<PAGE> 1




             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, 2000

                             OR

[    ]    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 0-12992

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

          Oregon                         84-0845771
   (State or Other Jurisdiction          (I.R.S. Employer
 of Incorporation or Organization)       Identification No.)

     1290 Industrial Way, Albany, Oregon        97321
   (Address of Principal Executive Offices)    (Zip Code)

                        (541) 967-6575
    (Registrant's Telephone Number, Including Area Code)

      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_____

      The number of shares of the registrant's common stock,
$.001  par  value, outstanding as of February  5,  2001  was
14,279,641.



<PAGE> 2

                       PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

<TABLE>
<CAPTION>
<S>                                   <C>               <C>

                             SYNTHETECH, INC.

                              BALANCE SHEETS
                          -------------------------

                                             (unaudited)
                                             December 31,       March 31,
                                                2000              2000
 -----------                                  -----------        ---------
  ASSETS
 -----------

CURRENT ASSETS:
  Cash and cash equivalents                 $  5,921,000     $  6,404,000
  Accounts receivable, less
   allowance for doubtful
   accounts of $15,000 for
   both periods                                1,105,000        2,433,000
  Income tax receivable                          920,000          137,000
  Inventories                                  4,657,000        4,112,000
  Prepaid expenses                               393,000          285,000
  Deferred income taxes                          140,000          140,000
  Other current assets                             2,000           31,000
                                            ------------     ------------
   TOTAL CURRENT ASSETS                       13,138,000       13,542,000

PROPERTY, PLANT AND EQUIPMENT, at cost, net   12,577,000       13,375,000
                                            ------------     ------------
   TOTAL ASSETS                             $ 25,715,000     $ 26,917,000
                                            ============     ============
</TABLE>
The accompanying notes are an integral part of these financial statements.

<PAGE> 3
<TABLE>
<CAPTION>
<S>                               <C>                   <C>

                            SYNTHETECH, INC.

                             BALANCE SHEETS
                        -------------------------
                              (continued)


                                            (unaudited)
                                            December 31,       March 31,
                                                2000             2000
  ------------------------------------      ------------       ---------
  LIABILITIES AND SHAREHOLDERS' EQUITY
  ------------------------------------

CURRENT LIABILITIES:
  Current portion of note payable               $     16,000    $     17,000
  Accounts payable                                   399,000         547,000
  Accrued compensation                               109,000         109,000
  Deferred revenue                                    44,000         544,000
  Other accrued liabilities                           13,000          25,000
                                                ------------    ------------
   TOTAL CURRENT LIABILITIES                         581,000       1,242,000

DEFERRED INCOME TAXES                                482,000         482,000

NOTE PAYABLE, net of current portion                 123,000         135,000

SHAREHOLDERS' EQUITY:
  Common stock, $.001 par value; authorized
   100,000,000 shares; issued and outstanding,
   14,280,000 and 14,277,000 shares                   14,000          14,000
  Paid-in capital                                  8,810,000       8,793,000
  Deferred  compensation                             (33,000)        (40,000)
  Retained earnings                               15,738,000      16,291,000
                                                ------------    ------------
   TOTAL SHAREHOLDERS' EQUITY                     24,529,000      25,058,000
                                                ------------    ------------
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 25,715,000    $ 26,917,000
                                                ============    ============
</TABLE>
The accompanying notes are an integral part of these financial statements.

<PAGE> 4

<TABLE>
<CAPTION>
<S>
                      <C>               <C>             <C>             <C>
                              SYNTHETECH, INC.

