SECURITIES AND EXCHANGE COMMISSION
                    WASHINGTON, D.C. 20549

                AMENDMENT NO. 3 TO FORM 10-K\A
                     FILED JANUARY 4, 1999

          Annual Report Pursuant to Section 13 or 15(d)
             of the Securities Exchange Act of 1934

For the Fiscal Year Ended 12/31/97   Commission File Number 0-10822

                    Biocontrol Technology, Inc.
     (Exact name of registrant as specified in its charter)

    Pennsylvania                                25-1229323
   (State or other jurisdiction of              (I.R.S. Employer
    incorporation or organization)              Identification Number)

      300 Indian Springs Road, Indiana, Pennsylvania       15701
      (Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code (412) 349-1811

Securities registered pursuant to Section 12(b) of the Act:  None

   Securities registered pursuant to Section 12(g) of the Act:
                  Common Stock, $.10 par value

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
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. [ ]

The   aggregate  market  value  of  the  voting  stock  held   by
nonaffiliates of the registrant as of March 20, 1998:

Common Stock, $.10 par value -- $ 22,562,581
As  of December 31, 1997, 138,583,978 shares of common stock, par
value $.10 per share, were outstanding.
As  of December 31, 1997, no shares of preferred stock, par value
$10 per share, were outstanding.

           Exhibit index is located on pages 34 to 37.

Item 1.  Business

General Development of Business

Biocontrol  Technology, Inc. was incorporated in the Commonwealth
of  Pennsylvania in 1972 as Coratomic, Inc. and  is  referred  to
herein as "BICO" or the "Company".  BICO's operations are located
at  300  Indian Springs Road, Indiana, PA, and its administrative
offices  are  located  at  2275 Swallow Hill  Road,  Bldg.  2500,
Pittsburgh,  PA.   The  Company  is  developing  the  Noninvasive
Glucose  Sensor  with  Diasense, Inc., its 52%  owed  subsidiary.
Where applicable, BICO and Diasense will be referred to herein as
the "Companies".

The  primary  business of the Company is the development  of  new
devices which include models of a noninvasive glucose sensor (the
"Noninvasive  Glucose  Sensor"), an  implantable  port  for  drug
delivery  and  hemodialysis  use,  a  polyurethane  heart  valve,
procedures  relating  to  the  use of  whole-body  extracorporeal
hyperthermia   in  the  treatment  of  cancer   and   the   human
immunodeficiency virus ("HIV"),  bioremediation products,  and  a
paint product which is designed to prevent the buildup of certain
substances  on underwater surfaces.  In addition, the Company  is
currently   manufacturing  and  selling   functional   electrical
stimulators.    In  early 1998, the Company acquired  a  majority
interest in a company which manufactures and sells metal  coating
products.

Forward-Looking Statements

From  time  to  time,  the  Company may  publish  forward-looking
statements  relating  to  such matters as  anticipated  financial
performance, business prospects, technological developments,  new
products,  research  and development activities,  the  regulatory
approval  process,  specifically  in  connection  with  the   FDA
marketing  approval  process, and similar matters.   The  Private
Securities  Litigation Reform Act of 1995 provides a safe  harbor
for  forward-looking statements.  In order  to  comply  with  the
terms  of  the safe harbor, the Company notes that a  variety  of
factors  could  cause  the  Company's actual  results  to  differ
materially  from  the anticipated results or  other  expectations
expressed in the Company's forward-looking statements.  The risks
and  uncertainties  that may affect the operations,  performance,
research  and  development and results of the Company's  business
include  the  following:   additional  delays  in  the  research,
development and FDA marketing approval of the Noninvasive Glucose
Sensor;  delays in the manufacture or marketing of the  Company's
other  products and medical devices; the Company's future capital
needs   and  the  uncertainty  of  additional  funding;    BICO's
uncertainty of additional funding; competition and the risk  that
the  Noninvasive Glucose Sensor or its other products may  become
obsolete;  the Company's continued operating losses, negative net
worth   and   uncertainty  of  future  profitability;   potential
conflicts  of  interest; the status and  risk  to  the  Company's
patents,  trademarks and licenses; the uncertainty of third-party
payor reimbursement for the Sensor and other medical devices  and
the   general  uncertainty  of  the  health  care  industry;  the
Company's  limited sales, marketing and manufacturing experience;
the  amount of time or funds required to complete or continue any
of the Company's various products or projects; the attraction and
retention  of  key employees; the risk of product liability;  the
uncertain  outcome  and  consequences  of  the  lawsuits  pending
against  the  Company; the ability of the Company to  maintain  a
national  listing for its common stock; and the dilution  of  the
Company's common stock.

Industry Segments

The  Company operates in a single industry segment consisting  of
the   design,   manufacture  and  sale  of  biological/biomedical
products   and   devices.   Although  some   of   the   Company's
subsidiaries are engaged in other activities, such activities are
immaterial at this time for industry segment purposes.

Description of Business

Development of the Noninvasive Glucose Sensor

BICO  and Diasense are currently developing a Noninvasive Glucose
Sensor,  which  management believes will be able to  measure  the
concentration  of glucose in human tissue without  requiring  the
drawing  of  blood.  Currently available glucose sensors  require
the drawing of blood by means of a finger prick.

BICO's initial research and development with insulin pumps led to
a  theory  by  which  blood  glucose  levels  could  be  detected
noninvasively   by  correlating  the  spectral   description   of
reflected electromagnetic energy from the skin with blood glucose
levels  in the 50 mg per deciliter to 500 mg per deciliter  range
in  the  infrared  region of the electromagnetic  spectrum.   The
method  was  studied in 1986 and 1987 by BICO and its consultants
at   Battelle   Memorial  Institute  in  Columbus,  Ohio,   using
laboratory  instruments.   The results of  the  studies  provided
information   regarding  the  use  of  infrared  light   in   the
noninvasive  measurement of glucose.  The  information  from  the
studies,  along  with later affirmative work,  led  to  a  patent
application  by BICO's research team in 1990.  A patent  covering
the  method was granted to the research team and assigned to BICO
in  December 1991.  The rights of this patent have been purchased
by  Diasense  from BICO, pursuant to a Purchase  Agreement  (See,
"Intercompany  Agreements").   A second  patent  application  was
filed  by BICO in December 1992, and was granted in January 1995.
This  filing contained new claims which extended the coverage  of
the  patent  based  on additional discoveries and  data  obtained
since  the  original  patent was filed.  BICO  has  assigned  the
rights  to  such  patent  to Diasense.   Additional  concepts  to
improve  the  capability  of the instrument  to  recognize  blood
glucose  were  developed, and, in May 1993, corresponding  patent
applications were filed.  As of  March 1998, a total of five U.S.
and  six foreign patents have been issued, with additional patent
applications  pending  (See, "Current Status of  the  Noninvasive
Glucose  Sensor"  and "Patents, Trademarks and Licenses").   BICO
has  been  granted  the right to develop and manufacture  sensors
pursuant   to   agreements  with  Diasense  (See,   "Intercompany
Agreements").

In  1991,  BICO's research team began development of  a  research
prototype utilizing different technology than previously  studied
or  developed.   This device, the Beta 1 research prototype,  was
initially  tested  on  six human subjects, and  was  subsequently
tested  on  110  human  subjects  in  March  1992,  during  which
simultaneous  spectral, blood and chemical data was recorded  for
analysis  in  order to develop calibration data for  the  device.
The  Beta  1  utilized  a separate lap-top  computer  to  perform
computational  functions.  The results of the  March  1992  tests
were  used  to  develop  further refinements  which  led  to  the
development of the Beta 2A.

Although functionally equivalent in terms of performance with the
Beta  1,  the  next prototype, the Beta 2A, was smaller  and  had
fully  integrated  computational software and  a  liquid  crystal
display  which  interacted  with the operator.   This  model  was
tested  by BICO on 40 human subjects in July 1992.  The  spectral
and  blood chemistry data obtained indicated that the Beta 2A did
not  have a satisfactory signal-to-noise ratio to allow  for  the
calculation of algorithms of sufficient accuracy to be acceptable
to  Diasense.   The signal-to-noise ratio reflects  the  sensor's
ability  to  optimize  the measurement by  accepting  the  signal
desired   (the   glucose   level)  and  rejecting   the    random
interference.  A higher signal-to-noise ratio results in  a  more
accurate measurement.

Additional Beta prototypes evolved which addressed this  problem.
Testing  was  performed  with  each  prototype,  culminating   in
clinical  trials  at  two hospitals with ten diabetic  volunteers
each  in  Des  Plaines,  Illinois in May  1993  and  in  Indiana,
Pennsylvania  in  August 1993.  These advanced systems  embodying
improvements in the optics, electronics and detection  subsystems
led  to  the  design  of  the  Beta 2D,  Beta  2E,  and  Beta  2F
prototypes,  designed  and  constructed  to  simulate  production
models.

BICO  initially obtained the approval of six Institutional Review
Boards  ("IRBs")  to conduct testing at their  hospitals.   Those
hospitals  are  Children's Hospital in Pittsburgh,  Pennsylvania;
Rush  North  Shore in Skokie, Illinois; Westmoreland Hospital  in
Greensburg,  Pennsylvania;  Lutheran  General  Hospital  in  Park
Ridge,  Illinois; Holy Family Hospital in Des Plaines,  Illinois;
and  Indiana  Hospital  in  Indiana, Pennsylvania.   The  Company
conducted initial testing at the Holy Family Hospital and Indiana
Hospital,  and may conduct further studies on present and  future
models  at  some  or all of the other hospitals  from  which  IRB
approval has been obtained.

On   January   6,   1994,  BICO  submitted  its  initial   510(k)
Notification to the U.S. Food and Drug Administration (the "FDA")
for approval to market the production model, the Diasensor_ 1000.
The  submission was based on data obtained from the advanced Beta
2  prototypes, since functionally, the production model  will  be
identical to these prototype models.  BICO's  510(k) Notification
claims  that  the  product has substantial  equivalence  to  home
market  glucose  monitoring devices presently in the  marketplace
since its function is similar, although the device operates on  a
different technological principle.  BICO provided information  in
this  510(k) submission which it believes substantiates that  the
device  does not raise different questions of safety and efficacy
and  is  as safe and effective as the legally marketed predicated
devices.   Such information is required by the FDA before  market
approval  can be granted.  In February 1996, the FDA  convened  a
panel  of  advisors  to  make a recommendation  regarding  BICO's
510(k)   Notification.   The  majority  of  the   panel   members
recommended  that  BICO conduct additional testing  and  clinical
trials prior to marketing the Diasensor_ 1000.  BICO and Diasense
announced that they remained committed to bringing the Diasensor_
1000 to diabetics, and that additional research, development  and
testing  would continue (See, "Current Status of the  Noninvasive
Glucose Sensor").

The   Diasensor_   1000   is  a  spectrophotometer   capable   of
illuminating  a  small  area of skin  on  a  patient's  arm  with
infrared  light, and then making measurements from  the  infrared
light  diffusely reflected back into the device,  which  it  then
displays  on  a  liquid  crystal  display  on  the  face  of  the
instrument  for  the  user  to read.  The  Diasensor_  1000  uses
internal algorithms to calculate a glucose measurement.

Since  the Diasensor_ 1000 will be calibrated individually,  each
instrument will be sold by prescription only in the U.S. and will
be  calibrated in the patient's home.  This feature may limit the
marketability  of  the Diasensor_ 1000, and,  if  the  device  is
unable  to  qualify for third-party reimbursement, the  Company's
ability to market the device could be adversely effected.

Current Status of the Noninvasive Glucose Sensor

Due  to  continued delays of the FDA approval process, which  are
summarized below, and while continuing to work with the  FDA  and
conduct  its  mandated testing, the Companies have  also  focused
their efforts on obtaining approval to market the Diasensor_ 1000
overseas.  The Companies are in the process of obtaining  a  "CE"
mark, which will facilitate sales in Europe.  As discussed below,
in connection with obtaining a CE mark, BICO has been awarded ISO
9001  certification,  and continues to  work  with  its  European
consultants to expedite the process as much as possible.
BICO,  as  designer and manufacturer of the device, was  recently
audited  for  ISO  certification  by  TUV  Rheinland,  a  company
authorized  to  conduct  such audits,  which  was  contracted  to
perform a "conformity assessment" of BICO's quality system.  BICO
has received certification to ISO 9001, a standard defined by the
International    Organization   for   Standardization    ("ISO"),
evidencing that BICO has in place a total quality system for  the
design,  development  and  manufacture  of  its  products.    The
certificate  formalizing the ISO 9001 certification was  received
by  BICO on January 14, 1998.  In February and March, 1998,  BICO
submitted its technical file on the Diasensor_ to TUV  in   order
to satisfy requirements of the European Medical Device Directive.
Once satisfied, BICO will receive approval to apply a CE mark  to
the  device.  Much like an Underwriters Laboratory "UL" mark, the
CE  mark  is  provided by the regulatory bodies of  the  European
Community,  or  by  authorized  private  bodies,  such   as   TUV
Rheinland,  to  indicate  that the  device  adheres  to  "quality
systems"   of   the   ISO   and  the   European   Committee   for
Standardization.  The CE mark will permit the Companies  to  sell
the Diasensor_ and other medical products in Europe.

With regard to marketing the device within the United States, the
Companies  continue to work with the FDA to obtain  approval.   A
revised  510(k) Notification was submitted in October, 1996,  and
was followed by continued discussions with the FDA.  During 1997,
the  Company  continued to meet with the FDA, and  established  a
protocol  for  in-home  testing of  the  Diasensor_  1000,  which
commenced in early 1997.  The Companies plan to resubmit a 510(k)
Notification after it obtains the CE mark and all  the  data  has
been  analyzed.   As with all other FDA-related  activities,  the
Companies cannot provide any assurances as to the date upon which
the  next 510(k) Notification will be submitted, or when the  FDA
will complete its review of such Notification.
Although the Company's research and development team continues to
meet  with  and  work closely with the FDA, due to  the  complex,
technical nature of the information being evaluated by  the  FDA,
it  is impossible for the Company to estimate how much longer the
FDA approval process will take.

FDA  approval is necessary to market the Diasensor_ 1000  in  the
United  States.   The Companies are continuing their  efforts  to
develop software with a more "universal" algorithm, which can  be
used   by  a  larger  population.   After  introduction  of   the
Diasensor_  1000, BICO plans to finalize the development  of  the
Diasensor_ 2000 which may contain more complex software, allowing
glucose  measurements from many individuals to be performed  with
one  instrument.  The Diasensor_ 2000 may be subject to the  same
regulatory testing and approval process as was required  for  the
Diasensor_ 1000.

Diasense  is  responsible  for the marketing  and  sales  of  the
Noninvasive  Glucose  Sensor.   Diasense  plans  to  market   the
Noninvasive  Glucose Sensor directly to diabetics, through  their
doctors'  orders, and is currently negotiating with domestic  and
international distribution organizations to aid in the  marketing
and  distribution of the Noninvasive Glucose Sensor.   Due to the
current  vicissitudes of the health-care insurance industry,  the
Companies  are  unable  to  make  any  projections  as   to   the
availability of, or procedures required in connection with, third-
party  reimbursement.  Although the Companies estimate, based  on
1997  American Diabetes Association data, that there  are  nearly
16,000,000 diabetics in the United States, not all diabetics will
be  suitable  users  of  the Noninvasive Glucose  Sensor.   Those
diabetics   who   require  and  benefit  from  frequent   glucose
monitoring  comprise  the potential market  for  the  Noninvasive
Glucose Sensor.  The Companies are unable to estimate the size of
that market at this time.

Bioremediation

BICO  is  also  involved  in  the field  of  biological  remedial
("bioremediation")    development.   Bioremediation    technology
utilizes  naturally  occurring  micro-organisms  or  bacteria  to
convert  various  types of contamination to  carbon  dioxide  and
water.   This  occurs through the dual processes of chemical  and
microbiological reactions.  The product, PRP_, which  stands  for
Petroleum  Remediation Product,  is designed as an  environmental
microbial  microcapsule  which is utilized  for  the  collection,
containment and separation of oil-type products in or from water.
The  product's  purpose is to convert the  contaminant,  with  no
residual mass (separated or absorbed) in need of disposal.   When
the  PRP_  comes  in contact with the petroleum  substances,  the
contaminants  are  bound  to  the PRP_,  and  they  stay  afloat.
Because  the product contains the necessary nutrients and  micro-
organisms,  the bioremediation process begins immediately,  which
limits   secondary  contamination  of  the  air  or   surrounding
wildlife.   Eventually,  the product  will  biodegrade  both  the
petroleum and itself.

In  connection  with  this project, BICO  created  a  subsidiary,
Petrol  Rem,  Inc.  ("Petrol Rem").  Petrol  Rem's  officers  and
directors  include Anthony J. Feola and Fred E. Cooper,  who  are
also directors and/or officers of BICO and its other affiliates.

Part  of  Petrol Rem's initial research and development  involved
field testing supervised by the National Environmental Technology
Applications  Corporation ("NETAC"),  a  group  endorsed  by  the
Environmental Protection Agency (the "EPA"), to determine whether
the  product  is  effective.  As a result of such testing,  NETAC
reported  positive  results regarding the  effectiveness  of  the
product.

PRP_ is now being manufactured and marketed for use in water  and
on  solid  surfaces  in the form of Petrol  Rem's  OIL  BUSTER  _
product,  which is used for small oil cleanups on  hard  surfaces
such  as  the  floors  of manufacturing facilities,  garages  and
machine shops.

The  product  system is listed on the EPA's National  Contingency
Plan  ("NCP")  Product Schedule, and is available in free-flowing
powder  or absorbent socks.  In 1995, the EPA required  that  all
products  previously listed on the NCP be submitted to additional
testing.   Because PRP_ successfully passed the Tier II  efficacy
test  conducted by NETAC, the product was requalified for listing
on  the  NCP.   Management  believes  that  this  requalification
process  will limit the number of products available for  use  in
clean-up  projects.  As illustrative evidence,  management  notes
that  only thirteen of the original fifty-three products  in  the
bioremediation agents category remain listed.

In  April 1993, Petrol Rem entered into a lease for a facility in
the  Pittsburgh, Pennsylvania area which is used  to  manufacture
PRP_.   The  current lease has a renewable three-year term,  with
monthly  rental payments of $2,888 plus utilities and  applicable
business   privilege  taxes.   Petrol  Rem  has  also   purchased
equipment  which has the capability to produce PRP_ in quantities
of   2,500  pounds per day, and Petrol Rem has built an  adequate
inventory.

During  1995,  Petrol  Rem completed a BioResponse  Action  Plan,
which  has  been  submitted  to applicable  regulatory  agencies,
including  the EPA, the Coast Guard, and various state  agencies.
The  Plan,  which  sets forth the available  options  and  proper
responses  to  clean-up projects, was created in  response  to  a
growing trend by the agencies to set up pre-approved plans to  be
used  in the event of an oil-spill emergency.  These pre-approved
plans  would direct the individuals on site as to which  products
to use, and should help accelerate approval and response time.

Because two of Petrol Rem's largest target marketing regions  are
Texas/Louisiana and Florida, Petrol Rem has been warehousing PRP_
in those areas.

Petrol  Rem  has  also  completed  development  of  a  new  spray
applicator for its PRP_ product.  The new applicator is a  light-
weight,  portable unit which provides a more continuous  flow  of
product.   The lighter weight and smaller size will allow  easier
access  to remote sites which were impossible to reach  with  the
previous applicator.

In  addition  to  PRP_,  Petrol  Rem  has  also  developed  other
products.  In order to address water pollution issues at marinas,
Petrol Rem has introduced BIO-SOK_, which is PRP_ contained in  a
10" fabric tube, is designed and  used to aid in the cleaning  of
boat bilges.  Bilges are commonly cleaned out with detergents and
emulsifiers, which cause the oil  pumped out of the bilge to sink
to  the bottom of the water, where it is harmful to marine  life,
and  becomes difficult to collect. In addition, it is illegal  to
dump  oil  or fuel into the water.  The BIO-SOK_, when placed  in
the  bilge,  absorbs and biodegrades the oil or fuel on  contact,
which significantly reduces or eliminates the pollution; then the
product biodegrades itself.  As a result, BIO-SOK_ helps to  keep
waters  clear.   In  addition, BIO-SOK_  helps to  eliminate  the
chore  of  bilge  cleanup, and helps users such  as  boaters  and
marinas  to  avoid  fines  for pumping  oil  and  fuel  into  the
waterways, which is prohibited.

In  July  1996,  the  Company's PRP_ and BIO-SOK_  products  were
selected  by  the  National Aeronautics and Space  Administration
("NASA")   to  be  featured  as  spinoff  technology  under   its
technology  transfer  program, which seeks  to  recognize  unique
civilian adaptations of NASA technology.  The products were  part
of NASA displays at major trade shows.

In  October  1996, the Company announced that its BIO-SOK_  Bilge
Maintenance  System  had  won  a 1996  Innovation  Award  at  the
International  Marine  Trades Exhibit and  Convention  ("IMTEC"),
which  is  held by the National Marine Manufacturers  Association
(the  "NMMA").   The award was conferred by a  panel  of  experts
which evaluated a field of approximately fifty seven entrants  in
the "Accessories and Trailers" category.  The NMMA cited the BIO-
SOK_'s  simplicity  of use and commended the product  as  on  the
"frontier of technology".

In December 1996, Petrol Rem announced that the BIO-SOK_ had been
chosen  by Boating, one of the largest pleasure boating magazines
in  the  world,  for  use  in all of the  boats  tested  for  its
magazine.  Boating, which tests over 100 boats each year,  called
the  BIO-SOK_   "one impressive new product".  In February  1997,
BIO-SOK_  was  given a 1997 Innovation Award  by  the  well-known
trade magazine Motorboating and Sailing.

BIO-SOK_  is guaranteed, lasts for an entire boating season,  and
is  available  from quality marine supply stores in  the  coastal
areas  of the United States, Canada, Europe and South East  Asia,
and is recommended by the Canadian Coast Guard.
Petrol Rem has also developed OIL BUSTER _, which is a mixture of
PRP_ and an absorbent material.  OIL BUSTER _ is used to clean up
and remediate oil spills on hard surfaces.

Petrol  Rem's  BIO-BOOM  _  product is  used  in  water  clean-up
projects.  The product is a 3" x 10' fabric tube which is  filled
with   PRP_,   and  is  used  to  both  contain  and   biodegrade
contaminants in water.  BIO-BOOM _ is a superior product to  most
containment products because, in addition to containing  the  oil
or fuel spill, or restricting the spread of an anticipated spill,
it  also  biodegrades  the contaminant, then biodegrades  itself.
These features act to virtually eliminate secondary contaminants,
thereby reducing disposal and clean-up costs.  Initial sales have
occurred, and marketing efforts are accelerating.

