SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549
                           FORM 10 - K
                                
        Annual Report Pursuant to Section 13 or 15 (d) of
               the Securities Exchange Act of 1934

      For the fiscal year ended               Commission File No.
1-8593
     December 31, 1998
                          ALPHARMA INC.
     (Exact name of registrant as specified in its charter)
                                
          Delaware                         22-2095212
        (State    of    Incorporation)        (I.R.S.    Employer
Identification No.)

               One Executive Drive, Fort Lee, New Jersey    07024
                (Address  of principal executive offices)     zip
code

                         (201) 947-7774
       (Registrant's Telephone Number Including Area Code)
                                
Securities registered pursuant to Section 12(b) of the Act:

                                        Name of each Exchange on
      Title of each Class                       which Registered

      Class A Common Stock,             New York Stock Exchange
        $.20 par value

      Subordinated Convertible Notes    New York Stock Exchange


Securities  registered pursuant to Section 12  (g)  of  the  Act:
None

Indicate  by check mark whether the Registrant (1) has filed  all
reports  to  be  filed by Section 13 or 15(d) of  the  Securities
Exchange Act of 1934 during the preceding twelve 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     .

Indicate  by  check  mark  if  disclosure  of  delinquent  filers
pursuant  to Item 405 of Regulation S-K is not contained  herein,
and will not be contained, to the best of registrant's knowledge,
in  definitive  proxy or information statements  incorporated  by
reference in Part III of this Form 10-K or any amendment to  this
Form 10-K.  (    )

The  aggregate market value of the voting stock of the Registrant
(Class  A Common Stock, $.20 par value) as of March 10, 1999  was
$734,958,000.

The  number  of  shares outstanding of each of  the  Registrant's
classes of common stock as of March 10, 1999 was:

  Class A Common Stock, $.20 par value - 17,763,347 shares;
   Class B Common Stock, $.20 par value - 9,500,000 shares.

              DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Proxy Statement relating to the Annual Meeting of
Shareholders  to  be  held on June 10, 1999 are  incorporated  by
reference   into  Part  III  of  this  report.   Other  documents
incorporated by reference are listed in the Exhibit index.
                             PART I

Item 1.   Business

GENERAL

      The  Company is a multinational pharmaceutical company that
develops, manufactures and markets specialty human pharmaceutical
and  animal health products. The Company manufactures and markets
approximately 600 pharmaceutical products for human  use  and  40
animal  health  products. The Company conducts business  in  more
than  60  countries and has approximately 3,000 employees  at  38
sites in 22 countries. For the year ended December 31, 1998,  the
Company  generated  revenue and operating  income  of  over  $600
million and $65 million, respectively.


Formation

      The  Company was originally organized as A.L. Laboratories,
Inc.,  a  wholly  owned  subsidiary of Apothekernes  Laboratorium
A.S., a Norwegian healthcare company (the predecessor company  to
A.L. Industrier). In 1994, the Company acquired the complementary
human  pharmaceutical and animal health business  of  its  parent
company  and  subsequently changed its name to Alpharma  Inc.  to
operate  worldwide  as  one  corporate entity  (the  "Combination
Transaction").


Controlling Stockholder

      A.L.  Industrier beneficially owns all of  the  outstanding
shares  of  the Company's Class B Common Stock, or 35.2%  of  the
Company's  total common stock outstanding at December  31,  1998.
The  Class  B Common Stock bears the right to elect more  than  a
majority  of  the  Company's Board of Directors  and  to  cast  a
majority  of the votes in any vote of the Company's stockholders.
Mr.  Einar Sissener, Chairman of the Board of the Company  and  a
controlling  stockholder of A.L. Industrier, and members  of  his
immediate  family, also beneficially own 346,668  shares  of  the
Company's  Class  A Common Stock. (See "Purchase  of  Outstanding
Warrants").  As  a  result, A.L. Industrier, and  ultimately  Mr.
Sissener,  can control the Company. In addition, A.L.  Industrier
may,  under certain circumstances, convert the Company's Class  B
Notes into 2,372,896 shares of the Company's Class B Common Stock
(see "Convertible Subordinated Note Offering").


Convertible Subordinated Note Offering

      On  March  30,  1998,  the Company  sold  $125,000,000  and
$67,850,000  of  Convertible Subordinated  Notes  convertible  at
$28.59375  per  share into shares of the Company's  Class  A  and
Class  B  Common Stock, respectively (the "Class A  and  Class  B
Notes").   A.L.  Industrier purchased all of the Class  B  Notes.
The  Class  A  Notes  were  sold  to  unaffiliated  parties  and,
substantially all of the Class A Notes have been registered  with
the Securities and Exchange Commission and listed on the New York
Stock  Exchange.  The Class B Notes are automatically convertible
into  Class B Common Stock on or after March 30, 2001 if at least
75%  of the Class A Notes have been converted into Class A Common
Stock.

Purchase of Outstanding Warrants

In  connection  with  the  Combination Transaction,  the  Company
issued  warrants which allowed the holders to purchase  3,819,600
shares of the Company's Class A Common Stock at an exercise price
of  $20.69  with  an  expiration date of  January  3,  1999  (the
"Warrants").   On  October  21,  1998,  the  Company  offered  to
exchange  the  Warrants for newly issued shares of the  Company's
Class  A  Common  Stock  based upon  an  exchange  formula  which
approximated  $1.00 plus the "spread" between the $20.69  warrant
exercise  price and the market price of the Company's  stock  for
the  ten  days immediately after the Company filed its Form  10-Q
for  the  quarter  ended  September 30, 1998.   Based  upon  this
formula, 3,345,921 warrants to purchase  shares were tendered  to
the  Company for which 1,230,448 shares of the Company's Class  A
Common  Stock were issued.  Of this amount, 346,668  shares  were
issued to Mr. Sissener, members of his immediate family or  other
entities  under  his  control. This  is  Mr.  Sissener's  initial
ownership  of  Class A Common Stock.  Additionally, warrants  for
237,680  shares  were  exercised prior  to  January  3,  1999  in
accordance with the original warrant terms.


Forward-Looking Statements

     This annual report contains "forward-looking statements," or
statements that are based on current expectations, estimates, and
projections  rather  than historical facts.  The  Company  offers
forward-looking  statements  in  reliance  on  the  safe   harbor
provisions  of  the Private Securities Litigation Reform  Act  of
1995.   Forward-looking statements may prove,  in  hindsight,  to
have been inaccurate because of risks and uncertainties that  are
difficult  to predict.  Many of the risks and uncertainties  that
the  Company faces are included under the caption "Risk  Factors"
in  "Item  7.  Management's Discussion and Analysis of  Financial
Condition and Results of Operations."


Financial Information About Industry Segments

      The Company operates in the human pharmaceutical and animal
health  industries.  It has five business segments  within  these
industries. The table that follows shows how much each  of  these
segments contributed to revenues and operating income in the past
three years.


($ in Millions)             REVENUES          OPERATING INCOME
                                                   (lOSS)
                      1998   1997    1996   1998    1997   1996
                                                             
U.S. Pharmaceutical                                          
Division              178.8  155.4   152.3   11.1    4.1   (19.2)
                       
                                                             
International                                                
Pharmaceuticals                                              
 Division             193.1  134.1   142.0   8.0     11.0    2.5
                             
                                                             
Fine Chemicals        53.0   38.7    36.0   17.5    9.4     8.5
Division
                                                             
Animal Health         166.3  158.4   146.0   37.8    32.0   21.0
Division               
                                                             
Aquatic Animal Health                                        
Division              19.0   15.3    12.2   3.6     2.8    (.3)



       For   additional  financial  information  concerning   the
Company's  business  segments see Note 20 of  the  Notes  to  the
Consolidated  Financial Statements included in  Item  8  of  this
Report.


NARRATIVE DESCRIPTION OF BUSINESS

Human Pharmaceuticals

   The  Company's human pharmaceuticals business is comprised  of
the  U.S. Pharmaceuticals Division, International Pharmaceuticals
Division and Fine Chemicals Division. Each of these Divisions  is
managed by a separate senior management team. The Company's human
pharmaceutical business had sales of approximately $424.9 million
in 1998, before elimination of intercompany sales, with operating
profit of approximately $36.6 million.



U.S. Pharmaceuticals Division ("USPD")

   The U.S. Pharmaceuticals Division develops, manufactures,  and
markets   specialty  generic  prescription  and  over-the-counter
("OTC")  pharmaceuticals for human use.  With  approximately  170
products,  the Division is a market leader in generic liquid  and
topical pharmaceuticals with what the Company believes to be
the  broadest portfolio of manufactured products in  the  generic
industry. In addition, the Company believes it is the only  major
U.S.  generic  prescription drug manufacturer with a  substantial
presence  in  generic OTC pharmaceuticals. With approximately  60
OTC products, the Company is increasing its presence as a
significant  supplier  to major retailers. The  Company  believes
that  its  broad  product lines gives the Company  a  competitive
advantage  by  providing large customers the  ability  to  buy  a
significant line of products from a single source.

   Generic  pharmaceuticals  are  the  chemical  and  therapeutic
equivalents   of   brand-name  drugs.  Although  typically   less
expensive,  they  are  required to  meet  the  same  governmental
standards as brand-name drugs and most must receive approval from
the FDA prior to manufacture and sale. A manufacturer cannot
produce  or  market a generic pharmaceutical until  all  relevant
patents   (and   any   additional   government-mandated    market
exclusivity  periods)  covering the original  brand-name  product
have expired.

   Sales  of  generic pharmaceuticals have continued to increase.
The  Company has identified four reasons for this trend: (i) laws
permitting  and/or  requiring pharmacists to substitute  generics
for  brand-name drugs; (ii) pressure from managed care and  third
party payors to encourage health care providers and consumers  to
contain costs; (iii) increased acceptance of generic drugs by
physicians,  pharmacists, and consumers; and (iv) an increase  in
the number of formerly patented drugs which have become available
to off-patent competition.


          Product   Lines.   The  Company's  U.S.  Pharmaceutical
     Division    (excluding    its    telemarketing    operation)
     manufactures  and/or  markets  approximately   170   generic
     products,   primarily   in  liquid,  cream   and   ointment,
     respiratory  and  suppository  dosage  forms.  Each  product
     represents  a different chemical entity. These products  are
     sold in over 300 product presentations under the "Alpharma",
     "Barre" or "NMC" labels and private labels.


          Liquid   Pharmaceuticals.  The   U.S.   Pharmaceuticals
     Division  is  the  leading  U.S.  manufacturer  of   generic
     pharmaceutical  products in liquid form  with  approximately
     110  products. The experience and technical know-how of  the
     Division  enables  it  to  formulate therapeutic  equivalent
     drugs  in liquid forms and to refine product characteristics
     such as taste, texture, appearance and fragrance.

           Cough  and  cold  remedies  constitute  a  significant
     portion  of the Division's liquid pharmaceuticals  business.
     This  business  is seasonal in nature, and sales  volume  is
     higher  in the fall and winter months and is affected,  from
     year  to  year,  by  the  incidence  of  colds,  respiratory
     diseases, and influenza.

            Creams,   Lotions   and   Ointments.   The   Division
     manufactures  approximately 50 cream,  lotion  and  ointment
     products for topical use. Most of these creams, lotions  and
     ointments are sold only by prescription.

           Suppositories,  Aerosols and Other  Specialty  Generic
     Products.  The  Division also manufactures five  suppository
     products   and  markets  certain  other  specialty   generic
     products, including two aerosols and two nebulizer products.


     In 1998, the Company continued the strategy of entering into
third   party   alliances  to  market   certain   of   its   U.S.
pharmaceutical products under licenses to third parties or  under
third  party  brands.   In addition, in  February  of  1999,  the
Company reached an agreement with Ascent Pediatrics, Inc. to lend
that entity a maximum of $40 million; $12 million of which can be
used  for working capital purposes with the remainder to be  used
to  execute  projects reasonably designed for  intermediate  term
growth.  The Company also received an option to purchase  all  of
the  capital stock of Ascent in 2002 for approximately 12.2 times
Ascent's  2001 operating earnings. Except for $4 million  of  the
aforesaid  loan  presently advanced, the  Ascent  transaction  is
subject  to  the approval of a majority of Ascent's stockholders.
Ascent  would add a branded pediatric product line  to  the  U.S.
Pharmaceuticals Division along with a strong direct  sales  force
dedicated to the pediatric market.

     Facilities. The Company maintains two manufacturing
facilities for its U.S. pharmaceutical operations, a research and
development center, three telemarketing facilities and an
automated central distribution center. The Division's largest
manufacturing facility is located in Baltimore, Maryland and is
designed to manufacture high volumes of liquid pharmaceuticals.
The Company's facility in Lincolnton, North Carolina manufactures
creams, ointments and suppositories. Pursuant to the Company's
plan to reduce manufacturing costs and improve efficiencies, the
Company closed two facilities in New York and New Jersey and
transferred the operations conducted at those facilities to its
facility in Lincolnton. The Company's Lincolnton facility's
production was increased and its operations have become more
efficient as a result of production consolidation plans announced
in May 1996.

     Competition. Although the Company is a market leader in the
U.S. in the manufacture and marketing of specialty generic
pharmaceuticals, it operates in a highly competitive market. The
Company competes with other companies that specialize in generic
products and with the generic drug divisions of major
international branded drug companies and encounters market entry
resistance from branded drug manufacturers.

     Sales  and Distribution. The Company maintains a sales force
of  approximately  ten sales professionals  to  market  the  U.S.
Pharmaceutical  Division's products. The Company supplements  its
sales  effort  through  its  use of  selected  independent  sales
representatives.    In   addition,   the    Company's    advanced
telemarketing  operation, which employs  approximately  75  sales
personnel, markets and distributes products manufactured by third
parties  and, to a limited extent, the Division. The Company  has
recently  increased the use of its telemarketing  operations  for
the  sale of its own products by adding a third facility for this
expanded  activity.  This business also provides  certain  custom
marketing  services, such as order processing, and  distribution,
to the pharmaceutical and certain other industries.

     Customers.  The  Company  has  historically  sold  its  U.S.
pharmaceutical    products    to   pharmaceutical    wholesalers,
distributors,  mass merchandising and retail chains,  and,  to  a
lesser extent, grocery stores, hospitals and managed care
providers.  In  response  to the general trend  of  consolidation
among  pharmaceutical customers and greater  amount  of  products
sold  through  wholesalers, the Company is placing  an  increased
emphasis  on  marketing  its products directly  to  managed  care
organizations,  purchasing groups, mass merchandisers  and  chain
drug stores to gain market share and enhance margins.


International Pharmaceuticals Division ("IPD")

   The Company's International Pharmaceuticals Division develops,
manufactures,  and  markets a broad range of pharmaceuticals  for
human  use.  The  Company believes that it has a  leading  market
position  for  branded  generic  pharmaceuticals  in  the  Nordic
countries, the United Kingdom, and the Netherlands with a  strong
presence in Indonesia.

   Product  Lines.  The  International  Pharmaceuticals  Division
manufactures  approximately  290  products  which  are  sold   in
approximately   670  product  presentations  including   tablets,
ointments,  creams, liquids, suppositories and injectable  dosage
forms.
     
  Prescription  Pharmaceuticals. The Division has a  broad  range
of   products   with   a  concentration  on   prescription   drug
antibiotics,       analgesics/antirheumatics,      psychotropics,
cardiovascular and oral healthcare products. The predominant
number of these products are sold on a generic basis.

     
  OTC  Products.  The  Division also has a  broad  range  of  OTC
products, such as those for skin care, gastrointestinal care  and
pain  relief,  and including such products as vitamins,  fluoride
tablets, adhesive bandages and surgical tapes. Substantially  all
of these products are sold on a branded basis.

  On  May  7,  1998,  the Company acquired a substantial  generic
pharmaceutical  presence  in  the  United  Kingdom  through   the
purchase  of  all of the capital stock of Arthur H. Cox  and  Co.
Ltd. ("Cox") from Hoechst AG for a total purchase price including
direct  costs  of  acquisition of approximately $198  million  in
cash.   Cox's  main  operations (which  consist  primarily  of  a
manufacturing   plant,  warehousing  facilities   and   a   sales
organization)  are  located in Barnstaple,  England.   Cox  is  a
generic  pharmaceutical  manufacturer and  marketer  of  tablets,
capsules,  suppositories,  liquids, ointments  and  creams.   Cox
distributes its products to pharmacy retailers and pharmaceutical
wholesalers primarily in the United Kingdom and the Netherlands.

  In  addition,  in November, 1998, the Company  acquired,  in  a
substantially   smaller  transaction,  a  generic  pharmaceutical
product  line in Germany. All of the products purchased  in  this
transaction are manufactured under contract by third parties.

  The  Company intends to continue the operations of Cox and  the
acquired  German  generic product line to achieve  benefits  from
leveraging   these  new  activities  with  the   other   European
businesses  of  the  International  Pharmaceutical  Division.  In
addition,  the Company plans to expand the scope of the  acquired
operations  by adding to the acquired product base certain  other
pharmaceutical products of the Company. The Company is continuing
to review market expansion opportunities in Europe.

  Facilities. The Company maintains five manufacturing facilities
for  its international pharmaceutical products, all of which also
house  administrative offices and warehouse space. The  Company's
plants  in  Lier,  Norway and Barnstaple, England,  include  many
technologically  advanced applications for the  manufacturing  of
tablet,  liquid  and  ointment products. The Company's  plant  in
Copenhagen,  Denmark,  which it shares  with  the  Fine  Chemical
Division,  manufactures  sterile products.  In  addition  to  the
Barnstaple,  Copenhagen  and Lier facilities,  the  Company  also
operates  plants in Vennesla, Norway, for bandages  and  surgical
tape products, and Jakarta, Indonesia, for tablets, ointments and
liquids.  The Jakarta plant has received regulatory  approval  to
export certain products to Europe.

  In 1998, the Company substantially completed the implementation
of  a production rationalization plan which commenced in 1996 and
included  the  transfer  of  all  tablet,  ointment  and   liquid
production  from Copenhagen to Lier and the transfer  of  sterile
production from Norway to the Copenhagen facility. In addition to
increasing  available capacity, the Company expects to  recognize
manufacturing efficiencies from this reorganization.

     Competition. The Division operates in geographic areas  that
are highly competitive. Many of the Company's competitors in this
area   are  substantially  larger  and  have  greater  financial,
technical, and marketing resources than the Company. Most of  the
Company's international pharmaceutical products compete with  one
or  more  other products that contain the same active ingredient.
In  the Nordic countries and certain other European countries  in
recent   years,  sales  of  generic  pharmaceuticals  have   been
increasing relative to sales of patent protected pharmaceuticals.
Generics  are  gaining market share because, among other  things,
governments  are attempting to reduce pharmaceutical expenses  by
enacting regulations that promote generic pharmaceuticals in lieu
of  original formulations. This increased focus on pharmaceutical
prices  may lead to increased competition and price pressure  for
suppliers  of  all  types of pharmaceuticals,  including  branded
generics(see  "Risk Factors-Government Regulations Affecting  the
Company").  The  Company's international pharmaceutical  products
have  also  been  encountering  price  pressures  from  "parallel
imports"  (i.e.,imports of identical products from  lower  priced
markets  under  EU  laws of free movement of goods).  (See  "Risk
Factors-Generic Pharmaceutical Industry").

     Geographic Markets. The principal geographic markets for the
Division's  pharmaceutical  products  are  the  United   Kingdom,
Netherlands,  the  Nordic and other Western  European  countries,
Indonesia, and the Middle East.

      Sales  and  Distribution and Customers.  Depending  on  the
characteristics of each geographic market, generic  products  are
predominantly marketed under either brand or generic  names.  OTC
products   are   typically  marketed  under  brand   names   with
concentration on skin care, tooth cavity prevention, pain  relief
and  vitamins. The Division employs a specialized sales force  of
approximately  310  persons, 150 of whom are in  Indonesia,  that
markets  and  promotes products to doctors, dentists,  hospitals,
pharmacies  and consumers. In each of its international  markets,
the  Company  uses  wholesalers to distribute its  pharmaceutical
products.


Fine Chemicals Division ("FCD")

     The Company's Fine Chemicals Division develops, manufactures
and  markets bulk antibiotics to the pharmaceutical industry  for
use  in finished dose products sold in more than 50 countries and
benefits from over four decades of experience in the use  of  and
development  of  fermentation  and purification  technology.  The
Division develops, manufactures and sells active ingredients in
bulk  quantities  for use in human and veterinary pharmaceuticals
produced  by third parties and, to a limited extent, the Company.
In   addition,  the  Company's  fermentation  expertise  in   the
production   of  bulk  antibiotics  has  a  direct  technological
application  to  the  manufacture of products  of  the  Company's
animal health business.

       Product   Lines.  The  Company's  fine  chemical  products
constitute  the active substances in certain pharmaceuticals  for
the  treatment of certain skin, throat, intestinal  and  systemic
infections.  The  Company  is  the world's  leading  producer  of
bacitracin,  bacitracin  zinc and polymixin,  and  is  a  leading
producer of vancomycin; all of which are important pharmaceutical
grade   antibiotics.   The   Company  also   manufactures   other
antibiotics  such  as  amphotericin  B  and  colistin   for   use
systemically  and  in  specialized  topical  and  surgical  human
applications.   The  Company  has  substantially   expanded   its
production  capacity  and sales of vancomycin  through  the  1997
approval to sell vancomycin in the U.S., expanded capacity at its
Copenhagen  facility,  and the December  1998  acquisition  of  a
facility in Budapest, Hungary.

      Facilities.  The  Company manufactures  its  fine  chemical
products  in  its plants in Oslo, Norway (which also manufactures
products  for  the  Animal Health Division), Copenhagen,  Denmark
(which   it   shares   with  the  International   Pharmaceuticals
Division)and Budapest, Hungary. Each plant includes fermentation,
specialized  recovery  and purification equipment.  The  Budapest
facility   is   presently  undergoing  a  material   upgrade   in
manufacturing  processes and capacity. All these facilities  have
been  approved  as  a manufacturer of certain  sterile  and  non-
sterile bulk antibiotics by the FDA and by the health authorities
of  certain  European  countries.  (See  "Environmental"  for   a
discussion  of an administrative action related to  the  Budapest
facility)

  Competition. The bulk antibiotic industry is highly competitive
and   many  of  the  Company's  competitors  in  this  area   are
substantially  larger and have greater financial, technical,  and
marketing  resources  than  the  Company.  Sales  are   made   to
relatively  few  large customers with prices and quality  as  the
determining  sales factors. The Company believes its fermentation
and purification expertise and established reputation provide  it
with a competitive advantage in these antibiotic products.

   Geographic Markets and Sales and Distribution. U.S.  sales  of
fine chemical products represent approximately 50% of the revenue
from  these products with significant additional sales in Europe,
Asia  and  Latin America. The Company distributes and  sells  its
fine  chemical products in the U.S. using its sales force of  two
professionals. Sales outside the U.S. are primarily  through  the
use of local agents and distributors.


Animal Health

   The  animal health business is comprised of the Animal  Health
Division  and the Aquatic Animal Health Division. Each  of  these
divisions  is  managed by a separate senior management  team.  In
1998,   the   Company  had  animal  health   product   sales   of
approximately $185.3 million, before elimination of  intercompany
sales, with operating profit of approximately $41.4 million.

Animal Health Division ("AHD")

   The  Company develops, manufactures and markets feed  additive
and animal health products for animals raised for commercial food
production worldwide. The Company believes that its animal health
business is a leading manufacturer and marketer of feed additives
to the worldwide poultry and swine industries.

   Product  Lines. The Company's principal animal health products
are:  (i) BMDT, a bacitracin based feed additive used to  promote
growth  and  feed  efficiency and prevent or  treat  diseases  in
poultry  and  swine;  (ii)  Albac(TM), a  bacitracin  based  feed
additive  to  promote  growth and prevent or  treat  diseases  in
poultry,  swine  and  calves;  (iii)  3-Nitro(R),  Histostat(TM),
Zoamix(R),  anticoccidials,  and chloromax  ("CTC"),  feed  grade
antibiotics,  all  of which are commonly used in  combination  or
sequentially  with  BMD;  (iv)  Deccox  cattle  and   calf   feed
additives;  and (v) Vitamin D3, a feed additive used for  poultry
and  swine. Based upon its fermentation experience and  a  strong
marketing  presence,  the Company is the  market  leader  in  the
manufacture and sale of bacitracin-based feed additives which are
marketed under the brand names Albac and BMD. (See "Risk  Factors
Governmental  Actions Affecting the Company" for a discussion  of
certain  legislative  action affecting the sales  of  Albac.)  In
addition,  the Company believes that it has a significant  market
share  with several other of its feed additives, including  those
sold under the Company's 3-Nitro brands.

  In 1997, the Company acquired the Deccox brand name and certain
related  assets  from Rhone-Poulenc's Animal Nutrition  Division.
Under the agreement pursuant to which Deccox was acquired, Rhone-
Poulenc will continue to manufacture this product for sale by the
Company  for a period of 15 years. Deccox is used to prevent  and
control  coccidiosis (a parasite that adversely affects growth)in
cattle.  The  acquisition of the Deccox brand  has  provided  the
Company  with its initial entry into the cattle and calf  market.
In  addition to Deccox sales, this has offered the opportunity to
market   to   the  cattle  industry  several  of  the   Company's
established  products which have historically been sold  only  in
the swine and poultry markets.

