SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549
                             _______________________
  
                                    FORM 10-K
        FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark one)
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
                     For the fiscal year ended June 30, 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 0-27854

                          Bone Care International, Inc.     
                         -----------------------------
              (Exact name of registrant as specified in its charter)

               Wisconsin                                  39-1527471      
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(State or other jurisdiction of                         (IRS Employer
incorporation or organization)                         Identification No.)

       313 West Beltline Highway            
           Madison, Wisconsin                                    53713         
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(Address of principal executive offices)                     (Zip Code)

       Registrant's telephone number, including area code:  (608) 274-7533
        Securities registered pursuant to Section 12(b) of the Act:  None

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

                         Common Stock, without par value
                         Preferred Stock Purchase Rights   
                        --------------------------------                      
                                 (Title of class)

     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

     Yes /x/  No / /

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

     As of September 24, 1997, there were issued and outstanding 4,361,191
shares of Common Stock.  The aggregate market value of the voting and
non-voting common equity held by nonaffiliates of the registrant was
$62,217,100 as of September 24, 1997, assuming solely for purposes of this
calculation that all directors and executive officers of the Registrant are
"affiliates."  This determination of affiliate status is not necessarily a
conclusive determination for other purposes.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of Bone Care International, Inc. Proxy Statement for its 1997
Shareholders Meeting to be held on November 19, 1997 (Part III)


                        BONE CARE INTERNATIONAL, INC.   
                      
                                  INDEX TO
                         ANNUAL REPORT ON FORM 10-K
                        For Year Ended June 30, 1997

Page
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Part I
Item 1         Business  . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2         Properties. . . . . . . . . . . . . . . . . . . . . . . . .11
Item 3         Legal Proceedings . . . . . . . . . . . . . . . . . . . . .11
Item 4         Submission of Matters to a Vote of Security Holders . . . .11
Part II
Item 5         Market for Registrant's Common Equity and
               Related Stockholder Matters . . . . . . . . . . . . . . . .11
Item 6         Selected Financial Data . . . . . . . . . . . . . . . . . .12
Item 7         Management's Discussion and Analysis of Financial
               Condition and Results of Operations . . . . . . . . . . . .13
Item 7A        Quantitative and Qualitative Disclosures about
               Market Risk . . . . . . . . . . . . . . . . . . . . . . . .15
Item 8         Financial Statements and Supplementary Data . . . . . . . .15
Item 9         Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure . . . . . . . . . . . .29
Part III
Item 10        Directors and Executive Officers
               of the Registrant . . . . . . . . . . . . . . . . . . . . .29
Item 11        Executive Compensation. . . . . . . . . . . . . . . . . . .30
Item 12        Security Ownership of Certain
               Beneficial Owners and Management. . . . . . . . . . . . . .30
Item 13        Certain Relationships and Related Transactions. . . . . . .30
Part IV
Item 14        Exhibits, Financial Statement Schedules,
               and Reports on Form 8-K . . . . . . . . . . . . . . . . . .30

Index to Consolidated Financial Statements and
  Financial Statement Schedule . . . . . . . . . . . . . . . . . . . . . .31

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

Index to Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . . .33

                                   PART I

ITEM 1.  BUSINESS
         --------
Introduction


     On May 8, 1996, Lunar Corporation ("Lunar") distributed to its
shareholders of record as of April 24, 1996, all of the shares of Bone
Care International, Inc. ("Bone Care" or "the Company") Common Stock then
owned by Lunar in a transaction intended to qualify as a tax-free
distribution.  As a result of that distribution, Bone Care became a
separate publicly owned company.

     The focus of Bone Care's pharmaceutical development program is
discovering, developing, and commercializing improved D-hormone therapies
for treating secondary hyperparathyroidism associated with end-stage renal
disease ("ESRD"), renal osteodystrophy, osteoporosis, primary
hyperparathyroidism, psoriasis, prostate cancer and breast cancer.  The
Company has a portfolio of proprietary D-hormones and analogs
characterized by reduced toxicity relative to approved oral or intravenous
D-hormone therapies.  The lead compound in this portfolio is one-alpha D-2
which was licensed from the Wisconsin Alumni Research Foundation ("WARF")
in 1987.  The Company selected this compound for clinical development
because of its 5-fold lower toxicity relative to D-hormones previously
approved for oral or intravenous administration.  Other compounds in the
portfolio are being evaluated in preclinical research as potential second
generation therapies.  The Company believes that some of its proprietary
compounds represent technical advances which may be exploited in
established and emerging markets for D-hormone therapies.  The Company has
no products which are commercially available.

     The Company is currently developing one-alpha D-2 for treatment of
secondary hyperparathyroidism associated with ESRD, conducting preclinical
research on other compounds, and pursuing research to discover improved
D-hormones.  The Company completed Phase 2 clinical trials of one-alpha D-2
on patients exhibiting secondary hyperparathyroidism associated with ESRD
in May 1996.  Data from these trials suggest that one-alpha D-2 is well
tolerated and effective in controlling excessive parathyroid hormone
("PTH") secretion.  Multi-centered Phase 3 clinical trials with oral
one-alpha D-2 began in May 1996 and were completed in August 1997.  A
multi-centered Phase 3 clinical trial with intravenous one-alpha D-2
commenced in July 1997, which the Company estimates will be completed in
early 1998.  Marketing approvals, if granted in the United States and
Europe, would occur in 1998 or 1999, at the earliest. 

     In September 1997, the Company began a Phase 3 clinical program with
oral one-alpha D-2 in pre-dialysis patients exhibiting secondary
hyperparathyroidism.  The expected completion date for this program is
September 1998.  Marketing approval, if granted in the United States,
would occur in 1999 or 2000, at the earliest.

     The Company also is conducting a Phase 1/Phase 2 trial with oral one-alpha
D-2 in patients exhibiting advanced androgen-independent prostate
cancer.  This study began in November 1996, and the Company estimates its
completion in 1998.

     Additional Phase 1/Phase 2 clinical trials are underway and planned
in 1997 or 1998 for oral one-alpha D-2 in patients with osteoporosis and
for a second generation compound, LR-103, in patients with prostate and/or
breast cancer.

     The Company's subsidiary, Continental Assays Corporation, develops
and performs specialized assays on biological samples.  Continental Assays
Corporation has developed proprietary procedures for measuring the levels
of blood-borne metabolites of one-alpha D-2 and other D-hormones and
metabolites.  Such assays provide support to the Company's internal
research programs and to the ongoing development of one-alpha D-2 and
other new drugs.  Continental Assays also provides assay services to
unaffiliated third parties on a contractual basis.  All of the Company's
revenues during the fiscal years ended June 1997 and 1996 were derived
from such services.

Background

     Secondary Hyperparathyroidism - One-alpha D-2 is being developed for
secondary hyperparathyroidism associated with ESRD.  This indication can
be classified as a subset of a more general condition known as renal
osteodystrophy, a disease of the kidneys characterized by impaired renal
function, by elevated blood phosphorus, and by chronic stimulation of
parathyroid function leading to bone disease.  The primary aim of one-alpha D-2
therapy is to normalize (or reduce) elevated serum PTH, thereby
preventing (or delaying) the onset of metabolic bone disease.

     In renal disease, there is a progressive loss of cells of the
proximal nephron, the primary site in the kidneys for the synthesis of the
D-hormones.  The loss of functioning nephrons reduces production of these
hormones, causing abnormally low blood levels of D-hormones.  Reduced
blood levels of D-hormones cause increased (ultimately excessive)
secretion of PTH by direct and indirect mechanisms.  The resulting
hyperparathyroidism leads to markedly increased bone turnover and
resulting bone disease (e.g., osteoporosis, osteomalacia, osteitis fibrosa
cystica and extraskeletal calcification) and related disorders (e.g., bone
pain).

     ESRD Market - The number of ESRD patients on dialysis in the United
States has grown from approximately 142,000 to approximately 214,000 over
the five-year period from 1991 to 1996.  The average annual growth rate
has been approximately 8.5%.  In Europe, the estimated number of ESRD
patients on dialysis is approximately 50% less than that for the United
States.  The annual growth rate in Europe has approximated 9.0% for the
past five years.

     Current D-Hormone Therapies - One D-hormone, known as calcitriol, is
approved in the United States and certain European countries for the
management of secondary hyperparathyroidism in ESRD patients.  Currently,
different formulations of calcitriol are marketed by two major
pharmaceutical companies:  Rocaltrol(Registered) (formulated for oral
administration) and Calcijex(Registered) (formulated for intravenous
administration).  An oral synthetic precursor of calcitriol, namely one-alpha
D-2 is approved in Europe for treating secondary hyperparathyroidism
and osteoporosis.

     The Company estimates that total combined United States and European
sales of calcitriol and one-alpha D3 were approximately $190 million in
both 1996 and 1995. 

     Rationale for One-Alpha D-2 Therapy - D-hormone replacement therapy
can compensate for deficient production of D-hormones in ESRD and,
thereby, lower elevated blood levels of PTH.  The Company believes that
one-alpha D-2 may be more effective and better tolerated by certain ESRD
patients with secondary hyperparathyroidism than currently approved D-hormone
therapies.  Oral and intravenous calcitriol and oral one-alpha D3
are effective therapies, but they frequently cause transient toxic side
effects (hypercalcemia and hyperphosphatemia) in some patients at the
prescribed dosages.  When these drugs are administered in lower, safer
dosages, efficacy decreases.  Thus, current clinical experience suggests
that calcitriol and one-alpha D3 are limited in their therapeutic
usefulness because of inherent toxicities.  Importantly, the frequency of
toxic side effects observed with these drugs is expected to increase with
nephrologists' growing preference for using calcium preparations as
dietary phosphate binders.  The Company's pre-clinical and clinical
research with one-alpha D-2 suggests that this synthetic prohormone has a
lower toxicity than calcitriol or one-alpha D3.

