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

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                    FORM 10-Q


                  Quarterly Report Under Section 13 or 15(d) of
                       the Securities Exchange Act of 1934


For the quarter ended: August 31, 1997          Commission file number: 0-11411



                                   Q-MED, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                   DELAWARE                                 22-2468665
       -------------------------------                  -------------------
       (State or other jurisdiction of                   (I.R.S. Employer
        incorporation or organization)                  Identification No.)


100 METRO PARK SOUTH, LAURENCE HARBOR, NEW JERSEY              08878
-------------------------------------------------            ----------
     (Address of principal executive offices)                (Zip Code)


       (Registrant's telephone number, including area code) (908) 566-2666


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 
                                   ---       ---

The number of shares outstanding of the registrant's common stock on 
October 6, 1997: 9,631,583

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


<PAGE>


                          Q-MED, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


                                                     August 31,    November 30,
                                                        1997           1996
                                                    ------------   ------------
                                                    (Unaudited)
ASSETS
Current assets
Cash and cash equivalents ........................  $  1,187,147   $    680,686
Investments ......................................          --        2,144,545
Accounts receivable, net of
        allowances of approximately
        $88,000 and $142,000 respectively ........       224,306        403,930
Inventories ......................................       741,355      1,123,664
Prepaid expenses and other current assets ........       147,591         84,074
                                                    ------------   ------------
        Total current assets .....................     2,300,399      4,436,899

Property and equipment, net ......................       650,820        454,674
Product software development costs ...............        67,534         87,140
Other assets .....................................       179,374        192,351
                                                    ------------   ------------
                                                    $  3,198,127   $  5,171,064
                                                    ============   ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses ............  $    904,026   $    855,795
Current maturities of long-term debt .............          --          100,000
                                                    ------------   ------------
        Total current liabilities ................       904,026        955,795

Leases payable--long-term ........................       104,270         72,053
Deferred revenue .................................        92,038         44,737
                                                    ------------   ------------
        Total liabilities ........................     1,100,334      1,072,585

Stockholders' equity
     Common stock $.001 par value;
     20,000,000 shares authorized;
     9,585,049 and 9,483,615 shares
     issued and 9,563,049 and 9,461,615 shares
     outstanding respectively ....................         9,585          9,477
Paid-in capital ..................................    17,974,354     17,836,480
Accumulated deficit ..............................   (15,810,521)   (13,656,095)
                                                    ------------   ------------
                                                       2,173,418      4,189,862
Unrealized (loss) on securities available 
  for sale .......................................          --          (15,758)
Less: treasury stock at cost, 22,000 
  common shares ..................................       (75,625)       (75,625)
                                                    ------------   ------------
Total stockholders' equity .......................     2,097,793      4,098,479
                                                    ------------   ------------
                                                    $  3,198,127   $  5,171,064
                                                    ============   ============


           See Accompanying Notes to Consolidated Financial Statements



<PAGE>


<TABLE>
                                               Q-MED, INC. AND SUBSIDIARIES

                                          CONSOLIDATED STATEMENTS OF OPERATIONS
                                                       (Unaudited)
<CAPTION>

                                                 For the Nine       For the Nine       For the Three     For the Three
                                                 Months Ended       Months Ended       Months Ended       Months Ended
                                                August 31, 1997    August 31, 1996    August 31, 1997    August 31, 1996
                                                ---------------    ---------------    ---------------    ---------------
<S>                                               <C>                <C>                <C>                <C>        
Sales ......................................      $ 1,688,876        $ 2,914,709        $   499,993        $   829,231
Less sales returns and allowances ..........           39,122            185,554             16,569             48,238
                                                  -----------        -----------        -----------        ----------- 
    Net sales ..............................        1,649,754          2,729,155            483,424            780,993
Cost of sales ..............................          658,691          1,085,306            206,612            347,118
                                                  -----------        -----------        -----------        ----------- 
    Gross profit ...........................          991,063          1,643,849            276,812            433,875
Selling, general and
  administrative expenses ..................        3,010,260          3,214,593            966,365          1,028,247
Provision for uncollectible accounts .......           30,548             11,286              3,499              6,472
Research and development expenses ..........          141,217            279,741             58,075             70,934
                                                  -----------        -----------        -----------        ----------- 
Income (loss) from operations ..............       (2,190,962)        (1,861,771)          (751,127)          (671,778)
Interest expense ...........................          (19,081)           (27,956)            (4,849)            (9,062)
Other income ...............................           86,191            114,707             22,279             49,934
(Loss) on sale of securities ...............          (30,574)              --              (30,574)              --
                                                  -----------        -----------        -----------        ----------- 
Net (loss) .................................      $(2,154,426)       $(1,775,020)       $  (764,271)       $  (630,906)
                                                  ===========        ===========        ===========        =========== 
(Loss) per common share ....................      $      (.23)       $      (.19)       $      (.08)       $      (.06)
                                                  -----------        -----------        -----------        ----------- 
Weighted average number of shares
  of common stock outstanding ..............        9,537,565          9,225,080          9,575,012          9,439,845
                                                  ===========        ===========        ===========        =========== 


