This Amendment No. 2 on Form 10-K/A amends and restates Items 12 and 13 of the Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2002 by Hybridon, Inc., a Delaware corporation (the “Company”) which was previously amended and restated by Amendment No. 1 on Form 10-K/A filed with Securities and Exchange Commission on April 30, 2002.

Item 12. Security Ownership of Certain Beneficial Owners and Management

      On March 31, 2002 Hybridon had 45,701,884 shares of Common Stock issued and outstanding. The following table sets forth certain information about the beneficial ownership of Common Stock, as of that date, by (i) each person known by the Company to own beneficially more than 5% of the outstanding shares of Common Stock, (ii) each director of the Company, (iii) each executive officer of the Company named in the Summary Compensation Table set forth under the caption “Executive Compensation” below and (iv) all directors and executive officers as a group.

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Item 13. Certain Relationships and Related Transactions

      Since January 1, 2001, Hybridon has entered into or has been engaged in the following transactions with the following Hybridon directors, officers, stockholders who beneficially owned more than 5% of the outstanding Common Stock (“5% Stockholders”) of Hybridon at the time of these transactions and affiliates or immediate family members of those directors, officers and 5% Stockholders. Hybridon believes that the terms of the transactions described below were no less favorable than Hybridon could have obtained from unaffiliated third parties.

$6.0 Million Loan Arrangement

      During 1998, the Company entered into a $6.0 million loan arrangement with several lenders, including several 5% Stockholders. The terms of the loan were as follows: (i) the maturity date was November 30, 2003; (ii) the interest rate was 8%; (iii) interest was payable monthly in arrears, with the principal due in full at maturity of the loan; (iv) the loan was convertible, at the holders’ option, in whole or in part, into shares of common stock at a conversion price equal to $2.40 per share; and (v) the loan required minimum liquidity, as defined, of $2.0 million.

      On March 28, 2001, the Company entered into an agreement with the lenders pursuant to which it agreed to pay $3.0 million to the lenders in partial payment of the principal amount outstanding under the loan. In addition, the Company deposited $821,250 in a restricted account for the purpose of securing the payment of the balance remaining on the loan. The Company entered into this arrangement in order to encourage the lenders to release their security interest in the shares of MethylGene Inc. held by Hybridon so that Hybridon could sell such shares to third parties. In addition, the Company agreed to reduce the conversion price of the loan from $2.40 per share to $1.50 per share upon completion of the sale of 60% of the Company’s holdings in MethlyGene. The Company also agreed to further reduce the conversion price from $1.50 per share to $0.50 per share if the balance of the loan was not paid in full by the Company before September 30, 2001. On September 27, 2001, the Company paid off the remaining $3.0 million to the lenders in full satisfaction of the loan. The $821,250 deposited in the restricted account to secure the loan was released to the Company.

      The following table sets forth the principal amounts originally loaned to the Company by 5% Stockholders and the amounts repaid by the Company to those 5% Stockholders in 2001, including interest paid:

8% Convertible Notes

      In March 2000, the Company completed an offering of 8% convertible notes (“8% Notes”) in the aggregate original principal amount of $7.6 million. On March 30, 2001, holders of 8% Notes in the aggregate principal amount of $7,354,046 exchanged their 8% Notes (including principal and accrued interest thereon) for 76,046 shares of the Company’s Series B Convertible Preferred Stock, $0.01 par value (the “Series B

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      As of April 15, 2002, Founders held 8% Notes in the aggregate principal amount of $299,549. This principal amount included $33,251 in interest paid by the Company to Founders through the issuance of additional 8% Notes between January 1, 2001 and April 15, 2002.

Early Exercise Program

      In 2001, the Company conducted an early exercise program (the “Early Exercise Program”) under which it exchanged its Common Stock for Series B Preferred Stock, several classes of its warrants and a portion of its remaining 8% Notes in order to simplify the Company’s capital structure and to reduce the number of outstanding securities which are exercisable for or convertible into shares of its Common Stock. The Company offered the holders of its Series B Preferred Stock the right to convert such shares into Common Stock at a lower conversion price than that set forth in the Certificate of Designation governing the terms of the Series B Preferred Stock. The Company offered the holders of various warrants the opportunity to immediately exercise their warrants for the purchase of shares covered by such warrants at a reduced exercise price, either by paying the lower exercise price for such shares in cash or by engaging in a “cashless” transaction, whereby they could receive a reduced number of shares of Common Stock in exchange for warrants of equivalent value. The value of the warrants was determined by the Company based on advice from the Company’s investment bankers. The Company offered the holders of its remaining 8% Notes the opportunity to exchange the 8% Notes for shares of the Company’s Common Stock at a reduced conversion price. As of December 31, 2001, the results of the program were as follows:

      All holders of the Company’s Series B Preferred Stock exchanged their shares of Series B Preferred Stock for 19,564,500 shares of the Company’s Common Stock, including the following directors, executive officers and 5% Stockholders of the Company, and affiliates thereof:

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      Holders of warrants with exercise prices ranging between $0.60 per share and $2.40 per share exchanged their warrants for 4,669,808 shares of the Company’s Common Stock. The following directors, executive officers and 5% Stockholders of the Company, and affiliates thereof, participated in the exchange and exercised their warrants either through a cashless exercise involving a cancellation of a portion of their warrants or through the payment of the exercise prices therefor as set forth below:

No directors, officers or 5% stockholders exchanged 8% Notes for Common Stock as part of the Early Exercise Program.

Pillar Consulting Fees

      In 2001, Pillar S.A. provided consulting services to the Company relating to the sale by the Company of shares of Methylgene Inc., the Company’s transaction with Isis Pharmaceuticals, Inc., the 8% Note conversion and the Early Exercise Program. In consideration for such services, the Company paid $250,000 in cash to Pillar and issued 178,571 shares of Common Stock to Pillar.

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SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Amendment No. 2 to the Registrant’s Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on this 24th day of May 2002.

POWER OF ATTORNEY AND SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date: May 24, 2002

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