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<TITLE>10-K FOR YEAR END 1999</TITLE>
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<H1 ALIGN=CENTER><FONT SIZE=3>UNITED STATES</FONT></H1>
<H1 ALIGN=CENTER><FONT SIZE=3>SECURITIES AND EXCHANGE COMMISSION</FONT></H1>
<H1 ALIGN=CENTER><FONT SIZE=3>WASHINGTON, D.C. 20549</FONT></H1>

<H2 ALIGN=CENTER><FONT SIZE=4>FORM 10-K</FONT></H2>

   [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
         SECURITIES EXCHANGE ACT OF 1934
           FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
<H1 ALIGN=CENTER><FONT SIZE=3>OR</FONT></H1>

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

                           COMMISSION FILE NO. 0-15443


<H1 ALIGN=CENTER><FONT SIZE=4><B>THERAGENICS CORPORATION</B></FONT></H1>
<H1 ALIGN=CENTER><FONT SIZE=3>(Exact name of registrant as specified in its charter)</FONT></H1>
<PRE>
             Delaware                                                            58-1528626
     (State of incorporation)                                      (I.R.S. Employer Identification Number)

     5203 Bristol Industrial Way
         Buford, Georgia                                                            30518
  (Address of principal executive offices)                                       (Zip Code)

Registrant's telephone number, including area code:(770) 271-0233

    Securities registered pursuant to Section 12(b) of the Act:

                                                                            Name of each exchange on
        Title of each class                                                    which registered
     - - - - - - - - - - - - - - -                                         - - - - - - - - - - - - - -
     Common stock, $.01 par value,                                           New York Stock Exchange
     Together with associated Common
     Stock Purchase Rights
</PRE>
<P><FONT SIZE=3>Securities registered pursuant to Section 12(g) of the Act: None</FONT></P><BR>

   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


<PAGE>



  Indicate by check mark if disclosure of delinquent  filers pursuant to Item 405 of Regulation S-K is not contained  herein,  and will
not be contained,  to the best of registrant's  knowledge,  in definitive proxy or information statements  incorporated by reference in
Part III of this Form 10-K or any amendment to this form 10-K. (X)

  As of March 17, 2000 the aggregate market value of the common
stock of the registrant held by non-affiliates of the registrant,
as determined by reference to the closing price of the Common Stock as reported on the New York Stock Exchange, was $384,068,160.

  As of March 17, 2000 the number of shares of common stock, $.01
par value, outstanding was 29,524,692.

<P><FONT SIZE=3>Documents incorporated by reference: Proxy Statement for the
registrant’s 2000 Annual Meeting of Stockholders, to be filed with the
Securities and Exchange Commission not later than 120 days after December 31,
1999, is incorporated by reference in Part III herein. </FONT></P>


<PAGE>




<H2 ALIGN=LEFT><FONT SIZE=3>Part I</FONT></H2>

Item 1.  BUSINESS

<H2 ALIGN=LEFT><FONT SIZE=3>General</FONT></H2>

<P><FONT SIZE=3>Theragenics Corporation (“Theragenics” or the
“Company”), a medical isotope and cancer treatment producer, is a
leader in the production and sales of implantable radiation devices
(“seeds”) used in the treatment of cancer. The Company produces and
sells TheraSeed®, which is a U.S. Food and Drug Administration (FDA)
licensed device, based on the radioactive isotope palladium 103 (Pd-103). The
Company received FDA clearance to market TheraSeed® in 1986 and commenced
commercial production and product sales in 1987. Currently, TheraSeed® is
used primarily in the treatment of early stage prostate cancer. In the
treatment, TheraSeeds® are implanted (“seeding”) into the prostate
in a one-time, minimally invasive procedure. The radiation emitted by the seeds
is contained within the immediate prostate area, killing the cancerous tumor
while sparing surrounding healthy cells and organs from any significant dose of
radiation. TheraSeed® has been shown in independent clinical studies to
offer success rates that are comparable to or better than conventional therapies
for the treatment of prostate cancer, while being associated with a reduced
incidence of adverse side effects. In addition, TheraSeed® offers
significant quality of life and cost advantages. Since 1987, TheraSeed® has
been used in over 800 centers across the United States. In 1998, the Company
received regulatory approval for the marketing of TheraSeed® throughout the
member countries of the European Union by obtaining CE Marking. Sales of
TheraSeed® in Europe were not significant in 1998 or 1999, and are not
expected to be significant in 2000. TheraSeed® has also been used on a
limited basis in the treatment of cancers of the pancreas, lung, head, neck,
oral cavity, brain and eye. </FONT></P>

<P><FONT SIZE=3>Theragenics has produced Pd-103 using Company-owned cyclotrons
since 1993. As of December 31, 1999, eleven cyclotrons were fully operational,
and three additional cyclotrons are expected to become operational during 2000.
Currently, all Pd-103 utilized by the Company is produced by Company-owned
cyclotrons. </FONT></P>

<P><FONT SIZE=3>In April 1999 the Company announced that the U.S. Department of
Energy (DOE) granted Theragenics access to unique DOE technology for use in
production of isotopes, including Pd-103. This technology venture represents
part of a DOE initiative to redirect Cold War assets to peacetime use and
cushion the economic impact of U.S. Defense Department cutbacks. The Company
expects that the use of this technology will significantly increase its capacity
and allow for expanded use of Pd-103 and TheraSeed® beyond treatment of
prostate cancer to new medical applications. The Company also believes that the
DOE Project may allow it to explore options for applying this technology to
other uses, though there are no assurances that this will be achieved. The
Company is constructing a facility in Oak Ridge, Tennessee to house the
equipment, infrastructure and work force necessary to support the production of
isotopes, including Pd-103, using this DOE technology. The Company expects to
invest approximately $25-$30 million through 2001 to build this manufacturing
and R&D facility. </FONT></P>

<P><FONT SIZE=3>In March 2000, the Company announced that it had signed and
agreement with the Atlanta Cardiovascular Research Institute (ACRI) to begin a
two-phase animal study addressing the use of Pd-103 for the prevention of
restenosis. Restenosis is the reclosing of arteries that often occurs after
coronary angioplasties. According to the University of Texas Southwestern
Medical Center, nearly half of the 350,000 coronary angioplasties done in the
United States each year fail or restenosis within the first few months of the
operation. In the first phase of the study, scheduled to begin in April 2000,
the Company will deliver catheter-based Pd-103 devices to ACRI for determination
of whether the devices can inhibit restenosis-like changes in pig coronary
arteries after balloon angioplasty and stent implantation, and to assess the
long-term consequences of this treatment model. The second phase of the study
will have similar objectives, except that the Company will be delivering
stent-based Pd-103 devices to ACRI for use in the studies. </FONT></P>

<P><FONT SIZE=3>The Company is seeking to diversify its operations. The ACRI
study addressing the use of Pd-103 for the prevention of restenosis is part of a
research and development initiative launched in 1999, which is seeking to expand
the application of Pd-103 and TheraSeed® and explore options for using the
Company’s expertise and capabilities in other areas. (See
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations, 1999 compared to 1998” and “Liquidity and
Capital Resources”.) Management does not expect the Company to generate
significant revenues from its research and development activities in the near
future. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Industry Overview</FONT></H2>

<H2 ALIGN=LEFT><FONT SIZE=3>Prostate Cancer</FONT></H2>

<P><FONT SIZE=3>Excluding skin cancer, prostate cancer is the most common form
of cancer, and the second leading cause of cancer deaths, in men. It is most
common in North American and northwestern Europe and less common in Asia,
Africa, Central America, and South America. The American Cancer Society
estimates there will be about 180,400 new cases of prostate cancer and an
estimated 31,900 deaths associated with the disease in year 2000. </FONT></P>

<P><FONT SIZE=3>Prostate cancer incidence and mortality increase with age.
Prostate cancer is found most often in men who are over the age of 50. More than
eight out of ten men diagnosed with prostate cancer are over the age of 65.
Prostate cancer accounts for about 13% of male cancer-related deaths. Men
survive at least five years in 89% of the diagnosed prostate cancer cases.
According to the American Cancer Society, approximately 58% of all prostate
cancers are found while they are still localized (confined to the prostate), and
a 5-year relative survival rate for men with localized prostate cancer is 100%.
31% of prostate cancers have spread to tissues near the prostate when diagnosed,
and the 5-year survival rate for these men is 94%. The remaining 11% of those
men diagnosed have prostate cancer that has spread to distant parts of the body.
Of the remaining 11%, about 31% are expected to survive at least five years.
These survival statistics, according to the American Cancer Society, include all
diagnosed prostate cancer cases, regardless of the treatment. </FONT></P>

<P><FONT SIZE=3>In addition to age, other risk factors are linked to prostate
cancer. One of these additional factors includes genetics. Men with close family
members who have had prostate cancer are more likely to get prostate cancer. </FONT></P>

<P><FONT SIZE=3>Another factor that may contribute to prostate cancer is diet. A
diet high in fat may play a part in causing prostate cancer. The American Cancer
society suggests a diet low in animal fat and high in vegetables, fruits and
grains may help lower the risk of prostate cancer in addition to some other
types of cancer. </FONT></P>

<P><FONT SIZE=3>The prostate is a walnut-sized gland surrounding the male
urethra, located below the bladder and adjacent to the rectum. The two most
prevalent prostate diseases are benign prostatic hyperplasia (“BPH”)
and prostate cancer. BPH is a non-cancerous enlargement of the innermost part of
the prostate. Prostate cancer is a malignant tumor that begins most often in the
periphery of the gland and, like other forms of cancer, may spread beyond the
prostate to other parts of the body. If left untreated, prostate cancer can
metastasize to the lung or bone, resulting in death. </FONT></P>

<P><FONT SIZE=3>Staging is the process of determining how far the cancer has
spread. The treatment and recovery outlook depend on the stage of the cancer.
The TNM system is the staging process used most often. The TNM system for
staging gives three key pieces of information: </FONT></P>

<P><FONT SIZE=3>T refers to the size of the Tumor which is measured in
centimeters (cm). One cm is about one-half inch. N describes how far the cancer
has spread to nearby lymph Nodes. M shows whether the cancer has spread
(Metastasized) to other organs of the body. In addition, the TNM descriptions
can be grouped together with stages labeled 0 through IV (0-4). The higher the
number, the more the cancer has spread. The following table summarizes the
various stages of prostate cancer. </FONT></P>

<PRE>
    Stages                          Characteristics of prostate cancer
    T1 or T2                        Localized in the prostate
    T3 or T4                        Locally advanced
    N+ or M+                        Spread to pelvic lymph nodes (N+)or disstant organs (M+)
</PRE>
<P><FONT SIZE=3>The Gleason system is typically used for “grading” or
determining how fast the tumor is growing. Some prostate cancers grow more
quickly than others. A Gleason grade, which ranges from 2 to 10, usually is used
to indicate the tumor’s growth rate after it is taken during a biopsy.
Higher Gleason grades such as 8-10 means cancer cells are likely to grow more
quickly. Most localized cancers of the prostate are an intermediate grade,
Gleason grades 4, 5, or 6. </FONT></P>

<P><FONT SIZE=3>Approximately 58% of new prostate cancer diagnoses are defined
as being localized (that is, confined to the prostate) and the 5-year relative
survival rate for men with localized prostate cancer is 100%. The lack of
early-stage symptoms makes diagnosis difficult. Until the mid 1980‘s, the
best method of routine examination had been the digital rectal exam, an
uncomfortable subjective determination. The diagnostic test currently used most
often is the PSA blood test, which determines the amount of prostate specific
antigen (“PSA”) present in the blood. PSA is found in a protein
secreted by the prostate, and elevated levels of PSA can be associated with
either prostatitis (a noncancerous inflammatory condition) or a proliferation of
cancer cells in the prostate. Industry studies have shown that the PSA test can
detect prostate cancer as many as five years earlier than the digital rectal
exam. The PSA test is currently part of the routine medical check-up for
prostate assessment. Transrectal ultrasound tests and biopsies are typically
performed on patients with elevated PSA readings to confirm the existence of
cancer. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Treatment Options</FONT></H2>

<P><FONT SIZE=3>In addition to seeding, prostate cancer can be treated with
radical prostatectomy (“RP”), transurethral resection of the prostate
(“TURP”), external beam radiation therapy (“EBRT”),
cryosurgery, hormone therapy, chemotherapy and watchful waiting. Some of these
therapies may be combined in special cases to address a specific cancer stage or
patient need. For example, TheraSeed® has been used in combination with EBRT
to treat some locally advanced cases of prostate cancer. The treatments that
have been most successful are those that remove or kill all of the cancerous
tissue while avoiding excessive damage to the surrounding healthy tissue. When
the cancerous tissue is not completely eliminated, the cancer typically returns
to the primary site, often with metastases to other areas. The following is a
summary of treatment options for prostate cancer other than seeding. </FONT></P>

<P><FONT SIZE=3>Radical Prostatectomy and transurethral resection of the
prostate are the two most common surgical procedures. Radical Prostatectomy
involves the complete removal of the prostate gland. This procedure has been
used for over 30 years and is considered to be the standard medical treatment
for early-stage, localized tumors. RP typically requires a three-day average
hospital stay and a lengthy recovery period (generally three to five weeks).
Possible side effects include impotence and incontinence. The cost of RP ranges
from $19,000 to $25,000 per procedure, excluding treatment for side effects and
postoperative complications. According to BBI, an industry newsletter,
approximately 120,000 men will undergo RP in the year 2000. </FONT></P>

<P><FONT SIZE=3>Transurethral resection of the prostate (TURP) is used for men
who are not able to have a radical prostatectomy because of advanced age or
serious illness in addition to the prostate cancer. It is not done to cure the
disease or to remove all of the cancer, but rather as a relief of the symptoms
from the disease before other treatments begin. The procedure is actually used
more often to relieve symptoms of non-cancerous prostate enlargement. The
procedure usually requires a hospital stay of one to two days and the patient
may return to work in one to two weeks. Possible side effects include some
bleeding into the urine after surgery, possibility of infections and the risks
associated with the type of anesthesia used. </FONT></P>

<P><FONT SIZE=3>External Beam Radiation Therapy involves directing a beam of
radiation at the prostate gland to destroy tumorous tissue and has been a common
technique for treating many kinds of cancer since the 1950s. EBRT has typically
been reserved for early-stage prostate cancer in locally advanced cases where
the patient is an inappropriate surgical risk. Patients are usually treated five
days per week in an outpatient center over a period of six to seven weeks.
Rectal complications resulting from damage to the rectal wall caused by the
radiation beam as it travels to the prostate are the most common side effects.
Other possible side effects also include incontinence and impotence, but these
side effects generally occur with less frequency than they do following RP. EBRT
is estimated to cost between $13,000 to $17,000 per patient. According to BBI,
an industry newsletter, approximately 65,000 EBRT procedures will be performed
in the year 2000 for the treatment of localized prostate cancer. </FONT></P>

<P><FONT SIZE=3>Cryosurgery involves placing a small metal tool into the tumor
and killing the cancer by freezing the entire prostate. Patients usually remain
in the hospital for one to two days. There will be some bruising and soreness of
the area where the probe was inserted. Side effects of cryosurgery may include
damage to nerves near the prostate that may cause impotence and incontinence,
damage to bladder and intestines, and a fistula (an abnormal opening) between
the rectum and bladder. This option is considered most appropriate for men with
serious medical conditions that make them unable to endure surgery or radiation
therapy. </FONT></P>

<P><FONT SIZE=3>Ancillary Therapies, primarily consisting of hormone therapy and
chemotherapy, are used to slow the growth of cancer and reduce tumor size, but
are generally not intended to be curative. Ancillary therapies are often used
during advanced stages of the disease to extend life and relieve symptoms. Side
effects of hormonal drug therapy include increased development of breasts,
impotence and decreased libido. In addition, many hormone pharmaceuticals
artificially lower PSA levels in patients, which can interfere with staging the
disease and monitoring its progress. Side effects of chemotherapy include
nausea, hair loss and fatigue. Drug therapy and chemotherapy require long-term,
repeated administration of medication on an outpatient basis. </FONT></P>

