SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549

                               FORM 10-K

       [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31,
1997

     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the Transition period from ____ to
____

                    Commission File Number 0-26144
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             INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
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        (Exact name of registrant as specified in its charter)

   BRITISH COLUMBIA, CANADA                           NOT APPLICABLE
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    (State or other jurisdiction of incorporation or organization)
               (I.R.S. Employer Identification Number)

                 2255 B. QUEEN STREET EAST, SUITE 828
                       TORONTO, ONTARIO M4E 1G3
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    (Address, including zip code, of principal executive officers)

                            (519) 836-8016
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         (Registrant's telephone number, including area code)

      Securities registered pursuant to Section 12(b) of the Act:

                                 NONE

      Securities registered pursuant to Section 12(g) of the Act:

                      COMMON SHARES, NO PAR VALUE

                        SHAREHOLDER RIGHTS PLAN

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months, and (2) has been
subject to such filing requirements for the past 90 days. Yes X     No    .
                                                             ---       ---

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 the Registrant's knowledge, in the
definitive proxy statement 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 Registrant's outstanding Common
Shares held by non-affiliates of the Registrant as of March 5, 1998
was U.S. $146,495,755. There were 16,742,372 Common Shares outstanding
as of March 5, 1998.

                 DOCUMENTS INCORPORATED BY REFERENCE:
                 -----------------------------------

Portions of the Registrant's Proxy Statement for the Annual General
Meeting of Shareholders to be held on June 4, 1998 are incorporated by
reference in Part III hereof.



                             Page 1 of 47
                                       ----
                     Index of Exhibits on Page 47



             INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
                      Annual Report on Form 10-K
              For the Fiscal Year Ended December 31, 1997


                           Table of Contents
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Item                                                                       Page
Number                                                                    Number
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                                              PART I

1.             Business                                                        3
               ..............................................
               ..............................................

2.             Properties                                                     10
               ..............................................
               ..............................................

3.             Legal Proceedings                                              10
               ..............................................
               ..............................................

4.             Submission of Matters to a Vote of Security                    10
               Holders
               ..............................................

                                PART II

5.             Market for the Registrant's Common Shares and                  11
               Related Shareholder Matters....................

6.             Selected Financial Data                                        12
               ..............................................
               ..............................................

7.             Management's Discussion and Analysis of                        13
               Financial Condition and Results of Operations
               ..............................................
               ..............................................

8.             Financial Statements and Supplementary Data                    17
               ..............................................

9.             Changes in and Disagreements with Accountants                  38
               on Accounting and Financial
               Disclosure
               ..............................................
               ..............................................

                               PART III

10.            Directors and Executive Officers of the                        38
               Registrant
               ..............................................

11.            Executive Compensation                                         38
               ..............................................
               ..............................................

12.            Security Ownership of Certain Beneficial                       38
               Owners and Management ........................

13.            Certain Relationships and Related Transactions                 38
               ..............................................

                                PART IV

14.            Exhibits, Financial Statements, and Reports on
               Form 8-K                                                       39
               ..............................................

               Signatures                                                     43
               ..............................................
               ..............................................

               Index of Exhibits                                              47
               ..............................................
               ..............................................



This Form 10-K contains forward-looking statements within the meaning
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of Section 27A of the Securities Act of 1933 and Section 21E of the
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Securities Exchange Act of 1934. The actual results could differ
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materially from those set forth in the forward- looking statements.
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Certain factors that might cause such a difference are discussed in
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the introductory paragraph to Item 7, "Management's Discussion and
------------------------------------------------------------------
Analysis of Financial Condition and Results of Operations," within
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this report.
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                                PART I
ITEM 1.   BUSINESS

GENERAL

     International Murex Technologies Corporation ("IMTC"), has many
incorporated subsidiaries operating throughout the world generally
under the Murex name (the "Murex Group"). The Murex Group develops,
manufactures and markets medical diagnostic products and provides
medical services for the screening, diagnosis and monitoring of
infectious diseases and other medical conditions.

     In February 1992, the Murex Group acquired all the operating
assets and assumed certain related liabilities of the diagnostics
division of The Wellcome Foundation Limited ("Wellcome"). As a result
of this acquisition, IMTC was converted from a research and
development company with a blood banking operation selling products
through an international distributor network to a holding company
which conducts business in a dozen major world currencies via its
subsidiaries with manufacturing capabilities and an international
direct sales force.

     The Murex Group performs research, develops and manufactures in
vitro diagnostic products mainly in the United Kingdom and markets
them throughout the world, using 15 distribution centers supporting a
direct sales force in 35 countries and a distributor network in more
than 100 countries. The Murex Group also distributes products
manufactured by third parties. Currently, the Murex Group markets
diagnostic tests, reagent components, and systems for use in clinical
laboratories and blood banks. The Murex Group sells approximately 110
products in the United States which meet the U.S. Food and Drug
Administration ("FDA") requirements. The Murex Group does not
presently intend to market its remaining products in the United
States.

     The majority of the Murex Group's products and technologies
relate to two primary product groups: virology and bacteriology assays
for screening, diagnosis and monitoring of infectious diseases.
Worldwide sales of blood viral tests for HIV, Human T- Cell
Lymphotropic Virus ("HTLV") and hepatitis constituted approximately
39%, 42% and 51% of the Company's revenue during 1997, 1996 and 1995,
respectively.

RECENT DEVELOPMENTS

Abbott Litigation

     On or about July 1, 1996, Murex Diagnostics Corporation ("MDC"),
a subsidiary within the Murex Group, filed a patent infringement suit
against Abbott Laboratories ("Abbott") in the District Court for the
Northern District of Georgia (No. 96- CV1676), seeking injunctive
relief against Abbott and damages for infringement of a patent held by
MDC for a particle bound binding component immunoassay. The suit
alleges that two Abbott systems, the Abbott IMx(TM) Immunoassay and
the Abbott AxSYM(TM) System, infringe one or more claims of MDC's
patent. In October 1997, a Summary Judgment motion to dismiss the case
that was filed by Abbott was denied in all aspects. Abbott
subsequently moved for reconsideration of this ruling on the Summary
Judgment; however, a decision on Abbott's motion for reconsideration
is still pending. A trial date has not yet been set, but may occur in
late 1998.

Worldwide Launch of LiPA(R) HIV-1 Reverse Transcriptase Test

     In conjunction with an important strategic alliance partner,
Innogenetics NV ("Innogenetics"), the LiPA (R) HIV-1 Reverse
Transcriptase ("HIV-RT") test was launched worldwide during May 1997.
This test is the first-ever commercially available, rapid assay that
simultaneously identifies HIV resistance associated with the drugs
AZT, ddI, ddC and 3TC. These reverse transcriptase drugs are currently
being utilized, separately and in combination, to treat HIV patients.
Unfortunately, the success of these therapies is greatly jeopardized
if a patient develops resistance to one or more of the drugs.
Resistance occurs as the HIV virus develops mutations that may
eventually cause the drug, or combination of drugs, to become
ineffective against the virus. Resistance mutations occur with all the
approved HIV drugs. Therefore, it is critical to monitor the
development of mutations so therapies can be appropriately combined
and adjusted. With the introduction of the LiPA(R) HIV-1 RT test,
physicians and healthcare providers will have a rapid assay to monitor
the development of key HIV mutations.

     The LiPA(R) HIV-1 RT test provides crucial information relating
to the development of resistance to individual and combination
therapy. By obtaining resistance information, physicians can avoid
using drugs that may not be effective and improve patient care by
selecting more appropriate therapy based on resistance knowledge. In
addition, the expense of unnecessary and ineffective therapy is
eliminated. Furthermore, a physician may utilize resistance
information prior to starting or changing therapy by screening a
patient for the presence of existing drug resistant mutations. See
"Business - Patient Monitoring Products" for further discussion.

South African Manufacturing Facility

     The Murex Group has constructed and opened a new, high technology
manufacturing facility near Johannesburg, South Africa. The new plant
contains state-of-the-art laboratories for production, quality
assurance and research and development, and includes warehousing and
administrative offices. The new site has already been ISO 9002
certified for its manufacturing and distribution systems. It is the
Murex Group's third manufacturing facility, built to international
manufacturing and quality specifications, including those of
regulatory authorities. The facility will manufacture blood screening
and medical diagnostics products with particular emphasis on HIV and
Hepatitis C ("HCV"). The Murex Group plans to export over 80% of the
products manufactured at the new facility to other African countries
and elsewhere throughout the world.

Sale of Certain Technologies

     During June 1997, the Murex Group sold TTP Corporation ("TTP"), a
wholly-owned subsidiary of MDC, to Shield Diagnostics Group plc.
("Shield"). TTP owned the intellectual property and other rights to
ten products used for the diagnosis of thyroid dysfunction and the
measurement of cardiovascular/blood coagulation degradation products.
TTP's assays are targeted to a specific segment of the diagnostics
industry that is not a part of the Murex Group's long-term strategy of
focusing on the screening, diagnosis and monitoring of infectious
diseases. Therefore, the divestiture of TTP is an element of the Murex
Group's overall plan that will allow it to focus its resources on the
infectious disease diagnostics monitoring market. The Murex Group will
continue to manufacture and sell the TTP product line acquired by
Shield for a period of three years, pursuant to a purchase commitment.
This will provide Shield security regarding availability of the
products while they are being integrated into Shield's business, as
well as permit Shield to utilize the Murex Group's worldwide
distribution network.

IMMUNODIAGNOSTIC PRODUCTS

     The health care industry is comprised of four main sectors:
diagnostics, therapeutics, preventive medicine, and health services.
The diagnostics sector involves the diagnosis or detection of specific
diseases or medical conditions. Proper therapy or treatment can only
be provided following an accurate diagnosis of these underlying
diseases or conditions. Diagnostics cover a wide range of products and
services, including items such as X-ray equipment, blood pressure
measurement equipment, analytical chemistry equipment and
immunodiagnostics.

     Immunodiagnostics is the field of diagnostics that employs the
reactions between antibodies and antigens as the basis of tests for
the detection of specific diseases and other medical conditions.
Antibodies are proteins in human or animal blood that are produced by
the immune system in response to exposure to foreign substances or
antigens such as bacteria and viruses. Antibodies and antigens are
complementary with each antibody being directed against, and reacting
with, one specific type of antigen. Antibodies will react with
antigens at very low concentrations, and it is these unique
characteristics that give immunodiagnostic tests their high degree of
sensitivity and specificity.

     The Murex Group's immunodiagnostic product line includes over 600
diagnostic tests, reagent components and systems. Approximately 39%,
42% and 51% of IMTC's revenue for 1997, 1996 and 1995, respectively,
was generated from the sale of virology diagnostics to detect HIV-1
and HIV-2 (the viruses causing AIDS), HTLV-I and II, and hepatitis A,
B and C infections. The Murex Group also markets bacteriology products
worldwide to detect such bacterial infections as strep throat and
salmonella poisoning. United States sales of bacteriology products
account for approximately 15% of the Murex Group's sales. Trade names
of these products include Wellcogen(TM), Wellcolex(TM),
Staphaurex(TM), REVEAL(TM), and Streptex(TM). The Murex Group
developed an in vitro, immunodiagnostic rapid test system, the Single
Use Diagnostic System, or SUDS(R), that can be used to diagnose
numerous specific diseases or medical conditions. The SUDS (R) HIV
test sales increased 42% during 1997 as compared to 1996, as interest
in this rapid test continues to grow due to new guidelines recently
published by the Center for Disease Control regarding occupational
exposure to HIV by healthcare professionals. The SUDS(R) HIV-1 test
was cleared by the FDA in 1992. In late 1993, the SUDS(R) HIV 1+2 test
was introduced by affiliated companies for sale in Europe. The HIV 1+2
test is not currently available, nor planned, for sale in the United
States and certain other countries because of regulatory and other
restrictions. The Murex Group's product introductions during 1995,
1996 and 1997 include HTLV I and II antibody detection assay, syphilis
antibody test, hepatitis C western blot, therapeutic drug
monitoring-quality assessment program, mycoplasma pneumonia antibody
detection kit, HIV 1+2 type O antibody test, Digene Sharps probe
assays, E-coli, Cryptococcus, Staphaurex Plus assays and Sample
Addition Monitor ("SAM(TM)"). See "Business - Patents, Trademarks and
Licenses".

PATIENT MONITORING PRODUCTS

     During February 1996, MDC entered into an exclusive distribution,
development and license agreement with Innogenetics to develop and
market gene probe products for the monitoring of patients and the
classification of viral diseases. This strategic alliance with
Innogenetics has provided the Murex Group with exclusive rights to the
Murex/Innogenetics LiPA(R) HIV-RT monitoring test. This test
simultaneously detects wild-type and HIV mutations associated with the
reverse transcriptase drugs AZT, ddI, ddC and 3TC. The Murex Group
launched the test world-wide, except in the U.S. and France where the
product is distributed for research use only, late in the second
quarter of 1997. In the U.S., Murex Diagnostics, Inc. ("MDI") has had
discussions with the FDA but has not yet filed an application for the
clearance of the test.

     The reverse transcriptase drugs AZT, ddI, ddC and 3TC are
currently being utilized, separately and in combination, to treat HIV
patients. Resistance to the drugs occurs as virus mutations develop
that may eventually cause the drug, or a combination of drugs, to
become ineffective against the virus. The Murex/Innogenetics LiPA (R)
HIV-1 RT test is the first rapid assay to identify HIV mutant strains.

     Resistant mutations occur with all the approved HIV therapies.
Therefore, it is critical to monitor the development of mutations so
therapies can be appropriately combined and adjusted. The new HIV-1 RT
test provides crucial information relating to the development of
resistance to individual and combination therapy. By obtaining
resistance information, physicians can avoid using drugs that may not
be effective, thereby improving patient care and eliminating the
expense of unnecessary and ineffective therapy. In addition, a
physician may utilize resistance information prior to starting or
changing therapy by screening a patient for the presence of existing
drug resistant mutations.

     The broadening of the Murex Group's focus into the world-wide
emerging diagnostics monitoring market, which management expects to
exceed $1 billion by the year 2000, should support revenue growth in
the coming years. The Innogenetics distribution, development and
licensing agreement gives the Murex Group access to the rapidly
growing gene probe market for monitoring patients and the
classification of viral diseases. The monitoring market directly
complements the Murex Group's existing markets of screening and
diagnosis and also leverages its worldwide marketing and distribution
network. The diagnostic monitoring market includes tests that, among
other applications, assess a patient through the course of a disease
or infection, monitor various forms of anti-viral therapies and
monitor conditions associated with transplants. In contrast, screening
and diagnosis tests are used to indicate whether a patient is, or is
not, carrying a disease or infection. In patient use, screening and
diagnosis tests are usually only required to be administered once
while monitoring tests are usually administered numerous times.

