UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)

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

         For the fiscal year ended December 31, 1997

                                       OR

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

For the transition period from ................... to .......................

                         Commission file number 0-19410

                                  HemaSure Inc.
             (Exact name of registrant as specified in its charter)

             Delaware                                  04-3216862
State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization                     Identification No.)

             140 Locke Drive
        Marlborough, Massachusetts                       01752
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code           (508) 485-6850
                                                   -----------------------------

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class               Name of each exchange on which registered
            None                                      None


           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.01 per share
                                (Title of class)



<PAGE>



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

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein,
and will not be contained,  to the best of registrant's knowledge, in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]

The aggregate market value of voting stock held by non-affiliates of the
registrant was $3,931,621 on January 31, 1998.

Number of shares  outstanding  of the  registrant's  class of common stock as of
January 31, 1998: 8,991,042.


                       DOCUMENTS INCORPORATED BY REFERENCE

1997 Annual Report to Stockholders - Part II
Proxy Statement for 1998 Annual Meeting of Stockholders - Part III






<PAGE>



                                EXPLANATORY NOTE

         This Annual Report on Form 10-K contains  predictions,  projections and
other  statements  about the future  that are  intended  to be  "forward-looking
statements" within the meaning of Section 21E of the Securities  Exchange Act of
1934, as amended (collectively,  "Forward-Looking Statements").  Forward-Looking
Statements  are  included  with  respect  to various  aspects  of the  Company's
strategy and  operations,  including but not limited to its product  development
efforts, including regulatory requirements and approvals;  potential development
and strategic  alliances;  and the  Company's  liquidity.  Each  Forward-Looking
Statement  that the Company  believes is material is  accompanied  by cautionary
statements  identifying  important  factors that could cause  actual  results to
differ  materially from those described in the  Forward-Looking  Statement.  The
cautionary  statements are set forth  following the  Forward-Looking  Statement,
and/or in other  sections  of the  Annual  Report  on Form  10-K.  IN  ASSESSING
FORWARD-LOOKING STATEMENTS CONTAINED IN THIS ANNUAL REPORT ON FORM 10-K, READERS
ARE  URGED TO READ  CAREFULLY  ALL  CAUTIONARY  STATEMENTS  --  INCLUDING  THOSE
CONTAINED IN OTHER SECTIONS OF THIS ANNUAL REPORT ON FORM 10-K.




<PAGE>



                                     PART I

Item 1.           BUSINESS

         HemaSure Inc. (the  "Company")  was  established  in December 1993 as a
wholly-owned  subsidiary of Sepracor Inc. ("Sepracor").  Prior to that date, its
business was conducted as part of Sepracor's  bioprocessing division.  Effective
as of January 1, 1994,  in exchange for 3,000,000  shares of common  stock,  par
value $.01 per share (the "Common Stock"), of the Company,  Sepracor transferred
to the  Company its  technology  relating  to the  manufacture,  use and sale of
medical devices for the separation and purification of blood, blood products and
blood components and its membrane filter design technologies.

         The Company is applying  its  proprietary  filtration  technologies  to
develop  products to increase the safety of donated blood and to improve certain
blood  transfusion  and  collection  procedures.  The Company is developing  the
following products for use by blood centers, hospital blood banks and hospitals:

         o        The Red Cell  Leukoreduction  System  (the "r\LS  System")  is
                  designed for use by blood centers and hospital  blood banks to
                  remove harmful leukocytes (white blood cells) from donated red
                  blood cells.

         o        The  LeukoVir-MB-Filter  is designed for use by blood  centers
                  and  hospital  blood banks to remove  methylene  blue that has
                  been used to inactivate  viruses in blood plasma and to remove
                  contaminating  leukocytes,  microaggregates  and excess lipids
                  that may compromise the integrity of plasma.

         o        The  Platelet  Leukoreduction  Filtration  System  (the  "p\LS
                  System") is designed for use by hospitals to remove leukocytes
                  from pooled donor platelet concentrates.

Industry Background

         Individuals  suffering  physical trauma or anemia,  undergoing  complex
surgical procedures or hemodialysis or undergoing treatment for cancer are among
the diverse  group of patients who require blood  transfusions  in the course of
their  medical  care.  Health  risks,  such  as  transfusion  complications  and
infections,  may arise  from  contaminated  blood and blood  products,  although
infection  risks are lower today than in the recent past as a result of improved
donor  education  and selection and  implementation  of screening  procedures to
identify certain virus contaminated blood prior to transfusion.  Moreover, these
health risks can increase in patients who receive frequent transfusions, such as
those  suffering  from  kidney  and  liver  disorders,   and  patients  who  are
immune-suppressed, such as those undergoing treatment for cancer.

         The  number  of units of whole  blood,  blood  components  or  plasma a
patient  receives  in  a  blood  transfusion  varies  significantly.  A  patient
undergoing  routine surgery may typically  receive three or four units,  while a
cancer  patient  undergoing  platelet  transfusion  may receive in excess of 100
units over time.  The risk of infection to a patient  increases as the number of
units transfused increases.



                                       -1-

<PAGE>



Transfusion Risks

         Health risks from transfusions, including complications and infections,
arise from the  presence of  leukocytes,  viruses and other  pathogens in blood,
cellular blood components and plasma. In addition, autologous blood recovery and
reinfusion results in an increased risk of contamination of a patient's blood.

         Leukocytes.  Leukocytes (white blood cells) may cause adverse reactions
in patients receiving blood transfusions,  such as fever, chills,  immune system
suppression  or  development  of  immunological  responses  that could cause the
affected  patient  to  reject  subsequent  blood   transfusions.   In  addition,
leukocytes may harbor infectious  viruses,  including  cytomegalovirus and human
T-cell  lymphocyte  virus I (HTLV-I).  The Company  believes that the demand for
filtered blood for transfusions  will continue to increase over the next several
years due to the growing  recognition  in the medical  field of the  benefits of
leukocyte reduction.

         Pathogens.  Viruses  such as HIV,  hepatitis  B and  hepatitis C may be
contained  inside or outside of the  leukocytes  and may be  transmitted  during
transfusions.  Other viruses may develop or become  prevalent  over time. Of the
currently known viruses,  there has been  significant  public focus on hepatitis
and HIV.

