**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C.  20549**

----

**FORM      10-Q**

**X**

**For      the Quarterly Period Ended June 30, 2007**

**Commission      file number 0-12992**

**SYNTHETECH,      INC.**

|   | **OREGON**                                                                                         |   | **84-0845771**                                                    |   |
|--------|----------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|   | (State                or Other Jurisdiction of                Incorporation or Organization)  |   | (I.R.S.                EmployerIdentification                No.) |   |

**1290      Industrial Way**

**PO      Box 646**

**Albany,      Oregon  97321**

**(541)      967-6575**

**Yes           X        No      ____**

| **Large                accelerated filer**____ | **Accelerated                filer  ____** | **Non-accelerated                filer   ****                  X   ** |
|------------------------------------------------|------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|

**Yes                        No     X    **

**Class:      Common Stock, $0.001 par value**

**Shares      outstanding as of August 8, 2007:  14,556,614**

----

**SYNTHETECH,      INC**

**INDEX**

|                                                                                       | **Page**                                                                                                                      |
|--------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|
| **Part                  I.    Financial                  Information** |                                                                                                                          |
|                                                                                       |                                                                                                                          |
| Item                  1.                                               | Condensed                  Financial Statements                                                                               |   |
|                                                                                       |                                                                                                                          |   |
|                                                                                       | Balance                  Sheets                                                                                               | 3 |
|                                                                                       | Statements                  of Operations                                                                                     | 5 |
|                                                                                       | Statements                  of Cash Flows                                                                                     | 6 |
|                                                                                       | Notes                  to Unaudited Condensed Financial                  Statements                                           | 7 |
|                                                                                       |                                                                                                                          |   |
| Item                  2.                                               | Management’s                  Discussion and Analysis of Financial Condition                  and Results of Operations | 16 |
|                                                                                       |                                                                                                                          |   |
| Item                  3.                                               | Quantitative                  and Qualitative Disclosure about Market                  Risk                                   | 26 |
|                                                                                       |                                                                                                                          |   |
| Item                  4.                                               | Controls                  and Procedures                                                                                      | 26 |
|                                                                                       |                                                                                                                          |
| **Part                  II.    Other                  Information**    |                                                                                                                          |
|                                                                                       |                                                                                                                          |
| Item                  6.                                               | Exhibits                                                                                                                      | 28 |
|                                                                                       |                                                                                                                          |
|                    Signatures                                               | 29                                                                                                                            |

**2**

----

| **PART                I. FINANCIAL INFORMATION**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| **Item                1. Financial Statements**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| **SYNTHETECH,                INC.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| **Condensed                Balance Sheets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
| (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **June                30,** |   |   | March                31, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **2007** |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |
| **Assets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Current                Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |
|      Cash                and cash                equivalents                                                                                                             |   | **$** | **343,000** |   |   | $ | 259,000 |   |
|      Accounts                receivable, less allowance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
|        for                doubtful accounts of $15,000 for                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
|        both                periods                                                                                                                             |   | ** ** | **2,483,000** |   |   |   | 2,195,000 |   |
|      Inventories                                                                                                                                                         |   | ** ** | **4,535,000** |   |   |   | 4,778,000 |   |
|      Prepaid                expenses                                                                                                                                     |   | ** ** | **255,000** |   |   |   | 354,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
|           Total                Current                Assets                                                                                    |   | ** ** | **7,616,000** |   |   |   | 7,586,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Property,                Plant and Equipment,                net                                                                                                                                  |   | ** ** | **3,770,000** |   |   |   | 3,746,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
|           Total                Assets                                                                                                           |   | **$** | **11,386,000** |   |   | $ | 11,332,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| *The                accompanying notes are an integral part of these condensed financial                statements.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |

**3**

----

| **SYNTHETECH,                INC.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| **Condensed                Balance Sheets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | **June                30,** |   |   | March                31, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | **2007** |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| **Liabilities                and Shareholders’ Equity**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| Current                Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|      Line                of                credit                                                                                                                           |   | **$** | **456,000** |   |   | $ | 644,000 |   |
|      Note                Payable                                                                                                                                            |   | ** ** | **26,000** |   |   |   | 132,000 |   |
|      Accounts                payable                                                                                                                                        |   | ** ** | **865,000** |   |   |   | 782,000 |   |
|      Accrued                compensation                                                                                                                                    |   | ** ** | **355,000** |   |   |   | 273,000 |   |
|      Accrued                termination                benefits                                                                                                             |   | ** ** | **71,000** |   |   |   | 124,000 |   |
|      Deferred                revenue                                                                                                                                        |   | ** ** | **43,000** |   |   |   | 43,000 |   |
|      Other                accrued                liabilities                                                                                                                               |   | ** ** | **18,000** |   |   |   | 3,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
|           Total                Current                Liabilities                                                                                  |   | ** ** | **1,834,000** |   |   |   | 2,001,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Shareholders'                Equity:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
|      Common                stock, $.001 par value; 100,000,000 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
|        authorized;                14,547,000 shares issued and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
|        outstanding                for both balance sheet dates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | ** ** | **15,000** |   |   |   | 15,000 |   |
|      Paid-in                capital                                                                                                                                         |   | ** ** | **9,278,000** |   |   |   | 9,176,000 |   |
|      Retained                earnings                                                                                                                                       |   | ** ** | **259,000** |   |   |   | 140,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
|           Total                Shareholders'                Equity                                                                                 |   | ** ** | **9,552,000** |   |   |   | 9,331,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Total                Liabilities and Shareholders' Equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | **$** | **11,386,000** |   |   | $ | 11,332,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| *The                accompanying notes are an integral part of these condensed financial                statements.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |

**4**

----

| **SYNTHETECH,                INC.**                                                                                  |   |
|----------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                 |   |
| **Condensed                Statements of                Operations**                                                 |   |
| (unaudited)                                                                                                          |   |
|                                                                                                                 |   |
| **Three                Months Ended June 30,**                                                                       |   | **2007** |   |   | 2006 |   |
|                                                                                                                 |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |
| Revenue                                                                                                              |   | **$** | **4,172,000** |   |   | $ | 1,743,000 |   |
| Cost                of revenue                                                                                       |   | ** ** | **2,983,000** |   |   |   | 1,698,000 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Gross                income                                                                                          |   | ** ** | **1,189,000** |   |   |   | 45,000 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Research                and development                                                                              |   | ** ** | **328,000** |   |   |   | 330,000 |   |
| Selling,                general and administrative                                                                   |   | ** ** | **725,000** |   |   |   | 510,000 |   |
| Total                operating expense                                                                               |   | ** ** | **1,053,000** |   |   |   | 840,000 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Operating                income (loss)                                                                               |   | ** ** | **136,000** |   |   |   | (795,000 | ) |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Interest                income                                                                                       |   | ** ** | **9,000** |   |   |   | 12,000 |   |
| Interest                expense                                                                                      |   | ** ** | **(26,000** | **)** |   |   | (2,000 | ) |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Income                (loss) before income taxes                                                                     |   | ** ** | **119,000** |   |   |   | (785,000 | ) |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Income                taxes                                                                                          |   | ** ** | **-** |   |   |   | - |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Net                income (loss)                                                                                     |   | **$** | **119,000** |   |   | $ | (785,000 | ) |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Net                income (loss) per common share:                                                                   |   |   |   |   |   |   |   |   |
|       Basic                and diluted income (loss) per share                         |   | **$** | **0.01** |   |   | $ | (0.05 | ) |
|                                                                                                                 |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding:                                                                  |   |   |   |   |   |   |   |   |
|       Basic                                                                            |   | ** ** | **14,546,614** |   |   |   | 14,521,614 |   |
|       Diluted                                                                          |   | ** ** | **15,128,113** |   |   |   | 14,521,614 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |
|                                                                                                                 |   |
| *The                accompanying notes are an integral part of these condensed financial                statements.* |   |