Petrol  Rem  is  marketing PRP_ through trade  shows,  magazines,
direct  mail advertising, and direct contacts with companies  and
consultants  specializing  in  petroleum  clean-up,  as  well  as
marketing directly to municipalities and corporations with  needs
for  the product.   Although there can be no assurances that PRP_
will  be  successfully marketed, the Company believes,  based  on
their  scientific determinations, the results  of  recent   NETAC
testing,  and  the favorable response at the retail  level,  that
PRP_ will be a viable product in the bioremediation marketplace.

As  a result of marketing efforts in Abu Dhabi, UAE from December
1997, Petrol Rem was invited to demonstrate the efficacy of PRP_.
A  recent  spill in Umm Al Qaiwain afforded Petrol  Rem  a  field
application  in a mangrove site and beach front property.   These
applications  were  made in February of 1998  and  are  presently
being evaluated.  Future presentations/applications are scheduled
with ADNOC (Abu Dhabi National Oil Company).

The Company believes that it has expended the necessary funds  to
complete the development of its bioremediation products,  and  to
build  up  sufficient inventory pending additional  orders.   The
Company  has  spent  approximately  $8,499,000  on  this  project
through December 31, 1997.

Whole-Body Extracorporeal Hyperthermia

BICO  is  currently  funding  a project  with  HemoCleanse,  Inc.
("HemoCleanse"),  an unaffiliated company located  in  Lafayette,
Indiana.  In connection with this project, BICO formed a  wholly-
owned  subsidiary,  IDT,  Inc.   IDT's  executive  officers   and
directors  include  Glenn Keeling, who is  also  an  officer  and
director of BICO.

IDT  and  HemoCleanse are currently engaged in  a  project  which
involves   the  experimental  use  of  a  delivery  system,   the
ThermoChem  System , for perfusion-induced systemic  hyperthermia
("PISH")  to  treat  persons with certain  types  of  cancer  and
HIV/AIDS.     HemoCleanse is an Indiana corporation with  offices
located  at  2700  Kent Avenue, West Lafayette,  Indiana   47906.
HemoCleanse designs, manufactures and markets products that treat
blood  outside  the  body  to  remove toxins  and  simultaneously
balance blood chemistries.  HemoCleanse believes that its systems
are  unique  in  being  able to selectively  remove  both  small,
intermediate   and   protein-bound   toxins,   and   to   provide
extracorporeal  hyperthermia  to  selectively  kill  infected  or
rapidly   dividing   cells  without  the  risk   of   electrolyte
imbalances.

HemoCleanse has developed two models of the device.  The BioLogic-
DT  is designed for use as a detoxifier for the treatment of drug
overdose  and was approved for marketing in the United States  by
the  FDA  in  September  1994.  The  ThermoChem  System  ,  which
incorporates  this  technology,  is  designed  for  use  in   the
hyperthermia procedure.  The ThermoChem System  is used in  IDT's
clinical trials.

Perfusion-induced  systemic hyperthermia, a  form  of  whole-body
hyperthermia,  achieved  through  extracorporeal  blood   heating
("PISH") involves heating the patient's blood outside the body to
approximately 48 degrees centigrade and returning it back to  the
body,  thus  raising the body's core temperature to  the  desired
treatment temperature up to a maximum of 42.5 degrees centigrade.
Blood  passes  a roller pump which sends it onward  to  the  heat
exchanger where indirect heating of the blood occurs, raising the
outside blood temperature to approximately 48 degrees centigrade.
A  portion  of  the  blood passes through a T-connection  to  the
ThermoChem-SB,  located  between the roller  pump  and  the  heat
exchanger,  where it is chemically balanced on a real-time  basis
and  then  returned to the blood flow path before it reaches  the
heat exchanger.  Continually circulating blood is returned to the
patient at 46 degrees centigrade, gradually raising the patient's
core body temperature to the desired treatment temperature, which
is measured by various temperature probes throughout the body.
Experimentation outside the United States to date,  to  the  best
knowledge of the Company, has been somewhat limited and not well-
documented.  IDT, and IDT's Scientific and Medical Advisory Board
believe that once a safe delivery system is established, serious,
extensive and well-documented testing will determine whether PISH
can  be  used as an effective treatment for persons with clinical
cancer or HIV.

Although other entities have experimented with the use of PISH,
one significant problem has been the safe delivery of the
procedure.  IDT believes that the improvements inherent to their
ThermoChem System  increase the safety of the procedure.  The
ThermoChem System  incorporates a single access device, utilizing
a parallel plate, cellulosic membrane dialyzer and a unique
sorbent suspension which can effectively remove a wide range of
chemicals and toxins from the blood, while maintaining a balance
of electrolytes and important nutrients.  The system is also
comprised of several specially integrated devices that perform
blood propulsion, water heating and cooling to control
extracorporeal blood temperature, air embolism detection,
auxiliary unit roller pump occlusion detection, catheter access
occlusion, and monitoring and recording of cardiac output and
patient temperatures.

As a result, IDT believes that they have taken a significant step
towards the creation of a safe delivery system.  Although there
can be no assurances that the ThermoChem System  is safe for all
humans, clinical trials to date have confirmed that the humans
tested were able to safely tolerate PISH at a core temperature of
42 degrees centigrade for two hours.  Based in part upon the
results of its initial clinical trials, the FDA has approved
additional clinical trials.

The ThermoChem System  is a combination of three system
components: 1) the ThermoChem-HT, which circulates and heats
blood extracorporeally up to approximately 48  C and monitors the
patient's core temperature, which provides constant up to the
minute access information on the status of the patient;  2) the
ThermoChem-SB, which can effectively remove a wide range of
chemicals and toxins from the blood, while maintaining a balance
of electrolytes and important nutrients; and  3) the Disposable
Kit, which contains the patented sorbent suspension, as well as
temperature probes, catheters, and tubing set, etc. .

The ThermoChem System's specifications include an extracorporeal
continuous blood circuit, a blood flow rate of 2000 ml/minute
maximum, an integrated device which heats blood outside the body
to approximately 48 degrees centigrade and core temperature to a
maximum of 42.5 degrees centigrade, and a sorbent suspension
system where optimum chemical transfer between the blood and
sorbent is attained, which balances critical blood chemistries.

Pre-clinical trials were conducted on six swine to assure safety
at an increased flow rate and maintenance of a higher core
temperature of 43 degrees centigrade for a period of two hours.
This study concluded that blood chemistries were normalized with
the use of the ThermoChem System .  In November 1996, the
Companies submitted an IDE application to the FDA for a study
utilizing the ThermoChem System  for PISH for metastatic non-
small cell lung cancer.  This protocol was developed by the
University of Texas in Galveston.  The FDA responded in December
1996 with an approval to conduct a Phase I trial.  The University
of Texas' Institutional Review Board (IRB) granted approval of
this study in May 1997.

On September 11, 1997, IDT entered into an agreement with the
University of Texas Medical Branch at Galveston (UTMB) to begin a
human clinical trial in October 1997.  The trial will utilize the
ThermoChem System  and disposables to deliver perfusion-induced
systemic hyperthermia to treat patients with metastatic non-small
cell lung cancer.

One of the objectives of this Phase I trial is to evaluate the
ThermoChem System  for the use in the treatment of metastatic non-
small cell lung cancer with regard to patient selection, tumor
response, patient performance status, and patient survival.  The
follow-up of the patients is patterned after the Southwest
Oncology Group protocols, which are considered state-of-the-art
studies to follow response of cancer to the therapy.

The study is being conducted at the General Clinical Research
Center (GCRC) at UTMB, which is supported by the National
Institute of Health (NIH).  This is the only PISH study for
metastatic non-small cell lung cancer approved by the FDA.

The ThermoChem-HT , a component of the ThermoChem System , which
circulates and heats blood extracorporeally up to approximately
48 C and monitors the patient's core temperature, through various
temperature probes, and also provides constant up to the minute
access information on the patient can be used independently from
the ThermoChem System  for regional hyperthermia.  Regional
hyperthermia is utilized where a systemic treatment is not
necessary, and isolated limb perfusion, a form of regional
hyperthermia, which was developed 40 years ago to treat patients
with melanoma and sarcoma of the limb.  Preclinical trials are
also being conducted for a Phase I trial to involve isolated limb
perfusion for melanomas and sarcomas of the limbs.

Pre-clinical trials are being conducted at M.D. Anderson Cancer
Center in preparation for a Phase I/II trials to involve
thermochemotherapy hemi-perfusion of patients with pelvic or
lower extremity recurrences of different types of cancer.  These
pre-clinical studies are being used to develop the surgical
techniques necessary for a clinical trial on humans and to train
and familiarize the center's staff in the use of the system.

The Cancer Center Protocol Committee of Bowman Gray School of
Medicine has approved a protocol concept to conduct a pilot study
investigating the safety of the ThermoChem-HT  for
intraperitoneal hyperthermic chemotherapy (IPHC) in the treatment
of advanced gastrointestinal and ovarian cancers.

The technique of IPHC has been done at Bowman Gray since 1992
utilizing a non-standardized perfusion setup.  The ThermoChem-HT
can possibly make the technique more efficient with better
temperature monitoring and control.  An IDE is being submitted to
the FDA to conduct this human trial.

IDT's Medical and Scientific Advisory Board consists of the three
following professionals. Currently, none of the board members
receive a fee for serving on the board, but are reimbursed for
expenses incurred.

Corklin R. Steinhart, M.D., Ph.D., is the medical director of
special immunology services at Mercy Hospital in Miami, Florida.

Milton B. Yatvin, Ph.D., is a professor in the Radiation &
Thermal Biology Division, Department of Radiation Oncology at
Oregon Health Sciences University in Portland, Oregon.

Stephen R. Ash, M.D., F.A.C.P., is the Chairman of the Board and
Director of Research and Development of HemoCleanse, a
corporation located in West Lafayette, Indiana.

The Company has expensed approximately$8,402,000 on this project
through December 31, 1997, which includes the Company's
acquisition of HemoCleanse common stock, via a purchase of common
stock and the conversion of a loan into common stock.

Functional Electrical Stimulators

In 1990, BICO began manufacturing functional electrical
stimulators, also referred to as implantable receiver stimulators
("IRS Devices") for Case Western Reserve University in Cleveland,
Ohio ("Case Western") pursuant to a $378,000 contract with the
Department of Veterans Affairs.  The stimulators, which are
implanted under the skin, are used to assist individuals disabled
as a result of spinal cord injury, stroke, head injury, multiple
sclerosis and other neurological disorders by using low levels of
electrical stimulation to activate nerves and muscles to function
in a specific manner.  The IRS Device manufactured by BICO is an
implantable device similar to a pacemaker, which is surgically
implanted in the chest or abdomen, and acts to replace a damaged
or severed nerve and stimulates muscles of the arm or leg to
restore hand grasping, arm movement, or  standing.  The implanted
device works in concert with a control stick and transmitting
coil which are worn on the torso, and an electronic unit which is
carried on the wheelchair.

In late 1994, NeuroControl Corporation in Cleveland, Ohio
("NeuroControl") acquired the rights to Case Western's IRS
Devices for hand functions.  In February 1995, NeuroControl
awarded BICO a $2.2 million contract to build IRS Devices which
would be used during the completion of clinical studies and into
the commercialization phase of the device.  The new contract
originally called for the first installment of devices to be
delivered over approximately a two-year period beginning in
October 1995, with the remaining devices to be delivered in
accordance with a schedule to be negotiated.  Because of
component supply problems, delivery on the initial installment of
devices was delayed until March 1996.   NeuroControl submitted a
Pre-Market Approval ("PMA") application in October 1995 to the
FDA to market the IRS Devices.  The application was complete
except for the manufacturing section which was submitted in
December 1996.  In August, 1997, NeuroControl received approval
from the FDA to market the IRS Device.

BICO expects to complete delivery of the devices on the initial
order in the first quarter of 1998.  In November 1997,
NeuroControl placed a second contract for 400 devices to be
delivered in 1998 after the first contract is complete.  The
value of that contract is $2.146 million.  In addition to the
contracts for the devices, NeuroControl has placed several
purchase orders for ancillary items and services.

When Case Western transitioned its rights to the IRS Devices,
scientists and engineers there began a new stimulator development
program for a device referred to as an Implantable Stimulator
Telemeter ("IST").  The device stimulates in a manner similar to
the IRS Device, but has built into it a wide range of other
capabilities.  BICO has been awarded several small contracts for
development of components for this device and is currently
fabricating IST devices for clinical trials being conducted by
Case Western.

Other Projects


Implantable Technology

In April 1996, BICO was granted FDA approval to market its
theraPORT_ Vascular Access System ("VAS").  The approval was in
connection with the Company's 510(k) Notification filed in
January 1996.  The device is comprised of a reservoir which is
implanted beneath the skin in the chest region with a catheter
inserted in a vein and  provides a delivery system for patients
who require continual injections.  Because such repeated
injections can cause veins to shut down and collapse, the
theraPORT_ offers an improved delivery system by eliminating that
vascular trauma.  If necessary to accommodate multiple drug
therapy with incompatible drugs, dual ports can be implanted.
Such devices are frequently used in cancer drug therapy. BICO
began selling the standard ports during the second quarter of
1997.  A second device with a low profile has been developed for
pediatric use, and a 510(k) was submitted to the FDA in November
1997 for marketing approval.  In early February, 1998, BICO
submitted a supplement to the FDA in response to a request for
additional information.  The Company is currently developing a
dual port device and plans to submit another 510(k) for that
device in the near future.

Through its subsidiary, Coraflex Inc. ("Coraflex"), BICO is
engaged in the development of a polyurethane heart valve which
management believes may not have the disadvantages of the
mechanical and bioprosthetic valves currently being marketed.
The Coraflex_ valve, which resembles the human heart's aortic
valve, is made by means of a proprietary manufacturing process.
The polyurethane used in the construction of the heart valve is
believed by BICO to exhibit strength and fatigue resistance which
compare favorably with that of other materials used for
prosthetic valves.  In vitro testing, some of which has been
performed through the Children's Hospital of Pittsburgh, of the
Coraflex_ valve to date has demonstrated superior fatigue
resistance and flow characteristics relative to the currently
available bioprosthetic and mechanical devices, respectively.
Additional development and testing must be conducted by BICO
prior to its making an application to the FDA for approval to
begin clinical testing in humans.  BICO will need additional
financing to complete  clinical testing of the valve and to begin
production.  No assurances can be made that BICO will receive the
necessary funding to complete testing, will receive FDA-marketing
approval, will be able to produce and sell the valve, or that the
valve will be commercially viable.

BICO also has developed technology for other implantable devices,
such as hemodialysis ports, implantable insulin dispensers and
rate-adaptive pacemakers.   Because BICO's management decided to
focus most of the Company's resources on the research and
development of the Noninvasive Glucose Sensor, little progress
was made on these projects.  Consequently, some of these devices
are in a very preliminary stage of development, and it is unclear
at this time whether their development will be pursued or
completed.

Barnacle Ban

In November 1993, BICO acquired the rights to a specialized
paint, as well as the rights to the name Barnacle Ban_ pursuant
to a patent and trademark license agreement with its inventor.
In 1995, the Company  applied for trademark protection for the
name HotBottom  Paint,  a barrier coat primer and antifouling
paint which received approval for registration from the EPA in
July 1995.  Barnacle Ban's paint is designed to repel zebra
mussels and other related marine life from the surfaces of ships,
pipelines and other objects which function under water.  Because
the accumulation of marine life on surfaces such as pipes and
ships have caused significant problems for entities such as water
authorities, utility companies, and naval operations, the Company
believes that there is a potential market for this product.  The
Company is continuing the testing and enhancement of the product;
manufacturing of the product began in 1994.

In connection with the development of this product, the Company
has formed a wholly-owned subsidiary, Barnacle Ban Corporation
("Barnacle Ban").  Barnacle Ban's officers and directors include
Fred E. Cooper and Anthony J. Feola, who are officers and
directors of BICO and its other affiliates.  Barnacle Ban has
leased space in Robinson Township, Pennsylvania for its
operations.

Marketing efforts on the Company's paint products have continued,
and the Company is marketing the products from its Pittsburgh, PA
and Gaithersburg, MD offices.  In July 1996, the Company
announced that it had entered into a five-year exclusive
distribution agreement with Pleasure Cove Marina, which is
located in Maryland,  for Maryland, Virginia, Delaware and the
District of Columbia; the agreement contains an agreed-upon
minimum purchase requirement.

The trademark and license agreement covers the patents, both
granted and pending, to the paint and its application.  The
agreement sets forth terms which include the minimum payment, in
the form of royalties and fees, of $32,500 for the first year,
$30,000 for the second year, $42,000 for the third year, $54,000
for the fourth year and $66,000 for the fifth and each successive
year. These payments will be minimum royalty payments on six
percent (6%) of  net sales of the product, plus thirty percent
(30%) of all payments received from any sublicensees.  The
Company has spent approximately $2,525,000 on this project
through December 31, 1997.

The information set forth herein regarding BICO's projects is of
a summary nature, and the status of each project is subject to
constant change.  There can be no assurances as to the completion
or success of any project.

RESEARCH AND DEVELOPMENT

The Company continues to be actively engaged in the research and
development of new products.  Its major emphasis has been the
development of a Noninvasive Glucose Sensor.  In order to raise
funds for the research and development of new products, the
Company and Diasense have conducted sales of stock.  (See,
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS").

MARKETING AND DISTRIBUTION
Petrol Rem began marketing of its bioremediation product, PRP_,
in mid-1993, and is now sold in quality marine supply stores in
the coastal areas of the United States, Canada, Europe and South
East Asia.  In addition, the  Barnacle Ban HotBottom  Paint
product is currently being manufactured and marketed.  These
projections are based on management's belief, as to which there
can be no assurances, that the development and manufacture of
those products will continue to proceed successfully and on
schedule.

PATENTS, TRADEMARKS AND LICENSES

The Company owns patents on certain of its products and files
applications to obtain patents on new inventions when practical.
Additionally, the Company endeavors to obtain licenses from
others as it deems necessary to conduct its business.

The Company also relies upon trade secret protection for its
confidential and proprietary information.  Although BICO,
Diasense and their affiliates take all reasonable steps to
protect such information, including the use of Confidentiality
Agreements and similar provisions, there can be no assurance that
others will not independently develop substantially equivalent
proprietary information or techniques, otherwise gain access to
the Company's trade secrets, disclose such technology, or that
the Company can meaningfully protect its trade secrets.

Noninvasive Glucose Sensor

Diasense owns a patent entitled "Non-Invasive Determination of
Glucose Concentration in Body of Patients" (the "Patent")  which
covers certain aspects of a process for measuring blood glucose
levels noninvasively.  Such Patent was awarded to BICO's research
team in December 1991 and was sold to Diasense pursuant to a
Purchase Agreement dated November 18, 1991 (See, "Intercompany
Agreements").  The Patent will expire, if all maintenance fees
are paid, no earlier than the year 2008.  If marketing of a
product made under the Patent is delayed by clinical testing or
regulatory review, an extension of the term of the Patent may be
obtained.  Diasense's Patent relates only to noninvasive sensing
of glucose but not to other blood constituents.  Diasense has
filed corresponding patent applications in a number of foreign
countries.

A second patent application was filed by BICO in December 1992,
which was assigned to Diasense.  This second patent contained new
claims which extend the coverage based upon additional
discoveries and data obtained since the original patent was
filed. The patent application was amended in October 1993, and
was granted in January 1995.

In May 1993, four additional patent applications were filed by
BICO's research teams related to the methods, measurement and
noninvasive determination of analyte concentrations in blood.

As of March, 1998, a total of five U.S. and six foreign patents
have been issued, all of which have been assigned to Diasense,
and additional patents are pending.    Corresponding patent
applications have been filed in foreign countries where the
Company anticipates marketing the Noninvasive Glucose Sensor.

BICO's research team continues to file patent applications,
provisional patent applications, some of which are being
converted into "PCTs" (Patent Cooperative Treaty) which reflect
the continued research and development and additional refinements
to the Noninvasive Glucose Sensor.

Diasense or BICO may file applications in the United States and
other countries, as appropriate, for additional patents directed
to other features of the Noninvasive Glucose Sensor and related
processes.

Those competitors known by BICO to be currently developing non-
invasive glucose sensors own patents directed to various devices
and processes related to  the non-invasive monitoring of
concentrations of glucose and other blood constituents.  It is
possible that such patents may require the Companies  to alter
any model of the Noninvasive Glucose Sensor or the underlying
processes relating to the Noninvasive Glucose Sensor, to obtain
licenses, or to cease certain activities.

The Company also relies upon trade secret protection for its
confidential and proprietary information.  Although  BICO and
Diasense take all reasonable steps to protect such information,
including the use of Confidentiality Agreements and similar
provisions, there can be no assurance that others will not
independently develop substantially equivalent proprietary
information or techniques, otherwise gain access to the Company's
trade secrets, disclose such technology, or that the Company can
meaningfully protect its trade secrets.

The Company has filed for trademark protection for the term
"Diasensor_ 1000", which is intended for use in connection with
the Diasensor_  models; such filing will remain pending until the
first production unit is shipped.  The Company intends to apply,
at the appropriate time, for registrations of other trademarks as
to any future products of the Company.

Whole-Body Hyperthermia

In September 1992, a research team funded by the Company applied
for a domestic patent in connection with the use of PISH and the
treatment of HIV-positive patients; the patent has been assigned
to IDT.  In October 1994, IDT received notification that the
patent application for its specialized method for whole-body
extracorporeal hyperthermia had been issued.  A Continuation in
Part, which included the ThermoChem System  was  filed by IDT,
was allowed in July 1995 and issued in December 1995.

The patent, entitled "Specialized Perfusion Protocol for Whole-
Body Hyperthermia", contains seventeen claims for the
hyperthermia procedure, including the method of heating all of
the blood in the extracorporeal blood circuit to raise the
patient's core temperature to approximately 42 degrees
centigrade.  A Continuation in Part, which was filed by IDT and
included the ThermoChem System , was allowed in July 1995 and was
issued in December 1995.

Implantable Technology

During 1995, the Company renewed its U.S. trademark registration
for the name Coraflex_, which was originally granted in 1988.
The Company has also obtained trademark registration for the name
theraPORT_  (See, "BUSINESS - Implantable Technology).

In October, 1996, a patent was issued for the Company's heart
valve product.

Bioremediation

In 1992 and 1993, Petrol Rem applied for patents in connection
with its bioremediation product, all of which are still pending.
The Company has received trademark authorization for the use of
the product names  PRP_, BIO-SOK_, BIO-BOOM_, and Oil Buster_
(See, "BUSINESS - Bioremediation").

