<PAGE>  1
SOMATOGEN, INC.


                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549
                                 Form 10-Q

                                (Mark one)
 (X)  Quarterly report pursuant to Section 13 or 15(d) of the 
Securities Exchange Act of 1934.  For the quarterly period ended 
December 31, 1996.

      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
                                 0-19423

                             SOMATOGEN, INC.
         (Exact name of registrant as specified in its charter)

             Delaware                                   84-0991858
(State or other jurisdiction of                    (I.R.S. Employer
 incorporation or organization)                   Identification No.)

  2545 Central Ave., Boulder, CO                           80301
 (Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code:  (303) 440-9988

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

                      Common Stock $.001 par value
                          (Title of Class)

    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 /  /    

    Indicate the number of shares outstanding of each of the issuer's 
classes of common stock, as of the latest practicable date.
   
Common Stock $.001 par value                     20,794,190
          Class                     Outstanding at February 7, 1997 

Somatogen, the Somatogen logo and Optro(TM) are trademarks of the 
Company.  All other brand names or trademarks appearing in this 10-Q 
are the property of their respective holders.








<PAGE>  2
SOMATOGEN, INC.
INDEX

 
PART I.    FINANCIAL INFORMATION                              PAGE NO.

  Consolidated Balance Sheet -
      December 31, 1996 and June 30, 1996..................    3-4

  Consolidated Statement of Operations- 
      for the three and six-month periods ended December 31, 
      1996 and 1995 and the period from July 10, 1985 
      (inception) to December 31, 1996.....................     5

  Consolidated Statement of Cash Flows -
      for the six-month periods ended December 31, 1996 and 
      1995 and the period from July 10, 1985 (inception) to
      December 31, 1996....................................    6-7

  Notes to Consolidated Financial Statements................   8-9

  Management's Discussion and Analysis of Financial Condition
      and Results of Operations.............................  10-14

PART II.    OTHER INFORMATION...............................  15-16

SIGNATURES..................................................    17
































<PAGE>  3
SOMATOGEN, INC.
(A Corporation in the Development Stage)
PART I  Financial Information
CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
ASSETS                                                  December 31,        June 30,
                                                            1996              1996
                                                        -----------        ----------
                                                        (unaudited)
<S>                                                      <C>                <C> 
Current assets:
    Cash and cash equivalents ........................   $17,156            $29,541
    Short-term investments............................    27,985             24,735
    Receivable from Lilly.............................     1,432              1,852
    Other receivables.................................       661              1,013
    Prepaid expenses and other current assets.........       333                444
                                                         -------            -------
          Total current assets........................    47,567             57,585

Property and equipment, at cost, net of
      accumulated depreciation and amortization.......     4,110              4,042
Assets held for sale..................................     6,210              6,446
Other assets, net.....................................     1,263              1,088
                                                         -------            -------
                                                         $59,150            $69,161
                                                         =======            =======
LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
    Accounts payable..................................   $ 1,160            $ 1,826
    Accrued payroll...................................       743                801
    Payable to Lilly..................................     1,433              2,454
    Other accrued liabilities.........................       660                606
    Current portion of capital lease obligations......         8                159
                                                         -------            -------
        Total current liabilities.....................     4,004              5,846
Capital lease obligations, less current portion.......         7                 11
                                                         -------            -------
Total liabilities.....................................     4,011              5,857
                                                         -------            -------

</TABLE>
See accompanying notes to consolidated financial statements















<PAGE>  4
SOMATOGEN, INC.
(A Corporation in the Development Stage)
PART I  Financial Information
CONSOLIDATED BALANCE SHEET (continued)
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
                                                        December 31,        June 30,
                                                            1996              1996
                                                        -----------        ----------
                                                        (unaudited)
<S>                                                      <C>               <C> 
Commitments and contingencies
Stockholders' equity:
    Preferred stock, $.001 par value, 10,000,000 shares 
        authorized at December 31, 1996,
        no shares issued or outstanding...............          --              --
    Common stock, $.001 par value; 35,000,000 shares 
        authorized, 20,753,288 and 20,684,970 shares 
        issued and outstanding at December 31, 1996
        and June 30, 1996, respectively...............          21              21
    Additional paid-in capital........................     205,033         204,518
    Deficit accumulated during the development stage..    (149,689)       (140,948)
    Deferred compensation related to grant of options.        (226)           (287)
                                                          --------        --------
        Total stockholders' equity....................      55,139          63,304
                                                          --------        --------
                                                          $ 59,150        $ 69,161
                                                          ========        ========