         Other Blood-Borne Pathogens.  In addition to viruses, other blood-borne
pathogens may be transmitted by blood transfusions.  These include the parasites
which cause malaria and Chagas' disease and the spirochetes which cause syphilis
and Lyme disease.

         Other Contaminants. During surgical procedures, the walls of red blood
cells can break down and release hemoglobin, the oxygen carrying chemical
component normally contained within red blood cells. In its free form,
hemoglobin is toxic and can result in renal shutdown if present in sufficient
quantities. The contamination of blood by free hemoglobin has limited the use of
reinfusion of recovered blood.

Products and Products Under Development

Red Blood Cell Systems

         r\LS System

         The Company's r\LS System is being designed for leukocyte filtration by
blood centers and hospital blood banks immediately  prior to blood  storage,  a
process which the Company believes results in improved quality leukocyte reduced
blood.  The Company believes that the demand for filtered blood for transfusions
will continue to increase over the next several years and that,  while leukocyte
filtration currently takes place primarily at the patient bedside, as the demand
for  filtered  blood  increases,  leukocyte  removal  will  shift  from  bedside
filtration of individual units on an "as needed" basis to centralized filtration
performed at blood centers.

         The r\LS System is based on a proprietary  filter  medium  comprised of
multiple  fibrous  components.  Leukocytes  are  removed  by  a  combination  of
entrapment and adhesion.  With a proprietary  automatic internal prime and drain
design,  the filter device reduces  operator  intervention  and facilitates high
volume,  centralized  processing  in a regional  blood center  environment.  The
Company is focusing  its  marketing  efforts  exclusively  on blood  centers and
hospital blood banks for pre-storage leukocyte reduction.



                                       -2-

<PAGE>



         The  Company  expects  to  file an  application  for  510(K)  premarket
notification  clearance  with respect to its r\LS System with the United  States
Food and Drug Administration (the "FDA") in 1998. There can be no assurance that
the r\LS System will receive the necessary regulatory approval or achieve market
acceptance.

         While the Company  believes that the performance and ease-of-use of the
r\LS System will compare  favorably with other blood filtration  devices,  there
can be no  assurance  that the  performance  or price of the r\LS System will be
sufficient to achieve  significant  sales,  particularly in view of the dominant
position in the market held by Pall Corporation. See "-- Competition."

         LeukoNet System

         In December  1994,  the Company filed a 510(k)  premarket  notification
clearance with the FDA for the LeukoNet Pre-Storage  Leukoreduction  System (the
"LeukoNet System"), the Company's first generation leukoreduction system, and in
June  1995  the  Company   received  such  clearance.   The  Company   commenced
commercialization  of the  LeukoNet  System in the United  States and in foreign
countries in the second half of 1995. In February 1998,  the Company  determined
to discontinue  manufacturing the LeukoNet System and focus on the completion of
development and market introduction of the r\LS System.

         Sales of the  Company's  LeukoNet  System  to the  American  Red  Cross
Biomedical  Services  accounted for 86% of the Company's  total revenues in 1997
and 83% of the Company's total revenues in 1996.

Plasma System

         LeukoVir-MB Filter

         The Company  expects to  complete  clinical  trials of its  LeukoVir-MB
Filter in Europe in 1998.  Developed in collaboration  with the German Red Cross
of Lower Saxony and the Swiss Red Cross,  the  Company's  LeukoVir-MB  Filter is
designed to remove the virucidal agent  methylene  blue,  which is used to treat
plasma for  transfusion.  Methylene  blue has not been  approved  for use in the
United States. The LeukoVir-MB Filter,  currently awaiting marketing approval in
Europe,  is  designed  to  process  individual  units  of  plasma  by a  single,
disposable  system,  eliminating  the  potential  infection-spreading  danger of
systems requiring pooling of many units before processing.  The Company believes
that the  reduction  of this viral  inactivation  agent to  undetectable  levels
should  eliminate  concerns  regarding   methylene  blue's  potential  toxicity.
Additionally,  the  LeukoVir-MB  Filter  is  designed  to  remove  contaminating
leukocytes  and eliminate  microaggregates,  bacteria and excess lipids that may
compromise the integrity of plasma.

         There can be no  assurance  however  that the  LeukoVir-MB  Filter will
receive marketing approval or achieve market acceptance.



                                       -3-

<PAGE>



Platelet System

         p\LS System

         Platelets  are  a  cellular   component  of  peripheral   blood,   used
therapeutically to prevent bleeding. There are two sources of platelets:

         1.       Pooled  platelets,  a by-product  of whole blood  donation and
                  subsequent component preparation, and

         2.       Single  donor  platelets  produced  by  a  platelet  apheresis
                  procedure and typically leukoreduced at that time.

         Pooled  platelets  (from whole  blood)  account for  approximately  4.4
million transfusions worldwide.  Anywhere from 30% (Asia-Pacific) to 70% (United
States) of these pooled platelets are leukoreduced.

         The p\LS  System is  designed to remove  leukocytes  from pooled  donor
platelet  concentrates.  The  Company  is  engaged  in  preliminary  discussions
pertaining to a cooperative  agreement  with a  manufacturer  of  leukoreduction
medium for platelets.  This medium has been  extensively  used in Europe and the
Near East for platelet leukoreduction.

         The  Company  expects  to  file an  application  for  510(K)  premarket
notification  clearance  with the FDA and  introduce the product for sale in the
United States in 1998. There can be no assurance,  however, that the p\LS System
will receive the necessary regulatory approval or achieve market acceptance.

Regulatory Approval

         The  Company  believes  that  its  blood   filtration   products  under
development  will be classified  as medical  devices and that it will be able to
secure  regulatory  approval in the United States for each of its medical device
products through 510(k) premarket  notification clearance with the FDA. There is
no assurance,  however,  that the FDA will  determine  that any of the Company's
products will meet the requirements for its expected classification.  If the FDA
concludes that any product does not meet such requirements, then the process for
obtaining  regulatory  approval for such  product in the United  States would be
significantly lengthened. See "-- Government Regulation."