                          STATEMENTS OF OPERATIONS
                  -------------------------------------------
                                (unaudited)

                          For the Three Months Ended    For the Nine Months Ended
                                 December 31,                  December 31,
                             2000           1999           2000          1999
------------------------  -----------    -----------    -----------   ------------
REVENUES                  $ 1,413,000    $ 1,503,000    $ 5,193,000   $ 9,509,000
COST OF SALES               1,757,000      1,368,000      4,986,000     6,002,000
                          -----------    -----------    -----------   -----------
GROSS PROFIT (LOSS)          (344,000)       135,000        207,000     3,507,000

RESEARCH AND DEVELOPMENT       84,000         87,000        310,000       335,000
SELLING, GENERAL AND
  ADMINISTRATIVE              313,000        291,000        992,000       923,000
                          -----------    -----------    -----------   -----------
OPERATING EXPENSE             397,000        378,000      1,302,000     1,258,000
                          -----------    -----------    -----------   -----------
OPERATING INCOME (LOSS)      (741,000)      (243,000)    (1,095,000)    2,249,000
OTHER INCOME, NET             108,000         99,000        216,000       275,000
INTEREST EXPENSE               (7,000)        (4,000)       (13,000)      (11,000)
                          -----------    -----------    -----------   -----------
INCOME (LOSS) BEFORE
  INCOME TAXES               (640,000)      (148,000)      (892,000)    2,513,000

PROVISION (BENEFIT) FOR
  INCOME TAXES               (243,000)       (56,000)      (339,000)      955,000
                          -----------    -----------    -----------   -----------
NET INCOME (LOSS)         $  (397,000)   $   (92,000)   $  (553,000)  $ 1,558,000
                          ===========    ===========    ===========   ===========

BASIC EARNINGS (LOSS) PER
  COMMON SHARE                $ (0.03)       $ (0.01)       $ (0.04)       $ 0.11
                              =======        =======        =======        ======

DILUTED EARNINGS (LOSS) PER
  COMMON SHARE                $ (0.03)       $ (0.01)       $ (0.04)       $ 0.11
                              =======        =======        =======        ======
</TABLE>
The accompanying notes are an integral part of these financial statements.

<PAGE> 5
<TABLE>
<CAPTION>
<S>                                            <C>              <C>
                             SYNTHETECH, INC.

                          STATEMENTS OF CASH FLOWS
                ----------------------------------------------
                                (unaudited)


For the Nine Month Period Ended December 31           2000            1999
-------------------------------------------       ------------    ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                  $  (553,000)    $ 1,558,000
Adjustments to reconcile net income (loss) to
  net cash provided by operating activities:
      Depreciation, amortization and other           1,965,000       1,180,000
      Amortization of deferred compensation             23,000          33,000
      Gain on disposal of property, plant
       and equipment                                         -          (2,000)
       Proceeds from stock option exercises
        and disqualifying dispositions                   2,000          14,000

    (Increase) decrease in assets:
      Accounts receivable, net                       1,328,000       2,602,000
      Inventories                                     (545,000)       (537,000)
      Prepaid expenses                                (108,000)        (78,000)
      Income tax receivable                           (783,000)       (132,000)
      Other assets                                      29,000          (5,000)

    Increase (decrease) in liabilities:
      Accounts payable and accrued liabilities        (160,000)     (1,706,000)
      Deferred revenue                                (500,000)              -
                                                   -----------     -----------
        Net cash provided by operating activities      698,000       2,927,000
                                                   -----------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Property, plant and equipment purchases, net     (1,168,000)     (2,629,000)
                                                   -----------     -----------
        Net cash used in investing activities       (1,168,000)     (2,629,000)
                                                   -----------     -----------
Cash Flows From Financing Activities:
   Principal payments under long-term debt
    obligations                                        (13,000)        (11,000)
                                                   -----------     -----------
        Net cash used in financing activities          (13,000)        (11,000)
                                                   -----------     -----------
NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                         (483,000)        287,000

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     6,404,000       7,470,000
                                                   -----------     -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD         $ 5,921,000     $ 7,757,000
                                                   ===========     ===========
NON-CASH INVESTING ACTIVITIES:
Issuance of stock options at below fair value      $    16,000     $     4,000

</TABLE>
The accompanying notes are an integral part of these financial statements.