</TABLE>


See accompanying notes to consolidated financial statements


















<PAGE>  5
SOMATOGEN, INC.
(A Corporation in the Development Stage)
PART I  Financial Information
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
                                                Three-months ended      Six-months ended          Period From
                                                   December 31,           December 31,          July 10, 1995
                                               --------------------     ----------------        (inception) to
                                                 1996         1995        1996      1995      December 31, 1996
                                                 ----         ----        ----      ----      ------------------
<S>                                            <C>        <C>            <C>         <C>          <C>
Revenue:
    Technology disclosure and license fees...  $    --    $      --     $     --     $    --       $  4,904
    Research and development grants
        and contracts........................       --           --           --          --          1,684
                                            ----------    ---------     --------    --------     ----------
            Total revenue....................       --           --           --          --          6,588
                                            ----------    ---------     --------    --------     ----------
Operating expenses:
    Research and development.................    5,320        4,752       10,201       9,360        111,453
    Reimbursements from Lilly................   (1,315)      (1,208)      (2,984)     (2,533)       (13,156)
    Reimbursements to Lilly..................      195          640        1,035         640          4,385
                                            ----------    ---------     --------    --------     ----------
    Research and development, net............    4,200        4,184        8,252       7,467        102,682
    General, administrative and marketing....      799        1,049        1,809       1,986         29,576
    Writedown of manufacturing
        facility assets......................       --           --           --          --         29,194
                                            ----------    ---------    ---------    --------     ----------
            Total operating expenses.........    4,999        5,233       10,061       9,453        161,452
                                            ----------    ---------    ---------    --------     ----------
    Operating loss...........................   (4,999)      (5,233)     (10,061)     (9,453)      (154,864)
    Interest and other income, net...........      635        1,094        1,320       1,694         10,093
                                            ----------    ---------    ---------    --------     ----------
    Loss from continuing operations..........   (4,364)      (4,139)      (8,741)     (7,759)      (144,771)
Discontinued operations:
    Loss from operations of subsidiary.......       --           --           --          --         (1,225)
    Gain on sale of subsidiary...............       --           --           --          --            300
                                            ----------    ---------    ---------    --------     ----------
    Net loss................................. $ (4,364)    $ (4,139)   $  (8,741)   $ (7,759)     $(145,696)
                                            ==========    =========    =========    ========     ==========
    Net loss per share....................... $  (0.21)    $  (0.20)   $   (0.42)   $  (0.40)  
                                            ==========    =========    =========    ========   
Shares used in calculating
    per share data                          20,727,000   20,278,000   20,715,000  19,503,000
                                            ==========   ==========   ==========  ========== 
</TABLE>
See accompanying notes to consolidated financial statements









