<PAGE>

                                       

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                           
                          ____________________________

                                   FORM 10-Q
                                           

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
               For the Quarterly Period Ended September 30, 1997
                                           
[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
             For the Transition Period From            to          
                                           

                                           
                         Commission File Number 0-68440
                                           


                           STRATEGIC DIAGNOSTICS INC.
             (Exact name of Registrant as specified in its charter)
                          ____________________________
                                           

                 Delaware                                 56-1581761
     (State or other jurisdiction of                   (I.R.S. employer
      incorporation or organization)                  identification no.)

              128 Sandy Drive
              Newark, Delaware                                19713
  (Address of principal executive offices)                  (Zip Code)


    Registrant's telephone number, including area code:  (302) 456-6789
                          ____________________________  

              Former Name, Former Address and Former Fiscal Year, 
                      if Changed Since Last Report:  None
                                           

     Indicate by check mark whether the Registrant: (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
Registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.  Yes  X      No __

     As of September 30, 1997 there were 13,102,949  outstanding shares of 
the Registrant's common stock, par value $.01 per share.

                                           
<PAGE>

                               STRATEGIC DIAGNOSTICS INC.

                                         INDEX
Item                                                                       Page
-----                                                                      ----

PART I 

   ITEM 1.   Financial Statements (Unaudited)

        Consolidated Balance Sheets - December 31, 1996
            and  September 30, 1997......................................   2

        Consolidated Statements of Operations - Three months
            and nine months ended September 30, 1996 and 1997.............  3

        Consolidated Statements of Cash Flows - Nine months ended 
             September 30, 1996 and 1997..................................  4

        Notes to Consolidated Interim Financial Statements................  5

                    
   ITEM 2.  Management's Discussion and Analysis of Financial Condition
            and Results of Operations....................................  11

PART II

   ITEM 6.  Exhibits and Reports on Form 8-K.............................  19

SIGNATURES...............................................................  20


<PAGE>

                                    PART I

ITEM 1. FINANCIAL STATEMENTS

                  STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                       (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                            December 31,            September 30,
-----------------------------------------------------------------------------------------------------------------
                                                                                1996                     1997
                                                                                                     (unaudited)
<S>                                                                        <C>                     <C>
ASSETS
-----------------------------------------------------------------------------------------------------------------
CURRENT ASSETS:
  Cash and cash equivalents.............................................         4,419                    3,612
  Short-term investments................................................         2,208                    1,501
  Receivables...........................................................         2,334                    3,468
  Inventories...........................................................         1,557                    1,839
  Other current assets..................................................           510                      261
-----------------------------------------------------------------------------------------------------------------
      Total current assets..............................................        11,028                   10,681
-----------------------------------------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT:
  Equipment.............................................................         1,002                    1,071
  Furniture and fixtures................................................            66                       66
  Leasehold improvements................................................           198                      235
-----------------------------------------------------------------------------------------------------------------
                                                                                 1,226                    1,372
  Less accumulated depreciation.........................................          (538)                    (880)
-----------------------------------------------------------------------------------------------------------------
      Net property and equipment........................................           728                      492
-----------------------------------------------------------------------------------------------------------------
OTHER ASSETS:
  Intangible assets, net................................................         2,110                    1,901
  Notes receivable and other............................................           715                      696
-----------------------------------------------------------------------------------------------------------------
      Total other assets................................................         2,825                    2,597
-----------------------------------------------------------------------------------------------------------------
      Total assets......................................................        14,581                   13,770
-----------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
-----------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
  Accounts payable......................................................         1,566                      432
  Accrued expenses......................................................         2,066                    1,302
  Deferred revenue......................................................           141                      118
  Current portion of capital lease obligations..........................            85                       31
-----------------------------------------------------------------------------------------------------------------
      Total current liabilities.........................................         3,858                    1,883
-----------------------------------------------------------------------------------------------------------------
CAPITAL LEASE OBLIGATIONS...............................................            50                       29
-----------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
  Preferred stock, $.01 par value, 17,500,000 shares authorized,
      no shares issued or outstanding...................................            --                       --
  Series A preferred stock, $.01 par value, 2,164,362 
      authorized, issued and outstanding................................            22                       22
   
  Common stock $.01 par value, 35,000,000 authorized,
      13,055,170 and 13,102,949 issued and outstanding
      in 1996 and 1997, 
      respectively......................................................           131                      131
 
  Additional paid-in capital............................................        23,905                   23,908
  Accumulated deficit...................................................       (13,379)                 (12,197)
  Deferred compensation.................................................            (6)                      (6)
-----------------------------------------------------------------------------------------------------------------
      Total stockholders' equity........................................        10,673                   11,858
-----------------------------------------------------------------------------------------------------------------
      Total liabilities and stockholders' equity........................        14,581                   13,770
-----------------------------------------------------------------------------------------------------------------

</TABLE>

         The accompanying notes are an integral part of these statements.

                                       2


<PAGE>
                                       
                 STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES
  
                    CONSOLIDATED STATEMENTS OF OPERATIONS
              (in thousands, except share and per share data)
                                (unaudited)

