<PAGE> 1

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


(Mark One)

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

          For the quarterly period ended December  31, 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 February  3,  1999  was
14,218,383.


 <PAGE> 2
                              
                        PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements                                               
                                                                            
                              SYNTHETECH, INC.

                               BALANCE SHEETS
                          ------------------------- 
<TABLE>                                                                     
<CAPTION>                                                                   
<S>                                       <C>                <C>
                                             (unaudited)                    
                                             December 31,       March 31,
                                                1998               1998
 -----------                              ----------------   ---------------
 ASSETS                                                                     
 -----------                                                                
                                                                            
CURRENT ASSETS:                                                             
  Cash and cash equivalents                 $  6,377,000       $  4,976,000
  Accounts receivable, less allowance                                       
   for doubtful accounts of $15,000 for                                    
   both periods                                2,364,000          1,470,000
  Inventories                                  3,484,000          3,184,000
  Prepaid expenses                               232,000            196,000
  Deferred income taxes                           70,000             70,000
  Other current assets                             7,000             24,000
                                            ------------       ------------
TOTAL CURRENT ASSETS                          12,534,000          9,920,000

PROPERTY, PLANT AND EQUIPMENT, at cost, net   10,132,000         9,439,000

OTHER ASSETS                                       4,000             5,000
                                            ------------      ------------
TOTAL ASSETS                                $ 22,670,000      $ 19,364,000
                                            ============      ============
                 
                  See Notes To Financial Statements.                           
                              
</TABLE>
<PAGE> 3
                              
                             SYNTHETECH, INC. 

                              BALANCE SHEETS
                         -------------------------
                               (continued)
<TABLE>
<CAPTION>
<S>                                     <C>              <C>
                                             (unaudited)    
                                             December 31,      March 31,
                                                1998            1998
--------------------------------------      --------------   --------------
  LIABILITIES AND SHAREHOLDERS' EQUITY
--------------------------------------
CURRENT LIABILITIES:
  Current portion of note payable        $     15,000      $     14,000
  Accounts payable                          1,055,000           672,000
  Accrued compensation                        276,000           221,000
  Deferred revenue                             44,000           247,000
  Accrued income tax                          167,000           514,000
  Other accrued liabilities                    10,000            15,000
                                         ------------      ------------
TOTAL CURRENT LIABILITIES                   1,567,000         1,683,000
         
DEFERRED INCOME TAXES                         209,000           209,000
NOTE PAYABLE, net of current portion          155,000           166,000
         
SHAREHOLDERS' EQUITY: 
 Common stock, $.001 par value; 
  authorized 100,000,000 shares; 
  issued and outstanding,
  14,213,000 and 14,143,000 shares             14,000            14,000
 Paid-in capital                            8,647,000         8,467,000
 Deferred compensation                        (67,000)         (106,000)
 Retained earnings                         12,145,000         8,931,000
                                          -----------       -----------
TOTAL SHAREHOLDERS' EQUITY                 20,739,000        17,306,000
                                          -----------       -----------
TOTAL LIABILITIES AND SHAREHOLDERS' 
 EQUITY                                  $ 22,670,000      $ 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 Nine Months
                             Ended December 31,          Ended December 31,
                             1998          1997          1998          1997
-----------------        ------------  ------------  ------------  ------------
REVENUES                 $  6,047,000  $  2,226,000  $ 15,502,000  $  5,197,000
COST OF SALES               3,624,000     1,248,000     9,166,000     2,832,000
                         ------------  ------------   -----------  ------------
GROSS PROFIT                2,423,000       978,000     6,336,000     2,365,000
                                                                      
RESEARCH AND DEVELOPMENT       71,000        57,000       228,000       170,000
SELLING, GENERAL AND                   
 ADMINISTRATIVE               373,000       303,000     1,111,000       913,000
                         ------------  ------------  ------------  ------------
OPERATING EXPENSE             444,000       360,000     1,339,000     1,083,000
                         ------------  ------------  ------------  ------------
OPERATING INCOME            1,979,000       618,000     4,997,000     1,282,000
OTHER INCOME, net              65,000        62,000       187,000       220,000
                         ------------  ------------  ------------  ------------
INCOME BEFORE INCOME 
 TAXES                      2,044,000       680,000     5,184,000     1,502,000
                   
PROVISION FOR INCOME 
 TAXES                        777,000       248,000     1,970,000       548,000
                         ------------  ------------  ------------  ------------
NET INCOME               $  1,267,000  $    432,000  $  3,214,000   $   954,000
                         ============  ============  ============   ===========
                                                                 
BASIC NET INCOME PER           $0.09          $0.03          $0.23         $0.07
 COMMON SHARE                  =====          =====          =====         =====
                                                              
DILUTED NET INCOME PER         $0.09          $0.03          $0.23         $0.07
 COMMON SHARE                  =====          =====          =====         =====

                           See Notes To Financial Statements.
</TABLE>
<PAGE> 5
                              
                                  SYNTHETECH, INC.
 
