PAGE
<PAGE>
================================================================================

                                 UNITED STATES

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                                  FORM 10-QSB


(Mark One)

[ X ]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 
                For the quarterly period ended June 30, 1997

[   ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 
  For the transition period from ___________________ to ____________________

                       Commission file number 0-19724



                     PROTEIN POLYMER TECHNOLOGIES, INC. 
      (Exact name of small business issuer as specified in its charter)


            Delaware                                   33-0311631 
(State or other jurisdiction of                      (IRS Employer
 incorporation or organization)                    Identification No.)          

              10655 Sorrento Valley Road, San Diego, CA  92121
                  (Address of principal executive offices)

                               (619) 558-6064
                         (Issuer's telephone number)


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 the latest practicable date:   As of August 13, 1997, 9,170,140
shares of common stock were outstanding.

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

================================================================================

PAGE
<PAGE>
                      PROTEIN POLYMER TECHNOLOGIES, INC.

                                 FORM 10-QSB

                                    INDEX



                                                                Page No.
                                                                ________

PART I.  FINANCIAL INFORMATION

Item 1.     Financial Statements (Unaudited)

Condensed Balance Sheets -
 June 30, 1997 and December 31, 1996............................   3

Condensed Statements of Operations -
 For the Three and Six Months Ended
  June 30, 1997 and 1996........................................   4

Condensed Statements of Cash Flows -
 For the Six Months Ended
  June 30, 1997 and 1996........................................   5

Notes to Condensed Financial Statements.........................   6

Item 2.     Management's Discussion and Analysis of
             Financial Condition and Results of Operations......   7


PART II.  OTHER INFORMATION

Item 4.     Submission of Matters to a Vote of Security Holders   10

Item 6.     Exhibits and Reports on Form 8-K....................  10

            Signature...........................................  11



                                       2
PAGE
<PAGE>
                      PROTEIN POLYMER TECHNOLOGIES, INC.

                           Condensed Balance Sheets

                                              June 30,         December 31,
                                                1997                1996
                                            ____________        ____________
ASSETS                                       (Unaudited)
Current assets:
  Cash and cash equivalents                 $    520,854        $    267,357
  Short-term investments                       3,158,443             993,042
  Interest receivable                             79,235              20,448
  Inventory, net                                  10,167              20,694
  Other current assets                           184,049              36,113
                                            ____________        ____________
Total current assets                           3,952,748           1,337,654

Deposits                                          38,479              22,257
Deferred offering costs                                -              17,356
Equipment and leasehold improvements, net        530,081             369,314
                                            ____________        ____________
                                            $  4,521,308        $  1,746,581
                                            ============        ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                          $    360,399        $    251,321
  Accrued employee benefits                      139,980             117,612
  Other accrued expenses                          82,197              53,525
  Deferred revenue                                75,000              75,000
                                            ____________        ____________
Total current liabilities                        657,576             497,458

Long-term portion capital leases                  33,894                   -

Stockholders' equity:
  Series D convertible preferred stock,
   $.01 par value, 71,600 shares
   authorized,49,187 shares issued and
   outstanding at June 30, 1997 and 
   December 31, 1996, respectively - 
   liquidation preference $4,918,700           4,764,745           4,764,745
  Common stock, $.01 par value, 25,000,000
   shares authorized, 9,153,048 and
   7,233,228 shares issued and outstanding
   at June 30, 1997 and December 31, 1996,
   respectively                                   91,531              72,333
  Additional paid-in capital                  20,238,721          15,619,282
  Accumulated deficit                        (21,265,159)        (19,207,237)
                                            ____________        ____________
Total stockholders' equity                     3,829,838           1,249,123
                                            ____________        ____________
                                            $  4,521,308        $  1,746,581
                                            ============        ============

See accompanying notes.

                                       3
PAGE
<PAGE>
                      PROTEIN POLYMER TECHNOLOGIES, INC.

                      Condensed Statements of Operations



                                  Three Months                Six Months 
                                 Ended June 30,             Ended June 30,
                               1997         1996          1997         1996
                            __________   __________    __________   __________
Revenues:
  Contract revenue         $    95,750  $   100,000   $   233,000  $   100,000
  Interest income               59,289       18,102       121,734       39,057
  Product and other income      15,300        9,010        33,904       24,524
                            __________   __________    __________   __________
Total revenues                 170,339      127,112       388,638      163,581


Expenses:
  Cost of sales                  6,033        5,670        17,921       11,885
  Research and development     777,296      461,107     1,416,225      908,269
  Selling, general and 
    administrative             561,326      356,806       989,914      667,155
  Royalties                      6,250        6,250        22,500       22,500
                            __________   __________    __________   __________
Total expenses               1,350,905      829,833     2,446,560    1,609,809
                            __________   __________    __________   __________

