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                      ----------------------------------
                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549
                      ----------------------------------

                                 FORM 10-Q

                _X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR
                    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                For the Quarterly Period Ended September 30, 1997

                                      OR

                ___ TRANSITION REPORT PURSUANT TO SECTION 13 OR
                    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                       For the transition period from      to

                           Commission File No. 0-15271

                            ---------------------------
                            CISTRON BIOTECHNOLOGY, INC.
                (Exact Name of Registrant as Specified in its Charter)
                            ---------------------------

      Delaware                                             22-2487972
(State or other jurisdiction of                         (I.R.S. Employer
 incorporation or organization)                          Identification Number)


10 Bloomfield Avenue, Pine Brook, New Jersey                   07058
(Address of Principal Executive Offices)                     (Zip Code)

              Registrant's telephone number, including area code:
                               (973) 575-1700

	Indicate by check mark whether the Registrant (1) has filed all 
reports required to be filed by Section 13 and 15 (d) of the Securities 
Exchange Act of 1934 during the preceding 12 months and (2) has been 
subject to such filing requirements for the past 90 days.


                                Yes _X_  No ___


    The aggregate number of Registrant's outstanding shares on November 10, 
1997 was 26,884,990 shares of Common Stock, .01 par value.



                               Page 1 of 10 pages
<PAGE>

                           CISTRON BIOTECHNOLOGY, INC.
                           ---------------------------
                          (A DEVELOPMENT STAGE COMPANY)
                           ---------------------------


                                     INDEX
                                     -----



<S>                                                                   <C>  
                                                                      PAGE
                                                                      ----
PART I  -  FINANCIAL INFORMATION

        Item 1. Financial Statements

        Balance sheets as of September 30, 1997 and June 30, 1997.....  3

        Statements of operations for the three months ended 
        September 30, 1997 and 1996...................................  4

        Statements of cash flows for the three months ended 
        September 30, 1997 and 1996...................................  5

        Notes to financial statements.................................  6

        Item 2. Management's discussion and analysis of results
        of operations and financial condition.........................  7


PART II - OTHER INFORMATION...........................................  9

        Signatures.................................................... 10

                                   2

<PAGE>
                          CISTRON BIOTECHNOLOGY, INC.
                          ---------------------------
                                BALANCE SHEETS
                                --------------
<S>                                           <C>               <C>
                                                  June 30,      September 30,
                                                    1997            1997
                                               ------------     -------------
CURRENT ASSETS:                                                  (unaudited) 
						
 Cash and equivalents                          $  6,368,228     $  5,616,185 
 Accounts receivable-trade                           55,309           43,052 
 Accounts receivable-other                        3,000,000        3,000,000 
 Inventories                                          4,278            3,163 
 Prepaid expenses                                       475              475  
 Notes receivable $230,000; reserve $230,000              -                -
                                                 ----------       ----------
TOTAL CURRENT ASSETS                              9,428,290        8,662,875 
                                                 ----------       ----------
ACCOUNTS RECEIVABLE - OTHER - Long Term           6,249,130        6,339,570 
                                                 ----------       ----------
PROPERTY AND EQUIPMENT:						
 Machinery and equipment                            533,374          528,821 
 Furniture and fixtures                             147,113          147,113 
 Leasehold improvements                              77,674           77,674
                                                 ----------       ----------
                                                    758,161          753,608
 Less: Accumulated depreciation                     726,877          728,190
                                                 ----------       ----------
                                                     31,284           25,418
                                                 ----------       ----------
SECURITY DEPOSITS                                    23,938           23,938 
PATENTS, Net of accumulated amortization         ----------       ----------
of $11,886 and $12,549, respectively                 25,219           24,557
                                                 ----------       ----------
TOTAL ASSETS                                   $ 15,757,861     $ 15,076,358 
LIABILITIES AND SHAREHOLDERS' EQUITY             ==========       ==========
						