**5**

----

| **SYNTHETECH,                INC.**                                                                                                                                 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                |   |
| **Condensed                Statements of Cash                Flows**                                                                                                |   |
| (unaudited)                                                                                                                                                         |   |
|                                                                                                                                                                |   |   |   |   |   |   |
| **For                The Three Months Ended June 30,**                                                                                                              |   | **2007** |   |   | 2006 |   |
|                                                                                                                                                                |   |   |   |   |   |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES:                                                                                                                |   |   |   |   |   |   |
| Net                income (loss)                                                                                                                                    |   | **$** | **119,000** |   |   | $ | (785,000 | ) |
| Adjustments                to reconcile net income (loss) to                                                                                                        |   |   |   |   |   |   |   |   |
|   net                cash provided by (used in) operating activities:                                                                                     |   |   |   |   |   |   |   |   |
|     Depreciation                expense                                                                                                         |   | ** ** | **115,000** |   |   |   | 135,000 |   |
|     Stock-based                compensation expense                                                                                             |   | ** ** | **102,000** |   |   |   | - |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
|     (Increase)                decrease in assets:                                                                                               |   |   |   |   |   |   |   |   |
|       Accounts                receivable, net                                                                                         |   | ** ** | **(288,000** | **)** |   |   | (761,000 | ) |
|       Inventories                                                                                                                     |   | ** ** | **243,000** |   |   |   | (770,000 | ) |
|       Prepaid                expenses                                                                                                 |   | ** ** | **99,000** |   |   |   | 125,000 |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
|     Increase                (decrease) in liabilities:                                                                                          |   |   |   |   |   |   |   |   |
|       Accounts                payable                 |   | ** ** | **83,000** |   |   |   | 240,000 |   |
|       Accrued                compensation                                                                                             |   | ** ** | **82,000** |   |   |   | 17,000 |   |
|       Accrued                termination benefits                                                                                     |   | ** ** | **(53,000** | **)** |   |   | - |   |
|       Deferred                revenue                                                                                                 |   | ** ** | **-** |   |   |   | 70,000 |   |
|       Other                accrued liabilities                                                                                        |   | ** ** | **15,000** |   |   |   | (8,000 | ) |
|         Cash                Provided By (Used In) Operating Activities                                                      |   | ** ** | **517,000** |   |   |   | (1,737,000 | ) |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES:                                                                                                                |   |   |   |   |   |   |   |   |
|    Property,                plant and equipment purchases                                                                                            |   | ** ** | **(139,000** | **)** |   |   | (33,000 | ) |
|    Sale                of marketable securities, available for sale                                                                                  |   | ** ** | **-** |   |   |   | 800,000 |   |
|         Cash                Provided by (Used In)  Investing Activities                                           |   | ** ** | **(139,000** | **)** |   |   | 767,000 |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES:                                                                                                                |   |   |   |   |   |   |   |   |
|    Proceeds                from (repayments of) line of credit                                                                                       |   | ** ** | **(188,000** | **)** |   |   | 425,000 |   |
|    Principal                payments under long-term debt obligations                                                                                |   | ** ** | **-** |   |   |   | (7,000 | ) |
|    Repayment                of note payable                                                                                                          |   | ** ** | **(106,000** | **)** |   |   | (68,000 | ) |
|         Cash                Provided By (Used In) Financing Activities                                                      |   | ** ** | **(294,000** | **)** |   |   | 350,000 |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
|         Increase                (Decrease) in Cash and Cash Equivalents                                                     |   | ** ** | **84,000** |   |   |   | (620,000 | ) |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
| Cash                and Cash Equivalents at Beginning of Period                                                                                                     |   | ** ** | **259,000** |   |   |   | 1,233,000 |   |
|                                                                                                                                                                |   |   |   |   |   |   |   |   |
| Cash                and Cash Equivalents at End of Period                                                                                                           |   | **$** | **343,000** |   |   | $ | 613,000 |   |
|                                                                                                                                                                |   |
|                                                                                                                                                                |   |
| *The                accompanying notes are an integral part of these condensed financial                statements.*                                                |   |

**6**

----

**SYNTHETECH,      INC.**

**NOTES      TO UNAUDITED CONDENSED FINANCIAL      STATEMENTS**

| **NOTE                A.** | **GENERAL                AND BUSINESS** |
|----------------------------|-----------------------------------------|

| **NOTE                B.** | **SUMMARY                OF SIGNIFICANT ACCOUNTING                POLICIES** |
|----------------------------|------------------------------------------------------------------------------|