     Patient monitoring has become an important and critical element
of patient care and treatment. The Murex Group believes it can capture
a significant portion of this emerging market by strategically
positioning itself in key segments of the market including AIDS
therapy, organ transplantation and other immune compromised
conditions.

     In addition to the agreement above, during May 1997 the Company
licensed its trademarked SAM(TM) technology to Innogenetics. The
color-coded SAM(TM) technology will be utilized in Innogenetics'
enzyme immunoassay products (EIA) with the first being Innogenetics'
HIV Ag assay. Developed by Murex's internal research and development,
SAM(TM)'s color-coded reagents change color in each testing step of an
assay. The technology assists clinicians in ensuring that samples have
been added and the testing procedure has been conducted correctly. The
Murex Group's SAM(TM) technology is utilized in selected Murex
products and it has been licensed to a number of large healthcare
companies, including Chiron Corporation.

ADDITIONAL STRATEGIC ALLIANCES

     As the relationship with Innogenetics demonstrates, management
believes strategic ventures and licensing arrangements position the
Murex Group for the future and play an important role in the
achievement of management's corporate objectives. The worldwide
marketing and distribution capabilities motivate companies like
Innogenetics, Digene Corporation ("Digene"), Eurogenetics N.V.
("Eurogenetics") and Genelabs Diagnostics SA ("Genelabs") to partner
with the Murex Group in licensing agreements and product development
and thereby contribute to the flow of new and creative products. The
alliances provide the Murex Group with access to technology,
strengthen and extend the monitoring market strategy and allow the
Murex Group to further penetrate its existing markets in blood
screening and clinical diagnostics.

Digene Corporation

     Effective February 1997, the Murex Group and Digene entered into
a five year agreement to work together to create a direct European
sales operation for Digene's sexually transmitted disease diagnostics
business. Digene, a leading developer of DNA probe technology, will
sell its Hybrid Capture(R) human papillomavirus ("HPV") DNA test
directly in selected European markets using the Murex Group's existing
distribution infrastructure in exchange for agency and selling service
fees. Additionally, Digene will make fixed payments over two years for
the European HPV business. The strategic alliance with Digene was
further extended during the year whereby the Murex Group received
exclusive rights to market Digene's new Hybrid Capture (R) II HIV RNA,
Cytomegalovirus ("CMV") and Hepatitis B ("HBV") tests in the United
Kingdom, Europe, Africa, the Middle East and Singapore, following
receipt of appropriate import and export authorizations from the FDA
and relevant foreign authorities.

Eurogenetics N.V.

     During January 1997, MDC entered into a ten year, worldwide
Original Equipment Manufacturer ("OEM") distribution agreement with
Eurogenetics. Pursuant to the terms of the agreement, the Murex Group
will distribute Eurogenetics' micro titre plate EIA kits for rubella,
toxoplasmosis, CMV, chlamydia, herpes and beta- 2 microglobulin.

Genelabs Diagnostics SA

     Effective June 1997, Genelabs, of Geneva, Switzerland, appointed
MDC to handle distribution of its diagnostics products in Europe and
South America. The move is expected to benefit hospitals and
laboratories in terms of product availability and technical support,
and expand the supply of Genelabs' speciality tests for the diagnosis
of infectious diseases and immunological disorders to new areas of
need. Agreements made between the two companies, which are exclusive
or co-exclusive depending on the country, provide for the sale of
viral confirmatory tests including, Western Blots for HTLV, HIV,
Epstein-Barr Virus ("EBV") and CMV, Autoblot 36 and Western Blot
instrumentation, as well as Hepatitis E Elisa.

MARKETING AND COMPETITION

     The immunodiagnostic systems industry is fragmented and very
competitive. It consists of large multinationals with very entrenched
market positions and many small to medium size companies competing
within specific market segments. The industry is experiencing some
concentration as some of the larger companies merge or acquire smaller
companies. Within the infectious disease market, segmentation exists
both by product group and the type of testing to be performed: mass
screening tests, confirmatory tests and rapid diagnostic tests. The
Murex Group's products compete in all these market segments. Principal
customer types in the infectious disease market include blood banks,
hospitals, clinical diagnostic laboratories and physicians' offices.
Principal competitors in the high volume mass screening market are
Abbott Laboratories, Ortho Diagnostic Systems, Genetic Systems and
Organon Teknika. Principal competitors in the rapid assay market are
Hybritech, Becton- Dickinson and Abbott Laboratories.

     The Murex Group possesses a significant portfolio of proven
products and technologies. Approximately 74% of product sales are
concentrated in Europe and the United States. Murex Group sales are
supported by regional distribution centers serving direct sales forces
in the United States, the United Kingdom, Germany, Italy, Spain,
France, Switzerland, the Czech Republic, the Netherlands, Canada,
Argentina, Columbia, Brazil, Australia and South Africa. The Murex
Group is represented in the rest of the world by a network of direct
sales representatives, distributors and agents.

     No single customer represented more than 5% of total sales in
1997. For further information concerning IMTC's or the Murex Group's
domestic and foreign operations, see Note 19 to the Consolidated
Financial Statements.

RESEARCH AND DEVELOPMENT

     The principal focus of the Murex Group's research and development
efforts has been and will continue to be the development of
high-volume assays for the detection of infectious agents such as
HTLV, HIV and hepatitis using advanced enzyme immunoassay
technologies. Also, under the terms of the 1992 acquisition of the
diagnostics division of Wellcome, Wellcome agreed to collaborate with
the Murex Group and grant first right of access to future
technological discoveries applicable to medical diagnostics through
February 1997. Pursuant to this agreement, MDC has entered into a
semi-exclusive patent licensing agreement with Glaxo-Wellcome relating
to testing for resistance to AZT.

     During February 1996, MDC entered into an exclusive distribution,
development and license agreement with Innogenetics to develop and
market gene probe products for the monitoring of patients and the
classification of viral diseases. Under the terms of the agreement,
MDC paid $5.9 million during 1996 and $1.6 million during 1997 to
Innogenetics for the exclusive rights to distribute Innogenetics'
LiPA(R) products, excluding HCV, for 15 years. MDC will also pay
Innogenetics a royalty of 10% of the Murex Group's net sales of
Innogenetics' products. Also under this agreement, MDC will fund
agreed-upon research and development programs, beginning in 1998 and
for each of the following 13 years in an amount equal to 20% of the
Murex Group's net sales of Innogenetics' products, subject to a cap.
This strategic alliance with Innogenetics has provided the Murex Group
exclusive rights to the Murex/Innogenetics HIV-RT monitoring test. In
the U.S., MDI has had discussions with the FDA but has not yet filed
an application for the approval of the test. The Murex/Innogenetics
LiPA(R) HIV-1 RT test is the first rapid assay to measure mutant
strains. See "Business - Patient Monitoring Products" for further
information.

     The Murex Group's internal research and development remains
strong as evidenced by its HTLV, syphilis, E. Coli 0157, redeveloped
HIV and HCV tests and other new product introductions. The Murex Group
incurred in-house and third party research and development expenses
aggregating $7,487,000, $6,369,000 and $7,426,000 for the years ended
December 31, 1997, 1996, and 1995, respectively.

MANUFACTURING OPERATIONS

     Worldwide distribution and sales of the majority of the Murex
Group's products originate from Murex Biotech Limited's ("MBL")
manufacturing facility, which is located in Dartford, England, under a
contract manufacturing and services agreement with MDC. Several
products sold by the Murex Group are produced by third party
manufacturers located throughout the world. Raw materials are produced
or acquired from independent suppliers and assembled into finished
products. MBL is fully compliant with the European Economic Community
ISO 9001 manufacturing and design standards. See "Business--Government
Regulation".

     As discussed in the "Business - Recent Developments" section, the
Murex Group recently constructed and opened a manufacturing plant near
Johannesburg, South Africa which is ISO 9002 certified for its
manufacturing and distribution systems.

     MDI operates under Good Manufacturing Practices ("GMP")
guidelines which outline the manufacturing, quality control, quality
assurance and documentation standards mandated by the FDA for a
medical products company. The components of the SUDS(R) test cartridge
and reagent raw materials are purchased by MDI from suppliers and
contract manufacturers and are assembled by MDI. Currently there are
no material adverse effects on capital expenditures, earnings or Murex
Group's competitive position due to compliance with federal, state and
local environmental regulations. See "Business-Government Regulation".

PATENTS, TRADEMARKS, AND LICENSES

     Patents and other proprietary technology are important to
biotechnology companies. Extensive research on a worldwide scale by
many companies has led to competitive claims of technology and patents
ownerships. The Murex Group's assets include a comprehensive patent
and license portfolio. Most of these patents and licenses are owned by
MDC. Patented latex agglutination technologies owned by the Murex
Group serve as the base technologies for the REVEAL and Wellcolex
bacterial product lines. License agreements with the Murex Group as
licensee include technologies and patents covering areas such as HIV-2
and hepatitis B core.

     The Murex Group's business utilizes newly developed technologies
that include patents on processes and devices. These types of
technologies are the focal point for the biotechnology industry. The
ownership and patentability of such processes or devices have become
increasingly complex, resulting in competitive claims of ownership
within the industry.

     As part of a 1996 agreement with Chiron Corporation ("Chiron")
and Ortho Diagnostics Systems, Inc. ("Ortho"), the Murex Group,
through MDC, has a license to sell HCV Serotyping tests worldwide and
other HCV tests in selected countries excluding North America,
European Union members and Japan. The agreement also grants to the
Chiron-Ortho joint business rights to MDC's SAM(TM) technology and an
option to sell MDC's HCV Serotyping test. The agreement also provides
Chiron the opportunity to acquire the Murex Group's HCV immunoassay
business at its then fair value in the event IMTC accepts an offer to
purchase 50% or more of the combined voting power of IMTC's then
outstanding securities, or if IMTC's Board of Directors approves a
merger, or the sale of all, or substantially all, of the Murex Group's
assets. If Chiron does not exercise this option, IMTC is entitled to
transfer its rights and licenses under the agreement described above.

     "Wellcogen", "Wellcolex", "Staphaurex", "Staphaurex Plus",
"Streptex", "REVEAL", "Murex", "SUDS" and "SAM" are among the
registered or licensed trademarks of the Murex Group. MDC has also
applied for a trademark for "Information for Life". Under the terms of
the acquisition of the diagnostics division of Wellcome, the Murex
Group has the right to continue to use the name "Well" in connection
with acquired products until August 2000.



     The Murex Group, largely through MDC, holds various patents on
current and potentially valuable technologies in multiple countries.
The exploitation of the potential value of this intellectual property
is anticipated through a combination of product development and/or
licensing of technology for use by others.

     MDC has licensed certain of its patented technologies to third
parties. MDC completed a non-exclusive, out-licensing transaction
during the second quarter of 1994 by licensing technology, acquired as
part of the 1992 acquisition of the diagnostics division of Wellcome,
to Abbott. This transaction provided MDC with a $10 million minimum
license fee which was paid over four years. Furthermore, MDC earned an
additional $1,075,000, $878,000 and $100,000 in 1997, 1996 and 1995,
respectively, as a result of minimum royalty levels being exceeded.
The underlying revenue stream associated with this licensing agreement
has grown 108% since 1994 and MDC expects the minimum royalty levels
to continue to be exceeded until the expiration of the patents in the
years 2004 and 2008, depending on the country. Beginning in 1998, the
Company anticipates receiving at least $3 million per year from this
licensing arrangement.

     The Murex Group also relies on unpatented technology and
know-how. There can be no assurance that others will not obtain access
to, or independently develop, such know-how. The Murex Group also
protects their proprietary information through confidentiality
agreements executed by all management employees.


GOVERNMENT REGULATION

     The manufacture and marketing of in vitro diagnostic products are
governed by a variety of statutes and regulations in the United States
and by comparable laws and regulations in other countries. Some
countries do not have any such statutes and regulations. The process
mandated by the FDA for clearance of a diagnostic product differs
depending on whether the product is classified as a medical device or
a biological product.

     FDA clearance may be obtained to market medical device products
in the United States through a pre-market notification filing, or
510(k) submission, for a device that is substantially equivalent to
devices on the market. Depending on the device's complexity, the
review period can be in excess of 200 days from the date of filing the
application. Affirmative FDA action is required before marketing may
proceed. Medical devices not substantially equivalent to devices
already on the market must undergo a more elaborate clearance process
requiring the submission to the FDA of an application for pre-market
approval ("PMA") containing substantial technical, manufacturing and
clinical data.

     Clearance by the FDA of a biological product (rather than a
medical device product ) for human use, such as the SUDS(R) HIV-1
test, which was cleared by the FDA in 1992, is a multi-step process.
The process includes: (a) pre-clinical laboratory and animal tests,
(b) submission to the FDA of an application for an Investigational New
Drug exemption ("IND"), which must become effective before human
clinical trials may commence, (c) human clinical trials to establish
the safety and effectiveness of the product, (d) submission to the FDA
of a Product License Application ("PLA"), which summarizes the results
of clinical studies, and a related Establishment License Application
("ELA") for the licensing of the product's manufacturing processes and
facilities, (e) FDA approval of the PLA and ELA, and, (f) FDA
evaluation and release of each manufactured lot prior to distribution.
An ELA provides information on the results of the clinical tests as
well as the details of the manufacturing process, such as raw material
suppliers, manufacturing equipment, quality control and assurance
procedures, and product labeling. Additionally, an ELA discloses the
qualifications of the personnel involved in product development,
manufacturing and testing. FDA's review of an ELA entails examination
of such data and information as well as inspection of the facilities
that will be used for the manufacture of the product. MBL's U.K.
manufacturing facility is ISO 9001 certified. The new facility in
South Africa is ISO 9002 certified for its manufacturing and
distribution systems. ISO 9000 certification is an international
quality management system standard for design, manufacture and
distribution of in vitro diagnostic kits and systems.

     Although the Murex Group anticipates additional FDA clearances
and foreign approvals, it is not possible to estimate when the
application and review processes will be completed with respect to a
given product or facility. There can be no assurance that additional
clearances or approvals from the FDA or other foreign regulators will
be granted.

     The Murex Group is also subject to various federal, state and
local laws and regulations relating to working conditions, laboratory
and manufacturing practices, the experimental use of animals and the
use and disposal of hazardous or potentially hazardous substances,
including radioactive compounds and infectious disease agents, used in
connection with research work and preclinical and clinical trials and
testing. The extent of government regulation which might result from
future legislation or administrative action cannot be accurately
predicted.

EMPLOYEES

     As of January 31, 1998, IMTC and its subsidiaries had 665 full
time employees located world wide, 55 of whom were involved in
research and development, 242 in manufacturing and 280 in sales and
marketing. All other employees perform executive and administrative
functions. Certain Murex Group employees are represented by seven
separate unions which include approximately 56 employees, primarily in
manufacturing and sales in the United Kingdom, Italy and France.
Management considers its relations with all of its employees, both
union and non-union, to be good.

