As filed with the Securities and Exchange Commission on April 13, 1995

                                                      Registration No. 33-88224
    

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

   
                                AMENDMENT NO. 1

                                       TO
    

                                    FORM S-3

                             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 juris-                          (I.R.S. Employer
         diction of incorporation                         Identification
         or organization)                                 Number)

                              70 Wood Avenue South
                            Iselin, New Jersey 08830
                                 (908) 632-8800

         (Address, including zip code, and telephone number, including
            area code, of registrant's principal executive offices)

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

                                    SIM FASS
                                   President
                          BIO-TECHNOLOGY GENERAL CORP.
                              70 Wood Avenue South
                            Iselin, New Jersey 08830
                                 (908) 632-8800

           (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

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

Copies of all communications, including all communications sent to the agent for
service, should be sent to:

                              CARL E. KAPLAN, ESQ.
                          Fulbright & Jaworski L.L.P.
                                666 Fifth Avenue
                            New York, New York 10103

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






     Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.

     If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

     If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [X]

   
     The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
    

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

                                      -2-



INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

   
                             Subject to Completion
                  Preliminary Prospectus dated April 13, 1995.
    

                          Bio-Technology General Corp.

                        5,142,857 Shares of Common Stock

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

   
     The shares of the common stock, par value $.01 per share ("Common Stock"),
of Bio-Technology General Corp. (the "Company" or "BTG") being offered hereby
are being offered by certain stockholders of the Company (the "Selling Security
Holders"). The Company will not receive any proceeds from the sale of the shares
of Common Stock being offered hereby. The shares of Common Stock that may be
sold by Selling Security Holders were acquired in a private placement in October
1994 at a purchase price of $1.75 per share (the "October Private Placement").

     The distribution of the Common Stock by the Selling Security Holders may be
effected from time to time in one or more transactions (which may involve block
transactions) in the over-the-counter market, on the National Association of
Securities Dealers Automated Quotation System National Market ("Nasdaq National
Market") or any exchange on which the Common Stock may then be listed in
negotiated transactions, through the writing of options on shares (whether such
options are listed on an options exchange or otherwise), or a combination of
such methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Selling
Security Holders may effect such transactions by selling shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Security
Holders and/or purchasers of shares for whom they may act as agent (which
compensation may be in excess of customary commissions). The Selling Security
Holders may also sell such shares pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), or may pledge shares
as collateral for margin accounts and such shares could be resold pursuant to
the terms of such accounts. The Selling Security Holders and any broker-dealers
that act in connection with the sale of Common Stock might be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act and any
commissions received by them and any profit on the resale of the shares might be
deemed to be underwriting discounts or commissions under the Securities Act. The
Selling Security Holders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the Common
Stock against certain liabilities, including liabilities arising under the
Securities Act.

     The Company's Common Stock trades on the Nasdaq National Market under the
symbol "BTGC." On April 12, 1995, the closing sale price of the Common Stock was
$2.1875 per share.
    

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

The securities offered hereby involve a HIGH DEGREE OF RISK. See "Risk Factors."

     All expenses of the registration of securities covered by this Prospectus
are to be borne by the Company, except that the Selling Security Holders will
pay underwriting discounts, selling commissions, and fees and the expenses, if
any, of counsel or other advisers to any of the Selling Security Holders.

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

         (Outside Front Cover Page is continued on the following page)

                                      -3-




                   (Continuation of Outside Front Cover Page)

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 April , 1995
    
                                      -4-




     No person has been authorized to give any information or to make any
representation in connection with this offering other than those contained in
the Prospectus or a supplement to this Prospectus, and, if given or made, such
other information or representations must not be relied upon as having been
authorized by the Company or any other person. Neither this Prospectus nor any
supplement to this Prospectus constitutes an offer to sell or the solicitation
of an offer to buy any securities other than the securities to which it relates
or an offer to sell or the solicitation of an offer to buy such securities in
any circumstances in which such offer or solicitation is unlawful. Neither the
delivery of this Prospectus or a supplement to this Prospectus nor any sale made
hereunder or thereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof or thereof or that the information contained herein or therein is correct
as of any time subsequent to its date.

                               TABLE OF CONTENTS

                                                                          Page

   
Available Information .................................................     5
Information Incorporated By Reference .................................     6
The Company ...........................................................     7
Risk Factors ..........................................................     8
Recent Developments ...................................................    22
Use of Proceeds .......................................................    26
Description of Capital Stock ..........................................    27
Selling Security Holders ..............................................    29
Plan of Distribution ..................................................    31
Legal Matters .........................................................    32
Experts ...............................................................    32
    

                             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 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, Washington,
D.C. 20006. This Prospectus does not contain all of the information set forth in
the Registration Statement of which this Prospectus is a part and exhibits
thereto which the Company has filed with the Commission under the Securities Act
and to which reference is hereby made.

          (Inside Front Cover Page is continued on the following page)

                                      -5-




                   (Continuation of Inside Front Cover Page)

                     INFORMATION INCORPORATED BY REFERENCE

     The following documents filed with the Commission by the Company (File No.
0-15313) pursuant to the Exchange Act are incorporated by reference into this
Prospectus:

   
     (i)  The Company's Annual Report on Form 10-K for the fiscal year ended
          December 31, 1994.

     (ii) The Company'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.

     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. 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.


                                      -6-



                                  THE COMPANY

   
     BTG, founded in 1980, is principally engaged in the research, development,
manufacture and marketing of genetically engineered and other products for human
health care. The Company is focusing primarily on the development of therapeutic
products that address serious conditions such as endocrine disorders,
cardio/pulmonary diseases, ophthalmic and skin disorders.

     The Company's key products include Bio-Tropin(TM) (human growth hormone)
for the treatment of short-stature; Oxandrin(R) (oxandrolone), for the treatment
of Turner syndrome, constitutional delay of growth and puberty in boys and HIV
wasting syndrome; Androtest-SL(R) (sublingual testosterone) for hypogonadism;
Hepandrin(TM) (oxandrolone), for the treatment of alcoholic hepatitis;
BioLon(TM) (sodium hyaluronate) for the protection of the corneal endothelium
during intraocular surgery; a vitamin D derivative for the topical treatment of
recalcitrant psoriasis, contact dermatitis, and other skin disorders;
Bio-Hep-B(TM), a third generation vaccine against the hepatitis B virus; and
Delatestryl(R) (injectable testosterone) for hypogonadism and delayed puberty.
BTG's current process development and pre-clinical research focus is on
cardiovascular drugs, on behalf of Bio-Cardia Corporation ("Bio-Cardia"), aimed
at reducing restenosis and reocclusion, anti-coagulants and a clot-imaging agent
with improved properties in comparison with existing methods.

     In December 1993 the Company licensed to Bio-Cardia, a newly-formed
corporation, its rights to develop and commercialize OxSODrol(TM) (human
superoxide dismutase) to detoxify oxygen free radicals in the treatment of
bronchopulmonary dysplasia in premature infants and the inhibition of
reocclusion of coronary arteries; sodium hyaluronate, including BioLon, for all
pharmaceutical applications in the United States and Japan; an anti-coagulant
agent; and other anti-reocclusion, anti-restenosis and thrombus-imaging agents.
Bio-Cardia has engaged BTG to conduct the research and development activities
for these products, and BTG has the right to reacquire all these products at any
time prior to January 1, 1998.

     The Company believes that its specialized biotechnology skills, including
its vector technology, macromolecular purification processes and manufacturing
capabilities, give it competitive advantages in developing and commercializing
new biotechnology products. In addition to its specialized biotechnology skills,
the Company has expertise in the clinical development of more traditional
pharmaceutical agents. To enhance the Company's research and development
activities, the Company has established ties with leading academic and
scientific institutions in the United States, Israel and other countries, some
of which also undertake research projects with the Company. These institutions
are important resources for the Company, providing access to technological
advances in the fields of biotechnology, drug-delivery, biology and pre-clinical
research.
    