Membrane Products

         Since its inception in December 1993 through the first quarter of 1996,
the  Company  manufactured  and sold  certain  non-blood  related  process-scale
membrane   devices  used  for  the  separation  and   purification   of  certain
pharmaceuticals,  chemicals and biologics.  See "-- Relationship with Sepracor."
Substantially  all of the Company's  revenues  through the first quarter of 1996
were attributable to sales of these non- blood related membrane filter products.
Revenues  from  these  products  were  $13,000  and  $517,000  in 1996 and 1995,
respectively.

         In 1996 and 1995,  sales to Sepracor with respect to membrane  products
accounted for 2% and 57% of the Company's total revenues, respectively. Revenues
from the U.S. Department of the Army related


                                       -4-

<PAGE>



to such products  represented  7% and 36% of the Company's  revenues in 1996 and
1995, respectively. The Company's agreement with the U.S. Department of the Army
concluded in 1996.

Technologies

         The   Company's   planned   products  are  based  on  its   proprietary
technologies  in the areas of  affinity  separations,  membrane  technology  and
device design and fabrication.

         Affinity Separations

         The  Company  has  proprietary  affinity  separations  technology  that
utilizes ligands,  which are molecules that bind to complementary  biomolecules,
in connection with the Company's various  filtration  products.  The Company has
identified a family of carbohydrate-based ligands that recognize and bind to the
cell surface receptors on leukocytes.  The Company has filed patent applications
covering the use of these carbohydrate-based ligands for removing leukocytes.

         Membrane Technology

         The Company  believes that, as a result of the research and development
work  performed at Sepracor over an  eight-year  period and  transferred  to the
Company  on  January  1,  1994,  the  Company  has  expertise  in the  field  of
separations  technology using both composite matrices and flat- and hollow-fiber
membranes.  Successful  separation  of a  substance  from its source  depends on
matching the properties of that substance,  such as size,  molecular  weight and
surface characteristics, to appropriate separations media. The ability to select
and modify  the  composition  and  physical  structure  of the media is a key to
successful  separations  technology.  The Company can utilize a variety of media
compositions,  custom made structures and surface  modifications,  including the
attachment of selective  ligands,  to separate a diverse  variety of substances.
The  Company's  separations  technologies  can be  used to  separate  substances
including  particulates,  such as  cells  and  debris,  macromolecules,  such as
enzymes,  and low  molecular  weight  substances,  such as salts,  nutrients and
anti-viral chemicals. See "-- Relationship with Sepracor."

         Device Design and Fabrication

         The Company believes that the benefits of high performance  separations
media  can only be  realized  in a  well-designed  device  where  access  to and
placement of the media,  hydrodynamics and selection of biocompatible  materials
have been  optimized.  The Company has  expertise  in module  design,  including
theoretical calculations of mass transfer,  hydrodynamic modeling,  prototyping,
testing and manufacturing engineering.

         Drawing from this expertise, the Company is integrating its proprietary
technologies  in device  design and media  development  with blood flow  control
systems, tubing, collection containers and other assembly components, in devices
which are designed to achieve  efficiency  in  increasing  the safety of donated
blood and improving  certain blood  transfusion and collection  procedures.  The
Company  considers  its  device  design  and  fabrication   capabilities  to  be
proprietary and intends to file patent applications where appropriate.



                                       -5-

<PAGE>



         The  Company  has  undertaken  preliminary  studies  on the  use of its
proprietary media in other  applications such as the removal of tumor cells from
peripheral stem cell preparations and in whole blood leukoreduction.

Research and Development Expenses

         Research and development  expenses were $3,577,000 in 1997,  $6,128,000
in 1996 and $4,061,000 in 1995.  The decrease in 1997 is primarily  attributable
to a decrease in expenses associated with the Company's SteriPath Blood Pathogen
Inactivation  System,  which program was  discontinued  in 1997. The increase in
1996 over the amounts  expended in 1995 is  primarily  attributable  to a higher
level of spending  associated with development of the Company's  SteriPath Blood
Pathogen  Inactivation  System  and  preparation  for  commercialization  of the
Company's LeukoNet System.

Plasma Pharmaceuticals

         In May 1996, the Company acquired, through its United States and Danish
subsidiaries,  the plasma  product unit of Novo  Nordisk  A/S, a Danish  company
("Novo  Nordisk").   See  "--Agreements."  The  Company's  plasma  product  unit
processed blood plasma into plasma  pharmaceutical  products.  In February 1997,
the Company  determined  to  discontinue  the  development  and operation of its
Danish  plasma  business  due, in large part,  to  Pharmacia & Upjohn's  ("P&U")
wrongful  termination  of the  Company's  planned  acquisition  of P&U's  plasma
division in Sweden,  which was a critical part of the Company's initial strategy
to  enter  the  plasma  business,  as well as  certain  other  factors.  See "--
Agreements," Item 3, "Legal  Proceedings" and Item 7,  "Management's  Discussion
and  Analysis of Financial  Condition  and Results of  Operations."  The Company
recorded  a  one-time  charge  of  $15,200,000  in the  fourth  quarter  of 1996
associated with its determination to exit the plasma business.

Agreements

         Under the terms of the May 1996  agreement  relating  to the  Company's
acquisition   of  the  plasma   product  unit  of  Novo  Nordisk  (the  "Denmark
Acquisition"),  the purchase price to be paid for the plasma product unit was to
be comprised of three portions: (i) $1,800,000 was to be payable in 1998 in cash
or Common Stock of the Company or a subsidiary of the Company,  at the Company's
option; (ii) approximately  $13,000,000 was to be payable from time to time upon
the sale of acquired inventory (valued at approximately  $13,000,000) but in any
event no later than 1998,  provided that up to approximately  $3,000,000 of such
portion  could be forgiven  in certain  circumstances;  and (iii)  approximately
$8,000,000 was to be payable in 1998 in cash or Common Stock of the Company or a
subsidiary of the Company,  at the Company's  option,  provided that all of this
portion would be forgiven in certain circumstances. In January 1997, the Company
and Novo Nordisk  entered into a  Restructuring  Agreement  relating to the Novo
Acquisition  (the  "Restructuring  Agreement").  Pursuant  to the  Restructuring
Agreement,  approximately  $23,000,000  million  of  indebtedness  owed  to Novo
Nordisk was  restructured by way of issuance by the Company to Novo Nordisk of a
12%  convertible  subordinated  promissory  note  in  the  principal  amount  of
approximately  $11,722,000,  which was due and payable on December 31, 2001 (the
"Note"),  with interest  payable  quarterly  (provided that up to  approximately
$3,000,000 would be forgiven in certain circumstances). Approximately $8,500,000
of the  reduction  of such  indebtedness  was  forgiven.  The  remainder  of the
reduction  represents a net amount due from Novo Nordisk to the Company  related
to various service arrangements  between the two companies.  On January 6, 1998,
the Company elected to convert all indebtedness under the Note,  pursuant to the
terms thereof,