   The  Company  believes  that the number  of  products  it  has
approved  to  be  used in combination with other  products  is  a
significant competitive advantage. FDA regulations require animal
health products to be approved for use in combination with  other
products in animal feeds. Therefore, it is generally difficult to
gain market acceptance for new products unless such products  are
approved  for use with other existing products. The approval  for
use of a new product in combination with other products generally
requires  the  cooperation  of the  manufacturer  of  such  other
products. When seeking such cooperation from other manufacturers,
the  Company  believes  it  is a competitive  advantage  to  have
products   with  which  other  manufacturers  desire  to   obtain
combination approval. To date, the Company has been successful in
its ability to obtain the cooperation of third parties in seeking
combination approval for its products. There can be no assurance,
however,   that  the  Company  will  continue  to   obtain   such
cooperation from others. Presently, the Company has  a  total  of
271 combination approvals in the U.S.

   The  Company  believes that features of BMD have enhanced  the
Company's  competitive  position in the animal  health  business.
Generally, FDA regulations do not permit animals to be  sold  for
food production unless their feed has been free of additives that
are  absorbed into animal tissue for at least a 14-day period  of
time  required  by  FDA  rules. BMD is not absorbed  into  animal
tissue,  and therefore need not be withdrawn from feed  prior  to
the  marketing of the food animals. This attribute of BMD  allows
producers  to  avoid the burden of removing these additives  from
feed in order to meet the FDA requirement.

   Facilities. The Company produces its animal health products in
state-of-the-art  manufacturing  facilities.  The  Animal  Health
Division  produces BMD at its Chicago Heights, Illinois facility,
which contains a modern fermentation and recovery plant. Albac is
manufactured at the Oslo facility shared with the Fine  Chemicals
Division.  CTC  is purchased from foreign suppliers  and  blended
domestically at the Company's facility in Lowell, Arkansas and at
independent  blending  facilities. The 3-Nitro  product  line  is
manufactured  in accordance with a ten year agreement  using  the
Company's  technology  at  an unrelated company's  facility.  The
contract   requires  the  Company  to  purchase  minimum   yearly
quantities on a cost plus basis. Blending of 3-Nitro is  done  at
the Company's Lowell plant. (See "Environmental" for a discussion
of an administrative action related to the Oslo facility").

   Competition. The animal health industry is highly  competitive
and  includes a large number of companies with greater financial,
technical,  and  marketing  resources  than  the  Company.  These
companies offer a wide range of products with various therapeutic
and  production enhancing qualities. Due to the Company's  strong
market  position in antibiotic feed additives and its  experience
in  obtaining requisite FDA approvals for combination  therapies,
the  Company  believes  it  enjoys  a  competitive  advantage  in
commercializing FDA-approved combination animal feed additives.

  Geographic Markets. The Company presently sells a major portion
of  its  animal health products in the U.S. and Europe. With  the
opening  of sales offices in Canada, Latin America, and  the  Far
East,  the  Animal Health Division has expanded its international
sales  capability  consistent  with  its  strategy  for  internal
growth.

  Sales and Distribution. The Company's animal health products in
the  U.S.,  Canada  and  Mexico  are  sold  through  a  staff  of
technically  trained  sales and technical service  employees  and
distributors located throughout the U.S. In January of 1999,  the
Company combined its wholly-owned U.S. distribution company  with
two  similar third party distribution businesses to form a  joint
venture  50%  owned  by  the  Company.  It  is  anticipated  that
approximately 50% of the Company's U.S. animal health sales  will
be  made  through this joint venture. Sales of the Animal  Health
Division's  products  outside North America  are  made  primarily
through  the use of distributors and sales companies. The Company
has  sales offices in Norway, Canada, Mexico, Singapore  and  the
People's  Republic of China and in 1997 added  sales  offices  in
Brazil  and France and, in 1998, added a sales office in Belgium.
The  Company  anticipates establishing additional  foreign  sales
offices.

  Customers. Sales are made principally to commercial animal feed
manufacturers   and  integrated  swine  and  poultry   producers.
Although  the Division is not dependent on any one customer,  the
customer  base  for animal health products is in a  consolidation
phase.  Therefore, as consolidation continues,  the  Company  may
become  more  dependent on certain individual customers  as  such
customers increase their size and market share.


Aquatic Animal Health Division ("AAHD")

   The  Company  believes  it  is a leader  in  the  development,
manufacture  and  marketing of vaccines  for  use  in  immunizing
farmed  fish against disease. The Company believes it  has  been,
and  expects to continue as, a leading innovator with respect  to
the   research  and  development  of  vaccines  to  combat  newly
developing forms of aquatic disease.

   The  Company's  vaccines for fish are used by  fish  farms  to
control   disease   in  densely  populated,   artificial   growth
environments. The Company believes that the market  for  vaccines
will continue to grow along with the growth of fish farms as  the
worldwide demand for fish continues to increase beyond  what  can
be supplied from the natural fish habitat.

   Product  Lines.  The  Aquatic Animal Health  Division  is  the
leading  supplier of injectable vaccines for farm raised  salmon.
In  addition  the  Division is a pioneer in  the  development  of
vaccines for trout, sea bass, sea bream, catfish, yellowtail  and
other commercially important farm species.

   Facilities. The Company manufactures its fish vaccine products
in Bellevue, Washington and at its Overhalla, Norway facility.  A
contract  manufacturer in Germany provides certain raw  materials
for vaccine production.

   Competition.  The Company has few competitors in  the  aquatic
animal health industry. However, the industry is subject to rapid
technological  change. Competitors could develop  new  techniques
and  products  that  would  render the Company's  aquatic  animal
health  products obsolete if the Company was unable to match  the
improvements  quickly. In this regard, the Company  is  presently
developing  a  new  salmon vaccine to meet the market  perception
that a competing product may provide better disease protection.

  Geographic Markets. The Company sells its aquatic animal health
products in Norway, the United Kingdom, Canada and the U.S.

   Sales  and Distribution. The Company sells its aquatic  animal
health products through its own technically oriented sales  staff
of  twelve  people in Norway and the U.S. In other  markets,  the
Company  operates  through distributors. The  Company  sells  its
products  to  fish farms, usually under a contract which  extends
for  at  least  one  growing  season. There  are  relatively  few
customers for the Division's products.


Information Applicable to all Business Segments

Research, Product Development and Technical Activities

     Scientific development is important to each of the Company's
business  segments.  The Company's research, product  development
and  technical  activities in the Human  Pharmaceuticals  segment
within   the  U.S.,  Norway  and  Denmark  concentrate   on   the
development of generic equivalents of established branded
products  as well as discovering creative uses of existing  drugs
for  new  treatments. The Company's research, product development
and  technical  activities also focus on  developing  proprietary
drug delivery systems and on improving existing delivery systems,
fermentation   technology   and   packaging   and   manufacturing
techniques. In view of the substantial funds which are generally
required to develop new chemical drug entities, the Company  does
not anticipate undertaking such activities.

   The  Company's technical development activities for the Animal
Health  segment involve extensive product development and testing
for  the primary purpose of establishing clinical support for new
products  and  additional  uses for  or  variations  of  existing
products  and  seeking  related FDA  and  analogous  governmental
approvals.

    Generally,  research  and  development  are  conducted  on  a
divisional  basis.  The  Company conducts its  technical  product
development activities at its facilities in Copenhagen,  Denmark;
Oslo,  Norway;  Baltimore,  Maryland; Bellevue,  Washington;  and
Chicago Heights, Illinois, as well as through independent
research facilities in the U.S. and Norway.

   Research  and  development expenses were  approximately  $36.0
million,  $32.1  million, and $34.3 million in  1998,  1997,  and
1996,  respectively. In 1998, the Company received  approximately
100 governmental product, market and manufacturing approvals.



Government Regulation

  General. The research, development, manufacturing and marketing
of  the  Company's  products are subject to extensive  government
regulation by either the FDA or the USDA, as well as by the  DEA,
FTC,  CPSC,  and  by comparable authorities in  the  EU,  Norway,
Indonesia and other countries. Although Norway is not a member of
the EU, it is a member of the European Economic Association
and,  as  such, has accepted all EU regulations with  respect  to
pharmaceuticals   except  in  the  area  of   feed   antibiotics.
Government  regulation  includes  detailed  inspection   of   and
controls over testing, manufacturing, safety, efficacy, labeling,
storage,  recordkeeping, approval, advertising,  promotion,  sale
and  distribution of pharmaceutical products. Noncompliance  with
applicable  requirements can result in civil or  criminal  fines,
recall  or  seizure of products, total or partial  suspension  of
production and/or distribution, debarment of individuals  or  the
Company from obtaining new generic drug approvals, refusal of the
government to approve new products and criminal prosecution. Such
government  regulation  substantially  increases  the   cost   of
producing human pharmaceutical and animal health products.

  The evolving and complex nature of regulatory requirements, the
broad  authority and discretion of the FDA and analogous  foreign
agencies,  and  the generally high level of regulatory  oversight
results  in a continuing possibility that from time to  time  the
Company  will be adversely affected by regulatory actions despite
its  ongoing efforts and commitment to achieve and maintain  full
compliance with all regulatory requirements. As a result of
actions taken by the Company to respond to the progressively more
demanding  regulatory  environment  in  which  it  operates,  the
Company has spent, and will continue to spend, significant  funds
and management time on regulatory compliance.

   Product  Marketing Authority. In the U.S., the FDA  regulatory
procedure  applicable  to  the Company's  generic  pharmaceutical
products depends on whether the branded drug is: (i) the  subject
of  an  approved  New  Drug Application ("NDA")  which  has  been
reviewed  for both safety and effectiveness; (ii) marketed  under
an  NDA approved for safety only; (iii)marketed without an NDA or
(iv)  marketed  pursuant  to over-the-counter  ("OTC")  monograph
regulations. If the drug to be offered as a generic version of  a
branded product is the subject of an NDA approved for both safety
and effectiveness, the generic product must be the subject of  an
Abbreviated New Drug Application ("ANDA") and be approved by  FDA
prior to marketing. Drug products which are generic copies of the
other  types  of branded products may be marketed  in  accordance
with  either  an  FDA enforcement policy or the  over-the-counter
drug  review monograph process and currently are not  subject  to
ANDA filings and approval prior to market introduction. While the
Company  believes that all of its current pharmaceutical products
are  legally  marketed under the applicable  FDA  procedure,  the
Company's  marketing authority is subject to  revocation  by  the
agency. All applications for regulatory approval of generic  drug
products  subject to ANDA requirements must contain data relating
to   product  formulation,  raw  material  suppliers,  stability,
manufacturing,  packaging, labeling and  quality  control.  Those
subject   to   a   Waxman-Hatch  Act  ANDA  also   must   contain
bioequivalency  data. Each product approval limits  manufacturing
to  a  specifically  identified site.  Supplemental  filings  for
approval  to  transfer  products from one manufacturing  site  to
another also require review and approval.

   Certain  of the Company's animal health products are regulated
by  the  FDA,  as  described  above, while  other  animal  health
products are regulated by the USDA. An EU Directive requires that
medical products must have a marketing authorization before  they
are placed on the market in the EU. The criteria upon which grant
of an authorization is assessed are quality, safety and efficacy.
Demonstration  of  safety  and efficacy  in  particular  requires
clinical trials on human subjects and the conduct of such  trials
is  subject to the standards codified in the EU guideline on Good
Clinical Practice. In addition, the EU requires that such  trials
be  preceded by adequate pharmacological and toxicological  tests
in  animals  and  that clinical trials should  use  controls,  be
carried  out double blind and capable of statistical analysis  by
using specific criteria wherever possible, rather than relying on
a  large  sample  size. The working party  on  the  Committee  of
Proprietary   Medicinal   Products   has   also   made    various
recommendations in this area. Analogous governmental  and  agency
approvals  are  similarly required in other countries  where  the
Company  conducts  business. There can be no assurance  that  new
product  approvals will be obtained in a timely manner, if  ever.
Failure  to  obtain  such  approvals,  or  to  obtain  them  when
expected,  could have a material adverse effect on the  Company's
business, results of operations and financial condition.

   Facility Approvals. The Company's manufacturing operations (in
the  U.S.  as well as three of the Company's European  facilities
that manufacture products for export to the U.S.) are required to
comply  with  Current  Good Manufacturing Practices  ("CGMP")  as
interpreted  by the FDA and EU regulations. CGMP encompasses  all
aspects  of  the  production process,  including  validation  and
record  keeping,  and  involves changing and evolving  standards.
Consequently,   continuing  compliance  with  CGMP   can   be   a
particularly   difficult  and  expensive   part   of   regulatory
compliance, especially since the FDA and certain other  analogous
governmental  agencies  have  increased  the  number  of  regular
inspections   to   determine  compliance.   There   are   similar
regulations   in   other   countries  where   the   Company   has
manufacturing operations. The EU requires that before a medicinal
product can be manufactured and assembled, each person or company
who  carries  out  such an operation must hold  a  manufacturer's
license, a product license must be held by the person responsible
for  the  composition  of the product, and  the  manufacture  and
assembly must be in accordance with the product license. There is
also  a Directive relating to Good Manufacturing Practice ("GMP")
which  makes  compliance with the principles  of  GMP  compulsory
throughout the EU.


  Potential Liability for Current Products. Continuing studies of
the  proper  utilization, safety, and efficacy of pharmaceuticals
and  other  health  care  products are  being  conducted  by  the
industry,  government agencies and others.  Such  studies,  which
increasingly employ sophisticated methods and techniques,
can  call  into question the utilization, safety and efficacy  of
previously marketed products and in some cases have resulted, and
may  in  the  future  result,  in  the  discontinuance  of  their
marketing  and,  in certain countries, give rise  to  claims  for
damages  from  persons who believe they have been  injured  as  a
result of their use.

   Extended  Protection  for  Branded Products.  The  Drug  Price
Competition  and  Patent Term Restoration Act of  1984  ("Waxman-
Hatch  Act")  amended both the Patent Code and the Federal  Food,
Drug,  and  Cosmetic  Act (the "FDC Act"). The  Waxman-Hatch  Act
codified and expanded application procedures for obtaining FDA
approval  for  generic forms of brand-name pharmaceuticals  which
are  off-patent and/or whose market exclusivity has expired.  The
Waxman-Hatch  Act  also  provides  patent  extension  and  market
exclusivity  provisions  for innovator drug  manufacturers  which
preclude the submission or delay the approval of a competing ANDA
under  certain conditions. One such provision allows a five  year
market   exclusivity  period  for  NDAs  involving  new  chemical
compounds  and  a three year market exclusivity period  for  NDAs
containing new clinical investigations essential to the  approval
of  such  application.  The market exclusivity  provisions  apply
equally  to  patented  and non-patented  drug  products.  Another
provision authorizes the extension of patent terms for up to five
years as compensation for reduction of the effective life of  the
patent  as a result of time spent in testing for, and FDA  review
of, an application for a drug approval. Patent terms may also  be
extended  pursuant to the terms of the Uruguay  Round  Agreements
Act  ("URAA")or  by  future legislation.  In  addition,  the  FDA
Modernization Act of 1997 allows brand name manufacturers to seek
six  months  of  additional exclusivity when they have  conducted
pediatric  studies  on the drug. Therefore,  the  Company  cannot
predict  the  extent  to  which the  Waxman-Hatch  Act,  the  FDA
Modernization  Act of 1997, the URAA or future legislation  could
postpone launch of some of its new products.

    In   Europe,  certain  Directives  confer  a  similar  market
exclusivity in respect of proprietary medicines, irrespective  of
any  patent protection. Before a generic manufacturer can present
an  abridged application for a marketing authorization,  it  must
generally  wait until the original proprietary drug has  been  on
the market for a certain period (unless he has the consent of the
person  who  submitted  the original  test  data  for  the  first
marketing  authorization, or can compile an adequate  dossier  of
his own). In the case of high-technology products, this period is
ten  years  and six years in respect of other medicinal products,
subject  to  the  option  for  member  states  to  elect  for  an
exclusivity period of ten years in respect of all products, or to
dispense  with  the  six-year  period  where  that  would   offer
protection beyond patent expiry.

   In addition to the exclusivity period, it is also possible  in
the  EU to effectively extend the period of patent protection for
a  product  which has a marketing authorization  by  means  of  a
Supplementary Protection Certificate ("SPC"). An SPC  comes  into
force on the expiry of the relevant patent and lasts for a period
calculated with reference to the delay between the lodging of the
patent and the granting of the first marketing authorization  for
the drug. This period of protection, subject to a maximum of five
years,   further  delays  the  marketing  of  generic   medicinal
products.

   The Generic Drug Enforcement Act. The Generic Drug Enforcement
Act of 1992, which amended the FDC Act, gives the FDA six ways to
penalize anyone that engages in wrongdoing in connection with the
development  or  submission  of  an  ANDA.  The  FDA   can:   (i)
permanently  or  temporarily  prohibit  alleged  wrongdoers  from
submitting  or  assisting  in the submission  of  an  ANDA;  (ii)
temporarily deny approval of, or suspend applications to  market,
particular generic drugs; (iii) suspend the distribution  of  all
drugs  approved  or developed pursuant to an invalid  ANDA;  (iv)
withdraw  approval  of an ANDA; (v) seek civil penalties  against
the  alleged wrongdoer; and (vi) significantly delay the approval
of  any  pending ANDA from the same party. The Company has  never
been  the  subject  of an enforcement action under  this  or  any
similar  statute but there can be no assurance that  restrictions
or fines will not be imposed upon the Company in the future.

   Controlled Substances Act. The Company also manufacturers  and
sells  drug products which are "controlled substances" as defined
in  the  Controlled  Substances Act,  which  establishes  certain
security and record keeping requirements administered by the DEA,
a  division of the Department of Justice. The Company is licensed
by  the  DEA  to  manufacture and distribute  certain  controlled
substances.  The  DEA  has  a  dual mission-law  enforcement  and
regulation.  The  former deals with the illicit  aspects  of  the
control  of  abusable  substances  and  the  equipment  and   raw
materials  used  in  making  them.  The  DEA  shares  enforcement
authority  with  the  Federal Bureau  of  Investigation,  another
division  of  the  Department of Justice.  The  DEA's  regulatory
responsibilities  are  concerned with  the  control  of  licensed
handlers  of  controlled  substances,  and  with  the  substances
themselves, equipment and raw materials used in their manufacture
and  packaging,  in  order to prevent such  articles  from  being
diverted  into illicit channels of commerce. The Company  is  not
under  any  restrictions for non-compliance  with  the  foregoing
regulations,  but there can be no assurance that restrictions  or
fines will not be imposed upon the Company in the future.

    Health   Care  Reimbursement.  The  methods  and   level   of
reimbursement   for  pharmaceutical  products   under   Medicare,
Medicaid,  and  other  domestic reimbursement  programs  are  the
subject  of constant review by state and federal governments  and
private third party payors like insurance companies. Management
believes  that U.S. government agencies will continue  to  review
and  assess alternative payment methodologies and reform measures
designed  to reduce the cost of drugs to the public. Because  the
outcome  of  these  and other health care reform  initiatives  is
uncertain, the Company cannot predict what impact, if  any,  they
will have on the Company.

   Medicaid legislation requires all pharmaceutical manufacturers
to  rebate to individual states a percentage of the revenues that
the  manufacturers derive from Medicaid reimbursed pharmaceutical
sales  in those states. The required rebate for manufacturers  of
generic products is currently 11%.

  In many countries other than the U.S. in which the Company does
business,  the initial prices of pharmaceutical preparations  for
human  use  are dependent upon governmental approval or clearance
under   governmental  reimbursement  schemes.  These   government
programs generally establish prices by reference to either
manufacturing  costs  or  the  prices  of  comparable   products.
Subsequent price increases may also be regulated. In past  years,
as  part of overall programs to reduce health care costs, certain
European  governments have prohibited price  increases  and  have
introduced various systems designed to lower prices. As a
result,  affected manufacturers, including the Company, have  not
always  been  able  to recover cost increases or  compensate  for
exchange rate fluctuations.

   In  order  to  control  expenditures on pharmaceuticals,  most
member states in the EU regulate the pricing of such products and
in  some  cases  limit the range of different  forms  of  a  drug
available  for  prescription by national health  services.  These
controls can result in considerable price differences between
member states. There is also a Common External Tariff payable  on
import  of medicinal products into the EU, though exemptions  are
available  in respect of certain products which allows duty  free
importation. Where there is no tariff suspension in operation  in
respect  of  a medicinal product, an application can be  made  to
import the product duty free but this is subject to review at
European level to establish whether a member state would be  able
to  produce  the  product in question instead. In addition,  some
products are subject to a governmental quota which restricts  the
amount which can be imported duty free.


Financial  Information About Foreign and Domestic Operations  and
Export Sales

      The  Company derives a substantial portion of its  revenues
and  operating income from its foreign operations. Revenues  from
foreign  operations  accounted  for  approximately  44%  of   the
Company's  revenues  in  1998. For certain financial  information
concerning  foreign and domestic operations see Note  20  of  the
Notes to the Consolidated Financial Statements included in Item 8
of  this Report.  Export sales from domestic operations were  not
significant.


Environmental Matters

   The  Company  believes that it is substantially in  compliance
with all presently applicable federal, state and local provisions
regulating  the  discharge of materials into the environment,  or
otherwise relating to the protection of the environment.

   The  State  of California has commenced an action against  the
Company  in the California Superior Court under the State's  Safe
Drinking  Water and Toxic Enforcement Act of 1986 (the  "Drinking
Water  Act")  alleging  that it failed to include  a  warning  to
California users of two of its prescription drugs to the
effect  that  said drugs are known to the State of California  to
cause  cancer or reproductive toxicity. The State further alleges
that by violating the Drinking Water Act, the Company is also  in
violation of the Unfair Competition Act (the "Competition  Act").
The Company believes that prescription drugs fall under a
"safe-harbor" regulation and the required notice is deemed to  be
given by giving the FDA mandated product warnings. On this basis,
the Company intends to defend this action vigorously. The Company
has  reason  to  believe that many other drug  manufacturers  are
relying upon the same regulation and therefore have not given any
notice  beyond  that required by the FDA in connection  with  the
sale  of  prescription drugs. While the State's action  does  not
request  a  specific monetary fine, the Company understands  that
the  maximum fine for violation of each of the Drinking Water Act
and  the  Competition  Act is $5,000 for each  day  of  violation
subject  to  a  four  year  statute of  limitation.  The  Company
believes   that  this  matter  will  not  result  in  a  material
liability.

   The Company is presently engaged in administrative proceedings
with  respect to the air emissions and noise levels at  its  Oslo
plant and soil and acquifier contamination of its Budapest plant.
The Company anticipates the need for improvements at both plants;
the cost of which has not yet been determined but is not believed
to  be  material  to the Company. Certain costs incurred  at  the
Budapest facility are subject to reimbursement obligations of the
previous owner.

  In  addition,  the  Company is a Potentially Responsible  Party
("PRP")  at  one  site  subject  to U.S.  Superfund  legislation.
Superfund provides for joint and several liability for all PRP's.
Based  upon  the  Company's minor involvement at  this  Superfund
site, and the identification of numerous PRP's who were larger
site  users,  the  Company  does not believe  that  its  ultimate
liability for this  site will be material to the Company.

   Although  many  major  capital projects  typically  include  a
component  for  environmental control,  including  the  Company's
current expansion projects, no material expenditures specifically
for environmental control are expected to be made in 1999.

Employees

     As of December 31, 1998, the Company had approximately 3,000
employees, including 1,100 in the U.S. and 1,900 outside  of  the
U.S.


Item 1A.  Executive Officers of the Registrant

      The following is a list of the names and ages of all of the
Company's corporate officers and certain officers of each of  the
Company's principal operating units, indicating all positions and
offices  with  the Registrant held by each such person  and  each
such person's principal occupations or employment during the past
five years.

     Each of the Company's corporate officers has been elected to
the  indicated office or offices of the Registrant, to  serve  as
such until the next annual election of officers of the Registrant
(expected  to  occur June 10, 1999) and until their successor  is
elected,  or  until  his  or her earlier  death,  resignation  or
removal.

Name and Position                  Principal  Business Experience
with the Company            Age    During the Past Five Years

E.W. Sissener               70     Chief Executive Officer since
Chairman,  Director   and          June 1994.  Member of the
Chief Executive Officer            Office of the Chief Executive
                                   of the Company July 1991 to
                                   May 1994.  Chairman of the
                                   Company since 1975.
                                   President, Alpharma AS since
                                   October 1994. President,
                                   Apothekernes AS (now AL
                                   Industrier AS) 1972 to 1994.
                                   Chairman of A.L. Industrier AS
                                   since November 1994.
                                   
Gert W. Munthe              42     President since May 1998 and
President,  Director  and          Director of the Company since
Chief Operating Officer            June 1994.President and Chief
                                   Executive Officer of NetCom
                                   GSM A.S., a Norwegian cellular
                                   telecommunications company,
                                   1993 to 1998. Executive Vice
                                   President and division
                                   President of Hafslund Nycomed
                                   A.S., a Norwegian energy and
                                   pharmaceutical corporation,
                                   1988 to 1993. President of
                                   Nycomed (Imaging) A.S., a
                                   wholly owned subsidiary of
                                   Hafslund Nycomed A.S., 1991 to
                                   1993. Division President in
                                   charge of the energy business
                                   of Hafslund Nycomed A.S., 1988
                                   to 1991. Mr. Munthe is Mr.
                                   Sissener's son-in-law.

Jeffrey E. Smith            51     Chief Financial Officer and
Vice President, Finance            Vice President since May 1994.
and Chief Financial                Executive Vice President and
Officer                            Member of the Office of the
                                   Chief Executive July 1991 to
                                   May 1994.  Vice President,
                                   Finance of the Company from
                                   November 1984 to July 1991.
                                   
Robert F. Wrobel            54     Vice President and Chief Legal
Vice President and Chief           Officer since October of 1997.
Legal Officer                      Vice President and Associate
                                   General Counsel of Duracell
                                   Inc., 1994 to September 1997
                                   and Senior Vice President,
                                   General Counsel and Chief
                                   Administrative Officer of The
                                   Marley Company 1975 to 1993.
                                   
