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

                                    FORM 10-Q

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

For the quarterly period ended September 30, 2001

[ ]  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 0-14983

                               NUTRITION 21, INC.
                               ------------------
             (Exact Name of Registrant as Specified in its Charter)

                  NEW YORK                                      11-2653613
--------------------------------------------          -------------------------
(State or other jurisdiction of incorporation         (I.R.S. Employer
or organization)                                      Identification No.)

         4 Manhattanville Road
         Purchase, New York                                   10577-2197
--------------------------------------------          -------------------------
(Address of Principal Executive Offices)                      (Zip Code)

Registrant's telephone number, including Area Code:        (914) 701-4500
                                                      -------------------------

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

                                      None
                    ----------------------------------------

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

                    Common Stock (par value $.005 per share)
                    ----------------------------------------
                                 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  twelve (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 ninety (90) days.

         Yes     X                No
             ---------               -------


The number of shares outstanding of Registrant's Common Stock as of
November 7, 2001:  32,251,818.


<PAGE>

                               NUTRITION 21, INC.

                                      INDEX

    PART I FINANCIAL INFORMATION                                     PAGE
    ------ ---------------------                                     ----

    ITEM 1 Consolidated Financial Statements (unaudited)

           Consolidated Balance Sheets at September 30, 2001
                  and June 30, 2001                                    3

           Consolidated Statements of Income for the three
                  months ended September 30, 2001 and 2000             5

           Consolidated Statement of Stockholders' Equity for
                  the three months ended September 30, 2001            6

           Consolidated Statements of Cash Flows for the three
                  months ended September 30, 2001 and 2000             7

           Notes to Unaudited Consolidated Financial Statements        8

    ITEM 2 Management's Discussion and Analysis of
                  Financial Condition and Results of Operations       12

    ITEM 3 Quantitative and Qualitative Disclosures
                  About Market Risk                                   15

    PART II OTHER INFORMATION

    ITEM 1 Legal Proceedings                                          16

    ITEM 6 Exhibits and Reports on Form 8-K                           16

                                       2

<PAGE>


                               NUTRITION 21, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                        September 30,       June 30,
                                                                                            2001              2001
                                                                                        -------------       --------
                                                                                         (unaudited)        (Note 1)
<S>                                                                                     <C>                 <C>
ASSETS

Current assets:
    Cash and cash equivalents                                                               $5,592           $5,355
    Accounts receivable (less allowance for doubtful accounts of $45 at September
    30, 2001 and at June 30, 2001)                                                           3,166            3,963
    Other receivables                                                                        2,795            1,650
    Inventories                                                                              1,171            1,322
    Prepaid expenses and other current assets                                                  536              475
                                                                                           -------          -------
         Total current assets                                                               13,260           12,765
Property and equipment, net                                                                    573              633
Patents and trademarks (net of accumulated amortization of $10,905 at September
30, 2001 and $10,375 at June 30, 2001)                                                      18,163           18,682
Goodwill (net of accumulated amortization of $886 at September 30, 2001 and at
June 30, 2001)                                                                               6,764            6,491
Other assets                                                                                   617              316
                                                                                           -------          -------
TOTAL ASSETS                                                                               $39,377          $38,887
                                                                                           =======          =======

</TABLE>
See accompanying notes to consolidated financial statements.

                                       3

<PAGE>

                               NUTRITION 21, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>

                                                                                          September 30,       June 30,
                                                                                              2001              2001
                                                                                          -------------       --------
                                                                                           (unaudited)        (Note 1)

<S>                                                                                       <C>                 <C>
LIABILITIES, REDEEMABLE PREFERRED STOCK AND
 STOCKHOLDERS' EQUITY

Current liabilities;
      Current portion of long-term debt                                                          $750          $1,125
      Accounts payable and accrued expenses                                                     2,650           3,371
      Contingent payments payable                                                               2,364           1,855
      Preferred dividends payable                                                                  21              22
                                                                                            ---------       ---------
             Total current liabilities                                                          5,785           6,373
Other long-term obligations                                                                       113             122
                                                                                            ---------       ---------
TOTAL LIABILITIES                                                                               5,898           6,495
                                                                                            ---------       ---------
Commitments and contingent liabilities

