<SUBMISSION>
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<TYPE>S-3
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<CONFORMED-NAME>ADVANCED BIOTHERAPY INC
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<STREET1>6355 TOPANGA CANYON BLVD
<STREET2>SUITE 510
<CITY>WOODLAND HILLS
<STATE>CA
<ZIP>91367
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</BUSINESS-ADDRESS>
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<STREET2>SUITE 510
<CITY>WOODLAND HILLS
<STATE>CA
<ZIP>91367
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<FORMER-CONFORMED-NAME>ADVANCED BIOTHERAPY CONCEPTS INC
<DATE-CHANGED>19990524
</FORMER-COMPANY>
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<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>v74327s-3.txt
<DESCRIPTION>FORM S-3
<TEXT>
<PAGE>   1

     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 31, 2001
                                                  REGISTRATION NO. 333-
===============================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-3
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                            ADVANCED BIOTHERAPY, INC.
             (Exact name of Registrant as specified in its charter)

<TABLE>

<S>                                    <C>                                     <C>
            Delaware                   6355 Topanga Canyon Boulevard               51-0402415
(State or other jurisdiction of                   Suite 510                      (I.R.S. Employer
 incorporation or organization)        Woodland Hills, California 91367        Identification Number)
                                                (818) 883-6716
                   (Address, including zip code, and telephone number, including
                      area code, of Registrant's principal executive offices)
</TABLE>

                                Edmond Buccellato
                             Chief Executive Officer
                            ADVANCED BIOTHERAPY, INC.
                    6355 Topanga Canyon Boulevard, Suite 510
                        Woodland Hills, California 91367
                                 (818) 883-6716
       (Name, address, including zip code, and telephone number, including
                        area code, of agent for service)

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

                                    Copy to:
                              Joel Weinstein, Esq.
                      RUTTER, HOBBS & DAVIDOFF INCORPORATED
                      1900 Avenue of the Stars, Suite 2700
                       Los Angeles, California 90067-4301
                                 (310) 286-1700

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

     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. [ ]

Page 1 of 26


<PAGE>   2


     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, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [X]

     IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462 (b) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING
BOX AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]

     IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462 (c)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [ ]

     IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [ ]


                         CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>

========================================================================================================================
   TITLE OF EACH CLASS OF                               PROPOSED MAXIMUM         PROPOSED MAXIMUM           AMOUNT OF
     SECURITIES TO BE            AMOUNT TO BE            OFFERING PRICE              AGGREGATE            REGISTRATION
        REGISTERED               REGISTERED (1)           PER SHARE (2)          OFFERING PRICE (2)            FEE
------------------------------------------------------------------------------------------------------------------------
<S>                            <C>                      <C>                   <C>                       <C>
Common Stock, par value
$0.001 per share               13,684,777 shares           $0.19                 $2,600,107.60             $651.00
========================================================================================================================
</TABLE>

(1)  Includes 6,550,145 shares that may be offered by Selling Stockholders upon
     conversion of Convertible Debt as described herein; an additional 2,449,497
     shares reserved for issuance in connection with the conversion of
     additional Convertible Debt which may be issued in the future by the
     Company to the Selling Stockholders as interest payments (in lieu of cash)
     as described herein; as well as 4,685,135 shares that may be offered by
     Selling Stockholders upon exercise of certain warrants as described herein.
(2)  Estimated in accordance with Rule 457(c) solely for the purpose of
     calculating the registration fee pursuant to Rule 457 under the Securities
     Act, based on the average of the bid and asked prices of the Registrant's
     Common Stock as reported on the OTC Bulletin Board on July 18, 2001.

     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 THAT 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.



Page 2 of 26

<PAGE>   3


                   SUBJECT TO COMPLETION, DATED JULY 26, 2001

                               P R O S P E C T U S
                                13,684,777 Shares

                            ADVANCED BIOTHERAPY, INC.
                                  COMMON STOCK

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

     This Prospectus relates to 13,684,777 shares (the "Shares") of common
stock, par value $0.001 per share ("Common Stock"), of Advanced Biotherapy, Inc.
The Shares may be offered by stockholders of the Company ("Selling
Stockholders") as described herein. During the year 2000, the Company completed
a private placement of 10% Convertible Subordinate Debt due September 30, 2004
("Convertible Debt"). The Convertible Debt is convertible into shares of Company
Common Stock at a conversion price of $0.25 per share. Interest upon the
Convertible Debt is payable in cash, or in equivalent principal amount of
Convertible Debt, at the option of the Company. The Company has elected to pay
the entire amount of accrued and unpaid interest through June 30, 2001, in
additional Convertible Debt. The amount of Shares consists of three components:
(i) 6,550,145 Shares with respect to the currently outstanding principal amount
of Convertible Debt; (ii) an additional 2,449,497 Shares reserved for issuance
by the Company in connection with additional Convertible Debt which may be
issued as interest payments (in lieu of cash); and (iii) 4,685,135 Shares
issuable upon exercise of certain warrants granted by the Company.

     None of the proceeds from the sale of the Shares by the Selling
Stockholders will be received by us.

     Our Common Stock is traded on the OTC Bulletin Board under the symbol
"ADVB.OB." On July 18, 2001, the last closing price for the Common Stock as
reported by the OTC Bulletin Board was $0.19 per share.

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

YOU SHOULD READ THIS PROSPECTUS CAREFULLY BEFORE YOU INVEST. PLEASE REFER TO THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 7 OF THIS PROSPECTUS FOR A DISCUSSION
OF THE MATERIAL RISKS INVOLVED IN INVESTING IN THE SHARES.

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

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.



Page 3 of 26

<PAGE>   4




                  The date of this Prospectus is July 26, 2001

INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS
NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.

<TABLE>
<CAPTION>

   -------------------------------------------------------------------------------------
                             TABLE OF CONTENTS                                     PAGE
   -------------------------------------------------------------------------------------
   <S>                                                                            <C>
   Prospectus Summary                                                                 4
   The Company                                                                        4
   Risk Factors                                                                       7
   Forward Looking Statements                                                        14
   Description of Common Stock                                                       14
   Use of Proceeds                                                                   15
   Selling Stockholders                                                              15
   Plan of Distribution                                                              18
   Legal Matters                                                                     20
   Experts                                                                           20
   Where You Can Find More Information                                               20

</TABLE>


     This Prospectus contains information about our Company and the shares of
our common stock being offered by this Prospectus. In addition, as described
below in the section entitled "Available Information," we have filed and plan to
continue filing other documents with the Securities and Exchange Commission
(SEC) that contain information about us and our common stock. These other
documents are incorporated by reference in this Prospectus. Before you decide to
invest in common stock being offered by this Prospectus, you should read this
Prospectus and other documents we file with the SEC.


     You should only rely on the information contained or incorporated by
reference in this Prospectus. We have not authorized anyone to provide you with
information different from that contained or incorporated by reference in this
Prospectus. The selling stockholders are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this Prospectus is accurate only as of
the date of this Prospectus, regardless of the time of delivery of this
Prospectus or of any sale of Common Stock.

                                   THE COMPANY

     Advanced Biotherapy Inc. is a corporation organized and existing under the
laws of the State of Delaware, headquartered in Woodland Hills, California. We
are a biotechnology company developing therapeutics for a range of autoimmune
diseases based on an anti-cytokine platform technology. Cytokines are soluble
components of the immune system that are largely



Page 4 of 26
<PAGE>   5

responsible for regulating the immune response. When overproduced, as in certain
autoimmune diseases, interferons and cytokines can lead to immune system
disturbance and inflammation. This results in localized tissue damage and leads
to the pathology seen in autoimmune diseases (AD). The Company plans to develop
drugs designed to reduce the levels of certain cytokines. To date, our
activities have consisted primarily of research, development and non-United
States clinical trials. Such activities have resulted in accumulated losses at
December 31, 2000.

