HYDROMER, INC.
                                35 Columbia Road
                            Branchburg, NJ 08876-3518


                  NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS
                           To be held October 21, 1998



     The Annual Meeting of the  Shareholders  of HYDROMER,  Inc. (the "Company")
will be held on Wednesday,  October 21, 1998, at the Corporate  Headquarters  of
Hydromer,  35 Columbia Road,  Branchburg,  New Jersey at 10 o'clock a.m. for the
following purpose, as more fully described in the accompanying Proxy Statement:

     1.   To elect directors of the Company for the ensuing year.

     2.   To ratify the  selection by the Board of  Directors of Rosenberg  Rich
          Baker Berman & Company as the Company's  independent  accountants  for
          fiscal 1999.

     3.   To  transact  such other  business  as may  properly  come  before the
          meeting or any adjournment thereof.

     The close of business on  September  1, 1998 has been fixed by the Board of
Directors as the record date for the  determination of shareholders  entitled to
notice of, and to vote at the Meeting.

                                           By Order of the Board of Directors


                                           /s/ Robert D. Frawley
                                           ---------------------------------
                                           Robert D. Frawley, Secretary

Branchburg, New Jersey
September 11, 1998


     WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING,  PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED  PROXY CARD AND PROMPTLY  MAIL IT IN THE ENCLOSED  ENVELOPE IN
ORDER TO ASSURE REPRESENTATION OF YOUR SHARES AT THE MEETING. NO POSTAGE NEED BE
AFFIXED IF PROXY CARD IS MAILED IN THE UNITED STATES.


<PAGE>


PROXY STATEMENT

This Proxy Statement,  which will be mailed commencing on or about September 15,
1998 to the  persons  entitled  to  receive  the  accompanying  Notice of Annual
Meeting of  Shareholders,  is provided in connection  with the  solicitation  of
Proxies on behalf of the Board of  Directors  of  HYDROMER,  INC. for use at the
Annual  Meeting of  Shareholders  to be held at the  Corporate  Headquarters  of
Hydromer, 35 Columbia Road, Branchburg, New Jersey at 10 o'clock a.m. on October
21, 1998 and at any  adjournment  thereof,  for the  purposes  set forth in such
Notice.  The  Company's  executive  office  is  located  at  35  Columbia  Road,
Branchburg, New Jersey 08876-3518.

At the close of business  on  September  1, 1998,  the record date stated in the
accompanying  Notice,  the Company had  4,367,987  outstanding  shares of Common
Stock without par value ("Common Stock"),  each of which is entitled to one vote
with respect to each matter to come before the  Meeting.  The Company has 10,917
shares of Common Stock,  which are Treasury  Stock and not entitled to vote. The
Company has no class or series of stock outstanding other than the Common Stock.

As of September 1, 1998,  Manfred F. Dyck,  Chairman of the Board and a director
of the  Company,  beneficially  owned  approximately  38.51% of the  outstanding
Common  Stock of the  Company,  and his wife  Ursula M. Dyck,  a director of the
Company,  beneficially  owned an  additional  3.62% of the  Common  Stock.  Such
ownership may enable such shareholders to exercise a controlling  influence over
the Company's affairs.

I. ELECTION OF DIRECTORS

Five directors will be elected at the Annual  Meeting of  Shareholders,  each to
serve for one year and  until a  successor  shall  have  been  duly  chosen  and
qualified.  Each  director  is elected by a plurality  of votes cast.  It is the
intention of each of the persons named in the accompanying form of Proxy to vote
the  shares  represented  thereby  in favor of the five  nominees  listed in the
following table,  unless  otherwise  instructed in the Proxy. In case any of the
nominees is unable or declines to serve,  such persons reserve the right to vote
the shares  represented  by such Proxy for another  person duly nominated by the
Board of Directors  in his or her stead or, if no other person is so  nominated,
to vote such shares only for the remaining nominees.  The Board of Directors has
no reason to  believe  that any person  named will be unable or will  decline to
serve. Certain information  concerning the nominees for election as directors is
set forth below. Such information was furnished by them to the Company.

Name of Nominee and Certain
Biographical Information

MANFRED F. DYCK, age 63; Chief Executive  Officer of Biosearch Medical Products,
Inc.  (manufacturer  and  distributor  of enteral  feeding  systems) since 1975;
Chairman of the Board of the Company since June 1983 and Chief  Executive of the
Company  since  July of 1989;  President  from 1980 to June  1983;  Director  of
Biosearch Medical Products Inc. since 1975;  Director of the Company since 1980.
Manfred and Ursula Dyck are husband and wife.