     The Company's headquarters are located at 70 Wood Avenue South, Iselin, New
Jersey, where the Company has leased approximately 9,700 square feet of office
space. 

                                      -7-




   

All human clinical studies and most U.S. regulatory affairs are
coordinated at the Company's headquarters. Pre-clinical studies, research,
development, production, formulation, distribution and marketing activities are
primarily carried out through its wholly-owned subsidiary in an approximately
74,000 square foot research and Good Manufacturing Practice ("GMP") designed
manufacturing facility located in Rehovot, Israel. All references herein to BTG
or the Company mean Bio-Technology General Corp. and its wholly-owned
subsidiaries, Bio-Technology General (Israel) Ltd. ("BTG-Israel"), BTG
Pharmaceuticals Corp. (as successor-in-interest by merger to Gynex
Pharmaceuticals, Inc. ("Gynex"), which merger was consummated on August 6, 1993)
and BTG Pharmaceuticals Ltd. (Bermuda).
    

                                  RISK FACTORS

     The securities being offered hereby involve a high degree of risk.
Prospective investors should review the entire Prospectus and the information
incorporated herein by reference and carefully consider, among other factors,
the following matters:

     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.

    

Lack of Profitable Operations. The Company's revenue to date has not
been sufficient to offset the expenses incurred in its research, development and
production activities. The Company had a net loss of approximately $7,419,000
for the year ended December 31, 1994. At December 31, 1994, the Company had an
accumulated deficit of $96,307,000. To the extent the Company continues to incur
losses, its ability to continue its operations will depend upon its ability to
secure additional funds from other sources. See "--Capital Needs." Revenue may
display significant variations due to the introduction of new research and
development contracts and licensing arrangements, the completion or termination
of those contracts and arrangements, the timing and amounts of milestone
payments, the timing of 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
product. There can be no assurance as to when or whether sustained profitability
will be achieved. The failure of Bio-Cardia to make certain research and
development payments to the Company during the three months ended September 30,
1994 adversely affected the Company's results of operations for the year ended
December 31, 1994. The Company's agreement to fund a substantial portion of the
operations of, and an exchange offer by, Bio-Cardia will adversely affect BTG's
results of operations in 1995. Additionally, if the Company exercises its option
to acquire Bio-Cardia prior to the commercialization of any of the products
licensed to Bio-Cardia, the purchase price will

    

                                      -8-



be allocated to research and development in process and will be
reflected as a one-time non-recurring charge in the Statement of Operations. See
"--Dependence on Third Parties" and "Recent Developments."
   
     Capital Needs. To date, the substantial majority of the Company's funds
necessary to finance its operations has been provided by debt and equity
financings. The Company has also relied on contract fees and research and
development revenue provided by the Company's collaborative partners and funds
for research and development provided by the Chief Scientist of the State of
Israel (the "Chief Scientist") to finance its operations. 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, the proceeds of sales of equity and continued funding from the
Chief Scientist at current levels, will be sufficient to fund the Company's
operations at least until the end of 1996. There can, however, be no assurance
that product sales will occur as anticipated, that the funds which the Company
anticipates receiving from its pharmaceutical partners and third parties will in
fact be received, that unanticipated events requiring the expenditure of funds
will not occur, that commercialization of its products will not be further
delayed or, if necessary, that the Company will be able to obtain additional
funds. The Company's future additional cash requirements will depend, in large
part, on the timing of milestone payments due to the Company under its license
agreements, the timing of research and development payments under its agreements
with third parties, the timing of regulatory approvals for its products and the
introduction of those products into the marketplace. If adequate funds are not
available, the Company may be required to significantly curtail one or more of
its research and development programs or obtain funds through arrangements with
third parties that may require the Company to relinquish rights to certain of
its technologies or products. See "--Dependence on Third Parties."
    

     The annual cash flows of the Company have fluctuated significantly due to
the impact of net losses, capital spending 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 loss less depreciation and
amortization, and financings, if any, undertaken by the Company.

   
     The Company expects to seek, from time to time, additional sources of
funds, the form of which will vary depending upon prevailing market and other
conditions and may include short- or long-term borrowings or the issuance of
debt or equity securities. However, 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. 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, and prohibit the sale of equity securities at a price per share of
less than $1.00 (as adjusted under certain circumstances). The Company continues
    

                                      -9-


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. The Company believes that delays in obtaining
regulatory approval of its products have negatively impacted the Company's
ability to attract funding and that, as a result, the terms of such financings
have been less favorable to BTG 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, BTG
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 the Company had commercialized the product
on its own.

     Patents and Protection of 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 or that patents
will not be circumvented or invalidated. The Company also relies on unpatented
proprietary technology. There can be no assurance that others may not obtain
access to BTG's proprietary technology. Furthermore, there can be no assurance
that others may not independently develop the same or similar technology and
obtain patents thereon either in the United States or in jurisdictions where the
Company is seeking patents for which the Company may have to obtain licenses.
There can be no assurance that needed licenses will be available on acceptable
terms. The Company believes that important legal issues remain to be resolved as
to the extent and scope of patent protection for biotechnology products, and 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 may require
a significant commitment of the Company's resources in the future.

   

     During 1991, the Company received notification from the United States
Patent and Trademark Office Board of Patent Appeals and Interferences of the
declaration of an interference between an issued patent assigned to the Company
covering a method for producing enzymatically active human copper/zinc
superoxide dismutase ("SOD") in bacteria and a pending application of Chiron
Corporation ("Chiron"), which claims an earlier filing date. While the Company
is vigorously defending its patent, it cannot predict the outcome of such
interference. However, should the Company's patent be disallowed and a
corresponding patent be issued to Chiron, the Company's present method of
producing enzymatically active copper/zinc SOD ("OxSODrol") in bacteria may need
to be altered, which may or may not be possible; alternatively, the Company
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. The Company is seeking to have the Patent Office either expand the scope of
the existing interference action or declare a separate interference to determine
that the Company

    

                                      -10-



   

rather than Chiron should hold the patent for the bacterially produced form
of recombinant human copper/zinc SOD on the basis that the Company's scientists,
not Chiron scientists, invented the method for producing recombinant human
copper/zinc SOD in bacteria. Unless the Company is able to prevail in this
effort or to obtain a license from Chiron, the Company may be unable to
commercialize OxSODrol 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 features for expression of active copper/zinc SOD and a method for
production of active copper/zinc SOD in a microorganism harboring this
construct. The Company is opposing the grant of this patent; however, there can
be no assurance that this opposition will be successful. If the opposition is
unsuccessful, the Company may be precluded from manufacturing OxSODrol in
Israel.

     On January 9, 1992, BTG-Israel filed an application in the Israel Patent
Office for a compulsory license to manufacture the Company's Bio-Hep-B under
Biogen's Israeli patent which license, upon approval, would enable the Company
to produce the vaccine in Israel and likely to export the vaccine to countries
in which neither Biogen nor others have been granted a blocking patent. During
1994 and January 1995, hearings took place and written summations were submitted
to the Registrar of Patents by both parties. BTG-Israel believes that it is
entitled to a compulsory license under Israeli law and that there is a
reasonable possibility such a license will be granted. However, there can be no
assurance that a compulsory license will be issued. If a compulsory license is
not issued, the Company may not be able to manufacture or sell its Bio-Hep-B in
Israel or to export such product from Israel unless the patent is revoked. On
August 31, 1992, Biogen sued BTG-Israel for allegedly infringing its Israeli
patent (which is the subject of the compulsory license application) by virtue of
its preparation of BTG's Bio-Hep-B for use in clinical trials and applied for an
interlocutory injunction restraining BTG-Israel from continuing research and
development and clinical trials. The District Court of Tel Aviv, Israel, on June
9, 1993, denied Biogen's application for an interlocutory injunction in
connection with research and development activities and clinical trials, but did
prohibit BTG-Israel from commercial marketing of Bio-Hep-B unless permitted by
Biogen or its exclusive licensee, until a compulsory license is obtained, or
until the patent is revoked.