REDEEMABLE PREFERRED STOCK:
Series E convertible preferred, 1,500 shares issued:
    191 shares outstanding at September 30, 2001 and June 30, 2001, respectively
    (aggregate liquidation value Series E- $196)                                                  191             191
Series F convertible preferred, 575 shares issued:
    169 shares  outstanding at September 30, 2001 and 227 shares  outstanding at
    June 30, 2001, respectively (aggregate liquidation value Series F- $173)                      169             227

STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value, authorized 5,000,000 shares
    Series G convertible preferred,  1,769 shares issued: 941 shares outstanding
    at September 30, 2001 and June 30, 2001, respectively (aggregate liquidation
    value - $953)                                                                                 941             941
Common stock, $0.005 par value, authorized 65,000,000 shares;
    32,342,818 shares issued at September 30, 2001 and June 30, 2001, respectively                161             161
Additional paid-in capital                                                                     63,196          63,196
Accumulated deficit                                                                          (31,099)        (32,324)
Less treasury stock, at cost, 91,000 common shares                                               (80)              --
                                                                                            ---------       ---------
TOTAL STOCKHOLDERS' EQUITY                                                                    $33,119         $31,974
                                                                                            ---------       ---------
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK
  AND STOCKHOLDERS' EQUITY                                                                    $39,377         $38,887
                                                                                            =========       =========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       4

<PAGE>



                               NUTRITION 21, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                 (in thousands, except share and per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                Three Months Ended
                                                                                                    September 30,
                                                                                            2001                   2000
                                                                                          --------               -------
<S>                                                                                         <C>                   <C>
Net sales                                                                                   $3,795                $5,256
Other revenues                                                                                 154                 1,647
                                                                                           -------               -------
REVENUES                                                                                     3,949                 6,903
Cost of goods sold                                                                           1,240                 1,714
                                                                                           -------               -------
GROSS PROFIT                                                                                 2,709                 5,189
    Research and development expenses                                                          186                   951
    Selling, general and administrative expenses                                             1,682                 3,139
    Depreciation and amortization                                                              656                 1,175
                                                                                           -------               -------
OPERATING INCOME (LOSS)                                                                        185                  (76)
Interest income                                                                                 45                   134
Interest expense                                                                                28                    76
Other income, net                                                                            1,794                    27
                                                                                           -------               -------
INCOME BEFORE INCOME TAXES                                                                   1,996                     9
Income taxes                                                                                   719                     3
                                                                                           -------               -------
NET INCOME                                                                                  $1,277                   $ 6
                                                                                           =======               =======
    Basic earnings (loss) per share                                                          $0.04               $(0.00)
                                                                                             =====               =======
    Diluted earnings (loss) per share                                                        $0.04               $(0.00)
                                                                                             =====               =======
    Weighted average number of common shares - basic                                    32,337,731            31,581,427
                                                                                        ==========            ==========
    Weighted average number of common shares and equivalents - diluted                  33,647,111            31,581,427
                                                                                        ==========            ==========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       5

<PAGE>

                               NUTRITION 21, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                        (in thousands, except share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                 Additional
                                        Preferred Stock                            Paid-In      Accumulated    Treasury
                                            Series G          Common Stock         Capital        Deficit       Stock       Total

                                        SHARES      $        SHARES         $          $              $           $           $
                                        ------     ----    ----------      ----     -------       --------      ------     -------
<S>                                     <C>        <C>     <C>             <C>     <C>            <C>          <C>         <C>
Balance at June 30, 2001                  941      $941    32,342,818      $161     $63,196       $(32,324)       $ --     $31,974

Preferred stock dividends declared         --        --            --        --          --            (23)         --        (23)
Premium on redemption of Series F
  preferred stock                          --        --            --        --          --            (29)         --        (29)
Repurchase of common stock for
  treasury                                 --        --      (91,000)        --          --              --       (80)        (80)
Net income for the period                  --        --            --        --          --           1,277         --       1,277
                                        -----     -----    ----------      ----     -------       ---------      -----     -------
Balance at September 30, 2001             941      $941    32,251,818      $161     $63,196       $(31,099)      $(80)     $33,119
                                        =====     =====    ==========      ====     =======       =========      =====     =======
</TABLE>

See accompanying notes to consolidated financial statements.

