_______________________________________________________________________________
                                   FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington D.C. 20549

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

 FOR THE YEAR ENDED DECEMBER 31, 1995      COMMISSION FILE NUMBER 1-9800
                                       OR
[ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
                                       
                              INCSTAR CORPORATION
            (Exact name of registrant as specified in its charter)
                                       
   MINNESOTA                                                 41-1254731
 (State of Incorporation)          (I.R.S. Employer Identification No.)

 1990 Industrial Boulevard
 Stillwater, Minnesota                                            55082
 (Address of principal executive offices)                    (Zip Code)
                                 (612) 439-9710
              (Registrant's telephone number, including area code)
                                       
                                       
            SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE
                       SECURITIES EXCHANGE ACT OF 1934:
                                       
    Title of Each Class              Name of Each Exchange on Which Registered
Common Stock, $.01 Par Value                   American Stock Exchange
        Per Share

            SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE
                       SECURITIES EXCHANGE ACT OF 1934:
        None.

  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    .

 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K is not contained herein, and will not be contained  to  the
best  of  Registrant's knowledge, in definitive proxy or information statements
incorporated  by  reference in Part III of this Form 10-K or any  amendment  to
this Form 10-K, [ X ].

 The aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 20, 1996 was approximately $39,749,000.

 The number of shares of the Registrant's Common Stock outstanding on March 20,
1996 was 16,413,350.
_______________________________________________________________________________
                     DOCUMENTS INCORPORATED BY REFERENCE:
Documents                                                Form 10-K Reference
                                       
Proxy Statement for annual meeting to be held May 21, 1996      Part III

                                    PART I.
ITEM 1. BUSINESS

GENERAL

      INCSTAR   Corporation  and  its  subsidiaries  (the  "Company")  develop,
manufacture, and market test kits and related products used by major hospitals,
clinical  reference  laboratories and researchers involved  in  diagnosing  and
treating  immunological conditions. Since December 1989, the Company  has  been
majority-owned  by BioFin Holding International B.V. (BFHI),  a  subsidiary  of
Sorin  Biomedica  Diagnostics S.p.A. (Sorin) which is an Italian  affiliate  of
Fiat, Inc. The Company was incorporated in Minnesota in 1975 under the name  of
Immuno  Nuclear  Corporation.  The Company's principal  executive  offices  are
located at 1990 Industrial Boulevard, Stillwater, Minnesota, 55082.
      
      
PRODUCTS
      
The  Company  currently  markets,  develops and  manufactures  individual  test
reagents  and  test  kits, using primarily RIA, EIA, immunoturbidimetric  assay
(ITA)   and  immunofluorescent assay (IFA) technologies for clinical diagnostic
and   medical  research  purposes.   The  Company  also  produces  and  markets
histochemical antisera and natural and synthetic peptides also used in clinical
diagnostic  and medical research.  The Company's product focus is on diagnostic
tests  for  autoimmune, infectious disease, endocrinology and bone and  mineral
metabolism  product  segments,  utilizing  a  variety  of  technologies.    The
immunodiagnostic market is shifting away from manual testing  to  automated  or
semi-automated  testing  in an effort to reduce laboratory  costs  involved  in
processing medical diagnostic tests.  As a result, the research and development
activities  of the Company are mainly focused on developing non-isotopic  tests
that  can  be run on open instrument systems that are either currently  in  the
customers labs, or can be placed there in a cost effective manner.

      DIAGNOSTIC AND RESEARCH KITS.  The Company believes that it is one of the
largest producers of RIA products in the world.  The total RIA market, however,
has  been  significantly decreasing in recent years due to  two  factors:   (1)
isotopic  technologies  such  as RIA are not easily  convertible  to  automated
instrument  testing  systems and (2) disposal issues  relative  to  radioactive
materials.   Current  trends  in  the immunodiagnostic  market  are  to  employ
technologies  such  as EIA, which require less labor to process  test  results.
Consequently, the challenge facing the Company is, and will continue to be,  to
develop  products that are non-isotopic and amiable to semi and fully automated
assay  systems.  Although the current trend in the domestic market,  and  to  a
lesser  degree in the international market, is away from manual,  RIA  testing,
the  Company feels that its strengths in RIA manufacturing and marketing  will
allow  it to maintain or grow its share of this declining market.  The  Company
believes  that  in  the near-term its RIA products will  provide  it  with  the
capital resources necessary to pursue new research and development activities.

       RIA  test  procedures are used to precisely measure  the  extremely  low
levels of certain hormones, peptides and other substances present in the  human
body.   Antibodies are proteins produced by higher animals in response to  some
foreign  material, known as the "antigen," entering the blood or  tissue.   The
antibody  protects the animal by binding to the antigen and helping other  body
mechanisms  destroy  it.   When human hormones and  peptides  are  injected  as
antigens  into a laboratory animal, the animal develops antibodies to eliminate
the  antigens.  Serum containing these antibodies (antiserum) is taken from the
laboratory animals and processed into a binding reagent for the specific  human
hormone or peptide. The reagent is then combined with other reagents in a  test
kit  to  create an analytical system to measure the level of that human hormone
or peptide present in the specimen to be tested.

       Precise  amounts of antiserum, which act as the binder, are  mixed  with
radioactively-labeled  (isotopic)  tracer antigen  and  a  lower  concentration
unlabeled  antigen.  The tracer antigen and the unlabeled antigen  compete  for
binding  locations  on  the antibody in the antiserum.  The  bound  antigen  is
measured  by  a radiation counter and the level of bound antigen is calculated.
The   results   of   this  controlled  procedure  are  repeated   for   several
concentrations  of  known  antigen and a standard curve  is  plotted.  A  fluid
specimen  is  then  taken from a patient for testing and  substituted  for  the
unlabeled antigen. The results of the competitive binding of the tracer antigen
and the antigen in the fluid specimen are compared with the standard curve, and
the  precise  quantity of hormone or peptide being measured is determined.  The
sensitivity and accuracy of RIA tests depend primarily upon the quality of  the
binding antisera and tracer antigen.

       The  Company currently markets approximately 90 RIA products,  primarily
used in the analysis of endocrine, neuroendocrine, bone and mineral metabolism,
therapeutic  drug  monitoring and thyroid function.  The  majority  of  thyroid
function  testing products are marketed under the Clinical Assays product  line
that   the  Company,  together  with  Sorin,  acquired  in  1990  from   Baxter
International Inc. (Baxter).  Each RIA kit contains the following: an antiserum
consisting  of  primary  antibodies and, in  most  cases,  a  reagent  used  to
precipitate  the  primary  antigen  antibody complex;  a  radioactively-labeled
antigen  to  act as tracer; a non-radioactive or cold antigen to  act  as  test
calibrators;  and a protocol booklet that provides specific test  instructions.
The  tracers in the RIA kits have shelf lives of six to twelve weeks  depending
on  the product.  The process of RIA testing requires the use of skilled  labor
in diagnostic laboratories.

      The   Company  markets  approximately  55  EIA  products  primarily   for
infectious  disease  and  autoimmune disorders.  The basic  principles  of  EIA
technology  is  very  similar to RIA in that a highly  specific  and  sensitive
reaction  of an antigen and antibody must take place.  With EIA, the result  is
measured  by  color  development  intensity  rather  than  radioactivity.   EIA
technology  uses standard laboratory procedures and facilitates  throughput  of
large  testing  volumes  such as those of a large  reference  laboratory.   EIA
product lines include the Epstein Barr Virus ("EBV") and TheraTest products, as
discussed  below,  and  the  ToRCH  group  of  tests  (toxoplasmosis,  rubella,
cytomegalovirus and herpes).

       The  Company  also  markets approximately   20  products  based  on  IFA
technology for infectious disease and autoimmune disorders.  The kits based  on
IFA  technology  are  employed  in sophisticated  diagnostic  laboratories  for
antibody  detection and semi-quantitation in infectious disease and  autoimmune
disorders.  Patient serum samples are incubated on microscope slides containing
prepared  antigen substrate, for example, virus-infected mammalian cells.   The
antibody,  if  present, will bind to the antigen.  After a saline  rinse  which
removes  unbound  serum,  the microscope slide is reacted  with  a  fluorescein
conjugate  which  binds  to  antigen-antibody complexes,  which  formed  during
initial  incubation.  Following a saline rinse, the slides are viewed  under  a
fluorescence  microscope and examined for fluorescent staining on the  specific
antigen  sites.  Immunofluorescence kits provide prepared multi-sample  slides,
positive and negative reference serum controls, fluorescein conjugate, buffered
saline  and mounting medium as ready-to-use stabilized reagents.  The Company's
infectious  disease  IFA assays include Toxoplasmosis, Cytomegalovirus,  Herpes
and  a  confirmatory  test  for  syphilis.  The  autoimmune  product  offerings
incorporate  a  broad range of kits and components intended  for  detection  of
antinuclear antibodies and anti-native DNA antibodies (useful in systemic lupus
erythematosus  testing),  antimitochondrial antibody  testing  and  antithyroid
antibodies  intended  for diagnosis of primary biliary  cirrhosis  and  Grave's
disease, respectively.

       In  addition  to  the distribution of those products which  the  Company
develops  and  manufactures, the Company is the exclusive  distributor  in  the
United  States  and Canada of certain of Sorin's hepatitis in vitro  diagnostic
products.  Sorin has developed RIA and EIA microplate hepatitis tests that  are
used  worldwide  in  the diagnosis of Hepatitis A and  Hepatitis  B.   Each  of
Sorin's  RIA  and  EIA hepatitis markers consist of 7 different  marker-reagent
kits that are FDA approved.

      SERUM PROTEIN MEASUREMENT.  The Company currently markets 16 ITA kits for
the  assessment  of specific human serum proteins.  Sold under the  trade  name
"SPQ  Test System", the tests are designed for use on common automated clinical
chemistry  analyzers.  The ITA kits are utilized on a large number of different
automated  analyzers.  Consequently, the development of new instrument-specific
applications  is  required on an ongoing basis.  Each assay  is  based  on  the
principle of immunoturbidimetric or immunonephelometric measurement of antigen-
antibody  complexes.  These antigen-antibody complexes are formed when  patient
samples are combined with the specific antibody of the test kit.  As a part  of
the  SPQ  Test System, specific human protein controls, patient sample diluents
and  specific  antibodies  are provided as separate products.   ITA  technology
offers the clinical laboratory the advantages of superior speed, precision  and
automation.   Included  in  the  ITA  product  line  are  specific  assays  for
Apolipoprotein  A-, Apolipoprotein B and Lipoprotein(a), which  are  useful  in
cardiac  risk assessment.  The remaining ITA assays in the SPQ Test System  are
used  in  the assessment of immunological disorders, nutritional status,  acute
response and kidney failure.
      
      ANTISERA PRODUCTS.  The antisera product lines from the Company are  used
for  the  analysis of human serum proteins present in the human serum.   Common
clinical   laboratory   procedures  using   the   antisera   products   include
immunofixation     electrophoresis,    immunoelectrophoresis     and     radial
immunodiffusion methods.  The techniques utilized by the laboratory  result  in
the  determination  of specific protein levels and the assessment  of  specific
protein  components following the binding of the antiserum to a specific  serum
protein.   The presence of the serum protein is determined by protein  staining
or through the use of fluorescent or enzyme staining procedures.

      BULK AND CUSTOM ANTISERA PRODUCTS.  The bulk and custom antisera products
produced  by  the  Company are used by major medical diagnostic instrumentation
manufacturers worldwide in the production of diagnostic test kits to be used on
their  instruments.  The Company offers an extensive line of antisera  products
to  human  serum  proteins  that are monospecific, avid,  and  of  high  titer.
Antisera products are produced as nephelometric quality, standard antisera, IgG
fractions  and fluorescent or enzyme conjugated preparations. The Company  also
produces calibrators to be used as reference standards in conjunction with  the
various antisera products offered.

      Custom  antisera  from the Company's standard supply  are  also  produced
according  to specifications provided by customers.  The Company also  performs
custom  immunization  and  development of  specific  antibodies  upon  customer
request.
      