YEAR 2000 SYSTEMS COMPLIANCE

     The Murex Group recognizes that the arrival of the Year 2000
poses a unique challenge to the ability of all systems to recognize
the date change from December 31, 1999 to January 1, 2000 and has
begun to analyze its various administrative and operating systems to
ensure that these systems will be Year 2000 compliant. Many of the
Murex Group's existing systems include new hardware and packaged
software recently purchased from large vendors who have represented
that these systems are already Year 2000 compliant. Management has not
estimated the costs to upgrade the remaining systems, however, they
are not expected to be material to any single year. Management
presently believes that with conversions to new systems and hardware,
the Year 2000 risks can be mitigated. An assessment of the readiness
of external entities, which it interfaces, such as vendors, customers
and others, is ongoing. There can be no guarantee that the systems of
other companies on which the Murex Group's systems rely will be timely
converted, nor that any unforseen costs won't be material to the
operations of the Murex Group.

ITEM 2.  PROPERTIES

     MBL researches, develops, manufactures and ships its products
from a 120,000 square foot facility located in Dartford, England,
leased from Glaxo-Wellcome Limited through 2000, subject to a five
year extension. Murex Biotech SA Limited, one of the Murex Group's
South African subsidiaries, leases a new 16,000 square foot
manufacturing facility close to Johannesburg, South Africa until 2002,
subject to a five year extension. MDI manufactures in a 41,000 square
foot facility located in Norcross, Georgia, leased through 1999.
Executive office and subsidiary sales office leases in various
countries generally expire at various times through 2002.

     The Murex Group believes its facilities are adequate and suitable
for its current and anticipated manufacturing, research, development,
marketing and administrative operations for the foreseeable future.

ITEM 3.  LEGAL PROCEEDINGS

     With the exception of the Abbott patent infringement suit in
which the Murex Group is the plaintiff, as discussed in the "Business
- Recent Developments" section, the Murex Group is no longer involved
in any other material legal proceedings. The following matters have
been favorably resolved, as discussed below:

CLASS ACTIONS

     Four class action lawsuits were instituted on behalf of all
persons who had purchased IMTC's securities between May 21, 1992 and
August 19, 1992 against IMTC, one former and one present executive
officer of IMTC, and two shareholders. Although the defendants denied
the allegations in the complaints, the parties agreed to settle all
outstanding claims for $5.4 million during 1996. In accordance with
the Stipulation Settlement Agreement, the two shareholders transferred
185,886 common shares of IMTC's stock to IMTC to be used as their
portion of the settlement. During 1997, the claims administrator
finished qualifying claimants and submitted a motion to the U.S.
District court setting out the final distribution for the settlement
fund, which was approved by the Court during October 1997. The sum of
damages claimed and expenses incurred by the claims administrator and
Plaintiffs' counsel was less than the total settlement fund.
Consequently, the Murex Group was entitled to the remaining cash of
approximately $2.1 million and 105,766 common shares of IMTC's stock.
These shares are valued at $615,000 ($5.81 per share), as defined by
the settlement agreement. The reversion of the settlement fund has
been reflected in the accompanying financial statements as an offset
to general and administrative costs for the cash portion and an
increase to additional paid-in capital for the stock portion.

UNITED KINGDOM TAX DISPUTE

     During 1995, the U.K. Inland Revenue questioned the tax basis of
inventory, accounts receivable and property, plant and equipment
related to the 1992 purchase of assets from Wellcome. This matter was
resolved during 1997, resulting in no additional tax payments or
liabilities. The U.K. Inland Revenue have finalized their review of
all tax returns through 1995, and all outstanding issues have been
resolved.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    None.




                                PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
           SHAREHOLDER MATTERS


     IMTC's Common Shares are listed and traded on the Nasdaq National
Market System ("Nasdaq") under the symbol "MURXF". The following table
sets forth the quarterly high and low closing sale prices of the
Common Shares for the periods noted.


                                               Calendar Year

                                         1997                 1996
--------------------------------------------------------------------------------
NASDAQ Stock Exchange

(Expressed in U.S
 Dollars)                          High       Low        High        Low
--------------------------------------------------------------------------------
First Quarter                  $    9.47   $   6.75   $   3.63   $   2.38

Second Quarter                     10.00       6.00       4.63       2.63

Third Quarter                      10.50       8.06       6.38       3.00

Fourth Quarter                     10.13       8.50       7.63       5.25


SHAREHOLDERS

     As of March 5, 1998, IMTC had 16,742,372 Common Shares held by
approximately 1,799 holders of record. The number of holders do not
include all individuals with a beneficial interest in IMTC's Common
Shares.

DIVIDEND POLICY

     IMTC has never paid a cash dividend on its Common Shares and has
no plans to pay cash dividends in the foreseeable future. The policy
of IMTC's Board of Directors is to retain any earnings for use in the
operation and expansion of business. The Bank of America line of
credit facility prohibits the payment of any IMTC dividends except
those paid in Common Shares.

UNREGISTERED SHARES

     During the fourth quarter of 1997, IMTC issued no unregistered
securities.






<PAGE>



ITEM 6.   SELECTED FINANCIAL DATA


<TABLE>
<CAPTION>

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

                                                                 Year Ended December 31,
                                      -------------------------------------------------------------
                                          1997         1996         1995         1994       1993
---------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF                (In thousands of U.S. Dollars, except per share data)
OPERATIONS DATA
<S>                                   <C>          <C>           <C>          <C>          <C>

Product sales                         $  98,553    $  99,881    $  92,394    $  93,192    $  79,689
License fees                              7,579          970                     9,250           36
                                      -------------------------------------------------------------
Total revenues                          106,132      100,851       92,394      102,442       79,725

Cost and expenses:
    Cost of products sold                39,250       34,887       30,181       24,353       24,368
    Research & development                7,487        6,369        7,426        6,372        5,967
    General & administrative             21,630       25,803       27,541       22,399       15,746
    Sales & marketing                    28,883       29,523       26,898       23,586       22,357
    Royalty expense                       5,625       (2,799)       8,365        9,599        6,430
    Restructuring costs                                2,100
    All other expenses                      104        1,542       (1,016)         547        1,091
                                      -------------------------------------------------------------
Total costs & expenses                  102,979       97,425       99,395       86,856       75,959

Operating income (loss)                   3,153        3,426       (7,001)      15,586        3,766
Interest income                             290          663        1,221          802          285
Interest expense                         (1,422)      (1,306)        (167)        (632)        (917)
All other income (expense), net           7,043         (934)        (663)      (1,532)        (460)
                                      -------------------------------------------------------------

Net income (loss)                     $   9,064    $   1,849    $  (6,610)   $  14,224    $   2,674
                                      =============================================================

Net income (loss) per common share
   Basic                              $    0.55    $    0.11  $     (0.40)   $    0.85    $    0.16
   Diluted                            $    0.52    $    0.11  $     (0.40)        0.85    $    0.16

Weighted average shares outstanding
   Basic, in thousands                   16,484       16,215       16,381       16,661       16,255
   Diluted, in thousands                 17,444       16,507       16,381       16,739       16,340

Cash dividends                                0            0            0            0            0
</TABLE>


<TABLE>
<CAPTION>

                                                               At December 31,
                                      -------------------------------------------------------------
                                          1997         1996         1995        1994        1993
---------------------------------------------------------------------------------------------------
CONSOLIDATED                                         (In thousands of U.S. Dollars)
BALANCE SHEET DATA
<S>                                   <C>          <C>           <C>          <C>            <C>

Total assets                          $  95,243    $  95,113    $  85,748    $  85,643    $  58,966

Long term debt                           14,331        9,638            0            0            0

</TABLE>






<PAGE>



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

     This report contains or refers to forward-looking information
including future revenues, products and income and is based upon
current expectations that involve a number of business risks and
uncertainties. Among the factors that could cause actual results to
differ materially from any forward-looking statement include, but are
not limited to, technological innovations of competitors, delays in
product introductions, changes in health care regulations and
reimbursements, litigation claims, changes in foreign economic
conditions or currency translation, product acceptance or changes in
government regulation of the Murex Group's products, as well as other
factors discussed in other Securities and Exchange Commission filings
for IMTC.

FINANCIAL CONDITION

     During the year ended December 31, 1997, IMTC and the Murex Group
(collectively referred to herein for consolidated financial purposes
only as the "Company"), continued its profitability, generated cash
from operations and maintained positive working capital.

Litigation and Technology Disputes

     The Murex Group's business utilizes newly developed technologies
that include patents on processes and devices. These types of
technologies are the focal point for the biotechnology industry. The
ownership and patentability of such processes or devices have become
increasingly complex, resulting in competitive claims of ownership
within the industry. The Company is not presently the defendant in any
material judicial proceeding, however, the Company is vigorously
pursuing its patent infringement suit in which the Company is the
plaintiff against Abbott. See "Business - Recent Developments".

Liquidity and Capital Resources

     The Company anticipates that its projected profitability, line of
credit facility, sufficient cash resources and adequate working
capital will enable it to carry on its current business and meet
existing capital requirements over the next twelve months and beyond.
Cash and working capital totaled $10.1 million and $48.9 million,
respectively at December 31, 1997. The Company generated cash from
operations of $6.0 million during the year ended December 31, 1997. On
November 12, 1996, the Company entered into a three year, $15 million
line of credit facility with Bank of America, which is collateralized
by the accounts receivable and inventory of its U.S., U.K. and
Barbados subsidiaries. Based on the value of the collateral, the
borrowings outstanding of $12,996,000 and a letter of credit
outstanding of $825,000, there was $186,000 unused and available under
this credit facility as of December 31, 1997. On January 14, 1998,
management amended the previous interest rate swap agreement with the
lender and fixed the interest rate at 8.98% (LIBOR + 2.5%) for
notional principal amount of $10 million for five years.

     The Company's working capital and capital requirements will
depend upon numerous factors including: the results of research and
development, the levels of resources devoted to the establishment and
expansion of marketing and manufacturing, technological developments,
and the timing and costs of obtaining approvals for new products.
Depending on the outcome of these factors, the Company may need to
raise additional funds in the future for use to complete products in
development or for other general purposes. There are no assurances
that such funds will be available on favorable terms, if at all.

Management Outlook

     The key to the Company's growth is the ability to identify new
needs in the marketplace, and to expeditiously meet these needs
through access to appropriate innovations and technologies, and to
rapidly incorporate them into the Murex Group's product line. However,
there can be no assurance that the Murex Group will successfully add a
significant number of new products to its product line. An alternative
strategy under consideration is to seek to maximize shareholder value
through asset sales or other dispositions. This strategy involves
management balancing its analysis of the Company's future prospects
against any third party proposal. There is no assurance that any third
party proposal would be acceptable to the Company or that management
would continue to explore this alternative.

     The Company is now positioned to benefit from investments made
during 1997 aimed at expansion not only into the patient monitoring
business with new products but also into emerging markets such as
South East Asia, South America and Southern Africa with both
diagnostic and monitoring products. Recent successes in emerging
markets include winning, for the second year, the entire Taiwan Red
Cross tender for over three million HCV, HTLV and HBsAg screening
assays. Also, late in 1997, the Company won a significant tender in
Turkey for 600,000 HCV tests. The Company also anticipates that sales
to South American countries will increase significantly during 1998.
Furthermore, by being the first company to market diagnostic products
which are manufactured in Africa, the Murex Group is positioned to
capitalize on the significant and growing African market.

     Recent Murex Group product innovations, such as SAM(TM), and
tests for HIV, HTLV, syphilis and E-Coli, should contribute to future
sales growth. These and other new or enhanced products, created
through in-house research and development, strengthened the Murex
Group's broad line of well-established virology and bacteriology
products and allowed the Murex Group to enter new markets in targeted
areas around the world.

     In addition to relying on research and development and licensing
of core technologies, management's operation strategy also focuses on
maintaining high quality standards, providing excellent customer
service, reducing costs and improving cash flows.

RESULTS OF OPERATIONS

Year ended December 31, 1997 compared to year ended December 31, 1996

     Total revenues for the year ended December 31, 1997 increased to
$106,132,000 over the prior year's revenues of $100,851,000. This
increase is partially due to the fixed payments made by Digene in
accordance with the February 1997 agreement and the sale of certain
technologies to Shield. An increase in the ongoing royalty revenue
generated from licensing certain technology to Abbott also contributed
to the increased revenues. The technologies sold to Shield are
targeted to a specific segment of the diagnostics industry that is not
part of the Company's long term focused strategy. The strength of the
U.S. Dollar against most major currencies during the year ended
December 31, 1997 relative to the prior year caused a decrease in the
Dollar equivalent product sales revenue. Murex operates a worldwide
distribution network; consequently, approximately 68% of the Company's
product sales are denominated in currencies other than the U.S.
Dollar, the reporting currency of the Company. The changes in product
sales represent actual increases, using a constant currency basis, of
$3,812,000, offset by negative foreign exchange impacts of $5,140,000
for the year ended December 31, 1997. License fees and royalties
increased to $7,579,000 from $970,000 in the previous year, as a
result of the Abbott, Digene and Shield agreements discussed above.

     Gross profit on product sales was 60.2% and 65.1% for the years
ended December 31, 1997 and 1996, respectively. The cost of products
sold was $39,250,000 and $34,887,000 the years ended December 31, 1997
and 1996, respectively. The increase in cost of goods sold is
primarily due to the strength of the British Pound, which also
strengthened against most major currencies during 1997, since the
majority of manufacturing is done in the U.K.
                                            
     Total costs and expenses, excluding cost of products sold, of
$63,729,000 for the year ended December 31, 1997 reflect a net
increase of $1,191,000 over the year ended December 31, 1996. Research
and development costs for 1997 were increased by $1,118,000 due to the
Company's strategy of developing innovative products for its
distribution network and continuously improving its existing products.
During 1997, the Company focused significant research and development
on improving its HIV and HCV test design and manufacturing process to
meet the changing requirements of this important market. General and
administrative expenses decreased $4,173,000 to $21,630,000 for 1997
as compared to $25,803,000 for 1996. The previous year's general and
administrative expenses included legal, employee compensation, and
other expenses associated with settling the patent litigation related
to its HCV test. As discussed in Note 16 of the accompanying financial
statements, the Company received the reversion of the class action
settlement fund, of which the cash portion of $2,133,000 is considered
as a reduction to general and administrative expenses in 1997. Sales
and marketing expenses were $28,883,000 and $29,523,000 for the years
ended December 31, 1997 and 1996, respectively. The decrease of
$640,000 was due to the effect of translating foreign currencies to a
stronger U.S. Dollar. The foreign exchange loss for the year ended
December 31, 1997 was $104,000 compared with a loss of $1,542,000 for
1996. The 1996 foreign exchange losses were caused predominantly by
the strengthening of the British Pound in relation to the U.S. and
German currencies, as well as the weakening of the South African Rand.
The royalty expense for the year ended December 31, 1997 was
$5,625,000 versus a net credit of $2,799,000 for 1996. As a result of
the settlement of HCV patent litigation during the third quarter of
1996, a reversal was made to royalty accruals made in previous years,
which resulted in a net credit to royalty expense. During September
1996, the Company recorded a restructuring charge of $2.1 million
before tax. The restructuring was driven by the need to reposition the
Company for its movement into the patient monitoring business, and
consisted predominantly of estimated costs for employee severance and
other benefits.