CURRENT LIABILITIES:						
 Accrued expenses and accounts payable         $    869,909     $    293,271 
 Taxes payable                                       46,175                -  
 Other current liabilities                          705,000          705,000
                                                 ----------       ----------
TOTAL CURRENT LIABILITIES                         1,621,084          998,271
                                                 ----------       ----------
 Deferred income taxes                              885,090          807,927
                                                 ----------       ----------
 Other non-current liabilities                    1,505,980        1,527,793 
SHAREHOLDERS' EQUITY:                            ----------       ----------
 Common stock, $.01 par value;
 50,000,000 shares authorized;
 issued and outstanding 26,884,990 shares
  and 26,884,990 shares, respectively               268,850          268,850 
 Additional paid-in capital                       8,616,253        8,681,253 
 Earnings accumulated during the
 development stage                                2,860,604        2,792,264
                                                 ----------       ----------
TOTAL SHAREHOLDERS' EQUITY                       11,745,707       11,742,367
                                                 ----------       ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     $ 15,757,861     $ 15,076,358
                                                 ==========       ==========
						
                       See accompanying notes to financial statements.    
						
                                             3
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                                 CISTRON BIOTECHNOLOGY, INC.
                                 ---------------------------
                                   STATEMENTS OF OPERATIONS
                                   ------------------------
                                         (UNAUDITED) 
                                          ---------
<S>                                       <C>               <C>              <C>
                                                                             February 2, 1982
                                                                              (commencement of
                                           Three Months ended September 30,   operations) to  
                                                1996              1997       September 30,1997
                                           ------------      --------------  ----------------- 

Sales..................................... $    175,480      $    175,290      $  9,035,070
Cost of sales.............................       62,977            81,315         3,888,966
                                             ----------        ----------        ----------
       Gross profit.......................      112,503            93,975         5,146,104  
Other revenues:	    								
  Litigation settlements..................            -                 -        14,684,206  
  License fees and funded research........      100,419           100,000         4,006,149
                                             ----------        ----------        ----------
       Operating income before expenses...      212,922           193,975        23,836,459
                                             ----------        ----------        ----------
Research and development..................       24,070            98,420         8,094,201  
Administrative and marketing..............      385,238           319,393        10,480,635  
Occupancy.................................       44,753            46,122         2,318,572
                                             ----------        ----------        ----------
Total expenses............................      454,061           463,935        20,893,408
                                             ----------        ----------        ----------
       Operating income (loss)............     (241,139)         (269,960)        2,943,051  
Interest income/(expense) - net...........            -           138,282           445,981  
Other expense.............................            -                 -            59,895  
Amortization of deferred financing costs..            -                 -           173,079  
Acquisition expense.......................            -                 -           429,620
                                             ----------        ----------        ----------
Income (loss) before income taxes                                                  
  and extraordinary credit................     (241,139)         (131,678)        2,726,438  
Income tax provision......................            -           (63,338)        1,696,490
                                             ----------        ----------        ----------
Income/(loss) before extraordinary credit.     (241,139)          (68,340)        1,029,948
Extraordinary credit - benefit of tax loss                                                 
  carryforward............................            -                 -           262,838  
       Net income/(loss).................. $   (241,139)     $    (68,340)     $  1,292,786
                                             ==========        ==========        ==========
Net loss per share................         $    (0.01)       $          -
                                             ==========        ==========
Weighted average shares outstanding........  26,884,990        26,884,990                    
                                             ==========        ==========            