                                       -6-

<PAGE>



into shares of Common Stock of the Company at a conversion price equal to $10.50
per share, or 827,375 shares.  Pursuant to a registration rights agreement,  the
Company previously granted Novo Nordisk certain registration rights with respect
to any shares of Common Stock  acquired by Novo Nordisk upon  conversion  of the
Note.  Novo Nordisk has  contested  the  conversion  of the Note,  including the
forgiveness of the $3,000,000  amount. The Company believes that such claims are
without merit.

         In June 1996,  the Company  entered  into a ten-year  Master  Strategic
Alliance  Agreement  with  the  American  Red  Cross  BioMedical   Services,   a
not-for-profit,  charitable  corporation  ("ARCBS"),  which  provides for, among
other  things,  the  development  and  enhancement  of a  number  of  filtration
practices  based on the  Company's  core  technology  including  red blood  cell
leukoreduction,  leukocyte recovery, platelet filtration, whole blood filtration
and  tumor  cell  filtration.  No  assurance  can be given,  however,  that such
products  will  ultimately  be  developed  or that  any  definitive  development
arrangements  with  respect to such  products  will  result  from the  strategic
alliance with ARCBS.

         In March 1996,  the Company  entered into a three-year  agreement  with
ARCBS for the sale of the LeukoNet  System.  The  agreement  provides for target
purchases  by ARCBS  over the term of this  agreement.  The  Agreement  does not
include  minimum  purchase  obligations  by  ARCBS.  The  ARCBS has the right to
terminate the agreement under certain circumstances. Pursuant to that agreement,
the Company  agrees to  indemnify  the ARCBS  against  all  losses,  damages and
liabilities  incurred  for,  among other things,  infringement  of patent rights
owned or held by Pall Corporation in connection with the use of Company products
delivered  under the terms and  conditions of the  contract.  See Item 3, "Legal
Proceedings."

         In February 1996,  the Company signed a cooperation  agreement with the
German Red Cross of Lower Saxony. Under the terms of the agreement,  the Company
will be the  worldwide  nonexclusive  licensing  agent  for the  methylene  blue
process (excluding the United States, Canada, Puerto Rico and Switzerland). Both
parties have agreed to  collaborate  on advancing the methylene  blue process in
order to broaden its acceptance worldwide.

Competition

         The Company expects to encounter intense competition in the sale of its
proposed  products.  The Company's proposed  products,  if commercialized,  will
compete  with other  products  currently  on the  market as well as with  future
products  developed  by  other  medical  device  companies'   biotechnology  and
pharmaceutical companies, hospital supply companies, national and regional blood
centers,   certain   governmental   organizations   and  agencies  and  academic
institutions.  Many of the  Company's  competitors  in the  field  of  leukocyte
reduction have  substantially  greater  resources,  manufacturing  and marketing
capabilities,  research and production staffs and production facilities than the
Company.  Moreover,  some of the Company's  competitors are significantly larger
than the Company, have greater experience in preclinical testing, human clinical
trials  and other  regulatory  approval  procedures.  In  addition,  many of the
Company's  competitors have access to greater capital and other  resources,  may
have management  personnel with more experience than that of the Company and may
have other  advantages  over the Company in conducting  certain  businesses  and
providing certain services.  The Company's ability to compete  successfully will
depend,  in part,  on its ability to develop  and  maintain  products  which are
technically superior to and/or of lower cost than those currently on the market;
develop proprietary products;  attract and retain scientific  personnel;  obtain
patent or other proprietary protection for its products and technologies; obtain
required regulatory approvals; and manufacture, assemble and successfully market
any products it develops.  In addition,  many of the Company's  competitors have
long-


                                       -7-

<PAGE>



standing relationships with the national and regional blood centers to which the
Company will market its  products.  There can be no  assurance  that the Company
will be able to compete effectively against such companies.

         In the area of leukocyte  removal,  the Company will compete  primarily
with Pall Corporation,  which  manufactures and sells a substantial  majority of
leukocyte removal filters currently on the market and has long-standing  and, in
certain cases, exclusive,  relationships,  including long-term supply contracts,
with the blood centers that are the Company's target customers. In addition, the
Company will compete with Baxter  Healthcare  Corporation  ("Baxter")  and Asahi
America,  Inc.  ("Asahi") which have formed an alliance pursuant to which Baxter
exclusively  markets Asahi's  leukocyte  removal products in North America.  The
Company expects that the principal  competitive factors in the area of leukocyte
removal will be removal efficiency, cost and ease of use.

         The Company is pursuing  areas of product  development  in a relatively
new field in which there is a potential for extensive  technological  innovation
in relatively  short periods of time. The Company's  competitors  may succeed in
developing  technologies  or products that are more  effective than those of the
Company.  Rapid technological change or developments by others may result in the
Company's technology or proposed products becoming obsolete or noncompetitive.

Licenses, Patents and Proprietary Information

         The Company  entered into a Technology  Transfer and License  Agreement
with Sepracor under which Sepracor  transferred to the Company all rights to the
technology developed by Sepracor for the development,  manufacture, use and sale
of  medical  devices  for the  separation  and  purification  of blood and blood
components, including technology relating to (1) optimization of flat membranes,
hollow  fiber  membranes  and  fibrous  supports;   (2)  specific  affinity  and
immunoaffinity  ligands;  (3)  linking  chemistries;  (4)  surface  modification
including hydrophilic polymers and coatings; (5) device designs and engineering;
(6)  fabrication  and   manufacturing   including   encapsulation  and  assembly
techniques;  and (7) organic  chemical  synthesis.  The Technology  Transfer and
License  Agreement expired on January 1, 1998 pursuant to its terms. The Company
does not expect such  termination  to have a material  effect upon its business,
future  operating  results or financial  condition.  See "--  Relationship  with
Sepracor."