     Net interest expense for the year ended December 31, 1997 was
$1,132,000 compared to $643,000 for the year ended December 31, 1996.
The Company currently has access to capital at favorable rates via the
line of credit with Bank of America, however, during the twelve months
ended December 31, 1997, the Company increased the amount borrowed. In
the prior year, the Company factored its Italian receivables to fund
the agreement with Innogenetics. Other income for the year ended
December 31, 1997 was $3,374,000 compared to $386,000 for the year
ended December 31, 1996. The increase of $2,988,000 was primarily from
realized gains on marketable securities. The gain on liquidation of
investee for the year ended December 31, 1997 of $1,114,000 represents
additional proceeds IMTC expects to receive upon the ultimate
liquidation of SDL. Management expects the liquidation process to be
completed during the first quarter of 1998. These additional proceeds
are the result of the final and favorable settlements of claims with
various tax authorities including U.K. Inland Revenue. The equity in
loss of investee for the year ended December 31, 1996 represents SDL's
net loss for that period. For the year ended December 31, 1997, the
provision for income taxes was a benefit of $2,605,000 versus an
expense of $1,016,000 in the prior year. The benefit is due to the
reversal of $2,800,000 of the deferred tax asset valuation reserve for
net operating loss carryforwards in the United States, which is the
portion of the deferred tax asset that management expects to realize.

Year ended December 31, 1996 compared to year ended December 31, 1995
---------------------------------------------------------------------

     Revenues for the year ended December 31, 1996 increased to
$100,851,000 over the previous year's revenues of $92,394,000. This
increase is mainly due to a $7,487,000 net increase in product sales
as a result of the newly-acquired Innogenetics' product line, growth
of sales in Eastern Europe, South America and South East Asia as well
as the acquisition of the Company's Canadian distributor. The net
increase in product sales represents an actual increase using a
constant currency basis of $8,836,000 which was partially offset by a
negative foreign exchange impact of $1,349,000. License fees and
royalties revenues increased to $970,000 from $0 in the previous year,
primarily as a result of Abbott exceeding the minimum royalty level as
defined in the 1994 agreement.

     Gross profit on product sales was 65.1% and 67.3% for the years
ended December 31, 1996 and 1995, respectively. Cost of products grew
$4,706,000 as a result of increased sales, increased use of direct
distributors, especially for the newly-acquired Innogenetics'
products, and increased sales of purchased-in products which have
lower gross profit margins. Furthermore, the strengthening of the
British Pound relative to the U.S. Dollar throughout 1996 caused the
translated Dollar equivalent cost of manufacturing in the U.K. to
increase.

     Total operating costs and expenses, excluding cost of products
sold, of $62,538,000 for the year ended December 31, 1996 reflect a
net decrease of $3,553,000 over the year ended December 31, 1995.
Research and development costs for 1996 were reduced by $1,057,000 due
to added efficiencies in internal costs and the Company shifting its
focus to forming strategic business alliances such as with
Innogenetics. General and administrative expenses increased $1,385,000
to $25,803,000 for 1996 as compared to $24,418,000 for 1995. This
increase is due to the legal, employee compensation and other expenses
associated with settling the Company's HCV patent litigation during
the third quarter of 1996. Sales and marketing expenses were
$29,523,000 and $26,898,000 for the years ended December 31, 1996 and
1995, respectively. The increase of $2,625,000 was driven by new
product introductions, including the Innogenetics' LiPA product line,
expansion into the monitoring market and further strengthening of the
Company's overall distribution network. The foreign exchange loss for
the year ended December 31, 1996 was $1,542,000 versus a gain of
$1,016,000 for 1995. The loss is primarily attributable to the
strengthening of the British Pound to its then four year high, as MBL
(the Dartford, England manufacturing facility) carried intercompany
receivables in the local currencies of the various Murex Group
territories. This foreign exchange loss was further exacerbated by the
weakening of the South African Rand. As a result of the 1996 agreement
with Chiron and Ortho, a reversal was made to royalty accruals made in
prior years, which resulted in a net credit to royalty expense of
$2,799,000 for the year ended December 31, 1996. During September
1996, the Company recorded a restructuring charge of $2,100,000 before
tax. The restructuring was driven by a need to reposition the Company
for its movement into the patient monitoring business. The world-wide
plan resulted in personnel reductions from various functions. The
restructuring charge consists predominantly of costs for employee
severance and other benefits, of which $1,402,000 remained accrued at
December 31, 1996.

     Net interest expense for the year ended December 31, 1996 was
$643,000 compared to net interest income of $1,054,000 for the year
ended December 31, 1995 due to the increase in long term debt from the
new line of credit arrangement and the factoring of Italian
receivables. The loss on liquidation of investee of $394,000
represents SDL's net loss for the year ended December 31, 1996, net of
the estimated gain upon ultimate liquidation. As of December 31, 1996,
IMTC and its subsidiaries represented predominantly all creditors of
SDL; therefore, in the financial statements, the subsidiary is assumed
to be fully liquidated.








<PAGE>



ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


International Murex Technologies Corporation
CONSOLIDATED BALANCE SHEETS

                                                                  December 31,
                                                               -----------------
(In Thousands of U. S. Dollars)                                  1997      1996
--------------------------------------------------------------------------------


ASSETS

CURRENT ASSETS
    Cash and cash equivalents                                  $10,087   $ 9,723
    Accounts receivable, net of allowance for doubtful
      accounts of $2,939 and $3,174,  respectively              35,062    33,718
    Inventories                                                 21,164    21,534
    Amounts due from affiliates                                  1,477     4,415
    Prepaid and other                                            3,454     1,207
                                                               -----------------

Total current assets                                            71,244    70,597
--------------------------------------------------------------------------------

PROPERTY, PLANT AND EQUIPMENT-
    at cost less accumulated depreciation and amortization      13,245    10,091

PATENTS, TRADEMARKS AND LICENSES-
    at cost less accumulated amortization                        7,016     5,738

OTHER ASSETS                                                     3,738     8,687
                                                               -----------------

TOTAL                                                          $95,243   $95,113
================================================================================


See notes to consolidated financial statements.




                                       17

<PAGE>



                                                                December 31,
                                                          --------------------
                                                              1997       1996
------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
    Trade accounts payable                                 $ 10,215    $  9,757
    Accrued expenses:
          Professional fees                                   1,229       2,222
          Royalty payments                                    1,559       1,978
          Employee related                                    5,032       5,985
          Income taxes payable                                  827       1,508
          Litigation settlements                                155       3,310
          Restructuring                                                   1,402
          Other                                               3,110       2,809
    Current portion of long term debt                            95
    Current portion of capitalized lease obligations            163         151
                                                           --------------------

Total current liabilities                                    22,385      29,122
-------------------------------------------------------------------------------

DEFERRED RENT                                                    47          77

LONG TERM DEBT,  less current portion                        14,331       9,638

CAPITALIZED LEASE OBLIGATIONS, less current portion             248          93

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Common shares, without par value,
     200,000,000 shares authorized;  16,689,934 and
      16,578,853 shares issued, respectively                 84,780      84,460
Additional paid-in capital                                   14,521      13,906
Accumulated deficit                                         (32,591)    (41,655)
Less cost of  101,043 and 286,929
  common shares held in treasury, respectively                   (5)     (1,085)
Unrealized gain on marketable securities                        676       4,405
Accumulated currency translation adjustment                  (9,149)     (3,848)
                                                           --------------------

Shareholders' equity                                         58,232      56,183
-------------------------------------------------------------------------------

TOTAL                                                      $ 95,243    $ 95,113
===============================================================================


See notes to consolidated financial statements.




                                       18

<PAGE>




<PAGE>




Second Page for Balance Sheet




<PAGE>



International Murex Technologies Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS



                                                Year Ended December 31,
                                         -----------------------------------
(In Thousands of U.S. Dollars,
except per share data)                    1997          1996         1995
----------------------------------------------------------------------------

REVENUES
   Product sales                         $  98,553    $  99,881    $  92,394
   License fees and other (See Note 6)       7,579          970
                                         -----------------------------------
Total revenues                             106,132      100,851       92,394

COSTS AND EXPENSES
   Cost of products sold                    39,250       34,887       30,181
   Research and development                  7,487        6,369        7,426
   General and administrative               21,630       25,803       27,541
   Sales and marketing                      28,883       29,523       26,898
   Foreign exchange loss (gain)                104        1,542       (1,016)
   Royalty expense (credit)                  5,625       (2,799)       8,365
   Restructuring expense                                  2,100
                                         -----------------------------------
Total costs and expenses                   102,979       97,425       99,395
----------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS                3,153        3,426       (7,001)

Interest income                                290          663        1,221
Interest (expense)                          (1,422)      (1,306)        (167)
Gain (loss) on asset disposals                 (50)          90          108
Gain (loss) on liquidation of investee       1,114         (394)
Other income (expense)                       3,374          386         (289)
                                         -----------------------------------
INCOME (LOSS) BEFORE INCOME TAXES            6,459        2,865       (6,128)

Income tax benefit (expense)                 2,605       (1,016)        (482)
                                         -----------------------------------
NET INCOME (LOSS)                        $   9,064    $   1,849    $  (6,610)
============================================================================

NET INCOME (LOSS) PER COMMON SHARE
   Basic                                 $    0.55    $    0.11    $   (0.40)
                                         =========    =========    ========= 
   Diluted                               $    0.52    $    0.11    $   (0.40)
                                         =========    =========    ========= 



WEIGHTED AVERAGE SHARES OUTSTANDING
   Basic, in thousands                      16,484       16,215       16,381
                                         =========    =========    =========
   Diluted, in thousands                    17,444       16,507       16,381
                                         =========    =========    =========



See notes to consolidated financial statements.



                                  19
<PAGE>  




<PAGE>



International Murex Technologies Corporation
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(In Thousands of U.S. Dollars, except share data)
<TABLE>
<CAPTION>

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


                                           Common Stock         Additional
                                      -----------------------    Paid-In   Accumulated
                                        Shares       Amount      Capital     Deficit
-------------------------------------------------------------------------------------
<S>                                   <C>          <C>         <C>         <C>

January 1, 1995                       16,778,646  $   84,082   $  13,906   $  (36,894)

Issued pursuant to employee
  stock purchase plan                     17,375          54

Shares repurchased for treasury

Retirement of  escrowed shares          (107,144)

Issued in exchange for
  subsidiary shares                           54

Net loss                                                                       (6,610)

Foreign currency translation
                                      -----------------------------------------------

December 31, 1995                     16,688,931      84,136      13,906      (43,504)

Issued pursuant to employee
  stock purchase plan                     23,297          91

Exercise of employee stock options        15,900          50

Issued as stock compensation             281,925       1,692

Shares tendered to treasury

Retirement of treasury shares           (431,200)     (1,509)

Unrealized gain on marketable
   securities

Net income                                                                      1,849

Foreign currency translation
                                      -----------------------------------------------

December 31, 1996                     16,578,853      84,460      13,906      (41,655)

Issued pursuant to employee
  stock purchase plan                     23,617         155

Exercise of employee stock options       218,300         999

Retirement of treasury shares           (185,886)     (1,080)

Issued pursuant to class action
   settlement                             80,120         465

Reversion of settlement shares                                       615

Shares tendered as tax withholding       (25,070)       (219)

Net change in unrealized gain on
   marketable securities

Net income                                                                      9,064

Foreign currency translation
                                      ===============================================

December 31, 1997                     16,689,934  $   84,780   $  14,521   $  (32,591)
                                      ===============================================
</TABLE>



<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
                                                  Unrealized   Accumulated
                                                   Gain on      Currency       Total
                                     Treasury    Marketable    Translation   Shareholders'
                                       Shares     Securities   Adjustment      Equity
------------------------------------------------------------------------------------------
<S>                                    <C>         <C>        <C>             <C>

January 1, 1995                        $     (5)              $   (4,585)  $   56,504

Issued pursuant to employee
  stock purchase plan                                                              54

Shares repurchased for treasury          (1,509)                               (1,509)

Retirement of  escrowed shares

Issued in exchange for
  subsidiary shares

Net loss                                                                       (6,610)

Foreign currency translation                                       1,092        1,092
                                      ------------------------------------------------

December 31, 1995                        (1,514)                  (3,493)      49,531

Issued pursuant to employee
  stock purchase plan                                                              91

Exercise of employee stock options                                                 50

Issued as stock compensation                                                    1,692

Shares tendered to treasury              (1,080)                               (1,080)

Retirement of treasury shares             1,509

Unrealized gain on marketable
   securities                                     $    4,405                    4,405

Net income                                                                      1,849

Foreign currency translation                                        (355)        (355)
                                      ------------------------------------------------

December 31, 1996                        (1,085)       4,405      (3,848)      56,183

Issued pursuant to employee
  stock purchase plan                                                             155

Exercise of employee stock options                                                999

Retirement of treasury shares             1,080

Issued pursuant to class action
   settlement                                                                     465

Reversion of settlement shares                                                    615

Shares tendered as tax withholding                                               (219)

Net change in unrealized gain on
   marketable securities                              (3,729)                  (3,729)

Net income                                                                      9,064

Foreign currency translation                                      (5,301)      (5,301)
                                      ===============================================

December 31, 1997                      $     (5)  $      676  $   (9,149)  $   58,232
                                      ================================================

</TABLE>




See notes to consolidated financial statements.