     We develop drugs that may effectively treat a range of autoimmune diseases.
Our technology is based upon the work of Dr. Simon Skurkovich and Dr. Boris
Skurkovich who first suggested that autoimmune disease may be the result of
augmented cytokine production (Nature, Vol. 241, P 551-552, 1974). We have
conducted a number of clinical trials at major institutes of the Medical Academy
of Sciences in Russia, in which we have evaluated the efficacy of a series of
polyclonal antibodies, raised against a variety of cytokines, in autoimmune
diseases such as rheumatoid arthritis (RA), multiple sclerosis (MS) and acquired
immunodeficiency disease (AIDS).

     In four randomized, placebo-controlled, double blind trials conducted in
Russia, we believe we have demonstrated efficacy of our anti-cytokine strategy
in both RA and MS. These studies have permitted us to determine which cytokines
are most active in the AD process, and therefore, which need to be reduced to
treat the disorder. With a five-day treatment course, statistically significant
and clinically relevant responses were obtained that persisted for as long as
one year after treatment termination in the MS studies and for one month in the
RA studies.

     Prior to marketing the Company's development stage products, the Company
must obtain regulatory approval from the United States Food and Drug
Administration ("FDA"). The Company is not sufficiently funded to allow it to
complete the product development process, obtain FDA approval, and market its
products. However, the Company plans to seek additional financing through the
private sale of restricted securities to investors, enter into joint ventures or
licensing or similar arrangements with large pharmaceutical companies to provide
the funding necessary for additional activities. There can be no assurance that
the Company will enter into any such arrangements, obtain the appropriate
regulatory approvals, or develop, manufacture, market, or distribute
commercially viable products.

     The Company anticipates that it will incur substantial losses in the
foreseeable future as a result of its continued product development. There are
no assurances that the Company will be successful in completing its product
development, receive FDA approval, implement manufacturing operations and
commercially market its development stage products.

BUSINESS OBJECTIVE

     The business strategy of the Company is twofold in nature and involves the
engagement of a corporate partner to assist in the clinical development of its
drug treatments for autoimmune disorders. This will involve, upon the
identification of such a partner, the filing of the necessary documents with the
FDA, conducting clinical trials and obtaining the necessary regulatory approvals
(New Drug Application (NDA) or a 510K device approval). The Company does not
intend to market its drug products if they are approved by the FDA,



Page 5 of 26
<PAGE>   6

but will instead seek a royalty arrangement with a corporate partner who will
market the product when and if it is approved.

     The second element of the Company's business strategy is to seek out merger
and acquisition candidates that can either expand the Company's technology base
in the area of autoimmune disease therapeutics or bring approved products into
the Company that will generate recurring revenue.

     The amount spent on research and development by the Company for the fiscal
year ending December 31, 2000 and 1999 was $39,579 and $156,280, respectively.

MANUFACTURING

     The Company intends to out-source product manufacturing and has identified
several contract manufacturers as having suitable facilities for manufacturing
large quantities of antibodies and the requisite extracorporeal devices. The raw
materials are used as base components in a number of drug products and are
commercially available nationally and internationally.

     The Company has not entered into any manufacturing agreement for fully
human antibodies and there is no assurance that any agreements will be entered
into in the future.

GOVERNMENT REGULATION

     The Company's activities are subject to extensive federal, state, county
and local laws and regulations controlling the development, testing, manufacture
and distribution of medical treatments. The type of antibody-based products
described in the section entitled "Product Development Plan" above will be
subject to regulation as therapeutics or devices by the FDA, as well as varying
degrees of regulation by a number of foreign governmental agencies. To comply
with the FDA regulations regarding the manufacture and marketing of such
products, the Company would likely incur substantial costs relating to
laboratory and clinical testing of new products, and for the preparation and
filing of documents in the formats required by the FDA. There are no assurances
that the Company will receive FDA approval necessary to commercially market its
products, if any, and that if the Company is successful, it will not encounter
delays in bringing its new products to market as a result of being required by
the FDA to conduct and document additional investigations of product safety and
effectiveness.

PATENT STATUS AND PROTECTION OF PROPRIETARY TECHNOLOGY

     The Company has been issued United States patent Nos. 5,626,843 and
5,888,511, and Australia patent No. 730498. It also had eleven United States
utility patents pending filed between December 22, 1997 and February 24, 2000
which have now been consolidated into seven pending utility patent applications.
The Company also has two foreign applications pending in Europe and Canada, one
PCT application and one U.S. non-provisional patent application pending.

     The Company believes that its most recently issued patent gives the Company
patent protection for a new anti-cytokine approach to treating different
autoimmune diseases via both the extracorporeal and the injectable treatment
route. These include rheumatoid arthritis,


Page 6 of 26
<PAGE>   7

multiple sclerosis, juvenile rheumatoid arthritis, psoriatic arthritis and
ankylosing spondylitis, among others. The patented treatment uses various
methods to neutralize or block specific combinations of cytokines and their
receptors. In management's opinion, the Company's patented approach is broader
in scope than certain other patented treatments.

EXECUTIVE OFFICES

     Our executive offices are located at 6355 Topanga Canyon Boulevard,
Woodland Hills, California 91367, and our telephone number is (818) 883-6716.

                                  RISK FACTORS

     Except for the historical information contained herein, the discussion in
this Prospectus contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those discussed
here. Factors that could cause or contribute to such differences include, but
are not limited to, those discussed in the following risk factors as well as
those discussed elsewhere in this Prospectus and any documents incorporated
herein by reference.

     The following factors, in addition to those discussed elsewhere in this
Prospectus, or incorporated herein by reference, should be carefully considered
in evaluating us and our business.

BECAUSE OF CONTINUING OPERATING LOSSES, THERE IS A NEED FOR ADDITIONAL
FINANCING, WHICH IF NOT SUCCESSFULLY MET WILL LIKELY RESULT IN A LACK OF
LIQUIDITY WHICH COULD ADVERSELY AFFECT THE COMPANY

     For the fiscal year ending December 31, 2000, we realized a net loss of
$653,270 and expect such losses to continue for the foreseeable future.
Therefore, we believe that we will need to raise additional capital during the
next twelve months. If we are unable to raise additional capital and/or generate
a positive cash flow before our cash is depleted, we will be required to curtail
operations substantially. We are seeking to obtain additional funds through
public and private equity and debt financings, collaborative or other
arrangements with corporate partners, acquisitions or mergers with companies
with strong capital positions or cash flow from product sales or from other
sources. There is no assurance that we will be able to obtain additional capital
if required, or if capital is available, to obtain it on terms favorable to us.
We may suffer from a lack of liquidity in the future that could impair our
research and development efforts and adversely affect our results of operations.

THERE CAN BE NO ASSURANCE THAT ANY PRODUCTS THE COMPANY DEVELOPS WILL SATISFY
THE EXTENSIVE AND RIGOROUS STANDARDS SET BY THE VARIOUS GOVERNMENTAL AUTHORITIES
OR EVEN IF SATISFIED, THAT APPROVALS WILL BE EITHER DELAYED OR RESTRICTED AND
THEREFORE HAVE A MATERIAL ADVERSE EFFECT ON COMMERCIALIZATION OF OUR PRODUCTS
AND OUR SALES REVENUES

     Our products are in the development stage, have not been subjected to
clinical studies in the United States, have limited clinical data based upon
studies conducted in Russia, have not been cleared for marketing by the FDA or
foreign regulatory authorities, and cannot be commercially distributed in the
United States and/or in foreign markets unless and until such


Page 7 of 26
<PAGE>   8

clearance is obtained. Failure to obtain FDA clearance would delay sales of our
products and would materially affect our financial condition.

