<TABLE>

                     ----------------------------------
                     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, 1998
              
                                      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,
1998 was 24,317,020 shares of Common Stock, .01 par value.

                            Page 1 of 13 pages
<PAGE> 2

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

                                  INDEX
                                  -----
										  	      	       
                                                                         PAGE

PART I  -  FINANCIAL INFORMATION

           Item 1. Financial Statements

           Balance sheets as of September 30, 1998 and June 30, 1998...    3

           Statements of operations for the three months ended 
           September 30, 1998 and 1997.................................    4

           Statements of cash flows for the three months ended 
           September 30, 1998 and 1997.................................    5

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

           Item 2. Management's discussion and analysis of results of 
           operations and financial condition..........................    8

PART II - OTHER INFORMATION............................................   11

          Item 2. Changes in Securities................................   11

          Item 5. Other Information....................................   12

          Item 6. Exhibits and Report on Form 8-K......................   12

          Signatures...................................................   13

                                     -2-
<PAGE> 3

<CAPTION>
                           CISTRON BIOTECHNOLOGY, INC.
                           ---------------------------
                                 BALANCE SHEETS
                                 --------------

                                                    June 30,      September 30,
                                                      1998            1998
                                                   ------------   -------------
                                                                   (unaudited)
ASSETS
------
<S>
CURRENT ASSETS:                                    <C>             <C>
 Cash and equivalents                              $  5,832,031    $  5,597,609
 Accounts receivable-trade                              101,859          58,505
 Accounts receivable-other                            2,940,673       2,980,222
 Inventories                                              3,635           2,548
 Taxes receivable                                       329,024         329,024
 Notes receivable $230,000; reserve $230,000"                 -               -
                                                     ----------      ----------
TOTAL CURRENT ASSETS                                  9,207,222       8,967,908
						
ACCOUNTS RECEIVABLE - OTHER - Long Term               3,670,221       3,721,116
                                                     ----------      ----------
PROPERTY AND EQUIPMENT:
 Machinery and equipment                                502,908         502,908
 Furniture and fixtures                                 147,113         147,113
 Leasehold improvements                                  77,674          77,674
                                                        727,695         727,695
                                                     ----------      ----------
 Less: Accumulated depreciation                         701,477         702,736
                                                     ----------      ----------
                                                         26,218          24,959
                                                     ----------      ----------
SECURITY DEPOSITS                                        23,938          23,938
                                                     ----------      ----------
PATENTS, Net of accumulated amortization                                       
of $14,536 and $15,198, respectively                     22,569          21,907
DEFERRED TAX ASSET                                       49,313          49,313
TOTAL ASSETS                                       $ 12,999,481    $ 12,809,141
                                                     ==========      ==========
LIABILITIES AND SHAREHOLDERS' EQUITY                                     
------------------------------------                                         
CURRENT LIABILITIES:						
 Accrued expenses and accounts payable             $    114,894    $     71,637
 Taxes payable                                          348,898         284,718
 Other current liabilities                              691,058         700,352
                                                     ----------      ----------
TOTAL CURRENT LIABILITIES                             1,154,850       1,056,707
                                                     ----------      ----------
 Other non-current liabilities                          902,174         914,693
                                                     ----------      ----------
SHAREHOLDERS' EQUITY:
 Common stock, $.01 par value; 50,000,000 shares
 authorized; issued and outstanding 26,930,187
 shares in each period                                  269,302         269,302
 Additional paid-in capital                           8,683,680       8,683,680
 Earnings accumulated during the development stage    2,384,125       2,279,409
 Treasury stock 3,946,500 shares at cost               (394,650)       (394,650)
                                                     ----------      ----------
TOTAL SHAREHOLDERS' EQUITY                           10,942,457      10,837,741
                                                     ----------      ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY         $ 12,999,481    $ 12,809,141
                                                     ==========      ==========
						
                     See accompanying notes to financial statements. 