                                  20
<PAGE>




<PAGE>



International Murex Technologies Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                    Year Ended December 31,
                                                              --------------------------------
(In Thousands of U.S. Dollars)                                   1997        1996       1995
----------------------------------------------------------------------------------------------
<S>                                                           <C>          <C>          <C>

OPERATING ACTIVITIES:
Net  income (loss)                                            $  9,064    $  1,849    $ (6,610)
Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
              Depreciation                                       3,903       3,519       4,199
              Amortization                                         850         459          85
              Loss (gain) on sale of property and equipment         50         (90)       (108)
              Gain on sale of marketable securities             (3,095)
              Deferred taxes                                    (2,800)
              Non-cash compensation                              2,694       1,692
              Changes in assets and liabilities:
                     Accounts receivable                         1,885       1,118      (3,074)
                     Inventories                                   370      (4,593)     (1,154)
                     Prepaid and other assets                   (1,004)     (1,088)      1,388
                     Trade accounts payable                        458       2,171       1,999
                     Accrued expenses                           (6,365)     (9,963)      5,444
----------------------------------------------------------------------------------------------
       Net cash (used in) provided by operating activities       6,010      (4,926)      2,169
----------------------------------------------------------------------------------------------

INVESTING ACTIVITIES:
Proceeds from sale of property and equipment                       157         269         265
Additions to property and equipment                             (7,805)     (4,558)     (4,994)
Additions to patents and licenses                               (2,128)     (5,968)       (101)
Proceeds from sale of marketable securities                      2,811
-----------------------------------------------------------------------------------------------
      Net cash used in investing activities                     (6,965)    (10,257)     (4,830)
-----------------------------------------------------------------------------------------------

FINANCING ACTIVITIES:
Increase in borrowings under line of credit                      3,263       9,638          40
Increase (decrease) of other long-term liabilities               1,342        (289)       (458)
Proceeds from issuance of common shares                          1,154         141          54
Repurchase of shares for treasury                                                       (1,509)
-----------------------------------------------------------------------------------------------
     Net cash provided by (used in) financing activities         5,759       9,490      (1,873)
-----------------------------------------------------------------------------------------------

Effect of Exchange Rate Changes                                 (4,440)       (355)      1,092

Net Increase (Decrease) in Cash and Cash Equivalents               364      (6,048)     (3,442)

Cash and Cash Equivalents at Beginning of Period                 9,723      15,771      19,213
-----------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                    $ 10,087    $  9,723    $ 15,771
-----------------------------------------------------------------------------------------------

Supplemental Disclosure of Cash Flow Information:
       Cash paid for interest                                 $  1,238    $  1,306    $    148
       Cash paid for income taxes                             $    876    $  1,140    $  1,348


</TABLE>



                                  21
<PAGE>




<PAGE>



International Murex Technologies Corporation
--------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(In Thousands of U.S. Dollars)
------------------------------

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

     During the years ended December 31, 1997, 1996 and 1995, the
Company entered into capital lease obligations of approximately $320,
$63 and $53 respectively.

    Unpaid acquisition costs totaled $750 at December 31, 1995.

See notes to consolidated financial statements.




<PAGE>



International Murex Technologies Corporation
--------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands of U.S. Dollars, except share amounts)
----------------------------------------------------


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

1.   NATURE OF THE COMPANY AND BASIS OF PRESENTATION:

     International Murex Technologies Corporation ("IMTC"), is
     incorporated in Canada and has many incorporated subsidiaries
     operating throughout the world under the Murex name (the "Murex
     Group"). The Murex Group develops, manufactures and markets
     medical diagnostic products and provides medical services for the
     screening, diagnosis and monitoring of infectious diseases and
     other medical conditions. (IMTC and the Murex Group are
     collectively referred to herein for consolidated financial
     purposes only as the "Company".)

     The accompanying financial statements include IMTC and its
     wholly-owned, incorporated subsidiaries doing business in various
     territories generally under the name Murex Diagnostics, Murex
     Holdings Corporation ("MHC"), a Delaware corporation; and MHC's
     majority owned subsidiary; Murex Corporation ("Murex"), a
     Delaware corporation; and Murex's wholly owned subsidiaries. In
     August 1995, Murex, a then majority-owned subsidiary was merged
     with MHC and subsequently into Murex Diagnostics, Inc. ("MDI").
     The previous minority interest's portion of Murex's continued
     losses in excess of their basis has not been recorded because
     management considers that it is not currently realizable. At
     December 31, 1996, the U.S. subsidiaries were further
     consolidated by merging the U.S. holding company, IMTC Holdings,
     Inc. into MDI.

     Effective January 1, 1996, IMTC's U.K. operating business was
     restructured into two companies, Murex Diagnostics Limited
     ("MDL") and Murex Biotech Limited ("MBL"). MDL subsequently
     changed its name to Specialist Diagnostics Limited ("SDL") and
     entered voluntary liquidation. As of December 31, 1997 and 1996,
     IMTC and its subsidiaries represented predominately all of the
     creditors of SDL; therefore, in the consolidated financial
     statements, the subsidiary is assumed to be fully liquidated.
     During 1997, approximately $3,888 in cash was returned to the
     Company from the SDL liquidator. During the fourth quarter of
     1997, claims with various tax authorities including Inland
     Revenue were effectively settled which resulted in additional
     expected proceeds of $1,114. As such, management expects to
     receive the remaining net proceeds of $1,477 from the SDL
     liquidator after settlement of all liquidation costs, which is
     reflected as of December 31, 1997 as amounts due from affiliates.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     The Company's financial statements have been prepared in
     accordance with United States generally accepted accounting
     principles and reflect the following policies:

     (A)  BASIS OF CONSOLIDATION: The consolidated financial
          statements include the accounts of IMTC and all
          subsidiaries. All significant intercompany accounts and
          transactions are eliminated.

     (B)  CASH EQUIVALENTS: The Company considers all highly liquid
          investments with original maturities of three months or less
          to be cash equivalents.

     (C)  ACCOUNTS RECEIVABLE: Accounts receivable include amounts due
          from customers in Italy and Spain which, if not factored,
          may take approximately one year to collect. An allowance for
          estimated doubtful accounts is provided, as considered
          appropriate, based on identification of specific
          uncollectible receivables.

     (D)  INVENTORIES: Stated at the lower of cost (first-in,
          first-out method) or market.

     (E)  LONG-LIVED ASSETS: At each balance sheet date management
          reviews assets for impairment based on its expectations of
          future non-discounted cash flows. Based on the Company's
          most recent analysis, the Company believes no material
          impairment of assets exists at December 31, 1997.

     (F)  PROPERTY, PLANT AND EQUIPMENT: Stated at cost less
          accumulated depreciation. Depreciation is provided by the
          straight-line method over the useful lives of the assets:
          forty years for buildings, three to ten years for equipment
          and furniture, and the lesser of the useful life or the term
          of the lease for leasehold improvements.

     (G)  PATENTS, TRADEMARKS AND LICENSES: Costs incurred for legal
          expenses in connection with obtaining patent protection,
          trademark rights and licenses for certain technology have
          been deferred. Amortization of such costs is provided by the
          straight-line method over five years for patents and
          trademarks and over the life of the agreement, not to exceed
          seven years, for license agreements.

     (H)  INVESTMENTS: The Company accounts for its long-term
          investment in the marketable securities of Digene
          Corporation in accordance with Statement of Financial
          Accounting Standards No. 115 ("SFAS 115"), "Accounting for
          Certain Investments in Debt and Equity Securities" .

     (I)  INCOME TAXES: Deferred income taxes are determined in
          accordance with Statement of Financial Accounting Standards
          No. 109 ("SFAS No. 109") and reflect the net tax effects of
          (a) temporary differences between the carrying amounts of
          assets and liabilities for financial reporting purposes and
          the amounts used for income tax purposes, and (b) operating
          loss and tax credit carry forwards.

     (J)  REVENUE: Revenue is recognized at the time product is
          shipped or when contract services are rendered .

     (K)  RESEARCH AND DEVELOPMENT: Research and development costs
          include primarily salaries and benefits, rent, laboratory
          materials and supplies, consulting fees, and subcontract
          costs, and are expensed in the period incurred.

     (L)  FOREIGN EXCHANGE: The reporting currency for the Company is
          the U.S. Dollar. The functional currency for all operations
          is the respective local currency. The translation of all
          foreign currencies into U.S. Dollars is performed for asset
          and liability accounts using exchange rates in effect at the
          balance sheet date, for equity accounts at historical rates,
          and for revenue and expense accounts using a weighted
          average exchange rate during the period. Gains and losses
          resulting from the translation of subsidiary financial
          statements and intercompany foreign currency transactions
          that are of a long-term investment nature are classified as
          accumulated currency translation adjustments within
          shareholders' equity. The gains and losses relating to all
          other transactions have been included in the consolidated
          statements of operations.

     (M)  STOCK BASED COMPENSATION: Accounting for stock options
          issued to employees and non-employee directors is based upon
          the "intrinsic value" method set forth in Accounting
          Principles Board Opinion No. 25 ("APB 25"), "Accountin g for
          Stock Issued to Employees" . Accounting for stock options
          issued to non-employees prior to December 16, 1995 is also
          based upon APB 25. Accounting for stock options issued to
          non-employees (excluding non-employee directors) after
          December 15, 1995 is based upon the "fair value" method set
          forth in Statement of Financial Accounting Standards No. 123
          ("SFAS 123"), "Accountin g for Stock- Based Compensati on".
          See footnote 12 for further discussion of SFAS 123.

     (N)  NET INCOME (LOSS) PER COMMON SHARE: Basic earnings per
          common share are computed by dividing net earnings by the
          weighted average number of common shares outstanding during
          each year. Diluted earnings per share include common share
          equivalents, the incremental shares that would have been
          outstanding upon the assumed exercise of dilutive stock
          options and warrants. For 1995, the calculation of loss per
          common share excludes the effect of common share equivalents
          as such effect is anti-dilutive.

     (O)  PERVASIVENESS OF ESTIMATES: The preparation of financial
          statements in conformity with generally accepted accounting
          principles requires management to make estimates and
          assumption s that affect the reported amounts of assets and
          liabilitie s and disclosure of contingent assets and
          liabilitie s 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.

     (P)  RECLASSIFICATIONS: Certain reclassifications of prior year
          amounts have been made to conform to the current year
          financial statement reporting format.

     (Q)  NEW ACCOUNTING PRONOUNCEMENTS: In June 1997, the Financial
          Accounting Standards Board ("FASB") issued SFAS 130,
          "Reporting Comprehens ive Income" and 131, "Disclosur es
          about Segments of an Enterprise and Related Informatio n."
          SFAS 130 establishe s standards for reporting and display of
          comprehens ive income and its components (revenues,
          expenses, gains, and losses) in a full set of general
          purpose financial statements . SFAS 131 establishe s
          standards for, among other things, reporting informatio n
          about operating segments in annual financial statements and
          requires that those enterprise s report selected informatio
          n about operating segments in interim financial reports
          issued to shareholde rs. SFAS 130 and 131 are effective for
          financial statements issued for periods beginning after
          December 15, 1997. Management believes that the adoption of
          these statements will not have a material adverse effect on
          the Company's consolidat ed financial statements .

3.   EQUITY INVESTMENT IN DIGENE CORPORATION:

     IMTC's subsidiary, Murex Diagnostics Corporation ("MDC"), owns
     common shares of Digene Corporation ("Digene"). In accordance
     with the provisions of SFAS 115, the Company has classified the
     investment as "available for sale" and reported it at fair value
     in the Other Assets section of the balance sheet, with the
     unrealized gain credited to a separate component of shareholders'
     equity. At December 31, 1997 and 1996, the fair market value of
     the investment was $1,359 and $7,497, respectively, with
     unrealized holding gains of $676 and $4,405, respectively. During
     the year ended December 31, 1997, 301,475 shares were used to
     settle a compensation liability to management. The Company
     realized a gain of $3,095 upon the disposition of shares during
     1997, which is included in the Other Income section of the income
     statement.

4.  INVENTORIES:
                                          December 31,       December 31,
                                              1997              1996
                                          ------------       ------------
Raw materials and supplies                   $  5,355        $  5,911
Work in process                                10,659          10,734
Finished goods                                  9,909          10,379
                                             --------        --------
Total Inventories                              25,923          27,024
Less inventory reserves                        (4,759)         (5,490)
                                             --------        --------
Total Inventories, net                       $ 21,164        $ 21,534
                                             ========        ========

5.  PROPERTY, PLANT AND EQUIPMENT:
                                          December 31,       December 31,
                                              1997              1996
                                          ------------       ------------
Furniture and office equipment               $  8,725        $  8,585
Equipment                                      18,478          16,524
Leasehold improvements                          2,671           2,316
                                             --------        --------
Total                                          29,874          27,425
Less accumulated depreciation and
amortization                                  (16,629)        (17,334)
                                             --------        --------
Property, plant and equipment, net           $ 13,245        $ 10,091
                                             ========        ========

6.   TECHNOLOGY LICENSING AND OTHER AGREEMENTS:

     MDC completed a non-exclusive, out-licensing transaction during
     1994 by licensing technology to Abbott Laboratories. This
     transaction provided MDC with a $10,000 minimum license fee which
     was paid over four years. Furthermore, MDC earned an additional
     $1,075, $878 and $100 in 1997, 1996, and 1995, respectively, as a
     result of minimum royalty levels being exceeded. Licenses have
     also been granted for SAM(TM) technology to Chiron Corporation
     ("Chiron"). MDC also licenses technology and products from other
     diagnostics manufacturers and generally, the Murex Group pays a
     royalty to these companies based on its sales of the products.
     See Note 15.

     MDC earned an additional $6,504 during 1997 as a result of
     strategic alliance transactions with Digene and Shield
     Diagnostics Group plc ("Shield"). Effective February 1997, the
     Murex Group and Digene entered into a five year distribution,
     agency and sales representation agreement whereby Digene will
     sell its Hybrid Capture (R) human papillomavirus ("HPV") DNA test
     directly in selected European markets using the Company's
     existing distribution infrastructure in exchange for selling
     service fees. Additionally, Digene purchased certain intangible
     properties for cash paid during 1997 and notes which are payable
     through 1998. During June 1997, the Murex Group sold TTP
     Corporation ("TTP"), a wholly-owned subsidiary of MDC, to Shield.
     TTP owned the intellectual property and other rights to ten
     products used for the diagnosis of thyroid dysfunction and the
     measurement of cardiovascular/blood coagulation degradation
     products. The Murex Group will continue to manufacture and sell
     the TTP product line acquired by Shield for a period of three
     years, pursuant to a purchase commitment.

     7.   PATENTS, TRADEMARKS AND LICENSES:

                                          December 31,       December 31,
                                              1997              1996
                                          ------------       ------------

Patents                                      $   891          $   663
Trademarks                                       203              159
Licenses                                       8,096            6,240
                                             -------          -------
Total                                          9,190            7,062
Less accumulated amortization                 (2,174)          (1,324)
                                             -------          -------
Total, net                                   $ 7,016          $ 5,738
                                             =======          =======

8.   BORROWINGS UNDER LINES OF CREDIT:

     On November 12, 1996, the Company entered into a three year,
     $15,000 line of credit facility with Bank of America, which is
     collateralized by the accounts receivable and inventory of its
     U.S., U.K. and Barbados subsidiaries. The credit agreement
     requires the Company to maintain certain financial ratios and
     other financial conditions, prohibits the payment of any IMTC
     dividends except those paid in common shares, and limits capital
     expenditures, certain investments and additional indebtedness. At
     December 31, 1997 and 1996, the Company was in compliance with
     all loan covenants. Based on the value of the collateral, the
     borrowings outstanding of $12,996 and a letter of credit
     outstanding of $825, there was $186 unused and available under
     this credit facility as of December 31, 1997. Interest is payable
     monthly at either LIBOR (5.7% at December 31, 1997) plus 2.5% or
     prime (8.5% at December 31, 1997).

