FORM 10-Q

               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended September 30, 1996.

OR

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

For the transition period from     N/A to    N/A
Commission file number 0-12984

                 ADVANCED TOBACCO PRODUCTS, INC.
     (Exact name of registrant as specified in its charter)

     TEXAS                                        74-2285214
(State or other jurisdiction                 (I.R.S. Employer
of incorporation or organization)            Identification No.)

     16607 Blanco Road, Suite 1504, San Antonio, Texas 78232
       (Address of principal executive offices) (Zip Code)
                         (210) 408-7077
      (Registrant's telephone number, including area code)
                               N/A
(Former name, former address and former fiscal year, if changed 
since last report)

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

Yes  X    No

        APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
          PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

     Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.

Yes  No   N/A

              APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date:
               7,952,136 as of September 30, 1996


                                   PART I - FINANCIAL INFORMATION

                                   Item 1:  Financial Statements



ADVANCED TOBACCO PRODUCTS, INC.
dba ADVANCED THERAPEUTIC PRODUCTS, INC.
BALANCE SHEETS

                                   (Unaudited)         (Audited)
                                   September 30         June 30
                                      1996               1996

ASSETS

CURRENT ASSETS:
  Cash & cash equivalents         $   59,612          $   84,918
  Investments                        240,476             237,434

     Total current assets            300,088             322,352

LICENSE AGREEMENTS, Net              153,520             154,809

INVESTMENTS                        1,022,691           1,007,837

          Total assets            $1,476,299          $1,484,998


LIABILITIES AND SHAREHOLDERS'
EQUITY:

LIABILITIES:
     Accounts payable             $   15,940          $    3,528
     Accrued liabilities              17,500                 -0-

          Total liabilities       $   33,440          $    3,528


SHAREHOLDERS' EQUITY:
  Common stock, $.01 par value;
    30,000,000 shares authorized;
    7,952,136 shares outstanding
    as of September 1996 and 
    June 1996, respectively           79,522              79,522
  Additional paid-in-capital      12,528,778          12,528,778
  Accumulated deficit            (11,165,441)        (11,126,830)

     Total stockholders' equity    1,442,859           1,481,470

     Total liabilities and
       stockholders' equity       $1,476,299          $1,484,998

ADVANCED TOBACCO PRODUCTS, INC.
dba ADVANCED THERAPEUTIC PRODUCTS, INC.
STATEMENT OF INCOME

                                            (Unaudited)
                                   Three Months Ended September 30
                                        1996           1995

REVENUES:                               $  -0-        $   -0- 
     Total operating revenues:             -0-            -0- 

EXPENSES:
     General and administrative         57,342          41,180

     Total operating expenses:          57,342          41,180

INCOME (LOSS) FROM OPERATIONS          (57,342)        (41,180)

OTHER INCOME:
     Interest Income                    18,731          19,866

     Total other income                 18,731          19,866

NET INCOME (LOSS):                    $(38,611)       $(21,314)

WEIGHTED AVERAGED NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING:         7,952,136       7,792,136

EARNINGS (LOSS) PER COMMON SHARE:     $ (.005)       $ (.002)

ADVANCED TOBACCO PRODUCTS, INC.
dba ADVANCED THERAPEUTIC PRODUCTS, INC.
STATEMENT OF CASH FLOWS


                                            (Unaudited)
                                   Three Months Ended September 30
                                        1996          1995

CASH FLOWS FROM OPERATING
  ACTIVITIES:
    Net income (loss):               $(38,611)     $(21,314)
    Adjustments to reconcile net
      income (loss) to net cash:
      Amortization                       1,670        1,670
      Accounts payable and accrued
      liabilities                       29,912       22,024

    Net cash provided by               (7,029)        2,380
     operations:

CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenses of license          (381)      (25,418)
     agreements:

     Net cash provided by
       investments:                      (381)      (25,418)

NET INCREASE (DECREASE) IN CASH:       (7,410)      (23,038)

CASH & INVESTMENTS AT BEGINNING
OF PERIOD:                           1,330,189    1,363,058

CASH & INVESTMENTS AT END
OF PERIOD:                          $1,322,779   $1,340,020





NOTES TO FINANCIAL STATEMENTS 

     1.   The condensed financial statements included herein were
prepared by the Company without audit.  Certain information and
footnote disclosures normally included in financial statements have
been omitted.  The condensed financial statements should be read in
conjunction with the financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K as of June 30,
1996.  