Diane M. Cady               44     Vice President, Investor
Vice President, Investor           Relations since November 1996.
Relations                          Vice President, Investor
                                   Relations for Ply Gem
                                   Industries, Inc. 1987 to
                                   October 1996.
                                   
Albert N. Marchio, II       46     Treasurer of the Company since
Vice President and                 May 1992. Treasurer of Laura
Treasurer                          Ashley, Inc. 1990 to 1992.
                                   
John S. Towler              50     Controller of the Company
Vice President and                 since March 1989.
Controller

Thomas L. Anderson          50     President of the Company's
Vice President and                 U.S. Pharmaceuticals Division
President, U.S.                    since January 1997; President
Pharmaceuticals Division           and Chief Operating Officer of
                                   FoxMeyer Health Corporation
                                   May 1993 to February 1996;
                                   Executive Vice President and
                                   Chief Operating Officer of
                                   FoxMeyer Health Corporation
                                   July 1991 to April 1993.
                                   

Bruce Andrews, Vice         52     President of the Company's
President and President,           Animal Health Division since
Animal Health Division             May 1997. Consultant with
                                   Brakke Consulting, Inc. from
                                   1996 through May of 1997,
                                   President of Lifelearn, Inc.
                                   in 1995, and President of the
                                   Cyanamid North American Animal
                                   Health and Nutrition Division
                                   from 1992 to 1994.

Thor Kristiansen            55     President of the Company's
Vice President and                 Fine Chemicals Division since
President, Fine Chemicals          October 1994; President,
Division                           Biotechnical Division of
                                   Apothekernes Laboratorium A.S
                                   1986 to 1994.

Knut Moksnes                48     President of the Company's
Vice President and                 Aquatic Animal Health Division
President, Aquatic Animal          since October 1994; Managing
Health Division                    Director, Fish Health Division
                                   of Apothekernes Laboratorium
                                   A.S 1991 to 1994.
                                   
Ingrid Wiik                 54     President of the Company's
Vice President and                 International Pharmaceuticals
President, International           Division since October 1994;
Pharmaceuticals Division           President, Pharmaceutical
                                   Division of Apothekernes
                                   Laboratorium A.S 1986 to 1994.
                                   

Item 2.   Properties

Manufacturing and Facilities

   The  Company's corporate offices and principal production  and
technical  development facilities are located in  the  U.S.,  the
United  Kingdom, Denmark, Norway and Indonesia. The Company  also
owns  or  leases  offices and warehouses  in  the  U.S.,  Sweden,
Holland, Finland and elsewhere.

                          Facility  
Location         Status     Size    Use
                          (sq.ft.)
                                    
Fort Lee, NJ    Leased     37,000   Offices-Alpharma corporate
                                    and AHD headquarters
Oslo, Norway    Leased    204,400   Manufacturing of AHD and FCD
                                    products, Alpharma corporate
                                    offices and headquarters for
                                    IPD,FCD and AAHD
Baltimore, MD   Owned     268,000   Manufacturing and offices for
                                    USPD
Baltimore, MD   Leased     18,000   Research and development for
                                    USPD
Bellevue, WA    Leased     20,000   Warehousing, laboratory and
                                    offices for AAHD
Chicago         Owned     195,000   Manufacturing,warehousing,res
Heights, IL.                        earch and development and
                                    offices for AHD
Columbia, MD    Leased    165,000   Distribution center for USPD
Lincolnton, NC  Owned     138,000   Manufacturing and offices for
                                    USPD
Lowell, AR      Leased     68,000   Manufacturing,warehousing and
                                    offices for AHD
Niagara Falls,  Owned      30,000   Warehousing and offices for
NY                                  USPD
Barnstaple,Engl Owned     250,000   Manufacturing, warehousing
and                                 and offices for IPD
Budapest,Hungar Owned     175,000   Manufacturing,warehousing and
y..                                 offices for FCD
Copenhagen,Denm Owned     345,000   Manufacturing,warehousing,
ark                                 research and development and
                                    offices for IPD and FCD
Jakarta,Indones Owned      80,000   Manufacturing, warehousing,
ia.                                 research and development and
                                    offices for IPD
Lier,Norway. .  Owned     180,000   Manufacturing,warehousing and
 .                                   offices for IPD
Overhalla,Norwa Owned      39,500   Manufacturing,warehousing and
y..                                 offices for AAHD
Vennesla,Norway Owned      81,300   Manufacturing, warehousing
 . .                                 and offices for IPD

The  Company  believes  that its principal  facilities  described
above are generally in good repair and condition and adequate and
suitable for the products they produce.


Item 3. Legal Proceedings

   The Company is one of multiple defendants in 80 lawsuits filed
in  various  US Federal District Courts and several State  Courts
alleging  personal  injuries  and two  class  actions  requesting
medical   monitoring  resulting  from  the  use  of   phentermine
distributed  by the Company and prescribed for use in combination
with  fenfluramine or dexfenfluramine manufactured  and  sold  by
other  defendants ("Fen-Phen" lawsuits). None of  the  plaintiffs
has  specified  the amount of his or her monetary demand,  but  a
majority  of the lawsuits allege serious injury. The Company  has
demanded defense and indemnification from the manufacturers  from
whom  it  has purchased phentermine and has filed claims  against
said   manufacturers'  insurance  carriers  and   the   Company's
carriers.  The  Company has received a partial  reimbursement  of
litigation  costs  from one of the manufacturer's  carriers.  The
plaintiff  in  34  of these lawsuits has agreed  to  dismiss  the
Company without prejudice but such dismissals must be approved by
the Court. The Company does not expect that the Fen-Phen lawsuits
will  be material to the Company. It is possible that the Company
could  later  be  named as a defendant in some of the  additional
lawsuits  already  on  file with respect to  these  drugs  or  in
similar lawsuits which could be filed in the future.


     The  Company has received written notice of a claim alleging
that it is violating certain third party U.S. patents in the area
of   electronic  reading  devices  and  offering  to  enter  into
licensing  discussions.  While the Company has not completed  its
analysis of either the validity or applicability of said patents,
several  material Company manufacturing facilities do use devices
and  machinery within the general technical area covered by these
third party patents.  Based upon factors considered reasonable as
of  this date, the Company has no reason to anticipate that  this
matter will result in liability material to the Company.


   From  time  to  time the Company is involved in  certain  non-
material  litigation which is ordinarily found in  businesses  of
this  type,  including contract, employment matters  and  product
liability actions. Product liability suits represent a continuing
risk  to  pharmaceutical  companies.  The  Company  attempts   to
minimize  such  risks by strict controls over  manufacturing  and
quality procedures. Although the Company carries what it believes
to  be  adequate  insurance,  there is  no  assurance  that  such
insurance can fully protect it against all such risks due to  the
inherent   potential  liability  in  the  business  of  producing
pharmaceuticals for human and animal use.


      The  Company is also subject to an action commenced by  the
State  of  California under the State's Safe Drinking  Water  and
Toxic Enforcement Act of 1986. (See "Environmental Matters").

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

        Not applicable.


                            PART II

Item 5.   Market for Registrant's Common Equity and Related
               Stockholder Matters

Market Information

     The Company's Class A Common Stock is listed on the New York
Stock Exchange ("NYSE"). Information concerning the 1998 and 1997
sales  prices of the Company's Class A Common Stock is set  forth
in the table below.

                              Stock Trading Price
                          1998                     1997
     Quarter         High      Low            High       Low

   First           $24.31    $18.94        $15.13      $11.38         
   Second          $23.00    $19.75        $18.13      $13.50 
   Third           $26.31    $21.44        $23.50      $15.25
   Fourth          $36.94    $22.56        $23.88      $21.25
      As  of  December 31, 1998 and March 10, 1999 the  Company's
stock closing price was $35.31 and $41.38, respectively.

Holders

      As of March 10, 1999, there were 1,609 holders of record of
the  Company's Class A Common Stock and A.L. Industrier held  all
of  the  Company's Class B Common Stock.  Record holders  of  the
Class  A Common Stock include Cede & Co., a clearing agency which
held      approximately  97% of the outstanding  Class  A  Common
Stock as a nominee.

Dividends

       The   Company  has  declared  consecutive  quarterly  cash
dividends  on  its Class A and Class B Common Stock beginning  in
the third quarter of 1984.  Quarterly dividends per share in 1998
and 1997 were $.045 per quarter or $.18 per year.

Item 6.   Selected Financial Data

      The  following is a summary of selected financial data  for
the  Company and its subsidiaries. The data for each of the three
years  in  the  period ended December 31, 1998 have been  derived
from,  and  all  data  should be read in  conjunction  with,  the
audited   consolidated  financial  statements  of  the   Company,
included  in Item 8 of this Report. All amounts are in thousands,
except per share data.

Income Statement Data                                     
                                   Years Ended December 31,
                        1998(4)    1997     1996(3)    1995    1994(2)
                                                               
Total revenue           $604,584  $500,288 $486,184  $520,882   $469,263
                                                              
                                                               
Cost of sales           351,324  289,235   297,128   302,127   275,543
                                                               
 Gross profit           253,260  211,053   189,056   218,755   193,720
                                                               
Selling, general and                                           
 administrative expense 188,264  164,155   185,136   166,274   177,742
                                                               
Operating income         64,996    46,898    3,920     52,481    15,978
                                                               
Interest expense        (25,613)  (18,581) (19,976)  (21,993) (15,355)
                                                              
                                                               
Other income                                                   
 (expense), net           (400)      (567)    (170)     (260)   1,113
                                                               
Income (loss) before                                           
 income taxes and                                              
 extraordinary item     38,983    27,750    (16,226)  30,228    1,736
                                                               
Provision (benefit)                                            
 for income taxes        14,772   10,342     (4,765)  11,411    3,439
                                                               
Income (loss) before                                           
 extraordinary item     $24,211 $ 17,408   $(11,461)  18,817   $(1,703)
                                                               
Net income (loss) (1)   $24,211 $ 17,408   $(11,461)  18,817   $(2,386)
                                                               
Average number of                                              
 shares outstanding:
  Diluted                26,279   22,780     21,715    21,754    21,568
                                                               
Earnings (loss) per                                            
 share: Diluted
  Income (loss)                                                
   before                                                      
extraordinary           $   .92  $   .76   $  (.53)  $   .87   $  (.08)
   item
  Net income (loss)     $   .92  $   .76   $  (.53)  $   .87   $  (.11)
                                                               
 Dividend per common                                           
  share                 $   .18  $   .18   $   .18   $   .18   $   .18
                                                               



(1)  Net  loss  includes: 1994 - extraordinary  item  -  loss  on
     extinguishment of debt ($683).

(2)  1994  includes transaction costs relating to the combination
     with Alpharma Oslo and Management Actions which are included in
     cost of goods sold ($450) and selling, general and administrative
     ($24,200). Amounts net after tax of approximately $17,400 ($0.81
     per share).

(3)  1996  includes  Management Actions  relating  to  production
     rationalizations and severance which are included in cost of
     goods       sold   ($1,100)   and   selling,   general   and
     administrative   ($17,700).  Amounts  net   after   tax   of
     approximately $12,600 ($0.58 per share).

(4)  1998 includes results of operations from date of acquisition
     of  Cox Pharmaceuticals (May 1998) and non-recurring charges
     related to the Cox acquisition which are included in cost of
     sales ($1,300) and selling, general and administrative ($2,300).
     Charges, net after tax, were approximately $3,130 ($0.12 per
     share).

                                 As of December 31,
Balance Sheet Data         1998(1)             1997      1996      1995
1994

Current assets           $335,484  $273,677  $274,859  $282,886  $250,499
Non-current assets        573,452   358,189   338,548   351,967   341,819

 Total assets           $908,936  $631,866  $613,407  $634,853  $592,318
Current liabilities      $170,437  $133,926  $155,651  $169,283  $154,650
Long-term debt, less
  current maturities      429,034   223,975   233,781   219,451   220,036
Deferred taxes and
  other non-current
  liabilities              42,186    35,492    37,933    40,929    36,344
Stockholders' equity      267,279   238,473   186,042   205,190   181,288
  Total liabilities
  and equity             $908,936  $631,866  $613,407  $634,853  $592,318
(1)  Includes   accounts   from  date  of  acquisition   of   Cox
     Pharmaceuticals (May 1998).


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

Overview

      1998  and  1997  were  years in which  operations  improved
relative  to the preceding year. Both years included a number  of
significant transactions which the Company believes will  enhance
future growth. Such transactions include:

1998

         In  March  the Company issued $192.8 million  of  5.75%
       Convertible Subordinated Notes due in 2005.

         In  May  the  Company's  International  Pharmaceuticals
       Division  ("IPD") purchased the Cox Generic Pharmaceutical
       business   ("Cox")  conducted  primarily  in  the   United
       Kingdom for approximately $198.0 million.

         In  November  the  Company's IPD  purchased  a  generic
       pharmaceutical product line in Germany for $13.3 million.

         In  November the Company acquired pursuant to a  tender
       offer  approximately 93% of the outstanding warrants which
       were  to have expired on January 3, 1999 with common stock
       with  a  market  value  of  approximately  $37.0  million.
       Subsequent  to  December  31, 1998  the  majority  of  the
       remaining  warrants  were exercised for  $4.4  million  in
       cash.

         In  December  the  Company's  Fine  Chemicals  Division
       ("FCD")  purchased a fine chemical manufacturing plant  in
       Budapest, Hungary for $8.4 million.

         During  the  year  the  Company commenced  negotiations
       (completed  in  January  1999) to  replace  its  Revolving
       Credit  Facility and existing domestic short  term  credit
       lines  with  a  comprehensive  syndicated  facility  which
       provides for increased borrowing capacity of up to  $300.0
       million.

1997
         The Company raised $56.4 million by issuing Class B stock
       through a stock subscription ($20.4 million) and Class A stock
       through a rights offering ($36.0 million).

         The Animal Health Division ("AHD") acquired the worldwide
       decoquinate ("Deccoxr") product and business from a  major
       pharmaceutical company. The product is an anticocidial feed
       additive which provides AHD with its first major product in the
       cattle industry.

          The FCD purchased a worldwide polymyxin business which
       complements its existing polymyxin business.

         Both the U.S. Pharmaceuticals Division ("USPD") and the IPD
       completed partnership alliances and marketing agreements to
       broaden their product lines.

1996

      Results in 1996 included charges for Management Actions. In
addition, operations were negatively affected by external  market
conditions. The factors which combined to produce a loss in  1996
and the status of these factors in 1997/1998 are as follows:

  1996  charges  for  Management Actions  -  approximately  $12.6
million after tax.

         Rationalization  of  the  IPD's  selling  and  marketing
     organization  in  Scandinavia  resulting  in   charges   for
     severance. Rationalization completed in 1997.

        Commencement  of  an  IPD plan to  transfer  all  tablet,
     ointment  and liquid production from Copenhagen, Denmark  to
     Lier, Norway resulting in charges for severance, asset write-
     offs and other exit costs. Transfer completed in late 1998.

        Commencement  of a USPD plan to accelerate  the  move  of
     production from locations in New Jersey and New York  to  an
     existing  plant in Lincolnton, North Carolina  resulting  in
     charges  for  severance,  asset write-offs  and  other  exit
     costs. Completed in 1997, benefits realized in 1997 and 1998
     due to more efficient production in the USPD.

        Rationalization  of  the AHD and  USPD  organizations  to
     address  current competitive conditions in their  respective
     industries  resulting  in charges for  severance  and  other
     termination benefits. Rationalization completed in 1997.

 1996 External Factors.

        Fundamental  shift  in  generic  pharmaceutical  industry
     distribution, purchasing and stocking patterns resulting  in
     significantly lower sales and prices in the USPD. USPD sales
     have  increased  in  both 1997 and 1998 in  a  more  orderly
     market;  however,  there  is  continuing  but  significantly
     lessened pressure on pricing relative to 1996.

        Significant bad debt expense due to the bankruptcy  of  a
     major wholesaler to the USPD and collection difficulties  in
     certain   international  markets.  No   major   bankruptcies
     occurred  in  1997  and  1998,  but  collection  of  certain
     accounts remains slow in certain international markets.

       High feed grain prices in the animal health industry which
     resulted  in lower industry usage of feed additive  products
     supplied  by  AHD  and  increased  competition  among   feed
     additive suppliers. Grain prices were at more normal  levels
     in 1997 and 1998. Competitive conditions continue.


Results of Operations

      Comparison  of year ended December 31, 1998 to  year  ended
December 31, 1997.

      For  the  year ended December 31, 1998 revenue  was  $604.6
million, an increase of $104.3 million (20.8%) compared to  1997.
Operating income was $65.0 million, an increase of $18.1 million,
compared  to 1997. Net income was $24.2 million ($.92 per  share)
compared  to  a net income of $17.4 million ($.76 per  share)  in
1997.  Results  for 1998 include non-recurring charges  resulting
from the Cox acquisition which reduced net income by $3.1 million
($.12 per share).

                       Acquisition of Cox

      All comparisons of 1998 results to 1997 are affected by Cox
which  was  acquired  in May of 1998 for a total  purchase  price
including  direct  costs  of acquisition  of  approximately  $198
million.  Cox  is  a  generic  pharmaceutical  manufacturer   and
marketer  of tablets, capsules, suppositories, liquids, ointments
and  creams. Cox's main operations (which primarily consist of  a
manufacturing   plant,  warehousing  facilities   and   a   sales
organization) are located in the United Kingdom with distribution
and  sales operations located in Scandinavia and the Netherlands.
Cox   distributes   its  products  to  pharmacy   retailers   and
pharmaceutical  wholesalers  primarily  in  the  United  Kingdom.
Exports account for approximately 10% of its sales.

      The  Company financed the $198 million purchase  price  and
related  debt repayments from borrowings under its then  existing
long-term  Revolving  Credit Facility  and  short-term  lines  of
credit.  The  $180 million Revolving Credit Facility ("RCF")  was
used to fund the principal portion of the purchase price. At  the
end  of March 1998, the Company repaid approximately $162 million
of  borrowings under the RCF with the proceeds from the  issuance
of $193 million of convertible subordinated notes. Such repayment
created  the capacity under the RCF to incur the borrowings  used
to finance the acquisition of Cox.

      The  acquisition was accounted for in accordance  with  the
purchase  method.  The  fair value of  the  assets  acquired  and
liabilities  assumed and the results of operations  are  included
from the date of acquisition.

      The purchase of Cox had a significant effect on the results
of  operations  of  the Company for the year ended  December  31,
1998. Cox is included in IPD.

     For the approximate eight month period included in 1998, Cox
contributed   sales  of  $62.1  million  and  operating   income,
exclusive of non-recurring acquisition related charges,  of  $5.2
million.  Operating  income is reduced  by  the  amortization  of
goodwill  totaling approximately $3.0 million.  Interest  expense
increased  by approximately $8.0 million reflecting the financing
of the acquisition primarily with long-term debt.

     Acquisition charges required by generally accepted accounted
principles  and recorded in the second quarter of  1998  included
the write-up of inventory to fair value and related write-off  on
the  sale  of the inventory of $1.3 million, a write-off  of  in-
process  research  and development ("R&D") of  $2.1  million  and
severance  of  certain  employees of the  IPD  of  $0.2  million.
Because  in-process R&D is not tax benefited the one-time charges
were $3.1 million after tax or $.12 per share.

                            Revenues

      Revenues increased $104.3 million in 1998 despite  currency
translation  of  international  sales  into  U.S.  dollars  which
reduced  reported  sales  by  over $20.0  million.  Increases  in
revenues and major components of change for each division in 1998
compared to 1997 are as follows:

      Revenues in IPD increased by $59.0 million due to  the  Cox
acquisition  ($62.1 million), increased volume for  existing  and
other  new and other acquired products ($14.0 million) offset  by
translation of IPD sales in local currencies into the U.S. dollar
($17.1  million).  Revenues in USPD increased $23.4  million  due
primarily  to  volume increases in existing and new products  and
revenue  from licensing activities offset slightly by  lower  net
pricing.  FCD  revenues  increased $14.4 million  due  mainly  to
volume  increases  in  vancomycin  and  polymyxin.  AHD  revenues
increased  $7.9  million due primarily to  sales  of  the  Deccox
product  line  acquired in 1997. Aquatic Animal  Health  Division
("AAHD")   sales  increased  $3.7  million  due  principally   to
increased sales of AlphaMax, a treatment for salmon lice.

                          Gross Profit

     On a consolidated basis gross profit increased $42.2 million
with margins at 41.9% in 1998 compared to 42.2% in 1997. Included
in  1998  results  is the non-recurring charge  of  $1.3  million
related  to  the  write-up and subsequent sale  of  acquired  Cox
inventory.  Without  the charge overall gross profit  percentages
would  be  essentially  the  same for both  years.  Gross  profit
dollars were positively affected by volume increases for existing
and  new  products  in all divisions and the acquisition  of  Cox
offset  by  increased costs incurred by IPD in  the  transfer  of
production  from  Copenhagen  to Lier  and  currency  translation
effects primarily in IPD. On an overall basis pricing had a minor
positive effect.

                       Operating Expenses

      Operating expenses increased by $24.1 million in 1998 on  a
consolidated  basis.  Included in 1998 operating  expenses  is  a
charge  for  in-process  R&D of $2.1  million  and  IPD  employee
severance  of  $.2  million resulting from the  Cox  acquisition.
Operating  expenses  in  1998  were  30.8%  of  revenues   (31.1%
including  the  Cox  acquisition charges) compared  to  32.8%  of
revenues in 1997. Operating expenses increased primarily  due  to
the acquisition of Cox including goodwill amortization, increased
selling  and marketing expenses due to higher revenues, increased
general and administrative expenses due to targeted increases  in
staffing  and  increased incentive programs  offset  slightly  by
translation of costs incurred in foreign currencies.

                        Operating Income

      Operating  income  as reported in 1998 increased  by  $18.1
million. The Company believes the change in operating income  can
be approximated as follows:

($ in millions)      IPD   USPD    FCD    AHD   AAHD  Unalloc  Total
                                                         .
                                                               
1997 Operating                                                 
 income             $11.0   4.1    9.4   32.0   2.8   (12.4)   $46.9
Acquisition                                                    
 charges - Cox      (3.6)    -      -      -     -      -      (3.6)
Cox operating        5.2   -      -      -     -      -        5.2
income
Net margin                                                     
 improvement due                                               
to  volume, new                                                           
products and price   5.9  10.5    7.7    9.8   3.0    -       36.9
(Increase) in                                                  
 production and                                                
 operating                                                     
expenses,                                    
 net                (7.1)  (3.5)  (.1)   (4.1) (1.9)   (.6)   (17.3)
Translation and                                                
 other              (3.4)   -      .5     .1   (.3)     -     (3.1) 
                                                               
1998 Operating       $8.0  11.1   17.5   37.8   3.6   (13.0)   $65.0
 income


                  Interest Expense/Other/Taxes

      Interest  expense  increased in 1998 by  $7.0  million  due
primarily  to  the acquisition of Cox. Lower interest  rates  and
positive  cash  flow  from operations which lowered  debt  levels
required for operations relative to 1997, offset a portion of the
increased interest from acquisitions.

     The provision for income taxes was 37.9% in 1998 compared to
37.3%  in 1997. The slight increase in 1998 results from  a  1.7%
rate increase due to the write-off of in-process R&D which is not
tax benefited, a .7% rate increase due to non-deductible goodwill
resulting from the Cox acquisition offset partially by higher tax
credits and lower statutory tax rates on foreign earnings.


Results of Operations

Comparison  of  Year  Ended  December  31,  1997  to  Year  Ended
December 31, 1996.

      For  the  year ended December 31, 1997 revenue  was  $500.3
million,  an increase of $14.1 million (2.9%) compared  to  1996.
Operating income was $46.9 million, an increase of $43.0 million,
compared  to 1996. Net income was $17.4 million ($.76 per  share)
compared to a net loss of $11.5 million ($.53 per share) in 1996.

      Net  income  in  1996  was reduced by  approximately  $12.6
million   ($.58   per   share)  for  severance   related   to   a
reorganization  of the IPD sales and marketing  function  in  the
Nordic  countries, charges and expenses resulting from production
rationalization  plans  in the IPD and the  USPD  and  additional
Management   Actions   in  the  AHD.  (See  section   "Management
Actions.")

                            Revenues

      On  an overall basis revenues increased $14.1 million. 1997
revenues compared to 1996 were reduced by over $20.0 million  due
to translation of sales in foreign currency into the U.S. dollar.
Revenue changes by division are as follows:

     Revenues increased by $3.1 million in the USPD due primarily
to  increased volume in a number of Rx and OTC products including
products introduced in the past three years. The increased volume
was  partially offset by lower net selling prices resulting  from
the  continuation of programs initiated by major  wholesalers  in
the  second  half  of  1996 which fundamentally  shifted  generic
pharmaceutical  industry  distribution  purchasing  and  stocking
patterns.  In IPD overall volume and pricing were up on  a  local
currency basis. However, IPD revenues were lower by $7.9  million
primarily  as a result of the effect of translation of  sales  in
Scandinavian  currencies  into the  U.S.  dollar.  A  substantial
majority of the translation effect was recognized in the IPD. For
the  year 1997 average exchange rates for Scandinavian currencies
where  IPD  conducts a substantial portion of  its  business  had
declined  by 10%-14% compared to 1996. Sales in the FCD increased
by $2.6 million principally due to higher volume.

      AHD  revenues  increased  $12.4 million  primarily  due  to
increased  volume  of  most  major  products,  as  well  as   the
acquisition  of  the  Deccox business  in  September  1997.  AAHD
revenues increased $3.0 million compared to 1996 due primarily to
increased  sales  in the Norwegian fish vaccine market  resulting
from  both  new  product  volume and increased  market  share  of
existing products.