     On December 11, 1996, the Company entered into a five year,
     interest rate swap agreement to reduce the impact of changes in
     interest rates on its LIBOR-based line of credit. The five year
     agreement effectively fixed the total interest rate at 8.9%, on a
     notional principal amount of $8,000. The Company specifically
     designated this interest rate swap agreement as a hedge of the
     line of credit, and therefore recognizes the differential paid or
     received as an adjustment to interest expense in the period in
     which it occurs. Therefore, as of December 31, 1997 and 1996,
     there were no carrying amounts related to the interest rate swap
     agreement in the consolidated balance sheets. The estimated fair
     value of the interest rate swap agreement, based on current
     market rates approximated a payable of $122 and $0 at December
     31, 1997 and 1996, respectively. The Company is exposed to credit
     loss in the event of non-performance in the event the other party
     to the interest rate swap agreement, however the Company does not
     anticipate non-performance by the counter party. See also
     Footnote 20.

     In order to finance a new manufacturing facility in South Africa
     as well as provide a partial, natural foreign exchange hedge of
     its long term investment, the Company entered into a Rand
     denominated six year term loan with a capacity of approximately
     $1,600 at an interest rate of 10.5%. The interest rate is
     favorable by South African standards because the loan is part of
     an investment incentive package which includes a tax holiday. At
     December 31, 1997, $1,430 was outstanding under this term loan,
     which is collateralized by the property in South Africa and
     guaranteed by IMTC.

     The scheduled maturities of long term debt are as follows:

     1998                                  $    95
     1999                                   13,282
     2000                                      286
     2001                                      286
     2002                                      286
     Thereafter                                191
                                            ------
     Total                                 $14,426
                                           =======


     The weighted average interest rate on average outstanding debt
     was 9.17%, 8.89% and 9.66% for each of the years ended December
     31, 1997, 1996 and 1995, respectively.

9.   CAPITAL LEASES:

     Capitalized lease obligations for property and equipment bear
     interest at an imputed average rate of 8.08%. The leases are
     collateralized by equipment with an original cost of $792 and
     $689 and a net book value of $257 and $81 at December 31, 1997
     and 1996, respectively. Future minimum lease payments under
     capital leases with terms in excess of one year at December 31,
     1997, together with the present value of minimum lease payments,
     are shown in the table below.

     1998                                  $   194
     1999                                      188
     2000                                      109
     2001                                        3
                                           -------
     Total                                     494
     Less interest                             (83)
                                           -------
     Present value                             411
     Current portion                          (163)
                                           -------
     Long term                             $   248
                                           =======

10.  OPERATING LEASES:

     The Company leases office space and certain office equipment
     under operating lease agreements. Future minimum lease payments
     under noncancellable operating lease agreements with terms in
     excess of one year are as follows:

     1998                                  $ 3,549
     1999                                    3,109
     2000                                    1,462
     2001                                      951
     2002                                      743
     Thereafter                                125
                                           -------
     Total                                 $ 9,939
                                           =======

     Rent expense under all operating leases amounted to approximately
     $3,179, $1,776 and $1,711 for each of the years ended December
     31, 1997, 1996 and 1995, respectively.


11.  INCOME TAXES:

     The taxation of a company that has operations in several
     countries involves many complex variables, such as differing tax
     structures from country to country as well as the existence and
     use of operating loss carryforwards in certain tax jurisdictions.
     These complexities do not permit meaningful comparisons between
     the domestic and international components of income before taxes
     and the provision for income taxes, and disclosures of these
     components do not provide indicators of relationships in future
     periods.

     The Company's deferred tax assets are subject to a valuation
     allowance that reduces the deferred tax assets at December 31,
     1997 and 1996 to $2,800 and $0, respectively. The long-term
     portions of the deferred tax assets were $1,435 and $0 at
     December 31, 1997 and 1996, respectively. The tax effects of
     significant items comprising the Company's deferred taxes are as
     follows:


                                          December 31,       December 31,
                                              1997              1996
                                          ------------       ------------

Deferred tax liabilities:
      Asset basis differences                $    91         $     22
                                            --------         --------

Deferred tax assets:
      Book reserves                            1,231            2,574
      Operating loss carryforwards            15,032           12,378
      All other                                  761            3,040
                                            --------         --------
                                              17,024           17,992
Less: Valuation allowance                    (14,133)         (17,970)
                                            --------         --------
                                               2,891               22
                                            --------         --------
Deferred income taxes                        $ 2,800         $      0
                                            ========         ========
                                                        
     During 1996, the Company increased the beginning balance of the
     valuation allowance by $1,810 to reflect the liquidation of SDL.

     The components of earnings and income tax expense (benefit) are
     as follows:

     Earnings (losses) before income taxes:

                                 1997            1996          1995
                                 ----            ----          ----
U.S.                           $ 2,205        $ 1,964         $   505
Foreign                          4,254            901          (6,633)
                               -------        -------         -------
                               $ 6,459        $ 2,865         $(6,128)
                               =======        =======         =======






Income Tax Provision              1997            1996           1995
                                  ----            ----           ----
Current
    Federal                     $    52         $    35        $    11

    State                            45              31             45
    Foreign                          98             835            423
Deferred
    Federal                      (2,800)
    Foreign                                         115              3
                                -------         -------        -------
    Total                       $(2,605)        $ 1,016        $   482
                                =======         =======        =======

     A reconciliation of differences between the statutory U.S.
     federal income tax rate and the Company's effective rate is as
     follows:

                                          1997       1996      1995
                                          ----       ----      ----

U.S.  Statutory Rate                    $ 2,196    $   974    $(2,084)
State taxes                                 258        115       (125)
Increase (decrease) in valuation
allowance                                (3,873)     2,497       (252)
Increase in unused net operating
losses                                    2,654        243      4,349
Effect of foreign rates differing
from U.S. statutory rate                 (3,840)    (2,813)    (1,406)
                                        -------    -------    -------
Total                                   $(2,605)   $ 1,016    $   482
                                        =======    =======    =======


     At December 31, 1997 the Company had, for tax reporting purposes,
     net operating loss carryforwards of approximately $41,824,
     generated as follows:

                                                          Other
                          U.S.      Canada      U.K.      Foreign     Total
                          ----      ------      ----      -------     -----

     1997                          $   975    $ 3,483    $ 4,734    $ 9,192
     1996                            1,200      2,876      1,938      6,014
     1995                              675                   362      1,037
     1994               $   724                              369      1,093
     1993                 1,076        290                   921      2,287
     Prior periods       18,868      3,333                           22,201
                        -------    -------    -------    -------    -------
     Total              $20,668    $ 6,473    $ 6,359    $ 8,324    $41,824
                        =======    =======    =======    =======    =======

     The company has recorded a deferred tax asset of $2,800
     reflecting the benefit of $7,368 in U.S. loss carryforwards,
     which expire in varying amounts between 1999 and 2009.
     Realization is dependent on generating sufficient taxable income
     prior to expiration of the loss carryforwards. Although
     realization is not assured, management believes it is more likely
     than not that all of the deferred tax asset will be realized. The
     amount of the deferred tax asset considered realizable, however,
     could be reduced in the near term if estimates of future taxable
     income during the carryforward period are reduced.

     The carryforwards expire through 2004 for Canadian purposes.
     Other foreign jurisdiction tax loss carryforwards include
     European countries which generally expire in 1998 or have
     indefinite carryforwards. The 1997, 1996 and 1995 income tax
     provisions primarily represent current amounts due to various
     U.S. state taxing authorities and various foreign taxing
     authorities.

     The net operating losses include the U.S. net operating losses of
     Murex prior to the merger of Murex into MDI. Net operating loss
     carryforwards for income tax purposes of $9,850 are subject to an
     annual limitation of approximately $390 on utilization due to a
     change in ownership in June 1988. As of December 31, 1997, $6,145
     was not yet available for utilization.

12.  COMMON SHARES:

     (A)  NET INCOME (LOSS) PER COMMON SHARE: In February 1997, the
          Financial Accounting Standards Board issued Statement of
          Financial Standards No. 128, "Earnings Per Share" ("SFAS
          128"). SFAS 128 requires disclosure of basic earnings per
          common share based on the net income (loss) and the weighted
          average number of common shares outstanding during the
          period. SFAS 128 also requires disclosure of diluted
          earnings per common share based on the net income (loss) and
          the weighted average number of common shares and common
          share equivalents outstanding during the period. All periods
          presented are retroactively restated to conform to the
          presentation requirements of SFAS 128. The following table
          represents the computation of basic and diluted earnings per
          common share:

<TABLE>
<CAPTION>

                                                           1997      1996        1995
                                                           ----      ----        ----
      <S>                                               <C>         <C>         <C>

     Basic earnings per common share:
           Net income (loss)                            $  9,064   $  1,849   $ (6,610)
           Weighted average common shares outstanding     16,484     16,215     16,381
           Basic net income (loss) per common share     $   0.55   $   0.11   $  (0.40)
     Diluted earnings per common share:
           Net income (loss)                            $  9,064   $  1,849   $ (6,610)
           Weighted average common shares outstanding     16,484     16,215     16,381
           Common stock equivalents                          960        292
                                                        --------   --------   --------
           Total weighted average shares                  17,444     16,507     16,381
           Diluted net income (loss) per common share   $   0.52   $   0.11   $  (0.40)

</TABLE>


     (B)  STOCK OPTIONS: On May 11, 1993, IMTC adopted the
          International Murex Technologies Corporation Employee Equity
          Incentive Plan (the "1993 Plan"), which was approved by
          shareholders in June 1993. The plan was amended and restated
          in June 1994. The number of options issued under this plan
          may not exceed 2 million. The option price per share shall
          be determined by the Compensation Committee at the time any
          option is granted and shall not be less than the closing
          trading price of the stock on the date of grant. Options
          granted to management generally vest at 50% per year over a
          two year period and expire five years from the grant date.
          Options granted to non- employee directors generally vest
          immediately and expire ten years from the grant date. In
          February 1996, the Compensation Committee of IMTC determined
          that certain of the outstanding options no longer provided
          the incentives intended by the original grants and
          authorized replacement of 946,100 of the options
          outstanding. This constituted all of the outstanding options
          except those held by outside directors, terminated employees
          and consultants. Replacement options totaling 946,100 were
          reissued on March 4, 1996 at an exercise price of $3.13 each
          expiring in March 2001.






<PAGE>



     The following table summarizes the stock option activity for the
     three years ended December 31, 1997.


<TABLE>
<CAPTION>

                                       Range of Exercise           Number of            Exercise
                                             Prices                 Options               Price
                                     ----------------------   -------------------   -----------------
<S>                                        <C>                      <C>                <C>

Balance, December 31, 1994                   $5.00 - 7.00             1,694,100           $6.14
Granted                                              3.38                80,000            3.38
Canceled                                      4.20 - 7.00             (123,500)            6.09
                                                              -------------------
Balance, December 31, 1995                    3.38 - 7.00             1,650,600            6.01
Granted                                       3.13 - 6.00             1,390,500            3.24
Canceled                                      3.13 - 7.00           (1,382,100)            6.03
Exercised                                            3.13              (15,900)            3.13
                                                              -------------------
Balance, December 31, 1996                    3.13 - 6.00             1,643,100            3.68
Granted                                       6.44 - 8.88               302,100            7.29
Canceled                                      3.13 - 7.13              (19,250)            4.77
Exercised                                     3.13 - 6.00             (218,300)            4.57
                                                              -------------------
Balance, December 31, 1997                    3.13 - 8.88             1,707,650            4.19
                                                              ===================

</TABLE>

          The weighted average grant date fair value of the options
          granted was $4.17, $1.67 and $2.69 for 1997, 1996 and 1995,
          respectively. At December 31, 1997, 1996 and 1995, the
          number of exercisable options was 1,377,700, 1,338,900 and
          1,677,434, respectively, and the weighted average exercise
          price of those options was $3.91, $3.79 and $6.14,
          respectively.

          The following table summarizes information about stock
          options outstanding and exercisable at December 31, 1997.

<TABLE>
<CAPTION>

                                  Options Outstanding                               Options Exercisable
             -------------------------------------------------------------  -----------------------------------
<S>                <C>                 <C>                   <C>                  <C>                <C>
                                          Weighted
                     Number               average                                 Number            Weighted
  Range of       outstanding at          remaining           Weighted         exercisable at        average
  Exercise        December 31,          contractual          average           December 31,         exercise
   Prices             1997                  life          exercise price           1997              price
---------------------------------------------------------------------------------------------------------------
 $3.13 - 4.50           1,169,850           3.4               $3.15                1,027,700         $3.14
  4.51 - 6.00             240,000           6.3                5.42                  230,000          5.40
  6.01 - 7.50             277,800           5.5                7.18                  100,000           7.39

  7.51 - 8.88              20,000            9.0               8.88                   20,000            8.88
             ----------------------                                         ------------------
                        1,707,650           4.2                4.19                1,377,700            3.91
             ======================                                         ==================
</TABLE>


<PAGE>

          The Company has adopted the disclosure only provisions of
          SFAS No. 123, "Accounting for Stock-Based Compensation".
          Accordingly, no compensation cost has been recognized for
          the stock option plans. Had compensation cost for the
          Company's stock option plans been determined based on the
          fair value at the grant date for awards in 1997, 1996 and
          1995, consistent with the provisions of SFAS No. 123, the
          Company's earnings would have been reduced to the pro forma
          amounts indicated below:

<TABLE>
<CAPTION>
                                                       1997        1996         1995
                                                  ---------   ---------    ---------
<S>                                               <C>         <C>          <C>       
Net income (loss) - as reported                   $   9,604   $   1,849    $  (6,610)
Net income (loss) - pro forma                         7,800        (254)      (6,825)
Basic earnings per common share - as reported          0.55        0.11        (0.40)
Basic earnings per common share - pro forma            0.47       (0.02)       (0.42)
Diluted earnings per common share - as reported        0.52        0.11        (0.40)
Diluted earnings per common share - pro forma          0.45       (0.02)       (0.42)

</TABLE>

          The fair value of each option grant is estimated on the date
          of grant using the Black Scholes option-pricing model with
          the following weighted-average assumptions used for grants
          in 1997, 1996 and 1995: dividend yield of 0%; expected
          volatility ranging from 69% to 74%; risk free interest rate
          ranging from 5.3% to 6.7%; and expected lives ranging from
          three to ten years.

