U.S. Securities and Exchange Commission
                              Washington D.C. 20549

                                   FORM 10-QSB
      (Mark One)

      [x]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
            THE SECURITIES EXCHANGE ACT OF 1934

      For the quarterly period ended: October 31, 1996
                                      ----------------
 
      [ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
            THE EXCHANGE ACT


      Commission File number: 0-19879
                              -------

                         BioSpecifics Technologies Corp.
                         -------------------------------
        (Exact name of Small Business Issuer as Specified in Its Charter)

           Delaware                                      11-3054851
           --------                                      ----------
   (State of Incorporation)                      (IRS Employer I.D. Number)

                                  35 Wilbur St.
                               Lynbrook, NY 11563
                               ------------------
                    (Address of principal executive offices)

                                 (516) 593-7000
                                 --------------
                (Issuer's telephone number, including area code)

Check  whether the issuer:  (1) has filed all reports  required by Section 13 or
15(d) of the Securities  Exchange Act of 1934 during the preceding 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No
    ---      --- 


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

      State the number of shares  outstanding of each of the issuer's classes of
common equity,  as of the latest  practicable  date:  4,883,396 shares of Common
                                                      --------------------------
Stock, $0.001 par value as of December 1, 1996.
-----------------------------------------------




                                  Page 1 of 12

<PAGE>

                                      INDEX
                                      -----

                                                                          Page
                                                                          ----

PART I - FINANCIAL INFORMATION                                               3


Item 1.  Financial Statements                                                3


Consolidated Financial Statements:


   Balance Sheets as of October 31, 1996 (unaudited) and January 31, 1996    3


   Statements of Operations for the Three and Nine Months Ended October
   31, 1996 and 1995 (unaudited)                                             4


   Statements of Cash Flows for the Nine Months Ended October 31, 1996
   and 1995 (unaudited)                                                      5


   Notes to Consolidated Interim Financial Statements (unaudited)            6


Item 2.  Management's Discussion and Analysis of Financial Condition and
Results of Operations                                                        8

SIGNATURES                                                                  12























                                       2

<PAGE>
                          PART I. FINANCIAL INFORMATION
                          Item 1. Financial Statements

BioSpecifics Technologies Corp. and Subsidiaries
Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                        (Unaudited)
                                                        October 31,    January 31,
                                                               1996           1996
                                                        -----------    -----------
<S>                                                     <C>            <C>  
ASSETS
Cash and cash equivalents                               $ 3,469,244    $ 2,288,316
Marketable securities                                     2,058,077      2,395,534
Accounts receivable                                       1,067,195      1,186,526
Inventory                                                 1,398,971      1,435,767
Prepaid expenses & other current assets                     263,813        340,616
                                                        -----------    -----------
   Total current assets                                   8,257,300      7,646,759

Property,  plant, and equipment - net                       870,504        981,082
Other assets                                                587,510        639,046
                                                        -----------    -----------

TOTAL ASSETS                                            $ 9,715,314    $ 9,266,887
                                                        ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses                   $   459,401    $   993,577
Notes payable to related parties                             11,275         10,570
Income taxes payable                                        205,440        140,090
Deferred revenue                                            175,000        130,000
                                                        -----------    -----------
     Total current liabilities                              851,116      1,274,237

Minority interest in subsidiaries                           170,708        148,458

STOCKHOLDERS' EQUITY
Series A Preferred stock, $.50 par value; 700,000
  shares authorized; none outstanding                          --             --
Common stock, $.001 par value; 10,000,000 shares
  authorized; 4,883,396 shares issued and outstanding
  at October 31, 1996 and January 31, 1996                    4,883          4,883
Additional paid-in capital                                3,586,145      3,556,145
Retained earnings                                         5,284,972      4,465,674
                                                        -----------    -----------
                                                          8,876,000      8,026,702
Less: Treasury stock - 10,000 shares at cost               (182,510)      (182,510)
                                                        -----------    -----------
    Stockholders' equity - net                            8,693,490      7,844,192

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              $ 9,715,314    $ 9,266,887
                                                        ===========    ===========

</TABLE>

See accompanying notes to consolidated
financial statements.




