<PAGE>



                    SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549

                               FORM 10-QSB

(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

OR

[   ]	TRANSITION REPORT PURSUANT TO SECTION 1 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)

                 Registrant's telephone number, including area code:  
                                    (541) 967-6575

	Check whether the issuer: (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 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, 1997 was 13,761,271.

	Transitional Small Business Disclosure Format (check):

Yes       No  X 
<PAGE> 








                           PART I.   FINANCIAL INFORMATION



 Item 1.  Financial Statements


                                    SYNTHETECH, INC.

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


<TABLE>
<CAPTION>
<S>                                           <C>               <C>
                                               (unaudited)
                                               December 31,       March 31,
                                                   1996              1996
                                               ------------       ----------
 

             ASSETS
             ------

CURRENT ASSETS:
  
  Cash and cash equivalents                       $6,725,000      $5,049,000 
  Securities available for sale                      409,000         395,000 
  Accounts receivable, less allowance for 
   doubtful accounts of $15,000 for both periods   1,582,000       1,355,000 
  Inventories                                      1,640,000       1,924,000 
  Prepaid expenses                                   212,000          71,000 
  Income tax receivable                                    0         152,000 
  Deferred income taxes                               59,000          59,000 
  Other current assets                                 1,000           1,000 
                                                  ----------       ---------
    TOTAL CURRENT ASSETS                          10,628,000       9,006,000 


PROPERTY, PLANT AND EQUIPMENT, at cost, net        4,303,000       1,311,000 

SECURITIES AVAILABLE FOR SALE                        622,000         626,000 

OTHER ASSETS                                          14,000          16,000 
                                                 -----------     -----------
TOTAL ASSETS                                     $15,567,000     $10,959,000 
                                                 ===========     ===========
</TABLE>            
                      See notes to financial statements.

<PAGE>
            
      
                                    SYNTHETECH, INC.
                          
                                     BALANCE SHEETS
                                    ----------------
                                      (continued)


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

                                                (unaudited)
                                                December  31,   March 31,
                                                    1996          1996
                                                -------------   ---------
------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

CURRENT LIABILITIES:

Accounts payable and accrued expenses                $455,000       $271,000 
Accrued compensation                                  373,000        479,000 
Income taxes payable                                   10,000              -
Other accrued liabilities                               9,000          1,000 
Deferred revenue                                       44,000         98,000 
                                                      -------        -------
    TOTAL CURRENT LIABILITIES                         891,000        849,000 


DEFERRED INCOME TAXES                                   8,000         10,000 
 

SHAREHOLDERS' EQUITY:

Common stock, $.001 par value; authorized 
 100,000,000 shares; issued and outstanding,
 13,761,000 and 13,475,000 shares                      14,000         13,000 
Paid-in capital                                     7,260,000      6,589,000 
Employee notes receivable and deferred 
 compensation                                         (55,000)      (130,000)
Unrealized gain on securities available for sale       26,000         30,000 
Retained earnings                                   7,423,000      3,598,000 
                                                    ---------      ---------
TOTAL SHAREHOLDERS' EQUITY                         14,668,000     10,100,000 
                                                   ----------     ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY        $15,567,000    $10,959,000 
                                                  ===========    ===========
</TABLE>
                         See notes to financial statements.

<PAGE>

                                    SYNTHETECH, INC.

                                STATEMENTS OF OPERATIONS
                                ------------------------
                                      (unauditied)
<TABLE>
<CAPTION>
<S>                           <C>         <C>         <C>         <C>

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

                                  1996        1995        1996       1995

---------------------            --------    -------     -------    -------
 
REVENUES                       $3,022,000  $2,039,000  $11,097,000  $6,229,000 
COST OF SALES                   1,281,000     862,000    4,177,000   2,548,000 
                               ----------  ----------  -----------  ----------
GROSS PROFIT                    1,741,000   1,177,000    6,920,000   3,681,000 