<PAGE> 6



                NOTES TO FINANCIAL STATEMENTS

NOTE A.   GENERAL AND BUSINESS

The  summary financial statements included herein have  been
prepared,   without  audit,  pursuant  to  the   rules   and
regulations  of  the  Securities  and  Exchange  Commission.
Certain   information  and  footnote  disclosures   normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or  omitted pursuant to such rules and regulations, although
Synthetech  management  believes that  the  disclosures  are
adequate  to  make the information presented not misleading.
It  is suggested that these summary financial statements  be
read  in  conjunction with the financial statements and  the
notes thereto included in Synthetech's fiscal 2000 Form  10-
K.

Interim  financial  statements  are  by  necessity  somewhat
tentative; judgments are used to estimate quarterly  amounts
for  items that are normally determinable only on an  annual
basis.   For  example,  provision for  income  taxes  is  an
estimate of the annual liability pro-rated over the quarters
of  the  fiscal  year based on estimates of  annual  income.
Further, all inventory quantities are verified by physically
counting  the units on hand at least once a year.  Normally,
selected  inventory  items  are cycle  counted  during  each
quarter.   For  those  inventories not  counted  during  the
quarter, quantities are determined using measured sales  and
production data for the period.

The  interim period information included herein reflects all
adjustments   which  are,  in  the  opinion  of   Synthetech
management, necessary for a fair statement of the results of
the  respective interim periods.  Results of operations  for
interim periods are not necessarily indicative of results to
be expected for an entire year.


NOTE B.   INVENTORIES

Inventories are stated at the lower of cost or market,
determined on the first-in, first-out (FIFO) basis.  Cost
utilized for inventory purposes include labor, material and
manufacturing overhead.
<TABLE>
<CAPTION>
<S>                           <C>                 <C>
                              December 31, 2000   March 31, 2000
                              -----------------   --------------
          Finished products     $ 1,999,000         $ 1,666,000
          Work-in-process         1,354,000             943,000
          Raw materials           1,304,000           1,503,000
                                -----------         -----------
                                $ 4,657,000         $ 4,112,000
                                ===========         ===========
</TABLE>

NOTE C.   STATEMENTS OF CASH FLOWS

          Supplemental cash flow disclosures for the nine month period
           ended December 31:
<TABLE>
<CAPTION>
<S>                          <C>            <C>        <C>          <C>


          Cash Paid
                               Three Months                Nine Months
                               ------------                -----------
                             2000        1999            2000        1999
                             ----        ----            ----        ----
          Income Taxes    $     1,000  $    66,000    $   443,000  $ 1,637,000
          Interest        $     7,000  $     4,000    $    13,000  $    11,000
</TABLE>

<PAGE> 7

          NOTES TO FINANCIAL STATEMENTS (continued)

NOTE C. EARNINGS PER SHARE

Basic earnings per share (EPS) are computed by dividing  net
income  by  the weighted average number of shares of  common
stock  outstanding during the period.  Diluted earnings  per
share  are  computed by dividing net income by the  weighted
average  number of shares of common stock and  common  stock
equivalents outstanding during the period, calculated  using
the  treasury stock method as defined in SFAS No. 128.   The
following  is  a  reconciliation  of  the  shares  used   to
calculate basic earnings per share and diluted earnings  per
share:

<TABLE>
<CAPTION>
<S>                         <C>           <C>

                             For the Three Months       For the Nine Months
                              Ended December 31,         Ended December 31,
                              --------------------        -------------------
                                2000         1999          2000       1999
                                ----         ----          ----       ----
Weighted average shares
 outstanding for Basic EPS    14,278,174   14,255,347    14,277,154  14,254,035