                  See accompanying notes to financial statements 
								
                                            4
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                                 CISTRON BIOTECHNOLOGY, INC.
                                 ---------------------------
                                   STATEMENTS OF CASH FLOWS
                                   ------------------------
                                        (UNAUDITED)
                                         ---------
<S>                                                <C>              <C>              <C>
                                                                                     February 2, 1982
                                                                                     (commencement of
                                                   Three Months ended September 30,   operations) to
                                                          1996            1997       September 30, 1997
                                                   --------------    --------------  ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Cash received from customers                        $   145,518     $    190,323     $  10,924,060 
 Cash paid to suppliers and employees                   (440,000)      (1,112,103)      (28,063,856)
 Interest received                                             -           69,655           377,359 
 Acquisition expenses paid                                     -                -          (429,620)
 Royalties, research funding, license fees received      100,419          100,000         2,572,987 
 Other receipts                                          126,939               82        12,135,423
                                                       ---------       ----------       -----------
  Net cash provided by (used in) operating activities    (67,124)        (752,043)       (2,483,647)
                                                       ---------       ----------       -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Collection of note receivable                                 -                -            15,097
 Issuance of note receivable                                   -                -          (230,000)
 Purchase of property and equipment                            -                -          (758,546)
                                                       ---------       ----------       -----------
  Net cash (used in) investing activities                      -                -          (973,449)
                                                       ---------       ----------       -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of capital stock and
  additional contributions                                   354                -         9,943,519
 Principal payments on notes payable                           -                -          (870,238)
                                                       ---------       ----------       -----------
  Net cash provided by financing activities                  354                -         9,073,281
                                                       ---------       ----------       -----------
  Net change in cash and cash equivalents                (66,770)        (752,043)        5,616,185
CASH AND CASH EQUIVALENTS, beginning of period           359,600        6,368,228                 -
                                                       ---------       ----------       -----------
CASH AND CASH EQUIVALENTS, end of period             $   292,830     $  5,616,185     $   5,616,185
                                                       =========        =========       ===========
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
  Net income (loss)                                  $  (241,139)    $    (68,340)    $   1,292,786
  Adjustments to reconcile net income (loss) to net
   cash provided by (used in) operating activities:
  Depreciation and amortization                            1,124            1,976           737,748
  Issuance of warrants                                         -                -            65,000
  Deferred income taxes                                        -          (77,163)          807,927
  Loss on disposal of property and equipment                   -            4,552             8,531
  Increase in reserve for note receivable                      -                -           230,000
  Amortization of deferred financing costs and other           -                -           195,179
  Decrease (increase) in assets:
   Accounts receivable                                   (74,019)          12,257           (43,052)
   Inventory                                               2,747            1,115            (3,163)
   Prepaid expenses                                            -                -              (475)
   Notes and other long-term receivables                       -          (90,440)       (9,355,270)
   Security deposit                                            -                -           (23,938)
   Intangible assets                                           -                -           (37,105)
  Increase (decrease) in liabilities:
   Accounts payable and accrued expenses               1,134,163         (576,638)        1,455,564
  Other current and non-current liabilities             (890,000)         (24,362)        2,186,618
                                                       ---------       ----------       -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: $   (67,124)    $   (752,043)    $  (2,483,650)
                                                       =========       ==========       ===========

                            See accompanying notes to financial statements
                                                                                                  
                                                 5

<PAGE>

                                    CISTRON BIOTECHNOLOGY, INC.
                                    ---------------------------
                                   NOTES TO FINANCIAL STATEMENTS
                                   -----------------------------
                                            (Unaudited)
                                             ---------

A. BASIS OF PRESENTATION
   ---------------------
   The financial statements for the periods ended September 30, 1997 and 
   1996 have been prepared without audit and, in the opinion of management, 
   all adjustments (which include only  normal recurring adjustments) 
   necessary to fairly present the Company's financial position, results of 
   operations, and cash flows at September 30, 1997 and 1996 and for the 
   periods then ended have been made.

   Certain information and footnote disclosures normally included in 
   financial statements prepared in accordance with generally accepted 
   accounting principles have been omitted.  These financial statements 
   should be read in conjunction with the financial statements and notes 
   thereto included in the Company's Annual Report on Form 10-K for the 
   fiscal year ended June 30, 1997.  The results of operations for the 
   periods ended September 30, 1997 and 1996 are not necessarily indicative 
   of the operating results for the full year.

B. OTHER INCOME
   ------------
   During the three-month period ended September 30, 1997 and 1996, the 
   Company received non-refundable research and development funding of 
   $100,000 respectively representing the ninth and fifth of 10 consecutive 
   quarterly research and development payments of $100,000 which another 
   company has agreed to make to Cistron.