     (C)  ISSUANCE OF COMMON SHARE PURCHASE WARRANTS: In February
          1996, IMTC entered into an agreement with an investment
          banking firm. As compensation for its services the
          investment banker received common share purchase warrants to
          purchase an aggregate of 100,000 common shares exercisable
          for a period of two years from February 12, 1996. These
          warrants were issued in two lots of 50,000 with exercise
          prices of $4.50 and $5.50 per share, respectively, and the
          Company recorded an expense of $64 related to these
          warrants. As of December 31, 1997 all of these warrants
          remained outstanding, however, all of the warrants were
          exercised on or before February 11, 1998. 

     (D)  EMPLOYEE STOCK PURCHASE PLAN: On April 14, 1993, IMTC
          adopted the International Murex Technologies Corporation
          Employee Stock Purchase Plan (the "Purchase Plan"), which
          was approved by shareholders in June 1993. Under the
          Purchase Plan, all eligible employees can purchase common
          shares of IMTC's stock at 90% of the closing market price on
          the last day of each month. The number of common shares
          which may be purchased under the plan available to employees
          shall be set from time to time by the Compensation Committee
          and was initially 100,000. On May 13, 1997, the shareholders
          approved an amendment to the Purchase Plan which increased
          the number of shares available by 500,000. Additionally, the
          amendment changed the purchase price to 85% of the lower of
          the fair market value at the beginning or end of a six month
          interval. The new purchase price was incorporated into the
          Purchase Plan effective January 1, 1998.

     (E)  SHARES RESERVED FOR FUTURE ISSUE: At December 31, 1997, IMTC
          has reserved common shares for issuance as shown in the
          table below.

          Options                                  1,851,237
          Employee Stock Purchase Plan               511,135
          Warrant Conversion                         100,000
                                                   ---------
          Total                                    2,462,372
                                                   =========

     (F)  TREASURY SHARES: In November 1996, pursuant to the
          Stipulation Settlement Agreement, Edward J. DeBartolo, Jr.
          and the Estate of Edward J. DeBartolo, Sr. each transferred
          92,943 common shares of the Company's stock to the Company
          to be used as their portion of the settlement of the class
          action lawsuits initiated in 1992. These shares were retired
          during 1997. See Footnote 16.

13.  EMPLOYEE RETIREMENT PLANS:

     The Murex Group has contributory and non-contributory defined
     contribution plans covering substantially all employees. The plan
     funding arrangements are consistent with the United States or
     other applicable governmental laws and regulations. The plans
     provide for employer match up to twice the employee contribution
     percentage to a maximum employer matching contribution of 10%.
     The Murex Group's contributions to these plans amounted to
     approximately $1,777, $1,637 and $1,587 in the years 1997, 1996
     and 1995, respectively.

     Certain of the Murex Group also have defined benefit pension
     plans covering selected employees in certain European locations.
     Pension costs and actuarial data are not significant to the
     consolidated financial statements. The Company currently provides
     no post-retirement benefit plans other than pensions, nor any
     significant post-employment benefits, therefore, the financial
     statements have no such provisions.

14.  FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK:

     The Company places its cash and cash equivalents with high credit
     quality financial institutions. As of December 31, 1997, the
     Company had no significant concentrations of credit risk. The
     Company has estimated the fair value of its financial
     instruments, using available market information and appropriate
     valuation methodologies. Considerable judgment is required in
     developing the estimated fair value and therefore the values are
     not necessarily indicative of the amounts that the Company could
     realize in a current market exchange.

15.  COMMITMENTS:

     Certain of the Murex Group also incur royalty obligations on
     certain product sales for the use of patent and license rights.
     Royalty rates may vary depending on particular product sales
     levels. Agreed royalties are payable on defined sales ranging
     from 2% to a combined maximum royalty of 35% for a particular
     product's sales. In addition, the Company also has future minimum
     royalty payments as follows:

     1998                        $1,365
     1999                         1,365
     2000                         1,365
     2001                         1,282
     2002                         1,200
     Thereafter                     600
                                 ------
     Total                       $7,177
                                 ======
    
     During February 1996, MDC entered into an exclusive distribution,
     development and license agreement with Innogenetics to develop
     and market gene probe products for the monitoring of patients and
     the classification of viral diseases. Under the terms of the
     agreement, MDC paid $5,900 during 1996 and $1,600 during 1997 to
     Innogenetics for the exclusive rights to distribute Innogenetics'
     LiPA products, excluding HCV, for 15 years. MDC will also pay
     Innogenetics a royalty of 10% of the Murex Group's net sales of
     Innogenetics' products. Also under this agreement, MDC shall fund
     agreed-upon research and development programs, beginning in 1998
     and for each of the following 13 years in an amount equal to 20%
     of the Murex Group's net sales of Innogenetics' products, subject
     to a cap.

16.  LITIGATION RESOLUTIONS:

     Four class action lawsuits were instituted on behalf of all
     persons who had purchased IMTC's securities between May 21, 1992
     and August 19, 1992 against IMTC, two executive officers of IMTC,
     and two shareholders. Although the defendants denied the
     allegations in the complaints, the parties agreed to settle all
     outstanding claims for $5,400 during 1996. In accordance with the
     Stipulation Settlement Agreement, the shareholders transferred
     185,886 common shares of the Company's stock to the Company to be
     used as their portion of the settlement. During 1997, the claims
     administrator finished qualifying claimants and submitted a
     motion to the U.S. District court setting out the final
     distribution for the settlement fund, which was approved by the
     Court during October 1997. The sum of damages claimed and
     expenses incurred by the claims administrator and Plaintiffs'
     counsel was less than the total settlement fund, consequently,
     the Company was entitled to the remaining cash of approximately
     $2,133 and 105,766 common shares of the Company's stock. These
     shares are valued at $615 ($5.81 per share), as defined by the
     settlement agreement. The reversion of the settlement fund has
     been reflected in the accompanying financial statements as an
     offset to general and administrative costs for the cash portion
     and an increase to additional paid-in-capital for the stock
     portion.

     During 1995, the U.K. Inland Revenue questioned the tax basis of
     inventory, accounts receivable and property, plant and equipment
     related to the 1992 purchase of assets from Wellcome. This matter
     was resolved during 1997, resulting in no additional tax payments
     or liabilities. The U.K. Inland Revenue have finalized their
     review of all tax returns through 1995, and all outstanding
     issues have been resolved.

     Several Subsidiaries of the Murex Group were involved in patent
     infringement litigation in several countries against Chiron and
     Ortho Diagnostic Systems, Inc. ("Ortho") related to Chiron's HCV
     patent. On August 28, 1996, IMTC reached a worldwide agreement
     with Chiron and Ortho concerning tests for HCV under which all
     litigation among the parties permanently ceased. As a result of
     the settlement with Chiron and Ortho, a reversal was made to
     royalty accruals made in prior years, which resulted in a net
     credit to royalty expense of $2,799 for the year ended December
     31, 1996.

17.  RESTRUCTURING:

     During September 1996, the Company recorded a restructuring
     charge of $2,100 before tax. The restructuring was driven by the
     need to reposition the Company for its movement into the patient
     monitoring business. The worldwide plan resulted in personnel
     reductions of approximately 50 people from various functions
     during 1997 and 1996. The restructuring provision consists
     predominantly of estimated costs for employee severance and other
     benefits. As of December 31, 1996, 35 employees left the Company
     related to the restructuring plan, resulting in actual payments
     of $698. As such, the remaining accrual at December 31, 1996 was
     $1,402. All remaining costs were incurred during 1997.

18.  SHAREHOLDER RIGHTS PLAN:

     In August 1995, IMTC adopted a Shareholder Rights Plan
     authorizing the distribution of one Right for each common share
     outstanding. The Rights are attached to the common shares and are
     not initially exercisable. Rights become exercisable in the
     circumstances described in the Shareholder Rights Plan, including
     ten days following the announcement that a person or group
     without prior approval from the Board of Directors has acquired,
     or obtained the right to acquire, beneficial ownership of 20
     percent or more of the outstanding common shares of IMTC or ten
     days following the announcement of a takeover bid, tender offer
     or exchange offer. In certain circumstances, the Rights may be
     redeemed by IMTC at a price of $.001 per Right. If not redeemed,
     the Rights expire in ten years.


19.  DOMESTIC AND FOREIGN OPERATIONS:

     Information concerning the Company's domestic and foreign
     operations for the years ended December 31, 1997, 1996 and 1995
     is summarized below. Murex Group product sales to affiliates are
     priced at market prices less an allowance for marketing,
     advertising and other sales costs.
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------
                                              United                  Far East
                                  Canada      States      Europe     and Other   Eliminations  Consolidated
-----------------------------------------------------------------------------------------------------------
December 31, 1997
-----------------
Net Revenues:
<S>                            <C>          <C>         <C>          <C>          <C>             <C>     
      Unaffiliated Customers   $   2,111    $  26,755   $  56,897    $  20,369                 $ 106,132
      Affiliates                                  447      28,728       47,332    $ (76,507)
                               ---------    ---------   ---------    ---------    ---------    ---------
      Total                        2,111       27,202      85,625       67,701      (76,507)     106,132
Net Income (Loss)                 (2,966)       5,169      (7,130)      13,991                     9,064
Identifiable Assets                3,456       12,935      46,693       32,159                    95,243


December 31, 1996
-----------------
Net Revenues:
      Unaffiliated Customers   $   1,995    $  24,228   $  59,461    $  15,167                 $ 100,851
      Affiliates                                  363      28,529        6,704    $ (35,596)
                               ---------    ---------   ---------    ---------    ---------    ---------
      Total                        1,995       24,591      87,990       21,871      (35,596)     100,851
Net Income (Loss)                 (4,789)       1,568      (2,860)       7,930                     1,849
Identifiable Assets                2,955       10,787      53,818       27,553                    95,113


December 31, 1995
-----------------
Net Revenues:
      Unaffiliated Customers                $  21,698   $  61,165    $   9,531                 $  92,394
      Affiliates                                1,578      33,076        3,430    $ (38,084)
                                            ---------   ---------    ---------    ---------    ---------
      Total                                    23,276      94,241       12,961      (38,084)      92,394
Net Income (Loss)              $  (4,088)         966      (6,761)       3,273                    (6,610)
Identifiable Assets                4,808       10,305      55,925       14,710                    85,748


</TABLE>

<PAGE>


     EXPORT SALES BY DESTINATION

     Export sales of $112, $339, and $834 for the years ended December
     31, 1997, 1996 and 1995, respectively, originated in the United
     States. Export sales of $12,320, $9,838, and $8,794 for the years
     ended December 31, 1997, 1996 and 1995, respectively, originated
     in the United Kingdom. Additional export sales of $4,751, $6,967
     and $12,694, for the years ended December 31, 1997, 1996 and
     1995, respectively, originated in other European countries and
     $1,193 and $5,181 originated in Barbados for the years ended
     December 31, 1997 and 1996, respectively. Also in 1997, export
     sales from South Africa to other African countries were $911. The
     table below summarizes export sales by destination.

                                           Middle East
                    Europe        Asia      and Africa      Other       Total
--------------------------------------------------------------------------------
December 31:
1997               $ 6,824      $ 5,118      $ 7,145      $   200      $19,287
1996                 7,388        5,349        9,588                    22,325
1995                13,447        2,160        6,154          561       22,322
--------------------------------------------------------------------------------


20.  SUBSEQUENT EVENTS:

     On January 14, 1998 the Company amended its existing interest
     rate swap agreement to increase the notional principal amount to
     $10,000 and extend the contract to January 14, 2003. This
     agreement fixed the LIBOR portion of the interest rate at 6.48%.
     The Company specifically designated this interest rate swap
     agreement as a hedge of the line of credit, and therefore will
     recognize the differential paid or received as an adjustment to
     interest expense in the period in which it occurs.

21.  RECONCILIATION OF CANADIAN AND U.S. GENERALLY ACCEPTED ACCOUNTING
     PRINCIPLES ("CANADIAN GAAP" AND "U.S. GAAP") :

     There were no differences between Canadian GAAP and U.S. GAAP
     during the years ended December 31, 1997, 1996 and 1995.



<PAGE>



International Murex Technologies Corporation
--------------------------------------------
INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Shareholders of
International Murex Technologies Corporation:

     We have audited the accompanying consolidated balance sheets of
International Murex Technologies Corporation and subsidiaries as of
December 31, 1997 and 1996 and the related consolidated statements of
operations, changes in shareholders' equity, and cash flows for each
of the three years in the period ended December 31, 1997. 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 in accordance with generally accepted
auditing standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of
International Murex Technologies Corporation and its subsidiaries at
December 31, 1997 and 1996 and the results of their operations and
their cash flows for each of the three years in the period ended
December 31, 1997 in conformity with generally accepted accounting
principles.



DELOITTE & TOUCHE LLP
Atlanta, Georgia
February 13, 1998




<PAGE>



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
        AND FINANCIAL DISCLOSURE

        None.


                               PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The required information is hereby incorporated by reference to
the sections entitled "Election of Directors" and "Shares Held by
Nominees for Election of Directors" in IMTC's Proxy Statement for the
1998 Annual Meeting of Shareholders to be held June 4, 1998. IMTC will
file with the Securities and Exchange Commission pursuant to
Regulation 14A a definitive Proxy Statement involving the election of
directors not later than 120 days after December 31, 1997.

ITEM 11. EXECUTIVE COMPENSATION

     The required information is hereby incorporated by reference to
the section entitled "Compensation of Executive Officers" in IMTC's
Proxy Statement for the 1998 Annual Meeting of Shareholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT

     The required information is hereby incorporated by reference to
the sections entitled "Voting Shares," "Shares Held by Nominees for
Election of Directors," and "Beneficial Owners of More Than 5% of
Voting Stock" in IMTC's Proxy Statement for the 1998 Annual Meeting of
Shareholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The required information is hereby incorporated by reference to
the section entitled "Interest of Certain Persons in Matters to be
Acted Upon" in IMTC's Proxy Statement for the 1998 Annual Meeting of
Shareholders.







<PAGE>



                                PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K

     (a)  Documents Filed as Part of This Report:

          (1)  Financial Statements

               Included in Part II, Item 8 of this Report:

               Consolidated Balance Sheets as of December 31, 1997 and
               1996.

               Consolidated Statements of Operations for each of the
               three years in the period ended December 31, 1997.

               Consolidated Statements of Changes in Shareholders'
               Equity for each of the three years in the period ended
               December 31, 1997.

               Consolidated Statements of Cash Flows for each of the
               three years in the period ended December 31, 1997.

               Notes to Consolidated Financial Statements.

               Independent Auditors' Report

          (2)  Financial Statement Schedule:

               Included in Part IV of this Report:
                                                                Schedule   Page
                                                                --------   ----
               Independent Auditors' Consent and Report
                    on Schedule                                    --       44

               Valuation and Qualifying Accounts                   II       45

               All financial statement schedules other than those
               listed above have been omitted as exhibits because they
               are not applicable or required under Regulation S-X.