     Other Indications - Beyond one-alpha D-2, the Company has designed,
synthesized, and conducted early preclinical evaluations on a number of
novel D-hormones and analogs having potential efficacy in the treatment of
primary hyperparathyroidism, osteoporosis, psoriasis, prostate cancer,
breast cancer, and colon cancer.  Like one-alpha D-2, these compounds are
characterized by apparent lower toxicity than those previously approved
for oral or intravenous administration.  Certain compounds in the
Company's proprietary portfolio may have 10- to 100-fold reductions in
calcemic activity despite apparent high activities at the target tissue
level, making them promising oral or intravenous therapies for such
diseases.  These diseases all involve tissues which often contain
intracellular receptors for D-hormones and, therefore, may be responsive
to the Company's compounds.

     Like secondary hyperparathyroidism, primary hyperparathyroidism is a
disease characterized by bone demineralization.  It is a condition in
which the secretion of PTH from the parathyroid glands is abnormally
elevated, causing increased breakdown of bone.  Primary
hyperparathyroidism is diagnosed in more than 65,000 women and 35,000 men
each year in the United States; its prevalence in most foreign countries
is similarly high.  No specific drug therapies are available for treating
primary hyperparathyroidism; therefore, surgical removal of some or all of
the parathyroid glands often is necessary.  The Company believes that
certain of its proprietary  compounds may be effective in treating this
disease.

     Breast, prostate, and colon tumor cells usually contain intracellular
D-hormone receptors.  The Company's preliminary in vitro studies have
suggested that these cells, when exposed to selected D-hormone compounds,
show reduced growth rates.  These cancers are highly prevalent in the
United States and Europe.  Unfortunately, the available therapies for
these cancers have significant adverse side effects and limited
efficacies.  The Company believes that some of its compounds may be
developed as effective and safer alternatives to currently approved
treatments.

Product Development Program

     Phase 2 Clinical Trials of One-Alpha D-2 - The Company completed its
first Phase 2 clinical study in October 1995, which examined the efficacy
of oral one-alpha D-2 in reducing elevated blood PTH levels in ESRD
patients on hemodialysis.  The study was conducted at the University of
California-Los Angeles ("UCLA") and at two satellite sites and the key
results were published in a leading nephrology journal, "Kidney
International" (1997; 51:317-323).

     The Company completed its second Phase 2 clinical trial in May 1996.
The main purposes of this study were to expand the positive results of the
first Phase 2 trial and to optimize the one-alpha D-2 dosing regimen for
the Phase 3 clinical studies.  The key results of this study, conducted at
UCLA and a satellite site, were recently published in a widely circulated
nephrology journal, "Dialysis & Transplantation" (1997; 26,9: 583-595).

     Phase 3 Clinical Trials of Oral and Intravenous One-Alpha D-2 - Two
Phase 3 studies of oral one-alpha D-2 were completed according to a common
protocol.  They contained open label and double-blind, placebo-controlled
treatment periods and were conducted in multiple dialysis centers located
in the United States.  These trials were finished in August 1997.  They
are intended to provide the basis for marketing approval for orally
administered one-alpha D-2 in the United States.  Overall the results
which are currently available from an ongoing study suggest to leading
researchers that one-alpha D-2, when given at the intermittent dosage
regimen studied, is efficacious and safe in the treatment of secondary
hyperparathyroidism in ESRD.

     An additional Phase 3 trial with intravenously administered one-alpha
D-2 was initiated in July 1997 with completion targeted for early 1998.
This trial is intended to provide the basis for marketing approval for
intravenous one-alpha D-2 in the United States as a treatment for
secondary hyperparathyroidism in ESRD.  There can be no assurance that the
Company will be able to complete the trial by the projected date.  There
can be no assurance that final data from all Phase 3 clinical trials will
confirm the safety and efficacy of clinical use of one-alpha D-2.
Furthermore, there is no assurance that even if the trials yield
confirming data, that such data will be accepted by the FDA as suitable
evidence of safety and efficacy.

     Other Clinical Trials of One-Alpha D2 - The Company plans to conduct
additional  clinical trials on one-alpha D-2 or other compounds in (1)
pre-dialysis patients exhibiting early signs of hyperparathyroidism
secondary to advanced renal insufficiency, (2) patients with severe
primary hyperparathyroidism, (3) elderly patients exhibiting mild
secondary hyperparathyroidism who are at heightened risk of developing
osteoporosis, (4) patients with psoriasis and/or (5) patients with
prostate cancer who no longer respond to therapies.

Marketing and Distribution

     The Company has not decided how it will market one-alpha D-2 for
secondary hyperparathyroidism associated with ESRD.  Given that the target
population is small and accessible through readily identifiable
hemodialysis units, the Company may elect to conduct its own marketing
program.  Alternatively, one-alpha D-2 may be marketed through one or more
pharmaceutical companies under licensing or distribution agreements with
the Company.  No assurance can be given that the Company will be able to
market one-alpha D-2 on its own or find a pharmaceutical company to
license one-alpha D-2. 

     The Company intends to conduct early-stage development on selected
second-generation compounds with the goal of entering into exclusive
development and marketing agreements with larger pharmaceutical companies
which will obtain approval for and market these drugs.  The Company also
will conduct later-stage development of selected compounds, with the
ultimate goal of directly selling a line of products in certain niche
markets.

Manufacturing

     The Company has no manufacturing facilities.  The Company relies on
contractors to manufacture its proprietary compounds and finished drug
products.  Such contractors, under agreements with the Company, focus on
exploratory research, bulk pharmaceutical production, and the manufacture
and packaging of finished pharmaceutical products, as described below:

     Exploratory Research - The principal aim of the Company's exploratory
research is the synthesis of new compounds identified by the Company which
may possess high biological activity and low toxicity.  A secondary goal
is to discover more efficient and cost-effective synthetic routes to such
compounds, to facilitate the production of analogues, isomers, metabolites
and radioisotopically labeled forms of the Company's investigational
drugs.

     Bulk Pharmaceutical Production - Contractors produce bulk drug
substances according to current Good Manufacturing Practices ("cGMP") for
formulation into pharmaceutical dosage forms, and ultimate administration
to human subjects.  Production of cGMP-grade one-alpha D-2 has been scaled
up to a level sufficient to support commercialization of a finished drug
product in both North America and Europe.

     Finished Drug Products - Other contractors manufacture and package
soft gelatin capsules and sterile formulations containing one-alpha D-2 on
a commercial scale.  The processes involved have been validated for
inclusion in a New Drug Application ("NDA").  These contractors or others
will manufacture and package formulation containing second-generation
compounds for use in clinical studies.

Patents and Proprietary Rights

     The Company relies in part upon know-how, trade secrets, trademarks
and copyrights, and patents to protect its products in the United States
and other countries.

     Patent protection is available for the chemical composition of a
drug, the process for making a drug, and the use of a drug.  A compound
patent generally affords the broadest protection as it protects the
chemical composition of the drug itself.  A compound patent gives the
patent owner the right to exclude others from making, using or selling
drugs having or containing the patented chemical composition.  A process
patent only protects a particular process employed for making a drug.
Other processes may be available which are not covered by the process
patent and which could be used by competitors to make the same drug
without infringing the process patent.  A use patent only protects a
particular use of the drug.  The drug may be approved for other uses which
are not covered by the use patent.  A competitor may thus sell the drug
for such other approved uses without infringing the use patent.

     Compound patents covering one-alpha D-2 have expired and cannot be
renewed or extended.  The Company owns patents covering the use of one-alpha
D-2 for the prevention and treatment of secondary
hyperparathyroidism and  metabolic bone disease, including bone disease
associated with renal osteodystrophy.  These patents have issued in the
United States and Europe.  Patent applications for similar coverage are
pending in other countries, including Japan.  The Company also owns United
States patents covering the use of one-alpha D-2 for treating
hyperparathyroidism secondary to end stage renal disease.  Foreign
counterpart applications are pending.  Recently, the Company has received
a United States patent for the use of one-alpha D-2 and other proprietary
D-hormone compounds for treating prostate cancer.  Foreign counterpart
applications are pending.  The Company does not know whether the claims of
its issued patents are sufficiently broad to provide meaningful protection
or will be invalidated.  The Company also does not know whether any of the
pending patent applications will result in the issuance of a patent, or if
issued, whether claims ultimately allowed will provide significant
proprietary protection or will be invalidated.

     The Company has an exclusive license from the WARF to practice any of
the WARF's process patents for the synthesis of one-alpha D-2.  Under this
license, WARF has agreed not to license others under its process patents
to synthesize one-alpha D-2.  The Company also has its own patent
applications pending in the United States and other countries for methods
of synthesizing one-alpha D-2.  The Company does not know at this time
whether it will manufacture one-alpha D-2 or license others to do the
same.  The Company also does not know whether its pending patent
applications will result in the issuance of a patent or, if issued,
whether claims ultimately allowed will provide significant proprietary
protection or will be invalidated.

