SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

|X|  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934.
        
     For the quarterly period ended March 31, 1997.

|_|  Transition period pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934.

     For the transition period from _____________ to ______________.

                                     0-20727
                                     -------
                            (Commission File Number)

                               Novoste Corporation
                               -------------------
             (Exact Name of Registrant as Specified in Its Charter)


                  Florida                                    59-2787476
                  -------                                    ----------
      (State or Other Jurisdiction of                        (I.R.S. Employer
      Incorporation or Organization)                         Identification No.)

      4350-C International Blvd., Norcross, GA               30093
      ----------------------------------------               -----
      (Address of Principal Executive Offices)               (Zip Code)

      Registrant's telephone, including area code: (770) 717-0904

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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
requirements for the past 90 days.

      (Item 1)       Yes  |X|         No |_|
      (Item 2)       Yes  |X|         No |_|

As of March 31, 1997, there were 8,430,375 shares of the Registrant's Common
Stock outstanding.

Exhibit Index on page:  14

Total number of pages:  16


                                       1
<PAGE>

                               NOVOSTE CORPORATION

                                    FORM 10-Q

                                      INDEX

PART I.    FINANCIAL INFORMATION                                        PAGE NO.
                                                                        --------
      Item 1. Condensed Financial Statements

              Condensed Balance Sheets as of March 31, 1997 
               (unaudited) and December 31, 1996                           3

              Condensed Statements of Operations (unaudited) 
               for the three months ended March 31, 1997 and
               1996 and the period from inception (May 22, 
               1992) through March 31, 1997                                4

              Condensed Statements of Cash Flows (unaudited)
               for the three months ended March 31, 1997 and
               1996 and the period from inception (May 22, 
               1992) through March 31, 1997                                5

              Notes to Condensed Financial Statements                     6-7


      Item 2. Management's Discussion and Analysis of Financial 
               Condition and Results of Operations                        8-11


PART II. OTHER INFORMATION

      Item 5. Other Information                                            12
      Item 6. Exhibits and Reports on Form 8-K                             12

SIGNATURES                                                                 13

EXHIBIT INDEX                                                              11

EXHIBIT 11 - COMPUTATION OF NET LOSS PER SHARE                             

EXHIBIT 27 - FINANCIAL DATA SCHEDULE                                      


                                       2
<PAGE>

                                          NOVOSTE CORPORATION
                                      (A Development Stage Company)

                                      CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                     March 31,    December 31,
                                                                       1997           1996
                                                                   ------------   ------------
                                                                    (unaudited)
<S>                                                                <C>            <C>         
Assets
Current assets:
    Cash and cash equivalents                                      $ 17,572,395   $ 19,954,827
    Short-term investments                                            7,753,093      7,588,693
    Prepaid expenses                                                     83,808        126,349
                                                                   ------------   ------------
Total current assets                                                 25,409,296     27,669,869
Property and equipment, net                                           1,108,329      1,128,031
License agreements, net                                                 149,987        153,396
Other assets                                                            159,884        303,642
                                                                   ------------   ------------
                                                                   $ 26,827,496   $ 29,254,938
                                                                   ============   ============


Liabilities and shareholders' equity 
Current liabilities:
    Accounts payable                                               $    321,106   $    155,946
    Accrued expenses and taxes withheld                                 502,551        665,175
                                                                   ------------   ------------
Total current liabilities                                               823,657        821,121
                                                                   ------------   ------------

Shareholders' equity:
    Preferred stock, $.01 par value, 5,000,000 shares authorized;
     no shares issued and outstanding                                        --             --
    Common stock, $.01 par value, 25,000,000 shares authorized;
     8,435,655 and 8,257,967 issued, respectively                        84,356         82,580
    Additional paid-in capital                                       41,983,443     41,772,791
    Deficit accumulated during the development stage                (16,048,120)   (13,405,714)
                                                                   ------------   ------------
                                                                     26,019,679     28,449,657
    Less treasury stock, 5,280 shares of common stock, at cost          (15,840)       (15,840)
                                                                   ------------   ------------
Total shareholders' equity                                           26,003,839     28,433,817
                                                                   ------------   ------------
                                                                   $ 26,827,496   $ 29,254,938
                                                                   ============   ============
</TABLE>

See accompanying notes.