                                       6

<PAGE>

                               NUTRITION 21, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                        Three Months Ended
                                                                                                           September 30,
                                                                                                        2001           2000
                                                                                                        ----           ----
<S>                                                                                                    <C>            <C>
Cash flows from operating activities:
    Net income                                                                                         $1,277         $    6
    Adjustments to reconcile net income to net cash provided by operating activities:
        Depreciation and amortization                                                                     656          1,175
        Gain on sale of assets                                                                            (40)            --
        Changes in operating assets and liabilities:
           Accounts receivable                                                                            797            652
           Other receivables                                                                             (945)          (230)
           Inventories                                                                                    135            110
           Prepaid expenses and other current assets                                                      (61)           110
           Other assets                                                                                  (300)          (665)
           Accounts payable and accrued expenses                                                         (730)          (620)
                                                                                                        -----         ------
               Net cash provided by operating activities                                                  789            538
                                                                                                        -----         ------
Cash flows from investing activities:
    Purchases of property and equipment                                                                    --            (85)
    Payments for patents and trademarks                                                                   (86)           (81)
    Proceeds from sale of assets                                                                          100             --
                                                                                                        -----         ------
        Net cash provided by (used in) investing activities                                                14           (166)
                                                                                                        -----         ------
Cash flows from financing activities:
    Debt repayments                                                                                      (375)          (375)
    Preferred stock dividends paid                                                                        (23)           (29)
    Repurchase of common stock for treasury                                                               (80)            --
    Redemption of redeemable preferred stock                                                              (88)            --
                                                                                                       ------         ------
        Net cash used in financing activities                                                            (566)          (404)
                                                                                                       ------         ------
Net increase (decrease) in cash and cash equivalents                                                      237            (32)
Cash and cash equivalents at beginning of period                                                        5,355          8,488
                                                                                                       ------         ------
Cash and cash equivalents at end of period                                                             $5,592         $8,456
                                                                                                       ======         ======
</TABLE>

See accompanying notes to consolidated financial statements.

                                       7

<PAGE>

                               NUTRITION 21, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       ($ in thousands, except share data)
                                   (unaudited)

     Note 1   BASIS OF PRESENTATION

              The accompanying  unaudited consolidated financial statements have
              been prepared in accordance with accounting  principles  generally
              accepted in the United  States for interim  financial  information
              and  with  the  instructions  to  Form  10-Q  and  Article  10  of
              Regulation  S-X.  Accordingly,  they  do  not  include  all of the
              information  and  footnotes  required  by  accounting   principles
              generally  accepted in the United  States for  complete  financial
              statements.   In  the  opinion  of  management,   all  adjustments
              (consisting of normal recurring adjustments)  considered necessary
              for a fair presentation have been included.  Operating results for
              the   three-month   period  ended   September  30,  2001  are  not
              necessarily indicative of the results that may be expected for the
              year ending June 30, 2002.

              The  balance  sheet at June 30,  2001  has been  derived  from the
              audited financial statements at that date but does not include all
              of the  information and footnotes  required by generally  accepted
              accounting principles for complete financial statements.

              For  further  information,  refer  to the  consolidated  financial
              statements and footnotes  thereto included in the Company's annual
              report on Form 10-K for the year ended June 30, 2001.

              Certain  reclassifications  have  been  made to the  prior  period
              amounts in order to conform to the current period presentation.

     Note 2   SIGNIFICANT ACCOUNTING PRONOUNCEMENTS

              In July 2001,  the  Financial  Accounting  Standards  Board (FASB)
              issued statement of Financial  Accounting  Standards  ("SFAS") No.
              141,  "Business  Combinations,"  and SFAS No. 142,  "Goodwill  and
              Other  Intangible  Assets."  SFAS No. 141 prohibits the use of the
              pooling-of-interests    method   of   accounting    for   business
              combinations  initiated  after June 30, 2001. SFAS No. 142 changes
              the way  companies  account for goodwill in that  goodwill will no
              longer be amortized,  but should be tested for impairment at least
              annually.  The Company  elected to early adopt SFAS No. 142 in the
              quarter  ending  September  30,  2001.  See  Note  9  for  further
              discussion on the impact on Nutrition 21's financial  position and
              results of operations.

              In October 2001, the FASB issued SFAS No. 144, "Accounting for the
              Impairment or Disposal of Long-Lived Assets." The FASB's new rules
              on asset  impairment  supersede SFAS No. 121,  "Accounting for the
              Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be
              Disposed of," and will be effective for the Company's  fiscal year
              beginning  July 1, 2002.  The Company is currently  evaluating the
              impact that  adoption of this  Standard will have on its financial
              statements. Management does not anticipate that this Standard will
              have a material  impact on Nutrition  21's  financial  position or
              results of operations.