<P><FONT SIZE=3>Watchful Waiting is recommended by some physicians in certain
circumstances based on the severity and growth rate of the disease, as well as
on the age and life expectancy of the patient. The aim of watchful waiting is to
monitor the patient, treat some of the attendant symptoms and determine when
more active intervention is required. Watchful waiting has gained popularity
among those patients refusing treatment due to side effects associated with
radical prostatectomy. Watchful waiting requires periodic physician visits and
PSA monitoring. </FONT></P>

<P><FONT SIZE=3>In addition to the treatment options described above, other
forms of treatment as well as prevention are being developed and tested in
clinical settings. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>The Theragenics Solution</FONT></H2>

<P><FONT SIZE=3>Theragenics produces TheraSeed®, an FDA-cleared device for
treatment of all solid localized tumors and currently used principally in
seeding for the treatment of prostate cancer. In the prostate application,
TheraSeeds® are implanted throughout the prostate gland in a minimally
invasive surgical technique under ultrasound guidance. The radiation emitted by
the seeds is contained within the immediate prostate area, killing the tumor
while sparing surrounding organs of significant radiation exposure. The seeds,
whose capsules are biocompatible, remain in the prostate after delivering their
radiation dose. TheraSeed® is best suited for solid localized tumors and is
typically classified as a treatment for early-stage disease. </FONT></P>

<P><FONT SIZE=3>Management believes TheraSeed® offers significant advantages
over RP and EBRT. Recent multi-year clinical studies indicate that seeding
offers success rates for early-stage prostate cancer that are comparable to or
better than those of RP or EBRT plus reduced complication rates. In addition,
the TheraSeed® treatment is a one-time outpatient procedure with a typical
two to three day recovery period. By comparison, RP is an inpatient procedure
typically accompanied by an average three day hospital stay and a three to five
week recovery period, and EBRT involves six to seven weeks of daily radiation
treatments. The Company estimates that treatment with TheraSeed® generally
costs $13,000 to $17,000 per procedure, which is substantially lower than the
cost of RP and comparable to the cost of EBRT. </FONT></P>

<P><FONT SIZE=3>TheraSeed® is a radioactive “seed” approximately
4.5 millimeters long and 0.8 millimeters wide, or roughly the size of a grain of
rice. Each seed consists of a biocompatible titanium outer capsule containing
the radioactive substance Pd-103. The half-life of Pd-103, or the time required
to reduce the emitted radiation to one-half of its initial level, is 17 days.
The half-life characteristics result in the loss of almost all radioactivity in
less than four months. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Treatment Protocol</FONT></H2>

<P><FONT SIZE=3>Prostate cancer patients electing seed therapy first undergo a
transrectal ultrasound test or CT scan, which generates a two-dimensional image
of the prostate. With the assistance of a computer program, a three dimensional
treatment plan is designed that calculates the number and placement of the seeds
required for the best possible distribution of radiation to the prostate. </FONT></P>

<P><FONT SIZE=3>Once the implant model has been constructed, the procedure is
scheduled and the seeds are ordered. The number of seeds implanted normally
ranges from 40 to 100, with the number of seeds varying with the size of the
prostate. The procedure is usually performed under local anesthesia in an
outpatient setting. An ultrasound probe is first positioned in the rectum to
guide needle placement and seed location. Correct needle placement is
facilitated by a template, or grid, that covers the perineum (the area between
the scrotum and rectum through which the needles are inserted). This template is
attached to the ultrasound probe. Implant needles loaded with seeds are assigned
to the appropriate template holes as indicated in the treatment plan. Each
needle is guided through the template and then through the perineum to its
predetermined position within the prostate under direct ultrasound
visualization. The seeds are implanted as the needle is withdrawn from the
prostate. When all seeds have been inserted, the ultrasound image is again
reviewed to verify seed placement. An experienced practitioner typically
performs the procedure in approximately 60 to 90 minutes, with the patient often
returning home at day’s end. </FONT></P>

<P><FONT SIZE=3>Seeding has been used as a treatment for prostate cancer since
the early 1980s, when seeds containing the radioactive isotope Iodine-125
(“I-125”) were implanted in prostate tumors under open surgery.
However, this technique fell into disfavor because the seeds were often
haphazardly arranged resulting in radiation not reaching all of the targeted
cancerous prostate. Compounding this was that often an unintended radiation dose
was delivered to healthy surrounding tissues, particularly the urethra and
rectum. Clinical results indicate that the computer modeling, advanced imaging
and other techniques used in seeding today have significantly ameliorated these
drawbacks. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Clinical Results</FONT></H2>

<P><FONT SIZE=3>Strong Efficacy Results. Clinical data indicates that seeding
offers success rates for early-stage prostate cancer treatment that are
comparable to or better than those of RP or EBRT. The vast majority of published
studies on the use of seeding in the treatment of early-stage prostate cancer
have been very positive. In a study published in Urology Times in September
1994, Drs. John Blasko and Haakon Ragde of the Northwest Tumor Institute in
Seattle, Washington, in a study of 298 men with early-stage prostate cancer,
found an actuarial local control rate of 96% after treatment with either Pd-103
or I-125 seed implantation. A study published in 1995 by Drs. Blasko and Ragde
found 100% of the 111 patients treated with TheraSeed® for localized
early-stage prostate cancer showed no localized prostate cancer after treatment
follow-up ranging from 12-73 months, with a median follow-up of 32 months. The
actuarial disease-free rate at 54 months was 89%. Updating their previous study
on patients treated with Pd-103 or I-125 for a paper published for the Seminars
in Surgical Oncology 1997, Drs. Blasko, Ragde, Grimm, et al. found a seven-year
actuarial local (confined to the prostate) and distal (outside the prostate)
disease-free rate of 97% and 95%, respectively for 320 patients treated for
localized early-stage prostate cancer. Because of Dr. Blasko’s extensive
experience in the treatment of cancer and brachytherapy, the Company retained
him as a medical and cancer advisor in 1998. </FONT></P>

<P><FONT SIZE=3>Seeding treatment in combination with EBRT has also recorded
impressive results in the treatment of higher risk prostate cancer patients. In
their paper published for the Seminars in Surgical Oncology 1997, Drs. Blasko,
Ragde, Grimm, et al. also presented an eight-year actuarial local and distal
disease-free rate of 91% and 83%, respectively for 231 patients who were
considered to represent higher risks of locally advanced prostate cancer and
were treated with a combination of Pd-103 or I-125 seeding and a modified dose
of EBRT. A study by Dr. Michael Dattoli of University Community Hospital, Tampa,
Florida, and Dr. Kent Wallner of Memorial Sloan-Kettering Cancer Center, New
York, New York, published in the International Journal of Radiation Oncology,
Biology and Physics in July 1996 found a three-year actuarial freedom from
biochemical failure (based on PSA scores) of 79% among 73 patients with
clinically localized, high risk prostate cancer who were treated with EBRT in
combination with Pd-103. This compares favorably to results reported for
patients treated with conventional dose EBRT alone. These locally advanced cases
are significant because typical RP protocols would not classify them as suitable
for surgical treatment. </FONT></P>

<P><FONT SIZE=3>Reduced Incidence of Side Effects. Because TheraSeed®
delivers a highly concentrated and confined dose of radiation directly to the
prostate, healthy surrounding tissues and organs are spared excessive radiation
exposure. This results in significantly fewer and less severe side effects and
complications than are incurred with other conventional therapies. RP generally
results in a 65-90% impotence rate and a 2-35% incontinence rate, and EBRT
generally results in impotence and incontinence rates of 40-60% and 8-18%,
respectively. In contrast, according to the 1995 study by the Northwest Tumor
Institute described above, it was reported that 85% of seed therapy patients
under 70 years of age who were potent before the procedure remained so. In
addition, patients who had not had a previous transurethral prostate resection
(“TURP”) suffered no incontinence. Patients having a previous TURP
have compromised urinary tracts and can experience higher rates of incontinence.
Patients receiving seeding can expect some urethra irritation and urinary
urgency post-implantation as the Pd-103 delivers its radiation dose. </FONT></P>

<P><FONT SIZE=3>Lower Treatment Cost. The total cost of seeding is approximately
$15,000 per procedure. This is approximately two-thirds the cost of RP, which
ranges from $19,000 to $25,000, excluding treatment for side effects and
post-operative complications. Seeding cost is comparable to the cost of EBRT,
which ranges from $13,000 to $17,000 for a six-to-seven week course of
treatment. </FONT></P>

<P><FONT SIZE=3>Management believes TheraSeed® represents the best available
form of seeding. Another radioactive isotope, Iodine-125 (“I-125”), is
also commercially available as a permanent implant. TheraSeed® was the first
commercially available alternative isotope to I-125 since I-125‘s
introduction in the 1970s. Management believes that I-125 and Pd-103 are used in
approximately 65% and 35%, respectively, of all prostate cancer seeding
procedures. Another technique known as “temporary seeding,” which
involves the temporary placement of an Iridium-based source in or near a tumor,
is used in a very small percentage of cases. Management believes Pd-103 has the
following advantages over I-125: (i) Pd-103 delivers three times the initial
dose rate of I-125, which can yield advantages in treating aggressive cancers,
(ii) Pd-103 has approximately one-third the half-life of I-125, which shortens
the duration of some radiation induced side effects by two-thirds and reduces
radiation exposure to medical personnel in treatment follow-up; and (iii) unlike
I-125, Pd-103 is nontoxic and non-volatile as it decays. </FONT></P>

<P><FONT SIZE=3>A seven-year, peer-reviewed study conducted at Yale University
School of Medicine published in the October 29, 1999, issue of Radiation
Oncology Investigations: Clinical and Basic Research demonstrated that patients
receiving TheraSeed® palladium-103 (Pd-103) seed implants experienced
significantly lower incidences of side effects than patients implanted with
I-125. Overall severe complication rates from both I-125 and Pd-103 are very low
when compared to other treatment modalities. Only 9% of the patients involved in
the study performed at Yale experienced long-term complications, all of whom
were implanted with I-125. Furthermore, the study indicates that implants
performed with TheraSeed® can utilize an increased minimum tumor dose
without jeopardizing the results from side effects. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Production</FONT></H2>

<P><FONT SIZE=3>The production of TheraSeed® is dependent upon the
availability of Pd-103, as well as Rhodium-103 (“Rh-103”), titanium,
graphite and lead. With the exception of Pd-103, all of these raw materials are
relatively inexpensive and readily available from third party suppliers. </FONT></P>

<P><FONT SIZE=3>Pd-103 is a radioactive isotope that can be produced by neutron
bombardment of Pd-102 in a nuclear reactor, or by proton bombardment of Rh-103
in a cyclotron. Following the production of Pd-103 from Rh-103 in the cyclotron,
the Pd-103 is harvested from the cyclotron and moved through a number of
proprietary production processes until it reaches its final seed form. </FONT></P>

<P><FONT SIZE=3>The Company has produced Pd-103 using Company-owned cyclotrons
since 1993. The Company currently has eleven cyclotrons in production and three
additional cyclotrons are scheduled to become operational in 2000. The
Company’s cyclotrons are designed, built, installed and tested by a company
specializing in the construction of such equipment. </FONT></P>

<P><FONT SIZE=3>Due to the highly sophisticated and technical nature of the
equipment, the Company has in the past encountered delays and difficulties in
the construction, installation and testing of its cyclotrons. Management cannot
be certain that such problems will not occur in connection with the
construction, installation and testing of the cyclotrons to be installed in
2000. </FONT></P>

<P><FONT SIZE=3>Cyclotron operations constitute only one component of the
TheraSeed® manufacturing process. Because the production of TheraSeed®
is highly sensitive and labor intensive, management is focusing significant
attention and effort on automating and otherwise improving all aspects of the
Company’s manufacturing process. Certain portions of the Company’s
production processes were automated during 1998 and 1999. Although the
automation process is difficult and time consuming, and has been subject to
significant delays, management believes it can continue to improve efficiency,
further reduce radiation exposure to personnel and provide additional production
capacity for TheraSeed®. </FONT></P>

<P><FONT SIZE=3>In April 1999 the Company announced that the U.S. Department of
Energy (DOE) had granted Theragenics access to unique DOE technology for use in
production of isotopes, including Pd-103 (See Item 7 -“Management’s
Discussion and Analysis of Financial Condition and Results of Operations –
Overview”). The Company is currently constructing the facilities and
infrastructure to support the use of this DOE technology, and does not expect
this capacity to be available before 2001. </FONT></P>

<P><FONT SIZE=3>During 1997, the Company received certification that its quality
control system meets all the requirements of the International Organization for
Standards’ ISO 9001/EN46001 Quality System Standard. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Marketing</FONT></H2>

<P><FONT SIZE=3>Strategic Alliance. In 1997, the Company entered into a sales
and marketing agreement with Indigo Medical, Inc., a Johnson & Johnson
Company, granting to Indigo the exclusive worldwide right to market and sell
TheraSeed® for the treatment of prostate cancer. Indigo has assumed
responsibility for the education and training of urologists, radiation
oncologists and other personnel involved in the use of TheraSeed® for the
treatment of prostate cancer. </FONT></P>

<P><FONT SIZE=3>The Company believes that upon full implementation of
Indigo’s marketing efforts directed to patients and medical professionals,
the alliance with Indigo provides the opportunity for long-term sales growth and
international expansion while allowing the Company to focus its resources on
maintaining its leadership in the production of Pd-103 for prostate cancer
treatment and other potential applications. By leveraging the extensive
worldwide marketing capability of Indigo and Johnson & Johnson, the Company
can avoid the need to develop an extensive, vertically integrated sales,
marketing and education and training network for the marketing of TheraSeed®
for prostate cancer. Management is confident in the ability of Indigo to more
fully develop potential markets. </FONT></P>

<P><FONT SIZE=3>In 1999, Indigo adjusted its sales and marketing efforts
directed at patients in addition to Indigo’s existing marketing efforts
directed to physicians and other healthcare professionals. As a result of the
sales and marketing agreement with Indigo, TheraSeed® sales depend on the
success of Indigo’s marketing strategy and efforts. </FONT></P>

TheraSphere(R)

<P><FONT SIZE=3>Theragenics has also participated in the development of
TheraSphere®, a microscopic radioactive glass sphere designed for the
treatment of liver cancer. The Company holds a worldwide exclusive license from
the University of Missouri for the use of the technology required to produce
TheraSphere®. The Company has granted to Nordion International, Inc.
(“Nordion”) an exclusive worldwide sublicense to manufacture,
distribute and sell TheraSphere® for any application. TheraSphere® has
been approved for distribution in Canada, but has not been approved by the FDA
for distribution in the United States. Under the terms of the sublicense,
Nordion has agreed to obtain the necessary regulatory approvals for distribution
of TheraSphere® in the United States and other countries. Timing for
commercial development and regulatory approval of TheraSphere® in the United
States and elsewhere is uncertain, and management does not anticipate
significant revenues from TheraSphere® within the foreseeable future. </FONT></P>

<P><FONT SIZE=3>A TheraSphere® treatment dose contains approximately five
million yttrium-90 glass spheres that are each approximately half the diameter
of a human hair. In the treatment of liver cancer, a radiation dose is delivered
to the tumor by introducing TheraSphere® by catheter into the hepatic
artery, which carries arterial blood to the liver. Because of greater blood flow
to tumors compared to healthy liver tissue, the microspheres concentrate in the
capillaries feeding the tumor. The concentration of microspheres in healthy
tissue is much lower. Because of the ability to place and concentrate the
radiation source in such close proximity to the tumor, TheraSphere® can
deliver a radiation dose to the tumor cells five times as strong as that which
can be delivered via external beam radiation. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Patents and Licenses; Trade Secrets</FONT></H2>