                                       3
<PAGE>

                               NOVOSTE CORPORATION
                          (A Development Stage Company)

                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                From inception
                                        Three months ended      (May 22, 1992)
                                             March 31,         through March 31,
                                        1997          1996           1997
                                    -------------------------- -----------------
<S>                                 <C>            <C>            <C>          
Revenues:
      Miscellaneous sales           $        --    $        --    $     290,887
Costs and expenses:
      Research and development        2,323,838        884,063       11,210,870
      General and administrative        517,098        176,965        4,604,639
      Marketing                         138,530        119,408        1,670,641
                                    -----------    -----------    ------------- 
                                      2,979,466      1,180,436       17,486,150
                                    -----------    -----------    ------------- 
Loss from operations                 (2,979,466)    (1,180,436)     (17,195,263)
                                    -----------    -----------    ------------- 

Interest income                         337,060          7,256        1,328,902
Interest expense                                       (37,481)        (181,759)
                                    -----------    -----------    ------------- 
Net loss                            $(2,642,406)   $(1,210,661)   $ (16,048,120)
                                    ===========    ===========    ============= 

Net loss per share                  $     (0.32)   $     (0.24)
                                     ==========    ===========

Weighted average shares outstanding   8,330,281      4,947,222
                                     ==========    ===========
</TABLE>

See accompanying notes.


                                       4
<PAGE>

                               NOVOSTE CORPORATION
                          (A Development Stage Company)

                  UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                    From inception
                                                            For the three months    (May 22, 1992)
                                                               ended March 31,     through March 31,
                                                            1997          1996           1997
                                                       -------------  -----------  -----------------
<S>                                                    <C>            <C>           <C>          
Cash flows from operating activities
Net loss                                               $ (2,642,406)  $(1,210,661)  $(16,048,120)
Adjustments to reconcile net loss to net cash used by
      operating activities:
      Depreciation and amortization                          99,060        70,217        976,935
      Issuance of stock for services or compensation         67,500       139,511      1,014,818
      Changes in assets and liabilities:
        Prepaid expenses                                     42,541       (27,237)       (91,267)
        Accounts payable                                    165,160        85,266        321,106
        Accrued expenses and taxes withheld                (162,624)      (19,934)       897,058
                                                       ------------   -----------   ------------ 
Net cash used by operations                              (2,430,769)     (962,838)   (12,929,470)
                                                       ------------   -----------   ------------ 

Cash flows from investing activities
Purchase of short-term investments                         (164,400)           --     (7,753,093)
Purchase of property and equipment, net                     (62,910)      (83,081)    (1,815,336)
Other                                                       130,719            --       (225,318)
                                                       ------------   -----------   ------------ 
Net cash used by investing activities                       (96,591)      (83,081)    (9,793,747)
                                                       ------------   -----------   ------------ 

Cash flows from financing activities
Proceeds from issuance of notes payable                          --     1,800,000      4,770,150
Repayment of notes payable                                       --            --     (2,970,150)
Proceeds from issuance of common stock                      144,928        57,540     38,227,394
Exercise of warrants                                             --            --        268,218
                                                       ------------   -----------   ------------ 
Net cash provided by financing activities                   144,928     1,857,540     40,295,612
                                                       ------------   -----------   ------------ 
Net (decrease) increase in cash and cash equivalents     (2,382,432)      811,621     17,572,395
Cash and cash equivalents at beginning of period         19,954,827       817,587             --
                                                       ------------   -----------   ------------ 
Cash and cash equivalents at end of period             $ 17,572,395   $ 1,629,208   $ 17,572,395
                                                       ============   ===========   ============ 

Supplemental disclosures of cash flow information
Cash paid for interest                                           --   $     8,986   $    165,137
                                                       ============   ===========   ============ 
</TABLE>

See accompanying notes.