     The Company has issued patents and has pending patent applications in
other countries relating to its other proprietary D-hormones.  Patents and
pending applications include claims to proprietary compounds, methods of
synthesizing the compounds, methods of use of the compounds for treatment
of disease, and methods of delivery of active D-hormones.  The Company
does not know whether these other compounds will ultimately be
commercialized, or if commercialized, whether the aforementioned patents
and patent applications will ultimately provide significant protection or
be invalidated.

     The commercial success of the Company will also depend in part on not
infringing patents or proprietary rights of others.  The Company may be
required to obtain licenses to third-party technology necessary to conduct
the Company's business.  Any failure by the Company to license at
reasonable cost any technology required to commercialize its technologies
or products would have an adverse impact on the Company.

     Litigation, which could result in substantial cost to the Company,
may also be necessary to enforce any patents issued to the Company or to
determine the scope and validity of other parties' proprietary rights.  If
the outcome of any such litigation is adverse to the Company, the
Company's business could be adversely affected.  To determine the priority
of inventions, the Company may have to participate in interference
proceedings declared by the United States Patent Office or similar
proceedings in foreign patent offices, which could result in substantial
cost to the Company and may result in an adverse decision as to the
priority of the inventions licensed to the Company.

     The Company also relies on unpatented trade secrets.  The Company
requires its employees, consultants, and advisors to execute
confidentiality agreements upon the commencement of an employment or a
consulting relationship with the Company.  The agreements provide that all
confidential information developed or made known to the individual during
the course of the relationship shall be kept confidential and not
disclosed to third parties except in specified circumstances.  The
agreements also provide that all inventions conceived by the individual
during this employment and relating to the business of the Company shall
be the exclusive property of the Company.  There can be no assurance,
however, that these agreements will provide meaningful protection for the
Company's trade secrets in the event of unauthorized use or disclosure of
such information.  Additionally, others may independently develop
substantially equivalent proprietary information and techniques, or
otherwise gain access to the Company's trade secrets or disclose such
technology. 

     The Company has granted Draxis Health Inc. a paid-up license to use
and market in Canada one-alpha D-2 for osteoporosis and other metabolic
bone diseases.  The Company has also granted Draxis Health Inc. a license
in Canada to all know-how developed by or on behalf of the Company
relating to the use of one-alpha D-2 for those indications.

Competition

     Numerous therapies are approved in the United States or European
countries for indications targeted by the Company's research and
development, and many others are under active development.  Some of these
products may be more effective than the Company's products.  A number of
the Company's current and potential competitors have significantly greater
research, manufacturing, marketing and financial resources than the
Company.

     Abbott Laboratories markets intravenous calcitriol
(Calcijex(Registered)), and Hoffmann-LaRoche markets oral calcitriol
(Rocaltrol(Registered)).  Both drugs are approved for secondary
hyperparathyroidism associated with ESRD in the United States and certain
European countries.  A number of companies market oral one-alpha D3 in
Europe under various trade names.  Other companies, including Abbott
Laboratories, Amgen, Inc., Chugai Pharma Europe Ltd. and NPS
Pharmaceutical, Inc., are also developing new therapies or have filed New
Drug Applications for secondary hyperparathyroidism associated with ESRD
for the United States or European markets.

     Numerous pharmaceutical companies market approved therapies for
breast, prostate, and colon cancers, including inhibitors of
adrenocorticosteroid biosynthesis (e.g., testolactone and
aminoglutethimide), inhibitors of testosterone biosynthesis (e.g.,
leuprolide acetate and flutamide) and inhibitors of cell proliferation
(e.g., cyclophosphamide, doxorubicin hydrochloride, fluoracil,
methotrexate and vinblastine and vincristine sulfates).  Investigational
therapies include targeted antineoplastic agents (cytotoxic agents
attached to monoclonal antibodies which seek out malignant cells), and
improved antiproliferative agents.  Leo Pharmaceuticals is developing
competitive D-hormones for breast cancer and possibly other cancers.  

     Certain investigational products for primary and secondary
hyperparathyroidism  and cancers could receive earlier regulatory approval
and be better accepted in the market than the Company's products.

Regulation

     The production and marketing of the Company's proposed products and
its research and development activities are subject to regulation for
safety, efficacy and quality by numerous governmental authorities in the
United States and other countries.  In the United States, drugs are
subject to rigorous FDA regulation.  The Federal Food, Drug and Cosmetic
Act, as amended, and the regulations promulgated thereunder, and other
federal and state statutes and regulations, govern, among other things,
the testing, manufacture, safety, efficacy, labeling, storage, record
keeping, approval, advertising and promotion of the Company's products.
Product development and approval within this regulatory framework takes a
number of years and involves the expenditure of substantial resources.

     The steps required before a pharmaceutical agent may be marketed in
the United States include (i) preclinical laboratory tests, in vivo
preclinical studies and formulation studies, (ii) the submission to the
FDA of an investigational new drug ("IND") application for human clinical
testing, which must become effective before human clinical trials
commence, (iii) adequate and well-controlled human clinical trials to
establish the safety and efficacy of the drug, (iv) the submission of a
New Drug Application ("NDA") to the FDA and (v) the FDA approval of the
NDA prior to any commercial sale or shipment of the drug.  Each domestic
drug manufacturing establishment must also be registered with, and
approved by, the FDA under cGMP regulations.  Domestic drug manufacturing
establishments are subjected to biennial inspections by the FDA and must
comply with cGMP regulations.  To supply products for use in the United
States, foreign manufacturing establishments must comply with cGMP and are
subject to periodic inspection by the FDA or by corresponding regulatory
agencies in their home countries under reciprocal agreements with the FDA.

     Preclinical tests include laboratory evaluation of product chemistry
and formulation, as well as animal studies to assess the potential safety
and efficacy of the product.  Compounds must be formulated according to
cGMP, and preclinical safety test must be conducted by laboratories that
comply with FDA regulations regarding current Good Laboratory Practices
("GLP").  The results of the preclinical tests are submitted to the FDA as
part of an Investigational New Drug ("IND") application and are reviewed
by the FDA prior to the commencement of human clinical trials.  Unless the
FDA objects to an IND, the IND will usually become effective 30 days
following its receipt by the FDA.  There can be no assurance that
submission of an IND will result in FDA authorization to commence clinical
trials.

     Clinical trials involve the administration of the IND to healthy
volunteers or to patients under the supervision of a qualified principal
investigator.  Clinical trials are conducted in accordance with Good
Clinical Practices under protocols that detail the objectives of the
study, the parameters to be used to monitor safety and the efficacy
criteria to be evaluated.  Each protocol must be submitted to the FDA as
part of the IND.  Further, each clinical study must be conducted under the
auspices of an Institutional Review Board ("IRB") at the institution at
which the study will be conducted.  The IRB will consider, among other
things, ethical factors, the safety of human subjects and the possible
liability of the institution.

     Clinical trials typically are conducted in three sequential phases,
but the phases may overlap.  In Phase 1, the initial introduction of the
drug into healthy subjects, the drug is tested for safety (adverse
effects), dosage tolerance, metabolism, distribution, excretion and
pharmacodynamics (clinical pharmacology).  Phase 2 involves studies in a
limited patient population to (i) determine the efficacy of the drug for
specific, targeted indications, (ii) determine dosage tolerance and
optimal dosage and (iii) identify possible adverse effects and safety
risks.  When a compound is found to be effective and to have an acceptable
safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to
evaluate further clinical efficacy and to test further for safety within
an expanded patient population at geographically dispersed clinical study
sites.  There can be no assurance that Phase 1, Phase 2, or Phase 3
testing will be completed successfully within any specific time period, if
at all, with respect to any of the Company's products subject to such
testing.  Further more, the Company or the FDA may suspend clinical trials
at any time if it is felt that the subjects or patients are being exposed
to an unacceptable health risk.

     The results of the pharmaceutical development, preclinical studies
and clinical studies are submitted to the FDA in the form of an NDA for
approval of the marketing and commercial shipment of the drug.  The
testing and approval process is likely to require substantial time and
effort, and there can be no assurance that any approval will be granted on
a timely basis, if at all.  The FDA may deny an NDA if applicable
regulatory criteria are not satisfied, require additional testing or
information, or require post-marketing testing and surveillance to monitor
the safety of the Company's products if the FDA does not view the NDA as
containing adequate evidence of the safety and efficacy of the drug.
Notwithstanding the submission of such data, the FDA may ultimately decide
that the application does not satisfy its regulatory criteria for
approval.  Moreover, if regulatory approval of a drug is granted, such
approval may entail limitations on the indicated uses for which it may be
marketed.  Finally, product approvals may be withdrawn if compliance with
regulatory standards is not maintained or if problems occur following
initial marketing.

     Among the conditions for NDA approval is the requirement that the
prospective manufacturer's quality control and manufacturing procedures
conform to cGMP, which must be followed at all times.  In complying with
standards set forth in these regulations, manufacturers must continue to
expend time, money and effort in the area of production and quality
control to ensure full technical compliance.

     The Company filed an IND for one-alpha D-2 with the FDA in March
1988; FDA clearance was received, and a series of Phase 1 and 2 clinical
studies in an osteoporotic population began in April 1988.  A Phase 2
clinical study was started in December 1994 in patients with secondary
hyperparathyroidism associated with ESRD; the Company completed this trial
October 1995.  A second Phase 2 trial to optimize the one-alpha D-2 dosing
regimen was completed in May 1996.  Multi-centered Phase 3 clinical trials
began in May 1996, the last of which the Company estimates will be
completed in 1998.  A Phase 1 clinical study in a prostate cancer
population began in November 1996; a Phase 1 clinical study in elderly
osteopenic patients with secondary hyperparathyroidism began in July 1997. 