                                          See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>


<TABLE>
                                                    Q-MED, INC. AND SUBSIDIARIES

                                          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                             For the Nine Months Ended August 31, 1997
                                                            (Unaudited)
<CAPTION>
                                                                                                           Unrealized
                                                                                      Common Stock        Gain (Loss)
                                                                                    Held in Treasury     on Securities
                                    Common        Paid-in        Accumulated      --------------------     Available
                                    Stock         Capital          Deficit        Shares      Amount       for Sale        Total
                                    ------      -----------     -------------     ------     ---------   -------------   ----------
<S>                                 <C>         <C>             <C>               <C>        <C>           <C>           <C>       
Balance--November 30, 1996 .....    $9,477      $17,836,480     $(13,656,095)     22,000     $(75,625)     $(15,758)     $4,098,479

Exercise of stock options 
  and warrants .................       108          137,874                                                                 137,982

Net loss for the nine months
  ended August 31, 1997 ........                                  (2,154,426)                                            (2,154,426)

Unrealized gain (loss) on 
  securities available 
  for sale .....................                                                                             15,758          15,758
                                    ------      -----------     ------------      ------     --------      --------      ----------
Balance--August 31, 1997 .......    $9,585      $17,974,354     $(15,810,521)     22,000     $(75,625)     $   --        $2,097,793
                                    ======      ===========     ============      ======     ========      ========      ==========


                                    See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>


                          Q-MED, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                      For the Nine Months Ended
                                                     ---------------------------
                                                      August 31,     August 31, 
                                                         1997          1996
                                                     -----------    -----------
Cash flows from operating activities:
  Net income (loss) ..............................   $(2,154,426)   $(1,775,020)
                                                     -----------    -----------
    Adjustments to reconcile net income
       to cash (used in) operating
       activities:
    Depreciation and amortization ................       200,379        219,945
    Loss on sale of securities ...................        30,574           --
    Changes in assets and liabilities:
       Decrease in accounts receivable ...........       179,624        364,201
       Decrease in inventories ...................       382,309        200,334
       Increase (decrease) in accounts payable
         and accrued liabilities .................        48,231       (302,246)
       (Increase) in prepaid expenses and
         other assets ............................       (63,517)       (28,634)
       Other, net ................................        72,616        (66,143)
                                                     -----------    -----------
         Total adjustments .......................       850,216        387,457
                                                     -----------    -----------
       Net cash (used in) operating activities ...    (1,304,210)    (1,387,563)
                                                     ===========    =========== 
Cash flows from investing activities:
  Purchase of securities .........................          --       (1,559,903)
  Sale of securities .............................     2,129,729      2,209,000
  Capital expenditures, net ......................      (357,040)      (169,147)
                                                     -----------    -----------
  Net cash provided by investing activities ......     1,772,689        479,950
                                                     ===========    =========== 
Cash flows from financing activities:
  Principal (payment) on note payable
     to bank .....................................      (100,000)      (225,000)
  Proceeds from issuance of common stock .........       137,982      2,680,530
                                                     -----------    -----------
  Net cash provided by financing activities ......        37,982      2,455,530
                                                     ===========    ===========
Net increase in cash and cash equivalents ........       506,461      1,547,917
Cash and cash equivalents at beginning of period..       680,686        866,750
                                                     -----------    -----------
Cash and cash equivalents at end of period .......   $ 1,187,147    $ 2,414,667
                                                     ===========    ===========
Supplemental disclosure of cash flow information:
  Cash paid during the period for:
      Interest ...................................   $    19,081    $    27,956
                                                     ===========    ===========