       HISTOCHEMICAL ANTISERA.  Unlike RIA, ITA and EIA methods which are  used
to  analyze fluid samples taken from the human body, histochemical antisera are
utilized  in  an  in vitro procedure to determine the presence of  hormones  or
peptides  in  body  tissue.  A histochemical antiserum is  used  as  a  binding
reagent  for  a  specific hormone or peptide.  Once binding has  occurred,  the
presence  of  the  hormone or peptide is determined by  fluorescent  or  enzyme
staining   procedures  performed  on  the  tissue  specimen.    The   Company's
histochemical  products are used in clinical diagnoses  and  medical  research,
frequently in conjunction with RIA, ITA or EIA technologies.

RECENT DEVELOPMENTS
      
      Dr.  Pierre  M.  Galletti, currently affiliated with Brown University  in
Providence,  Rhode Island,  was appointed to the position of  Chairman  of  the
Board effective March 1, 1995, replacing Dr. Orwin L. Carter, who resigned from
this position.
      
      During  the  second quarter of 1995 the Company announced the  completion
of  the  manufacturing transfer of its TheraTest trademark product  line  of  
diagnostic assays  to  its  Stillwater  facility.  INCSTAR acquired  this  Food 
and  Drug Administration (FDA)-cleared ELISA-based panel of autoimmune 
diagnostic  assays in  May  1994  from  TheraTest Laboratories, Inc. of  
Chicago.   The  TheraTest products  are  used  as  a  confirmatory test for the 
diagnosis  of  rheumatoid arthritis  and  other  connective  tissue  diseases  
such  as  systemic lupus erythematosus and scleroderma.  The TheraTest products 
are also an extension of the Company's existing immunofluorescence autoimmunity 
product line and complement the Company's Enzyme Immunoassay (EIA) product 
offerings.
      
      Also  during  the  second quarter of 1995 the Company  received  approval
from  the  FDA  for  its second generation EBV diagnostic tests.   EBV  is  the
causative  agent of infectious mononucleosis, and can cause lymphomas,  chronic
fatigue  syndrome and a variety of other diseases in patients with  a  weakened
immune  system.  International market introduction of these tests began in  the
third quarter of 1994.
      
      The  Company launched two autoimmune products in the international market
during  the  second  quarter  of  1995 -- a  quantitative  thyroid  stimulating
autoantibodies assay (TRAb), which is used for the diagnosis of Grave's  disease
and  the  complement  activation  enzyme assay  (CAE)  which  provides  general
information  about the immune system in disease states such  as  rheumatic  and
rare  connective  tissue  disorders as well  as  tissue  injury.   The  Company
received 510K clearance from the FDA in the fourth quarter of 1995 for its  CAE
kit.
      
      During  the  third  quarter of 1995 the Company  launched  worldwide  its
second generation Parathyroid Hormone-related Protein (PTHrP) assay.  PTHrP  is
the  agent responsible for the condition of humoral hypercalcemia of malignancy
(HHM).   This is a condition in which serum calcium is increased to potentially
life threatening levels.  This assay provides customers with a superior product
that  has  significantly  improved sensitivity and  better  definition  of  the
protein under investigation than the first generation product.  This product is
being distributed as a "research use only" product in the US and is targeted to
the  clinical  research  market.   Internationally,  the  Company  is  pursuing
registration in several European countries as well as Japan.
      
      During the third quarter of 1995, the Company experienced an increase  in
demand  for  one  of  its hepatitis assays due to a competitor's  kit  becoming
unavailable  to  the  market.  This opportunity resulted in approximately  $2.9
million in sales during 1995.  The competitor re-entered the marketplace during
the  first quarter of 1996.  While the Company believes that a portion of these
sales may be maintained, the impact on future sales is uncertain at this time.
      
      During  the  fourth  quarter of 1995 the Company  received  the  approved
licensure from the FDA for the final two assays within the Hepatitis line which
gave the Company a complete panel of seven EIA approved/licensed assays used in
the diagnosis of hepatitis A and B infections.
      
      
MARKETING
      
       The  Company's medical products are sold to commercial and public health
laboratories,  blood  banks, research and teaching  institutions  and  hospital
laboratories,  which  use  the  Company's kits  to  conduct  tests  ordered  by
physicians.  Increased frequency of use of the Company's kits will  depend,  in
part, upon the acceptance by practicing physicians of the need and desirability
for measuring certain therapeutic drug, hormone, peptide and serology levels in
the evaluation of diseases and body disorders.
      
       In North America, the Company's principal market for its medical products
includes   approximately  1,200  clinical  reference  laboratories  and   2,500
hospitals,  which have laboratories that perform immunodiagnostic  testing.  In
the  United  States  and  Canada, the Company utilizes a  direct  sales  force,
combined with selected independent distributors, to market its products.
      
       The  Company  also utilizes foreign distributors in conjunction  with  a
subsidiary  in  the United Kingdom to market its products abroad.   Since  1989
Sorin  has  been  the distributor for the Company's products in  Italy,  Spain,
Portugal,  Germany and the Benelux countries.  As part of the 1990  acquisition
from  Baxter,  the Company manufactures and sells to Sorin the Clinical  Assays
products for distribution in the above mentioned countries and France. Pursuant
to  these  arrangements, the Company recorded sales to Sorin of $7,625,000  for
the  year ended December 31, 1995, which comprised 16.7% of total sales.  Other
transactions entered into with Sorin and its subsidiaries are set forth in Note
6  of  the  Company's  consolidated financial  statements  contained  elsewhere
herein.  Other than Sorin, the Company is not dependent on any single  customer
for more than 15% of its business.

       The  Company's international sales constitute 46% of sales for the  year
ended December 31, 1995; 50% of sales for the year ended December 31, 1994  and
46% of sales for the year ended December 31, 1993.

       Because  of the limited shelf life of the Company's radioactive  tracer,
the  Company  delivers  products by international air freight  to  its  foreign
markets.
      
RESEARCH AND PRODUCT DEVELOPMENT

      The ability of the Company to compete effectively in the marketplace will
depend  upon  the  success of its efforts to improve existing products  and  to
develop  new products, primarily non-isotopic and conducive to instrumentation,
that  are useful to the medical diagnostic and research markets. The levels  of
research  and development expenditures by the Company during the periods  shown
below were as follows:

<TABLE>
<CAPTION>
                                                       Percent of
                                         Amount        Net Sales
     <S>                               <C>             <C>
     Year ended December 31, 1995      $3,748,000          8.2%
     Year ended December 31, 1994      $5,069,000         11.9%
     Year ended December 31, 1993      $5,719,000         13.2%
</TABLE>

        The  reduction in research spending in 1995 from previous years levels,
results primarily from the discontinuance of a development program discussed in
Note 2 of the financial statements contained elsewhere herein.
      The   Company  has  established  scientific  advisory  panels   for   its
autoimmune and bone and mineral metabolism segments.  In addition, the  Company
intends  to  establish  a  third scientific panel  in  its  infectious  disease
segment.   These  panels  are overseen by a scientific advisory  board  led  by
INCSTAR's  Chairman  Dr.  Pierre M. Galetti.   Also,  Dr.  Michael  Steffes,  a
director  of the Company, is a member of the Scientific Advisory Board.   These
panels  are  intended  to enhance and strengthen the Company's  ties  with  the
scientific community.
      
MANUFACTURING

       The Company manufactures its immunoassay kits and serum protein products
in  two  locations  within the United States.  It maintains  manufacturing  and
administration  activities in its principal facility in Stillwater,  Minnesota,
which consists of 120,000 square feet.  Additionally, the Company is vertically
integrated  into the production of bulk antisera and maintains a USDA  licensed
animal  facility on 116 acres in Windham, Maine (the Serum Proteins segment  of
the  Company's  business).   Management believes that  it  will  have  adequate
capability  to meet its anticipated manufacturing needs in all current  product
lines for the foreseeable future.

       The  steps involved in manufacturing the Company's immunoassay and serum
protein  kits  include  the  following:  i) the  isolation  and  production  of
antigens; ii) the development and production of antibodies; iii) the design and
development  of the required reagent system; iv) the iodination or  conjugation
of  precursors; v) the manufacture and packaging of the components in  the  kit
format; and vi) ongoing quality control to meet all regulatory requirements.

      As a result of strategic alliances and acquisitions over the past several
years,  the  Company  has an extensive line of immunoassay  and  serum  protein
assays  which  are  manufactured  in  a cost  effective  manner  in  a  quality
environment.   The  Company's  products and  kits  consist  of  the  components
necessary  to  perform specific assays in consistent and reproducible  fashion.
Antisera are a critical component in the products which are manufactured  using
RIA,  ITA, EIA and IFA technologies and the Company insures the quality of this
raw material from its source in its Serum Protein segment of the business.   In
addition  to  these antiserums, the components of the immunoassay kits  include
specialized  chemical  reagents,  reference  standards  and  performance   data
required  to  properly  calibrate test results.  Raw materials  used  in  these
components  meet  design specifications.  The Company is not dependent  on  any
particular supplier for ongoing operations.  Some raw materials critical in the
production  of  the  Company's products have extensive lead times  for  supply.
Lack of supply of critical raw materials would have a materially adverse affect
on  the  Company.  For this reason the Company continually strives to  maintain
multiple sources for its most critical raw materials.


      The Company maintains quality controls for the assurance of accurate and
reliable test kits and to meet FDA good manufacturing standards. The Company
also complies with procedures mandated by the Nuclear Regulatory Commission
(NRC) for the use and disposal of radioactive materials.

COMPETITION

      Historically  the  Company  has developed  and  marketed  diagnostic  and
research  products  serving specialized markets not adequately  served  by  its
largest  competitors.  Included here are the fields of endocrinology, bone  and
mineral  metabolism and therapeutic drug monitoring.  However, as a  result  of
the  Company's acquisition of the Clinical Assay product lines from Baxter  and
relationship with Sorin, the Company now competes with a number of  the  larger
immunodiagnostic companies offering similar lines of RIA and EIA products.
      
      The  Company's  major  competition, outside the specialty  product  area,
includes Abbott Diagnostics, Diagnostic Products Corporation, Hybritech,  Ares-
Serono,  and  CIBA Corning Diagnostic Corporation.  The principle  elements  of
competition  for the Company are based upon providing quality,  consistent  and
reliable products and services.  Price is only a factor for those tests in  the
larger,  more  competitive  markets.   The  Company  intends  to  maintain  its
competitive  differentiation  in the market by  selecting  new  and  innovative
technology  approaches to both the routine and specialty market analytes.   The
Company  intends  to  develop and maintain quality customer relationships  with
health care professionals.
      
GOVERNMENT REGULATION

       Under the Medical Device Amendments of 1976, the Company is required  to
file  an  annual  registration statement with the FDA and  to  provide  updated
device  listings.   The  Company  is  also  required  to  submit  a  pre-market
notification  submission  to  the FDA for each  new  diagnostic  product.  This
submission  may  be  either a 510(k), a premarket approval  application,  or  a
product  license  application,  unless the product  is  being  distributed  for
research  or investigational use only. The FDA also imposes rules with  respect
to  good  manufacturing  practices  (GMP).   The  Company  believes  it  is  in
compliance  with  FDA  regulations.  The Company  also  complies  with  foreign
government  regulations,  specifically  for  Japan,  France,  Germany,  Canada,
England  and  other  countries  where  required.   These  requirements  include
adherence to GMP, device listings, premarket notifications, or product licenses
where  applicable.  Additionally, the Company is in the process  of  certifying
its  Quality  Assurance system to ISO 9000 standards and hopes to complete  the
registration process under this standard by the end of 1996.

       Because the Company uses radioactive isotopes in the manufacture of some
of   its  products,  it  is  required  to  maintain  licenses  authorizing  the
possession,  use and distribution of radioactive material.  The  licenses  were
renewed  in  1993  and  will expire by their terms in 1998.   To  maintain  the
licenses,  the  Company is required to keep certain records and to  demonstrate
continued compliance with NRC regulations and the conditions of its radioactive
licenses.   Although  not  expected,  loss  of  these  licenses  would  have  a
materially adverse affect on the Company.