     On March 16, 1993, Genentech Inc. ("Genentech") filed a complaint with the
U.S. International Trade Commission (the "ITC") alleging, among other things,
that the Company's importation of 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. Additionally Genentech filed a motion for a temporary exclusion
order ("TEO") seeking to exclude the Company from importing human growth hormone
into the United States pending the outcome of the ITC investigation. On February
25, 1994, the ITC adopted the initial determination of the administrative judge
hearing this matter denying the motion for a TEO. 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
     

                                      -11-


   

as a sanction for Genentech's conduct which resulted in an incomplete
record and violated the due process rights of the Company and Novo-Nordisk A/S
("Novo") another respondent in the proceeding. The ITC also found no violation
by the Company of Section 337 of the Tariff Act of 1930. In March 1995 Genentech
filed a notice of appeal of the ITC decision in the United States Court of
Appeals for the Federal Circuit. During 1993 and 1994, BTG incurred total legal
fees of approximately $4,200,000 relating to the ITC proceeding.

     On December 1, 1994, Genentech filed a lawsuit against the Company and Novo
in the United States District Court for the District of Delaware alleging that
BTG's hGH infringed two Genentech patents. In January 1995, the Company
commenced an action against Genentech in the United States District Court for
the Southern District of New York seeking, among other things, declaratory
judgment 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 Company believes that it does not infringe any valid
Genentech patent, although there can be no assurance that the Company will not
be found to be infringing Genentech's patents. If the Company is found by the
district court to infringe one or more U.S. patents of Genentech, it likely will
be precluded from selling its hGH in the United States. The Company expects to
incur substantial legal fees in defending and prosecuting these lawsuits in
respect to Genentech.

     In September 1993, JCR Pharmaceuticals Co., Ltd. ("JCR"), the Company's
exclusive distributor of human growth hormone products in Japan, received a
letter from attorneys representing Genentech and its Japanese licensee claiming
that JCR's sale of the Company's hGH in Japan infringed certain Genentech
patents and patent applications and demanding that JCR cease the sale of the
Company's hGH in Japan. 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 the Company'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, the Company may be obligated to pay
money damages and will be obligated to obtain a license from Genentech in Japan,
of which there can be no assurance, or JCR will be required to stop selling the
Company's hGH in Japan. During 1994, BTG filed oppositions to two Genentech
patent applications in Japan which were first published for opposition in the
first half of 1994. There can be no assurance that BTG will be successful in its
opposition to these patents.

     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) and 1985 (one). BTG is opposing the grant of these
patents. One of these three Israeli patents corresponds to two of the three U.S.
patents which are the subject of the complaint asserted by Genentech against BTG
in the United States District Court in Delaware. 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

    

                                      -12-



   

to 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 to oppose the grant to
several of its competitors of patents relating to vector systems, and may as
necessary oppose corresponding patents in other jurisdictions. 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.

     Janssen, a division of Johnson & Johnson, has commenced an interference
action in the Patent Office relating to a cyclodextrin patent. A claim of this
patent, which relates to the cyclodextrin patent licensed to BTG under an
agreement with the National Technical Information Service ("NTIS"), an operating
unit of the United States Department of Commerce, is exclusively licensed to
BTG. If Janssen is successful in the interference proceeding, BTG may not be
able to market Androtest-SL in the United States without a license, which may
not be available.
    

     Healthcare Reimbursement May Not be Available. 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 healthcare
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 healthcare
costs by limiting both coverage and the level of reimbursement for new
therapeutic products approved for marketing by the United States Food and Drug
Administration ("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
healthcare products, the market acceptance of these products would be adversely
affected. It is anticipated that one or more healthcare reform proposals, the
principal goals of which will be to provide health insurance coverage to
substantially all Americans and to reduce the rate of increase in national
healthcare expenditures, will be considered by Congress and various states in
the next several years. There can be no assurance as to the ultimate content,
timing or effect of any healthcare reform

                                      -13-



legislation, nor is it possible at this time to estimate the impact of
potential legislation on the Company.

     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,
producing 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 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 is to manage the exchange rate
while allowing the Consumer Price Index to rise by approximately 9% in 1992, 11%
in 1993 and 14% in 1994. 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 1992, 1993 and 1994 the Shekel was devalued by approximately
21%, 8% and 1%, respectively, against the U.S. dollar. As a result of the
devaluations of the Shekel and modest increases in cost-of-living adjustments in
Shekel salaries in 1992 and 1993, BTG's costs of local goods and services in
Israel measured in U.S. dollars remained relatively constant in 

    

                                      -14-


   

1992 and 1993 despite the rise in the Consumer Price Index. However,
because of the insignificant devaluation of the Shekel against the U.S. dollar
despite the 14% annual rate of increase in the Consumer Price Index during 1994,
the Company's cost of local goods and services, to the extent linked in whole or
in part of the Consumer Price Index, increased in U.S. dollar terms in 1994. To
the extent that expenses in Shekels exceed the Company's revenues in Shekels
(which to date have consisted primarily of research funding from the Chief
Scientist and sales of Bio-Tropin and BioLon in Israel), the devaluations of
Israeli currency have been and will continue to be a benefit to the Company's
financial condition. However, should the Company's revenues in Shekels exceed
its expenses in Shekels in any material respect, the devaluation of the Shekel
will adversely affect the Company'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, the Company'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 $5,000,000 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.

     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. 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 

                                      -15-



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 will have, a material adverse effect on
the results of operations and financial condition of the Company. The Company
believes that these delays have 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. See
"-- Capital Needs." The Company believes that FDA approval of genetically
engineered bovine growth hormone, including the Company's bovine growth hormone
product, has been delayed by opposition from certain consumer, environmental and
farm groups, which have petitioned the FDA not to approve genetically engineered
bovine growth hormone until its long-term health and economic effects are fully
studied. In addition, certain environmental and consumer groups are generally
opposed to genetically engineered products, primarily in the agricultural field.
There can be no assurance that opposition from such groups will not adversely
affect the FDA approval process with respect to other products of the Company.

     Dependence on Third Parties. The Company has licensed substantially all its
basic technology from third-parties. In addition, the Company has generally
licensed the commercialization rights for its products to third-parties. These
license agreements, which constitute BTG's most significant assets, may be
canceled by the other party upon BTG's failure to perform its obligations
thereunder. In addition, certain contracts may also be canceled by the Company's
licensees at any or at certain specified times.

     The Company has derived, and expects to continue to derive over the next
several years, a portion of its 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, 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. For each of the
last three years, licensing fees and research funding of this type have provided
a substantial portion of the Company's non-interest operating revenues.
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 

                                      -16-



   
considerations include the relative advantages, including patent and
proprietary positions, of alternate products being marketed or developed by
others and, in the case of research and development funding by Bio-Cardia,
receipt by Bio-Cardia of funds from its stockholders, of which there can be no
assurance. During the three months ended September 30, 1994, a substantial
number of Bio-Cardia stockholders defaulted on their obligations to Bio-Cardia.
As a result of the default by certain Bio-Cardia stockholders on their
obligations to Bio-Cardia, Bio-Cardia was unable to pay approximately $1,540,000
of the $3,250,000 in reimbursement of previously incurred research and
development expenses and approximately $2,961,000 for research and development
performed by BTG on behalf of Bio-Cardia during 1994. The Company has been
informed by Bio-Cardia that it has reached settlements with certain of the
defaulting stockholders, the net effect of which is to reduce the funding
expected by Bio-Cardia by approximately $14,240,000, and that Bio-Cardia has
commenced legal action against the remaining defaulting stockholders, who owe an
aggregate of $3,200,000. Accordingly, Bio-Cardia will not be in a position to
fund the up to $32 million research and development program originally
contemplated by Bio-Cardia and the Company. The failure of Bio-Cardia to make
certain research and development payments to the Company during the three months
ended September 30, 1994 adversely affected the Company's results of operations
for the year ended December 31, 1994. The Company's agreement to fund a
substantial portion of the operation's of, and an exchange offer by, Bio-Cardia
will adversely affect BTG's results of operations in 1995. See "Recent
Developments."
    