<PAGE>  6
SOMATOGEN, INC.
(A Corporation in the Development Stage)
CONSOLIDATED STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(In thousands - unaudited)
<TABLE>
<CAPTION>
                                                                                           Period from
                                                                 Six-months ended        July 10, 1985
                                                                   December 31,          (inception) to
                                                                 1996         1995      December 31, 1996
                                                                 ----         ----      ------------------
<S>                                                              <C>        <C>           <C> 
Cash flows provided by (used in) operating activities:
    Net loss...............................................     $ (8,741)   $ (7,759)      $(145,696)
    Adjustments to reconcile net loss to net cash
        used in operating activities:
        Depreciation and amortization......................          814       1,096          15,581
        Writedown of manufacturing facility assets.........           --          --          29,194
        Other, net                                                   201         218           1,163
    Changes in assets and liabilities:
        Receivables........................................          772      (1,135)         (1,931)
        Prepaid expenses and other current assets..........          111         194            (308)
        Accounts payable and accrued liabilities...........       (1,688)        894           4,147
        Other, net.........................................           --          (6)            328
                                                                --------     --------        --------
          Net cash used in operating activities............       (8,531)     (6,498)        (97,522)
                                                                --------     --------        --------
Cash flows provided by (used in) investing activities:
    Purchase of short-term investments.....................      (27,982)    (35,804)       (276,943)
    Proceeds from sale of short-term investments...........       24,732      15,376         248,958
    Purchases of property and equipment....................         (831)       (969)        (23,086)
    Proceeds from sale of property and equipment...........          244         421           3,022
    Additions to construction-in-progress..................           --          --         (18,956)
    Other                           .......................         (234)        (91)         (9,120)
                                                                --------     --------       ---------
        Net cash (used in) 
          investing activities.............................       (4,071)    (21,067)         (76,125)
                                                                --------     --------       --------

</TABLE>
See accompanying notes to consolidated financial statements

















<PAGE>  7
SOMATOGEN, INC.
(A Corporation in the Development Stage)
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
Increase (Decrease) in Cash and Cash Equivalents
(In thousands - unaudited)
<TABLE>
<CAPTION>
                                                                                            Period from
                                                                 Six-months ended          July 10, 1985
                                                                   December 31,            (inception) to
                                                                 1996         1995       December 31, 1996
                                                                 ----         ----       -----------------
<S>                                                           <C>         <C>                 <C> 
Cash flows provided by (used in) financing activities:
    Payments of capital lease obligations and long- 
        term debt .........................................      (158)        (620)           (10,452)
    Net proceeds from issuance of stock and warrants.......       375       33,049            197,736
    Other..................................................        --           --              3,519
                                                              -------      -------            -------
    Net cash provided by financing activities..............       217       32,429            190,803
                                                              -------      -------            -------

Net increase (decrease) in cash and cash equivalent........   (12,385)       4,864             17,156
Cash and cash equivalents at beginning of period...........    29,541       26,376                 --
                                                              -------      -------            -------
Cash and cash equivalents at end of period.................   $17,156      $31,240            $17,156
                                                              =======      =======            =======
Supplemental disclosures of cash flow information:
    Cash paid for interest.................................   $    12      $    73            $ 2,392
    Capital lease obligations incurred for purchase 
        of property and equipment..........................        --           --              5,318
    Equipment deposits transferred to net
        property, plant and equipment......................        --           --              3,423
    Net property, plant and equipment transferred
        to assets held for sale............................        --           --              9,541

</TABLE>
See accompanying notes to consolidated financial statements





















<PAGE>  8
SOMATOGEN, INC.
(A Corporation in the Development Stage)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996
(Unaudited)


Note 1--STATEMENT OF ACCOUNTING PRESENTATION

       In the opinion of the Company, the accompanying unaudited 
consolidated financial statements include all adjustments (consisting 
only of normal recurring accruals) necessary to fairly state the 
Company's consolidated financial position as of December 31, 1996 and 
the consolidated results of operations and of cash flows for the three 
and six-month periods ended December 31, 1996 and 1995, and for the 
period from July 10, 1985 (inception) to December 31, 1996.  The 
accompanying consolidated financial statements should be read in 
conjunction with the consolidated financial statements included in the 
Company's Annual Report on Form 10-K for the year ended June 30, 1996.  
The information set forth in the accompanying consolidated balance 
sheet as of June 30, 1996, has been derived from the audited 
consolidated balance sheet included in the Company's Annual Report on 
Form 10-K for the year ended June 30, 1996.

       Interim results are not necessarily indicative of the 
results for the full year.