**Use      of Estimates:  **

**7**

----

**Cash      and Cash Equivalents:**

|                                                                                                                                                                                                                                                                                                                                                    |   | **June                30,** |        |   | March                31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|-------------|--------|--------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                    |   | **2007**                    |        |   | 2007                     |   |
|                                                                                                                                                                                                                                                                                                                                                    |   |                        |        |   |                     |   |
| Cash                                                                                |   | **$**                       | **35,000**  |   |                     | $      | 209,000 |   |
| Cash                equivalents                                                     |   | ** **                  | **308,000** |   |                     |   | 50,000 |   |
|                                                                                                                                                                                                                                                                                                                                                    |   | **$**                       | **343,000** |   |                     | $      | 259,000 |   |

**Accounts      Receivable: **

**Concentrations      of Credit Risk:**

**Inventories:**

**Property,      Plant and Equipment:**

**8**

----

**Income      Taxes:  **

**Revenue      Recognition:**

**Research      and Development Costs:**

**Comprehensive      Income or Loss:  **

**Stock-Based      Compensation:  **

**9**

----

**Recent      Accounting Pronouncements:  **

| **NOTE                C.** | **NET                INCOME (LOSS) PER SHARE** |
|----------------------------|------------------------------------------------|

|                                                                          |   | Three                Months Ended June 30, |           |
|-------------------------------------------------------------------------------|--------|--------------------------------------------|----------------|
| Weighted                average common shares outstanding:                    |   | **2007**                                   |           |   | 2006 |   |
|                                                                          |   |                                       |           |   |   |   |
|      Basic                                           |   | ** **                                 | **14,546,614** |   |   |   | 14,521,614 |   |
|      Dilutive                effect of stock options |   | ** **                                 | **581,499**    |   |   |   | - |   |
|                                                                          |   |                                       |           |   |   |   |   |   |
|      Diluted                                         |   | ** **                                 | **15,128,113** |   |   |   | 14,521,614 |   |

| **NOTE                D.** | **STATEMENTS                OF CASH FLOWS** |
|----------------------------|---------------------------------------------|

| Cash                Paid |   | Three                Months Ended June 30, |       |
|--------------------------|--------|--------------------------------------------|------------|
|                     |   | **2007**                                   |       |   | 2006 |   |
|                     |   |                                       |       |
| Interest                 |   | **$**                                      | **26,000** |   |   | $ | 2,000 |   |

**10**

----

| **NOTE                E.** | **INVENTORIES** |
|----------------------------|-----------------|

|                                                                                                                                                                                                                                                                                                                                                                  |   | **June                30,** |          |   | March                31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|---------------|--------|--------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                  |   | **2007**                    |          |   | 2007                     |   |
|                                                                                                                                                                                                                                                                                                                                                                  |   |                        |          |   |                     |   |
| Finished                products                                                                  |   | **$**                       | **2,045,000** |   |                     | $      | 2,051,000 |   |
| Work                in                process                                                     |   | ** **                  | **1,031,000** |   |                     |   | 1,106,000 |   |
| Raw                materials                                                                      |   | ** **                  | **1,459,000** |   |                     |   | 1,621,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                  |   | **$**                       | **4,535,000** |   |                     | $      | 4,778,000 |   |

| **NOTE                F.** | **PROPERTY,                PLANT AND EQUIPMENT** |
|----------------------------|--------------------------------------------------|

|                                    |   | Depreciable                Life |                         |   | **June                30,** |        |           | March                31, |   |
|-----------------------------------------|--------|---------------------------------|------------------------------|--------|-----------------------------|-------------|----------------|--------------------------|--------|
|                                    |   | In                Years         |                         |   | **2007**                    |        |           | 2007                     |   |
| Land                                    |   |                            |                         |   | **$**                       | **241,000** |           |                     | $      | 241,000 |   |
| Buildings                               |   |                            | 15                – 40 |   |                        | ** **  | **1,617,000**  |                     |   |   | 1,616,000 |   |
| Machinery                and equipment  |   |                            | 5–                17   |   |                        | ** **  | **2,378,000**  |                     |   |   | 2,382,000 |   |
| Laboratory                equipment     |   |                            | 5–                17   |   |                        | ** **  | **1,058,000**  |                     |   |   | 1,058,000 |   |
| Furniture                and fixtures   |   |                            | 3–                5    |   |                        | ** **  | **89,000**     |                     |   |   | 82,000 |   |
| Construction                in process  |   |                            |                         |   |                        | ** **  | **140,000**    |                     |   |   | 7,000 |   |
|                                    |   |                            |                         |   |                        | ** **  | **5,523,000**  |                     |   |   | 5,386,000 |   |
|                                    |   |                            |                         |   |                        |        |           |                     |   |   |   |   |
| Less:                                   |   |                            |                         |   |                        |        |           |                     |   |   |   |   |
| Accumulated                depreciation |   |                            |                         |   |                        | ** **  | **(1,753,000** | **)**                    |   |   | (1,640,000 | ) |
|                                    |   |                            |                         |   |                        |        |           |                     |   |   |   |   |
|                                    |   |                            |                         |   |                        | **$**       | **3,770,000**  |                     |   | $ | 3,746,000 |   |