     The Company's revenues from license agreements have fluctuated in the past
and are expected to continue to fluctuate in the future. In addition, some of
the license agreements from which the Company derives those revenues are subject
to early termination. There is no assurance that historical levels of revenue
from these sources will be maintained. Furthermore, the amounts of any royalty
payments to be received by the Company under its license agreements will be
dependent on the extent to which its licensees devote resources to the
development and commercialization of the products. Although the Company believes
its licensees have an economic motivation to commercialize their products, the
Company will have no effective control over the licensees' commercialization
efforts.

     Limited Manufacturing and Marketing Capability 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 the requirements of existing license and distribution agreements for the
near term, there is no assurance that these requirements will be satisfied. The
Company will be required to obtain regulatory approval for all of its commercial
manufacturing processes and facilities. Any failure to receive, or substantial
delay in obtaining, regulatory approval for its manufacturing processes and
facilities could have a material adverse effect on the Company. The Company
believes that it operates its facilities under, and is in compliance with, the
FDA's good laboratory and manufacturing practices.

     The Company does not yet have an established sales force and relies on
third 

                                      -17-



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.

     Volatility of Share Price. The market prices for securities of
biotechnology companies have been volatile. Factors such as announcements of
technological innovations or new commercial products by the Company or its
competitors, governmental regulation, patent or proprietary rights developments,
public concern as to the safety or other implications of biotechnology products
and market conditions in general may have a significant impact on the market
price of the Company's Common Stock.

     The market price of the Company's Common Stock has fluctuated over a wide
range and it is likely that the price of the Company's Common Stock will
fluctuate in the future. Because the Company's Common Stock is issuable upon
exercise of outstanding warrants and upon the conversion of outstanding
convertible debentures, the market price of the Company's Common Stock could be
adversely affected by future exercises of outstanding warrants or conversions of
debentures. In addition, the future sale of a substantial number of shares of
the Company's Common Stock by existing stockholders and option and warrant
holders may have an adverse impact on the market price of the Company's Common
Stock. See "--Dilutive Effect of Stock Issuances, Grants, Options and Warrants"
and "--Effect on Trading Market of Common Stock."

   
     Absence of Dividends. No dividends have been paid on the Company's Common
Stock to date and the Company does not anticipate paying dividends in the
foreseeable future. The indentures under which the Company's 7 1/2% Convertible
Senior Subordinated Notes due April 15, 1997 and the Series B 11% Senior Secured
Convertible Notes due October 15, 1998 were issued prohibit the payment of cash
dividends on BTG Common Stock.
    

     Dilutive Effect of Stock Issuances, Grants, Options and Warrants. BTG has
granted options to purchase an aggregate of approximately 7,857,000 shares of
the Company's Common Stock under certain employee benefit plans. Warrants to
purchase an aggregate of approximately 11.2 million shares of the Company's
Common Stock are also outstanding under previous financing arrangements and
other transactions. Many of these options and warrants have exercise prices
below the current market price of the Company's Common Stock. In addition, the
Company may issue additional stock, warrants and/or options to raise capital in
the future. The Company regularly examines opportunities to expand its
technology base and product line through means such as licenses, joint ventures
and acquisition of assets or ongoing businesses and may issue securities in
connection with such transactions, including the reacquisition of technology
licensed to Bio-Cardia through the purchase of all outstanding Bio-Cardia
capital stock pursuant to the exercise of options to purchase such stock granted
to the Company by the Bio-Cardia stockholders. See "--Capital Needs" and "Recent


                                      -18-


   

Developments." 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 Company's Common Stock. The exercise of such options and
warrants may have an adverse effect on the market value of the Company's Common
Stock. The existence of such options and warrants may adversely affect the terms
on which the Company can obtain additional equity financing. See "-- Capital
Needs." To the extent the exercise prices of such options and warrants are less
than the net tangible book value of the Company's 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. If the
Company elects to acquire Bio-Cardia, the number of shares of Common Stock
required to purchase the outstanding capital stock of Bio-Cardia will depend on
the market price of the Common Stock at the time the option to purchase the
Bio-Cardia capital stock is exercised, and the issuance of such shares could
result in substantial dilution to the Company's stockholders and could
significantly affect the market price of the Common Stock. In addition, to the
extent the Company issues more than 3,000,000 shares of Common Stock to purchase
the outstanding capital stock of Bio-Cardia, the Company will be obligated to
issue additional shares of Common Stock, at a price of $.01 per share, to the
Selling Security Holders. See "Recent Developments."

     Effect on Trading Market. The Company's Common Stock is currently traded on
the Nasdaq National Market. Although there are a number of market makers for the
Company's Common Stock, there can be no assurance that a trading market will
continue for the Common Stock. The qualification requirements for inclusion in
the Nasdaq National Market include, without limitation, a requirement that the
Company have, at the time of application, net tangible assets (defined as total
assets (including the value of patents, copyrights and trademarks but excluding
the value of goodwill) less total liabilities), of at least $12,000,000, and
thereafter maintain net tangible assets of at least $4,000,000. There can be no
assurance that the Common Stock will not in the future be removed for failure to
continue to satisfy the Nasdaq National Market requirements.
    

     In addition to the shares of Common Stock registered hereunder, the Company
currently has registered for resale from time to time on behalf of certain
stockholders of the Company an aggregate of 12,073,032 additional shares of
Common Stock, including 9,331,158 shares of Common Stock issuable upon the
exercise of outstanding warrants, and 8,047,485 warrants. The shares of Common
Stock and warrants which are currently registered for resale were purchased by
certain stockholders of the Company in five separate private placements as
follows: (1) an aggregate of 695,666 shares of Common Stock which were purchased
by such stockholders in July 1990 (the "July Private Placement"), (2) an
aggregate of 2,111,580 shares of Common Stock (including 659,687 shares of
Common Stock issuable upon the exercise of warrants) and 441,680 warrants, which
securities were purchased in May 1991 (the "May Private Placement"), (3) an
aggregate of 571,428 shares of Common Stock issuable upon the exercise of
warrants, which warrants were acquired by such stockholders in August 

                                      -19-



1991 (the "August Private Placement"), (4) an aggregate of 2,488,108 shares
of Common Stock (including 1,893,793 shares of Common Stock issuable upon the
exercise of warrants) and 1,466,055 warrants, which securities were purchased by
such stockholders in December 1991 (the "December Private Placement") and (5) an
aggregate of 6,206,250 shares of Common Stock (all such shares are issuable upon
the exercise of warrants) and 6,206,250 warrants, which securities were acquired
by such stockholders in December 1993 (the "Bio-Cardia Private Placement"). The
sale of such shares and warrants could adversely affect prevailing market
prices.

     In the July Private Placement, the Company sold an aggregate of 1,666,662
units of Common Stock and warrants at a price of $3.00 per unit. Each unit
consisted of one share of Common Stock and a warrant to purchase one-half share
of Common Stock at $6.00 per share. The number of shares of Common Stock
issuable upon exercise of warrants was subsequently adjusted as a result of the
anti-dilution provisions to 866,545 shares at $5.77 per share. The warrants
expired, unexercised, on February 21, 1994. The market price of the Company's
Common Stock on the date the Company sold the 1,666,662 units was $3.625 per
share.