           See Accompanying Notes to Consolidated Financial Statements



<PAGE>


                          Q-MED, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


BASIS OF PRESENTATION

The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, these financial statements do not include
all of the information and footnotes required by generally accepted accounting
principles. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the nine month period ended August 31, 1997 are
not necessarily indicative of the results that may be expected for the year
ending November 30, 1997. These consolidated condensed financial statements
should be read in conjunction with the financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year ended
November 30, 1996.


NOTE 1 -- RESULTS OF OPERATIONS

In the opinion of management, the financial statements for the nine and three
months ended August 31, 1997 and August 31, 1996 include all adjustments and
accruals necessary for a fair presentation. All such adjustments are of a normal
recurring nature. The results of operations for the nine months ended August 31,
1997 are not necessarily indicative of the results which may be expected for the
full year ending November 30, 1997.


NOTE 2 -- INVENTORIES

Inventories, consisting of finished units and raw materials, are stated at the
lower of cost (determined on moving weighted average method) or market.
Inventories consist of the following:

                                                  August 31,       November 30,
                                                     1997              1996
                                                  ----------       ------------
                                                 (Unaudited)
                                              
Raw materials (component parts) ..............     $220,630         $  251,494
Finished units ...............................      520,725            872,170
                                                   --------         ----------
                                                   $741,355         $1,123,664
                                                   ========         ==========
                                              
NOTE 3 -- Accounts Payable and Accrued Expenses
                                              
Accounts payable and accrued expenses include the following:
                                              

                                                  August 31,       November 30,
                                                     1997              1996
                                                  ----------       ------------
                           
Accounts payable-trade .......................     $283,017         $  282,123
Deferred revenue .............................      268,161            247,368
Accrued payroll and commissions ..............      112,463            105,262
Other accrued expenses .......................      240,385            221,042
                                                   --------         ----------
                                                   $904,026         $  855,795
                                                   ========         ==========
                                              
                                           

<PAGE>


NOTE 4 -- Principles of Consolidation

The consolidated financial statements include the accounts of qmed, Inc., its
83% owned subsidiary, Heart Map, Inc., and its 100% owned subsidiary,
Interactive Heart Management Corp., which was formed in March, 1995. Interactive
Heart Management Corp. provides coronary artery disease management services to
health care providers throughout the United States. All inter-company accounts
and transactions have been eliminated.



<PAGE>


                                     PART I

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The following table presents the percentage of total revenues for the periods
indicated and changes from period to period of certain items included in the
Company's Statements of Operations.

<TABLE>
<CAPTION>
                                                                                            Period to Period Percentage Changes
                                         For the Nine Months     For the Three Months   --------------------------------------------
                                           Ended August 31,         Ended August 31,     For the Nine Months    For the Three Months
                                         ------------------      -------------------       Ended August 31,       Ended August 31, 
                                          1997        1996         1997        1996        1997 Vs. 1996          1997 Vs. 1996
                                         ------      ------       ------      ------    -------------------    --------------------
<S>                                      <C>         <C>          <C>         <C>              <C>                    <C>   
Sales (net) ...........................  100.0%      100.0%       100.0%      100.0%           (39.5)                 (38.1)
Cost of Sales .........................   39.9        39.8         42.7        44.4            (39.3)                 (40.5)
                                         -----       -----        -----       -----
Gross Profit ..........................   60.1        60.2         57.3        55.6            (39.7)                 (36.2)
Selling, general and administrative ...  182.5       117.8        199.9       131.6             (6.4)                  (6.0)
Provision for uncollectible accounts ..    1.9          .4           .7          .8            170.7                  (45.9)
Research and development ..............    8.5        10.2         12.0         9.1            (49.5)                 (18.1)
                                         -----       -----        -----       -----
(Loss) from continuing operations ..... (132.8)      (68.2)      (155.3)      (85.9)            17.7                   11.8
Interest expense ......................   (1.2)       (1.0)        (1.0)       (1.2)           (31.7)                 (46.5)
Other Income ..........................    5.2         4.2          4.5         6.4            (24.9)                 (55.4)
(Loss) on sale of securities ..........   (1.8)         --         (6.3)         --               *                      *
                                         -----       -----        -----       -----
Net (loss) ............................ (130.6)      (65.0)      (158.1)      (80.7)            21.4                   21.1
                                         =====       =====        =====       =====
----------