<TABLE>
<CAPTION>
                                                            Three Months Ended              Nine Months Ended
                                                               September 30,                   September 30,
                                                          -----------------------        -----------------------
                                                             1996         1997              1996         1997
                                                          ----------   ----------        ----------   ----------
<S>                                                       <C>          <C>               <C>          <C>       
NET REVENUES:
   Product related.....................................          852        3,801             2,077        9,306
   Contract and other..................................          461          512             1,555        1,278
                                                          ----------   ----------        ----------   ----------
      Total net revenues...............................        1,313        4,313             3,632       10,584
                                                          ----------   ----------        ----------   ----------
OPERATING EXPENSES:
   Manufacturing.......................................          606        1,577             1,534        3,826
   Research and development............................          396          313             1,178        1,216
   Acquired research and development...................        3,913         --               3,913         --
   Selling, general and administrative.................          412        1,751               864        4,539
                                                          ----------   ----------        ----------   ----------
      Total Operating Expenses.........................        5,327        3,641             7,489        9,581
                                                          ----------   ----------        ----------   ----------
      Operating income (loss)..........................       (4,014)         672            (3,857)       1,003
INTEREST INCOME (EXPENSE) NET..........................           (2)          50                 6          179
EQUITY IN INCOME OF TSD BIOSERVICES....................           15         --                 178         --
                                                          ----------   ----------        ----------   ----------
NET INCOME.............................................       (4,001)         722            (3,673)       1,182

ACCRETION OF REDEEMABLE
   CONVERTIBLE PREFERRED STOCK
   LIQUIDATION VALUE...................................         (159)        --                (477)         --
                                                          ----------   ----------        ----------   ----------
NET INCOME APPLICABLE TO
   COMMON STOCKHOLDERS.................................  $    (4,160) $       722       $    (4,150) $     1,182
                                                          ----------   ----------        ----------   ----------
NET INCOME PER SHARE
   APPLICABLE TO COMMON STOCKHOLDERS...................  $     (0.99) $      0.05       $     (1.12) $      0.08
                                                          ----------   ----------        ----------   ----------
SHARES USED IN COMPUTING NET INCOME PER SHARE
   APPLICABLE TO COMMON STOCKHOLDERS....................   4,220,000   15,623,000         3,716,000   15,606,000 
                                                          ----------   ----------        ----------   ----------
</TABLE>

       The accompanying notes are an integral part of these statements.


                                      3

<PAGE>

<TABLE>
<CAPTION>

                                     STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

                                        CONSOLIDATED STATEMENT OF CASH FLOWS
                                                (in thousands)
                                                 (unaudited)

                                                                        Nine Months Ended September 30,
-------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>           <C>
                                                                             1996          1997
-------------------------------------------------------------------------------------------------------------
Cash Flows from Operating Activities:

     Net Income (loss)..................................................... ($3,673)       $1,182
     Adjustments to reconcile net income to cash used in
          operating activities:
       Acquired research and development write-off.........................   3,913
       Depreciation and amortization.......................................      96           554
       Equity in losses (income) of investment in TSD Bioservices..........    (178)
       Amortization of deferred compensation...............................      40 

     (Increase) decrease in:

       Receivables.........................................................    (499)       (1,134)
       Inventories.........................................................     (51)         (282)
       Other current assets................................................    (385)          249
       Note receivable and other assets....................................      30            19

     Increase (decrease) in:

       Accounts payable....................................................     484        (1,134)
       Accrued expenses....................................................      61          (764)
       Deferred revenue....................................................    (111)          (23)

-------------------------------------------------------------------------------------------------------------
Net cash used in operating activities......................................    (273)       (1,333)
-------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:

     Purchase of property and equipment....................................     (35)         (106)
     Proceeds from Ohmicron acquisition....................................      54
     Short-term investment activity........................................      (2)          707

-------------------------------------------------------------------------------------------------------------
Net cash provided by investing activities..................................      17           601
-------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities:

     Proceeds from sale of preferred stock, net............................     473
     Repayments on capital lease obligations...............................      (6)          (75)

-------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities........................     467           (75)
-------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents.......................     211          (807)

Cash and Cash Equivalents, Beginning of Period.............................      35         4,419

-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents, End of Period...................................    $246        $3,612
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Supplement Cash Flow Disclosure:

     Cash paid for interest................................................  $    0        $   36

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

                                       4

<PAGE>

                    STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

                NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                  (in thousands, except share and per share data)
                                    (unaudited)

1. BACKGROUND:
   
   Business
   
        Strategic Diagnostics Inc.  (the "Company") develops, manufactures and 
   markets immunoassay based test kits for rapid and inexpensive detection of a 
   wide variety of substances in the water quality, industrial and agricultural 
   market segments.
   
   Business Risks
   
           The Company is subject to risks of entities in similar stages of 
   development.  These risks include the Company's ability to successfully 
   develop, produce and market its products and its dependence on its key 
   collaborative partners and management personnel.  Management believes 
   that its current cash resources are sufficient to fund operations for at 
   least the next 18 months.
   
   Basis of Presentation and Interim Financial Statements
   
           The accompanying balance sheets at December 31, 1996 and 
   September 30, 1997, and the statements of operations for the three months 
   and nine months ended September 30, 1996 and 1997 and cash flows for the 
   nine months ended September 30, 1996 and 1997 include the consolidated 
   financial statements of  the Company.  All intercompany balances and 
   transactions have been eliminated in consolidation.  For comparative 
   purposes, the statements of operations for the three months and nine 
   months ended September 30, 1996 and 1997 and cash flows for the nine 
   months ended September 30, 1996 and 1997 include Strategic Diagnostics 
   Inc. ("SDI") prior to its acquisition of Ohmicron Corporation 
   ("Ohmicron"), which occurred on August 30, 1996 (Note 3), the dissolution 
   of TSD BioServices which occurred on October  15, 1996  (Note 3) and its 
   merger with EnSys Environmental Products, Inc.  ("EnSys") which occurred 
   on December 30, 1996 (Note 3).  Also presented where indicated, is 
   selected pro forma information for the three months and nine months ended 
   September 30, 1996, which includes SDI, Ohmicron and EnSys as if the 
   EnSys and Ohmicron transactions had occurred on January 1, 1996.
      