Marine Anti-Fouling Paint

In 1993, the Company acquired the rights to certain patents, both
issued and pending, in connection with its Barnacle Ban project.
A patent was issued on July 13, 1993 for a marine organism
repellant and its application.  A Continuation-In-Part Patent
application is pending.  The Company also filed patent
applications in various foreign countries in November 1993, all
of which are pending.   The Company has filed for trademark
authorization for the product names Barnacle Ban  and HotBottom
for the anti-fouling paint.  In July 1995, the EPA approved the
registration of HotBottom  Paint  (See, "BUSINESS - Barnacle
Ban").

WARRANTIES AND PRODUCT LIABILITY

The Company's present product liability insurance coverage is
$1,000,000 in the aggregate, which management considers to be a
sufficient amount due to the Company's discontinuance of sales
and potential exposure to liability.

SOURCE OF SUPPLY

In connection with the manufacture the Noninvasive Glucose
Sensor, the Company will be dependent upon suppliers for some of
the components required for the devices fabrication.  The Company
plans to assemble the devices, but will need to purchase
components, including some components which will be custom made
for the Company from certain suppliers.  These components will
not be generally available, and the Company may become dependent
upon those suppliers which do provide such specialized products.

If the Company successfully develops other new products, and
receives the regulatory approvals to manufacture such products,
it may become dependent on certain suppliers for custom parts.

COMPETITION

Noninvasive Glucose Sensor

With the rapid progress of medical technology, and in spite of
continuing research and development programs, the Company's
developmental products are always subject to the risk of
obsolescence through the introduction by others of new products
or techniques.  Management is aware that other research groups
are developing noninvasive glucose sensors, but has limited
knowledge as to the technology used or stage of development of
these devices.  There is a risk that those other groups will
complete the development of their devices before the Company
does.  To the best knowledge of the Companies, there is no other
company currently producing or marketing noninvasive sensors for
the measurement of blood glucose similar to those being developed
by the Company.

The Noninvasive Glucose Sensor will compete with existing
invasive glucose sensors.  Although the Company believes that the
features of the Noninvasive Glucose Sensor, particularly its
convenience and the fact that no blood samples are required, will
compete favorably with existing invasive glucose sensors, there
can be no assurance that the Noninvasive Glucose Sensor will
compete successfully.  Most currently available invasive glucose
sensors yield accuracy levels of plus or minus 25% to 30%, range
in price from $80 to $200, not including monthly costs for
disposable supplies and accessories, and are produced and
marketed by eight to ten sizable companies.  Those companies
include Miles Laboratories, Inc., Boehringer Mannheim
Diagnostics, and Lifescan (an affiliate of Johnson & Johnson).

Such companies have established marketing and sales forces, and
represent established entities in the industry.  Certain of the
Company's competitors (including their corporate or joint venture
partners or affiliates) currently marketing invasive glucose
sensors have substantially greater financial, technical,
marketing and other resources and expertise than Diasense, and
may have other competitive advantages over Diasense (based on any
one or more competitive factors such as accuracy, convenience,
features, price or brand loyalty).  Additionally, competitors
marketing existing invasive glucose sensors may from time to time
improve or refine their products (or otherwise make them more
price competitive) so as to enhance their marketing
competitiveness relative to the Company's Noninvasive Glucose
Sensor.  Accordingly, there can be no assurance that the product,
or Diasense as marketer for the Noninvasive Glucose Sensor, will
be able to compete favorably with such competition.

In addition to the invasive glucose sensors discussed above,
there exist invasive sensors, such as the Yellow Springs Sensor
(the "Clinical Sensors") which the Company believes achieve
accuracy levels within 30 minutes which are within plus or minus
3% of actual glucose levels.  The Company will also compete with
this technology, which is relatively non-portable and bears a
price of approximately $8,000.  The Clinical Sensors are
presently used almost exclusively by hospitals and other
institutions, and, like all invasive sensors, still require
repeated blood samples.  It is anticipated that the Company will
also face competition from the Clinical Sensors, at least in some
markets.  For example, certain institutions that might otherwise
purchase Diasense's products may decide to continue to use the
Clinical Sensors, whether due to the superior accuracy levels of
that sensor or institutional or historical bias, despite what
Diasense believes will be the superior convenience and cost
factors of the Noninvasive Glucose Sensor.

The Company faces more direct competition from other companies
who are currently researching and developing noninvasive glucose
sensors.  The Company has very limited knowledge as to the stage
of development of these sensors; however, should another company
successfully develop a noninvasive glucose sensor, achieve FDA
approval, and reach the market prior to the Company, it would
have an adverse effect upon the Company's ability to market its
sensor.

The companies which are currently engaged in the research and/or
development of noninvasive glucose sensors include the following:
Rio Grande Medical Technology ("Rio Grande"), which is working
with the University of New Mexico, CME Telemetrix, Inc. ("CME"),
Cygnus, Inc. ("Cygnus"), Technical Chemicals and Products, Inc.
("TCPI"); Samsung Fine Chemicals ("SFC") and SpectRX.  Although
the Company is not aware, there may be other companies engaged in
similar research and development.  The named companies, and
others, may be further along in their development than the
Company is aware, and may have access to capital and other
resources which would give them a competitive advantage over the
Company.  The following is a summary of the Company's current
knowledge regarding the companies listed.

Rio Grande, formerly associated with Sandia, is affiliated with
the University of New Mexico, continues to develop its
noninvasive glucose sensor based on infrared spectroscopy and
using near-infrared light. To the best knowledge of the Company,
no submission have been made to the FDA in connection with this
device.   CME, a Canadian company is developing a device which
claims to measure glucose noninvasively  via a finger receptacle.
Testing has been conducted in Canada and the U.S.; however, no
approval has been received to sell the device in Canada, and no
FDA submission has been made to date. Cygnus has disclosed that
it is developing a "GlucoWatch", which it claims periodically
directs an electrical current into the diabetic in order to
monitor glucose levels.  Cygnus,  has not yet submitted its
device for FDA scrutiny and, to the best of the Companies'
knowledge, must complete additional clinical trials prior to
applying for FDA approval to market the device.   Cygnus' latest
reports indicate that its plans make a submission for FDA
approval have been further delayed until late 1998.  TCPI
recently announced that it began clinical studies of its system
to correlate interstitial glucose fluid data with various blood
glucose; although TCPI claims that its technology is noninvasive,
it utilizes electronic charges to penetrate the skin and draw
fluid from the body.  SFC, a Korean company, announced in
February that it had developed a hand-held device which the
company claims measures glucose using an electromagnetic radiant
ray (which management believes is a laser similar to the TCPI
technology) to measure glucose.  SFC's announcement stated that
marketing would be limited to Korea and other parts of Asia, and
would begin in mid-1988 pending government approvals.  SpectRX,
which is funded by Abbott Laboratories, also uses lasers to
penetrate the skin and measure interstitial fluids; like the TCPI
and SFC devices, it claims to be noninvasive; however, body
fluids are drawn from the body via lasers.

Certain organizations are also actively engaged in researching
and developing technologies that may regulate the use or
production of insulin or otherwise affect or cure the underlying
causes of diabetes.  Diasense is not aware of any new or
anticipated technology that would effectively render the
Noninvasive Glucose Sensor obsolete or otherwise not marketable
as currently contemplated.  However, there can be no assurance
that future technological developments or products will not make
the Noninvasive Glucose Sensor significantly less competitive or,
in the case of the discovery of a cure for diabetes, even
effectively obsolete.

GOVERNMENT REGULATIONS

Since most of the Company's products are "medical devices" as
defined by the Federal Food, Drug and Cosmetic Act, as amended
(the "Act"), they are subject to the regulatory authority of the
FDA.  The FDA regulates the testing, marketing and registration
of new medical devices, in addition to regulating manufacturing
practices, labeling and record keeping procedures.  The FDA can
subject the Company to inspections of its facilities and
operations and may also audit its record keeping procedures at
any time.  The FDA's Good Manufacturing Practices for Medical
Devices specifies various requirements for BICO's manufacturing
processes and maintenance of certain records.

In March 1993, the FDA announced that it intends to take steps to
enhance its review and approval procedures and guidelines
relating to the testing of medical devices, including imposing a
higher standard of proof on medical devices that might pose
potential health risks.  BICO is unable to determine at this time
whether such action may have a material adverse effect on the
approval by the FDA of the Noninvasive Glucose Sensor, the WBH
delivery system,  any other product, or on BICO's business
generally.  The extent of federal, state, local or foreign
governmental regulations that might result from any future
legislation or administrative action, and the impact of any such
action on BICO's products or business, cannot be accurately
determined.

Noninvasive Glucose Sensor

Because the Noninvasive Glucose Sensor is subject to regulation
by the FDA, the Company will be required to meet applicable FDA
requirements prior to marketing the device in the United States.
These requirements include clinical testing, which must be
supervised by the IRBs  of chosen hospitals.  Clinical testing
began on the Noninvasive Glucose Sensor in May 1993 (See,
"Current Status of the Noninvasive Glucose Sensor").  The
clinical trials have been conducted based on a determination by
the Company and the IRBs that the device is a "non-significant
risk" device, thus obviating the need for an Investigational
Device Exemption ("IDE") filing with the FDA.  Should any of the
IRBs determine, and are successful in convincing the FDA, that
the device is a "significant risk" device, the Company would be
required to submit an IDE filing to the FDA.  Such filing would
result in material delays and expenses for the Company, and a
resulting significant delay in the completion, marketing and sale
of the Noninvasive Glucose Sensor.  To date, neither the IRBs nor
the FDA have informed the Company that they are of the opinion
that the device is a "significant risk" device.

BICO may conclude clinical testing on any device at any point at
which it believes additional data is not necessary for inclusion
in the 510(k) Notification.  Such notification will include a
detailed description of the prototype and data produced during
clinical trials.  The 510(k) Notification review by the FDA
involves a substantial period of time, and requests for
additional information and clinical data will require additional
time.  There can be no assurance that the 510(k) Notification
will ultimately be approved, or when it will be approved.

The 510(k) Notification filed by the Company for the Diasensor_
1000 indicated that the device is "substantially equivalent" to
similar existing devices, namely invasive glucose sensors.  In
connection with its review of the Company's 510(k) Notification,
the FDA will determine whether the device is "substantially
equivalent" to a similar existing device based upon the following
factors: (i) whether the device has the same "intended use" as an
existing device; and (ii) whether the device has the same
technological characteristics as the existing device, unless the
different technological characteristics do not adversely affect
its safety and effectiveness.  Although the Company and the IRBs
believe that the Noninvasive Glucose Sensor satisfies those
requirements, thus qualifying for a 510(k) Notification, there
can be no assurance that the FDA will agree.  Although its
correspondence with the Company appears to indicate that the FDA
believes that the 510(k) Notification is the appropriate filing
for the Diasensor_ 1000, should the FDA determine that the device
is not "substantially equivalent" to an existing device, or
refuse to approve the 510(k) Notification for any reason, the
Company would be required to submit to the FDA's full pre-market
approval process, which would require additional testing, and
result in significant delays and increased expenses.  The FDA's
pre-market approval process is more extensive, time-consuming and
will result in increased research and development expenses, while
delaying the time period in which BICO and Diasense could begin
manufacturing and marketing the product.

The time elapsed between the completion of clinical testing at
IRBs and the grant of marketing approval by the FDA is uncertain,
and no assurance can be given that approval to market the
Noninvasive Glucose Sensor will ultimately be obtained.  In
addition, delays or rejections may be encountered based upon
changes in the FDA's regulatory policies during the period of
research and development and the FDA's review.

The Company may also be required to comply with the same
regulatory requirements prior to introducing the Diasensor_
2000, or other models of the Noninvasive Glucose Sensor, to the
market.  Any changes in FDA procedures or requirements will
require corresponding changes in the Company's obligations in
order to maintain compliance with FDA standards.  Such changes
may result in additional delays or increased expenses.
BICO's products may also be subject to foreign regulatory
approval prior to any sales.

The FDA's Good Manufacturing Practices for Medical Devices
specifies various requirements for BICO's manufacturing processes
and maintenance of certain records.

Whole-Body Extracorporeal Hyperthermia

HemoCleanse has received FDA approval of its Form 510(k)
Notification in connection with the use of the BioLogic-DT model,
which is used in drug detoxification procedures.  However, the
510(k) Notification process, which is intended to be a shorter,
less complex FDA procedure as compared to a full Pre-Market
Approval process, may not be available for the ThermoChem System
model which is used in the hyperthermia project.  IDT and
HemoCleanse continuing to hold discussions with the FDA regarding
the number of patients which must be treated with the ThermoChem
System  before the FDA will accept an application to market the
delivery system in the U.S., and the such companies have retained
a biostatistician to assist them in making that determination.
The Company believes, based on the federal government's
statements regarding the priority treatment to be afforded to
drugs and procedures in connection with the treatment of HIV and
AIDS, that its FDA application, in whatever form, may receive
expedited review.  If either a Pre-Market Approval application or
a 510(k) Notification is approved by the FDA, it would allow IDT
to market the  device.

Although the federal government has publicly stated that
experimental drugs and procedures in connection with the
treatment of HIV will receive priority treatment, there can be no
assurances that any future 510(k) Notifications, Pre-Market
Approval applications, or IDEs will obtain FDA approval.  Without
FDA approval, the delivery system cannot be used or marketed in
the United States.

Bioremediation

The Company's bioremediation project will be supervised by NETAC,
a private group endorsed and supervised by the EPA and the
Pennsylvania Department of Environmental Resources.  In addition,
each state in which the bioremediation products are used will
apply its own environmental regulations to the use and sale of
the products.

HUMAN RESOURCES

As of December 31, 1997, the Company had 147 full-time employees
who were located primarily in either the Indiana or Pittsburgh
locations.  The Company offers employee benefits which include
group life, health, and disability insurance, and the option to
participate in a 401(k) plan.  The Company believes that its
relations with its employees are good.

The Company has employment contracts with some of its non-officer
employees, most of whom are scientists and engineers employed in
the Company's research and development operations.  Such
contracts are typically for terms of five years and contain
confidentiality provisions.  The Company also employs consultants
as needed; some of the consultants are employed pursuant to
consulting contracts which contain confidentiality provisions.
As of December 31, 1997, in addition to BICO's full-time
employees, its subsidiaries IDT had three full-time employees;
Barnacle Ban had eleven full-time  employees; Diasense had three
full-time employees; and Petrol Rem had ten full-time employees.
No employees of any of the companies are currently represented by
a collective bargaining unit.


Item 2. Properties

The Company's research and development operations are located in
a 20,000 square foot one-story building at 300 Indian Springs
Road, Indiana, Pennsylvania.  This facility contains sufficient
additional space to accommodate the Company's projected
operations through 1998, except for its manufacturing space which
is described below.  The building is leased by the Company from
the 300 Indian Springs Road Real Estate Partnership (the
"Partnership").  The lease period is 20 years and runs
concurrently for ten years with a mortgage arranged by the
Partnership at a stated amount of rent.  At the end of ten years,
the amount of rent paid by the Company is subject to
renegotiation, based on refinancing of a balloon payment due on
the mortgage, unless the mortgage has been satisfied by the
Partnership.   In addition to rent, the Company pays all taxes,
utilities, insurance, and other expenses related to its
operations at that location (See, "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS").

In September 1992, BICO entered into a ten-year lease agreement
with the Indiana County Board of Commissioners for 22,500 square
feet of space which BICO plans to use for the manufacture of the
Noninvasive Glucose Sensor, once developed.   The facility,
comprised of 22,500 square feet, has been reconfigured to BICO's
specifications, and the machinery and equipment necessary to
manufacture have been ordered.  In addition, the Company has made
arrangements with Indiana County Commerce Park, the location of
the manufacturing facility, for an additional 32,250 square feet
of manufacturing space.

BICO also leases office space at various locations in
Pennsylvania and Maryland for its administrative and sales
offices, as well as manufacturing space for such operations.

Item 3.  Legal Proceedings

In May 1996, BICO and Diasense, along with BICO's individual
directors, was served with a federal class action lawsuit based
on alleged violations of federal securities laws. The Companies
have filed a Motion to Dismiss the suit and are aggressively
defending against it.  No determinations as to possible liability
or exposure are possible at this time, although the Company does
not believe that any violations of the securities laws have
occurred.

The Pennsylvania Securities Commission is conducting a private
investigation of BICO and Diasense in connection with sales of
securities.  Both companies have cooperated with the
investigation.  To the best knowledge of the Companies, no
findings have been made and no orders have been issued.


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

         Not applicable.


Item 5.  Market for Registrant's Common Equity and Related
         Stockholder Matters

The Company's common stock is traded on the NASDAQ Small-Cap
Market under the symbol "BICO" and is also reported under the
symbol "BIOCNTRL TEC".  On March 20, 1998 the closing price for
the common stock of the Company as reported by NASDAQ was $.125.
Pursuant to current disclosure guidelines, the following table
sets forth the high and low sales prices for the common stock of
the Company during the calendar periods indicated, through
December 31, 1997, as reported by NASDAQ:

     Calendar Year and Quarter           High               Low

     1995 First Quarter                 2.719              1.500
          Second Quarter                4.689              2.375
          Third Quarter                 4.125              3.000
          Fourth Quarter                6.438              2.688

     1996 First Quarter                 3.9375             1.500
          Second Quarter                3.0625             1.406
          Third Quarter                 2.969              1.625
          Fourth Quarter                2.4375              .656


     1997 First Quarter                 1.500               .625
          Second Quarter                1.000               .3125
          Third Quarter                  .719               .3125
          Fourth Quarter                 .406               .0937

As of December 31, 1997 the Company had approximately 29,000
holders, including those who hold in street name, for its common
stock and no holders of record for its preferred stock.

Nasdaq has revised its requirements for companies listed on its
Small-Cap market.  Such requirements, which include a minimum
trading price of $1.00, will limit the Company's option to
continue to trade on  Nasdaq.

Employment Agreement Provisions Related to Changes in Control

BICO has entered into agreements (the "Agreements") with Fred E.
Cooper, David L. Purdy, Anthony J. Feola, Glenn Keeling, and two
non-executive officer employees.  The Agreements provide that in
the event of a "change of control" of BICO, BICO is required to
issue the following shares of common stock, represented by a
percentage of the outstanding shares of common stock of the
Company immediately after the change in control: five percent
(5%) to  Mr. Cooper and Mr. Purdy; four percent (4%) to Mr.
Feola; three percent (3%) to Mr. Keeling; and two percent (2%)
each to the two non-executive officer employees.  In general, a
"change of control" is deemed to occur for purposes of the
Agreement: (i) when 20% or more of BICO's outstanding voting
stock is acquired by any person, (ii) when one-third (1/3) or
more of BICO's directors are not Continuing Directors (as defined
in the Agreements), or (iii) when a controlling influence over
the management or policies of BICO is exercised by any person or
by persons acting as a group within the meaning of Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (See, "MANAGEMENT - Employment Agreements").

Item 6.  Selected Financial Data


                    YEARS ENDED DECEMBER 31st


                    1997        1996         1995       1994           1993

Total Assets    $12,981,300  $14,543,991  $9,074,669  $6,375,778     $2,995,334

Long-Term
Obligations     $ 2,697,099  $ 2,669,727  $  175,330  $  163,201     $  104,917

Working Capital $   888,082  $ 1,785,576  $3,188,246  $2,612,884     $1,112,541

Preferred Stock $         0  $         0  $   37,900  $   54,900     $   54,900

Net Sales       $ 1,155,907  $   597,592  $  461,257  $  184,507     $   54,000

TOTAL           $ 1,426,134  $   776,727  $  755,991  $  481,453     $  134,329
REVENUES

Warrant         $ 4,046,875  $ 9,175,375  $12,523,220 $         0    $        0
Extensions

Benefit         $         0  $         0  $         0 $         0    $        0
(Provision)for
Income Taxes

Net Loss       ($30,433,177)($24,045,702)($29,420,345)($11,672,123)($ 7,855,998)

Net Loss per   ($       .43)($       .57)($       .84)($       .43)($       .45)
Common Share


Cash Dividends
per share:
   Preferred    $         0  $         0  $         0  $         0    $       0
   Common       $         0  $         0  $         0  $         0    $       0


Item 7.  Management's Discussion and Analysis of Financial
Condition and Results of Operations

The following is a summary of the more detailed information set
forth in the financial statements attached hereto.  Data from all
year-end periods are from the Company's Audited Financial
Statements.

Forward-Looking Statements

In addition to other sections of this report, the Management's
Discussion and Analysis section also contains the type of forward-
looking statements discussed on page 2 herein.  Please refer to
such discussion in connection with the information presented
here.


Liquidity and Capital Resources

Working capital was $888,082 at December 31, 1997, as compared to
$1,785,576 at December 31, 1996, and  to $3,188,246 at December
31, 1995.  Working Capital fluctuations are due primarily to the
varied capital-raising efforts of the Company and its affiliate
Diasense, which aggregated approximately $22,300,000 in 1997;
$21,600,000 in 1996; and $19,275,000 in 1995, as well as a
decrease  in net inventory from $3,340,120 as of December 31,
1996 to $1,834,018 as of December 31, 1997.

Cash decreased from $3,802,874 at December 31, 1996 to $2,759,067
at December 31, 1997, as compared to  $3,204,501 at December 31,
1995.  These changes were attributable to the following factors.
The Company's sales of its securities raised funds aggregating
$22,600,000 during 1997 ; $21,600,000 during 1996 and
$19,275,000 during 1995.  During those periods, the Company's
cash flows used by operating activities aggregated $19,121,752;
$19,972,000 and $16,891,000, respectively.  During 1997, such
activities included a $2.1 million increase in inventory
reserves.  In addition, the Company recorded a $4 million charge
against operations due to warrant extensions by the Company and
its subsidiary in 1997, with similar charges of approximately $9
million in 1996 and $12.5 million charge in 1995. (See, Note J to
the Financial Statements).  The Company's cash flows used by
investing activities aggregated $1.4 million in 1997 as compared
to $1 million in 1996, and $2.7 million in 1995.  The primary
difference in such activities was the absence of over $1 million
in notes receivable which was recorded in 1995, but not 1996 or
1997.  The Company's other assets increased by $816,000 from 1996
to 1997; such increase was due in large part to an increase in
notes receivable from related parties (See, Note C to the
Financial Statements) and a $300,000 deposit on equipment during
1997.

The Company's current liabilities decreased by $1,635,000 from
1996 to 1997; the decrease was due to the Company's decreased
issuance of convertible debentures  as part of its capital-
raising efforts, $3.3 million of which were outstanding as of
December 31, 1997, as compared to $4.6 million of which were
outstanding as of December 31, 1996.

During 1996, the Company incurred $2.6 million in capital leases
in connection with the lease of two buildings used for the
manufacture of the Diasensor_ 1000, the current portion of which
was $110,000 at 1997 year end (See, Note H to the Financial
Statements).