                                        -3-
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
                                CISTRON BIOTECHNOLOGY, INC.
                                ---------------------------
                                 STATEMENTS OF OPERATIONS
                                 ------------------------
                                        (UNAUDITED)
                                                                               February 2, 1982
                                                                               (commencement of
                                             Three Months ended September 30,   operations) to
                                                   1997              1998      September 30, 1998
                                             ----------------------------------------------------
<S>                                           <C>              <C>               <C>
Sales.......................................  $    175,290     $    153,570      $  9,568,555
Cost of sales...............................        81,315           79,634         4,196,963
                                                ----------       ----------        ----------
       Gross profit.........................        93,975           73,936         5,371,592
Other income:
  Litigation settlements....................             -                -        14,684,206 
  License fees and funded research..........       100,000                -         4,111,149
Expenses:                                                           
  Research and development..................        98,420          103,661         8,647,007
  Administrative and marketing..............       319,393          225,669        11,432,731
  Occupancy.................................        46,122           50,213         2,521,178
                                                ----------       ----------        ----------
Total expenses..............................       463,935          379,543        22,600,916
       Operating income (loss)..............      (269,960)        (305,607)        1,566,031
Interest income/(expense) - net.............       138,282          136,711         1,017,275
Other expense...............................             -                -            59,895
Amortization of deferred financing costs....             -                -           173,079
Acquisition expense.........................             -                -           429,620
                                                ----------       ----------        ----------
Income (loss) before income taxes
 and extraordinary credit...................      (131,678)        (168,896)        1,920,712
Income tax provision (benefit)..............       (63,338)         (64,180)        1,403,619
                                                ----------       ----------        ----------
Income/(loss) before extraordinary credit...       (68,340)        (104,716)          517,093
Extraordinary credit - benefit of tax loss                            
  carryforward..............................             -                -           262,838
                                                ----------       ----------        ----------
       Net income/(loss)....................  $    (68,340)    $   (104,716)     $    779,931
                                                ==========       ==========        ==========
Net loss per share..........................  $          -     $          -   
Weighted average shares outstanding.........    26,884,990       22,983,687
                                                ==========       ==========
Net income/(loss) per share -                                               
 assuming dilution..........................  $          -     $          -
                                                ==========       ==========
Weighted average shares outstanding                                  
 assuming dilution..........................    26,884,990       22,983,687 
                                                ==========       ==========         