       The  Company  believes it is in compliance with all federal,  state  and
local  regulations  regarding the discharge of material into  the  environment.
Additionally, the cost to maintain licenses and meet environmental  and  safety
requirements is not material to the Company's consolidated financial statements
and  the Company does not expect any material financial commitment in the near-
term.
      
      
FOREIGN AND DOMESTIC OPERATIONS AND INTERNATIONAL SALES

       Company information with respect to foreign and domestic operations  and
international  sales  is  set  forth in Note 12 to the  Company's  consolidated
financial statements contained elsewhere herein.
      
PATENTS

       The  Company  has  been  issued patents  covering  (i)  the  method  and
radioactive tracers used for the immunoassay of C-terminal parathyroid hormone,
(ii)  bioassay  for  parathyroid  hormone, and  (iii)  usage  of  iodinated  or
fluorescent forms of cyclosporin in immunoassay kits.  These patents expire  on
July 26, 1999; January 17, 2000; and April 1, 2002, respectively.

       The Company does not believe patent protection will be a material factor
in  its operations because of the Company's proprietary know-how regarding  the
production  and development of its product lines.  Certain other companies  may
have  been issued or applied for patents with respect to products or technology
manufactured by, or of interest to the Company.  Management is unable  at  this
time  to determine the impact, if any, which any such patents may have  on  the
Company.

LICENSES AND TRADEMARKS

       The Company holds certain licenses for technology, intellectual property
and  distribution rights.  The Company also holds certain registered trademarks
such  as  CYCLO-Trac registered trademark, N-tact registered trademark and 
PTH-MM registered trademark as well as several other non-registered trademarks. 
The terms of these licenses and trademarks vary.  The Company does not  believe 
that  any  of these licenses or trademarks is material to its business or 
operations.

EMPLOYEES

      As of December 31, 1995 the Company had 290 employees, including part-
time employees.

<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY

The executive officers of the Company are listed below:


John J. Booth                  President  and  Chief  Executive  Officer  since
                               September,  1994 and Senior Vice  President  and
                               Chief Financial Officer since May, 1992, age 41.
                               Mr.  Booth joined the Company in December,  1989
                               as  Vice President of Finance and Administration
                               and prior to that was Vice President, Controller
                               and  Secretary  of  CSI from  October,  1989  to
                               December, 1989.


Fabio Lunghi                   Executive  Vice  President and  Chief  Operating
                               Officer  of  the Company since September,  1994,
                               age 51.  Prior to joining the Company, from 1986
                               to  1994  Mr.  Lunghi  was  Vice  President  and
                               General   Manager   of  the  radiopharmaceutical
                               business unit at Sorin Biomedica, S.p.A.

Gerald L. Majewski, Ph.D.      Vice President of Research and Development since
                               October  1992,  age 46.  Prior  to  joining  the
                               Company, from 1983 to 1992 Dr. Majewski  held  a
                               variety      of     positions     at      Fisher
                               Scientific/Instrumentation   Laboratory,    most
                               recently    as   Director   of   Research    and
                               Development, Reagents Development from  1989  to
                               1992.

Thomas P. Maun                 Vice  President and Chief Financial  Officer  of
                               the  Company since September, 1994 and  Director
                               of  Finance  since January, 1990, age  42.   Mr.
                               Maun  joined  the Company in 1987  as  Corporate
                               Controller.
      
George E. Wellock              Vice  President of Manufacturing of the  Company
                               since March     1991, age 46.  From June 1988 to
                               March   1991,  Mr.  Wellock           was   Vice
                               President  of  Operations  of  Baxter  Dade   in
                               Cambridge,       Massachusetts, a subsidiary  of
                               Baxter International.  From June        1984  to
                               June  1988,  he served as Manufacturing  Manager
                               for       Travenol  Genentech  Diagnostics   and
                               Baxter Dade.
      
      At each annual meeting of the Board of Directors, the board elects
executive officers as necessary.  Such elected officers hold office until the
next annual meeting of the directors or until their successors are elected and
qualified.
      
<PAGE>      
ITEM 2.  PROPERTIES

        The  Company presently owns three adjacent concrete buildings  totaling
approximately  120,000  square feet located on a 14 acre  site  in  Stillwater,
Minnesota, which is part of the metropolitan area of Minneapolis-St. Paul.  One
building  houses  all  manufacturing operations.  A second  building  houses  a
research  laboratory.   The  third  building  houses  the  Company's  executive
offices.   The  Company believes this capacity to be adequate for  present  and
future  needs.   The  Company owns a farm operation of 116  acres  and  related
buildings in Windham, Maine, which houses laboratory animals.
      
ITEM 3. LEGAL PROCEEDINGS

      The Company is engaged in routine litigation incident to its business,
which management believes will not have an adverse effect upon its operations
or consolidated financial position.
                                       
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
                                       
                                    PART II
                                       
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS

       The  Company's  Common Stock is currently traded on the  American  Stock
Exchange (AMEX) under the symbol:  "ISR".  As of December 31, 1995, there  were
approximately  1,425  shareholders of record  holding  16,363,477  shares.  The
following table sets forth for the calendar quarters indicated the high and low
sales prices as reported by the AMEX.
<TABLE>
<CAPTION>

                                          High         Low
         <S>                          <C>          <C>
         1994                                           
             First Quarter            $ 3 15/16    $  2 3/4
             Second Quarter             3 5/16        2 3/8
             Third Quarter              2 3/4         1 3/4
             Fourth Quarter             2 3/8         1 11/16
         <S>                            <C>           <C>                       
         1995                                     
             First Quarter              2 3/4         1 1/2
             Second Quarter             3 3/4         2 1/2
             Third Quarter              5 5/16        2 7/8
             Fourth Quarter             5             3 3/4
</TABLE>
DIVIDENDS.   The Company did not pay cash dividends on its common stock  during
1994 or 1995.  It is not currently anticipated that cash dividends will be paid
in  the  future  on the Company's Common Stock. The Board of Directors  of  the
Company  will  review  its  dividend policy from  time  to  time.   Any  future
determination as to the payment of dividends on the Company's Common Stock will
depend  upon future earnings, results of operations, capital requirements,  the
financial condition of the Company and any other factors the Board of Directors
of the Company may consider relevant.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Summary Operations Statement               Year Ended
                                           December 31,
                                             
                       1995        1994        1993         1992         1991
<S>                 <C>         <C>         <C>         <C>         <C>        
Domestic sales      $24,494,000 $21,282,000 $23,321,000 $24,712,000 $18,601,000
International sales  21,266,000  21,221,000  19,967,000  21,272,000  19,585,000
Net sales            45,760,000  42,503,000  43,288,000  45,984,000  38,186,000
Cost of goods sold   23,271,000  22,039,000  23,007,000  22,052,000  16,450,000
Inventory valuation                                                          
  adjustment                ---     750,000a        ---         ---         ---
Gross profit         22,489,000  19,714,000  20,281,000  23,932,000  21,736,000
Operating expenses:                                                             
Selling,general and
 administrative      12,592,000  12,853,000  12,761,000  13,621,000  12,001,000
Research and 
 development          3,748,000   5,069,000   5,719,000   3,277,000   3,023,000
Unusual items               ---   5,750,000a    750,000a        ---         ---
Total operating
 expenses            16,340,000  23,672,000  19,230,000  16,898,000  15,024,000
Operating 
 income (loss)        6,149,000  (3,958,000)  1,051,000   7,034,000   6,712,000
Interest expense       (348,000)   (365,000)   (472,000)   (656,000) (1,551,000)
Investment and other                                                            
 income (expenses)       33,000      11,000     (42,000)     73,000     116,000
INCOME (LOSS) BEFORE                                                            
INCOME TAXES AND                                                               
EXTRAORDINARY ITEMS   5,834,000  (4,312,000)    537,000   6,451,000   5,277,000

Provision for
 income taxes         1,571,000     193,000     284,000   1,577,000   1,521,000

INCOME (LOSS) BEFORE                                                            
EXTRAORDINARY ITEMS   4,263,000  (4,505,000)    253,000   4,874,000   3,756,000
Extraordinary items         ---         ---         ---         ---     329,000
NET INCOME (LOSS)   $ 4,263,000 $(4,505,000)$   253,000 $ 4,874,000 $ 4,085,000
                                                                                
INCOME (LOSS) PER                                                        
SHARE BEFORE        
EXTRAORDINARY ITEMS $      0.26 $     (0.28)$      0.02 $      0.30 $      0.23
NET INCOME (LOSS)                                                              
 PER SHARE          $      0.26 $     (0.28)$      0.02 $      0.30 $      0.25
Weighted average                                                                
 shares and 
 equivalents         16,491,501  16,322,301  16,432,883  16,337,857  16,203,750

<CAPTION>                                                                
Balance Sheet Information                  December 31,

                      1995        1994        1993         1992        1991
<S>                 <C>         <C>         <C>         <C>         <C>       
Total assets        $38,761,000 $38,154,000 $43,426,000 $45,069,000 $43,985,000
Working capital      14,947,000  13,873,000  14,555,000  13,863,000  12,434,000
Long-term debt            3,000   4,143,000   6,501,000   8,167,000  12,295,000
Shareholders'equity  28,384,000  23,889,000  28,240,000  27,277,000  21,974,000
Book value per share       1.72        1.46        1.73        1.69        1.38
<FN>
Note 1.For information with respect to dividends, see Item 5 above.

a)   Relates to the write off of certain tangible and intangible costs,
severance and related costs and inventory write downs as discussed in Note 2 to
the consolidated financial statements contained elsewhere herein.
</FN>
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
      
RESULTS OF OPERATIONS
      Sales  in  1995 were $45,760,000, an 8 percent increase from  $42,503,000
in  1994.  Contributing to the increase were sales from the Company's hepatitis
assays, as discussed below, and many new products introduced during the last 16
months  in  the  Company's autoimmune disease, bone and mineral metabolism  and
infectious  disease  market segments.  These gains  were  partially  offset  by
declines in the Company's oncology and endocrinology market segments due to the
continued shift in the diagnostic industry from isotopic, manual testing to non-
isotopic, automated and semi-automated testing.  1994 sales declined 2  percent
from  $43,288,000  in  1993  due to these shifts  away  from  isotopic,  manual
testing.
      
      Domestic sales increased to $24,494,000, a 15 percent increase from  1994
sales of $21,282,000.  Sales increased in the autoimmune disease market segment
due  primarily  to sales of an ELISA-based panel of diagnostic assays  acquired
from TheraTest Laboratories, Inc. in May, 1994.  The manufacturing transfer  of
these  tests to the Company's Stillwater facility was completed in  the  second
quarter  of  1995.   The bone and mineral metabolism market  segment  has  been
favorably  impacted by sales of the Company's Vitamin D assays.   In  addition,
since June, 1995, the Company has experienced an increase in demand for one  of
its  hepatitis  assays due to a competitor's kit becoming  unavailable  to  the
market.   This  opportunity resulted in approximately  $2.9  million  in  sales
during  1995.   The  competitor  re-entered the marketplace  during  the  first
quarter of 1996.  While the Company believes that a portion of these sales  may
be  maintained, the impact on future sales is uncertain at this time.  Domestic
sales  have  continued to be negatively impacted by declines in  the  Company's
oncology  and  endocrinology market segments, as discussed above.   1994  sales
decreased from $23,321,000 in 1993 due primarily to these declines.
      
      1995 international sales of $21,266,000 remained flat with 1994 sales  of
$21,221,000.  Sales were favorably impacted in 1995 due to the introduction  of
a  second  generation Epstein Barr Virus diagnostic kit and a Thyroid  Receptor
Autoantibody  (TRAb) assay.  Sales were negatively impacted,  however,  in  the
serum  protein  segment  resulting  mainly from  declines  in  demand  for  the
Company's  bulk  antisera products.  1994 sales increased from  $19,967,000  in
1993  primarily  due to the introduction of new products in the Company's  bone
and mineral metabolism market segment.
      
