<PAGE>
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                  FORM 10-QSB  




(Mark One)

 X  QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE  SECURITIES
    EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997.

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


Commission file number   33-43537

              
                              COVALENT GROUP, INC.
                  (Name of small business issuer in its charter)


              Nevada                            56-1668867

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


One Glenhardie Corporate Center, 1275 Drummers Lane, Wayne, PA 19087
     (address of principal executive offices)             (Zip Code)


Issuer's telephone number: 610-975-9533


Check  whether the issuer (1) filed all reports required to be filed  by
Section  13  or 15(d) of the Exchange Act during the past 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 

State  the number of shares outstanding of each of the issuer's  classes
of common equity, as of July 31, 1997.


Common Stock, Par Value  $.001                               11,675,914  
------------------------------                               -----------
         (Class)                                             Outstanding

Transitional Small Business Disclosure Format (check one): Yes    No X 

<PAGE>
FORM 10-QSB

   
                              COVALENT GROUP, INC.


                                    INDEX


                                                             Page(s)
                                                             -------
PART I.   Financial Information

     Item 1.  Consolidated Financial Statements

          Balance Sheet - June 30, 1997 (Unaudited)           2 & 3

          Statements of Operations (Unaudited) - Six  
          Months Ended June 30, 1997 and 1996                   4

          Statements of Cash Flows (Unaudited) - Six
          Months Ended June 30, 1997 and 1996                   5

          Notes to Consolidated Financial Statements
          (Unaudited)                                         6 & 7

     Item 2.  Management's Discussion and Analysis of
              Financial Condition and Results of
              Operations                                      8 - 11

PART II.  Other Information                                    12

Signature Page                                                 13




<PAGE>
FORM 10-QSB             PART I - FINANCIAL INFORMATION

                              COVALENT GROUP, INC.
                         CONSOLIDATED BALANCE SHEET
                                JUNE 30, 1997
                                 (Unaudited)


    Assets

Current Assets
--------------
Cash                                                 $ 2,021,779
Accounts receivable                                    3,984,932
Note receivable, current                                  37,500
Costs and estimated earnings in 
  excess of billings on uncompleted
  contracts                                              930,154
Prepaid expenses                                         217,538
Deferred income taxes                                    199,871
                                                     ----------- 
    Total Current Assets                               7,391,774
    --------------------                             -----------
Property and Equipment
----------------------
Equipment                                                738,810
Furniture and fixtures                                   172,165
Leasehold improvements                                    59,440
                                                     -----------
                                                         970,415
Less accumulated depreciation and
  amortization                                        (  279,092)
                                                     -----------
    Net Property and Equipment                           691,323
    --------------------------                       -----------
Other Assets
------------
Note receivable, less current portion                    187,500
Security deposit                                           6,538
Other asset                                                1,177
                                                     -----------

    Total Other Assets                                   195,215
    ------------------                               -----------
    Total Assets                                     $ 8,278,312
    -----------                                      ===========

                See accompanying notes to financial statements.
<PAGE>
FORM 10-QSB

                               COVALENT GROUP, INC.
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 1997
                                   (Unaudited)







    Liabilities and Shareholders' Equity
    ------------------------------------
Current Liabilities
-------------------
Accounts payable                                     $ 3,034,994
Advance billings                                       1,467,763
                                                     -----------
    Total Liabilities                                  4,502,757
    -----------------                                -----------

Shareholders' Equity
--------------------
Common stock, $.001 par value per
  share, authorized 25,000,000 shares,
  issued and outstanding 11,675,914
  shares                                                  11,676
Additional paid in capital                             9,147,429
Deficit                                               (5,383,550)
                                                      ----------
    Total Shareholders' Equity                         3,775,555
    --------------------------                        ----------

    Total Liabilities and
      Shareholders' Equity                           $ 8,278,312
    ----------------------                           ===========

               See accompanying notes to financial statements.
<PAGE>
FORM 10-QSB
                                 COVALENT GROUP, INC.      
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (Unaudited)