     Note 3   INVENTORIES

              The  components of  inventories at September 30, 2001 and June 30,
2001 were:

                                              September 30,         June 30,
                                                  2001                2001
                                               -----------          --------

                         Raw materials             $431                $471
                         Finished goods             740                 851
                                                    ---                 ---
                         Total inventories       $1,171              $1,322
                                                 ======              ======

                                       8

<PAGE>

                               NUTRITION 21, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       ($ in thousands, except share data)
                                   (unaudited)

     Note 4   REDEEMABLE PREFERRED STOCK

              During the three month period ended  September 30, 2001, 58 shares
              of the Company's Series F Preferred and accrued  dividends thereon
              were  redeemed  for $88.  As a  result  of this  transaction,  the
              Company  recorded a premium on redemption of $29  representing the
              excess of the  consideration  paid over the carrying  value of the
              then outstanding F preferred.

     Note 5   EARNINGS (LOSS) PER SHARE

              The  following  table  sets  forth  the  computation  of basic and
              diluted earnings (loss) per share for the periods indicated.

<TABLE>
<CAPTION>
                                                                                                     Three months ended
                                                                                                        September 30,
                                                                                                 2001                2000
                                                                                                 ----                ----
       <S>                                                                                     <C>                <C>
        Basic and diluted earnings (loss) per share:

        Net income                                                                                $1,277             $     6
            Less: Dividends on preferred shares                                                     (23)                (29)
                  Premium on redemption of preferred stock                                          (29)                  --
                                                                                              ----------          ----------
        Net income (loss) available to common stockholders                                        $1,225             $  (23)
                                                                                              ==========          ==========

        Weighted average shares                                                               32,337,731          31,581,427
                                                                                              ==========          ==========
        Basic earnings (loss) per share                                                            $0.04             $(0.00)
                                                                                              ==========          ==========
        Diluted earnings (loss) per share computation:
        Net income (loss) available to common stockholders                                        $1,225             $  (23)
           Add dividends on preferred stock                                                           23                  --
                                                                                              ----------          ----------
        Net income (loss) available to common stockholders                                        $1,248             $  (23)
                                                                                              ----------          ----------
        Weighted average shares:                                                              32,337,731          31,581,427
          Plus incremental shares from assumed conversions:
            Preferred stock                                                                    1,217,129                  --
            Stock option plans                                                                    92,251                  --
                                                                                              ----------          ----------
        Adjusted weighted average shares                                                      33,647,111          31,581,427
                                                                                              ----------          ----------
        Diluted earnings (loss) per share                                                          $0.04             $(0.00)
                                                                                              ==========          ==========
</TABLE>


         Diluted loss per share for the  three-month  period ended September 30,
         2000,  does  not  reflect  the  incremental  shares  from  the  assumed
         conversion of preferred stock (919,396  shares),  as the effect of such
         inclusion would be anti dilutive and thus reduce the loss per share.

                                       9

<PAGE>

                               NUTRITION 21, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        (in thousands, except share data)
                                   (unaudited)

  Note 6 OTHER INCOME

         In the three  month  period  ended  September  30,  2001,  the  Company
         recorded as other  income $1.8 million  from the  settlement  of patent
         infringement  claims  related  to  chromium  picolinate  and a sale  of
         assets.  At September 30, 2001,  cash proceeds of $1.7 million from the
         settlements  and $0.2  million from the sale of assets to an officer of
         the Company remain to be collected.

  Note 7 INCOME TAXES

         The effective tax rate for the three-month  periods ended September 30,
         2001 and 2000 was 36.0%, respectively.

  Note 8 SEGMENT REPORTING

         A summary of business data for the Company's  reportable segments is as
         follows:

         Information by business segment (in thousands):

<TABLE>
<CAPTION>
                                                                    Three months ended
                                                                       September 30,
                                                                   2001              2000
                                                                   ----              ----
               <S>                                               <C>               <C>
               REVENUES
               Nutritional Products                              $3,884            $6,840
               Pharmaceutical Products                               65                63
                                                                 ------            ------
                                                                 $3,949            $6,903
                                                                 ======            ======

               OPERATING INCOME (LOSS)
               Nutritional Products                                $162             $(92)
               Pharmaceutical Products                               23                16
                                                                 ------            ------
                                                                   $185             $(76)
                                                                 ======            ======
</TABLE>

         The operations of the Company are principally in the United States.