           The accompanying unaudited consolidated interim financial 
   statements of the Company have been prepared by the Company pursuant to 
   the rules and regulations of the Securities and Exchange Commission 
   regarding financial reporting.  Accordingly, they do not include all the 
   information and footnotes required by generally accepted accounting 
   principles for complete financial statements and should be read in 
   conjunction with the Company's Annual 

                                       5
<PAGE>

   Report on Form 10-K for the fiscal year ended December 31, 1996.  In the 
   opinion of management, the accompanying financial statements include all 
   adjustments (all of which are of a normal recurring nature) necessary for 
   a fair presentation.  The results of operations for the three months and 
   nine months ended September 30, 1997 are not necessarily indicative of 
   the results expected for the full year.
   
   Use of Estimates
   
           The preparation of financial statements in conformity with 
   generally accepted accounting principles requires management to make 
   estimates and assumptions that affect the reported amount 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.
   
2. NET INCOME PER SHARE APPLICABLE TO COMMON STOCKHOLDERS:
   
           Net income per share applicable to common stockholders for all 
   periods presented is calculated by dividing net income applicable to 
   common  stockholders by the weighted average number of shares 
   outstanding.  All shares  and per share amounts have been adjusted 
   retroactively to give effect to the  equivalent number of shares received 
   by the SDI stockholders in the EnSys  Merger discussed in Note 3.  This 
   retroactive adjustment is reflected in the  net income per share 
   calculations and the Notes to the Consolidated Interim Financial  
   Statements.
   
           Net income applicable to common stockholders is the sum of the 
   net income less the accretion of the redeemable convertible preferred 
   stock liquidation value.  Effective December 30, 1996, the redeemable 
   convertible preferred stock was converted into shares of a newly issued 
   class of Series A Preferred Stock (Note 6).  No additional accretion will 
   be recorded.
   
3. MERGERS AND ACQUISITIONS
   
   Merger with EnSys Environmental Products, Inc.
   
           On December 30, 1996, SDI merged with and into EnSys (the 
   "Merger").  The Merger agreement provided that SDI common and preferred 
   stockholders receive .7392048 shares of EnSys stock for each share of SDI 
   Common or Preferred Stock.  This resulted in the former SDI stockholders 
   owning 5,780,136 shares of EnSys Common Stock and 2,164,362 shares of 
   EnSys Series A Convertible Preferred Stock or approximately 52% of the 
   15,219,532 voting shares outstanding after the Merger.  In addition to 
   the Common and Preferred Stock noted above, SDI option and warrant 
   holders received options and warrants to purchase .7818026 shares of 
   EnSys Common Stock for each option or warrant held.  Upon consummation of 
   the Merger, SDI option and warrant holders received options and warrants 
   for the purchase of 383,216 and 599,644 shares, respectively, of EnSys 
   Common Stock.  The difference in exchange ratios between stockholders and 
   option and warrant holders is due to the stock
   
                                       6
<PAGE>

   references received by SDI's preferred stockholders upon exchange of 
   their shares.  The cost of receiving these preferences was shared by all 
   SDI stockholders upon exchange of their shares, but was not borne by the 
   SDI option and warrant holders.
      
           The Merger was accounted for as a purchase transaction with SDI 
   as the acquiring company.  Based on the $1.75 per share closing price of 
   EnSys Common Stock on October 14, 1996, (date of transaction public 
   announcement) the estimated total purchase price of EnSys was $16,133, 
   which consists of the following: (i) the $12,731 market value of the 
   outstanding shares of EnSys Common Stock (7,275,034 shares multiplied by 
   $1.75 per share), (ii) the $328 fair value of the outstanding options and 
   warrants to purchase EnSys Common Stock and (iii) estimated transaction 
   costs of approximately $3,074.  Since SDI is the acquiror for accounting 
   purposes, the EnSys options and warrants are required to be valued for 
   purchase accounting purposes as if they are additional consideration in 
   the transaction.  The valuation for EnSys options and warrants was 
   provided by an investment banking firm using a traditional valuation 
   approach.  Of the approximately $3,074 of estimated transaction costs, 
   approximately $457 relates to severance payments to former EnSys 
   employees, $362 to facility termination and moving and $36 to employee 
   relocation.  In connection with the Merger, approximately 35 EnSys 
   employees were terminated in December 1996.
   
           In connection with the Merger, all identifiable assets acquired 
   by SDI, including intangible assets, were assigned a portion of the cost 
   of the acquired company based on an independent valuation of EnSys' 
   assets.  Such allocation included the identification and evaluation of 
   each development project to determine if technological feasibility had 
   been achieved and if there were any alternative future uses.  EnSys' 
   primary research and development focus, the "One Step" assay, is 
   currently under development.  If such technology is not  fully developed 
   on a timely basis, the existing products may not be competitive enough to 
   satisfy the technical requirements of a changing market  or be cost 
   effective despite demonstration of research prototypes by EnSys.  The 
   costs of developing the remaining technology for the "One Step" assay is  
   significant.  As a result of the substantial time and effort to produce 
   the product in accordance with all functions and specification, it has 
   been determined that technological feasibility has not been achieved.  In 
   addition, since alternative uses of this developmental technology do not 
   exist, the costs of such technology have been charged to expense in 
   accordance with SFAS No. 2, ("Accounting for Research and Development 
   Costs," "SFAS No. 2").  Based on the foregoing purchase price, the amount 
   allocated  to acquired research and development of $4,353 was charged to 
   the statement  of operations at the effective date of the Merger.  The 
   remaining amount of  intangible assets of approximately $1,167 includes 
   approximately $472 for  developed technology, $55 for assembled workforce 
   and $640 for goodwill.  The  intangible assets purchased are being 
   amortized on a straight-line basis over 7-10 years.  Amortization expense 
   included in selling, general and administrative in the accompanying 
   consolidated statement of operations, for the nine months ended September 
   30, 1997 is approximately $103 related to the merger.
      