               Items 10 through 13 of this Report incorporate only the
               indicated portions of IMTC's Proxy Statement for the
               1998 Annual Meeting of Shareholders. No other portion
               of such Proxy Statement shall be deemed to be
               incorporated herein or filed with the Securities and
               Exchange Commission.

        (b)    Reports on Form 8-K

               None

        (c)    Exhibits.

               The following exhibits are filed with or incorporated
               by reference in this Report. If such filing is made by
               incorporation by reference to a previously filed
               report, such report is identified in parentheses. See
               the Index of Exhibits included with the exhibits filed
               as part of this Report.



<PAGE>



Exhibit
Number         Document
------         --------

3.1            Memorandum of Association of IMTC dated October 31,
               1983, as amended on June 16, 1986, December 5, 1988,
               February 20, 1989, December 11, 1990 and December 11,
               1990 (Exhibit 3.1 to Registration Statement on Form
               S-1, No. 33-35422 ("Registration Statement") and
               Exhibit 3.3 to Post-Effective Amendment No. 3 to
               Registration Statement)

3.2            Articles of Association of IMTC dated October 31, 1983,
               as amended November 29, 1985 (Exhibit 3.2 to
               Registration Statement)

3.3            Amendments to Memorandum of Association (Exhibit 3.3 to
               the Company's Post-Effective Amendment No. 3 to
               Registration Statements and Schedule A to the Company's
               Proxy Statement dated June 7, 1994)

3.4            Amendments to Articles of Association of IMTC passed by
               Special Resolution on June 7, 1994 as filed on May 2,
               1995 (Exhibit 3.4 to the Company's Annual Report on
               Form 10-K for the fiscal year ended December 31, 1995)

4.1            IMTC Stock Option Plan (Exhibit 4.2 to the Company's
               Annual Report on Form 10-K for the fiscal year ended
               December 31, 1991)

4.2            IMTC Employee Equity Incentive Plan, as amended
               (Schedule A to the Company's Proxy Statement dated June
               7, 1994)

4.3            IMTC Employee Stock Purchase Plan, (Schedule B to the
               Company's Proxy Statement dated May 14, 1993)

4.3.1          IMTC Amended and Restated Employee Stock Purchase Plan
               (Schedule A to the Company's Proxy Statement dated
               April 3, 1997)

4.4            Warrant Indenture dated July 15, 1993 between IMTC and
               Montreal Trust of Canada. (Exhibit 4 to the Company's
               Current Report on Form 8-K dated July 27, 1993)

4.5            Shareholder Protection Rights Agreement between IMTC
               and The Bank of New York, as Rights Agent, dated August
               31, 1996 (Exhibit 4.1 to the Company's Current Report
               on Form 8-K dated August 31, 1995)

10.1           Pooling Agreement dated December 16, 1985 among IMTC,
               Central Guaranty Trust Company and Axon Limited, Murex
               Medical Research Limited, Semiotic Research Limited
               Partnership and Coral Sociedade Brasileira de Pesquisas
               e Desenvolvimento (Exhibit 10.9 to Registration
               Statement)

10.2           Escrow Agreement among Edward J. DeBartolo, Jr.,
               Central Guaranty Trust Company and Murex Clinical
               Technologies Corporation (Exhibit 10.33 to Current
               Report on Form 8-K dated October 26, 1990)

10.3           Employment Agreement dated as of January 1, 1992
               between IMTC and F. Michael P. Warren (Exhibit 10.10 to
               the Company's Annual Report on Form 10-K for the fiscal
               year ended December 31, 1995 (the "1995 Form 10-K"))

10.3.1         Employment Agreement dated as of January 1, 1992
               between MDC (formerly International Murex Technologies
               Limited which was formerly Sishui Funds Limited) and F.
               Michael P. Warren (Exhibit 10.10.1 to the 1995 Form
               10-K)

10.3.2         Employment Agreement dated as of January 1, 1992
               between MDL and F. Michael P. Warren (as assigned to
               MBL effective January 31, 1996) (Exhibit 10.10.2 to the
               1995 Form 10-K)

10.3.3*        Employment Agreement dated August 1, 1997 between IMTC
               and F. Michael P. Warren



<PAGE>

10.3.4*        Employment Agreement dated August 1, 1997 between Murex
               Biotech Limited and F. Michael P. Warren

10.3.5*        Employment Agreement dated August 1, 1997 between Murex
               Diagnostics Corporation and F. Michael P. Warren

10.4           Employment Agreement dated as of January 1, 1995
               between IMTC and C. Robert Cusick (Exhibit 10.11.1 to
               the 1995 Form 10-K)

10.4.1.*       Employment Agreement dated August 1, 1997 between IMTC
               and C. Robert Cusick

10.4.2*        Amendment to Employment Agreement dated November 6,
               1997 between IMTC and C. Robert Cusick

10.5           Employment Agreement dated as of January 1, 1995
               between IMTC and J. David Tholen (Exhibit 10.13.1 to
               the 1995 Form 10-K)

10.5.1         Separation Agreement dated as of January 20, 1997
               between IMTC and J. David Tholen (Exhibit 10.13.1 to
               the 1995 Form 10-K)

10.6           Redemption Agreement dated December 30, 1994 among
               NuBio Technologies Corporation, IMTC, IMTC Holdings,
               Inc. Dominion Biologicals Limited, Blaine MacNeil,
               Patrick Waddy and Samuel A. Brushett (Exhibit 10.18.1
               to the 1995 Form 10-K)

10.7           License Agreement dated May 3, 1994 between IMTC and
               Abbott Laboratories (Exhibit 10.1 to the Company's
               Quarterly Report on Form 10-Q dated May 13, 1994)

10.8           Stock Purchase Agreement dated May 31, 1994 between
               Digene Diagnostics, Inc. ("Digene") and International
               Murex Technologies Limited ("IMTL") for the purchase of
               1994 Series Preferred Stock (Exhibit 10.20 to the 1995
               Form 10- K)

10.8.1         Escrow Agreement dated May 31, 1994 among IMTL, Digene
               and Reid & Priest LLP (Exhibit 10.20.1 to the 1995 Form
               10-K)

10.8.2         Shareholders Agreement dated May 31, 1994 among IMTL,
               Armonk Partners and Digene (Exhibit 10.20.2 to the 1995
               Form 10-K )

10.9           Employment Agreement dated as of July 1, 1995 between
               IMTC and Steven C. Ramsey (Exhibit 10.19 to the 1995
               Form 10-K)

10.9.1*        Amendment to Employment Agreement dated November 6,
               1997 between IMTC and Steven C. Ramsey

10.10          Distribution, Development and License Agreement between
               MDC and Innogenetics dated January 31, 1996 (Exhibit
               10.20 to the 1995 Form 10-K)

10.11          Agreement among Chiron Corporation, Johnson &
               Johnson/Ortho Diagnostics Systems, Inc. and
               International Murex Technologies Corporation dated
               August 27, 1996, without exhibits (Exhibit 10 to the
               Company's Quarterly Report on Form 10-Q for the period
               ended September 30, 1996)

10.12          Letter Agreement dated January 12, 1996 between Guido
               Guidetti and MDL (as assigned to MBL effective January
               31, 1996) (Exhibit 10.12 to the Company's Annual Report
               on Form 10-K for the year ended December 31, 1996 (the
               "1996 Form 10-K"))

10.13          Letter Agreement dated January 12, 1996 between P.
               Silveston and MDL (as assigned to MBL effective January
               31, 1996) (Exhibit 10.13 to the 1996 Form 10-K).

10.14          Credit Agreement (without schedules or exhibits) dated
               as of November 12, 1996 among IMTC, Murex Diagnostics
               International, Inc. ("MDII"), IMTC Holdings, Inc.
               ("Holdings U.S."), MDC, IMTC Holdings (U.K.) Limited
               ("Holdings U.K."), MDI and MBL, as the borrowers; Bank


<PAGE>


               of America Illinois and Bank of America National Trust
               and Savings Association, as issuing banks ("BOA"); Bank
               of America, F.S.B., as agent and lender ("BAFSB"), et
               al.,as the lenders, in the original principal amount of
               $15,000,000 (Exhibit 10.14 to the 1996 Form 10-K).

10.14.1*       First Amendment to Credit Agreement dated December 31,
               1997 among IMTC, MDII, MDC, Holdings U.K., MDI and MBL,
               as the borrowers, and BOA and BAFSB, et.al., as the
               lenders. 10.15 Promissory Note dated November 12, 1996
               executed by IMTC, MDII, Holdings U.S., MDC, Holdings
               U.K., MDI and MBL to the order of BAFSB in the original
               principal amount of $8,000,000 (Exhibit 10.15 to the
               1996 Form 10-K).

10.16          Offshore Currency Promissory Note dated November 12,
               1996 executed by Holdings U.K. and MBL to the order of
               BOA (Exhibit 10.16 to the 1996 Form 10-K).

10.17          Security Agreement (without schedules) executed by
               Holdings U.S., MDI and IMTC in favor of BASFB (Exhibit
               10.17 to the 1996 Form 10-K).

10.18          Deed of Charge executed by Holdings U.K. in favor of
               BOA (Exhibit 10.18 to the 1996 Form 10-K).

10.19          Deed of Charge executed by MBL in favor of BOA (Exhibit
               10.19 to the 1996 Form 10-K).

10.20          Debenture executed by MDII and MDC in favor of BASFB
               (Exhibit 10.20 to the 1996 Form 10-K).

21*            Subsidiaries

24*            Powers of Attorney


*  Filed with this Report


(b)            Exhibits required by Item 601 of Regulation S-K.

               See Item 14(a)(3) above.

(c)            Financial Statement Schedule.

               See Item 14(a)(2) above.




<PAGE>



                              SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized:

                                           INTERNATIONAL MUREX TECHNOLOGIES
                                           CORPORATION



                                           By:   /s/ C. Robert Cusick
                                                --------------------------------
                                                C. Robert Cusick, Vice Chairman,
                                                Chief Executive Officer,
                                                President and Director

DATE: March 6, 1998
      -------------

     Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities indicated on March 6,
1998.


          Signature                                   Title
          ---------                                   -----

     /s/ C. Robert Cusick                Vice Chairman, CEO/President and
-------------------------------------      Director
         C. Robert Cusick
       * F. Michael P. Warren, Q.C.        Chairman of the Board of Directors
-------------------------------------
       F. Michael P. Warren, Q.C.
       * J. Trevor Eyton, O. C.            Director
-------------------------------------
      J. Trevor Eyton, O. C.
        * Thomas L. Gavan, M.D.            Director
-------------------------------------
       Thomas L. Gavan, M.D.
        * Norbert Gilmore, M.D.            Director
-------------------------------------
       Norbert Gilmore, M.D.
       * Jay A. Lefton, Esq.               Director
-------------------------------------
        Jay A. Lefton, Esq.
 *Hartland M. MacDougall, O.C.             Director
-------------------------------------
  Hartland M. MacDougall, O.C.
        * Stanley E. Read, M.D.            Director
-------------------------------------
       Stanley E. Read, M.D.
          *Victor A. Rice                  Director
-------------------------------------
          Victor A. Rice


                                           Vice President, Chief
*By: /s/ Steven C. Ramsey                  Financial Officer and
-------------------------------------
       Steven C. Ramsey, as                Authorized  Representative in
         Attorney-in-Fact                  the United States



             INTERNATIONAL MUREX TECHNOLOGIES CORPORATION



<PAGE>



          INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULES


                                                                            Page
                                                                            ----

   --      Independent Auditors' Consent and Report on Schedules.............45
  II.      Valuation and Qualifying Accounts.................................46





<PAGE>



INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE



Board of Directors and Shareholders
International Murex Technologies Corporation:

We consent to the incorporation by reference in Registration
Statements No. 33-40726 and No. 333-44629 of International Murex
Technologies Corporation on Form S-8 of our report dated February 13,
1998 appearing in the Annual Report on Form 10-K of International
Murex Technologies Corporation for the year ended December 31, 1997.

Our audits of the consolidated financial statements referred to in our
aforementioned report also included the financial statement schedule
of International Murex Technologies Corporation, listed in Item 14.
This financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion
based on our audits. In our opinion, such financial statement
schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.


DELOITTE & TOUCHE LLP

Atlanta, Georgia
March 10, 1998








<PAGE>



INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
Schedule II - Valuation and Qualifying Accounts
For the years ended December 31, 1997, 1996, and 1995
(Expressed in U.S. Dollars)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                               ADDITIONS                         DEDUCTIONS
                                    -------------------------------    ------------------------------
                                 BALANCE AT     CHARGED TO                                                 BALANCE AT
                                  BEGINNING     COSTS AND    TRANSLATION    TRANSLATION                      END OF
     DESCRIPTION                  OF PERIOD     EXPENSES      ADJUSTMENT    ADJUSTMENT     WRITE-OFF        PERIOD
     -----------                  ---------     --------      ----------    ----------     ---------        ------
<S>                               <C>             <C>          <C>            <C>           <C>              <C>

Year ended December 31, 1997:
     Allowance for
      Doubtful Accounts         $ 3,174,000   $   171,000                  $  (249,000)   $  (157,000)   $ 2,939,000
     Inventory Reserve            5,490,000       439,000                     (157,000)    (1,012,000)     4,759,000
Year ended December 31, 1996:
     Allowance for
      Doubtful Accounts           3,410,000       257,000   $   282,000                      (775,000)     3,174,000
     Inventory Reserve            3,954,000     3,669,000       297,000                    (2,430,000)     5,490,000
Year ended
  December 31, 1995:
  Allowances for
    Doubtful Accounts             2,097,000     1,682,000       124,000                      (493,000)     3,410,000
   Inventory Reserve              2,581,000     1,424,000       124,000                      (175,000)     3,954,000


</TABLE>





<PAGE>


                           INDEX OF EXHIBITS

        The exhibits listed below are filed with this Report.


  Exhibit
  Number                           Document
  ------                           --------

10.3.3*      Employment Agreement dated August 1, 1997 between IMTC
             and F. Michael P. Warren

10.3.4*      Employment Agreement dated August 1, 1997 between Murex
             Biotech Limited and F. Michael P. Warren

10.3.5*      Employment Agreement dated August 1, 1997 between Murex
             Diagnostics Corporation and F. Michael P. Warren

10.4.1.*     Employment Agreement dated August 1, 1997 between IMTC
             and C. Robert Cusick

10.4.2*      Amendment to Employment Agreement dated November 6, 1997
             between IMTC and C. Robert Cusick

10.9.1*      Amendment to Employment Agreement dated November 6, 1997
             between IMTC and Steven C. Ramsey

10.14.1*     First Amendment to Credit Agreement dated December 31,
             1997 among IMTC, MDII, MDC, Holdings U.K., MDI and MBL as
             the borrowers; and BOA and BAFSB, et.al., as the lenders.

21           Subsidiaries

24           Powers of Attorney