                              STATEMENTS OF CASH FLOWS
                     --------------------------------------------
                                     (unaudited)
<TABLE>           
<CAPTION>
<S>                                            <C>              <C>
For the Nine Month Period Ended December 31               1998         1997
-------------------------------------------           -----------  -----------
CASH FLOWS FROM OPERATING ACTIVITIES:                    
Net income                                            $ 3,214,000  $   954,000
Adjustments to reconcile net income to                      
  net cash provided by (used in) operating 
   activities:                      
      Depreciation, amortization and other                957,000      342,000
      Amortization of deferred compensation                85,000       82,000
      Accrued interest on securities available  
       for sale                                                 -      (11,000)
      Loss on disposal of property, plant and
       equipment                                            1,000        5,000
      Deferred income taxes                                     -        1,000
    (Increase) decrease in assets:                                          
      Accounts receivable, net                           (894,000)    (703,000)
      Inventories                                        (300,000)    (979,000)
      Prepaid expenses                                    (36,000)     (91,000)
      Income tax receivable                                     -      798,000
      Other assets                                         18,000       12,000
    Increase (decrease) in liabilities:                                     
      Accounts payable and accrued liabilities             87,000     (214,000)
      Deferred revenue                                   (203,000)     165,000
                                                      -----------  -----------
Net cash provided by operating activities               2,929,000      361,000
                                                      -----------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES:                         
   Property, plant and equipment purchases             (1,652,000)  (3,468,000)
   Employee notes receivable                                    -       30,000
                                                      -----------  -----------
Net cash used in investing activities                  (1,652,000)  (3,438,000)
                                                      -----------  -----------
CASH FLOWS FROM FINANCING ACTIVITIES:                         
   Principal payments under long-term debt obligations    (11,000)      (9,000)
   Proceeds from stock option exercises and                        
    disqualifying dispositions                            135,000        7,000
                                                      -----------  -----------
Net cash provided by (used in) financing               
 activities                                               124,000       (2,000)
                                                      -----------  -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS    1,401,000   (3,079,000)
                                                                            
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD        4,976,000    6,740,000
                                                      -----------  -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD            $ 6,377,000  $ 3,661,000
                                                      ===========  ===========
NON-CASH INVESTING ACTIVITIES:                              
Issuance of stock options at below fair value         $    57,000  $    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 December 31:

          Cash Paid
          ---------
<TABLE>
<CAPTION>
<S>                 <C>       <C>       <C>       <C>
                            Three Months                   Nine Months
                         1998          1997            1998          1997
                         ----          ----            ----          ----
      Income Taxes   $ 1,354,000    $         -    $ 2,210,000   $   153,000
      Interest       $     4,000    $     5,000    $    12,000   $    14,000
</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              For the Nine       
                                  Months Ended               Months Ended
                                  December 31,               December 31,
                                -----------------            ----------------
                                1998         1997          1998        1997
                                ----         ----          ----        ----
   Weighted average shares                                         
    outstanding for Basic    
    EPS                      14,207,622   13,909,805    14,189,698  13,887,189
      
   Dilutive effect of                                             
    common stock options                                          
    issuable under treasury         
    stock method                 82,733      324,145        90,905     346,688
                             ----------   ----------    ----------  ----------
    Weighted average                                               
     common and common                                             
     equivalent shares       
     outstanding for
     Diluted EPS             14,290,355   14,233,950    14,280,603  14,233,877
                             ==========   ==========    ==========  ========== 
</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        For the Nine    
                                  Months Ended         Months Ended 
                                  December 31,         December 31,
                                ----------------     ----------------     
                                  1998      1997       1998      1997
                                  ----      ----       ----      ---- 
    Common stock options                                             
     outstanding                593,800   499,750    593,800   499,750

</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         For the Nine
                                      Months Ended          Months Ended
                                      December 31,          December 31,
                 
                                     1998      1997        1998        1997
------------------------------     --------   -------     -------     -------
Revenues                             100.0 %   100.0 %     100.0 %     100.0 %
Cost of Sales                         59.9      56.1        59.1        54.5   
                                     ------    ------      ------      ------
Gross Profit                          40.1      43.9        40.9        45.5   
                                            
Research and Development               1.2       2.6         1.5         3.3   
Selling, General and                   
 Administration                        6.2      13.6         7.2        17.6   
                                     ------    ------      ------      ------ 
Operating Expense                      7.4      16.2         8.6        20.9