     The development, manufacture and sale of drug products are subject to
extensive and rigorous regulation by federal, state, local and foreign
governmental authorities. In particular, products for human health are subject
to substantial preclinical and clinical testing and other approval requirements
by the FDA and comparable foreign regulatory authorities. The process for
obtaining the required regulatory approvals from the FDA and other regulatory
authorities takes many years and is very expensive. There can be no assurance
that any product developed by us will prove to meet all of the applicable
standards to receive marketing approval. There can be no assurance that any such
approvals will be granted on a timely basis, if at all. Delays in and costs of
obtaining these approvals could adversely affect our ability to commercialize
our products, if any, and to generate sales revenues. If regulatory approval of
a product is obtained, such approval may involve restrictions and limitations on
the use of the product.

OUR RESEARCH AND DEVELOPMENT AND MARKETING EFFORTS ARE DEPENDENT ON CORPORATE
COLLABORATORS AND OTHER THIRD PARTIES WHO MAY NOT DEVOTE SUFFICIENT TIME,
RESOURCES AND ATTENTION TO OUR PROGRAMS, WHICH MAY LIMIT OUR EFFORTS TO
SUCCESSFULLY DEVELOP AND MARKET POTENTIAL PRODUCTS

     Because we have limited resources, we anticipate entering into a number of
collaboration agreements with other companies. At present, however, we have no
such agreements. These agreements may be expected to call for our partners to
control the supply of bulk or formulated drugs for commercial use or for use in
clinical trials; design and execution of clinical studies; process of obtaining
regulatory approval to market the product; and/or marketing and selling of any
approved product.

     In each of these areas, our partners may not support fully our research and
commercial interests since our program may compete for time, attention and
resources with the internal programs of our corporate collaborators. As such, we
cannot be sure that our corporate collaborators will share our perspectives on
the relative importance of our program, that they will commit sufficient
resources to our program to move it forward effectively, or that the program
will advance as rapidly as it might if we had retained complete control of all
research, development, regulatory and commercialization decisions. We also rely
on several of these collaborators and other third parties for the production of
compounds and the manufacture and supply of pharmaceutical products.
Additionally, we may find it necessary from time to time to seek new or
additional partners to assist us in commercializing our products. It is
uncertain whether we would be successful in establishing any such new or
additional relationships.

OUR RELIANCE UPON CLINICAL TRIALS CONDUCTED IN RUSSIA MAY HAVE A MATERIAL
ADVERSE AFFECT ON OUR RESEARCH, DEVELOPMENT AND FUND RAISING EFFORTS

     We have conducted a number of clinical trials at major institutes of the
Medical Academy of Sciences in Russia as more fully discussed above under the
caption "The



Page 8 of 26
<PAGE>   9

Company." The results of these clinical trials are essential to our further
research and development of pharmaceutical products. There can be no assurance
that variations between the standards and conventions of such clinical trials in
Russia from those in the United States may have not have a material impact on
the acceptance of such results by either governmental authorities or potential
sources of financing of the continued research and development program of the
Company or that such results can be duplicated under United States standards and
procedures. Accordingly, such variations could have a material adverse impact on
the Company and its research and development and financial prospects.

THE RESULTS AND TIMING OF OUR RESEARCH AND DEVELOPMENT ACTIVITIES, INCLUDING
FUTURE CLINICAL TRIALS ARE DIFFICULT TO PREDICT, SUBJECT TO FUTURE SETBACKS AND,
ULTIMATELY, MAY NOT RESULT IN ANY PHARMACEUTICAL PRODUCTS, WHICH MAY ADVERSELY
AFFECT OUR BUSINESS

     Preclinical testing and clinical trials must demonstrate that a product
candidate is safe and efficacious. The results from preclinical testing and
early clinical trials may not be predictive of results obtained in subsequent
clinical trials, and we cannot be sure that these clinical trials will
demonstrate the safety and efficacy necessary to obtain regulatory approval for
any product candidates. A number of companies in the biotechnology industries
have suffered significant setbacks in advanced clinical trials, even after
obtaining promising results in earlier trials. In addition, certain clinical
trials are conducted with patients having the most advanced stages of disease.
During the course of treatment, these patients often die or suffer other adverse
medical effects for reasons that may not be related to the pharmaceutical agent
being tested. Such events can have a negative impact on the statistical analysis
of clinical trial results.

     We cannot be sure that we will be permitted by regulatory authorities to
undertake clinical trials for any of our product candidates, or that if such
trials are conducted, any of our product candidates will prove to be safe and
efficacious or will receive regulatory approvals. Any delays in or termination
of these clinical trial efforts may have a material adverse effect on our
business.

     The completion of clinical trials of our product candidates may be delayed
by many factors. One such factor is the rate of enrollment of patients. Neither
we nor our prospective collaborators can control the rate at which patients
present themselves for enrollment, and we cannot be sure that the rate of
patient enrollment will be consistent with our expectations or be sufficient to
enable clinical trials of our product candidates to be completed in a timely
manner or at all. Any significant delays in, or termination of, clinical trials
of our product candidates may have a material adverse effect on our business.

PRODUCT SALES, IF ANY, AND RELATED FINANCIAL RESULTS ARE LIKELY TO FLUCTUATE AND
THESE FLUCTUATIONS MAY CAUSE OUR STOCK PRICE TO FALL, ESPECIALLY IF THEY ARE NOT
ANTICIPATED BY INVESTORS


Page 9 of 26
<PAGE>   10

     Forecasting revenue growth is difficult, especially when there is no
commercial history and when the level of market acceptance of the product is
uncertain. Forecasting is further complicated by the difficulties in estimating
stocking levels by corporate collaborators and in estimating potential product
returns. As a result, even assuming our product development efforts are
successful, it is likely that there will be significant fluctuations in
revenues, which may not meet with market expectations and which also may
adversely affect our stock price. Other factors which cause our financial
results to fluctuate unexpectedly include the cost of product sales, achievement
and timing of research and development milestones, co-promotion and other
collaboration revenues, cost and timing of clinical trials, marketing and other
expenses and manufacturing or supply disruption.

THE PRICE OF OUR COMMON STOCK HAS BEEN AND MAY CONTINUE TO BE HIGHLY VOLATILE

     The market price of our Common Stock is volatile, and we expect it to
continue to be volatile for the foreseeable future. For example, during the
period January 1, 2000 through July 19, 2001, our Common Stock traded at a high
price of $3.93 and a low price of $0.16. Negative announcements (such as adverse
regulatory decisions, disappointing clinical trial results, disputes concerning
patent or other proprietary rights, or operating results that fall below the
market's expectations) could trigger significant declines in the price of our
Common Stock. In addition, external events, such as news concerning our
competitors, changes in government regulations that may impact the biotechnology
industries or the movement of capital into or out of our industry, also are
likely to affect the price of our Common Stock.