         The Company  believes that protection of the proprietary  nature of its
products and technology is critical to its business. Accordingly, it has adopted
and will maintain a vigorous program to secure and maintain such protection. The
Company's  practice is to file patent  applications  with respect to technology,
inventions and improvements that are important to its business. The Company also
relies on trade secrets, unpatented know-how, continuing technological invention
and  the  pursuit  of  licensing  opportunities  to  develop  and  maintain  its
competitive   position.   There  can  be  no  assurance  that  others  will  not
independently develop substantially  equivalent  proprietary  technology or that
the Company can meaningfully protect its proprietary position.

         To date,  the Company owns or has filed 21 patent  applications  in the
United  States   relating  to  blood   filtration   and  pathogen   inactivation
technologies.  Corresponding  foreign patent  applications  have been filed with
respect  to  certain  of  these  United   States  patent   applications.   Where
appropriate,  the Company  intends to file,  or cause to be filed on its behalf,
additional patent applications  relating to future discoveries and improvements,
including,  among  other  things,  the  use  of  certain  ligands  for  affinity
separations. To date, nine patents have been issued to the Company (which expire
at various dates from 2011 through 2017).



                                       -8-

<PAGE>



         The Company's success depends in part on its ability to obtain patents,
to protect trade secrets,  to operate  without  infringing  upon the proprietary
rights of others and to prevent others from infringing on the proprietary rights
of the Company. See Item 3, "Legal Proceedings."  Proprietary rights relating to
the Company's  planned products will be protected from unauthorized use by third
parties  only to the  extent  that they are  covered  by valid  and  enforceable
patents  or are  maintained  in  confidence  as trade  secrets.  There can be no
assurance  that any patents  owned by or  licensed  to the  Company  will afford
protection  against  competitors or that any pending patent  applications now or
hereafter  filed by or  licensed to the  Company  will  result in patents  being
issued.  Competitors,  including those with substantially greater resources than
the  Company,  may seek to  challenge  the  validity of the patents  owned by or
licensed to the Company or may use their resources to design comparable products
that do not infringe these patents. See Item 3, "Legal Proceedings."

         There  are  many  issued  third-party  patents  in the  field  of blood
filtration,  including  patents held by competitors of the Company.  The Company
may need to  acquire  licenses  to, or contest  the  validity  of,  some of such
patents.  It is likely  that  significant  funds would be required to defend any
claim that the Company infringes a third-party  patent, and any such claim could
adversely  affect sales of the  challenged  product until the claim is resolved.
There can be no assurance that any license  required under any such patent would
be made  available on acceptable  terms or that the Company would prevail in any
litigation involving such patent. See Item 3, "Legal Proceedings."

         Much of the know-how of importance to the Company's technology and many
of its processes are dependent upon the unpatentable  knowledge,  experience and
skills of its key scientific and technical personnel.  To protect its rights and
to maintain the  confidentiality  of trade secrets and proprietary  information,
the Company requires all of its employees,  consultants and commercial  partners
and  members  of its  Scientific/Medical  Advisory  Board  to  agree to keep the
Company's  proprietary  information  confidential.  These  agreements  generally
prohibit  the  disclosure  of  confidential  information  to anyone  outside the
Company  and  require  disclosure  and  assignment  to  the  Company  of  ideas,
developments,  discoveries and inventions. There can be no assurances,  however,
that these  agreements  will provide  meaningful  protection  for the  Company's
proprietary  information in the event of unauthorized  use or disclosure of such
information.

Government Regulation

         Government  regulations in the United States and other  countries are a
significant  factor in the research,  development and  commercialization  of the
Company's  products.  The products  manufactured and marketed by the Company are
subject to regulation by the FDA and similar  authorities in foreign  countries.
The Company  believes  that all of its products  will be classified as "devices"
under federal law and FDA regulations.  The process of obtaining  approvals from
the FDA and other  regulatory  authorities  can be costly,  time  consuming  and
subject to  unanticipated  delays.  There can be no assurance  that the FDA will
approve any of the  Company's  products for  marketing or, if they are approved,
that they will be approved on a timely basis.

         Among the conditions for FDA approval of a drug,  biologic or device is
the  requirement  that the  manufacturer's  quality  control  and  manufacturing
procedures  conform to cGMP,  which must be followed at all times.  Although the
Company's  facilities  and  manufacturing  procedures are designed to conform to
cGMP,  there can be no assurance  that the FDA will determine that they conform.
These practices  control every phase of production from the incoming  receipt of
raw materials, components and subassemblies to


                                       -9-

<PAGE>



the labeling of the finished product,  tracing of consignees after  distribution
and follow-up and reporting of complaint information.

         The  Company  believes  that  its  blood  filtration  products  will be
classified  as medical  devices.  All medical  devices  introduced to the market
since 1976 are required by the FDA, as a condition of marketing in the U.S.,  to
secure either a 510(k)  premarket  notification  clearance or an approved PMA. A
510(k)  premarket   notification  clearance  indicates  FDA  agreement  with  an
applicant's  determination  that the product for which clearance has been sought
is  substantially  equivalent to another  medical  device that was on the market
prior to 1976. An approved PMA application indicates that the FDA has determined
that the device has been proven,  through the  submission  of clinical  data and
manufacturing information, to be safe and effective for its labeled indications.
The process of obtaining a 510(k) clearance typically takes at least six months,
and may take several  years,  and involves the  submission  of clinical data and
supporting  information,  while the PMA process typically lasts at least several
years and requires the submission of significant quantities of clinical data and
supporting   information.   The  Company   intends  to  seek  510(k)   premarket
notification  clearance  for its  blood  filtration  products.  There  can be no
assurance that the FDA will conclude that any of the Company's  products,  other
than  the  LeukoNet   System,   meet  the   requirements  for  510(k)  premarket
notification clearance.

         In the event the FDA does not  classify  the  Company's  planned  blood
filtration  products  as medical  devices,  these  products  would  probably  be
regulated  as drugs or  biologics.  If  regulated  as  drugs or  biologics,  the
products  would require  premarket  approval,  as described  below.  The Company
believes that the FDA will classify the Company's blood  filtration  products as
medical devices.