<P><FONT SIZE=3>The Company holds United States patents directed to Pd-103 based
on its production using both cyclotrons and nuclear reactors. The Company also
has corresponding patents in Canada, South Africa, Japan and the countries of
the European patent convention, and a PCT patent application on file for Japan,
Australia, New Zealand, Canada, and Europe (representing 16 European countries)
as well as a direct filing in Mexico. The Company may file additional patent
applications from time to time and considers the ownership of patents important,
but not necessarily essential, to its operations. The Company also uses a
strategy of confidentiality agreements and trade secret treatment to provide
primary protection to a number of proprietary design modifications in the
cyclotrons, as well as various production processes. </FONT></P>

<P><FONT SIZE=3>The Company also holds a worldwide exclusive license from the
University of Missouri for the use of technology required for producing
TheraSphere®. Theragenics holds the rights to all improvements developed by
the University of Missouri on this technology. The Company, in turn, sublicenses
exclusive worldwide rights to this technology and all improvements to Nordion.
Pursuant to its license agreement with the University of Missouri, the Company
is obligated to pay the University the greater of a fixed annual amount or a
percentage of the gross sales amount derived from the sale of TheraSphere®. </FONT></P>

<P><FONT SIZE=3>Theragenics holds patents for technology concerning methods for
delivery of TheraSphere® in several countries, including the United States,
Canada, Australia, Argentina, South Africa and the countries of the European
patent convention, and has patent applications on file in other countries,
including Japan. The Company exclusively licenses this technology to Nordion for
worldwide use. </FONT></P>

<P><FONT SIZE=3>The Company also relies to a significant degree on trade
secrets, proprietary know-how and technological advances that are either not
patentable or which the Company chooses not to patent. In particular, the
Company has designed certain modifications to its cyclotrons as well as various
production processes that it deems to be proprietary. The Company seeks to
protect non-patented proprietary information, in part, by confidentiality
agreements with suppliers, employees and consultants. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Seasonality</FONT></H2>

<P><FONT SIZE=3>Management believes that certain periods of a year contain
seasonally slow periods due to vacations taken by physicians, patients and
patients’ families, and the occurrence of holidays and major medical
conventions. During 1999, management has begun to identify certain seasonality
associated with the demand for TheraSeed®. It appears that holidays, major
medical conventions and vacations taken by physicians, patients and
patients’ families may have an impact on sales during the year. Management
is continuing to monitor and assess the impact that seasonality may have on the
demand for TheraSeed®. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Research and Development</FONT></H2>

<P><FONT SIZE=3>Research and development (R&D) expenses were $709,000 in
1999 compared to $448,000 in 1998. The increase in R&D was a result of
development efforts to improve the Company’s proprietary production
processes and the launching of a research and development initiative in the
third quarter of 1999 (see Item 7 – Management’s Discussion and
Analysis of Financial Condition and Results of Operations, 1999 compared to
1998”). </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Competition</FONT></H2>

<P><FONT SIZE=3>The Company competes in a market characterized by technological
innovation, extensive research efforts and significant competition. In general,
TheraSeed® competes with conventional methods of treating localized cancer,
such as RP and EBRT, as well as competing permanent implant devices. RP
currently represents the standard medical treatment for early-stage, localized
prostate cancer. RP has a long history of favorable clinical results and
physicians have developed a high degree of familiarity and comfort with this
procedure. EBRT is also a well-established method of treatment and is widely
accepted for patients who do not represent a good surgical risk or whose
prostate cancer has advanced beyond the stage for which surgical treatment is
indicated. Management believes that if general conversion from these treatment
options (or other established or conventional procedures) to TheraSeed®
treatment does occur, such conversion will be the result of a combination of
equivalent or better efficacy, reduced incidence of side effects and
complications, lower cost, other quality of life issues and pressure by health
care providers and patients. </FONT></P>

<P><FONT SIZE=3>Iodine-125 (I-125) is commercially available as a permanent
implant and competes with TheraSeed®. At least eight companies have obtained
regulatory approval to produce and distribute I-125 seeds and a number of other
companies have announced their intentions to apply for such approval. Management
believes that I-125 and Pd-103 are used in approximately 65% and 35%,
respectively, of all prostate cancer seeding procedures. </FONT></P>

<P><FONT SIZE=3>Management believes that Pd-103 has certain advantages over
I-125. A seven-year study conducted at Yale University School of Medicine
demonstrated that patients receiving TheraSeed® Pd-103 implants experienced
significantly lower incidences of side effects than patients implanted with
I-125. The results of this peer-reviewed study appeared in the October 29, 1999
issue of “Radiation Oncology Investigations: Clinical and Basic
Research”. A review of 123 early stage T1c and T2 prostate cancer patients
implanted between 1992 and 1999 with I-125 or TheraSeed® revealed an overall
complication rate of 0% with TheraSeed® versus 13% for I-125. Most
important, the grade III-IV complication (bladder, urethra, and rectum) rate for
TheraSeed® was 0% versus 6% for I-125. The three-year actuarial probability
of remaining free of long-term complications was 100% for TheraSeed® versus
82% for I-125. The study also reported that a review of the literature for 992
patients implanted with I-125 versus 540 patients implanted with TheraSeed®
shows a consistently higher complication rate for I-125 versus TheraSeed®. </FONT></P>

<P><FONT SIZE=3>Management believes that certain characteristics of Pd-103 can
lead to continued improved results over I-125, including: (i) a higher dose
rate, which can yield advantages in treating aggressive cancers; (ii) a shorter
half-life, which shortens the duration of some radiation induced side effects by
two-thirds and reduces radiation exposure to medical personnel in treatment
follow-up; and (iii) unlike I-125, Pd-103 is non toxic and non-volatile as it
decays. </FONT></P>

<P><FONT SIZE=3>At least three companies have obtained regulatory approval to
produce and distribute Pd-103 seeds, which compete directly with TheraSeed®.
These companies have announced their intention to produce Pd-103 seeds in
commercial quantities in 2000. A number of other companies have also announced
their intentions to apply for regulatory approval to produce and distribute
Pd-103 seeds. Management believes that Theragenics has competitive advantages
over these companies including: (i) its proprietary production processes that
have been developed and patented; (ii) its record of reliability and safety in
its manufacturing operations; (iii) the time and resources required for
competitors’ production capabilities to ramp up to commercial production on
a scale comparable to Theragenics’; and (iv) the resources and world-wide
marketing capabilities of its marketing partner, Indigo, a Johnson and Johnson
company. </FONT></P>

<P><FONT SIZE=3>One of the companies that has produced Pd-103 consists of
certain former employees of Theragenics. Theragenics initiated legal action
against this company in 1997 for misappropriation of trade secrets. The
Company’s lawsuit against the former employees’ company is on going,
and management is currently unable to predict the ultimate outcome of the
litigation. </FONT></P>

<P><FONT SIZE=3>At any point in time, management of Theragenics and/or Indigo
may change their respective pricing policies for TheraSeed® in order to take
advantage of market opportunities or respond to competitive situations.
Responding to market opportunities and competitive situations could have an
adverse effect on the prices of TheraSeed®, while failure to do so could
adversely affect market share and volumes. </FONT></P>

<P><FONT SIZE=3>In addition to the competition from the procedures and companies
noted above, many companies, both public and private, are researching new and
innovative methods of preventing and treating cancer. In addition, many
companies, including many large, well-known pharmaceutical, medical device and
chemical companies that have significant resources available to them, are
engaged in radiological pharmaceutical and device research. These companies are
located in the United States, Europe and throughout the world. Significant
developments by any of these companies could have a material adverse effect on
the demand for Theragenics’ products. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Government Regulation</FONT></H2>

<P><FONT SIZE=3>The Company’s present and future intended activities in the
development, manufacture and sale of cancer therapy products are subject to
extensive laws, regulations, regulatory approvals and guidelines. Within the
United States, the Company’s therapeutic radiological device must comply
with the U.S. Federal Food, Drug and Cosmetic Act, which is enforced by the FDA.
As a result of receiving its CE Marking during 1998, the Company must also
comply with the regulations of the Competent Authorities of the European Union
for TheraSeed® sold in the member nations of the European Union. </FONT></P>

<P><FONT SIZE=3>The Company is also required to adhere to applicable FDA
regulations for Good Manufacturing Practices, including extensive record keeping
and periodic inspections of manufacturing facilities. </FONT></P>

<P><FONT SIZE=3>The Company obtained FDA 510(k) clearance in 1986 to market
TheraSeed® for, in general, the treatment of localized solid tumors. A new
510(k) clearance would be required for any modifications in the device or its
labeling that could significantly affect the safety or effectiveness of the
original product. </FONT></P>

<P><FONT SIZE=3>The Company’s handling of radioactive materials is governed
by the State of Georgia in agreement with the Nuclear Regulatory Commission
(NRC). The users of TheraSeed® are also required to possess licenses issued
either by the states in which they reside or the NRC (depending upon the state
involved and the production process used). The Company’s expansion plans
require the Company to secure additional permits and licenses from a number of
environmental, health and safety regulatory agencies. The Company believes, but
cannot assure, that it will be able to acquire the permits and licenses
necessary for its planned expansion of its manufacturing capacity in accordance
with its timetable. To date, the Company has not experienced delays in licensing
any of its facilities or cyclotrons. </FONT></P>

<P><FONT SIZE=3>The Company is required under its radioactive materials license
to maintain radiation control and radiation safety personnel, procedures,
equipment and processes, and to monitor its facilities and its employees and
contractors. The Company is also required to provide financial assurance that
adequate funding will exist for end-of-life radiological decommissioning of its
cyclotrons and other radioactive areas of its property that contain radioactive
materials. The Company’s decommissioning obligations will increase as its
production capacity is expanded. </FONT></P>

<P><FONT SIZE=3>The Company disposes of low level radioactive waste to licensed
commercial radioactive waste treatment or disposal facilities for incineration
or land disposal. Management believes the Company is in compliance with all
state and federal regulations in this regard. The Company provides training and
monitoring of its personnel to facilitate the proper handling of all materials. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Employees</FONT></H2>

<P><FONT SIZE=3>As of December 31, 1999, the Company had 159 full time employees
(including full time temporary employees and executive personnel). Of this
total, 122 were engaged in the development and production of the Company’s
products. The remainder were engaged in marketing and general corporate
activities. The Company’s employees are not represented by a union or a
collective bargaining agreement, and management considers employee relations to
be good. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Item 2. Properties</FONT></H2>

<P><FONT SIZE=3>The Company owns two manufacturing facilities located in Buford,
Georgia. One, completed and placed into service during 1998, houses cyclotrons,
raw material processing, assembly and shipping operations. The second facility,
which is adjacent to the first facility, houses cyclotrons. The Company also
owns an administrative facility adjacent to its production facilities in Buford.
The administrative facility was placed in service in February 2000. </FONT></P>

<P><FONT SIZE=3>Upon completion of the expansion projects currently underway,
approximately 15 acres will be available for future development adjacent to the
Company’s current Buford location. Management intends to use this land for
long term expansion of its manufacturing and support operations, if such
expansion is required. </FONT></P>

<P><FONT SIZE=3>The Company leases 21 acres of land in the Oak Ridge, Tennessee
area, on which it is constructing a facility to house the equipment,
infrastructure and workforce necessary to support operations using technology
leased from the U.S. Department of Energy (see Item 7 - “Management’s
Discussion and Analysis of Financial Condition and Results of Operations –
Overview”). The Company also holds a right of first refusal option on the
lease of 21 acres adjacent to its current leased site in the Oak Ridge area. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Item 3. Legal Proceedings</FONT></H2>

<P><FONT SIZE=3>In January 1999, the Company and certain of its officers and
directors were named as defendants in certain securities actions, alleging
violations of the federal securities laws, including Sections 10(b), 20(a) and
Rule 10b-5 of the Securities and Exchange Act of 1934, as amended. These actions
have been consolidated into a single action pending in the U.S. District Court
for the Northern District of Georgia. The complaint, as amended, purports to
represent a class of investors who purchased or sold securities during the time
period from January 29, 1998 to January 11, 1999. The amended complaint
generally alleges that the defendants made certain misrepresentations and
omissions in connection with the performance of the Company during the class
period and seeks unspecified damages. On May 14, 1999 a stockholder of the
Company filed a derivative complaint in the Delaware Court of Chancery
purportedly on behalf of the Company, alleging that certain directors breached
their fiduciary duties by engaging in the conduct that is alleged in the
consolidated federal class action complaint. The derivative action has been
stayed by the agreement of the parties. On September 3, 1999, the Company filed
a motion to dismiss the consolidated federal class action complaint on the
grounds that it fails to state a claim against the Company. There has not yet
been a ruling on the Company’s motion. Management believes these charges
are without merit and intends to vigorously oppose the litigation, however,
given the nature and early stage of the proceedings, the ultimate outcome of the
litigation cannot be determined at this time. Accordingly, no provision for any
liability that might result from this litigation has been made. The Company
maintains insurance for claims of this general nature. </FONT></P>

<P><FONT SIZE=3>In trade secret litigation filed against International
Brachytherapy (“IBt”), Theragenics has claimed ownership of certain
cyclotron improvements incorporated into the cyclotrons provided to IBt by the
companies’ common cyclotron vendor. IBt is seeking indemnification from the
cyclotron vendor against the Company’s claims. The cyclotron vendor has in
turn filed for arbitration seeking determination of ownership of the cyclotron
improvements and certain other information developed by Theragenics relating to
the cyclotron technology. The cyclotron vendor is also seeking indemnification
for any amounts paid by the vendor to IBt to defend against the trade secret
claims of Theragenics, and attorney fees in the arbitration. The cyclotron
vendor is not seeking to prevent the Company from using the cyclotrons or the
related improvements or information. The parties are in the process of
conducting discovery and the ultimate outcome of this uncertainty cannot be
determined at this time. Accordingly, no provision for any liability that might
result from this uncertainty has been made. </FONT></P>

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

<P><FONT SIZE=3>The Company did not submit any matter to a vote of its security
holders during the fourth quarter of calendar 1999. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>PART II</FONT></H2>

<H2 ALIGN=LEFT><FONT SIZE=3>Item 5. Market for Registrant’s Common Equity
and RelatedStockholder <BR>Matters</FONT></H2>

<P><FONT SIZE=3>The Company’s common stock, $.01 par value, (“Common Stock”)
is traded on the New York Stock Exchange (NYSE) under the symbol
“TGX”. Trading on the NYSE commenced on August 6, 1998. Prior to that
date, the Company’s Common Stock was traded on the Nasdaq National Market.
The high and low prices for the Company’s Common Stock as reported on the
NYSE and, prior to August 6, 1998, the high and low bid information as reported
by NASDAQ, for each quarterly period in 1998 and 1999 are as follows: </FONT></P>

<PRE>
                                                                                        High         Low
1999
First Quarter..........................................................................$17.75       $5.00
Second Quarter...........................................................................8.94        6.63
Third Quarter...........................................................................13.69        6.75
Fourth Quarter..........................................................................13.75        7.63

1998
First Quarter...........................................................................35.37       17.81
Second Quarter..........................................................................34.62       22.25
Third Quarter...........................................................................24.75        9.25
Fourth Quarter..........................................................................21.75       10.81
</PRE>
<P><FONT SIZE=3>As of March 17, 2000, the closing price of the Company’s
Common Stock was $13.125 per share. Also, as of that date, there were
approximately 740 holders of record of the Company’s Common Stock. The
number of record holders does not reflect the number of beneficial owners of the
Company’s Common Stock for whom shares are held by depositary trust
companies, brokerage firms and others. </FONT></P>