Note 2.-- STRATEGIC ALLIANCE AND RESEARCH AND DEVELOPMENT ARRANGEMENT

       In June 1994, Somatogen entered into a global strategic 
alliance with Eli Lilly and Company ("Lilly") whereby Lilly is co-
developing Optro (the "Lilly Alliance") and in September 1995, 
Somatogen and Lilly agreed to amend certain terms of the Lilly 
Alliance. Under the terms of the Lilly Alliance, Lilly is responsible 
for establishing manufacturing facilities to supply Optro for Phase 
III clinical trials and for global commercialization. In North 
America, the Company's expanded Phase II and Phase III trials for 
Optro will be performed in conjunction with Lilly's clinical and 
research groups, and Lilly and Somatogen will co-promote the 
product, splitting the development costs and sharing equally in 
the profits. Outside North America, except in Scandinavia, Lilly 
will be responsible for clinical development of Optro and related 
costs, and will have exclusive marketing rights. Lilly will pay 
Somatogen a royalty on product sales outside North America. Lilly 
has invested $30,000,000 in exchange for Somatogen Common Stock.  














<PAGE> 9
SOMATOGEN, INC.


The Lilly Alliance originally contemplated a March 1996 determination 
date at which Lilly would have made a decision whether to proceed with 
the clinical development and commercialization of Optro.  The 
September 1995 amendment to the Lilly Alliance accelerated $7,000,000 
of the $10,000,000 equity investment which Lilly would have made at 
such determination date.  Pursuant to the amendment,  Lilly made such 
$7,000,000 equity investment in October 1995. In addition, the 
amendment eliminated the March 1996 determination date and combined 
all remaining milestone equity investments into a single $7,000,000 
milestone equity investment to be made if the joint Somatogen-Lilly 
steering committee for the alliance determines that certain conditions 
have been met. The amendment also modified the termination provisions 
of the alliance, which provide for payment of certain financial 
consideration by Lilly to Somatogen in the event that the alliance is 
terminated under certain circumstances. Pharmacia & Upjohn, Inc. has 
the marketing rights to Optro in Scandinavia under its 1991 agreement 
with Somatogen.

       In accordance with the terms of the Lilly Alliance, 
Somatogen and Lilly share certain clinical development costs and 
effective January 1, 1996, Somatogen and Lilly began to share certain 
process improvement costs.  Expense reimbursements from Lilly and 
payable to Lilly are disclosed as a separate component of research and 
development on the Consolidated Statement of Operations.

Note 3.-- NET LOSS PER SHARE

       Net loss per share is computed using the weighted average 
number of shares of common stock outstanding.  Common equivalent 
shares from stock options and warrants are excluded from the 
computation as their effect is antidilutive.

























<PAGE>  10
SOMATOGEN, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations


       Except for the historical information contained herein, the 
following discussion contains forward-looking statements that involve 
risks and uncertainties.  The Company's actual results could differ 
materially from those discussed here.  Factors that could cause or 
contribute to such differences include, but are not limited to, those 
discussed in this section, those discussed in the Company's Form 10-K 
for the year ended June 30, 1996, and those discussed in the Company's 
Prospectus dated October 13, 1995.

RESULTS OF OPERATIONS

      Revenue

       The Company did not recognize any revenue for the three or six-
month periods ended  December 31, 1996 or 1995.

       Operating Expenses

       Total operating expenses decreased by 4% to $4,999,000 during 
the quarter ended December 31, 1996 from $5,233,000 for the comparable 
period in the previous fiscal year.  For the six-month period ended 
December 31, 1996, total operating expenses increased by 6% to 
$10,061,000 from $9,453,000 for the comparable period in the previous 
fiscal year.

       Net research and development expense for the quarter ended 
December 31, 1996 increased to $4,200,000 from $4,184,000 for the 
comparable period in the previous fiscal year.   The Company's net 
research and development expense increased by 11% for the six-month 
period ended December 31, 1996 to $8,252,000 from $7,467,000 for the 
comparable period in fiscal 1996.  The Company expects net research 
and development expenses to increase during the foreseeable future 
compared to the levels incurred during the three and six-month periods 
ended December 31, 1996.   

       Excluding Lilly reimbursements, research and development 
expense for the quarter ended December 31, 1996 increased by 12% to 
$5,320,000 from $4,752,000 for the comparable period in the previous 
fiscal year.  For the six-month period ended December 31, 1996, 
research and development expense increased by 9% to $10,201,000 from 
$9,360,000 for the comparable period in the previous fiscal year.  
These increases are primarily a result of increased product 
development expenditures.  











