FORM 10Q
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1999
                                    


                         Commission file number 0-16005

                           Unigene Laboratories, Inc.
             -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                         22-2328609
-------------------------------                         -------------------
(State or other jurisdiction of                         (I.R.S. Employer
 incorporation or organization)                         Identification No.)

110 Little Falls Road, Fairfield, New Jersey                  07004
--------------------------------------------                ---------
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code: (973) 882-0860
                                                     -------------

--------------------------------------------------------------------------------
(Former  name,  former  address and former  fiscal year,  if changed  since last
report.)

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  filing
requirements for the past 90 days.     Yes [ X ]  No [  ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:

Common Stock, $.01 Par Value--40,122,421 shares as of May 7, 1999
<PAGE>
                                      INDEX


                           UNIGENE LABORATORIES, INC.




PART I.  FINANCIAL INFORMATION                                     

Item 1. Financial Statements (Unaudited)

Condensed balance sheets-
    March 31, 1999 and December 31, 1998                           

Condensed statements of operations-
    Three months ended March 31, 1999 and 1998                     

Condensed statements of cash flows-
    Three months ended March 31, 1999 and 1998                     

Notes to condensed financial statements-
    March 31, 1999                                                 

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

Item 3. Quantitative and Qualitative Disclosures About
    Market Risk                                                    

PART II. OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds                 

Item 6.  Exhibits and Reports on Form 8-K                          


SIGNATURES                                                         




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

                                 UNIGENE LABORATORIES, INC.
                                  CONDENSED BALANCE SHEETS

                                                              March 31       December  31
                                                                1999               1998 
                                                            ------------      ------------
ASSETS                                                       (Unaudited)
<S>                                                         <C>               <C>         
Current assets:
    Cash and cash equivalents .........................     $    589,532      $    402,664
    Prepaid expenses ..................................          297,936           317,823
    Other current assets ..............................          667,323           887,904
                                                            ------------      ------------
         Total current assets .........................        1,554,791         1,608,391

Property, plant and equipment-net
    of accumulated depreciation and amortization ......        7,737,573         8,085,250
Patents and other intangibles, net ....................        1,200,932         1,206,018
Other assets ..........................................          597,670           664,434
                                                            ------------      ------------
                                                            $ 11,090,966      $ 11,564,093
                                                            ============      ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable ..................................     $  1,060,184      $    982,752
    Accrued expenses ..................................        1,124,786         1,329,199
    Notes payable - stockholders ......................        1,040,000         1,040,000
    Current portion-capital lease obligations .........           61,464            61,464
                                                            ------------      ------------
  Total current liabilities ...........................        3,286,434         3,413,415

5% convertible debentures .............................        3,753,788         3,802,807
Capital lease obligations, excluding current portion ..          106,015           127,783

   Stockholders' equity:
    Common stock-par value $.01 per share;
       authorized 60,000,000 shares, issued
       39,628,308 shares in 1999 and 39,384,822 in 1998          396,283           393,848
    Additional paid-in capital ........................       65,444,364        65,158,403
    Accumulated deficit ...............................      (61,894,887)      (61,331,132)
    Less: Treasury stock, at cost, 7,290 shares .......           (1,031)           (1,031)
                                                            ------------      ------------
         Total stockholders' equity ...................        3,944,729         4,220,088
                                                            ------------      ------------
                                                            $ 11,090,966      $ 11,564,093
                                                            ============      ============
</TABLE>
See notes to condensed financial statements .
<PAGE>
<TABLE>
<CAPTION>
                                 UNIGENE LABORATORIES, INC.
                             CONDENSED STATEMENTS OF OPERATIONS
                                        (Unaudited)

                                                           Three Months Ended
                                                               March 31
                                                    ------------------------------- 
                                                         1999              1998
                                                    ------------      -------------

<S>                                                 <C>               <C>         
Licensing and other revenue ....................    $  2,500,172      $  2,011,715
                                                    ------------      ------------
Operating expenses:
    Research and development ...................       2,373,643         2,150,314

    General and administrative .................         476,236           489,186
                                                    ------------      ------------
                                                       2,849,879         2,639,500
                                                    ------------      ------------
Operating loss .................................        (349,707)         (627,785)
                                                    ------------      ------------
Other income (expense):
   Interest/other income .......................          10,953            30,340
   Interest expense ............................        (225,001)          (51,255)
                                                    ------------      ------------
                                                        (214,048)         ( 20,915)
                                                    ------------      ------------
Net loss .......................................    $   (563,755)     $   (648,700)
                                                    ============      ============
Net loss per share, basic ......................    $       (.01)     $       (.02)
                                                    ============      ============
Net loss per share, diluted ....................    $       (.01)     $       (.02)
                                                    ============      ============
Weighted average number of shares outstanding ..      39,558,201        38,510,432
                                                    ============      ============