                                       7
<PAGE>
   
   Acquisition of Ohmicron Corporation
   
           On August 30, 1996, SDI acquired Ohmicron and certain of its 
   wholly owned subsidiaries for 2,268,456 shares of common stock.  Prior 
   to the acquisition, Ohmicron spun-off certain assets and liabilities of 
   another of its wholly-owned subsidiaries, Ohmicron Medical Diagnostics, 
   Inc.  The acquisition of Ohmicron was recorded as a purchase transaction 
   accounting using the fair market value of the SDI common stock issued to 
   Ohmicron.  The total purchase price of approximately $4,503, including 
   transaction and other costs of $533, has been allocated to the fair 
   market value of the assets acquired and liabilities assumed.  Based on 
   the foregoing estimated purchase price, the amount allocated to acquired 
   research and development of $3,913 was charged to the statement of 
   operations at the time of the acquisition.  In connection with the 
   Ohmicron transaction, all identifiable assets acquired including  
   intangible assets were assigned a portion of the cost of the acquired 
   company  based on an independent valuation of Ohmicron's assets.  Such 
   allocation  included the evaluation of each development project 
   identified to determine  if technological feasibility had been achieved 
   and if there were any alternative future uses.  Based on this analysis, 
   it has been determined that technological feasibility has not been 
   achieved, and that alternative uses of  this developmental technology do 
   not exist.  The cost of such technology has  therefore been charged to 
   expense in accordance with SFAS No.  2.  The remaining amount of 
   intangible assets of approximately $590 included approximately $384 for 
   developed  technology, $103 for assembled workforce and $103 for 
   goodwill.  The intangible assets purchased are being amortized on a 
   straight-line basis over 7-10 years.  Amortization expense included in 
   selling, general and administrative in the accompanying consolidated 
   statement of operations for the nine months ended September 30, 1997 is 
   approximately $57.  The fair market value of the common stock issued to 
   Ohmicron was based on several factors including recent equity 
   transactions, as well as the subsequently negotiated Merger.
   
   TSD BioServices Dissolution
   
           In October 1996, SDI entered into an agreement with Taconic 
   Farms, Inc. ("Taconic") to dissolve TSD BioServices, a partnership 
   between Taconic and SDI and to liquidate its assets, in connection with 
   which certain of the rights and assets were distributed to SDI.  Upon 
   dissolution, certain rights and assets formerly owned by the joint 
   venture were placed in a wholly-owned subsidiary of SDI.  The agreement 
   to dissolve TSD BioServices provides that each of the former partners 
   receive rights to perform services that were considered to be either a 
   core part of that partner's expertise, or an area in which the partner 
   wanted to increase its market presence or technical competency.  The 
   dissolution agreement also provided that certain services previously 
   provided by TSD BioServices, such as ascites production and sales and 
   marketing, would be subcontracted to Taconic by SDI in the future based 
   on established fees set annually.  For accounting purposes, this 
   transaction was treated as a purchase, with the consideration provided 
   being SDI's investment of $338 which approximated the fair market value 
   of the assets received.
      
   
                                       8
<PAGE>
   
   
   Unaudited Pro Forma Combined Results of Operations
   
           The following table summarizes the unaudited pro forma combined 
   results of operations for the three months and nine months ended 
   September 30, 1996, assuming that the Merger, the Ohmicron acquisition 
   and the TSD BioServices dissolution had occurred on January 1, 1996:

<TABLE>
<CAPTION>
                                      Three Months Ended         Nine Months Ended
                                      September 30, 1996         September 30, 1996
                                      ------------------         ------------------
<S>                                   <C>                        <C>
   Net Revenues                           $  3,471                    $ 10,097
   Net loss                               $   (300)                   $ (2,434)           
   Net loss per share                     $   (.02)                   $   (.19)

</TABLE>

        The above pro forma information excludes the $5,613 one-time 
charge to earnings for acquired research and development.
   
        The shares used in computing pro forma net loss per common share 
   assumes that the Merger with EnSys, the acquisition of Ohmicron and the 
   TSD BioServices dissolution had occurred on January 1, 1996.  In addition 
   the pro forma information excludes accretion of preferred stock (Note 2).
      
   SHORT-TERM INVESTMENTS:


<TABLE>
<CAPTION>
                                      December 31,             September 30,
                                         1996                       1997
                                      ------------             --------------
<S>                                   <C>                      <C>
   U.S. Government Securities          $   686                    $   -- 
   Commercial Paper                      1,522                     1,501
                                       --------                  ---------
                                        $2,208                    $1,501
                                       --------                  ---------
                                       --------                  ---------
</TABLE>

                                       
           The Company considers its investments as being available for sale 
   in accordance with SFAS No. 115 "Accounting for Certain Investments in 
   Debt and Equity Securities."   
   
5. NOTES PAYABLE:
   
           In October 1994 and April 1995, the holders of the redeemable 
   convertible preferred stock provided $500 and $1,000, in working capital 
   loans to the Company.  These notes bore interest at 9% and 10% per annum, 
   respectively, and each became due during 1995.  In addition, 89,349 and 
   223,372 warrants were issued, respectively, for the purchase of Common 
   Stock of the Company at an exercise price of $2.37 per share.  The 
   warrant values deemed for accounting purposes were $23 and $75, 
   respectively, which were recorded as an asset and amortized over the term 
   of the loans.  The warrants have an exercise period of five years.

                                       9

<PAGE>

           In January 1996, the Company converted the $1,500 of Notes 
   Payable and $124 of accrued interest into 685,952 shares of redeemable 
   convertible preferred stock (Note 6).
      
6. SERIES A PREFERRED STOCK:
   
           In June 1993, the Company sold 1,267,208 shares of redeemable 
   convertible preferred stock and received proceeds of $3,000 less $47 of 
   transaction costs.  In connection with the 1996 financing, the Company 
   converted the $1,500 of notes payable and $124 of accrued interest into 
   685,952 shares of redeemable convertible preferred stock at $2.37 per 
   share and received an additional investment of $500 for the purchase of 
   211,202 shares less transaction costs of $27.  All such shares were 
   redeemable with cumulative dividends, at the option of the holders, 
   beginning in 1998.  Dividends have been accreted through the Merger
   (Note 3).
   