MAXWELL  BOROW,  M.D.,  age 72,  Medical  Doctor,  retired  Chief of  Surgery at
Somerset Medical Center (hospital) from 1985-1994,  Chief of Vascular Surgery at
Somerset Medical Center from 1978-1985; Director of the Company since 1990.

URSULA M. DYCK, age 64;  Director of the Company since 1980.  Ursula and Manfred
Dyck are wife and husband.

DIETER HEINEMANN,  age 60; Specialist,  Frankfurt,  Germany Stock Exchange since
prior to 1987. Director of the Company since 1991.

ROBERT H. BEA, age 45; Vice President of Quality Assurance & Regulatory  Affairs
of Siemens  Hearing  Instruments,  Inc.  since 1994;  Vice  President of Quality
Assurance and Regulatory Affairs of Biosearch Medical


                                       1
<PAGE>

Products, Inc. from 1992- 1994; Previously, he worked at Johnson & Johnson where
he held positions of increasing  responsibility  in  Quality/Regulatory  affairs
from 1973-1991. Director of the Company since 1996.



                                           Stock Owned
September 1, 1998 (1)                   Beneficially as of      Percent of Class
---------------------                   ------------------      ----------------
MANFRED F. DYCK,                          1,682,173(2)              38.51%
                                   
MAXWELL BOROW, M.D.,                          6,000              Less than 1%
                                   
URSULA M. DYCK,                             158,076(3)               3.62%
                                   
DIETER HEINEMANN,                           565,125(4)              12.94%
                                   
ROBERT H. BEA                                   -0-                    --
                                   
                          

(1) As of September 1, 1998,  except as otherwise  indicated below, each nominee
has sole voting and  investment  power with  respect to all shares  shown in the
table as beneficially owned by such nominee.

(2)  Includes an aggregate  of 23,676  shares held by Mr. Dyck as custodian  for
certain of his  children  and does not  include  186,908  shares  held with sole
voting  investment power by Mr. Dyck's children and relatives of Mr. Dyck's,  as
to which Mr. Dyck disclaims  beneficial  ownership,  or shares held by Ursula M.
Dyck, his wife.

(3) Includes an aggregate of 23,076  shares held by Mrs.  Dyck as custodian  for
certain of her  children  and does not  include  140,756  shares  held with sole
voting and  investment  power by Mrs.  Dyck's  children,  as to which Mrs.  Dyck
disclaims beneficial ownership,  or shares held by Manfred F. Dyck, her husband,
individually or as custodian.

(4) Does not  include  135,000  shares  held by the  wife  and  children  of Mr.
Heinemann as to which he disclaims beneficial ownership.

During the past year, the Board of Directors of the Company met four times.  Dr.
Borow attended 75% of the meetings and all other Directors  attended 100% of the
meetings.

Since  May of 1990,  directors  have  been  compensated  at the rate of $750 per
meeting for  directors  meetings  attended  in person,  and $200 per meeting for
telephone  conference  meetings.  In addition,  directors may attend operational
meetings with Company  management,  and will be  compensated at the rate of $500
per meeting for attendance at such meetings.  No such operational  meetings were
held in the fiscal year 1998.

The  Board of  Directors  of the  Company  does not have a  separate  Nominating
Committee,  Audit  Committee or  Compensation  Committee.  These  functions  are
performed by the Board at its meetings.

Five Directors are standing for election at the annual meeting.

Executive Officers

Manfred F. Dyck has been  Chairman of the Board of the  Company  since June 1983
and a Director  of the  Company  since its  inception.  Mr. Dyck served as Chief
Executive  Officer of the Company from its inception  until October 1986, and as
of August 1989,  reassumed the duties of Chief Executive  Officer.  Mr. Dyck has
been Chief Executive  Officer and a Director of Biosearch  Medical Products Inc.
since 1975.



                                       2
<PAGE>

Kenneth  P.  Brice  has  been  Vice-President,  Chief  Financial  Officer  since
September  1997.  Prior to joining  Hydromer,  Mr.  Brice was  President  of CFO
Resources, Inc., a company that provides financial resources to other companies.
Mr. Brice previously was  Vice-President  and Chief Financial Officer of Digital
Solutions,  Inc., a NJ based Professional Employer Organization.  From September
1992 to February  1995,  he was  Vice-President  and  Corporate  Controller  for
Interim Services, Inc., a large international temporary help firm located in Ft.
Lauderdale, Fl.