RESEARCH AND DEVELOPMENT           52,000      41,000      156,000     162,000 
SELLING, GENERAL AND 
 ADMINISTRATIVE                   283,000     186,000      873,000     620,000 
                               ----------  ----------   ----------   ---------
OPERATING EXPENSE                 335,000     227,000    1,029,000     782,000 
                               ----------  ----------   ----------   --------- 
OPERATING INCOME                1,406,000     950,000    5,891,000   2,899,000 

OTHER INCOME, net                 104,000     101,000      279,000     223,000 
                               ----------  ----------   ----------   ---------
INCOME BEFORE INCOME TAXES      1,510,000   1,051,000    6,170,000   3,122,000 

PROVISION FOR INCOME TAXES        574,000     331,000    2,345,000   1,126,000 
                               ----------  ----------   ----------  ----------
NET INCOME                       $936,000    $720,000   $3,825,000  $1,996,000 
                               ==========  ==========   ==========  ==========
 
 NET INCOME PER COMMON SHARE        $0.06       $0.05        $0.26       $0.15 
                                =========   =========    =========   =========
 
SHARES USED IN PER SHARE 
 CALCULATION                   14,480,689  13,814,185   14,457,616  13,731,711 
                               ==========  ==========   ==========  ==========
 
</TABLE>

                     See notes to financial statements.

<PAGE>

                                    SYNTHETECH, INC.

                                STATEMENTS OF CASH FLOWS
                                ------------------------
                                      (unaudited)
<TABLE>
<CAPTION>
<S>                                              <C>              <C>
For the Nine Month Period Ended December 31            1996           1995
-------------------------------------------          -------         ------

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                          $3,825,000     $1,996,000 
Adjustments to reconcile net income to
 net cash provided by operating activities:
   Depreciation, amortization and other                182,000        147,000 
   Amortization of deferred compensation                61,000         14,000 
   Accrued interest on securities available for sale   (16,000)       (11,000)
   Realized gain on sale of securities available 
    for sale                                                 -        (44,000)

  (Increase) decrease in assets:
    Accounts receivable, net                          (227,000)      (699,000)
    Inventories                                        284,000       (185,000)
    Prepaid expenses                                  (141,000)       (41,000)
    Income tax receivable                              152,000              -
    Other assets                                         2,000          7,000 

   Increase (decrease) in liabilities:
    Accounts payable, accrued liabilities and income 
     taxes payable                                      96,000        118,000 
      Deferred revenue                                 (54,000)        98,000 
                                                     ----------     ----------
    Net cash provided by operating activites         4,164,000      1,400,000 
                                                     ----------     ----------

CASH FLOWS FROM INVESTING ACTIVITIES:

Property, plant and equipment purchases             (3,172,000)      (245,000)
Proceeds from sale of securities available 
 for sale                                                    -        658,000 
Employee notes receivable                               50,000        (80,000)
                                                    -----------     ----------
Net cash (used by) provided by 
 investing activities                               (3,122,000)       333,000 
                                                    -----------     ----------

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from stock option exercises and 
 disqualifying dispositions                            190,000        175,000 
Proceeds from stock warrant exercises, including 
 tax benefit                                           444,000              -
                                                     ----------      ---------
Net cash provided by financing activities              634,000        175,000 
                                                     ----------      ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS            1,676,000      1,908,000 
 
CASH AND CASH EQUIVALENTS AT BEGINNING OF 
 PERIOD                                              5,049,000      1,199,000 
                                                    -----------    -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD          $6,725,000     $3,107,000 
                                                    ===========    ===========

NON-CASH INVESTING ACTIVITIES:

Unrealized (loss) gain on securities 
 available for sale                                     (4,000)         9,000 
Issuance of stock options at below fair 
 value                                                       -         34,000 
</TABLE>
                              See notes to financial statements.

<PAGE>

                               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 1996 Form 10-KSB.