                                       5
<PAGE>

                              NOVOSTE CORPORATION
                         (A Development Stage Company)

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                 March 31, 1997

Note 1. Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in accordance with instructions to Article 10 of Regulation S-X.
Accordingly, such financial statements do not include all of the information and
disclosures required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included.

The operating results of the interim periods presented are not necessarily
indicative of the results to be achieved for the year ending December 31, 1997.
The accompanying financial statements should be read in conjunction with the
audited financial statements and notes thereto for the year ended December 31,
1996 and for the cumulative period from May 22, 1992 (inception) through
December 31, 1996, included in the Company's 1996 Annual Report on Form 10-K
filed with the Securities and Exchange Commission ("SEC").

Certain prior year expense amounts have been reclassified in the Statements of
Operations for the three months ended March 31, 1996 and the period from
inception through March 31, 1997 to conform with current year classifications.

Note 2. Net Loss Per Share

The net loss per share is computed based on the weighted average number of
common shares outstanding after giving effect to certain adjustments described
below. Common equivalent shares are not included in the per share calculations
where the effect of their inclusion would be antidilutive, except that, in
accordance with SEC requirements, common and common stock equivalent shares
issued during the twelve-month period prior to the initial filing of the public
offering on April 11, 1996 have been included in the calculations as if they
were outstanding through March 31, 1996 using the treasury stock method. See
Exhibit 11.

Historical net loss per share information presented in accordance with GAAP for
the periods affected by the above mentioned SEC requirement is as follows:

                                            Three months ended 
                                                 March 31,
                                                   1996
                                                   ----

Net loss per share                              $    (0.29)
                                                ========== 

Shares used in computing net loss per share      4,110,195
                                                ==========


                                       6
<PAGE>

                               NOVOSTE CORPORATION
                          (A Development Stage Company)

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                 March 31, 1997

Note 3. Cash Equivalents and Investments

Cash equivalents are comprised of certain highly liquid investments with
maturities of less than three months. In addition to cash equivalents, the
Company has investments in commercial paper that are classified as short-term
(mature in more than 90 days but less than one year). Such investments are
classified as held-to-maturity, as the Company has the ability and intent to
hold them until maturity. Investments held-to-maturity are carried at amortized
cost, adjusted for the amortization or accretion of premiums or discounts
without recognition of gains or losses that are deemed to be temporary. Premiums
and discounts are amortized or accreted over the life of the related instrument
as an adjustment to yield using the straight-line method, which approximates the
effective interest method. Interest income is recognized when earned. Fair value
approximates carrying value for all cash equivalents and investments.

Note 4. Shareholders' Equity

On May 20, 1996 the Company amended an option to purchase 100,000 shares of
Common Stock at $3.20 per share of which options for 75,000 shares had not yet
become exercisable. As amended, options to purchase such 75,000 shares become
exercisable at the annual rate of 25,000 shares beginning May 20, 1997, subject
to acceleration upon the achievement of three specified milestones at the rate
of 25,000 shares per milestone. The Company is recording total non-cash
compensation expense of $810,000 ratably over the three year period ending May
19, 1999, subject to acceleration if the specific milestones are met at earlier
dates; $67,500 was expensed in the three months ended March 31, 1997 relating to
these options.


