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, 2001
                                        ----------------

[   ]   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:

       The number of shares outstanding of the issuer's common stock, par
value $0.001 per share as of December 1, 2001, was 4,550,836.


       Transitional Small Business Disclosure Format (check one): Yes    No  X
                                                                     ----   ----
<PAGE>


                BIOSPECIFICS TECHNOLOGIES CORP. AND SUBSIDIARIES



                                      INDEX

                                                                        Page
                                                                        ----
PART I - FINANCIAL INFORMATION


Item 1.  Consolidated Financial Statements


         Balance Sheets as of October 31, 2001 (unaudited)
         and January 31, 2001                                            3


         Statements of  Operations  for the Three and Nine Months
         Ended October 31, 2001 and 2000 (unaudited)                     4


         Statements of Cash Flows for the Nine Months Ended
         October 31, 2001 and 2000 (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

Part II - Other Information

Item 1.  Legal Proceedings                                              14
Item 6.  Filings on Form 8-K                                            14

Signatures                                                              15






                                       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,
                                                                         2001                 2001
                                                                     -----------          -----------
<S>                                                                  <C>                  <C>
ASSETS
Cash and cash equivalents                                            $   774,201          $   569,170
Marketable securities                                                      3,026              114,187
Accounts receivable                                                    1,029,933            1,165,932
Inventory                                                              1,409,019            1,930,044
Income tax refund receivable                                             111,933              150,000
Prepaid expenses and other current assets                                 26,581               27,946
                                                                     -----------          -----------
   Total current assets                                                3,354,693            3,957,279
                                                                     -----------          -----------

Property, plant, and equipment - net                                   5,193,247            4,893,167
Deferred tax assets                                                      136,206              136,206
Due from related parties                                                 118,252              128,280
Other assets                                                              28,812               28,812
                                                                     -----------          -----------

TOTAL ASSETS                                                         $ 8,831,210          $ 9,143,744
                                                                     ===========          ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses                                $ 1,498,239          $ 1,782,317
Notes payable to related parties                                          13,885               13,510
Deferred revenue                                                          45,000               45,000
                                                                     -----------          -----------
     Total current liabilities                                         1,557,124            1,840,827
                                                                     -----------          -----------

Minority interest in subsidiaries                                        237,948              239,448
                                                                     -----------          -----------

Commitments and contingencies

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;
4,912,216 shares issued at October 31, 2001 and
4,891,146 shares issued at January 31, 2001                                4,912                4,891
Additional paid-in capital                                             3,800,104            3,748,375
Retained earnings                                                      6,116,862            6,358,331
Accumulated other comprehensive income                                    15,473               18,151
Treasury stock - 361,380 shares, at cost                              (1,911,237)          (1,911,237)
Notes receivable from chairman                                          (989,976)          (1,155,042)
                                                                     -----------          -----------
    Total stockholders' equity                                         7,036,138            7,063,469
                                                                     -----------          -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                           $ 8,831,210          $ 9,143,744
                                                                     ===========          ===========
</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,
                                                       2001                2000                 2001                 2000
                                                   -----------          -----------          -----------          -----------
<S>                                                <C>                  <C>                  <C>                  <C>
Revenues:
   Net sales                                       $   235,260          $    69,434          $ 4,007,578          $ 2,644,817
   Royalties                                           559,149              503,414            1,738,147            1,431,425
                                                   -----------          -----------          -----------          -----------
Total Revenues                                         794,409              572,848            5,745,725            4,076,242
                                                   -----------          -----------          -----------          -----------

Costs and Expenses:
   Cost of sales                                       346,227              340,705            3,469,319            1,584,062
   Selling, general and administrative                 630,791              788,615            1,592,944            2,043,167
   Research and development                            371,791              252,127              939,575            1,028,757
                                                   -----------          -----------          -----------          -----------
Total costs and expenses                             1,348,809            1,381,447            6,001,838            4,655,986
                                                   -----------          -----------          -----------          -----------

Loss from operations                                  (554,400)            (808,599)            (256,113)            (579,744)

