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

                                   FORM 10-K/A

                     (Amendment No. 1, amending Items 10-13)

[X]  Annual Report  Pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 for the fiscal year ended December 31,1998.

[ ]  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 0-22401

                              BIONX IMPLANTS, INC.
             (Exact name of registrant as specified in its charter)

       Delaware                                          22-3458598
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
 incorporation or organization)

                1777 Sentry Parkway West, Gwynedd Hall, Suite 400
                  Blue Bell, Pennsylvania 19422 (215-643-5000)

 (Address and telephone number, including area code, of registrant's principal
                               executive office)

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

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

                               Title of each class

                    Common Stock, par value $.0019 per share

     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
reporting requirements for the past 90 days. Yes X No __

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  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. [ ]

     Aggregate  market  value  of  voting  stock  held by  non-affiliates  as of
February 5, 1999 was approximately $27,259,060.

     Number of shares  of Common  Stock  outstanding  as of  February  5,  1998:

8,901,576

     Documents incorporated by reference: None


<PAGE>


                                    PART III

Item 10.  Directors of the Registrant

     The  Bionx  Implants,   Inc.  (the  "Company")   Restated   Certificate  of
Incorporation  provides that the Company's  Board of Directors  shall be divided
into three classes.  Each class currently has two members who serve for a period
of three years on a staggered term basis. The following information contains the
current and past five years' business  experience,  certain other  directorships
and  age of  each  current  director.  Except  where  otherwise  indicated,  the
directors have held the occupational  positions noted for at least the past five
years.

     Directors Whose Term Expires at the 1999 Annual Meeting:

o    David J. Bershad: Senior Partner, Milberg Weiss Bershad Hynes & Lerach (law
     firm).  Director of Vital  Signs,  Inc.  ("Vital  Signs").  Director of the
     Company since 1995. Age: 59.

o    Pertti Tormala:  Executive Vice President,  Research and Development of the
     Company (1995 to the present);  Chief Executive Officer (and co-founder) of
     the Company's foreign  subsidiaries (prior years).  Director of the Company
     since 1995. Age: 53.

     Directors Whose Term Expires at the 2000 Annual Meeting:

o    Anthony J. Dimun:  Executive Vice President and Chief Financial  Officer of
     Vital  Signs   (manufacturer  of  disposable   anesthesia  and  respiratory
     devices).  Director of  EchoCath,  Inc.  and Vital  Signs.  Director of the
     Company since 1995. Age: 55.

o    David H.  MacCallum:  Executive Vice  President,  Head of  Healthcare,  ING
     Baring  Furman  Selz,  LLC  (investment  banking  firm)  (April 1998 to the
     present);  Managing  Director for Life  Sciences  Investment  Banking,  UBS
     Securities  LLC  (investment  banking firm) (1994 to March 1998);  Co-Head,
     Investment Banking,  Hambrecht & Quist LLC (1983-1994)  (investment banking
     firm). Director Minimed Inc. Director since 1995. Age: 61.

     Directors Whose Term Expires at the 2001 Annual Meeting:

o    David W.  Anderson:  President and Chief  Executive  Officer of the Company
     (1995 to April 1999);  President and Chief Executive  Officer,  Kensey Nash
     Corporation  (developer of cardiology products) (1992 to 1994). Director of
     the Company since 1995. Age: 46.

o    Terry D. Wall:  Chairman of the Board of the Company (1995 to the present);
     President  and Chief  Executive  Officer of Vital Signs.  Director of Vital
     Signs and Exogen, Inc. Director of the Company since 1995. Age: 57.

     Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors to file initial reports of beneficial ownership
and reports of changes of  beneficial  ownership of the  Company's  Common Stock
with the SEC.  Executive  officers  and  directors  are  required to furnish the
Company with copies of all Section  16(a)  reports that they file.  Based upon a
review of these  filings and other  documentation,  the  Company  notes that (i)
Stephen A.  Lubischer  and Gregory S. Jones failed to timely report the purchase
of 1,000 and 2,000 shares, respectively,  during September 1998, (ii) Michael F.
Matz failed to timely  report the sale of 3,000 shares in December  1998,  (iii)
Michael  F. Matz,  Gerard  Carlozzi  and James  Hogan  failed to timely  file an
initial report of beneficial  ownership upon becoming officers of the Company in
September 1997, November 1998, and November 1998, respectively, and (iv) Michael
J.  O'Brien and Steven A.  Lubischer  each failed to timely  report the grant of
options to purchase 5,000 shares of Common Stock in July 1998. Such late filings
were  inadvertent.  Filings  were  made  promptly  after the  deficiencies  were
noticed.


Item 11.  Executive Compensation

     Summary of Cash and Certain Other Compensation

     The following  table and  accompanying  footnotes set forth certain summary
information relating to the three years ended December 31, 1998, with respect to
the Company's Chief  Executive  Officer and the Company's four other most highly
compensated  executive officers  (collectively,  the "Named Executive Officers")
during 1998:


<PAGE>


<TABLE>
<CAPTION>


                                                                                               Long-Term
                                                                                              Compensation
                                               Annual Compensation                               Awards
                              -------------------------------------------------------      -------------------
                                                                                               Securities
     Name and Principal                                Bonus        Other Annual               Underlying             All Other
          Position              Year     Salary($)      ($)       Compensation (1)          Options/SARs (#)        Compensation
          --------              ----     ---------      ---       ----------------          ----------------        ------------
                                                                                                                       ($)(2)

<S>                             <C>       <C>                           <C>                                            <C>   
David W. Anderson               1998      180,000          -            6,000                          -               20,000
President and Chief             1997      160,000     50,000            6,000                          -               17,316
Executive Officer               1996      151,600     40,000                -                          -                7,708

Stephen Lubischer (3) Vice      1998      120,000          -            6,000                   5,000(5)               13,580
President, U.S. Sales           1997      107,500     32,000            6,000                          -               11,740
                                1996       74,622     35,000                -                     52,632                7,462

Michael J. O'Brien (4), Vice    1998      120,000          -            6,000                   5,000(5)               13,580
President, Finance and          1997      110,000     48,250              500                          -               10,368
Administration and  Chief       1996        9,167          -                -                     65,790                  917
Financial Officer

Michael F. Matz (6), Vice       1998      120,000     20,000            6,000                          -               13,580
President - Sales               1997       40,000      6,666            4,000                          -                    -
Craniofacial Division           1996            -          -                -                          -                    -

Pertti Tormala, Executive       1998      119,814          -            8,615                          -                    -
Vice President, Research and    1997      118,070     22,000            9,423                          -             68,650(7)
Development                     1996       84,680          -                -                          -             26,400(7)
</TABLE>

--------------

(1)  Represents car allowances.

(2)  For 1998, for Messrs. Anderson, Lubischer, O'Brien and Matz, represents (a)
     amounts paid on behalf of the Named Executive  Officer for various employee
     benefits  selected by such  individual  pursuant  to a cafeteria  plan (Mr.
     Anderson:  $18,000; Mr. Lubischer:  $12,000; Mr. O'Brien:  $12,000; and Mr.
     Matz: $12,000) and (b) employer  contributions to the Company's 401(k) plan
     (Mr. Anderson: $2,000; Mr. Lubischer:  $1,580; Mr. O'Brien: $1,580; and Mr.
     Matz: $1,580) .

(3)  Mr. Lubischer joined the Company in April 1996.

(4)  Mr. O'Brien joined the Company in November 1996.

(5)  In July 1998,  both Mr.  O'Brien and Mr.  Lubischer  were  granted  options
     covering  5,000 shares of Common  Stock,  vesting  ratably over a five-year
     period.

(6)  Mr. Matz joined the Company in September 1997.

(7)  Represents  royalty  payments  to  Professor  Tormala  under  a  superseded
     employment agreement with respect to 1996 product sales.