MANUFACTURING, SALES AND DISTRIBUTION RELATED PROBLEMS MAY CREATE DISRUPTIONS
THAT COULD RESULT IN A REDUCTION OF PRODUCT SALES REVENUE AND DAMAGE COMMERCIAL
PROSPECTS FOR PRODUCTS WE MAY SUCCESSFULLY DEVELOP

     Our management has limited sales, distribution and marketing experience,
and therefore, if the necessary regulatory approvals are obtained, we intend to
market, distribute and sell our products, through a network of qualified
independent distributors, agents, and key strategic partners, none of which are
currently in place. There are no assurances that we can establish the necessary
relationships for marketing and selling products or that the network will
successfully implement an effective marketing and sales strategy. We expect to
rely on third parties to provide customer service activities and accept and
process returns. Although it is anticipated that we will employ a small number
of persons to coordinate and manage the activities undertaken by these third
parties, we have relatively limited experience in this regard. Any disruption in
these activities could impede our ability to sell our products and could reduce
sales revenues.

MANUFACTURING PROBLEMS WOULD MATERIALLY IMPAIR OUR COMPETITIVE POSITION AND OUR
POSSIBILITY OF ACHIEVING PROFITABILITY

     We lack the facilities to manufacture our products and do not have an
adequate supply of product to begin clinical studies in the United States. If we
are unable to contract for manufacturing capabilities on acceptable terms, it
would result in the delay of sales, which in



Page 10 of 26
<PAGE>   11

turn could materially impair our competitive position, and our possibility of
achieving profitability.

OUR DEPENDENCE ON PRODUCTS COULD HAVE A MATERIAL ADVERSE AFFECT ON THE COMPANY'S
FINANCIAL CONDITION

     We expect to derive a substantial majority of our revenues from our
proprietary development stage products through product licensing and royalty
fees. The life cycle of our products, if approved for marketing, is difficult to
estimate in terms of current and future technological developments, competition,
and other factors. Our failure to successfully commercialize products or to
realize significant revenues from the products would have a material adverse
effect on our financial condition. As of the date hereof, we have not realized
any revenues from the sale of products.

IF AND AS OUR PRODUCTS ARE USED COMMERCIALLY, UNINTENDED SIDE EFFECTS, ADVERSE
REACTIONS OR INCIDENTS OF MISUSE MAY OCCUR WHICH COULD RESULT IN ADDITIONAL
REGULATORY CONTROLS, AND REDUCE SALES OF OUR PRODUCTS

     The developmental use of our products will be limited principally to
clinical trial patients under controlled conditions and under the care of expert
physicians. If these efforts are successful, we cannot predict whether the
widespread commercial use of our products will produce undesirable or unintended
side effects not evident in our clinical trials or other limited use. In
addition, in patients who take multiple medications, drug interactions could
occur which can be difficult to predict. Additionally, incidents of product
misuse may occur. These events, among others, could result in additional
regulatory controls that could limit the circumstances under which the products
are prescribed or even lead to the withdrawal of the product from the market.

UNCERTAINTY RELATING TO FAVORABLE THIRD-PARTY REIMBURSEMENT MAY HAVE A MATERIAL
ADVERSE EFFECT ON THE COMMERCIAL SUCCESS OF PRODUCTS WE DEVELOP

     In the United States, success in obtaining favorable third-party payment
for a new product depends greatly on the ability to present data which
demonstrates positive outcomes and reduced utilization of other products or
services, as well as cost data which shows that treatment costs using the new
product are equal to or less than what is currently covered for other products.
Our failure to present such clinical data would adversely affect our ability to
obtain favorable third-party reimbursement as well as the commercial success of
our products.

OUR DEPENDENCE ON SCIENTISTS AND KEY EXECUTIVES COULD HAVE AN ADVERSE IMPACT THE
DEVELOPMENT AND MANAGEMENT OF OUR BUSINESS

     There is intense competition for qualified personnel in the biotechnology
industry, and we cannot be sure that we will be able to attract and retain the
qualified personnel necessary


Page 11 of 26
<PAGE>   12

for the development and management of our business. Our research and development
programs and our business might be harmed by the failure to recruit additional
key scientific, technical and managerial personnel in a timely manner. Much of
the know-how we have developed resides in our scientific and technical personnel
and is not readily transferable to other personnel. We do not maintain "key man"
life insurance on any of our employees.

WE MAY NOT BE ABLE TO MAINTAIN ADEQUATE PATENT PROTECTION WHICH WOULD HAVE A
MATERIAL ADVERSE IMPACT ON OUR ABILITY TO DEVELOP COMMERCIAL PRODUCTS AND A
PATENT APPLICATION APPEAL, IF NOT SUCCESSFUL, MAY HAVE A MATERIAL ADVERSE IMPACT
ON THE COMPANY

     We have two issued United States patents and one patent issued in
Australia. Our success and ability to compete effectively will depend, in part,
on the strength of our patents and the ability to obtain protection for its
products in foreign markets. No assurance can be given that any patents issued
to us will not be challenged, invalidated, or circumvented. Litigation, which
could result in substantial cost to us, may also be necessary to enforce any
patents issued to us and/or determine the scope and validity of other parties'
proprietary rights.

     We have seven United States utility patent applications pending. The United
States patent position of pharmaceutical companies involves many complex legal
and technical issues and has recently been the subject of much litigation. There
is no clear policy establishing the breadth of claims or the degree of
protection afforded under such patents. As a result, there can be no assurance
that any of our patent applications will be approved, except where claims under
an application have already been examined and allowed, nor that we will develop
additional proprietary products that are patentable. There can be no assurance
that any United States patents issued to us will provide us with any competitive
advantages or will not be challenged by third parties or that patents issued to
others will not have an adverse effect on our ability to conduct our business.
We could incur substantial costs in asserting our patent rights and in defending
patent infringement suits against us or our executives relating to ownership of,
or rights to, patents and other intellectual property of third parties. Such
disputes could substantially delay our drug development or commercialization.

     Furthermore, because until November 29, 2000, patent applications in the
United States were maintained in secrecy until issue, and are only published now
following certain rules, and because publication of discoveries in the
scientific and patent literature often lag behind actual discoveries, we cannot
be certain that we were the first chronologically to make the inventions covered
by each of our pending patent applications or that we were the first to file
patent applications for such inventions. In the event that a third party has
also filed a patent application for any of its inventions, we may have to
participate in interference proceedings declared by the United States Patent and
Trademark Office ("PTO") to determine priority of the invention, which could
result in substantial cost to us, even if the eventual outcome is favorable to
us. In the event of an adverse decision as to priority of invention, we would
not be entitled to a patent on the invention at issue in the interference
proceeding. The PTO or a private party could also institute reexamination
proceedings involving us in connection with one or more of our


Page 12 of 26
<PAGE>   13

patents, and such proceedings could result in an adverse decision as to the
validity or scope of the patents. In addition, there can be no assurance that
our patents would be held valid by a court of law of competent jurisdiction. We
could be forced to either seek a license to intellectual property rights of
others, which may not be available to us on acceptable terms, if at all, or
alter our products or processes so that they no longer infringe on the
proprietary rights of others.

GOVERNMENTAL REFORMS AND THE EFFORTS OF GOVERNMENT ENTITIES AND THIRD PARTY
PAYORS TO CONTAIN OR REDUCE THE COSTS OF HEALTH CARE MAY ADVERSELY AFFECT OUR
SALES AND LIMIT THE COMMERCIAL SUCCESS OF OUR PRODUCTS

     Health care reform is an area of increasing national and international
attention and a priority of many elected officials in the United States. Several
proposals to modify the current health care system in the United States to
improve access and control costs are currently being considered by federal and
state governments. It is uncertain what legislation, if any, will be adopted or
what actions governmental or private payors for health care goods and services
may take in response to proposed or actual legislation in the United States. We
cannot predict the outcome of health care reform proposals or the effect such
reforms may have on our business.