</TABLE>

See notes to condensed financial statements.
<PAGE>
<TABLE>
<CAPTION>
                                 UNIGENE LABORATORIES, INC.
                             CONDENSED STATEMENTS OF CASH FLOWS
                                        (Unaudited)

                                                                     Three Months Ended
                                                                         March 31
                                                                ----------------------------- 
                                                                    1999            1998
                                                                -----------      -----------
<S>                                                             <C>              <C>         
       Net cash provided by (used for) operating activities     $   187,880      $  (448,637)
                                                                -----------      -----------
Investing activities:

    Purchase of equipment and furniture ...................         (28,413)         (78,759)
    (Increase) decrease in patents
      and other assets ....................................          50,079          (37,119)
    Construction of leasehold improvements ................            (910)            --
                                                                -----------      -----------
                                                                     20,756         (115,878)
                                                                -----------      -----------
Financing activities:

    Repayment of capital lease obligations ................         (21,768)            --
                                                                -----------      -----------

Net increase (decrease) in cash and cash equivalents ......         186,868         (564,515)

Cash and cash equivalents at beginning of year ............         402,664        2,126,327
                                                                -----------      -----------
Cash and cash equivalents at end of period ................     $   589,532      $ 1,561,812
                                                                ===========      ===========

SUPPLEMENTAL CASH FLOW INFORMATION:

Non-cash investing and financing activities:

Conversion of convertible debentures and
   accrued interest into Common Stock .....................     $   301,096      $      --
                                                                ===========      ===========

Cash paid for interest ....................................     $     4,600      $       500
                                                                ===========      ===========
</TABLE>

See notes to condensed financial statements.
<PAGE>
                                 UNIGENE LABORATORIES, INC.
                          NOTES TO CONDENSED FINANCIAL STATEMENTS
                                       MARCH 31, 1999

NOTE A - BASIS OF PRESENTATION

The accompanying  unaudited condensed financial statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information and with the  instructions to Form 10-Q and Article 10 of Regulation
S-X.  Accordingly,  they do not include  all of the  information  and  footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements.  In the opinion of management,  all adjustments considered necessary
for  a  fair  presentation  have  been  included.   Operating  results  for  the
three-month  period ended March 31, 1999 are not  necessarily  indicative of the
results that may be expected for the year ended  December 31, 1999.  For further
information,  please refer to the Company's  financial  statements and footnotes
thereto  included in the Company's annual report on Form 10-K for the year ended
December 31, 1998.

NOTE B - CONVERTIBLE DEBENTURES

During  January  1999,   $200,000  of  principal  amount  of  the  Company's  5%
Convertible  Debentures,  due December 31, 2001, were converted into (a) 164,102
shares of Common Stock and (b) warrants,  expiring January 29, 2004, to purchase
6,564  shares of  Common  Stock at an  exercise  price of $1.52  per  share.  In
addition,  the  Company  issued  79,384  shares of Common  Stock as  payment  of
interest on the 5% Convertible  Debentures in lieu of a cash interest payment in
the amount of $101,000.

NOTE C - LIQUIDITY

The Company has incurred annual  operating  losses since its inception and, as a
result,  at  March  31,  1999  had  an  accumulated   deficit  of  approximately
$61,895,000 and a working capital  deficiency of approximately  $1,732,000.  The
independent  auditors'  report covering the Company's 1998 financial  statements
includes  an   explanatory   paragraph  that  states  the  above  factors  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
However,  the financial  statements  have been prepared on a going concern basis
and as such do not include any adjustments that might result from the outcome of
this uncertainty.

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

RESULTS OF OPERATIONS

Revenue  for  the  first  quarter  of  1999  increased  24% to  $2,500,000  from
$2,012,000  in the first  quarter of 1998.  Revenue for both  periods  consisted
primarily of milestone payments from  Warner-Lambert  Company,  as the result of
the achievement of benchmarks in the  development of an oral calcitonin  product
for treating osteoporosis under a July 1997 licensing agreement.

Research and  development,  the Company's  largest  expense,  increased 10% from
$2,150,000 to $2,374,000  for the three months ended March 31, 1999, as compared
to the same period in 1998. The increase was primarily  attributable to expenses
incurred  in 1999  related to the  Company's  filing of a Type II  Variation  in
Europe for its injectable calcitonin product, as well as to development expenses
related to its nasal calcitonin product.
<PAGE>
General and  administrative  expenses decreased 3% from $489,000 to $476,000 for
the three months  ended March 31, 1999,  as compared to the same period in 1998.
The decrease was primarily due to  reductions in public  relations  expenses and
professional fees.