Net loss                    (1,180,566)    (702,721)   (2,057,922)  (1,446,228)

Undeclared dividends on 
  preferred stock              122,630      122,295       243,912      244,590
                            __________   __________    __________   __________

Net loss applicable to
  common shareholders      $(1,303,196) $  (825,016)  $(2,301,834) $(1,690,818)
                           ===========  ===========   ===========  =========== 

Net loss per common share  $     (0.14) $     (0.13)  $     (0.25) $     (0.27)
                           ===========  ===========   ===========  =========== 

Shares used in computing
  loss per common share      9,148,593    6,454,777     9,092,163    6,160,837
                           ===========  ===========   ===========  =========== 

See accompanying notes.


                                       4
PAGE
<PAGE>
                      PROTEIN POLYMER TECHNOLOGIES, INC.

                      Condensed Statements of Cash Flows


                                                Six months ended June 30,
                                                1997                1996
                                            ____________        ____________
                                                       (unaudited)
OPERATING ACTIVITIES
Net loss                                    $ (2,057,922)       $ (1,446,228) 
Adjustments to reconcile net loss to
 net cash used for operating activities:
  Depreciation and amortization                   76,572              55,098
  Changes in assets and liabilities:
    Inventory                                     10,527               3,324
    Deposits                                     (16,222)               (800)
    Deferred offering costs                       17,356                   -
    Other current assets                        (206,723)           (331,798)
    Accounts payable                             109,078             (14,636)
    Accrued employee benefits                     22,368              12,039
    Other accrued expenses                        28,672             (16,325)
                                            ____________        ____________
Net cash used for operating activities        (2,016,294)         (1,739,326)

INVESTING ACTIVITIES
Purchase of equipment and improvements          (198,744)            (35,311)
Short-term investments                        (2,165,401)          1,340,000
                                            ____________        ____________
Net cash provided by (used for)
 investing activities                         (2,364,145)          1,304,689

FINANCING ACTIVITIES
Net proceeds from exercise of options and
 warrants, and sale of common stock            4,638,637           1,093,939
Payment on capital lease obligations              (4,701)                  -
                                            ____________        ____________
Net cash provided by financing activities      4,633,936           1,093,939
                                            ____________        ____________

Net increase in cash and cash equivalents        253,497             659,302

Cash and cash equivalents at beginning
 of the period                                   267,357             471,296
                                            ____________        ____________
Cash and cash equivalents at end
 of the period                              $    520,854        $  1,130,598
                                            ============        ============
                                            
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid                               $      1,824        $          -
Equipment financed by capital leases        $     38,595        $          -

See accompanying notes.

                                       5
PAGE
<PAGE>
                      PROTEIN POLYMER TECHNOLOGIES, INC.

                   Notes to Condensed Financial Statements
                                 (Unaudited)

                                June 30, 1997

1.  Basis of Presentation

The condensed financial statements of Protein Polymer Technologies, Inc. (the
"Company") for the three and six months ended June 30, 1997 and 1996 are
unaudited.  These financial statements reflect all adjustments, consisting of
only normal recurring adjustments which, in the opinion of management, are
necessary to state fairly the financial position at June 30, 1997 and the
results of operations for the three and six months ended June 30, 1997 and
1996. The results of operations for the three and six months ended June 30,
1997 are not necessarily indicative of the results to be expected for the year
ended December 31, 1997.  For more complete financial information, these
financial statements and the notes thereto should be read in conjunction with
the audited financial statements included in the Company's Annual Report and
Form 10-KSB for the year ended December 31, 1996, filed with the Securities and
Exchange Commission.

2.  Net Loss Per Share

Net loss per share is computed using the weighted average number of common
shares outstanding during the period.  The net loss figures used for this
calculation recognize accumulated dividends on the Company's Series D Preferred
Stock.  Such dividends are payable when declared by the Board of Directors in
cash or common stock.

3.  Accounting Standards on Earnings per Share

In February 1997 the Financial Accounting Standards Board issued Statement No.
128, "Earnings per Share", which is required to be adopted on December 31,
1997.  At that time, the Company will be required to change the method
currently used to compute earnings per share and to restate all prior periods. 
Under the new requirements for calculating primary earnings per share, the
dilutive effect of stock options will be excluded.  The impact is not expected
to be material.

4.  Liquidity

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  The Company believes its existing
available cash and short-term investments as of June 30, 1997 is sufficient to
meet its anticipated capital requirements until June 1998.  Substantial
additional capital resources will be required to fund continuing expenditures
related to the Company's research, development and product marketing
activities.  If adequate funds are not available, the Company may be required
to significantly curtail its operating plans and relinquish rights to
significant portions of the Company's technology or potential products.