     The Company's ability to market a product outside the United States
is contingent upon receiving a marketing authorization from the
appropriate regulatory authority.  This foreign regulatory approval
process includes all of the risks associated with FDA approval set forth
above.  

Research and Development

     As of June 30, 1997, the Company had 11 employees engaged in research
and development.  During fiscal years 1995, 1996, and 1997, the Company's
research and development expenses were $535,195, $1,157,914, and
$2,885,127, respectively.

Product Liability Insurance

     The Company does not maintain product liability insurance.  While the
Company has not experienced any material product liability claims to date,
if such claims arise in the future, they could have a material adverse
effect on the results of operations or financial condition of the Company.

Employees

     As of June 30, 1997, Bone Care, including its subsidiary Continental
Assays Corporation, had 15 full-time employees, including 11 in research
and development and 4 in administration.  Three of Bone Care's employees
have Ph.Ds.  None of the Company's employees is represented by a union.
The Company considers its employee relations to be excellent.


Transition Agreement

     Pursuant to a Transition Agreement (the "Transition Agreement")
between the Company  and Lunar, Dr. Richard B. Mazess, Robert A. Beckman,
and Carl E. Gulbrandsen, and other employees of Lunar perform certain
services and provide certain assistance to the Company.  Such services
include certain legal, treasury, financial, accounting, insurance
administration, employee benefit and other services.  As compensation for
the various services provided to the Company pursuant to the Transition
Agreement, the Company pays Lunar a monthly fee of $7,000 plus certain
costs in respect of any services provided.  Under the Transition
Agreement, Lunar leases to the Company for a monthly fee of $2,000
approximately 3,000 square feet in its principal offices in Madison,
Wisconsin.  The Transition Agreement runs until May 8, 1999; however, the
Company may terminate the Transition Agreement prior to the completion of
the term upon giving Lunar 90 days notice.  See Note 4 of the "Notes to
Consolidated Financial Statements".

Glossary of Defined Terms

One-alpha D-2 - One-alpha hydroxyvitamin D-2, a synthetic D-prohormone
which is metabolized primarily to one-alpha,25-D-2.

One-alpha D3 - One-alpha hydroxyvitamin D3 (also known as alfacalcidol), a
synthetic D-prohormone which is metabolized primarily to one-alpha,25-D-2.

One-alpha,25-D-2 - One-alpha,25-dihydroxyvitamin D-2, the natural D-
hormone formed from vitamin D-2.

One-alpha,25-D3 - One-alpha,25-dihydroxyvitamin D3, the natural D- hormone
formed from vitamin D3.

Calcemic - Pertaining to excessive calcium in the blood.

Calcification - The process by which organic tissue becomes hardened by
deposition of calcium salts within its substance.

ESRD - End-stage renal disease.

FDA - Food and Drug Administration.

Hemodialysis - Removal of certain elements (usually biological wastes)
from the blood through dialysis.

Hyperparathyroidism - A condition in which blood levels of parathyroid
hormone are excessively high.

IND - Investigational New Drug application.

in vivo - Within the living body.

in vitro - In an artificial environment (e.g., a petri dish or test tube).

IRB - Institutional Review Board

Metabolic bone diseases - Endocrinological disorders characterized by loss
of bone mineral.

NDA - New Drug Application.

Nephrologist - Kidney specialist.

Nephron - The anatomical and functional unit of the kidney.

Osteitis fibrosa cystica - Inflammation of the bone (with fibrous
degeneration and formation of cysts) caused by hyperfunction of the
parathyroid gland.

Osteomalacia - A condition characterized by softening of the bones.

pg/mL - Picogram (1.0 x 10(superscript -12) gram) per milliliter.

PTH - Parathyroid hormone.

WARF - Wisconsin Alumni Research Foundation.


ITEM 2.  PROPERTIES

     The Company leases approximately 3,000 square feet of office,
laboratory, and warehouse space in Madison, Wisconsin, from Lunar. The
lease expires on May 8, 1999.

ITEM 3.  LEGAL PROCEEDINGS

     The Company may be a defendant from time to time in actions arising
out of its ordinary business operations.  There are no legal proceedings
known to the Company at this time which it believes would likely have a
material adverse impact on the results of operations or financial
condition of the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

     None.

PART II

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

     The shares of common stock have been quoted on The Nasdaq Stock
Market since May 9, 1996, under the symbol "BCII."  The following table
sets forth high and low sales prices as reported on The Nasdaq Stock
Market for fiscal years 1997 and 1996 as indicated.

            First       Second      Third      Fourth
1997        Quarter     Quarter     Quarter    Quarter
----       --------    ---------   --------   --------
High        $7-1/2        $8        $13-1/4      $14
Low           $6          $6         $7-1/4     $11-1/2

1996 (May 9, 1996 through June 30, 1996)
----
High           -           -           -         $8-1/2
Low            -           -           -         $5-7/8

       As of September 24, 1997, Bone Care's common stock was held by
approximately 2,100 stockholders of record or through nominee or street
name accounts with brokers.



       The Company has not paid any cash dividends on its shares of common
stock since its spin-off from Lunar on May 8, 1996, and does not expect to
pay any cash dividends in the foreseeable future.  Any payment of
dividends would depend upon the Company's pattern of growth,
profitability, financial condition, and such other factors as the Board of
Directors may deem relevant.

ITEM 6.  SELECTED FINANCIAL DATA

  The following selected consolidated financial data for each of the five
years in the period ended June 30, 1997 have been derived from the audited
consolidated financial statements of Bone Care. The consolidated financial
statements for the fiscal years ended June 30, 1993 through 1997 have been
audited by KPMG Peat Marwick LLP, independent auditors. References to a
year are to Bone Care's fiscal year ended June 30, unless
otherwise designated.

  The following data should be read in conjunction with the consolidated
financial statements and notes thereto included elsewhere in this Annual
Report and "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

                         STATEMENT OF OPERATIONS DATA

Year Ended June 30,             1997      1996     1995   1994      1993
                                 ----     ----     ----    ----     ----       
                                   (in thousands, except per-share data) 
REVENUES
Licensing revenues               $-        $-       $15     $-       $600
Bulk drug sales and
  other revenues                   39        19        -      -        226
-------------------------------------------------------------------------------
                                   39        19       15      -        826 

OPERATING  EXPENSES
Cost of sales                       38        12       -       -        158
Research and development         2,885     1,158      535     329       426
General and administrative         439       197      172     165       226
-------------------------------------------------------------------------------
                                  3,362    1,367      707      494      810
-------------------------------------------------------------------------------
                                                                              
Income (loss) from operations    (3,323)  (1,348)    (692)    (494)      16
OTHER  INCOME  (EXPENSE)
Interest income                     529      103        2        9       22
Interest expense   Lunar
  Corporation                        -       (13)      (9)       -        -  
-------------------------------------------------------------------------------
                                    529       90       (7)       9       22
-------------------------------------------------------------------------------
                                                                              
Income (loss) before                        
  income taxes                   (2,794)   (1,258)    (699)    (485)      38
Income tax expense                   -         -        -        38      867
-------------------------------------------------------------------------------
                                                                              
NET LOSS                        ($2,794)   ($1,258)   ($699)   ($485)     $-  
===============================================================================
                                                                              
NET  LOSS  PER  SHARE            ($0.64)    ($0.51)   ($0.82)  ($0.57)    $-  
===============================================================================
                                                                              
Weighted average shares
  outstanding                      4,357     2,447       849      849      849
===============================================================================
                                                                               


                                BALANCE SHEET DATA

                                                    As of June 30,
                                       1997    1996     1995    1994      1993
                                       ----    ----     ----     ----     ----
                                                   (in thousands) 
Working capital                      $ 8,103 $11,004    ($427)    $198     $584
Total assets                           9,900  12,261    1,029    1,280    1,771
Long-Term liabilities                    -      -         -        -        -  
Shareholders' equity                   9,420  12,182      559    1,258    1,743 


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

          Overview - The Company commenced operations in 1987 when it licensed
one-alpha D-2 from the WARF.  The Company selected one-alpha D-2 for
development because of its lower toxicity relative to D-hormone compounds
approved for oral or intravenous administration.  The Company was
primarily involved in the development of one-alpha D-2 for treatment of
osteoporosis between April 1987 and March 1994.  The preclinical and
clinical studies of one-alpha D-2 during this period were largely funded
by licensing agreements with each of SmithKline Beecham Pharmaceuticals
("SmithKline Beecham") and Takeda Chemical Industries, Ltd. ("Takeda").
When the results of a pilot clinical study were released in late 1992,
SmithKline Beecham terminated its licensing agreement with the Company due
to lower-than-expected bone mineral density changes in patients taking
one-alpha D-2 versus placebo.  This termination in part led to the
termination by Takeda of its license agreement in early 1993.  The Company
halted further clinical trials for osteoporosis because the projected
aggregate costs associated with funding clinical trials for an
osteoporosis indication exceeded $50 million.  Over the last several
years, the Company has begun to focus a considerable amount of its
resources on the development of one-alpha D-2 as a treatment for secondary
hyperparathyroidism associated with ESRD due to lower development costs
and the Company's belief that the drug would be more effective than
existing therapies.  Two Phase 3 clinical trials with oral one-alpha D-2
began in May 1996 and were completed in August 1997.  A multi-centered
Phase 3 clinical trial with intravenous one-alpha D-2 commenced in July
1997, which the Company estimates will be completed in early 1998.
Marketing approvals, if granted in the United States and Europe, would
occur in 1998 or 1999, at the earliest. 