Interest and other income decreased $19,000 for the three months ended March 31,
1999, as compared to the same period in 1998, due to reduced funds available for
investment in 1999.

Interest expense increased $174,000 or 339% in 1999 from 1998. The 1999 increase
principally  was  due  to  the  amortization  of the  value  of  the  beneficial
conversion  feature  and  related  warrants  of  the  Company's  5%  Convertible
Debentures in the amount of $151,000.

As a result of increased revenue,  mostly offset by increased operating expenses
and interest  expense,  net loss  decreased  $85,000 or 13% for the three months
ended March 31, 1999, as compared to the corresponding period in 1998.

As of December  31, 1998,  the Company had  available  for income tax  reporting
purposes  net  operating  loss   carryforwards  in  the  approximate  amount  of
$58,400,000,  expiring  from 1999 through  2018,  which are  available to reduce
future earnings that would otherwise be subject to federal income taxes. For the
three months ending March 31, 1999, the Company accumulated additional losses of
approximately  $564,000. In addition, the Company has investment tax credits and
research  and  development  credits in the  amounts of $19,000  and  $2,178,000,
respectively,  which are available to reduce the amount of future federal income
taxes. These credits expire from 1999 through 2018.

The Company follows Statement of Financial  Accounting Standards (SFAS) No. 109,
"Accounting  for Income  Taxes".  Given the Company's  past history of incurring
operating losses,  any deferred tax assets that are recognizable  under SFAS 109
have been fully reserved. As of January 1, 1999, under SFAS 109, the Company had
deferred  tax  assets  of  approximately  $25,500,000,  subject  to a  valuation
allowance of  $25,500,000.  The deferred tax assets are primarily as a result of
the  Company's  net  operating  losses  and  tax  credits  generated.   For  the
three-month  period ended March 31, 1999, the Company's  deferred tax assets and
valuation allowances each increased by approximately $226,000.

LIQUIDITY AND CAPITAL RESOURCES

There are currently no material commitments outstanding for capital expenditures
relating to either the Boonton,  New Jersey production facility or the Company's
facility in Fairfield, New Jersey.

The Company,  at March 31, 1999, had cash and cash  equivalents of $590,000,  an
increase of $187,000 from December 31, 1998.

The Company has incurred annual  operating  losses since its inception and, as a
result,  at  March  31,  1999  had  an  accumulated   deficit  of  approximately
$61,895,000 and a working capital  deficiency of approximately  $1,732,000.  The
independent  auditors'  report covering the Company's 1998 financial  statements
includes  an   explanatory   paragraph  that  states  the  above  factors  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
However,  the financial  statements  have been prepared on a going concern basis
and as such do not include any adjustments that might result from the outcome of
this uncertainty.
<PAGE>
The Company's  ability to generate cash from  operations  will depend  primarily
upon signing research or licensing  agreements,  achieving defined benchmarks in
such agreements,  receiving  regulatory approval for its licensed products,  and
the commercial sale of these products.

In July 1997,  the Company  entered into an agreement  under which it granted to
the Parke-Davis  division of  Warner-Lambert  Company a worldwide license to use
the Company's oral calcitonin technology.  Upon execution of the agreement,  the
Company received $6 million in payments from Warner-Lambert,  consisting of a $3
million  licensing  fee and a $3 million  equity  investment  by  Warner-Lambert
(695,066 shares of Common Stock were purchased at a price of approximately $4.32
per share). Under the terms of the license agreement, the Company is eligible to
receive up to an  additional  $48.5  million in  milestone  payments  during the
course of the development program if specified milestones are achieved.  Through
March 31, 1999,  the Company had  received an  aggregate  of $13.5  million from
Warner-Lambert,  $7.5  million of which  represents  milestone  payments.  These
payments include a $2.5 million  milestone payment in February 1999. The Company
is eligible to receive an additional $8 million if other milestones are achieved
prior to the  commencement of Phase I clinical  studies in the U.S.  Early-stage
milestones primarily relate to the product's performance characteristics,  while
the latter-stage  milestones are primarily related to regulatory  activities and
approvals. If the product is successfully commercialized, the Company also would
receive  revenue  from  royalties  on product  sales by  Warner-Lambert  and its
affiliates and from the sale of raw material to Warner-Lambert.  The Company has
retained the right to license the use of its  technologies  for  injectable  and
nasal  formulations of Calcitonin on a worldwide  basis. The Company is actively
seeking other licensing and/or supply agreements with  pharmaceutical  companies
for  injectable and nasal forms of  calcitonin.  However,  there is no assurance
that any additional revenue-generating agreements will be signed.