<PAGE>

     Stock Option Information

     The following table sets forth certain information concerning stock options
granted during the year ended December 31, 1998 to the Named Executive Officers.
In accordance with the rules of the SEC, the following table also sets forth the
potential  realizable  value over the term of the  options  (the period from the
grant  date to the  expiration  date)  based on  assumed  rates  of stock  price
appreciation of 5% and 10% compounded  annually.  These amounts do not represent
the  Company's  estimate of future stock price  performance.  Actual  realizable
values,  if any, of stock options will depend on the future stock performance of
the Common Stock.  No stock  appreciation  rights were granted during the fiscal
year ended December 31, 1998.

<TABLE>
<CAPTION>

                             Option Grants in the Fiscal Year Ended December 31, 1998

                               Number of        Percent of                                        Potential Realizable
                              Securities       Total Options   Exercise Price                    Value at Assumed Annual
                              Underlying        Granted to        per Share                       Rates of Stock Price
                                Options        Employees in     ($/Share)(2)      Expiration    Appreciation for Option
          Name               Granted(#)(1)         1998                              Date                Term(3)
          ----               -------------         ----                              ----                -------
                                                                                                         5%
                                                                                                10%

<S>                              <C>               <C>             <C>             <C>  <C>       <C>           <C>     
Stephen A. Lubischer             5,000             5.5%            $15.50          7/30/08        $126,239      $201,015

Michael J. O'Brien               5,000             5.5%            $15.50          7/30/08        $126,239      $201,015

</TABLE>

----------------------------
(1)  These options were granted under the Company's Stock Option/Stock  Issuance
     Plan. For information regarding the vesting of these options, see the notes
     to the Summary Compensation Table.

(2)  The  exercise  price per share of the  options was equal to the fair market
     value of the Common Stock on the date of grant as determined by the Board.

(3)  The  potential  realizable  value  is  calculated  based on the term of the
     option at the date of grant (10 years). It is calculated  assuming that the
     fair  market  value  of the  Company's  Common  Stock  on the date of grant
     appreciates at the indicated annual rate compounded annually for the entire
     term of the options and that the options are exercised and sold on the last
     day of their term for the appreciated stock price.

     No stock options or stock  appreciation  rights were exercised by the Named
Executive Officers during 1998 and no stock appreciation rights were outstanding
as of December 31, 1998. The following table sets forth certain information with
respect to the value of stock options held by the Named Executive Officers as of
December 31, 1998.



<PAGE>

<TABLE>
<CAPTION>


                                          Fiscal Year End Options Values

                                                  Number of Securities                         Value of Unexercised
                                                 Underlying Unexercised                            In-the-Money
                                                       Options at                                   Options at
                                                  December 31, 1998(#)                       December 31, 1998(1)($)
                                            Exercisable         Unexercisable            Exercisable        Unexercisable

<S>                                             <C>                <C>                    <C>                  <C>    
David W. Anderson                               221,608            55,401                 1,683,667            420,909
Stephen A. Lubischer                             36,844            20,788                   118,425             29,601
Michael J. O'Brien                               31,578            39,212                     -                   -
</TABLE>

--------------

(1)    Based on a value equal to the closing  sale price of the Common  Stock on
       December 31, 1998, minus the per share exercise price,  multiplied by the
       number of shares underlying the options.

     Director Compensation

     The  Company  has not yet  commenced  paying  cash  fees  to  directors  in
connection  with their service on the Board of Directors or on committees of the
Board. The Company does grant stock options to non-employee  directors under its
Stock Option/Stock Issuance Plan.

     Employment Agreements

     The Company previously  entered into an employment  agreement with David W.
Anderson,  its  President  and Chief  Executive  Officer  until April 1999.  The
original  term  of  the  agreement   expired  on  December  31,  1998,  but  was
automatically  renewed for one year.  Pursuant to the  agreement,  Mr.  Anderson
received  minimum annual  compensation  of $160,000 and is entitled to receive a
performance  based bonus.  Mr.  Anderson is also  entitled to receive all health
insurance benefits  generally made available to the Company's  employees as well
as a monthly car allowance of $500. The agreement  further  provides that if Mr.
Anderson's  employment  is  terminated  without  cause by the Company  after the
initial  term,  Mr.  Anderson is  entitled  to base salary and health  insurance
benefits  continuation for a period of six months after the date of termination.
Mr. Anderson stepped down as President of the Company in April 1999.