                                       6
PAGE
<PAGE>
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS


THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS, IN ADDITION TO HISTORICAL
INFORMATION, FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. 
THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THE RESULTS DISCUSSED
IN THE FORWARD-LOOKING STATEMENTS.  FACTORS THAT COULD CAUSE OR CONTRIBUTE TO
SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED HEREIN, AS
WELL AS THOSE DISCUSSED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE
YEAR ENDED DECEMBER 31, 1996.

General Overview

Protein Polymer Technologies, Inc. is a development-stage biotechnology company
engaged in the research, development and production of proprietary
protein-based biomaterials.  Since 1992 the Company has focused on medical uses
for its materials, primarily for the surgical repair markets: surgical
adhesives and sealants, soft tissue augmentation, wound healing and tissue
engineering, surgical adhesion barriers and drug delivery devices. The Company
has also developed coating technology that can efficiently modify and improve
the surface properties of more traditional implantable materials used in a
variety of applications, including cardiovascular products and contact lenses. 
The Company has been unprofitable to date, and has an accumulated deficit of
$21,265,000.

In September 1995 the Company entered into collaborative agreements with
Ethicon, Inc., a subsidiary of the Johnson & Johnson Company, related to the
Company's surgical adhesives and sealants program.  To date the Company has
received $1.7 million in contractual payments from Ethicon as reimbursements
for ongoing program research and development efforts.  The Company's intended
strategy with most of its other programs is to enter into product development
agreements with additional medical product marketing and distribution
companies.

In early January 1997 the Company received $4.76 million, less expenses of
approximately $140,000, from a private placement of the Company's common stock
with a number of institutional and qualified individual investors, consisting
of 1,904,000 shares at $2.50 per share. The Company agreed to register the
shares with the Securities and Exchange Commission promptly after the closing;
the registration was declared effective on January 24, 1997.

Results of Operations

Contract research revenue for the three months ended June 30, 1997 totaled
$96,000, compared to $100,000 revenue for the same period in 1996.  For the six
month period ended June 30, 1997 these revenues were $233,000, compared to
$100,000 for the same period in 1996.  The revenue represents contractual
payments from Ethicon related to the Company's surgical adhesives and sealants
program.

                                        7
PAGE
<PAGE>
Interest income was $59,000 for the three months ended June 30, 1997, versus
$18,000 for the same period in 1996.  For the six month period ended June 30,
1997 interest income was $122,000, compared to $39,000 for the same period in
1996.  The increase in income resulted from additional cash made available for
investing from the sale of common stock in a private placement during January
1997.

For the three months ended June 30, 1997 and 1996, sales from the Company's
ProNectin(R) F product line were $15,000 and $9,000, respectively.  For the six
month period ended June 30, 1997 these product sales were $34,000, compared to
$25,000 for the same period in 1996.  The increases were due to reorders into
the distributor pipeline.

Cost of sales was $6,000 for the three months ended June 30, 1997, compared to
$6,000 for the same period in 1996.  For the six month period ended June 30,
1997 these expenses were $18,000, compared to $12,000 for the same period in
1996.  The increases related primarily to the mix of product sold.  Royalty
expenses paid to Stanford University and Telios Pharmaceuticals, Inc. were
$6,000 for each of the three month periods ended June 30, 1997 and 1996.  These
expenses were $23,000 for each of the six month periods ended June 30, 1997 and
1996.

Research and development expenses for the three months ended June 30, 1997 were
$777,000, compared to $461,000 for the same period in 1996, a 69% increase. For
the six month period ended June 30, 1997 these expenses were $1,416,000,
compared to $908,000 for the same period in 1996, a 56% increase.  These
increases were primarily attributable to expanded efforts related to the
Company's surgical adhesives and sealants program and the soft tissue
augmentation program, including preparation for Good Laboratory Practices
("GLP") materials manufacturing and testing capabilities, as required by the
Food and Drug Administration before entering clinical trials. The Company
expects that its research and development expenses will continue to increase
over time to the extent its programs are successfully progressing and
additional capital is obtained.

Selling, general and administrative expenses for the three months ended June
30, 1997 were $561,000, as compared to $357,000 for the same period in 1996, a
57% increase.  For the six month period ended June 30, 1997 these expenses were
$990,000, compared to $667,000 for the same period in 1996, a 48% increase. 
These increases were primarily due to additional patent, legal and insurance
expenses and expanded investor relations efforts.  The Company expects its
selling, general and administrative expenses to continue to increase as support
for its research and development efforts require and to the extent additional
capital is raised.