<P><FONT SIZE=3>The Company has a Stockholder Rights Plan (the “Rights
Plan”), which contains provisions to protect the Company’s
stockholders in the event of an unsolicited offer to acquire the Company,
including offers that do not treat all stockholders equally, the acquisition in
the open market of shares constituting control without offering fair value to
all stockholders, and other coercive, unfair or inadequate takeover bids and
practices that could impair the ability of the Board of Directors to represent
stockholders’ interests fully. Pursuant to the Rights Plan, each share of
the Company’s Common Stock contains a share purchase right (a
“Right”). The Rights expire in February 2007, and do not become
exercisable unless certain events occur, including the acquisition of, or
commencement of a tender offer for, 15% or more of the outstanding Common Stock.
In the event certain triggering events occur, including the acquisition of 20%
or more of the outstanding Common Stock, each Right that is not held by the 20%
or more stockholder will entitle its holder to purchase additional shares of
Common Stock at a substantial discount to then current market prices. These
effects could adversely effect the market price of the Company’s Common
Stock. The Rights Plan and the terms of the Rights, which are set forth in a
Rights Agreement between the Company and SunTrust Bank, Atlanta, as Rights
Agent, could add substantially to the cost of acquiring the Company, and
consequently could delay or prevent a change in control of the Company. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Dividend Policy</FONT></H2>

<P><FONT SIZE=3>The Company has never declared or paid a cash dividend on its
Common Stock. It is the present policy of the Board of Directors to retain all
earnings to support operations and to finance expansion. Consequently, the Board
of Directors does not anticipate declaring or paying cash dividends on the
Common Stock in the foreseeable future. The Company’s current credit
facility restricts the Company’s ability to pay dividends if such dividend
payment would cause a default under any of the credit facility’s financial
covenants. Decisions on the payment and amount of any dividends on the Common
Stock will depend on the Company’s results of operations, capital
requirements and financial condition and other relevant factors as determined by
the Board of Directors. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Stock Split</FONT></H2>

<P><FONT SIZE=3>On March 16, 1998, the Board of Directors approved a two-for-one
Common Stock split, effected in the form of a 100% stock dividend, which was
distributed on April 15, 1998 to stockholders of record on March 31, 1998. All
references to shares outstanding and per share amounts contained herein have
been restated to reflect the stock split. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Item 6. Selected Financial Data</FONT></H2>

<P><FONT SIZE=3>The selected financial data set forth below as of December 31,
1998 and 1999 and for each of the three years in the period ended December 31,
1999 have been derived from the financial statements of the Company included
elsewhere herein, which have been audited by Grant Thornton LLP, independent
certified public accountants. The selected financial data as of December 31,
1995, 1996 and 1997 and for each of the two years in the period ended December
31, 1996 have been derived from the financial statements of the Company, which
have been audited by Grant Thornton LLP but are not included herein. The
selected financial data set forth below should be read in conjunction with the
financial statements of the Company and related notes thereto and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” included elsewhere herein. </FONT></P>


<PAGE>


<PRE>
                                                                                          Year Ended December 31,
                                                                            1995         1996          1997           1998           1999
                                                                                    (Amounts in thousands, except per share data)
Statement of Earnings Data:
Product sales.....................................................         $7,782      $12,257       $24,457         $37,858       $43,618
Licensing fees....................................................             85          100           100             100           100
                                                                            -----       ------        ------          ------        ------
Total revenue.....................................................          7,867       12,357        24,557          37,958        43,718
Cost of product sales.............................................          2,645        3,736         6,141          10,869        13,293
                                                                            -----       ------        ------          ------        ------
Gross profit......................................................          5,222        8,621        18,416          27,089        30,425
Selling, general and administrative...............................          2,396        3,198         4,819           6,000         6,300
Research and development..........................................             18            7            55             448           709
                                                                            -----        -----        ------          ------        ------
Operating profit..................................................          2,808        5,416        13,542          20,641        23,416
Other income......................................................             64           36         1,306           1,262         1,273
                                                                            -----        -----        ------          ------       -------
Net earnings before income taxes..................................          2,872        5,452        14,848          21,903        24,689
Income tax expense................................................          1,100        2,067         5,350           7,880         8,667
Net earnings......................................................         $1,772        3,385         9,498          14,023        16,012
                                                                            =====        =====        ======          ======        ======



<PAGE>




                                                                                                   December 31,
                                                                           1995          1996          1997           1998          1999
                                                                                           (Amounts in thousands, except per share data)
Earnings per common share
    Basic.........................................................         $ 0.08       $ 0.15        $ 0.35         $ 0.48         $ 0.54
    Diluted.......................................................         $ 0.07       $ 0.14        $ 0.33         $ 0.46         $ 0.53

  Weighted average common shares
    Basic.........................................................         22,206       23,250        27,526         29,259         29,478
    Diluted.......................................................         23,696       24,582        28,618         30,315         29,960

Balance Sheet Data:
Cash and short-term investments..................................          $3,266       $2,986       $30,162        $19,542        $18,765
Marketable securities                                                          -             -         8,392          6,830         15,137
Property, plant and equipment, net...............................          10,073       17,586        28,986         53,258         64,081
Total assets.....................................................          16,878       23,689        71,200         88,273        108,043
Long-term debt, including current installments...................
                                                                            1,519        3,458             -              -              -
Shareholders' equity.............................................          14,769       19,385        67,033         84,385        101,077
</PRE>
         Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

<H2 ALIGN=LEFT><FONT SIZE=3>Overview</FONT></H2>

<P><FONT SIZE=3>Theragenics is a medical isotopes and cancer treatment producer.
Currently, TheraSeed® is the Company’s principal product and is used
primarily in the treatment of early-stage prostate cancer. Physicians, hospitals
and other healthcare providers, located primarily in the United States, utilize
the TheraSeed® product. In 1998 the Company received regulatory approval for
the marketing of TheraSeed® throughout the member countries of the European
Union by obtaining CE Marking. Sales of TheraSeed® in Europe were not
significant in 1998 or 1999. </FONT></P>

<P><FONT SIZE=3>Under a Sales and Marketing agreement executed in May 1997 with
Indigo Medical, Inc. (“Indigo”), a Johnson & Johnson company, (the
“Indigo Agreement”) Indigo obtained the exclusive worldwide right to
market and sell TheraSeed® for the treatment of prostate cancer. Under the
terms of the Indigo Agreement, Indigo has responsibility for the education and
training of urologists, radiation oncologists and other personnel involved in
the use of TheraSeed®, as well as all other sales and marketing activities.
The Company continues to be responsible for all manufacturing and distribution
of TheraSeed®. </FONT></P>

<P><FONT SIZE=3>Palladium-103 (Pd-103) is the radioactive isotope that supplies
the therapeutic radiation of TheraSeed®. Currently, all Pd-103 utilized by
the Company is produced by Company-owned cyclotrons and, as of December 31,
1999, eleven cyclotrons were fully operational. </FONT></P>

<P><FONT SIZE=3>Three additional cyclotrons are scheduled to become operational
in 2000, bringing the total number of cyclotrons in operation to fourteen. The
Company does not currently have any additional cyclotron purchase commitments.
Because a cyclotron does not become operational until approximately 18 months
after it is ordered, the accuracy of the Company’s long-term projections
related to delivery of cyclotrons and market conditions, such as demand, can
significantly affect its results of operations. The delivery of cyclotrons prior
to a commensurate increase in demand could adversely impact gross margins, while
inadequate capacity could limit the Company’s ability to meet demand and
achieve maximum sales growth. Also, due to the highly sophisticated and
technical nature of the equipment, the Company has in the past encountered
delays and difficulties in the construction, installation and testing of its
cyclotrons. Management cannot be certain that such problems will not occur in
connection with the construction, installation and testing of the cyclotrons to
be installed in 2000. </FONT></P>

<P><FONT SIZE=3>In April 1999 the Company announced that the U.S. Department of
Energy (DOE) had granted Theragenics access to unique DOE technology for use in
production of isotopes, including Pd-103 (the “DOE Project”). This
technology venture represents part of a DOE initiative to redirect Cold War
assets to peacetime use and cushion the economic impact of U.S. Defense
Department cutbacks. The Company expects that the use of this technology will
significantly increase its capacity and may allow for expanded use of Pd-103 and
TheraSeed® beyond treatment of prostate cancer to new medical applications.
The Company also believes that the DOE Project may allow it to explore options
for applying this technology to other uses, though there are no assurances that
this will be achieved. The Company is constructing a facility in Oak Ridge,
Tennessee to house the equipment, infrastructure and work force necessary to
support the production of isotopes, including Pd-103, using this DOE technology.
The Company expects to invest approximately $25-$30 million through 2001 to
build this manufacturing and R&D facility. </FONT></P>

         RESULTS OF OPERATIONS

         Year Ended December 31, 1999 Compared to year Ended December 31, 1998

<P><FONT SIZE=3>Revenues were $43.7 million in 1999 compared to $38.0 million in
1998, an increase of $5.7 million or 15.0%. In light of results below
expectations in the first quarter of 1999 that had carried over from the fourth
quarter of 1998, Indigo made adjustments to its sales and marketing programs for
TheraSeed®. The Company believes these adjustments contributed significantly
to the recovery in sales in the second half of 1999. While pleased with this
recovery, the Company recognizes that the brachytherapy market has become very
dynamic, and sales and marketing adjustments will continue to be needed to
anticipate and react to this changing marketplace. </FONT></P>

<P><FONT SIZE=3>As do all providers of health care products and services,
Theragenics, Indigo and Johnson & Johnson closely monitor reimbursement of
healthcare costs. The Balanced Budget Act of 1997 represented a reimbursement
concern for the entire healthcare industry in that it provided for reductions in
Medicare spending and prospective payment reform on healthcare purchasing levels
and payment streams. Along with most other health care products and services,
brachytherapy seeds faced the potential of reimbursement reductions under
Medicare as a result of the 1997 Act and the rules proposed thereunder. Indigo,
Johnson & Johnson and Theragenics were all active in efforts to educate
Congress about brachytherapy and thereby protect adequate reimbursement for the
procedure. In part as a result of these efforts, the Omnibus Consolidated
Appropriations Act, adopted in November 1999, provides that brachytherapy seeds
continue to be reimbursed based on the individual health care provider’s
actual cost of the product. This cost reimbursement will continue for a period
of two to three years while the Health Care Financing Administration (HCFA)
collects more appropriate cost data. Management expects that it, along with
Indigo and Johnson & Johnson, will continue to monitor the progress of HCFA
as it relates to this issue. </FONT></P>

<P><FONT SIZE=3>Licensing fees represent royalty payments with respect to the
Company’s licensed TheraSphere® technology. Management does not expect
such licensing fees to become material in the foreseeable future. </FONT></P>

<P><FONT SIZE=3>Gross profit percentage decreased to 69.6% of revenue in 1999
from 71.4% of revenue in 1998. This decrease was attributable to an increase in
the manufacturing fixed cost base as depreciation and other fixed expenses
associated with additional cyclotrons and new manufacturing facilities were
incurred during 1999. As additional cyclotrons come on line, margins generally
decline because each machine represents excess capacity for a period while
carrying its full component of fixed costs, including depreciation. Currently,
eleven cyclotrons are operational. Three additional cyclotrons are expected to
be operational during the first half of 2000, bringing the total number of
cyclotrons in operation to fourteen. Cost of product sales are expected to
continue to increase as a percent of revenue to the extent that additional
cyclotrons create capacity more rapidly than the growth in demand for Pd-103
based products. </FONT></P>

<P><FONT SIZE=3>Selling, general and administrative (SG&A) expenses were
$6.3 million in 1999 compared to $6.0 million in 1998, reflecting an increase of
$300,000 or 5.0%. This increase was due primarily to increases in compensation
and benefits as a result of the increasing scope of the Company’s
operations. </FONT></P>

<P><FONT SIZE=3>Research and development (R&D) expenses were $709,000 in
1999 compared to $448,000 in 1998. The increase in R&D expenses was a result
of development efforts to improve the Company’s proprietary production
processes and an increased emphasis on the Company’s new R&D
initiatives. During the third quarter of 1999, the Company launched a research
and development initiative to expand the application of Pd-103 and
TheraSeed® to other oncological and non-oncological uses, and explore
options for using its expertise and capabilities in other areas. In October
1999, the Company hired a Vice President of Isotope Production and Research, to
assist in its research and development initiative. The Vice President of Isotope
Production and Research brings extensive scientific experience to the Company.
Management plans to significantly increase efforts in research and development
as its initiatives to diversify move forward and expects future R&D
expenditures to increase significantly. However, R&D spending is dependent
on the complex scheduling of research and development activities in progress as
well as the pursuit of other appropriate opportunities as they arise. For these
reasons, no assurances can be made as to spending amounts and R&D expenses
may fluctuate significantly from period to period. </FONT></P>

<P><FONT SIZE=3>Other income was approximately $1.3 million for both 1999 and
1998, comprised primarily of interest income generated from the Company’s
short-term investments and high quality municipal bond investments. These funds
have and will continue to be utilized for the Company’s current and future
expansion programs, including its R&D initiatives. As funds continue to be
used for these programs, management expects other income to decline accordingly. </FONT></P>

<P><FONT SIZE=3>The Company’s effective income tax rate was 35.1% for 1999,
compared to an effective income tax rate of 36.0% for 1998. The reduction in the
effective income tax rate was a result of the recognition of $330,000 of
investment tax credits in 1999. These tax credits were a result of the
Company’s investments in its expansion projects. </FONT></P>

         Year Ended December 31, 1998, Compared to Year Ended December 31, 1997

<P><FONT SIZE=3>Revenues were $38.0 million in 1998 compared to $24.6 million in
1997, an increase of $13.4 million or 54.5%. This increase was attributable to
the Company’s ability to increase production and sales volume of
TheraSeed® with additional cyclotron and assembly capacity, including the
addition of three cyclotrons in 1998. Although 1998 was another year of record
revenue for Theragenics, sales for the fourth quarter of 1998 declined as
compared to the third quarter of 1998. This was the first full quarter in which
the transition of sales responsibility for TheraSeed® to Indigo under the
Indigo Agreement was substantially complete, as well as the first quarter in
which the Company had more capacity than current demand. During 1998 Indigo
focused its marketing efforts on physician training and building physician
relationships, rather than efforts directed at patients. The Company believes
that the results of Indigo’s 1998 marketing efforts have confirmed
Theragenics’ experience that in addition to marketing TheraSeed® to
physicians and other health care professionals, substantial attention and
resources must be devoted to educating the ultimate consumer regarding the
benefits of seeding therapy. In recognition of the potential value added by
consumer marketing and in an effort to build sales growth momentum, Indigo
advised the Company that it made adjustments to its sales and marketing strategy
to increase the focus on marketing efforts directed to patients. </FONT></P>

<P><FONT SIZE=3>Licensing fees represent royalty payments with respect to the
Company’s licensed TheraSphere® technology. Management does not expect
such licensing fees to become material in the foreseeable future. </FONT></P>

<P><FONT SIZE=3>Cost of product sales increased to 28.7% of product sales in
1998 from 25.1% of product sales revenue in 1997. This increase was attributable
to an increase in the manufacturing fixed cost base as depreciation and other
fixed expenses associated with additional cyclotrons and new manufacturing
facilities were incurred during 1998. As additional cyclotrons come on line,
margins generally decline because each machine represents excess capacity for a
period while carrying its full component of fixed costs, including depreciation.
Cost of product sales are expected to continue to increase as a percent of
revenue to the extent that additional cyclotrons create capacity more rapidly
than the growth in demand. During 1998 the Company also increased the number of
manufacturing employees and enhanced employee compensation and benefits in an
effort to continue to attract and retain qualified employees. Fiscal 1998 also
included moving, training, testing and other start-up expenses associated with
its new manufacturing facilities, which were placed in service in the third
quarter, and testing and start-up expenses related to three cyclotrons. Only one
cyclotron was added in 1997. </FONT></P>

<P><FONT SIZE=3>The increase in cost of sales as a percentage of revenue over
1997 is also attributable to the fact that during the first half of 1997, prior
to the execution of the Indigo Agreement, the Company sold and marketed
TheraSeed® with internal resources and accordingly, charged higher unit
prices than it has charged to Indigo. Fiscal 1998 reflects a full year of these
reduced unit prices, while the Indigo Agreement was in effect for only the last
half of 1997. Under the terms of the Indigo Agreement, Indigo bears the selling
and marketing expenses directly associated with TheraSeed® for prostate
cancer. </FONT></P>

