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

(Mark One)

[  X  ]  QUARTERLY  REPORT  PURSUANT TO SECTION  13  OR  15(d)  OF  THE
         SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996

                                    OR

[    ]   TRANSITION  REPORT  PURSUANT TO  SECTION  1  OR  15(d)  OF  THE
         SECURITIES EXCHANGE ACT OF 1934
For the transition period from_______________to_______________

Commission file number 0-12992

                             SYNTHETECH, INC.
          (Exact name of registrant as specified in its charter)
                                     
         Oregon                                          84-0845771
 (State or other jurisdiction                            (I.R.S. Employer
 of incorporation or organization)                      Identification No.)
                                     
         1290 Industrial Way, Albany, Oregon                  97321
   (Address of principal executive offices)                 (Zip Code)

            Registrant's telephone number, including area code:
                              (541) 967-6575
                                     
     Check whether the issuer: (1) filed all reports required to be file by
Section  13 or 15(d) of the Exchange Act during the past 12 months (or  for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

Yes  X    No_____

      The  number  of  shares of the registrant's common stock,  $.001  par
value, outstanding as of November 7, 1996 was 13,723,671.

     Transitional Small Business Disclosure Format (check):

Yes       No  X
<PAGE>                                                    .
                                                            
                 PART I.   FINANCIAL INFORMATION
                                                            
Item 1.  Financial Statements                           
                                                            
                                                            
                           SYNTHETECH, INC.
                           ----------------
                                                            
                            BALANCE SHEETS
                            --------------                       
--------------------
<TABLE>                                                    
<CAPTION>                                                   
<S>                                              <C>          <C>
                                                        
                                                 (unaudited)
                                                September 30,   March 31,
                                                     1996         1996
                                               -------------  ------------
                                                                           
             ASSETS                                         
             ------                                    
                                                            
CURRENT ASSETS:                                             
  Cash and cash equivalents                       $6,539,000   $5,049,000
  Securities available for sale                      394,000      395,000
  Accounts receivable, less allowance for
   doubtful accounts of $15,000 for both periods   1,810,000    1,355,000     
  Inventories                                      2,086,000    1,924,000
  Prepaid expenses                                   173,000       71,000
  Income tax receivable                                    -      152,000
  Deferred income taxes                               59,000       59,000
  Other current assets                                 1,000        1,000
                                                  ----------    ---------
    TOTAL CURRENT ASSETS                          11,062,000    9,006,000
                                                            
                                                            
PROPERTY, PLANT AND EQUIPMENT, at cost, net        2,885,000    1,311,000
                                                            
SECURITIES AVAILABLE FOR SALE                        621,000      626,000
                                                            
OTHER ASSETS                                          15,000       16,000
                                                 -----------  -----------
TOTAL ASSETS                                     $14,583,000  $10,959,000
                                                 ===========  ===========
</TABLE>                                                    
                        See notes to financial statements.
<PAGE>
                                                            
                                SYNTHETECH, INC.
                                ----------------
                                                            
                                 BALANCE SHEETS
                                 --------------
                                   (continued)
<TABLE>                                                     
<CAPTION>                                               
<S>                                               <C>          <C>
                                                  (unaudited)
                                                 September 30,    March 31,
                                                     1996          1996
------------------------------------             ------------   ------------
                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------                       
                                                            
                                                            
CURRENT LIABILITIES:                                        
  Accounts payable and accrued expenses            $  625,000  $  271,000
  Accrued compensation                                283,000     479,000
  Income taxes payable                                217,000           -
  Other accrued liabilities                            10,000       1,000
  Deferred revenue                                     44,000      98,000
                                                  ----------- -----------
    TOTAL CURRENT LIABILITIES                       1,179,000     849,000
                                                            