           In connection with the Merger, the redeemable convertible 
   preferred stock plus cumulative dividends were converted into 2,164,362 
   shares of a newly issued class of Series A Preferred Stock ("Series A").  
   The Series A has no redemption provisions outside the control of the 
   Company.  As a result, the Series A is now classified as a component of 
   stockholders' equity.
   
           The Series A is convertible into one share of Common Stock at the 
   option of the holder at any time, or at the option of the Company if the 
   closing share price of the Company's Common Stock exceeds $4.50 per share 
   for a period of 45 business days.  The Series A carries an aggregate 
   liquidation preference of $6,378.  The Series A contains no annual 
   dividend provisions and is only redeemable in the event the Company 
   converts the Series A into securities of a lesser value, as defined.
   
                                       10

<PAGE>

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

Forward Looking Statements

    The information included in this report on Form 10-Q contains forward 
looking statements reflecting the current expectations of Strategic 
Diagnostics Inc. and its subsidiaries (the "Company").  Investors are 
cautioned that all forward looking statements involve risks and uncertainties 
that may cause actual results to differ from those anticipated at this time.  
Such risks and uncertainties include, without limitation, changes in demand 
for products, delays in product development, failure to obtain necessary 
regulatory approvals, modifications to development and sales relationships, 
the ability to integrate the acquired businesses and achieve anticipated 
synergies, and competition.

Background

    The Company is the entity resulting from the combination of EnSys 
Environmental Products, Inc. ("EnSys"), Ohmicron Corporation ("Ohmicron"), 
TSD BioServices ("TSD") and Strategic Diagnostics Inc. ("SDI").  On August 
30, 1996 Ohmicron was acquired by SDI, with certain Ohmicron shareholders and 
note holders receiving shares of SDI common stock.  On October 1, 1996 SDI 
entered into an agreement to dissolve TSD BioServices, a partnership, between 
Taconic Farms, Inc. and SDI and to liquidate its assets, in connection with 
which certain rights and assets formerly owned by the partnership were 
distributed to SDI and placed in a wholly owned subsidiary of SDI.  On 
December 30, 1996 SDI was merged  with and into EnSys.  The surviving entity 
was then renamed Strategic Diagnostics Inc.  Each of the transactions was 
accounted for as a purchase transaction with SDI as the acquiring company 
and, therefore, the surviving company for financial reporting purposes.  As a 
result, the unaudited historical financial information presented herein 
includes the results of SDI for all periods and the results of Ohmicron from 
August 30, 1996, TSD from October 1, 1996, and EnSys from December 30, 1996, 
(the "Historical Financial Statements").

    EnSys was formed in 1987 to develop proprietary biotechnology based test 
systems designed for fast and inexpensive detection of various chemicals in 
soil and water samples.  EnSys raised approximately $30 million in equity 
financing, including approximately $16 million from the sale of 1,800,000 
shares of EnSys common stock in its initial public offering in October 1993. 
Since 1991, EnSys commercialized eleven immunoassay test kits and four other 
test kits for the detection of various environmental contaminants.  EnSys 
marketed and sold these test kits and other associated products and services 
to environmental consulting and engineering firms, hazardous waste processing 
firms, environmental testing laboratories, and various state and federal 
agencies through distributors and a regionally based direct sales force in 
the US.  EnSys also marketed and sold its products in Europe through EnSys 
(Europe) Limited, a wholly owned subsidiary of EnSys.  In March 1996, EnSys 
acquired from Millipore, Inc. certain assets, which consisted primarily of 
inventory, work-in-process, equipment, intellectual property rights, 

                                       11
<PAGE>

contract rights and customer lists related to Millipore's EnviroGard-TM- 
product line for $1 million and 1,100,000 shares of EnSys common stock.  

    Ohmicron was founded in 1984 and began marketing its RaPID 
Assay-Registered Trademark- products in 1991 to the same general market and 
in the same fashion as previously described for EnSys.  

    Since its inception in 1990, SDI has focused on using proprietary 
technology and know-how to develop, manufacture and market immunoassay test 
kits for applications primarily in the water quality, industrial testing and 
agricultural markets. Commercial operations were initiated with a contact 
with a corporate partner (a large integrated chemical company) to develop an 
immunoassay test to detect certain corrosion causing bacteria.  This product 
was introduced in late 1991 and SDI purchased all rights and technology 
related to this product in 1994.  

    In February 1992, SDI entered into a $3.9 million research and 
development partnership with EM Industries, Inc.  (an affiliate of Merck 
KGaA, Darmstadt, Germany) for the development and manufacture of a line of 
immunoassay test kits capable of identifying and quantifying targeted 
priority pollutants.  The first products under this agreement were introduced 
 in 1993. Through August 1996, these products were manufactured by SDI and 
marketed by EM Industries, Inc.  In September 1996, EM Industries, Inc. and 
SDI reached an agreement whereby the February 1992 agreement was terminated, 
together with EM Industries, Inc.'s marketing rights thereunder, in exchange 
for certain specified royalty payments to EM Industries, Inc. and shares of 
SDI common stock.  The marketing activities with respect to such products are 
now the responsibility of the Company.

    Since 1992, the Company has entered into research and development 
agreements with multiple corporate partners that have led to the introduction 
of various products to the water quality, industrial testing, agricultural 
and other markets.  These agreements generally provide that sales and 
marketing costs associated with a new product are borne by the corporate 
partner.  In addition, the Company currently sells directly other products 
that it has developed or acquired.