WE MAY FACE SIGNIFICANT PRODUCT LIABILITY RISKS, WHICH MAY HAVE A NEGATIVE
EFFECT ON OUR FINANCIAL PERFORMANCE

         The administration of drugs to humans, whether in clinical trials or
commercially, can result in product liability claims whether or not the drugs
are actually at fault for causing an injury. Furthermore, if we are successful
in developing our products, they may cause, or may appear to have caused,
serious adverse side effects (including death) or potentially dangerous drug
interactions that we may not learn about or understand fully until the drug has
been administered to patients for some time. Product liability claims can be
expensive to defend and may result in large judgments or settlements against us,
which could have a negative effect on our financial performance. The Company
does not maintain any product liability insurance. Even if the Company obtains
product liability insurance, there is no assurance that available amounts of
coverage will be sufficient to adequately protect the Company in the event of a
successful product liability claim. Thus, we cannot be certain that we will be
able to purchase sufficient insurance at an affordable rate and in any event
there is an additional risk that claims could exceed coverage limits.
Accordingly, if litigation is initiated against the Company, the Company may
have to pay all costs associated with the litigation as well as any judgment
rendered against the Company. In the event a large judgment is entered against
the Company, the Company may not be able to pay the same and the Company could
be forced to cease operations. However, the Company believes that it would not
be held liable for injuries suffered by participants in its clinical trials
because it plans to require each participating patient to execute a waiver of
claims as a result of adverse reaction to the Company's products. There can be
no assurance that such waivers will be effective to protect the Company against
such claims. Even if a product liability claim is not successful, the adverse
publicity and time and expense of defending such a claim may interfere with our
business.



Page 13 of 26
<PAGE>   14

THERE CAN BE NO ASSURANCE THAT WE CAN SUCCESSFULLY COMPETE AGAINST OUR
COMPETITION, SOME OF WHOM HAVE SUBSTANTIALLY GREATER CAPITAL RESEARCH AND
DEVELOPMENT STAFF AND FACILITIES THAN THE COMPANY OR THAT TECHNOLOGICAL ADVANCES
WILL NOT RENDER OUR PRODUCTS LESS COMPETITIVE OR OBSOLETE

     The products that we are planning to develop may compete for market share
with alternate therapies. A number of companies are pursuing the development of
novel products which target the same diseases as we are targeting. Many of these
competitors have substantially greater capital resources, research and
development staffs and facilities than we do. They may develop and introduce
products and processes competitive with those of ours. They represent
significant long-term competition for us. For certain of our products, an
important factor in competition may be the timing of market introduction of
these competitive products. This timing will be based on the effectiveness with
which we or the competition can complete clinical trials and approval processes
and supply quantities of these products to market. Competition among products
approved for sale will be based on, among other things, efficacy, safety,
reliability, price, marketing capability and patent position.

                           FORWARD-LOOKING STATEMENTS

     In addition to historical facts or statements of current condition, this
Prospectus contains forward-looking statements. Forward-looking statements
provide our current expectations or forecasts of future events. These may
include statements regarding anticipated scientific progress in our research
programs, development of potential pharmaceutical products, prospects for
regulatory approval, manufacturing capabilities, market prospects for our
products, sales and earnings projections, and other statements regarding matters
that are not historical facts. Some of these forward-looking statements may be
identified by the use of words in the statements such as "anticipate,"
"estimate," "expect," "project," "intend," "plan," "believe" or other words and
terms of similar meaning. Our performance and results could differ materially
from those reflected in these forward-looking statements due to general
financial, economic, regulatory and political conditions affecting the
biotechnology and pharmaceutical industries as well as more specific risks and
uncertainties such as those set forth above and in this report. Given these
risks and uncertainties, any or all of these forward-looking statements may
prove to be incorrect. Therefore, you should not rely on any such
forward-looking statements. Furthermore, we do not intend (and we are not
obligated) to update publicly any forward-looking statements. You are advised,
however, to consult any further disclosures we make on related subjects in our
reports to the Securities and Exchange Commission. Risks that we anticipate are
discussed in more detail in the section entitled "Risk Factors." Other
unanticipated occurrences besides those listed in this Prospectus could also
adversely affect us.

                          DESCRIPTION OF COMMON STOCK

     The Company's authorized capital stock presently consists of 100,000,000
authorized shares of common stock, $.001 par value and 20,000,000 authorized
shares of preferred stock, $.001 par


Page 14 of 26
<PAGE>   15

value ("Preferred Stock"). The Certificate of Incorporation ("Certificate")
authorizes a class of preferred stock commonly known as a "blank check"
preferred stock. The Preferred Stock may be issued from time to time in one or
more series, and the Board of Directors, without further approval of the
Company's stockholders, is authorized to fix the relative rights, preferences,
privileges and restrictions applicable to each series of Preferred Stock. Such
shares of Preferred Stock, if and when issued, may have rights, powers and
preferences superior to those of the Common Stock.

     The holders of Common Stock are entitled to one (1) vote for each share on
all matters voted on by stockholders, including the election of directors and,
except as otherwise required by law, or provided in any resolution adopted by
the Board of Directors with respect to any series of Preferred Stock,
exclusively possess all voting power. The holders of Common Stock do not have
any cumulative voting, conversion, redemption or preemptive rights. Subject to
any preferential rights of any outstanding series of Preferred Stock designed by
the Board of Directors from time to time, the holders of Common Stock are
entitled to such dividends as may be declared from time to time by the Board of
Directors from funds available therefor, and upon liquidation will be entitled
to receive pro rata all assets of the Company available for distribution to such
holders.

     The Certificate provides that directors may be removed with or without
cause, and only upon the affirmative vote of holders of at least 66-2/3% of the
voting power of all the then outstanding shares of stock entitled to vote
generally in the election of directors, voting together as a single class,
subject to any rights of holders of Preferred Stock; provided, however, that
where such action is approved by a majority of the directors the affirmative
vote of only a majority of the holders of all outstanding shares of Common Stock
will be required for approval of such action.

     The Certificate contains provisions requiring the affirmative vote of the
holders of at least 66-2/3% of the voting power of the voting stock, to amend
certain provisions of the Certificate, or to amend any provision of the Bylaws;
provided, however, that where such action is approved by a majority of the
directors the affirmative vote of only a majority of the holders of all
outstanding shares of Common Stock will be required for approval of such action.

                                 USE OF PROCEEDS

     We will not receive any proceeds from the sale of Common Stock reserved for
conversion of the Convertible Debt or exercise of the Warrants held by Selling
Stockholders covered by this Prospectus. See the "Selling Stockholders" section
of this Prospectus, which follows, for more information.

                              SELLING STOCKHOLDERS

     The following table sets forth certain information regarding the beneficial
ownership of Common Stock of the Selling Stockholders as of July 18, 2001 and as
adjusted to give effect to the sale of the Shares offered hereby. The Shares are
being registered to permit public secondary


Page 15 of 26
<PAGE>   16

trading of the Shares, and the Selling Stockholders may offer the Shares for
resale from time to time. See "Plan of Distribution."

     In connection with the placement of the Convertible Debt, we entered into
an agreement with the Selling Stockholders pursuant to which we were obligated
to file a registration statement under the Securities Act of 1933, as amended,
registering the shares of Common Stock underlying the Convertible Debt
("Convertible Debt Shares"). We are further obligated to use our reasonable best
efforts to maintain the effectiveness of this Registration Statement through
September 30, 2004, upon the request of the Selling Stockholders who hold a
majority of the shares of common stock of the Company registered pursuant to
this Registration Statement. The investor rights agreement further provides that
the Company is required to file and maintain the effectiveness of any
registration statement that contemplates a distribution of securities on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act. The
Company also is obligated to register the Warrant Shares as described herein.