**11**

----

| **NOTE                G.** | **LINE                OF CREDIT** |
|----------------------------|-----------------------------------|

| **NOTE                H.** | **NOTE                PAYABLE** |
|----------------------------|---------------------------------|

| **NOTE                I.** | **ACCRUED                TERMINATION BENEFITS** |
|----------------------------|-------------------------------------------------|

| **NOTE                J.** | **EMPLOYEE                STOCK BENEFITS** |
|----------------------------|--------------------------------------------|

**Description      of the Stock Plans**

*Stock      Plan*

*2005 Plan*

*Stock      Option Agreements – *

**12**

----

*Restricted      stock awards (RSAs) – *

*Other        Stock Grant*

**Stock      Option Activity**

|                                               |   |    |      |   |                            |   |   | Weighted                Average |   |   |      |   |
|----------------------------------------------------|--------|---------|-----------|--------|---------------------------------|--------|--------|---------------------------------|--------|--------|-----------|--------|
|                                               |   | Number  |      |   | Weighted                Average |   |   | Remaining                       |   |   | Aggregate |   |
|                                               |   | Of      |      |   | Exercise                        |   |   | Contractual                Term |   |   | Intrinsic |   |
|                                               |   | Options |      |   | Price                           |   |   | (years)                         |   |   | Value     |   |
| Options                outstanding, March 31, 2007 |   |    | 1,793,800 |   |                            | $      | 1.13   |                            |   |   |      |   |   |   |
| Granted                                            |   |    | 525,000   |   |                            | $      | 0.87   |                            |   |   |      |   |   |   |
| Exercised                                          |   |    | -         |   |                            |   | -      |                            |   |   |      |   |   |   |
| Canceled                                           |   |    | (14,700   | )      |                            | $      | 1.56   |                            |   |   |      |   |   |   |
| Options                outstanding, June 30, 2007  |   |    | 2,304,100 |   |                            | $      | 1.07   |                            |   |   | 7.4       |   |   | $ | 566,000 |   |
| Options                exercisable, June 30, 2007  |   |    | 1,699,110 |   |                            | $      | 1.22   |                            |   |   | 6.7       |   |   | $ | 352,000 |   |

----

**13**

----

|                           |                         |   | **Options                Outstanding** |   |      | **Options                Exercisable** |   |
|--------------------------------|------------------------------|--------|----------------------------------------|--------|-----------|----------------------------------------|--------|
|                           |                         |   |                                   |   |      | **Weighted**                           |   |   | **Weighted** |   |   |   |   |   | **Weighted** |   |
|                           |                         |   |                                   |   |      | **Average**                            |   |   | **Average** |   |   |   |   |   | **Average** |   |
| **Exercise**                   |                         |   |                                   |   |      | **Exercise**                           |   |   | **Remaining** |   |   |   |   |   | **Exercise** |   |
| **Price                Range** |                         |   | **Shares**                             |   |      | **Price**                              |   |   | **Life** |   |   | **Shares** |   |   | **Price** |   |
|                           | $0.16                - $0.92 |   |                                   |   | 1,356,000 |                                   |   | $ | 0.57 |   |   |   | 9.3 |   |   |   | 751,010 |   |   | $ | 0.52 |   |
|                           | $1.08                - $1.82 |   |                                   |   | 707,200   |                                   |   | $ | 1.54 |   |   |   | 5.6 |   |   |   | 707,200 |   |   | $ | 1.54 |   |
|                           | $2.07                - $2.50 |   |                                   |   | 179,100   |                                   |   | $ | 2.09 |   |   |   | 5.0 |   |   |   | 179,100 |   |   | $ | 2.09 |   |
|                           | $3.13                - $4.56 |   |                                   |   | 61,800    |                                   |   | $ | 3.63 |   |   |   | 3.0 |   |   |   | 61,800 |   |   | $ | 3.63 |   |
|                           |                         |   |                                   |   |      |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |                         |   |                                   |   | 2,304,100 |                                   |   | $ | 1.07 |   |   |   | 7.4 |   |   |   | 1,699,110 |   |   | $ | 1.22 |   |
|                           |                         |   |                                   |   |      |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