<P><FONT SIZE=3>Selling, general and administrative (SG&A) expenses were
$6.0 million in 1998 compared to $4.8 million in 1997, reflecting an increase of
$1.2 million or 25.0%. However, SG&A expenses as a percentage of revenue
declined to 15.8% in 1998 from 19.6% in 1997. The increase in SG&A expenses
during 1998 was primarily attributable to increases in professional fees and
compensation and benefits. Legal and professional fees increased primarily due
to fees in connection with the Company’s on-going efforts to protect its
trade secrets and other proprietary information, including litigation against
parties the Company believes have violated or threaten to violate the
Company’s rights. Compensation and benefits increased as the Company
continued to add employees and build infrastructure to support its increasing
operations. </FONT></P>

<P><FONT SIZE=3>The increase in SG&A expenses in 1998 over 1997 were
partially offset by a reduction in selling expenses as a result of the Indigo
Agreement. Under the Indigo Agreement, Indigo bears the cost of the selling and
marketing efforts related to TheraSeed® for prostate cancer. The decreases
in these selling expenses contributed to the decrease in SG&A expenses as a
percentage of revenue in 1998 from the 1997. Additionally, SG&A expenses
incurred to support increasing operations did not increase at the same rate as
the growth in revenue. </FONT></P>

<P><FONT SIZE=3>Research and development (R&D) expenses were $448,000 in
1998 compared to $55,000 in 1997. The increase in R&D was a result of
development efforts to improve the Company’s proprietary production
processes. </FONT></P>

<P><FONT SIZE=3>Other income was approximately $1.3 million for both 1998 and
1997, comprised primarily of interest income generated from the Company’s
short-term investments and high quality municipal bond investments. These
investments were made utilizing the proceeds from the Company’s secondary
stock offering in April 1997. These funds have and will continue to be utilized
for the Company’s current and future expansion programs. </FONT></P>

<P><FONT SIZE=3>Income tax expense was $7.9 million in 1998 and $5.4 million in
1997. The increase was due to the increase in pretax earnings in 1998 over 1997.
The effective income tax rate was 36.0% for 1998 and 1997. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Liquidity and Capital Resources</FONT></H2>

<P><FONT SIZE=3>The Company had cash, short-term investments and marketable
securities of $33.9 million at December 31, 1999, compared to $26.4 million at
December 31, 1998. Marketable securities consist primarily of high-credit
quality municipal obligations, in accordance with the Company’s investment
policies. The increase in cash, short-term investments and marketable securities
was a result of cash generated by operations, partially offset by capital
expenditures. Working capital was $40.8 million at December 31, 1999, compared
to $33.0 million at December 31, 1998. </FONT></P>

<P><FONT SIZE=3>The Company’s principal source of cash in 1999 and 1998 has
been cash generated from operations. Cash provided by operations was $21.5
million and $13.6 million in 1999 and 1998, respectively. Cash generated from
operations consists of net earnings plus non-cash expenses such as depreciation
and deferred income tax expense. In 1998, cash from operations was reduced by
approximately $4.2 million due to cash absorbed by an increase in accounts
receivable. The 1998 increase in accounts receivable was due to the
Company’s 55% increase in revenue over 1997. </FONT></P>

<P><FONT SIZE=3>The Company’s primary use of cash in 1999 and 1998 related
to capital spending to increase manufacturing capacity. Cash used for capital
expenditures was $14.1 million and $26.2 million in 1999 and 1998 respectively.
These expenditures relate primarily to capital expansion projects including the
addition of cyclotrons and new manufacturing and support facilities. In 1999,
the Company added four new cyclotrons and supporting facilities, bringing the
total number of fully operational cyclotrons to eleven. Three additional
cyclotrons and supporting facilities, and the Company’s new headquarters
facility, are expected to become operational during 2000. Costs incurred through
December 31, 1999 on these projects were approximately $13.6 million and they
are expected to cost approximately $1.4 million to complete. </FONT></P>

<P><FONT SIZE=3>The Company expects to invest approximately $25.0 to $30.0
million through 2001 to construct the facilities and infrastructure required for
its DOE Project in Oak Ridge, Tennessee, (see “Overview” above) with
approximately $19.0 to $24.0 million expected to be spent in 2000. Construction
costs of approximately $2.2 million were incurred on this project as of
December 31, 1999. </FONT></P>

<P><FONT SIZE=3>As part of the DOE Project, the Company has leased land in the
Oak Ridge, Tennessee area and equipment previously used by the government to
produce isotopes. As a result of the sensitive nature of the equipment, the
specialized technology involved and the restrictions on access to unique
DOE-operated facilities, the Company has contracted with the DOE’s primary
contractor for the Oak Ridge government installation to handle certain technical
and operational services that are critical to the project, including moving,
reassembling and recommissioning equipment currently in storage, designing and
fabricating new parts and modifications to the equipment and DOE facilities; and
operating and providing ongoing access to the DOE facilities. The success of the
project is dependent on the continued cooperation of the DOE and its primary
contractor, which could be adversely affected by future changes in governmental
program priorities and funding. If the equipment cannot be moved and
recommissioned successfully, if there are problems with the operation or
modification of the DOE-operated facilities, or if unforeseen challenges arise,
the project may not be successful or the costs or timeliness associated with the
project could exceed current estimates. </FONT></P>

<P><FONT SIZE=3>In addition to using cash to fund ongoing capital expansion
projects in 2000, the Company expects to significantly increase its spending for
R&D. In March 2000, the Company announced that it had signed an agreement
with the Atlanta Cardiovascular Research Institute to begin a two-phase animal
study addressing the use of Pd-103 for the prevention of restenosis. Other
R&D activities are also occurring (see “Results of Operations, 1999
compared to 1998", above). The Company expects that R&D expense
spending may total up to 5% of revenue in 2000, depending on whether appropriate
R&D opportunities arise. </FONT></P>

<P><FONT SIZE=3>Cash provided by financing activities was $286,000 in 1999 and
$462,000 in 1998, consisting of cash proceeds from the exercise of stock options
and warrants. 1999 also included $100,000 in financing fees paid in connection
with the Company’s $40.0 million Unsecured Credit Agreement. </FONT></P>

<P><FONT SIZE=3>During 1999, the Company executed an Unsecured Credit Agreement
with a financial institution. The Unsecured Credit Agreement, which expires in
August 2002, provides for borrowings of up to $40.0 million under two lines of
credit. Interest on outstanding borrowings is payable monthly at the prime rate
or a LIBOR based rate, at the option of the Company. The LIBOR based rate is
equal to LIBOR plus a margin ranging from .7% to 1.55%, depending upon certain
financial ratios of the Company. Under the Unsecured Credit Agreement, the
Company has the option, through August 2001, of converting outstanding
borrowings of up to $25.0 million to a term loan which would be repayable over 5
years. An additional uncommitted $10.0 million line of credit is also available
under the Unsecured Credit Agreement, subject to the approval of the financial
institution. No borrowings were outstanding under the Company’s Unsecured
Credit Agreement at December 31, 1999. The Company has no other existing credit
facilities. </FONT></P>

<P><FONT SIZE=3>Management believes that current cash and investment balances,
cash from future operations and its available credit facilities, will be
sufficient to meet its currently anticipated working capital, capital
expenditure and R&D requirements. In the event additional financing becomes
necessary, management may choose to raise those funds through other means of
financing as appropriate. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Foreign Currency Information</FONT></H2>

<P><FONT SIZE=3>Remaining purchase commitments denominated in Belgian Francs and
balance sheet items denominated in foreign currencies at year-end were not
significant. Additionally, foreign currency transaction gains or losses were not
significant during any of the three years in the period ended December 31, 1999. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Impact of the Year 2000 Issue</FONT></H2>

<P><FONT SIZE=3>The Company has not identified any significant interruptions,
delays or problems associated with the Year 2000 (Y2K) Issue. Additionally, the
Company has not been notified by any of its critical suppliers, significant
customer or any of the healthcare providers that utilize its product that they
have experienced a Y2K related disruption that would have a material adverse
effect on the Company’s operations. Though no Y2K related disruptions have
been experienced to date, the Company intends on monitoring its Y2K status, as
well as the potential effect on its operations of the Y2K status of its critical
suppliers, significant customer, and healthcare providers that utilize its
product, during 2000. During 1999, the Company incurred direct costs of less
than $100,000 in addressing the Y2K issue </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Forward Looking Statements</FONT></H2>

<P><FONT SIZE=3>This document contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 including,
without limitation, statements regarding sales and marketing efforts, possible
benefits associated with the Indigo Agreement, future cost of sales, continuing
sufficiency of reimbursement, R&D efforts and expenses, SG&A expenses,
capacity expansion projects, the Oak Ridge project, possible data processing
issues related to the year 2000, the development of new technologies, processes
and products, and the sufficiency of the Company’s liquidity and capital
resources. From time to time, the Company may also make other forward-looking
statements relating to such matters as well as anticipated financial
performance, business prospects, technological developments, research and
development activities and similar matters. These forward-looking statements are
subject to certain risks, uncertainties and other factors which could cause
actual results to differ materially from those anticipated, including risks
associated with the management of growth, Year 2000 issues, research and
development activities, adverse changes in governmental program priorities and
budgetary funding by the relevant governmental authorities, potential costs and
delays in the startup and refinement of technology and related equipment,
potential equipment failure, inability to obtain, construct or install necessary
parts or modifications to production equipment or facilities, effectiveness and
execution of Indigo’s marketing and sales programs, acceptance and efficacy
of Pd-103 for other applications, government regulation of the therapeutic
radiological pharmaceutical and device business, the impact of a prospective
payment system for Medicare reimbursement of healthcare providers and other
changes in third party healthcare reimbursement, and competition from other
brachytherapy products and conventional and newly developed methods of treating
localized cancer. </FONT></P>


<PAGE>




<H2 ALIGN=LEFT><FONT SIZE=3>Quarterly Results</FONT></H2>

<P><FONT SIZE=3>The following table sets forth certain statement of operations
data for each of the Company’s last eight quarters. This unaudited
quarterly information has been prepared on the same basis as the annual audited
information presented elsewhere in this Form 10-K, reflects all adjustments
(consisting only of normal, recurring adjustments) which are, in
management’s opinion, necessary for a fair presentation of the information
for the periods covered and should be read in conjunction with the financial
statements and notes thereto. The operating results for any quarter are not
necessarily indicative of results for any future period. Quarterly data
presented may not reconcile to totals or full year results due to rounding. </FONT></P>


<PAGE>


<PRE>

<PAGE>



                              First          Second         Third        Fourth         First       Second      Third       Fourth
                               Qtr             Qtr           Qtr           Qtr           Qtr         Qtr         Qtr         Qtr
                                            (Amounts in thousands, except per share data)

Total revenues                 $8,281          $8,714      $11,129       $9,834        $9,164      $11,121      $11,480     $11,953
Cost of product sales           2,188           2,414        3,184        3,083         3,380        3,187        3,458       3,268
                               ------          ------      -------       ------        ------      -------      -------     -------

Gross profit                    6,093           6,300        7,945        6,751         5,784        7,934        8,022       8,695
Selling,
general and                     1,337           1,307        1,644        1,711         1,407        1,761        1,697       1,435
administrative
Research and development           41              49          262           96           139          140          203         227

Other income                      443             297          260          261           274          346          331         322
(expense)
Net earnings before income      5,158           5,241        6,299        5,205         4,512        6,379        6,453       7,345
taxes
Income tax expense              1,857           1,908        2,267        1,848         1,632        2,322        2,064       2,659
                               ------          ------       ------       ------        ------       ------       ------      ------
Net earnings                   $3,301          $3,333       $4,032       $3,357        $2,880       $4,057       $4,389      $4,686

Earnings per common
share:
  Basic                         $0.11           $0.11        $0.14        $0.11         $0.10        $0.14        $0.15       $0.16
  Diluted                       $0.11           $0.11        $0.13        $0.11         $0.10        $0.14        $0.15       $0.16
Weighted average shares
outstanding:
  Basic:                       29,088           29,191      29,364       29,396        29,427       29,474       29,503      29,510
  Diluted                      30,353           30,479      30,160       30,166        29,872       29,867       30,065      30,077
</PRE>

<PAGE>


<H2 ALIGN=LEFT><FONT SIZE=3>Inflation</FONT></H2>

<P><FONT SIZE=3>Management does not believe that the relatively moderate levels
of inflation which have been experienced in the United States in recent years
have had a significant effect on the Company’s net sales or profitability. </FONT></P>

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

<P><FONT SIZE=3>See Item 7, “Management’s Discussion and Analysis of
Financial Condition and Results of Operations; Foreign Currency
Information.” </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Item 8. Financial Statements and Supplementary Data</FONT></H2>

           See Index to Financial Statements (Page 43) and
           following pages.

Item 9.  Changes in and Disagreements on Accounting and Financial Disclosure

<H2 ALIGN=LEFT><FONT SIZE=3>Not Applicable</FONT></H2>

<H2 ALIGN=LEFT><FONT SIZE=3>PART III</FONT></H2>

Item 10. Directors and Officers of Registrant*

Item 11. Executive Compensation*

Item 12. Security Ownership of Certain Beneficial Owners and Management*

Item 13. Certain Relationships and Related Transactions*
<P>__________

   *The information called for by Items 10, 11, 12 and 13 is omitted from this Report and is incorporated by reference to the
       definitive Proxy Statement to be filed by the Company not later than 120 days after December 31, 1999, the close of its fiscal
       year.







<PAGE>



<H2 ALIGN=LEFT><FONT SIZE=3>PART IV</FONT></H2>

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

     a) The following documents are filed as part of this Report.

