<PAGE> 1
                              
                              
             SECURITIES AND EXCHANGE COMMISSION
                              
                   Washington, D.C.  20549
                              
                          FORM 10-Q
                              


(Mark One)

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

          For the quarterly period ended September 30, 1998

                             OR

[    ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
          OF THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from________to_______

          Commission file number 0-12992

                      SYNTHETECH, INC.
    (Exact name of registrant as specified in its charter)
                              
              Oregon                       84-0845771
    (State or Other Jurisdiction         (I.R.S. Employer
     of Incorporation or Organization)    Identification No.)
                              
      1290 Industrial Way, Albany, Oregon       97321
   (Address of Principal Executive Offices)   (Zip Code)

                        (541) 967-6575
    (Registrant's Telephone Number, Including Area Code)
                              
      Indicate by check mark whether the registrant: (1) has
filed  all  reports required to be filed by  Section  13  or
15(d)  of  the  Securities Exchange Act of 1934  during  the
preceding  12  months (or for such shorter period  that  the
registrant was required to file such reports), and  (2)  has
been  subject to such filing requirements for  the  past  90
days.

Yes__X__   No_____

      The number of shares of the registrant's common stock,
$.001  par  value, outstanding as of November  6,  1998  was
14,203,383.


 <PAGE> 2
                              
                    PART I.  FINANCIAL INFORMATION
                                                                              
Item 1.  Financial Statements                                                 
                                                                              
                             SYNTHETECH, INC.
                                                                              
                              BALANCE SHEETS         
                         -------------------------   
<TABLE>                                                                       
<CAPTION>                                                                     
<S>                                       <C>              <C>
                                             (unaudited)                  
                                             September 30,      March 31,
                                                 1998             1998
   ------                                    ------------     ------------
   ASSETS                                                                       
   ------                                                                  
CURRENT ASSETS:                                                               
  Cash and cash equivalents                  $  6,298,000    $  4,976,000
  Accounts receivable, less allowance                                         
    for doubtful accounts of $15,000 for                                      
    both periods                                1,880,000       1,470,000
  Inventories                                   3,633,000       3,184,000
  Prepaid expenses                                190,000         196,000
  Deferred income taxes                            70,000          70,000
  Other current assets                             16,000          24,000
                                               ----------     -----------
   TOTAL CURRENT ASSETS                        12,087,000       9,920,000
                                                                              
PROPERTY, PLANT AND EQUIPMENT, at cost, net     9,497,000       9,439,000
                                                                              
OTHER ASSETS                                        4,000           5,000
                                             ------------    ------------
   TOTAL ASSETS                              $ 21,588,000    $ 19,364,000
                                             ============    ============
</TABLE>                                    
                   See Notes To Financial Statements. 
<PAGE> 3
                              
                             SYNTHETECH, INC. 
                                                                          
                              BALANCE SHEETS
                         -------------------------   
                              (continued)
<TABLE>                                                                   
<CAPTION>                                                                 
<S>                                       <C>              <C>
                                            (unaudited)                    
                                            September 30,      March 31,
                                                1998             1998
   ------------------------------------     ------------     ------------
   LIABILITIES AND SHAREHOLDERS' EQUITY                                    
   ------------------------------------ 
                                                                          
CURRENT LIABILITIES:                                                      
  Current portion of note payable            $     14,000    $     14,000
  Accounts payable                                749,000         672,000
  Accrued compensation                            231,000         221,000
  Deferred revenue                                 46,000         247,000
  Accrued income tax                              851,000         514,000
  Other accrued liabilities                        15,000          15,000
                                             ------------    ------------ 
   TOTAL CURRENT LIABILITIES                    1,906,000       1,683,000
                                                                          