          In September 1997, the Company began a Phase 3 clinical program with
oral one-alpha D-2 in pre-dialysis patients exhibiting secondary
hyperparathyroidism.  The expected completion date for these trials is
September 1998.  Marketing approval, if granted in the United States,
would occur in 1999 or 2000, at the earliest.

          The Company also is conducting a Phase 1/Phase 2 trial with oral
one-alpha D-2 in patients exhibiting advanced androgen-independent prostate
cancer.  This study began in November 1996, and the Company estimates its
completion in 1998.

          Additional Phase 1/Phase 2 clinical trials are planned in 1997 or
1998 for oral one-alpha D-2 in patients with osteoporosis and with
metastatic breast cancer and for a second generation compound, LR-103, in
patients with prostate and/or breast cancer.

          The success of the Company will depend on its ability to develop,
license, and market drugs.  The Company has not developed any commercial
products to date, and there can be no assurance that it will be successful
in developing or marketing any commercial products in the future.  Its
efforts currently are focused primarily on one-alpha D-2.  The outcome of
the Company's efforts to develop, market, and license drugs will depend on
a number of factors, including the results of clinical trials, the ability
to procure regulatory approvals, the success of competing products,
regulatory developments (including those relating to healthcare reform),
third party reimbursement policies, the Company's ability to contract for
production from third parties, and the extent to which the Company is able
to develop its own marketing capability or enter into satisfactory
marketing arrangements with third parties.

          YEAR ENDED JUNE 30, 1997 VERSUS 1996 -  The Company's
D-hormone-related research and development expenses totaled $2,885,000 in
fiscal 1997 compared to $1,158,000 in fiscal year 1996.  The increase is due
primarily to higher expenditures on one-alpha D-2 clinical trials for
secondary hyperparathyroidism associated with ESRD.  This increase is also
due in part to the Company assuming research and development expenses for
D-hormone analogs contributed by Lunar Corporation in October 1995.
Interest income was $528,000 in fiscal 1997 compared to $103,000 in fiscal
year 1996.  The increase is primarily the result of interest earned on
capital contributions made in fiscal 1996 by Lunar and Draxis Health Care,
Inc., the Company's shareholders at the time of the contributions.  On May
8, 1996, Lunar distributed its ownership of the Company to its
shareholders.

          At June 30, 1997, the Company had state tax net operating loss
carryforwards of approximately $4,797,000 and state research and
development tax credit carryforwards of approximately $82,000, which will
begin expiring in 2009 and federal net operating loss carryforwards of
approximately $2,989,000 and research and development tax credit
carryforwards of approximately $169,000, which will begin expiring in
2011.  During the period from June 30, 1990 to May 8, 1996, Lunar realized
certain federal income tax savings that were attributable to losses
incurred by Bone Care.  As part of a tax disaffiliation agreement, Lunar
paid the Company $725,000 for the benefit of these tax savings. 

          YEAR  ENDED  JUNE  30, 1996  VERSUS  1995   The Company's D-hormone
related research and development expenses totaled $1,158,000 in fiscal
year 1996 compared to $535,000 in fiscal year 1995.  The increase is due
primarily to higher expenditures on one-alpha D-2 clinical trials for
secondary hyperparathyroidism associated with ESRD.  Interest expense was
$13,000 in fiscal year 1996 compared to $9,000 fiscal year 1995.  Interest
expense during these periods relates exclusively to loans made by Lunar to
the Company.  Interest income was $103,000 in fiscal year 1996 and $3,000
in fiscal year 1995. The increase is primarily the result of interest
earned on capital contributions. In October 1995, in exchange for additional
shares of Bone Care Common Stock, Lunar canceled outstanding loans in the
amount of approximately $635,000.  The Company's net loss for fiscal year 1996
was $1,258,000 compared to its net loss of $699,000 for fiscal year 1995.  

          LIQUIDITY  AND  CAPITAL  RESOURCES   The Company has historically
financed its operations through a combination of capital contributions,
license agreements and sales of bulk drugs and contract services.  All of
these third party collaborative research and licensing agreements have
either expired or terminated.

          Cash and cash equivalents decreased $2,529,000 to $8,532,000 for the
year ended June 30, 1997.  These funds are currently invested primarily in
a government securities money market mutual fund.  This decrease is primarily
due to increased research and development activities, including clinical trials
of one-alpha D-2 and pre-clinical development of other D-hormones. 

          Management believes that the current level of cash and cash
equivalents are adequate to finance the Company's current operations at
least through the end of calendar 1998.  After that time, the Company will
require additional funds for research and development activities.  Additional
funds also could be required before that time if the Company were to expand the
scope of its activities.  There can be no assurance that additional financing
will be available in the future on acceptable terms.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          In January 1997, the SEC released amended Rule 4-08 of Regulations
S-X (General Notes to the Financial Statements), as part of Release No.
33-7386, requiring additional disclosure with respect to accounting policies
followed in connection with the accounting for derivative financial instruments
and derivative commodity instruments.  This disclosure is required for all
periods ending after June 15, 1997, unless a registrant's most recent Form 10-K
is in compliance.  The Release also added Item 305 to Regulation S-K to require
quantitative and qualitative disclosures outside the financial statements about
market risk inherent in derivative and other financial instruments.  The
requirements of Item 305 become effective for non-bank registrants with market
capitalization in excess of $2.5 billion at January 28, 1997, for filings that
include annual financial statements for periods ending after June 15, 1997.
For registrants with market capitalization under $2.5 billion, the
requirements of Item 305 become effective for filings that include annual
financial statements for periods ending after June 15, 1998.  The Registrant
believes it is currently in compliance with amended Rule 4-08 of Regulation S-X
in its most recent Form 10-K.  Based on the Registrant's market capitalization
being under $2.5 billion on January 28, 1997, the requirement of Item 305 will
commence with its Form 10-K for the period ended June 30, 1998, at which time
the additional requirements of Item 305 will be addressed.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                  CONSOLIDATED  STATEMENTS  OF  OPERATIONS
              BONE  CARE  INTERNATIONAL,  INC.  AND  SUBSIDIARY


      Years ended June 30,               1997            1996           1995
                                         ----            ----           ----
 
REVENUES                                $39,425        $18,620        $15,000 

OPERATING EXPENSES
        Cost of sales                    38,304         11,918           -    
        Research and development      2,885,127      1,157,914        535,195
        General and administrative      438,831        196,370        171,788
-------------------------------------------------------------------------------
                                      3,362,262      1,366,202        706,983
-------------------------------------------------------------------------------
LOSS  FROM  OPERATIONS               (3,322,837)    (1,347,582)      (691,983)

OTHER  INCOME  (EXPENSE)
        Interest income                 528,492        103,310          2,588
        Interest expense                   -           (13,495)        (9,344)
-------------------------------------------------------------------------------
                                        528,492         89,815         (6,756)
-------------------------------------------------------------------------------
NET  LOSS                          $ (2,794,345)   ($1,257,767)     ($698,739)
===============================================================================

NET  LOSS  PER  COMMON  SHARE            ($0.64)        ($0.51)        ($0.82)
===============================================================================
See accompanying notes to consolidated financial statements.


                         CONSOLIDATED  BALANCE  SHEETS
              BONE  CARE  INTERNATIONAL,  INC.  AND  SUBSIDIARY
                                    ASSETS


June 30,                                                  1997        1996
                                                          -----       -----
CURRENT  ASSETS
        Cash and cash equivalents                      $ 8,531,714  $11,060,843
        Receivables                                         -             1,619
        Inventory                                           52,565        -    
        Prepaid expenses                                    -            20,695
-------------------------------------------------------------------------------
TOTAL  CURRENT  ASSETS                                    8,584,279  11,083,157

PROPERTY,  PLANT  AND  EQUIPMENT   AT  COST
        Lab improvements                                     21,092      21,092
        Furniture and fixtures                               24,625      20,390
        Machinery and other equipment                       263,970     215,979
-------------------------------------------------------------------------------
                                                            309,687     257,461

        Less accumulated depreciation                       226,737     192,677
-------------------------------------------------------------------------------
                                                             82,950      64,784

        Excess of cost over fair value of net
           assets acquired, net of accumulated
           amortization of $642,960 at June 30,
           1997 and $553,512 at June 30, 1996               716,957   806,405

        Patent fees, net of accumulated amortization of
           $359,462 at June 30, 1997 and $251,462
           at June 30, 1996                                 516,270   306,979
-------------------------------------------------------------------------------
                                                        $ 9,900,456 $12,261,325
===============================================================================
See accompanying notes to consolidated financial statements.




                     CONSOLIDATED  BALANCE  SHEETS (cont.)
               BONE  CARE  INTERNATIONAL,  INC.  AND  SUBSIDIARY
                    LIABILITIES  AND  SHAREHOLDERS'  EQUITY


June 30,                                                    1997        1996
                                                            ----        ----
CURRENT  LIABILITIES
        Accounts payable                                  $141,445      $73,236
        Accrued liabilities:
           Accrued clinical study and research costs       291,165          -  
           Compensation payable                             15,447        4,133
           Property, payroll and other taxes                 8,388        1,750
           Other                                            24,500          -  
                                                                             
-------------------------------------------------------------------------------
TOTAL  CURRENT  LIABILITIES                               480,945       79,119 

SHAREHOLDERS'  EQUITY
        Preferred stock
             authorized 1,000,000 shares of $.001
             par value; none issued                          -             -   
                  
        Common stock
             authorized 14,000,000 shares of no par
             value; issued and outstanding, 4,361,191
             and 4,353,691 at June 30, 1997 and 1996    11,393,958   11,393,883
        Additional paid-in capital                       3,555,850    3,524,275
        Accumulated deficit                             (5,530,297) (2,735,952)
-------------------------------------------------------------------------------
                                                         9,419,511   12,182,206
-------------------------------------------------------------------------------
                                                       $ 9,900,456  $12,261,325
===============================================================================
See accompanying notes to consolidated financial statements.