     In the May Private Placement, the Company sold an aggregate of 1,618,528
units at a price of $3.50 per unit, each unit consisting of one share of Common
stock and a warrant to purchase one-half share of Common Stock at a price of
$6.00 per share. These warrants expire between May 7, 1994 and May 7, 1996,
depending on the market price of Common Stock. The market price of Common Stock
on the closing date of the May Private Placement was $3.875 per share. See
"Description of Capital Stock--Warrants."

     In the August Private Placement, the Company sold an aggregate of 1,142,857
units of Common Stock and warrants at a price of $5.25 per unit, which warrants
expire on August 26, 1995 or earlier under certain circumstances. Each unit
consisted of one share of Common Stock and a warrant to purchase one-half share
of Common Stock at $8.00 per share. The market price of the Company's Common
Stock on August 26, 1991 and August 30, 1991, the dates on which the units were
sold, was $5.625 per share and $6.125 per share, respectively. See "Description
of Capital Stock--Warrants."

     In the December Private Placement, the Company sold an aggregate of
1,733,333 units of Common Stock and warrants at a price of $7.52 per unit. Each
unit consists of one share of Common Stock and a warrant to purchase one share
of Common Stock at a price of $10.53 per share. The warrants expire between
December 19, 1993 and December 19, 1995, depending on the market price of the
Common Stock. The Company, at the same time, issued to the sales agent and
selected dealers for the December Private Placement warrants to purchase 160,460
shares of Common Stock having the same terms as the warrants included in the
units. The market price of the Company's Common Stock on the date of the
December Private Placement was $9.00 per share. See "Description of Capital
Stock--Warrants."

                                      -20-




   
     In the Bio-Cardia Private Placement, the Company and Bio-Cardia sold an
aggregate of 375 units at a price of $100,000 per unit. Each unit consisted of
four shares of Bio-Cardia Common Stock, $.01 par value per share, and warrants
to purchase 15,000 shares of the Company's Common Stock at a price of $5.49 per
share. The warrants expire at 5:00 p.m. New York time on December 31, 1998. The
Company at the same time issued to the placement agent for the Bio-Cardia
Private Placement warrants to purchase 562,500 shares of Common Stock having the
same terms as the warrants included in the units. In addition, the Company at
the same time issued to the directors of Bio-Cardia warrants to purchase an
aggregate of 18,750 shares of Common Stock having the same terms as the warrants
included in the units. The market price of the Company's Common Stock on the
date of the Bio-Cardia Private Placement was $5.25 per share. See "Recent
Developments" and "Description of Capital Stock."
    

     To the extent the exercise prices of the warrants issued in the May Private
Placement, August Private Placement, December Private Placement and the
Bio-Cardia Private Placement are less than the net tangible book value of the
Common Stock at the time such warrants are exercised, the Company's stockholders
will experience an immediate dilution in the net tangible book value of their
investment.

     Certain Anti-Takeover Effects. The shares beneficially owned by the
Company's executive officers, directors and five percent stockholders, combined
with the ability of the Company's Board of Directors to issue shares of
preferred stock without further vote or action by the Company's stockholders,
may have the effect of delaying, deferring or preventing a change in control of
the Company without further action by the Company's stockholders. Consequently,
the market price for the Company's Common Stock may be less likely to reflect a
"premium for control." In addition, Section 203 of the Delaware Law, which is
applicable to the Company, contains provisions that are normally considered to
have the effect of inhibiting a non-negotiated merger or other business
combination.

     Limitation on Use of Net Operating Loss Carryforwards. The Company has net
operating loss carryforwards available to reduce future federal taxable income,
aggregating approximately $50 million as of December 31, 1993, which expire from
1995 through 2008. The use of such carryforwards is severely limited as a result
of ownership changes resulting from previous share issuances. Subsequent changes
in the Company's ownership may cause further limitations on the annual amounts
of the carryforwards which can be utilized.

                                      -21-



                              RECENT DEVELOPMENTS

Default in Bio-Cardia Funding

    

     On December 31, 1993, the Company and Bio-Cardia completed the Bio-Cardia
Private Placement of 375 units, each unit (a "Unit"), consisting of four shares
of common stock of Bio-Cardia and warrants to purchase 15,000 shares of the
Company's Common Stock at an exercise price of $5.49 per share (the "Warrants").
The purchase price per unit was $100,000, of which $15,000 per unit was paid at
the closing, with the remainder paid with a promissory note (the "Note") due in
five installments over a period of three years. All of the cash proceeds of the
financing are received by Bio-Cardia. In consideration of the warrants included
in the Units, the Company received from each purchaser of Units an option (the
"Stock Purchase Option"), exercisable at any time on or prior to December 31,
1997, to purchase the Bio-Cardia stock at a purchase price beginning at 125% and
increasing over time to 200% of the cash portion of the price paid for such
stock. The Company has been informed by Bio-Cardia that as of the date hereof
non-defaulting Bio-Cardia stockholders have paid Bio-Cardia approximately
$4,620,000 in respect of their Bio-Cardia stock. Should the Company exercise the
Stock Purchase Option, the aggregate purchase price will be allocated to the
assets acquired based upon their estimated fair market value at the date the
acquisition is consummated. However, if the Stock Purchase Option is exercised
prior to commercialization of any of the products licensed to Bio-Cardia, the
purchase price will be allocated to research and development in process and will
be reflected as a one-time non-recurring charge in the Statement of Operations.
Such purchase price may be paid in cash, shares of the Company's Common Stock or
both, at the Company's discretion. In connection with the closing of the
Bio-Cardia Private Placement, the Company licensed to Bio-Cardia, pursuant to a
technology license agreement, the right to pursue (i) the worldwide development
and commercialization of the Company's Imagex, Bio-Flow, Factorex and Bio-Lase
products for all cardio-vascular indications, the Company's OxSODrol product for
the inhibition of reocclusion of coronary arteries during and after thrombolysis
or angioplasty or in cases of unstable angina, and for the prevention of
restenosis, and the Company's OxSODrol product for the treatment of
bronchopulmonary dysplasia in premature neonates, and (ii) the development and
commercialization of the Company's sodium hyaluronate-based products for
ophthalmic applications in the United States and Japan to protect the corneal
endothelium during intraocular surgery and other pharmaceutical applications
where a shock-absorbing and lubricating material compatible with the human body
is required. The Company and Bio-Cardia entered into a research and development
agreement pursuant to which the Company is conducting research, development and
clinical testing of these products. Bio-Cardia has determined not to pursue
Bio-Lase for the inhibition of acute reocclusion and treatment of diabetic
thromboembolism, and OxSODrol for the inhibition of reocclusion of coronary
arteries during and after thrombolysis or angioplasty or in cases of unstable
angina, and for the prevention of restenosis, as preliminary studies were not
sufficiently encouraging to justify continued pursuit of these products.