DEFERRED INCOME TAXES                             209,000         209,000
                                                                          
NOTE PAYABLE, net of current portion              159,000         166,000
                                                                          
SHAREHOLDERS' EQUITY:                                                     
  Common stock, $.001 par value;                                          
    authorized 100,000,000 shares; 
    issued and outstanding,
    14,203,000 and 14,143,000 shares               14,000          14,000
  Paid-in capital                               8,501,000       8,467,000
  Employee notes receivable and                                           
    deferred compensation                         (79,000)       (106,000)
  Retained earnings                            10,878,000       8,931,000
                                             ------------    ------------
   TOTAL SHAREHOLDERS' EQUITY                  19,314,000      17,306,000
                                             ------------    ------------
   TOTAL LIABILITIES AND SHAREHOLDERS' 
     EQUITY                                  $ 21,588,000    $ 19,364,000
                                             ============    ============
                                                                          
                 See Notes To Financial Statements. 
</TABLE>

<PAGE> 4
                              
                                SYNTHETECH, INC.

                              STATEMENTS OF INCOME                         
                           -------------------------- 
                                 (unaudited)    
<TABLE>                                                             
<CAPTION>                                                           
<S>                        <C>         <C>          <C>          <C>
                             For the Three Months       For the Six Months
                             Ended September 30,        Ended September 30,
                           
                               1998         1997          1998         1997
---------------------       -----------  -----------   -----------  -----------
REVENUES                   $ 5,327,000  $ 1,491,000   $ 9,455,000  $ 2,971,000
COST OF SALES                3,007,000      861,000     5,542,000    1,584,000
                           -----------  -----------   -----------  -----------
GROSS PROFIT                 2,320,000      630,000     3,913,000    1,387,000
                                                                               
                                                                               
RESEARCH AND DEVELOPMENT        76,000       52,000       157,000      113,000
SELLING, GENERAL AND           
  ADMINISTRATIVE               383,000      321,000       738,000      610,000
                           -----------  -----------   -----------  -----------
OPERATING EXPENSE              459,000      373,000       895,000      723,000
                           -----------  -----------   -----------  -----------
OPERATING INCOME             1,861,000      257,000     3,018,000      664,000
OTHER INCOME, net               63,000       75,000       122,000      158,000
                           -----------  -----------   -----------  -----------
INCOME BEFORE INCOME TAXES   1,924,000      332,000     3,140,000      822,000
                                                                               
PROVISION FOR INCOME TAXES     731,000      114,000     1,193,000      300,000
                           -----------  -----------   -----------  -----------
NET INCOME                 $ 1,193,000  $   218,000   $ 1,947,000  $   522,000
                           ===========  ===========   ===========  ===========
                                                                               
BASIC NET INCOME PER        
  COMMON SHARE                   $0.08        $0.02         $0.14        $0.04
                                 =====        =====         =====        =====
                                                                               
DILUTED NET INCOME PER           $0.08        $0.02         $0.14        $0.04
  COMMON SHARE                   =====        =====         =====        =====
                                                                               
                        See Notes To Financial Statements.
</TABLE>

<PAGE> 5
                              
                                    SYNTHETECH, INC.                     
                                     
                                STATEMENTS OF CASH FLOWS         
                        ----------------------------------------
                                     (unaudited)                 
<TABLE>                                                                      
<CAPTION>                                                                    
<S>                                                <C>           <C>
For the Six Month Period Ended September 30             1998           1997
-------------------------------------------          -----------   -----------
CASH FLOWS FROM OPERATING ACTIVITIES:                 
Net income                                           $ 1,947,000   $   522,000
Adjustments to reconcile net income to                  
  net cash provided by (used in) operating 
    activities:                       
      Depreciation, amortization and other               583,000       166,000
      Amortization of deferred compensation               54,000        55,000
      Accrued interest on securities available
        for sale                                               -         1,000
      Accrued interest on employee notes 
        receivable                                             -        (1,000)
      Loss on disposal of property, plant 
        and equipment                                          -         5,000
      Deferred income taxes                                    -         2,000
                         