For the three months ended June 30, 1997, the Company recorded a net loss
applicable to common shareholders of $1,303,000, or $.14 per share, compared to
a loss of $825,000, or $.13 per share for the same period in 1996.  For the six
month period ended June 30, 1997 the net loss applicable to common shareholders
was $2,302,000, or $.25 per share, compared to a loss of $1,691,000, or $.27
per share for the same period in 1996.  Included in the net loss figures for
each of the three and six month periods of 1997 and 1996 were undeclared
dividends related to the Company's preferred stock.

                                        8
PAGE
<PAGE>
The Company expects to incur similar or increasing operating losses for the
immediate future (to the extent additional capital is obtained), due primarily
to increases in the Company's product development, manufacturing and business
development activities. The Company's results depend on its ability to generate
product and contract revenues, establish and maintain strategic alliances,
increased research, development and manufacturing efforts, preclinical and
clinical product testing and commercialization expenditures, expenses incurred
for regulatory compliance and seeking various regulatory approvals, patent
prosecution, and other factors.  The Company's results will also fluctuate from
period to period due to timing differences.

To date the Company believes that inflation and changing prices have not had a
material effect on its continuing operations.

Liquidity and Capital Resources

As of June 30, 1997, the Company had cash, cash equivalents and short-term
investments of $3,679,000 as compared to $1,260,000 at December 31, 1996.  As
of June 30, 1997, the Company had working capital of $3,295,000, compared to
$840,000 at December 31, 1996.  In early January 1997 the Company received
$4.76 million, less expenses of approximately $140,000, from a private
placement of the Company's common stock with a number of institutional and
qualified individual investors, consisting of 1,904,000 shares at $2.50 per
share.

The Company had long-term debt obligations as of June 30, 1997 of $34,000 in
the form of capital lease obligations, versus no such obligation as of December
31, 1996.  For the six months ending June 30, 1997, the Company's expenditures
for capital equipment and leasehold improvements totaled $199,000, compared
with $35,000 for the same period last year.  The Company is expecting to
continue increasing its capital expenditures in the next few quarters (to the
extent additional capital is obtained), as the Company improves existing space
to achieve GLP compliance for laboratory testing and materials manufacturing
requirements.  The Company may enter into additional capital lease
arrangements, if available or under appropriate terms and timing.

The Company believes its existing available cash and short-term investments as
of June 30, 1997 will be sufficient to meet its anticipated capital
requirements until June 1998.  Substantial additional capital resources will be
required to fund continuing expenditures related to the Company's research,
development and manufacturing activities.  The Company believes there may be a
number of alternatives to meet the continuing capital requirements of its
operations, such as additional collaborative agreements and public or private
financings, and is actively pursuing all of these approaches.  However, there
can be no assurance that the requisite fundings will be consummated in the
necessary time frame or on terms favorable to the Company.  If adequate funds
are not available, the Company may be required to significantly curtail its
operating plans and relinquish rights to significant portions of the Company's
technology or potential products.


                                        9
PAGE
<PAGE>
                         PART II.  OTHER INFORMATION



Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


The Company's Annual Meeting of Stockholders was held on April 25, 1997. 
Proposals voted upon and the results of voting were as follows:

(1)     Proposal to approve the Company's 1996 Employee Stock Purchase Plan.

        Votes for:            4,678,394
        Votes against:           87,843
        Abstentions:             60,925
        Broker non-votes:     2,040,050

(2)     Proposal to approve ratification of Ernst & Young, LLP as independent
        auditors for the fiscal year ending December 31, 1997.

        Votes for:            6,827,392
        Votes against:           19,345
        Abstentions:             20,475


Item 6. EXHIBITS AND REPORTS ON FORM 8-K


a.   Exhibits:

     Exhibit
     Number     Description

       27       Financial Data Schedule


b.   Reports on Form 8-K

     None.


                                       10
PAGE
<PAGE>
                                  SIGNATURE


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.


                                       PROTEIN POLYMER TECHNOLOGIES, INC.



Date:  August 13, 1997                 By:  /s/  J. Thomas Parmeter 
      _________________                   __________________________________
                                          J. Thomas Parmeter 
                                          Chairman of the Board, Chief
                                          Executive Officer, President



Date:  August 13, 1997                 By:  /s/  Aron P. Stern
      _________________                   __________________________________
                                          Aron P. Stern
                                          Vice President, Finance and
                                          Administration and Chief Financial
                                          Officer


                                      11
PAGE
<PAGE>
EXHIBIT INDEX



Exhibit                                                    Sequentially
Number      Description                                    Numbered Page
________    ___________________________________________    _____________

  27        Financial Data Schedule                             13
  

                                      12
PAGE
<PAGE>