RESULTS OF OPERATIONS

    As described above, the Historical Financial Statements presented herein 
include the results of SDI for all periods and the results of Ohmicron from 
August 30, 1996, TSD from October 1, 1996 and EnSys from December 30, 1996.

    For comparative purposes, the following table sets forth the pro forma 
results of operations for the periods indicated. The 1996 unaudited pro forma 
information presents the combined results as if the acquisition of Ohmicron, 
dissolution of TSD and the  EnSys merger had been completed at January 1, 
1996 (the "Pro Forma Financial Information").

                                      12
<PAGE>

      Selected Historical Financial Data and Pro Forma Combined Information


<TABLE>
<CAPTION>

                                                       Three Months Ended                                   Nine Months Ended
                                   -------------------------------------------------------------        --------------------------
                                          Pro Forma                       Historical                     Pro Forma     Historical 
                                   ------------------------    ---------------------------------        -----------    -----------
                                   Sep-96(1)      Dec-96(2)     Mar-97       Jun-97       Sep-97         Sep-96(3)       Sep-97
                                   ---------      ---------     ------       ------       ------        -----------    -----------
<S>                                <C>            <C>           <C>          <C>          <C>           <C>            <C>
 NET REVENUES:
  Product related...............     $3,049         $2,310      $2,402       $3,103       $3,801           $8,624       $9,306
  Contract and other............        422            293         371          395          512            1,473        1,278
                                   ---------      ---------     ------       ------       ------        -----------    ----------
    Total net revenues..........      3,471          2,603       2,773        3,498        4,313           10,097       10,584
 OPERATING EXPENSES:
  Manufacturing.................      1,590          1,652         809        1,440        1,577            4,295        3,826
  Research and development......        657            591         494          409          313            2,741        1,216
  Selling, general and admini...      1,682          2,320       1,430        1,358        1,751            5,962        4,539
                                   ---------      ---------     ------       ------       ------        -----------    ----------
    Total operating expense.....      3,929          4,563       2,733        3,207        3,641           12,998        9,581
                                   ---------      ---------     ------       ------       ------        -----------    ----------
    Operating income (loss).....       (458)        (1,960)         40          291          672           (2,901)       1,003
 INTEREST INCOME, NET............       158            122          69           60           50              467          179
                                   ---------      ---------     ------       ------       ------        -----------    ----------
NET INCOME (LOSS)................     ($300)       ($1,838)       $109         $351          722          ($2,434)      $1,182
                                   ---------      ---------     ------       ------       ------        -----------    ----------
                                   ---------      ---------     ------       ------       ------        -----------    ----------

</TABLE>

 (1)  Pro forma data excludes $3.9 million of acquired research 
and development expenses incurred in connection with the acquisition of 
Ohmicron. 

 (2)  Pro forma data excludes $4.4 million of acquired research and 
development expenses incurred in connection with the  acquisition of EnSys. 

(3)  Pro forma data results excludes $5.6 million of acquired research and 
development expenses incurred in connection with the acquisition of the 
EnviroGard product line from Millipore, Inc. in March 1996, and the 
acquisition of Ohmicron in August 1996. See the Historical Financial 
Information for 1996 actual results. 

COMPARISON WITH PRO FORMA COMBINED FINANCIAL INFORMATION

Three Months Ended September 30, 1997 vs. 1996

    Product related revenues increased during the three month period ended 
September 30, 1997 by $752,000 or 25%, over the comparable pro forma period 
in 1996.  Product revenues in the third quarter included the first sales of a 
new pre-commercial product designed to detect the proprietary polymers of a 
corporate partner.  The Company shipped over 2,000 test kits during the 
quarter to this corporate partner and earned revenues of $600,000.  The 
Company expects to ship the remaining pre-commercial kits under the terms of 
the agreement in the fourth quarter of 1997, and expects to earn an 
additional $400,000 in revenue.  The Company also expects to begin shipping 
additional tests in 1998 under this long-term supply agreement, which 
provides among other things, for the Company to exclusively manufacture these 
kits.  Also during the third quarter of 1997, the Company continued shipping 
product under the supply agreement initiated during the second quarter of 
1997 with a major seed company.  Revenues under this agreement totaled 
approximately $460,000 during the third quarter of 1997, for which there were 
no comparable amounts in the prior year.

                                      13
<PAGE>

    Other product revenues during the third quarter of 1997, declined to $2.7 
million, a small decrease from $3.0 million in the third quarter of 1996.  
This decline in the remediation and other base business categories is 
attributable to a reduction in total volume from (1) the elimination of more 
than 30 products during the quarter where continued sales and support was not 
justified in light of the sales volume and (2) the consolidation of common 
customers who previously purchased products from each of SDI, Ohmicron and 
EnSys. 

    Research and Development revenues increased by $90,000 or 21%, reflecting 
the achievement of milestones for three customers. Associated billings and 
revenues of $350,000, were recorded during the third quarter relating to 
these milestones.  Research and Development contracts historically have been 
large and long-term in nature. Accordingly, such revenues tend to fluctuate 
from quarter-to-quarter.

    Total operating expenses decreased by $288,000 or 7%,  from the prior 
period to $3.6 million.  This decrease is primarily the result of lower costs 
associated with more efficient operations of the combined companies after the 
combinations.  The combined Company has a lower level of personnel costs 
compared with each of the separate companies combined.  Efficiencies were 
also achieved as duplicate facilities were closed.  The operations in North 
Carolina and portions of the Pennsylvania operation have been consolidated 
into the Company's Delaware facility.

    Manufacturing expenses include the costs of  products sold and decreased 
$13,000 or 1% in the third quarter of 1997 to $1.6 million.  Gross margins 
for product sales in the quarter increased to 58.5% in 1997, from 47.9% in 
1996, due to increased sales volume, efficiencies gained through 
consolidation and the elimination of the product sales at cost to EM 
Industries, Inc. that occurred in the third quarter of 1996.