Other income (expense)
  Investment and other income (loss)                       453              (66,975)              18,418             (268,484)
  Interest expense                                      (2,260)                (952)              (5,274)              (3,797)
                                                   -----------          -----------          -----------          -----------
Total other income (expense) - net                      (1,807)             (67,927)              13,144             (272,281)
                                                   -----------          -----------          -----------          -----------

Loss before provision for income taxes                (556,207)            (876,526)            (242,969)            (852,025)
   Income tax expense (benefit)                              0              (92,100)                   0              (95,000)
                                                   -----------          -----------          -----------          -----------
Income (loss) before minority interest                (556,207)            (784,426)            (242,969)            (757,025)
Minority interest in losses                            (10,000)             (20,100)              (1,500)             (14,200)
                                                   -----------          -----------          -----------          -----------
Net loss                                           $  (546,207)         $  (764,326)         $  (241,469)         $  (742,825)
                                                   ===========          ===========          ===========          ===========


Basic net loss per common share                    $     (0.12)         $     (0.17)         $     (0.05)         $     (0.16)
                                                   ===========          ===========          ===========          ===========


Weighted-average common shares outstanding           4,549,063            4,529,766            4,535,488            4,529,766
                                                   ===========          ===========          ===========          ===========


Diluted net loss per common share                  $     (0.12)         $     (0.17)         $     (0.05)         $     (0.16)
                                                   ===========          ===========          ===========          ===========

Weighted-average common and dilutive
potential common shares outstanding                  4,549,063            4,529,766            4,535,488            4,529,766
                                                   ===========          ===========          ===========          ===========
</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,
                                                                2001                2000
                                                            -----------          -----------
<S>                                                         <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                  $  (241,469)         $  (742,825)
  Adjustments to reconcile net loss
  to cash provided by operating activities:
    Depreciation                                                291,749              115,193
    Options and stock issued for services                        45,000               17,500
    Loss on marketable securities - net                           1,320              441,811
    Minority interest                                            (1,500)             (14,200)
    Deferred tax assets                                              --              (75,000)
  Changes in operating assets & liabilities:
    Accounts receivable                                         135,999              591,574
    Marketable securities - net                                 109,841              (17,133)
    Inventory                                                   521,025             (241,922)
    Prepaid expenses and other current assets                     1,362               93,586
    Accounts payable and accrued expenses                      (284,074)              73,499
    Income taxes payable                                         38,067               (3,970)
    Deferred revenue                                                 --              421,978
                                                            -----------          -----------
      Net cash provided by operating activities                 617,320              660,091
                                                            -----------          -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Decrease in notes receivable from chairman - net             165,066             (336,886)
    Due from related parties                                     10,028               (8,500)
  Expenditures for plant, property and equipment               (591,830)          (2,856,910)
                                                            -----------          -----------
      Net cash used in investing activities                    (416,736)          (3,202,296)
                                                            -----------          -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in notes payable to related parties                      375                  375
  Exercises of stock options                                      6,750                   --
                                                            -----------          -----------
      Net cash provided by financing activities                   7,125                  375
                                                            -----------          -----------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                          (2,678)              (1,915)
                                                            -----------          -----------

CHANGE IN CASH AND CASH EQUIVALENTS                             205,031           (2,543,745)

  CASH AND EQUIVALENTS:
  Beginning of Period                                           569,170            4,221,447
                                                            -----------          -----------
  End of Period                                             $   774,201          $  ,677,702
                                                            ===========          ===========



SUPPLEMENTAL DISCLOSURE
  Cash paid during the period for interest                  $     5,277          $     3,797
                                                            ===========          ===========
  Cash paid during the period for income taxes              $     1,188          $    33,563
                                                            ===========          ===========
</TABLE>
See accompanying notes to consolidated financial statements

                                       5

<PAGE>
                BIOSPECIFICS TECHNOLOGIES CORP. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                OCTOBER 31, 2001
                                   (UNAUDITED)


1. Description of Business and Basis of Presentation
   -------------------------------------------------

The accompanying consolidated financial statements include the accounts of
BioSpecifics Technologies Corp. (the "Company"), its 97.2% majority-owned
subsidiaries, Advance Biofactures Corp. ("ABC") and Advance Biofactures of
Curacao N.V. ("ABC - Curacao") and its wholly-owned subsidiary, Biospecifics
Pharma GmbH ("Bio Pharma") of Germany. All significant intercompany transactions
and balances have been eliminated in consolidation.