<H2 ALIGN=LEFT><FONT SIZE=3>1. Financial Statements</FONT></H2>

             See index to financial statements on page 43

<H2 ALIGN=LEFT><FONT SIZE=3>2. Financial Schedules</FONT></H2>

             See the index to financial schedules on page 43

<H2 ALIGN=LEFT><FONT SIZE=3>3. Exhibits</FONT></H2>

<PRE>
                   3.1             -  Certificate of Incorporation as amended through July 29, 1998, (incorporated
                                      by reference to Exhibit 3.1 of the Company's report on Form 10-Q for the
                                      quarterly period ended June 30, 1998)
                   3.2             -  By-Laws, (incorporated by reference to Exhibit 3.4 of the Company's
                                      registration statement on Form S-1, File No. 33-7097, and post-effective
                                      amendments thereto)
                   4.1             -  See Exhibits 3.1 - 3.2 for provisions in
                                      the Company's Certificate of Incorporation
                                      and By-Laws defining the rights of holders
                                      of the Company's Common Stock.
                  10.1             -  License Agreement with University of
                                      Missouri, as amended, (incorporated by reference to Exhibit 10.3 of the
                                      Company's registration statement on Form S-1, File No. 33-7097, and
                                      post-effective amendments thereto)
                  10.2             -  Reassignment and Release Agreement among the Company, John L.
                                      Russell, Jr., and  Georgia Tech Research Institute, (incorporated by
                                      reference to Exhibit 10.8 of the Company's registration statement on Form
                                      S-1, File No. 33-7097, and post-effective amendments thereto)
                  10.3             -  1986 Incentive and Non-Incentive Stock
                                      Option Plan*, (incorporated by reference to Exhibit 10.11 of the Company's
                                      registration statement on Form S-1, File No. 33-7097, and post-effective
                                      amendments thereto)
                  10.4             -  1990 Incentive and Non-Incentive Stock
                                      Option Plan*, (incorporated by reference to Exhibit 10.10 of the Company's
                                      report on Form 10-K for the year ended December 31, 1990)
                  10.5             -  Agreement with Nordion International Inc.,
                                      (incorporated by reference to the Company's report on Form 8-K dated March
                                      23, 1995)
                  10.6(a)          -  Purchase Agreement dated December 27, 1996 between Theragenics Corporation
                                      and Ion Beam Applications s.a., (incorporated by reference to Exhibit
                                      10.23(A) of the Company's report on Form 8-K dated January 13, 1997)
                  10.6(b)          -  Purchase Agreement dated December 27, 1996 between Theragenics Corporation
                                      and Ion Beam Applications s.a., (incorporated by reference to Exhibit
                                      10.23(B) of the Company's report on Form 8-K dated January 13, 1997)
                  10.6(c)          -  Purchase Agreement dated December 27, 1996 between Theragenics Corporation
                                      and Ion Beam Applications s.a., (incorporated by    reference to Exhibit
                                      10.23(C) of the Company's report on Form 8-K dated January 13, 1997)
                  10.6(d)          -  Purchase Agreement dated December 27, 1996 between Theragenics
                                      Corporation and Ion   Beam Applications s.a., (incorporated by reference to
                                      Exhibit 10.23(D) of the Company's report on Form 8-K dated January 13, 1997)
                  10.7             -  Rights Agreement dated as of February 17, 1997 between the Company and
                                      SunTrust Bank, Atlanta, (incorporated by reference to Exhibit 99.1 of the
                                      Company's registration statement on Form 8-A filed February 27, 1997)
                  10.8             -  Theragenics  Corporation  1995 Stock Option Plan*,  (incorporated by reference
                                      to Exhibit 10.1 of the Company's common stock  registration  statement on Form
                                      S-8, file no. 333-15313 )
                  10.9             -  1997 Stock Incentive Plan, (incorporated by reference to appendix B of the
                                      Company's proxy statement for its 1997 Annual Meeting of Stockholders filed
                                      on Schedule 14A)*
                  10.10            -  Marketing and Sales Agreement by and between the Company and Indigo
                                      Medical, Inc. dated May 30, 1997 (incorporated by reference to Exhibit 10 of
                                      the Company's report on Form 10-Q for the quarterly period ended September
                                      30, 1997)
                  10.11            -  Theragenics Corporation Employee Stock Purchase Plan*, (incorporated by
                                      reference to appendix A of the Company's proxy statement for its 1998 Annual
                                      Meeting of Stockholders filed on Schedule 14A)
                  10.12            -  Employment agreement of Bruce W. Smith*, (incorporated by reference to
                                      Exhibit 10.22 of the Company's report on Form 10-K for the year ended
                                      December 31, 1998)
                  10.13            -  Sublease dated March 25, 1999 between Theragenics Corporation and Community
                                      Reuse Organization of East Tennessee, (incorporated by reference to Exhibit
                                      10.1 of the Company's report on Form 10-Q for the quarterly period ended
                                      March 31, 1999)
                  10.14            -  Work for Others Agreement dated March 25, 1999 between Theragenics
                                      Corporation and Lockheed Martin Energy Research Corporation, (incorporated by
                                      reference to Exhibit 10.2 of the Company's report on Form 10-Q for the
                                      quarterly period ended March 31, 1999)
                  10.15            -  Credit Agreement between Theragenics Corporation and Wachovia Bank, National
                                      Association, (incorporated by reference to Exhibit 10.1 of the Company's
                                      report on Form 10-Q for the quarterly period ended September 30, 1999)
                  10.16            -  Theragenics Corporation 2000 Stock Incentive Plan*
                  23.1             -  Consent of Independent Public Accountants
                                      for Incorporation by Reference of Audit
                                      Report into Registration Statements
                  27.1             -  Financial Data Schedule for the years ended December 31, 1999 and 1998 (for
                                      SEC use only)
</PRE>
<P><FONT SIZE=3>* Management contract or compensatory plan or arrangement
identified pursuant to Item 14(a)(3) of Form 10-K </FONT></P>


<PAGE>






(b) Reports on Form 8-K

                  No reports on Form 8-K were filed by the Company during the last quarter of the most
                  recent fiscal year.


<PAGE>



<H2 ALIGN=CENTER><FONT SIZE=3>SIGNATURES</FONT></H2>

     Pursuant to the requirements of Section 13 or 15(d) 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.<BR>
                                  <P ALIGN=RIGHT><FONT SIZE=3>THERAGENICS CORPORATION</FONT></P><BR>
                                    <P ALIGN=RIGHT><FONT SIZE=3>(Registrant)</FONT></P><BR>

<H2 ALIGN=RIGHT><FONT SIZE=3>By:/s/ M. Christine Jacobs<BR>M. Christine Jacobs<BR>Chief
Executive Officer</FONT></H2>

<H2 ALIGN=LEFT><FONT SIZE=3>Dated: March 24, 2000<BR>Buford, Georgia</FONT></H2>

     Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
<PRE>
Name                                            Title                                                   Date


/s/ M. Christine Jacobs                         Chief Executive Officer                                 3/24/00
M. Christine Jacobs                             (Principal Executive Officer);
                                                Director, Chairman

/s/ Bruce W. Smith                              Chief Financial Officer,                                3/24/00
Bruce W. Smith                                  Treasurer (Principal
                                                Financial and Accounting
                                                Officer) and Secretary

/s/ Otis W. Brawley                             Director                                                3/24/00
Otis W. Brawley

/s/ Orwin L. Carter                             Director                                                3/24/00
Orwin L. Carter

/s/  Patrick L. Flinn                           Director                                                3/24/00
Patrick L. Flinn


<PAGE>




/s/ John V. Herndon                             Director                                                3/24/00
John V. Herndon

/s/ Peter A.A. Saunders                         Director                                                3/24/00
Peter A.A. Saunders


</PRE>

<PAGE>



THERAGENICS CORPORATION

TABLE OF CONTENTS
<PRE>
                                                                                         Page No.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENTS  ...............................................................    44

FINANCIAL STATEMENTS

Balance Sheets - December 31, 1998 and 1999.............................................    45

Statements of Earnings for each of the three
years in the period ended December 31, 1999.............................................    47

Statements of Shareholders' Equity for each of the three
years in the period ended December 31, 1999.............................................    48

Statements of Cash Flows for each of the three years
in the period ended December 31, 1999 ..................................................    50

NOTES TO FINANCIAL STATEMENTS ..........................................................    52

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE....................................    67

Schedule II - Valuation and Qualifying Accounts for each
of the three years in the period ended December 31, 1999................................    68

</PRE>
<H1 ALIGN=CENTER><FONT SIZE=3>Report of Independent Certified Public Accountants</FONT></H1>

<H2 ALIGN=LEFT><FONT SIZE=3>Board of Directors<BR>Theragenics Corporation</FONT></H2>

<P><FONT SIZE=3>We have audited the balance sheets of Theragenics Corporation (a
Delaware corporation) as of December 31, 1998 and 1999, and the related
statements of earnings, shareholders’ equity, and cash flows for each of
the three years in the period ended December 31, 1999. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits. </FONT></P>

<P><FONT SIZE=3>We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe our audits provide a reasonable basis for our opinion. </FONT></P>

<P><FONT SIZE=3>In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Theragenics
Corporation as of December 31, 1998 and 1999, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1999, in conformity with generally accepted accounting principles. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>/s/ Grant Thornton LLP</FONT></H2>

<H2 ALIGN=LEFT><FONT SIZE=3>Atlanta, Georgia<BR>January 14, 2000</FONT></H2>


<PAGE>




<H2 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H2>

                          <H2 ALIGN=CENTER><FONT SIZE=3>BALANCE SHEETS</FONT></H2><BR>

                             <H2 ALIGN=CENTER><FONT SIZE=3>December 31,</FONT></H2><BR>

                   <H2 ALIGN=CENTER><FONT SIZE=3> (Amounts in thousands, except per share data</FONT></H2>


<H2 ALIGN=CENTER><FONT SIZE=3>ASSETS</FONT></H2>

<PRE>
                                                                                        1998            1999
                                                                                  -------------    -------------

CURRENT ASSETS
   Cash and short-term investments                                               $       19,542   $       18,765
   Marketable securities                                                                  6,830           15,137
   Trade accounts receivable, less allowance of
     $54 in 1998 and $43 in 1999                                                          7,000            7,333
   Inventories                                                                              781            1,172
   Deferred income tax asset                                                                210              432
   Prepaid expenses and other current assets                                                579              963
                                                                                  -------------    -------------
           Total current assets                                                          34,942           43,802

PROPERTY, PLANT AND EQUIPMENT - AT COST
   Buildings and improvements                                                            17,426           20,453
   Office furniture and equipment                                                           334              436
   Machinery and equipment                                                               25,570           37,010
   Leasehold improvements                                                                   154                -
                                                                                  -------------    -------------
                                                                                         43,484           57,899
   Less accumulated depreciation                                                          7.032           10,676
                                                                                  -------------    -------------
                                                                                         36,452           47,223
   Land and improvements                                                                    848              848
   Construction in progress                                                              15,958           16,010
                                                                                  -------------    -------------
                                                                                         53,258           64,081
OTHER ASSETS                                                                                 73              160

                                                                                 $       88,273   $      108,043
                                                                                  =============    =============
</PRE>
The accompanying notes are an integral part of these statements.








<H1 ALIGN=CENTER><FONT SIZE=3>LIABILITIES AND SHAREHOLDERS’ EQUITY</FONT></H1>

<PRE>
                                                                                       1998            1999
                                                                                  -------------    -------------
CURRENT LIABILITIES
   Accounts payable
     Trade                                                                        $         628    $         783
     Construction                                                                           359              843
   Accrued salaries, wages and payroll taxes                                                499              333
   Income taxes payable                                                                     165              563
   Other current liabilities                                                                317              466
                                                                                  -------------    -------------

         Total current liabilities                                                        1,968            2,988

DEFERRED INCOME TAXES                                                                     1,920            3,900

OTHER LIABILITIES                                                                             -               78

COMMITMENTS AND CONTINGENCIES                                                                 -                -

SHAREHOLDERS' EQUITY
   Common stock - authorized 100,000 shares
     of $.01 par value; issued and outstanding,
     29,406 in 1998 and 29,514 in 1999                                                      294              295
   Additional paid-in capital                                                            58,921           59,600
   Retained earnings                                                                     25,170           41,182
                                                                                  -------------    -------------
                                                                                         84,385          101,077
                                                                                  -------------    -------------
                                                                                 $       88,273   $      108,043
                                                                                  =============    =============
</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>STATEMENTS OF EARNINGS</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>Year ended December 31,</FONT></H1>

                                                 (Amounts in thousands, except per share data)
<PRE>
                                                                     1997                 1998              1999
                                                                -------------       -------------     -------------
Revenue
   Product sales - affiliate                                   $      12,287       $       37,775   $        43,473
   Product sales                                                      12,170                   83               145
   Licensing fees                                                        100                  100               100
                                                                ------------        -------------     -------------
                                                                      24,557               37,958            43,718
                                                                ------------        -------------     -------------
Cost of sales                                                          6,141               10,869            13,293
                                                                ------------        -------------     -------------
     Gross profit                                                     18,416               27,089            30,425

Operating expenses
   Selling, general and administrative                                 4,819                6,000             6,300
   Research and development                                               55                  448               709
                                                                ------------        -------------     -------------
                                                                       4,874                6,448             7,009
                                                                ------------        -------------     -------------
     Earnings from operations                                         13,542               20,641            23,416

Other income (expense)
   Interest income                                                     1,362                1,318             1,316
   Interest and financing costs                                          (21)                 (56)              (93)
   Other                                                                 (35)                   -                50
                                                                ------------        -------------     -------------
                                                                       1,306                1,262             1,273
                                                                ------------        -------------     -------------
         Net earnings before income taxes                             14,848               21,903            24,689

Income tax expense                                                     5,350                7,880             8,677
                                                                ------------        -------------     -------------
         Net earnings                                          $       9,498       $       14,023   $        16,012
                                                                ============        =============     =============
Net earnings per common share
   Basic                                                       $         .35       $          .48   $           .54
                                                                ============        =============     =============
   Diluted                                                     $         .33       $          .46   $           .53
                                                                ============        =============     =============
</PRE>
The accompanying notes are an integral part of these statements.



<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>STATEMENTS OF SHAREHOLDERS’ EQUITY</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>For the three years ended December 31, 1999</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>(Amounts in thousands, except per share data)</FONT></H1>
<PRE>
                                                                Common Stock
                                                         ---------------------------     Additional
                                                          Number of      Par value        paid-in          Retained
                                                           shares         $.01            capital          earnings         Total
                                                         ---------------------------    ------------     -----------    ------------
Balance, December 31, 1996                                 23,629       $     237        $   17,498       $   1,649      $  19,384

Issuance of common stock in secondary public
  offering, net of offering costs of $2,483                 4,600              46            31,971               -         32,017

Issuance of common stock to Johnson Johnson
  Development Corporation                                     509               5             4,995               -          5,000

Exercise of stock options and warrants,
  net of 2 common shares redeemed                             338               3               640               -            643

Income tax benefit from stock options exercised                 -               -               490               -            490

Net earnings for the year                                       -               -                 -           9,498          9,498

Balance, December 31, 1997                                 29,076             291            55,594          11,147         67,032
                                                         ---------     -----------      ------------     -----------    ------------
Exercise of stock options and warrants,
  net of 8 shares redeemed                                    330               3               459               -            462

Stock-based compensation                                        -               -               164               -            164
</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>STATEMENTS OF SHAREHOLDERS’ EQUITY -
CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>For the three years ended December 31, 1999</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>(Amounts in thousands, except per share data)</FONT></H1>

<PRE>
                                                              Common Stock
                                                         ---------------------------     Additional
                                                          Number of      Par value        paid-in          Retained
                                                           shares         $.01            capital          earnings         Total
                                                         ---------------------------    ------------     -----------    ------------
Income tax benefit from stock options exercised                   -               -            2,704              -            2,704

Net earnings for the year                                         -               -                -          14,023          14,023

Balance, December 31, 1998                                   29,406             294           58,921          25,170          84,385
                                                         -----------     -----------      ------------     -----------    ----------
Exercise of stock options and warrants                           97               1              322               -             323

Common shares issued under employee stock purchase plan          11               -               73               -              73

Stock-based compensation                                          -               -              276               -             276

Income tax benefit from stock options and stock purchase plan     -               -                8               -               8

Net earnings for the year                                         -               -                -          16,012          16,012
                                                         -----------     -----------      ------------     -----------    ----------
Balance, December 31, 1999                                   29,514      $      295     $     59,600     $    41,182   $     101,077
                                                         ===========     ===========      ============     ===========    ==========
</PRE>
The accompanying notes are an integral part of these statements.


<PAGE>



<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>STATEMENTS OF CASH FLOWS</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>Year ended December 31,</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>(Amounts in thousands)</FONT></H1>

<PRE>
                                                                       1997               1998               1999
                                                                -------------       ------------      --------------
Cash flows from operating activities:
   Net earnings                                                 $      9,498        $    14,023       $      16,012
   Adjustments to reconcile net earnings to net
     cash provided by operating activities:
       Depreciation and amortization                                   1,467              2,366               3,887
       Deferred income taxes                                           1,850                710               1,468
       Income tax benefit from stock options                             490              2,704                   8
       Stock-based compensation                                            -                164                 276
       Deferred rent                                                       -                  -                  78
       Provision for reserves                                             65                268                 263
       Loss on disposal of equipment                                       -                  -                   4
       Change in assets and liabilities:
         Accounts receivable                                            (732)            (4,193)               (322)
         Inventories                                                    (205)              (615)               (665)
         Prepaid expenses and other current assets                       (27)              (301)               (384)
         Other assets                                                     46                  -                   -
         Accounts payable                                              1,105               (807)                155
         Accrued salaries, wages and payroll taxes                       230               (191)               (166)
         Income taxes payable                                            355               (680)                688
         Other current liabilities                                        80                179                 149
                                                                -------------       ------------      --------------
             Net cash provided by operating activities                14,222             13,627              21,451
                                                                -------------       ------------      --------------
Cash flows from investing activities:
   Purchase and construction of property and equipment               (12,858)           (26,249)            (14,129)
   Purchase of marketable securities                                  (8,392)            (2,610)            (11,985)
   Maturities of marketable securities                                     -              4,150               3,600
                                                                -------------       ------------      --------------
              Net cash used by investing activities                  (21,250)           (24,709)            (22,514)
                                                                -------------       ------------      --------------
</PRE>

<PAGE>






<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>STATEMENTS OF CASH FLOWS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>Year ended December 31,</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>(Amounts in thousands)</FONT></H1>

<PRE>
                                                                       1997               1998                1999
                                                                -------------       ------------      --------------
Cash flows from financing activities:
   Repayment of long-term debt                                        (3,458)                 -                   -
   Proceeds from issuance of common stock, net                        37,017                  -                   -
   Proceeds from exercise of stock options,
     warrants and stock purchase plan                                    644                462                 396
   Financing fees                                                          -                  -                (110)
                                                                -------------       ------------      --------------
         Net cash provided by
           financing activities                                       34,203                462                 286
                                                                -------------       ------------      --------------
Net increase (decrease) in cash and
   short-term investments                                             27,175            (10,620)               (777)

Cash and short-term investments
   at beginning of year                                                2,987             30,162              19,542
                                                                -------------       ------------      --------------
Cash and short-term investments
   at end of year                                               $     30,162       $     19,542      $       18,765
                                                                =============       ============      ==============

Supplementary Cash Flow Disclosure

   Interest paid, net of amounts capitalized                    $         29       $         56      $           93

   Income taxes paid                                            $      2,655       $      5,650      $        6,513
</PRE>
The accompanying notes are an integral part of these statements.