               CONSOLIDATED  STATEMENTS  OF  SHAREHOLDERS'  EQUITY
                BONE  CARE  INTERNATIONAL,  INC.  AND  SUBSIDIARY


Years ended June 30, 1997,
1996, and 1995                Number           Additional
                                of      Common  paid-in  Accumulated
                              shares    stock   capital    deficit    Total
                             -------   ------   --------   -------    ------
BALANCE  AT  JUNE 30, 1994          
                            848,942  $583,333 $1,453,984 ($779,446) $1,257,871

   Net loss for the year
    ended June 30, 1995         -         -        -      (698,739)  (698,739)
                                                                               
-------------------------------------------------------------------------------

BALANCE  AT  JUNE 30, 1995          
                             848,942   583,333 1,453,984 (1,478,185)  559,132

   Conversion of Lunar
    Corporation advances
    to common stock          107,401    634,683    -        -         634,683

   Contribution of Lunar
    Corporation D-hormone
    assets and all out-
    standing shares of 
    Continental Assays 
    Corporation for
    common stock           1,698,674    175,867     -        -         175,867

   Capital contributions
    by Lunar Corporation   1,698,674 10,000,000 1,285,291    -      11,285,291

   Capital contribution
    by Draxis Health, Inc.    -        -         60,000      -          60,000

   Payment from
    Lunar Corporation                  
    for tax benefit           -        -        725,000      -         725,000

   Net loss for the year
      ended June 30, 1996     -        -          -    (1,257,767)  (1,257,767)
                                                                               
-------------------------------------------------------------------------------

BALANCE  AT  JUNE 30, 1996          
                        4,353,691 11,393,883  3,524,275 (2,735,952) 12,182,206

   Issuance of shares under
     stock Option plan      7,500         75     31,575                 31,650

   Net loss for the year
     ended June 30, 1997    -          -          -     (2,794,345) (2,794,345)
                                                                             
-------------------------------------------------------------------------------
BALANCE AT June 30, 1997           
                      $4,361,191 $11,393,958 $3,555,850 ($5,530,297) $9,419,511
===============================================================================
See accompanying notes to consolidated financial statements.




                    CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
                BONE  CARE  INTERNATIONAL,  INC.  AND  SUBSIDIARY

Years ended June 30,                        1997        1996       1995
                                            -----       ----       ----
CASH  FLOWS
        FROM  OPERATING  ACTIVITIES

   Net loss                             ($2,794,345)($1,257,767)($698,739)

ADJUSTMENTS  TO  RECONCILE
   NET  LOSS  TO  NET  CASH
   USED  IN  OPERATING  ACTIVITIES

   Depreciation and amortization            231,508    182,378    115,094
  Changes in assets and liabilities:
   Decrease (increase) in
     receivables                              1,619     33,168      (785)
   Decrease (increase) in
     inventories                            (52,565)       -          -    
   Decrease (increase) in
     Prepaid expenses                        20,695     (2,695)     1,110
   Increase (decrease) in
     Accounts payable                        68,209    (70,909)    11,692
   Increase (decrease) in
     Accrued liabilities                    333,617      4,289     (8,431)
                                                                               
-------------------------------------------------------------------------------
NET  CASH  USED
      IN  OPERATING  ACTIVITIES          (2,191,262) (1,111,536) (580,059)
-------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.




                CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS  (cont.)
                BONE  CARE  INTERNATIONAL,  INC.  AND  SUBSIDIARY

Years ended June 30,                        1997           1996            1995
                                            ----           ----            ----
CASH  FLOWS
        FROM  INVESTING  ACTIVITIES

   Additions to property, plant
    and equipment                       ($ 52,226)      ($30,081)     ($15,254)
   Patent fees                           (317,291)       (87,597)      (26,501)
   Continental Assays cash contribution      -             6,832          -
-------------------------------------------------------------------------------
                                                                              
NET  CASH  USED
   IN  INVESTING  ACTIVITIES             (369,517)      (110,846)      (41,755)
-------------------------------------------------------------------------------
                                                                              
CASH  FLOWS
   PROVIDED  BY  FINANCING  ACTIVITIES

   Proceeds from
      Lunar Corporation advances              -          190,339       444,344
   Proceeds from
      Lunar Corporation capital
      contributions                           -       12,010,291           -
   Proceeds from
      Draxis Health, Inc. capital
      contribution                            -           60,000           -
   Proceeds from exercise of
      stock options                        31,650           -              -
-------------------------------------------------------------------------------
                                                                              
NET  CASH
   PROVIDED  BY  FINANCING  ACTIVITIES     31,650     12,260,630        444,344
-------------------------------------------------------------------------------
   Net increase (decrease)
      in cash and cash equivalents     (2,529,129)    11,038,248      (177,470)
   Cash and cash equivalents
      at beginning of year             11,060,843         22,595        200,065
-------------------------------------------------------------------------------
CASH  AND  CASH  EQUIVALENTS
   AT  END  OF  YEAR                  $ 8,531,714    $11,060,843        $22,595
===============================================================================
See accompanying notes to consolidated financial statements.




               NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
              BONE  CARE  INTERNATIONAL,  INC.  AND  SUBSIDIARY

(1) Summary of Accounting Policies

     PRINCIPLES  OF  CONSOLIDATION:  The consolidated financial statements
include the accounts of Bone Care International, Inc. and its wholly owned
subsidiary, Continental Assays Corporation (the Company).  All significant
intercompany accounts and transactions have been eliminated in
consolidation.

     DESCRIPTION  OF  BUSINESS:  Bone Care International, Inc. discovers,
develops, and commercializes D-hormones intended for a variety of
therapies.  Its lead drug, One-alpha D-2, is a new treatment for secondary
hyperparathyroidism associated with end stage renal disease.  Continental
Assays Corporation performs blood assays to determine the variety and
level of D-hormone metabolites in blood for both internal research and on
behalf of third parties.

     The Company was a subsidiary of Lunar Corporation (Lunar) until May
8, 1996.  The Board of Directors of Lunar declared a dividend, payable to
holders of record of Lunar common stock, of one share of the Company's
common stock for every two shares of Lunar common stock held of record on
April 24, 1996.  The distribution occurred on May 8, 1996, at which time
Lunar and the Company became separate companies.

     REVENUE  RECOGNITION: Revenues from assay services are recognized as
services are performed.

     CASH  AND  CASH  EQUIVALENTS: For purposes of the statements of cash
flows, the Company considers all highly liquid investments purchased with
original maturities of three months or less to be cash equivalents.

     INVENTORY: Inventory is stated at the lower of cost or market; cost
is determined by the first-in, first-out method.  Inventory consists of
raw materials.

     DEPRECIATION  AND  AMORTIZATION: Depreciation and amortization are
provided for in amounts sufficient to relate the cost of depreciable
assets to operations over their estimated service lives.  A combination of
straight-line and accelerated methods of depreciation are used for
financial statement and income tax reporting purposes.

     The cost of property and equipment are depreciated over the following
estimated useful lives:

     Asset classification                 Estimated useful life
     --------------------                 ---------------------
     Machinery, furniture, and fixtures         5-7 years
     Lab improvements                          31.5 years

     INTANGIBLE  ASSETS: The excess of cost over fair value of net assets
acquired is being amortized on a straight-line basis over a 15-year
period.  Legal costs incurred to register patents are amortized over a
period of up to 10 years.  The Company continuously reviews intangibles to
assess recoverability from future operations using undiscounted cash
flows.  Impairment would be recognized in operating results if a permanent
diminution in value occurred.  Impairment would be measured using fair
value.

     RESEARCH  AND  DEVELOPMENT  COSTS: Materials, labor, and overhead
expenses related to research and development projects are charged to
operations as incurred.

     STOCK-BASED COMPENSATION: Stock-based compensation related to
employees is recognized using the intrinsic value method and thus there is
no compensation expense for options granted with exercise prices equal to
the fair value of the Company's common stock on the date of the grant.
Stock-based compensation related to non-employees is not material.

     NET  LOSS  PER  SHARE:  Net loss per share is based on a weighted
average number of shares of common stock of 4,356,672, 2,447,014, and
848,942 for the years ended June 30, 1997, 1996 and 1995 respectively.
Common equivalent shares resulting from stock options have been excluded
as their effect is antidilutive.  

     INCOME  TAXES:  Income taxes are accounted under the assets and
liability method.  Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities
and their respective tax bases and operating loss and credit
carryforwards.  Deferred tax assets and liabilities are measured using
enacted rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled.  The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

     For the period prior to the May 8, 1996 distribution, the Company was
included in the consolidated Federal income tax return of Lunar.  Through
the date of distribution, tax expense has been calculated as if the
Company filed separate income tax returns; however, as a result of net
operating losses incurred, no income taxes have been provided for in the
years ended June 30, 1997, 1996 and 1995.  