The Company produces a fermentation-derived enzyme named Collagenase ABC (the
"product" or "enzyme") that is licensed by the U.S. Food and Drug Administration
(the "FDA") and is indicated for topical debridement of dermal ulcers and burn
wounds. The Company operates a production facility in Lynbrook, New York (the
"Lynbrook Plant or Facility") and in Curacao, Netherlands Antilles (the "Curacao
Plant or Facility"). The Company is also researching and developing additional
products derived from this enzyme for potential use as pharmaceuticals.

The Company derives most of its net sales of product revenues and all of its
royalty revenues from one customer, Knoll Pharmaceutical Company ("KPC"). KPC
acts as the Company's contract manufacturer by compounding the product into
Collagenase Santyl(R) (Santyl(R)), an ointment used to treat various types of
skin wounds, particularly chronic dermal ulcers and severely burned areas. The
Company and KPC are parties to a licensing agreement expiring in August 2003
providing KPC with exclusive rights to market Santyl(R) in North America in
exchange for purchases of the product and royalties on KPC's Santyl(R) sales to
distributors. The license agreement has an automatic ten-year renewal clause
unless KPC elects not to renew the agreement. The rest of the Company's revenues
come from product sales to pharmaceutical companies in Brazil and India.

In January 2000, pursuant to a sublicense and assignment agreement, KPC
sublicensed its rights to Smith & Nephew, Inc. ("S&N") with the consent of ABC.
Under the sublicense, KPC will continue to purchase the product from the Company
and manufacture Santyl(R). S&N will market the Santyl(R). In connection with the
sublicense, the Company entered into several contemporaneous agreements with KPC
and S&N. These agreements included one allocating responsibility under the KPC
Agreement among ABC, KPC, and S&N for both the sublicense and license period.
Another agreement imparts certain obligations upon ABC to address the FDA issues
concerning the Curacao and Lynbrook manufacturing facilities. (See "Liquidity,
Capital Resources, and Changes in Financial Condition".) KPC will assign its
license rights in the KPC Agreement to S&N in the event of FDA approval of a
compliance program being undertaken by ABC. If the license rights are assigned
to S&N, the KPC agreement will be automatically extended at that time until
2013.

In March 2001, KPC became an indirect wholly owned subsidiary of Abbott
Laboratories ("Abbott"). Therefore, all ensuing references, which in the past
were made to "KPC", have been changed to "Abbott".

2. Interim Financial Statements
   ----------------------------

In the opinion of management, the accompanying consolidated financial statements
of the Company have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial
information and reflect all adjustments, consisting of normal recurring accrual
adjustments, considered necessary to present fairly, in all material respects,
the Company's consolidated balance sheet as of October 31, 2001, the
consolidated statements of operations for the three and nine months ended

                                       6
<PAGE>

October 31, 2001 and 2000, and consolidated statements of cash flows for the
nine months ended October 31, 2001 and 2000.

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 annual report on Form 10-KSB for the fiscal year
ended January 31, 2001.

3. Net income (loss) per share
   ---------------------------

Basic net income (loss) per share ("EPS") excludes dilution and is computed by
dividing earnings (loss) available to common stockholders by the
weighted-average number of common shares outstanding for the period. Diluted EPS
reflects the dilution that would occur if common stock equivalents were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the Company. As a result of the net
loss for the three and nine months ended October 31, 2001 and 2000, common stock
options have not been included in the diluted EPS calculation, as their effect
would have been antidilutive.

4. Segment Information
   -------------------

The Company is engaged in one segment, specifically research, development and
production of pharmaceutical products. Operations in this business segment take
place in one location in the United States of America, one location in Curacao,
Netherlands Antilles, and one location in Germany. As of October 31, 2001,
identifiable assets in the United States of America approximated $3.6 million
and identifiable assets in Curacao, Netherlands Antilles approximated $5.2
million. For the three months and nine months ended October 31, 2001, total
revenues derived from Abbott in the United States of America approximated $0.5
million and $5.1 million, respectively, and $227,000 and $579,000, respectively
from customers in Brazil and India. For the three and nine months ended October
31, 2000, total revenues derived from Abbott in the United States of America
approximated $0.5 million and $3.5 million, respectively, and $49,000 and
$531,000, respectively from customers in Brazil and India. There are minimal
assets and operations in Germany.