Dilutive effect of
 common stock options
 issuable under
 treasury stock method                 -            -             -      47,703
                             -----------   ----------    ----------  ----------
Weighted average common
 and common equivalent
 shares outstanding for
 Diluted EPS                 14,278,174    14,255,347    14,277,154  14,301,738
                             ==========    ==========    ==========  ==========
</TABLE>


The following common stock equivalents were excluded from the earnings per
share computation because their effect would have been anti-dilutive:
<TABLE>
<CAPTION>
<S>                     <C>           <C>          <C>          <C>

                           For the Three Months      For the Nine Months
                            Ended December 31,         Ended December 31,
                           --------------------      --------------------
                             2000         1999         2000         1999
                             ----         ----         ----         ----
Common stock options
 outstanding                707,100     777,813       707,100      523,800

</TABLE>

<PAGE> 8
          NOTES TO FINANCIAL STATEMENTS (continued)


NEW ACCOUNTING PRONOUNCEMENT

In  June  1999,  the  FASB  issued  Statement  of  Financial
Accounting  Standards  No. 137, "Accounting  for  Derivative
Instruments and Hedging Activities" ("SFAS 137").  SFAS  137
is   an  amendment  to  Statement  of  Financial  Accounting
Standards  No.  133, "Accounting for Derivative  Instruments
and  Hedging  Activities."  SFAS 137 establishes  accounting
and  reporting  standards  for all  derivative  instruments.
SFAS  137 is effective for fiscal years beginning after June
15,   2000.   The  Company  does  not  currently  have   any
derivative instruments and, accordingly, does not expect the
adoption  of  SFAS  137 to have an impact on  its  financial
position or results of operations.

<PAGE> 9

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

RESULTS OF OPERATIONS

The  following table sets forth, for the periods  indicated,
the percentage of revenues represented by each item included
in the Statements of Operations.

<TABLE>
<CAPTION>
<S>                         <C>             <C>           <C>        <C>

                              Percentage of Revenues
                           ---------------------------

                           For the Three Months   For the Nine Months
                            Ended December 31,     Ended December 31,

                               2000      1999         2000      1999
------------------            -----     -----        -----     -----

REVENUES                      100.0 %    100.0 %      100.0 %   100.0 %
COST OF SALES                 124.3       91.0         96.0      63.1
                             ------     ------       ------    ------
GROSS PROFIT (LOSS)           (24.3)       9.0          4.0      36.9

RESEARCH AND DEVELOPMENT        5.9        5.8          6.0       3.5
SELLING, GENERAL AND
 ADMINISTRATIVE                22.2       19.4         19.1       9.7
                             ------     ------       ------    ------
OPERATING EXPENSE              28.1       25.2         25.1      13.2
                             ------     ------       ------    ------
OPERATING INCOME (LOSS)       (52.4)     (16.2)       (21.1)     23.7
OTHER INCOME, NET               7.6        6.6          4.2       2.8
INTEREST EXPENSE               (0.5)      (0.3)        (0.3)     (0.1)
                             ------     ------       ------    ------
INCOME (LOSS) BEFORE
 INCOME TAXES                 (45.3)      (9.9)       (17.2)     26.4

PROVISION (BENEFIT)
 FOR INCOME TAXES             (17.2)      (3.7)        (6.5)     10.0
                             ------     ------       ------    ------
NET INCOME (LOSS)             (28.1) %    (6.2) %     (10.7) %   16.4 %
                             ======     ======       ======    ======
</TABLE>

Revenues
--------
Revenues  decreased  by 6% to $1.41  million  in  the  third
quarter  of  fiscal  2001 from $1.50 million  in  the  third
quarter of fiscal 2000.  Revenues were $5.19 million in  the
first  nine  months  of fiscal 2001,  a  45%  decrease  from
revenues of $9.51 million in the first nine months of fiscal
2000.  International sales were $140,000 and $852,000 in the
third   quarter  and  first  nine  months  of  fiscal  2001,
respectively, as compared to $664,000 and $6.22  million  in
the  third  quarter and first nine months  of  fiscal  2000,
respectively.   These sales were mainly  to  Europe  in  the
first  nine  months of fiscal 2001 and mainly to Europe  and
Mexico in the first nine months of fiscal 2000.