C. INCOME TAXES
   ------------
   At September 30, 1997 the Company had available investment and research
   and development tax credits of $372,000.   A tax benefit of $63,338 was
   recorded in the three-month period ended September 30, 1997 against the
   net loss incurred.

   The Company may be in an Alternative Minimum Tax (AMT) position for the 
   fiscal year principally due to the limitations placed on the utilization 
   of the Company's Federal Net Operating Loss (NOL) carryforwards; and, 
   will receive an AMT credit in future years for the amount of AMT paid.

D. ACCOUNTS RECEIVABLE 
   -------------------
   Accounts receivable - other consists of amounts due in November 1997
   (current) and amounts due in November 1998, 1999 and 2000 (long term) 
   pursuant to a litigation settlement agreement entered into in 1996.  
   Long term amounts have been discounted to reflect their present value.

E. CHANGES IN SHAREHOLDERS' EQUITY
   -------------------------------
   During the three-month period ended September 30, 1997, shareholders' 
   equity decreased by a net loss of $68,340.

                                  6
<PAGE>

F. EARNINGS PER SHARE CALCULATIONS 
   -------------------------------
   The Financial Accounting Standards Board issued Statement of 
   Accounting Standards No. 128, "Earnings Per Share" ("FAS 128").  The 
   Company is required to adopt FAS 128 for both interim and annual periods 
   ending after December 15, 1997.  FAS 128 requires the Company to present 
   Basic Earnings Per Share which excludes dilution and Diluted Earnings 
   Per Share which includes potential dilution.  The Company believes that 
   the adoption of FAS 128 will not have a material effect on the Company's 
   earnings per share calculations.
 


Item 2.  Management's Discussion and Analysis of Results of
         --------------------------------------------------
         Operations and Financial Condition
         ----------------------------------
   The following discussion should be read in conjunction with and is 
   qualified in its entirety by the accompanying financial information and 
   notes thereto, and the financial information, notes thereto and 
   management's discussion and analysis of results of operations and financial 
   condition contained in the Company's Annual Report on Form 10-K for the 
   fiscal year ended June 30, 1997.

   Certain statements in this discussion and analysis constitute forward-
   looking statements, are not historical facts, and involve risks and 
   uncertainties that could cause actual results to differ from those expected 
   and projected.  Such risks and uncertainties include but are not limited 
   to: (i) general economic conditions; (ii) conditions specific to the 
   biotechnology industry; (iii) the Company's ability to develop or acquire 
   new technology or products through licensing, merger or acquisition and to 
   obtain regulatory approval to commercialize diagnostic or therapeutic 
   products; (iv) the effectiveness and ultimate market acceptance of any such 
   products; (v) limitations on third party reimbursements with respect to any 
   such products; and (vi) competition.  The Company does not undertake to 
   update or revise any forward-looking statements contained herein whether as 
   a result of new information, future events or otherwise.

Results of Operations
---------------------
   The Company sells its products to the research market and has not generated 
   significant revenues therefrom.  None of its products have been submitted 
   to or received approval from the Food and Drug Administration for the sale 
   of such products to the diagnostic or therapeutic markets.
  
	Three Months Ended September 30, 1997 and
        -----------------------------------------
        Three Months Ended September 30, 1996
        -------------------------------------
   Sales were unchanged in the quarter ended September 30, 1997 versus the 
   same quarter of the prior year.  In the quarter ended September 30, 1997, 
   higher sales of bulk cytokine assays were made offset by lower sales of 
   bulk proteins.  This resulted in an increase in cost of sales versus the 
   prior year period. 

   During the periods ended September 30, 1997 and 1996, respectively, the 
   Company received non-refundable research and development funding of 
   $100,000, in each period representing the ninth and fifth, respectively, of 
   10 consecutive quarterly research and development payments of $100,000 
   which another company has agreed to make to Cistron. 