5. Stockholders' equity and other comprehensive income
   ---------------------------------------------------

The change to stockholders' equity during the periods presented includes
decreases to retained earnings due to net losses. Increases in common stock and
additional paid in capital include the issuance of common stock for services,
fully vested and non-forfeitable stock options granted to non-employees, and the
issuance of common stock resulting from the exercise of stock options. Other
comprehensive income represents gains and losses resulting from translation of a
foreign subsidiary's balance sheet and statement of operations.

6) Recent Accounting Pronouncements
   --------------------------------

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets" effective for fiscal years
beginning after December 15, 2001. Under the new standards, goodwill and
intangible assets deemed to have indefinite lives will no longer be amortized
but will be subject to annual impairment tests. Other intangible assets will
continue to be amortized over their useful lives. The Company does not expect
the adoption of SFAS No. 141 and 142 to have a material impact on its financial
position and results of operations.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets". The new guidance resolves significant
implementation issues related to SFAS No. 121, "Accounting for Impairment of

                                       7

<PAGE>

Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". SFAS No. 144
supersedes SFAS No. 121, but it retains its fundamental provisions. SFAS No. 144
retains the requirements of SFAS No. 121 to recognize an impairment loss only if
the carrying amount of a long-lived asset within the scope of SFAS No. 144 is
not recoverable from its undiscounted cash flows and exceeds its fair value. It
also amends Accounting Research Bulletin No. 51, "Consolidated Financial
Statements" to eliminate the exception to consolidate a subsidiary for which
control is likely to be temporary. SFAS No. 144 is effective for fiscal years
beginning after December 15, 2001. The Company plans to adopt its provisions in
the first quarter of the Company's fiscal year ending January 31, 2002. The
Company does not expect the adoption of SFAS No. 144 to have a material impact
on its financial position and results of operations.

7. Regulatory Matter
   -----------------

See "Liquidity, Capital Resources, and Changes in Financial Condition" in Item
2: Management's Discussion and Analysis of Financial Condition and Results of
Operations below for a discussion regarding the effect of this regulatory matter
on the Company's financial condition.

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
--------------------------------------------------------------------------------

Information provided by the Company or statements contained in this report or
made by its employees, if not historical, are forward looking information, which
involve uncertainties and risk. 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, government regulation, the ability
of the Company to complete the renovation of its production facilities and
comply with the Form 483 and FDA Letter, the Company's estimate that its
inventory of product is sufficient until the renovated facilities can release
product again, changing market conditions, the impact of competitive products
and pricing, the timely development and approval by the FDA and foreign health
authorities of potential products in development, market acceptance of the
Company's potential products, and other risks detailed herein and in other
filings the Company makes with the Securities and Exchange Commission. Further,
any forward looking statement or statements speak only as of the date on which
such statements were made, and the Company undertakes no obligation to update
any forward looking statement or statements to reflect events or circumstances
after the date on which such statement or statements were made.

The Company incorporates by reference the Management's Discussion and Analysis
of Financial Condition and Results of Operations set forth in its annual report
on Form 10-KSB for the fiscal year ended January 31, 2001.

                  Three months ended October 31, 2001 and 2000
                  --------------------------------------------

Net sales - Net sales for the three months ended October 31, 2001 and 2000 were
$235,260 and $69,434 respectively, representing an increase of $165,826 or 239%.

During both the three months ended October 31, 2001 and 2000 none of the
Company's inventory of enzyme product, Collagenase ABC, was in the finished
stage and available for delivery to KPC, due to the implementation of new
production controls. These controls lengthened the production cycle and the
impact was felt during both three month periods. The Company is delivering to
Abbott Collagenase ABC inventory that was produced prior to the voluntary

                                       8
<PAGE>

closure and renovation of production facilities that began in March 2000
("previously produced work in process inventory"). The Company anticipates that
much of this inventory will be finished and delivered to Abbott in the fourth
quarter of this fiscal year (ended January 31, 2002), although there can be no
assurance as to the exact timing. The timing of deliveries to Abbott depends
upon when the final stage processes for this previously produced work in process
inventory are complete. Abbott has indicated that the Company may deliver any of
the enzyme product in inventory as soon as it is finished. Net sales include
testing of ointment compounded by Abbott during both periods presented, and
sales of Collagenase ABC to foreign customers from inventory not designated for
Abbott.