         One nutritional  product segment customer  accounted for  approximately
         28% and 33% of the segment  revenue in the  three-month  periods  ended
         September 30, 2001 and September 30, 2000, respectively.


Note 9   INTANGIBLE ASSETS

         The Company has adopted SFAS No. 142 effective July 1, 2001. Under SFAS
         No. 142,  goodwill is no longer  amortized but reviewed for  impairment
         annually,  or more frequently if certain  indicators arise. The Company
         is required to complete the initial step of a  transitional  impairment
         test within six months of adoption of SFAS No. 142 and to complete  the
         final step of the transitional impairment test by the end of the fiscal
         year. Any impairment  loss resulting from the  transitional  impairment
         test will be recorded as a cumulative  effect of a change in accounting
         principle.  Subsequent impairment losses will be reflected in operating
         income in the statement of income.  Had the Company been accounting for
         its  goodwill  under  SFAS  No.  142 for  all  periods  presented,  the
         Company's net income and earnings per share would have been as follows:

                                       10

<PAGE>


                               NUTRITION 21, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        (in thousands, except share data)
                                   (unaudited)


Note 9   INTANGIBLE ASSETS, (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                      Three months ended
                                                                                                         September 30,
                                                                                                     2001              2000
                                                                                                     ----              ----
<S>                                                                                                 <C>                   <C>
Reported net income                                                                                 $1,277                $6
  Add back goodwill amortization, net of tax                                                            --                60
                                                                                                    ------           -------
Adjusted net income                                                                                 $1,277               $66
                                                                                                    ======           =======
Basic earnings (loss) per share
  Reported net income                                                                               $ 0.04           $(0.00)
  Goodwill amortization, net of tax                                                                     --                --
                                                                                                    ------           -------
Adjusted net income (loss)                                                                          $ 0.04           $(0.00)
                                                                                                    ======           =======
Diluted earnings (loss) per share
  Reported net income (loss)                                                                        $ 0.04           $(0.00)
  Goodwill amortization, net of tax                                                                     --                --
                                                                                                    ------           -------
Adjusted net income (loss)                                                                          $ 0.04           $(0.00)
                                                                                                    ======           =======
</TABLE>

Note 10   SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                                                                     Three months Ended
                                                                                                        September 30,
                                                                                                     2001           2000
                                                                                                     ----           ----
         <S>                                                                                        <C>            <C>
         Supplemental disclosure of cash flow information:
               Cash paid for interest                                                                $   22          $ 71
               Cash paid for income taxes                                                            $  502          $ 80

         Supplemental schedule of non-cash financing activities:
               Obligation for purchase of property and equipment                                     $  144          $192
               Obligation for N21 contingent payments                                                $1,701          $804
               Obligation for Lite Bites contingent payment                                          $  663          $252
</TABLE>

                                       11

<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


           The  following  discussion  should  be read in  conjunction  with the
           consolidated  financial  statements  and related notes thereto of the
           Company included elsewhere herein.

           GENERAL

           The Company's  revenues have been primarily  derived from the sale of
           nutrition   products   to   manufacturers   of  vitamin  and  mineral
           supplements  and sales of nutrition  bars and other  related  dietary
           supplement  products  marketed under the trademark  "Lite Bites" (the
           "Lite Bites  Business").  The  Company  has,  in  addition,  received
           royalty and license income from users of its patented technology.

           Cost of goods sold  includes  both direct and indirect  manufacturing
           costs.  Research  expenses include  internal  expenditures as well as
           expenses associated with third party providers.  Selling, general and
           administrative  expenses include  salaries and overhead,  third party
           fees and expenses,  royalty expenses for licenses and trademarks, and
           costs  associated  with the selling of the  Company's  products.  The
           Company capitalizes patent costs and acquisition-related goodwill and
           intangible  assets,  and amortizes  them,  excluding  goodwill,  over
           periods of one to twenty years.

           RESULTS OF OPERATIONS

           REVENUES

           Net sales for the three  months  ended  September  30, 2001 were $3.8
           million, a decrease of $1.5 million when compared to $5.3 million for
           the same period a year  earlier.  The  decrease is due  primarily  to
           softness  in  retail  sales  of  vitamin  and  mineral   supplements;
           continuing  industry  consolidation;  and  reductions  in the selling
           price  of  chromium  picolinate  subsequent  to the  expiration  of a
           composition-of-matter patent in August 2000. Partially offsetting the
           decrease was a 22% increase in the volume of chromium picolinate sold
           in the three months  ended  September  30, 2001 when  compared to the
           same period a year earlier.