                          Gross Profit

      On  a  consolidated  basis, gross  profit  increased  $22.0
million  and the gross margin percent increased to 42.2% in  1997
compared to 38.9% in 1996.

      The  increase in dollars and percent was the  result  of  a
number  of factors. USPD gross profits accounted for the majority
of  the  increase and improved as a result of lower manufacturing
costs  in  the  aggregate (due to the transfer of production  and
closing  of two marginal facilities as part of Management Actions
in  1996)  and  increased  production  efficiencies  in  the  two
remaining core facilities. Offsetting savings in production costs
were  lower  net  selling prices in the UPSD. IPD  had  increased
gross  profits in local currencies but decreased in the aggregate
when  translated  into U.S. dollars. FCD gross profits  increased
marginally compared to 1996.

      AHD  gross profits increased due to increased volume  (both
existing products and Deccox) offset partially by somewhat  lower
pricing.  AAHD  gross  profits increased  due  to  higher  margin
products introduced in 1997.

                       Operating Expenses

      Operating expenses on a consolidated basis decreased  $21.0
million  or  11.3%. Included in operating expenses in  1996  were
charges  incurred for Management Actions totaling $17.7  million.
(See  section "Management Actions"). The following table compares
operating  expenses  for  the year with  and  without  Management
Actions:

  ($ in millions)                         1997         1996
                                                    
  Operating expenses as reported        $164.2       $185.1
                                                    
  Management actions - 1996                -          (17.7)
                                        $164.2       $167.4
                                                    
  As a % of revenues                      32.8%        34.4%

      The  net  reduction in operating expenses, after  excluding
Management Actions reflects a continued emphasis on cost control,
the  effect  of  currency  translation on  expenses  incurred  in
foreign  currencies, and a reduction of expenses  resulting  from
prior  year Management Actions which reduced payroll,  offset  by
planned   increases  in  certain  expenses   and   increases   in
administrative   expenses  resulting  from   personnel   changes,
employee incentive programs, and litigation expenses.

                        Operating Income

      Operating  income  as  reported  in  1997  increased  $43.0
million. The increase in gross profit due to increased sales  and
lower production costs, lower operating expenses, and the absence
of   charges  for  Management  Actions  all  contributed  to  the
increase.

      The  Company believes the change in operating  income  from
1996 to 1997 can be approximated as follows:


($ in millions)      IPD   USPD    FCD    AHD   AAHD  Unalloc  Total
                                                         .
                                                               
1996 Operating                                                 
 income(loss)        $2.5  (19.2)   8.5   21.0  (.3)    (8.6)   $3.9
Add back 1996                                                  
 management           8.1   5.7     -     4.5    -       .5    18.8
actions
     Sub-total       10.6  (13.5)   8.5   25.5  (.3)   (8.1)   22.7
Net margin change                                              
 due to volume,                                                
new products and  
price                 3.9  (3.3)   3.8    6.6   3.8     -      14.8        
(Increase)decrease                   
 in production and                                             
 operating expenses,
 net                 (3.1)   20.8  (2.9)  (.4)   (.4)   (4.0)   10.0
Translation and                                                
 other               (.4)      .1     -    .3    (.3)    (.3)   (.6)
                                                               
1997 Operating                                                 
 income             $11.0   4.1    9.4   32.0   2.8   (12.4)   $46.9

                  Interest Expense/Other/Taxes

      Interest  expense decreased $1.4 million due to lower  debt
levels  (aided  by  the receipt, in 1997 of  approximately  $56.4
million  of  new  equity) and generally lower interest  rates  in
1997.

      Other,  net in 1997 was a $0.6 million loss compared  to  a
$0.2  million  loss in 1996. Foreign exchange transaction  losses
included  in Other, net in 1997 and 1996 were approximately  $0.7
million  and  $0.2 million, respectively. The loss  in  1997  was
primarily  the  result of the strengthening of  the  U.S.  dollar
during 1997.

     The provision for income taxes was 37.3% in 1997 compared to
a  benefit for income taxes (due to a pre-tax loss) of  29.4%  in
1996. The difference between the statutory rate and the effective
rate  is the interaction of state income taxes and non-deductible
costs which increase the rate partially offset by lower taxes  in
foreign jurisdictions.


Management Actions

      In  December  1994, after the acquisition of Alpharma  Oslo
from  A.L. Industrier, and continuing to some degree in 1995  the
Company  announced a number of Management Actions which  included
staff   reductions  and  certain  product  line  and   facilities
rationalizations  as  a  first step toward realizing  combination
synergies  and  maximizing  the overall  position  of  the  newly
combined Company.

      In  the  first  quarter of 1996, the Company announced  the
reorganization  of  the IPD sales and marketing  organization  in
Scandinavia. The reorganization resulted in severing 30 personnel
at  a  cost  of  $1.9 million. IPD estimates the  annual  expense
reduction by 1997 from this action at over $1.0 million.

      In  the  second  quarter of 1996, the  Board  of  Directors
approved  an  IPD production rationalization plan which  included
the  transfer of all tablet, ointment and liquid production  from
Copenhagen,  Denmark  to  Lier, Norway.  The  full  transfer  was
completed  in  late  1998 and resulted  in  a  net  reduction  of
approximately 100 employees. The rationalization plan resulted in
a  charge  in  the  second  quarter of  1996  for  severance  for
Copenhagen   employees,  an  impairment  write-off  for   certain
buildings and machinery and equipment and other exit costs.

      In  1995, the Company announced a plan by USPD to move  all
suppositories  and  cream  and  ointment  production   from   two
locations  to  the  Lincolnton, North Carolina location.  In  the
second  quarter  of 1996, USPD prepared a plan to accelerate  the
previously  approved plan for consolidation of the  manufacturing
operations  within  USPD.  The Board of  Directors  approved  the
acceleration in May 1996.

      The  acceleration  plan included the discontinuing  of  all
activities in two USPD manufacturing facilities in New  York  and
New Jersey and the transfer of all pharmaceutical production from
those  sites  to the facility in Lincolnton, North Carolina.  The
plan  provided for complete exit by early 1997 and resulted in  a
net  reduction  of  over  150 employees.  The  acceleration  plan
resulted  in  a  second quarter charge in 1996 for  severance  of
employees,  a write-off for leasehold improvements and  machinery
and  equipment  and  significant exit costs  including  estimated
remaining  lease costs and facility refurbishment costs.  In  the
third quarter of 1996, the Company sold its tablet business which
was located in New Jersey and sub-leased the New Jersey location.
The  sale provided net proceeds of approximately $0.5 million and
resulted  in  the adjustment of certain accruals for  exit  costs
made  in  the second quarter which contemplated the shut down  of
the facility.

      In  the  second half of 1996, additional Management Actions
included  a reorganization at USPD which resulted in severing  15
employees and a reorganization of the AHD business practices  and
staffing   levels  which  resulted  in  severing   and/or   early
retirement of 33 employees and other exit costs.

      As a result of the 1996 reorganizations in USPD and AHD the
Company believes annual payroll and payroll related costs of $2.5
million  were  eliminated. The production  rationalization  plans
have  benefited  operations in 1997 and 1998  for  USPD  and  are
expected to begin to benefit operations in IPD in 1999.

      The Company believes the dynamic nature of its business may
present   additional   opportunities  to  rationalize   personnel
functions    and   operations   to   increase   efficiency    and
profitability.  Accordingly, similar management  actions  may  be
considered in the future and could be material to the results  of
operations in the quarter they are announced.

Inflation

      The  effect of inflation on the Company's operations during
1998, 1997 and 1996 was not significant.

Liquidity and Capital Resources

      At  December  31,  1998, stockholders'  equity  was  $267.3
million compared to $238.5 million and $186.0 million at December
31, 1997, and 1996, respectively.  The ratio of long-term debt to
equity  was 1.61:1, 0.94:1 and 1.26:1 at December 31, 1998,  1997
and  1996, respectively. The increase in stockholders' equity  in
1998 primarily reflects net income in 1998 less dividends and the
issuance  of common stock in 1998 through the exercise  of  stock
options and purchases under the employee stock purchase plan. The
increase in long-term debt from 1997 to 1998 was due primarily to
the acquisition of Cox in May 1998.

      Working  capital  at December 31, 1998 was  $165.0  million
compared  to  $139.8 million and $119.2 million at  December  31,
1997  and  1996, respectively. The current ratio  was  1.97:1  at
December  31, 1998 compared to 2.04:1 and 1.77:1 at December  31,
1997 and 1996, respectively.

      The  Cox  acquisition substantially increased the following
balance  sheet  captions:  accounts receivable  ($17.7  million),
inventory  ($17.1 million), property, plant and equipment  ($33.9
million),  intangible  assets  ($160.0  million),  and   accounts
payable  and  accrued expenses ($17.7 million).  Additionally  at
year end accounts receivable increased by over $22.0 million  due
to  significantly  higher fourth quarter 1998 sales  relative  to
1997.

      The  Company  presently  has  various  capital  expenditure
programs  under  way and planned including the expansion  of  the
newly  acquired FCD facility in Budapest, Hungary. In  1998,  the
Company's  capital expenditures were $31.4 million, and  in  1999
the Company plans to spend a greater amount than in 1998.

      In  February  1999,  the Company's  USPD  entered  into  an
agreement  with  Ascent Pediatrics, Inc. ("Ascent")  under  which
UPSD  will  provide up to $40 million in loans to  Ascent  to  be
evidenced by 7 1/2% convertible subordinated notes due 2005. Up  to
$12  million of the proceeds of the Loans can be used for general
corporate  purposes,  with $28 million of proceeds  reserved  for
projects  and acquisitions intended to enhance growth of  Ascent.
While  exact timing cannot be predicted, it is expected the $40.0
million will be advanced in the next two years.

      At  December  31,  1998,  the  Company  had  $65.8  million
available  under existing short-term unused lines of  credit  and
$14.4 million in cash. In January 1999, the Company replaced  its
prior $180.0 million revolving credit facility and domestic short
term lines of credit with a $300.0 million credit facility ("1999
Credit Facility"). In addition, European short term credit  lines
were set at $30.0 million. The 1999 Credit Facility provides  for
a  $100.0  million  six  year  term loan  and  a  $200.0  million
revolving credit facility with an initial five year term with two
possible  one  year extensions. The 1999 Credit Facility  extends
the  maturities  under prior agreements and  allows  the  Company
additional financing flexibility. Comparing year end debt amounts
for  the prior Revolving Credit, domestic short term debt and the
A/S Eksportfinans loan (all of which were refinanced in the first
quarter  1999),  to  the  1999 Credit Facility  the  Company  has
approximately  $95.0  million  available.  Comparing   the   1999
European  line of credit to the year end short term debt balance,
the  Company  has  over  $10.0  million  available.  The  Company
believes  that the combination of cash from operations and  funds
available  under existing lines of credit will be  sufficient  to
cover its currently planned operating needs.

      A substantial portion of the Company's short-term and long-
term debt is at variable interest rates. During 1999, the Company
will  consider  entering  into interest rate  agreements  to  fix
interest  rates  for  all or a portion of its  variable  debt  to
minimize  the  impact  of future changes in interest  rates.  The
Company's  policy  is to selectively enter into  "plain  vanilla"
agreements  to  fix interest rates for existing  debt  if  it  is
deemed prudent.

      In addition to investments for internal growth, the Company
has  continued  its  pursuit  of  complementary  acquisitions  or
alliances,  particularly  in  human  pharmaceuticals,  that   can
provide new products and market opportunities as well as leverage
existing   assets.  In  order  to  accomplish   any   significant
acquisition,  it is likely that the Company will need  to  obtain
additional  financing  in the form of equity  related  securities
and/or  borrowings.  Any significant new borrowings  require  the
Company  meet  the  debt covenants included in  the  1999  Credit
Facility  which provide for varying interest rates based  on  the
ratio of total debt to EBITDA.

Year 2000

General

      The  Year  2000 ("Y2K") issue is primarily  the  result  of
certain  computer  programs  and embedded  computer  chips  being
unable  to  distinguish between the year 1900  and  2000.   As  a
result,   the   Company  along  with  all  other   business   and
governmental entities, is at risk for possible miscalculations of
a   financial  nature  and  systems  failures  which  may   cause
disruptions  in its operations.  The Company can be  affected  by
the Y2K readiness of its systems or the systems of the many other
entities with which it interfaces, directly or indirectly.

      The Company began its program to address its potential  Y2K
issues  in late 1996 and has organized its activities to  prepare
for  Y2K at the division level.  The divisions have focused their
efforts  on  three areas:  (1) information systems  software  and
hardware;  (2)  manufacturing facilities and  related  equipment;
(i.e.  embedded  technology)  and (3)  third-party  relationships
(i.e.  customers, suppliers, and other).  Information system  and
hardware  Y2K  efforts are being coordinated by  an  IT  steering
committee composed of divisional personnel.

       The   Company  and  the  divisions  have  organized  their
activities and are monitoring their progress in each area by  the
following four phases:

     Phase 1:  Awareness/Assessment  -  identify,  quantify   and
               prioritize business and financial risks by area.
     
     Phase 2:  Budget/Plan/Timetable - prepare a  plan  including
               costs   and  target  dates  to  address  phase   1
               exposures.
     
     Phase 3:  Implementation  -  execute the  plan  prepared  in
               phase 2.
     
     Phase 4:  Testing/Validation  -  test   and   validate   the
               implemented  plans to insure the Y2K exposure  has
               been eliminated or mitigated.

State of Readiness

     The Company summarizes its divisions' state of readiness  at
December 31, 1998 as follows:

Information Systems and Hardware

                                         Quarter forecasted
                    Approximate range    for substantial
Phase               of completion        completion
                                         
1                   100%                 Completed
2                   95 - 100%            1st Quarter 1999
3                   70 -  80%            2nd Quarter 1999
4                   50 -  90%            3rd Quarter 1999


Embedded Factory Systems

                                         Quarter forecasted
                    Approximate range    for substantial
Phase               of completion        completion
                                         
1                   90 - 100%            1st Quarter 1999
2                   85 - 100%            1st Quarter 1999
3                   35 -  85%            3rd Quarter 1999
4                   35 -  85%            3rd Quarter 1999

Third Party Relationships

                                         Quarter forecasted
                    Approximate range    for substantial
Phase               of completion        completion
                                         
1                   50 - 100% (a)        2nd Quarter 1999(a)
2                   55 -  90%  (a)       2nd Quarter 1999(a)
3                   (a) (b)              (a) (b)
4                   (a) (b)              (a) (b)


(a)   Refers  to  significant identified risks - (e.g. customers,
   suppliers of raw materials and providers of services) does not
   include  exposures that relate to interruption of  utility  or
   government provided services.
   
(b)   Awaiting  completion of vendor response and  follow-up  due
   diligence to Y2K readiness surveys.
   

Cost
     
     The  Company expects the costs directly associated with  its
Y2K  efforts  to  be  between  $3.0 and  $4.0  million  of  which
approximately $1.3 has been spent to date.  The cost estimates do
not include additional costs that may be incurred as a result  of
the failure of third parties to become Y2K compliant or costs  to
implement any contingency plans.

Risks

     The   Company   has  identified  the  following  significant
reasonably  possible  Y2K  problems and  is  considering  related
contingency plans.

      Possible problem: the inability of significant sole  source
suppliers  of raw materials or active ingredients to  provide  an
uninterrupted supply of material necessary for the manufacture of
Company  products. Since various drug regulations will  make  the
establishment  of  alternative  supply  sources  difficult,   the
Company  is  considering building inventory  levels  of  critical
materials prior to December 31, 1999.
     
     Possible  problem: the failure to properly interface  caused
by  noncompliance  of  significant customer  operated  electronic
ordering  systems.  The Company is considering plans to  manually
process orders until these systems become compliant.
     
     Possible problem: the shutdown or malfunctioning of  Company
manufacturing equipment. The Company will advance internal clocks
to  the year 2000 on certain key equipment during scheduled plant
shutdowns  in  1999  to determine the effect  on  operations  and
develop plans, as necessary, for manual operations or third party
contract manufacturing.
     
     Based  on  the assessment efforts to date, the Company  does
not  believe  that  the Y2K issue will have  a  material  adverse
effect  on  its financial condition or results of operation.  The
Company  believes that any effect of the Year 2000 issue will  be
mitigated because of the Company's divisional operating structure
which is diverse both geographically and with respect to customer
and  supplier  relationships.  Therefore, the adverse  effect  of
most  individual  failures should be isolated  to  an  individual
product, customer or Company facility. However, there can  be  no
assurance that the systems of third-parties on which the  Company
relies will be converted in a timely manner, or that a failure to
properly  convert by another company would not  have  a  material
adverse effect on the Company.

     The  Company's  Y2K program is an ongoing process  that  may
uncover  additional  exposures and all  estimates  of  costs  and
completion are subject to change as the process continues.

Derivative Financial Instruments-Market Risk and Risk Management
Policies

      The  Company's  earnings  and  cash  flow  are  subject  to
fluctuations  due to changes in foreign currency  exchange  rates
and  interest  rates.  The  Company's  risk  management  practice
includes  the  selective  use, on a  limited  basis,  of  forward
foreign currency exchange contracts and interest rate agreements.
Such instruments are used for purposes other than trading.

     Foreign currency exchange rate movements create fluctuations
in  U.S.  dollar  reported amounts of foreign subsidiaries  whose
local currencies are their respective functional currencies.  The
Company  has not used foreign currency derivative instruments  to
manage  translation fluctuations. The Company and its  respective
subsidiaries primarily use forward foreign exchange contracts  to
hedge certain cash flows denominated in currencies other than the
subsidiary's  functional currency. Such cash flows  are  normally
represented  by  actual receivables and payables and  anticipated
receivables and payables for which there is a firm commitment.

      At  December  31,  1998  the Company  had  forward  foreign
exchange  contracts with a notional amount of $17,300.  The  fair
market  value of such contracts is essentially the  same  as  the
notional  amount.  All contracts expire in the first  quarter  of
1999.  The  cash flows expected from the contracts will generally
offset   the  cash  flows  of  related  non-functional   currency
transactions. The change in value of the foreign currency forward
contracts  resulting  from  a 10% movement  in  foreign  currency
exchange  rates would be approximately $1.0 million and generally
would  be  offset by the change in value of the hedged receivable
or payable.

      At  December  31,  1998 the Company has  no  interest  rate
agreements outstanding. The Company is considering entering  into
interest  rate agreements in 1999 to fix the interest rate  on  a
portion of its long term debt.

Recent Accounting Pronouncements

      In  June  1998,  the Financial Accounting  Standards  Board
(FASB) issued SFAS No. 133, Accounting for Derivative Instruments
and  Hedging Activities (SFAS 133). SFAS 133 is effective for all
fiscal quarters of all fiscal years beginning after June 15, 1999
(January  1,  2000 for the Company). SFAS 133 requires  that  all
derivative instruments be recorded on the balance sheet at  their
fair value. Changes in the fair value of derivatives are recorded
each  period  in current earnings or other comprehensive  income,
depending  on  whether a derivative is designated as  part  of  a
hedge  transaction and, if it is, the type of hedge  transaction.
SFAS  133  is  not  expected to have a  material  impact  on  the
Company's consolidated results of operations, financial  position
or cash flows.

RISK FACTORS

      This  report  includes certain forward looking  statements.
Like  any  company subject to a competitive business environment,
the  Company cannot guarantee the results predicted in any of the
Company's  forward-looking  statements.  Important  factors  that
could cause actual results to differ materially from those in the
forward-looking statements include (but are not limited  to)  the
following:

                      Government Regulation

      The  research, development, manufacturing and marketing  of
the  Company's  products  are  subject  to  extensive  government
regulation.  Government  regulation includes  inspection  of  and
controls over testing, manufacturing, safety, efficacy, labeling,
record keeping, sale and distribution of pharmaceutical products.
The  U.S.  and  other governments regularly review  manufacturing
operations. Noncompliance with applicable requirements can result
in fines, recall or seizure of products, suspension of production
and  debarment  of individuals or the Company from obtaining  new
drug   approvals.   Such   government  regulation   substantially
increases  the  cost of manufacturing and selling  the  Company's
products.

      The  Company has filed applications to market its  products
with  regulatory  agencies both in the U.S. and  internationally.
The  timing  of  receipt of approvals of these  applications  can
significantly  affect  future revenues and  income,  particularly
with respect to human pharmaceuticals at the end of third parties
patent  protection. There can be no assurance  that  new  product
approvals  will be obtained in a timely manner, if ever.  Failure
to  obtain approvals, or timing of approvals when expected, could
have a material adverse effect on the Company's business.

      The  use  of  bacitracin  zinc, a  feed  antibiotic  growth
promoter,  is  being  banned for use in livestock  feeds  in  the
European  Union,  effective  1st  July,  1999.  The  Company   is
attempting  to  reverse or limit this action,  that  affects  its
Albac  product,  by  political  and  legal  means.  Although   no
assurance  of  success can be given, it is the  Company's  belief
that  strong scientific evidence exists to refute the EU  action.
In   addition,  certain  other  countries  have  enacted  or  are
considering a similar ban. If the loss of Albac sales is  limited
to the European Union and those countries that have already taken
similar  action,  the  Company does  not  anticipate  a  material
adverse  effect. If either (a) other countries more important  to
the  Company's sales of bacitracin based products should ban  the
product  or  (b)  the European Union should act  to  prevent  the
importation of meat products from countries that allow the use of
bacitracin based products, such actions could depending on  their
scope,  be materially adverse to the Company. The Company  cannot
predict whether the present bacitracin zinc ban will be expanded.
                                
                 Risks Associated with Leverage

      As  of December 31, 1998, the Company had total outstanding
long-term  indebtedness  of  approximately  $429.0  million,   or
approximately  62%  of the Company's total capitalization.  After
refinancing of its long-term debt in January 1999 the Company may
incur   approximately  $105.0  million  additional   indebtedness
through  borrowings under its credit agreements, subject  to  the
satisfaction  of  certain  financial  conditions.  The  Company's
leverage   could  have  important  consequences,  including   the
following: (i) the ability to obtain additional financing may  be
limited;  (ii) the operating flexibility is limited by  covenants
contained  in  the  credit agreements, and (iii)  the  degree  of
leverage  makes  it  more vulnerable to economic  downturns,  may
limit  its  ability  to pursue other business  opportunities  and
reduces  its flexibility. In addition, the Company believes  that
it  has  greater leverage on its balance sheet than many  of  its
competitors.

               Risks Associated with Acquisitions

     The Company maintains its search for acquisitions which will
provide  new product and market opportunities, leverage  existing
assets  and add critical mass. The Company is actively evaluating
various  acquisition possibilities. Based on current  acquisition
prices   in  the  pharmaceutical  industry,  acquisitions   could
initially  be  dilutive  to  the  Company's  earnings   and   add
significant  intangible assets and related goodwill  amortization
charges.   The   Company's  acquisition  strategy  will   require
additional  debt  or  equity financing, resulting  in  additional
leverage and dilution of ownership, respectively. There can be no
assurance  that  the  Company's  acquisition  strategy  will   be
successful.

        Foreign Operations; Risk of Currency Fluctuation

      The  Company's  foreign operations are subject  to  various
risks which are not present in domestic operations, including, in
certain    countries,   currency   exchange   fluctuations    and
restrictions, political instability, and uncertainty  as  to  the
enforceability  of,  and  government  control  over,   commercial
rights.

      The  Company's Far East operations, particularly  Indonesia
where  the  Company  has  a  manufacturing  facility,  are  being
affected by the wide currency fluctuations and decreased economic
activity  in the Far East and by the social and political  unrest
in  Indonesia. While the Company's present exposure  to  economic
factors  in  the  Far  East is not material,  the  region  is  an
important area for anticipated future growth.

      Products in many countries recognized to be susceptible  to
significant  foreign currency risk are generally  sold  for  U.S.
dollars which eliminates the direct currency risk but can  create
a   risk   of  collectibility  if  the  local  currency  devalues
significantly.

                  Fluctuating Operating Results

     The Company has experienced in the past, and will experience
in  the future, variations in revenues and net income as a result
of   many   factors,  including  acquisitions,  delays   in   the
introduction  of new products, the level of expenses,  management
actions  and  the  general conditions of the  pharmaceutical  and
animal health industry.

                           Competition

       All   of  the  Company's  businesses  operate  in   highly
competitive  markets  and many of the Company's  competitors  are
substantially  larger and have greater financial,  technical  and
marketing  resources than the Company. As a result,  the  Company
may be at a disadvantage in its ability to develop and market new
products to meet competitive demands.

      The  U.S.  generic pharmaceutical industry has historically
been  characterized by intense competition. As patents and  other
basis for market exclusivity expire, prices typically decline  as
generic competitors enter the marketplace. Normally, there  is  a
further  unit price decline as the number of generic  competitors
increase.  The  timing of these price decreases is  unpredictable
and   can   result  in  a  significantly  curtailed   period   of
profitability  for  a  generic product.  In  addition  brand-name
manufacturers  frequently take actions to prevent  or  discourage
the  use  of generic equivalents through marketing and regulatory
activities and litigation.

      Generic  pharmaceutical market conditions in the U.S.  were
further  exacerbated in the second half of 1996 by a  fundamental
shift  in industry distribution, purchasing and stocking patterns
resulting from increased importance of sales to major wholesalers
and  a  concurrent  reduction in sales to private  label  generic
distributors. The Company believes that this trend  continues  to
date.  Wholesaler  programs generally  require  lower  prices  on
products sold, lower inventory levels kept at the wholesaler  and
fewer   manufacturers  selected  to  provide  products   to   the
wholesaler's own marketing programs.