*Recognition      of Compensation Expense and Forfeitures*

|                                     |   | **For                the Three Months Ended** |
|------------------------------------------|--------|-----------------------------------------------|
|                                     |   | **June                30, 2007**              |
|                                     |   |                                          |
| Expected                price volatility |   | 50%                                           |
| Risk-free                interest rate   |   | 4.96%                                         |
| Expected                term in years    |   | 6.00                                          |
| Dividend                yield            |   | -                                             |

*Expense      Information under SFAS No. 123(R)*

|                                                                    |   | **For                the Three Months Ended** |    |
|-------------------------------------------------------------------------|--------|-----------------------------------------------|---------|
|                                                                    |   | **June                30, 2007**              |    |
| Stock-based                compensation expense:                        |   |                                          |    |
| Cost                of revenue                                          |   | $                                             | 24,000  |   |
| Operating                expenses                                       |   | $                                             | 78,000  |   |
|   Stock-based                compensation expense             |   |                                          |    |   |
|      before                income taxes        |   | $                                             | 102,000 |   |
| Income                tax benefit                                       |   |                                          | -       |   |
| Total                stock-based compensation                           |   |                                          |    |   |
|      expense                after income taxes |   | $                                             | 102,000 |   |

**14**

----

| **NOTE                K.** | **SYNTHETECH                COMMON STOCK** |
|----------------------------|--------------------------------------------|

| **NOTE                L.** | **RELATED                PERSON TRANSACTIONS** |
|----------------------------|------------------------------------------------|

| **NOTE                M.** | **LIQUIDITY** |
|----------------------------|---------------|

**15**

----

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

**FORWARD      LOOKING STATEMENTS**

*This      Quarterly Report on Form 10-Q contains forward-looking statements within the      meaning of the Private Securities Litigation Reform Act of 1995.  All      statements, other than statements of historical fact, including statements      regarding industry prospects and future results of operations or financial      position, made in this Quarterly Report are forward looking. Words such as      “anticipates,” “believes,” “expects,” “future” and “intends” and similar      expressions may identify forward-looking statements. In particular,      forward-looking statements in this report include statements      regarding:  our future performance and operating      results;  expected revenue from and shipping dates for customer      orders; recurrence of large-scale projects; resolution of manufacturing process      difficulties; estimated quarterly stock-based compensation amounts for the      remainder of fiscal 2008, continued Section 404 expenses for the remainder      of fiscal 2008; our ability to finance our growth strategy; the conditions      of      the fine chemicals industry; obtaining regulatory approval for new drugs and      other matters relating to drug development progress; financing our current      and      future capital expenditures and the amount of such expenditures; the effect      any      change in foreign currency exchange rates would have on our operating results;      whether our cash and cash equivalents, borrowing capacity and      internally-generated funds will be adequate to operate our business; and our      inability to recognize deferred tax assets. Forward-looking statements reflect      management’s current expectations, plans or projections and are inherently      uncertain.  Actual results could differ materially from management's*
*expectations, plans or projections.  Readers are cautioned      not to place undue reliance on these forward-looking statements, which speak      only as of the date of this report. The risks and uncertainties that may cause      actual results to vary materially from any forward-looking statements include,      but are not limited to, the following: the uncertain market for our products;      potential loss of a significant customer; customer concentration; potential      termination or suspension by customers of significant projects or orders;      potential production or shipping delays; our limited experience in entering      new      markets and market segments; potential period-to-period revenue or expense      fluctuations; our limited financial and other resources; higher than expected      cash use, or inability to borrow funds under our line of credit or to raise      other debt or equity capital required to continue operations or to implement      our      growth strategy; production factors and timely access to raw materials; industry      cost factors; competition; government regulation; labor disputes; technological      change; future incentive stock awards and international business      risks.  Investors are urged to read our filings with the Securities      and Exchange Commission, including our Annual Report on Form 10-K for the fiscal      year ended March 31, 2007, for a further description of risks and uncertainties      related to forward-looking statements made by us as well as to other aspects      of      our business. Synthetech does not intend to release any revisions to these      forward-looking statements that may be made to reflect events or circumstances      after the date hereof or to reflect the occurrence of unanticipated      events.*