The Company continued to fund operations mostly from sales of its
securities.  During 1997,  the Company sold 22,000 shares of its
Series B convertible preferred stock;  and issued $20.2 million
in subordinated convertible debentures.    All convertible
securities contain mandatory conversion provisions which expire
at various dates during 1998 and require minimum holding periods
prior to conversion.

As of December 31, 1997 and 1996, the conversion price of the debentures
would have been approximately $.146 and $.686 per share, respectively,
based upon a formula which applies a discount to the average market
price for the previous week and determined by the length of the
holding period.  As of December 31, 1997 and 1996, the number of
shares issued upon conversion of all outstanding debentures was
approximately 23.9 million and 6.7 million shares, respectively,
which would have reflected discounts of approximately 18% and 17%,
respectively.

Due to the Company's current limited sources of revenue, the
Company plans to seek additional financing which will be used to
finance development of, and to proceed to manufacture, the
Noninvasive Glucose Sensor and to complete the development of its
other projects.   No assurances are made as to the availability
of any such financing (See, "BUSINESS").

The Company's products are at various stages of development and
will require additional funding for completion.  This paragraph
summarizes the Company's estimates as to the aggregate amounts
needed to complete each project, assuming continued testing and
development is successful.  The Company may choose to discontinue
any of its projects at any time if research and development
efforts indicate that continuation would be inadvisable. The
Diasensor_ 1000 has been submitted to the FDA for marketing
approval and the Diasensor_  2000 is in the pre-clinical trial
stage of development.

The Company currently has a commitment for capital leases on
certain of its capital equipment and future commitments for new
capital expenditures will be required to continue the Company's
efforts in research and development, and to manufacture and
market its existing products and any other products it may
develop.

As of March, 1998, the Company estimates that its short-term
liquidity needs will be met from currently available funds.  The
Company estimates that such funds will be sufficient to complete
the research and development stage of the Noninvasive Glucose
Sensor, to complete the CE mark process, and to begin marketing
the device.  The Company anticipates that it will finance those
expenses with existing funds, as well as funds raised through the
sales of its securities and from the other sources of funds
described herein.  The Company has a history of successful
capital-raising efforts; since 1989, and through December 1997,
BICO and its affiliate Diasense have raised over $100,000,000 in
private and public offerings alone.

Management also expects to meet a portion of its short-term
working capital needs through development contracts with other
organizations and through manufacturing for other companies on a
contractual basis, as described herein.  During 1995, 1996 and
1997, the Company was awarded contracts by the Department of
Veteran's Affairs Medical Center for Case Western Reserve
University, Shriners Hospital - Philadelphia Unit, and Austin
Hospital to manufacture FES products.  Such contracts generated
revenues of  $168,461, $508,561 and $880,919 1995, 1996 and 1997,
respectively  (See, "BUSINESS").

Pursuant to a Research and Development Agreement (the "R&D
Agreement") Diasense is obligated to pay BICO for its work to
develop the Noninvasive Glucose Sensor.  During 1995, both
billings and payments pursuant to the  R&D Agreement were
suspended.  In May, 1995, BICO agreed to accept 3,000,000 shares
of Diasense common stock at an assigned value of $3.50 per share
in return for a reduction of $10,500,000 in amounts due to BICO.
As of December 31, 1995, all amounts due to BICO by Diasense
pursuant to the R&D Agreement had been paid.

In view of BICO's expenses resulting from its product development
projects, and other factors discussed herein, as compared to
BICO's contract revenues, currently available funds, and
established ability to raise capital in public and private
markets, BICO estimates that it will meet its liquidity needs for
a period of at least twelve months from December 31, 1997 from
currently available funds, including those expected to be raised
via additional sales of the Company's securities.  This estimate
is based, in part, upon the current absence of any extraordinary
technological, regulatory or legal problems.  Should such
problems, which could include unanticipated delays resulting from
new developmental hurdles in product development, FDA
requirements, or the loss of a key employee, arise, the Company's
estimates would require re-evaluation.  There can be no
assurances that despite the Company's good-faith efforts, its
estimates will lead to accurate results.

The Company's long-term liquidity needs are expected to include
working capital to fund manufacturing expenses for its products
and continued research and development expenses for existing and
future projects.  Such needs are expected to be met from
continued FES and IRS Device contract revenues, sales of its
bioremediation products, HotBottom  paint, and, once production
begins, the Noninvasive Glucose Sensor and other products.
Delays in the development of the Company's products will result
in increased needs for capital from other sources.  The Company
anticipates that such other sources will include continued sales
of common stock, and investment partners such as venture capital
funds and private investment groups.  There can be no assurances
given that adequate funds will be available.  If the Company is
unable to raise the funds necessary to fund the long-term
expenses necessary to complete the development or manufacture of
its products, the Company will be unable to continue its
operations.

As described hereinabove, management believes the Company has
sufficient liquidity to meet its projected expenditures on a
short-term basis.  Absent additional funding, the Company will
have limited liquidity on a long-term basis.  Moreover, many
demands on liquidity, such as technological, regulatory or legal
problems, could cause the Company's liquidity to be inadequate.
At present, the Company does not have any additional sources of
liquidity, including bank lines of credit.  Long-term working
capital needs are expected to be met through sales of the
Noninvasive Glucose Sensor, the PRP_ bioremediation product,
HotBottom  paint, and other new products.  There can be no
assurances that any such products will be successfully marketed
or commercially viable.




Results of Operations


The following seven paragraphs discuss the Results of Operations
of the entire Company based on its consolidated financial
statements.  A discussion of the business segments follows.

In 1997, the Company's net sales increased to $1,155,907 from
$597,592 in 1996 and $461,257 in 1995.  The increase was due to
an increase in all product sales, including its Petrol Rem and
Barnacle Ban products (See, Note F to the Financial Statements)
Of the total net sales, the Company had $880,919 in implantable
device revenues in 1997 as compared to $508,561 in 1996 and
$168,461 in 1995.

In 1997, 1996 and 1995, the Company received interest income in
the amount of $165,977; $176,478; and $294,734, respectively.
The fluctuation was due to the investment of the Company's liquid
assets (which are  composed primarily of funds raised via sales
of securities), the availability of such assets and applicable
interest rates.  The Company's other income increased to $104,250
in 1997 from $2,657 in 1996 and $0 in 1995; the increase was due
primarily to amounts due from directors in connection with the
settlement of certain lawsuits.

In 1997, the Company's costs of products sold was $641,331 as
compared to $325,414 in 1996 and $198,542 in 1995.  The increase
is primarily due to the Company's corresponding increases in
product sales, and products produced pursuant to FES and IRS
Device contracts.

The Company's research and development expenses were $6,977,590
in 1997, a decrease from $8,742,922 in 1996, and $7,649,678 in
1995.  The overall decrease was due to the Company's realignment
of personnel and resources in an effort to obtain a CE Mark for
sale of the Noninvasive Glucose Sensor outside the U.S. (See,
"Business of the Company - Current Status of the Noninvasive
Glucose Sensor").

In 1997, General and Administrative expenses were $12,704,146, an
increase from $8,963,693 in 1996 and $11,117,107 in 1995.  The
increase was due, in part, to the allocation of funds to outside
consultants and other advisors to assist the Company in its
efforts to obtain a CE Mark.

During  1997, the Company extended 177,800  warrants originally
granted to certain officers, directors, employees and consultants
in 1992, as compared to similar extension of 351,482 warrants in
1996, and 2,069,500 warrants in 1995.  Because the exercise price
of some such warrants ($.25 to $3.50) was lower than the market
price of the common stock at the time of the extensions $604,342
was charged to operations during 1996, as compared to $7,228,220
in 1995. During 1997, no expense was charged to operations since
the market price was lower than of the original warrant exercise
price.  In addition,  a similar charge of $4,046,875 in 1997;
$8,571,033 in 1996 and $5,295,000 in 1995 was made by the
Company's subsidiary, Diasense (See, "EXECUTIVE COMPENSATION" and
Note J to the Financial Statements).

Interest expense on the Company's outstanding indebtedness was
$315,624 in 1997 as compared to $133,460 in 1996 and $17,048 in
1995. The increase was due to an increase in capital leases and
interest payment on the Company's subordinated debentures.

Segment Discussion

For purposes of accounting disclosure, the Company provides the
following discussion regarding three business segments:
Biomedical devices, which includes the operations of Biocontrol
Technology, Inc. and Diasense, Inc.; Bioremediation, which
includes the operations of Petrol Rem, Inc.; and Marine Paint
Products, which includes the operations of Barnacle Ban
Corporation.  More complete financial information on these
segments is set forth in Note F to the accompanying financial
statements.


Biomedical Device Segment.  During the year ended December 31,
1997, sales to external customers increased to $880,919 from
$508,561 in 1996 and $168,461 in 1995.  These increases were
primarily due to increased sales of the functional electrical
stimulators.  Corresponding increases in costs of products goods
sold occurred for the same reason, from $91,859 in 1995 to
$288,537 in 1996 and to $445,843 in 1997.


Bioremediation Segment.  During the year ended December 31, 1997,
sales to external customers increased to $138,362 from $47,625 in
1996.  Both years' sales to external customers decreased from
$215,211 in 1995.   The decrease from 1995 to 1996 was due to
different marketing targets and a decrease in the orders for
products.  The increase from 1996 to 1997 was due to increased
sales of the Bio-Sok to boating suppliers and users through trade
shows and marketing exposure.  Costs of products sold fluctuated
due to the same factors, from $53,813 in 1995 to $16,092 in 1996
and $88,178 in 1997.  The relatively higher costs of products
sold in 1997 was due to the higher cost of producing the Bio-Sok
as opposed to other bioremediation products.

Marine Paint Products Segment.  Sales to external customers
increased to $136,624 in 1997 from $41,406 in 1996, which was a
decrease from $77,585 in 1995.  The higher sales in 1995 and 1997
were due to a focus on marine craft, rather than municipal,
users, which was the focus in 1996.  Costs of products sold
reflect the same impact, a decrease from 1995's $52,870 to 1996's
$20,785 and an increase to 1997's $107,310.

Income Taxes

Due to the Company's net operating loss carried forward from
previous years and its current year losses, no federal or state
income taxes were required to be paid for the years 1987 through
1997.  As of December 31, 1997, the Company and its subsidiaries,
except for Diasense and Petrol Rem, had available net operating
loss carryforwards for federal income tax purposes of
approximately $63,260,000, which expire during the years 1998
through 2012  (See, Note K to the Financial Statements).

Supplemental Financial Information

As of March 25, 1998, the Company has outstanding approximately
$5,020,000 in subordinated convertible debentures with expiration
dates ranging from December 29, 1998 through March 25, 1999.

On February 2, 1998, BICO's shareholders approved an increase in
the number of authorized shares of common stock from 150,000,000
to 300,000,000 at a Special Shareholders Meeting convened for
that purpose.

Effective March 4, 1998, the Company acquired a majority interest
in International Chemical Technologies, Inc. ("ICTI"), a company
which produces metal-coating products (See, Note O to the
Financial Statements).

Item 8.  Financial Statements and Supplementary Data

The Company's financial statements appear on pages F-1 through
F-22 of this report.

Item 9.  Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure

Effective January 25, 1995, upon a determination by the Board of
Directors, the Company engaged Thompson Dugan, P.C. as its
independent auditors and accountants to replace Grant Thornton
LLP.  Thompson Dugan, P.C.  also serves as the independent
auditors and accountants for Diasense, replacing Grant Thornton
LLP.  Neither company had any disagreements with Grant Thornton
LLP or Thompson Dugan, P.C.  on any matter of accounting
principles or practices, financial statement disclosure or
auditing scope or procedure.
Item 10.  Directors and Executive Officers of the Registrant

The directors and executive officers of the Company as of
December 31, 1997 were as follows:


					     Director
     Name          Age   Since                Position


David L. Purdy      69    1972      President, Chaairman of the Board,
                                    Treasurer, Director

Fred. E. Cooper     52    1989      Chief Executive Officer, Executive Vice
                                    President, Director

Anthony J. Feola    50    1990      Senior Vice President, Director

Glenn Keeling       47    1991      Vice President, Director
_________________________________


DAVID L. PURDY, 69 is President, Chairman of the Board, Treasurer
and a director of the Company.  Mr. Purdy has been a director and
Chairman of the Board since its organization in 1972 and is
considered the organizer and founder of the Company; he devotes
60% of his time to the business of the Company, and 40% of his
time to Diasense.  He has also served as President of the Company
from 1972 through December 1990, with the exception of five
months in 1980, when he served as Chairman and full-time Program
Director of the Company's implantable medicine dispensing device
program with St. Jude Medical, Inc., and from October 1, 1987
through July 15, 1988, when he served as Chairman and Director of
Research and Development for the Company.  Prior to founding the
Company, he was employed by various companies in the medical
technology field, including Arco Medical, Inc.  Mr. Purdy is also
an officer and director of Diasense and Coraflex.

FRED E. COOPER, 52, is the Chief Executive Officer, Executive
Vice President and a director of the Company; he devotes
approximately 60% of his time to the business of the Company, and
40% to Diasense.  Prior to joining the Company, Mr. Cooper
co-founded Equitable Financial Management, Inc. of Pittsburgh,
PA, a company in which he served as Executive Vice President
until his resignation and divestiture of ownership in August
1990.  In 1972, Mr. Cooper founded Cooper Leasing Corp.,
Pittsburgh, Pennsylvania, a company specializing in equipment and
venture financing.   Mr. Cooper was appointed Chief Executive
Officer in January 1990. He is also an officer and director of
Diasense and Barnacle Ban, and a director of Petrol Rem and
Coraflex.

ANTHONY J. FEOLA, 50, rejoined the Company as its Senior Vice
President in April, 1994, after serving as Diasense's Vice
President of Marketing and Sales from January, 1992 until April,
1994. Prior to January, 1992, he was the Company's Vice President
of Marketing and Sales.  Prior to joining the Company in November
1989, Mr. Feola was Vice President and Chief Operating Officer
with Gateway Broadcasting in Pittsburgh in 1989, and National
Sales Manager for Westinghouse Corporation, also in Pittsburgh,
from 1980 until 1989.  He was elected a director of the Company
in February 1990, and also serves as a director of Diasense,
Coraflex, Petrol Rem and Barnacle Ban.

GLENN KEELING, 47, joined the Board of Directors in April 1991.
Mr. Keeling currently is a full-time employee of BICO in the
position of Vice President of Marketing; his primary
responsibilities during 1994 through 1997 have been the
management and operation of IDT's Whole-Body Extracorporeal
Hyperthermia project.  From 1976 through 1991, he was a Vice
President in charge of new business development at Equitable
Financial Management, Inc., a regional equipment lessor.  His
responsibilities included initial contacts with banks and
investment firms to open new lines of business referrals in
connection with financing large equipment transactions.  He is
also President and a director of IDT.

Pursuant to the disclosure requirements of Item 405 of Regulation
S-K regarding timely filings required by Section 16(a) of the
Securities and Exchange Act, the Company represents the
following.  Based solely on its review of copies of forms
received and written representations from certain reporting
persons, the Company believes that all of its officers, directors
and greater than ten percent beneficial owners complied with
applicable filing requirements.

In February 1998, the Company appointed two new members to its
Board of Directors: Stan Cottrell and Richard Bourret.  Both
Mssrs. Cottrell and Bourret are outside directors.

Item 11.  Executive Compensation

The following table sets forth information concerning the annual
and long-term compensation for services in all capacities to the
Company for the fiscal years ended December 31, 1997, 1996 and
1995, of those persons who were, at December 31, 1997 (i) the
Chief Executive Officer, and (ii) the other most highly
compensated executive officers of the Company whose remuneration
exceeded $100,000 (the "Named Executives").

                         SUMMARY COMPENSATION TABLE
==============================================================================
             Annual Compensation                 | (1)Long Term  Compensation
------------------------------------------------------------------------------
                                                 |   Awards
Name and                                         | Securities
Principal                                (2)     | Underlying  (2) All other
Position      Year  Salary($) Bonus($) Other($)  | Warrants(#)  Compensation
==============================================================================
David L.                                         |
Purdy ,       1997  $241,667      $0        $0   |           0          $0
President,    1996  $400,000      $0        $0   |           0          $0
Treasurer (4) 1995  $400,000      $0        $0   |     820,000 (3)      $0
------------------------------------------------------------------------------
Fred E.       1997  $592,000      $0        $0   |           0          $0
Cooper,       1996  $592,000      $0        $0   |           0          $0
CEO (5)       1995  $480,000      $0        $0   |     575,000 (3)      $0
------------------------------------------------------------------------------
Anthony J.    1997  $300,000      $0        $0   |           0          $0
Feola , Sr.   1996  $300,000      $0        $0   |     350,000 (3)      $0
Vice Pres.(6) 1995  $250,000      $93,125   $0   |     200,000 (3)      $0
------------------------------------------------------------------------------
Glenn         1997  $200,000      $0        $0   |           0          $0
Keeling, VP   1996  $200,000      $0        $0   |     100,000 (8)      $0
(7)           1995  $175,000      $0        $0   |           0          $0
==============================================================================

(1)  The Company does not currently have a Long-Term Incentive
     Plan ("LTIP"), and no payouts were made pursuant to any LTIP
     during the years 1997, 1996, or 1995.  The Company did not
     award any restricted stock to the Named Executives during
     any year, including the years 1997, 1996 or 1995.    The
     Company did not award any warrants, options or Stock
     Appreciation Rights ("SARs") to the Named Executives during
     the years ended December 31, 1997, 1996 or 1995; however,
     the Company did extend warrants owned by the Named
     Executives, which would have expired during 1995 and 1996
     (See Note 3, below).  The Company has no retirement, pension
     or profit-sharing programs for the benefit of its directors,
     officers or other employees.  The Company currently has key-
     man life insurance for David L. Purdy and Fred E. Cooper in
     the amount of $1,000,000 each.

(2)  During the year ended December 31, 1997, the Named
     Executives received medical benefits under the Company's
     group insurance policy, including disability and life
     insurance benefits.  The aggregate amount of all perquisite
     compensation was less than 10% of the total annual salary
     and bonus reported for each Named Executive.

(3)  During 1995 and 1996, the Company extended warrants
     previously issued to the Named Executives which would have
     otherwise expired.  Although the extensions were in
     connection with warrants already held by the Named
     Executives, they are shown in the table set forth above as
     "awards" for executive compensation disclosure purposes
     because at the time of the extension, the exercise price of
     the warrants (which remained unchanged) was less than the
     "market price" of the common stock.

(4)  In November, 1994,  Mr. Purdy's employment agreement was
     renegotiated to provide for an annual salary of $250,000
     effective November 1, 1994  through October 31, 1999.  All
     other terms of the contract remained substantially the same
     (See, "Employment Agreements").  During 1995, Mr. Purdy's
     salary was increased by $50,000.  In 1997, 1996 and 1995,
     Mr. Purdy was paid $87,500; $100,000 and $100,000 by
     Diasense.  Mr. Purdy is paid a salary by the Company based
     upon his employment contract.  Amounts paid to Mr. Purdy by
     Diasense are determined by the Diasense Board of Directors
     based upon services performed on its behalf.

(5)  In November, 1994,  Mr. Cooper's employment agreement was
     renegotiated to provide for an annual salary of $250,000
     effective November 1, 1994  through October 31, 1999.  All
     other terms of the contract remained substantially the same
     (See, "Employment Agreements").  In addition, in 1997, 1996
     and 1995, Mr. Cooper was paid $96,000; $96,000; and $40,000
     respectively by both Petrol Rem and IDT, both of which are
     subsidiaries of BICO. In 1997, 1996, and 1995, Mr. Cooper
     was paid $150,000 in salary by Diasense.  Mr. Cooper is paid
     a salary by the Company based upon his employment agreement.
     Amounts paid to Mr. Cooper by Diasense, Petrol Rem and IDT
     are determined by the Boards of Directors of those companies
     based upon services performed on their behalf.

(6)  In April, 1994, Mr. Feola's employment agreement with
     Diasense was assigned to BICO when he left Diasense to
     rejoin BICO as its Senior Vice President.  In November,
     1994,  Mr. Feola's employment agreement was renegotiated,
     provides for an annual salary of $200,000 and is effective
     November 1, 1994  through October 31, 1999.  All other terms
     of the contract remained substantially the same (See,
     "Employment Agreements").  During 1996 and 1995, Mr. Feola's
     salary was increased by $50,000 per year.

(7)  In November, 1994, Mr. Keeling entered into an employment
     agreement with the Company which provides for an annual
     salary of $150,000 effective November 1, 1994 through
     October 31, 1999 (See, "Employment Agreements").  During
     1996 and 1995, Mr. Keeling's salary was increased by $25,000
     per year.

(8)  On August 26, 1996, Mr. Keeling was granted warrants to
     purchase 100,000 shares of the Company's common stock at a
     price of $1.48 per share (the market price as of that date)
     until August 26, 2001.


               Option/Warrant/SAR Grants in Last Fiscal Year

No options, warrants or SARs were granted or extended to the Named Executives
during 1997.


 AGGREGATED OPTION/WARRANT/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL
               YEAR-END OPTION/WARRANT/SAR VALUE TABLE
=========================================================================
                                            Number of         Value of
                                            Securities        Unexercised
                                            Underlying        In-the-Money
                                            Unexercised       Options/SARs
                                            Options/SARs      12/31/97 ($)
                                            at 12/31/97 (#)
           Shares           Value
           Acquired on      Realized ($)    Exercisable       Exercisable/
           Exercise           (2)           Unexercisable(3)  Unexercisable (4)
Name       (#)(1)
-------------------------------------------------------------------------------
David L.     52,800         $ 8,239          767,200           $   0
Purdy        (5)              (6)            (7)                 (13)
-------------------------------------------------------------------------------
Fred E.     100,000         $33,440          300,000           $   0
Cooper       (8)              (9)            (10)                (13)
-------------------------------------------------------------------------------
Anthony J.        0         $     0          550,000           $   0
Feola                                        (11)                (13)
-------------------------------------------------------------------------------
Glenn             0         $     0          100,000           $   0
Keeling                                      (12)                (13)
===============================================================================

(1)  This  figure represents the number of shares of common stock
     acquired  by each named executive officer upon the  exercise
     of warrants.

(2)  The value realized of the warrants exercised was computed by
     determining  the  spread between the  market  value  of  the
     underlying  securities  at the time of  exercise  minus  the
     exercise price of the warrant.

(3)  All  warrants  held  by the Named Executives  are  currently
     exercisable.

(4)  The   value   of  unexercised  warrants  was   computed   by
     subtracting  the exercise price of the outstanding  warrants
     from  the closing sales price of the Company's common  stock
     on December 31, 1997 as reported by Nasdaq ($.1875).

(5)  During the year ended December 31, 1997, Mr. Purdy exercised
     warrants to purchase 52,800 shares of common stock  at  $.25
     per share.