Royalties - Royalties for the three months ended October 31, 2001 and 2000 were
$559,149 and $503,414 respectively, representing an increase of $55,735 or 11%.
As reported to the Company by Abbott, S&N sold greater amounts of Collagenase
Santyl(R) Ointment, on which the royalty is earned, during the three months
ended October 31, 2001 than it did in the year ago period. We consider the
calendar year 2000 to have been a transition year in which S&N began marketing
Collagenase Santyl(R) Ointment, as discussed in Note 1 to the Company's
Consolidated Interim Financial Statements.

Cost of sales - Cost of sales for the three months ended October 31, 2001 and
2000 were $346,227 and $340,705, respectively, representing an increase of
$5,522, or 2%. The gross profit margin was negative during both three months
ended October 31, 2001 and 2000 due to sales to foreign customers of higher cost
previously produced work in process inventory and declining levels of this
inventory being processed in the final stages. During the quarter ended July 31,
2001, the Company began producing new inventory at the renovated Curacao
facility (which is subject to FDA approval, as described below), besides
continuing the processing of previously produced work in process inventory.

From March 2000 to April 30, 2001, the Company renovated its Collagenase ABC
production facilities and thus could not produce any new inventory (see
"Liquidity, Capital Resources, and Changes in Financial Position"). Production
costs, primarily wages, benefits, and production overhead during that period
were allocated to the Company's previously produced work in process inventory
that was and still is being processed, but at more limited levels than could be
during normal production.

In May 2001, the Company resumed Collagenase ABC enzyme production at its
renovated facility in Curacao at a limited level. The Company cannot sell enzyme
it is now producing at the renovated facility to Abbott until the FDA approves a
supplement (the "supplement') to ABC's Establishment License. While we allocated
certain production costs to this new inventory, the remaining costs went to
selling, general and administrative, as the Company is dependent on the FDA's
approval of the renovated plant in Curacao for the resumption of normal
operations. See "Liquidity, Capital Resources, and Changes in Financial
Condition".

Selling, general and administrative - Selling, general and administrative
("SG&A") expenses for the three months ended October 31, 2001 and 2000 were
$630,791 and $788,615, respectively, representing a decrease of $157,824 or 20%.
During the prior year quarter ended October 31, 2000, the Company engaged, to a
greater extent versus the current period, consultants to assist in responding to
FDA inspectional observations on FDA's Form 483 ("483's") from FDA inspectors,
and the associated costs were included in SG&A. During both periods, however,
production lab personnel have been highly involved in the response effort and
validation of the Curacao production facility. These costs usually allocated to
production are included in SG&A. The Company will continue to incur into the
foreseeable future consultation costs and involvement of its lab personnel in
responding to the 483s and validating the Curacao production facility. See
"Liquidity, Capital Resources, and Changes in Financial Condition".

Research and development - Research and development ("R&D") expenses for the
three months ended October 31, 2001 and 2000 were $371,791 and $252,127,
respectively, representing an increase of $119,664, or 47%. During the quarter
ended October 31, 2001, the Company began planning and preparation for Phase 3

                                       9

<PAGE>

trials of its injectable collagenase for the treatment of Dupuytren's disease,
resulting in greater costs than incurred in the prior period. The Company
anticipates that R&D expenses may begin to increase again as trials for
Dupuytren's are initiated.

Other income (expense)- net - Other income (expense)- net for the three months
ended October 31, 2001 and 2000 was ($1,807) and ($67,927) respectively. The
decrease of 66,120 in the loss was primarily due to the recognition of losses in
the prior comparative period from decreasing values of equity securities held as
trading security investments. There was an insignificant level of funds
available for investment during the three months ended October 31, 2001 versus
the prior comparative period due to expenditures for renovation of facilities.