Joseph A. Ehrhard has been Vice-President of New Business and R&D since February
1998. Prior to joining Hydromer,  Mr. Ehrhard was Director of R&D for the Golden
Cat Division of  Ralston-Purina  in St. Louis,  Mo. Mr.  Ehrhard was  previously
Director of R&D in  Worldwide  Absorbent  Products  and  Materials  Research for
Johnson & Johnson in New Jersey.  From June 1987 through January 1995, he was in
R&D at Procter & Gamble  Company,  most  recently as Section  Head of Global New
Technology Development in Personal Cleansing in Cincinnati, OH.

Robert J. Moravsik has been Vice-President and General Counsel since April 1998.
He also serves in the same capacity for  Biosearch  Medical  Products,  Inc. and
affiliated  company since 1987. Prior to that he was  Vice-President and General
Counsel to Fisher Stevens, Inc., a subsidiary of the Bureau of National Affairs.

Robert D. Frawley has been  Secretary of the Company  since  January  1984.  Mr.
Frawley has been an attorney in private  practice  since  December  1985.  He is
employed by the law firm of Smith, Stratton, Wise, Heher and Brennan, Princeton,
New Jersey since February 1994. From December 1983 to December 1985, Mr. Frawley
was Vice  President  - Corporate  Counsel and  Secretary  of  Biosearch  Medical
Products Inc.

Compensation of Executive Officers

The following table sets forth information  concerning cash compensation paid or
accrued by the Company  during the fiscal year ended June 30,  1998,  to the CEO
and  for  each  of the  executive  officers  of the  Company  whose  total  cash
compensation exceeded $100,000.


SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                        Annual Compensation                                  Long-Term Compensation
                                        -------------------                                  ----------------------
      Name
      and                                                  Other Annual       Restricted
    Principle                                             Compensation($)       Stock         Options        LTIP        All Other
    Position           Year      Salary($)   Bonus($)           (1)             Awards        /SARs($)     Payouts      Compensation
---------------        ----       ------      ------       -------------       --------       -------      -------      ------------
<S>                    <C>        <C>         <C>              <C>                <C>             <C>         <C>            <C>
Manfred F. Dyck,       1995       50,000         -               -                -               -           -              -
Chairman,              1996       52,500         -             5,000
President, CEO         1997       64,257      25,687           6,250
                       1998       82,500      23,660           5,000
</TABLE>


The aggregate value of restricted  shares of the Company held by Manfred F. Dyck
as of June 30,  1998 was  approximately  $1,997,580  (includes  only shares held
directly, does not include option or shares held as custodian.)

(1) Amount of Automobile Allowance, which was paid in the year shown.



                                       3
<PAGE>

Stock Options

In 1984 the Board of Directors  conferred upon Manfred F. Dyck,  Chairman of the
Board of the Company, the authority to grant to, among others,  employees of the
Company including executive officers, options to purchase up to 15,000 shares of
the Common  Stock of the  Company at an exercise  price of $1.00 per share,  and
upon such other terms and  conditions  as the  Chairman may  determine.  No such
options were granted during the 1998 fiscal year.

On January 22, 1998 the Board of  Directors  authorized  a stock option plan for
senior  management.  Under the plan,  senior  management  would be issued  stock
options in an amount  equal to 3% of the  incremental  market cap of the Company
(defined as # of  outstanding  shares  times share  price)  divided by the stock
price at June  3oth in each of the next  three  years.  These  options  would be
equally divided but the number of participants in the plan. As of June 30, 1998,
there were three  participants.  The plan was effective July 1, 1998. The market
cap of the company on July 1, 1998 was  $3,010,496.  The first  options  will be
issued under this plan as of June 30, 1999.

On  January  22,  1998 the  company  issued  25,000  stock  options  to a senior
executive  as part of his  employment  agreement.  These  options vest 100% in 6
months and are priced at $0.875 per share.  The Company also issued 60,000 stock
options to the same  executive  that will vest once the company gets listed on a
regional or national exchange.  The vesting will be at the rate of 20,000 shares
will vest immediately upon listing. 5,000 shares will vest at the end of each of
the next 8 quarters  from  listing  date.  The price of the options  will be the
listing price or $2.00, whichever is higher.

On January  22, 1998 the Board of  Directors  approved an option plan for active
directors that would give each active director of the Company 5,000 options with
a strike price on September 1, 1998, the date of record and each subsequent year
on the record date.

On August 12, 1998 the Board of  Directors  authorized  a stock  option plan for
Manfred Dyck, Chairman and CEO. Under the plan, he would be issued stock options
in an amount equal to 3% of the incremental  market cap of the Company  (defined
as # of outstanding shares times share price) divided by the stock price at June
3oth in each of the next three years.  The plan was effective  July 1, 1998. The
market cap of the company on July 1, 1998 was $3,010,496. The first options will
be issued under this plan as of June 30, 1999.