(6)  The  closing  sales price as reported by Nasdaq  on  May  1,
     1997, the date of the warrant exercise set forth in note (5)
     was $.406 per share.

(7)  Includes  warrants  to purchase: 187,200  shares  of  common
     stock at $.25 per share until April 24, 1995 (extended until
     April 24, 1998); 500,000 shares of common stock at $.25  per
     share  until May 1, 1995 (extended until May 1,  1998);  and
     80,000  shares of common stock at $.33 per share until  June
     29, 1995 (extended until June 29, 1998) (See, "Warrants").

(8)  During  year ended December 31, 1997,  Mr. Cooper  exercised
     warrants to purchase 100,000  shares of common stock at $.25
     per share.

(9)  The  closing sales price as reported by Nasdaq on April  21,
     1997,  the  date of the warrant exercise set forth  in  note
     (8), was $.594.

(10) Includes  warrants  to purchase: 300,000  shares  of  common
     stock  at  $.25 per share until May 1, 1995 (extended  until
     May 1, 1998) (See, "Warrants").

(11) Includes  warrants to purchase:  100,000  shares  of  common
     stock  at  $.25 per share until May 1, 1995 (extended  until
     May  1,  1998); 100,000 shares of common stock at  $.25  per
     share  until November 26, 1995 (extended until November  26,
     1998); and 350,000 shares of common stock at $.50 per  share
     until  October  11, 1996 (extended until October  11,  1999)
     (See, "Warrants").

(12) Includes  warrants  to purchase: 100,000  shares  of  common
     stock at $1.48 per share until August 26, 2001.

(13) Because  the market price as of December 31, 1997  was  less
     than the exercise price of the warrants, such warrants  were
     not "in-the-money".

Employment Agreements

BICO  has  entered into employment agreements (the  "Agreements")
with its Named Executives Fred E. Cooper, David L. Purdy, Anthony
J.  Feola  and Glenn Keeling effective November 1, 1994, pursuant
to  which  they are currently entitled to receive annual salaries
of $250,000, $300,000, $300,000 and $200,000  respectively, which
are  subject to review and adjustment.  The initial term  of  the
Agreements  with Messrs. Cooper and Purdy expires on October  31,
1999,  and  continues thereafter for additional three-year  terms
unless any of the parties give proper notice of non-renewal.  The
initial  term  of the Agreements with Messrs. Feola  and  Keeling
expires  on  October  31,  1999,  and  continues  thereafter  for
additional  two-year  terms unless either  of  the  parties  give
proper  notice of non-renewal.  The Agreements also provide  that
in  the  event of a "change of control" of BICO, BICO is required
to  issue the following shares of common stock, represented by  a
percentage  of  the  outstanding shares of common  stock  of  the
Company  immediately  after the change in control:  five  percent
(5%)  to   Mr.  Cooper and Mr. Purdy; four percent  (4%)  to  Mr.
Feola;  and  three percent (3%) to Mr. Keeling.   In  general,  a
"change  of  control"  is deemed to occur  for  purposes  of  the
Agreements  (i)  when  20% or more of BICO's  outstanding  voting
stock  is  acquired by any person, (ii) when one-third  (1/3)  or
more of BICO's directors are not Continuing Directors (as defined
in the Agreement), or (iii) when a controlling influence over the
management or policies of BICO is exercised by any person  or  by
persons acting as a group within the meaning of Section 13(d)  of
the  Securities  Exchange Act of 1934, as amended (the  "Exchange
Act").

In  addition, in the event of a change in control within the term
of  the Agreements or within one year thereafter, Messrs. Cooper,
Purdy,  Feola  and  Keeling  are entitled  to  receive  severance
payments  in  amounts equal to: 100% of their most recent  annual
salary  for the first three years following termination;  50%  of
their  most recent annual salary for the next two years; and  25%
of  their  most recent salary for the next five years.   BICO  is
also  required to continue medical insurance coverage for Messrs.
Cooper,  Purdy, Feola and Keeling and their families during  such
periods.  Such severance payments will terminate in the event  of
the employee's death.

In  the  event  that  either  Mr. Purdy  or  Mr.  Cooper  becomes
disabled, as defined in their Agreements, he will be entitled  to
the  following payments, in lieu of salary, such payments  to  be
reduced  by  any  amount  paid directly  to  him  pursuant  to  a
disability  insurance  policy provided  by  the  Company  or  its
affiliates: 100% of his most recent annual salary for  the  first
three  years; and 70% of his most recent salary for the next  two
years.  In the event that either Mr. Feola or Mr. Keeling becomes
disabled, as defined in their Agreements, he will be entitled  to
the  following payments, in lieu of salary, such payments  to  be
reduced  by  any  amount  paid directly  to  him  pursuant  to  a
disability  insurance  policy provided  by  the  Company  or  its
affiliates: 100% of his most recent annual salary for  the  first
year; and 70% of his most recent salary for the second year.

The  Agreements also generally restrict the disclosure of certain
confidential information obtained by Messrs. Cooper, Purdy, Feola
and  Keeling during the term of the Agreements and restricts them
from  competing  with BICO for a eriod of one year  in  specified
states following the expiration or termination of the Agreements.

In  addition  to the Employment Agreements described above,  BICO
also  entered  into employment agreements with two  of  its  non-
executive  officer  employees effective November  1,  1994.   The
terms  of  such  agreements are similar to  those  described  for
Messrs.  Feola and Keeling above, with the following  amendments:
the  term  of  one  agreement is from November  1,  1994  through
October 31, 2002, and is renewable for successive two-year terms;
the  term of the other agreement is from November 1, 1994 through
October 31, 1999, and is renewable for successive two-year terms;
in  the event of a "change in control", BICO is required to issue
both  employees shares of common stock equal to two percent  (2%)
of  the  outstanding shares of the common stock  of  the  Company
immediately after the change in control.

Item  12.   Security Ownership of Certain Beneficial  Owners  and
Management

The  following table sets forth the indicated information  as  of
December 31, 1997 with respect to each person who is known by the
Company to be the beneficial owner of more than five percent (5%)
of  the  outstanding common stock, each director of the  Company,
and  all  directors and executive officers of the  Company  as  a
group.  The table excludes disclosure of entities such as Cede  &
Co.  and  other  companies which would reflect the  ownership  of
entities who hold stock on behalf of shareholders.

As  of  December 31, 1997, there were 138,583,978 shares  of  the
Company's common stock outstanding.  The first column sets  forth
the  common  stock  currently owned  by  each  person  or  group,
excluding  currently  exercisable warrants for  the  purchase  of
common stock.  The second column sets forth the percentage of the
total number of shares of common stock outstanding as of December
31,  1997  owned  by each person or group, excluding  exercisable
warrants.  The third column sets forth the total number of shares
of common stock which each named person or group has the right to
acquire,  through  the exercise of warrants,  within  sixty  (60)
days, plus common stock currently owned.  The fourth column  sets
forth  the  percentage of the total number of  shares  of  common
stock outstanding as of December 31, 1997 which would be owned by
each  named  person  or group upon the exercise  of  all  of  the
warrants held by such person or group together with common  stock
currently  owned,  as set forth in the third column.   Except  as
otherwise indicated, each person has the sole power to  vote  and
dispose of each of the shares listed in the columns opposite  his
name.
                       Amount and Nature                             Percent of
Name and Address of      of Beneficial   Percent of   Ownership with Class with
Beneficial Owner          Ownership(1)    Class (2)     Warrants (3) Warrants(4)


David L. Purdy (5)         240,140           *         1,007,340(6)      *
300 Indian Springs Road
Indiana, PA 15701

Fred E. Cooper             776,200           *         1,076,200(7)      *
Building 2500, 2nd Floor
2275 Swallow Hill Rd.
Pittsburgh, PA 15220

Anthony J. Feola           354,000           *           904,000(8)      *
Building 2500, 2nd Floor
2275 Swallow Hill Rd.
Pittsburgh, PA 15220

Glenn Keeling              138,500           *           238,500(9)      *
200 Julrich Drive
McMurray, PA 15317

All directors and        1,508,840          1.1%       3,226,040(10)    2.3%
executive officers
as a group (4 persons)

* Less than one percent
________________________


(1)  Excludes  currently exercisable warrants set  forth  in  the
     third column and detailed in the footnotes below.

(2)  Represents current common stock owned by each person, as set
     forth  in  the first column, excluding currently exercisable
     warrants,  as a percentage of the total number of shares  of
     common stock outstanding as of December 31, 1997.

(3)  Includes ownership of all shares of common stock which  each
     named person or group has the right to acquire, through  the
     exercise of warrants, within sixty (60) days, together  with
     the common stock currently owned.

(4)  Represents total number of shares of common stock  owned  by
     each  person, as set forth in the third column,  which  each
     named person or group has the right to acquire, through  the
     exercise  of warrants within sixty (60) days, together  with
     common  stock currently owned, as a percentage of the  total
     number  of shares of common stock outstanding as of December
     31,  1997.  For  computation purposes, the total  number  of
     shares  of common stock outstanding as of December 31,  1997
     has  been increased by the number of additional shares which
     would be outstanding if the person or group owned the number
     of shares set forth in the third column.

(5)  Does  not include shares held by Mr. Purdy's spouse or adult
     children.   Mr. Purdy disclaims any beneficial  interest  to
     shares held by members of his family.

(6)  Includes  currently  exercisable warrants  to  purchase  the
     following: 187,200 shares of common stock at $.25 per  share
     until April 24, 1995 (extended until April 24, 1998); 80,000
     shares of common stock at $.33 per share until June 29, 1995
     (extended until June 29, 1998); and 500,000 shares of common
     stock  at  $.25 per share until May 1, 1995 (extended  until
     May  1,  1998)  pursuant to Mr. Purdy's previous  employment
     agreement.   In addition, Mr. Purdy is entitled  to  certain
     shares  of Common Stock upon a change of control of BICO  as
     defined   in  his  employment  agreement  (See,  "Employment
     Agreements").

(7)  Includes  currently  exercisable warrants  to  purchase  the
     following: 300,000 shares of common stock at $.25 per  share
     until  May 1, 1995 (extended until May 1, 1998) pursuant  to
     Mr. Cooper's previous employment agreement. In addition, Mr.
     Cooper is entitled to certain shares of Common Stock upon  a
     change  of  control  of BICO as defined  in  his  employment
     agreement (See, "Employment Agreements").

(8)  Includes  currently  exercisable warrants  to  purchase  the
     following:    100,000 shares of common  stock  at  $.25  per
     share  until November 26, 1995 (extended until November  26,
     1998);  100,000  shares of common stock at  $.25  per  share
     until  May 1, 1995 (extended until May 1, 1998) pursuant  to
     Mr.  Feola's  previous  employment  agreement;  and  350,000
     shares  of common stock at $.50 per share until October  11,
     1996  (extended  until October 11, 1999). In  addition,  Mr.
     Feola  is entitled to certain shares of Common Stock upon  a
     change  of  control  of BICO as defined  in  his  employment
     agreement (See, "Employment Agreements").

(9)  Includes currently exercisable warrants to purchase  100,000
     shares  of common stock at $1.48 per share until August  26,
     2001.   In  addition,  Mr. Keeling is  entitled  to  certain
     shares  of Common Stock upon a change of control of BICO  as
     defined   in  his  employment  agreement  (See,  "Employment
     Agreements").

(10) Includes  shares of common stock, including stock  currently
     owned, available under currently exercisable warrants as set
     forth above.


Item 13.  Certain Relationships and Related Transactions

The   Company  and  its  affiliates  share  common  officers  and
directors.   In  addition, BICO and Diasense  have  entered  into
several intercompany agreements including a Purchase Agreement, a
Research and Development Agreement and a Manufacturing Agreement,
which are summarized herein.  Management believes that it was  in
the  best  interest of the Company to enter into such  agreements
and  that the transactions were based upon terms as fair as those
which  may  have  been available in comparable transactions  with
third parties.  However, no unaffiliated third party was retained
to  determine  independently the fairness of  such  transactions.
The   Company's  policy  concerning  related  party  transactions
requires   the  approval  of  a  majority  of  the  disinterested
directors of both the corporations involved, if applicable.

Employment Relationships

The  Board  of  Directors  of  the  Company  approved  employment
agreements on November 1, 1994 for its officers, David L.  Purdy,
Fred  E.  Cooper,  Anthony  J.  Feola  and  Glenn  Keeling   (See
"Employment Agreements").

David  L.  Purdy,  President, Treasurer and  a  director  of  the
Company, is a director of Diasense and  Coraflex.  He is also the
chairman  and Chief Scientist of Diasense, and the President  and
Treasurer  of  Coraflex.  Mr. Purdy devotes 60% of  his  time  to
BICO,  and  40% to Diasense.  In addition to his salary  paid  by
BICO, Mr. Purdy was paid $87,500 and $100,000 by Diasense in 1997
and 1996, respectively.  Fred E. Cooper, Chief Executive Officer,
Executive  Vice  President and a director of the  Company,  is  a
director  of  Diasense, Coraflex,  Petrol Rem, and Barnacle  Ban.
He  is  also  the President of Diasense, and Barnacle  Ban.   Mr.
Cooper  devotes approximately 60% of his time to BICO and 40%  to
Diasense.  In addition to his salary and bonus paid by  BICO,  he
was  paid  $150,000  by Diasense in 1996 and  1997.   Anthony  J.
Feola,  Senior Vice President  and a director of the Company,  is
also  a  director of Diasense, Coraflex, Petrol Rem, and Barnacle
Ban.    Glenn  Keeling,  Vice President and  a  director  of  the
Company,  was  employed on January 1, 1992 as BICO's  manager  of
product  development.   Mr. Keeling is also the President  and  a
director  of  IDT.   Gary Keeling, the brother of Glenn  Keeling,
resigned as an officer and director of Diasense in August, 1997.

Property

Three   of  the  Company's  current  executive  officers   and/or
directors and two former directors of the Company are members  of
the  nine-member 300 Indian Springs Road Real Estate  Partnership
(the  "Partnership") which in July 1990, purchased the  Company's
real  estate  in  Indiana, Pennsylvania, and each has  personally
guaranteed the payment of lease obligations to the bank providing
the  funding.   The five members of the Partnership who are  also
current or former officers and/or directors of the Company, David
L.  Purdy, Fred E. Cooper, Glenn Keeling, Jack H. Onorato and  C.
Terry Adkins, each received warrants on June 29, 1990 to purchase
100,000 shares of the Company's common stock at an exercise price
of  $.33  per  share  until June 29, 1995 (those  warrants  still
outstanding  as  of  the original expiration date  were  extended
until June 29, 1998).  Mr. Adkins, who was a director at the time
of the transaction, resigned from the Board of Directors on March
30,  1992,  and is currently an officer and director of Diasense.
Mr.  Keeling,  who  was  not  a  director  at  the  time  of  the
transaction, joined the Board of Directors on May 3, 1991.    Mr.
Onorato,  who  was not a director at the time of the transaction,
was a BICO director from September 1992 until April 1994.

In  all  instances where warrants were issued in connection  with
the  transactions  set  forth above, the exercise  price  of  the
warrants was equal to or above the current quoted market price of
the Company's common stock on the date of issuance.

In  April 1992, Diasense purchased an office condominium  located
at  the Bourse Office Park, Virginia Manor, Building 2500, Second
Floor,  Pittsburgh, Pennsylvania 15220 for $190,000.  The Company
has  entered  into  a lease with Diasense and pays  rent  in  the
amount of $3,544 per month, plus one-half of the utilities.


Warrants

The  following paragraphs, along with the notes to the  financial
statements, include disclosure of the warrants which were granted
to  executive  officers and directors of the  Company  from  1995
through  1997.   These warrants were accounted for in  accordance
with Accounting Principles Board Opinion 25 (based on the spread,
if any, between the exercise price and the quoted market price of
the  stock on the date that the warrants were granted).  No value
was  recorded for these warrants since they were all  granted  at
exercise  prices which were equal to or above the current  quoted
market price of the stock on the date issued (See, Note J to  the
Financial  Statements).  In 1995 and 1996, the  Company  extended
warrants granted in 1990 and 1991, which were scheduled to expire
in 1995 and 1996, until 1998-2000.  Because the exercise price of
the  warrants, which remained unchanged, was less than the market
price of the common stock on the dates of the extensions, charges
were  made against operations (See, "MANAGEMENT'S DISCUSSION  AND
ANALYSIS  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS",  and
Note J to the Financial Statements).

On  August 26, 1996, the Board of Directors approved the granting
of  warrants to purchase 100,000 shares of common stock at  $1.48
per  share  to  Glenn  Keeling, an officer and  director  of  the
Company.

Loans

On  October  1, 1990, the Board of Directors approved  a  $75,000
loan  from  the Company to Fred E. Cooper.  Mr. Cooper  signed  a
promissory note promising to pay the principal amount plus twelve
percent (12%) simple interest.  Mr. Cooper repaid $66,500 of  the
$75,000 principal balance during 1991.   During 1991, the Company
granted  loans  to  Fred  E. Cooper in the  aggregate  amount  of
$57,400.  Mr. Cooper signed promissory notes promising to pay the
principal  amounts  upon  demand plus ten  percent  (10%)  simple
interest.  In January 1992, the Company granted a loan to Fred E.
Cooper  in the amount of $25,000.  Mr. Cooper signed a promissory
note  promising to pay the principal amount upon demand plus  ten
percent  (10%)  simple interest.  In 1997, the Companies  granted
loans  to Fred E. Cooper aggregating $158,000; Mr. Cooper  signed
promissory  notes  promising to pay the  principal  amounts  upon
demand plus  8.25% simple interest.  In 1998, the Company granted
loans   to Fred E. Cooper aggregating $275,000; Mr. Cooper signed
a  promissory  note  promising to pay the principal  amount  upon
demand  plus  8.25%  simple  interest.   Except  for  the   joint
liability set forth below, the aggregate balance of the loans  as
of March 15, 1998, including accrued interest, was $597,636.

In  November  1997, the Companies granted a loan  to  Anthony  J.
Feola  in  the amount of $50,000.  Mr. Feola signed a  promissory
note promising to pay the principal amount upon demand plus 8.25%
simple interest.  In February 1998, the Company granted a loan to
Anthony  J. Feola in the amount of $185,000.  Mr. Feola signed  a
promissory  note promising to pay the principal upon demand  plus
8.25%  simple interest.  Except for the joint liability set forth
below,  the aggregate balance of the loans as of March 15,  1998,
including accrued interest, was $237,762.

In  December 1991, the Company granted a loan to Glenn Keeling in
the  amount  of  $5,000.  Mr. Keeling signed  a  Promissory  Note
promising  to  pay  the  principal amount upon  demand  plus  ten
percent  (10%)  simple interest.  In December 1996,  the  Company
granted  a  loan to Glenn Keeling in the amount of $50,000.   Mr.
Keeling  signed a promissory note promising to pay the  principal
amounts  upon  demand plus 8.25% simple interest.   In  November,
1997,  the Company granted a loan to Glenn Keeling in the  amount
of  $20,000.   Mr. Keeling signed a promissory note promising  to
pay  the  principal upon demand plus 8.25% simple  interest.   In
February 1998, the Company granted a loan to Glenn Keeling in the
amount  of  $190,000.   Mr.  Keeling  signed  a  promissory  note
promising  to  pay  the principal upon demand plus  8.25%  simple
interest.   Except for the joint liability set forth  below,  the
aggregate  balance of the loans as of March 15,  1998,  including
accrued interest, was $275,310.

In  September 1995, the Company granted a loan in the  amount  of
$250,000  to Allegheny Food Services  in the form of  a  one-year
renewable note bearing interest at prime rate as reported by  the
Wall  Street  Journal plus one percent (1%).   Interest  payments
have  been  made on the note, and as of December  31,  1997,  the
balance  was  $250,000.  Joseph Kondisko, a  former  director  of
Diasense, is a principal owner of Allegheny Food Services.

In  1997,  the  Company  paid  $35,000  in  connection  with  the
settlement  of a lawsuit.  The payment was secured  with  a  loan
executed  jointly by all of the directors: Fred E. Cooper,  David
L. Purdy, Anthony J. Feola and Glenn Keeling.  The balance of the
loan as of December 31, 1997 and March 20, 1998 was $35,000.

Each  of  the  loans  made  to officers or  directors  and  their
affiliates was made for a bona fide business purpose.  All future
loans  to officers, directors and their affiliates will  be  made
for bona fide business purposes only.

Intercompany Agreements

Management  of  the Company believes that the agreements  between
BICO  and  Diasense, which are summarized below, were based  upon
terms  which  were  as  favorable as those which  may  have  been
available in comparable transactions with third parties.  However
no   unaffiliated   third   party  was  retained   to   determine
independently the fairness of such transactions.

License and Marketing Agreement.  Diasense acquired the exclusive
marketing  rights for the Noninvasive Glucose Sensor and  related
products  and  services from BICO in August 1989 in exchange  for
8,000,000  shares  of  its  common  stock.   That  agreement  was
canceled pursuant to a Cancellation Agreement dated November  18,
1991,  and superseded by a Purchase Agreement dated November  18,
1991.   The Cancellation Agreement provides that BICO will retain
the 8,000,000 shares of Diasense common stock which BICO received
pursuant to the License and Marketing Agreement.

Purchase  Agreement.  BICO and Diasense entered into  a  Purchase
Agreement  dated  November  18, 1991  whereby  BICO  conveyed  to
Diasense  its entire right, title and interest in the Noninvasive
Glucose  Sensor  and  its  development, including  its  extensive
knowledge,   technology   and  proprietary   information.    Such
conveyance  includes  BICO's patent  received  in  December  1991
(See, Report to Shareholders - "Business").

In  consideration of the conveyance of its entire  right  in  the
Noninvasive  Glucose  Sensor and its development,  BICO  received
$2,000,000.   In  addition, Diasense may  endeavor,  at  its  own
expense,  to obtain patents on other inventions relating  to  the
Noninvasive  Glucose Sensor.  Diasense also guaranteed  BICO  the
right  to  use  such  patented technology in the  development  of
BICO's  proposed implantable closed-loop system, a related system
in the early stages of development.

In  December 1992, BICO and Diasense executed an amendment to the
Purchase   Agreement  which  clarified  terms  of  the   Purchase
Agreement.   The  amendment  defines  "Sensors"  to  include  all
devices  for the noninvasive detection of analytes in mammals  or
in  other  biological  materials.   In  addition,  the  amendment
provides for a royalty to be paid to Diasense in connection  with
any sales by BICO of its proposed closed-loop system.