*  Not meaningful

</TABLE>


NINE AND THREE MONTHS ENDED AUGUST 31, 1997 COMPARED WITH THE NINE AND THREE
MONTHS ENDED AUGUST 31, 1996

Net sales for the nine months ended August 31, 1997 decreased by 39.5% or
approximately $1,079,000 when compared to the nine months ended August 31, 1996.
Net sales for the three months ended August 31, 1997 decreased by 38% or
approximately $298,000 when compared to the three months ended August 31, 1996.
This decrease is primarily due to the continued reduction in the Company's
capital equipment sales to the primary care marketplace. During fiscal 1997, the
Company has continued to focus on the marketing and development of the ohms|cad
system through its wholly owned subsidiary, Interactive Heart Management Corp
("IHMC").

The Company, through its subsidiary, IHMC, has aggressively marketed the
ohms|cad system to over 30 leading health care providers throughout the United
States and will continue these efforts throughout fiscal 1997. The Company
entered into another contract in April, 1997 to provide coronary artery disease
management services to the approximately 110,000 members of the San Jose Medical
Group. The contract was implemented in August, 1997. Because of the terms of the
contract, which includes the Company sharing in the savings, any significant
revenue from this or other contracts will not be recognized until approximately
18 months from implementation due to the time involved in reviewing data for
specific periods of time. Included in the Company's net loss of $(2,154,426) was
approximately $(1,448,956) from Interactive Heart Management Corp.

The Company's gross profit margin decreased slightly to 60.1% for the nine
months ended August 31, 1997 from 60.2% for the nine months ended August 31,
1996 and increased slightly to 57.3% for the three months ended August 31, 1997
from 55.6% for the three months ended August 31, 1996. The fluctuation was due
to the reduction in sales while certain elements of costs remain fixed.

Selling, general and administrative expenses for the nine months ended August
31, 1997 decreased by 6.4% or approximately $204,000 when compared to the
corresponding period of the prior year. Selling, general and administrative
expenses for the three months ended August 31, 1997 decreased by 6% or
approximately $62,000 when compared to the three months ended August 31, 1996.
The decrease was 



<PAGE>


primarily due to the continued decrease in sales-related expenses in connection
with the Company's direct sales force. Management expects selling expenses to
increase slightly as marketing activity expands through the Company's
Interactive Heart Management subsidiary.

Research and development expenses for the nine months ended August 31, 1997
decreased by 49.5% or approximately $138,000 when compared to the nine months
ended August 31, 1996. Research and development expenses for the three months
ended August 31, 1997 decreased by 18.1% or approximately $13,000 when compared
to the three months ended August 31, 1996. The decrease is due to the Company's
shift of resources into developing the ohms|cad system.

LIQUIDITY AND CAPITAL RESOURCES

To date, the Company's principal sources of working capital have been provided
from operations, proceeds from public and private placements of securities, and
the sale of certain assets. Since the Company's inception, these transactions
have generated approximately $18,000,000 less applicable expenses.

The Company had an installment note payable to a bank in the amount of $625,000
dated March 1, 1995. The Company had been making monthly installments of $25,000
plus interest at 1% over prime rate. The note was fully paid on March 31, 1997.

The Company had working capital of $1,396,373 at August 31, 1997 compared to
$3,481,104 at November 30, 1996 and ratios of current assets to current
liabilities of 2.5:1 and 4.6:1, respectively. The working capital decrease was
primarily due to the net loss of approximately $2,154,000 for the nine months
ending August 31, 1997.

The Company anticipates that funds generated from operations, together with cash
and cash equivalents, may not be sufficient to meet its working capital and
capital requirements for the current year. The Company is currently seeking
additional financing to support IHMC's sales effort. See "Need for Additional
Capital".