**16**

----

**OVERVIEW**

*cGMP*
*FDA)*

*Market      Overview*

*Business      Conditions*

**17**

----

*Customer      Project Pipeline*

*Financial      Results*

**18**

----

**RESULTS      OF OPERATIONS**

|                                               |   | Three                Months   |           |
|----------------------------------------------------|--------|-------------------------------|----------------|
|                                               |   | Ended                June 30, |           |
|                                               |   | **2007**                      |           |   | 2006 |   |
|                                               |   |                          |           |   |   |   |
| Revenue                                            |   | ** **                    | **100.0%**     |   |   |   | 100.0% |   |
| Cost                of revenue                     |   | ** **                    | **71.5 ** |   |   |   | 97.4  |   |
|                                               |   |                          |           |   |   |   |   |   |
| Gross                income                        |   | ** **                    | **28.5 ** |   |   |   | 2.6  |   |
|                                               |   |                          |           |   |   |   |   |   |
| Research                and development            |   | ** **                    | **7.9 **  |   |   |   | 18.9  |   |
| Selling,                general and administrative |   | ** **                    | **17.3 ** |   |   |   | 29.3  |   |
|                                               |   |                          |           |   |   |   |   |   |
| Total                operating expenses            |   | ** **                    | **25.2 ** |   |   |   | 48.2  |   |
|                                               |   |                          |           |   |   |   |   |   |
| Operating                income (loss)             |   | ** **                    | **3.3 **  |   |   |   | (45.6) |   |
|                                               |   |                          |           |   |   |   |   |   |
| Interest                income                     |   | ** **                    | **0.2 **  |   |   |   | 0.7  |   |
| Interest                expense                    |   | ** **                    | **(0.6)**      |   |   |   | (0.1) |   |
|                                               |   |                          |           |   |   |   |   |   |
| Income                (loss) before income taxes   |   | ** **                    | **2.9 **  |   |   |   | (45.0) |   |
|                                               |   |                          |           |   |   |   |   |   |
| Income                taxes                        |   | ** **                    | **- **    |    |   |   | -  |   |
|                                               |   |                          |           |   |   |   |   |   |
| Net                income (loss)                   |   | ** **                    | **2.9%**       |   |   |   | (45.0)% |   |

**Revenue**

**19**

----

**Gross      income**

**Operating      Expenses**

***R&D      Expense.***

**20**

----

| ·   | decreased                costs during the first quarter of fiscal 2008 of $69,000 in fees                for                contract research services provided by a facility in India, as discussed                below; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                decrease during the first quarter of fiscal 2008 in laboratory supplies                expense of $27,000; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                decrease during the first quarter of fiscal 2008 of $18,000 arising                from                an increase in the amount of R&D department costs allocated to                inventory for the manufacture of small-scale products, as described                below; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                aggregate increase during the first quarter of fiscal 2008 in compensation                expense of $93,000, composed of: a net increase of approximately                $67,000                from additional chemists employed by Synthetech in response to improving                business conditions, the termination of the contract research services                agreement with the facility in India in August 2006, and general                increases in salaries and benefits; $13,000 of stock-based compensation                expense; and $13,000 of performance bonuses;                and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                increase during the first quarter of fiscal 2008 in contracted R&D                services of $12,000; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                increase during the first quarter of fiscal 2008 in waste disposal                costs                of $6,000. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