Income tax benefit - The income tax benefit for the three months ended October
31, 2001 and 2000 was $0 and $92,100, respectively, a decrease of $92,100. The
Company recognized tax credits for research and development in the year-ago
period.

                   Nine months ended October 31, 2001 and 2000
                   -------------------------------------------

Net sales - Net sales for the nine months ended October 31, 2001 and 2000 were
$4,007,578 and $2,644,817, respectively, representing a $1,362,761 or 52%
increase. The increase was primarily due to a 63% increase in deliveries of
Collagenase ABC to Abbott in the United States. There was also a 9% increase in
deliveries to pharmaceutical companies in countries outside the United States.

As explained above, during both periods the Company delivered to Abbott
Collagenase ABC inventory that was produced prior to the voluntary closure and
renovation of production facilities that began in March 2000 ("previously
produced work in process inventory"). The timing of deliveries to Abbott depends
upon when the final stage processes for this previously produced work in process
inventory are complete. There were no deliveries to Abbott during the fiscal
third quarters ended October 31, 2001 and 2000 because remaining previously
produced work in process inventory had not completed final stage processing by
the end of the period. The Company anticipates that much of this inventory will
be completed and delivered to Abbott during the fiscal fourth quarter of the
year ending January 31, 2002, although there can be no assurance that it will be
able to do so.

Royalties - Royalties for the nine months ended October 31, 2001 and 2000 were
$1,738,147 and $1,431,425, respectively, representing a $306,722 or 21%
increase. As reported to the Company by Abbott, S&N sold greater amounts of
Collagenase Santyl(R) Ointment, on which the royalty is earned, during the nine
months ended October 31, 2001 than it did in the year ago transition period of
2000, the year when S&N began marketing Collagenase Santyl(R) Ointment, as
discussed in Note 1 to the Company's Consolidated Interim Financial Statements.

Cost of sales - Cost of sales for the nine months ended October 31, 2001 and
2000 were $3,469,319 and $1,584,062, respectively, representing an increase of
$1,885,257 or 119% due to higher net sales, and a lower gross profit margin. The
gross profit margin decreased to 13% during the nine months ended October 31,
2001 compared to 40% for the nine months ended October 31, 2000 due to sales of
higher cost previously produced work in process inventory, declining levels of
this inventory being processed in the final stages, and provision for potential
warranty costs. During the nine months ended October 31, 2001, the Company began
producing new inventory at the renovated Curacao facility, besides continuing
the processing of the previously produced work in process inventory.

From March 2000 to April 30, 2001, the Company renovated its Collagenase ABC
production facilities and thus could not produce any new inventory (see
"Liquidity, Capital Resources, and Changes in Financial Position"). Production
costs, primarily wages, benefits, and production overhead during that period
were allocated to the Company's previously produced work in process inventory
that was and still is being processed, but at more limited levels than could be
during normal production.

                                       10

<PAGE>

Starting in May 2001, the Company resumed Collagenase ABC enzyme production at
its renovated facility in Curacao at a limited level. The Company cannot sell
the enzyme it is now producing at the renovated facility to Abbott until the FDA
approves a supplement (the "supplement') to ABC's Establishment License. While
we allocated certain production costs to this new inventory, the remaining costs
were allocated to selling, general and administrative, as the Company is
dependent on the FDA's approval of the renovated plant in Curacao for the
resumption of normal operations. See "Liquidity, Capital Resources, and Changes
in Financial Condition".

Selling, general and administrative - SG&A expenses for the nine months ended
October 31, 2001 and 2000 were $1,592,944 and $2,043,167, respectively,
representing a $450,223, or 22% decrease. As explained above, during the prior
year nine month period ended October 31, 2000, the Company engaged, to a greater
extent versus the current period, consultants to assist in responding to FDA
inspectional observations on FDA's Form 483 ("483's") from FDA inspectors, the
cost of which were included in SG&A. During both periods, however, production
lab personnel have been highly involved in the response effort and validation of
the Curacao production facility. These costs usually allocated to production are
included in SG&A. The Company will continue to incur into the foreseeable future
consultation costs and involvement of its lab personnel in responding to the
483s and validating the Curacao production facility. See "Liquidity, Capital
Resources, and Changes in Financial Condition".