    

                                      -22-



   


     Bio-Cardia and the Company had originally budgeted approximately $32
million of the net proceeds of the Bio-Cardia Private Placement (less if the
Stock Purchase Option was exercised prior to January 1, 1997) to fund
development and commercialization of the products licensed to Bio-Cardia over a
period of four years and to reimburse BTG for previously incurred research and
development expenses, of which approximately $6 million was to be received in
1994. However, holders of 218 Units failed to make the required July 1, 1994
payment of $10,000 per unit, which resulted in Bio-Cardia being unable to pay
approximately $1,540,000 of the $3,250,000 in reimbursement of previously
incurred research and development expenses and approximately $500,000 of the
$1,521,000 of development costs due BTG during the three months ended September
30, 1994 under the research and development agreement. In October 1994
Bio-Cardia reached settlements with certain of the defaulting stockholders,
holding an aggregate of 178 Units, who surrendered to Bio-Cardia their
Bio-Cardia stock and Warrants to purchase an aggregate of 2,670,000 shares of
BTG Common Stock (the "Surrendered Warrants") in exchange for a release from
their future funding obligations to Bio-Cardia. The net effect of this
settlement was to reduce the funding expected by Bio-Cardia by approximately
$14,240,000. In addition, Bio-Cardia commenced legal action against the
remaining defaulting stockholders, holding an aggregate of 40 Units, who owe an
aggregate of $3,200,000. Accordingly, Bio-Cardia will not be in a position to
fund the up to $32 million research and development program originally
contemplated by Bio-Cardia and BTG. As a result, BTG has the right to terminate
the technology license agreement and repossess all rights to the technology
licensed or sublicensed to Bio-Cardia without the payment of any amounts to
Bio-Cardia other than a royalty on all Improvements (as defined in the
technology license agreement) to the products developed pursuant to the
development program conducted by BTG on behalf of Bio-Cardia. At December 31,
1994, Bio-Cardia owed BTG approximately $2,961,000 for research and development
performed by BTG on behalf of Bio-Cardia during 1994, as well as $1,540,000 in
reimbursement of previously incurred research and development expenses due to be
paid to BTG in 1994.

     The Company has agreed not to terminate the technology license agreement in
1995 as a result of the Bio-Cardia defaults in 1994 and has further agreed to
fund a revised research and development budget for 1995 aggregating
approximately $6.2 million to the extent Bio-Cardia does not have sufficient
funds and to advance to Bio-Cardia amounts required by Bio-Cardia for general
and administrative expenses. Bio-Cardia anticipates that it will receive
$900,000 in 1995 from third parties, and up to $3,140,000 from its existing
stockholders under the Notes, subject to the Exchange Offer described below.
However, because the Company has not at this time committed to fund any research
and development for Bio-Cardia in 1996 or 1997 or to exercise the Stock Purchase
Option, and, therefore, because there can be no assurance that Bio-Cardia would
have the funds needed to fund research and development after December 31, 1995,
Bio-Cardia, with the Company's consent, has offered to the current Bio-Cardia
stockholders the ability to avoid having to make any additional payments to
Bio-Cardia under their Note (the "Exchange Offer"). Under the terms of the
Exchange Offer, Bio-Cardia has offered to exchange $4,250 in cash (together with
interest on $2,500 from the date Bio-Cardia received such funds) and forgiveness
of $17,500 principal amount 

    
                                      -23-



   

of the Note remaining outstanding for each one share of Bio-Cardia common
stock and an unconditional release. If all Bio-Cardia stockholders who are not
in default accept the Exchange Offer, BTG will recognize an expense of
approximately $1,000,000 in the second quarter of 1995. In addition, Bio-Cardia
has agreed that if by December 15, 1995 (i) the average daily price of the
Company's Common Stock for any 20 trading days in a 30 consecutive trading day
period did not exceed $3.50 and (ii) the best closing bid price of the Warrants
did not exceed $1.10 during any 20 trading days, then Bio-Cardia will distribute
to the Bio-Cardia stockholders accepting the Exchange Offer some or all of the
Surrendered Warrants obtained in the settlements with defaulting Bio-Cardia
stockholders such that, in the aggregate, the Warrants issued in the Offering,
together with the Warrants distributed by Bio-Cardia, have a value of $16,500 as
determined using the Black Scholes option pricing formula using an assumption of
no dividends and a volatility of 70%; provided, however, that in no event will
Bio-Cardia be obligated to pay additional cash to such Bio-Cardia stockholders
accepting the Exchange Offer in order to attain such value if the Surrendered
Warrants are insufficient. The Exchange Offer is conditioned upon acceptance by
holders of at least 139 Units (constituting approximately 90% of the Units held
by non-defaulting Bio-Cardia stockholders), although this condition can be
waived at the Company's sole discretion. If all the non-defaulting Bio-Cardia
stockholders accept the Exchange Offer, BTG will be obligated to fund
approximately $5.3 million of Bio-Cardia's research and development expenditures
in 1995. The failure of Bio-Cardia to make these research and development
payments in 1994 adversely affected the Company's results of operations for the
year ended December 31, 1994. The obligation of BTG to fund the Exchange Offer
and a substantial portion of Bio-Cardia's operations in 1995 could adversely
affect the Company's results of operations for 1995.

     One of the defaulting Bio-Cardia stockholders whom Bio-Cardia sued for
payment under the Notes has commenced two actions which are pending in the
United States District Court for the Southern District of New York against
Bio-Cardia, BTG and, in one of the actions, David Blech and D. Blech & Company,
Incorporated, the placement agent for the Bio-Cardia Private Placement,
alleging, among other things, that the Bio-Cardia Private Placement violated the
federal securities laws and constituted common law fraud. In almost identically
worded complaints, the plaintiff seeks rescission of her purchase of Units in
the Bio-Cardia Private Placement and restitution of the purchase price paid by
her to date ($640,000), together with interest thereon and expenses. The Company
believes that these claims have no merit, and intends to defend them vigorously.
    

October Private Placement

   
     On October 12, 1994 and October 13, 1994, the Company consummated a private
placement (the "October Private Placement") of an aggregate of 5,142,857 shares
of the Company's Common Stock, $.01 par value per share (the "Common Stock"), to
Elliott Associates, L.P., Grace Holdings, L.P., Momar Corporation and WACO
Partners, pursuant to agreements entered into as of October 4, 1994. The Common
Stock was sold for $1.75 per share and the private placement resulted in gross
proceeds of 

    
                                      -24-



   

$9,000,000. The proceeds from the financing are being used to fund
ongoing Company activities including research and development. The closing price
of the Common Stock on October 4, 1994, October 12, 1994 and October 13, 1994
was $2.25, $2.25 and $2.3125, respectively. The 5,142,857 shares of Common Stock
covered by this Prospectus have been registered for resale pursuant to the terms
of the October Private Placement.
    

     The Company agreed with the Selling Security Holders to file with the
Commission, prior to January 10, 1995, a registration statement registering for
resale under the Securities Act the shares of Common Stock issued in the October
Private Placement, and to use its reasonable best efforts to have such
registration statement declared effective by the Commission as promptly as
practicable. The Company agreed with the Selling Security Holders that if such
registration statement has not been declared effective by the Commission by May
31, 1995, it will pay to the Selling Security Holders, as compensation for the
failure to have the registration statement declared effective, a monthly amount
equal to the quotient determined by dividing (x) the product determined by
multiplying (1) the "applicable percentage" (defined below) by (2) $1.75 and
then multiplying such amount by (3) the number of shares of Common Stock then
owned by such Selling Security Holder, by (y) the fair market value (defined
below) of the Common Stock. The term "fair market value" means the average of
the highest closing bid price of the Common Stock on the principal market or
exchange where such shares are traded over the ten (10) trading days immediately
preceding such first trading day of such applicable month. The applicable
percentages are as follows: for the first three (3) months following the failure
to obtain registration by May 31, 1995 (i.e., June, July and August 1995),
three-quarters of one percent (0.75%) per month; for the following three (3)
months, one percent (1.0%) per month; and for each month thereafter, one and
one-quarter percent (1.25%) per month. Payments would continue to be made until
the registration statement has been declared effective. All shares issued as
compensation for the failure to have the registration statement declared
effective by May 31, 1995 would also be included within such registration
statement.

     The Company agreed with the Selling Security Holders that if the Company
issues more than 3,000,000 shares of Common Stock in connection with the
purchase of all the outstanding capital stock of Bio-Cardia, then BTG must issue
to the holders of the Common Stock purchased in the October Private Placement,
at a purchase price of $.01 per share, that number of shares of Common Stock as
equals 23.4% of the difference between the number of shares of Common Stock
issued to the holders of Bio-Cardia capital stock and 3,000,000 shares.