<PAGE> 10

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

Revenues  for the third quarters of fiscal 2001  and  fiscal
2000 were low due to the absence of revenue from large scale
orders,  as  well  as  the  unpredictable  ordering   cycles
inherent  in  drug  development projects.  The  decrease  in
revenues  for the first nine months of fiscal 2001 from  the
first  nine  months of fiscal 2000 reflected the absence  of
revenue   from   large  scale  orders,  as   well   as   the
unpredictable  ordering cycles inherent in drug  development
projects.  The Company expects the level of revenues  during
the  final quarter of fiscal 2001 to be similar to the  last
two  quarters - resulting in the Company's results  for  the
final  quarter  of  fiscal 2001 hovering  at  or  below  the
breakeven level and a net loss for fiscal year 2001.

Looking ahead to fiscal 2002, the Company recently secured a
$1.67  million  firm  order for supply of  Peptide  Building
Blocks  (PBBs)  during  the first half  of  fiscal  2002  to
support production of launch volumes of a drug in late-stage
clinical trials.  Pending favorable review of clinical data,
Synthetech's  customer  has indicated  that  it  will  place
additional  orders  for these PBBs of  around  $2.5  million
during fiscal 2002.  This could amount to a $4 million  plus
order for the PBBs during the next fiscal year.  The Company
also  continues to be a supplier of PBBs for  several  other
pharmaceutical   development  projects   advancing   through
clinical  trials  and these projects could have  substantial
future business potential.  There are, however, many factors
affecting  the success of all drug projects and Synthetech's
involvement.  (See "Industry Factors" below.)

The Company's strong balance sheet has allowed it to weather
the  current  level of business without hindering  long-term
strategic direction.  Synthetech continues to invest in  the
necessary  organizational resources.  The  Company  recently
added  Dr.  Michael Cannarsa to the management team  as  the
Company's  Director of Business Development.   Dr.  Cannarsa
will reinforce and expand the Company's efforts in sales and
marketing,   and   explore   suitable   opportunities    for
complementary product lines and technology licensing.   With
a   doctoral  degree  in  Organic  Chemistry  from   Cornell
University  and  a  distinguished career spanning  15  years
including positions with Arco Chemical, Technology Catalysts
International   and  PPG-Sipsy,  Dr.  Cannarsa   brings   to
Synthetech  a  strong  technology background,  coupled  with
extensive     commercial    development    experience     in
pharmaceutical intermediates and chiral fine chemicals.   He
is  based  strategically in the Philadelphia area  in  close
proximity to the large pharmaceutical customer base  in  the
northeastern United States and with easy access to  European
customers.   The  Company  also  continues  to   invest   in
necessary infrastructure improvements.  (See "Liquidity  and
Capital Resources" below.)


Gross Profit (Loss)
-------------------
Cost of sales for the third quarter of fiscal 2001 was $1.76
million,  resulting  in a gross loss of  $344,000.  Cost  of
sales  for  the  third  quarter of fiscal  2001  included  a
$165,000 write-off of expenses associated with initial  off-
specification batches of a new project.  Also, cost of sales
includes  all labor, facility and similar expenses  incurred
by   the  Company's  manufacturing  department  during   the
period-not   just  those  expenses  directly  allocated   to
manufacturing  the  Company's  products  sold   during   the
period-and the plant expansion has caused these to be higher
in the third quarter of fiscal 2001 as compared to the third
quarter  of fiscal 2000.  By comparison, a similar level  of
revenue for the third quarter of fiscal 2000 created a gross
profit of $135,000 for that quarter.