DEFERRED INCOME TAXES                                   9,000      10,000
                                                    
SHAREHOLDERS' EQUITY:                                       
  Common stock, $.001 par value; authorized
   100,000,000 shares; issued and outstanding,
   13,724,000 and 13,475,000 shares                    14,000      13,000
  Paid-in capital                                   6,932,000   6,589,000
  Employee notes receivable and deferred
   compensation                                       (62,000)   (130,000)
  Unrealized gain on securities available
   for sale                                            25,000      30,000
  Retained earnings                                 6,486,000   3,598,000
                                                  -----------  -----------
    TOTAL SHAREHOLDERS' EQUITY                     13,395,000  10,100,000
                                                  ----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY        $14,583,000 $10,959,000     
                                                  =========== ===========
</TABLE>                                                    
                       See notes to financial statements.
<PAGE>

                                     SYNTHETECH,INC.
                                                                            
                                 STATEMENTS OF OPERATIONS
                                 ------------------------
                                       (unaudited)
<TABLE>                                                        
<CAPTION>                                                              
<S>                        <C>          <C>          <C>         <C>
                          FOR the Three Months Ended  FOR the Six Months Ended
                                 September 30,              September 30,   
                               1996         1995         1996         1995
-------------------------   ----------   ----------   ----------   ----------
REVENUES                    $4,554,000   $1,976,000   $8,075,000   $4,190,000
COST OF SALES                1,768,000      939,000    2,896,000    1,686,000
                            ----------    ---------    ---------    ---------
GROSS PROFIT                 2,786,000    1,037,000    5,179,000    2,504,000
                                                                        
RESEARCH AND DEVELOPMENT        35,000       62,000      104,000      121,000
SELLING, GENERAL             
 AND ADMINISTRATIVE            311,000      198,000      590,000      434,000
                             ---------    ---------    ---------    ---------
OPERATING EXPENSE              346,000      260,000      694,000      555,000
                             ---------    ---------    ---------    ---------
OPERATING INCOME             2,440,000      777,000    4,485,000    1,949,000
OTHER INCOME, net               92,000       63,000      175,000      122,000
                             ---------    ---------    ---------    ---------
INCOME BEFORE INCOME TAXES   2,532,000      840,000    4,660,000    2,071,000
                       
PROVISION FOR INCOME TAXES     962,000      322,000    1,771,000      795,000
                             ---------    ---------    ---------    ---------
NET INCOME                  $1,570,000     $518,000   $2,889,000   $1,276,000
                            ==========   ==========   ==========   ==========
NET INCOME PER 
 COMMOM SHARE                    $0.11        $0.04        $0.20        $0.09
                            ==========   ==========   ==========   ==========
                                                        
SHARES USED IN PER 
 USED IN PER SHARE
 CALCULATION                14,259,752   13,754,285   14,219,601   13,658,262
                            ==========   ==========   ==========   ==========
</TABLE>                          
                           See notes to financial statements.
<PAGE>
                                    
                                       SYNTHETECH, INC.
                                                           
                                   STATEMENTS OF CASH FLOWS
                                   ------------------------
                                         (unaudited)
<TABLE>                                                             
<CAPTION>                                                         
<S>                                                      <C>          <C>
                                                                         
For the Six Month Period Ended September                1996         1995
----------------------------------------             ----------   ----------
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net income                                           $2,889,000   $1,276,000
Adjustments to reconcile net income to                          
  net cash provided by operating                                               
activities:
      Depreciation, amortization and other              113,000       97,000
      Amortization of deferred compensation              18,000       11,000
      Accrued interest on securities                            
       available for sale                                     -       (2,000)
      Accrued interest on employee notes receivable      (2,000)      (1,000)
      Realized gain on sale of securities
       available for sale                                     -       (8,000) 
            
    (Increase) decrease in assets:                            
      Accounts receivable, net                         (455,000)    (412,000)
      Inventories                                      (162,000)       7,000
      Prepaid expenses                                 (102,000)     (35,000)
      Income tax receivable                             152,000            -
      Other assets                                            -       10,000
                 
    Increase (decrease) in liabilities:              
      Accounts payable, accrued
       liabilities and income taxes payable             384,000      151,000
      Deferred revenue                                  (54,000)           -
                                                      ----------   ----------
        Net cash provided by operating activities     2,781,000    1,094,000
                                                      ----------   ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
                                                     
   Property, plant and equipment purchases           (1,685,000)    (161,000)
   Proceeds from sale of securities
    available for sale                                        -      148,000
   Employee notes receivable                             50,000      (80,000)
                                                     ----------   -----------
       Net cash used by investing activities         (1,635,000)     (93,000)
                                                     -----------  -----------