    (Increase) decrease in assets:               
      Accounts receivable, net                          (410,000)     (412,000)
      Inventories                                       (449,000)     (680,000)
      Prepaid expenses                                     6,000        (6,000)
      Income tax receivable                                    -       726,000
      Other assets                                         9,000         1,000
    Increase (decrease) in liabilities:              
      Accounts payable and accrued liabilities           424,000      (601,000)
      Deferred revenue                                  (201,000)            -
                                                     -----------   -----------
        Net cash (used in) provided by 
          operating activities                         1,963,000      (222,000)
                                                     -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:                     
   Property, plant and equipment purchases              (641,000)   (2,501,000)
                                                     -----------   -----------
        Net cash used by investing activities           (641,000)   (2,501,000)
                                                     -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:                      
   Principal payments under long-term 
     debt obligations                                      (7,000)      (6,000)
   Proceeds from stock option exercises 
     and disqualifying dispositions                         7,000      118,000
                                                      -----------  -----------
        Net cash provided by financing activities               -      112,000
                                                      -----------  -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS    1,322,000   (2,611,000)
                                               
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD        4,976,000    6,740,000
                                                      -----------  -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD            $ 6,298,000  $ 4,129,000
                                                      ===========  ===========
NON-CASH INVESTING ACTIVITIES:                  
  Unrealized gain on securities available for sale    $         -  $     1,000
  Issuance of stock options at below fair value       $    38,000  $    21,000
                 
                            See Notes To Financial Statements.              
</TABLE>

<PAGE> 6
                              
                NOTES TO FINANCIAL STATEMENTS

NOTE A.   GENERAL AND BUSINESS


The  summary financial statements included herein have  been
prepared,   without  audit,  pursuant  to  the   rules   and
regulations  of  the  Securities  and  Exchange  Commission.
Certain   information  and  footnote  disclosures   normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or  omitted pursuant to such rules and regulations, although
Synthetech  management  believes that  the  disclosures  are
adequate  to  make the information presented not misleading.
It  is suggested that these summary financial statements  be
read  in  conjunction with the financial statements and  the
notes thereto included in Synthetech's 1998 Form 10-K.

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

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


NOTE B.   STATEMENTS OF CASH FLOWS

       Supplemental cash flow disclosures for the periods
         ended September 30:
<TABLE>
<CAPTION>
<S>                      <C>         <C>          <C>         <C>
          Cash Paid
                                Three Months             Six Months
                              1998        1997          1998       1997
                              ----        ----          ----       ----   
      Income Taxes        $  841,000   $  74,000    $ 856,000   $ 153,000
      Interest            $    4,000   $   5,000    $   8,000   $   9,000
</TABLE>

<PAGE> 7
          NOTES TO FINANCIAL STATEMENTS (continued)
                              
NOTE C. EARNINGS PER SHARE
     
     
The   Company  adopted  Statement  of  Financial  Accounting
Standards No. 128 "Earnings per Share" ("SFAS  128") in  the
quarter   ended   December  31,   1997.    Under   the   new
requirements, the Company reports basic and diluted earnings
per  share.   Basic  earnings  per  share  are  computed  by
dividing net income by the weighted average number of shares
of  common  stock  outstanding during the  period.   Diluted
earnings  per share are computed by dividing net  income  by
the  weighted average number of shares of common  stock  and
common  stock  equivalents outstanding  during  the  period,
calculated  using the treasury stock method  as  defined  in
SFAS  128.   Where necessary, prior year amounts  have  been
restated.   The following is a reconciliation of the  shares
used  to  calculate  basic earnings per  share  and  diluted
earnings per share:
<TABLE>
<CAPTION>
<S>                           <C>         <C>           <C>       <C>
                                For the Three Months      For the Six Months
                                 Ended September 30,      Ended September 30,
                                
                                   1998       1997          1998       1997
                                   ----       ----          ----       ----   
  Weighted average shares                                            
    outstanding for Basic EPS   14,201,171  13,883,630   14,180,688  13,875,048
                        
  Dilutive effect of common                                         
    stock options issuable                                           
    under treasury stock method     86,039     400,724       91,928     406,304
                                ----------  ----------   ----------   ---------
  Weighted average common                                           
    and common equivalent                                            
    shares outstanding for     
    Diluted EPS                 14,287,210  14,284,354   14,272,616  14,281,352
                                ==========  ==========   ==========  ==========
</TABLE>