<PAGE>  11
SOMATOGEN, INC.


       For the quarter ended December 31, 1996, reimbursements from 
Lilly increased by 9% to $1,315,000 from $1,208,000 for the comparable 
period in the previous fiscal year.  For the six-month period ended 
December 31, 1996, reimbursements from Lilly increased by 18% to 
$2,984,000 from $2,533,000 for the comparable period in the previous 
fiscal year.  The increases in reimbursements from Lilly are primarily 
the result of the September 1995 amendment to the Lilly Alliance, which 
provided that certain process development expenditures would be 
reimbursable beginning January 1, 1996. 

       Reimbursements to Lilly for the quarter ended December 31, 1996 
decreased by 70% to $195,000 from $640,000 for the comparable period 
in the previous fiscal year.  For the six-month period ended December 
31, 1996, reimbursements to Lilly increased by 62% to $1,035,000 from 
$640,000 for the comparable period of the previous fiscal year.  The 
decrease in reimbursements to Lilly for the quarter ended December 31, 
1996 compared to the comparable quarter in the previous fiscal year 
resulted from favorable adjustments made to estimated obligations to 
Lilly which were recorded in the current quarter.  The increase in 
reimbursements to Lilly for the six-month period ended December 31, 
1996 compared to the comparable period of the previous year was a 
result of sharing certain process development expenditures which began  
January 1, 1996, partially offset by favorable adjustments related 
to estimated Lilly obligations, which were recorded during the six-month 
period ended December 31, 1996.  Reimbursements attributable to the
Lilly Alliance may vary significantly from quarter to quarter and year
to year.

       General, administrative and marketing expense decreased 24% to 
$799,000 for the quarter ended December 31, 1996 from $1,049,000 for 
the comparable quarter in the previous fiscal year.  For the six-month 
period ended December 31, 1996, general, administrative and marketing 
expense decreased 9% to $1,809,000 from $1,986,000 for the comparable 
period in fiscal 1996.  These decreases are primarily due to a 
decrease in commercial development expenditures.





















<PAGE>  12
SOMATOGEN, INC.


       Interest and Other Income, Net

       Interest and other income decreased to $635,000 for the quarter 
ended December 31, 1996 from $1,094,000 for the quarter ended 
December 31, 1995 and to $1,320,000 for the six-month period ended 
December 31, 1996 from $1,694,000 for the comparable period in fiscal 
1996.  The decrease in interest and other income for the three and 
six-month periods ended December 31, 1996, as compared to the 
comparable periods of the previous year, is primarily a result of 
decreased average investment balances coupled with a decrease in other 
income.  Interest expense for the three and six-month periods ended 
December 31, 1996 and 1995 was primarily associated with equipment 
leasing arrangements.

       Net Loss

       The net loss for the quarter ended December 31, 1996 was 
$4,364,000 (or $0.21 per share) compared to $4,139,000 (or $0.20 per 
share) for the same period in fiscal 1996.  For the six-month periods 
ended December 31, 1996 and 1995, the net loss totaled $8,741,000 (or 
$0.42 per share) and $7,759,000 (or $0.40 per share), respectively. 

LIQUIDITY AND CAPITAL RESOURCES

       Somatogen's operations to date have consumed substantial 
amounts of cash.  It is expected that negative cash flow from 
operations will increase during the remainder of fiscal 1997 and in 
future years from the level experienced during the three and six-month
periods ended December 31, 1996.  Such increase is expected as preclinical
and clinical studies of new products are undertaken, as clinical trials 
for Optro increase in scope and as additional product and process 
improvement costs are incurred.  Somatogen will need to raise 
significant additional funds in order to fund the Company's future 
operations and capital expenditures prior to commercialization of the 
Company's products.  

       The Company has relied primarily on public and private 
offerings of equity and cost sharing and equity investments pursuant 
to the Lilly Alliance to fund its operations and upon equipment 
leasing arrangements to finance the acquisition of capital equipment 
for the Company's laboratory and pilot manufacturing facilities.    