                                       7
<PAGE>

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

Forward Looking Information

The statements contained in this Form 10-Q that are not historical are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including
statements regarding the expectations, beliefs, intentions or strategies
regarding the future. The Company intends that all forward-looking statements be
subject to the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements reflect the Company's views
as of the date they are made with respect to future events and financial
performance, but are subject to many uncertainties and risks which could cause
the actual results of the Company to differ materially from any future results
expressed or implied by such forward-looking statements. Examples of such
uncertainties and risks include, but are not limited to, whether the
Beta-Cath(TM) System, the Company's primary product in development, will prove
safe and effective; whether and when the Company will obtain approval of the
Beta-Cath(TM) System from the United States Food and Drug Administration ("FDA")
and corresponding foreign agencies; the Company's need to achieve manufacturing
scale-up in a timely manner, and its need to provide for the efficient
manufacturing of sufficient quantities of its products; the Company's dependence
on the Beta-Cath(TM) System as the primary source of future revenue; the lack of
an alternative source of supply for the radiation source materials used in the
Beta-Cath(TM) System; the Company's patent and intellectual property position;
the Company's need to develop the marketing, distribution, customer service and
technical support and other functions critical to the success of the Company's
business plan; the effectiveness and ultimate market acceptance of the
Beta-Cath(TM) System; limitations on third party reimbursement; and competition
between rival developers of restenosis reduction and other products. The Company
does not undertake any obligation to update or revise any forward-looking
statement, made by it or on its behalf, whether as a result of new information,
future events, or otherwise.

Overview

Novoste, incorporated in January 1987, was first capitalized and commenced
operations in May 1992. To date the Company has been engaged primarily in
research and development efforts and clinical trials in interventional
cardiology, electrophysiology and critical care products. Commencing in 1994,
the Company has devoted its efforts to developing the Beta-Cath(TM) System, an
intraluminal beta radiation catheter delivery system designed to reduce the
frequency of restenosis subsequent to percutaneous transluminal coronary
angioplasty ("PTCA"). The Beta-Cath(TM) System applies localized beta radiation
to the site of the vascular injury caused by a PTCA procedure and is designed to
inhibit long-term cell proliferation ("hyperplasia") and vascular remodeling,
each primary causes of restenosis. The Beta-Cath(TM) System was developed in
collaboration with certain physicians at Emory University Hospital, including
its Director of Interventional Cardiology, Dr. Spencer B. King, III.

The development, manufacture, sale and distribution of medical devices such as
the Company's Beta-Cath(TM) System are subject to numerous regulations imposed
by governmental authorities, principally the FDA and corresponding state and
foreign agencies. The regulatory process is lengthy, expensive and uncertain.
FDA approval of a Pre Market Approval ("PMA") application is required before any
Beta-


                                       8
<PAGE>

Cath(TM) System can be marketed in the United States. Securing FDA approval will
require submission to the FDA of extensive clinical data and technical
information. The Company does not expect regulatory approval of the
Beta-Cath(TM) System for sale in the United States prior to 1999 or for sale
outside the United States prior to 1998, and there can be no assurance when or
if such approvals will be obtained. The Company conducted a feasibility clinical
trial at Emory and Rhode Island Hospital under an Investigational Device
Exemption ("IDE") granted by the FDA to determine the clinical safety of the
Beta-Cath(TM) System for use in coronary arteries. Patient enrollment for the
clinical trial at Emory was completed on July 31, 1996 and the enrollment at
Rhode Island was completed on October 25, 1996. Twenty-three patients were
enrolled in the study. Six month follow-up has been completed for all patients
and preliminary summary data on 18 patients revealed a restenosis rate of 17%.
Three patients required target lesion revascularization (a re-opening procedure
at the original treatment site) during the six month follow-up. The late loss
index (a measure of how much of the angioplasty benefit is lost over six months)
was 5%. In addition, no adverse clinical events relating to the Beta-Cath(TM)
System were reported. The Company commenced a human clinical safety study at a
single site in Canada on February 19, 1997 and anticipates commencing a similar
study in The Netherlands by the end of April 1997. In addition, the Company
anticipates filing an IDE supplement shortly to perform a multicenter safety and
efficacy clinical trial in the United States, which is scheduled to start in the
summer of 1997.