The Company's cash requirements  have increased to approximately  $10-11 million
per year with the opening of its peptide  manufacturing  facility and with three
calcitonin products in various stages of development.  In addition,  the Company
faces principal and interest  obligations  over the next several years under its
outstanding 5% Convertible Debentures and other indebtedness.  However,  because
of the  conversion  features  of these  debentures,  a  substantial  portion  is
expected to be converted  into Common Stock,  thereby  decreasing  the amount of
cash required for principal payments. The Company also may elect to pay interest
on these  debentures  in Common Stock,  which would  decrease the amount of cash
required for interest payments.

With the receipt of the $2.5  million  from  Warner-Lambert  in  February  1999,
management  believes  that  the  Company  currently  has  sufficient   financial
resources to sustain its  operations at the current level through May 1999.  The
Company  expects  to  achieve  a  number  of  additional  milestones  under  the
Warner-Lambert  agreement  during 1999,  which will result in further  payments.
However,  there can be no  assurance  as to when or if the Company  will achieve
such milestones.  The Company is currently negotiating a secured debt financing,
using its building  and  equipment as  collateral.  In addition,  the Company is
negotiating  licensing  agreements  for  its  nasal  and  injectable  calcitonin
products.  These  agreements  should provide  short-term funds to the Company as
well as  milestone  payments.  The Company has also  applied for the sale of its
state tax benefits  under a New Jersey  program that went into effect on January
1, 1999,  and which could  provide the Company  with up to $4 million.  However,
there can be no assurance that any of these  transactions  will be completed or,
if  completed,  that the terms and  timing of such  transactions  would  provide
sufficient funds to sustain operations at the current level.
<PAGE>
While the Company  believes that the  transactions  it currently is pursuing and
the milestone  payments  under the  Warner-Lambert  agreement  would satisfy the
Company's  liquidity  requirements  in the near term,  satisfying  the Company's
long-term liquidity  requirements will require the successful  commercialization
of its nasal or oral calcitonin product. In addition,  the  commercialization of
its  calcitonin  products will require the Company to incur  additional  capital
expenditures,   including  expenditures  to  expand  or  upgrade  the  Company's
manufacturing   operations  to  satisfy   certain  of  its   calcitonin   supply
obligations.  However,  neither the cost nor timing of such capital expenditures
is determinable at this time.

YEAR 2000

The  Company has  established  a Year 2000  taskforce  that is  responsible  for
identifying  and reviewing all of the Company's  internal  computer  systems for
Year 2000 compliance, including workstations, its accounting system, and control
systems for equipment in the Company's  manufacturing and laboratory facilities.
The  taskforce is currently  taking  inventory of all critical and  non-critical
systems  and has  begun to test  its  systems  and  workstations  for Year  2000
compliance.  Of the systems and workstations tested so far, most have been found
to be in  compliance.  Certain  systems,  such as the  accounting  and telephone
systems, have been brought into compliance. Of the workstations tested and found
not to be in compliance,  most have been updated to be compliant. The review and
all testing  should be completed  during the second  quarter of 1999.  After the
review and testing are  completed,  the taskforce  will determine how to address
any  remediation  necessary.  The  Company  intends  to  repair or  replace  any
noncompliant systems in a timely manner so that the business of the Company will
not be adversely affected.

Because  most  of the  principal  hardware  and  software  used  by the  Company
(including most of the equipment  control  systems) were acquired by the Company
within the last several years, the Company expects that most of its systems will
be Year 2000 compliant.  However,  until the taskforce  completes its review and
testing,  the Company will not be able to assess the level of compliance or make
an accurate  estimate  of the costs of any  remediation.  To date,  the costs of
remediation  have  not  been  material.  Contingency  plans  have  not yet  been
developed.

The Company  has no  material  relationships  with third  party  suppliers.  The
Company could be significantly  affected by Year 2000  noncompliance on the part
of  Warner-Lambert  as the Company  currently is dependent upon timely milestone
payments from Warner-Lambert. In addition, the loss of the utility supply to the
Company's  laboratory,  production and  administrative  facilities would cause a
shut down of those facilities which, depending on the duration of the shut down,
may have a material adverse impact on the Company's business.  In addition,  the
loss of  telecommunications  services and banking services would, as is the case
with all businesses, adversely affect the Company.