                                       3

<PAGE>




Biospecifics Technologies Corp., and Subsidiaries
Consolidated Statements of Operations  

<TABLE>
<CAPTION>
                                                             (Unaudited)                  (Unaudited)
                                                         Three months ended            Nine months ended
                                                             October 31,                  October 31,
                                                            1996           1995           1996           1995
                                                     -----------    -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>            <C>   
Revenues:
   Net sales                                         $ 1,098,056    $   520,955    $ 3,098,717    $ 1,671,090
   Royalties                                             333,622        506,372      1,530,763      1,351,600
   License fees                                             --           75,000         20,000         75,000
                                                     -----------    -----------    -----------    -----------
Total Revenues                                         1,431,678      1,102,327      4,649,480      3,097,690
                                                     -----------    -----------    -----------    -----------

Costs & Expenses:
   Cost of sales                                         444,386        187,405      1,296,056        774,892
   Selling, general and administrative                   423,577        346,572      1,147,126      1,175,887
   Research and development                              322,137        499,510      1,084,724      1,438,459
                                                     -----------    -----------    -----------    -----------
Total Costs and Expenses                               1,190,100      1,033,487      3,527,906      3,389,238
                                                     -----------    -----------    -----------    -----------

Income (loss) from operations                            241,578         68,840      1,121,574       (291,548)

Other income (expense) - net
  Investment & other income                              118,998         75,382        190,502        354,104
  Interest expense                                          (892)        (5,276)        (4,178)       (13,221)
                                                     -----------    -----------    -----------    -----------
Total other income - net                                 118,106         70,106        186,324        340,883
                                                     -----------    -----------    -----------    -----------

Income before provision for income taxes                 359,684        138,946      1,307,898         49,335
   Provision for income taxes                           (110,140)       (93,645)      (466,350)      (119,590)
                                                     -----------    -----------    -----------    -----------
Income (loss) before minority interest                   249,544         45,301        841,548        (70,255)
   Minority interest in net income of subsidiaries         3,125          2,080         22,250             60
                                                     -----------    -----------    -----------    -----------
Net income (loss)                                    $   246,419    $    43,221    $   819,298    ($   70,315)
                                                     ===========    ===========    ===========    ===========


NET INCOME (LOSS) PER COMMON SHARE                   $       .05    $      0.01    $      0.17    ($     0.01)
                                                     ===========    ===========    ===========    ===========


Weighted average number of shares used in
computing net income (loss) per share:                 4,930,000      4,929,599      4,930,000      4,922,328
                                                     ===========    ===========    ===========    ===========

</TABLE>





See accompanying notes to consolidated
financial statements









                                                     4

<PAGE>

BioSpecifics Technologies Corp. and Subsidiaries  
Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                       (Unaudited)
                                                                    Nine months ended
                                                                        October 31,
                                                                     1996          1995
                                                              -----------    -----------
<S>                                                           <C>            <C>  
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                           $   819,298    ($   70,315)
  Adjustments to reconcile net income (loss)
  to cash  provided by/(used by)
  operating activities:
    depreciation                                                  142,907        154,800
    (gain) loss on marketable securities - net                     12,623       (115,992)
    minority interest in income of subsidiaries                    22,250             60
    issuance of stock options                                      30,000         20,000
  Changes in operating assets & liabilities:
    decrease in accounts receivable                               119,331        868,354
    proceeds from sales of marketable securities                  780,413        976,258
    purchases of marketable securities                           (455,579)      (942,260)
    (increase) decrease in inventory                               36,796       (165,625)
    (increase) decrease in prepaid and other current assets        76,803       (200,320)
    (increase) decrease in other assets                            51,536       (217,822)
    decrease in accounts payable & accruals                      (534,177)      (128,639)
    increase in deferred revenues                                  45,000         60,000
    increase in income taxes payable                               65,350         18,968
                                                              -----------    -----------
      Net cash provided by (used in) operating activities       1,212,551        257,467
                                                              -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for plant, property and equipment                  (32,328)       (50,703)
                                                              -----------    -----------
      Net cash (used in) investing activities                     (32,328)       (50,703)
                                                              -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from redemption of long term securities                   --          460,000
  Proceeds from (payments of) notes with related parties              705           --
  Exercise of stock options                                          --            6,150
                                                              -----------    -----------
      Net cash provided by financing activities                       705        466,150
                                                              -----------    -----------

INCREASE IN CASH AND CASH EQUIVALENTS                           1,180,928        672,914

  CASH AND EQUIVALENTS:
  Beginning of Period                                           2,288,316      1,438,368
                                                              -----------    -----------
  End of Period                                               $ 3,469,244    $ 2,111,282
                                                              ===========    ===========


SUPPLEMENTAL DISCLOSURE
  Cash paid during period for interest                        $     4,179    $    13,178
                                                              ===========    ===========
  Cash paid during period for income taxes                    $   378,000    $   194,000
                                                              ===========    ===========

</TABLE>

See accompanying notes to consolidated
financial statements

                                       5

<PAGE>

                BIOSPECIFICS TECHNOLOGIES CORP. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                OCTOBER 31, 1996
                                   (UNAUDITED)


1.   DESCRIPTION  OF  BUSINESS  AND  BASIS  OF   PRESENTATION  -  BioSpecifics
Technologies  Corp.  (the  "Company")  serves as a holding company for Advance
Biofactures  Corporation (ABC-New York), Advance Biofactures of Curacao,  N.V.
and subsidiaries  (ABC-Curacao),  and  Biospecifics  Pharma GmbH (Bio Pharma),
Germany, which was established in November 1995.