Research  and Development ("R&D") Agreement.  Diasense  and  BICO
entered  into  an agreement dated January 20, 1992 in  connection
with  the  research  and development of the  Noninvasive  Glucose
Sensor.   Pursuant  to  the agreement,  BICO  will  continue  the
development  of  the  Noninvasive Glucose Sensor,  including  the
fabrication  of  prototypes, the performance of clinical  trials,
and  the  submission to the FDA of all necessary applications  in
order  to  obtain  market  approval for the  Noninvasive  Glucose
Sensor.  BICO will also manufacture the models of the Noninvasive
Glucose  Sensor  to  be  delivered to  Diasense  for  sale  (See,
"Manufacturing Agreement").  Upon the delivery of  the  completed
models,  the  research and development phase of  the  Noninvasive
Glucose Sensor will be deemed complete.

Diasense  has agreed to pay BICO $100,000 per month for  indirect
costs  beginning April 1, 1992, during the 15 year  term  of  the
agreement,  plus  all direct costs, including labor.   BICO  also
received  a first right of refusal for any program undertaken  to
develop,  refine or improve the Noninvasive Glucose  Sensor,  and
for  the  development of other related products.  In  July  1995,
BICO and Diasense agreed to suspend billings, accruals of amounts
due  and payments pursuant to the R&D Agreement pending the FDA's
review of the 510(k) Notification.

Manufacturing  Agreement.   BICO and  Diasense  entered  into  an
agreement  dated January 20, 1992, whereby BICO will act  as  the
exclusive  manufacturer  of the Noninvasive  Glucose  Sensor  and
other related products.  Diasense will provide BICO with purchase
orders  for the products and will endeavor to provide projections
of   future   quantities  needed.   The  original   Manufacturing
Agreement called for the products to be manufactured and sold  at
a  price  to  be  determined  in accordance  with  the  following
formula:  Cost  of Goods (including actual or 275%  of  overhead,
whichever is lower) plus a fee of 30% of Cost of Goods.  In  July
1994,  the formula was amended to be as follows: Costs  of  Goods
Sold  (defined as BICO's aggregate cost of materials,  labor  and
associated  manufacturing overhead) + a fee equal  to  one  third
(1/3)  of  the  difference between the Cost  of  Goods  Sold  and
Diasense's sales price of each Sensor.  Diasense's sales price of
each  Sensor  is  defined  as the price paid  by  any  purchaser,
whether  retail  or  wholesale, directly  to  Diasense  for  each
Sensor.   Subject to certain restrictions, BICO  may  assign  its
manufacturing  rights to a subcontractor with Diasense's  written
approval.  The term of the agreement is fifteen years.

Item 14.  Exhibits, Financial Statement Schedules, and Reports on
Form 8-K

(a)  1.   Financial Statements

The financial statements, together with the report thereon of the
Company's independent accountants, are included in this report on
the pages listed below.

     Financial Statements                                        Page

     Report of Independent Certified Public Accountants
     Thompson Dugan, P.C.                                        F-1

     Consolidated Balance Sheets
     December 31, 1997 and 1996                                  F-2

     Consolidated Statements of Operations
     for the years ended December 31, 1997, 1996 and 1995        F-4

     Consolidated Statements of  Stockholders' Equity
     for the years ended December 31, 1997, 1996, 1995 and 1994  F-5
     Consolidated Statements of Cash Flows
     for the years ended December 31, 1997, 1996 and 1995        F-6

     Notes to Consolidated Financial Statements
     December 31, 1997, 1996 and 1995                            F-8


2.   Exhibits:

(b)  Reports on Form 8-K

     The  Company  filed a Form 8-K report dated April  7,  1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated April  14,  1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated April  24,  1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated May 2, 1997.  The
     items  listed  were  Item 5, Other Events;  and  Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated May 8, 1997.  The
     items  listed  were  Item 5, Other Events;  and  Item  7(c),
     Exhibits.

     The Company filed a Form 8-K report dated May 14, 1997.  The
     items  listed  were  Item 5, Other Events;  and  Item  7(c),
     Exhibits.

     The Company filed a Form 8-K report dated May 21, 1997.  The
     items  listed  were  Item 5, Other Events;  and  Item  7(c),
     Exhibits.

     The Company filed a Form 8-K report dated June 3, 1997.  The
     items  listed  were  Item 5, Other Events;  and  Item  7(c),
     Exhibits.

     The  Company  filed a Form 8-K report dated June  18,  1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company  filed a Form 8-K report dated July  15,  1997.
     The  items listed were Item 5, Other Events, and Item  7(c),
     Exhibits.

     The  Company  filed a Form 8-K report dated July  17,  1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company  filed a Form 8-K report dated July  23,  1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated August 12,  1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated August 19,  1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated August 26,  1997.
     The item listed was Item 5, Other Events.

     The  Company  filed  a Form 8-K report dated  September  11,
     1997.  The items listed were Item 5, Other Events; and  Item
     7(c), Exhibits.

     The  Company  filed  a Form 8-K report dated  September  15,
     1997.  The items listed were Item 5, Other Events; and  Item
     7(c), Exhibits.

     The  Company  filed  a Form 8-K report dated  September  22,
     1997.  The item listed was Item 5, Other Events.

     The  Company  filed  a Form 8-K report dated  September  30,
     1997.   The item listed was Item 5, Other Events;  and  Item
     7(c), Exhibits.

     The  Company filed a Form 8-K report dated October 31, 1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated October 31, 1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated November 3, 1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated November 4, 1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The Company filed a Form 8-K report dated November 13, 1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The Company filed a Form 8-K report dated November 18, 1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated December 3, 1997.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated January 6,  1998.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated January 21, 1998.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated January 30, 1998.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated February 2, 1998.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The Company filed a Form 8-K report dated February 23, 1998.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.
     The Company filed a Form 8-K report dated February 25, 1998.
     The item listed was Item 5, Other Events.

     The Company filed a Form 8-K report dated February 27, 1998.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company  filed a Form 8-K report dated March  5,  1998.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.

     The  Company filed a Form 8-K report dated March  17,  1998.
     The  items listed were Item 5, Other Events; and Item  7(c),
     Exhibits.
(c)  Exhibits Required by Item 601 of Regulation S-K

          The   following  exhibits  required  by  Item  601   of
          Regulation  S-K  are  filed as  part  of  this  report.
          Except   as   otherwise   noted,   all   exhibits   are
          incorporated  by reference from exhibits  to  Form  S-1
          (Registration #33-55200) filed December 1, 1992 or from
          exhibits to Form 10-K filings prior to or subsequent to
          that date.

3.1       Articles of Incorporation as filed March 20, 1972

3.2       Amendment to Articles filed May 8, 1972

3.3       Restated Articles filed June 19, 1975

3.4       Amendment to Articles filed February 4, 1980

3.5       Amendment to Articles filed March 17, 1981

3.6       Amendment to Articles filed January 27, 1982

3.7       Amendment to Articles filed November 22, 1982

3.8       Amendment to Articles filed October 30, 1985

3.9       Amendment to Articles filed October 30, 1986

3.10      By-Laws

3.11(1)        Amendment to Articles filed December 28, 1992

4.1       Incentive Stock Option Plan and Schedule

4.2       Form of Warrant and Schedule

5.1(2)    Legal Opinion of Sweeney & Associates P.C.

16.1(3)   Disclosure  and Letter Regarding  Change  in
          Certifying Accountants dated January 25, 1995
____________________________

(1)  Incorporated by reference to First Amendment to Registration
     Statement   on  Form  S-1  (Registration  #33-55200)   filed
     February 8, 1993
(2)  Incorporated  by reference from Exhibit with this  title  to
     Form S-1 and Prospectus dated August 16, 1993

(3)   Incorporated  by reference from Report on  Form  8-K  dated
      November 1, 1995


                           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, on the 31st day of March, 1998.

                                   BIOCONTROL TECHNOLOGY, INC.



                                   By:  /s/ David L. Purdy
                                            David L. Purdy
                                          President, Treasurer, Director

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

     Signature           Title                         Date


/s/ Fred E. Cooper       Director, CEO,                March 31, 1998
Fred E. Cooper           (principal executive
                         officer, principal
                         financial officer and
                         principal accounting
                         officer)


/s/ Anthony J. Feola     Senior Vice President,        March 31, 1998
Anthony J. Feola         Director


/s/  Glenn Keeling       Director                      March 31, 1998
Glenn Keeling

/s/ Stan Cottrell        Director                      March 31, 1998
Stan Cottrell

/s/ Richard Bourret      Director                      March 31, 1998
Richard Bourret


            Biocontrol Technology, Inc. and Subsidiaries

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                  December 31, 1997, 1996 and 1995

                           THOMPSON DUGAN
                    CERTIFIED PUBLIC ACCOUNTANTS
                      ________________________

                         Pinebridge Commons
                       1580 McLaughlin Run Rd.
                        Pittsburgh, PA 15241


         Report of Independent Certified Public Accountants


Board of Directors
Biocontrol Technology, Inc.

      We have audited the accompanying consolidated balance sheets of
Biocontrol  Technology, Inc. and its subsidiaries as of December  31,
1997 and 1996, and the related consolidated statements of operations,
changes in stockholders' equity and cash flows for each of the  three
years  in  the  period  ended  December 31,  1997.   These  financial
statements  are  the responsibility of the Corporation's  management.
Our  responsibility  is  to  express an opinion  on  these  financial
statements 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, such consolidated financial statements present
fairly, in all material respects, the consolidated financial position
of  Biocontrol Technology, Inc. and its subsidiaries as  of  December
31,  1997  and 1996, and the consolidated results of their operations
and  their cash flows for each of the three years in the period ended
December  31,  1997 in conformity with generally accepted  accounting
principles.

       The  accompanying  financial  statements  have  been  prepared
assuming  that the Corporation will continue as a going concern.   As
discussed in Note B to the financial statements, the Corporation  has
incurred  losses  and negative cash flows from operations  in  recent
years through December 31, 1997 and these conditions are expected  to
continue   through  1998,  raising  substantial   doubt   about   the
Corporation's  ability to continue as a going concern.   Management's
plans in regard to these matters are also discussed in Note B.  These
financial statements do not include any adjustments that might result
from the outcome of this uncertainty.

       As   discussed,  in  Note  P  to  the  consolidated  financial
statements,   certain  restatements  have  been  made  to   financial
statements which were previously issued by the Company.

Pittsburgh, Pennsylvania
March 25, 1998, except for Note P
as to which the date is November 17, 1998

<PAGE> F-1
<TABLE>
                              Biocontrol Technology, Inc. and Subsidiaries
                                       Consolidated Balance Sheets
<CAPTION>

                                                            Dec. 31, 1997    Dec. 31, 1996
                                                            -------------    -------------
<S>                                                        <C>              <C>
CURRENT ASSETS
 Cash and equivalents (note A)                              $  2,759,067     $ 3,802,874
 Accounts receivable - net of allowance for doubtful accounts
   of $14,931 at Dec. 31, 1997 and $195,840 at Dec. 31, 1996     417,329	  98,769
 Inventory - net of valuation allowance (notes A and D)        1,834,018       3,340,120
 Notes receivable - related parties (notes C and L)               35,000         300,000
 Notes  receivable (note C)                                       87,000          12,000
 Interest receivable (note C)                                      2,134            -
 Prepaid expenses                                                164,012         277,409
                                                            -------------    -------------

                 TOTAL CURRENT ASSETS                          5,298,560        7,831,172


PROPERTY, PLANT AND EQUIPMENT (notes A and H)
 Building                                                     1,444,273        1,442,423
 Land                                                           246,250          246,250
 Construction in progress                                     1,465,152        1,240,320
 Leasehold improvements                                       1,197,977        1,157,239
 Machinery and equipment                                      5,042,736        4,386,364
 Furniture, fixtures & equipment                                812,221          735,962
                                                            -------------    -------------
  Subtotal                                                   10,208,609        9,208,558

 Less accumulated depreciation                                3,516,677        2,670,207
                                                            -------------    -------------
                                                              6,691,932        6,538,351

OTHER ASSETS
 Notes receivable - related parties (notes C and L)             598,900           95,900
 Interest receivable - related parties (notes C and L)           75,343           53,958
 Deposit on Equipment                                           300,000             -
 Patents, net of amortization (note A)                            6,765           11,097
 Other assets                                                     9,800           13,513
                                                            -------------    -------------
                                                                990,808          174,468
                                                            -------------    -------------
         TOTAL ASSETS                                      $ 12,981,300     $ 14,543,991
                                                            =============    =============

The accompanying notes are an integral part of these statements.

</TABLE>
<PAGE>  F-2
<TABLE>
                                    Biocontrol Technology, Inc. and Subsidiaries
                                            Consolidated Balance Sheets
                                                    (Continued)
<CAPTION>

                                                                    Dec. 31, 1997    Dec. 31, 1996
                                                                    -------------    -------------
<S>                                                                 <C>              <C>
CURRENT LIABILITIES
  Accounts payable                                                    $   646,535    $   1,035,171
  Current portion of long-term debt (note G)                               18,765           30,478
  Current portion of capital lease obligations (note H)                   109,933           48,944
  Debentures payable (note I)                                           3,301,280        4,600,000
  Accrued liabilities (note E)                                            215,119          148,303
  Escrow payable (note J)                                                   2,700            2,700
  Deferred revenue on contract billings (note A)                          116,146          180,000
                                                                    -------------   -------------
        TOTAL CURRENT LIABILITIES                                       4,410,478        6,045,596

LONG-TERM LIABILITIES
  Capital lease obligations (note H)                                    2,688,293        2,660,730
  Long-term debt (note G)                                                   8,806           38,997
                                                                    -------------   -------------
                                                                        2,697,099        2,699,727

COMMITMENTS AND CONTIGENCIES (notes M and O)

UNRELATED INVESTORS'INTEREST
   IN SUBSIDIARY (note A)                                               1,409,647        1,881,437

STOCKHOLDERS' EQUITY (notes J and O)

   Common stock, par value $.10 per share,
   authorized 150,000,000 shares, issued and
   outstanding 138,583,978 at Dec. 31, 1997 and
   49,213,790 at Dec. 31, 1996                                         13,858,398        4,921,379
   Additional paid-in  capital (note P)                               104,932,920       82,354,749
   Notes receivable issued for common stock-related party (note C)        (25,000)            -
   Warrants                                                             6,396,994        6,907,162
   Accumulated deficit (note P)                                      (120,699,236)     (90,266,059)
                                                                    -------------    -------------
          TOTAL STOCKHOLDERS' EQUITY                                    4,464,076        3,917,231

          TOTAL LIABILITIES AND
            STOCKHOLDER' EQUITY                                       $12,981,300      $14,543,991
                                                                    =============    =============

The accompanying notes are an integral part of these statements.

</TABLE>
<PAGE> F-3
<TABLE>
                                 BIOCONTROL  TECHNOLOGY,  INC.  AND  SUBSIDIARIES
                                       CONSOLIDATED  STATEMENTS  OF  OPERATIONS

<CAPTION>

                                                             Year Ended December 31,
                                                    1997              1996             1995
                                                -------------    -------------    -------------
<S>                                             <C>               <C>             <C>
Revenues
  Net Sales                                     $   1,155,907    $     597,592    $     461,257
  Interest income                                     165,977          176,478          294,734
  Other income                                        104,250            2,657             -
                                                -------------    -------------    -------------
                                                    1,426,134          776,727          755,991

Costs and expenses
  Cost of products sold                               641,331          325,414          198,542
  Research and development (notes A and L)          6,977,590        8,742,922        7,649,678
  General and administrative                       12,704,146        8,963,693       11,117,107
  Debt issue costs (note A)                         3,306,812          502,000             -
  Warrant extensions (note J)                          -               604,342        7,228,220
  Warrant extensions - Subsidiary (note J)          4,046,875        8,571,033        5,295,000
  Interest expense                                    315,624          133,460           17,048
  Beneficial convertible debt feature (note P)      6,278,853        1,650,000             -
                                                -------------    -------------    -------------
                                                   34,271,231       29,492,864       31,505,595
                                                -------------    -------------    -------------

Loss before unrelated investors' interest         (32,845,097)     (28,716,137)     (30,749,604)

Unrelated investors' interest in net loss of
  subsidiary                                        2,411,920        4,670,435        1,329,259
                                                -------------    -------------    -------------

  Net loss (note P)                              ($30,433,177)    ($24,045,702)    ($29,420,345)
                                                =============    =============   ==============

  Loss per common share (notes A and P)                ($0.43)          ($0.57)          ($0.84)
                                                =============    ==============  ==============

The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE> F-4
<TABLE>

                  Biocontrol Technology, Inc. and Subsidiaries

                Consolidated Statements of Stockholders' Equity

<CAPTION>

								                Note rec.
                              Preferred Stock      Common Stock                  issued for  Additional
                              ---------------    ----------------                Common Stk   Paid in      Accumulated
                              Shares   Amount    Shares      Amount   Warrants    Rel Party   Capital        Deficit        Total
                              ------- --------  ---------  ---------- ----------  --------- -----------  -------------- -----------
<S>                            <C>     <C>     <C>         <C>        <C>        <C>       <C>            <C>            <C>
Balance at Dec. 31, 1993        5,490  $54,900  21,108,847  $2,110,885         -          - $25,025,643   ($25,127,889)  $2,063,539
                              -------  -------  ----------  ---------- ----------  -------- ----------   ------------- ------------
Proceeds from stock offering        -        -   7,224,690     722,469          -         -  13,206,152              -   13,928,621
Additional paid in capital from
    subsidiary stock offering       -        -           -           -                          507,370              -      507,370
Warrants exercised                  -        -     977,542      97,754          -         -     183,129              -      280,883
     Net Loss                       -        -           -           -          -         -           -    (11,672,123) (11,672,123)
                             --------  -------   ----------  ---------- ---------- -------- -----------   ------------  -----------

Balance at Dec. 31, 1994        5,490   54,900  29,311,079   2,931,108          -         -   38,922,294   (36,800,012)   5,108,290
                             --------  -------  ----------  ----------   --------   -------  ----------    ------------ -----------
Proceeds from stock offering        -        -   6,892,325     689,233          -         -   15,580,180             -   16,269,413
Conversion of preferred stk.   (1,700) (17,000)     17,000       1,700          -         -       15,300             -            -
Additional PIC from
  subsidiary stock offering         -        -           -           -          -         -    1,648,677             -    1,648,677
Warrant extensions                  -        -           -           -  7,228,220         -            -             -    7,228,220
Warrant extensions - sub.           -        -           -           -          -         -    4,984,755             -    4,984,755
Change in ownership int.-sub.       -        -           -           -          -         -   (2,012,785)            -   (2,012,785)
Warrants exercised                  -        -     800,714      80,071   (550,400)        -      711,454             -      241,125
     Net Loss                       -        -           -           -          -         -            -   (29,420,345) (29,420,345)
                             --------  -------  ----------  ---------- ---------- ---------   ----------  ------------ ------------
Balance at December 31, 1995    3,790   37,900  37,021,118   3,702,112  6,677,820         -   59,849,875   (66,220,357)   4,047,350
                             --------  -------  ----------  ---------- ---------- ---------   ----------  ------------  -----------
Proceeds from stock offering        -        -   7,839,065     783,907          -         -   12,571,822             -   13,355,729
Conversion of preferred stk.  (22,730)(227,300)  1,958,602     195,860          -         -       31,440             -            -
Cash redemp. at par-pref stk.  (1,060) (10,600)          -           -          -         -            -             -      (10,600)
Proceeds from sale of
  preferred stk.- series A     20,000  200,000           -           -          -         -    1,640,000             -    1,840,000
Conversion of debenture             -        -   2,275,005     227,500          -         -    1,799,623             -    2,027,123
Warrant extensions                  -        -           -           -    604,342         -            -             -      604,342
Warrant extensions - sub.           -        -           -           -          -         -    4,441,262             -    4,441,262
Change in ownership int.-sub.       -        -           -           -          -         -      (22,873)            -      (22,873)
Warrants exercised                  -        -     120,000      12,000   (375,000)        -      393,600             -       30,600
Issuance of convertible
 debt (note P)                      -        -           -           -          -         -    1,650,000             -    1,650,000
  Net loss (note P)                 -        -           -           -          -         -            -   (24,045,702) (24,045,702)
                             -------- -------- -----------  ---------- ----------  -------- ------------ --------------  ----------
Balance at Dec. 31, 1996            -        -  49,213,790   4,921,379  6,907,162         -   82,354,749   (90,266,059)   3,917,231
                             -------- -------- -----------  ---------- ----------  -------- ------------  ------------   ----------
Proceeds from stk offering          -        -   1,705,000     170,500          -         -      765,648             -      936,148
Conversion of preferred stk.  (22,000)(220,000)  6,913,366     691,337          -         -     (471,337)            -            -
Proceeds from sale of
  preferred stk.-Series B      22,000  220,000           -           -          -         -    1,807,000             -    2,027,000
Conversion of debenture             -        -  80,599,022   8,059,902          -         -   11,554,077             -   19,613,979
Warrant extensions - sub.           -        -           -           -          -         -    2,108,421             -    2,108,421
Change in ownership int-sub.        -        -           -           -          -         -        2,421             -        2,421
Warrants exercised                  -        -     152,800      15,280   (510,168)  (25,000)     533,088             -       13,200
Issuance of convertible
 debt (note P)                      -        -           -           -          -         -    6,278,853             -    6,278,853
  Net loss (note P)                 -        -           -           -          -         -            -   (30,433,177) (30,433,177)
                             -------- -------- -----------  ---------- ----------- --------- ----------- -------------   ----------
Balance at Dec. 31, 1997            - $      - 138,583,978 $13,858,398 $6,396,994  ($25,000)$104,932,920 ($120,699,236)  $4,464,076
                             ======== ======== =========== =========== =========== ========= =========== ============== ===========



The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE> F-5
<TABLE>



                                    Biocontrol Technology, Inc. and Subsidiaries
                                        Consolidated Statements of Cash Flows
<CAPTION>