     The Company  has also  entered  into an  employment  agreement  with Pertti
Tormala.  The agreement  provides for a term  expiring in 2002.  Pursuant to the
agreement,  Professor  Tormala will receive a minimum base salary of 540,000 FIM
(approximately  $100,000) and is eligible to receive cash bonuses granted by the
Company's  Board of  Directors.  Professor  Tormala is also  entitled  to a car,
certain  pension  benefits  and  reimbursement  of  all  reasonable  travel  and
entertainment  expenses.  Under the agreement,  all patents, patent applications
and other industrial  property rights developed by Professor Tormala relating to
the Company's  research and development  activities are the sole property of the
Company.  The agreement  permits  Professor  Tormala to spend up to 16 hours per
month working on a business  spun-off from the Company prior to the consummation
of its  initial  public  offerings.  See Item 13 -  "Certain  Relationships  and
Related Transactions."

     The Company has also entered into an employment  agreement  with Michael J.
O'Brien,  its Vice  President,  Finance and  Administration  and Chief Financial
Officer.  The term of the agreement will expire on December 1, 1999. Pursuant to
the agreement,  Mr. O'Brien receives minimum annual compensation of $110,000 and
is  entitled  to receive a bonus.  Mr.  O'Brien is also  entitled to receive all
health insurance benefits generally made available to the Company's employees as
well as a monthly car allowance of $500. The agreement  further provides that if
Mr. O'Brien's employment is terminated without cause by the Company prior to the
expiration of the initial term,  Mr. O'Brien will be entitled to base salary and
health insurance  benefits  continuation for a period of one year after the date
of termination.

     Compensation Committee Interlocks and Insider Participation

     The Company's Compensation Committee consists of Terry D. Wall and David J.
Bershad.  Mr. Wall and Mr.  Bershad  (as well as Anthony J. Dimun)  serve on the
Boards of Directors of both the Company and Vital Signs  (which  latter  company
does not have a compensation committee).  For information regarding transactions
between the Company and persons  named in this  paragraph,  see Item 13 "Certain
Relationships and Related Transactions."

<PAGE>

Item 12.  Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth the beneficial ownership of shares of Common
Stock as of January 31, 1999 by (i) the only  stockholders  of the Company known
by management to  beneficially  own more than 5% of the Company's  Common Stock,
(2) the directors of the Company,  (iii) the Named  Executive  Officers and (iv)
all directors and executive officers of the Company as a group.


<TABLE>
<CAPTION>


                                                      Shares of
                                              Common Stock Beneficially        ------------------------------------
Beneficial Owner(2)                                  Owned (1)(2)                 Percentage Beneficially Owned

<S>         <C>                                       <C>                                      <C> 
Bionix B.V. (3)                                       2,684,211                                30.1
Terry D. Wall (4)                                     2,570,217                                28.8
The Kaufman Fund, Inc. (5)                              985,000                                11.0
Waddell & Reed Investment
  Management Company (6)                                715,000                                 8.0
David W. Anderson (7)                                   386,772                                 4.2
David J. Bershad (8)                                    395,390                                 4.4
Anthony J. Dimun (9)                                    170,070                                 1.9
Stephen A. Lubischer (10)                                37,844                                 *
David H. MacCallum (11)                                 140,317                                 1.6
Michael J. O'Brien (12)                                  32,578                                 *
Pertti Tormala (13)                                   1,122,037                                12.6
Michael F. Matz                                               0                                 *
All directors  and  executive  officers               5,003,004                                54.3
as a group (13 persons)(14)

</TABLE>

--------------

* Represents less than 1% of the outstanding Common Stock.