      The  factors which have adversely affected the U.S. generic
pharmaceutical  industry  may also affect  some  or  all  of  the
markets   in  which  the  International  Pharmaceutical  Division
operates.  In  addition,  in Europe the Company  is  encountering
price  pressure from parallel imports (i.e., imports of identical
products from lower priced markets under EU laws of free movement
of  goods)  and general governmental initiatives to  reduce  drug
prices. Parallel imports could lead to lower volume growth.  Both
parallel  imports and governmental cost containment could  create
downward  pressure on prices in certain product and  geographical
market areas including the Nordic countries where the Company has
significant sales.

     The Company has been and will continue to be affected by the
competitive  and  changing nature of this industry.  Accordingly,
because of competition, the significance of relatively few  major
customers  (e.g., large wholesalers and chain stores), a  rapidly
changing  market  and  uncertainty  of  timing  of  new   product
approvals, the sales volume, prices and profits of the  Company's
U.S.  and International Pharmaceutical Divisions and its  generic
competitors are subject to unforeseen fluctuation.
                                
                                
Dependence on Single Sources of Raw Material Supply and Contract
                          Manufacturers

      Raw  materials  and certain products are currently  sourced
from  single domestic or foreign suppliers. Although the  Company
has not experienced difficulty to date, there can be no assurance
that  supply interruptions will not occur in the future  or  that
the  Company  will  not  have to obtain substitute  materials  or
products,  which  would require additional regulatory  approvals.
Further, there can be no assurance that third parties that supply
the  Company will continue to do so. Any interruption  of  supply
could have a material adverse effect on the Company.

           Third Party Reimbursement Pricing Pressures

      The  Company's commercial success with respect  to  generic
products  will depend, in part, on the availability  of  adequate
reimbursement  from  third-party  health  care  payers,  such  as
government   and  private  health  insurers  and   managed   care
organizations.  Third-party payers are  increasingly  challenging
the  pricing of medical products and services. There  can  be  no
assurance  that  reimbursement will be available  to  enable  the
Company  to  maintain  its  present  product  price  levels.   In
addition, the market for the Company's products may be limited by
actions  of third-party payers. For example, many managed  health
care   organizations  are  now  controlling  the   pharmaceutical
products   which   will  be  approved  for   reimbursement.   The
competition  to  place   products on  these  approved  lists  has
created  a  trend of downward pricing pressure in  the  industry.
There  can  be no assurance that the Company's products  will  be
included  on the approved lists of managed care organizations  or
that  downward  pricing pressures in the industry generally  will
not negatively impact the Company's business.

            Potential Liability for Current Products

      Continuing  studies of the proper utilization, safety,  and
efficacy  of  pharmaceuticals and other health care products  are
being  conducted by the industry, government agencies and others.
Such studies, which increasingly employ sophisticated methods and
techniques,  can call into question the utilization,  safety  and
efficacy  of  previously marketed products. In some  cases  these
studies have resulted in the removal of products from the  market
and  have  given rise to claims for damages from previous  users.
The Company's business could be materially adversely affected  by
the assertion of such product liability claims.

  Relationship of the Company and A.L. Industrier; Controlling
               Stockholder; Conflicts of Interest

      A.L. Industrier, ("Industrier") as the beneficial owner  of
100% of the outstanding shares of the Class B Stock, is presently
entitled  to  elect two-thirds of the members  of  the  Company's
Board  of  Directors  and to cast more  than  50%  of  the  votes
generally  entitled  to  be  cast on  matters  presented  to  the
Company's stockholders. Secondly, Industrier controls the Company
and  its  policies.  Mr. Sissener, Chairman and  Chief  Executive
Officer  of  the  Company,  controls a majority  of  Industrier's
outstanding   shares  and  thus  may  be  deemed   the   indirect
controlling stockholder of the Company. Industrier's ownership of
the Class B Stock has the effect of preventing hostile takeovers,
including  transactions  in  which stockholders  might  otherwise
receive  a  premium for their shares over current market  prices.
Industrier  also  beneficially owns a  convertible  note  of  the
Company  in  the  principal amount of $67.9  million,  which  may
convert upon the occurrence of certain events after April 6, 2001
into 2,373,896 shares of Class B Stock. In addition, Mr. Sissener
and his family hold 346,668 shares of Class A Common Stock.

      E.W. Sissener, Chairman and Chief Executive Officer of  the
Company,  is also Chairman of Industrier and controls Industrier.
Gert  Munthe,  President  and  Chief  Operating  Officer  of  the
Company,  is a director of Industrier. The Company and Industrier
engage  in  various transactions from time to time, and conflicts
of  interest  are  present with respect  to  the  terms  of  such
transactions. The Company believes that contractual  arrangements
with  Industrier are no less favorable to the Company than  other
third  party  contracts that are negotiated on  an  arm's  length
basis.  All  contractual  arrangements between  the  Company  and
Industrier  are subject to approval by, or ratification  of,  the
Audit  Committee  of  the  Board  of  Directors  of  the  Company
consisting of directors who are unaffiliated with Industrier.

                            Year 2000

     See previous section included in Item 7.


Item 8.   Financial Statements and Supplementary Data

      See page F-1 of this Report, which includes an index to the
consolidated   financial  statements  and   financial   statement
schedule.

Item 9.   Changes  in  and  Disagreements  With  Accountants   on
          Accounting and Financial Disclosure

     Not applicable.


                            PART III

Item 10.  Directors and Executive Officers of the Registrant

      The  information as to the Directors of the Registrant  set
forth  under the sub-caption "Board of Directors" appearing under
the  caption  "Election  of Directors"  of  the  Proxy  Statement
relating  to  the Annual Meeting of Shareholders to  be  held  on
June 10, 1999, which Proxy Statement will be filed on or prior to
April  15,  1999, is incorporated by reference into this  Report.
The information as to the Executive Officers of the Registrant is
included  in  Part I hereof under the caption Item 1A  "Executive
Officers  of the Registrant" in reliance upon General Instruction
G  to Form 10-K and Instruction 3 to Item 401(b) of Regulation S-
K.


Item 11.  Executive Compensation

      The  information  to  be  set forth  under  the  subcaption
"Directors'  Fees  and Related Information" appearing  under  the
caption  "Board of Directors" of the Proxy Statement relating  to
the  Annual Meeting of Shareholders to be held on June 10,  1999,
which  Proxy  Statement will be filed on or prior  to  April  15,
1999,  and the information set forth under the caption "Executive
Compensation   and   Benefits"  in  such   Proxy   Statement   is
incorporated into this Report by reference.

Item  12.   Security Ownership of Certain Beneficial  Owners  and
Management

      The information to be set forth under the caption "Security
Ownership  of  Certain Beneficial Owners" of the Proxy  Statement
relating  to  the Annual Meeting of Stockholders expected  to  be
held  on  June  10,  1999, is incorporated into  this  Report  by
reference.   Such Proxy Statement will be filed on  or  prior  to
April 15, 1999.

      There  are  no  arrangements known to the  Registrant,  the
operation of which may at a subsequent date result in a change in
control of the Registrant.

Item 13.  Certain Relationships and Related Transactions

      The  information to be set forth under the caption "Certain
Related  Transactions and Relationships" of the  Proxy  Statement
relating  to  the Annual Meeting of Stockholders expected  to  be
held  on  June  10,  1999, is incorporated into  this  Report  by
reference.   Such Proxy Statement will be filed on  or  prior  to
April 15, 1999.

                            PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports  on
Form 8-K

List of Financial Statements

      See  page  F-1 of this Report, which includes an  index  to
consolidated   financial  statements  and   financial   statement
schedule.


List  of  Exhibits   (numbered in accordance  with  Item  601  of
Regulation S-K)

      3.1A   Amended and Restated Certificate of Incorporation of
the  Company,  dated  September  30,  1994  and  filed  with  the
Secretary of State of the State of Delaware on October  3,  1994,
was  filed as Exhibit 3.1 to the Company's 1994 Annual Report  on
Form 10-K and is incorporated by reference.

      3.1B    Certificate  of  Amendment of  the  Certificate  of
Incorporation of the Company dated September 15, 1995  and  filed
with the Secretary of State of Delaware on September 15, 1995 was
filed as Exhibit 3.1 to the Company's Amendment No. 1 to Form S-3
dated  September 21, 1995 (Registration on No. 33-60029)  and  is
incorporated by reference.

       3.2     Amended  and  Restated  By-Laws  of  the  Company,
effective as of October 3, 1994, were filed as Exhibit 3.2 to the
Company's 1994 Annual Report on Form 10-K and is incorporated  by
reference.

      4.1     Reference is made to Article Fourth of the  Amended
and Restated Certificate of Incorporation of the Company which is
referenced as Exhibit 3.1 to this Report.

      4.2     Warrant Agreement between the Company and The First
National  Bank  of  Boston, as warrant agent,  was  filed  as  an
Exhibit 4.2 to the Company's 1994 Annual Report on Form 10-K  and
is incorporated by reference.

        10.1     $185,000,000   Credit   Agreement   among   A.L.
Laboratories, Inc.,(now known as Alpharma U.S. Inc.) as Borrower,
Union Bank of Norway, as agent and arranger, and Den norske  Bank
AS,  as  co-arranger,  dated September 28,  1994,  was  filed  as
Exhibit 10.1 to the Company's 1994 Annual Report on Form 10-K and
is incorporated by reference.

      10.1A  Amendment to the Credit Agreement dated February 26,
1997  between the Company and the Union Bank of Norway, as  agent
was filed as Exhibit 10.1A to the Company's 1996 Annual Report on
Form 10K and is incorporated by reference.

      10.1B   Amendment to the Credit Agreement dated  April  10,
1997  between the Company and Union Bank of Norway, as agent  was
filed  as  Exhibit 10.a to the Company's March 31, 1997 quarterly
report on Form 10Q and is incorporated by reference.

      10.2    $300,000,000 Credit Agreement among  Alpharma  U.S.
Inc.  as  Borrower, Union Bank of Norway, as agent and  arranger,
and  Den norske Bank AS, as co-arranger, dated January 20,  1999,
is filed as an Exhibit to this report.

      10.3    Purchase Agreement, dated as of March 25, 1998,  by
and  among  the  Company,  SBC Warburg Dillion  Read  Inc.,  CIBC
Oppenheimer Corp. and Cowen  Company was filed as Exhibit 1.1  of
the  Company's  Form  8-K, dated as of  March  30,  1998  and  is
incorporated by reference.

      10.4    Indenture, dated as of March 30, 1998, by amd among
the  Company  and  First Union National Bank,  as  trustee,  with
respect  to the 5 _% Convertible Subordinated Notes due 2005  was
filed  as Exhibit 4.1 of the Company's Form 8-K dated as of March
30, 1998 and is incorporated by reference.

      10.5    Note  Purchase Agreement dated March  5,  1998  and
Amendment  No. 1 thereto dated March 25, 1998 by and between  the
Company and A.L. Industrier A.S. was filed as Exhibit 1.2 of  the
Company's Form 8-K dated as of March 30, 1998 and is incorporated
by reference.

      Copies of debt instruments (other than those listed  above)
for  which  the related debt does not exceed 10% of  consolidated
total  assets  as of December 31, 1997 will be furnished  to  the
Commission upon request.

      10.6    Parent Guaranty, made by the Company  in  favor  of
Union Bank of Norway, as agent and arranger, and Den norske  Bank
AS, as co-arranger, dated September 28, 1994 was filed as Exhibit
10.2  to  the  Company's 1994 Annual Report on Form 10-K  and  is
incorporated by reference.

      10.7    Parent Guaranty, made by the Company  in  favor  of
Union Bank of Norway, as agent and arranger, and Den norske  Bank
AS, as co-arranger, dated January 20, 1999 is filed as an Exhibit
to this report.

      10.8    Restructuring Agreement, dated as of May 16,  1994,
between the Company and Apothekernes Laboratorium A.S (now  known
as  A.L.  Industrier AS) was filed as Exhibit A to the Definitive
Proxy  Statement dated August 22, 1994 and is incorporated herein
by reference.

      10.9    Employment  Agreement dated  January  1,  1987,  as
amended  December 12, 1989, between I. Roy Cohen and the  Company
and  A.L.  Laboratories, Inc. was filed as Exhibit  10.3  to  the
Company's  1989  Annual Report on Form 10-K and  is  incorporated
herein by reference.

      10.10   Control  Agreement dated February 7,  1986  between
Apothekernes  Laboratorium A.S (now known as A.L. Industrier  AS)
and  the Company was filed as Exhibit 10.10 to the Company's 1985
Annual  Report  on  Form  10-K  and  is  incorporated  herein  by
reference.

      10.11  Amendment to Control Agreement dated October 3, 1994
between  A.L.  Industrier  AS  (formerly  known  as  Apothekernes
Laboratorium  A.S) and the Company was filed as Exhibit  10.6  to
the Company's 1994 Annual Report on Form 10-K and is incorporated
by reference.

      10.12   Amendment to Control Agreement dated  December  19,
1996  between  A.L. Industrier AS and the Company  was  filed  as
Exhibit  10.6A to the Company's 1996 Annual Report on  Form  10-K
and is incorporated by reference.

      10.13   The  Company's  1997  Incentive  Stock  Option  and
Appreciation  Right Plan, as amended was filed as an  Exhibit  to
the  Company's  1996  Proxy  Statement  and  is  incorporated  by
reference.

      10.14  Employment agreement dated July 30, 1991 between the
Company  and  Jeffrey E. Smith was filed as Exhibit 10.8  to  the
Company's 1991 Annual Report on Form 10-K and is incorporated  by
reference.

      10.15   Employment agreement between the Company and Thomas
Anderson dated January 13, 1997 was filed as Exhibit 10.9 to  the
Company's 1996 Annual Report on Form 10-K and is incorporated  by
reference.

     10.16  Employment Agreement between the Company and Bruce I.
Andrews  dated  April 7, 1997 was filed as Exhibit  10.b  to  the
Company's  March 31, 1997 quarterly report on Form  10-Q  and  is
incorporated by reference.

      10.17   Lease  Agreement  between A.L.  Industrier  AS,  as
landlord, and Alpharma AS, as tenant, dated October 3,  1994  was
filed  as  Exhibit 10.10 to the Company's 1994 Annual  Report  on
Form 10-K and is incorporated by reference.

       10.18   Administrative  Services  Agreement  between  A.L.
Industrier AS and Alpharma AS dated October 3, 1994 was filed  as
Exhibit  10.11 to the Company's 1994 Annual Report on  Form  10-K
and is incorporated by reference.

     10.19  Employment agreement dated March 14, 1996 between the
Company and Einar W. Sissener was filed as Exhibit 10.13  to  the
Company's 1995 Annual Report on Form 10-K and is incorporated  by
reference.

      10.20   Employment contract dated October 5,  1989  between
Apothekernes Laboratorium A.S (transferred to Alpharma  Oslo  per
the combination transaction) and Ingrid Wiik was filed as Exhibit
10.13  to  the Company's 1994 Annual Report on Form 10-K  and  is
incorporated by reference.

      10.21   Employment contract dated October 5,  1989  between
Apothekernes Laboratorium A.S (transferred to Alpharma  Oslo  per
the  combination transaction) and Thor Kristiansen was  filed  as
Exhibit  10.14 to the Company's 1994 Annual Report on  Form  10-K
and is incorporated by reference.

      10.22   Employment contract dated October 2,  1991  between
Apothekernes Laboratorium A.S (transferred to Alpharma  Oslo  per
the  combination  transaction) and  Knut  Moksnes  was  filed  as
Exhibit  10.15 to the Company's 1994 Annual Report on  Form  10-K
and is incorporated by reference.

      10.23  Agreement dated April 28, 1997 between D.E.Cohen and
the  Company  was  filed as Exhibit 10.17 to the  Company's  1997
Annual Report on Form 10-K and is incorporated by reference.

      10.24   Stock  Subscription and  Purchase  Agreement  dated
February  10,  1997 between the Company and A.L.  Industrier  was
filed as Exhibit 10 on Form 8-K filed on February 19, 1997 and is
incorporated herein by reference.

      10.24a  Amendment No. 1 to Stock Subscription and  Purchase
Agreement  dated  June  26, 1997, between the  Company  and  A.L.
Industrier AS was filed as an Exhibit to the Company's  Form  8-K
dated June 27, 1997 and is incorporated herein by reference.

     10.25  Employment Agreement dated March 13, 1998 between the
Company  and  Gert  W. Munthe was filed as  Exhibit  10a  to  the
Company's  March 31, 1998 Quarterly Report on Form  10-Q  and  is
incorporated by reference.

     10.26  Master Agreement dated as of February 16, 1999 by and
among Ascent, USPD and the Company and was filed as Exhibit  99.1
of  the  Company's  Form  8-K dated  February  23,  1999  and  is
incorporated by reference.

     10.26a Depositary Agreement dated as of February 16, 1999 by
and  among  Ascent, USPD the Company and State  Street  Bank  and
Trust Company was filed as Exhibit 99.2 of the Company's Form 8-K
dated February 23, 1999 and is incorporated by reference.

      10.26b Loan Agreement dated as of February 16, 1999 by  and
among  Ascent, USPD and the Company was filed as Exhibit 99.3  of
the   Company's  Form  8-K  dated  February  23,  1999   and   is
incorporated by reference.

      10.26c Guaranty Agreement dated as of February 16, 1999  by
and  between Ascent and the Company was filed as Exhibit 99.4  of
the   Company's  Form  8-K  dated  February  23,  1999   and   is
incorporated by reference.

      10.26d  Registration Rights Agreement dated as of  February
16, 1999 by and between Ascent and USPD was filed as Exhibit 99.5
of  the  Company's  Form  8-K dated  February  23,  1999  and  is
incorporated by reference.

     10.26e Subordination Agreement dated as of February 16, 1999
by  and  among Ascent, USPD and the purchasers named therein  was
filed  as  Exhibit 99.6 of the Company's Form 8-K dated  February
23, 1999 and is incorporated by reference.

      10.27   Agreement for the sale and purchase of  the  issued
share  capital of Cox Investments Limited, dated April  30,  1998
between  Hoechst AG, Alpharma (U.K.) Limited, and  Alpharma  Inc.
was  filed as Exhibit 2.1 of the Company's Form 8-K, dated as  of
May 7, 1998 and is incorporated by reference.

      21      A list of the subsidiaries of the Registrant as  of
March 1, 1999 is filed as an Exhibit to this Report.

     23     Consent of PricewaterhouseCoopers L.L.P., Independent
Accountants, is filed as an Exhibit to this Report.

     27     Financial Data Schedule


Report on Form 8-K

      On February 23, 1999 the Company filed a report on Form 8-K
dated  February  16, 1999 reporting Item 5, "Other  Events".  The
event  reported  was  a loan agreement between  the  Company  and
Ascent Pediatrics, Inc.

Undertakings

      For  purposes of complying with the amendments to the rules
governing  Registration Statements under the  Securities  Act  of
1933,  the  undersigned Registrant hereby undertakes as  follows,
which  undertaking  shall  be  incorporated  by  reference   into
Registrant's  Registration Statements on Form S-8 (No.  33-60495,
effective  July 13, 1990) and Form S-3 (File Nos.  333-57501  and
333-70229):

     Insofar as indemnification for liabilities arising under the
Securities  Act  of 1933 may be permitted to directors,  officers
and  controlling  persons  of  the  Registrant  pursuant  to  the
foregoing  provisions,  or otherwise,  the  Registrant  has  been
advised  that  in  the  opinion of the  Securities  and  Exchange
Commission  such  indemnification is  against  public  policy  as
expressed  in  the  Securities Act of  1933  and  is,  therefore,
unenforceable.   In  the event that a claim  for  indemnification
against  such  liabilities  (other  than  the  payment   by   the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of
any  action,  suit or proceeding) is asserted by  such  director,
officer  or  controlling person in connection with the securities
being  registered, the Registrant will, unless in the opinion  of
its counsel the matter has been settled by controlling precedent,
submit  to  a  court  of  appropriate jurisdiction  the  question
whether  such indemnification by it is against public  policy  as
expressed  in  the  Act  and  will  be  governed  by  the   final
adjudication of such issue.

                           SIGNATURES

      Pursuant to the requirements of Section 13 of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.

March 25, 1999                ALPHARMA INC.
                              Registrant


                              By: /s/ Einar W. Sissener
                                  Einar W. Sissener
                                  Chairman, Director and
Chief Executive Officer

     Pursuant to the requirements of the Securities and Exchange Act of
1934,  this  Report has been signed below by the following persons  on
behalf  of  the  Registrant and in the capacities  and  on  the  dates
indicated.


Date:  March 25, 1999              /s/ Einar W. Sissener
                              Einar W. Sissener
                                   Chairman, Director and
                                   Chief Executive Officer



Date:       March 25, 1999              /s/ Gert W. Munthe
                                   Gert W. Munthe
                                   Director, President and
                                   Chief Operating Officer



Date:  March 25, 1999              /s/ Jeffrey E. Smith
                                   Jeffrey E. Smith
                                     Vice   President,   Finance   and
Chief Financial Officer
                                   (Principal accounting officer)




Date:  March 25, 1999              /s/ I. Roy Cohen
                                   I. Roy Cohen
                                   Director and Chairman of the
                                   Executive Committee




Date:  March 25, 1999              /s/ Thomas G. Gibian
                                   Thomas G. Gibian
                                   Director and Chairman of the
                                   Audit Committee



Date:  March 25, 1999              /s/ Glen E. Hess
                                   Glen E. Hess
                                   Director



Date:  March 25, 1999              /s/ Peter G. Tombros
                                   Peter G. Tombros
                                   Director and Chairman
                              of the Compensation Committee




Date:  March 25, 1999              /s/ Erik G. Tandberg
                                   Erik G. Tandberg
                                   Director



Date:       March 25, 1999              /s/Oyvin Broymer
                                  Oyvin Broymer
                                   Director



Date:       March 25, 1999              /s/ Erik Hornnaess
                                   Erik Hornnaess
                                   Director


   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

                         ______________




                                                       Page

Consolidated Financial Statements:

  Report of Independent Accountants                         F-2

  Consolidated Balance Sheet at
     December 31, 1998 and 1997                        F-3

  Consolidated Statement of Operations for
     the years ended December 31, 1998,
     1997 and 1996                                     F-4

  Consolidated Statement of Stockholders'
     Equity for the years ended
     December 31, 1998, 1997 and 1996                F-5 to F-6

  Consolidated Statement of Cash Flows
     for the years ended December 31, 1998,
     1997 and 1996                                   F-7 to F-8

  Notes to Consolidated Financial Statements         F-9 to F-42

Financial  statement schedules are omitted for  the  reason  that
they  are  not applicable or the required information is included
in the consolidated financial statements or notes thereto.
               REPORT OF INDEPENDENT ACCOUNTANTS







To the Stockholders and
 Board of Directors of
 Alpharma Inc.:


In   our   opinion,   the  accompanying  consolidated   financial
statements  listed  in the index on page F-1 of  this  Form  10-K
present  fairly,  in  all  material  respects,  the  consolidated
financial  position  of  Alpharma  Inc.  and  Subsidiaries   (the
"Company")  as of December 31, 1998 and 1997 and the consolidated
results of their operations and their cash flows for each of  the
three  years in the period ended December 31, 1998, in conformity
with  generally  accepted accounting principles. These  financial
statements  are  the responsibility of the Company's  management;
our  responsibility is to express an opinion on  these  financial
statements based on our audits. We conducted our audits of  these
statements   in  accordance  with  generally  accepted   auditing
standards  which require that we plan and perform  the  audit  to
obtain   reasonable   assurance  about  whether   the   financial
statements  are free of material misstatement. An audit  includes
examining,  on a test basis, evidence supporting the amounts  and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating  the  overall  financial  statement  presentation.  We
believe  that  our  audits  provide a reasonable  basis  for  the
opinion expressed above.





PRICEWATERHOUSECOOPERS LLP
Florham Park, New Jersey
February 24, 1999

                 ALPHARMA INC. AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEET
                (In thousands, except share data)

                                                December 31,
                                            1998         1997
ASSETS
Current assets:
 Cash and cash equivalents              $ 14,414      $ 10,997
 Accounts receivable, net                169,744       127,637
 Inventories                             138,318       121,451
 Prepaid expenses and other
  current assets                          13,008        13,592

     Total current assets                335,484       273,677

Property, plant and equipment, net       244,132       199,560
Intangible assets, net                   315,709       149,816
Other assets and deferred charges         13,611         8,813

       Total assets                     $908,936      $631,866

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Current portion of long-term debt       $ 12,053     $ 10,872
 Short-term debt                          41,921        39,066
 Accounts payable                         41,083        27,659
 Accrued expenses                         64,596        51,139
 Accrued and deferred income taxes         10,784        5,190

     Total current liabilities           170,437       133,926

Long-term debt:
 Senior                                  236,184       223,975
 Convertible subordinated notes,
   including $67,850 to related party    192,850           -
Deferred income taxes                     31,846        26,360
Other non-current liabilities             10,340         9,132

Stockholders' equity:
 Preferred stock, $1 par value,
   no shares issued                          -             -
 Class A Common Stock, $.20
   par value, 17,755,249 and
   16,118,606 shares issued                3,551         3,224
 Class B Common Stock, $.20 par value,
  9,500,000 shares issued                  1,900         1,900
 Additional paid-in capital              219,306       179,636
 Accumulated other comprehensive loss    (7,943)       (8,375)
 Retained earnings                        56,649        68,206
 Treasury stock, at cost                 (6,184)       (6,118)

     Total stockholders' equity          267,279       238,473
      Total liabilities and
stockholders' equity                    $908,936      $631,866

         See notes to consolidated financial statements.
                 ALPHARMA INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENT OF OPERATIONS
              (In thousands, except per share data)

                                      Years Ended December 31,
                                     1998     1997       1996

Total revenue                     $604,584  $500,288   $486,184
  Cost of sales                    351,324   289,235    297,128

Gross profit                       253,260   211,053    189,056
  Selling, general and
    administrative expenses        188,264   164,155    185,136

Operating income                    64,996    46,898      3,920
  Interest expense                (25,613)  (18,581)   (19,976)
  Other income (expense), net        (400)     (567)      (170)

Income (loss) before
  income taxes                      38,983    27,750   (16,226)
     Provision (benefit) for
      income taxes                  14,772    10,342     (4,765)

Net income (loss)                  $24,211  $ 17,408  $(11,461)

Earnings (loss) per common share:
   Basic                          $   .95  $    .77  $   (.53)
Diluted                           $   .92  $    .76  $   (.53)

         See notes to consolidated financial statements.