    Research and Development expenses decreased $ 344,000 or 52% to $313,000 
in the third quarter of 1997.  This decrease is attributable to the 
consolidation of the Research and Development departments of SDI, Ohmicron 
and EnSys into one group. 

    Selling, general and administrative expenses increased $69,000 or 4% to 
$1.8 million in the third quarter of 1997.  This increase is attributable to 
the increased sales and business activity recorded during the quarter.

    Net interest income decreased $108,000 or 68% to $50,000 in the third 
quarter of 1997.  This decrease is primarily attributable to a lower average 
balance of investments during the quarter ended September 30, 1997, than in 
the same period of 1996. 
               
    Net income increased $1.0 million for the three month period ended 
September 30, 1997 to $722,000.  This increase was primarily the result of 
increased sales activity as well as lower operating costs, all as described 
above.

                                      14

<PAGE>


Nine Months Ended September 30, 1997 vs. 1996

    Overall, product related revenues increased in the nine month period 
ended September 30, 1997 by $682,000 or 8% to $9.3 million compared to the 
comparable period in the prior year.  Product related revenues from the 
Company's products for genetic testing of agricultural products and water 
quality tests increased significantly during the period over 1996.  During 
the 1997 period, the Company completed major supply agreements with customers 
in each of these markets.  The aggregate revenue recognized under these 
agreements was $1.2 million in the period.  These increases were offset by a 
small decrease in the Company's industrial testing business.  This decrease 
was primarily due to the consolidation of duplicative and low-volume product 
lines previously sold by each of the separate companies prior to the 
combinations.  

    Approximately 40% of the Company's product related revenues in 1997 has 
been, and is expected to be, generated from the environmental remediation 
industry.  Historically, remediation activities have followed seasonal 
patterns, with lower levels of activity during the period from October to 
March.  Therefore, the Company's sales in a particular quarter in 1997 may 
not be indicative of its revenues for any subsequent quarter during the year.

    Contract and other revenues decreased by $195,000 or 13% to $1.3 million 
during the period, reflecting the Company's emphasis to increase revenues by 
marketing developed products over additional research and development 
projects.  These contracts historically have been large and long-term in 
nature.  Accordingly, such revenues tend to fluctuate from period-to-period.

    Total operating expenses decreased $3.4 million or 26% from the prior 
period to $9.6 million.  This decrease results primarily from lower costs 
associated with more efficient operations of the combined companies after the 
mergers as previously discussed.

    Manufacturing costs decreased $469,000 or 11% from the prior period to 
$3.8 million.  This decrease resulted primarily from lower costs associated 
with more efficient operations of the combined companies after the 
combinations as previously discussed. Product related gross margins increased 
$1.2 million or  27% to $5.5 million.  These margins for the first three 
quarters of 1997 were approximately 59% of product revenues.  The increase in 
gross margins for the first three quarters of 1997 resulted primarily from 
the efficiencies and other factors described above.  Product margins, as a 
percent of revenue, for the final quarter of 1997 is expected to be 
approximately equal to those in the first nine months.  

    Research and development costs decreased $1.5 million or 56% from the 
prior period to $1.2 million.  This decrease is attributable to the 
consolidation of an EnSys research and development project underway during 
the first half of 1996 with the Company's on-going research and development 
projects, as well as other factors noted above.

    Selling, general and administrative costs decreased $1.4 million or 24% 
from the prior period to $4.5 million.  These decreases are attributable to 
increased efficiencies from the mergers as described above.

                                     15
<PAGE>


    Net interest income decreased $288,000 or 62% to $179,000.  This decrease 
is attributable primarily to a lower average balance of investments during 
the quarter ended September 30, 1997.  

    The net income for the nine month period ended September 30, 1997 was 
$1.2 million compared to the net loss of $2.4 million for the nine month 
period ended September 30, 1996. The net income was primarily a result of a 
combination of increased revenues and decreased total operating expenses due 
to the combination of the companies as discussed above.

HISTORICAL FINANCIAL STATEMENTS

    As described above, the Historical Financial Statements presented herein 
include the results of SDI for all periods and the results of Ohmicron from 
August 30, 1996, TSD from October 1, 1996 and EnSys from December 30, 1996.

Three Months Ended September 30, 1997 vs. June 30, 1997

    Total net revenues increased during the three month period ended 
September 30, 1997 over the three month period ended June 30, 1997 by 
$815,000 or 23%.  Product related sales increased $698,000 or 22%.  This 
increase reflects the favorable effects of the efforts the Company made 
during the quarter to stabilize and further develop customer relationships 
after the mergers.  This increase also was achieved as demand for the 
Company's immunoassay based test kits increased during the third quarter of 
1997 due to seasonal factors.  Historically, the third quarter is a strong 
selling period of the year.  Additionally, sales of the Company's products to 
the agricultural and water quality market segments (segments that are less 
seasonal) continued to be strong.

    Total operating expenses increased $434,000 or 14% from the prior period 
to $3.6 million.  Included in this total, manufacturing costs increased 
$137,000 or 10% from the prior period to $1.6 million.  This increase in 
manufacturing costs is due primarily to the higher volume of products sold in 
the third quarter of 1997.  The Company expects gross profit margins to 
increase in 1997 due to an increase in the sales of its products and 
efficiencies gained through consolidation.  Research and development costs 
decreased $96,000 or 23% from the prior period to $313,000 as continued 
efficiencies from the combination of three former research and development 
departments into one are being realized.  Selling, general and administrative 
costs increased $393,000 or 29% from the prior period to $1.8 million.  The 
increase in selling, general and administrative costs is due to the increased 
business activity recorded in the quarter.