The following common stock equivalents were excluded from
the earnings per share computation because their effect
would have been anti-dilutive:
<TABLE>
<CAPTION>
<S>                            <C>       <C>            <C>        <C>
                                For the Three Months      For the Six Months    
                                 Ended September 30       Ended September 30,
                         
                                   1998      1997           1998      1997
                                   ----      ----           ----      ----  
  Common stock options                                             
    outstanding                  593,800   510,000        593,800   510,000
</TABLE>

<PAGE> 8
                   NOTES TO FINANCIAL STATEMENTS (continued)


NOTE D.  NEW ACCOUNTING PRONOUNCEMENTS
     
In  June  1998,  the  FASB  issued  Statement  of  Financial
Accounting  Standards  No. 133, "Accounting  for  Derivative
Instruments and Hedging Activities" ("SFAS 133").   SFAS 133
establishes  accounting  and  reporting  standards  for  all
derivative  instruments.  SFAS 133 is effective  for  fiscal
years  beginning after June 15, 1999.  The Company does  not
have  any  derivative  instruments  and,  accordingly,   the
adoption  of  SFAS 133 will have no impact on the  Company's
financial position or results of operations.

<PAGE> 9
Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations


RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
<S>                         <C>     <C>         <C>       <C>
                                  Percentage of Revenues
                                                                                
                          For the Three Months   For the Six Months 
                           Ended September 30,   Ended September 30,
                                                                                
                              1998     1997        1998     1997
-----------                   ----     ----        ----     ----
Revenues                     100.0 %  100.0 %     100.0 %  100.0 %
Cost of sales                 56.4     57.7        58.6     53.3      
                             -----    -----       -----    -----
Gross Profit                  43.6     42.3        41.4     46.7      
                                                                               
Research and Development       1.4      3.5         1.7      3.8      
Selling, General and           
  Administration               7.2     21.5         7.8     20.5      
                             -----    -----       -----    -----
Operating Expense              8.6     25.0         9.5     24.3      
                                                                               
Operating Income              35.0     17.3        31.9     22.4      
Other Income                   1.2      5.0         1.3      5.3      
                             -----    -----       -----    -----
Income Before Income Taxes    36.2     22.3        33.2     27.7      
Provision For Income Taxes    13.7      7.7        12.6     10.1      
                             -----    -----       -----    -----
Net Income                    22.5 %   14.6 %      20.6 %   17.6 %
                             =====    =====       =====    =====

</TABLE>
Revenues
--------
Revenues  increased by 257%  to $5.33  million  in the second
quarter  of  fiscal 1999  from $1.49  million  in  the second
quarter of fiscal  1998.  Revenues were $9.46 million for the
first half of fiscal 1999,  a 218% increase from  revenues of
$2.97 million in the first half of fiscal 1998. International 
sales,  mainly  to Western Europe,  were $799,000  and  $2.06 
million for  the second quarter and first half of fiscal 1999 
as  compared  to $417,000 million  and $1.19 million  for the 
second quarter and first half of fiscal 1998.

<PAGE> 10
Item  2.   Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)


The  increase in revenues for the second quarter  and  first
half  of  fiscal 1999 over the same periods of  fiscal  1998
principally  reflected the $3.08 million and  $5.31  million
revenue contribution, respectively, of shipments from large-
scale  Peptide Building Block  ("PBB")  orders  to  be  used 
in two marketed  drugs.  The Company  has recently  received 
additional  orders   for    these   two   PBBs   of   nearly  
$10 million.   With  these  additional orders,  the  Company 
has  orders  for  these   two   large-scale   PBBs  totaling 
$11.8  million  for  periodic  deliveries   expected  to  be  
completed  by the Summer of 1999.  Accordingly,  the Company 
expects  large-scale   orders  to   continue  to  provide  a
substantial  contribution  to revenue  for  the  balance  of
fiscal 1999.