The Company, through its subsidiaries,  engages in the business of producing and
licensing  for sale by  others  a U.S.  Food  and  Drug  Administration  ("FDA")
approved enzyme named  Collagenase  ABC, which is used  principally as a topical
debridement  treatment  for dermal  ulcers;  and  researching,   developing  and
clinically  testing  additional   products  derived  from  Collagenase  ABC  for
potential use as pharmaceuticals.

The  Company  currently  derives  substantially  all of its  revenues  through a
license agreement with a major US pharmaceutical  company,  Knoll Pharmaceutical
Company  ("KPC").  Since February 1, 1995,  sales of  Collagenase  ABC have been
principally  to KPC,  which markets it as an ointment in the United States under
its trademarked name  "Collagenase  Santyl(R)".  The license  agreement with KPC
expires in 2003. In the event that KPC were to cancel the license  agreement for
cause,  which the Company believes is unlikely,  the financial  condition of the
Company would be materially  adversely  impacted unless the Company were to find
another licensee in the United States.

The  Company  has  undertaken  efforts to secure  licensees  outside  the United
States.  The Company has licensing  agreements with foreign  companies to market
collagenase,  either as a topical  product or an  injectable,  when permitted by
local   governmental   authorities.   The  Company  sells   Collagenase  ABC  to
pharmaceutical  companies  in Latin  America  and  India,  in  relatively  small
amounts.



















                                       6

<PAGE>



2. INTERIM FINANCIAL STATEMENTS - In the opinion of management, the accompanying
consolidated  financial  statements  of  the  Company  reflect  all  adjustments
necessary to present fairly,  in all material  respects,  the Company's  balance
sheet as of October 31, 1996,  the results of operations  for the three and nine
months ended October 31, 1996 and 1995, and cash flows for the nine months ended
October 31, 1996 and 1995. The results of operations for interim periods are not
necessarily  indicative of the results to be expected for an entire fiscal year,
and the results for the current interim period are not necessarily indicative of
results  to be  expected  in other  interim  periods.  These  interim  financial
statements  should be read in conjunction with the Company's Form 10-KSB for the
fiscal year ended January 31, 1996.

3.  NET  INCOME  PER  SHARE -  Net Income per share is  computed by dividing net
income available to common stockholders by the weighted average number of common
shares  outstanding  during the period. The dilutive effect of outstanding stock
options and  warrants  was  included in the  calculation  for the three and nine
months ended  October 31,  1996.  Net loss per share is computed by dividing net
loss by the weighted  average  number of common  shares  outstanding  during the
period.  Options  and  warrants  are not  included in any period when the effect
would be anti-dilutive.

4.  ACCOUNTING  FOR STOCK BASED  COMPENSATION  - In October 1995,  The Financial
Accounting  Standards  Board ("FASB") issued  Statement of Financial  Accounting
Standards No. 123,  "Accounting for Stock-Based  Compensation"  (SFAS 123). SFAS
123  establishes  financial  accounting and reporting  standards for stock-based
employee  compensation  plans. SFAS 123 also applies to transactions in which an
entity  issues  its  equity  instruments  to  acquire  goods  or  services  from
non-employees.  SFAS 123  encourages,  but does not require,  a fair value based
method of accounting for employee  stock options or similar equity  instruments.
Entities  electing  not to  adopt  a  fair  value  method  must  make  pro-forma
disclosures of net income and earnings per share as if a fair value based method
had been  applied.  SFAS 123 requires a fair value  method for stock  options or
similar equity  instruments  issued to non employees.  SFAS 123 is effective for
fiscal year 1997.  The  Company  does not expect that it will adopt a fair value
based  method and  therefore  does not expect the  adoption  of SFAS 123 to have
material impact on its financial position or results of operations.


