(1)    Applicable  percentage  ownership is based on 8,922,076  shares of Common
       Stock  outstanding as of January 31, 1999 together with applicable  stock
       options for such  stockholder.  Beneficial  ownership  is  determined  in
       accordance with the rules of the SEC, based on factors  including  voting
       and  investment  power with  respect to  shares.  Shares of Common  Stock
       subject to stock options currently exercisable,  or exercisable within 60
       days after  January 31, 1999,  are deemed  outstanding  for computing the
       percentage ownership of the person holding such stock options but are not
       deemed  outstanding  for computing the percentage  ownership of any other
       person.  Each owner of an equity  interest  in Bionix  B.V.  (the  "Dutch
       Company") is deemed to beneficially own a percentage of the shares of the
       Common  Stock  owned  by  the  Dutch   Company   equal  to  such  owner's
       proportionate equity interest in the Dutch Company.

(2)    Except as otherwise indicated in the footnotes to this table and pursuant
       to applicable  community  property laws,  persons named in the table have
       sole  voting and  investment  power with  respect to all shares of Common
       Stock and the address of the 5%  stockholders  is c/o the  Company,  1777
       Sentry  Parkway West,  Gwynedd Hall,  Suite 400, Blue Bell,  Pennsylvania
       19422.

(3)    Nearly  all of the  capital  stock of the Dutch  Company  is owned by the
       former stockholders of the Company's operating subsidiaries. The Board of
       Directors of the Dutch Company  consists of David W.  Anderson,  David J.
       Bershad,  Anthony J. Dimun,  David H. MacCallum,  Pertti Tormala,  Pertti
       Viitanen,  Michael J.  O'Brien and Pentti  Rokkanen,  all but the last of
       whom are  directors or executive  officers of the Company.  As of January
       31,  1999,  Messrs.   Anderson,   Bershad,   Dimun,  MacCallum  and  Wall
       beneficially  owned capital stock of the Dutch Company  representing,  in
       the aggregate,  approximately 23.5 % of the equity of the Dutch Company's
       capital  stock.  As of January 31,  1999,  Messrs.  Tormala and  Viitanen
       beneficially  owned capital stock of the Dutch Company  representing,  in
       the aggregate,  approximately  47.1% of the equity of the Dutch Company's
       capital stock. The remaining equity of the Dutch Company's  capital stock
       is allocated among several other Finnish investors.

(4)    Mr. Wall's shares  include 1,500 shares of Common Stock issuable upon the
       exercise of vested stock options and 484,421 shares of Common Stock owned
       by the  Dutch  Company,  representing  Mr.  Wall's  proportionate  equity
       interest in the shares of Common  Stock owned by the Dutch  Company.  Mr.
       Wall has the right to cause the Dutch  Company to transfer  such  484,421
       shares to him pursuant to an agreement with the Dutch Company. All of Mr.
       Wall's  shares of Common Stock and of the Dutch  Company's  capital stock
       are held in an investment partnership which he controls.

<PAGE>

(5)    The information set forth herein regarding The Kaufman Fund's  beneficial
       ownership  is based on a report on Schedule 13G filed by The Kaufman Fund
       with the SEC on February 2, 1998.  The address of The Kaufman Fund is 140
       E. 45th Street, 43rd Floor, Suite 2624, New York, New York 10017.

(6)    The  information  set forth herein  regarding  Waddell & Reed  Investment
       Management  Company's  beneficial  ownership  is based  upon a report  on
       Schedule 13G filed by it with the SEC on February  12, 1999.  The address
       of Waddell & Reed  Investment  Management  Company is 6300 Lamar  Avenue,
       Overland Park, Kansas 66202.

(7)    Mr.  Anderson's  shares  include  221,608 shares of Common Stock issuable
       upon the  exercise of vested  stock  options and 34,842  shares of Common
       Stock  owned  by  the  Dutch   Company,   representing   Mr.   Anderson's
       proportionate  equity interest in the shares of Common Stock owned by the
       Dutch Company.  Mr.  Anderson has the right to cause the Dutch Company to
       transfer  such 34,842  shares to him  pursuant to an  agreement  with the
       Dutch  Company.  Pursuant to the Company's  Stock  Option/Stock  Issuance
       Plan, Mr.  Anderson has  transferred to a trust  established  for his son
       vested stock options covering 900 of the aforementioned 277,009 shares.