                         ALPHARMA INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                 (In thousands)
<TABLE>
<CAPTION>
                                                  Accumulated                            
                                                     Other                             Total
                                      Additional  Comprehen-                          Stock-
                             Common    Paid-In    sive Income  Retained   Treasury    holders
                             Stock     Capital      (Loss)     Earnings    Stock      Equity

<S>                         <C>       <C>         <C>          <C>       <C>         <C>                      
Balance, December 31, 1995  $4,386    $120,357    $15,884      $70,385   $(5,822)    $205,190
Comprehensive                                                                        
income(loss):
Net loss - 1996                                                (11,461)              (11,461)
Currency translation                                                                 
 adjustment                                       (5,393)                             (5,393)
 Total comprehensive loss                                                            (16,854)
Dividends declared                                                                   
 ($.18 per common share)                                       (3,928)               (3,928)
Tax benefit realized from                                                            
 stock option plan                        202                                            202
Purchase of treasury stock                                                 (283)       (283)
Exercise of stock options                                                            
 (Class A) and other            13        862                                            875
Employee stock purchase                                                              
 plan                            9        831                                            840
Balance, December 31, 1996  $4,408    $122,252    $10,491      $54,996   $(6,105)    $186,042
Comprehensive                                                                        
income(loss):
Net income - 1997                                              17,408                 17,408
Currency translation                                                                 
 adjustment                                       (18,866)                           (18,866)
 Total comprehensive loss                                                             (1,458)
Dividends declared                                                                   
 ($.18 per common share)                                       (4,198)               (4,198)
Tax benefit realized from                                                            
 stock option plan                        228                                            228
Purchase of treasury stock                                                  (13)        (13)
Exercise of stock options                                                            
 (Class A) and other            14        794                                            808
Exercise of stock rights                                                             
 (Class A)                     440     35,538                                         35,978
Stock subscription by                                                                
 A.L. Industrier (Class B)     254     20,125                                         20,379
Employee stock purchase                                                              
 plan                            8        699                                            707
Balance, December 31, 1997  $5,124    $179,636    $(8,375)     $68,206   $(6,118)    $238,473
Comprehensive                                                                        
income(loss):
Net income - 1998                                              24,211                 24,211
Currency translation                                                                 
 adjustment                                           432                                432
 Total comprehensive                                                                 
  income                                                                              24,643
Dividends declared                                                                   
 ($.18 per common share)                                       (4,651)               (4,651)
Tax benefit realized from                                                            
 stock option plan                      1,415                                          1,415
Purchase of treasury stock                                                  (66)        (66)
Exercise of stock options                                                            
 (Class A) and other            68      5,687                                          5,755
Exercise of warrants            48      4,910                                          4,958
Stock subscription                                                                   
 receivable for warrant                                                              
 exercises                    (47)    (4,869)                                        (4,916)
Stock issued in tender                                                               
 offer for warrants            246     30,871                  (31,117)              
Employee stock purchase                                                              
 plan                           12      1,656                                          1,668
Balance, December 31, 1998  $5,451    $219,306    $(7,943)     $56,649   $(6,184)    $267,279
                       See notes to consolidated financial statements.
</TABLE>
                 ALPHARMA INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENT OF CASH FLOWS
                    (In thousands of dollars)

                                                  Years     Ended
December 31,
                                             1998      1997       1996
Operating activities:
  Net income (loss)                       $24,211    $17,408  $(11,461)
  Adjustments to reconcile net income
    (loss) to net cash provided by
    operating activities:
  Depreciation and amortization            38,120     30,908     31,503
  Deferred income taxes                       493    (1,101)    (3,104)
  Noncurrent asset write-offs                 -          -        5,753
  Purchased in-process research and
    development                             2,081        -          -
  Change in assets and liabilities, net
    of effects from business
    acquisitions:
      (Increase) decrease in accounts
        receivable                       (22,487)   (13,029)      9,204
      Decrease (increase) in inventory      3,212    (2,121)    (5,876)
    (Increase) in prepaid expenses
        and other current assets            (686)    (1,013)      (595)
    Increase(decrease) in accounts
        payable and accrued expenses        8,189    (4,782)      3,346
    Increase (decrease) in accrued
        income taxes                        3,641      4,077    (4,523)
      Other, net                            (119)        616        574
     Net cash provided by operating
       activities                          56,655     30,963     24,821

Investing activities:

  Capital expenditures                   (31,378)   (27,783)   (30,874)
  Purchase of Cox, net of cash acquired (197,354)        -          -
  Purchase of other businesses
     and intangibles, net of cash
     acquired                            (23,315)   (44,029)        -
  Other                                     -           -         (348)

      Net cash used in investing
        activities                      (252,047)   (71,812)   (31,222)
                                
                     Continued on next page.
         See notes to consolidated financial statements.
                 ALPHARMA INC. AND SUBSIDIARIES
        CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
                    (In thousands of dollars)



                                                  Years     Ended
December 31,
                                             1998       1997      1996
Financing activities:

  Net advances (repayments)
    under lines of credit                 $ 2,542  $(19,389)   $  (630)
  Proceeds of senior long-term debt       187,522     27,506     24,213
  Reduction of senior long-term debt    (183,751)   (25,366)   (17,137)
  Dividends paid                          (4,651)    (4,198)    (3,928)
  Proceeds from sale of convertible
    subordinated notes                    192,850        -            -
  Proceeds from exercise of stock
    rights                                    -       56,357          -
  Payment for debt issuance costs         (4,175)        -            -
  Proceeds from employee stock option
    and stock purchase plan                 7,427      1,515      1,715
  Other, net                                1,387        214       (82)
      Net cash provided by
        financing activities              199,151     36,639      4,151

Exchange rate changes:

  Effect of exchange rate changes
    on cash                                   397    (1,606)      (627)
  Income tax effect of exchange rate
    changes on intercompany advances        (739)        869        470
      Net cash flows from exchange
       rate changes                         (342)      (737)      (157)
Increase (decrease) in cash and cash
  equivalents                               3,417    (4,947)    (2,407)
Cash and cash equivalents at
  beginning of year                        10,997     15,944     18,351
Cash and cash equivalents at
  end of year                             $14,414    $10,997    $15,944



         See notes to consolidated financial statements.
                 ALPHARMA INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (In thousands, except share data)


1.   The Company:
     
      Alpharma  Inc.  and  Subsidiaries,  (the  "Company")  is  a
multinational    pharmaceutical    company    which     develops,
manufactures and markets specialty generic and proprietary  human
pharmaceutical and animal health products.

     In 1994 the Company acquired the pharmaceutical, animal
health, bulk antibiotic and aquatic animal health business
("Alpharma Oslo") of A.L. Industrier A.S ("A.L. Industrier"), the
beneficial owner of 100% of the outstanding shares of the
Company's Class B Stock. The Class B stock represents 35.2% of
the total outstanding common stock. A.L. Industrier, a Norwegian
company, is able to control the Company through its ability to
elect more than a majority of the Board of Directors and to cast
a majority of the votes in any vote of the Company's
stockholders. (See Note 16.)

     Upon  consummation of the acquisition of Alpharma Oslo,  the
Company  was  reorganized  on a global  basis  within  its  Human
Pharmaceutical   and   Animal   Health   businesses   into   five
decentralized  divisions  each  of  which  has  a  president  and
operates in a distinct business and/or geographic area.
     
      Divisions in the Human Pharmaceutical business include: the
U.S.   Pharmaceuticals  Division  ("USPD"),   the   International
Pharmaceuticals Division ("IPD") and the Fine Chemicals  Division
("FCD").  The  USPD's principal products are generic  liquid  and
topical    pharmaceuticals   sold   primarily   to   wholesalers,
distributors  and  merchandising  chains.  The  IPD's   principal
products  are  dosage  form  pharmaceuticals  sold  primarily  in
Scandinavia,  the United Kingdom and western Europe  as  well  as
Indonesia  and  certain  middle  eastern  countries.  The   FCD's
principal  products are bulk pharmaceutical antibiotics  sold  to
the pharmaceutical industry in the U.S. and worldwide for use  as
active substances in a number of finished pharmaceuticals.

      Divisions in the Animal Health business include: the Animal
Health  Division  ("AHD") and the Aquatic Animal Health  Division
("AAHD").  The  AHD's principal products are  feed  additive  and
other  animal  health products for animals raised for  commercial
food  production (principally poultry, cattle and swine)  in  the
U.S.  and  worldwide. The AAHD manufactures and markets  vaccines
primarily for use in immunizing farmed fish (principally  salmon)
worldwide  with  a  concentration in Norway.  (See  Note  20  for
segment and geographic information.)


2.   Summary of Significant Accounting Policies:

Principles of consolidation:

      The  consolidated financial statements include the accounts
of  the  Company and its domestic and foreign subsidiaries.   The
effects  of all significant intercompany transactions  have  been
eliminated.

Use of estimates:

      The  preparation of financial statements in conformity with
generally  accepted accounting principles requires management  to
make  estimates  and assumptions. The estimates  and  assumptions
affect  the  reported  amounts  of assets  and  liabilities,  the
disclosure  of contingent assets and liabilities at the  date  of
the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates.

Cash equivalents:

      Cash equivalents include all highly liquid investments that
have an original maturity of three months or less.

Inventories:

      Inventories are valued at the lower of cost or market.  The
last-in, first-out (LIFO) method is principally used to determine
the  cost  of the USPD manufacturing subsidiary inventories.  The
first-in, first-out (FIFO) and average cost methods are  used  to
value remaining inventories.

Property, plant and equipment:

       Property,  plant  and  equipment  are  recorded  at  cost.
Expenditures  for additions, major renewals and  betterments  are
capitalized  and  expenditures for maintenance  and  repairs  are
charged  to income as incurred.  When assets are sold or retired,
their cost and related accumulated depreciation are removed  from
the accounts, with any gain or loss included in net income.

      Interest is capitalized as part of the acquisition cost  of
major construction projects.  In 1998, 1997 and 1996, $744,  $407
and $572 of interest cost was capitalized, respectively.

      Depreciation is computed by the straight-line  method  over
the estimated useful lives which are generally as follows:

          Buildings                 30-40 years
          Building improvements     10-30 years
          Machinery and equipment    2-20 years

Intangible assets:

      Intangible assets represent the excess of cost of  acquired
businesses  over  the underlying fair value of the  tangible  net
assets  acquired  and  the  cost of technology,  trademarks,  New
Animal Drug Applications ("NADAs"), and other non-tangible assets
acquired  in  product  line acquisitions. Intangible  assets  are
amortized on a straight-line basis over their estimated period of
benefit.  The  following table is net of accumulated amortization
of   $63,014  and  $50,514  at  December  31,  1998   and   1997,
respectively.

                                   1998      1997     Life
Excess of cost of acquired
businesses over the fair value
of the net assets acquired       $247,869   $92,228    20 - 40

Technology, trademarks, NADAs
and   other                       67,840     57,588     6 - 20

                                 $315,709  $149,816

Foreign currency translation and transactions:

       The  assets  and  liabilities  of  the  Company's  foreign
subsidiaries  are  translated  from their  respective  functional
currencies  into U.S. Dollars at rates in effect at  the  balance
sheet  date.  Results of operations are translated using  average
rates  in  effect during the year.  Foreign currency  transaction
gains  and  losses  are  included in  income.   Foreign  currency
translation   adjustments  are  included  in  accumulated   other
comprehensive   income   (loss)  as  a  separate   component   of
stockholders'   equity.    The   foreign   currency   translation
adjustment  for 1998, 1997 and 1996 is net of $(739),  $869,  and
$470,   respectively,  representing  the  foreign   tax   effects
associated with intercompany advances to foreign subsidiaries.

Foreign exchange contracts:

       The  Company  selectively  enters  into  foreign  exchange
contracts  to  buy and sell certain cash flows in  non-functional
currencies  and to hedge certain firm commitments due in  foreign
currencies. Foreign exchange contracts, other than hedges of firm
commitments,  are accounted for as foreign currency  transactions
and  gains  or  losses are included in income. Gains  and  losses
related  to hedges of firm commitments are deferred and  included
in the basis of the transaction when it is completed.

Interest rate transactions:

     The Company selectively enters into interest rate agreements
which  fix the interest rate to be paid for specified periods  on
variable rate long-term debt.  The effect of these agreements  is
recognized  over the life of the agreements as an  adjustment  to
interest expense.

Income taxes:

      The provision for income taxes includes federal, state  and
foreign income taxes currently payable and those deferred because
of  temporary differences in the basis of assets and  liabilities
between   amounts  recorded  for  financial  statement  and   tax
purposes.  Deferred  taxes  are calculated  using  the  liability
method.

       At   December  31,  1998,  the  Company's  share  of   the
undistributed  earnings  of its foreign  subsidiaries  (excluding
cumulative   foreign   currency  translation   adjustments)   was
approximately  $51,000. No provisions are made  for  U.S.  income
taxes  that  would be payable upon the distribution  of  earnings
which  have been reinvested abroad or are expected to be returned
in  tax-free distributions. It is the Company's policy to provide
for U.S. taxes payable with respect to earnings which the Company
plans to repatriate.

Accounting for stock based compensation:

      Effective January 1, 1996, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting  for
Stock-Based Compensation." The standard establishes a fair  value
method  of accounting for or, alternatively, disclosing the  pro-
forma  effect of the fair value method of accounting  for  stock-
based  compensation plans. The Company has adopted the disclosure
alternative.  As a result, the adoption of this standard  had  no
impact  on  the  Company's consolidated  results  of  operations,
financial position or cash flows.

Comprehensive income:
     
     As  of  January 1, 1998, the Company adopted SFAS  No.  130,
"Reporting Comprehensive Income." SFAS 130 established new  rules
which  require  the  reporting of comprehensive  income  and  its
components. The adoption of this statement had no impact  on  the
Company's consolidated results of operations, financial  position
or cash flows.
     
      SFAS  130 requires foreign currency translation adjustments
and  certain  other items, which prior to adoption were  reported
separately  in  stockholders' equity, to  be  included  in  other
comprehensive  income (loss). The only components of  accumulated
other  comprehensive  loss for the Company are  foreign  currency
translation  adjustments. Total comprehensive income  (loss)  for
the  years ended 1998, 1997 and 1996 is included in the Statement
of Stockholders' Equity.

Segment information:

      In  1998, the Company adopted SFAS 131, "Disclosures  about
Segments  of  an  Enterprise and Related Information."  SFAS  131
supersedes  SFAS  14,  "Financial Reporting  for  Segments  of  a
Business  Enterprise," replacing the "industry segment"  approach
with  the "management" approach. The management approach is based
on  the method that management organizes the segments within  the
Company for making operating decisions and assessing performance.
SFAS  131  also requires disclosures about products and services,
geographic areas, and major customers. The adoption of  SFAS  131
did  not  affect results of operations or financial position  but
did affect the disclosure of segment information.

Accounting for pensions and postretirement benefits:

      In  1998,  the  Company adopted SFAS No.  132,  "Employers'
Disclosures  about  Pensions and Other Postretirement  Benefits".
SFAS  132 revises employers' disclosures about pension and  other
postretirement  benefit  plans. Restatement  of  disclosures  for
earlier  periods provided for comparative purposes was  required.
The  adoption  of  SFAS  132  has  no  impact  on  the  Company's
consolidated  results of operations, financial position  or  cash
flows.


Recent accounting pronouncements:
    
In June 1998, the Financial Accounting Standards Board (FASB) issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS 133 is effective for all fiscal quarters of all
fiscal years beginning after June 15, 1999 (January 1, 2000 for
the Company). SFAS 133 requires that all derivative instruments
be recorded on the balance sheet at their fair value. Changes in
the fair value of derivatives are recorded each period in current
earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction and, if
it is, the type of hedge transaction. SFAS 133 is not expected to
have a material impact on the Company's consolidated results of
operations, financial position or cash flows.

3.   Management Actions -  1996

      In  1996,  the IPD took actions designed to strengthen  the
competitive  nature  of the division by lowering  costs.  In  the
first  quarter  of  1996,  IPD severed  approximately  30  sales,
marketing  and  other  personnel based primarily  in  the  Nordic
countries and incurred termination related costs of approximately
$1,900.  The  termination costs are included in selling,  general
and administrative expenses.

      In  May  1996, the Board of Directors approved a production
rationalization plan which included the transfer of  all  tablet,
ointment and liquid production from Copenhagen, Denmark to  Lier,
Norway. The full transfer was completed in late 1998 and resulted
in  the  reduction  of  approximately  175  employees  (primarily
involved in production). The rationalization plan resulted  in  a
charge in the second quarter of 1996 for severance for Copenhagen
employees,  an  impairment write off for  certain  buildings  and
machinery and equipment and other exit costs.

     In addition in May 1996, the Board of Directors approved the
USPD   plan   to  accelerate  a  consolidation  of  manufacturing
operations within the USPD.

     The plan included the discontinuing of all activities in two
USPD manufacturing facilities in New York and New Jersey and  the
transfer of all pharmaceutical production from those sites to the
facility  in  Lincolnton, North Carolina. The plan  provided  for
complete  exit  by  early 1997 and resulted  in  a  reduction  of
approximately  200 employees (i.e. all production, administration
and  support  personnel  at the plants).  The  acceleration  plan
resulted  in a charge in the second quarter of 1996 for severance
of employees, a write-off of leasehold improvements and machinery
and  equipment  and  significant exit costs  including  estimated
remaining  lease costs and refurbishment costs for the facilities
being exited.

      Due  to  the  time necessary to achieve both  transfers  of
production  the  Company, as part of the severance  arrangements,
instituted  stay bonus plans. The overall cost of the stay  bonus
plans  was approximately $1,900, and was accrued over the periods
necessary to achieve shut down and transfer. The stay bonus plans
generally required the employee to remain until their position is
eliminated to earn the payment.

      In  the  second half of 1996 the USPD's Management  Actions
were  adjusted for the sale of the Able tablet business. The sale
of  the  Able tablet business and sub-lease of the Able  facility
(located in New Jersey) resulted in the Company reducing  certain
accruals  which would have been incurred in closing the facility.
The  net reduction of the second quarter charge for the sale  was
$1,400  and  included the net proceeds received on  the  sale  of
approximately  $500.  In  addition  in  1996  certain  staff  and
executives  at  USPD headquarters were terminated (15  employees)
resulting  in  severance of $782. In 1997 the USPD completed  the
transfer  of  production, paid the stay  bonus  as  accrued,  and
severed all identified employees.

      As  a result of difficult market conditions experienced  in
1996,  the  Company's  AHD reviewed its  business  practices  and
staffing   levels.  As  a  result  33  salaried  employees   were
terminated  or elected an early retirement program.  Concurrently
office space was vacated resulting in a charge for the write  off
of   leasehold  improvements  and  lease  payments  required   to
terminate  the lease. In addition, the AHD distribution  business
was reviewed and a number of minor products were discontinued.

      A  summary of 1996 charges and expenses resulting from  the
Management  Actions  which are included in  cost  of  goods  sold
($1,100),  and  selling,  general  and  administrative   expenses
($17,700)follows:

Pre-Tax
Amount       Description
$11,200      Severance and employee termination benefits for  all
             1996  employee  related actions  (approximately  450
             employees  were  to be terminated; at  December  31,
             1998, 446 employees were terminated).

   1,000       Stay  bonus accrued, as earned as of December  31,
               1996.

  4,175      Write  off  of building, leasehold improvements  and
             machinery  and equipment. (Net of sales proceeds  of
             approximately $500 in the third quarter of 1996.)

    550      Accrual  of the non cancelable term of the operating
             leases  and estimated refurbishment costs for exited
             USPD facilities.

  1,875      Exit  costs for demolition of facilities,  clean  up
             costs and other.
 ______
$18,800

      The net after tax effect of the 1996 Management Actions was
a loss of approximately $12,600 or ($.58 per share).

      A  summary  of  the  liabilities set up for  severance  and
included  in  accrued  expenses is  as  follows  (including  stay
bonus):

      1996                                 
       Accruals                            $11,338
       Payments                            (2,122)
       Translation and                     
         adjustments                           (2)
                                           
     Balance, December 31, 1996            $ 9,214
      1997                                       
       Accruals - Stay bonus IPD                652
       Payments                              (5,980)
       Translation and adjustments             (479)
                                           
     Balance, December 31, 1997            $ 3,407
     1998                                  
       Payments                            (3,007)
       Translation and adjustments              78
     Balance, December 31, 1998             $   478
                                           

4.   Business and Product Line Acquisitions:

      The  following acquisitions were accounted  for  under  the
purchase method and the accompanying financial statements reflect
results of operations from their respective acquisition dates.

Cox:

      On  May  7,  1998, the Company acquired all of the  capital
stock  of  Cox Investments Ltd. and its wholly owned  subsidiary,
Arthur  H.  Cox  and Co., Ltd. and all of the  capital  stock  of
certain  related marketing subsidiaries ("Cox") from  Hoechst  AG
for  approximately $192,000 in cash, the assumption of bank  debt
which  was  repaid  subsequent to  the  closing,  and  a  further
purchase  price adjustment equal to an increase in net assets  of
Cox  from  January 1, 1998 to the date of acquisition. The  total
purchase price including the purchase price adjustment and direct
costs  of  the  acquisition  was  approximately  $198,000.  Cox's
operations are included in IPD and are located primarily  in  the
United   Kingdom   with   distribution  operations   located   in
Scandinavia  and the Netherlands. Cox is a generic pharmaceutical
manufacturer  and  marketer of tablets, capsules,  suppositories,
liquids,  ointments and creams. Cox distributes its  products  to
pharmacy  retailers and pharmaceutical wholesalers  primarily  in
the United Kingdom.

     The Company financed the $198,000 purchase price and related
debt  repayments  from  borrowings under its  existing  long-term
Revolving  Credit Facility and short-term lines of  credit  which
had   been  repaid  in  March  1998  with  the  proceeds  of  the
convertible  subordinated  notes  offering.  To  accomplish   the
acquisition  the  principal members of the bank syndicate,  which
were   parties  to  the  Company's  Revolving  Credit   Facility,
consented  to a change until December 31, 1998 in the  method  of
calculating  certain financial convenants. The  Revolving  Credit
Facility  was replaced in January 1999 with a new credit facility
which contains updated financial covenants. (See Note 9.)

      The  acquisition was accounted for in accordance  with  the
purchase  method.  The  fair value of  the  assets  acquired  and
liabilities  assumed  and  the results of  Cox's  operations  are
included  in  the  Company's  consolidated  financial  statements
beginning  on the acquisition date, May 7, 1998. The  Company  is
amortizing the acquired goodwill (approximately $160,000) over 35
years using the straight line method.

      The non-recurring charges related to the acquisition of Cox
included in the second quarter of 1998 are summarized below.  The
charge for in-process research and development ("R&D") is not tax
benefited;  therefore  the  computed tax  benefit  is  below  the
expected  rate.  The  valuation of purchased in-process  R&D  was
based  on  the cost approach for 12 generic products  at  varying
stages of development at the acquisition date.

     Inventory write-up  $1,300 (Included in cost of sales)
     In-process R&D       2,100 (Included in selling, general
     Severance of existing       and administrative expenses)
       employees             200
                          3,600
        Tax benefit        (470)
                         $3,130 ($.12 per share)

     The following pro forma information on results of operations
for  the periods presented assumes the purchase of Cox as if  the
companies had combined at the beginning of each of the respective
periods:

                                    Pro Forma
                                    Year Ended
                                   December 31,
                                   (Unaudited)
                                1998*        1997
                                               
                                          
        Revenues              $637,139    $590,450
        Net income            $26,868     $13,311
        Basic EPS               $1.05       $0.59
        Diluted EPS             $1.02       $0.58

*  1998  excludes  actual non-recurring charges  related  to  the
acquisition of $ 3,130 after tax or $ .12 per share.

Other Acquisitions:

       In December 1998, the Company acquired SKW Biotech, a part
of  SKW Trostberg AG, in Budapest, Hungary. The purchase included
an  antibiotic fermentation and purification plant in Budapest on
a  300,000 square foot site. SKW Biotech is included in  the  FCD
and  currently  produces vancomycin. The  cost  of  approximately
$8,400  was  preliminarily allocated to  goodwill  and  property,
plant  and  equipment.  A  final  purchase  allocation  will   be
completed in 1999.

        In  November 1998, the Company acquired the Siga  product
line  in Germany from Hexal AG. The branded product line, "Siga",
is  included  in  the IPD and consists of over 20  products.  The
acquisition consisted of product registrations and trademarks; no
personnel  or plants were part of the transaction.  The  cost  of
approximately $13,300 has been allocated to intangible assets and
will be amortized over 15 years.

      In  November  1997,  the  Company  acquired  the  worldwide
polymyxin  business  from Cultor Food Science.  Polymyxin  is  an
antibiotic  mainly  used  in topical ointments  and  creams.  The
transaction included product technology, registrations,  customer
information  and  inventories.  The  Company's  FCD  manufactures
polymyxin  in  its  Copenhagen facility and has manufactured  its
additional polymyxin requirements at this facility. The cost  was
approximately  $16,500  which  included  approximately  $500   of
inventory.  The balance of the purchase price has been  allocated
to  intangible  assets and will generally be  amortized  over  15
years.  The  purchase agreement also provides  for  a  contingent
payment  and  future  royalties in the event that  certain  sales
levels are achieved of a product presently being developed by  an
independent  pharmaceutical company utilizing polymyxin  supplied
by the Company.