***SG&A      Expense.***

| ·   | An                increase in compensation expenses of $153,000, composed of stock-based                compensation expense of $65,000; performance bonuses of $35,000;                a new                senior sales position of $26,000; and general increases in salaries                and                benefits of $27,000; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                increase in consulting fees of $40,000, related to the implementation                of                Section 404 of the Sarbanes-Oxley Act;                and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                increase in costs for consulting services of $15,000 related to marketing                services provided by M. Sreenivasan, Synthetech’s former Chief Executive                Officer since his retirement on October 31,                2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**21**

----

**Interest      Income**

**Interest      Expense**

**Income      Taxes**

**Net      Income (Loss)**

**CRITICAL      ACCOUNTING POLICIES AND ESTIMATES**

**Allowance      for Doubtful Accounts**

**22**

----

**Inventories**

**Long-Lived      Asset Impairment**

| ·                     | a                significant change in the extent or manner in which a long-lived                asset is                being used; |
|------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| ·                     | a                significant change in the business climate that could affect the                value of                a long-lived asset; and |
|------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| ·                     | a                significant decrease in the market value of                assets. |
|------------------------------------------------|-------------------------------------------------------------------------------------|

**Revenue      Recognition**

| ·                     | Persuasive                evidence of an arrangement exists; |
|------------------------------------------------|--------------------------------------------------------------|

| ·                     | Delivery                has occurred or services have been                rendered; |
|------------------------------------------------|-------------------------------------------------------------------------------------|

| ·                     | Synthetech’s                price to our customer is fixed or determinable;                and |
|------------------------------------------------|------------------------------------------------------------------------------------------------------|

| ·                     | Collectibility                is reasonably assured. |
|------------------------------------------------|------------------------------------------------------|

**23**

----

**INDUSTRY      FACTORS**

**Market      Factors**

**Production      Factors**

**24**

----

**LIQUIDITY      AND CAPITAL RESOURCES**

**25**

----

**Item      3.  Quantitative and Qualitative Disclosures about      Market Risk**

**Item      4.  Controls and Procedures**

**26**

----

**27**

----

**PART      II.  OTHER INFORMATION**

**Item      6.  Exhibits**

|  | Exhibit                3.1 | Articles                of Incorporation of Synthetech, as amended (incorporated by reference                to                the exhibits filed with Synthetech’s Annual Report on Form 10-K for the                fiscal year ended March 31, 1991). |
|--|----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | Exhibit                3.2 | Bylaws                of Synthetech, as amended (incorporated by reference to the exhibits                filed                with Synthetech’s Annual Report on Form 10-K for the fiscal year ended                March 31, 2005). |
|--|----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | Exhibit                31.1 | Rule                13a-14(a) Certification of Chief Executive                Officer. |
|--|-----------------------------|----------------------------------------------------------------------------------------|

|  | Exhibit                31.2 | Rule                13a-14(a) Certification of Chief Financial                Officer. |
|--|-----------------------------|----------------------------------------------------------------------------------------|

|  | Exhibit                32.1 | Section                1350 Certification of Chief Executive                Officer. |
|--|-----------------------------|--------------------------------------------------------------------------------------|

|  | Exhibit                32.2 | Section                1350 Certification of Chief Financial                Officer |
|--|-----------------------------|-------------------------------------------------------------------------------------|

**28**

----

**SIGNATURES**

|                                               | SYNTHETECH,              INC. |                                                |
|----------------------------------------------------|-------------------------------|-----------------------------------------------------|
|                                               | (Registrant)                  |                                                |
|                                               |                          |                                                |   |
| Date:                August 9,                2007 | By:                           | /s/ Daniel              T. Fagan               |   |
|                                               |                          | Daniel              T. Fagan                        |   |
|                                               |                          | Chairman              & Chief Executive Officer |   |
|                                               |                          |                                                |   |
|                                                   |   |                                      |
|--------------------------------------------------------|--------|-------------------------------------------|
|                                                   |   |                                      |   |
| Date:                  August 9,                  2007 | By:    | /s/ Gary              A. Weber       |   |
|                                                   |   | Gary              A. Weber                |   |
|                                                   |   | Vice              President Finance & |   |
|                                                   |   | Chief              Financial Officer      |   |

**29**