<PAGE>  13
SOMATOGEN, INC.

       At December 31, 1996 the Company had cash, cash equivalents 
and short-term investments of $45,141,000.  The Company's cash, cash 
equivalents and short-term investments decreased approximately 
$9,135,000 during the six-month period ended December 31, 1996.  This 
decrease is primarily a result of the use of cash for operations.   
The Company believes that capital resources existing at December 31, 
1996 will be adequate to meet its needs through fiscal 1998.

       Under the terms of its agreement with Somatogen, Lilly has made 
equity investments in Somatogen totaling $30,000,000.  The agreement 
provides for Lilly to make an additional $7,000,000 milestone equity 
investment if the joint Somatogen-Lilly steering committee determines 
that certain conditions have been met.  Furthermore, the agreement 
provides that Lilly will be responsible for providing manufacturing 
facilities to supply Optro for Phase III clinical trials and global 
commercialization thus eliminating the need for Somatogen to build 
commercial scale manufacturing facilities for Optro, which the Company 
estimates would have cost more than $150,000,000.

       In September 1992, the Company commenced construction of a 
clinical manufacturing facility.  The Company had also acquired land 
for, and begun the design of, a larger commercial manufacturing 
facility.  In conjunction with entering into the Lilly Alliance, an 
evaluation of the Company's future manufacturing requirements was 
completed and construction of the clinical manufacturing facility was 
discontinued.  During the fourth quarter of fiscal 1994, the Company 
recognized a non-recurring charge, which was principally non-cash, 
associated with the writedown of its clinical and commercial 
manufacturing assets of $29,200,000.  The components of the charge 
included approximately $21,000,000 for the clinical manufacturing 
facility, $6,000,000 for related manufacturing equipment and 
$2,200,000 for engineering design costs for the proposed commercial 
manufacturing facility.  

       Land and building related to manufacturing facilities and the 
related manufacturing equipment aggregating $6,210,000 are classified 
in Somatogen's balance sheet as assets held for sale.  During the 
three-month period ended December 31, 1996, the Company realized $235,000
in proceeds from the sale of assets held for sale.  The Company believes 
the aggregate carrying value of all assets held for sale approximates 
the assets' net realizable value; however, the Company continues to 
monitor estimated realizable values on a quarterly basis.  There can 
be no assurances that the Company will realize the aggregate carrying 
value of assets held for sale.  Proceeds from such asset sales are 
being used for general corporate purposes.      












<PAGE>  14
SOMATOGEN, INC.


       The Company historically has leased a significant portion of 
the equipment used in its laboratory and pilot manufacturing 
facilities.  As of December 31, 1996, the Company had outstanding 
capital lease obligations of $15,000.  Additionally, the Company had 
aggregate future operating lease obligations of approximately 
$1,056,000 at December 31, 1996.  In January 1997, the Company and the 
Company's landlord agreed to extend certain facility leases for 
periods of up to four years.  Incremental future lease obligations
associated with those lease extensions aggregated $2,310,000.  The
Company spent $831,000 during the six-month period ended December 31,
1996 for the purchase of capital equipment and leasehold improvements.  

       The Company's near-term operating requirements include 
increased research and development expenditures, including costs 
related to clinical trials and new product development and 
manufacturing.  The Company's capital spending program includes 
purchases of additional equipment for its research and development 
laboratories and pilot manufacturing facility.  In subsequent fiscal 
years, the Company's operating requirements are expected to include 
continuing increases in research and development funding to cover the 
costs of manufacturing process improvements, expanded clinical trials 
and new product development, as well as general, administrative, 
marketing and distribution expenses.

       In order to meet its long-term financing requirements, the 
Company may pursue a number of financing alternatives, including public 
and/or private offerings of securities and additional strategic 
alliances.  However, there can be no assurance that the Company will 
be able to raise additional financing from any of such sources, or 
that any additional funding which may become available to the Company 
will be on acceptable terms.  The Company's ability to raise 
additional financing may be dependent on many factors beyond the 
Company's control, including the state of the capital markets and the 
rate of progress of the Company's clinical trials.  Any additional 
financing that the Company may be able to obtain could result in 
substantial dilution to existing stockholders.  If adequate funds are 
not available, the Company will be required to significantly curtail 
operations.  Any such action could impact the Company's research and 
development programs, including the Company's clinical trial program. 
Any of these events could adversely affect the Company's ability to 
commercialize its products. 