Operating Income                      32.7      27.7        32.2        24.6   
Other Income                           1.1       2.8         1.2         4.2   
                                     ------    ------      ------      ------
Income Before Income Taxes            33.8      30.5        33.4        28.8   
Provision For Income Taxes            12.8      11.1        12.7        10.5   
                                     ------    ------      ------      ------
Net Income                            21.0 %    19.4 %      20.7 %      18.3 %
                                     ======    ======      ======      ====== 

</TABLE>

Revenues
--------
Revenues  increased by 172% to $6.05 million  in  the  third
quarter  of  fiscal  1999 from $2.23 million  in  the  third
quarter  of  fiscal 1998.  Revenues were $15.50 million  for
the  nine  months  of  fiscal 1999,  a  198%  increase  from
revenues  of  $5.20 million for the nine  months  of  fiscal
1998.   International sales, mainly to Western Europe,  were
$1.59  million and $3.65 million for the third  quarter  and
nine months of fiscal 1999 as compared to $269,000 and $1.46
million  for  the  third quarter and nine months  of  fiscal
1998.

<PAGE> 10

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

Revenues  for  the third quarter and nine months  of  fiscal
1999 were at record levels.  In fact, the $15.50 million  of
revenues for the nine months of fiscal 1999 exceeded by over
20%  the  previous highest revenues recorded for  an  entire
year.

The  increase  in  revenues for the third quarter  and  nine
months  of fiscal 1999 over the same periods of fiscal  1998
principally  reflected the $4.07 million and  $9.37  million
revenue contribution, respectively, of shipments from large-
scale  Peptide Building Block ("PBB") orders to be  used  in
two  marketed  drugs. The Company expects  that  the  fourth
quarter  will be another strong quarter with the two  large-
scale   orders   continuing   to   provide   a   substantial
contribution to revenues.

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 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, Synthetech believes that additional orders  from
this  customer are unlikely after it completes  the  current
order by the summer of 1999.  This could change, however, if
the  customer  determines that the alternative manufacturing
route is not feasible. 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 $2.42 million in the third quarter
of fiscal 1999 from $978,000 in the third  quarter of fiscal
1998.  As a percent of sales, gross profit decreased to  40%
in  the  third quarter of fiscal 1999 from 44% for the  same
period  last year.  Gross profit increased to $6.34  million
or  41%  of revenues in the nine months of fiscal 1999  from
$2.37  million  or 46% of revenues for the  same  period  of
fiscal 1998.

The gross profit margins for the third quarter and the nine
months of fiscal 1999 resulted primarily from the mix of
products.  Revenues from large-scale PBB orders during the
third quarter and the nine months of fiscal 1999 represented
67% and 60%, 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)

Gross  profit  margins  during the third  quarter  and  nine
months  of fiscal 1998 resulted 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 $444,000  in  the  third
quarter  of  fiscal 1999 compared to $360,000 in  the  third
quarter  of fiscal 1998.  As a percentage of sales, R&D  and
SG&A expenses decreased to 7% in the third quarter of fiscal
1999  from 16% in the same period of fiscal 1998 due to  the
higher  level of revenues.  R&D and SG&A expenses  increased
to  $1.34  million for the nine months of fiscal  1999  from
$1.08 million in fiscal 1998.  As a percentage of sales, R&D
and  SG&A  expenses decreased to 9% for the nine  months  of
fiscal  1999 from 21% in the same period of fiscal 1998  due
to  the  higher level of revenues.  The increase in R&D  for
the  nine  months  of  fiscal 1999  reflected  increases  in
staffing and staffing compensation.  The increases  in  SG&A
expense for the third quarter and nine months of fiscal 1999
principally reflected increases in staffing compensation and
related payments.

Operating Income
----------------
Operating  income  increased to  $1.98  million  or  33%  of
revenues  in the third quarter of fiscal 1999 from  $618,000
or  28%  for the same period last year.  For the nine months
of fiscal 1999 operating income increased to $5.0 million or
32%  of revenues compared with $1.28 million or 25% for  the
nine  months  of fiscal 1998.  The significant  increase  in
operating  income for the third quarter and nine  months  of
fiscal  1999 reflected the substantial increase in  revenues
over prior periods.

Other Income
------------
The  net  other income of $65,000 for the third  quarter  of
fiscal 1999 included $70,000 of interest earnings and $4,000
of  interest expense.  The net other income of $187,000  for
the nine months of fiscal 1999 included $203,000 of interest
earnings  and $12,000 of interest expense.  The $62,000  and
$220,000  net  other income in the third  quarter  and  nine
months  of  fiscal 1998, respectively, came  primarily  from
interest earnings.

