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 December 31, 1997

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:

                8,092,136 as of December 31, 1997




							PART I - FINANCIAL INFORMATION

							Item 1:  Financial Statements


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


							 (Unaudited)		 (Audited)
							 December 31		  June 30
							    1997			   1997

ASSETS:		
		
CURRENT ASSETS:		
    Cash & cash equivalents		$    39,753  		$    38,877
    Investments                  471,495        454,428
    Accounts Receivable          125,000         79,539  

        Total current assets:    636,248  		    572,844  
		
LICENSE AGREEMENTS, Net:  			    159,435  		    159,074  
		
INVESTMENTS:            					    893,500  		    868,570  
		
          TOTAL ASSETS:   			$ 1,689,183  		$ 1,600,488  
		
LIABILITIES AND SHAREHOLDERS' EQUITY:		
		
LIABILITIES:		
    Accounts payable      			$     5,804  		$     6,760

          TOTAL LIABILITIES:   			 5,804  		      6,760  
		
SHAREHOLDER'S EQUITY:		
    Common stock - authorized, 30,000,000	
      shares of $.01 par value; 8,092,136	
      shares outstanding as of December
      31, 1997, and June 30, 1997,		
      respectively	        			    80,922       		80,922      
Additional paid-in-capital    12,544,878     12,544,878   
Accumulated deficit          (10,942,421)   (11,032,072)
		
   TOTAL STOCKHOLDERS' EQUITY: 1,683,379  	   1,593,728  
		
    TOTAL LIABILITIES AND
    STOCKHOLDERS' EQUITY:	    $ 1,689,183  	$ 1,600,488  







ADVANCED TOBACCO PRODUCTS, INC.
dba ADVANCED THERAPEUTIC PRODUCTS, INC.
STATEMENT OF INCOME (LOSS)


                           						     		 (Unaudited)
						                               Three Months Ended December 31
						                                  		1997      		   1996

REVENUES:	 	 
  Royalty Income, Net	  		            $ 102,500	       $  78,200
        Total operating revenues:       102,500           78,200 
		

EXPENSES:	
  General and Administrative	          		26,158	          30,177  
        Total operating expenses:	       26,158 	         30,177 

		
INCOME FROM OPERATIONS:		              		76,342       	   48,023  

		
OTHER INCOME:
  Interest Income	                   				18,687	          21,786 
             Total other income:       		18,687	          21,786  

		
NET INCOME:		                    			  $  95,029       	$  69,809  

		
WEIGHTED AVERAGED NUMBER OF SHARES		
   OF COMMON STOCK OUTSTANDING:    	  8,092,136       	8,069,310  
		
EARNINGS PER COMMON SHARE:	          	$    .012       	$  .01 

                                     								  (Unaudited)
                                 							Six Months Ended December 31
                                  							    1997		        1996

REVENUES:	 	 
  Royalty Income, Net		               	  $ 123,156      	$  78,200  
       Total operating revenues:	          123,156      	   78,200  

		
EXPENSES:		
  General and Administrative             			71,859      	   87,519 
       Total operating expenses:	          	71,859 	        87,519 

		
INCOME (LOSS) FROM OPERATIONS:	            	51,297      	   (9,319)

		
OTHER INCOME:
  Interest Income		                      			38,353      	   40,516 
       Total other income:		                38,353      	   40,516 

		
NET INCOME:	                       				  $  89,650      	$  31,197  

		
WEIGHTED AVERAGED NUMBER OF SHARES
  OF COMMON STOCK OUTSTANDING:        	  8,092,136      	8,010,723  

		
EARNINGS PER COMMON SHARE:            		$   .011         $  .004  









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


                                         								  (Unaudited)
                                     							Six Months Ended December 31
                                         								1997	          1996

CASH FLOWS FROM OPERATING ACTIVITIES:		
  Net income:					                          $   89,650      $   31,197  
  Adjustments to reconcile net income
	to net cash:	
    Amortization					                            3,340        	  3,340  
    Accounts receivable			                     (45,460)	       (76,934)
    Accounts payable and accrued liabilities		    (956)         30,790 
		
    Net cash provided (used) by	operations: 		  46,574        	(11,607)
		

CASH FLOWS FROM INVESTING ACTIVITIES: 		
  Capital expenses of license	agreements			 		  (3,701)	        (4,653)
		
    Net cash provided (used)	by investments:    (3,701)         (4,653)
		

CASH FLOWS FROM FINANCING ACTIVITIES:	
  Exercise of Stock Options	              	       -0-           17,500  
		
    Net cash provided by	financing:               -0-           17,500  
 		

NET INCREASE IN CASH:		                         42,873        	  1,240  
		

CASH & INVESTMENTS AT BEGINNING
	OF PERIOD:			                          	    1,361,875       1,330,189  
		

CASH & INVESTMENTS AT END
	OF PERIOD:                      			      $  1,404,748     $ 1,331,429  
		

NOTES TO FINANCIAL STATEMENTS

	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, 1997.


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


RESULTS OF OPERATIONS

	In 1987, the Company sold patented nicotine technology and related assets to
 what is now Pharmacia & Upjohn, Inc. ("Pharmacia & Upjohn"), a worldwide
 pharmaceutical company that manufacturers the Nicorette Chewing/Gum, the
 Nicorette/Nicotrol Patch, the Nicorette/Nicotrol Nasal Spray and the
 Nicorette/Nicotrol Inhaler.