                            See accompanying notes to financial statements
                                                -4-
</TABLE>
<PAGE>  5
<TABLE>
<CAPTION>
                                      CISTRON BIOTECHNOLOGY, INC.
                                      ---------------------------
                                       STATEMENTS OF CASH FLOWS
                                       ------------------------
                                              (UNAUDITED)
                                              -----------
                                                                                         February 2, 1982
                                                                                         (commencement of
                                                     Three Months ended September 30,     operations) to
                                                            1997              1998       September 30, 1998
                                                     ------------------------------------------------------
<S>                                                  <C>                <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Cash received from customers                         $    190,323      $    199,319      $  11,454,013
 Cash paid to suppliers and employees                   (1,112,103)         (504,529)       (31,623,299)
 Interest received                                          69,655            68,080            674,137
 Acquisition expenses paid                                       -                 -           (429,620)
 Royalties, research funding, license fees received        100,000                 -          2,677,987
 Other receipts                                                 82             2,708         15,140,256
                                                        ----------        ----------        -----------
  Net cash provided by (used in) operating activities     (752,043)         (234,422)        (2,106,526)
                                                        ----------        ----------        -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Collection of note receivable                                   -                 -             15,097
 Issuance of note receivable                                     -                 -           (230,000)
 Purchase of property and equipment                              -                 -           (762,472)
                                                        ----------        ----------        -----------
  Net cash (used in) investing activities                        -                 -           (977,375)
                                                        ----------        ----------        -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of capital stock and
  additional contributions                                       -                 -          9,946,398
 Principal payments on notes payable                             -                 -           (870,238)
                                                        ----------        ----------        -----------
 Purchase of treasury stock                                      -                 -           (394,650)
                                                        ----------        ----------        -----------
  Net cash provided by financing activities                      -                 -          8,681,510
                                                        ----------        ----------        -----------
  Net change in cash and cash equivalents                 (752,043)         (234,422)         5,597,609
CASH AND CASH EQUIVALENTS, beginning of period           6,368,228         5,832,031                 -
                                                        ----------        ----------        -----------
CASH AND CASH EQUIVALENTS, end of period              $  5,616,185      $  5,597,609      $   5,597,609
                                                        ==========        ==========        ===========
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
  Net income (loss)                                   $    (68,340)     $   (104,716)     $     779,931
  Adjustments to reconcile net income (loss) to net
   cash provided by (used in) operating activities:
  Depreciation and amortization                              1,976             1,921            744,786
  Issuance of warrants                                      65,000                 -             65,000
  Deferred income taxes                                    (77,163)                -            (49,313)
  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                                      12,257            43,354            (58,505)
   Inventory                                                 1,115             1,087             (2,548)
   Taxes receivable                                              -                 -           (329,024)
   Notes and other long-term receivables                   (90,440)          (90,444)        (6,717,038)
   Security Deposits                                             -                 -            (23,938)
   Intangible assets                                             -                 -            (37,105)
  Increase (decrease) in liabilities:
   Accounts payable and accrued expenses                  (576,638)          (43,257)         1,536,653
  Other current and non-current liabilities                (24,362)          (42,367)         1,550,865
                                                        ----------        ----------        -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:  $   (752,043)     $   (234,422)     $  (2,106,526)
                                                        ==========        ==========        ===========

                                 See accompanying notes to financial statements

                                                       -5-
</TABLE>
<PAGE> 6


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


A. BASIS OF PRESENTATION
   ---------------------

   The financial statements for the periods ended September 30, 1998 and 
1997 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, 1998 and 1997 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, 1998.  The results of operations for the 
periods ended September 30, 1998 and 1997 are not necessarily indicative 
of the operating results for the full year.

B. OTHER INCOME
   ------------

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

C. INCOME TAXES
   ------------

   Tax benefits of $63,338 and $64,180 were recorded in the three-month 
periods ended September 30, 1997 and 1998, respectively, against the net 
losses incurred.

D. ACCOUNTS RECEIVABLE 
   -------------------

   Accounts receivable - other consists of amounts due in November 1998 
(current) and amounts due in November 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 which was partially offset by 
a $65,000 increase in additional paid-in capital as the result of 
recording the value of warrants issued to third parties.  During the 
three-month period ended September 30, 1998, shareholders' equity 
decreased due to a net loss of $104,716.

                                  -6-
<PAGE> 7

F. EARNINGS PER SHARE CALCULATIONS 
   -------------------------------

   In February 1997, The Financial Accounting Standards Board issued 
Statement of Accounting Standards ("SFAS") No. 128, "Earnings Per 
Share".  SFAS No. 128 specifies the computation, presentation and 
disclosure requirements for earnings per share ("EPS") and became 
effective for both interim and annual periods ending after December 15, 
1997.  All prior period EPS data has been restated to conform with the 
provisions of SFAS No. 128.  The following is a reconciliation of the 
numerators and denominators used to calculate Earnings per Share: 

<TABLE>
<CAPTION>
                                              Three Months Ended
                                                 September 30, 
                                           1997               1998
                                     --------------------------------
<S>                                  <C>                <C>
Earnings per common share:
------------------------------
 Net income (loss) (numerator)       $    (68,340)      $   (104,716)
 Weighted average shares
  (denominator)                        26,884,990         22,983,687
Income (loss) per share              $          -       $          -
                                       ==========         ==========

Earnings per common share - 
 assuming dilution:
-----------------------------

Net income (loss) (numerator)        $    (68,340)      $   (104,716)
Weighted average shares                26,884,990         22,983,687
Effect of dilutive options                      -                  -
                                       ==========         ==========

Weighted average shares - 
  assuming dilution (denominator)      26,884,990         22,983,687

Income (loss) per share              $          -       $          -
                                       ==========         ==========
</TABLE>

G. NEW ACCOUNTING PRONOUNCEMENT
   ----------------------------

   In June 1997, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standards No. 131, "Disclosures About Segments 
of an Enterprise and Related Information."  This Statement became 
effective for the Company during the current year.  The Company is 
currently in compliance with this accounting pronouncement.