Manufacturing and Facilities

         The Company's facilities consist of approximately 30,000 square feet of
leased  office,  laboratory  and  manufacturing  space in a modern  facility  in
Marlborough,  Massachusetts.  The Company  believes  that these  facilities  are
adequate and suitable for its needs through 1998. See Item 2, "Properties."

         The leased  facilities in Massachusetts  include 25,000  square-feet of
product  development  and  manufacturing  space.  This space is  expected  to be
adequate to address clinical and early commercial-scale  production requirements
of the Company  through  1998.  The  facility is designed to conform to cGMP and
other applicable government standards. The Company anticipates that its facility
will be  subject  to  ongoing  inspections  by the FDA  and  foreign  regulatory
authorities in connection with their review of the Company's products.

         In January 1998, the Company received ISO 9001 Registration,  which was
awarded  by  Bureau  Veritas  Quality  International.  The ISO  9000  Series  of
international  standards was  developed by the  International  Organization  for
Standardization  to promote  homogeneous  quality  processes  through the global
trade  community.   ISO  9001  specifically   addresses   requirements  for  the
manufacture, design, development, installation and service of products.

         For manufacturing  outside the United States,  the Company will also be
subject to foreign  regulatory  requirements  governing  human clinical  trials,
manufacturing and marketing approval for drugs or biologics and medical devices.
The regulatory requirements may vary widely from country to country.



                                      -10-

<PAGE>



Employees

         As of March 1, 1998, the Company employed a total of 45 persons of whom
13 were in research and development,  19 were in  manufacturing  and development
support  and 13  were  in  sales  and  administration.  Three  of the  Company's
employees hold Ph.D. degrees.

Relationship with Sepracor

         The Company was organized in December 1993 as a wholly-owned subsidiary
of  Sepracor.   Effective  January  1,  1994,  Sepracor  transferred  its  blood
filtration  and membrane  filter design  business to the Company in exchange for
3,000,000 shares of Common Stock. As of January 31, 1998,  Sepracor owned 33% of
the Company's Common Stock.

         Sepracor  is engaged  in the  business  of using  chiral  chemistry  to
develop  single-isomer  forms of existing,  widely sold  pharmaceuticals  and to
supply  major   pharmaceutical   companies   with  bulk   quantities  of  chiral
intermediates.

         Sale of Membrane  Products.  From inception  through December 31, 1995,
the Company's  sales of membrane models to Sepracor  amounted to $668,000.  Such
sales did not continue in any material  respect  beyond  December 31, 1995.  See
Item 7, "Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Results of Continuing Operations."

         Registration Rights. Beginning in April 1998, Sepracor will be entitled
to certain rights with respect to the  registration  under the Securities Act of
1933, as amended,  of a total of 3,000,000 shares of Common Stock.  These rights
provide that  Sepracor may require the Company,  on two  occasions,  to register
shares having an aggregate  offering  price of at least  $5,000,000,  subject to
certain conditions and limitations.

         All future  arrangements  and  transactions  between  the  Company  and
Sepracor will continue to be on terms which the Company  determines are fair and
reasonable to the Company.

Item 2.           PROPERTIES

         The Company's facilities consist of approximately 30,000 square feet of
leased  office,  laboratory  and  manufacturing  space in a modern  facility  in
Marlborough,  Massachusetts  (which lease expires in February 2004, and provides
for two five-year renewal options  thereafter).  The Company believes that these
facilities  are adequate and suitable for its needs  through  1998.  See Item 1.
"Business -- Manufacturing and Facilities."

Item 3.           LEGAL PROCEEDINGS

         The Company is a defendant in two lawsuits  brought by Pall Corporation
("Pall").  In complaints  filed in February 1996 and November 1996, Pall alleged
that  the  Company's  manufacture,  use  and/or  sale  of the  LeukoNet  product
infringes upon three patents held by Pall.


                                      -11-

<PAGE>


         On October 14, 1996,  in  connection  with the first action  concerning
U.S.  Patent No.  5,451,321,  (the "'321 Patent") the Company filed a motion for
summary  judgment  of  noninfringement.  Pall filed a cross  motion for  summary
judgment of infringement at the same time.

         In October  1997,  the  Eastern  District  of New York  granted in part
Pall's  summary  judgment  motion  relating to the '321 patent.  The Company has
agreed to terminate the manufacture,  use, sale and offer for sale of the filter
subject to the  court's  order.  The court has not yet ruled on the  validity of
Pall's  '321  patent  claims,  which  HemaSure  has  asserted  are  invalid  and
unenforceable. No date has been set for the proceeding to determine the validity
and enforceability of Pall's '321 patent claims.

         With respect to the second action concerning U.S. Patent Nos. 4,340,479
(the "'479 patent") and 4,952,572 (the "'572 patent"),  the Company has answered
the  complaint  stating  that it does not  infringe  any  claim of the  asserted
patents.  Further,  the Company has counterclaimed  for declaratory  judgment of
invalidity,  noninfringement  and  unenforceability  of the '572  patent,  and a
declaratory  judgment of  noninfringement  of the '479 patent,  as a result of a
license. Pall has attempted to withdraw the '479 patent from the second action.

         The Company  believes,  based on advice of its patent  counsel,  that a
properly informed court should conclude that the manufacture, use and/or sale by
the Company or its customers of the present  LeukoNet  product does not infringe
any valid enforceable claim of the three asserted Pall patents.  However,  there
can be no assurance  that the Company  will prevail in the pending  litigations,
and an adverse  outcome in a patent  infringement  action  would have a material
adverse effect on the Company's future business and operations.

         On November  1, 1996,  the  Company  filed a  complaint  in the Supreme
Court, State of New York, County of New York, against P&U. In its complaint, the
Company sought to receive damages arising out of the alleged breach by P&U of an
agreement to sell to the Company P&U's plasma pharmaceutical business located in
Stockholm,  Sweden.  In  September  1997,  the Company  reached an  out-of-court
settlement with P&U. The terms of settlement included a cash payment to HemaSure
and the  granting  of an option to P&U to  license,  on a  non-exclusive  basis,
certain  intellectual  property  held by  HemaSure  Inc.  and  its  subsidiaries
relating  to plasma  fractionation.  The cash  payment was  recognized  as other
income in the third quarter ended September 30, 1997.