                                                                                  Year ended December 31,

                                                                         1997           1996           1995
                                                                     -------------  -------------  -------------
<S>                                                                   <C>            <C>            <C>
Cash flows used by operating activities:
  Net loss                                                           ($30,433,177)  ($24,045,702)  ($29,420,345)
  Adjustments to reconcile net loss to net
   cash used by operating activities:
    Depreciation and amortization                                         850,802        587,507        459,778
    Unrelated investors' interest in susidiary                         (2,411,920)    (4,670,435)    (1,329,259)
    Stock issued in exchange for services                                 936,148         17,200        180,373
    Stock issued in exchange for services by subsidiary                       600          7,000           -
    Debenture interest converted to stock                                 164,055          -               -
    Premium for extension on Debenture                                    527,113          -               -
    Beneficial convertible debt feature                                 6,278,853      1,650,000           -
    Provision for potential loss on notes receivable                        -              -          1,050,000
    Warrant extensions                                                      -            604,342      7,228,220
    Warrant extensions by subsidiary                                    4,046,875      8,571,033      5,295,000
    (Decrease)increase in allowance for losses on accounts receivable    (180,909)       195,840           -
    (Increase) in accounts receivable                                    (137,651)       (92,083)      (169,805)
    (Increase) in inventories                                            (586,029)    (1,679,981)    (2,379,694)
    (Increase) in inventory valuation allowance                         2,092,131          -            900,000
    (Increase) decrease in prepaid expenses                               113,397       (128,883)        38,934
    (Increase) decrease in other assets                                     3,713         (2,445)        79,472
    Increase (decrease) in accounts payable                              (388,636)      (803,237)     1,195,044
    Increase (decrease) in other liabilities                               66,737        (35,960)       (18,960)
    (Decrease) in deferred revenue                                        (63,854)      (146,000)          -
                                                                     -------------  -------------  -------------
      Net cash flow used by operating activities                      (19,121,752)   (19,971,804)   (16,891,242)
                                                                     -------------  -------------  -------------
Cash flows from investing activities:
  Purchase of property, plant and equipment                              (845,512)      (954,610)    (1,441,509)
  (Increase) in notes receivable                                         (313,000)       (50,000)    (1,312,000)
  Deposit on equipment                                                   (300,000)         -              -
  (Increase) in interest receivable                                       (23,519)       (11,721)        (9,792)
                                                                     -------------  -------------  -------------
    Net cash used by investing activites                               (1,482,031)    (1,016,331)    (2,763,301)
                                                                     -------------  -------------  -------------

Cash flows from financing activities:
  Proceeds from stock offering                                              -         13,338,531     16,195,788
  Proceeds from sale by subsidiary of its common stock                      3,500       (172,315)     3,079,200
  Proceeds from warrants exercised                                         13,200         30,600        273,325
  Proceeds from warrants exercised-subsidiary                               -              2,000          -
  Proceeds from sale of Preferred stock-Series A                            -          1,840,000          -
  Proceeds from sale of Preferred stock-Series B                        2,027,000          -              -
  Cash redemption at par - Preferred stock                                  -             (7,900)         -
  Proceeds from debentures payable                                     20,230,000      6,600,000          -
  Payments on debentures payable                                       (2,605,833)         -              -
  Payments on notes payable                                               (41,904)       (19,509)        (5,115)
  Payments on capital lease obligations                                   (65,987)       (24,899)         -
                                                                     -------------  -------------  -------------
      Net cash provided by financing activities                        19,559,976     21,586,508     19,543,198


      Net increase (decrease) in cash                                  (1,043,807)       598,373       (111,345)
                                                                     -------------  -------------  -------------
  Cash and cash equivalents, beginning of year                          3,802,874      3,204,501      3,315,846
                                                                     -------------  -------------  -------------
  Cash and cash equivalents, end of year                               $2,759,067     $3,802,874     $3,204,501
                                                                     =============  =============  =============

The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>F-6
<TABLE>

                                    Biocontrol Technology, Inc. and Subsidiaries
                                        Consolidated Statements of Cash Flows
                                                     (Continued)

<CAPTION>
                                                                                Year ended December 31,
                                                                         1997             1996            1995
                                                                     -------------   -------------   -------------
<S>                                                                  <C>             <C>             <C>
Supplemental Information:
           Interest paid                                             $    155,647    $    72,578     $     17,048
                                                                     =============   ============    ============

Supplemental schedule of non-cash
investing and financing activities:

Acquisition of equipment with note payable                           $          0     $  145,063     $    47,282
                                                                     =============    ===========    ============

Acquisition of property under a capital lease:
           Building                                                  $           -   $   1,205,760   $           -
           Land                                                                  -         246,250               -
           Construction in progress                                              -       1,137,500               -
           Equipment                                                       154,539               -               -
                                                                     -------------    -------------   -------------
                                                                     $     154,539    $   2,589,510   $          -
                                                                     =============    =============   =============

Conversion of Series I-preferred stock for common stock:
          Common stock                                               $           -    $       2,730   $       1,700
          Additional paid-in capital                                             -           24,570          15,300
                                                                     -------------    -------------   -------------
                                                                     $           -    $      27,300   $      17,000
                                                                     =============    =============   =============

Redemption of preferred stock held in escrow                         $           -    $       2,700   $           -
                                                                     =============    =============   =============
Conversion of Series A - preferred stock for common stock:
                Common stock                                         $           -    $     193,130   $           -
                Additional paid in capital                                       -            6,870               -
                                                                     -------------    -------------   -------------
                                                                     $           -    $     200,000   $           -
                                                                     =============    =============   =============

Conversion of Series B- preferred stock for common stock:
  		Common stock                                         $    220,000     $          -    $           -
		Additional paid-in capital                              1,807,000                -                -
                                                                     -------------    -------------   -------------
                                                                        2,027,000     $          -                -
                                                                     =============    =============   =============

Conversion of debentures for common stock                            $ 19,449,924     $  2,000,000    $           -
                                                                     =============    =============   =============

Converion of debenture interest for common stock                     $    164,055     $     27,122    $           -
                                                                     =============    =============   =============
Stock granted to related party for note receivable                   $     25,000     $          0    $           -
                                                                     =============    =============   =============
Conversion of warrants for common stock                              $    510,168     $     375,000   $     550,400
                                                                     =============    =============   =============


The accompanying notes are an integral part of these statements.
</TABLE>


NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES

1.   Organization

     Biocontrol  Technology, Inc. - BICO  (the  Company)  and  its
     subsidiaries  are  engaged in the development,  manufacturing
     and   marketing   of  biomedical  products   and   biological
     remediation products.

2.   Principles of Consolidation

     The  consolidated financial statements include  the  accounts
     of:  Diasense, Inc. (Diasense) a 52% owned subsidiary  as  of
     December  31, 1997 and 1996; Petrol Rem, Inc.,  a  67%  owned
     subsidiary  as of December 31, 1997 and 1996;  IDT,  Inc.,  a
     99.1% owned subsidiary as of December 31, 1997 and 1996;  and
     Barnacle  Ban  Corporation, a 100%  owned  subsidiary  as  of
     December  31,  1997  and 1996.  All significant  intercompany
     accounts  and transactions have been eliminated.   Subsidiary
     losses  in  excess of the unrelated investors'  interest  are
     charged against the Company's interest.

3.   Cash and Cash Equivalents

     For  purposes  of  the statement of cash flows,  the  Company
     considers  all highly liquid investments with a  maturity  of
     three months or less at acquisition to be cash equivalents.

4.   Inventory

     Inventory is valued at the lower of cost (first-in, first-out
     method)  or  market.   An  inventory valuation  allowance  is
     provided  against  finished  goods  and  raw  materials   for
     products for which a market has not yet been established.

5.   Property and Equipment

     Property  and  equipment are accounted for at  cost  and  are
     depreciated over their estimated useful lives on a  straight-
     line basis.

6.   Patents

     Patents  are  amortized  over their legal  or  useful  lives,
     whichever  is less.  Accumulated amortization on patents  was
     $90,176   and  $85,844  at  December  31,  1997   and   1996,
     respectively.

7.   Deferred Revenue on Contract Billings

     Revenue  is  recognized from sales when products are  shipped
     and/or services performed.  Advance billings are recorded  as
     deferred revenue until shipment or performance.

8.   Loss Per Common Share

     Loss  per  common  share is based upon the  weighted  average
     number  of  common  shares  outstanding  which  amounted   to
     71,415,351  shares  in 1997, 42,266,597 shares  in  1996  and
     35,025,237  shares  in  1995, respectively.  Shares  issuable
     under  stock options, stock warrants, convertible  debentures
     and   convertible   preferred   stock   are   excluded   from
     computations as their effect is antidilutive.

9.   Research and Development Costs

     Research  and development costs are charged to operations  as
     incurred.     Machinery,   equipment   and   other    capital
     expenditures  which  have  alternative  future   use   beyond
     specific  research and development activities are capitalized
     and depreciated over their estimated useful lives.

10.  Income Taxes

     The   Company   previously  adopted  Statement  of   Financial
     Accounting Standards No. 109 (FAS 109), Accounting for  Income
     Taxes,  which  requires  the asset  and  liability  method  of
     accounting for income taxes.  Enacted statutory tax rates  are
     applied  to temporary differences arising from the differences
     in  financial statement carrying amounts and the tax bases  of
     existing assets and liabilities. Due to the uncertainty of the
     realization of income tax benefits, (Note K), the adoption  of
     FAS  109  had  no  effect on the financial statements  of  the
     Company.
     
11.  Interest

     The  Company follows the policy of capitalizing interest as  a
     component  of  the  cost  of  property,  plant  and  equipment
     constructed for its own use.  Total interest incurred for  the
     periods  December  31,  1997, 1996,  and  1995  was  $528,942,
     $236,280   and  $17,048,  respectively,  of  which   $315,624,
     $133,460 and $17,048, respectively, was charged to operations.
     
12.  Estimates and Assumptions

     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.  The Company has established allowances based  upon
     management's   evaluation   of   inventories   and    accounts
     receivable.

13.  Common Stock Warrants

     The Company recognizes cost, if any, on warrants granted based
     upon  the excess of the market price of the underlying  shares
     of  common stock as of the warrant grant date over the warrant
     exercise price.  Had the Company adopted the fair value  based
     accounting method for recognizing stock-based compensation (as
     permitted  by  Financial  Accounting  Standard  No.  123)  its
     reported  net  losses (utilizing the Black-Scholes  method  of
     valuation) for the periods ending December 31, 1997, 1996  and
     1995  would  have been approximately $27,150,101,  $24,173,787
     and  $29,911,000, respectively.  Net loss per share under  the
     fair  value  based  accounting method for the  periods  ending
     December 31, 1997, 1996 and 1995 would have been approximately
     $.38, $.88 and $.85, respectively.
     
14.  Debt Issue Costs

     The  Company follows the policy of expensing debt issue  costs
     on  debentures during the period of debenture issuance.  Total
     debt  issue costs incurred for the periods December 31,  1997,
     1996, and 1995 was $3,306,812, $502,000 and $0, respectively.

15.  Concentration of Credit Risk

     Financial instruments which potentially subject the Company to
     significant  concentrations of credit risk consist principally
     of  cash investments at commercial banks and receivables  from
     officers  and  directors  of  the  Company.   Cash  and   cash
     equivalents  are  temporarily  invested  in  interest  bearing
     accounts  in financial institutions, and such investments  may
     be  in  excess of the FDIC insurance limit.  Receivables  from
     directors  and officers of the Company (Note C, L and  O)  are
     unsecured and represent a concentration of credit risk due  to
     the  common  employment  and  financial  dependency  of  these
     individuals on the Company.

NOTE   B  - OPERATIONS AND LIQUIDITY
     
     The  Company  and its subsidiaries have incurred  substantial
     losses  in  1997  and in prior years and  have  funded  their
     operations and product development primarily through the sale
     of  stock and issuance of debt instruments.  Until such  time
     that products can be successfully developed and marketed, the
     Company and its subsidiaries will continue to need to fulfill
     working  capital requirements through the sale of  stock  and
     issuance  of debt.  The inability of the Company to  continue
     its   operations  as  a  going  concern  would   impact   the
     recoverability and classification of recorded asset amounts.
     
     The  ability  of  the  Company to continue  in  existence  is
     dependent  on  its having sufficient financial  resources  to
     complete   the   research   and  development   necessary   to
     successfully  bring  products to market and  for  marketplace
     acceptance.  As a result of its significant losses,  negative
     cash  flows  from  operations,  and  significant  accumulated
     deficits  for each of the periods ending December  31,  1997,
     1996 and 1995, there is substantial doubt about the Company's
     ability to continue as a going concern.
     
     Management  believes  that  its currently  available  working
     capital, anticipated contract revenues,  subsequent sales  of
     stock and future debt issuance will be sufficient to meet its
     projected expenditures for a period of at least twelve months
     from December 31, 1997.

NOTE C - NOTES RECEIVABLE
     
     Notes  receivable  due  from various  related  and  unrelated
     parties consisted of:

                                     Dec. 31,     Dec. 31,
                                       1997         1996
  Related Parties
  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand
  with 12% interest.                  $  8,500    $   8,500

  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand         82,400       82,400
  with 10% simple interest.

  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand         83,000        -
  with 8.25% simple interest.

  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand         35,000        -
  with 8.25% simple interest.

  Note receivable from Fred E.
  Cooper, Chief Executive
   Officer, payable upon demand         15,000        -
  with 8.25% simple interest.

  Note receivable from Glenn
  Keeling, Director,
   payable upon demand with 10%          5,000        5,000
  simple interest.

  Note receivable from Glenn
  Keeling, Director
   payable upon demand with 8.25%       50,000       50,000
  interest.

  Note receivable from Glenn
  Keeling, Director
   payable upon demand with 8.25%       20,000        -
  interest.

  Note receivable from T.J. Feola,
  Director
   payable upon demand with 8.25%       50,000        -
  interest.

  Note receivable from Dave Purdy,
  T.J. Feola, Fred Cooper, Glen          35,000       -
  Keeling, all directors who are
  jointly liable to the company.

  Note receivable from Allegheny
  Food  Services, Inc. of which
  Joseph Kondisko, a former             250,000     250,000
  director, is principal owner,
  payable 9/1/98 with interest at
  prime plus 1% interest.

  Unrelated Parties
  Note receivable from an
  individual, payable upon
   demand with 8.75% interest.           12,000      12,000

  Note receivable from HemoCleanse
  Inc, payable without
  interest on demand.                                 -
                                         75,000
                                        -------     -------

                                        720,900     407,900
  Less current notes receivable         122,000     312,000
                                        -------     -------
  Noncurrent                          $ 598,900    $ 95,900
                                        =======     =======


     Accrued interest receivable on the related party notes as  of
     December   31,  1997  and  1996  was  $77,477  and   $53,958,
     respectively.

NOTE D - INVENTORY

     Inventories consisted of the following as of:


                                 Dec. 31,       Dec. 31,
                                   1997          1996

          Raw materials         4,380,254     3,928,565
          Work-in-process          47,976       191,220
          Finished goods        1,005,788       728,204
                                ---------     ---------
                                5,434,018     4,847,989
          Less valuation
            allowance          (3,600,000)   (1,507,869)
                               -----------   -----------
                              $ 1,834,018   $ 3,340,120

     The inventory valuation allowance was increased to $3,600,000
     in 1997 based upon management's estimation of market value of
     materials  for products for which a market has not  yet  been
     established.   There  was no change in the  allowance  during
     1996.

NOTE E - ACCRUED LIABILITIES


     Accrued liabilities consisted of the following as of:

                                 Dec. 31,       Dec. 31,
                                   1997           1996
      Current
      -------
      Accrued payroll taxes     $  13,606     $   18,537
      Accrued vacation             87,652         68,344
      Other accrued liabilities   113,861         61,422
                                  -------        -------

                                $ 215,119     $  148,303
                                =========     ==========

NOTE F - BUSINESS SEGMENTS

The   Company   operates  in  three  reportable  business   segments:
Biomedical  devices,  which includes the  operations  of   Biocontrol
Technology, Inc., and Diasense, Inc.;  Bioremediation, which includes
the operations of Petrol Rem, Inc.;  and Marine Paint Products, which
includes  the  operations of Barnacle Ban Corporation.  Following  is
summarized   financial  information  for  the  Company's   reportable
segments:

<TABLE>
<CAPTION>
                             Biomedical  Bioremediation   Marine      All    Consolidated
                             Devices                      Paint       Other
                                                          Products
<S>                        <C>               <C>         <C>       <C>       <C>
1997
Sales to external customers $  880,919        $138,362    $136,624  $      0  $ 1,155,905
Cost of product sold           445,843          88,178     107,310         0      641,331
Gross profit                   435,076          50,184      29,314         0      514,574
Identifiable assets         11,122,314         602,460      56,860   999,666    12,981,30
Capital expenditures           661,095           4,460       8,680   526,933    1,000,051
Depreciation & amortization    720,150          33,976       2,751    93,925      850,802

1996
Sales to external customers    508,561          47,625      41,406         0      597,592
Cost of products sold          288,537          16,092      20,785         0      325,414
Gross profit                   220,024          31,533      20,621         0      272,178
Identifiable assets         13,683,657         380,851      96,710   382,773   14,543,991
Capital expenditures         3,362,400           9,188      23,755   293,840    3,689,183
Depreciation & amortization    498,256          35,725       5,406    48,120      587,507

1995
Sales to external customers    168,461         215,211      77,585          0     461,257
Cost of products sold           91,859          53,813      52,870          0     198,542
Gross profit                    76,602         161,398      24,715          0     262,715
Identifiable assets          8,467,569         452,601      24,969    129,530   9,074,669
Capital expenditures         1,424,388          31,501       2,463      9,476   1,467,828
Depreciation & amortization    404,392          29,999         858     24,529     459,778

</TABLE>


The  Company  will adopt Statement of Financial Accounting  Standards
No.  131,  "Disclosures about segments of an Enterprise  and  Related
Information"  in 1998.  The disclosures under this new  standard  are
not expected to be significantly different from the Company's current
disclosures of segment information.


NOTE G - LONG TERM DEBT

Long term debt consisted of the following as of:
                                                Dec. 31,      Dec. 31,
                                                  1997          1996
Note Payable to a bank in monthly payments of
$999 including interest at a rate of   7.35%.    $13,007     $ 23,584
Collateralized by cash on deposit.

Note Payable in monthly payments of $495
including interest at a rate of   8.48%.
Collateralized by equipment.                        -          15,095
Canceled and reissued as a Capital Lease in 1997.

Note Payable in monthly payments of $374
including interest at a rate of  18.00%.           5,452        7,810
Collateralized by equipment.

Note Payable in monthly payments of $851
including interest at a rate of  10.11%.
Collateralized by equipment.                        -           9,675

Note Payable to a bank in monthly payments of
$433 including interest at a rate of   8.75%.      9,112       13,311
Collateralized by equipment.                    ---------     --------
                                                  27,571       69,475

Current portion of long-term debt                 18,765       30,478
                                                 --------     --------
Long-term debt                                  $  8,806     $ 38,997
                                                =========    =========

NOTE H - LEASES

     Operating Leases

     The  Company  is  committed under a  noncancelable  operating
     lease for its research and product development facility.  The
     lease  between the Company and a group of investors  (lessor)
     which  includes  four  of  the Company's  Executive  Officers
     and/or  Directors  is  for a period of 240  months  beginning
     September  1,  1990.  Monthly rental under the terms  of  the
     lease is $8,810 for a period of 119 months to August 1,  2000
     when  the monthly rental payments shall be fixed at an amount
     equal  to the fair rental value of the property as determined
     by mutual agreement of lessor and the Company for the balance
     of the lease.  Total rent expense was $105,720 in each of the
     years 1997, 1996 and 1995.  Future minimum lease payments  as
     of  December  31,  1997 are $105,720 for 1998  and  1999  and
     $61,670  for 2000 on which date the rental payments shall  be
     renegotiated.

     The  Company  and its related subsidiaries also  lease  other
     office  facilities, various equipment and  automobiles  under
     operating  leases  expiring in various  years  through  2002.
     Total  lease  expense related to these leases  was  $295,809,
     $239,096  and $216,143 in the years ended December 31,  1997,
     1996 and 1995, respectively.

     During  1996, the Company leased two manufacturing  buildings
     under  capital leases expiring in various years through 2011.
     The  assets and liabilities under capital leases are recorded
     at  the  lower  of  the present value of  the  minimum  lease
     payments  or  the fair value of the asset.   The  assets  are
     depreciated  over the lower of their related lease  terms  or
     their  estimated  productive lives.  Depreciation  of  assets
     under capital leases is included in depreciation expense.

     The  following  is a summary of property held  under  capital
     leases:


                                   Dec. 31,       Dec. 31,
                                     1997           1996

      Building                  $ 1,207,610    $ 1,205,760
      Construction in Progress    1,465,152      1,240,320
      Land                          246,250        246,250
      Equipment                     243,271        166,026
                                -----------    -----------
            Sub Total             3,162,283      2,858,356

      Less:  Accumulated Depreciation
                                    165,951         46,278
      Total Property under      -----------    -----------
      Capital Leases              2,996,332      2,812,078
                                ===========    ===========

     Minimum  future  lease  payments  to  related  and  unrelated
     parties are as follows:

                                  Related    Unrelated
                                  Parties    Parties      Total

         1998                   $ 105,720   $ 635,536  $  741,256
         1999                     105,720     466,938     572,658
         2000                      61,670     394,872     456,542
         2001                           0     393,617     393,617
         2002                           0     362,958     362,958
         Thereafter                     0   3,142,160   3,142,160
                                ---------   ---------  ----------
Future minimum lease payments   $ 273,110  $5,396,081  $5,669,191
                                =========  ==========  ==========

NOTE I - SUBORDINATED CONVERTIBLE DEBENTURE

     During  1997  and  1996  the Company issued  subordinated  4%
     convertible  debentures totaling $20,230,000 and  $6,600,000,
     respectively,  with  a  one  year  mandatory  maturity.    At
     December  31,  1997  and  1996, the subordinated  convertible
     debentures totaled $3,301,280 and $4,600,000, respectively.

     As of December 31, 1997 and 1996, the conversion price of the
     debentures would have been approximately $.146 and $.686  per
     share,  respectively, based upon a formula  which  applies  a
     discount  to  the average market price for the previous  week
     and  determined by the length of the holding period.   As  of
     December 31, 1997 and 1996, the number of shares issued  upon
     conversion  of  all outstanding debentures was  approximately
     23.9  million  and  6.7 million shares,  respectively,  which
     would have reflected discounts of approximately 18% and  17%,
     respectively.

NOTE J - STOCKHOLDERS' EQUITY

     Preferred Stock

     The  Board  of  Directors of the Company may issue  preferred
     stock in series which would have rights as determined by  the
     Board.

     During  1996,  2,730 shares of the Series I  preferred  stock
     were converted to common stock, 790 shares were redeemed  for
     cash and an escrow payable of $2,700 was established for  the
     redemption of the remaining 270 shares.

     During  1996,  20,000  shares of  the  Series  A  convertible
     preferred stock were sold and converted.
     
     During  1997  22,000  shares  of  the  Series  B  convertible
     preferred stock were sold and converted.
     