Item 2:   Management's Discussion and Analysis of Financial
          Condition and Results of Operation 


RESULTS OF OPERATIONS 

     In 1987, the Company sold all of its nicotine technology to an
entity owned or controlled by Pharmacia & Upjohn, Inc. ("Pharmacia
& Upjohn"), a worldwide pharmaceutical company that manufactures
the Nicorette chewing gum and the Nicotrol patch. 

     Based upon the nicotine technology acquired from the Company,
Pharmacia & Upjohn developed a pharmaceutical nicotine vapor
inhaler for use in the nicotine replacement therapy industry.  On
September 6, 1996, Pharmacia & Upjohn announced the launch of its
nicotine inhaler in Denmark as the first of a series of launches
planned throughout Europe and worldwide.  The additional launches
are planned by Pharmacia & Upjohn to occur as regulatory approvals
are granted to add to those existing in Italy and the Netherlands. 
Pharmacia & Upjohn filed new drug applications ("NDA's") with the
respective regulatory agencies in several major European countries. 
Pharmacia & Upjohn filed an NDA with the United States Food and
Drug Administration ("FDA") for regulatory approval of its nicotine
inhaler in the Spring of 1996.  The time required for the FDA and
similar European agencies to review and approve the NDA submissions
cannot be determined in advance because it is difficult to predict
the specific questions or comments which may be made by the FDA or
the other regulatory agencies.  

     The Company believes that the Pharmacia & Upjohn nicotine
inhaler has the potential for being the next generation of nicotine
replacement therapy products following the transdermal nicotine
patch.  Unlike the patches, Pharmacia & Upjohn's nicotine inhaler
approximates the behavioral characteristics customarily experienced
by smokers. 

     The generation of significant royalties for the Company from
sales by Pharmacia & Upjohn of the nicotine inhaler will require
the approval of the FDA in the United States and similar agencies
in other countries and the successful marketing of the product by
Pharmacia & Upjohn.  

     During the three-month period ended September 30, 1996, the
Company's only source of revenues has been from interest income.






LIQUIDITY AND CAPITAL RESOURCES 

     Cash resources, including investments, available on September
30, 1996, were approximately $1,323,000, as compared to approx-
imately $1,340,020, for September 30, 1995.


COMPARISON OF SELECTED FINANCIAL DATA 

     Interest income for the three-month period ended September 30,
1996, decreased to $18,731, as compared to $19,866 for the three-
month period ended September 30, 1995.  This decrease is primarily
due to minor interest rate fluctuations and a decrease in the cash
reserves of September 30, 1996, as compared to September 30, 1995.

     Net loss for the three-month period ended September 30, 1996,
increased to $38,611, as compared to a net loss of $21,314 for the
three-month period ended September 30, 1995.  This increase is
primarily due to increased general and administrative expenses.
  
     General and administrative expenses for the three-month period
ended September 30, 1996, increased to $57,342, as compared to
$41,180 for the three-month period ended September 30, 1995.  This
increase is primarily due to the award of a one-time bonus in the
amount of $17,500 to a consultant and a Director of the Company.


PART II - OTHER INFORMATION 

Item 1:   Legal Proceedings 

          None 

Item 2:   Changes in Securities 

          None 

Item 3:   Defaults Upon Senior Securities 

          None 

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

          None 

Item 5:   Other Information 

          None 

Item 6:   Exhibits and Reports on Form 8-K 

          None 






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


                              ADVANCED TOBACCO PRODUCTS, INC. 
                                        (Registrant) 


Dated: November 12, 1996 
                              By: /s/ J. W. Linehan           
                                   J.W. Linehan, Chief 
                                   Executive Officer and
                                   Chief Accounting Officer