New York, New York 10103. Partners and
Of Counsel of Fulbright & Jaworski L.L.P., as of July 15, 1997, beneficially
owned an aggregate of 4,800 shares of the Company's Common Stock.

                                      -17-
EXPERTS

      The audited financial statements incorporated by reference in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.
================================================================================
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE
COMMON STOCK OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
                                                   
                               ------------------

                               TABLE OF CONTENTS

                                                                           PAGE
                                                                           ----
Available Information ...................................................     2
Incorporation of Certain Documents by Reference..........................     3
The Company..............................................................     4
Risk Factors.............................................................     6
Use of Proceeds..........................................................    16
Selling Stockholders.....................................................    16
Plan of Distribution.....................................................    17
Legal Matters............................................................    17
Experts..................................................................    18

                                    500,000
                                     Shares
                     
                     
                     
                     
                     
                                 BIO-TECHNOLOGY
                                 GENERAL CORP.
                     
                     
                     
                     
                     
                                  Common Stock
                     
                     
                     
                     
                                   ---------
                     
                                   PROSPECTUS
                     
                                   ---------
                     
                     
                     
                                August 7, 1997
                     
                     

================================================================================
PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE

     The following documents heretofore filed by Bio-Technology General Corp.
("Registrant") (File No. 0-15313) with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:

          (i)  The Registrant's Annual Report on Form 10-K for the fiscal year
               ended December 31, 1996.

          (ii) The Registrant's Quarterly Report on Form 10-Q for the quarter
               ended March 31, 1997.

          (iii) The Registrant's Form 8-A dated July 25, 1983, as amended by
               Amendment No. 1 to Form 8-A dated September 29, 1983 and
               Amendment No. 2 to Form 8-A dated October 1, 1986.

     In addition, all documents filed by Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934 subsequent to the
date of this filing and prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated herein by
reference and to be a part thereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
hereof to the extent that a statement contained in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute part of this registration statement.

ITEM 4. DESCRIPTION OF SECURITIES

     Not Applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL

     Not Applicable.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Section 145(a) of the General Corporation Law of Delaware provides that a
Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation), by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, judgments, fines 

                                      II-1
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.

     Section 145(b) provides that a Delaware corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted under similar standards, except that no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the corporation unless and
only to the extent that the court in which such action or suit was brought shall
determine that despite the adjudication of liability, such person is fairly and
reasonably entitled to be indemnified for such expenses which the court shall
deem proper.

     Section 145 further provides that to the extent a director, officer,
employee or agent of a corporation has been successful in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) or in the
defense of any claim, issue or matter therein, he shall be indemnified against
expenses actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the
corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him or incurred by him in any
such capacity or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liabilities under
such Section 145.

     The Registrant's By-laws provide that the Registrant shall indemnify
certain persons, including officers, directors, employees and agents, within the
limitations permitted by Section 145 of the General Corporation Law of the State
of Delaware. The Registrant has also entered into indemnification agreements
with its current directors and executive officers. Reference is made to the
By-laws and Form of Indemnity Agreement filed as exhibits 3(b) and 10(o),
respectively, to the Registrant's Annual Report on Form 10-K.

     The Registrant maintains a policy of insurance under which the directors
and officers of the Registrant are insured, subject to the limits of the policy,
against certain losses arising from claims made against such directors and
officers by reason of any acts or omissions covered under such policy in their
respective capacities as directors and officers.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED

     Not Applicable.

                                     -II-2
ITEM 8. EXHIBITS

     (a) See Index to Exhibits.

ITEM 9. UNDERTAKINGS

     (a) The undersigned Registrant hereby undertakes:

          (1) To file, during any period in which offers or sales are being
     made, a post-effective amendment to this registration statement:

               (i) To include any prospectus required by Section 10(a)(3) of the
          Securities Act of 1933;

               (ii) To reflect in the prospectus any facts or events arising
          after the effective date of the registration statement (or the most
          recent post-effective amendment thereof) which, individually or in the
          aggregate, represent a fundamental change in the information set forth
          herein;

               (iii) To include any material information with respect to the
          plan of distribution not previously disclosed herein or any material
          change to such information in this registration statement;

     Provided, however, That paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated herein by
reference;

            (2) That, for the purpose of determining any liability under the
      Securities Act of 1933, each such post-effective amendment shall be deemed
      to be a new registration statement relating to the securities offered
      therein, and the offering of such securities at that time shall be deemed
      to be the initial bona fide offering thereof; and

            (3) To remove from registration by means of a post-effective
      amendment any of the securities being registered which remain unsold at
      the termination of the offering.

     (b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to SectionE15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in 

                                     -II-3
the Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

                                      II-4
SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Iselin, State of New Jersey, on August 6, 1997.

                                    Bio-Technology General Corp.

                                    By: /s/ SIM FASS
                                        ----------------------------------------
                                        (Sim Fass, Chairman of the Board,
                                        Chief Executive Officer and President)

                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints SIM FASS and YEHUDA STERNLICHT, or either
of them, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same with all
exhibits thereto and all documents in connection therewith, with the Securities
and Exchange Commission, granting said attorney-in-fact and agent and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

                                      II-5
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature                     Title                                      Date
---------                     -----                                      ----
/s/ SIM FASS                  Chairman of the Board, President,
----------------------        CEO, and Treasurer            
(Sim Fass)                    (Principal Executive Officer)             August 6, 1997
                              

/s/ HERBERT J. CONRAD         Director                                  August 6, 1997
---------------------
(Herbert J. Conrad)

/s/ MOSES MARX                Director                                  August 6, 1997
---------------------
(Moses Marx)

/s/ ALLAN ROSENFIELD          Director                                  August 6, 1997
---------------------
(Allan Rosenfield)

/s/ DAVID TENDLER             Director                                  August 6, 1997
---------------------
(David Tendler)

/s/ VIRGIL THOMPSON           Director                                  August 6, 1997
---------------------
(Virgil Thompson)

/s/ DAN TOLKOWSKY             Director                                  August 6, 1997
----------------------
(Dan Tolkowsky)

/s/ FAYE WATTLETON            Director                                  August 6, 1997
----------------------
(Faye Wattleton)

/s/ HERBERT WEISSBACH         Director                                  August 6, 1997
----------------------
(Herbert Weissbach)

/s/ YEHUDA STERNLICHT         Vice President_Finance and                August 6, 1997
----------------------        Chief Financial Officer 
(Yehuda Sternlicht)           (Principal Financial and
                              Accounting Officer)
II-6
INDEX TO EXHIBITS

EXHIBIT NO.
-----------

4(a)           The Bio-Technology General Corp. 1997 Stock Option Plan for 
               Non-Employee Directors                                      
               
5              Opinion of Fulbright & Jaworski L.L.P. 
               
23(a)          Consent of Arthur Andersen L.L.P.

23(b)          Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5)

24             Power of attorney authorizing representatives to sign this       
               Registration Statement and any and all amendments (including     
               post-effective amendments) to this Registration Statement on     
               behalf of Bio-Technology General Corp. and certain directors and 
               officers thereof (included on signature page).                   

                                      II-7