The Company maintains a general policy of net 30-day payment terms for
distributors, cash or third-party leasing arrangements with direct sales to
physicians and letters of credit or open account for international sales. In
some instances, the Company has extended payment terms beyond net 30 to selected
distributors. The Company's receivables balances over 90 days past due was 18.4%
of the receivables balance at August 31, 1997 compared to 19.1% at November 30,
1996. The Company is aggressively seeking payment arrangements to be made in the
near future on these overdue balances.

The Company, with its subsidiary, Interactive Heart Management Corp., enters
into contract arrangements with physician groups and managed care organizations
where either a prepayment is made per month or billing is done on a per test
basis. The Company generally holds a security deposit for systems placed in
physicians' offices.

The Company offers certain distributors the opportunity upon the introduction of
new or upgraded products to exchange their inventory units. In such cases, the
customer is billed for the net price differential at the time of the product
exchange.

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

FUTURE OPERATING RESULTS. Future operating results may be impacted by a number
of factors that could cause actual results to differ materially from those
stated herein, which reflect management's current expectations. These factors
include worldwide economic and political conditions, industry specific factors,
the Company's ability to maintain access to external financing sources and its
financial liquidity,



<PAGE>


the acceptance of the ohms|cad system by managed care organizations, and the
Company's ability to manage expense levels.

NEED FOR ADDITIONAL CAPITAL. As of August 31, 1997, the Company had
approximately $1,187,000 cash and short term investments. The Company has
experienced negative cash flows since fiscal 1995 and expects the negative cash
flow to continue until significant service revenue is generated under agreements
to provide ohms|cad services. The Company expects that the monthly negative cash
flow will increase as a result of increased activities related to the marketing
of ohms|cad. As a result of the increased expenditure of funds, the Company
believes that it will be necessary for the Company to raise additional capital
to sustain its marketing efforts. The Company must raise additional equity funds
in order to continue its operations until it is able to generate sufficient
additional revenue from the sale of its products and services. There can be no
assurance that the Company will be successful in raising such funds on terms
acceptable to it or at all. The Company is discussing the possibility of raising
additional funds with potential investors, but as of August 31, 1997, the
Company had not entered into any firm commitments for additional funds. The
Company's future success is highly dependent upon its continued access to
sources of financing which it believes are necessary for the continued support
of IHMC's sales effort. In the event the Company is unable to maintain access to
its existing financing sources, or obtain other sources of financing, there
would be a material adverse effect on the Company's business, financial position
and results of operations.

REGULATION. The Company's products are subject to extensive government
regulation in the United States by federal, state and local agencies including
the Food and Drug Administration (FDA). The process of obtaining and maintaining
FDA and other required regulatory approvals for the Company's products is
lengthy, expensive and uncertain. There can be no assurance that changes in
existing regulations or the adoption of new regulations will not occur which
will adversely affect the Company.

STOCK PRICE FLUCTUATIONS. The Company's participation in a highly competitive
industry often results in significant volatility in the Company's common stock
price. This volatility in the stock price is a significant risk investors should
consider.

FORWARD-LOOKING STATEMENTS. This report contains certain forward-looking
statements that are based on current expectations. In light of the important
factors that can materially affect results, including those set forth above and
elsewhere in this report, the inclusion of forward-looking information herein
should not be regarded as a representation by the Company or any other person
that the objectives or plans of the Company will be achieved. The Company may
encounter competitive, technological, financial and business challenges making
it more difficult than expected to continue to market its products and services;
competitive conditions within the industry may change adversely; the Company may
be unable to retain existing key management personnel; the Company's forecasts
may not accurately anticipate market demand; and there may be other material
adverse changes in the Company's operations or business. Certain important
factors affecting the forward-looking statements made herein include, but are
not limited to (i) accurately forecasting capital expenditures, and (ii)
obtaining new sources of external financing. Assumptions relating to budgeting,
marketing, product development and other management decisions are subjective in
many respects and thus susceptible to interpretations and periodic revisions
based on actual experience and business developments, the impact of which may
cause the Company to alter its capital expenditure or other budgets, which may
in turn affect the Company's financial position and results of operations.



<PAGE>


                                    PART II

                               OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS

        No change from previous filing.

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


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                           Q-MED, INC.


                                           By: /s/ MICHAEL W. COX
                                               ---------------------------------
                                               Michael W. Cox
                                               President
                                               Principal Executive and
                                               Financial Officer



Dated: October 8, 1997