	     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 inventories are counted at the end of each 
quarter.  For those inventories not counted at the end of 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.   STATEMENTS OF CASH FLOWS
	     
	     Supplemental cash flow disclosures for periods ended December 31:

<TABLE>
<CAPTION>
<S>				                   <C>		       <C>		        <C>		         <C>		
		Cash Paid       
                              	Three Months		            Nine Months  
                              1996       1995	        1996	        1995
                              ----       ----         ----         ---- 
	    Income Taxes   	      $ 570,000  $ 351,000   $ 1,973,000  $ 1,160,000

</TABLE>
NOTE C. EARNINGS PER SHARE

	Earnings per share are computed using the weighted average number of common 
shares and common stock equivalents (stock options and warrants) outstanding 
during the applicable period.
<PAGE>


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


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


                                         Percentage of Revenues

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

                          Three Months December 31,   Nine Months December 31,
                              1996        1995            1996       1995
                              ----        ----            ----       ---- 
--------------------
Revenues                      100.0 %     100.0 %         100.0 %    100.0 %
Cost of sales                  42.4        42.3            37.6       40.9 
                              -----       -----           -----      ----- 
Gross Profit                   57.6        57.7            62.4       59.1 

Research and Development        1.7         2.0             1.4        2.6 
Selling, General and 
 Administration                 9.4         9.1             7.9       10.0 
                              -----       -----           -----      -----    
 Operating Expense             11.1        11.1             9.3       12.6 

Operating Income               46.5        46.6            53.1       46.5 
Other Income                    3.4         5.0             2.5        3.6 

Income Before Income Taxes     49.9        51.6            55.6       50.1 

Provision For Income Taxes     19.0        16.2            21.1       18.1 
                              -----       -----           -----      -----
Net Income                     30.9 %      35.4 %          34.5 %     32.0 %
                               ====        ====            ====       ====
</TABLE>


Revenues
--------
	
     Revenues increased by 48% to $3.02 million in the third quarter of 
fiscal 1997 from $2.04 million in the third quarter of fiscal 1996.  Revenues
were $11.10 million for the nine months of fiscal 1997, a 78% increase from 
revenues of $6.23 million for the nine months of fiscal 1996.  Peptide 
Building Blocks (PBBs) represented nearly 100% of revenues for the third 
quarter and nine months of fiscal 1997 and fiscal 1996.  International sales, 
mainly to Japan and Western Europe, were $980,000 and $3.75 million for the 
third quarter and nine months of fiscal 1997 as compared to $383,000 and 
$1.54 million for the third quarter and nine months of fiscal 1996.  
	
     Revenues for the third quarter of fiscal 1997 included sales associated 
with PBB orders for use in late stage clinical trials by two customers of 
$398,000 and $985,000, respectively, representing 46% of revenues for the 
third quarter.  The revenues associated with these two customers for the nine
months of fiscal 1997 were $3.65 million and $3.49 million, respectively, 
representing 64% of revenues for the nine months.  Revenues from these 
customers in the third quarter of fiscal 1996 were only $295,000 and 
$189,000, respectively, or 24% of revenues for that quarter, and in the nine 
months of fiscal 1996 were only $1.06 million and $271,000, respectively, or 
21% of revenues.  The results for these products demonstrate the continuing 
potential for fluctuation in sales of products.

<PAGE>
     As a supplier of PBBs for drugs in various stages of development, the 
Company's orders are always subject to curtailment or cancellation.  For 
example, the customer with purchases of $398,000 in the third quarter of 
fiscal 1997, and a total of nearly $5.67 million from February 1995 through 
October 1996, has advised the Company that it is pursuing an alternative, 
lower-cost manufacturing process and discontinuing additional purchases.  The
final shipment of product to this customer was in October 1996.   While the 
customer with purchases of $985,000 in the third quarter of fiscal 1997 
continues to be an important customer, the Company expects a significant 
reduction in revenue from this customer during the fourth quarter of fiscal 
1997.  This customer has indicated that its future requirements will be based
on the project moving to the next phase of clinical development.  With the 
reductions in the purchases by these two customers, the Company believes that
the revenues for the second half of fiscal 1997 will be lower than those for 
the first half, and that revenues for the fourth quarter of fiscal 1997 will 
be lower than the third quarter of fiscal 1997.  Nevertheless, the Company 
expects to have another solid growth year and continue to be active with PBB 
sales related to ongoing and new business.  The exact extent of its future 
business, however, is difficult to predict.
	