                                 -7-
<PAGE>  8


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 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, 1998.

        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.

        The Company believes it is a development stage enterprise because
planned principal operations have not yet commenced.  The Company's planned 
principal operations include the development of clinical and therapeutic 
products for distribution through pharmaceutical and diagnostic companies.  
This requires the approval of the Company's products by the Food and Drug 
Administration ("FDA").  At September 30, 1998, none of the Company's 
products had received such approval.  In addition, the Company continues to 
devote most of its efforts to activities such as research and development, 
financial planning and developing markets which are typical activities for 
a development stage enterprise.  Specifically, the Company has expended 
funds relating to the dental assay and vaccine adjuvant programs.  With 
respect to financial planning, from September 1997 to September 1998, the 
Company engaged the services of BlueStone Capital Partners, LP 
("Bluestone") to act as Cistron's financial advisor as to corporate 
strategic and financial initiatives.  In October 1998, the Company engaged 
Genome Securities, Inc. to act in this capacity.  Accordingly, as the 
Company has not yet commenced principal operations and is devoting most of 
its efforts to activities typical of a development stage enterprise as 
outlined in Statement of Financial Accounting Standards No.7, the Company 
believes that it continues to be in the development stage.

                                -8-
<PAGE> 9

Three Months Ended September 30, 1998 and Three Months Ended September 30, 1997
-------------------------------------------------------------------------------

        Sales decreased $21,720 (12.4%) in the quarter ended September 30, 1998
versus the same period of the prior year due to decreased bulk cytokine 
assay kit components offset, in part, by increased bulk cytokine protein 
sales.  While customers may vary, Cistron's product sales are usually 
concentrated among a limited number of customers.  In the quarter ended 
September 30, 1997, two customers accounted for approximately 65% of sales 
while in the quarter ended September 30, 1998, three customers accounted 
for approximately 60% of sales.  Export sales decreased $35,975 (55.0%) 
primarily due to decreased bulk assay kit component sales.  Domestic sales 
increased $14,255 (13.0%) due to increased protein sales, offset, in part, 
by lower bulk assay kit component sales.

        Cost of sales decreased $1,681 (2.1%) from the prior year due to the
lower sales volume, offset, in part, by increased manufacturing salary expense.

        During the quarter ended September 30, 1997, the Company received non-
refundable research and development funding of $100,000, representing the 
ninth of 10 consecutive quarterly research and development payments of 
$100,000 which another company had agreed to make to Cistron. 

        Operating expenses decreased $84,392 (18.2%) in the quarter ended
September 30, 1998 versus the same quarter of the prior year.  Research and 
development expenses increased $5,241 (5.3%) due to higher external 
research funding for vaccine adjuvant studies, offset, by lower research 
salary and consulting expenses.  

        Administrative and marketing expenses decreased $93,724 (29.3%)
primarily due to lower consulting expenses in the quarter ended September 30,
1998 as compared to last year's quarter, in which BlueStone Capital Partners,
LP were engaged and $65,000 was charged as non-cash compensation related to 
the issuance of an initial warrant to purchase 400,000 shares.  Occupancy 
expenses increased $4,091 (8.9%) as the result of higher utility expenses 
incurred in the quarter ended September 30, 1998 than in the same quarter 
of the previous year.

        Interest income of $68,080 was earned on the investment of higher cash
balances.  In addition, net interest income of $68,631 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 $305,607 in the quarter and there
can be no assurance that its operations will reach profitability.