      Gross  margins were 49 percent of sales in 1995 compared with 46  percent
of  sales  in 1994 and 47 percent in 1993. The decline in 1994 was attributable
to  the  $750,000 charge for excess inventories as discussed in Note 2  of  the
Company's   consolidated  financial  statements  contained  elsewhere   herein.
Exclusive of the inventory write down, gross margins were 48 percent  of  sales
in  1994. Gross margins have improved during the last two years due to improved
product  mix  as  well as efficiencies derived from operational  restructuring.
Pricing  pressures  associated with healthcare cost containment  measures,  and
shifts  away  from isotopic testing resulting in production volume declines  in
the Company's endocrinology market segment, continue to negatively impact gross
margins.  Despite these negative pressures, the Company expects to maintain  or
slightly improve its gross margins during 1996.
      
      The  Company's ratio of selling, general and administrative  expenses  to
sales  was 28 percent in 1995, 30 percent in 1994 and 29 percent in 1993. These
expenses,  as  a  percentage  of  sales,  are  expected  to  remain  relatively
consistent with 1995.
      
      Research and development expenses were $3,748,000 in 1995, compared  with
$5,069,000  in  1994  and  $5,719,000  in 1993.  The  continued  decreases  are
attributable to the discontinuance during 1994 of the Fluorescence Polarization
Immunoassay (FPIA) development project as discussed in Note 2 of the  Company's
consolidated  financial statements contained elsewhere  herein.   Exclusive  of
FPIA,  these expenses represent 8 percent, 9 percent and 7 percent of sales  in
1995,  1994  and  1993,  respectively.  Research and development  expenses  are
projected to increase slightly due to the Company's increased emphasis  on  new
development activities.
      
      Interest expense declined by 5 percent in 1995 to $348,000 compared  with
$365,000  in  1994  and  26 percent from $472,000 in 1993.   The  decrease  was
attributable to lower average debt levels.  1995 expense includes  interest  on
certain tax obligations.
      
      Income  tax  expense was 27 percent of income before taxes or $1,571,000,
compared with $193,000 in 1994 and $284,000 in 1993.  The tax expense  in  1994
related  primarily  to  book reserves and liabilities not  deductible  for  tax
purposes until paid.  These book reserves and liabilities created deferred  tax
assets  subject  to a valuation allowance.  The effective rate is  expected  to
decline slightly in 1996 as this valuation allowance is reduced.
      
      Net  income in 1995 was $4,263,000, or 26 cents per share, compared  with
a  net  loss  of $4,505,000, or 28 cents per share, in 1994 and net  income  of
$253,000,  or  2  cents per share, in 1993.   The 1994 loss results  from  $6.5
million  in  charges,  as  discussed in Note 2 to  the  Company's  consolidated
financial  statements contained elsewhere herein. 1993 net income was  impacted
by  a  $750,000  pre-tax  charge  in the first  quarter  relating  to  employee
severance and related costs.

LIQUIDITY AND CAPITAL RESOURCES
      INCSTAR's   free   cash  flow  (operating  cash  flow   less   investment
activities)  was  $5,190,000  in  1995, compared  to  $3,118,000  in  1994  and
$1,954,000  in  1993.  These funds were used to eliminate all outstanding  debt
obligations, which were in excess of $4.0 million at the beginning of the year.
The  Company's ratio of total debt to total capital was 16 percent in 1994  and
20 percent in 1993.
      
      Working   capital  increased  to  $14,947,000  at  year-end   1995   from
$13,873,000  at the end of 1994, resulting from higher accounts receivable  and
inventory balances associated with increased sales levels.
      
      Capital expenditures for 1995 were $1,557,000, compared with $923,000  in
1994 and $1,535,000 in 1993.  For 1996, capital expenditures are expected to be
approximately  $2.8  million,  primarily  for  manufacturing  improvements  and
laboratory equipment.
      
      The  Company's  primary sources of liquidity are a $1  million  revolving
bank  credit line secured by Company assets and a $4.5 million unsecured credit
line  with  Fiat  Finance USA, Inc. (Fiat).  At year-end, the  Company  had  no
outstanding borrowings under these credit lines.  The Company anticipates  that
the  generation of free cash flow and the resources available within  the  Fiat
Group  will  provide sufficient sources of liquidity for  planned  capital  and
research and development expenditures.
<PAGE>      
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The consolidated financial statements of the Company and financial
statement schedules are listed under Items 6,  14 (a) (1) and 14 (a) (2) of
this report and contained elsewhere herein.
      
      
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
       ON ACCOUNTING AND FINANCIAL DISCLOSURE
      
None.
      
      
      
      
      
      
            [The remainder of this page left blank intentionally.]
<PAGE>      
                                   PART III
                                       
                                       
                                       
                                       
      Part III, Items 10, 11, 12 and 13, except for certain information
relating to Executive Officers included in Part I, Item 1, is omitted inasmuch
as the Company intends to file with the Securities and Exchange Commission
within 120 days of the close of the fiscal year ended December 31, 1995, a
definitive proxy statement containing such information pursuant to Regulation
14A of the Securities Exchange Act of 1934 and such information shall be deemed
to be incorporated herein by reference from the date of filing such document.
      
      
      
      
      
      
      
      
            [The remainder of this page left blank intentionally.]
<PAGE>                                       
                                    PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

          (a)     List of documents filed as part of this report:

                  (1)     Consolidated Statements of Operations - Years Ended 
                           December 31, 1995, December 31, 1994, and 
                           December 31, 1993
                          Consolidated Balance Sheets - As of December 31,
                           1995 and 1994
                          Consolidated Statements of Cash Flows - Years Ended
                           December 31, 1995, December 31, 1994; and 
                           December 31, 1993
                          Consolidated Statements of Shareholders' Equity -
                           Years Ended December 31, 1995; December 31, 1994; and
                           December 31, 1993
                          Consolidated Quarterly Results (unaudited) for
                           the Years Ended December 31, 1995 and 1994
                          Notes to Consolidated Financial Statements
                          Independent Auditors' Report

                  (2)     Financial Statement Schedule:
                          Schedule II - Valuation and Qualifying Accounts

                  All other financial statement schedules not listed have been
                  omitted since the required information is included in the
                  consolidated financial statements or the notes thereto or is 
                  not applicable or required.

                  (3)     Exhibits:

                 Number          Description


                  3.1      Restated Articles of Incorporation of INCSTAR
                           Corporation,  as amended to date [incorporated by 
                           reference  to Exhibit 4.1 to the Registrant's 
                           Registration Statement on  Form S-8 
                           (File No. 33-84498)].

                  3.2      Bylaws of INCSTAR Corporation, as amended  to date   
                           [incorporated  by  reference  to  Exhibit  4.2  to 
                           the Registrant's Registration Statement on Form S-8 
                           (File  No.  33-84498)].

                  4.1      Specimen   Certificate   representing   the 
                           Registrant's   Common  Stock  [incorporated  by  
                           reference   to Exhibit 4.1 to the Registrant's 
                           Registration Statement on  Form S-3 
                           (File No. 33-37805)].

                  4.2      Note Purchase Agreement, dated December 27,
                           1991 between the Registrant and Fiat Finance, U.S.A. 
                           Inc. [incorporated by reference to Exhibit 4.2 to the
                           Registrant's Report on Form 10-K for the year ended 
                           December 31, 1991 (File No. 1-9800)]

                  4.3      Form of Warrant Certificate issued by the
                           Registrant in favor of Bioengineering International 
                           B.V. (now BioFin Holding International B.V.) 
                           [incorporated by reference to Exhibit 10.11 of the
                           Registrant's Registration Statement on Form S-4 
                           (File No. 33-30785)].

                  4.4      Form of Purchase Rights Agreement between
                           Bioengineering International B.V. (now BioFin Holding
                           International B.V.) and the Registrant [incorporated
                           by reference to Exhibit 10.12 of the Registrant's 
                           Registration Statement on Form S-4 
                           (File No. 33-30785)].

                 10.1+*    INCSTAR Corporation Stock Option Plan, as
                           amended to date, filed herewith.

                 10.2*     Economic Value Sharing Plan [incorporated by
                           reference to Exhibit 10.1 of the Registrant's Report 
                           on Form 10-K for the year ended December 31, 1994 
                           (File No. 1-9800)].

                 10.3*     Form of Executive Survivor Benefit Income
                           Continuation Agreement between the Registrant and 
                           certain of its employees [incorporated by reference 
                           to Exhibit 10.4 of the Registrant's Registration 
                           Statement on Form S-4 (File No. 33-30785)].

                 10.4*     Executive Survivor Benefit Income Continuation Plan 
                           covering certain executive officers of the Registrant
                           [incorporated by reference to Exhibit 10.4 of the 
                           Registrant's Report on Form 10-K for the year ended 
                           December 31, 1993 (File No. 1-9800)].

                 10.5*     Form of Employment Agreement between the Registrant 
                           and John J. Booth [incorporated by reference to
                           Exhibit 10.13 of the Registrant's Registration 
                           Statement on Form S-4 (File No. 33-30785)].

                 10.6*     Amendments to Employment Agreement between the
                           Registrant and John J. Booth [incorporated by 
                           reference to Exhibit 10.8 of the Registrant's Report 
                           on Form 10-K for the year ended December 31, 1993 
                           (File No. 1-9800)].

                 10.7*     Employment Continuation Agreement between the
                           Registrant and Orwin L. Carter [incorporated by 
                           reference to Exhibit 10.1 of the Registrant's report 
                           on Form 10-Q for the quarter ended September 30, 1994
                           (File No. 1-9800)].

                 10.8*     Separation Agreement between the Registrant and 
                           Jacques A. Bagdasarian [incorporated by reference to
                           Exhibit 10.1 of the Registrant's Report on Form 10-K 
                           for the year ended December 31, 1994 
                           (File No. 1-9800)].

                 10.9+     Form of Scientific Advisory Board agreement between 
                           the Registrant and Dr. Pierre M. Galetti and Dr.
                           Michael Steffes filed herewith.

                 10.10+    Consulting Agreement between the Registrant and Dr.
                           Michael Steffes filed herewith.

                 10.11     Form of Distributorship Agreement between the
                           Registrant and Sorin Biomedica S.p.A., without 
                           exhibits or schedules [incorporated by reference to 
                           Exhibit 10.15 of the Registrant's Registration 
                           Statement on Form S-4 (File No. 33-30785)].

                 10.12     Form of Distributorship Agreement between Sorin 
                           Biomedica S.p.A. and the Registrant [incorporated by
                           reference to Exhibit 10.16 of the Registrant's 
                           Registration Statement on Form S-4 
                           (File No. 33-30785)].

                 10.13     Distribution Agreement, dated October 30, 1986, 
                           between Clinical Sciences Inc. and Sorin Biomedica
                           S.p.A., as amended [incorporated by reference to 
                           Exhibit 10.17 of the Registrant's Registration 
                           Statement on Form S-4 (File No. 33-30785)].

                 10.14     Form of Technology Transfer Agreement between
                           the Registrant and Sorin Biomedica S.p.A. 
                           [incorporated by reference to Exhibit 10.18 of the 
                           Registrant's Registration Statement on Form S-4 
                           (File No. 33-30785)].

                 10.15     Distribution and Supply Agreement between Baxter 
                           International Inc. and the Registrant dated September
                           19, 1990 [incorporated by reference to Exhibit 10(b) 
                           of the Registrant's report on Form 10-Q for the 
                           quarter ended September 30, 1990 (File No. 1-9800)].

                 10.16     Product Distribution Agreement between Centocor, Inc.
                           and the Registrant dated December 2, 1991
                           [incorporated by reference to Exhibit 10.14 of the
                           Registrant's Report on Form 10-K for the year ended  
                           December 31, 1991 (File No. 1-9800)].

                 10.17.1   Letter agreements dated August 3, 1992 and February 
                           19, 1993 amending the product distribution agreement
                           filed as Exhibit 10.15 [incorporated by reference to 
                           Exhibit 10.14.1 of the Registrant's Report on Form 
                           10-K for the year ended December 31, 1993 
                           (File No. 1-9800)].