<PAGE>



<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS

<P><FONT SIZE=3>Theragenics Corporation (the “Company”) was organized
to develop, manufacture and market radiological pharmaceuticals and devices used
in the treatment of cancer. Currently, the Company manufactures and sells one
product, TheraSeed®, which is an implantable radiation device used primarily
in the treatment of prostate cancer. TheraSeed® is a U.S. Food and Drug
Administration (FDA) licensed device based on Pd-103, a radioactive isotope.
Under a Sales and Marketing Agreement executed in May 1997 with Indigo Medical,
Inc. (Indigo), a Johnson & Johnson Company, all TheraSeed® products used
in the treatment of prostate cancer are sold to Indigo. Physicians, hospitals
and other healthcare providers, located primarily in the United States, utilize
the TheraSeed® product. In 1998 the Company received regulatory approval for
the marketing of TheraSeed® throughout the member countries of the European
Union by obtaining CE Marking. Sales of TheraSeed® in Europe were not
significant in 1998 or 1999. </FONT></P>

<P><FONT SIZE=3>The Company competes in a market characterized by rapid
technological innovation, significant research efforts and continual scientific
discoveries. This market is also subject to significant regulatory oversight at
the federal, state and local levels. The regulatory bodies include, among
others, the FDA, the Nuclear Regulatory Commission (NRC),various states’
agencies such as the Departments of Natural and Human Resources, and the
Occupational and Health Safety Administration, as well as the European
counterparts of these U.S. governmental units. The Company is therefore directly
affected by changes in technology and products, as they may apply to cancer
treatment, governmental regulations related to its industry and the well being
of the healthcare industry. </FONT></P>

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

<P><FONT SIZE=3>A summary of the significant accounting policies consistently
applied in the preparation of the accompanying financial statements follows: </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>1.Use of Estimates</FONT></H2>

<P><FONT SIZE=3>In preparing financial statements in conformity with generally
accepted accounting principles (“GAAP”), management is required to
make certain estimates and assumptions that affect the reported amounts in the
financial statements and accompanying notes. Actual results could differ from
those estimates and assumptions. </FONT></P>


<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

<H2 ALIGN=LEFT><FONT SIZE=3>2. Revenue Recognition</FONT></H2>

<P><FONT SIZE=3>Revenue from product sales is recognized upon shipment.
Licensing fees are recognized in the period to which they relate. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>3.Cash and Short-Term Investments</FONT></H2>

<P><FONT SIZE=3>For purposes of reporting cash flows, cash and short-term
investments include cash on hand, cash in banks and variable rate demand notes
and commercial paper with original maturities of less than 90 days. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>4.Marketable Securities</FONT></H2>

<P><FONT SIZE=3>Marketable securities consist primarily of high-credit quality
municipality obligations in accordance with the Company’s investment
policies. Marketable securities are classified as available for sale and are
reported at fair value, based upon quoted market prices at the balance sheet
date. The amortized cost of marketable securities approximated their fair value
at both December 31, 1998 and 1999. The estimated fair value of marketable
securities by contractual maturity at December 31, 1999, is as follows: </FONT></P>

<PRE>
         Due in one-year or less                                 $     7,167,000
         Due after one year through five years                         7,970,000
</PRE>
<H2 ALIGN=LEFT><FONT SIZE=3>5.Inventories</FONT></H2>

<P><FONT SIZE=3>Inventories are stated at the lower of cost or market. Cost is
determined using the first-in, first-out (FIFO) method. Inventories consist
primarily of spare parts, components and work in process. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>6.Property, Equipment, Depreciation and Amortization</FONT></H2>

<P><FONT SIZE=3>Property and equipment are recorded at historical cost.
Depreciation and amortization is provided for in amounts sufficient to relate
the cost of depreciable assets to operations over their estimated services lives
on a straight-line basis. Depreciation and amortization expense related to
property and equipment charged to operations was approximately $1,458,000,
$2,336,000 and $3,786,000 for 1997, 1998 and 1999, respectively. Estimated
services lives are 30 years for buildings and improvements, and three to ten
years for machinery, equipment and furniture. </FONT></P>


<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

<H2 ALIGN=LEFT><FONT SIZE=3>6.Property, Equipment, Depreciation and
Amortization - Continued</FONT></H2>

<P><FONT SIZE=3>A significant portion of the Company’s depreciable assets
are utilized in the production of its product. Management periodically evaluates
the realizability of its depreciable assets in light of its current industry
environment. Management believes that no impairment of depreciable assets exists
at December 31, 1999. It is possible, however, that management’s estimates
concerning the realizability of the Company’s depreciable assets could
change in the near term due to changes in the technological and regulatory
environment. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>7.Income Taxes</FONT></H2>

<P><FONT SIZE=3>The Company accounts for income taxes using the asset and
liability method. Under this method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates applied to taxable income. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. A valuation allowance is provided for
deferred tax assets when it is more likely than not that the asset will not be
realized. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>8.Research and Development Costs</FONT></H2>

   Research and development costs are expensed when incurred.

<H2 ALIGN=LEFT><FONT SIZE=3>9.Advertising</FONT></H2>

<P><FONT SIZE=3>The Company expenses the cost of advertising as incurred.
Advertising expense was not significant for each of the three years in the
period ended December 31, 1999. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>10. Earnings Per Share and Common Stock</FONT></H2>

<P><FONT SIZE=3>Basic net earnings per common share is based upon the weighted
average number of common shares outstanding during the period. Diluted net
earnings per common share is based upon the weighted average number of common
shares outstanding plus dilutive potential common shares, including options and
warrants outstanding during the period. </FONT></P>


<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

   10. Earnings Per Share and Common Stock - Continued

<P><FONT SIZE=3>On March 16, 1998, the board of directors approved a two-for-one
common stock split, effected in the form of a 100% stock dividend, which was
distributed on April 15, 1998 to shareholders of record on March 31, 1998. The
stock split has been recognized by reclassifying the par value of the additional
shares resulting from the stock split from additional paid in capital to common
stock. All references to shares outstanding and per share amounts have been
restated to reflect the stock split. </FONT></P>

<P><FONT SIZE=3>On June 12, 1998, the shareholders approved an increase in the
number of authorized common shares from 50,000,000 to 100,000,000. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>11. Stock Based Compensation</FONT></H2>

<P><FONT SIZE=3>Stock options issued to employees are accounted for under the
intrinsic value method in which compensation expense is recognized for the
amount, if any, that the fair value of the underlying common stock exceeds the
exercise price at the date of grant. Stock options and other equity instruments
issued in exchange for goods or services with non-employees are accounted for
based on the fair value of the consideration received or the fair value of the
equity instruments issued, whichever is more readily measurable. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>12. Fair Value of Financial Instruments</FONT></H2>

<P><FONT SIZE=3>The Company’s financial instruments include cash, cash
equivalents and marketable securities. The carrying value of cash and cash
equivalents approximates fair value due to the relatively short period to
maturity of the instruments. Marketable securities are classified as available
for sale and are reported at fair value. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>13. Foreign Currency</FONT></H2>

<P><FONT SIZE=3>All balance sheet accounts denominated in foreign currencies are
translated into U.S. dollars at the year-end rate of exchange. Such balance
sheet accounts were not significant at December 31, 1998 or 1999. Additionally,
foreign currency transaction gains or losses were not significant during any of
the three years in the period ended December 31, 1999. </FONT></P>


<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

<H2 ALIGN=LEFT><FONT SIZE=3>14. Reclassifications</FONT></H2>

<P><FONT SIZE=3>The 1997 and 1998 Statements of Earnings have been conformed to
the 1999 presentation, which includes explicit disclosure of gross profit.
Management believes that this format provides a more meaningful presentation. </FONT></P>

NOTE C - CONSTRUCTION IN PROGRESS AND PURCHASE COMMITMENTS

<P><FONT SIZE=3>Approximately $13.6 million of construction in progress consists
of payments made for manufacturing equipment and facilities expansion at the
Company’s location in the Atlanta, Georgia area. At December 31, 1999, the
remaining purchase commitments for this expansion, which is expected to be
completed in 2000, totaled approximately $1.4 million. Remaining purchase
commitments denominated in foreign currencies were not significant at December
31, 1999. </FONT></P>

<P><FONT SIZE=3>In April 1999, the Company announced that the U.S. Department of
Energy (DOE) granted Theragenics access to unique DOE technology for use in
production of isotopes, including Pd-103. This technology venture represents
part of a DOE initiative to redirect Cold War assets to peacetime use and
cushion the economic impact of U.S. Defense Department cutbacks. This project is
expected to enable the Company to significantly increase its production capacity
and allow for expanded use of Pd-103 and TheraSeed® beyond treatment of
prostate cancer to new medical applications. The Company is constructing a
facility in Oak Ridge, Tennessee to house the equipment, infrastructure and work
force necessary to support the production of isotopes, including Pd-103, using
this DOE technology. The Company expects to invest approximately $25.0 million
to $30.0 million through 2001 to build this manufacturing and R&D facility.
Construction costs of approximately $2.2 million have been incurred on this
project as of December 31, 1999 and are included in construction in progress. </FONT></P>


<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE D - INCOME TAXES

   The income tax provision consisted of the following (in thousands):
<PRE>
                                                                  1997             1998              1999
                                                            -------------     ------------     -------------
       Current:
         Federal                                           $       3,300     $      6,570     $       6,926
         State                                                       200              600               283
                                                            -------------     ------------     -------------
                                                                   3,500            7,170             7,209
                                                            -------------     ------------     -------------
       Deferred:
         Federal                                                   1,750              655             1,334
         State                                                       100               55               134
                                                            -------------     ------------     -------------
                                                                   1,850              710             1,468
                                                            -------------     ------------     -------------
                                                           $       5,350     $      7,880     $       8,677
                                                            =============     ============     =============
</PRE>
   The Company's temporary  differences result in a deferred income tax liability at December 31, 1998 and 1999,  summarized as follows
   (in thousands):
<PRE>
                                                                                   December 31,
                                                                        -----------------------------------
                                                                               1998                 1999
                                                                        -------------         -------------
       Deferred tax assets:
         Nondeductible accruals and allowances                         $         210         $         292
         Inventories                                                              10                   168
         Stock compensation                                                       60                   161
                                                                        -------------         -------------
           Gross deferred tax assets                                             280                   621
                                                                        -------------         -------------
       Deferred tax liabilities:
         Property and equipment                                               (1,990)               (4,089)
                                                                        -------------         -------------
           Net deferred tax liability                                  $      (1,710)        $      (3,468)
                                                                        =============         =============
</PRE>
<P><FONT SIZE=3>The net deferred tax liability is classified in the accompanying
balance sheets as follows (in thousands): </FONT></P>

<PRE>
       Current deferred tax asset                                      $         210         $         432
       Long-term deferred tax liability                                       (1,920)               (3,900)
                                                                        -------------         -------------
           Net deferred tax liability                                  $      (1,710)        $      (3,468)
                                                                        =============         =============
</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE D - INCOME TAXES - Continued

<P><FONT SIZE=3>A reconciliation of the statutory federal income tax rate and
the effective tax rate follows: </FONT></P>

<PRE>
                                                                   1997           1998            1999
                                                              -----------     -----------     -----------
         Tax at applicable federal rates                         35.0%           35.0%           35.0%
         Effect of surtax exemption                              (0.7)            -               -
         State tax, net of federal income tax                     1.7             1.9             2.0
         State investment credits                                 -               -              (1.3)
         Tax exempt interest                                     (0.3)           (1.1)           (0.8)
         Other                                                    0.3             0.2             0.2
                                                              -----------     -----------     -----------
                                                                 36.0%           36.0%           35.1%
                                                              ===========     ===========     ===========
</PRE>
NOTE E - UNSECURED CREDIT AGREEMENT

<P><FONT SIZE=3>In August 1999, the Company executed an Unsecured Credit
Agreement with a financial institution. The Unsecured Credit Agreement, which
expires in August 2002, provides for borrowings, of up to $40.0 million under
two lines of credit. Interest on outstanding borrowings is payable monthly at
the prime rate or a LIBOR based rate, at the option of the Company. The LIBOR
based rate is equal to LIBOR plus a margin ranging from .7% to 1.55%, depending
upon certain financial ratios of the Company. Under the Unsecured Credit
Agreement, the Company has the option, through August 2001, of converting
outstanding borrowings of up to $25.0 million to a term loan which would be
repayable over 5 years. An additional uncommitted $10.0 million line of credit
is also available under the Unsecured Credit Agreement, subject to the approval
of the financial institution. </FONT></P>

<P><FONT SIZE=3>Provisions of the Unsecured Credit Agreement limit the
incurrence of additional debt and require the maintenance of certain financial
ratios, among other things. As of December 31, 1999, the Company was in
compliance with the provisions of the Unsecured Credit Agreement and there were
no outstanding borrowings. </FONT></P>

<P><FONT SIZE=3>The Company has a letter of credit outstanding under the
Unsecured Credit Agreement for approximately $500,000 relating to regulatory
requirements. The letter of credit is subject to terms identical to those of
borrowings under the Unsecured Credit Agreement. </FONT></P>

<P><FONT SIZE=3>The Unsecured Credit Agreement replaced the $15.0 million
Amended and Restated Loan and Security Agreement that was previously
outstanding. </FONT></P>


<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE F - MARKETING AND SALES AGREEMENT AND MAJOR CUSTOMER

<P><FONT SIZE=3>In May 1997, the Company executed a Sales and Marketing
Agreement (the Agreement) with Indigo Medical, Inc. (Indigo), a subsidiary of
Johnson & Johnson Development Corporation (Johnson & Johnson), granting
Indigo the exclusive worldwide right to market and sell TheraSeed® for the
treatment of prostate cancer for a period of seven years with a provision for
successive three-year renewals. In accordance with the Agreement, all
TheraSeed® products used for the treatment of prostate cancer are sold to
Indigo. The terms of the Agreement require Indigo to purchase minimum quantities
of TheraSeed® on an annual basis. The minimum quantities have been exceeded
in each of the three years in the period ended December 31, 1999. </FONT></P>

<P><FONT SIZE=3>As a result of the Indigo Agreement, approximately 50% of sales
in 1997, and substantially all sales in 1998 and 1999 were to Indigo.
Additionally, substantially all accounts receivable were from Indigo at December
31, 1998 and 1999, respectively. </FONT></P>

<P><FONT SIZE=3>Concurrent with the execution of the Agreement in 1997, Johnson
& Johnson purchased 509,000 shares of the Company’s common stock for
$5.0 million in cash. </FONT></P>

NOTE G - COMMITMENTS AND CONTINGENCIES

<H2 ALIGN=LEFT><FONT SIZE=3>Licensing Agreement</FONT></H2>

<P><FONT SIZE=3>The Company holds a worldwide exclusive license from the
University of Missouri for the use of technology, patented by the University,
used in the Company’s “Therasphere®” product. The licensing
agreement provides for the payment of royalties based on the level of sales and
on lump sum payments received pursuant to a licensing agreement with Nordion
International, Inc. (see below). </FONT></P>