Certain Agreements with Directors and Executive Officers

Manfred F. Dyck has served as Chairman, Chief Executive Officer and President of
the Company since July of 1989. He serves the Company  approximately  5 days per
month,  not to exceed 20% of his time. He is compensated by a salary of $100,000
per annum effective  August 12, 1998 and a car allowance of $5,000 per annum. He
also   participates   in  a  management   bonus   program   based  upon  Company
profitability.

Robert  Moravsik  serves the company 4 days per week in his current  capacity as
Vice-President,  and General  Counsel.  He holds the same  position at Biosearch
Medical Products for the remaining 20% of his time.

Information Concerning Certain Shareholders

The  shareholders  (including  any "group" as that term is used in Section 13(d)
(3) of the  Securities  Exchange Act of 1934) who, to the knowledge of the Board
of Directors of the Company,  owned beneficially more than 5% of the outstanding
Common  Stock as of  September 1, 1998,  and all  directors  and officers of the
Company as a group, and their respective shareholdings (according to information
furnished by them to the Company),  are set forth in the following table. Except
as  indicated in the  footnotes to the table,  all of such shares are owned with
sole voting and investment power.



                                       4
<PAGE>

                                      Shares of Common
                                         Stock Owned
Name and Address                       Beneficially (1)        Percent of Class
----------------                       ----------------        ----------------

Manfred F. Dyck                        1,682,173(2)(3)             38.52%
255 Holland Road
Far Hills, NJ 07931

Ben A Posdal                             355,361                    8.14%
Post Office Box 23632
Tampa, FL 33623

Dieter Heinemann                         565,125(4)                12.92%
Goldbergweg 64
60599 Frankfurt AM
Federal Republic of Germany

All Directors and Officers             2,412,374(2)(4)(5)          55.23%
As a group (8 persons)

(1) As of September 1, 1998,  except as otherwise  indicated below, each nominee
had sole voting and  investment  power with  respect to all shares  shown in the
table as beneficially owned by such nominee.

(2)  Includes an aggregate  of 23,676  shares held by Mr. Dyck as custodian  for
certain of his  children  and does not  include  186,908  shares  held with sole
voting and investment power by Mr. Dyck's children and relatives of Mr. Dyck..

(3) Does not include  158,076  shares held by Ursula M. Dyck,  Mr.  Dyck's wife,
individually and as custodian, and pursuant to exercisable options.

(4) Does not  include  135,000  shares  held by the  wife  and  children  of Mr.
Heinemann as to which he disclaims beneficial ownership.

(5) Includes 250 shares held by an officer as custodian for a child. Includes an
aggregate of 23,076  shares held by Mrs.  Dyck as  custodian  for certain of her
children.

Other Information Concerning Directors, Officers and Shareholders

During 1998 and 1997,  the Company  sold  materials  and  services to  Biosearch
Medical  Products,  Inc.,  (BMP),  its former  parent,  for $45,019 and $31,257,
respectively.  The Company  also earned  royalty  income from BMP of $25,894 and
$43,171 for the years ended June 30, 1998 and 1997, respectively.  Total amounts
owed to the  Company by BMP were  $25,093 and $19,794 at June 30, 1998 and 1997,
respectively.  In addition, BMP provides engineering and secretarial services to
Hydromer.  These  expenses  amounted  to $17,393 and $10,090 for the years ended
June 30, 1998 and 1997,  respectively.  Amounts owed to BMP at June 30, 1998 and
1997,  respectively,  were  $3,811  and  $597.  In 1998 and  1997,  the  Company
purchased  furniture and equipment from BMP for $500 and $46,000,  respectively.
Also,  during  1998 and 1997,  the  Company  leased  equipment  and  space  from
Biosearch Medical Products,  Inc., on a week-to-week basis. Total rental expense
paid to BMP was  $10,000  for the year  ended 1998 and $6,000 for the year ended
June 30,1997.

On June 12, 1998, the Company  purchased the Biosearch Medical Products facility
and land for $850,000 in cash and a pre-paid lease of $345,000.  The transaction
was funded  with a 15-year  mortgage at a local bank.  The  mortgage  carries an
interest rate of 200 basis points over the Bank's fully absorbed  five-year cost
of funds,  adjusted every 5 years. The interest rate for the first 5-year period
is 8.0%. The land and building has an appraised  value of $1,370,000.  Biosearch
Medical Products will occupy  approximately 75% of the building and Hydromer the
remaining  25%.  Manfred F. Dyck who is a director and executive  officer of the
Company  is 


                                       5
<PAGE>

also a director and Chief Executive  Officer of BMP, and hold  approximately 20%
of the Common Stock of BMP on a fully diluted basis.  The Company  believes that
the terms of the foregoing arrangements are fair and equitable to both parties.