     Common Stock Warrants

     During 1997, warrants ranging from $.22 to $1.25 per share to
     purchase  2,594,000 shares of common stock  were  granted  at
     exercise  prices  which were equal to or  above  the  current
     quoted  market  price  of  the  stock  on  the  date  issued.
     Warrants  to purchase 5,346,662 shares of common  stock  were
     exercisable  at  December 31, 1997.  The per  share  exercise
     prices of these warrants are as follows:
                   Shares            Exercise
                                     Price
                      10,000              $.22
                   1,226,700              $.25
                     180,000              $.33
                      50,000              $.38
                       1,482              $.45
                     350,000              $.50
                   2,334,000             $1.00
                     200,000             $1.25
                     994,480         $1.48 - $4.03
          Total    5,346,662

     The fiscal year in which common stock warrants were granted
     and the various expiration dates by fiscal year are as
     follows:
Fiscal      Warrants          Warrants Expire During Fiscal Year
Year        Granted       1998       1999       2000      2001      2002
Granted
  1990      506,700      506,700      -           -          -        -
  1991      1,251,482    900,000   351,482        -          -        -
  1992      25,000          -         -         25,000       -        -
  1993      209,000      209,000      -           -          -        -
  1994      130,000         -      130,000        -          -        -
  1995       21,000         -         -         21,000       -        -
  1996      609,480       59,480      -           -       550,000     -
  1997      2,594,000       -      200,000        -     1,400,000   994,000
            ---------  ---------  ---------  ---------  ---------  ---------
            5,346,662  1,675,180   681,482      46,000  1,950,000   994,000
            =========  =========  =========  =========  =========  =========

     The  following  is  a summary of warrant transactions  during
     1997:

          Outstanding beginning of period:          2,905,462

          Granted during the twelve month period:   2,594,000

          Canceled during the twelve month period:        -0-

          Exercised during the twelve month period:  (152,800)
                                                   -----------

          Outstanding, and eligible for exercise:   5,346,662
                                                   ===========

     Common Stock Reserve

     At December 31, 1997 the Company has reserved unissued common
     stock as follows:

               Warrants                    5,346,662
               Convertible debentures     23,874,729
               Total                      29,221,391

     Warrant Extensions

     During  1997,  the  Company extended  the  exercise  date  of
     warrants  to  purchase  177,800 shares  of  common  stock  to
     certain  officers and consultants.  The warrant  shares  were
     originally  granted at exercise prices ranging from  $.25  to
     $3.50,  and  were extended at the original grant  price.   No
     expense was charged to operations since the market price  was
     less than the original warrant price.
     
     During  1996,  the  Company extended  the  exercise  date  of
     warrants  to  purchase  351,482 shares  of  common  stock  to
     certain  officers and consultants.  The warrant  shares  were
     originally  granted at exercise prices ranging from  $.45  to
     $.50,  and  were extended at the original grant  price.   The
     Company  recorded  a  $604,342  expense  for  the  difference
     between  the fair market value on the date the warrants  were
     extended and the warrant exercise prices.
     
     During  1995,  the  company extended  the  exercise  date  of
     warrants  to  purchase 2,069,500 shares of  common  stock  to
     certain officers, directors, employees and consultants.   The
     warrant  shares  were originally granted at  exercise  prices
     ranging  from $.25 to $.33, and were extended at the original
     grant  price.  The company recorded a $7,228,220 expense  for
     the difference between the fair market values on the date the
     warrants were extended and the warrants' exercise prices.

     Diasense Common Stock
     
     At  December 31, 1997, warrants to purchase 7,476,513  shares
     of  Diasense  common stock were exercisable.  The  per  share
     exercise  price for 4,055,000 shares is $.50,  for  2,286,763
     shares  is  $1.00  and for 1,134,750 shares  is  $3.50.   The
     warrants expire at various dates through 2001.  To the extent
     that   all   the   warrants  are  exercised,  the   Company's
     proportionate ownership would be diluted from 52% at December
     31, 1997 to 39.2%.

     Diasense Warrant Extensions

     During  1997, Diasense extended the exercise date of warrants
     to  purchase  2,236,550  shares of common  stock  to  certain
     officers, directors, employees and consultants.  The  warrant
     shares were originally granted at an exercise price of $1.00,
     and  extended  at  the  same  price.   Diasense  recorded   a
     $4,046,875  expense  for the difference between  the  assumed
     value  on  the  date  the  warrants  were  extended  and  the
     warrants' exercise prices.

     During  1996, Diasense extended the exercise date of warrants
     to  purchase  2,970,013  shares of common  stock  to  certain
     officers, directors, employees and consultants.  The  warrant
     shares  were  originally granted at exercise  prices  ranging
     from $.50 to $1.00, and extended at the same price.  Diasense
     recorded a $8,571,033 expense for the difference between  the
     assumed value on the date the warrants were extended and  the
     warrants' exercise prices.

     During  1995, Diasense extended the exercise date of warrants
     to  purchase  1,765,000  shares of common  stock  to  certain
     officers, directors, employees and consultants.  The  warrant
     shares  were originally granted at exercise prices  of  $.50,
     and  extended  at  the  same  price.   Diasense  recorded   a
     $5,295,000  expense  for the difference between  the  assumed
     value  on  the  date  the  warrants  were  extended  and  the
     warrants' exercise prices.

     Petrol Rem Common Stock

     At December 31, 1997 warrants to purchase 3,920,000 shares of
     Petrol  Rem  common stock were exercisable  at  the  exercise
     price  of $.10.  The warrants expire at various dates through
     2002.  To the extent that if all the warrants were exercised,
     the  Company's proportionate ownership would be diluted  from
     67% at December 31, 1997 to 53.3%.
     
     IDT Common Stock
     
     At December 31, 1997 warrants to purchase 3,875,000 shares of
     IDT  common  stock were exercisable.  The per share  exercise
     price  for 3,780,000 shares is $.10 and for 75,000 shares  is
     $1.00 and for 20,000 shares is $2.00.  The warrants expire at
     various  dates through 2001. To the extent that  if  all  the
     warrants   were   exercised,  the   Company's   proportionate
     ownership would be diluted from 99.1% at December 31, 1997 to
     71.6%.

NOTE K - INCOME TAXES

     As  of   December 31, 1997, the company and its subsidiaries,
     except  Diasense and Petrol Rem, have available approximately
     $63,260,000  of net operating loss carryforwards for  federal
     income  tax  purposes.   These carryforwards  are  available,
     subject to limitations, to offset future taxable income,  and
     expire in tax years 1998 through 2012.  The Company also  has
     research  and  development credit carryforwards available  to
     offset federal income taxes of approximately $580,000 subject
     to limitations, expiring in tax years 2005 through 2012.

     As  of   September  30,  1997, the end of  its  fiscal  year,
     Diasense  had  available  approximately  $21,500,000  of  net
     operating loss carryforwards for federal income tax purposes.
     These  carryforwards,  which expire  during  the  years  2005
     through  2012,  are  available, subject  to  limitations,  to
     offset future taxable income.  Diasense also has research and
     development credit carryforwards available for federal income
     tax   purposes   of   approximately  $700,000,   subject   to
     limitations, expiring in the years 2005 through 2012.

     As   of   December  31,  1997,  Petrol  Rem   had   available
     approximately  $8,700,000 of net operating loss carryforwards
     for  federal income tax purposes.  These carryforwards, which
     expire  during  the years 2008 through 2012,  are  available,
     subject  to  limitations, to offset  future  taxable  income.
     Petrol   Rem   also  has  research  and  development   credit
     carryforwards  available for federal income tax  purposes  of
     approximately $75,000.

     Certain  items  of  income  and  expense  are  recognized  in
     different  periods  for financial and  income  tax  reporting
     purposes.  In the years ended December 31, 1996 and  1995,  a
     warrant  exercise  adjustment  of  $211,520  and  $1,267,640,
     respectively, was reported for tax purposes. The fair  market
     value  of  warrant extensions have been recorded and expensed
     for  financial statement purposes in the years ended December
     31,  1996 and 1995 in the amounts of $604,342 and $7,228,220,
     respectively.

     The  Company has not reflected any future income tax benefits
     for these temporary differences or for net operating loss and
     credit  carryforwards  because  of  the  uncertainty  as   to
     realization.  Accordingly, the adoption of  FAS  109  had  no
     effect on the financial statements of the Company.

     The  following  is  a  summary  of  the  composition  of  the
     Company's  deferred tax asset (all long-term) and  associated
     valuation allowance at December 31, 1997, December  31,  1996
     and December 31, 1995:

                                 Dec. 31,       Dec. 31,       Dec. 31,
                                   1997           1996           1995

       Net Operating Loss      $ 21,508,400   $ 15,330,642   $ 10,959,420
       Warrant Expense            2,741,397      2,741,397      2,529,877
       Tax Credit Carryforward      580,000        520,000        400,000
                               ------------   ------------   ------------
                                 24,829,797     18,592,039     13,889,297

       Valuation Allowance      (24,829,797)   (18,592,039)   (13,889,297)
                                ------------   ------------   ------------
       Net Deferred Tax Asset  $          0   $          0   $          0
                                ============   ============   ============

     The  deferred tax benefit and the associated increase in  the
     valuation allowance are summarized in the following schedule:


                                    Deferred       Increase in
                                    Tax            Valuation
                                    Benefit        Allowance     Net


     Year-ended December 31,1997    $(6,237,758)   $ 6,237,758   $ 0
     Year-ended December 31, 1996   $(4,702,742)   $ 4,702,742   $ 0
     Year-ended December 31, 1995   $(6,977,857)   $ 6,977,857   $ 0
     From March 20, 1972 (inception)
     through December 31, 1997      $(24,829,797)  $24,829,797   $ 0

     NOTE L - RELATED PARTY TRANSACTIONS

     Research and Development Activities

     The  Company is currently performing research and development
     activities  related to the non-invasive glucose  sensor  (the
     Sensor)  under  a  Research  and Development  Agreement  with
     Diasense.  If successfully developed, the Sensor will  enable
     users  to  measure blood glucose levels without taking  blood
     samples.   Diasense  acquired  the  rights  to  the   Sensor,
     including  one United States patent from BICO for  $2,000,000
     on  November  18, 1991.  Such patent covers  the  process  of
     measuring  blood glucose levels non-invasively.  Approval  to
     market the Sensor is subject to federal regulations including
     the  Food  and  Drug  Administration (FDA).   The  Sensor  is
     subject to clinical testing and regulatory approvals  by  the
     FDA.  BICO is responsible for substantially all activities in
     connection  with  the  development,  clinical   testing,  FDA
     approval  and  manufacturing of the Sensor. As  discussed  in
     Note  B, BICO finances its operations from the sales of stock
     and  issuance  of debt and was reimbursed for costs  incurred
     under   the   terms  and  conditions  of  the  Research   and
     Development Agreement for the research and development of the
     Sensor  by Diasense.  If BICO is unable to perform under  the
     Research   and   Development  or  Manufacturing   Agreements,
     Diasense would need to rely on other arrangements to  develop
     and manufacture the Sensor or perform these efforts itself.

     BICO  and  Diasense have entered into a series of  agreements
     related  to  the development, manufacturing and marketing  of
     the  Sensor.  BICO is to develop the Sensor and carry out all
     steps  necessary to bring the Sensor to market  including  1)
     developing  and  fabricating  the  prototypes  necessary  for
     clinical  testing; 2) performing the clinical  investigations
     leading  to  FDA  approval for marketing; 3)  submitting  all
     applications  to  the  FDA  for marketing  approval;  and  4)
     developing a manufacturable and marketable product.  Diasense
     is  to conduct the marketing of the Sensor.  The following is
     a brief description of the agreements:

     Manufacturing Agreement

     The  manufacturing agreement between BICO  and  Diasense  was
     entered  into  on January 20, 1992.  BICO is to  act  as  the
     exclusive manufacturer of production units of the Sensor upon
     the  completion of the Research and Development Agreement and
     sell  the  units  to  Diasense at a price determined  by  the
     agreement. The term of the agreement is fifteen years.

     Under  a  January 1992 agreement between BICO  and  Diasense,
     beginning  in April 1992, BICO received $100,000  per  month,
     plus  all  direct  costs  for the  research  and  development
     activities of the Sensor.  This agreement replaced a previous
     agreement  dated May 14, 1991.  The term of the new agreement
     is  fifteen  years.  Under the terms of this  agreement,  the
     Company   billed   Diasense  $2,955,863   in   research   and
     development and general and administrative expenses  for  the
     year   ending   December 31, 1995.  In July 1995,   BICO  and
     Diasense  agreed  to  suspend
     billings,  accruals of amounts due and payments  pursuant  to
     the  research  and  development agreement pending  the  FDA's
     review of the Sensor.


     Purchase Agreement
     
     In November 1991, BICO entered into a Purchase Agreement with
     Diasense under which Diasense acquired BICO's rights  to  the
     Sensor  for  a  cash payment of $2,000,000.   This  agreement
     permits BICO to use Sensor technology for the manufacture and
     sale  by  BICO of a proposed implantable closed loop  system.
     BICO will pay Diasense a royalty equal to five percent of the
     net sales of such implantable closed loop system.
     
     Real Estate Activities
     
     Four of the Company's Executives and/or Directors are members
     of  an  eight-member partnership which in July 1990 purchased
     the  Company's real estate in Indiana, Pennsylvania, and each
     has personally guaranteed the payment of lease obligations to
     the   bank   providing  the  funding.   For  their   personal
     guarantees,  the four individuals each received  warrants  to
     purchase 100,000 shares of the Company's common stock  at  an
     exercise price of $.33 per share until June 29, 1998.
     
     Amounts due from Officers

     At  December  31, 1997 and 1996, Mr. Cooper owed the  Company
     $8,500  related to a 12 percent simple interest demand  loan.
     At  December  31, 1997 and 1996, Mr. Cooper owed the  Company
     $82,400, related to 10 percent simple interest demand  loans.
     At  December  31,  1997,  Mr.  Cooper  owed  the  Company  in
     aggregate  notes of $158,000, related to 8.25 percent  simple
     interest  demand  loans  The accrued  interest  owed  by  Mr.
     Cooper on all demand notes at December 31, 1997 and 1996  was
     $66,121 and $50,070, respectively.

     At  December 31, 1997 and 1996, the Company had a demand loan
     of $5,000 with 10 percent simple interest with Glenn Keeling,
     a  Director.  At December 31, 1997 and 1996 the Company had a
     demand  loan of $50,000 with 8.25 percent interest  with  Mr.
     Keeling.  At December 31, 1997, the Company had a demand loan
     of  $50,000 with 8.25 percent interest with Mr. Keeling.  The
     accrued  interest owed by Mr. Keeling on all demand notes  at
     December   31,   1997  and  1996  was  $7,664   and   $2,804,
     respectively.

     At  December  31,  1997, the Company had  a  demand  loan  of
     $50,000  with 8.25 percent simple interest with TJ  Feola,  a
     Director.   The  accrued interest owed by Mr.  Feola  on  the
     demand note at December 31, 1997 was $1,254 .


     At  December  31, 1997, the Company had a note receivable  of
     $35,000  with 8.25 percent simple interest with  Dave  Purdy,
     Fred Cooper, TJ Feola and Glen Keeling, all Directors who are
     jointly  liable.   As  of December 31,  1997,  there  was  no
     accrued interest owed

     At December 31, 1997 and 1996, the Company had extended a one
     year  judgment note payable September 1, 1997, for  $250,000,
     with  an interest rate of prime plus one percent, with Joseph
     Kondisko,  Allegheny  Food Services,  Inc.  of  which  Joseph
     Kondisko,  a  former  director, is principal  owner.   As  of
     December  31,  1997  and 1996 there was no  accrued  interest
     owed.


     Advances to Officers

     During  the  periods  1997  and 1996,  the  Company  and  its
     subsidiaries  made advances to Mr. Cooper.  At  December  31,
     1997  and  1996,  these advances accumulated to  $26,150  and
     $32,535, respectively.

     Employment Contracts

     The Company's employment contracts with four officers and two
     employees  commenced  November 1, 1994 and  end  October  31,
     1999.   These  employment contracts set  forth  annual  basic
     salaries  aggregating  $1,500,000 in  1997  and  expiring  in
     periods  beginning  October  1999  through  2002,  which  are
     subject  to  review  and adjustment.  The  contracts  may  be
     extended  for two to three - year periods.  In the  event  of
     change   in  control  in  the  Company  and  termination   of
     employment,   continuation  of  annual   salaries   at   100%
     decreasing  to 25% are payable in addition to the issuing  of
     shares  of  common  stock as defined in the  contracts.   The
     contracts also provide for severance, disability benefits and
     issuances of BICO common stock under certain circumstances.
                                  
NOTE M - COMMITMENTS AND CONTINGENCIES
     
     Litigation
     
     Several  class  action lawsuits have been filed  against  the
     company  and  its subsidiary Diasense as well as  certain  of
     their  directors, all of which have been consolidated into  a
     single  action.   The  suit  alleges  various  violations  of
     federal  securities laws on behalf of a class  of  plaintiffs
     who  purchased common stock of the Company between April  25,
     1995  and February 26, 1996, at which time the value  of  the
     Company's  stock  dropped  as  a  result  of  an  unfavorable
     recommendation  of  a  Panel Review convened  by  the  United
     States Food and Drug Administration with respect to a certain
     medical  device  owned by Diasense and  manufactured  by  the
     Company.  To date, a complaint has been filed in the  action,
     to  which the defendants have filed a Motion to Dismiss.  The
     Company  has  engaged  in voluntary  mediation  in  order  to
     explore whether settlement is an option.  As a result of  the
     mediation,  the  plaintiffs agreed to a "standstill"  period,
     which has now expired; however, no further activity has  been
     conducted  by  the  plaintiffs  to  move  the  case  forward.
     Management believes that no federal securities violation  has
     occurred, and they intend to strongly defend the action.   At
     this  time it is not possible to predict the outcome  of  the
     litigation or to estimate the potential damages arising  from
     the claims, since the number of class members, and the volume
     and pricing of shares traded, are unknown.

     Pennsylvania Securities Commission

     The  Pennsylvania  Securities  Commission  is  conducting   a
     private  investigation  of the Company  and  its  subsidiary,
     Diasense,  Inc.  in connection with the sale  of  securities.
     The  Companies have cooperated with and provided  information
     to  the Pennsylvania Securities Commission in connection with
     the private investigation.  As the Commission's investigation
     is  not  yet complete, there can be no estimate or evaluation
     of the likelihood of an unfavorable outcome in this matter or
     the range of possible loss, if any.

     License Agreement

     Under  terms  of  a license agreement with a  shareholder  of
     Petrol  Rem for the marketing rights with respect to  certain
     inventions Petrol Rem is to make minimum royalty payments  of
     $120,000  per  year  for each year starting in  1994  through
     2001.
     
NOTE N - EMPLOYEE BENEFIT PLAN
     
     The  Company  has  a  defined  contribution  plan  with  401k
     provisions which covers all employees meeting certain age and
     period  of service requirements.  Employer contributions  are
     discretionary as determined by the Board of Directors.  There
     have  been  no  employer contributions to  the  plan  through
     December 31, 1997.
     
NOTE O - SUBSEQUENT EVENTS

     Special Meeting

     On  February 2, 1998 BICO's shareholders approved an increase
     in the number of authorized common shares from 150,000,000 to
     300,000,000  at a special shareholders meeting  convened  for
     that purpose.

     Debentures

     Subsequent to December 31, 1997, and through March 25,  1998.
     the   Company  issued additional 4% subordinated  convertible
     debentures  totaling  $5,020,000 with a  one  year  mandatory
     maturity  and converted $4,271,280 of subordinate  debentures
     into common stock.

     Common Stock
     
     Subsequent to December 31, 1997 and through March  25,  1998,
     the  Company issued an additional 50,385,098 shares of common
     stock  bringing total outstanding common stock at  March  25,
     1998, to 188,969,076.
     
     The  Company's common stock is currently traded on the NASDAQ
     Small-Cap  Market.   Revised  requirements  for  this  market
     include a minimum trading price of $1.00 which will limit the
     Company's option to continue to trade on NASDAQ.

     Related Party Transactions

     Subsequent  to  December  31, 1997, the  company  issued  Mr.
     Cooper  demand  notes  in the amount of  $275,000  with  8.25
     percent simple interest.

     Subsequent  to  December  31, 1997, the  company  issued  Mr.
     Keeling  a  demand note in the amount of $190,000  with  8.25
     percent simple interest.

     Subsequent to December 31, 1997, the company issued Mr. Feola
     a  demand  note in the amount of $185,000 with  8.25  percent
     simple interest.

     Stock Purchase Agreement

     Effective  March  4,  1998,  pursuant  to  a  Stock  Purchase
     Agreement dated February 20, 1998, the Company acquired 58.4%
     of   International  Chemical  Technologies,  Inc.  (ICTI)   a
     development stage corporation.  ICTI commenced operations  in
     May 1997 and plans to engage in the business of manufacturing
     and  marketing, and licensing rights with respect to  certain
     corrosion/wear-resistant  metal alloy  coating  compositions.
     The unaudited financial statements of ITCI as of December 31,
     1997  present  accumulated  losses  of  $680,335,  a  working
     capital  deficiency  of $457,164, and  a  net  deficiency  in
     assets of $678,335.
     
     Consideration  for the purchase of the 58.4%  interest  in  ICTI
     included  a  cash payment of $1,030,000; a promissory  note  for
     $3,350,000  at 8%; 2,000,000 shares of Biocontrol  common  stock
     (fair market value of $250,000), a warrant to purchase 1,000,000
     shares  of  Biocontrol  stock for $2 per share  anytime  through
     March  4,  2003; and the guarantee by Biocontrol of a promissory
     note for $1,300,000 payable by ICTI to the seller.

     The  Biocontrol  promissory note for $3,350,000  is  payable  in
     monthly  installments as follows;  (i) on the first day of  each
     calendar   month  from  April  1,  1998  through  and  including
     September 1, 1998 a principal payment of $150,000 per month plus
     accrued  interest  (ii) on October 1, 1998, a principal  payment
     of  $1,100,000 plus accrued interest  (iii) on the first day  of
     each  calendar month from November 1, 1998 through and including
     November 1, 1999 a principal payment of $100,000 per month  plus
     accrued  interest and  (iv)  on December 1, 1999 a final payment
     equal  to  the remaining outstanding principal balance plus  all
     accrued interest thereon.  The note is collateralized by  shares
     of ICTI purchased by Biocontrol.

     The  ICTI promissory note, guaranteed by Biocontrol,  is  for
     $1,300,000 at an annual interest rate of 9.5% and is  payable
     in  monthly principal amounts of $36,111 plus interest.  This
     note  is collateralized by all tangible and intangible assets
     of ICTI.
     
     In  addition,  Biocontrol  has agreed  to  make  nonscheduled
     capital  contributions  totaling $3,000,000  to  ICTI  on  or
     before September 4, 1998.


NOTE P -  RESTATEMENT

     The accompanying financial statements include the effect of
adjustments which were made to financial     statements previously
issued by the Company.

     Subsequent to the issuance of its consolidated financial
statements in March 1998, the Company   determined that beneficial
conversion terms included in its convertible debentures issued in
1996 and       1997 should be reflected in its financial statements
as expense and as additional paid-in capital.  The     amount of
expense charged to operations as a result of this adjustment was
$1,650,000 in 1996, and  $6,278,853 in 1997.  Corresponding amounts
were recognized as additional paid-in capital and there     was no
effect to the total Stockholders Equity as a result of these
adjustments.