OTHER

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
"Accounting For Derivative  Instruments and Hedging  Activities." This statement
establishes  accounting  and  reporting  standards for  derivative  instruments,
including certain derivative  instruments  embedded in other contracts,  and for
hedging activities. SFAS No. 133 will be effective for the Company's fiscal year
beginning  January 1, 2000. The adoption of SFAS No. 133 is not expected to have
a material effect on the Company's financial position or results of operations.
<PAGE>
Item 3.      Quantitative and Qualitative Disclosures About Market Risk

MARKET RISK

In the normal  course of  business,  the Company is exposed to  fluctuations  in
interest  rates as the Company seeks debt  financing to sustain its  operations.
The  Company  does not use  derivative  instruments  or  hedging  to manage  its
exposures.

The information below summarizes the Company's market risks associated with debt
obligations  as of March  31,  1999.  Fair  values  included  herein  have  been
estimated taking into  consideration the nature and terms of each instrument and
the  prevailing  economic and market  conditions at the balance sheet date.  The
table below presents  principal cash flows and related interest rates by year of
maturity based on the terms of the debt without  consideration  as to conversion
features.  While  convertible  debentures  may  be  converted  to  common  stock
beginning  January  1999,  the  Company  is unable to  predict  if and when such
conversions may occur.  Variable interest rates disclosed represent the rates at
March 31, 1999.
<TABLE>
<CAPTION>
                                          Estimated                                                         Year of Maturity
                                             Fair            Carrying         ----------------------------------------------------
                                            Value              Amount              1999       2000        2001       2002     2003
                                            ------             ------              ----       ----        ----       ----     ----
<S>                                      <C>                 <C>              <C>             <C>      <C>           <C>      <C> 
Notes payable - stockholders             $1,040,000          1,040,000        1,040,000         --         --         --       --
Variable interest rate                                                            8.125%        --         --         --       --

5% convertible debentures                $4,000,000          3,753,788              --          --     3,800,000      --       --
Fixed interest rate (1)                                                               5%          5%           5%     --       --
</TABLE>

(1) At the  option  of the  Company,  interest  payments  may be made  using the
Company's Common Stock.

                     SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain  statements in this Form 10-Q  constitute  "forward-looking  statements"
within the meaning of the Private Securities  Litigation Reform Act of 1995 (the
"Reform Act"). Such forward-looking  statements involve known and unknown risks,
uncertainties  and other factors that may cause the actual results,  performance
or activities of the Company,  or industry results,  to be materially  different
from any future results,  performance or activities expressed or implied by such
forward-looking  statements. Such factors include: general economic and business
conditions, the financial condition of the Company, including the Company's need
for and success in securing  additional  financing,  competition,  the Company's
dependence on other  companies to  commercialize,  manufacture and sell products
using the Company's technologies,  the uncertainty of results of preclinical and
clinical testing, the risk of product liability and liability for human clinical
trials,  the  Company's  dependence  on patents  and other  proprietary  rights,
dependence on key management  officials,  the  availability and cost of capital,
the  availability of qualified  personnel,  changes in, or the failure to comply
with,  governmental  regulations,  the failure to obtain regulatory approvals of
the  Company's  products and other factors  discussed in the  Company's  various
filings with the  Securities  and Exchange  Commission,  including the Company's
Annual Report or Form 10-K for the year ended December 31, 1998.
<PAGE>
PART II. OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds

         (a)       Not applicable.

         (b)       Not applicable.

         (c)       Recent Sales of Unregistered Securities.

In January 1999,  the Company issued 79,384 shares of Common Stock as payment of
approximately  $101,000 in accrued  interest  on the  Company's  5%  Convertible
Debentures  due December 31, 2001. All of such shares were issued by the Company
without  registration  in reliance on an  exemption  under  Section 4 (2) of the
Securities Act.

In January  1999,  the Company  issued  164,102  shares of Common Stock upon the
conversion  of $200,000 in  principal  amount of the  Company's  5%  Convertible
Debentures  due December 31, 2001. All of such shares were issued by the Company
without  registration  in reliance on an exemption  under Section 3(a)(9) of the
Securities Act.

         (d)       Not applicable.

Item 6.           Exhibits and Reports on Form 8-K

         (a)      Exhibits:  None

         (b)      Reports on Form 8-K:

The Company did not file any reports on Form 8-K during the three  months  ended
March 31, 1999.




<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 thereunto duly authorized.


                                            UNIGENE LABORATORIES, INC.
                                            -----------------------
                                                     (Registrant)


                                            /s/ Warren P. Levy
May 17, 1999                                -----------------------
                                            Warren P. Levy, President
                                            (Chief Executive Officer)


                                            /s/ Jay Levy
May 17, 1999                                -----------------------
                                            Jay Levy, Treasurer
                                            (Chief Financial Officer and
                                             Chief Accounting Officer)