<P><FONT SIZE=3>The Company has granted certain of its geographical rights under
the licensing agreement with the University of Missouri to Nordion
International, Inc., a Canadian company which is a producer, marketer and
supplier of radioisotope products and related equipment. Under the Nordion
agreement, the Company will receive a licensing fee for each geographic area in
which Nordion receives new drug approval. The Company will also be entitled to a
percentage of future revenues earned by Nordion as royalties under the
agreement. Royalties from this agreement were not significant for each of the
three years in the period ended December 31, 1999. </FONT></P>


<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE G - COMMITMENTS AND CONTINGENCIES - Continued

<H2 ALIGN=LEFT><FONT SIZE=3>Lease Commitments</FONT></H2>

<P><FONT SIZE=3>The Company leases land, space and office equipment under
noncancelable leases which expire at various dates through April 2029.
Approximate minimum lease payments under the leases are as follows: 2000,
$357,000; 2001, $316,000; 2002, $311,000; 2003, $314,000; 2004, $137,000;
beyond, $3,322,000. </FONT></P>

<P><FONT SIZE=3>Rent expense was approximately $179,000, $190,000 and $404,000
for the years ended December 31, 1997, 1998 and 1999, respectively. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Contingencies</FONT></H2>

<P><FONT SIZE=3>In January 1999, the Company and certain of its officers and
directors were named as defendants in certain securities actions, alleging
violations of the federal securities laws, including Sections 10(b), 20(a) and
Rule 10b-5 of the Securities and Exchange Act of 1934, as amended. These actions
have been consolidated into a single action pending in the U.S. District Court
for the Northern District of Georgia. The complaint, as amended, purports to
represent a class of investors who purchased or sold securities during the time
period from January 29, 1998 to January 11, 1999. The amended complaint
generally alleges that the defendants made certain misrepresentations and
omissions in connection with the performance of the Company during the class
period and seeks unspecified damages. On May 14, 1999 a stockholder of the
Company filed a derivative complaint in the Delaware Court of Chancery
purportedly on behalf of the Company, alleging that certain directors breached
their fiduciary duties by engaging in the conduct that is alleged in the
consolidated federal class action complaint. The derivative action has been
stayed by the agreement of the parties. On September 3, 1999, the Company filed
a motion to dismiss the consolidated federal class action complaint on the
grounds that it fails to state a claim against the Company. There has not yet
been a ruling on the Company’s motion. Management believes these charges
are without merit and intends to vigorously oppose the litigation, however,
given the nature and early stage of the proceedings, the ultimate outcome of the
litigation cannot be determined at this time. Accordingly, no provision for any
liability that might result from this litigation has been made. The Company
maintains insurance for claims of this general nature. </FONT></P>

<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE G - COMMITMENTS AND CONTINGENCIES - Continued

<H2 ALIGN=LEFT><FONT SIZE=3>Contingencies - Continued</FONT></H2>

<P><FONT SIZE=3>In trade secret litigation filed against International
Brachytherapy (“IBt”), Theragenics has claimed ownership of certain
cyclotron improvements incorporated into the cyclotrons provided to IBt by the
companies’ common cyclotron vendor. IBt is seeking indemnification from the
cyclotron vendor against the Company’s claims. The cyclotron vendor has in
turn filed for arbitration seeking determination of ownership of the cyclotron
improvements and certain other information developed by Theragenics relating to
the cyclotron technology. The cyclotron vendor is also seeking indemnification
for any amounts paid by the vendor to IBt to defend against the trade secret
claims of Theragenics, and attorney fees in the arbitration. The cyclotron
vendor is not seeking to prevent the Company from using the cyclotrons or the
related improvements or information. The parties are in the process of
conducting discovery and the ultimate outcome of this uncertainty cannot be
determined at this time. Accordingly, no provision for any liability that might
result from this uncertainty has been made. </FONT></P>

NOTE H - STOCK OPTIONS AND WARRANTS

<H2 ALIGN=LEFT><FONT SIZE=3>Stock Options</FONT></H2>

<P><FONT SIZE=3>The Company’s board of directors has approved three stock
option plans which in aggregate cover up to 4,000,000 shares of common stock.
The plans provide for the expiration of options ten years from the date of grant
and requires the exercise price of the options granted to be at least equal to
100% of market value on the date granted. Stock options become exercisable over
a two to five-year vesting period. </FONT></P>

<P><FONT SIZE=3>Stock option transactions for each of the three years in the
period ended December 31, 1999, are summarized below (shares in thousands): </FONT></P>

<PRE>
                                                   1997                     1998                    1999
                                        -----------------------  -----------------------  ---------------------
                                                      Weighted                Weighted                Weighted
                                                       Average                 Average                 Average
                                                      Exercise                Exercise                Exercise
                                           Shares      Price       Shares      Price         Shares     Price

       Outstanding, beginning of year        1,674    $  3.57        1,888      $ 7.95        1,734     $10.24
       Granted                                 538      17.90          157       20.07          564       8.77
       Exercised                              (300)      1.80         (311)       1.30          (37)      2.64
       Forfeited                               (24)      5.38            -           -            -          -
                                        ----------     ------    ---------      ------    ---------      -----

       Outstanding, end of year              1,888    $  7.95        1,734      $10.24        2,261     $ 9.99
                                        ==========     ======    =========      ======    =========      =====
</PRE>
<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE H - STOCK OPTIONS AND WARRANTS - Continued

<H2 ALIGN=LEFT><FONT SIZE=3>Stock Options - Continued</FONT></H2>

<P><FONT SIZE=3>The following table summarizes information about stock options
outstanding at December 31, 1999 (shares in thousands): </FONT></P>

<PRE>
                                                Options Outstanding                         Options Exercisable
                                                  Weighted
                                                  Average         Weighted                              Weighted
              Range of            Number           Remaining      Average            Number             Average
              Exercise         Outstanding at    Contractual      Exercise         Exercisable at       Exercise
              Price            December 31, 1999  Life (Years)      Price         December 31, 1999      Price
             ----------        -----------------  -----------     ---------      -------------------    ---------
             $1.63 - $3.19                587         5.4            $2.66                542             $2.65
             $7.44 - $11.75             1,027         8.4             8.58                431              8.11
            $16.56 - $26.63               647         8.2            18.88                241             18.86
                                    ----------     ------         ---------             ------            ------
                                        2,261         7.6           $ 9.99              1,214            $ 7.81
                                    ==========     ======         =========             ======            ======
</PRE>
<P><FONT SIZE=3>The Company follows the practice of recording amounts received upon
the exercise of certain options by crediting common stock and additional paid-in
capital. No charges are reflected in the statements of operations as a result of
the grant or exercise of options to or by employees. The Company realizes an
income tax benefit from the exercise of certain stock options and the exercise
and early disposition of the shares acquired via certain other stock options.
This benefit results in a reduction to income taxes payable and an increase to
additional paid-in capital. </FONT></P>

<P><FONT SIZE=3>The Company uses the intrinsic value method in accounting for
stock options issued to employees. In applying this method, no compensation cost
has been recognized. Had compensation cost for the Company’s stock option
plans been determined based on the fair value at the grant dates for awards
under those plans, the Company’s net earnings and earnings per share would
have resulted in the pro forma amounts indicated below (in thousands, except per
share data): </FONT></P>


<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE H - STOCK OPTIONS AND WARRANTS - Continued

<H2 ALIGN=LEFT><FONT SIZE=3>Stock Options - Continued</FONT></H2>

<PRE>
                                                                   1997                  1998               1999
                                                               ----------            -----------         ----------
     Net earnings                   As reported               $    9,498            $    14,023         $   16,012
                                    Pro forma                      8,629                 11,942             14,122

     Basic net earnings per
       common share                 As reported               $      .35            $       .48         $      .54
                                    Pro forma                        .31                    .41                .47

     Diluted net earnings per
       common share                 As reported               $      .33            $       .46         $      .53
                                    Pro forma                        .31                    .40                .46

</PRE>
<P><FONT SIZE=3>The weighted average fair value of the options granted during
1997, 1998 and 1999 was $9.38, $14.76 and $6.37, respectively. The fair values
were estimated using the Black Sholes options-pricing model with the following
weighted average assumptions: </FONT></P>

<PRE>
                                                                   1997                 1998               1999
                                                               ----------           -----------         ----------
     Expected dividend yield                                        0.0%                0.0%               0.0%
     Expected stock price volatility                               68.0%               65.0%              77.3%
     Risk-free interest rate                                        5.9%                5.0%               6.2%
     Expected life of option (years)                                3.7                 5.0                6.3
</PRE>
<H2 ALIGN=LEFT><FONT SIZE=3>Stock Options Issued to Non-Employees</FONT></H2>

<P><FONT SIZE=3>During 1998, the Company issued 100,000 stock options to an
individual for medical and cancer consulting services. The Company is recording
consulting expenses based on the estimated fair value of the options at the
grant date over the consulting term of five years. Consulting expenses related
to this agreement were approximately $164,000 and $276,000 during 1998 and 1999,
respectively. </FONT></P>


<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE H - STOCK OPTIONS AND WARRANTS - Continued

<H2 ALIGN=LEFT><FONT SIZE=3>Warrants</FONT></H2>

<P><FONT SIZE=3>Warrants exercised totaled 40,000, 20,000 and 60,000 during
1997, 1998 and 1999, respectively, resulting in proceeds to the Company of
$150,000, $75,000 and $225,000, respectively. No unexercised warrants were
outstanding as of December 31, 1999. </FONT></P>

NOTE I - EARNINGS PER SHARE

   Earnings per common share was computed as follows (in thousands except per share data):
<PRE>
                                                                           Year ended December 31,
                                                             ----------------------------------------------------
                                                                    1997                 1998              1999
                                                              -------------        -------------     ------------
     Numerator for basic and diluted earnings
       per share - income available common
       shareholders                                         $        9,498       $       14,023   $       16,012
                                                              =============        =============     =============
     Denominator for basic earnings per share -
       weighted average shares                                      27,526               29,259           29,478
     Effect of dilutive stock options and warrants                   1,092                1,056              482
                                                              -------------        -------------     ------------
     Denominator for diluted earnings per share -
       adjusted weighted average shares                             28,618               30,315           29,960
                                                             =============        =============     =============
     Basic earnings per share                               $          .35       $          .48   $          .54
                                                             =============        =============     =============
     Diluted earnings per share                             $          .33       $          .46   $          .53
                                                             =============        =============     =============
</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE J - EMPLOYEE BENEFIT PLAN

<H2 ALIGN=LEFT><FONT SIZE=3>401(k) Savings Plan</FONT></H2>

<P><FONT SIZE=3>The Company has a 401(k) savings plan providing retirement
benefits to all employees at least 21 years of age. Commencing in the fourth
quarter of 1998, the Company makes matching contributions of 20%-60% of each
participant’s contribution, up to 6% of salary. The percentage of matching
contributions are based on net earnings and are made in the form of Company
common stock. Matching contributions are charged to operating expenses and
totaled approximately $8,000 and $69,000 in 1998 and 1999, respectively. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Employee Stock Purchase Plan</FONT></H2>

<P><FONT SIZE=3>In June 1998, the Company’s stockholders approved the
Theragenics Corporation Employee Stock Purchase Plan (the “ESPP”). The
ESPP allows eligible employees the right to purchase common stock on a quarterly
basis at the lower of 85% of the market price at the beginning or end of each
quarterly offering period. As of December 31, 1998 and 1999, there were
approximately 200,000 and 189,000 shares of common stock reserved for the ESPP,
respectively, and 0 and 11,000 shares had been issued under the plan,
respectively. </FONT></P>

NOTE K - QUARTERLY FINANCIAL DATA (UNAUDITED)

<P><FONT SIZE=3>The following summarizes certain quarterly results of operations
(in thousands, except per share data): </FONT></P>

<PRE>
                                                                       Quarters ended
                                                -----------------------------------------------------------------
                                                 March 31       June 30         September 30        December 31
                                                ----------    ----------       --------------     ---------------
 Year ended December 31, 1999:
   Net revenue                                  $    9,164     $  11,121       $       11,480     $       11,953
   Gross profit                                      5,784         7,934                8,022              8,685
   Net earnings                                      2,880         4,057                4,389              4,686
   Net earnings per common share
     Basic                                      $      .10     $     .14       $          .15     $          .16
     Diluted                                    $      .10     $     .14       $          .15     $          .16                                                                          Quarters ended

</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO FINANCIAL STATEMENTS - CONTINUED</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>December 31, 1998 and 1999</FONT></H1>

NOTE K - QUARTERLY FINANCIAL DATA (UNAUDITED) - Continued
<PRE>
                                                                          Quarters ended
                                               ------------------------------------------------------------------
                                                 March 31        June 30         September 30        December 31
                                               -----------    -----------       --------------     --------------

   Year ended December 31, 1998:
   Net revenue                                  $    8,281    $    8,714         $     11,129      $      9,834
   Gross profit                                      6,093         6,299                7,945             6,752
   Net earnings                                      3,301         3,333                4,032             3,357
   Net earnings per common share
     Basic                                      $     .11     $      .11         $        .14      $        .11
     Diluted                                    $     .11     $      .11         $        .13      $        .11

</PRE>


<H1 ALIGN=CENTER><FONT SIZE=3>Report of Independent Certified Public
Accountants on Schedule</FONT></H1>

<H2 ALIGN=LEFT><FONT SIZE=3>Board of Director<BR>Theragenics Corporation</FONT></H2>

<P><FONT SIZE=3>In connection with our audit of the financial statements of
Theragenics Corporation referred to in our report dated January 14, 2000, which
is included in the annual report to security holders and incorporated by
reference in Part II of this form, we have also audited Schedule II for each of
the three years in the period ended December 31, 1999. In our opinion, the
schedule presents fairly, in all material respects, the information required to
be set forth therein. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>/s/ Grant Thornton LLPGrant <BR>Thornton LLP</FONT></H2>

<H2 ALIGN=LEFT><FONT SIZE=3>Atlanta, GeorgiaJanuary <BR>14, 2000</FONT></H2>


<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Theragenics Corporation</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS</FONT></H1>

                                   For each of the three years in the period ended December 31, 1999
<H1 ALIGN=CENTER><FONT SIZE=3>(Amounts in thousands)</FONT></H1>

<PRE>
                Column A                     Column B               Column C                   Column D       Column E
-----------------------------------      --------------   -----------------------------  ----------------  -------------
                                                                 Additions
                                                            (1)            (2)
                                           Balance at      Charged to     Charged to                        Balance at
                                          beginning of     costs and     other accounts     Deductions -      end of
             Description                    Period          expense        describe         describe (a)     period
-----------------------------------      --------------   -----------------------------  ----------------  -------------
Year ended December 31, 1999
   Allowance for doubtful
     accounts receivable                  $        54     $        -     $     -         $      11(a)      $      43
   Allowance for doubtful inventory       $       345     $      274     $     -         $       -         $     619

Year ended December 31, 1998
   Allowance for doubtful
     accounts receivable                  $        65     $        -     $      -        $      11(b)      $      54
   Allowance for doubtful inventory       $        77     $      268     $      -        $       -         $     345

Year ended December 31, 1997
   Allowance for doubtful
     accounts receivable                  $         -     $       65     $      -        $       -         $      65
   Allowance for doubtful inventory       $        77     $        -     $      -        $       -         $      77


</PRE>
(a) - adjustment to reserve
(b) - write-off of uncollectible accounts receivable.








<PAGE>


THERAGENICS CORPORATION

INDEX TO EXHIBITS
<PRE>
 Page No.
10.16 -  Theragenics Corporation 2000 Stock
             Incentive Plan                                       70


24.1  -  Consent of Independent Public Accountants                86
         for Incorporation by Reference of Audit
         Report into Registration Statements

</PRE>

<PAGE>
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