	Based upon the nicotine technology acquired from the Company, Pharmacia &
 Upjohn developed the Nicorette/Nicotrol Inhaler for use in the nicotine
 replacement therapy ("NRT") market.  ATP receives product payments of 3% of
 sales of the Inhaler to wholesale distributors (see paragraph below).
 Pharmacia & Upjohn launched the Inhaler commercially in Denmark in September
 1996, in Sweden in December 1996, in Italy in February 1997, in the
 Netherlands in July 1997, in Austria in September 1997, and in the United
 Kingdom in December 1997, under the trade name Nicorette Inhaler.  
 Additional worldwide launches are planned by Pharmacia & Upjohn to occur as
 regulatory approvals are granted.

	The Inhaler was recently approved for sale as a prescription product by the
 United States Food and Drug Administration, and the Company anticipates that
 the Inhaler will be initially offered in the U.S. in the first half of 1998
 as the Nicotrol Inhaler by McNeil Consumer Products, a Johnson & Johnson
 company.  The U.S. represents approximately 50% of the world NRT market.

	The Inhaler is the first and only form of nicotine replacement therapy
 designed to help control a smoker's cravings for cigarettes and provide a
 key behavioral component of smoking--the hand-to-mouth ritual. 

	The Inhaler consists of a mouthpiece and a cartridge containing nicotine. 
 The smoker puffs on the mouthpiece to inhale the nicotine which is then
 absorbed through the lining of the mouth. The Inhaler does not contain any
 of the harmful substances such as tar and carbon monoxide found in tobacco
 smoke which cause smoking related diseases like lung cancer.  It provides
 about 30% of the nicotine a smoker gets from cigarettes.  The Inhaler is
 recommended by Pharmacia & Upjohn for smokers who show a high behavioral
 dependence and smoke twenty or less cigarettes per day.

	In September 1992, the Company obtained an exclusive worldwide license to
 certain dry powder nicotine inhaler technology from Duke University.  In
 February 1993, the Company filed a patent application covering this
 technology resulting in the issuance of U.S. patents in 1995 and in 1997. 
 Additional U.S. and foreign patent applications are pending.  The Company
 believes that a dry powder nicotine inhaler has the potential to be a future
 generation NRT product.  The Company is continuing to seek a strategic
 partner to develop this technology.

	Effective as of October 1993, the Company has an agreement with Pharmacia &
 Upjohn under which, among other matters, the Company has the right to
 receive a royalty equal to .1% of net revenues received by Pharmacia &
 Upjohn from the sale of any product using a nicotine impermeable copolymer
 technology covered by, and subsequent to, the issuance of a patent in March
 1996.  Under the terms of the agreement, the Company now receives royalties
 from the sales of the Nicorette/Nicotrol patch by Pharmacia & Upjohn.

	The Company has the right to receive royalty payments from Pharmacia &
 Upjohn with respect to the Nicorette/Nicotrol Inhaler of three percent (3%)
 of Net Sales (defined generally as sales by Pharmacia & Upjohn and McNeil
 Consumer Products to wholesale distributors) payable on a country by country
 basis for the greater of 10 years following the date of the first commercial
 sales or the expiration of all issued patents (latest patent issued
 3/26/96).  There are royalty limitations in the event of the sale of
 a nicotine vapor product competitive with the Nicorette/Nicotrol Inhaler.
 Royalty payments in excess of $1,000,000 per year are to be reduced by fifty
 percent (50%) until the aggregate of such reductions equal the sum of
 $4,400,000.


LIQUIDITY AND CAPITAL RESOURCES

Cash resources, including investments, available on December 31, 1997, were
approximately $1,404,000, as compared to approximately $1,330,000 for
December 31, 1996.


COMPARISON OF SELECTED FINANCIAL DATA

Operating Revenues for the six month period ended December 31, 1997,
increased to $123,156, as compared to $78,200 for the six month period ended
December 31, 1996.  This increase is due to an increase in product payments
from Pharmacia & Upjohn as the Inhaler continues to be launched worldwide. 

Interest income for the six-month period ended December 31, 1997, decreased
to $38,353, as compared to $40,516 for the six-month period ended December
31, 1996.  This decrease is primarily due to minor interest fluctuations.

Net income for the six-month period ended December 31, 1997, increased to
$89,650, as compared to $31,197 for the six-month period ended December 31,
1996.  This increase is due to an increase in product payments from Pharmacia
& Upjohn as the Inhaler continues to be launched worldwide.

General and administrative expenses for the six-month period ended December
31, 1997, decreased to $71,859, as compared to $87,519 for the six-month
period ended December 31, 1996.  This decrease is primarily due to absence in
the first quarter of 1997 of a one-time bonus awarded in the first quarter of
1996 to a consultant and a Director of the Company.



PART II - OTHER INFORMATION 

Item 1:	Legal Proceedings. 

		None 

Item 2:	Changes in Securities and Use of Proceeds.

		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:  February 12, 1998

                            					By: /s/ J. W. Linehan          
						                              J. W. Linehan, Chief
                              						Executive Officer and
                              						Chief Accounting Officer





ABB0F8EF