                                       7

<PAGE>


Item 2:  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS
---------------------

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
--------------------------------------------------------------------------------

The Company  cautions  readers that  important  factors may affect the Company's
actual  results  and  could  cause  such  results  to  differ   materially  from
forward-looking  statements  made by or on behalf of the  Company.  Such factors
include,  but are not  limited to,  changing  market  conditions,  the impact of
competitive  products and pricing,  the timely development,  approval by the FDA
and foreign health authorities, and market acceptance, of the Company's products
in development, the Company's dependence on KPC, and other risks detailed herein
and in other  filings  the  Company  makes  with  the  Securities  and  Exchange
Commission.

The Company  incorporates by reference the Management's  Discussion and Analysis
of Financial  Condition and Results of  Operations  set forth in its Form 10-KSB
for the fiscal year ended January 31, 1996.

                  Three months ended October 31, 1996 and 1995
                  --------------------------------------------

NET SALES - Net sales for the three months ended  October 31, 1996 and 1995 were
$1,098,056 and $520,955 respectively,  representing a $577,101 or 111% increase.
The increase was primarily due to higher sales of  collagenase  to KPC in the US
and to a lesser extent to a pharmaceutical company in Latin America.

ROYALTIES - Royalties  for the three months ended October 31, 1996 and 1995 were
$333,622 and $506,372  respectively,  representing  a $172,750 or 34%  decrease.
Sales of  Collagenase  Santyl(R)  in the US declined  during the  quarter  ended
October 31, 1996 due to unusually high Collagenase  Santyl(R) sales in the prior
quarter, ended July 31, 1996, which the Company believes,  resulted from advance
buying by KPC's  customers in  anticipation  of a price  increase in Collagenase
Santyl(R), as reported to the Company by KPC.

LICENSE FEES - The Company earned a license fee during the quarter ended October
31, 1995 due to a product distribution agreement with a European  pharmaceutical
company.  There were no license fees earned during the quarter ended October 31,
1996.











                                       8

<PAGE>


COST OF SALES - Cost of sales for the three  months  ended  October 31, 1996 and
1995 were  $444,386  and  $187,405  respectively,  representing  an  increase of
$256,981 or 137%, due to higher net sales. Cost of sales in the 1995 period were
reduced by the waiver of an FDA fee which had been previously accrued.

SELLING,  GENERAL  AND  ADMINISTRATIVE  - Selling,  general  and  administrative
("SG&A")  expenses  for the three  months  ended  October 31, 1996 and 1995 were
$423,577 and $346,572 respectively,  representing a $77,005 or 22% increase. The
increase  was due to  higher  professional  fees  incurred  in the  more  recent
quarter, and the SG&A expenses of the Company's subsidiary Bio Pharma, which did
not exist during the second quarter of 1995.

RESEARCH AND  DEVELOPMENT - Research and  development  ("R&D")  expenses for the
three  months  ended  October  31,  1996 and 1995  were  $322,137  and  $499,510
respectively,  representing  a decrease of $177,373 or 36%. The decrease was due
to  completion  of  most  R&D  activities  in  Europe  for  Collagenase  ABC and
Nucleolysin(R)  in  1995.  Most R&D  expenses  in the more  recent  period  were
incurred in the United States, for clinical trials of injectable collagenase for
Peyronie's disease,  keloids, and Dupuytren's contracture,  and for pre-clinical
research of other uses of collagenase.

OTHER INCOME - NET - Other  income - net for the three months ended  October 31,
1996 and 1995 was $118,106 and $70,106 respectively. The increase of $48,000 was
due  primarily  to  realized  and  unrealized  gains  on  fixed  income  trading
securities  in the 1996  period,  due to  declining  interest  rates  during the
period.

PROVISION FOR INCOME TAXES - The provision for income taxes for the three months
ended  October  31, 1996 and 1995 was  $110,140  and  $93,645  respectively,  an
increase  of  $16,495.  The  increase  was due to  higher  profitability  of the
Company's  Curacao,  Netherlands  Antilles  subsidiary,  primarily the result of
higher sales of collagenase. The principal reason for the difference between the
United States Federal statutory tax rate of 34% and the Company's  effective tax
rate is the  additional  provision  required  for state  income  taxes where the
Company's US subsidiary is domiciled, offset by lower tax rates in Curacao.




















                                       9

<PAGE>


                   Nine months ended October 31, 1996 and 1995
                   -------------------------------------------

NET SALES - Net sales for the nine months  ended  October 31, 1996 and 1995 were
$3,098,717  and  $1,671,090  respectively,  representing  a  $1,427,627  or  85%
increase.  The increase in net sales was primarily due to  significantly  higher
sales of  collagenase  to KPC in the first nine  months of the  October 31, 1996
fiscal period versus 1995. Net sales in the 1995 period were negatively impacted
by KPC's  implementation  of a "just in time" inventory policy which resulted in
lower  purchases of  collagenase.  Also,  the Company's  Latin America and India
pharmaceutical customers purchased more collagenase in the 1996 period.