Research and development - R&D expenses for the nine months ended October 31,
2001 and 2000 were $939,575 and $1,028,757, respectively, representing a
decrease of $89,182 or 9%. During the nine months ended October 31, 2001,
mid-stage clinical trials that were underway during the prior year period for
Dupuytren's disease and Peyronie's disease were mostly completed, hence the
decline in expense. The Company anticipates that R&D expenses will increase
again as trials for Dupuytren's disease advance to Phase 3.

Other income (expense) - net - Other income (expense) - net for the nine months
ended October 31, 2001 and 2000 was $13,144 and ($272,281), respectively. The
change of $285,425 was due primarily the recognition of losses in the prior
comparative period from decreasing values of equity securities held as trading
security investments. There was an insignificant level of funds available for
investment during the nine months ended October 31, 2001 versus the prior
comparative period due to expenditures for renovation of facilities.

Income tax benefit - The income tax benefit for the nine months ended October
31, 2001 and 2000 was $0 and $95,000, respectively, a decrease of $95,000. The
Company recognized tax credits for research and development in the year-ago
period.

Liquidity, Capital Resources, and Changes in Financial Condition
----------------------------------------------------------------

The Company's primary source of working capital is from operations, which
includes sales of product, royalties, and periodic license fees. At October 31,
2001, the Company had working capital of approximately $1.8 million, which
includes cash and cash equivalents, and marketable securities of approximately
$774,000. The principal sources of cash during the nine months ended October 31,
2001 were approximately $617,000 from operating activities, and net repayment of
notes due from chairman of approximately $165,000. The principal use of cash
during the nine months ended October 31, 2001 was approximately $592,000
invested in plant, property and equipment for the Curacao and Lynbrook
facilities.

The Company's manufacturing facilities in New York and Curacao are registered
with, and licensed by, the FDA. As previously disclosed, in January and March of
1999, ABC was issued a List of Inspectional Observations on FDA Form 483 (the
"Form 483") from FDA inspectors, citing numerous inspectional observations
relating to deficiencies in the Company's compliance with FDA regulations at its
Lynbrook, New York and Curacao, Netherlands Antilles facilities. In addition, in

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<PAGE>

May 1999, ABC received a letter from the FDA (the "FDA Letter") citing certain
inspectional observations relating to deficiencies at its Lynbrook, New York
facility, Curacao, Netherlands Antilles facility, and contract manufacturing
facility at KPC.

The FDA Letter advised ABC that the FDA would institute formal proceedings to
revoke ABC's Establishment License to manufacture Collagenase Santyl(R) Ointment
unless ABC provided satisfactory assurances to the FDA, including submitting to
the FDA a comprehensive plan of corrective action to address the observations
listed in the Form 483 and the FDA Letter, and otherwise demonstrate compliance
with applicable regulatory requirements.

The Company provided the FDA with a plan of corrective action and had a number
of meetings with the FDA to discuss the plan of corrective action and the
renovation of the Curacao production facility. ABC has submitted a number of
periodic updates to the FDA on progress under the plan. ABC hired outside
consultants and employed additional staff for its reorganized Quality Unit. The
Company has retained an outside consulting firm with expertise in FDA regulatory
compliance matters to assist in developing and implementing the corrective
action plan.

The Company produced the enzyme Collagenase ABC (the "enzyme"), the active
ingredient in Collagenase Santyl(R) Ointment, at its Lynbrook and Curacao
facilities. The Company started extensive renovations at the Curacao facility in
March 2000, which resulted in the suspension of enzyme production there.
Production at the Curacao facility resumed in May 2001. The Company also
voluntarily suspended the production of the enzyme at the Lynbrook facility,
although final stage testing on previously produced work in process inventory
continues there.

The Company has spent approximately $5.4 million through October 31, 2001 in new
equipment and leasehold improvements and anticipates it could invest
approximately $75,000 more to completion. This investment is intended to address
matters described in the Form 483 and the FDA Letter, as well as to modernize
and ensure the efficiency of the Company's production process in the future.
During the fiscal year ended January 31, 2000 the Company had spent
approximately $1,000,000 for professional fees and other expenses in connection
with the remediation of the FDA's deficiency observations, approximately
$215,000 during the fiscal year ended January 31, 2001, and approximately
$75,000 during the nine months ended October 31, 2001. The Company estimates it
could spend an additional $50,000 in professional fees in connection with the
remediation of the FDA's deficiency observations.