     The information presented below is based on data furnished to us by the
Selling Stockholders. The number of Shares that may be actually sold by the
Selling Stockholders will be determined by the Selling Stockholders. Because
each Selling Stockholder may sell all, some or none of the shares of Common
Stock that it owns, no estimate can be given as to the number of shares of
Common Stock that will be owned by the Selling Stockholders upon termination of
the offering.

<TABLE>
<CAPTION>

                                                       Number of Shares
                                                 Beneficially Owned Prior to    Number of Shares Being
         Name of Selling Stockholder                       Offering                    Offered
         <S>                                     <C>                            <C>
         Cappello Capital Corp.(1)                       1,405,541                   1,405,541
         Alexander Cappello(2)                           1,324,149                   1,224,149
         Robert & Ellen Deutschman Family                  852,695                     852,695
         Trust(3)
         Gerard Cappello(4)                                764,107                     764,107
         Thomas Pernice(5)                                 755,919                     755,919
         Graham Beachum(7)                                 437,845                     437,845
         Doris Ruff(7)(9)                                  437,387                     437,387
         Karpnale Investment PTE(7)                        427,751                     427,751
         Bio-Shenk Investment(7)                           265,623                     265,623
         Earl Gales(7)                                     218,865                     218,865
         Gerald Bedrin(7)                                  218,693                     218,693
         Jeff Lotman(7)                                    218,234                     218,234
         Thomas Turner(7)                                  217,489                     217,489
         Larry Fleischman(7)                               216,915                     216,915
         Harold Kaufman(7)                                 215,768                     215,768
         John Bendheim(6)                                  208,744                     108,744
         Bothwell International(7)                         173,441                     173,441
         Leon Watne(7)                                     156,261                     156,261
         Stephen and Brenda Delaney(7)                     148,548                     148,548
</TABLE>


Page 16 of 26

<PAGE>   17

<TABLE>

         <S>                                     <C>                            <C>
         Brad Farmer(7)                                    130,941                     130,941
         Murdeen Johnson(7)                                130,493                     130,493
         Charles and Phyllis Tighe(7)                      109,691                     109,691
         Robert Hayman(7)                                  109,117                     109,117
         Howard Posner(7)                                  109,117                     109,117
         Robert Deutschman(7)                              109,088                     109,088
         Jonathan Shapiro(7)                               109,031                     109,031
         Kenneth Staub(7)                                  109,031                     109,031
         Robin Ferracone(7)                                108,916                     108,916
         Lloyd Brune(7)                                    108,515                     108,515
         Don Montague(7)                                   108,429                     108,429
         Paul and Leslie Aronzon(7)                        107,884                     107,884
         Matthew Dolan(7)                                  107,884                     107,884
         Arthur Miles(7)                                   107,884                     108,884
         Greg Nagel(7)                                     107,425                     107,425
         Gary and Gloria Gottesman(7)                      106,106                     106,106
         William Ross(7)                                   106,106                     106,106
         Bonchar LTD(7)                                     86,789                      86,789
         Cort Wagner(7)                                     65,677                      65,677
         Thomas Bendheim(7)(8)                              65,320                      65,320
         Gregory Sain(7)                                    54,559                      54,559
         Carl Peterson(7)                                   54,430                      54,430
         John and Carolyn Alt(7)                            54,257                      54,257
         David and Andrea Szott(7)                          53,942                      53,942
         Blossom Deutschman(7)                              53,827                      53,827
         Arlene Rohkohl(7)                                  53,655                      53,655
         John Lloyd(7)                                      52,938                      52,938
         Ted and Susan Samuelson(7)                         52,528                      52,528
         Roberta Wieman(7)                                  43,773                      43,773
         Blake Mirkin(7)                                    43,773                      43,773
         Howard Berman(7)                                   43,647                      43,647
         Charles A.  and Sophia Pernice(7)                  43,647                      43,647
         Leonard Kirtman(7)                                 43,154                      43,154
         Greg and Rajshree Chapman(7)                       43,154                      43,154
         Nancy Aossey(7)                                    27,258                      27,258
         Michael Bascetta, Jr.(7)                           26,526                      26,526
         Charles Pernice, Esq.(7)                           21,892                      21,892

</TABLE>

(1)  Cappello Capital Corp. ("CCC") was engaged by the Company to render
     financial advisory and investment banking services, and CCC was granted
     warrants to purchase 4,685,135 shares of Common Stock at $0.15 per share
     ("Warrant Shares"). CCC retained a warrant to purchase 1,405,541 of the
     Warrant Shares and assigned warrants for the remaining Warrant Shares to
     various individuals disclosed herein.
(2)  Shares held in the name of Alexander Cappello include a warrant to purchase
     100,000 shares of Common Stock of the Company at $0.25 per share ("Board
     Warrant"), but neither the Board Warrant nor the underlying shares are
     being




Page 17 of 26
<PAGE>   18

     registered hereunder; warrants assigned to him by CCC to purchase 1,115,061
     of the Warrant Shares which are being registered hereunder; and includes
     109,088 Shares underlying Convertible Debt held by him.
(3)  CCC assigned to the Robert & Ellen Deutschman Family Trust warrants to
     purchase 852,695 of the Warrant Shares.
(4)  CCC assigned to Gerard Cappello warrants to purchase 655,919 of the Warrant
     Shares. Mr. Cappello is the owner, president and chief executive officer of
     CCC and is the brother of Alexander Cappello.
(5)  CCC assigned to Thomas Pernice warrants to purchase 655,919 of the Warrant
     Shares; also includes a Board Warrant to purchase 100,000 shares of Common
     Stock, but neither the Board Warrant nor the underlying shares are being
     registered hereunder.
(6)  Shares held in the name of John Bendheim include a Board Warrant to
     purchase 100,000 shares of Common Stock at $0.25 per share, but neither the
     Board Warrant nor the underlying shares are being registered hereunder; and
     includes 108,744 Shares underlying Convertible Debt held by a trust for the
     benefit of his minor child.
(7)  Represents the number of Shares underlying the principal amount of the
     Convertible Debt purchased by this Selling Stockholder, together with
     accrued interest thereon through June 30, 2001, paid in additional
     Convertible Debt (in lieu of cash).
(8)  Shares held in the name of Thomas Bendheim include ownership of 65,280
     Shares underlying Convertible Debt held by trusts for the benefit of his
     minor children.
(9)  Shares held in the name of Doris Ruff includes 109,347 Shares underlying
     Convertible Debt held by a revocable trust for her benefit.

PLAN OF DISTRIBUTION

     Sales of the Convertible Debt Shares and the Warrant Shares are for the
Selling Stockholders' own account. We will not receive any proceeds from the
sale of the Shares offered hereby. The Selling Stockholders may sell the Shares
from time to time, as market conditions permit on the OTC Bulletin Board, or
otherwise, through brokerage transactions, in negotiated transactions, at fixed
prices which may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Selling Stockholders may effect such transactions by selling the Shares to or
through broker-dealers, and all such broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the Selling Stockholders
and/or the purchasers of the Shares for whom such broker-dealers may act as
agent or to whom they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). The
aforementioned methods of sale may not be all-inclusive.