     The Company has not yet established a stable baseload of demand for its 
products.  The Company's products are part of a new and emerging market with 
sizable fluctuations in orders between periods.  In most instances, order or 
reorder cycles for products are not predictable.  Demand for PBBs is 
extremely variable since individual clinical trial programs are always 
subject to significant risk of suspension or early cancellation and only 
a small percentage of drugs in clinical trial programs are ultimately 
approved for market use.  As a result, the Company expects to continue to see
fluctuations in its revenue from period to period.  (See "Industry Factors" 
below.)

	
Gross Profit	
------------
     Gross profit increased to $1.74 million in the third quarter of fiscal 
1997 from $1.18 million in the third quarter of fiscal 1996.  As a percent of
sales, gross profit was about 58% in the third quarter of fiscal 1997 and 
the third quarter of fiscal 1996. Gross profit increased to $6.92 million or 
62% of revenues for the nine months of fiscal 1997 from $3.68 million or 59% 
of revenues for the same period of fiscal 1996.  The increase in gross profit
as a percentage of revenues for the nine months resulted from the increased 
level of revenues combined with a change in the mix of products.  The Company
expects these factors to continue to fluctuate from period to period and 
cause variations in gross profit margins.  Increased revenues positively 
affect gross profit margins since a portion of the Company's manufacturing 
overhead costs are relatively fixed.


Operating Expenses
------------------
     Research and development (R&D) and selling, general and administrative 
(SG&A) expenses were $335,000 in the third quarter of fiscal 1997 compared to
$227,000 in the third quarter of fiscal 1996.  As a percentage of sales, R&D 
and SG&A expenses were 11% in the third quarter of fiscal 1997 and third 
quarter of fiscal 1996.  R&D and SG&A expenses increased to $1.03 million for
the nine months of fiscal 1997 from $782,000 in fiscal 1996.  As a percentage
of sales, R&D and SG&A expenses decreased to 9% for the nine months of 
fiscal 1997 from 13% in the same period of fiscal 1996.  While operating 
expenses have increased reflecting increased staffing and other costs 
associated with the Company's growth, operating expenses as a percent of 
revenues for the nine months have decreased significantly.
	
<PAGE>

Operating Income
----------------
     Operating income increased to $1.41 million or 47% of revenues in the 
third quarter of fiscal 1997 from $950,000 or 47% for the same period last 
year.  For the nine months of fiscal 1997 operating income increased to $5.89
million or 53% of revenues compared with $2.90 million or 47% for the nine 
months of fiscal 1996. 


Other Income
------------
     The net other income of $104,000, and $279,000 in the third quarter and 
for the nine months of fiscal 1997, respectively, and the $101,000 and 
$223,000 net other income in the third quarter and for the nine months 
of fiscal 1996, respectively, came primarily from interest earnings.  


Net Income
----------
     For the third quarter and for the nine months of fiscal 1997, the 
Company earned $1.51 million, and $6.17 million before income taxes, 
respectively.  A provision for income taxes of $574,000 resulted in net income 
of $936,000 million for the third quarter and a provision for income taxes of
$2.35 million resulted in net income of $3.83 million for the nine months of 
fiscal 1997.  The Company's effective tax rate for the third quarter and nine
months of fiscal 1997 was 38% compared to 31% and 36% for the third quarter 
and nine months of fiscal 1996, respectively, reflecting a one time tax 
credit legislated by the State of Oregon for fiscal 1996. 



Industry Factors
----------------
     The market for PBBs is driven by the market for the peptide-based drugs 
in which they are incorporated.  Since there are only a handful of approved 
peptide-based drugs on the market today, this market is still very early in 
development and a substantial amount of the activity is occurring at the 
earlier stages of research and development and clinical trials.  Developments
of new biological information, based on rational drug design and 
combinatorial chemistry, are creating additional peptide-based drug 
candidates.  Cost pressures in the pharmaceutical industry, however, have 
tightened the criteria used to assess drug prospects at all phases of drug 
development programs.  Cost pressures in the pharmaceutical industry can also
cause pharmaceutical companies to investigate alternative drug manufacturing 
processes which may not include the Company's products as an intermediate.