                 10.18     Revolving Credit, Security and Note Agreement, with 
                           exhibits thereto, dated as of December 27, 1993 
                           between Norwest Bank Minnesota, National Association 
                           and the Registrant [incorporated by reference to 
                           Exhibit 10.1 of the Registrant's Report on Form 10-K 
                           for the year ended December 31, 1994 
                           (File No. 1-9800)].

                 10.18.1   First Amendment dated January 3, 1995 to Revolving 
                           Credit, Security and Note Agreement filed as Exhibit
                           10.16 [incorporated by reference to Exhibit 10.1 of 
                           the Registrant's Report on Form 10-K for the year 
                           ended December 31, 1994 (File No. 1-9800)].

                 10.18.2   Second Amendment dated February 15, 1995 to Revolving
                           Credit, Security and Note Agreement filed as Exhibit
                           10.16 [incorporated by reference to Exhibit 10.1 of 
                           the Registrant's Report on Form 10-K for the year 
                           ended December 31, 1994 (File No. 1-9800)].

                 10.18.3+  Third Amendment dated January 29, 1996 to Revolving 
                           Credit, Security and Note Agreement filed as Exhibit
                           10.16.

                 10.19     Agreement for Purchase, Sale and Distribution of 
                           Assets between TheraTest Laboratories Inc. and the
                           Registrant dated May 16, 1994 [incorporated by 
                           reference to Exhibit 10.1 of the Registrant's Report 
                           on Form 10-K for the year ended December 31, 1994 
                           (File No. 1-9800)].

                 11+       Statement Re: Computation of Net Income (Loss)
                           Per Common Share.

                 21+       Subsidiaries of the Registrant.

                 23+       Independent Auditors' Consent

                 27+       Financial Data Schedules

                 * Executive Compensation Plans and Arrangements
                 + Filed with this Annual Report on Form 10-K

          (b) Reports on Form 8-K

          There were no reports on Form 8-K filed during the quarter ended
          December 31, 1995.
<PAGE>    
                                     SIGNATURES
                                          
      Pursuant  to  the requirements of Section 13 or 15(d) 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.
      
                                          INCSTAR CORPORATION

                                          
Dated:   March 28, 1996              By:  /s/John J. Booth
                                          John J. Booth
                                          President


      Pursuant to the requirements of the Securities and Exchange Act of  1934,
this  report  has been signed below by the following persons on behalf  of  the
Registrant and in the capacities indicated on March 21, 1996.


/s/Pierre M. Galetti                  Chairman of the Board,
Pierre M. Galletti, M.D., Ph.D.       Director
  
/s/John J. Booth                      President and Director
John J. Booth                         (Principal Executive Officer)

/s/Thomas P. Maun                     Vice President and Chief Financial Officer
Thomas P. Maun                       (Principal  Accounting  and   Financial 
                                      Officer)

/s/Ennio Denti                        Director
Ennio Denti

/s/Michael W. Steffes                 Director
Michael W. Steffes, M.D., Ph.D.

_________________                     Director
George H. Dixon                       

_________________                     Director
Umberto Rosa                                               

/s/Carlo Vanoli                       Director
Carlo Vanoli

/s/D. Ross Hamilton                   Director
D. Ross Hamilton

/s/Franco Fornasari                   Director
Franco Fornasari

/s/Ezio Garibaldi                     Director
Ezio Garibaldi
<PAGE>
                              INCSTAR CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                        Year Ended December 31,
                                 1995            1994            1993
<S>                          <C>            <C>             <C> 
Net sales                    $45,760,000    $  42,503,000   $  43,288,000
Cost of goods sold            23,271,000       22,039,000      23,007,000
Inventory valuation adjustment       ---          750,000             ---
  Gross profit                22,489,000       19,714,000      20,281,000

Operating expenses:                                         
Selling, general and         
 administrative               12,592,000       12,853,000      12,761,000
Research and development       3,748,000        5,069,000       5,719,000
Unusual items                        ---        5,750,000         750,000
  Total operating expenses    16,340,000       23,672,000      19,230,000
  Operating income (loss)      6,149,000       (3,958,000)      1,051,000

Interest expense                (348,000)        (365,000)       (472,000)
Investment and other             
 income (expense)                 33,000           11,000         (42,000)
INCOME (LOSS) BEFORE                                        
 INCOME TAXES                  5,834,000       (4,312,000)        537,000

Provision for income taxes     1,571,000          193,000         284,000
  NET INCOME (LOSS)          $ 4,263,000    $  (4,505,000)  $     253,000

INCOME (LOSS) PER SHARE:                                    
Net income (loss) per share  $      0.26    $       (0.28)  $        0.02
Weighted average shares                                     
and equivalents               16,491,501       16,322,301      16,432,883
</TABLE>
                                                            
                                                            
   The accompanying notes are an integral part of the consolidated financial
                                  statements.

<PAGE>
                              INCSTAR CORPORATION
                          CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                       
                                               December 31,       December 31,
                                                    1995               1994
<S>                                       <C>                 <C>
ASSETS                                                        
CURRENT ASSETS:                                               
Cash and cash equivalents                 $        460,000    $      153,000
Restricted cash                                    251,000           251,000
Accounts receivable, net of allowance for                     
 doubtful  accounts of $107,000 and            
 $113,000, respectively                          7,575,000         6,759,000
Other receivables                                   24,000           119,000
Inventories                                     13,445,000        12,368,000
Other current assets                               294,000           562,000
       TOTAL CURRENT ASSETS                     22,049,000        20,212,000
                                                              
PROPERTY AND EQUIPMENT:                                       
Land and land improvements                       1,573,000         1,573,000
Buildings and improvements                      13,252,000        13,103,000
Equipment and furniture                         18,170,000        16,924,000
Construction in progress                             6,000           114,000
                                                33,001,000        31,714,000
Less allowance for depreciation and           
 amortization                                  (18,387,000)      (16,482,000)
                                                14,614,000        15,232,000
INTANGIBLE ASSETS                                1,105,000         1,744,000
OTHER ASSETS                                       993,000           966,000
                                          $     38,761,000    $   38,154,000
LIABILITIES AND SHAREHOLDERS' EQUITY                          
CURRENT LIABILITIES:                                          
Current portion of long-term debt         $         76,000    $      278,000
Accounts payable and cash overdraft              1,914,000         2,262,000
Accrued compensation                             1,972,000         1,418,000
Accrued expenses                                 2,928,000         2,286,000
Income taxes payable                               212,000            95,000
       TOTAL CURRENT LIABILITIES                 7,102,000         6,339,000
LONG-TERM DEBT                                       3,000         4,143,000
OTHER NON-CURRENT LIABILITIES                    3,272,000         3,783,000
                                                              
SHAREHOLDERS' EQUITY:                                         
Undesignated stock, authorized 5,000,000 shares     - - -             - - -
Common stock, par value $.01, authorized                      
 25,000,000 shares; issued and outstanding                     
 16,363,477 and 16,322,521 shares, respectively    164,000           163,000
Additional paid-in capital                      17,940,000        17,676,000
Foreign currency translation adjustment           (151,000)         (118,000)
Retained earnings                               10,431,000         6,168,000
       TOTAL SHAREHOLDERS' EQUITY               28,384,000        23,889,000
                                          $     38,761,000    $   38,154,000
</TABLE>
                                       
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
<PAGE>                             
                             INCSTAR CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                   
                                               Year Ended December 31,
                                         1995           1994           1993
<S>                                   <C>           <C>             <C>
OPERATING ACTIVITIES:                                               
Net income (loss)                     $4,263,000    $(4,505,000)    $   253,000
Adjustments to reconcile net income                                 
 (loss) to net cash provided by
 operating activities:
Provision for deferred taxes                  --             --         (79,000)
Cumulative effect of accounting            
 change                                       --             --          16,000
Provision (payments) for unusual
 items and inventory valuation
 adjustment                           (1,060,000)     5,371,000              --
Provision for retirement plans           272,000        529,000         489,000
Depreciation and amortization          2,910,000      3,395,000       3,280,000
Changes in operating assets and                                     
 liabilities:
Accounts receivable                     (816,000)        39,000         297,000
Other receivables                         95,000        (29,000)         82,000
Inventories                           (1,077,000)       194,000         414,000
Other current assets                     212,000        (21,000)         75,000
Accounts payable                         254,000       (229,000)        156,000
Accrued compensation                     554,000       (108,000)         51,000
Accrued expenses                         975,000         90,000        (380,000)
Income taxes payable                     320,000        (56,000)        (27,000)
Other, net                               (33,000)        35,000         (11,000)
   Net cash provided by operating     
    activities                         6,869,000      4,705,000       4,616,000
                                                                    
INVESTING ACTIVITIES:                                               
Proceeds from sale of property and        
 equipment                                    --             --         610,000
Additions to property and equipment,  
 net                                  (1,557,000)      (923,000)     (1,535,000)
Payments for product distribution         
 rights                                       --       (599,000)     (1,350,000)
Payments for intellectual property   
 and purchased technology                (86,000)            --        (508,000)
(Increase) decrease in other assets      (36,000)       (65,000)        121,000
Net cash used in investing activities (1,679,000)    (1,587,000)     (2,662,000)
                                                                    
FINANCING ACTIVITIES:                                               
Net repayments under lines of credit          --       (422,000)       (563,000)
Net increase (decrease) in cash        
 overdraft                              (602,000)      (512,000)        275,000
Increase in restricted cash                   --        (11,000)        (10,000)
Payments on long-term debt            (4,342,000)    (2,364,000)     (2,059,000)
Payments on officer loans                     --             --          35,000
Issuance of common stock                      --             --         296,000
Issuance of common stock to employees     61,000        119,000         219,000
Net cash used in financing activities (4,883,000)    (3,190,000)     (1,807,000)
Effects of exchange rate changes on          
 foreign currency cash balances               --             --           1,000
   NET INCREASE (DECREASE) IN CASH
    AND CASH EQUIVALENTS                 307,000        (72,000)        148,000
Cash and cash equivalents at            
 beginning of year                       153,000        225,000          77,000
Cash and cash equivalents at end of  
 year                                 $  460,000    $   153,000     $   225,000 
</TABLE>
                                                                    
                                       
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
<PAGE>
                              INCSTAR CORPORATION
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                          Foreign
                          Common Stock       Additional  Currency
                      Number of               Paid-In   Translation   Retained
                       Shares      Amount     Capital    Adjustment   Earnings
<S>                  <C>         <C>        <C>         <C>         <C>     
Balance at December  16,156,615  $ 162,000  $16,832,000 $ (137,000) $10,420,000
 31, 1992
Common stock issued                                                             
 under employee stock                                                          
 purchase plan and   
 and upon exercise of
 stock options           46,847         --      219,000         --           --
Officer loans related                                                          
 to options exercised        --         --       35,000         --           --
Issuance of shares      
 to BFHI                 77,595      1,000      295,000         --           --
Compensation expense on                  
 executive stock options     --         --      176,000         --           --
Translation adjustments      --         --           --    (16,000)          --
Net income                   --         --           --         --      253,000
Balance at December 
 31, 1993            16,281,057  $ 163,000  $17,557,000 $ (153,000) $10,673,000
Common stock issued                                                             
 under employee stock                                                           
 purchase plan and 
 upon exercise of
 stock options           41,464         --      119,000         --           --
Translation adjustments      --         --           --     35,000           --
Net loss                     --         --           --         --   (4,505,000)
Balance at December
 31, 1994            16,322,521  $ 163,000  $17,676,000 $ (118,000) $ 6,168,000
Common stock issued                                                             
 under employee stock                                                          
 purchase plan and
 upon exercise of
 stock options           40,956      1,000       61,000         --           --
Translation adjustments      --         --           --    (33,000)          --
Compensation expense on     
 executive stock options     --         --      203,000         --           --
Net income                   --         --           --         --    4,263,000
Balance at December
 31, 1995            16,363,477  $ 164,000  $17,940,000 $ (151,000) $10,431,000
</TABLE>
                                                                    
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
<PAGE>
                              INCSTAR CORPORATION
<TABLE>
QUARTERLY RESULTS (UNAUDITED):
(in thousands, except per share data)
<CAPTION>
Net Sales                                 Gross Profit

                  Year Ended                                 Year Ended
                 December 31,                                December 31,
Quarter        1995        1994           Quarter         1995         1994
<S>        <C>         <C>                <S>         <C>          <C>        
First      $  11,117   $   10,657         First       $    5,130   $    5,036
Second        11,041       11,188         Second           5,319        5,434
Third         11,664       10,451         Third            5,873        5,131
Fourth        11,938       10,207         Fourth           6,167        4,113



<CAPTION>                                          
Net Income (Loss)                         Net Income (Loss) Per Share

                  Year Ended                                 Year Ended
                 December 31,                               December 31,
Quarter        1995        1994           Quarter         1995         1994
<S>        <C>        <C>                 <S>        <C>         <C>        
First      $     799  $      104          First      $      0.05 $     0.01
Second           827      (2,443)         Second            0.05      (0.15)
Third          1,092         487          Third             0.07       0.03
Fourth         1,545      (2,653)         Fourth            0.09      (0.16)
</TABLE>

<PAGE>
                              INCSTAR CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       
NOTE 1_SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS
      INCSTAR  Corporation  (the  "Company")  is  a  medical  immunodiagnostics
company  focused  on  the  development, production and worldwide  marketing  of
reagents,  particularly for bone/mineral metabolism, endocrinology,  infectious
and  autoimmune diseases.  The Company predominantly markets these products  in
North America, Europe and Asia.