Gross  profit  for  the  first nine months  of  fiscal  2001
decreased  to  $207,000  from $3.51 million  for  that  same
period  of  fiscal 2000.  As a percentage  of  sales,  gross
profit  decreased to 4% in the first nine months  of  fiscal
2001  from  37%  of revenues for the same period  of  fiscal
2000.

<PAGE> 11

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

The  negative gross profit margin for the third  quarter  of
fiscal 2001 and lower gross profit margin for the first nine
months  of  fiscal  2001 as compared  to  the  gross  profit
margins  for  the  third quarter and first  nine  months  in
fiscal 2000 primarily reflected the downward pressure caused
by  a lower level of revenues, the write-off discussed above
and  the  increased manufacturing overhead costs  associated
with the second phase expansion of the new plant.

Operating Expenses
------------------
Research  and  development (R&D) expenses were  $84,000  and
$310,000  in the third quarter and the first nine months  of
fiscal  2001, respectively, compared to $87,000 and $335,000
in  the  third quarter and the first nine months  of  fiscal
2000,  respectively.  As a percentage of sales, R&D expenses
in the third quarter of fiscal 2001 and the third quarter of
fiscal  2000  were  both 6% and were 6% in  the  first  nine
months  of  fiscal 2001 as compared to 4% in the first  nine
months  of  fiscal 2000.  During the nine month  period  the
fluctuations  of  R&D expenses principally reflected  slight
variations  in employee head count and, to a lesser  extent,
the  absence  or presence of one-time costs associated  with
employee hiring.

Selling,   general   and  administrative   (SG&A)   expenses
increased to $313,000 and $992,000 in the third quarter  and
the  first  nine  months of fiscal 2001, respectively,  from
$291,000  and  $923,000 in the third quarter and  the  first
nine  months of fiscal 2000, respectively.  As a  percentage
of  sales,  SG&A  expenses increased to  22%  in  the  third
quarter  of  fiscal 2001 as compared to  19%  in  the  third
quarter  of fiscal 2000, and increased to 19% in  the  first
nine  months of fiscal 2001 as compared to 10% in  the  same
period of fiscal 2000. The increase as a percentage of sales
in the third quarter and first nine months of fiscal 2001 as
compared  to  the  third quarter and first  nine  months  of
fiscal 2000 was primarily attributable to lower revenues.


Operating Income (Loss)
-----------------------
The  Company had an operating loss of $741,000 in the  third
quarter  of  fiscal  2001 compared to an operating  loss  of
$243,000  in the same period last year.  For the first  nine
months  of  fiscal  2001 operating loss  was  $1.10  million
compared with operating income of $2.25 million in the first
nine months of fiscal 2000.


Other Income, net
-----------------
Other income, net in the third quarter and first nine months
of  fiscal  2001  was  $108,000 and $216,000,  respectively,
compared  to  $99,000  and $275,000, respectively,  for  the
third  quarter and first nine months of fiscal 2000.   Other
income,  net in the third quarter of fiscal 2001 and  fiscal
2000  primarily reflected interest earnings.  Other  income,
net in first nine months of fiscal 2001 included $323,000 in
interest  earnings partially offset by a $107,000  equipment
write  down.  Other income, net in the first nine months  of
fiscal 2000 primarily reflected interest earnings.


<PAGE> 12

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

Interest Expense
----------------
Interest expense in the third quarter and first nine  months
of  fiscal  2001 were $7,000 and $13,000, respectively,  and
were  $4,000 and $11,000, respectively, in the third quarter
and first nine months of fiscal 2000.


Net Income (Loss)
-----------------
For the third quarter of fiscal 2001, the Company incurred a
loss  before  income taxes of $640,000.   In light  of  this
loss, the Company received an income tax benefit of $243,000
for  that quarter.  This  resulted in a net loss of $397,000
for  that period.  For the first nine months of fiscal 2001,
the Company incurred a loss before income taxes of $892,000.
In  light  of this loss, the Company received an income  tax
benefit of $339,000 for that period. This resulted in a  net
loss of $553,000 for the first nine months of fiscal 2001.