                                    -9-
<PAGE> 10

Liquidity and Capital Resources
-------------------------------

        At September 30, 1998, the Company had current assets of $8,967,908 
including cash and cash equivalents of $5,597,609 and had current 
liabilities of $1,056,707.  Cash used in the quarter ended September 30, 
1998 was largely for operating expenses.

        In September 1997, the Company engaged the services of BlueStone
Capital Partners, LP to act as Cistron's financial advisor as to corporate 
strategic and financial initiatives. The Company's agreement with BlueStone 
was not renewed at its expiration in September 1998.  In October 1998, 
Cistron engaged Genome Securities, Inc., whose Chairman and CEO, Robert 
Naismith, Ph. D. is also a member of the Company's Board of Directors, to 
perform these services.  In this regard, the Company has held exploratory 
discussions with several biotechnology and pharmaceutical companies 
regarding possible strategic alliances including joint ventures, mergers or 
the sale of the Company.   There can be no assurances that any of these 
discussions will result in any agreements with the Company.

        On June 30, 1998, Cistron and Pasteur Merieux Serums & Vaccins, S.A. 
(PMS&V), the world's largest vaccine company, entered into a letter of 
intent for an option and license agreement pertaining to the use of IL-1 as 
a vaccine adjuvant in the fields of preventive and therapeutic vaccines.  
On October 30, 1998, PMS&V purchased 1,333,333 shares of Cistron common 
stock at approximately $.75 per share and received warrants to purchase 
666,667 additional shares at $.25 per share, for an aggregate price of 
$1,000,000.  BlueStone Capital is entitled to a fee from Cistron of 7% of 
this transaction and to receive an additional warrant to purchase 400,000 
shares of common stock at $.25 per share.

        Simultaneously, the parties also entered into an option and
collaboration agreement, under which PMS&V obtained a three-year option to
acquire an exclusive license to use Cistron's interleukin-1 beta technology
in the fields of therapeutic and preventive vaccines.  Under that agreement,
PMS&V also agreed to fund Cistron's vaccine adjuvant development program over
the three-year period for $900,000.  The agreement contemplates that PMS&V
will conduct its own preclinical and clinical work on the use of IL-1 beta as
a vaccine adjuvant in these fields.  

        If the option is exercised, Cistron could receive an aggregate of $31 
million in milestone payments based upon the development progress of 
adjuvanted vaccine products using Cistron's IL-1 beta technology or joint 
technology developed by the parties, through clinical trials and FDA 
approvals, provided PMS&V exercises all its rights under the agreement and 
subject to completion of the development program as currently contemplated.  
Cistron would also receive royalties should PMS&V sell vaccines using that 
technology.

        There can be no assurance that PMS&V will exercise its option to
license IL-1 adjuvant rights or if they do, that product development milestones
will be achieved.

        Management believes that it will have sufficient assets to fund the 
Company's current programs and plans through fiscal 1999 and beyond. 

                                   -10-
<PAGE> 11


PART II - OTHER INFORMATION
---------------------------

Item 1.	Legal Proceedings
        -----------------
        Not applicable.


Item 2.	Changes in Securities
        ---------------------
        a.  Not applicable.

        b.  Not applicable.