Net Income
----------
For  the  third quarter and nine months of fiscal 1999,  the
Company  earned  $2.04  million, and  $5.18  million  before
income taxes, respectively.  A provision for income taxes of
$777,000  resulted in net income of $1.27  million  for  the
third  quarter  and a provision for income  taxes  of  $1.97
million resulted in net income of $3.21 million for the nine
months of fiscal 1999.  The Company's effective tax rate for
the  nine  months of fiscal 1999 was 38% and  for  the  nine
months  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. 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 have represented a relatively
small portion of total revenue in the past. Revenues of PBBs
for  marketed drugs now 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 can be 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.   Accordingly,  the
Company continues to lack a stable baseload of demand and an
ability  to  predict future demand beyond its current  order
base.

<PAGE> 13

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


LIQUIDITY AND CAPITAL RESOURCES

At  December  31, 1998, the Company had working  capital  of
$10.97 million compared to $8.24 million at March 31,  1998.
The Company's cash and cash equivalents at December 31, 1998
totaled  $6.38 million.  In addition, the Company had  a  $1
million  bank  line of credit of which there was  no  amount
outstanding at December 31, 1998.

The  increase in cash and cash equivalents to $6.38  million
at  December 31, 1998 from $4.98 million at March  31,  1998
reflected  the  higher level of sales for the  period.   The
increase in accounts receivable to $2.36 million at December
31,  1998 from $1.47 million at March 31, 1998 reflected the
higher  level of sales during the quarter.  The increase  of
inventory  to $3.48 million at December 31, 1998 from  $3.18
million at March 31, 1998 primarily resulted from restocking
raw materials and the timing of production projects in work-
in-process inventory.

The  Company  had  approximately $1.65  million  of  capital
expenditures   for   the  nine  months   of   fiscal   1999.
Approximately $550,000 was spent for equipment and equipment
upgrades  in the existing plant and $1.10 million 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 $800,000  and  for  the
second  phase of the new plant expansion to be $2.60 million
for  a  total of $3.40 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 established a Y2K team consisting  of  its
Chief Financial Officer and associates from the Finance  and
Administration,  and  Manufacturing Groups.   The  team  has
completed   its  assessment  of  the  Company's  information
systems  which  support business applications.  The  Company
utilizes   packaged   application   strategies   for   these
information  systems functions.  The Company  believes  that
these information system components are current with all Y2K
updates  and changes recommended by the vendors, except  for
its  manufacturing/accounting software package,  a  facility
maintenance   software  package  and  an   electronic   data
interface.   The Company intends to install a Y2K  compliant
upgrade for  the manufacturing/accounting software  no later
than the end of fiscal 1999 and for the facility maintenance
software and the electronic data exchange during the  summer
of  1999.   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
completed  by  the  end of fiscal 1999.   Based  on  current
information, the Company  believes that it will be  able  to 

<PAGE> 14

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


complete any Y2K compliant upgrades or replacements associated 
with research  and  development,  manufacturing  processes  or 
facility  management systems by the summer of 1999.

The Company has begun a Y2K supplier and customer assessment
program.   It is in the process of contacting key  suppliers
and  customers by questionnaire 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.

The  Company's information technology budget for fiscal 1999
is $102,000, of which approximately 33% is allocated for the
Company's Y2K program.  These expenses will be paid  out  of
revenues  from operations.  In fiscal 1999, the Company  has
already  spent $9,000 and anticipates spending an additional
$10,000  for  computer hardware and software  Y2K  compliant
upgrades  or  replacements.  In  addition,  the  Company  is
currently  considering  hiring a consultant  to  assist  the
Company in running Y2K compliance tests and the Company  has
budgeted $15,000 for this effort.

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 developed any worst-case scenarios  or
contingency  plans  in  regard  to  its  internal   systems,
supplier/customer  issues  or  any  of   the   more   global
infrastructure issues.  The Company is considering  whether,
and to what extent, to develop such scenarios or  plans  and

<PAGE> 15

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

expects to  have made  a  decision  no later than the end of 
fiscal 1999.
                              


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 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.

(b)  Reports
      
      No reports on Form 8-K were filed during the quarter.
                              
<PAGE> 17
                         SIGNATURES



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

     




                                        SYNTHETECH, INC.
                                         (Registrant)



Date:   February 11, 1999               /s/ M. Sreenivasan
                                        M. Sreenivasan
                                        President & C.E.O.



Date:   February 11, 1999              /s/Charles B. Williams
                                       Charles B. Williams
                                       Vice President, Finance
                                       and Administration, C.F.O.,
                                       Chief Accounting Officer

                              
     <PAGE>