           Other  revenues of $0.2 million for the three months ended  September
           30, 2001  declined $1.4 million when compared to $1.6 million for the
           same period a year ago.  Other  revenues  for the three  months ended
           September  2000,  included  $1.5  million of license fees earned from
           Biosynexus Incorporated in accordance with License Agreements entered
           into in August  2000.  These  license fees did not recur in the three
           months ended September 30, 2001.

           COST OF GOODS SOLD

           Cost of goods sold for the three months ended September 2001 was $1.2
           million, a decrease of $0.5 million when compared to $1.7 million for
           the same period a year ago. The reduction in cost of goods  primarily
           reflects  the  cost  savings   attributable   to  the   restructuring
           undertaken  by the  Company in the second  quarter of fiscal  2001 as
           well as lower sales for the quarter ended  September 30, 2001.  Gross
           margin on  product  sales  was  67.3% and 67.4% for the three  months
           ended September 30, 2001 and 2000, respectively.

           RESEARCH AND DEVELOPMENT EXPENSES

           Research  costs of $0.2 million for the three months ended  September
           30, 2001 decreased $0.8 million when compared to $1.0 million for the
           same  period  a  year  ago.  The  cost  savings  attributable  to the
           restructuring  undertaken  by the  Company in the  second  quarter of
           fiscal  2001,  as well as more focused  spending on research  related
           activities were the primary reasons for the savings.

                                       12

<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

           SELLING GENERAL AND ADMINISTRATIVE EXPENSES (SG&A)

           SG&A expenses for the three months ended September 30, 2001 were $1.7
           million a decrease of $1.4 million when  compared to $3.1 million for
           the same  period a year  ago.  The  decrease  is due to cost  savings
           attributable to a restructuring  undertaken by the Company during the
           second  quarter  of  fiscal  2001;   reductions  in  advertising  and
           consulting expenditures;  and the non recurrence of a one-time charge
           of $0.6 million  related to the departure of the  Company's  previous
           CEO recorded in the three month period ended September 30, 2000.

           DEPRECIATION AND AMORTIZATION

           Depreciation  and  amortization  for the three months ended September
           30, 2001 of $0.7 million decreased $0.5 million when compared to $1.2
           million for the same period a year ago. The decrease is due primarily
           to the expiration of the composition-of-matter patent and adoption of
           accounting  pronouncements  relating to goodwill and other intangible
           assets. See Note 9.

           OPERATING INCOME

           Operating  income for the three months ended  September  30, 2001 was
           $0.2 million  compared to an  operating  loss of $0.1 million for the
           same period a year ago.  While  lower  revenues  negatively  impacted
           gross  profit in the three  months ended  September  30,  2001,  cost
           savings resulting from the  restructuring  undertaken by the Company,
           controlled  spending in all operating  areas,  and early  adoption of
           accounting  pronouncements  were more than  sufficient  to offset the
           shortfall.

           INTEREST INCOME, NET AND OTHER INCOME

           Interest  income,  net of $17  thousand  for the three  months  ended
           September  30,  2001,  declined  $41  thousand  when  compared to $58
           thousand for the same period a year ago. Levels of invested cash were
           lower in the three months ended  September 30, 2001, when compared to
           the comparable period a year ago.

           Other income for the three months ended  September 30, 2001, was $1.8
           million due primarily to amounts  earned on the  settlement of patent
           infringement  lawsuits, and gains resulting from licensing its rights
           to sell  lysostaphin  for  research  purposes  to an  officer  of the
           Company.

           INCOME TAXES

           Income taxes for the three month period  ending  September  30, 2001,
           were $0.7 million  compared to $3 thousand for the same period a year
           ago.  The  increase is due to  increased  profitability  in the three
           months ended  September 30, 2001. The effective tax rate that applied
           in both quarters was 36%.

           BUSINESS SEGMENT

           The Company operates in two business segments,  Nutritional  Products
           and Pharmaceutical Products.