     The Company further agreed with the Selling Security Holders that if, prior
to the effective date of the registration statement of which this Prospectus is
a part, the Company issues shares of Common Stock at a price per share less than
$1.75, or securities convertible into or exercisable for Common Stock at a
conversion or exercise price per share less than $1.75 (in each case other than
(i) issuances of shares of Common Stock pursuant to options or warrants
outstanding on October 4, 1994, (ii) the


                                      -25-



   

issuance of shares of Common Stock or options to purchase shares of Common
Stock pursuant to the Company's stock option and stock compensation plans or
(iii) the issuance of shares of Common Stock to purchase shares of Bio-Cardia),
then the Company shall immediately issue and deliver to the purchasers in the
October Private Placement, for a purchase price of $.01 per share, that number
of shares of Common Stock as is necessary to reduce the price per share of
Common Stock paid by the Selling Security Holders to the purchase price per
share paid by such new purchaser.

    

     In the event the Company is prohibited from issuing shares of Common Stock
to the Selling Security Holders because the indenture under which certain of the
Company's debt securities have been issued prohibit the issuance of equity
securities at a price less than $1.00 per share, then the Company shall, in lieu
of issuing shares, make the payments due the Selling Security Holders in cash.
The amount of cash to be paid shall be equal to the product determined by
multiplying the number of shares of Common Stock that would be issuable in
accordance with the preceding paragraph by the average of the highest closing
bid price of the shares of Common Stock of the Company on the principal market
or exchange where such shares are traded over the ten (10) trading day period
preceding the date of the issuance of the securities giving rise to the
Company's obligation to issue additional shares to the Selling Security Holders.

Board Restructuring

     On November 14, 1994, Elliott Associates, L.P., a Selling Security Holder
hereunder, amended its Schedule 13D to state that it believed it would be in the
best interest of the Company and its shareholders for there to be a change in
the size and composition of the Board. On December 6, 1994, the Company
restructured its Board of Directors to address the concerns raised by Elliott
Associates, L.P. In the restructuring, Bradford T. Whitmore and Moses Marx,
representatives of Grace Brothers Ltd. and United Equities Co., respectively,
were elected directors of the Company. Affiliates of Grace Brothers Ltd. and
United Equities Co. are Selling Security Holders hereunder. See "Selling
Security Holders." The Board of Directors now consists of 12 members. Dr. Marian
Gorecki, Mr. Christopher D. Illick and Carl E. Kaplan, Esq. resigned as
directors to facilitate the restructuring; Ms. Jane Cahill Pfeiffer had
previously resigned in November 1994 for personal reasons.

                                USE OF PROCEEDS

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

                                      -26-



                          DESCRIPTION OF CAPITAL STOCK

     The Company is authorized to issue 150,000,000 shares of Common Stock, par
value $.01, and 4,000,000 shares of Preferred Stock, par value $.01. The
following brief description of the capital stock of the Company is qualified in
its entirety by reference to the Company's Certificate of Incorporation, as
amended, copies of which are on file with the Commission.

     Common Stock. Holders of Common Stock are entitled to one vote per share on
all matters to be voted upon by the stockholders generally, including the
election of directors. Subject to the rights of holders of Preferred Stock, the
holders of Common Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors out of funds legally
available therefor, and in the event of liquidation, dissolution or winding up
of the Company, to share ratably in all assets remaining after payment of
liabilities. The holders of Common Stock have no preemptive or conversion rights
and are not subject to further calls or assessments by the Company.

     The Transfer Agent and Registrar for the Common Stock is the American Stock
Transfer & Trust Company, New York, New York.

     Preferred Stock. The Board of Directors has authority to issue the
Preferred Stock from time to time without stockholder approval, in one or more
series. The Board of Directors is authorized with respect to any series of
Preferred Stock to fix the designation, the number of shares, the voting powers,
the conditions of the conversion privilege, if any, the terms and conditions of
the redemption rights, if any, the rights upon liquidation, merger,
consolidation, distribution or sale of assets, and dissolution or winding-up,
the dividend rate and whether dividends shall be cumulative, and any other
powers, preferences and relative, participating, optional and other rights and
the qualifications, limitations and restrictions of such series. No shares of
Preferred Stock are currently outstanding.

   
     Warrants. The Company currently has outstanding (i) warrants to purchase an
aggregate of 809,264 shares of Common Stock at an exercise price of $6.00 per
share, exercisable at any time up to and including 5:00 p.m. on the earlier of
(a) the date 30 days following the last day of a period consisting of twenty
consecutive trading days during which the Company's Common Stock had a market
value of $10.00 or more per share or (b) May 7, 1996, (ii) warrants to purchase
an aggregate of 571,428 shares of Common Stock at an exercise price of $8.00 per
share, exercisable at any time up to and including 5:00 p.m. on the earlier of
(a) the date 30 days following the last day of a period consisting of twenty
consecutive trading days during which the Company's Common Stock had a market
value of $13.00 or more per share or (b) August 26, 1995, (iii) warrants to
purchase an aggregate of 1,893,793 shares of Common Stock at an exercise price
of $10.53 per share, exercisable at any time up to and including 5:00 p.m. on
the earlier of (a) the date 30 days following the last day of a period
consisting of
    

                                      -27-



twenty consecutive trading days during which the Common Stock on each day in
such twenty day period has a market value of $15.80 per share or (b) December
19, 1995, and (iv) warrants to purchase an aggregate of 6,206,250 shares of
Common Stock at an exercise price of $5.49 per share, exercisable at any time up
to and including 5:00 p.m. on December 31, 1998.

                                      -28-




                            SELLING SECURITY HOLDERS

   
     The following table sets forth information as of February 1, 1995.
    



                                 Number of              Number of                                      Percent of
                                 Shares of              Shares of              Percent of             Common Stock
                                Common Stock           Common Stock           Common Stock             Owned Upon
Selling                         Beneficially            Registered             Owned Prior            Consummation
Security Holder                    Owned                 Herein(1)             to Offering             of Offering
- ---------------                 ------------           ------------           ------------            -------------
                                                                                                
   
Elliott Associates, L.P.          4,450,764              2,078,857                10.4%                    5.5%
Grace Holdings, L.P. (a)          3,853,300              1,914,000                 9.0%                    4.5%
Momar Corporation (b)             2,650,390              1,000,000                 6.2%                    3.9%
WACO Partners (c)                   311,414                150,000                  *                        *
    


- -----------------
*    denotes less than 1%

(1)  The shares of Common Stock offered hereby were issued in the October
     Private Placement. In the October Private Placement, an aggregate of
     5,142,857 shares of Common Stock were sold to the Selling Security Holders,
     at a purchase price of $1.75 per share, pursuant to agreements entered into
     as of October 4, 1994. See "Recent Developments."

   
(a)  Beneficial ownership includes 1,530,614 shares of Common Stock held of
     record by Grace Brothers, Ltd. and 408,686 shares of Common Stock held of
     record by Grace Brothers International, Ltd. Both the Selling Security
     Holder and Grace Brothers International, Ltd. are substantially wholly
     owned affiliates of Grace Brothers, Ltd. The Selling Security Holder may be
     deemed to have shared power, with Grace Brothers, Ltd., to vote and dispose
     of the 1,914,000 shares owned by it. Mr. Bradford T. Whitmore, a director
     of the Company, is a general partner of Grace Brothers, Ltd. and the sole
     shareholder of a general partner of Grace Holdings, L.P.

(b)  Beneficial ownership includes 1,650,390 shares of Common Stock held of
     record by United Equities (Commodities) Company. Mr. Moses Marx, a director
     of the Company, is the controlling shareholder of the Selling Security
     Holder and the majority owner of United Equities (Commodities) Company.