Although  PBB sales associated with marketed drugs are  more
likely to provide a longer term, ongoing revenue stream than
sales  associated  with drugs at the discovery  or  clinical
stage,  continuation  of  customer  demand  for  these  PBBs
associated  with marketed drugs remains subject  to  various
market  conditions, including potential use  of  alternative
manufacturing  routes, competition from other  suppliers  of
PBBs and continued market demand for the drug.  For example,
one  of  the large-scale PBB customers referenced above  has
advised  the  Company that it is researching the feasibility
of an alternative lower-cost manufacturing route involving a
different PBB than the one currently being sold to  it.   At
this   time,   the  Company  does  not  know  whether   this
alternative  manufacturing  route  will  be  feasible.   The
Company's customer has advised the Company that, even if the
alternative route is selected, the customer will continue to
purchase  and  take delivery of the $9.2 million  of  orders
that  it  has  already placed with Synthetech.  Accordingly,
while  large-scale  orders for marketed  drugs  can  provide
significant and predictable revenues for the duration of the
orders,  there  continues  to be  a  significant  risk  that
revenues   can  fluctuate  from  period  to  period.    (See
"Industry Factors" below.)

Gross Profit
------------
Gross  profit  increased  to $2.32  million  in  the  second
quarter  of fiscal 1999 from $630,000 in the second  quarter
of  fiscal  1998.   As  a  percent of  sales,  gross  profit
increased  to 44% in the second quarter of fiscal 1999  from
42%  for  the same period last year.  Gross profit increased
to  $3.91  million or 41% of revenues in the first  half  of
fiscal  1999 from $1.39 million or 47% of revenues  for  the
same period of fiscal 1998.

The  gross profit  margins  for  the second quarter  and the
first half of fiscal 1999 resulted primarily from the mix of
products.  Revenues  from large-scale PBB  orders during the
second quarter and the first half of fiscal 1999 represented
58% and 56%, respectively, of total revenue for the periods.
While  large-scale  orders  for  marketed drugs  can provide
significant  revenues for the  duration  of the orders, they
typically generate a lower gross profit margin than the sale
of  smaller quantities  of the  same PBB  product during the
drug discovery  and clinical  stages.  The Company, however,
continuously  seeks  to improve  the gross profit margins of
large-scale   orders   through   process   improvements  and 
operating efficiencies.

<PAGE> 11
Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)

While there were no significant large-scale PBB sales during
the  second  quarter  or  first half  of  fiscal  1998,  the
relatively  low  gross profit margins during  these  periods
resulted principally from a low level of revenues occasioned
by  the  timing of orders.  To a lesser extent, the  mix  of
products  also  affected gross profit margins  during  these
periods.

Operating Expenses
------------------
Research  and  development (R&D) and  selling,  general  and
administrative (SG&A) expenses were $459,000  in the  second
quarter  of  fiscal 1999 compared to $373,000 in the  second
quarter  of fiscal 1998.  As a percentage of sales, R&D  and
SG&A  expenses  decreased to 9% in  the  second  quarter  of
fiscal  1999 from 25% in the same period of fiscal 1998  due
to  the  higher  level of revenues.  R&D and  SG&A  expenses
increased to $895,000 in the first half of fiscal 1999  from
$723,000 in fiscal 1998.  As a percentage of sales, R&D  and
SG&A  expenses decreased to 10% in the first half of  fiscal
1999  from 24% in the same period of fiscal 1998 due to  the
higher level of revenues.  The increases in R&D expense  for
the  second quarter and first half of fiscal 1999  reflected
increases  in  staffing  and  staffing  compensation.    The
increases  in SG&A expense for the second quarter and  first
half  of  fiscal  1999  principally reflected  increases  in
staffing compensation and related payments.

Operating Income
----------------
Operating  income  increased to  $1.86  million  or  35%  of
revenues  in the second quarter of fiscal 1999 from $257,000
or 17% for the same period last year.  For the first half of
fiscal  1999 operating income increased to $3.02 million  or
32%  of revenues compared with $664,000 or 22% for the first
half  of fiscal 1998.  The significant increase in operating
income for the second quarter and first half of fiscal  1999
reflected  the substantial increase in revenues  over  prior
periods.