PRICIPLES OF CONSOLIDATION
      The  accompanying consolidated financial statements include the  accounts
of INCSTAR Corporation  and its wholly-owned subsidiaries, Atlantic Antibodies,
Inc.,  INCSTAR  Ltd. and Immuno Nuclear Export Ltd. All material  inter-company
accounts  and  transactions  have been eliminated  in  consolidation.   Certain
amounts  for  periods  prior  to the year ended December  31,  1995  have  been
reclassified to conform with the current classifications.
      
CASH EQUIVALENTS
       Cash  equivalents consist primarily of investments in mutual funds  with
current maturities.

       The  Company's  cash  management system is  designed  to  maintain  zero
balances  at  certain banks in order to minimize interest expense  by  reducing
outstanding debt.  Accounting records classify checks written but not presented
to  these banks as cash overdraft in the balance sheet heading Accounts payable
and cash overdraft.

RESTRICTED CASH
        Through December 31, 1995 the Company maintained a self insured workers
compensation  insurance  plan.   Pursuant to the  plan,  the  Company  holds  a
certificate of deposit with current maturity as a compensating balance  with  a
bank.  These funds are restricted to assure future credit availability for  the
potential self insured aggregate limits under the plan.  The funds are required
to be on deposit with a bank under Minnesota state regulations and are expected
to  be  released  in the second quarter of 1996.  As of January  1,  1996,  the
Company is no longer self insured.

INVENTORIES
       Inventories  are valued at the lower of average cost, which approximates
the first-in, first-out (FIFO) method, or market.

PROPERTY AND EQUIPMENT
        Property  and equipment, including equipment under capital  leases,  is
reported  at  cost less accumulated depreciation and amortization.  Maintenance
and   repairs  are  charged  to  expense  as  incurred.  The  Company  computes
depreciation and amortization using the straight-line method based on estimated
useful  lives of three to seven years for equipment and furniture and seven  to
thirty years for buildings and improvements.

INTANGIBLE ASSETS
      Intangible assets includes patents, trademarks, intellectual property and
purchased  technology, goodwill and product distribution  rights.  Patents  and
trademarks  are  amortized  using the straight-line  method  over  a  five-year
period. Goodwill, which represents the cost in excess of the fair value of  net
assets  acquired, is amortized using the straight-line method over  a  ten-year
period.  Intellectual property and purchased technology is amortized using  the
straight  line  method over the properties estimated useful lives  which  range
from  seven to ten years.  Product distribution rights are amortized using  the
straight  line  method over the life of the agreement or the estimated  product
life, whichever is shorter.

RESEARCH AND DEVELOPMENT
     Research and development costs are expensed when incurred.

INCOME TAXES
      The  Company  accounts for income taxes in accordance with  Statement  of
Financial  Accounting Standard (SFAS) No. 109.  Under the asset  and  liability
method of SFAS No. 109, deferred tax assets and liabilities are recognized  for
the  future tax consequences attributable to differences between the  financial
statement  carrying  amounts  of  existing assets  and  liabilities  and  their
respective  tax bases.  Deferred tax assets and liabilities are measured  using
enacted  tax  rates expected to apply to taxable income in the years  in  which
those  temporary  differences are expected to be recovered or  settled.   Under
SFAS No. 109, the effect on deferred tax assets and liabilities of a change  in
tax  rates  is  recognized in income in the period that includes the  enactment
date.

INCOME (LOSS) PER SHARE
     Income (loss) per share is computed by dividing net income (loss) by  the
weighted average number of shares of common stock and common stock equivalents,
consisting  of stock options and warrants, outstanding during the period.   For
all  periods presented, fully diluted and primary income or loss per share  are
the  same.   For 1994, the effects of stock options and warrants were  excluded
from  the  computation  of  weighted average shares outstanding  because  their
effects were antidilutive.
     
FOREIGN CURRENCY TRANSLATION
      Assets  and liabilities of foreign operations are translated at rates  of
exchange  in  effect  at  period  end.  Statement  of  operations  amounts  are
translated  at  the average rate of exchange for the period. Gains  and  losses
resulting  from  translation  are  accumulated  in  a  separate  component   of
shareholders' equity. Foreign currency transaction gains and losses, which  are
not material, are included in the consolidated statements of operations.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
      The  preparation  of  financial statements in conformity  with  generally
accepted  accounting  principles  requires management  to  make  estimates  and
assumptions  that  affect the reported amounts of assets  and  liabilities  and
disclosure  of  contingent assets and liabilities at the date of the  financial
statements  and  the  reported  amounts of revenues  and  expenses  during  the
reporting period.  Actual results could differ from those estimates.

RECENTLY ISSUED ACCOUNTING STANDARDS
      The  Financial Accounting Standards Board issued SFAS No. 121 "Accounting
for  the  Impairment  of  Long-Lived Assets and for  Long-Lived  Assets  to  be
Disposed  Of"  in  March,  1995.  This statement  will  be  effective  for  the
Company's  year ended December 31, 1996.  Management believes that adoption  of
this pronouncement will not have a significant impact on the financial position
or results of operations of the Company.

      In addition, the Financial Accounting Standards Board issued SFAS No. 123
"Accounting  for Awards for Stock-Based Compensation to Employees" in  October,
1995.   This statement will be effective for the Company's year ended  December
31,  1996.  Management intends to adopt the disclosure provisions of  SFAS  No.
123 during 1996.

NOTE 2_ UNUSUAL ITEMS AND INVENTORY VALUATION ADJUSTMENTS

     In  December, 1994 the Company recorded a $750,000 charge related  to  the
write down of excess inventories and a $2,450,000 unusual charge related to the
termination of certain distribution and supply agreements ($540,000) as well as
severance  and  other costs related to senior management changes  ($1,910,000).
Amounts  remaining to be paid at December 31, 1995 pursuant to this charge  are
$498,000  included  in  Accrued expenses and $102,000 included  in  Other  non-
current  liabilities,  exclusive  of amounts  included  in  Note  9,  Executive
Retirement Plans.  The non-current portion will be paid in 1997.

     In May, 1994 the Company discontinued the development of certain purchased
technology  acquired  in  1992  from Robert  Dowben  Associates,  a  diagnostic
research  company, and incurred a one-time pre-tax charge of  $3,300,000.   The
majority  of  this charge related to the write off of tangible  and  intangible
assets ($1,560,000), costs incurred to terminate contracts with outside vendors
and  consultants  ($797,000),  as  well as  severance  and  related  costs  for
terminated employees ($943,000).  Amounts remaining to be paid at December  31,
1995  pursuant  to  this  charge, exclusive of  amounts  included  in  Note  9,
Executive Retirement Plans, are $49,000, and are included in Accrued expenses.

     In  March,  1993  the  Company reduced its workforce by  approximately  40
positions,  or  10% of its employee base.  This resulted in a $750,000  pre-tax
charge  to  earnings  for severance and related costs.   None  of  this  amount
remains  to  be  paid  on December 31, 1995.  This reduction  was  accomplished
through lay-offs and elimination of open positions.

NOTE 3 - INVENTORIES
<TABLE>
      Inventories consist of the following:
<CAPTION>
                                               December 31,       December 31,
                                                   1995               1994
<S>                                        <C>                  <C>
Raw materials                              $     2,281,000      $   2,242,000
Work in progress                                 9,421,000          8,521,000
Finished goods                                   1,743,000          1,605,000
                                           $    13,445,000      $  12,368,000
</TABLE>

NOTE 4 - INTANGIBLE ASSETS
<TABLE>
  Intangible assets consist of the following:
<CAPTION>
                                                December 31,      December 31,
                                                    1995              1994
<S>                                           <C>               <C>
Patents                                       $     717,000     $     717,000
Trademarks                                           17,000            17,000
Goodwill                                            619,000           619,000
Intellectual property and purchased                 734,000           648,000
technology
Product distribution rights                       2,700,000         2,700,000
                                                  4,787,000         4,701,000
Less accumulated amortization                    (3,682,000)       (2,957,000)
                                              $   1,105,000     $   1,744,000
</TABLE>

NOTE 5_LONG-TERM DEBT,  LEASE AND ROYALTY COMMITMENTS
<TABLE>
      Long-term debt consists of the following:
<CAPTION>
                                                December 31,     December 31,
                                                    1995             1994
<S>                                           <C>               <C>           
Long-term note from affiliate due December                     
 1996, interest at LIBOR plus 125 basis       $         ---     $   4,020,000
 points
Capitalized lease obligations, 8.0%,                           
 due through 1996                                    72,000           390,000
Other                                                 7,000            11,000
                                                     79,000         4,421,000
      Less current portion                          (76,000)         (278,000)
      Total long-term debt                    $       3,000     $   4,143,000
</TABLE>
                                                               

      The Company has a revolving line of credit from a bank which provides for
maximum  borrowings of $1,000,000 through January 31, 1996 and  is  secured  by
accounts  receivable. This credit line has been renegotiated for  another  one-
year  term  at  the prime interest rate or LIBOR plus 2.50%. In  addition,  the
Company  has  a  $4,500,000 revolving line of credit with Fiat Finance  U.S.A.,
Inc.  which expires on April 29, 1996.  It is anticipated that this credit line
will continue to be renewed at one year terms.

       At  December 31, 1995 and 1994, property and equipment includes  capital
lease  costs of $842,000 and accumulated amortization of $773,000 and $615,000,
respectively.  Lease amortization included in depreciation was $158,000 for the
year ended December 31, 1995 and $264,000 for the year ended December 31, 1994.

       Aggregate  annual maturities of long-term debt are $76,000 in  1996  and
$3,000  in 1997.  These amounts include payments on capitalized leases, net  of
$2,000 representing future interest payments.

        The  Company  leases  certain  manufacturing  and  other  equipment  in
connection  with  its  normal operations.  Rent expense under  these  operating
leases  was $295,000 for the year ended December 31, 1995 and $238,000 for  the
year  ended  December  31,  1994.   Future  minimum  lease  payments  for   all
noncancelable operating leases having a remaining term in excess  of  one  year
are as follows:  1996_$226,000; 1997_$145,000; 1998_$21,000.

       The  Company  is  obligated  to  make  royalty  payments  under  several
distribution  and licensing agreements.  The majority of these agreements  call
for  payments  based on  a percentage of sales and contain no  minimum  royalty
clause.   Royalty  expense  under  these agreements  was  $1,715,000  in  1995,
$1,099,000 in 1994 and $1,564,000 in 1993.