CASH FLOWS FROM FINANCING ACTIVITIES:             
                                                      
   Proceeds from stock option exercises 
    and disqualifying dispositions                      158,000      171,000
   Proceeds from stock warrant exercises                186,000            -
                                                     ----------   ----------
        Net cash provided by financing activities       344,000      171,000
                                                     ----------   ----------

NET INCREASE IN CASH AND CASH EQUIVALENTS             1,490,000    1,172,000
             
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD      5,049,000    1,199,000
                                                     ----------   ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $6,539,000   $2,371,000
                                                     ==========   ==========
NON-CASH INVESTING ACTIVITIES:            
Unrealized gain (loss) on securities available                 
 for sale                                                (5,000)      22,000
Issuance of stock options at below fair value                 -       21,000 
                                                     
                             See notes to financial statements.
<PAGE>

                       NOTES TO FINANCIAL STATEMENTS

NOTE A.   GENERAL AND BUSINESS

          The summary financial statements included herein have been
prepared, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission.  Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although
Synthetech management believes that the disclosures are adequate to make
the information presented not misleading.  It is suggested that these
summary financial statements be read in conjunction with the financial
statements and the notes thereto included in Synthetech's 1996 Form 10-KSB.

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

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


NOTE B.   STATEMENTS OF CASH FLOWS

          Supplemental cash flow disclosures for periods ended September 30:


</TABLE>
<TABLE>
<CAPTION>
<S>                   <C>         <C>         <C>          <C>
          Cash Paid
          ---------
                            Three Months               Six Months
                          1996       1995           1996       1995

     Income Taxes     $ 1,397,000  $ 769,000    $ 1,403,000  $ 809,000
</TABLE>

NOTE C. EARNINGS PER SHARE

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

<PAGE>

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

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

                                                             
                                                                 
                                       Percentage of Revenues
<TABLE>                                                             
<CAPTION>                                                               
<S>                       <C>          <C>            <C>          <C>   
                                                                        
                       Three Months September 30,     Six Months September 30,
                           1996          1995           1996         1995 
------------------         -----         -----          -----        -----
                                                                
Revenues                   100.0 %      100.0 %        100.0 %      100.0 %
Cost of sales               38.8         47.5           35.9         40.2 
                           ------       ------         ------       ------
Gross Profit                61.2         52.5           64.1         59.8   
            
Research and Development     0.8          3.1            1.3          2.9
Selling, General    
 and Administration          6.8         10.0            7.3         10.4
                           ------       ------         ------       ------
Operating Expense            7.6         13.1            8.6         13.3  
           
Operating Income            53.6         39.4           55.5         46.5   
Other Income                 2.0          3.2            2.2          2.9    
                           ------       ------         ------       ------
Income Before 
 Income Taxes               55.6         42.6           57.7         49.4
Provision For  
 Income Taxes               21.1         16.3           21.9         19.0   
                           ------       ------         ------       ------
Net Income                  34.5 %       26.3 %         35.8 %       30.4 %
                           ======       ======         ======       ======
</TABLE>


Revenues

     Revenues increased by 130% to $4.56 million in the second quarter of
fiscal 1997 from $1.98 million in the second quarter of fiscal 1996.
Revenues were $8.08 million for the first half of fiscal 1997, a 93%
increase from revenues of $4.19 million in the first half of fiscal 1996.
Peptide Building Blocks (PBBs) represented nearly 100% of revenues for the
second quarter and first half of fiscal 1997 and fiscal 1996.
International sales, mainly to Japan and Western Europe, were $2.25 million
and $2.77 million for the second quarter and first half of fiscal 1997 as
compared to $523,000 and $1.15 million for the second quarter and first
half of fiscal 1996.