Although renovations at the Curacao and Lynbrook facilities were substantially
completed by May 2001 and resumed production in Curacao, the Company cannot
release enzyme now being produced at these facilities for sale as a
pharmaceutical in the United States until the FDA approves a supplement (the
"supplement') to ABC's Establishment License. As part of the approval process
for the supplement, the FDA will conduct an inspection of the Curacao facility
and inspect the Lynbrook facility. In anticipation of the renovation and
suspension of manufacturing operations, the Company accumulated an inventory of
the product (the "previously produced work in process inventory"), which it
continues to test, and estimates can be used by Abbott to contract manufacture
Collagenase Santyl(R) Ointment into the second quarter of calendar 2002. In the
opinion of the Company, Abbott will be able to supply S&N with the Santyl(R)
ointment made from previously produced work in process inventory into the
beginning of calendar 2003 (or the fourth quarter of our fiscal year ending
January 31, 2003).

While the Company believes that it has made considerable progress in addressing
the FDA concerns addressed in the Form 483 and the FDA Letter, if the Company is
unable to further address these matters in a timely manner, there may be delays
in the delivery of the Collagenase ABC enzyme product produced in the renovated
facilities to Abbott for use to contract manufacture Collagenase Santyl(R)
Ointment. Such delays could have a material adverse effect on the Company's
future operating results.

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<PAGE>

In November 2001, the Company, through its subsidiary ABC - Curacao, drew down a
two-year, non-amortizing loan of $450,000 at 6.5% interest from Korpodeko, a
Curacao development corporation established to develop industry on the island of
Curacao. The entire principal will come due in two years or November 2003. In
connection with this loan, ABC-Curacao pledged as collateral substantially all
of the Company's fixed assets located in Curacao, with a book value of
approximately $4.3 million. The Company has also guaranteed the Korpodeko loan.

The Company, through its subsidiary, ABC-Curacao, also maintains a line of
credit with a Netherlands Antilles bank under which the bank will lend up to
$110,000 to ABC-Curacao, with interest at the bank's prime lending rate (12% at
October 31, 2001). Drawings under the line of credit would be secured by
investment assets and cash on deposit at the bank, is payable on demand, and is
guaranteed by ABC-New York.

The Company believes that its capital resources, together with anticipated
proceeds from the sales of available inventory and related royalty income, are
adequate to sustain the business through October 31, 2002. In addition, the
Company also believes that it has made substantial progress in addressing the
FDA's inspectional observations and that it may be able to resume normal
operations during the second quarter of calendar year 2002 (or the second
quarter of our fiscal year ending January 31, 2003). However, the Company is
dependent on the FDA's approval of its renovated plant in Curacao for the
resumption of normal operations and the release for sale of Collagenase ABC
enzyme to Abbott.

Although management believes that the Company's capital resources are adequate
and that it has made satisfactory progress toward completing the Corrective
Action Plan and addressing the FDA's concerns, there can be no assurance that
unforeseen circumstances will not have a material adverse effect on the
Company's financial condition and that the cost of completing the renovation of
the Lynbrook and Curacao plants will not exceed management's estimates. In
addition there can be no assurance that the FDA will not have additional
inspectional observations that could result in the delay of completing the
Corrective Action Plan or that the FDA will approve the renovated plant and
permit the Company to resume its normal operations at all. In July 2001, we
retained a strategic advisor with experience in biotechnology joint ventures and
alliances to assist us in evaluating strategic opportunities. There can be no
assurance that we will be able to enter into any joint ventures or alliances
with other companies in the healthcare industry.




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<PAGE>

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

For a discussion of the Company's progress concerning inspectional observations
from the U.S. Food and Drug Administration, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity, Capital
Resources, and Change in Financial Condition."

Item 6.  Filings on Form 8-K

In an 8-K report dated December 10, 2001, the Company reported a change in
certifying accountant from Grant Thornton LLP to BDO Seidman, LLP.








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<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 20, 2001
        -----------------


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




Date:   December 20, 2001
        ---------------------------


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










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