NOTE 6 -  RELATED PARTY TRANSACTIONS
<TABLE>
      As  part  of  the ongoing operations of the Company, various transactions
were  entered  into  during  1995, 1994 and 1993  with  its  affiliates,  Sorin
Biomedica S.p.A. and its subsidiaries (Sorin), an affiliate of the Fiat  group,
and  Fiat Finance U.S.A., Inc.  The following tables summarize transactions and
related year end balances:
<CAPTION>
Operating                       Sorin                 Fiat Finance U.S.A., Inc.
Statement Data:         Year Ended December 31,        Year Ended December 31,
                     1995        1994        1993      1995     1994      1993
<S>              <C>         <C>         <C>        <C>       <C>       <C>    
Product sales    $7,625,000  $6,903,000  $6,842,000 $    ---  $    ---  $    ---
Product purchases 1,807,000   1,248,000   1,240,000      ---       ---       ---
Royalty expense     582,000     176,000     211,000      ---       ---       ---
Interest expense        ---         ---         ---  170,000   312,000   389,000

<CAPTION>
Balance Sheet Data:                                  
                               December 31,                   December 31,
                            1995         1994             1995          1994
<S>                     <C>          <C>             <C>          <C>       
Assets                                                            
Trade receivables       $1,965,000   $  1,743,000    $        ---  $         ---
Other receivables            6,000          5,000             ---            ---
                                                                                
                                                                                
Liabilities                                                                     
                                                                                
Accounts payable        $  675,000   $    389,000    $        ---  $         ---
Accrued royalty            480,000         47,000             ---            ---
Accrued interest               ---            ---           4,000          3,500
Long-term debt                 ---            ---             ---      4,020,000
</TABLE>
                                                                                
NOTE 7_INCOME TAXES
<TABLE>
      The provision for income taxes is summarized as follows:
<CAPTION>
Year Ended December 31,      Federal      State      Foreign       Total
<S>                        <C>         <C>         <C>         <C>
1995                                                                       
Current                    $1,505,000  $   89,000  $  (23,000)  $  1,571,000
Deferred                        - - -       - - -       - - -          - - -
Provision for Income Taxes $1,505,000  $   89,000  $  (23,000)  $  1,571,000
                                                                           
1994                                                                       
Current                    $  123,000  $   34,000  $   36,000  $     193,000
Deferred                        - - -       - - -       - - -          - - -
Provision for Income Taxes $  123,000  $   34,000  $   36,000  $     193,000
                                                                           
1993                                                                       
Current                    $  428,000  $  (58,000) $   (7,000)  $    363,000
Deferred                      (79,000)      - - -       - - -        (79,000)
Provision for Income Taxes $  349,000  $  (58,000) $   (7,000)  $    284,000
</TABLE>

<TABLE>
       The  provision for income taxes differs from the statutory  federal  tax
rate of 34% applied to income (loss) before income taxes as follows:
<CAPTION>
                                            Year Ended December 31,
                                         1995          1994         1993
<S>                                    <C>         <C>           <C>         
Federal tax calculated at the          
 statutory rate                        $1,984,000  $(1,466,000)  $  183,000
Tax credits                                 - - -        - - -     (120,000)
Change  in  the valuation allowance     
 for deferred taxes                      (532,000)   1,872,000      528,000
Amortization and depreciation of                                           
 intangible and fixed assets acquired      34,000       34,000       34,000
Exempt income attributable to           
 foreign sales                           (333,000)    (288,000)    (269,000)
Tax differential of foreign               
 subsidiary income                          6,000       13,000        6,000 
State taxes, net of federal benefit        59,000       22,000       52,000
State refunds, net of federal tax benefit   - - -        - - -      (90,000)
Compensation expense on executive        
 stock options                            203,000        - - -       47,000  
Other, net                                150,000        6,000      (87,000)
Provision for income taxes             $1,571,000  $   193,000   $  284,000
</TABLE>

<TABLE>
      The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities at December 31, 1995 and
1994 are as follows:
<CAPTION>
                                             December 31,     December 31,
                                                 1995             1994
<S>                                         <C>             <C>
Deferred tax assets:
Accounts receivable, principally due                                    
 to allowance for doubtful accounts         $     29,000    $     32,000
Accrued vacation pay                              27,000          33,000
Inventories, reserves and additional                                    
 costs inventoried for tax purposes              728,000         798,000
Patents, due to different book and tax lives      27,000          30,000
Retirement plans                               1,066,000         984,000
Tax credits                                      492,000         527,000
Net operating loss carryforward                      ---          72,000
Severance and related costs not                  
 currently deductible                            189,000         650,000
Other                                             26,000          75,000
Gross deferred tax assets                      2,584,000       3,201,000
Valuation allowance                           (2,553,000)     (3,084,000)
      Net deferred tax asset                $     31,000    $    117,000
                                                                        
Deferred tax liabilities:                                               
Plant and equipment, principally due                                    
 to differences in depreciation and          
 capitalized interest                       $     41,000    $    127,000
Other                                              5,000           5,000
       Deferred tax liability               $     46,000    $    132,000
                                                                        
Total net deferred tax liability            $   ( 15,000)   $   ( 15,000)
</TABLE>
At  December 31, 1995, the Company has research and development tax credits  of
$492,000, expiring in years through 2005.

NOTE 8_EMPLOYEE SAVINGS RETIREMENT AND VALUE SHARING PLAN

     The  Company  adopted a Salary Savings Plan under Section  401(k)  of  the
Internal  Revenue Code, effective November 1, 1985. Participants  make  pre-tax
contributions of up to 15% of their wages subject to an annual limit of $9,500.
The  Company is required to match 50% of that portion of the participant's pre-
tax  contribution  which does not exceed 6% of the participant's  compensation.
The Company contributed $262,000 for the year ended December 31, 1995, $273,000
for  the year ended December 31, 1994, and $230,000 for the year ended December
31, 1993.
     
     In  1994 the Company changed its profit sharing plan to a non-contributory
value  sharing plan.  Cash payments to all eligible employees are based on  the
improvement  in  economic value as well as a targeted  performance  factor  for
economic value added (EVA).  The Company incurred $984,000 and $0 expense under
this plan for the years ended December 31, 1995 and 1994, respectively.
     
       Prior to the adoption of an EVA value sharing plan the Company sponsored
a  non-contributory profit sharing plan covering all eligible  employees.  Cash
payments to participants were based on a sliding scale of pre-tax income. There
was no expense under this plan for the year ended December 31, 1993.

NOTE 9_EXECUTIVE RETIREMENT PLANS

      The Company has individual retirement agreements with certain current and
prior  executive officers which are intended to provide continued  compensation
to  such individuals or their respective beneficiaries upon the later of  their
retirement  from the Company after attainment of sixty years of age (fifty-five
years  of  age  for one plan participant) or attainment of sixty years  of  age
(fifty-five  years  of age for one plan participant) following  termination  of
employment,  or  upon  death  during the term of  employment  (the  "triggering
events").   Subject to vesting requirements, the retirement agreements  provide
for  the  payment  to these individuals or their respective  beneficiaries,  of
annual  benefits  for a period of fifteen years following the occurrence  of  a
triggering  event.   The  amount of annual benefits  is  adjusted  annually  to
reflect changes in the cost of living.  The annual benefit amounts vest at  the
rate of 10% per year.

      The  Company  maintains  an executive income continuation  plan  for  the
benefit of executive officers not covered under the agreements discussed above.
The  plan  provides  payments  for fifteen years  to  such  officers  or  their
respective  beneficiaries upon the later of an officer's  retirement  from  the
Company after attainment of sixty years of age or attainment of sixty years  of
age  following  termination of employment, or upon death  during  the  term  of
employment.  The annual retirement payment is the product of an annual  benefit
rate  set by the Board of Directors ($3,333 for 1995) multiplied by the  number
of  years  of employment, up to a maximum of fifteen years, and as adjusted  to
reflect  the  cost of living changes during the payment period.   An  officer's
rights under the plan are fully vested after ten years of employment.

      In  connection with both of the above plans, included in other noncurrent
liabilities  at  December  31,  1995 and 1994  is  $3,136,000  and  $2,895,000,
respectively,  representing the present value of the future  liability.   Also,
included  in Accrued expenses at December 31, 1995 is $31,000 representing  the
current portion of this liability.  The Company intends to fund this obligation
through  life  insurance contracts on the individual executives.   Included  in
Other  assets  at  December  31,  1995  and  1994  is  $934,000  and  $905,000,
respectively, of cash surrender value in connection with these policies.


NOTE 10_EMPLOYEE STOCK PURCHASE AND OPTION PLAN

       The Company's Employee Stock Purchase Plan enables eligible employees to
purchase  the  Company's Common Stock at the lower of 85% of  the  fair  market
value  on  the  first or the last day of each plan year. The number  of  shares
reserved for sale under this plan is 300,000, of which 250,127 shares have been
sold.

       Under  the  Company's Stock Option Plan, as amended, stock  options  are
awarded  to  key employees, consultants and directors at a price equal  to  the
fair  market  value at the date of grant.  All options have five  or  ten  year
terms and become exercisable in varying amounts after the grant date.
<TABLE>
      A summary of activity under the Company's various options plans follows:
<CAPTION>
                                   Shares        Options Outstanding
                                  reserved                    Option
                                  for grant      Shares        price
<S>                               <C>           <C>        <C>
Balance December 31, 1992           109,968      582,875   $  1.44/8.50
 Exercised                              ---      (13,500)     2.50/3.63
 Canceled                            49,200      (49,200)     3.63/8.25
 Granted                           (322,000)     322,000     3.375/5.63
 Additional shares reserved
  -1989 plan as amended             500,000          ---            ---

Balance December 31, 1993           337,168      842,175   $  1.44/8.50
 Exercised                              ---       (1,500)     1.44/2.50
 Canceled                           136,000     (136,000)     2.50/8.50
 Granted                           (119,000)     119,000      2.50/3.00

Balance December 31, 1994           354,168      823,675   $  2.50/8.50
 Exercised outside the plan                       (1,000)          1.44
 Canceled                           206,000     (206,000)     2.50/8.25
 Canceled outside the plan                       (14,035)     1.44/2.50
 Granted                           (103,000)     103,000*    2.375/4.75

Balance December 31, 1995           457,168      705,640   $ 2.375/8.25
</TABLE>

      As  of  December 31, 1995 options for 464,923 shares were exercisable  at
prices  ranging from $1.44 to $8.25 per share. *Includes 12,000 options  issued
subject to approval at the Company's annual shareholder meeting to be held  May
21, 1996.

NOTE 11_SUPPLEMENTARY CASH FLOW INFORMATION
<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                                               1995         1994        1993
<S>                                       <C>           <C>         <C>
Supplemental disclosures of cash flow                               
information:
Cash paid during the year for:                                      
    Interest                              $    192,000  $  369,000  $  474,000
    Income taxes, net                        1,151,000     242,000     390,000
Schedule of non-cash investing and                                  
financing activities:
Capital lease obligations incurred under                            
    new equipment leases                           ---         ---     510,000
</TABLE>
                                                                   
NOTE 12_GEOGRAPHIC SEGMENT DATA
<TABLE>
      Comparative geographical data for the Company's operations is  summarized
as follows:
<CAPTION>
                                        1995          1994           1993
<S>                                 <C>            <C>           <C>
SALES                                                            
United States                       $  24,494,000  $ 21,282,000  $  23,321,000
Europe                                 13,110,000    12,478,000     12,562,000
Asia                                    4,798,000     5,290,000      3,949,000
Other Foreign                           3,358,000     3,453,000      3,456,000
 Total                              $  45,760,000  $ 42,503,000  $  43,288,000
                                                                 
OPERATING INCOME                                                 
United States                       $   3,515,000  $    877,000  $     638,000
Europe                                    938,000       639,000        388,000
Asia                                      971,000       290,000         76,000
Other Foreign                             725,000       736,000        699,000
                                       6 ,149,000     2,542,000      1,801,000
Unusual items                                 ---    (5,750,000)      (750,000)
Inventory valuation adjustment                ---      (750,000)            ---
Other expenses, net                      (315,000)     (354,000)      (514,000)
 Income (loss) before income taxes  $   5,834,000  $ (4,312,000) $     537,000
                                                                              
TOTAL ASSETS                                                     
United States                       $  38,059,000  $ 37,272,000  $  42,615,000
Europe                                    702,000       882,000        811,000
Asia                                          ---           ---            ---
Other Foreign                                 ---           ---            ---
 Total                              $  38,761,000  $ 38,154,000  $  43,426,000
</TABLE>
                                                                 

NOTE 13_WARRANTS AND STOCK PURCHASE RIGHTS

      The Company has issued to BFHI a warrant to purchase up to 730,720 shares
of  Common Stock at the prevailing market price and has granted BFHI the  right
to  purchase additional Common Stock at a price identical to any new issuances.
These  agreements  enable  BFHI  to maintain a minimum  51%  ownership  in  the
Company.