     Any broker-dealer acquiring the Shares in the over-the-counter market from
the holder may sell the Shares either directly, in its normal market-making
activities, through or to other brokers on a principal or agency basis or to its
customers. Any such sales may be at prices then prevailing in the
over-the-counter market, at prices related to such prevailing market prices or
at negotiated


Page 18 of 26
<PAGE>   19

prices to its customers or a combination of such methods. The Selling
Stockholders and any broker-dealers that act in connection with the sale of
Shares hereunder may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933; any commissions received by them and profits on any
resale of the Shares as principal might be deemed to be underwriting discounts
and commissions under the Securities Act of 1933. Any such commissions, as well
as other expenses of the Selling Stockholders and applicable transfer taxes, are
payable by such parties, as the case may be.

     In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In certain states, the Shares may not be sold unless the
Shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.

     Under applicable rules and regulations under Regulation M under the
Securities Exchange Act of 1934, any person engaged in the distribution of our
Common Stock may not simultaneously engage in market making activities, subject
to certain exceptions, with respect to our Common Stock for a specified period
set forth in Regulation M prior to the commencement of such distribution and
until its completion. In addition and without limiting the foregoing, each
Selling Stockholder will be subject to the applicable provisions of the
Securities Act of 1933 and Securities Exchange Act of 1934 and the rules and
regulations thereunder, including, without limitation, Regulation M, which
provisions may limit the timing of purchases and sales of Shares of our by the
Selling Stockholders. The foregoing may affect the marketability of the Shares.

     Notwithstanding the registration of the Shares, John Bendheim, Alexander
Cappello and Thomas Pernice have agreed not to sell any Shares until January 1,
2002, unless, in the interim, the SEC declares this Registration Statement
effective and the market price for the Company's Common Stock has been at least
seventy-five cents ($0.75) per share for at least twenty (20) consecutive
trading days.

     We entered into an agreement with the Selling Stockholders in connection
with the private placement of Convertible Debt which required us to register the
Selling Stockholders' Convertible Debt Shares under applicable federal and state
securities laws. The registration rights agreement provides for
cross-indemnification of the Selling Stockholders and us and our respective
directors, officers and controlling persons against certain liabilities in
connection with the offer and sale of the shares of our Common Stock, including
liabilities under the Securities Act of 1933 and requires the Selling
Stockholders and us to contribute to payments the parties may be required to
make in respect thereof.

ABOUT THIS PROSPECTUS

     This Prospectus is a part of a registration statement that we have filed
with the SEC using a "shelf registration" process. You should read both this
Prospectus and any supplement together with additional information described
under "Where You Can Find More Information."



Page 19 of 26
<PAGE>   20

     You should rely only on the information provided or incorporated by
reference in this Prospectus or any supplement. We have not authorized anyone
else to provide you with additional or different information. Our Common Stock
is not being offered in any state where the offer is not permitted. You should
not assume that the information in this Prospectus or any supplement is accurate
as of any date other than the date on the front of such documents.

LEGAL OPINION

     The validity of the shares of Common Stock offered hereby have been passed
upon for us by Rutter, Hobbs & Davidoff Incorporated, 1900 Avenue of the Stars,
Suite 2700, Los Angeles, California 90067-4301.

EXPERTS

     The financial statements of Advanced Biotherapy, Inc. incorporated by
reference in its Form 10-KSB for the fiscal year ended December 31, 2000, have
been audited by Williams & Webster, P.S., independent auditors, as set forth in
their report thereon incorporated by reference therein and incorporated herein
by reference. Such financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

     We are subject to the information requirements of the Securities Exchange
Act of 1934, which means we are required to file annual, quarterly and current
reports, proxy statements and other information with the SEC. Copies of the
registration statement and any other materials that we file with the SEC and may
be read and copied at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at (800) SEC-0330. The SEC maintains a
Website that contains all information filed electronically by us, including
reports, proxy and information statements. The address of the SEC's Website is
http://www.sec.gov.

     We have filed a registration statement on Form S-3, of which this
Prospectus forms a part, to register with the SEC the Shares of Common Stock
being offered by this Prospectus. As allowed by SEC rules, this Prospectus does
not contain all the information you can find in the registration statement or
the exhibits to the registration statement. The SEC allows us to "incorporate by
reference" information into this Prospectus, which means that we can disclose
important information to you by referring you to another document filed
separately with the SEC. The historical and future information incorporated by
reference is deemed to be part of this Prospectus, except for any information
superseded by information in this Prospectus. The documents incorporated by
reference contain important information about us, our business and our finances.

     The documents that we are incorporating by reference are:


Page 20 of 26
<PAGE>   21

     o    Our Annual Report on Form 10-KSB for the year ended December 31, 2000;

     o    Our Quarterly Report on Form 10-QSB for the quarter ended March 31,
          2001.

     Any documents that we file pursuant to Sections 13(a), 13(c), 14 or 15 of
the Securities Exchange Act of 1934 after the date of this Prospectus but before
the end of the offering of the securities covered by this Prospectus will also
be considered to be incorporated by reference.

     If you receive a copy of this Prospectus and you request, either orally or
in writing, we will provide you with a copy of any or all documents which are
incorporated by reference into the document. You should address written requests
to Edmond Buccellato, Chief Executive Officer, 6355 Topanga Canyon Boulevard,
Suite 510, Woodland Hills, California 91367, (818) 883-6716.

     NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED OR INCORPORATED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, BY ANY PERSON
IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS AT ANY TIME NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, IMPLY THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.

                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

     The following table sets forth all expenses payable by the Company in
connection with the sale of the Common Stock being registered. All the amounts
shown are estimates except for the SEC registration fee.

<TABLE>

<S>                                                                           <C>
SEC Registration fee.....................................................     $   651.00
Legal fees and expenses..................................................     $12,000.00
Accounting fees and expenses.............................................     $ 1,200.00
                                                                              ----------
          Total..........................................................     $13,851.00
</TABLE>

ITEM 15.  INDEMNIFICATION OF OFFICERS AND DIRECTORS.

     Set forth below are certain provisions of law and a brief summary of the
relevant provisions of the Certificate of Incorporation and By-Laws of Advanced
Biotherapy, Inc. (the



Page 21 of 26
<PAGE>   22

"Company"). The general effect of such provisions is to provide indemnification
to officers and directors of the Company for actions taken in good faith on
behalf of the Company.

     Section 145 of the General Corporation Law of Delaware empowers a
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that the person is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise. Depending on the character of the proceeding, a corporation may
indemnify against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by the person in
connection with such action, suit or proceeding if the person indemnified acted
in good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the person's
conduct was unlawful. If the person indemnified is not wholly successful in such
action, suit or proceeding, but is successful, on the merits or otherwise, in
one or more but less than all claims, issues or matters in such proceeding, such
person may be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by such person in connection with each successfully
resolved claim, issue or matter. In the case of an action or suit by or in the
right of the corporation, no indemnification may be made in respect to any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that despite the adjudication of liability but in the view of
all the circumstances of the case such person is fairly and reasonably entitled
to indemnity for such expenses which the court shall deem proper. Section 145
provides that to the extent a present or former director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to above or in the defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.

     The Certificate of Incorporation of the Company provides that a director of
the Company will not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involved intentional
misconduct or a knowing violation of the law, (iii) under Section 174 of the
General Corporation Law of the State of Delaware or (iv) for any transaction
from which the director derived an improper personal benefit.

     The Bylaws of the Company provide that each person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company), by reason of the fact
that he or she is or was a director, officer,



Page 22 of 26
<PAGE>   23

employee or agent of the Company (which term includes any predecessor
corporation of the Company) or is or was serving at the request of the Company
as a director, officer, employee, trustee or agent of another corporation,
partnership, joint venture, trust or other enterprise, will be indemnified by
the Company to the fullest extent authorized by the General Corporation Law of
the State of Delaware, as the same exists or may hereafter be amended against
all expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred in connection therewith and such
indemnification will inure to the benefit of the indemnity's heirs, executors
and administrators.