                                  7
<PAGE>

   Operating expenses increased $9,874 (2.2%) in the quarter ended September 
   30, 1997 as compared to the same quarter last year.  Research and 
   development expenses increased $74,350 (308.9%) due to increased external 
   research funding of periodontal disease, vaccine adjuvant and IL-1 
   inhibition preclinical studies.  Consulting expenses related to the 
   preparation of the periodontal disease program also increased.

   Administrative and marketing expenses decreased $65,845 (17.1%) due to lower 
   legal and consulting expenses in the quarter ended September 30, 1997 than 
   in the same quarter of the prior year, in which higher legal and consulting 
   expenses related to litigation were incurred.  Higher salary and insurance 
   expenses partially offset the decrease in legal and litigation related
   consulting.  In the quarter ended September 30, 1997, the Company also
   recorded the initial cash fee of $50,000 and a charge of $65,000 for
   non-cash compensation related to the issuance of 400,000 warrants to the
   investment bankers retained by the Company in September 1997.  Occupancy
   expenses were essentially unchanged. 

   Interest income of $69,655 was earned on the investment of higher cash 
   balances.  In addition, net interest income of $68,627 was recognized on
   accounts receivable other and other non-current liabilities to reflect
   the increase in their present value.
 
   The Company had an operating loss of $269,960 in the quarter and expects 
   research expenditures to increase. There can be no assurance that its 
   operations will reach profitability.


Liquidity and Capital Resources
-------------------------------
   At September 30, 1997, the Company had current assets of $8,662,875 
   including cash and cash equivalents of $5,616,185 and had current 
   liabilities of $998,271.  Cash used in the quarter ended September 30, 1997 
   was largely due to the payment of amounts due to the Institutions pursuant 
   to litigation settlements. These amounts were shown as accrued payables at 
   June 30, 1997.

   Management believes that it will have sufficient assets to fund the 
   Company's current programs and plans through fiscal 1998 and beyond.  The 
   Company will be expending funds for research, including the initiation of 
   periodontal disease clinical studies, throughout fiscal 1998 and fiscal 
   1999.  Management believes that it will have sufficient assets to fund the 
   Company's current programs through this period.


                                    8
<PAGE>

PART II - OTHER INFORMATION
---------------------------
Item 1.	Legal Proceedings
        -----------------
        On October 10, 1997, judgment was entered in favor of the Company 
        in the Circuit Court of Fairfax County (Virginia) against 
        Rebuild, LLC and Henry Grausz.  The judgment was for $230,000 
        loan principal plus interest and attorneys' fees.  It is not 
        known if Rebuild or Dr. Grausz has the ability to repay this 
        amount.

Item 2.	Changes in Securities
        ---------------------
        a.  Not applicable
        b.  Not applicable
        c.  On September 5, 1997, the Company issued to BlueStone
            Capital Partners, LP, investment bankers, a warrant to
            purchase 400,000 shares of the Company's common stock, at
            $.25 per share, the closing bid price on September 5, 1997,
            as additional compensation.  The warrant was acquired by
            BlueStone for investment, the warrant was appropriately
            legended and the issuance of the warrant was exempt from
            the registration requirements of the Securities Act of 1933,
            as amended, by virtue of Section 4(2) thereunder.

Item 3.	Defaults upon Senior Securities
        -------------------------------
	Not applicable.

Item 4.	Submission of Matters to a Vote of Security Holders
        ---------------------------------------------------
        Not applicable.                            

Item 5.	Other Information
        ----------------- 
        Not applicable.

Item 6.	Exhibits and Reports on Form 8-K
        --------------------------------
        a.  Exhibit.

            27. Financial Data Schedule

        b.   Reports on Form 8-K.   Not applicable.

                                    9
<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.


Date: November 10, 1997                 CISTRON BIOTECHNOLOGY, INC.
                                        ---------------------------
                                              (Registrant)


                                        BRUCE C. GALTON
                                        ----------------------------
                                        Bruce C. Galton
                                        Acting Chairman & CEO, 
                                        President, Chief Operating
                                        and Financial Officer,
                                        Secretary and Treasurer
                                        (Principal Financial and
                                         Accounting Officer)
 
                                  10


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