Other Income
------------
The  net  other income of $63,000 for the second quarter  of
fiscal 1999 included $68,000 of interest earnings and $4,000
of  interest expense.  The net other income of $122,000  for
the second half of fiscal 1999 included $132,000 of interest
earnings  and $8,000 of interest expense.  The  $75,000  and
$158,000  net other income in the second quarter  and  first
half  of  fiscal  1998, respectively,  came  primarily  from
interest earnings.

Net Income
----------
For  the  second quarter and first half of fiscal 1999,  the
Company  earned  $1.92  million, and  $3.14  million  before
income taxes, respectively.  A provision for income taxes of
$731,000  resulted in net income of $1.19  million  for  the
second  quarter  and a provision for income taxes  of  $1.19
million  resulted  in net income of $1.95  million  for  the
first half of fiscal 1999.  The Company's effective tax rate
for  the first half of fiscal 1999 was 38% and for the first
half  of  fiscal 1998 was 36.5% reflecting a  one  time  tax
credit legislated by the State of  Oregon.

<PAGE> 12
Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)


INDUSTRY FACTORS

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

The  three  stages of the drug development process  include:
R&D  or  discovery stage, clinical trial stage and  marketed
drug   stage.    Synthetech's  customers  can  spend   years
researching  and developing new drugs, taking only  a  small
percentage  to  clinical trials and fewer yet to  commercial
market.   A substantial amount of the activity continues  to
occur at the earlier stages of research and development  and
clinical  trials.   In spite of the two  large-scale  orders
received  by  the  Company in fiscal 1998,  the  market  for
peptide-based drugs is still very early in development.

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

While  the Company has been selling PBBs for marketed  drugs
for  several  years,  these sales represented  a  relatively
small  portion  of total revenue.  With the two  large-scale
orders  received  in  fiscal 1998 for PBBs  to  be  used  in
marketed   drugs,  revenues  of  PBBs  for  marketed   drugs
represent  a  significant portion of total revenue  for  the
first  time  in the Company's history.  Sales  of  PBBs  for
marketed drugs provide an opportunity for continuing longer-
term  sales.   Moreover,  the size of  the  PBB  orders  for
marketed  drugs can be substantially larger than  those  for
the  discovery or clinical trial stages.  While not  subject
to  the  same high cancellation rate faced by discovery  and
clinical  trial stage drug development programs, the  demand
for   the   approved   drugs   remains   subject   to   many
uncertainties,  including,  without  limitation,  the   drug
price,  the  drug  side effects and the existence  of  other
competing  drugs.  These factors, which are outside  of  the
control of the Company, will affect the level of demand  for
the  drug itself and, therefore, the demand for PBBs.  Also,
with  the  longer-term,  larger-scale  orders,  the  Company
expects  increased  competition to supply  these  PBBs,  and
industry   cost  pressures  can  also  cause  pharmaceutical
companies    to   investigate   alternative    manufacturing
processes which may not include PBBs as an intermediate.

Large-scale   PBB   orders  for  use   in   marketed   drugs
significantly  increases  the  size  and  the  term  of  the
Company's  current  order  base.  Also,  the  likelihood  of
recurring revenue from reorders is significantly higher  for
PBBs  used  in  marketed  drugs.   Nevertheless,  since  the
Company's  revenues are composed of PBB sales in  all  three
drug  development stages, and since even sales of  PBBs  for
marketed drugs are subject to cancellation or reduction, the
Company  is  likely  to  continue to experience  significant
fluctuations in its quarterly results.

<PAGE> 13
Item  2.   Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)

Accordingly, the Company continues to lack a stable baseload
of demand and an ability to predict future demand beyond its
current order base.


LIQUIDITY AND CAPITAL RESOURCES

At  September 30, 1998, the Company had working  capital  of
$10.18 million compared to $8.24 million at March 31,  1998.
The  Company's  cash and cash equivalents at  September  30,
1998 totaled $6.30 million.  In addition, the Company had  a
$1  million bank line of credit of which there was no amount
outstanding at September 30, 1998.