<PAGE> 13

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


INDUSTRY FACTORS

The   market   for  PBBs  is  driven  by  the   market   for
synthetically  manufactured  peptide,  peptidomimetic  small
molecule and other drugs in which they are incorporated. The
drug development process for these drugs is dictated by  the
marketplace,  drug companies and the regulatory environment.
The  Company  has  no control over the pace  of  these  drug
development  efforts, which drugs get selected for  clinical
trials,  which drugs are approved by the FDA  and,  even  if
approved, the ultimate market potential of such drugs.

The  three  stages of the drug development process  include:
R&D  or  discovery stage, clinical trial stage and  marketed
drug   stage.   Synthetech's  customers  can   spend   years
researching  and developing new drugs, taking only  a  small
percentage  to  clinical trials and fewer yet to  commercial
market.  A  substantial amount of the activity continues  to
occur at the earlier stages of research and development  and
clinical  trials. The market for peptide and  peptidomimetic
small molecule drugs is still developing.

Recurring sales of PBBs for development programs is sporadic
at  best.  The  high cancellation rate for drug  development
programs results in a significant likelihood that there will
be no subsequent or "follow-on" PBB sales for any particular
drug   development  program.  Accordingly,  the   level   of
purchasing  by  the  Company's customers for  specific  drug
development  programs varies substantially from  quarter  to
quarter and the Company cannot rely on any one customer as a
constant source of revenue.

The  size  of  the  PBB  orders for marketed  drugs  can  be
substantially  larger  than  those  for  the  discovery   or
clinical trial stages. Sales of PBBs for marketed drugs  can
also  provide  an  opportunity  for  continuing  longer-term
sales. While not subject to the same high cancellation  rate
faced by discovery and clinical trial stage drug development
programs,  the  demand  for  the  approved  drugs,  however,
remains  subject  to many uncertainties, including,  without
limitation,  the drug price, the drug side effects  and  the
existence of other competing drugs. These factors, which are
outside of the control of the Company, will affect the level
of demand for the drug itself and, therefore, the demand for
PBBs. Also, industry cost pressures can cause pharmaceutical
companies   to  explore  and  ultimately  adopt  alternative
manufacturing  processes which do not include the  Company's
PBBs  as  an  intermediate. Finally, with  the  longer-term,
larger-scale   orders,   the   Company   expects   increased
competition to supply these PBBs.

Accordingly, these industry factors create an inability  for
the  Company  to  predict future demand beyond  its  current
order base. Until the Company develops a stable baseload  of
demand,  the  Company  is likely to continue  to  experience
significant fluctuations in its quarterly results.


<PAGE> 14

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


LIQUIDITY AND CAPITAL RESOURCES

At  December  31, 2000, the Company had working  capital  of
$12.56 million compared to $12.30 million at March 31, 2000.
The Company's cash and cash equivalents at December 31, 2000
totaled  $5.92  million.  The Company  does  not  invest  in
derivative securities.  In addition, the Company  had  a  $1
million unsecured bank line of credit of which there was  no
amount outstanding at December 31, 2000.

The  decrease  in  accounts receivable to $1.11  million  at
December  31,  2000  from $2.43 million at  March  31,  2000
reflected  the  lower level of shipments  during  the  third
quarter  of  fiscal  2001.   The  increase  in  income   tax
receivable to $920,000 at December 31, 2000 from $137,000 at
March 31, 2000 reflected the tax benefit for the first  nine
months  of fiscal 2001.  The increase in inventory to  $4.66
million at December 31, 2000 from $4.11 million at March 31,
2000  reflected an increase in work in process and  finished
goods,   a   majority  of  which  was  for  products   being
manufactured  and stocked in anticipation of future  orders,
offset somewhat by a reduction in the level of raw materials
held  in  inventory.  The decrease in  accounts  payable  to
$399,000  at  December 31, 2000 from $547,000 at  March  31,
2000   primarily  reflected  the  reduction  of  expenditure
commitments  related  to  the  second  phase  of  the  plant
expansion.   The decrease in deferred revenue to $44,000  at
December  31, 2000 from $544,000 at March 31, 2000  resulted
from  the  recognition of revenue associated with a $500,000
customer advance payment.