     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS: The fair value of financial
instruments, which consisted  of cash and cash equivalents, receivables,
accounts payable, and accrued liabilities, approximated their carrying
values at June 30, 1997 and 1996.

     USE  OF  ESTIMATES: In preparing the consolidated financial
statements, the Company's management makes estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those estimates.  

     RECENTLY  ISSUED  ACCOUNTING  PRONOUNCEMENTS: The Financial
Accounting Standards Board has recently issued a new accounting standard,
SFAS No. 128. Earnings Per Share.  This statement will affect the
disclosure requirements for the 1998 annual financial statements.
Currently, the Company does not believe the adoption of SFAS No. 128 will
have a material impact on its financial statements. 



(2)   Stock Options

     Bone Care has granted options to key employees and directors under
two separate programs.

     The January 1, 1989 option plan is intended to qualify as an
incentive stock option plan within the meaning of Section 422 of the
Internal Revenue Code of 1986.  Stock options to purchase shares of the
Company's common stock granted under this plan may be exercised, with
certain exceptions in the case of the optionee's death or retirement, only
during employment.  Stock options granted are exercisable, during the
optionee's lifetime, only by the optionee.  The stock options are all
fully vested and expire 10 years from the granting date.  A total of
63,176 options were issued and remain outstanding under this plan.  In
June 1990, the Board of Directors of Bone Care agreed not to issue any new
options under this plan.

     Under the second option program, titled the Bone Care International,
Inc. 1996 Stock Option Plan, a total of 500,000 shares of common stock
were made available, of which 309,850 remain available.  Options granted
under this program vest over a three- or five-year period.  The options
will expire 10 years from the granting date, or upon termination of
employment.

          A summary of the Company's stock option activity, and related
information are summarized as follows:

                                        Year Ending June 30,
                         ------------------------------------------------------
                              1997           1996           1995
                         ------------------------------------------------------
                                   Weighted        Weighted           Weighted 
                                   average         average            average
                                   exercise        exercise           exercise
                        Options    price   Options   price    Options   price
--------------------------------------------------------------------------------

Outstanding -                                                                 
Beginning of year        225,976   $  4.23    63,176   $   4.22  63,176 $  4.22
Granted                   27,350     11.03   162,800       4.23     -       -
Exercised                 (7,500)     4.22      -           -       -       -
-------------------------------------------------------------------------------

Outstanding
     - end of year       245,826   $  4.98   225,976   $   4.23   63,176 $ 4.22
-------------------------------------------------------------------------------

Exercisable at
     end of year         59,619    $  4.23    63,176   $   4.23   63,176 $ 4.22
-------------------------------------------------------------------------------

Weighted average fair
  value of options
  granted during year    $  5.76             $  2.16
-------------------------------------------------------------------------------







          The options outstanding at June 30, 1997, have been segregated into
three ranges for additional disclosure as follows:


                              Options Outstanding           Options Exercisable
-------------------------------------------------------------------------------
                         Options   Weighted              Options               
                        Outstanding average   Weighted  currently   Weighted   
                            at     remaining  average  exercisable   average
                        June 30,  contractual exercise  at June 30,  exercise 
                           1997      life      price       1997       price
Range of exercise prices    
-------------------------------------------------------------------------------
                                    
     $     4.22          217,576      7.4    $   4.22       59,269    $   4.22
     $ 5.87 -$ 6.25        3,250      9.1    $   6.02          350    $   6.03 
     $    11.50           25,000     10.0    $   11.50         -      $    -
------------------------------------------------------------------------------- 

                                                                         
     The Company has elected to follow Accounting Principles Board Option No.
25, Accounting for Stock Issued to Employees (APB 25), and related
interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under
SFAS No. 123, Accounting for Stock-Based Compensation, requires use of option
valuation models that were not developed for use in valuing employee stock
options.  Under APB 25, because of the exercise price of the Company's employee
stock options equals the market price of the underlying stock on the date of
grant, no compensation expense is recognized.
                                                                         
     Proforma information regarding net loss and net loss per share is
required by SFAS No. 123, which also requires that the information be
determined as if the Company has accounted for its employee stock options
granted subsequent to June 30, 1995, under the fair market value method of
that statement.  The fair value for these options was estimated at the date of
grant using a Black-Scholes option pricing model with the following weighted-
average assumptions for 1997 and 1996, risk free interest rate of 6.0% for 1997
and 5.5% for 1996, volatility factors of the expected market price of the
Company's common stock of 0.60, no expected dividends, and a weighted- average
expected life of the option of four years from the grant date.
                                                                         
     The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable.  In addition, option valuation models require the
input of highly subjective assumptions, including the expected stock price
volatility.  Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in
the subjective input assumptions can materially affect the fair market value
estimate, in management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair market value of its employee
stock options.
                                                                         
                                                                           

   For purposes of pro forma disclosures, the estimated fair value of
the options is amortized to expense over the options' vesting period.  The     
Company's pro forma information follows:
                                                                         
-------------------------------------------------------------------------------
                                        1997                1996
-------------------------------------------------------------------------------

Pro forma net loss                 $ (2,889,880)       $ (1,291,830)
Pro forma net loss per share            (0.66)              (0.53)
===============================================================================

     Since SFAS No. 123 is applicable only to options granted subsequent
to June 30, 1995, its pro forma effect will not be reflective until 2000.



(3)  Income Taxes

     The Company has federal and state net operating loss and R & D tax
credit carryforwards expiring as follows:  

                                                                                

-------------------------------------------------------------------------------
                                   Federal                       State    
                              --------------------          ---------------
                              NOL       R & D Credit        NOL  R&D Credit
                                                                                

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

          2009              $      -         $       -    $   388,000$   24,000
          2010                     -                 -       596,000    24,000
          2011                     -                 -      1,146,000    16,000
          2012                  322,000              -      2,667,000    18,000
          2013                2,667,000           169,000        -         -   
                                                                            
-------------------------------------------------------------------------------
          Total             $ 2,989,000      $    169,000 $ 4,797,000$   82,000
                                                                               
-------------------------------------------------------------------------------
          Deferred tax assets at June 30, 1997 and 1996 were as follows:

                                                      1997         1996 
                                                     -----         -----
   Federal net operating loss carryforward     $  1,016,000       $110,000
   Federal R&D tax credit carryforward              169,000          -
   State net operating loss carryforward            377,000       168,000
   State R&D tax credit carryforward                 82,000          -
   Valuation allowance                           (1,644,000)      (278,000)
                                                 ---------------------------
                                             $        -       $       - 
                                                =============================


Realization of deferred tax assets is dependent upon generating sufficient
taxable income prior to the expiration of the related carryforward period.
Management believes there is a risk that such carryforwards may expire unused,
and accordingly, has established a valuation allowance against them.


(4)  Related-party Transactions

          The Company entered into a Transition Agreement with Lunar pursuant
to which certain employees of Lunar will perform administrative services
for the Company.  Such services include legal, treasury, accounting, insurance
and employee benefit administration.  As compensation the Company pays Lunar a
monthly fee of $7,000 plus certain expenses.  Lunar leases 3,000 square feet of
office space to the Company for $2,000 per month under the Transition
Agreement.  The term of the Transition Agreement is three years; however, the
Company may terminate the agreement by giving Lunar 90 days advance written
notice.  Prior to the distribution, the Company paid $5,000 per month to Lunar
for rent and the aforementioned administrative services.  The total payments
for those expenses were $135,000, $66,968, and $60,000 during the years ended
June 30, 1997, 1996, and 1995, respectively.

          During the years ended June 30, 1996 and 1995, the Company paid
$13,495 and $9,344, respectively, for interest on intercompany advances
from Lunar.  


(5)   Shareholders' Equity

          On April 15, 1996, the Board of Directors of the Company adopted
Amended and Restated Articles of Incorporation of the Company which, among
other things, increased the authorized capital of the Company to
15,000,000 shares consisting of 14,000,000 shares of common stock and
1,000,000 shares of preferred stock issuable in series.  The Board of
Directors of the Company also declared a 789.7 for 1 stock split payable
in the form of a stock dividend.  The accompanying financial statements
give retroactive effect to these changes.  


(6)  Non-cash Transactions

          In October 1995, Lunar contributed its ownership of Continental
Assays Corporation and certain assets with a book value of $175,867 for
1,698,674 shares of the Company's common stock.  In October 1995, Lunar
also exchanged $634,683 of loans receivable from the Company for 107,401
shares of common stock of the Company.  

(7)  Profit-sharing Plan

          The Company has established a 401(k) profit-sharing plan covering
substantially all employees.  Employer contributions to the plan are at
the discretion of the Board of Directors.  The Company's policy is to fund
profit-sharing plan contributions as they accrue.  Profit-sharing expense
amounted to $6,215, $6,699, and $7,779 for the years ended June 30, 1997,
1996 and 1995, respectively.


(8)  Shareholders Rights Plan and Preferred Stock

          In 1996, the Company adopted a Shareholders Rights Plan.  Under this
plan, each share of common stock has associated with it one preferred share
purchase right (a Right).  Under certain circumstances, each Right would
entitle the holders thereof to purchase from the Company 1/100th of one share
of Series A Junior Participating Preferred Stock for the price of $25.00 per
1/100th of one share.  The Rights do not have voting or dividend rights, and
until they become exercisable, have no dilutive effect on the per-share
earnings of the Company.  The Rights are not presently exercisable and are
transferable only with the related shares of common stock.  The Company's Board
of Directors has designated 140,000 shares of the Preferred Stock as Series A
Junior Participating Preferred Stock in connection with the Rights.