     Revenues for the second quarter of fiscal 1997 included sales
associated with PBB orders for use in late stage clinical trials by two
customers of $1.9 million and $1.21 million, respectively, representing 68%
of revenues for the quarter.  The revenues associated with these two
customers for the first half of fiscal 1997 were $3.25 million and $2.51
million, respectively, representing 71% of revenues for the first half.
Revenues from these customers in the second quarter of fiscal 1996 were
only $483,000 and $33,000, respectively, or 26% of revenues for that
quarter, and in the first half of fiscal 1996 were only $762,000 and
$83,000, respectively, or 20% of revenues.   While the Company has had two
record revenue quarters, the year-to-year results for these products
demonstrate the continuing potential for fluctuation in sales of products.
<PAGE>
     Moreover, as a supplier of PBBs for drugs in various stages of
development, the Company's orders are always subject to curtailment or
cancellation.  For example, the customer with purchases of $1.9 million in
the second quarter of fiscal 1997, and a total of nearly $5.27 million from
February 1995 through September 1996, advised the Company that it is
pursuing an alternative, lower-cost manufacturing process and discontinuing
additional purchases.  With the completion of shipments to this customer in
mid-October 1996, the Company believes that it is unlikely that the
revenues for the second half of fiscal 1997 will be at the same level as
for the first half.  Nevertheless, the Company expects to have another
solid growth year and continue to be active with PBB sales, including
additional sales to the customer that purchased $1.21 million in the second
quarter of fiscal 1997 and sales related to other ongoing and new business.
The exact extent of its future business, however, is difficult to predict.

     The Company has not yet established a stable baseload of demand for
its products.  The Company's products are part of a new and emerging market
with sizable fluctuations in orders between periods.  In most instances,
order or reorder cycles for products are not predictable.  Demand for PBBs
is extremely variable since individual clinical trial programs are always
subject to significant risk of suspension or early cancellation and only a
small percentage of drugs in clinical trial programs are ultimately
approved for market use.  As a result, the Company expects to continue to
see fluctuations in its revenue from period to period.  (See "Industry
Factors" below.)


Gross Profit

     Gross profit increased to $2.79 million in the second quarter of
fiscal 1997 from $1.04 million in the second quarter of fiscal 1996.  As a
percent of sales, gross profit increased to 61% in the second quarter of
fiscal 1997 from 53% for the same period last year.  Gross profit increased
to $5.18 million or 64% of revenues in the first half of fiscal 1997 from
$2.5 million or 60% of revenues for the same period of fiscal 1996.  The
increase in gross profit as a percentage of revenues resulted from the
increased level of revenues combined with a change in the mix of products.
The Company expects these factors to continue to fluctuate from period to
period and cause variations in gross profit margins.  Increased revenues
positively affect gross profit margins since a portion of the Company's
manufacturing overhead costs are relatively fixed.

Operating Expenses

     Research and development (R&D) and selling, general and administrative
(SG&A) expenses were $346,000 in the second quarter of fiscal 1997 compared
to $260,000 in the second quarter of fiscal 1996.  As a percentage of
sales, R&D and SG&A expenses decreased to 8% in the second quarter of
fiscal 1997 from 13% in the same period of fiscal 1996.  R&D and SG&A
expenses increased to $694,000 in the first half of fiscal 1997 from
$555,000 in fiscal 1996.  As a percentage of sales, R&D and SG&A expenses
decreased to 9% in the first half of fiscal 1997 from 13% in the same
period of fiscal 1996.  While operating expenses have increased reflecting
increased staffing and other costs associated with the Company's growth,
operating expenses as a percent of revenues have decreased significantly.

Operating Income

     Operating income increased to $2.44 million or 54% of revenues in the
second quarter of fiscal 1997 from $777,000 or 39% for the same period last
year.  For the first half of fiscal 1997 operating income increased to
$4.49 million or 56% of revenues compared with $1.95 million or 47% for the
first half of fiscal 1996.
<PAGE>

Other Income

     The net other income of $92,000, and $175,000 in the second quarter
and first half of fiscal 1997, respectively,  and the $63,000 and $122,000
net other income in the second quarter and first half of fiscal 1996,
respectively, came primarily from interest earnings.

Net Income

     For the second quarter and first half of fiscal 1997, the Company
earned $2.53 million, and $4.66 million before income taxes, respectively.
A provision for income taxes of $962,000 resulted in net income of $1.57
million for the second quarter and a provision for income taxes of $1.77
million resulted in net income of $2.89 million for the first half of
fiscal 1997.  The Company's effective tax rate for the second quarter and
first half of fiscal 1997 was 38% which was the same for the second quarter
and first half of fiscal 1996.