Item 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to a vote of security holders of the Company,
through  solicitation  of proxies or  otherwise,  during the last quarter of the
year ended December 31, 1997.



                                      -12-
<PAGE>



                                     PART II

Item 5.           MARKET FOR REGISTRANT'S COMMON EQUITY
                  AND RELATED STOCKHOLDER MATTERS

         (a)   Market Information.

         The Common Stock of the Company has been  included for quotation on the
OTC bulletin  board under the symbol HMSR since  January 14, 1998.  From October
28, 1997 until January 13, 1998,  the Common Stock was included for quotation on
The Nasdaq SmallCap Market under the symbol HMSRC. Prior to October 28, 1997 and
since April 7, 1994,  the Common Stock of the Company was included for quotation
on the Nasdaq National Market under the symbol HMSR. Prior to April 7, 1994, the
Company's Common Stock was not publicly  traded.  The following table sets forth
for the periods indicated the range of high and low bid information per share of
the Common Stock as included for quotation on the Nasdaq  National Market or The
Nasdaq SmallCap Market, as the case may be.


                1997                        High                    Low
                ----                        ----                    ---
                First Quarter               8                       3 3/4
                Second Quarter              4 1/16                  1 9/16
                Third Quarter               4 5/8                   2 1/4
                Fourth Quarter              4 1/4                   11/16

                1996                        High                    Low
                ----                        ----                    ---
                First Quarter               19 1/4                  11 3/4
                Second Quarter              17 1/4                  12 1/2
                Third Quarter               15                      6 1/2
                Fourth Quarter              10 7/8                  4 7/8

         (b)  Holders.

         On March 13, 1998, the Company's Common Stock was held by approximately
99  stockholders  of record.  On March 13, 1998, the last reported sale price of
the Company's Common Stock on the OTC bulletin board was $1.00.



                                      -13-

<PAGE>



         (c)  Dividend Information.

         The Company has never paid  dividends on its Common Stock.  The Company
currently intends to reinvest its earnings,  if any, for use in the business and
does not expect to pay cash dividends in the foreseeable future.

Item 6.           SELECTED FINANCIAL DATA

         The information under the heading  "Selected  Financial Data" contained
in the Company's 1997 Annual Report to Stockholders is incorporated by reference
herein and filed as Exhibit 13.1 hereto.  With the exception of the  information
specifically  incorporated herein by reference, the Company's 1997 Annual Report
to  Stockholders  is not to be  deemed  filed  as part of  this  report  for the
purposes of this Item.

Item 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

         The information under the heading "Management's Discussion and Analysis
of Financial  Condition  and Results of  Operations"  contained in the Company's
1997 Annual Report to Stockholders is incorporated by reference herein and filed
as Exhibit  13.1 hereto.  With the  exception  of the  information  specifically
incorporated   herein  by  reference,   the  Company's  1997  Annual  Report  to
Stockholders  is not to be deemed  filed as part of this report for the purposes
of this Item.

Item 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The  financial  statements  filed as part of this Annual Report on Form
10-K are (i)  provided  under Item 14 below and (ii) the  information  under the
heading "Financial  Statements and Notes" contained in the Company's 1997 Annual
Report to Stockholders is incorporated by reference  herein and filed as Exhibit
13.1 hereto.  With the exception of the  information  specifically  incorporated
herein by reference,  the Company's 1997 Annual Report to Stockholders is not to
be deemed filed as part of this report for the purposes of this Item.

Item 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE

         Not applicable.

                                    PART III

Items 10-13.

         The  information  required  for Part III in this Annual  Report on Form
10-K is incorporated by reference from the Company's  definitive proxy statement
for the Company's 1998 Annual Meeting of Stockholders.  Such information will be
contained in the sections of such proxy statement  captioned "Stock Ownership of
Certain  Beneficial Owners and Management,"  "Election of Directors," "Board and
Committee  Meetings,"  "Compensation for Directors,"  "Executive Officers of the
Registrant,"  "Compensation for Executive  Officers" and "Certain  Relationships
and Related Transactions."


                                      -14-
<PAGE>



                                    PART IV

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

         (a) The following documents are incorporated by reference or included
as part of this Annual Report on Form 10-K.


              1.    The following  financial  statements  (and related notes) of
                    the Company are incorporated by reference from the Company's
                    1997 Annual Report to Stockholders:
<TABLE>
<S>                 <C>                                                                                <C>
                                                                                                        Page
                    Report of Independent Accountants                                                   15*

                    Consolidated Balance Sheets at December 31, 1997 and 1996                           16*

                    Consolidated Statements of Operations for the Years Ended                           17*
                    December 31, 1997, 1996 and 1995

                    Consolidated Statements of Stockholders' Equity (Deficit)                           18*
                    for the Years Ended December 31, 1997, 1996 and 1995

                    Consolidated Statements of Cash Flows for the Years Ended                           19*
                    December 31, 1997, 1996 and 1995

                    Notes to Consolidated Financial Statements                                          20*

                    * Refers to page number of 1997 Annual Report to Stockholders
</TABLE>

              2.    All  schedules  are omitted as the  information  required is
                    inapplicable   or  the   information  is  presented  in  the
                    consolidated financial statements or the related notes.

              3.    The  Exhibits  listed  in  the  Exhibit  Index   immediately
                    preceding  the  Exhibits hereto are  filed as a part of this
                    Annual Report on Form 10-K.

         (b) No Current Reports on Form 8-K were filed by the Company during the
last quarter of the period covered by this report.

         The  following  trademarks  are mentioned in this Annual Report on Form
10-K: HemaSure, LeukoNet and LeukoVir.


                                      -15-

<PAGE>


                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 31st day of
March, 1998.

                                    HEMASURE INC.


Date:  March 31, 1998               By:    /s/ John F. McGuire
                                           -------------------
                                           John F. McGuire, President
                                           and Chief Executive Officer

         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.