INDEPENDENT  AUDITORS'  REPORT

THE  BOARD  OF  DIRECTORS
BONE  CARE  INTERNATIONAL,  INC:


We have audited the accompanying consolidated balance sheets of Bone Care
International, Inc. and subsidiary as of June 30, 1997 and 1996, and the
related consolidated statements of operations, shareholders' equity, and
cash flows for each of the years in the three-year period ended June 30,
1997.  These consolidated financial statements are the responsibility of
the Company's management.  Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.  

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Bone
Care International, Inc. and subsidiary as of June 30, 1997 and 1996, and
the results of their operations and their cash flows for each of the years
in the three-year period ended June 30, 1997 in conformity with generally
accepted accounting principles.  



KPMG Peat Marwick LLP
Chicago, Illinois
August 2, 1997




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

             None

                                  PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

           The Company incorporates by reference the information included in
the Company's definitive Proxy Statement for its 1997 Shareholders Meeting
to be held on November 19, 1997, ("Proxy Statement") under the captions
"Purposes of the Meeting - Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting of Compliance"  which will be filed with
the Securities and Exchange Commission separately pursuant to Rule 14a-6
under the Securities Exchange Act of 1934 and in accordance with General
Instruction G(3) to Form 10-K, not later than 120 days after the end of
the Company's fiscal year.

          As of September 24, 1997, the executive officers of the Registrant
are as follows:

Name                                  Age       Title
----                                  ---       ----- 
Richard B. Mazess, Ph.D.              58        Chairman 

Charles W. Bishop, Ph.D.              45        President

Dale W. Gutman                        44        Vice President - Finance

Carl E. Gulbrandsen, Ph.D., J.D.      50        Corporate General Counsel
                                                      and Secretary 

          Dr. Richard B. Mazess, the founder of Lunar and Bone Care, has been
President and a director of Lunar since its inception in 1980, and
President of Bone Care since its inception in 1986 through February 1996.
Dr. Mazess has served as a director of Bone Care since 1986 and now serves
as its Chairman of the Board.  Dr. Mazess became Professor Emeritus of
Medical Physics at the University of Wisconsin - Madison in 1985, and has
been on the faculty of the Department of Medical Physics since 1968.  Dr.
Mazess has authored over 100 scientific publications on bone, bone
measurement, and body composition; he also has edited several books and
has served on the editorial boards of several medical journals.  Dr.
Mazess has organized various international scientific meetings on bone
measurement and osteoporosis.

          Dr. Charles W. Bishop joined the Company in September 1987 as Project
Director and was named Vice President in March 1990, and President in February
1996.  Dr. Bishop has been a director of Bone Care since 1989.  Dr. Bishop
received a Ph.D. degree in Nutritional Biochemistry from Virginia Polytechnic
Institute and completed a four-year National Institutes of Health Postdoctoral
Fellowship in Biochemistry at the University of Wisconsin - Madison.

          Dale W. Gutman joined Bone Care in December 1996 as Vice President of
Finance.  From September 1986 to December 1996, Mr. Gutman served as Vice
President and Corporate Controller of the Chas. Levy Company in Chicago,
Illinois, a company which distributes magazines and books to independent and
mass market retailers throughout the United States.  Mr. Gutman is a Certified
Public Accountant.


          Dr. Carl E. Gulbrandsen, J.D., who joined Lunar in 1992 as Corporate
General Counsel and Secretary, also serves as Bone Care's Corporate
General Counsel and Secretary.  From 1989 until 1992, Dr. Gulbrandsen was
a partner in the law firm of Stroud, Stroud, Willink, Thompson & Howard of
Madison, Wisconsin, where he specialized in patent law.  From 1987 until
1989, Dr. Gulbrandsen was a partner in the Madison office of Haight &
Hofeldt, a patent litigation firm based in Chicago, Illinois.  Dr. Gulbrandsen
received his J.D. degree in 1981 from the University of Wisconsin School of Law
and his Ph.D. degree in physiology from the University of Wisconsin - Madison
in 1978.

          Officers are elected to serve, subject to the discretion of the Board
of Directors, until their successors are appointed.

ITEM 11.  EXECUTIVE COMPENSATION

           The Company incorporates by reference the information included in
the Proxy Statement under the caption "Executive Compensation," other than
the information included in the Proxy Statement under the sub-captions
"Board of Directors Report on Executive Compensation" and "Performance
Graph"

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

           The Company incorporates by reference the information included in
the  Proxy Statement under the caption "Securities Beneficially Owned by
Principal Shareholders, Directors, and Executive Officers."

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          The Company incorporates by reference the information included in the
Proxy Statement under the caption "Certain Transactions."

                                   PART IV

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

(a)
          1 and 2.  Financial statements and financial statement schedule
                    -----------------------------------------------------
          Reference is made to the separate index to the Company's consolidated
          financial statements and schedule contained on page 31 hereof.

          3.  Exhibits
              --------  
          Reference is made to the separate exhibit index contained on page 33
          hereof.

(b)
          Reports on Form 8-K
          -------------------
          No reports on Form 8-K were filed by the Company during the fourth
          quarter ended June 30, 1997.


                        BONE CARE INTERNATIONAL, INC.

                 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                     AND
                        FINANCIAL STATEMENT SCHEDULE


The following documents are filed                                 Page(s) in
as part of this report:                                            Form 10-K

(1)     Financial Statements:

           Independent Auditors' Report. . . . . . . . . . . . . . . . . .28

           Consolidated Balance Sheets at June 30, 1997 and 1996 . . . 16-17

           Consolidated Statements of Operations for the years ended
             June 30, 1997, 1996, and 1995 . . . . . . . . . . . . . . . .15

           Consolidated Statements of Shareholders' Equity for the
             years ended June 30, 1997, 1996, and 1995 . . . . . . . . . .18

           Consolidated Statements of Cash Flows for the years
             ended June 30, 1997, 1996, and 1995 . . . . . . . . . . . 19-20

           Notes to Consolidated Financial Statements. . . . . . . . . 21-27

(2)     Financial Statement Schedule:

           All schedules are omitted because they are not applicable or the
           required information is shown in the financial statements or notes
           thereto.

          

                                 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.

                        BONE CARE INTERNATIONAL, INC.

Date:  September 25, 1997          By:   /s/ Charles W. Bishop, Ph.D.      
                                        -----------------------------
                                        Charles W. Bishop, Ph.D.
                                        President

          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.

Name
----


/s/ Charles W. Bishop, Ph.D.       President and          September 25, 1997
----------------------------  Director (Principal
Charles W. Bishop, Ph.D.      Executive Officer)
                                   


/s/ Richard B. Mazess, Ph.D.       Chairman and Director  September 25, 1997
----------------------------
Richard B. Mazess, Ph.D.



/s/ Robert A. Beckman              Director               September 25, 1997
---------------------
Robert A. Beckman



/s/ Martin Barkin, M.D.            Director               September 25, 1997
-----------------------
Martin Barkin, M.D.



/s/ John Kapoor, Ph.D.             Director               September 25, 1997
----------------------
John Kapoor, Ph.D.



/s/ Dale W. Gutman            Vice President of           September 25, 1997
------------------            Finance (Principal
Dale W. Gutman                Financial and Accounting                    
                              Officer)



                        BONE CARE INTERNATIONAL, INC.
                              INDEX TO EXHIBITS

Exhibit
Number    Document Description
-------   --------------------
 3.1           Restated Articles of Incorporation of Registrant(superscript 1)
               (Exhibit 3.1, Amendment No. 3 to Form 10/A)

 3.2           By-Laws of Registrant (superscript 2) (Exhibit 3.2)

 4.1           Shareholders Rights Agreement between Bone Care and Norwest Bank
               Minnesota, N.A.(superscript 1) (Exhibit 4.1, Amendment No. 3 to
               Form 10/A)

10.1           Distribution Agreement Between Bone Care and Lunar Corporation
               (superscript 1) (Exhibit 10.1, Amendment No. 3 to Form 10/A)

10.2           Tax Disaffiliation Agreement Between Bone Care and Lunar
               Corporation (superscript 1)(Exhibit 10.2,  Amendment No. 3 to
               Form 10/A)

10.3           Transition Agreement Between Bone Care and Lunar Corporation
               (superscript 1) (Exhibit 10.3, Amendment No. 3 to Form 10/A)

10.4*          Incentive Stock Option Plan(superscript 1) (Exhibit 10.4)

10.5*          1996 Stock Option Plan(superscript 1) (Exhibit 10.5,
               Amendment No. 3 to Form 10/A)

10.6           Restated License Agreement Between Bone Care and
               Draxis Health, Inc. (superscript 1) (Exhibit 10.6) 

21             List of Subsidiaries of Registrant

23             Consent of KPMG Peat Marwick LLP

27             Financial Data Schedule


(Superscript 1)Incorporated by reference to exhibits filed with
Registrant's Form 10  Registration Statement (Registration Number 02-27854)
filed under the Securities Exchange Act of 1934.  Parenthetical
references to exhibit numbers are to the exhibit numbers in the Form 10
or, if applicable, the Amendment to the Form 10.

(Superscript 2)Incorporated by reference to the exhibits filed with the
Registrant's Quarterly Report on Form 10-Q for the quarter ended December
31, 1996 (File No. 0-27854).  Parenthetical references to exhibit numbers
are to the exhibit numbers in the Form 10-Q.

*Indicates a management contract or compensatory plan or arrangement
required to be filed as an exhibit to this Form 10-K.