      In  September  1997,  the Company  acquired  the  worldwide
decoquinate  business  from  Rhone-Poulenc  Animal  Nutrition  of
France (RPAN). Decoquinate is an anticoccidial feed additive used
primarily in beef cattle and calves. The transaction included all
rights  for decoquinate worldwide and the trademark Deccoxr  that
is  registered in over 50 countries. The agreement also  provides
that  RPAN will continue to manufacture decoquinate for  the  AHD
under  a  long  term supply contract. The cost was  approximately
$27,550,  which  included approximately $1,850 of inventory.  The
balance  of  the purchase price has been allocated to  intangible
assets and will generally be amortized over 15 years.

5.   Earnings Per Share

      Basic earnings per share is based upon the weighted average
number  of common shares outstanding. Diluted earnings per  share
reflect  the  dilutive effect of stock options, rights,  warrants
and convertible debt when appropriate.

      A reconciliation of weighted average shares outstanding for
basic to diluted weighted average shares outstanding used in  the
calculation of EPS is as follows:

     (Shares in thousands)        For the years ended
                                      December 31,
                               1998      1997       1996
     Average shares                               
      outstanding - basic     25,567    22,695     21,715
     Stock options               222        85         -
     Rights                      -        -         -
     Warrants                    490      -         -
     Convertible debt           -         -          -
     Average shares                               
      outstanding - diluted   26,279    22,780     21,715

      The amount of dilution attributable to the options, rights,
and  warrants determined by the treasury stock method depends  on
the  average market price of the Company's common stock for  each
period.  Subordinated debt, convertible into 6,744,481 shares  of
common stock at $28.59 per share, was outstanding at December 31,
1998 and was included in the computation of diluted EPS using the
if-converted  method for the three month periods ended  September
30,   and   December  31,  1998.  The  if-converted  method   was
antidilutive  for the year ended December 31, 1998 and  therefore
the  shares  attributable  to  the  subordinated  debt  were  not
included in the diluted EPS calculation.

      The numerator for the calculation of basic and diluted  EPS
is  net income for all periods. The numerator for the three month
periods ended September 30, and December 31, 1998 includes an add
back  for  interest  expense and debt cost amortization,  net  of
income tax effects, related to the convertible notes.


6.   Accounts Receivable, Net:

     Accounts receivable consist of the following:

                                             December 31,
                                          1998          1997
                                                    
     Accounts receivable, trade       $171,073        $129,382
     Other                               4,941           3,460
                                       176,014         132,842
     Less allowances for doubtful                   
      accounts                           6,270           5,205
                                      $169,744        $127,637

      The  allowance  for doubtful accounts for the  three  years
ended December 31, consisted of the following:

                             1998          1997         1996
                                                    
Balance at January 1,     $5,205         $4,359            $5,751
Provision for doubtful                              
     accounts              1,032          2,111             3,572
Reductions for accounts                             
 written off               (175)           (789)           (4,589)
Translation and other        208           (476)             (375)
Balance at December 31,   $6,270         $5,205            $4,359

7.   Inventories:

     Inventories consist of the following:

                                         December 31,
                                      1998          1997

     Finished product               $ 68,834      $ 68,525
     Work-in-process                  25,751        20,009
     Raw materials                    43,733        32,917
                                    $138,318      $121,451

      At  December 31, 1998 and 1997, approximately  $41,900  and
$48,700 of inventories, respectively, are valued on a LIFO basis.
LIFO inventory is approximately equal to FIFO in 1998 and 1997.

8.   Property, Plant and Equipment, Net:

       Property,  plant  and  equipment,  net,  consist  of   the
following:
                                           December 31,
                                       1998         1997

     Land                            $ 10,603    $  8,954
     Buildings and building
       improvements                   120,357     100,017
     Machinery and equipment          259,988     219,566
     Construction in progress          20,199      16,197
                                      411,147     344,734
     Less, accumulated depreciation   167,015     145,174

                                     $244,132    $199,560

9.   Long-Term Debt:

Long-term debt consists of the following:
                                                 December 31,
                                               1998          1997
Senior debt:                                             
 U.S. Dollar Denominated:                                
  Revolving Credit Facility 6.6% - 7.0%   $180,000       $161,575
  A/S Eksportfinans                          7,200          9,000
  Industrial Development Revenue Bonds:                  
   Baltimore County, Maryland                            
     (7.25%)                                 4,565          5,155
     (6.875%)                                1,200          1,200
   Lincoln County, NC                        4,500          5,000
  Other, U.S.                                  504            758
                                                         
 Denominated in Other Currencies:                        
       Mortgage notes payable (NOK)         42,224         38,099
  Bank and agency development loans          7,991         13,803
(NOK)
  Other, foreign                                53            257
                                                         
 Total senior debt                         248,237        234,847
                                                         
Subordinated debt:                                       
 5.75% Convertible Subordinated Notes
  due 2005                                 125,000            -
 5.75% Convertible Subordinated                          
     Note due 2005 - Industrier Note       67,850            -
Total subordinated debt                    192,850            -
  Total long-term debt                     441,087        234,847
  Less, current maturities                 12,053          10,872
                                          $429,034       $223,975

      In  January  1999,  the Company signed  a  $300,000  credit
agreement  ("1999  Credit Facility") with a consortium  of  banks
arranged  by the Union Bank of Norway, Den norske Bank A.S.,  and
Summit  Bank.  The agreement replaced the prior revolving  credit
facility and the current U.S. short-term facilities and increased
overall  credit  availability. The  prior  revolving  credit  was
repaid in February 1999 by drawing on the 1999 Credit Facility.

      The  1999  Credit Facility provides for (i) a $100,000  six
year Term Loan; and (ii) a revolving credit agreement of $200,000
with  an  initial term of five years with two possible  one  year
extensions.

      The  1999  Credit Facility has several financial covenants,
including  an  interest coverage ratio, total  debt  to  earnings
before interest, taxes, depreciation and amortization ("EBITDA"),
and equity to asset ratio.

      Interest on the facility will be at the LIBOR rate  with  a
margin  of  between .875% and 1.6625% depending on the  ratio  of
total debt to EBITDA.

      In  December  1995,  the Company's Danish  subsidiary,  A/S
Dumex, borrowed $9,000 from A/S Eksportfinans with credit support
provided  by  Union  Bank  of Norway  and  Bikuben  Girobank  A/S
("Bikuben")   to   finance  an  expansion   of   its   Vancomycin
manufacturing facility in Copenhagen. The term of  the  loan  was
seven  years. Interest for the loan was fixed at 6.59%, including
the  cost  of the credit support provided via guarantee by  Union
Bank  of Norway and Bikuben. The loan was repaid in February 1999
from proceeds received under the 1999 Credit Facility.

      The  Baltimore County Industrial Development Revenue  Bonds
are  payable in varying amounts through 2009. Plant and equipment
with  an approximate net book value of $13,605 collateralize this
obligation.

      In  August  1994, the Company issued Industrial Development
Revenue Bonds for $6,000 in connection with the expansion of  the
Lincolnton,  North  Carolina plant.  The  bonds  require  monthly
interest payments at a floating rate (4.15% at December 31, 1998;
3.56%  weighted average for 1998) approximating the current money
market rate on tax exempt bonds and the payment by the Company of
annual  letter of credit, remarketing, trustee, and rating agency
fees   of  1.125%.  The  bonds  require  a  yearly  sinking  fund
redemption  of  $500  to August 2004 and $300 thereafter  through
August  2009.  Plant and equipment with an approximate  net  book
value of $5,166 serve as collateral for this loan.

      The  mortgage notes payable denominated in Norwegian Kroner
(NOK)  include amounts originally issued in connection  with  the
construction  of  a pharmaceutical facility in Lier,  Norway  and
amounts  issued in 1997 and 1998 in connection with the expansion
of the Lier facility ($14,700). The mortgage is collateralized by
this  facility  (net  book value $44,985) and  the  Oslo,  Norway
("Skoyen")  facility. (See Note 13.) The debt was borrowed  in  a
number  of tranches over the construction period and interest  is
fixed   for   specified  periods  based  on  actual   yields   of
Norgeskreditt  publicly traded bonds plus  a  lending  margin  of
0.70%.  The weighted average interest rate at December  31,  1998
and  1997  was  6.8%  and 5.6%, respectively.  The  tranches  are
repayable  in  semiannual  installments  through  2021.    Yearly
amounts payable vary between $1,237 and $2,009.

      Mortgage notes payable also include amounts issued in  1997
($5,356)  to  finance a new production unit at an Aquatic  Animal
Health facility in Overhalla, Norway. The mortgage has a 12  year
term  and  an  interest rate of 4.9%, is repayable  in  10  equal
installments in years 2001 - 2009, and is collateralized  by  the
net book value of the facility ($7,367).

      Alpharma Oslo has various loans with government development
agencies  and  banks  which have been used for  acquisitions  and
construction  projects.  Such loans  are  collateralized  by  the
Skoyen property and require payments in 1999 of $7,322 and  final
payments of $669 in 2000.  The weighted average interest rate  of
the  loans  at  December 31, 1998 and 1997  was  7.4%  and  5.0%,
respectively.  The banks and agencies have the option  to  extend
payment in 1999.

      In  March  1998,  the  Company  issued  $125,000  of  5.75%
Convertible Subordinated Notes (the "Notes") due 2005. The  Notes
may  be converted into common stock at $28.594 at any time  prior
to  maturity, subject to adjustment under certain conditions. The
Company  may redeem the Notes, in whole or in part, on  or  after
April 6, 2001, at a premium plus accrued interest.

      Concurrently, A.L. Industrier, the controlling  stockholder
of  the  Company,  purchased at par for  cash  $67,850  principal
amount  of  a  Convertible  Subordinated  Note  (the  "Industrier
Note").   The   Industrier   Note  has  substantially   identical
adjustment terms and interest rate as the Notes.

      The  Notes  are convertible into Class A common stock.  The
Industrier Note is automatically convertible into Class B  common
stock  if  at  least 75% of the Class A notes are converted  into
common stock.

     The net proceeds from the combined offering of $189,100 were
used  initially to retire outstanding senior long-term debt.  The
Revolving Credit Facility was used in the second quarter of 1998,
along  with  an  amount  of  short  term  debt,  to  finance  the
acquisition of Cox Pharmaceuticals. (See Note 4.)

      Maturities of long-term debt during each of the  next  five
years  and  thereafter as of December 31,  1998  are  as  follows
(amounts  are  presented  as reported and  on  a  proforma  basis
reflecting the 1999 Credit Facility):

     Year ending December 31,
                                                        
                                                        
                            As Reported        Proforma
                            
          1999                  $ 12,053          $ 10,253
          2000                   185,089             8,289
          2001                     4,949            18,149
          2002                     4,947            18,147
          2003                     3,184            18,184
          Thereafter             230,865           368,065
                                $441,087          $441,087
                                               
10.  Short-Term Debt:

     Short-term debt consists of the following:
                                  December 31,
                                1998       1997

               Domestic       $17,275    $24,200
               Foreign         24,646     14,866
                              $41,921    $39,066

       At  December  31,  1998,  the  Company  and  its  domestic
subsidiaries  have  available  bank  lines  of  credit   totaling
$65,500.   Borrowings  under  the  lines  are  made  for  periods
generally less than three months and bear interest from 6.60%  to
6.75%  at December 31, 1998. At December 31, 1998, the amount  of
the  unused lines totaled $48,225. In January 1999 the lines were
refinanced into the 1999 Credit Facility. (See Note 9.)

      At  December  31, 1998, the Company's foreign  subsidiaries
have  available  lines  of  credit with  various  banks  totaling
$42,222  ($40,722 in Europe and $1,500 in the Far East). Drawings
under  these lines are made for periods generally less than three
months  and  bear interest at December 31, 1998 at rates  ranging
from  4.00%  to  9.50%. At December 31, 1998, the amount  of  the
unused lines totaled $17,576 ($16,076 in Europe and $1,500 in the
Far East).

     The weighted average interest rate on short-term debt during
the   years  1998,  1997  and  1996  was  6.4%,  5.9%  and  6.2%,
respectively.

11.  Income Taxes:

      Domestic and foreign income (loss) before income taxes  was
$28,296,  and $10,687, respectively in 1998, $14,267 and $13,483,
respectively  in 1997, and $(17,991) and $1,765, respectively  in
1996. Taxes on income of foreign subsidiaries are provided at the
tax   rates   applicable   to  their   respective   foreign   tax
jurisdictions.  The provision for income taxes  consists  of  the
following:
                                    Years Ended December 31,
                                      1998     1997      1996
          Current:
            Federal                  $8,373   $5,164  $(4,796)
            Foreign                   4,224    5,184     3,367
            State                     1,682    1,095     (232)
                                     14,279   11,443   (1,661)
          Deferred:
            Federal                   (351)      439     (522)
            Foreign                     930  (1,295)   (2,531)
            State                      (86)    (245)      (51)
                                        493  (1,101)   (3,104)
             Provision/(benefit)
              for income taxes      $14,772  $10,342  $(4,765)

     A reconciliation of the statutory U.S. federal income tax
 rate to the effective rate follows:

                                    Years Ended December 31,
                                    1998      1997      1996

Statutory U.S. federal rate         35.0%     35.0%     (35.0%)
State income tax, net of federal
  tax benefit                        2.6%      2.0%      (1.1%)
Lower taxes on foreign
    earnings,   net                 (5.2%)    (4.4%)     (2.7%)
Tax credits                         (1.2%)       -       (0.9%)
Non-deductible costs, principally
  amortization of intangibles
  related to acquired companies      5.6%      4.9%       8.5%
Non-deductible in-process R&D        1.7%       -          -
Other,   net                        (0.6%)    (0.2%)      1.8%
Effective rate                      37.9%      37.3%     (29.4%)

      Deferred  tax  liabilities (assets) are  comprised  of  the
following:
                                                 Year Ended
                                                December 31,
                                               1998     1997

Accelerated depreciation and amortization
    for   income  tax  purposes              $23,956   $20,976
Excess of book basis of acquired assets
  over tax bases                              11,488     8,391
Differences between inventory valuation
  methods used for book and tax purposes       2,219     3,306
Other                                            623       808
  Gross deferred tax liabilities              38,286    33,481

Accrued liabilities and other reserves        (4,418)   (7,178)
Pension liabilities                           (1,496)   (1,351)
Loss carryforwards                            (1,890)   (1,945)
Deferred income                                 (581)      -
Other                                         (1,792)   (2,118)
  Gross deferred tax assets                  (10,177)  (12,592)

Deferred tax assets valuation allowance        1,890     1,945

     Net deferred tax liabilities            $29,999   $22,834

      As  of  December  31,  1998, the  Company  has  state  loss
carryforwards  in one state of approximately $16,100,  which  are
available  to  offset future taxable income. These  carryforwards
will expire between the years 1999 and 2005. The Company also has
foreign  loss carryforwards in five countries as of December  31,
1998,  of  approximately $2,000, which are  available  to  offset
future taxable income, and have carryforward periods ranging from
five  years  to unlimited. The Company has recognized a  deferred
tax  asset  relating to these carryforwards;  however,  based  on
analysis of current information, which indicated that it  is  not
likely  that  such state and foreign losses will be  realized,  a
valuation allowance has been established for the entire amount of
these carryforwards.

12.  Pension Plans and Postretirement Benefits:

Domestic:

      The  Company maintains a qualified noncontributory, defined
benefit  pension  plan  covering the  majority  of  its  domestic
employees.  The  benefits are based on years of service  and  the
employee's highest consecutive five years compensation during the
last  ten  years of service. The Company's funding policy  is  to
contribute  annually an amount that can be deducted  for  federal
income tax purposes. The plan assets are under a single custodian
and  a  single  investment manager. Plan assets are  invested  in
equities,  government  securities and  bonds.  In  addition,  the
Company   has  unfunded  supplemental  executive  pension   plans
providing additional benefits to certain employees.

      The Company also has an unfunded postretirement medical and
nominal  life insurance plan ("postretirement benefits") covering
certain  domestic employees who were eligible as  of  January  1,
1993.  The plan will not be extended to any additional employees.
Retired employees are required to contribute for coverage  as  if
they were active employees.

      The  postretirement transition obligation as of January  1,
1993 of $1,079 is being amortized over twenty years. The discount
rate  used  in  determining the 1998, 1997 and 1996  expense  was
7.25%, 7.75%, and 7.25%, respectively. The health care cost trend
rate was 6.5% declining to 5.0% over a ten year period, remaining
level  thereafter. Assumed health care cost trend  rates  do  not
have  a significant effect on the amounts reported for the health
care  plans. A one-percentage-point change in assumed health care
cost trend rates would not have a material effect on the reported
amounts.

     In 1996 the Company's AHD announced an early retirement plan
for  employees  meeting certain criteria. As  part  of  the  plan
employees  electing early retirement would be eligible  for  post
retirement medical even if they had not met the required  service
and  age  requirements.  The charge for the  special  termination
benefits of $492 was required and is included in the accrued post
retirement benefit cost.
                                                  Postretirement
                               Pension Benefits   Benefits
Change in benefit obligation     1998     1997     1998    1997
Benefit obligation at                                     
  beginning of year            $13,973  $11,691   $3,011  $2,747
Service cost                    1,235    1,192       85       92
Interest cost                   1,035    1,035      167      204
Plan participants'                                        
  contributions                   -        -         23       20
Amendments                         32     272     (533)      -
Actuarial (gain) loss             882    1,703       70      184
Benefits paid                    (530)  (1,920)    (190)   (236)
Benefit obligation at end of                              
  year                         16,627   13,973    2,633    3,011
                                                          
    Change in plan assets                                 
Fair value of plan assets at                              
  beginning of year            12,897   11,276      -        -
Actual return on plan assets    4,051    2,340      -        -
Employer contribution           1,200    1,201      -        -
Benefits paid                   (530)   (1,920)     -         -
Fair value of plan assets at                              
  end of year                  17,618   12,897      -         -
                                                          
Funded status                     991   (1,076)   (2,633) (3,011)
Unrecognized net actuarial                                
  (gain)loss                    (144)    1,750      744      695
Unrecognized net transition                               
  obligation                      155      184      258      809
Unrecognized prior service                                
  cost                          (823)     (936)     -         -
Prepaid (accrued) benefit      $  179   $  (78) $(1,631)  $(1,507)
cost                                
                                                          
                                                  Postretirement
                               Pension Benefits   Benefits
                                 1998     1997     1998    1997
Weighted-average assumptions                              
  as of December 31
Discount rate                  6.75%    7.25%     6.75%   7.25%
Expected   return   on   plan  9.25%    9.00%      N/A     N/A
assets
Rate of compensation increase  4.00%    4.00%      N/A     N/A
                                                          

                                              Postretirement
                      Pension Benefits        Benefits
                       1998    1997    1996   1998  1997    1996
Components of net                                          
 periodic benefit
cost
Service cost          $1,235  $1,192  $1,380  $85    $92   $120
Interest cost         1,035   1,035     991   167    204   146
Expected return on                                         
 plan assets          (1,274) (1,056) (946)    -      -     -
Net amortization of                                        
 transition              30     30       30    18     54    54
obligation
Amortization of                                            
prior                  (81)   (82)     (99)    -      -     -
 service cost
Recognized net                                             
 actuarial              (2)     28      129    21     15    17
(gain)loss
Special termination                                         
 benefits                 -      -        -      -      -   492
Net periodic benefit                                       
 cost                 $  943  $1,147  $1,485  $291  $365   $829
                                                           

       The  projected  benefit  obligation,  accumulated  benefit
obligation,  and  fair  value  of  plan  assets  for  plans  with
accumulated  benefit obligations in excess of  plan  assets  were
$288,  $177 and $0 respectively as of December 31, 1998 and $187,
$104 and $0 as of December 31, 1997.

     The Company and its domestic subsidiaries also have a number
of  defined contribution plans, both qualified and non-qualified,
which allow eligible employees to withhold a fixed percentage  of
their  salary (maximum 15%) and provide for a Company match based
on  service  (maximum 6%). The Company's contributions  to  these
plans were approximately $1,200, $1,200 and $1,300 in 1998,  1997
and 1996, respectively.

Europe:

      Certain of the Company's European subsidiaries have various
defined  benefit  plans, both contributory  and  noncontributory,
which  are  available  to a majority of employees.  Pension  plan
contributions from the Company and the participants are  paid  to
independent  trustees  and invested in fixed  income  and  equity
securities in accordance with local practices.

      Certain  subsidiaries also have direct pension arrangements
with a limited number of employees. These pension commitments are
paid  out  of general assets and the obligations are accrued  but
not prefunded.
                                 
                                    1998         1997
Change in benefit obligation:                 
Benefit obligation at                         
  beginning of year               $20,230      $18,232
Service cost                        2,003      1,264
Interest cost                       1,763      1,142
Plan participants' contribution       234      -
Actuarial (gain)/loss               3,859      2,503
Acquisition                        16,787      -
Benefits paid                       (622)      (594)
Translation adjustment              (620)      (2,317)
Benefit obligation at end                     
  of year                          43,634      20,230
                                              
Change in plan assets:                        
Fair value of plan assets at                  
  beginning of year                11,832      11,738
Actual return on plan assets        1,818      951
Acquisition                        14,700      -
Employer contribution               1,347      1,111
Plan participants' contributions      234      -
Benefits paid                       (548)      (518)
Translation adjustment              (321)      (1,450)
Fair value of plan assets at                  
  end of year                      29,062      11,832
                                              
Funded status                    (14,572)      (8,398)
Unrecognized net actuarial                    
  loss                              2,155      1,625
Unrecognized transitional                     
  obligation                        6,793      1,039
Unrecognized prior service                    
  cost                                777      911
Additional minimum liability       (452)         (582)
 Prepaid (accrued) benefit cost  $(5,299)      $(5,405)


                                   1998       1997
Weighted-average assumptions:              
Discount rate                     6.4%       6.0%
Expected return on plan assets    7.3%       7.0%
Rate of compensation increase     4.5%       3.5%
                                           

                                  1998      1997      1996
Components of net periodic                          
benefit cost:
Service cost                    $2,003    $1,264    $1,302
Interest cost                    1,763     1,142     1,122
Expected return on plan assets  (1,478)     (793)     (774)
Amortization of transition                          
 obligation                         35        102     112
Amortization of prior service                       
 cost                              101        107     118
Recognized net actuarial                            
 loss                               40       -         -
Net periodic benefit cost       $2,464    $1,822    $1,880
                                                    
      The  Company's  Danish subsidiary,  Dumex,  has  a  defined
contribution pension plan for salaried employees. Under the plan,
the  Company contributes a percentage of each salaried employee's
compensation to an account which is administered by an  insurance
company. Pension expense under the plan was approximately $2,059,
$2,204 and $2,250 in 1998, 1997 and 1996, respectively.

13.  Transactions with A. L. Industrier:

                                  Years Ended December 31,
                                   1998      1997     1996

Sales to and commissions received
  from A.L. Industrier           $2,722    $3,107     $3,075

Compensation received for
  management services rendered to
  A.L. Industrier                $  397    $  424     $  464

Inventory purchased from and
  commissions paid to A.L.
  Industrier                     $   32    $   34     $  200

Interest incurred on
 Industrier Note                 $2,937    $  -       $   -

      In  March  1998,  A.L. Industrier purchased  a  convertible
subordinated note issued by the Company in the amount of $67,850.
(See  Note 9.) As of December 31, 1998 and 1997 there was  a  net
current  receivable  (payable) of $(98) and  $742,  respectively,
from A.L. Industrier.

      In 1997 A.L. Industrier purchased Class B common stock from
the Company. (See Note 16.)

      The  Company  and  A.L. Industrier have  an  administrative
service   agreement  whereby  the  Company  provides   management
services  to A.L. Industrier. The agreement provides for  payment
equal  to  the direct and indirect cost of providing the services
subject  to  a  minimum  amount. The agreement  is  automatically
extended  for  one year each January 1, but may be terminated  by
either party upon six months notice.

      In connection with the agreement to purchase Alpharma Oslo,
A.L.   Industrier   retained  the   ownership   of   the   Skoyen
manufacturing facility and administrative offices (not  including
leasehold improvements and manufacturing equipment) and leases it
to the Company. The agreement also permits the Company to use the
Skoyen  facility  as  collateral on existing debt  until  October
1999.  The Company is required to pay all expenses related to the
operation and maintenance of the facility in addition to  nominal
rent.  The lease has an initial 20 year term and is renewable  at
the  then fair rental value at the option of the Company for four
consecutive five year terms.


14.  Contingent Liabilities, Litigation and Commitments:

      The  Company is one of multiple defendants in  80  lawsuits
alleging  personal  injuries and two class  actions  for  medical
monitoring  resulting from the use of phentermine distributed  by
the  Company  and subsequently prescribed for use in  combination
with  fenflurameine or dexfenfluramine manufactured and  sold  by
other defendants (Fen-Phen Lawsuits). None of the plaintiffs have
specified  an amount of monetary damage. Because the Company  has
not  manufactured,  but  only  distributed  phentermine,  it  has
demanded  defense and indemnification from the manufacturers  and
the   insurance  carriers  of  manufacturers  from  whom  it  has
purchased  the  phentermine. The Company has received  a  partial
reimbursement  of litigation costs from one of the manufacturer's
carriers.  The  plaintiff in 34 of these lawsuits has  agreed  to
dismiss the Company without prejudice but such dismissals must be
approved   by   the  Court.  Based  on  an  evaluation   of   the
circumstances as now known, including but not solely limited  to,
1)  the fact that the Company did not manufacture phentermine, 2)
it  had  a diminimus share of the phentermine market and  3)  the
presumption  of  some insurance coverage, the  Company  does  not
expect  that  the  ultimate resolution of  the  current  Fen-Phen
lawsuits will have a material impact on the financial position or
results of operations of the Company.