     As a supplier of building blocks for peptide-based drugs, Synthetech's 
revenue will be affected by these industry factors.  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.  Since Synthetech's revenue comes predominantly from 
PBBs used in drug development programs, the overall impact on Synthetech's 
business from the cancellation rate will depend, to a large extent, on the 
rate of new drug development efforts being commenced.
  
     The advancement of a drug for which Synthetech is providing PBBs from a 
drug development program into an "approved" status by the FDA could also 
significantly affect Synthetech's business if Synthetech is able to 

<PAGE>
continue to supply the PBBs for the approved drug.  With the increased volume
typically associated with "approved" drugs, the Company, however, expects to 
face increased competition for this business.

     These industry factors combined with timing of customer and regulatory 
decisions and other unanticipated events may produce substantial fluctuations
in Synthetech's revenues for the foreseeable future.


Capital Resources and Liquidity
-------------------------------
     At December  31, 1996, the Company had working capital of $9.74 million 
compared to $8.16 million at March 31, 1996.  The Company's cash, cash 
equivalents and short term securities available for sale at December 31, 1996
totaled $7.13 million.  In addition, the Company had a $1 million bank line 
of credit of which there was no amount outstanding at December 31, 1996.  

     The increase in accounts receivable to $1.58 million at December 31, 
1996 from $1.36 million at March 31, 1996 reflected the higher level of sales
in the quarter.  The decrease of inventory to $1.64 million at December  31, 
1996 from $1.92 million at March 31, 1996 primarily resulted from lower 
levels of raw material inventory and work-in-process inventory.

     The Company had approximately $3.17 million of capital expenditures for 
the nine months of fiscal 1997, of which $585,000 was for equipment and 
equipment upgrades in the existing plant and $2.59 million for the new plant 
expansion.  The Company now anticipates total capital expenditures for fiscal
1997 for the existing plant to be $700,000 and for the new plant expansion to
be $4.03 million for a total of $4.7 million.  The Company has revised its 
total estimated capital expenditure for the new plant expansion to $6.7 
million.  The Company continues to expect to finance a majority of these 
capital expenditures from internal cash flow, but is also exploring bank 
financing and other outside funding sources.  

     Groundbreaking for the new plant began during the first quarter of 
fiscal 1997 and despite some weather related delays in November and December 
of 1996, the expected completion date continues to be in the spring of 1997. 
In response to the conclusion of the order for the PBB customer discussed 
earlier, the Company reduced its production from a 7-day to a 5-day per week,
round-the-clock production schedule in late September of 1996.


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

     Certain statements in the Company's Form 10-QSB contain 
"forward-looking" information (as defined in Section 27A of the Securities 
Act of 1933, as amended) that involve risks and uncertainties, including, but
not limited to, potential quarterly revenue fluctuations, uncertain market 
for products, technological change, customer concentration, impact of 
competitive products and pricing, and other risks detailed in the Company's 
Securities and Exchange Commission Filings, including the Company's Form 
10-KSB for the fiscal year ended March 31, 1996.
<PAGE>


                         PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

(a)	Exhibits

 	   3.1*	Articles of Incorporation

    	3.2*	Bylaws

    27	Financial Data Schedule

__________________

*Incorporated by reference herein from the Company's Form 10-K for the year 
ended March 31, 1991.


(b)	Reports

	No reports on Form 8-K were filed during the quarter.


<PAGE>




                                   SIGNATURES



In accordance with the requirements of the Exchange Act, the registrant 
caused this report to be signed on its behalf by the undersigned, thereunto 
duly authorized.




                                    							SYNTHETECH, INC.
                                   							   (Registrant)



Date:  February 10, 1997 		           		/s/  M. Sreenivasan     
                                  							M. Sreenivasan
                                			  				President & C.E.O.



Date:  February 10, 1997 		        		   /s/  Charles B. Williams					
							                                  Charles B. Williams
							                                  Vice President, Finance 
							                                  and Administration, C.F.O.,
							                                  Chief Accounting Officer




<PAGE>