<TABLE>
<CAPTION>
                  Signature                                       Title                                Date
<S>                                          <C>                                          <C>
/s/ John F. McGuire                           President, Chief Executive Officer             March 31, 1998
------------------------                      and Director (Principal Executive
John F. McGuire                               Officer)


/s/ James B. Murphy                           Senior Vice President, Finance and             March 31, 1998
------------------------                      Administration (Principal Financial
James B. Murphy                               Officer)


/s/ Timothy J. Barberich                      Director                                       March 31, 1998
------------------------------------
Timothy J. Barberich

/s/ David S. Barlow                           Director                                       March 31, 1998
------------------------------------
David S. Barlow

/s/ Rolf S. Stutz                             Director                                       March 31, 1998
------------------------------------
Rolf S. Stutz
</TABLE>




                                       S-1

<PAGE>



                                  Exhibit Index

         The following  exhibits are filed as part of this Annual Report on Form
10-K.


<TABLE>
<CAPTION>
                                                                                          Sequential
Exhibit No.                        Description                                             Page No.
----------                         -----------                                             --------
<S>                 <C>
2.1(7)              Heads of Agreement, dated as of January 31, 1996,
                    between the Company and Novo Nordisk A/S.

3.1(2)              Certificate of Incorporation of the Company. 3.2(2)
                    By-Laws of the Company.

4.1(2)              Specimen Certificate for shares of Common Stock, $.01
                    par value, of the Company. 4.2(10) Registration Rights
                    Agreement, dated January 23, 1997, by and among the Company
                    and Novo Nordisk A/S.

10.1(10)            1994 Stock Option Plan, as amended.

10.2(10)            1994 Director Option Plan.

10.3(2)             Form of Technology Transfer and License Agreement between
                    the Company and Sepracor Inc.

10.4(7)             Lease Agreement for 140 Locke Drive, Marlborough, MA,
                    dated as of November 1995, between the Company and
                    First Marlboro Development Trust.

10.5(3)             Purchase Agreement, dated as of September 14, 1994,
                    between the Company and Lydall Central, Inc./Westex
                    Division.

10.6(3)             Letter of Intent, dated as of February 2, 1995,
                    between the Company and DRK-Niederschsen.

10.7(4)             Amendment of Solicitation/Modification of Contract
                    issued by the United States Army Medical Research
                    Acquisition Activity effective March 15, 1995.

10.8(5)+            Purchase Agreement, dated July 28, 1995, by and
                    between the Company and Blood Centers of America.

10.9(5)             Employment Agreement between the Company and Dr. Hans
                    Heiniger, dated January 10, 1994.

10.10(7)+           Purchase Agreement between the Company and American
                    Red Cross Biomedical Services, dated March 11, 1996.

10.11(7)            Employment Agreement between the Company and Steven
                    H. Rouhandeh, dated February 16, 1996.

10.12(7)+           Cooperation Agreement dated February 26, 1996 between
                    the Company and the German Red Cross.
</TABLE>



                                      I-1

<PAGE>



<TABLE>
<CAPTION>
                                                                                          Sequential
Exhibit No.                        Description                                             Page No.
----------                         -----------                                             --------
<S>                 <C>
10.13(6)+           Purchase Agreement between the Company and Blood
                    Centers of America, dated September 11, 1995.

10.14(8)            Asset Purchase Agreement dated as of May 2, 1996 between
                    the Company, HemaPharm Inc., HemaSure A/S and Novo Nordisk A/S.

10.15(10)           Employment Agreement between the Company and Jeffrey
                    B. Davis, dated May 23, 1996. 10.16(9) Restructuring Agreement,
                    dated January 23, 1997, between the Company, HemaPharm
                    Inc., HemaSure A/S and Novo Nordisk A/S.

10.17(10)           Convertible Subordinated Note Due December 31, 2001
                    in the amount of U.S. $11,721,989, issued by the
                    Company to Novo Nordisk A/S, dated January 23, 1997.

10.18(10)           Master Strategic Alliance Agreement, dated June 5, 1996, by
                    and between the Company and American Red Cross BioMedical Services.

10.19(10)           Amendment to the Company's 1994 Director Option Plan,
                    dated June 25, 1996. 10.20(10) Amendment to the Company's 1994
                    Director Option Plan, effective as of May 16, 1996. 10.21(10)
                    Amendment to the Company's 1994 Stock Option Plan, dated June
                    25, 1996. 10.22(10) Amendment to the Company's 1994 Stock Option
                    Plan, effective as of May 16, 1996. 10.23(10) Sublease
                    Agreement, between the Company and Novo Nordisk A/S, dated May
                    2, 1996, for the Premises (Denmark), as amended.

10.24(10)           Sublease Agreement between the Company and Novo Nordisk A/S, dated
                    May 2, 1996, for the Warehouse (Denmark), as amended.

10.25(1)            Employment Agreement between the Company and John F. McGuire, dated
                    April 1, 1997. 10.26(1) Settlement Agreement, dated September 1997,
                    by and among the Company, HemaSure AB, HemaPharm Inc., Pharmacia &
                    Upjohn Inc. and Pharmacia & Upjohn AB.

13.1                Selected pages of the Company's 1997 Annual Report to Stockholders
                    incorporated by reference into Part II of the Company's Annual Report
                    on Form 10-K for the fiscal year ended December 31, 1997.

21.1                Subsidiaries of the Company.

23.1                Consent of Coopers & Lybrand L.L.P.

27.1                Financial Data Schedule.
</TABLE>



                                      I-2


<PAGE>
----------------------------
<TABLE>
<S>                 <C>
(1)                Management contract or other contract or arrangement filed as an exhibit to this Form pursuant
                   to Items 14(a) and 14(c) of Form 10-K.

(2)                Incorporated herein by reference to the Company's Registration Statement on Form S-1, as
                   amended (File No. 33-75930).

(3)                Incorporated herein by reference to the Company's Annual Report on Form 10-K for the year ended
                   December 31, 1994.

(4)                Incorporated herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter
                   ended March 31, 1995.

(5)                Incorporated herein by reference to the Company's Registration Statement on Form S-1, as
                   amended (File No. 33-95540).

(6)                Incorporated herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter
                   ended September 30, 1994.

(7)                Incorporated herein by reference to the Company's Annual Report on Form 10-K for the year ended
                   December 31, 1995.

(8)                Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended
                   March 31, 1996.

(9)                Incorporated by reference to the Company's Current Report on Form 8-K filed with the Securities
                   and Exchange Commission on February 27, 1997.

(10)               Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended
                   December 31, 1996.

+                  Confidential treatment requested as to certain portions.
</TABLE>




                                      I-3