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

     As a supplier of building blocks for peptide-based drugs, Synthetech's
revenue will be affected by these industry factors.  The high cancellation
rate for drug development programs results in a significant likelihood that
there will be no subsequent or "follow-on" PBB sales for any particular
drug development program.  Since Synthetech's revenue comes predominantly
from PBBs used in drug development programs, the overall impact on
Synthetech's business from the cancellation rate will depend, to a large
extent, on the rate of new drug development efforts being commenced.
<PAGE>
     The advancement of a drug for which Synthetech is providing PBBs from
a drug development program into an "approved" status by the FDA could also
significantly affect Synthetech's business if Synthetech is able to
continue to supply the PBBs for the approved drug.  With the increased
volume typically associated with "approved" drugs, the Company, however,
expects to face increased competition for this business.

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

Capital Resources and Liquidity

     At September 30, 1996, the Company had working capital of $9.88
million compared to $8.16 million at March 31, 1996.  The Company's cash,
cash equivalents and short term securities available for sale at September
30, 1996 totaled $6.93 million.  In addition, the Company had a $1 million
bank line of credit of which there was no amount outstanding at September
30, 1996.

     The increase in accounts receivable to $1.81 million at September 30,
1996 from $1.36 million at March 31, 1996 reflected the higher level of
sales in the quarter.  The increase of inventory to $2.09 million at
September 30, 1996 from $1.92 million at March 31, 1996 primarily resulted
from higher levels of work-in-process inventory.

     The Company had approximately $1.69 million of capital expenditures
during the first half of fiscal 1997, of which $364,000 was for equipment
and equipment upgrades in the existing plant and $1.32 million for the new
plant expansion.  The Company anticipates total capital expenditures for
fiscal 1997 for the existing plant to be $500,000 and for the new plant
expansion to be $6 million for a total of $6.5 million.  The Company
continues to expect to finance a majority of these capital expenditures
from internal cash flow, but is also exploring bank financing and other
outside funding sources.

      Groundbreaking for the new plant began during the first quarter of
fiscal 1997 and the expected completion date continues to be in the spring
of 1997.  In response to the conclusion of the order for the PBB customer
discussed earlier, the Company has reduced its production from a 7-day to a
5-day per week, round-the-clock production schedule.
                                     
                      _________________________          
      
      
      Certain statements in the Company's Form 10-QSB contain "forward-
looking" information (as defined in Section 27A of the Securities Act of
1933, as amended) that involve risks and uncertainties, including, but not
limited to, potential quarterly revenue fluctuations, uncertain market for
products, technological change, customer concentration, impact of
competitive products and pricing, and other risks detailed in the Company's
Securities and Exchange Commission Filings, including the Company's Form 10-
KSB for the fiscal year ended March 31, 1996.

<PAGE>

                        PART II - OTHER INFORMATION

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

     The Company held its Annual Meeting of Shareholders on July 18, 1996.
At that meeting, the following proposals were approved by the shareholders:


Election Of Directors
<TABLE>
<CAPTION>
<S>                                <C>            <C>
     Name                             For         Withheld
     ----                             ---         --------
     Paul C. Ahrens                 12,579,562      39,603
     Howard L. Farkas               12,579,437      39,728
     Page E. Golsan III             12,579,882      39,283
     M. ("Sreeni") Sreenivasan      12,580,882      38,283

</TABLE>

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

     3.1* Articles of Incorporation

     3.2* Bylaws

      27   Financial Data Schedule

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


(b)  Reports

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




                                SIGNATURES



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




                                   SYNTHETECH, INC.
                                     (Registrant)



Date:  November 8, 1996            /s/  M. Sreenivasan
                                   M. Sreenivasan
                                   President & C.E.O.



Date:   November  8,  1996         /s/   Charles  B.  Williams
                                   Charles B. Williams
                                   Vice President, Finance
                                   and Administration, C.F.O,
                                   Chief Accounting Officer