ROYALTIES - Royalties  for the nine months ended  October 31, 1996 and 1995 were
$1,530,763 and $1,351,600 respectively, representing a $179,163 or 13% increase,
due to higher sales of Collagenase  Santyl(R) in the United States,  as reported
to the Company by KPC.

LICENSE  FEES - The Company  earned part of the advance  payment  from a product
distribution license agreement with a German  pharmaceutical  company during the
nine months ended October 31, 1996. A portion of the advance payment relating to
this  agreement  was added to  deferred  revenues  and will be earned as certain
milestones  are  reached.  During the nine months ended  October 31,  1995,  the
Company  earned a  $75,000  license  fee  from a  product  distribution  license
agreement with another licensee in Europe.

COST OF SALES - Cost of sales for the nine  months  ended  October  31, 1996 and
1995 were  $1,296,056  and $774,892  respectively,  representing  an increase of
$521,164 or 67% due to higher net sales as described above. Cost of sales in the
1995 period were  reduced by the waiver of an FDA fee which had been  previously
accrued.

SELLING,  GENERAL AND  ADMINISTRATIVE  - SG&A expenses for the nine months ended
October  31,  1996  and  1995  were  $1,147,126  and  $1,175,887   respectively,
representing  a  $28,761  or  2%  decrease.   The  decrease  was  due  to  lower
professional  fees incurred in the more recent nine months,  the effect of which
was  partially  offset by the SG&A  expenses  of the  Company's  subsidiary  Bio
Pharma, which did not exist during the first nine months of 1995.


















                                       10

<PAGE>


RESEARCH AND DEVELOPMENT - Research and development expenses for the nine months
ended October 31, 1996 and 1995 were  $1,084,724  and  $1,438,459  respectively,
representing  a decrease of $353,735 or 25%. The decrease was due to  completion
of most R&D activities in Europe for Collagenase ABC and Nucleolysin(R) in 1995.
Most R&D expense in the more recent  period was  incurred in the United  States,
for clinical trials of injectable  collagenase for Peyronie's disease,  keloids,
and  Dupuytren's  contracture,  and for  pre-clinical  research of other uses of
collagenase.

OTHER INCOME - NET - Other  income - net for the nine months  ended  October 31,
1996 and 1995 was $186,324 and $340,883  respectively.  The decrease of $163,602
was due primarily to realized and unrealized gains on trading  securities in the
1995 period.  Gains were not as  extensive in the more current nine months,  nor
are they expected to be in the future.

PROVISION  FOR INCOME TAXES - The provision for income taxes for the nine months
ended  October 31, 1996 and 1995 was  $466,350  and  $119,590  respectively,  an
increase of $346,760.  The increase was due to  profitability  of the  Company's
United States and Curacao subsidiaries,  due to higher sales and royalties.  The
principal reason for the difference  between the United States Federal statutory
tax rate of 34% and the Company's effective tax rate is the additional provision
required for state income taxes where the Company's US subsidiary is domiciled.


LIQUIDITY, CAPITAL RESOURCES AND CHANGES IN FINANCIAL CONDITION
---------------------------------------------------------------

The Company's  primary source of working  capital is from operating  activities,
including  sales,  royalties,  and new license fees. As of October 31, 1996, the
Company had working  capital of  approximately  $7.4 million which includes cash
and cash equivalents and marketable  securities of  approximately  $5.5 million.
The  principal  source of cash during the nine months ended October 31, 1996 was
approximately  $1.2 million from operating  activities,  which includes proceeds
from sales of  investments,  net of purchases,  of  approximately  $324,800.  At
October  31,  1996  the  Company  had  no  material   commitments   for  capital
expenditures.

Although  there can be no  assurance,  management  believes  that in view of the
Company's  working  capital  position and  anticipated  positive  cash flow from
operating activities, the Company has sufficient liquidity and capital resources
to meet its immediate  operating  needs.  The Company believes that cash on hand
and cash from  operations will be sufficient to meet the Company's cash needs on
an ongoing basis.












                                       11

<PAGE>


                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                BioSpecifics Technologies Corp.
                                (The Registrant)



Date: December 12, 1996
      -----------------


By:/s/Edwin H. Wegman
   ------------------  
      Edwin H. Wegman
      Chairman and President




Date: December 12, 1996
      -----------------


By:/s/Albert Horcher
   -----------------
      Albert Horcher
      Controller, Principal Financial and
      Chief Accounting Officer



















                                       12