The  increase in cash and cash equivalents to $6.30  million
at  September 30, 1998 from $4.98 million at March 31,  1998
reflected  the  higher level of sales for the  period.   The
increase   in  accounts  receivable  to  $1.88  million   at
September  30,  1998 from $1.47 million at  March  31,  1998
reflected  the timing of shipments during the quarter.   The
increase of inventory to $3.63 million at September 30, 1998
from $3.18 million at March 31, 1998 primarily resulted from
restocking raw materials.

The   Company   had   approximately  $641,000   of   capital
expenditures   during  the  first  half  of   fiscal   1999.
Approximately $279,000 was spent for equipment and equipment
upgrades  in the existing plant and $362,000 was  spent  for
the  second  phase of the new plant expansion.  The  Company
anticipates total capital expenditures for fiscal  1999  for
the existing plant to be $1 million and for the second phase
of the new plant expansion to be $3.2 million for a total of
$4.2 million.  Although  the Company expects  to be able  to 
finance these capital expenditures  from internal cash flow,  
it is  also considering  whether  bank or  similar financing  
would be preferable.



YEAR 2000

The  Year 2000 ("Y2K") issue arose as the result of existing
computer programs that use only the last two digits to refer
to  a year. Any of the Company's computer programs that have
date-sensitive software may recognize a date using  "00"  as
the  year 1900 rather than the year 2000.  If not corrected,
many  computer  applications could fail or create  erroneous
results.

The  Company has completed its assessment of its information
systems  which  support business applications.  The  Company
utilizes   packaged   application   strategies   for   these
information  systems  functions.  These  information  system
components  are,  or  will be by the  end  of  fiscal  1999,
current with all Y2K updates and changes recommended by  the
vendors.    These  information  systems  include  enterprise
software,    operating   systems,   networking   components,
application  and data servers, PC hardware and  core  office
automation  software.  The Company's assessment of  research
and   development,  manufacturing  processes  and   facility
management  systems  is  underway  and  is  expected  to  be
substantially completed by the end of fiscal 1999.

<PAGE> 14
Item  2.   Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)

The Company has begun a Y2K supplier and customer assessment
program.   It is in the process of contacting key  suppliers
and customers to determine the level of their Y2K readiness.
This assessment program is in its early stages and does  not
have a return rate useful for determining their level of Y2K
readiness.

Like  all  businesses,  the Company will  be  at  risk  from
external  infrastructure failures that could arise from  Y2K
failures.   It is not clear that electrical power, telephone
and computer networks, for example, will be fully functional
across  the  nation  in  the year 2000.   Investigation  and
assessment of infrastructures, like the nations' power grid,
is beyond the scope and resources of the Company.  Investors
should use their own awareness of the issues in the nations'
infrastructure   to   make   ongoing   infrastructure   risk
assessments  and  their  potential  impact  to  a  company's
performance.

It  should also be noted that there have been predictions of
failures   of   key   components   in   the   transportation
infrastructure due to the Y2K problem.  It is possible  that
there  could  be  delays  in  rail,  over-the-road  and  air
shipments due to failure in transportation control  systems.
Investigation  and validation of the world's  transportation
infrastructure is beyond the scope and the resources of  the
Company.  Investors should use their own  awareness  of  the
issues  in  the  nations'  infrastructure  to  make  ongoing
infrastructure  risk assessments and their potential  impact
to a company's performance.

The  failure to correct a material Y2K problem could  result
in  an  interruption  in, or a failure  of,  certain  normal
business  activities  or operations.   Such  failures  could
materially  and  adversely affect the Company's  results  of
operations, liquidity and financial condition.  Due  to  the
general  uncertainty inherent in the Y2K problem,  resulting
in  part from the uncertainty of the Y2K readiness of third-
party  suppliers  and customers, the Company  is  unable  to
determine  at  this  time whether the  consequences  of  Y2K
failures  will  have  a  material impact  on  the  Company's
results  of  operations, liquidity or  financial  condition.
The  Company's  efforts to help ensure Y2K preparedness  are
expected  to  significantly reduce the  Company's  level  of
uncertainty  about  the Y2K problem.  The  Company  believes
that, with completion of the above-mentioned system upgrades
and testing, the possibility of significant interruptions of
normal operations should be reduced.