The  Company  had  approximately $1.17  million  of  capital
expenditures  during the first nine months  of  fiscal  2001
which included $483,000 for equipment and equipment upgrades
in  the existing plant, $386,000 for the second-phase of the
new  plant  expansion,  $255,000 for  the  R&D  lab  remodel
including  design  work, and $44,000 for preliminary  design
work  relating  to  wastewater treatment capabilities.   The
Company  anticipates total fiscal 2001 capital  expenditures
for the existing plant to be $700,000, the completion of the
second-phase of the new plant expansion to be $386,000,  the
R&D  lab  remodel to be $1.2 million, and for the wastewater
treatment  system to be $250,000.  The total  investment  in
upgrades  to  the R&D lab is estimated to be  $1.3  million.
The completion of the R&D lab remodel is scheduled for April
of  2001.   The  total investment in the on-site  wastewater
treatment  system is estimated to be $1.46 million  and  the
project  is  to  be  completed in September  of  2001.   The
Company  expects  to finance all capital  expenditures  from
internal cash flow and does not anticipate the need for  any
new debt or equity financing.

               _____________________________

This  Form  10-Q includes "forward-looking" information  (as
defined  in  Section 27A of the Securities Act of  1933  and
Section  21E  of  the  Securities  Exchange  Act  of  1934).
Investors  are  cautioned  that  forward-looking  statements
involve  risks and uncertainties, and various factors  could
cause actual results to differ materially from those in  the
forward-looking   statements.   Forward-looking   statements
include, without limitation, any statement that may predict,
forecast,  indicate or imply future results, performance  or
achievements,   and   may  contain  the   words   "believe,"
"anticipate,"  "expect," "estimate," "project,"  "will  be,"
"will  continue," "will likely result," or words or  phrases
of  similar meanings.  The risks and uncertainties  include,
but are not limited to, the following:  the uncertain market
for  products,  customer concentration, potential  quarterly
revenue  fluctuations,  industry cost factors,  competition,

<PAGE> 15

government    regulation,    product    liability     risks,
technological  change, increased costs associated  with  the
Company's facility expansions, international business risks,
and  Y2K  risks.   Investors are directed to  the  Company's
filings   with  the  Securities  and  Exchange   Commission,
including the Company's Form 10-K for the fiscal year  ended
March 31, 2000, which are available from the Company without
charge,   for  a  further  description  of  the  risks   and
uncertainties related to forward-looking statements made  by
the  Company  as well as to other aspects of  the  Company's
business.

                 PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

       3(i)(1)    Articles of Incorporation of Synthetech, Inc., as amended.

       3(ii)(2)   Bylaws of Synthetech, Inc., as amended.

      27          Financial Data Schedule
__________________
      (1)  Incorporated by reference herein from the Company's Form 10-KSB
            for the year ended March 31, 1997.
      (2)  Incorporated by reference herein from the Company's Form 10-Q for
           the period ended June 30, 2000.

(b)  Reports
     No reports on Form 8-K were filed during the quarter.

<PAGE> 17

                             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.



                                        SYNTHETECH, INC.
                                         (Registrant)

Date:    February 13, 2001          /s/ M.Sreenivasan
                                        M. Sreenivasan
                                        President & C.E.O.



Date:    February 13, 2001         /s/ Charles B. Williams
                                       Charles B. Williams
                                       Vice   President, Finance
                                       and Administration, C.F.O.,
                                       Chief Accounting Officer