                                 For Three Months        For Six Months
                                  Ended June 30,         Ended June 30,
                                 1997        1996        1997        1996
                                 ----        ----        ----        ----
Revenues                      $3,267,726  $2,228,969  $6,313,444  $3,936,151
--------
Cost of Revenues               2,549,422   1,189,604   4,862,194   2,172,500
----------------              ----------  ----------  ----------  ----------
Gross Profit                     718,304   1,039,365   1,451,250   1,763,651
------------               
Operating Expenses
------------------
General and administrative       596,450     486,790   1,181,996     950,473
Research and development         255,399     176,146     420,970     297,294
                              ----------  ----------  ----------  ----------
Total Operating Expenses         851,849     662,936   1,602,966   1,247,767
------------------------      ----------  ----------  ----------  ----------
Income (Loss) From Operations (  133,545)    376,429  (  151,716)    515,884 
----------------------------- ----------  ----------  ----------  ----------
Other Income (Expense)
---------------------
Miscellaneous income              36,853      17,824      50,298      34,100
Miscellaneous expense                     (      696)             (      996)   
                              ----------  ----------  ----------  ----------   
Total Other Income (Expense)      36,853      17,128      50,298      33,104
---------------------------   ----------  ----------  ----------  ----------
Income (Loss) From Continuing
  Operations Before Income
  Tax Benefit                 (   96,692)    393,557  (  101,418)    548,988
----------------------------
Income tax benefit                                       103,508            
                              ----------  ----------  ----------  ----------
Income (Loss) From
  Continuing Operations       (   96,692)    393,557       2,090     548,988 
-----------------------
Discontinued Operations
-----------------------
Loss from operations                      (   89,742)             (  130,113)  
                              ----------  ----------  ----------  ----------
Net Income (Loss)            $(   96,692) $  303,815  $    2,090  $  418,875 
----------------             ===========  ==========  ==========  ==========
Net Income (Loss) Per Common 
  and Common Equivalent
  Share                      $(      .01)$       .03  $      .00 $       .04    
---------------------------- =========== ===========  ========== ===========

Weighted Average Common 
  Shares Outstanding          12,328,462  11,021,568  12,373,164  10,942,490
-----------------------       ==========  ==========  ==========  ==========

                   See accompanying notes to financial statements.
<PAGE>
FORM 10-QSB
                               COVALENT GROUP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)




                                                Six Months Ended 
                                                   June 30,        
                                               1997          1996
                                               ----          ----
Cash Flows From Operating Activities
------------------------------------
Net income for the period                  $     2,090   $   418,875 

Adjustments to Reconcile Net Income
  To Net Cash Provided By Operating
  Activities                       
-----------------------------------
Depreciation and amortization                   76,032        70,467

Changes In Operating Assets
  and Liabilities
---------------------------
Increase in accounts receivable             (  851,141)   (  739,053)
Increase in other receivable                              (   60,000)  
Increase in costs and estimated
  earnings in excess of billings
  on uncompleted contracts                  (  930,154)
(Increase) decrease in prepaid expenses     (  134,889)       25,744
Increase in deferred income taxes           (  103,508)
Increase in accounts payable                 2,338,496       249,585
Increase in advance billings                   881,895       751,220
                                            ----------    ----------
Net Cash Provided By Operating
  Activities                                 1,278,821       716,838
------------------------------              ----------    ----------
Cash Flows From Investing Activities
------------------------------------
Purchases of equipment and furniture        (  242,922)   (  197,064)
Net change in assets of discontinued
  operations                                              (  176,669)
                                            ----------    ----------
Net Cash Used In Investing Activities       (  242,922)   (  373,733)
-------------------------------------       ----------    ----------
Cash Flows Provided By Financing Activities
-------------------------------------------
Proceeds from sales of common stock
  and option exercises                          63,870     1,897,495 
                                            ----------    ----------
Net Increase In Cash                         1,099,769     2,240,600
--------------------
Cash at Beginning of Period                    922,010       298,583
---------------------------                 ----------    ----------
Cash at End of Period                      $ 2,021,779   $ 2,539,183
---------------------                       ----------    ---------- 

             See accompanying notes to financial statements.
<PAGE>
FORM 10-QSB

                              COVALENT GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1. Description of Business
   -----------------------
   Covalent Group, Inc. (the Company), formerly Future Medical
   Technologies International, Inc., is a leading contractual research
   organization, providing clinical research and development services
   to pharmaceutical, biotechnology, medical services and managed care
   organizations.  The Company initiates, designs and monitors
   clinical trials, manages and analyzes clinical data and offers
   other related services and products.

2. Summary of Significant Accounting Policies
   ------------------------------------------
   Use of Estimates

   The preparation of financial statements in conformity with
   generally accepted accounting principles requires management to
   make estimates and assumptions that affect the reported amounts of
   assets and liabilities and disclosure of contingent assets and
   liabilities at the date of the financial statements and the
   reported amounts of revenues and expenses during the period. 
   Actual results could differ from those estimates.