(c)  Beneficial ownership includes (i) 125,220 shares of Common Stock owned of
     record by Norman J. Wechsler and 2,500 shares of Common Stock owned of
     record by Philip Glickman, each of whom are partners of the Selling
     Security Holder, (ii) 2,500 shares owned of record by Jane Solomon, the
     wife of a partner of the Selling Security Holder, and (iii) (1) 300 shares
     of Common Stock, (2) 7,428 shares of Common Stock issuable upon conversion
     of $13,000 aggregate principal amount of the Company's Series B 11% Senior
     Secured Convertible Notes due October 15, 1998, (3) 

    
                                      -29-



    
     2,666 shares of Common Stock issuable upon conversion of $28,000 aggregate
     principal amount of the Company's 7 1/2% Convertible Senior Subordinated
     Notes due April 15, 1997, and (4) 800 shares of Common Stock issuable upon
     conversion of $7,000 aggregate principal amount of the Company's 11%
     Convertible Senior Subordinated Debentures due March 1, 2006, held of
     record by Wechsler & Co., Inc ("Wechsler"). The officers and directors of
     Wechsler and all of the holders of Wechsler common stock are partners of
     the Selling Security Holder.

                                      -30-



                              PLAN OF DISTRIBUTION

   
     The distribution of the shares of Common Stock by the Selling Security
Holders may be effected from time to time in one or more transactions (which may
involve block transactions) in the over-the-counter market or on the Nasdaq
National Market (or any exchange on which the Common Stock may then be listed)
in negotiated transactions, through the writing of options (whether such options
are listed on an options exchange or otherwise), or a combination of such
methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Selling
Security Holders may effect such transactions by selling shares to or through
broker-dealers, and such broker-dealer may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Security
Holders and/or purchasers of shares for whom they may act as agent (which
compensation may be in excess of customary commissions). The Selling Security
Holders may also sell such shares pursuant to Rule 144 promulgated under the
Securities Act, or may pledge shares as collateral for margin accounts and such
shares could be resold pursuant to the terms of such accounts. The Selling
Security Holders 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 Security Holders 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.
    

     Because the Selling Security Holders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, the Selling Security
Holders will be subject to prospectus delivery requirements under the Securities
Act. Furthermore, in the event of a "distribution" of the shares, such Selling
Security Holders, 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.

     In order to comply with certain state securities laws, if applicable, the
Common Stock will not be sold in a particular state unless such securities have
been registered or qualified for sale in such state or any exemption from
registration or qualification is available and complied with.

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


                                      -31-



                                 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 of
Fulbright & Jaworski L.L.P., as of December 20, 1994, beneficially owned an
aggregate of 358,167 shares of the Company's Common Stock and options to
purchase 10,000 shares which are presently exercisable.

                                    EXPERTS

     The audited financial statements and schedules 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.

                                      -32-




                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

     The expenses payable by the Registrant in connection with the issuance and
distribution of the securities being registered (other than underwriting
accounts and commissions) are estimated to be as follows:

        SEC Registration Fee ............................      $ 3,657.67
        Accountant's Fees and Expenses ..................        7,500.00*
        Legal Fees and Expenses .........................       10,000.00*
        Miscellaneous ...................................        3,842.33*
                                                               ---------- 
            Total .......................................      $25,000.00*
                                                               ========== 
- ------------
* estimated

Item 15. Indemnification of Directors and Officers.

     Section 145 of the General Corporation Law of Delaware permits
indemnification of directors, officers and employees of a corporation under
certain conditions and subject to certain limitations. Article VI of the By-Laws
of the Registrant contains provision for the indemnification of directors,
officers and employees within the limitations permitted by Section 145. In
addition, the Company has entered into Indemnity Agreements with its directors
and officers which provide the maximum indemnification allowed by Section 145.
The Common Stock Purchase Agreement, dated as of October 4, 1994, by and between
Bio-Technology General Corp. and Elliott Associates, L.P., the Common Stock
Purchase Agreement, dated as of October 4, 1994, by and between Bio-Technology
General Corp. and Grace Holdings, L.P., the Common Stock Purchase Agreement,
dated as of October 4, 1994, by and between Bio-Technology General Corp. and
Momar Corporation, and the Common Stock Purchase Agreement, dated as of October
4, 1994, by and between Bio-Technology General Corp. and WACO Partners, provide
for the indemnification of the Selling Security Holders by the Registrant for
certain liabilities arising under the Securities Act of 1933, as amended, or
otherwise. The Company's officers and directors are insured against losses
arising from any claim against them as such for wrongful acts or omissions,
subject to certain limitations.

Item 16. Exhibits

   
 5 -      Opinion of Fulbright & Jaworski L.L.P. regarding legality.*
    
10   (a)  Common Stock Purchase Agreement, dated as of October 4, 1994, by and

                                      II-1



   

          between Bio-Technology General Corp. and Elliott Associates, L.P.*(1)

     (b)  Common Stock Purchase Agreement, dated as of October 4, 1994, by and
          between Bio-Technology General Corp. and Grace Holdings, L.P.*(1)

     (c)  Common Stock Purchase Agreement, dated as of October 4, 1994, by and
          between Bio-Technology General Corp. and Momar Corporation.*(1)

     (d)  Common Stock Purchase Agreement, dated as of October 4, 1994, by and
          between Bio-Technology General Corp. and WACO Partners.*(1)

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

     (b)  Consent of Arthur Andersen.*

     (c)  Consent of Price Waterhouse.*

24   Power of Attorney.*

- -------------------
* Previously filed.

(1)  Incorporated by reference to Exhibits to the Company's Current Report on
     Form 8-K, dated October 12, 1994.
    

Item 17.  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 to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;

          (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;

          (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 

                                      II-2




Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
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 the Act
and is, therefore, unenforceable. In the event 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 of the Registrant 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-3




                                   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-3 and has duly caused this Amendment
No. 1 to registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Iselin, State of New Jersey, on April
12, 1995.
    

                                        Bio-Technology General Corp.

                                        By: /s/ SIM FASS
                                           ---------------------------------
                                           (Sim Fass, President)

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

   
    

     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.

                                      II-4



Signature                              Title                         Date
- ---------                              -----                         ----
   
/s/ SIM FASS                  President, CEO, Treasurer and      April 12, 1995
- --------------------------    Director (Principal Executive
(Sim Fass)                    Officer)

                                     
/s/ HERBERT J. CONRAD*        Director                           April 12, 1995
- --------------------------
(Herbert J. Conrad)


/s/ DAVID HASELKORN*          Director                           April 12, 1995
- -------------------------- 
(David Haselkorn)


/s/ FRED HOLUBOW*             Director                           April 12, 1995
- --------------------------
(Fred Holubow)


/s/ HOFFER KABACK*            Director                           April 12, 1995
- --------------------------
(Hoffer Kaback)


/s/ CHARLES MACDONALD*        Director                           April 12, 1995
- -------------------------- 
(Charles MacDonald)


/s/ MOSES MARX*               Director                           April 12, 1995
- --------------------------
(Moses Marx)


/s/ STEPHEN M. SIMES*         Director                           April 12, 1995
- -------------------------- 
(Stephen M. Simes)


/s/ DAVID TENDLER*            Director                           April 12, 1995
- --------------------------
(David Tendler)


/s/ VIRGIL THOMPSON*          Director                           April 12, 1995
- --------------------------
(Virgil Thompson)
    
                                      II-5



   
/s/ DAN TOLKOWSKY*            Director                           April 12, 1995
- -------------------------- 
(Dan Tolkowsky)


/s/ BRADFORD T. WHITMORE*     Director                           April 12, 1995
- --------------------------
(Bradford T. Whitmore)


/s/ YEHUDA STERNLICHT*        Chief Financial Officer            April 12, 1995
- --------------------------    (Principal Financial and
(Yehuda Sternlicht)           Accounting Officer)                     

*  By Power of Attorney
    

                                      II-6