    Net interest income decreased $10,000 or 17%.  This decrease is 
attributable primarily to a lower rate of return on cash invested during the 
quarter ended September 30, 1997, as compared to the prior quarter.

                                     16
<PAGE>

    Net income increased $371,000 or 106% to $722,000, in the quarter ended 
September 30, 1997.  This increase in net income results from an increase in 
sales volume that was larger than the increase in expenses, all as described 
above.

Three Months Ended September 30, 1997 vs 1996

    Net revenues for the period increased by $3 million or 228% to $4.3 
million during the three month period ended September 30, 1997 compared to 
the comparable period of 1996.  Of this total, product related revenues 
increased $2.9 million or 346% to $3.8 million and contract and other 
revenues increased $51,000 or 11% to $512,000.  The increase in total net 
revenue and product related revenue is attributable to the additional 
products and customers arising from the merger of SDI, Ohmicron and EnSys.  
The increase in contract and other revenue reflects the achievement of 
milestones and associated revenue and billings for three customers during the 
three month period ended September 30, 1997.

    Total operating expenses (exclusive of acquired research and development) 
increased $2.2 million or 157% to $3.6 million. Of this total, manufacturing 
costs increased $971,000 or 160% to $1.6 million, research and development 
expenses decreased $83,000 or 21% to $313,000 and selling, general and 
administrative expenses increased $1.3 million or 325% to $1.8 million.  All 
of these increases are due to the combination of SDI, Ohmicron, TSD and 
EnSys. 

    Net interest income increased $52,000 to $50,000 during the period.  This 
increase is due to the investments acquired in the combinations.

    Equity in the income of TSD, a partnership in which SDI was a general 
partner, was eliminated in 1997 as TSD was dissolved in 1996 and certain 
assets of the partnership were transferred into a wholly owned subsidiary of 
the Company.  

    The net income for the three month period ended September 30, 1997 was 
$722,000 compared to a net loss of $4,001,000 or a net loss of $88,000 
(exclusive of acquired research and development) for the three month period 
ended September 30, 1996.  The net income was primarily a result of the 
increase in revenue and decrease in the proportion of total operating 
expenses due to the combined companies after the combinations as discussed 
above.

Nine Months Ended September 30, 1997 vs. 1996

    Revenues for the period increased by $7 million or 191% to $10.6 million 
during the nine months ended September 30, 1997 as compared to the comparable 
period of 1996.  Of this total, product related revenues increased $7.2 
million or 348% to $9.3 million and contract and other revenues decreased 
$277,000 or 18% to $1.3 million.  The increase in total net revenue and 
product related revenue is attributable to the additional products and 
customers arising from the combination of SDI, Ohmicron and EnSys. The 
decrease in contract and other revenue reflects the decreased emphasis by the 
Company on research and development contract revenues in favor of the 
marketing of developed products as described above.

                                     17

<PAGE>


    Total operating expenses (exclusive of acquired research and development) 
increased by $6 million 168% to $9.6 million. Of this total, manufacturing 
costs increased $2.3 million or 149% to $3.8 million, research and 
development expenses increased $38,000 or 3% to $1.2 million and selling, 
general and administrative expenses increased $3.7 million or 425% to $4.5 
million.  All of these increases are due to the combination of SDI, Ohmicron, 
TSD and EnSys. 

    Net interest income increased $173,000 to $179,000 during the period.  
This increase is due to the investments acquired in the combinations.

    Equity in income of TSD  (a partnership) was eliminated in 1997 as TSD 
was dissolved in 1996 and became a wholly owned subsidiary.  

    The net income for the nine month period ended September 30, 1997 was 
$1.2 million compared to the net loss of  $4.2 million or a net loss of 
$237,000 (exclusive of acquired research and development) for the nine month 
period ended September 30, 1996.  The net income was primarily a result of 
the increase in revenue and decrease in the proportion of total operating 
expenses due to the combined companies after the combinations as discussed 
above.

LIQUIDITY AND CAPITAL RESOURCES

    The Company's working capital which consists principally of cash, cash 
equivalents and marketable investments, increased $1.6 million from December 
31, 1996 to $8.8 million at September 30, 1997.  Cash, cash equivalents and 
short-term investments decreased $1.5 million to $5.1 million.  This decrease 
was used to reduce accounts payable and accrued expenses by $1.9 million and 
finance increases in accounts receivable and inventories of $1.4 million and 
was net of increases attributable to changes in other current assets and 
liabilities of $174,000 and net income of $1.2 million.

   The Company believes that its current cash, cash equivalents and 
marketable securities will be sufficient to meet its working capital and 
funding needs for at least the next 18 months.  However, the Company's 
ability to meet its long-term working capital and capital expenditure 
requirements will depend on a number of factors, including the success of the 
Company's current and future products, the focus and direction of the 
Company's research and development programs, competitive and technological 
advances, future relationships with corporate partners, government regulation 
and the Company's marketing and distribution strategy.  Accordingly, there 
can be no assurance that the Company will be able to meet its long-term 
requirements.

                                     18

<PAGE>


                                    PART II


ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

(a)            Exhibits:

               27 Financial Data Schedule (in electronic format only).

(b)            Reports on Form 8-K

               No reports on Form 8-K were filed by the registrant during the 
               quarter covered by this report.



                                     19

<PAGE>


                                 SIGNATURES

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

                           STRATEGIC DIAGNOSTICS INC
                                  (Registrant)



         Signature                     Title                        Date
         ---------                     -----                        ----
/s/ RICHARD C. BIRKMEYER 
--------------------------
    Richard C. Birkmeyer        President and Chief           October 30, 1997
                                 Executive Officer
                            (Principal Executive Officer)

/s/ ARTHUR A. KOCH, JR.
--------------------------
    Arthur A. Koch, Jr.       Vice President and Chief        October 30, 1997
                                  Financial Officer
                            (Principal Financial Officer)




                                        


                                      20