   Principles of Consolidation

   The consolidated financial statements include the accounts of the
   Company and its wholly owned subsidiary.  Intercompany transactions
   and balances have been eliminated in consolidation.

   Basis of Presentation

   The financial statements for the six months ended June 30, 1997
   have been prepared without audit and, in the opinion of management,
   reflect all adjustments necessary (consisting only of normal
   recurring adjustments) to present fairly the Company's financial
   position at June 30, 1997 and the results of its operations and its
   cash flows for the interim and cumulative periods presented.  Such
   financial statements do not include all of the information and
   footnotes required by generally accepted accounting principles for
   complete financial statements.  For further information, refer to
   the financial statements and footnotes thereto included in the
   Company's annual report on Form 10-KSB for the year ended December
   31, 1996.

   Operating results for the six months ended  June 30, 1997 are not
   necessarily indicative of the results for the year ending December
   31, 1997.
<PAGE>
   Revenue Recognition

   Fixed price contract revenue is recognized using the percentage of
   completion method based on the ratio of costs incurred to date to
   estimated total costs at completion.  Revenue from other contracts
   is recognized as services are provided.  Revenue related to
   contract modifications is recognized when realization is assured
   and the amounts are reasonably determinable.  Adjustments to
   contract cost estimates are made in the periods in which the facts
   which require the revisions become known.  When the revised
   estimate indicates a loss, such loss is provided for currently in
   its entirety.  Unbilled accounts receivable, included in accounts
   receivable, represent revenue recognized in excess of amounts
   billed.  Advance billings represent amounts billed in excess of
   revenue recognized.

   Property and Equipment

   Property and equipment are recorded at cost.  Depreciation is
   provided using a combination of straight line and accelerated
   methods over the estimated useful lives of the assets.  No material
   differences would result if depreciation was provided under the
   straight line method.  Expenditures for maintenance and repairs are
   charged against income as incurred.  When assets are sold or
   retired, the cost and accumulated depreciation are removed from the
   accounts and any gain or loss is included in income.

   Research and Development

   Research and development costs are charged to operations when
   incurred.

   Reclassification

   Certain prior year balances have been reclassified to conform to
   current year presentation.

   Net Income Per Common and Common Equivalent Share

   Net income per common and common equivalent share is based on the
   weighted average number of common and common equivalent shares
   (stock options and warrants) outstanding in each period.    

3. Discontinued Operations
   -----------------------
   On July 31, 1996, the Company sold all of the assets and
   liabilities of Future Medical Technologies, Inc. (FMT) for $250,000
   and certain royalty payments upon the sale of certain products for
   up to five years.  $25,000 of the selling price was received in
   1996 and the remaining balance is due in annual installments of
   $25,000 (1997), $50,000 (1998 and 1999) and $100,000 (2000). 
   Interest is charged at 7% per annum.  FMT was accounted for as
   discontinued operations and accordingly, assets, liabilities and
   operations were segregated in the accompanying consolidated balance
   sheet and statements of operations.

<PAGE>
ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION
AND RESULTS OF OPERATIONS

The information set forth and discussed below for the three months and
six months ended June 30, 1997 is derived from the Consolidated
Financial Statements included elsewhere herein.  The financial
information set forth and discussed below is unaudited but, in the
opinion of management, reflects all adjustments (consisting of normal
recurring accruals) necessary for a fair presentation of such
information.  The Company's results of operations for a particular
quarter may not be indicative of results expected during the other
quarters or for the entire year.

GENERAL

Covalent Group, Inc. (the Company), and its wholly owned subsidiary
Covalent Research Alliance Corp., is a research management organization
that designs, coordinates and monitors clinical trials in drug
development for some of the world's leading pharmaceutical firms.  In
addition, using advanced technologies, the Company works extensively in
managed care, medical outcomes research and health management programs
that focus on compliance and provider/patient behavior modification. 
Revenue is derived principally from the identification, placement,
monitoring and management of clinical development studies in the
traditional pharmaceutical, as well as managed care environment.

The Company's quarterly results can fluctuate as a result of a number of
factors, including the Company's success in attracting new business, the
size and duration of the clinical trials, the timing of client decisions
to conduct new clinical trials or possible cancellation or delays of
ongoing trials, and other factors, many of which are beyond the
Company's control.  Clinical research service contracts generally have
terms ranging from several months to several years.  A portion of the
contract fee is generally payable upon execution of the contract, with
the balance payable in installments over the life of the contract. 
Revenue and related cost of revenue are recognized as specific contract
terms are fulfilled under the percentage of completion method.