For the period since its capitalization through March 31, 1997 the Company has
earned minimal non-recurring revenues and experienced significant losses in each
period. At March 31, 1997 the Company had an accumulated deficit of
approximately $16 million. Further, Novoste expects to continue to incur
significant operating losses through at least 1998 and expects cumulative losses
to increase significantly as the Company continues to initiate new research and
development projects, conduct its clinical trials in the United States, Canada
and Europe, seek regulatory approval or clearance for its products, expand its
sales and marketing efforts in contemplation of product introduction and market
development, and increase its administrative activities to support growth of the
Company.

There can be no assurance that the Company's research and development efforts
will be successfully completed. Additionally, as clinical testing is incomplete,
there can be no assurance that the Beta-Cath(TM) System will be safe and
effective. There can be no assurance that the Beta-Cath(TM) System will be
approved by the FDA or any domestic or foreign government agency or that the
Beta-Cath(TM) System or any other product developed by Novoste will be
successfully introduced or attain any significant level of market acceptance.
There can be no assurance that the Company will ever achieve either significant
revenues from sales of its Beta-Cath(TM) System or ever achieve or sustain
profitability.

Results of Operations

Net loss for the three months ended March 31, 1997 was $2,642,000, or ($0.32)
per share, as compared to $1,211,000, or ($0.24) per share, for the three months
ended March 31, 1996. The increase in net loss for the three months ended March
31, 1997 compared to the year earlier period is due to increased spending for
research and development and general and administrative expenses related to the
Company's development of its Beta-Cath(TM) System, offset by increased interest
income earned from the investment of the net proceeds from the initial public
offering in May 1996.

Revenues. No revenues were earned in the three months ended March 31, 1997 and
1996.


                                       9
<PAGE>

Research and Development Expenses. Research and development expenses increased
163% to $2,324,000 for the three months ended March 31, 1997 from $884,000 for
the three months ended March 31, 1996. These increases were primarily a result
of increased services provided by outside consultants in the development of the
Beta-Cath(TM) System, and the reimbursement of development costs incurred by the
Company's radioactive isotope supplier. The Company expects research and
development expenses to continue to increase in the future as the Company
initiates additional clinical trials of its Beta-Cath(TM) System in both the
U.S. and selected foreign countries, and it continues the development and design
of the Beta-Cath(TM) System and component parts.

General and Administrative Expenses. General and administrative expenses
increased 192% to $517,000 for the three months ended March 31, 1997 from
$177,000 for the three months ended March 31, 1996. These increases were
primarily a result of additional personnel, higher salaries and increased costs
associated with being a public company such as directors and officers liability
insurance and legal and accounting fees. The Company expects general and
administrative expenses to increase in the future in support of a higher level
of operations.

Marketing Expenses. Marketing expenses increased 17% to $139,000 for the three
months ended March 31, 1997 from $119,000 for the three months ended March 31,
1996. These increases were primarily a result of increased trade show costs and
higher salaries. The Company expects sales and marketing expenses to
significantly increase in the future, if and when the Beta-Cath(TM) System is
approved in the U.S. and other countries.

Interest Income. Net interest income increased to $337,000 for the three months
ended March 31, 1997 whereas net interest expense of $30,000 was incurred during
the three months ended March 31, 1996. The increase in interest income was
primarily due to the closing of the Company's initial public offering resulting
in larger cash equivalents and short-term investment balances.

Liquidity and Capital Resources

The Company financed its activities since inception up to May 29, 1996, the date
of the Company's initial public offering, through private placements of its
Common Stock, Class B Common Stock and promissory notes. Since inception through
March 31, 1997, the Company obtained funds aggregating approximately $38.2
million in net proceeds from the issuance of Common Stock and Class B Common
Stock (including approximately $30.6 million in net proceeds from its initial
public offering which closed in May 1996), and approximately $1.8 million in net
proceeds from the issuance of convertible promissory notes.