     Bacitracin zinc, one of the Company's feed additive products
has  been  banned  from  sale in the European  Union  (the  "EU")
effective  July  1, 1999. While no assurance of  success  can  be
given,  the  Company  is actively pursuing initiatives  based  on
scientific  evidence  available for the  product,  to  limit  the
effects  of  this ban. In addition, certain other countries,  not
presently material to the Company's sales of bacitracin zinc have
either followed the EU's ban or are considering such action.  The
existing  governmental actions negatively  impact  the  Company's
business but are not material to the Company's financial position
or  results  of operations. However, an expansion of the  ban  to
further  countries  where  the  Company  has  material  sales  of
bacitracin  based  products could be material  to  the  financial
condition and results of operations of the Company.

      The  Company and its subsidiaries are, from time  to  time,
involved  in other litigation arising out of the ordinary  course
of  business.  It  is the view of management, after  consultation
with  counsel, that the ultimate resolution of all other  pending
suits   should  not  have  a  material  adverse  effect  on   the
consolidated financial position or results of operations  of  the
Company.

      In  connection with a 1991 product line acquisition and the
Decoquinate business purchased in 1997, the Company entered  into
manufacturing  agreements which require the Company  to  purchase
yearly minimum quantities of product on a cost-plus basis. If the
minimum  quantities are not purchased, the Company must reimburse
the  supplier  a  percentage of the fixed costs  related  to  the
unpurchased  quantities.  The  Company  has  purchased   required
minimums in 1998. In the case of the Decoquinate agreement  there
are  contingent  payments which may be required of  either  party
upon  early  termination  of  the  agreement  depending  on   the
circumstances of the termination.

15. Leases:

      Rental  expense under operating leases for 1998,  1997  and
1996  was $6,665, $5,825 and $6,578, respectively. Future minimum
lease  commitments under non-cancelable operating  leases  during
each of the next five years and thereafter are as follows:

     Year Ending December 31,

                    1999          $ 5,280
                    2000            4,159
                    2001            3,868
                    2002            3,435
                    2003            2,907
                    Thereafter      3,865
                                  $23,514

16.  Stockholders' Equity:

      The holders of the Company's Class B Common Stock, (totally
held  by  A. L. Industrier at December 31, 1998) are entitled  to
elect  66 2/3% of the Board of Directors of the Company  and  may
convert  each share of Class B Common Stock held into  one  fully
paid  share of Class A Common Stock. Whenever the holders of  the
Company's common stock are entitled to vote as a combined  class,
each  holder  of Class A and Class B Common Stock is entitled  to
one and four votes, respectively, for each share held.

      The  number  of  authorized shares of  Preferred  Stock  is
500,000; the number of authorized shares of Class A Common  Stock
is  40,000,000; and the number of authorized shares  of  Class  B
Common Stock is 15,000,000.

      On  February  10, 1997, the Company entered  into  a  Stock
Subscription  and  Purchase Agreement with A.L.  Industrier.  The
agreement provided for the sale of 1,273,438 newly issued  shares
of  Class B Common stock for $16.34 per share. The agreement also
provided  for  the issuance of rights to the Class A shareholders
to  purchase  one share of Class A Common stock  for  $16.34  per
share  for every six shares of Class A Common held. The agreement
required  that the Class B shares be purchased at the  same  time
that  the  rights for the Class A Common stock would  expire  and
total consideration for the Class B Common stock was agreed to be
$20,808.

      On  June 26, 1997, the Company and A.L. Industrier  entered
into  Amendment No. 1 to the Subscription and Purchase  Agreement
whereby A.L. Industrier agreed to purchase the 1,273,438 Class  B
shares  on  June 27, 1997. The amendment provided that the  price
paid  by  A.L.  Industrier  would be adjusted  to  recognize  the
benefit  to  the Company of the A.L. Industrier purchase  of  the
stock on June 27, 1997 instead of November 25, 1997 (the date the
Class A rights expired). The sale of stock was completed for cash
on  June 27, 1997. Accordingly, stockholders' equity increased in
1997  by  $20,379 to reflect the issuance of the Class B  shares.
A.L.  Industrier is the beneficial owner of 9,500,000  shares  of
Class B Common stock.

      On September 4, 1997, the Board of Directors distributed to
the  holders  of  its  Class A Common Stock certain  subscription
rights. Each shareholder received one right for every six  shares
of  Class  A Stock held on the record date. Each right,  entitled
the  holder  to  purchase  one  share  of  Class  A  Stock  at  a
subscription  price of $16.34 per share. The rights  were  listed
and  traded  on  the  New York Stock Exchange.  The  rights  were
exercisable at the holder's option ending on November  25,  1997.
As  a  result of the rights offering the Company issued 2,201,837
shares  with net proceeds of $35,978. (Approximately 97%  of  the
rights were exercised.)

      In October 1994, the Company issued approximately 3,600,000
warrants  which  were  a  portion of the consideration  paid  for
Alpharma  Oslo.  The  Company was required  to  account  for  the
acquisition  of Alpharma Oslo as a transfer and exchange  between
companies  under  common control. Accordingly,  the  accounts  of
Alpharma were combined with the Company at historical cost  in  a
manner  similar  to  a  pooling-of-interests  and  the  Company's
financial statements were restated. At the acquisition date,  the
consideration paid for Alpharma Oslo was reflected as a  decrease
to  stockholders' equity net of the estimated value  ascribed  to
the  warrants.  The  estimated value of the warrants  ($6,552  or
$1.82  per  warrant) was added to additional paid in capital  and
deducted from retained earnings.

      On October 21, 1998 the Company announced that its Board of
Directors   had  approved  an  offer  by  the  Company   to   its
warrantholders  to  exchange  all of  the  Company's  outstanding
warrants  for  shares  of its Class A Common  Stock.  There  were
3,596,254  outstanding  warrants, each of which  represented  the
right  to  purchase 1.061 shares of Class A Common  Stock  at  an
exercise  price  of  $20.69  per  share.  The  warrants   expired
January 3, 1999.

      Under the transaction, the Company offered to issue to each
warrantholder  a  number of Class A shares in exchange  for  each
warrant  pursuant to an exchange formula based  upon  the  market
prices  of  the  shares during the offer. The  number  of  shares
issued  for  each  warrant  tendered was  .3678  and,  in  total,
1,230,448  shares were issued in exchange for 3,345,921  warrants
tendered  (93%  of the warrants outstanding). The excess  of  the
fair  market  value of the warrants tendered over  the  estimated
value  in 1994 of $31,117 was added to additional paid-in-capital
and  Class A Common stock and deducted from retained earnings  to
reflect the fair value of the Class A stock issued.

      At  December  31,  1998 the holders of  223,211  untendered
warrants  gave irrevocable notice of their intention to  exercise
their  warrants  by  paying $20.69 per  share.  The  subscription
amount  for  the exercised but unpaid for warrants are  shown  in
stockholders  equity  at  year end  with  the  subscribed  amount
($4,916)  deducted. The subscription proceeds  were  received  in
January  1999.  Less than 1% of the original  warrant  issue  was
untendered or unexercised.

A summary of activity in common and treasury stock follows:

Class A Common Stock Issued                           
                               1998         1997          1996
                                                      
 Balance, January 1        16,118,606   13,813,516    13,699,592
Exercise of stock options                             
 and other                 339,860          63,300    66,637
Exercise of stock rights   -             2,201,837    -
Exercise of warrants, net  2,124              -       -
Stock issued in tender                                
 offer for warrants        1,230,448          -       -
Employee stock purchase                               
 plan                          64,211       39,953        47,287
 Balance, December 31      17,755,249   16,118,606    13,813,516
                                                      
Class B Common Stock Issued                           
                               1998         1997          1996
                                                      
 Balance, January 1        9,500,000     8,226,562    8,226,562
Stock subscription by                                 
 A.L. Industrier                 -       1,273,438         -
 Balance, December 31      9,500,000     9,500,000    8,226,562
                                                      
Treasury Stock (Class A)                              
                               1998         1997          1996
                                                      
 Balance, January 1        275,382         274,786    263,017
Purchases                    1,952             596     11,769
  Balance, December 31     277,334         275,382    274,786


17.  Derivatives and Fair Value of Financial Instruments:

       The   Company  currently  uses  the  following  derivative
financial instruments for purposes other than trading.

Derivative             Use              Purpose

Forward foreign        Occasional       Entered into selectively
exchange contracts                      to sell or buy cash flows
                                        in non-functional
                                        currencies.
Interest rate          Occasional       Entered into selectively
agreements                              to fix interest rate for
                                        specified periods on
                                        variable rate long-term
                                        debt.

      At  December 31, 1998 and 1997, the Company's  had  foreign
currency   contracts  outstanding  with  a  notional  amount   of
approximately  $17,300 and $4,700, respectively. These  contracts
called  for  the exchange of Scandinavian and European currencies
and  in some cases the U.S. Dollar to meet commitments in or sell
cash   flows   generated   in  non-functional   currencies.   All
outstanding  contracts  will expire in 1999  and  the  unrealized
gains and losses are not material.

     In November 1995, the Company entered into two interest rate
swap agreements with two members of the consortium of banks which
were  parties  to  the Revolving Credit Facility  to  reduce  the
impact  of changes in interest rates on a portion of its floating
rate  long-term debt. The swap agreements fixed the interest rate
at  5.655%  plus  1.25%  for a portion of  the  revolving  credit
facility ($54,600) through October 1998. (See Note 9.)

      Counterparties to derivative agreements are major financial
institutions.  Management believes the risk of  incurring  losses
related to credit risk is remote.

      The  carrying  amount reported in the consolidated  balance
sheets  for  cash  and  cash  equivalents,  accounts  receivable,
accounts  payable  and  short-term debt approximates  fair  value
because  of  the  immediate  or  short-term  maturity  of   these
financial instruments. The carrying amount reported for long-term
debt other than the Convertible Subordinated Notes issued in 1998
approximates  fair  value because a significant  portion  of  the
underlying debt is at variable rates and reprices frequently. The
estimated  fair  value based on the bid price of the  Convertible
Subordinated Notes at December 31, 1998 was $264,928 compared  to
a carrying amount of $192,850.

18.  Stock Options and Employee Stock Purchase Plan:

       Under  the  Company's  1997  Incentive  Stock  Option  and
Appreciation  Right  Plan (the "Plan"),  the  Company  may  grant
options  to  key employees to purchase shares of Class  A  Common
Stock.  An  increase from 3,500,000 to 4,500,000 in  the  maximum
number of Class A shares available for grant was approved by  the
shareholders  in May 1998. In addition, the Company  has  a  Non-
Employee  Director  Option  Plan  (the  "Director  Plan")   which
provides for the issue of up to 150,000 shares of Class A  Common
stock.  The exercise price of options granted under the Plan  may
not  be  less than 100% of the fair market value of the  Class  A
Common  Stock  on the date of the grant. Options  granted  expire
from  three to ten years after the grant date. Generally, options
are  exercisable in installments of 25% beginning one  year  from
date  of grant. The Plan permits a cash appreciation right to  be
granted to certain employees. Included in options outstanding  at
December 31, 1998 are options to purchase 12,250 shares with cash
appreciation rights, 4,338 of which are exercisable. If an option
holder   ceases  to  be  an  employee  of  the  Company  or   its
subsidiaries for any reason prior to vesting of any options,  all
options  which  are  not vested at the date  of  termination  are
forfeited.  As  of  December  31,  1998  and  1997,  options  for
1,663,799 and 1,572,327 shares, respectively, were available  for
future grant.

The table below summarizes the activity of the Plan:

                                   Weighted              Weighted
                        Options    Average               Average
                          Out-     Exercise   Options    Exercise
                        standing    Price   Exercisabl    Price
                                                 e
                                                         
Balance at                                               
 December 31, 1995      896,775    $16.85    383,278     $15.49
  Granted in 1996        44,000    $22.18                
  Canceled in 1996     (36,000)    $18.01                
  Exercised in 1996    (66,437)    $14.21                
                                                         
Balance at                                               
 December 31, 1996      838,338    $17.30    444,982     $16.42
  Granted in 1997(1)    643,075    $16.65                
  Canceled in 1997     (107,347)   $17.76                
  Exercised in 1997    (63,100)    $12.22                
                                                         
Balance at                                               
 December 31, 1997     1,310,966   $17.20    462,765     $17.29
  Granted in 1998(2)    989,500    $25.14                
  Canceled in 1998     (80,972)    $18.34                
  Exercised in 1998    (344,160)   $17.01                
                                                         
Balance at                                               
 December 31, 1998     1,875,334   $21.38    854,514     $23.09
                                                         

(1)  Included  in options outstanding at December 31,  1997  were
     161,100 options granted in 1997 with exercise prices in excess of
     the fair market value of Class A stock on the date of grant. The
     weighted average exercise price of these options is $22.24. The
     weighted average exercise price of the remaining 481,975 options
     granted in 1997 is $14.76.
     
(2)  Included  in options outstanding at December 31,  1998  were
     383,900 options granted in 1998 with exercise prices in excess of
     the fair market value of Class A stock on the date of grant. The
     weighted average exercise price of these options is $30.09. The
     weighted average exercise price of the remaining 605,600 options
     granted in 1998 is $22.01.
     
      The  Company has adopted the disclosure only provisions  of
SFAS   No.   123.  If  the  Company  had  elected  to   recognize
compensation  costs in accordance with SFAS No. 123 the  reported
net  income  (loss)  would have been reduced  to  the  pro  forma
amounts  for the years ended December 31, 1998, 1997 and 1996  as
indicated below:

                                    1998       1997       1996
Net income (loss):                                     
  As reported                     $24,211    $17,408   $(11,461)
  Proforma                        $22,427    $16,328   $(12,028)
                                                       
Basic earnings (loss) per share:                       
  As reported                     $   .95    $  .77     $  (.53)
  Proforma                        $   .88    $  .72     $  (.55)
                                                       
Diluted earnings (loss) per                            
share:
  As reported                     $   .92    $   .76    $  (.53)
  Proforma                        $   .85    $   .72    $  (.55)

      The  Company estimated the fair value, as of  the  date  of
grant, of options outstanding in the plan using the Black-Scholes
option pricing model with the following assumptions:

                                      1998      1997     1996

     Expected life (years)              1-5      4-5      4-5
     Expected future dividend
          yield (average)             .81%     1.25%      .85%
     Expected volatility              0.35      0.40     0.40

      The  risk-free interest rates for 1998, 1997 and 1996  were
based   upon   U.S.  Treasury  instrument  rates  with   maturity
approximating  the expected term. The weighted  average  interest
rate  in  1998,  1997 and 1996 amounted to 5.6%, 6.4%  and  6.0%,
respectively. The weighted average fair value of options  granted
during  the  years ended December 31, 1998, 1997, and  1996  with
exercise  prices equal to fair market value on the date of  grant
were  $8.36, $5.53 and $7.90, respectively. The weighted  average
fair value of options granted during the years ended December 31,
1998 and 1997 with exercise prices in excess of fair market value
at  the  date  of  grant were $1.26 and $3.27.  No  options  with
exercise  prices in excess of fair market value at  the  date  of
grant were granted in 1996.
      The  following  table  summarizes information  about  stock
options outstanding at December 31, 1998:

                    OPTIONS OUTSTANDING      OPTIONS EXERCISABLE
                                   Weight-                Weight-
                                      ed                    ed
                 Number   Weighted Average                Average
                Outstand- Average   Exer-      Number      Exer-
   Range of      ing at   Remain-    cise   Exercisable    cise
   Exercise     12/31/98  ing Life  Price   at 12/31/98    Price
    Prices
                                                          
$8.75 - $18.75   641,484    4.0    $15.39     346,850     $15.89
$19.50 - $22.13  674,350    6.1    $21.89      72,250     $20.99
$22.20 - $30.09  559,500    2.6    $27.64     435,414     $29.17
                                          
$8.75 - $30.09 1,875,334   4.3    $21.38     854,514     $23.09
                                                          

      The  Company has an Employee Stock Purchase Plan  by  which
eligible   employees  of  the  Company  may   authorize   payroll
deductions  up  to  4% of their regular base salary  to  purchase
shares  of  Class  A Common Stock at the fair market  value.  The
Company   matches   these  contributions   with   an   additional
contribution equal to 25% of the employee's contribution.  As  of
the second quarter of 1998 the Company increased the match to 50%
of  the employee contributions. Shares are issued on the last day
of each calendar quarter. The Company's contributions to the plan
were  approximately $513, $137 and $163 in 1998, 1997  and  1996,
respectively.


19.  Supplemental Data:
                                       Years Ended December 31,
                                     1998      1997      1996
Research and development
 expense                         $36,034*     $32,068  $34,269
Depreciation   expense           $22,941      $21,591  $22,751
Amortization  expense            $15,179      $ 9,317  $ 8,752
Interest cost incurred           $26,357      $18,988  $20,549

Other income (expense), net:
      Interest income            $   757      $    519   $529
     Foreign exchange
       losses, net                  (895)        (726)    (195)
       Other,  net                  (262)        (360)    (504)
                                 $  (400)     $  (567) $  (170)


*  Includes write-off of purchased in-process R&D related to  Cox
acquisition. (See Note 4.)

Supplemental cash flow information:

                                     1998      1997      1996
   Cash paid for interest
    (net of amount capitalized)    $25,078   $19,193   $20,250
   Cash paid for income taxes (net
     of refunds)                   $10,175   $   221   $ 9,182

   Supplemental schedule of
     noncash investing and
     financing activities:

   Fair value of assets acquired $255,121   $44,029       -
   Liabilities                     33,950        -         -
   Cash paid                      221,171     44,029      -
   Less cash acquired                 502        -         -

   Net cash paid                 $220,669   $44,029    $  -


20.   Information  Concerning Business  Segments  and  Geographic
Operations:

      In  1998  the  Company  adopted  SFAS  131.  The  Company's
reportable   segments   are  the  five  decentralized   divisions
described  in Note 1, (i.e. IPD, FCD, USPD, AHD, and AAHD).  Each
division has a president and operates in distinct business and/or
geographic  area. Prior years segment data has been  restated  to
present the required information.

      The  accounting policies of the segments are generally  the
same as those described in the "Summary of Significant Accounting
Policies."   Segment   data   includes  immaterial   intersegment
revenues.  No customer accounts for more than 10% of consolidated
revenues.

      The  operations  of  each segment are  evaluated  based  on
earnings  before interest and taxes (operating income). Corporate
expenses  and  certain  other expenses  or  income  not  directly
attributable  to  the  segments are not  allocated.  Eliminations
include  intersegment sales. Geographic revenues represent  sales
to  third parties by country in which the selling legal entity is
domiciled.  Operating  assets directly attributable  to  business
segments  are  included  in  identifiable  assets  (i.e.  sum  of
accounts   receivable,  inventories,  net  property,  plant   and
equipment and net intangible assets). Cash, prepaid expenses, and
other  corporate  and  non  allocated  assets  are  included   in
unallocated.  For geographic reporting long lived assets  include
net property, plant and equipment and net intangibles.

                                                    Depre-    
                                                    ciation   
                                         Identi-    and       Captial
                    Total     Operating  fiable     Amorti-   Expendi-
                    Revenue   Income(a)  Assets     zation    tures
1998                                                          
Business segments:                                            
 IPD                $193,106  $ 7,971(b) $379,217   $11,460   $14,913
 USPD                178,785   11,061    209,243      8,063     6,807
 FCD                  53,048   17,526     85,409      5,301     3,643
 AHD                 166,343   37,800    151,000      8,578     2,864
 AAHD                 18,963    3,623     19,850      1,044       815
 Unallocated            -     (12,695)    64,217      3,674     2,336
 Eliminations        (5,661)    (290)       -          -         -
                    $604,584  $64,996    $908,936   $38,120   $31,378
                                                              
1997                                                          
Business segments:                                            
 IPD                $134,075  $10,975    $134,679   $ 6,525   $16,430
 USPD                155,381    4,057    211,096      8,355     4,703
 FCD                  38,664    9,442     74,672      4,634     1,621
 AHD                 158,428   32,023    139,367      7,279     3,028
 AAHD                 15,283    2,764     19,494      1,110       151
 Unallocated            -     (12,225)    52,558      3,005     1,850
 Eliminations        (1,543)     (138)      -         -          -
                    $500,288  $46,898    $631,866   $30,908   $27,783
                                                              
1996                                                          
Business segments:                                            
 IPD                $141,976   $2,521    $137,051   $ 7,638   $ 5,985
 USPD                152,317  (19,241)   206,310      9,493     3,727
 FCD                  36,032    8,538     68,361      4,691     4,931
 AHD                 146,005   20,993    119,001      6,631     6,778
 AAHD                 12,241    (302)     20,121        721     6,082
 Unallocated            -     (8,268)     62,563      2,329     3,371
 Eliminations        (2,387)     (321)      -         -          -
                    $486,184   $3,920    $613,407   $31,503   $30,874


(a)  1998  operating income includes one-time charges related  to
     the acquisition of Cox Pharmaceuticals and 1996 operating income
     includes  charges for management actions. The  segments  are
     impacted as follows:

                                     1998          1996
                                               
        IPD                       $3,600          $8,051
        USPD                         -             5,738
        AHD                          -            4,542
        Unallocated                  -               469
                                  $3,600         $18,800
                                               

(b) Goodwill  amortization in IPD related to the Cox  acquisition
    in 1998 amounted to approximately $3,000.

Geographic
                                                    Long-lived
                          Revenues             Identifiable Assets
                  1998      1997     1996     1998    1997      1996
                                                              
United States   $338,487  $294,772 $280,277 $196,745 $205,188  $190,111
Norway           86,019    91,760   89,329  85,719     86,384    87,400
Denmark          52,565    53,624   55,867  57,144     55,795    48,626
United Kingdom   73,258     8,961    6,680  196,669     -         -
Other foreign                                                 
 (primarily                                                   
 Europe)         54,255    51,171   54,031    23,564    2,009     3,584
               $604,584  $500,288 $486,184  $559,841 $349,376  $329,721


21.  Selected Quarterly Financial Data (unaudited):

                                    Quarter                       
                                                                Total
                     First      Second     Third     Fourth     Year
                                                              
1998                                                          
Total revenue       $126,562  $139,513    $164,337  $174,172  $604,584
                                                              
Gross profit         $53,417   $59,162     $66,695  $73,986   $253,260
                                                              
Net income          $5,402    $2,305(a)     $7,551   $8,953   $24,211
                                                              
Earnings per                                                  
common share(b)
                                                              
 Basic                  $.21     $.09         $.30     $.34      $.95
 Diluted                $.21     $.09         $.28     $.32      $.92
                                                              
1997                                                          
Total revenue       $121,424  $118,986    $125,240  $134,638  $500,288
                                                              
Gross profit         $48,122   $51,440     $51,559   $59,932  $211,053
                                                              
Net income            $2,260    $3,470      $5,257    $6,421   $17,408
                                                              
Earnings per                                                  
  common share(c)
                                                              
 Basic                  $.10      $.16        $.23      $.27      $.77
                                                              
 Diluted                $.10      $.16        $.22      $.26      $.76
                                                              


(a) The  second  quarter  of  1998 results include  non-recurring
    charges  of  $3,600 pre-tax ($3,130 after tax)  or  $.12  per
    share related to the acquisition of Cox Pharmaceuticals. (See
    Note 4.)

(b) The  sum of the earnings per share for the four quarters  in
    1998  does  not equal the total for the year due  to  higher
    dilution  in the third and fourth quarter calculations  from
    the  effect  of the convertible debt using the  if-converted
    method. The convertible debt was anti-dilutive for the  year
    and therefore not included in the full year calculation.

(c) The  sum of the earnings per share for the four quarters  in
    1997 does not equal the total for the year due to higher net
    income  recognized in the third and fourth quarters combined
    with a higher number of shares outstanding during the second
    half  of  the year which does not have the same proportional
    effect on the total year calculation.


22.  Subsequent Events

New bank credit facility:

     In January 1999, the Company signed a $300,000 credit
agreement with a consortium of banks. (See Note 9.)

Merger of Wade Jones distribution business:

In January 1999, the AHD contributed the distribution business of its
Wade Jones Company ("WJ") into a partnership with G&M Animal
Health Distributors and T&H Distributors. The WJ distribution
business which was merged had annual sales of approximately
$30,000 and assets (primarily accounts receivable and inventory)
of less than $10,000. WJ will own 50% of the new entity, WYNCO
LLC ("WYNCO").

    WYNCO is a regional distributor of animal health products and
services primarily to integrated poultry and swine producers and
independent dealers operating in the Central South West and
Eastern regions of the U.S. WYNCO will be the exclusive
distributor for the Company's animal health products.
Manufacturing and premixing operations at Wade Jones will remain
part of the Company.

Strategic alliance with Ascent Pediatrics:

    On  February  4,  1999,  the Company  entered  into  a  loan
agreement  with Ascent Pediatrics, Inc. ("Ascent")  under  which
the Company will provide up to $40,000 in loans to Ascent to  be
evidenced  by  7 1/2% convertible subordinated  notes  due  2005.
Pursuant to the loan agreement, up to $12,000 of the proceeds of
the  loans  can  be  used for general corporate  purposes,  with
$28,000  of  proceeds  reserved for  projects  and  acquisitions
intended to enhance growth of Ascent.
    
     In addition, Ascent and the Company have entered into an
agreement under which the Company will have the option during the
first half of 2002 to acquire all of the then outstanding shares
of Ascent for cash at a price to be determined by a formula based
on Ascent's operating income.

     The  transactions are subject to the approval  of  Ascent's
stockholders at a meeting expected to be held during the  second
quarter of 1999.