Contracts generally may be terminated by clients with or without cause. 
Clinical trials may be terminated or delayed for several reasons,
including unexpected results or adverse patient reactions to the drug,
inadequate patient enrollment or investigator recruitment, manufacturing
problems resulting in shortages of the drug or decisions by the client
to de-emphasize or terminate a particular trial or development efforts
on a particular drug.  Depending on the size of the trial in question,
a client's decision to terminate or delay a trial in which the Company
participates could have a materially adverse effect on the Company's
backlog, future revenue and profitability.

The Company's backlog consists of anticipated revenues from signed
contracts in excess of $11 million at June 30, 1997.  The Company
believes that its backlog as of any date is not necessarily a meaningful
predictor of future results.

<PAGE>
Three Month Period Ended June 30, 1997 Compared To The Three Month
Period Ended June 30, 1996.
--------------------------------------------------------------------
Revenues for the three months ended June 30, 1997 increased 47% to
$3,268,000 as compared to $2,229,000 for the three month period ended
June 30, 1996.  The increase of $1,039,000 is directly related to the
number and size of clinical development studies.

Cost of revenues includes compensation and other expenses directly
related to conducting clinical studies.  These costs increased
$1,359,000 from $1,190,000 to $2,549,000 for the three month periods
ended June 30, 1996 and 1997, respectively.  Cost of revenues as a
percentage of total revenues was 78% for the three months ended June 30,
1997 as compared to 53% for the same period last year.  The increase in
relative percent is due to the type of clinical studies, the different
cost structures of the studies, and costs of increased personnel
necessary to support an expected greater volume of clinical trials.

General and administrative expenses include all administrative personnel
and business development, and all other support expenses not directly
related to specific contracts.  General and administrative expenses for
the three month period ended June 30, 1997 amounted to $596,000 as
compared to $487,000 for the same period last year.  The increase in the
level of expenses of $109,000 is due to the overall expansion of the
business and costs associated with building the necessary support
infrastructure.  As a percentage of revenues, general and administrative
expenses decreased from 22% to 18% for the three month periods ended
June 30, 1996 and 1997, respectively.  The decrease in expenses as a
percentage of revenues results from the growth of clinical trial
services.

Research and development expense for the three month period ended June
30, 1997 amounted to $255,000 as compared to $176,000 for the same
period last year and relates to costs associated with developing an
interactive voice recognition system.  For the three months ended June
30, 1997, expense is net of $21,000 in reimbursed costs funded by a
client for a specific application.

Other income increased $20,000 from $17,000 for the three months ended
June 30, 1996 to $37,000 for the three months ended June 30, 1997.  The
increase is a result of additional interest income.

Net loss from discontinued operations for the three month period ended
June 30, 1996 amounted to $90,000 and relates to three months of
operations of Future Medical Technologies, Inc., a subsidiary of the
Company, which was sold to a third party on July 26, 1996.  All results
associated with this business have been reclassified to this line for
financial reporting purposes.

Net loss incurred by the Company for the three month period ended June
30, 1997 amounted to $97,000 as compared to net income of $304,000 for
the same period last year.  The decrease was due to the above factors
including delays in beginning clinical projects and additional staffing
costs for these projects.

<PAGE>
Six Month Period Ended June 30, 1997 Compared To The Six Month
Period Ended June 30, 1996.
---------------------------------------------------------------
Revenues for the six months ended June 30, 1997 increased 60% to
$6,313,000 as compared to $3,936,000 for the six month period ended June
30, 1996.  The increase of $2,377,000 is directly related to the number
and size of clinical development studies.

Cost of revenues includes compensation and other expenses directly
related to conducting clinical studies.  These costs increased
$2,689,000 from $2,173,000 to $4,862,000 for the six month periods ended
June 30, 1996 and 1997, respectively.  Cost of revenues as a percentage
of total revenues was 77% for the six months ended June 30, 1997 as
compared to 55% for the same period last year.  The increase in relative
percent is due to the type of clinical studies, the different cost
structures of the studies, and costs of increased personnel necessary to
support an expected greater volume of clinical trials.