        c.  On October 30, 1998, the Company issued and sold to Pasteur 
        Merieux Serums & Vaccins, S.A. ("PMS&V") 1,333,333 shares of Common 
        Stock of the Company (the "Common Stock") and a warrant to purchase 
        666,667 shares of Common Stock at an exercise price of $.25 per 
        share, for an aggregate consideration of $1,000,000, under the terms 
        of a Common Stock and Warrant Purchase Agreement dated as of October 
        30, 1998 between the Company and PMS&V.  The shares of Common Stock 
        and the warrant were purchased for investment and the issuance of 
        those securities was exempt from the registration requirements of 
        the Securities Act of 1933, as amended, by virtue of Section 4(2) 
        thereof and Rule 506 thereunder. The certificate representing the 
        shares of Common Stock and the warrant were appropriately legended 
        to reflect that they have not been registered under said Act. 
        On October 30, 1998, at partial compensation for the financial 
        advisory services of BlueStone Capital Partners, L.P. ("BlueStone"), 
        on the transactions described in the preceding paragraph, the 
        Company issued to BlueStone's designee, Robert Naismith, Ph.D. (a 
        former Managing Director of BlueStone), a warrant to purchase 
        400,000 shares of Common Stock at an exercise price of $.25 per 
        share.  The warrant was purchased for investment 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) 
        thereof.  The warrant was appropriately legended to reflect that 
        neither it nor the shares of Common Stock issuable upon exercise of 
        the warrant have been registered under said Act.


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


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

                                   -11-
<PAGE> 12

Item 5.	Other Information
        ----------------- 
        On October 30, 1998, PMS&V purchased 1,333,333 shares of Cistron 
        common stock at approximately $.75 per share and received warrants 
        to purchase 666,667 additional shares at $.25 per share, for an 
        aggregate price of $1,000,000. PMS&V was granted demand and 
        piggyback registration rights with certain priorities (i.e. PMS&V 
        will be included in the registration of a potential future offering 
        of other securities of the Company).

        Simultaneously, the parties also entered into an option and 
        collaboration agreement, under which PMS&V obtained a three-year 
        option to acquire an exclusive license to use Cistron's interleukin-
        1 beta technology in the fields of therapeutic and preventive 
        vaccines.  Under that agreement, PMS&V also agreed to fund Cistron's 
        vaccine adjuvant development program over the three-year period for 
        $900,000.  The agreement contemplates that PMS&V will conduct its 
        own preclinical and clinical work on the use of IL-1 beta as a 
        vaccine adjuvant in these fields.  

        If the option is exercised, Cistron could receive an aggregate of 
        $31 million in milestone payments based upon the development 
        progress of adjuvanted vaccine products using Cistron's IL-1 beta 
        technology or joint technology developed by the parties, through 
        clinical trials and FDA approvals, provided PMS&V exercises all its 
        rights under the agreement and subject to completion of the 
        development program as currently contemplated.  Cistron would also 
        receive royalties should PMS&V sell vaccines using that technology.


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

            4.1  Common Stock Purchase Warrant of Registrant issued 
                 to Kirkland & Ellis LLP to purchase 250,000 shares 
                 of Common Stock.

            4.1a Amendment to Common Stock Purchase Warrant of 
                 Registrant issued to Kirkland & Ellis LLP to 
                 purchase 250,000 shares of Common Stock.

            4.2  Common Stock Purchase Warrant of Registrant issued
                 to BlueStone Capital Partners, L.P. to purchase
                 400,000 shares of Common Stock.

            4.3  Common Stock and Warrant Purchase Agreement pursuant 
                 to which Pasteur Merieux Serums & Vaccins, S.A. 
                 purchased 1,333,333 shares of Common Stock and a 
                 warrant to purchase 666,667 shares of Common Stock.

            4.4  Registration Rights Agreement between Registrant and 
                 Pasteur Merieux Serums & Vaccins, S.A.

            4.5  Common Stock Purchase Warrant of Registrant issued 
                 to Robert Naismith, Ph.D. to purchase 400,000 shares 
                 of Common Stock.

                                         -2-
<PAGE> 13

           10.18 Collaboration and Option Agreement between 
                 Registrant and Pasteur Merieux Serums & Vaccins, S.A.
                 + Portions have been omitted and filed separately
                 with the Securities and Exchange Commission pursuant to a
                 request for confidential treatment.

           10.19 Letter of engagement, dated October 5, 1998, between 
                 Registrant and Genome Securities, Inc.

           27.   Financial Data Schedule

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


                            _________________________

                                   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, 1998                 CISTRON BIOTECHNOLOGY, INC.


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

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