(8)    Mr.  Bershad's  shares include 1,500 shares of Common Stock issuable upon
       the  exercise of vested stock  options and 50,736  shares of Common Stock
       owned by the Dutch  Company,  representing  Mr.  Bershad's  proportionate
       equity interest in the shares of Common Stock owned by the Dutch Company.
       Mr.  Bershad has the right to cause the Dutch  Company to  transfer  such
       50,736 shares to him pursuant to an agreement with the Dutch  Company.  A
       total of 254,732 of Mr.  Bershad's  shares of Common Stock and all of Mr.
       Bershad's  shares of the  Dutch  Company's  capital  stock are held in an
       investment partnership which he controls.

(9)    Mr. Dimun's shares include 1,500 shares of Common Stock issuable upon the
       exercise of vested stock  options and 34,679 shares of Common Stock owned
       by the Dutch  Company,  representing  Mr.  Dimun's  proportionate  equity
       interest in the shares of Common  Stock owned by the Dutch  Company.  Mr.
       Dimun has the right to cause the Dutch  Company to  transfer  such 34,679
       shares to him pursuant to an agreement with the Dutch Company. All of Mr.
       Dimun's shares of Common Stock and the Dutch Company's  capital stock are
       held in entities which he controls.

(10)   Mr. Lubischer's shares include 36,844 shares of Common Stock issuable 
       upon the exercise of vested options.

(11)   Mr. MacCallum's shares include 1,500 shares of Common Stock issuable upon
       the  exercise of vested stock  options and 26,900  shares of Common Stock
       owned by the Dutch Company,  representing Mr.  MacCallum's  proportionate
       equity interest in the shares of Common Stock owned by the Dutch Company.
       Mr.  MacCallum  has the right to cause the Dutch Company to transfer such
       26,900 shares to him pursuant to an agreement with the Dutch  Company.  A
       total of 14,738 of Mr.  MacCallum's shares of Common Stock are held in an
       entity which he controls.

(12)   Mr.  O'Brien's  shares  include  31,578  shares of Common Stock  issuable
       upon the exercise of vested stock options.

(13)   Represents the proportionate  equity interest of Professor Tormala in the
       shares of Common Stock owned by the Dutch Company.  Professor Tormala has
       the right to cause the Dutch Company to transfer such 1,122,037 shares to
       him  pursuant to an  agreement  with the Dutch  Company.  That  agreement
       enables  Professor Tormala to direct the voting by the Dutch Company of a
       specified  number of shares of the  Company's  Common  Stock  held by the
       Dutch  Company.  As of January 31, 1999,  that  specified  number  equals
       2,052,633, representing Professor Tormala's proportionate equity interest
       in the  2,684,211  shares of  Common  Stock  owned by the  Dutch  Company
       (1,122,037  shares) and the  proportionate  equity  interest of all other
       Finnish  investors in such 2,684,211 shares (930,596  shares).  The table
       above excludes from Professor Tormala's  beneficial ownership the 930,596
       shares  attributable  to the  equity  interests  of  such  other  Finnish
       investors.

(14)   Includes  296,030  shares of Common Stock  issuable  upon the exercise of
       vested stock options,  and 1,899,394  shares of Common Stock owned by the
       Dutch  Company,  representing  the  directors'  and  executive  officers'
       proportionate  equity  interest in the  2,684,211  shares of Common Stock
       owned by the Dutch  Company.  As of January 31, 1999,  the  directors and
       executive officers as a group beneficially own approximately 70.7% of the
       equity  associated  with the  capital  stock of the  Dutch  Company.  The
       directors and  executive  officers of the Company as a group have a right
       to vote all of the  2,684,211  shares of Common  Stock owned by the Dutch
       Company.  If all such  2,684,211  shares were  deemed to be  beneficially
       owned by the Company's directors and executive officers,  such persons as
       a group would be deemed to be the beneficial  owners of 5,786,821  shares
       of Common Stock,  representing 62.8% of the shares outstanding on January
       31, 1999.