<PAGE>                                       
                         INDEPENDENT AUDITORS' REPORT
                                       
                                       
The Board of Directors and Shareholders of INCSTAR Corporation:

     We   have   audited  the  consolidated  financial  statements  of  INCSTAR
Corporation  and  subsidiaries  as listed in the  accompanying  index  in  Item
14(a)(1)  on  page  17.  In  connection with our  audits  of  the  consolidated
financial statements, we also have audited the financial statement schedule  as
listed  in  the  accompanying  index  in  Item  14(a)(2)  on  page  17.   These
consolidated  financial  statements and financial statement  schedule  are  the
responsibility of the Company's management. Our responsibility is to express an
opinion  on  these  consolidated financial statements and  financial  statement
schedule based on our audits.
     
     We  conducted  our  audits in accordance with generally accepted  auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable  assurance  about  whether the  financial  statements  are  free  of
material  misstatement. An audit includes examining, on a test basis,  evidence
supporting  the amounts and disclosures in the financial statements.  An  audit
also   includes  assessing  the  accounting  principles  used  and  significant
estimates  made  by  management, as well as evaluating  the  overall  financial
statement  presentation. We believe that our audits provide a reasonable  basis
for our opinion.
     
      In  our opinion, the consolidated financial statements referred to  above
present  fairly,  in all material respects, the financial position  of  INCSTAR
Corporation and subsidiaries as of December 31, 1995 and 1994, and the  results
of  their  operations and their cash flows for each of the years in the  three-
year  period  ended  December 31, 1995, in conformity with  generally  accepted
accounting  principles.  Also in our opinion, the related  financial  statement
schedule,  when  considered  in  relation to the basic  consolidated  financial
statements  taken  as  a whole, presents fairly, in all material  aspects,  the
information set forth therein.





                                                  KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 26, 1996
<PAGE>
                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                     INCSTAR CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
                                       
      Column A          Column B        Column C          Column D   Column E
                                                                         
                       Balance at              Charged                   
                          the                    to                 Balance at
                       Beginning    Charged     Other                  the
                           of     to Costs &  Accounts   Deductions   End of
                         Period    Expenses   Describe   (Describe)   Period
<S>                    <C>        <C>         <C>        <C>        <C>
Allowance for doubtful
accounts receivable:                                                
                                                                    
Year ended December                                                         
 31, 1995              $113,000   $  16,000   $  - -     $22,000(A) $107,000
Year ended December                                                         
 31, 1994               195,000      23,000      - -     105,000(A)  113,000
Year ended December                                                         
 31, 1993               170,000      39,000      - -      14,000(A)  195,000
                                                                            
<FN>                                                         
(A) Uncollectible accounts written off, net of recoveries
</FN>
</TABLE>



                                 EXHIBIT INDEX
                                       
          (a)     List of documents filed as part of this report:

                  (1)     Consolidated Statements of Operations - Years Ended 
                          December 31, 1995, December 31, 1994, and December 31,
                           1993
                          Consolidated Balance Sheets - As of December 31,
                           1995 and 1994
                          Consolidated Statements of Cash Flows - Years
                           Ended December 31, 1995, December 31, 1994; and 
                           December 31, 1993
                          Consolidated Statements of Shareholders' Equity - 
                           Years Ended December 31, 1995; December 31, 1994; and
                           December 31, 1993
                          Consolidated Quarterly Results (unaudited) for
                           the Years Ended December 31, 1995 and 1994
                          Notes to Consolidated Financial Statements
                          Independent Auditors' Report

                  (2)     Financial Statement Schedule:
                          Schedule II - Valuation and Qualifying Accounts

                  All other financial statement schedules not listed have been
                  omitted since the required information is included in the
                  consolidated financial statements or the notes thereto or is 
                  not applicable or required.

                  (3)     Exhibits:

                Number          Description


                  3.1      Restated Articles of Incorporation of INCSTAR
                           Corporation,  as amended to date [incorporated by 
                           reference  to Exhibit 4.1 to the Registrant's 
                           Registration Statement on  Form S-8 
                           (File No. 33-84498)].

                  3.2      Bylaws of INCSTAR Corporation, as amended  to date 
                           [incorporated  by  reference  to  Exhibit  4.2  to   
                           the Registrant's Registration Statement on Form S-8 
                           (File  No.  33-84498)].

                  4.1      Specimen   Certificate   representing   the
                           Registrant's   Common  Stock  [incorporated  by  
                           reference   to Exhibit 4.1 to the Registrant's 
                           Registration Statement on  Form S-3 
                           (File No. 33-37805)].

                  4.2      Note Purchase Agreement, dated December 27, 1991 
                           between the Registrant and Fiat Finance, U.S.A. Inc.
                           [incorporated by reference to Exhibit 4.2 to the 
                           Registrant's Report on Form 10-K for the year ended 
                           December 31, 1991 (File No. 1-9800)]

                  4.3      Form of Warrant Certificate issued by the Registrant 
                           in favor of Bioengineering International B.V. (now
                           BioFin Holding International B.V.) [incorporated by 
                           reference to Exhibit 10.11 of the Registrant's 
                           Registration Statement on Form S-4 
                           (File No. 33-30785)].

                  4.4      Form of Purchase Rights Agreement between
                           Bioengineering International B.V. (now BioFin Holding
                           International B.V.) and the Registrant [incorporated 
                           by reference to Exhibit 10.12 of the Registrant's 
                           Registration Statement on Form S-4 
                           (File No. 33-30785)].

                 10.1+*    INCSTAR Corporation Stock Option Plan, as amended to 
                           date, filed herewith.

                 10.2*     Economic Value Sharing Plan [incorporated by
                           reference to Exhibit 10.1 of the Registrant's Report 
                           on Form 10-K for the year ended December 31, 1994 
                           (File No. 1-9800)].

                 10.3*     Form of Executive Survivor Benefit Income 
                           Continuation Agreement between the Registrant and 
                           certain of its employees [incorporated by reference 
                           to Exhibit 10.4 of the Registrant's Registration 
                           Statement on Form S-4 (File No. 33-30785)].

                 10.4*     Executive Survivor Benefit Income Continuation Plan 
                           covering certain executive officers of the Registrant
                           [incorporated by reference to Exhibit 10.4 of the 
                           Registrant's Report on Form 10-K for the year ended 
                           December 31, 1993 (File No. 1-9800)].

                 10.5*     Form of Employment Agreement between the Registrant 
                           and John J. Booth [incorporated by reference to
                           Exhibit 10.13 of the Registrant's Registration 
                           Statement on Form S-4 (File No. 33-30785)].

                 10.6*     Amendments to Employment Agreement between the
                           Registrant and John J. Booth [incorporated by 
                           reference to Exhibit 10.8 of the Registrant's Report 
                           on Form 10-K for the year ended December 31, 1993 
                           (File No. 1-9800)].
         
                 10.7*     Employment Continuation Agreement between the
                           Registrant and Orwin L. Carter [incorporated by 
                           reference to Exhibit 10.1 of the Registrant's report 
                           on Form 10-Q for the quarter ended September 30, 1994
                           (File No. 1-9800)].

                 10.8*     Separation Agreement between the Registrant and 
                           Jacques A. Bagdasarian [incorporated by reference to
                           Exhibit 10.1 of the Registrant's Report on Form 10-K 
                           for the year ended December 31, 1994 
                           (File No. 1-9800)].

                 10.9+     Form of Scientific Advisory Board agreement between 
                           the Registrant and Dr. Pierre M. Galetti and Dr.
                           Michael Steffes filed herewith.

                 10.10+    Consulting Agreement between the Registrant and
                           Dr. Michael Steffes filed herewith.

                 10.11     Form of Distributorship Agreement between the
                           Registrant and Sorin Biomedica S.p.A., without 
                           exhibits or schedules [incorporated by reference to 
                           Exhibit 10.15 of the Registrant's Registration 
                           Statement on Form S-4 (File No. 33-30785)].

                 10.12     Form of Distributorship Agreement between Sorin 
                           Biomedica S.p.A. and the Registrant [incorporated by
                           reference to Exhibit 10.16 of the Registrant's 
                           Registration Statement on Form S-4 
                           (File No. 33-30785)].

                 10.13     Distribution Agreement, dated October 30, 1986, 
                           between Clinical Sciences Inc. and Sorin Biomedica
                           S.p.A., as amended [incorporated by reference to 
                           Exhibit 10.17 of the Registrant's Registration 
                           Statement on Form S-4 (File No. 33-30785)].

                 10.14     Form of Technology Transfer Agreement between the 
                           Registrant and Sorin Biomedica S.p.A. [incorporated 
                           by reference to Exhibit 10.18 of the Registrant's 
                           Registration Statement on Form S-4 
                           (File No. 33-30785)].

                 10.15     Distribution and Supply Agreement between Baxter 
                           International Inc. and the Registrant dated September
                           19, 1990 [incorporated by reference to Exhibit 10(b) 
                           of the Registrant's report on Form 10-Q for the 
                           quarter ended September 30, 1990 (File No. 1-9800)].

                 10.16     Product Distribution Agreement between Centocor, Inc.
                           and the Registrant dated December 2, 1991 
                           [incorporated by reference to Exhibit 10.14 of the
                           Registrant's Report on Form 10-K for the year ended 
                           December 31, 1991 (File No. 1-9800)].

                 10.17.1   Letter agreements dated August 3, 1992 and
                           February 19, 1993 amending the product distribution 
                           agreement filed as Exhibit 10.15 [incorporated by 
                           reference to Exhibit 10.14.1 of the Registrant's 
                           Report on Form 10-K for the year ended December 31, 
                           1993 (File No. 1-9800)].

                 10.18     Revolving Credit, Security and Note Agreement, with 
                           exhibits thereto, dated as of December 27, 1993 
                           between Norwest Bank Minnesota, National Association 
                           and the Registrant [incorporated by reference to 
                           Exhibit 10.1 of the Registrant's Report on Form 10-K 
                           for the year ended December 31, 1994 
                           (File No. 1-9800)].

                 10.18.1   First Amendment dated January 3, 1995 to Revolving 
                           Credit, Security and Note Agreement filed as Exhibit
                           10.16 [incorporated by reference to Exhibit 10.1 of 
                           the Registrant's Report on Form 10-K for the year 
                           ended December 31, 1994 (File No. 1-9800)].

                 10.18.2   Second Amendment dated February 15, 1995 to Revolving
                           Credit, Security and Note Agreement filed as Exhibit
                           10.16 [incorporated by reference to Exhibit 10.1 of 
                           the Registrant's Report on Form 10-K for the year 
                           ended December 31, 1994 (File No. 1-9800)].

                 10.18.3+  Third Amendment dated January 29, 1996 to Revolving 
                           Credit, Security and Note Agreement filed as Exhibit
                           10.16.

                 10.19     Agreement for Purchase, Sale and Distribution of 
                           Assets between TheraTest Laboratories Inc. and the
                           Registrant dated May 16, 1994 [incorporated by 
                           reference to Exhibit 10.1 of the Registrant's Report 
                           on Form 10-K for the year ended December 31, 1994 
                           (File No. 1-9800)].

                 11+       Statement Re: Computation of Net Income (Loss)
                           Per Common Share.

                 21+       Subsidiaries of the Registrant.

                 23+       Independent Auditors' Consent

                 27+       Financial Data Schedules

                 * Executive Compensation Plans and Arrangements
                 + Filed with this Annual Report on Form 10-K