Robert J.  Moravsik,  Vice-President  and General  Counsel of the  Company  also
serves as Vice-President and General Counsel of Biosearch Medical Products, Inc.
In the  event a  conflict  exists  outside  counsel  is  retained  to  represent
Hydromer's interests. In the fiscal year ended June 30, 1998, the firm of Smith,
Stratton,  Wise, Heher and Brennan  represented  Hydromer in the purchase of the
building from Biosearch.

Robert D.  Frawley,  Secretary of the Company,  is of counsel to the law firm of
Smith, Stratton,  Wise, Heher and Brennan,  Princeton,  New Jersey. By agreement
with the  Company,  Mr.  Frawley  provides  legal  counsel  to the  Company on a
fee-for-service  basis.  Smith,  Stratton,  Wise, Heher & Brennan is expected to
render legal services in the future.

II. RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS

Subject  to  ratification  by the  stockholders,  the  Board of  Directors,  has
selected  the firm of  Rosenberg  Rich Baker  Berman & Company as the  Company's
independent public accountants for the current year.

Representatives  of  Rosenberg  Rick Baker  Berman & Company are  expected to be
present  at the  Annual  Meeting.  They  will  have  the  opportunity  to make a
statement  if they  desire to do so and will also be  available  to  respond  to
appropriate questions from stockholders.

III. OTHER MATTERS

The Board of Directors of the Company does not know of any other  matters  which
may be brought  before the  meeting.  However,  if any such  other  matters  are
properly  presented for action,  it is the intention of the persons named in the
accompanying form of Proxy to vote the shares represented  thereby in accordance
with their judgment on such matters.

IV. MISCELLANEOUS

If the  accompanying  form  of  Proxy  is  executed  and  returned,  the  shares
represented  thereby  will be voted in  accordance  with the terms of the Proxy,
unless the proxy is revoked by written  notice  addressed to and received by the
Secretary of the Corporation.  If no directions are indicated in such Proxy, the
shares  represented  thereby will be voted in the election of directors in favor
of the nominees proposed by the Board of Directors, and in favor of ratification
of The Independent Certified Public Accountants. Any Proxy may be revoked at any
time  before  it is  exercised.  The  casting  of a ballot at the  Meeting  by a
shareholder who may  theretofore  have given a Proxy will not have the effect of
revoking  the same unless the  shareholder  so  notifies  the  Secretary  of the
meeting in writing at any time prior to the voting of the shares  represented by
the Proxy.

Votes that are withheld and broker  nonvotes  will be treated as shares that are
present for purposes of determining a quorum. Withheld votes will be excluded in
determining  whether a nominee for director or the  ratification  of independent
certified public accountants, has received a plurality of the votes cast.

All costs relating to the  solicitation of Proxies will be borne by the Company.
Proxies  may be  solicited  by mail and the  Company  may pay  brokers and other
persons  holding  shares of stock in their names or those of their  nominees for
their reasonable expenses in sending soliciting materials to their principals.

It is  important  that  Proxies be returned  promptly.  Shareholders  who do not
expect to attend  the  Meeting  in person  are urged to mark,  sign and date the
accompanying  form of Proxy and mail it in the enclosed return  envelope,  which
requires  no postage if mailed in the United  States,  so that their vote can be
recorded.



                                       6
<PAGE>

V. EXCHANGE ACT COMPLIANCE

Section  16(a) of the  Securities  Exchange  Act  requires  that  certain of the
Company's  officers,  directors  and  persons who own more than ten percent of a
registered  class of the  Company's  securities,  file reports of ownership  and
changes in ownership of the Company's  securities  with the Securities  Exchange
Commission.  Officers,  directors and greater than ten percent  shareholders are
required to provide the Company with copies of the forms they file.

Based  solely upon its review of copies of such forms  received by the  Company,
and upon  representations  by the  Company's  officers and  directors  regarding
compliance  with the filing  requirements,  the company  believes that in Fiscal
1998,  all filing  requirements  applicable to its  officers,  directors and ten
percent shareholders were complied within a timely manner.


Shareholder Proposals

Shareholder  proposals  intended to be presented  at the 1999 Annual  Meeting of
Shareholders  of the Company  must be received by the Company by May 22, 1999 in
order to be considered for inclusion in the Company's Proxy  Statement  relating
to such meeting.



                                              Branchburg, New Jersey
                                              September 11, 1998

                                              By Order of the Board of Directors



                                              /s/ Robert D. Frawley
                                              ----------------------------------
                                              Robert D. Frawley
                                              Secretary



                                       7