During the three months ended March 31, 1997 and 1996, the Company used cash to
fund operations of $2.4 million and $1.0 million, respectively. Cash used to
fund operations since inception was approximately $12.9 million. The increase in
cash used in operations was due primarily to higher expenses associated with
increased research and development activities and increased general and
administrative expenses to support increased operations. The Company's
expenditures for equipment and improvements have aggregated $1.8 million since
inception. Future cash needs for operating activities are


                                       10
<PAGE>

anticipated to be higher than historical levels because of the development,
manufacturing scale-up and commercialization of the Beta-Cath(TM) System,
subject to the factors discussed above.

The Company's principal source of liquidity at March 31, 1997 consisted of cash,
cash equivalents and short-term investments of $25.3 million. The Company did
not have any credit lines available or outstanding borrowings at March 31, 1997.

The Company anticipates that its operating losses will continue through at least
1998 because it plans to expend substantial resources in funding clinical trials
in support of regulatory approvals, and continues to expand research and
development and marketing activities. Novoste believes that current cash
balances and short-term investments, together with interest thereon, will be
sufficient to meet the Company's operating and capital requirements through
calendar 1997. However, the Company's future liquidity and capital requirements
will depend upon numerous factors, including the progress of the Company's
clinical research and product development programs; the receipt of and the time
required to obtain regulatory clearances and approvals; the resources required
to gain approvals; the resources the Company devotes to the development,
manufacture and marketing of its products; the resources required to hire and
develop a direct sales force in the United States, develop distributors
internationally, and to expand manufacturing capacity; facilities requirements;
market acceptance and demand for its products; and other factors. Novoste may in
the future seek to raise additional funds through bank facilities, debt or
equity offerings or other sources of capital. There can be no assurance that
additional financing, if required, will be available on satisfactory terms, or
at all.

New Accounting Pronouncements

In February 1997 the Financial Accounting Standards Board issued a new
accounting pronouncement, SFAS No. 128, "Earnings per Share", which will change
the current method of computing earnings per share. The new standard requires
presentation of "basic earnings per share" and "diluted earnings per share"
amounts, as defined. SFAS No. 128 will be effective for the Company's quarter
and year ending December 31, 1997, and, upon adoption, all prior-period earnings
per share data presented shall be restated to conform with the provisions of the
new pronouncement. Application earlier than the Company's quarter ending
December 31, 1997 is not permitted.


                                       11
<PAGE>

PART II. OTHER INFORMATION

Item 5. Other Information

Jonathan J. Rosen resigned as Vice President - Product Development of the
Company effective February 28, 1997. Also on February 28, 1997 Charles E. Larsen
was promoted to Chief Technical Officer from his previous position as Chief
Operating Officer, and David N. Gill was promoted to Chief Operating Officer.
David Gill will continue as Vice President - Finance and Chief Financial
Officer.


Item 6.    Exhibits and Reports on Form 8-K

(a) The following exhibits are included herein:

(11)         Computation of net loss per share

(27)         Financial data schedule


(b) The Company did not file any reports on Form 8-K during the three months
ended March 31, 1997.


                                       12
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                      NOVOSTE CORPORATION


April 23, 1997                        s/Thomas D. Weldon
-----------------------------------   ------------------------------------------
Date                                  Thomas D. Weldon
                                      President & Chief Executive Officer


April 23,1997                         s/David N. Gill
-----------------------------------   ------------------------------------------
Date                                  David N. Gill
                                      Vice President - Finance,
                                      Chief Operating Officer
                                      and Chief Financial Officer
                                      (Principal Financial & Accounting Officer)


                                       13
<PAGE>

EXHIBIT INDEX

Exhibit                                                                    Page
Number                           Exhibit Description                      Number
-------                    ------------------------------------           ------

11                         Computation of net loss per share                   

27                         Financial data schedule                             


                                       14