General and administrative expenses include all administrative personnel
and business development, and all other support expenses not directly
related to specific contracts.  General and  administrative expenses for
the six month period ended June 30, 1997 amounted to $1,182,000 as
compared to $950,000 for the same period last year.  The increase in the
level of expenses of $232,000 is due to the overall expansion of the
business and costs associated with building the necessary support
infrastructure.  As a percentage of revenues, general and administrative
expenses decreased from 24% to 19% for the six month periods ended June
30, 1996 and 1997, respectively.  The decrease in expenses as a
percentage of revenues results from the growth of clinical trial
services.

Research and development expense for the six month period ended June 30,
1997 amounted to $421,000 as compared to $297,000 for the same period
last year and relates to costs associated with developing an interactive
voice recognition system.  For the six months ended June 30, 1997,
expense is net of $100,000 in reimbursed costs funded by a client for a
specific application.

Other income increased $17,000 from $33,000 for the six months ended
June 30, 1996 to $50,000 for the six months ended June 30, 1997.  The
increase is a result of additional interest income.
<PAGE>
Net loss from discontinued operations for the six month period ended
June 30, 1996 amounted to $130,000 and relates to six months of
operations of Future Medical Technologies, Inc. (FMT), a subsidiary of
the Company, which was sold to a third party on July 26, 1996.  All
results associated with this business have been reclassified to this
line for financial reporting purposes.

The financial impact of this transaction resulted in a one time
nonrecurring loss of $328,000 which was charged to earnings in the
quarter ended September 30, 1996.  In 1997, the Company reached
agreement with the purchaser, to treat the sale of FMT as an asset sale
under Internal Revenue Code Section 338 (h)(10).  Accordingly, the loss
on the disposition of FMT is deductible for tax purposes against future
net income.  As a result, during the first quarter of 1997, the Company
incurred an additional deferred tax asset of $104,000.  Management
anticipates the loss on disposition to be fully utilized.

Net income realized by the Company for the six month period ended June
30, 1997 amounted to $2,000 as compared to net income of $419,000 for
the same period last year.  The decrease in income was due to the above
factors including delays in beginning clinical projects and additional
staffing costs for these projects.

LIQUIDITY AND CAPITAL RESOURCES

The Company's contracts usually require a portion of the contract amount
to be paid at the time the contract is initiated.  Additional payments
are generally made upon completion of negotiated performance
requirements throughout the life of the contract.  Cash receipts do not
necessarily correspond to costs incurred and revenue recognized (revenue
recognition is based on the percentage of completion accounting method). 
The Company typically receives a low volume of large-dollar receipts. 
As a result, the number of days outstanding in accounts receivable will
fluctuate due to the timing and size of cash receipts.  Accounts
receivable including unbilled services to clients was $3,985,000 at June
30, 1997 as compared to $3,134,000 at December 31, 1996.

Cash and cash equivalents increased by $1,100,000 for the period ended
June 30, 1997 and was provided by operating activities, net of equipment
purchases of $243,000.

The Company has a line of credit with a commercial bank providing a
maximum credit facility of $1 million, and bears interest at a rate not
to exceed 1% point above the bank's prime rate.  Borrowings outstanding
under the line are secured by substantially all of the assets of the
Company.  No borrowings were outstanding under the line of credit at
June 30, 1997.

The Company's principal cash needs on both a short and long-term basis
are for the funding of its operations, and capital expenditure
requirements.  The Company expects to continue expanding its operations
through internal growth, expansion of existing list of services as well
as developing new service products for clinical research and the
healthcare industry.  The Company expects such activities will be funded
from existing cash and cash equivalents and cash flow from operations.

<PAGE>
                              COVALENT GROUP, INC.



PART II.      OTHER INFORMATION

              ITEM 1.     Legal Proceeding:

                          None.

              ITEM 2.     Changes in Securities:

                          None.

              ITEM 3.     Defaults Upon Senior Securities:

                          None.

              ITEM 4.     Submission of Matters to a Vote of Security
                          Holders:

                          None.

              ITEM 5.     Other Information:

                          None.

              ITEM 6.     Exhibits and Reports on Form 8-K:

                          None.




<PAGE>
                                   SIGNATURES




    In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



                                      COVALENT GROUP, INC.




Dated: 8/7/97                      By:/s/Bruce LaMont
                                      ------------------------
                                      Bruce LaMont, President
                                      and Chief Executive Officer



Dated: 8/7/97                      By:/s/William K. Robinson
                                      ------------------------
                                      William K. Robinson, Chief
                                      Financial Officer