<PAGE>

Item 13.  Certain Relationships and Related Transactions

     Transactions with Interested Persons

     The Company  consummated  its initial public offering (the "IPO") in April,
1997.  Prior to the IPO,  Terry Wall,  Pertti  Tormala and the Company were each
one-third  equity  owners in a  business  organized  to  engage  in  developing,
manufacturing  and selling  polymer-based  advanced drug  delivery  systems (the
"Business"). The Company acquired its interest in the Business from an unrelated
individual  in 1996 in  exchange  for a payment of $85,000 and did not incur any
expenses relating to the Business since that time. During 1997, the Business had
no tangible assets and was expected to be in the development  stage for a period
of at least four years. The Board of Directors of the Company  concluded that in
light of the substantial  expenditures  that would be required in order to bring
any of the  Business'  products to market,  it was in the best  interests of the
Company and its  stockholders  for the Company to forego its  development of the
Business  and  to  instead  spin-off  the  Business.  Accordingly,  the  Company
distributed  its  interest  in the  Business  to  stockholders  of record of the
Company  as of a date  prior  to the  closing  of the  IPO,  pro  rata to  their
ownership  interest  in the  Company  prior  to  the  IPO.  Professor  Tormala's
employment  agreement  with the Company  enables him to dedicate  certain of his
services  to the  Business  but  provides he may not work more than 16 hours per
month during business hours on matters pertaining to the Business.

     In 1998,  Brown  Brothers  Harriman & Co.  loaned  $800,000  to Bionix B.V.
Bionix B.V. in turn loaned  $800,000 to Pertti  Tormala,  a director of both the
Company and Bionix B.V.,  pursuant to a demand  promissory note. As security for
the loan, Professor Tormala pledged a portion of his Bionix B.V. capital stock.

     During 1998, the Company paid certain administrative  expenses on behalf of
Bionx B.V. For information regarding the ownership of Bionx B.V., see Item 12 of
this Annual Report.  The loan amount outstanding was $238,950 as of December 31,
1998, and is payable in 1999.

     As disclosed in the Summary Compensation Table set forth above, the Company
was required to make certain royalty  payments to Pertti Tormala  pursuant to an
employment  agreement that no longer remains in effect.  These royalty  payments
(totaling $68,650) were accrued and recorded in 1997 and paid in 1998.




<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended,  the registrant has duly caused this Amendment
No. 1 to its Annual Report on Form 10-K for the year ended  December 31, 1998 to
be signed on its behalf by the undersigned, thereunto duly authorized, this 29th
day of April, 1999.


                                         BIONX IMPLANTS, INC.


                                         By: Gerard Carlozzi
                                             Gerard Carlozzi
                                             (Acting President)


     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended, this Amendment No. 1 to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1998 has been signed by the following persons in the
capacities and on the dates indicated:

    Signature                         Title                             Date


/s/Gerard Carlozzi
Gerard Carlozzi                     Acting President
                                    (Principal Executive Officer) April 29, 1999


/s/David J. Bershad*
David J. Bershad                    Director                      April 29, 1999


/s/Anthony J. Dimun*
Anthony J. Dimun                    Director                      April 29, 1999


/s/David H. MacCallum*
David H. MacCallum                  Director                      April 29, 1999


/s/Pertti Tormala*
Pertti Tormala                      Director                      April 29, 1999


/s/Terry D. Wall*
Terry D. Wall                       Director                      April 29, 1999


/s/Michael J. O'Brien
Michael J. O'Brien                  Chief Financial and 
                                    Accounting Officer            April 29, 1999


*By: Michael J. O'Brien
Michael J. O'Brien
Attorney-in-Fact