     There is no pending material litigation or proceeding involving a director,
officer, employee or other agent of the Company as to which indemnification is
being sought, nor is the Company aware of any pending or threatened material
litigation that may result in claims for indemnification by any director,
officer, employee or other agent.

ITEM 16.  EXHIBITS.

     EXHIBIT
     NUMBER   DESCRIPTION OF DOCUMENT


       3.1    Certificate of Incorporation of Registrant (1)

       3.2    Bylaws of Registrant (1)

       4.1    Form of Registrant's Common Stock Certificate. (2)

       5.1    Opinion of Rutter, Hobbs & Davidoff Incorporated.

       10.1   Form of Common Stock Purchase Warrant in favor of Cappello Capital
              Corp. (1)

       10.2   Form of 10% Convertible Subordinated Debt Instrument. (3)

       10.3   Form of Convertible Subordinated Debt Purchase Agreement. (4)

       10.4   Form of Investor Rights Agreement. (4)

       23.1   Consent of Williams & Webster, P.S., Independent Auditors.

       23.2   Consent of Rutter Hobbs & Davidoff Incorporated. Reference
              is made to Exhibit 5.1.

 --------------
(1) Filed as an exhibit to Registrant's Form 10-QSB for the quarter ending March
31, 2000, and incorporated herein by reference.



Page 23 of 26
<PAGE>   24

(2) To be filed by an amendment.

(3) Filed as an exhibit to Registrant's Form 10-QSB for the quarter ending June
30, 2000, and incorporated herein by reference.

(4) Filed as an exhibit to Registrant's Form 10-KSB for the fiscal year ending
December 31, 2000.

ITEM 17.  UNDERTAKINGS.

       A. Undertaking Pursuant to Rule 415.

       The Undersigned registrant hereby undertakes:

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

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

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

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

provided, however, that paragraph 1(i) and 1(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Sections 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference 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. Filing Incorporating Subsequent Exchange Act Documents by Reference.



Page 24 of 26
<PAGE>   25

       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 15(d) of the Securities
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 the time shall be deemed to be
the initial bona fide offering thereof.

4. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officer and controlling persons of the
registrant pursuant to the provisions of the Investor Rights Agreement, 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 that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.



                                   SIGNATURES

       Pursuant to the requirements of the Securities Act of 1933, 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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the County of Los Angeles, State of California, on the 26th day
of July, 2001.



[Remainder of Page Intentionally Left Blank]



Page 25 of 26
<PAGE>   26





                                          ADVANCED BIOTHERAPY, INC.



                                          By: /s/ EDMOND BUCCELLATO
                                             ------------------------------
                                               Edmond Buccellato
                                               Chief Executive Officer
                                              (Principal executive officer)

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

<TABLE>
<CAPTION>

               Signature                                 Title                                  Date
               ---------                                 -----                                  ----
<S>                                       <C>                                               <C>
                                                     President and
/s/ EDMOND BUCCELLATO                           Chief Executive Officer                      July 26, 2001
----------------------------------           (Principal Executive Officer)
Edmond Buccellato                                      and Director

/s/ THOMAS PERNICE                              Treasurer and Secretary                      July 26, 2001
----------------------------------        (Principal Financial and Accounting
Thomas Pernice                                   Officer) and Director

/s/ JOHN BENDHEIM
----------------------------------                     Director                              July 26, 2001
John Bendheim


/s/ ALEXANDER CAPPELLO
----------------------------------              Chairman of the Board,                       July 26, 2001
Alexander Cappello                                     Director


----------------------------------                     Director
Lawrence Loomis



----------------------------------                     Director
Leonard Millstein


/s/ BORIS SKURKOVICH, M.D.
----------------------------------                     Director                              July 26, 2001
Boris Skurkovich, M.D.


SIMON SKURKOVICH, M.D.
----------------------------------                     Director                              July 26, 2001
Simon Skurkovich, M.D.


</TABLE>



Page 26 of 26

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>3
<FILENAME>v74327ex5-1.txt
<DESCRIPTION>EXHIBIT 5.1
<TEXT>
<PAGE>   1
                               EXHIBIT NUMBER 5.1


                     [RUTTER, HOBBS & DAVIDOFF INCORPORATED]

                                  July 26, 2001




Advanced Biotherapy, Inc.
6355 Topanga Canyon Boulevard
Woodland Hills, California 91367

Gentlemen:

        We are counsel for Advanced Biotherapy, Inc., a Delaware corporation
(the "Company"), and are acting as such in connection with the filing of a
registration statement on Form S-3 (including all amendments thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the registration of 8,999,642 shares of the
Company's common stock, par value $.001 per share ("Common Stock"), that may be
issued in connection with the conversion of convertible subordinated debt due
September 30, 2004 ("Convertible Debt") presently outstanding or which hereafter
may be issued by the Company as interest payments (in lieu of cash payments),
and with respect to an additional 4,685,135 shares issuable upon exercise of
certain warrants ("Warrants") granted by the Company (all 13,684,777 shares
covered by the Registration Statement referred to herein as "Shares").

        We have examined and considered all such documents, corporate records,
certificates of public officials, and other instruments as we have deemed
necessary or appropriate for the purposes of the opinion set forth below. In
addition to the examination outlined above, we have conferred with various
officers of the Company and have ascertained or verified to our satisfaction
such additional facts as we deem necessary or appropriate for the purposes of
this opinion. We have assumed, with your permission, that the holders of the
Convertible Debt validly exercise their respective conversion rights to acquire
Shares in accordance with the terms thereof and that the holders of the Warrants
validly exercise their respective purchase rights to acquire Shares in
accordance with the terms thereof. We call your attention to the fact that our
opinion is limited to facts as they exist on the date hereof, and we disclaim
any undertakings to advise you of changes which hereafter may be brought to our
attention.

        Based on the foregoing, we are of the opinion that the Shares have been
duly authorized, and, upon due conversion and due exercise, as applicable, will
be validly


<PAGE>   2


issued and non-assessable.

        Members of our firm are admitted to the practice of law in the State of
California and we express no opinions as to the laws of any jurisdiction other
than the laws of the State of California and the General Corporation Law of the
State of Delaware. We hereby consent to the references to our firm in the
Registration Statement and to the filing of this opinion by the Company as an
exhibit to the Registration Statement. In giving this consent, we do not hereby
admit that we come within the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of Securities
and Exchange Commission thereunder.

                                       Very truly yours,




                                       RUTTER, HOBBS & DAVIDOFF
                                       INCORPORATED

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>4
<FILENAME>v74327ex23-1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<PAGE>   1

                     [WILLIAMS & WEBSTER, P.S. LETTERHEAD]



The Board of Directors
Advanced Biotherapy, Inc.
Woodland Hills, CA



                    CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS


We consent to incorporation by reference in this registration statement on Form
S-3 of Advanced Biotherapy, Inc. of our report dated March 6, 2001, relating to
the balance sheets of Advanced Biotherapy, Inc. as of the end of fiscal years
2000 and 1999, and the related statements of operations, stockholders' equity
(deficit) and cash flows for the fiscal years 2000 and 1999, which report
appears in the fiscal 2000 annual report on Form 10-KSB of Advanced Biotherapy,
Inc. and to the reference to our firm under the heading "Experts" in the
Prospectus.



/s/ WILLIAMS & WEBSTER, P.S.
------------------------------
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington

July 25, 2001




</TEXT>
</DOCUMENT>
</SUBMISSION>