       Cash requirements for the Company may vary materially from 
those now planned due to results of research and development, results 
of clinical testing, changes in focus and direction of the Company's 
research and development programs, manufacturing processes, 
competitive and technological advances, the FDA regulatory process, 
changes in the Company's marketing and distribution strategy, 
potential acquisitions or collaborative agreements and other factors.







<Page 15>
SOMATOGEN, INC.
PART II. OTHER INFORMATION


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

         At the Company's annual meeting of stockholders, which was 
         held on October 31, 1996, the Company's stockholders elected 
         the following seven persons as directors, each to serve until 
         the next annual meeting of stockholders or until his 
         successor is elected and qualified: Andre de Bruin, Bernadine 
         Healy, Carlos A. Ferrer, Gene I. Miller, George B. Rathmann, 
         Jack W. Schuler and Ralph Snyderman. 

         The following votes were cast by the stockholders with 
         respect to the election of directors named in the 
         Proxy Statement:

<TABLE>
<CAPTION>
                                 Shares         Shares Voted
         Director               Voted For      Against/Withheld
         --------               ---------      ----------------
         <S>                     <C>               <C>
         Andre de Bruin          17,710,789        1,291,199
         Bernadine Healy         18,598,554          403,434
         Carlos A. Ferrer        18,593,721          408,267
         Gene I. Miller          18,290,824          711,164
         George B. Rathmann      17,714,269        1,287,719
         Jack W. Schuler         18,293,653          708,335
         Ralph Snyderman         18,280,241          721,747

</TABLE>

         The stockholders also approved an amendment to the Company's 
         Stock Option Plan, increasing the aggregate number of shares 
         of common stock authorized for issuance under such plan by 
         1,000,000 shares.  Voting in favor were 16,788,341, opposed 
         were 1,847,889, abstaining were 98,283 and broker non-votes 
         were zero.



















<Page 16>
SOMATOGEN, INC.
PART II. OTHER INFORMATION (continued)

         The stockholders also ratified the selection of Price 
         Waterhouse LLP as the Company's independent accountants for 
         the fiscal year ending June 30, 1997.  Voting in favor were 
         18,893,676, opposed were 68,191, abstaining were 40,121 and 
         broker non-votes were zero.

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

         a)  Exhibits

             10.69 - Lease Extension Agreement dated January 21, 1997 
             with 2545 Central Avenue Partnership ("Central") for 2545 
             Central Avenue, Boulder, Colorado. 

             10.70 - Lease Extension Agreement dated January 21, 1997 
             with Central  for 2590 Central Avenue, Boulder, Colorado. 

             10.71 - Lease Extension Agreement dated January 21, 1997 
             with Central for 5797 Central Avenue, Boulder, Colorado. 

             27 - Financial Data Schedule (submitted only to SEC in 
             electronic format).

         b)  Reports on Form 8-K

             None






























<PAGE>  17
SOMATOGEN, INC.
SIGNATURES


       The financial information furnished herein has not been audited 
by independent auditors; however, in the opinion of management all 
adjustments necessary for a fair presentation for the three and six-
month periods ended December 31, 1996 and 1995, have been included.

       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.

Date:   February 13, 1997              SOMATOGEN, INC.


                                       Andre de Bruin
                                       -------------------------
                                       Chairman of the Board,
                                       President and Chief Executive
                                       Officer (Authorized Signatory)


                                       Timothy D. Hoogheem
                                       -------------------------
                                       Senior Vice President of Finance
                                       and Administration, Chief
                                       Financial Officer and Treasurer
                                       (Principal Financial Officer)


                                       Conrad A. McCarty
                                       -------------------------
                                       Corporate Controller
                                       (Principal Accounting Officer)