The  Company has not yet developed any contingency plans  in
regard to its internal systems, supplier/customer issues  or
any of the more global infrastructure issues.

            ___________________________
                              
<PAGE> 15
Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)


This Form 10-Q includes  "forward-looking"  information  (as 
defined  in   Section  27A  of  the Securities  Act  of 1933 
and Section 21E  of  the   Securities Exchange Act of 1934).  
Investors  are  cautioned  that  forward-looking  statements  
involve  risks  and  uncertainties,   and  various   factors  
could  cause  actual  results  to   differ  materially  from  
those  in the  forward-looking  statements.  Forward-looking 
statements include, without limitation,  any statement  that  
may predict,  forecast,  indicate  or  imply future results, 
performance  or  achievements,  and  may contain  the  words  
"believe,"  "anticipate," "expect,"  "estimate,"  "project," 
"will be," "will continue," "will likely  result," or  words  
or  phrases of similar  meanings.   The  following  factors, 
among others, could cause  actual  results  to  differ  from 
those  indicated  in the  forward-looking  statements:   the 
uncertain   market  for  products,  customer  concentration,
potential  quarterly  revenue fluctuations,  the  impact  of
competitive  products and pricing, the impact of  government
regulation,  product  liability risks, technological  change
and  increased costs associated with the Company's  facility
expansions.  Investors are directed to the Company's filings
with  the Securities and Exchange Commission, including  the
Company's  Form  10-K for the fiscal year  ended  March  31,
1998,  which are available from the Company without  charge,
for  a  further  description of the risks and  uncertainties
related to forward-looking statements made by the Company as
well as to other aspects of the Company's business.
      

<PAGE> 16
                              
                 PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security-Holders

     The Company held its Annual Meeting of Shareholders on
July 23, 1998.  At that meeting, the following Directors
were elected  by the Shareholders:

Election Of Directors
<TABLE>
<CAPTION>
<S>                                            <C>                      <C>
     Class/Name                                   Votes For     Votes Withheld
     ----------                                   ---------     --------------
     Class I Directors (term expiring in 2001):
     Paul C. Ahrens                               11,742,789         398,783
     Page E. Golsan, III                          11,742,789         389,783

</TABLE>
Continuing Directors

     Class/Name
     ----------
     Class II Directors (term expiring in 1999):
     Edward M. Giles
     Charles B. Williams

     Class III Directors (term expiring in 2000):
     Howard L. Farkas
     Donald E. Kuhla, Ph.D.
     M. ("Sreeni") Sreenivasan
     

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

       3.1*    Articles of Incorporation

       3.2*    Bylaws

      27       Financial Data Schedule
__________________
      
      *Incorporated by reference herein from the Company's
       Form 10-KSB for the year ended March 31, 1997.
      
<PAGE> 17
Item 6.  Exhibits and Reports on Form 8-K (continued)

(b)  Reports

     The following report on Form 8-K was filed during the
     quarter ended September 30, 1998:
      
      A Current Report on Form 8-K dated July 24, 1998 was
      filed on July 24, 1998 to report the adoption of a
      shareholders rights agreement.
      
                              
<PAGE> 18
                         SIGNATURES



Pursuant to the requirements of the Securities Exchange  Act
of  1934, the registrant has duly caused this report  to  be
signed  on  its  behalf  by the undersigned  thereunto  duly
authorized.

     




                                        SYNTHETECH, INC.
                                         (Registrant)



Date:   November 13, 1998               /s/ M. Sreenivasan
                                        ------------------ 
                                        M. Sreenivasan
                                        President & C.E.O.



Date:   November 13, 1998               /s/ Charles B. Williams
                                        -----------------------
                                        Charles B. Williams
                                        Vice President, Finance
                                        and Administration, C.F.O., 
                                        Chief Accounting Officer