           NUTRITIONAL PRODUCTS

           Nutritional product revenues for the three months ended September 30,
           2001, were $3.9 million,  a decrease of $3.0 million when compared to
           $6.9 million for the same period a year ago. The decrease in revenues
           is  primarily  due to lower  retail  sales  of  vitamin  and  mineral
           supplements;  reductions in the selling price of chromium  picolinate
           subsequent  to the  expiration of a  composition-of-matter  patent in
           August 2000, as well as a lack of  significant  license fee income in
           the  current  quarter  similar  to the  $1.5  million  earned  in the
           comparable period a year ago.

                                       13

<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

           Nutritional products operating income was $162 thousand for the three
           months ended  September 30, 2001 as compared to an operating  loss of
           $92  thousand  for the same  period  a year  ago.  The  cost  savings
           attributable  to the  restructuring  undertaken by the Company in the
           second  quarter of fiscal 2001 and the early  adoption of  accounting
           pronouncements  discussed  in Note 9, more than offset the decline in
           product sales and the lack of significant  license fees earned in the
           current quarter.

           PHARMACEUTICAL PRODUCTS

           Pharmaceutical  product  revenues  were $65  thousand  for the  three
           months  ended  September  30,  2001,  compared to $63 thousand in the
           comparable period a year ago.

           Pharmaceutical  products  operating  income was $23  thousand and $16
           thousand,  for the three  months ended  September  30, 2001 and 2000,
           respectively.

           LIQUIDITY AND CAPITAL RESOURCES

           Cash and cash  equivalents  at  September  30, 2001 were $5.6 million
           compared to $5.4 million at June 30, 2001.  As of September 30, 2001,
           the Company had a working capital surplus of $7.5 million compared to
           a $6.4  million  surplus as of June 30,  2001.  The  working  capital
           surplus  increase  was due  primarily  to the  proceeds  due from the
           successful settlement of patent infringement lawsuits.

           During the three months  ended  September  30, 2001,  net cash of $14
           thousand was provided by investing activities compared to net cash of
           $0.2 million used in investing activities for the comparable period a
           year  ago.  Funds  received  from  the  licensing  of  the  Company's
           remaining  rights to use lysostaphin  for research  purposes were the
           primary reason for the improvement. Cash used in financing activities
           for the  three  months  ended  September  30,  2001 was $0.6  million
           compared to $0.4  million  for the same  period a year ago.  Proceeds
           used  for  the  redemption  of  Series  F  preferred  stock  and  the
           repurchase of common stock were the primary reasons for the increased
           use.

           The Company's  primary  sources of financing are cash  generated from
           continuing  operations  and up to a $4.0  million  revolving  line of
           credit with Citizens Bank of Massachusetts  (successor in interest to
           loans originally issued to the Company by State Street Bank and Trust
           Company)  based on certain  criteria.  At  September  30,  2001,  the
           availability under the revolving line of credit was $2.7 million.  At
           September 30, 2001, the Company had no borrowings under the revolving
           line of credit.

           The Company  believes that cash  generated  from  operations and cash
           available under the line of credit will provide sufficient  liquidity
           to fund operations for the next twelve months.

           Future  acquisition  activities  and any  increases in marketing  and
           research and development expenses over the present levels may require
           additional   funds.   The  Company  intends  to  seek  any  necessary
           additional funding through arrangements with corporate collaborators,
           through public or private sales of its securities,  including  equity
           securities, or through bank financing arrangements.  The Company does
           not currently have any specific arrangements for additional financing
           and  there  can be no  assurance  that  additional  funding  will  be
           available at all or on reasonable terms.

           SIGNIFICANT ACCOUNTING PRONOUNCEMENTS

           In  June  2001,  the  Financial  Accounting  Standards  Board  issued
           Statements  of  Financial  Accounting  Standards  No.  141  "Business
           Combinations",  and No. 142 "Goodwill and other  Intangible  Assets",
           effective for fiscal years beginning  after December 15, 2001.  Under
           the new  rules,  goodwill  will no  longer be  amortized  but will be
           subject to annual impairment tests in accordance with the Statements.
           Other  intangible  assets will  continue to be  amortized  over their
           useful lives.

                                       14

<PAGE>


ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

           Market  risk  represents  the risk of changes in value of a financial
           instrument,  derivative or non-derivative,  caused by fluctuations in
           interest rates, foreign exchange rates and equity prices. The Company
           has no  financial  instruments  that  give  it  exposure  to  foreign
           exchange  rates or equity  prices.  The Company's  existing term loan
           with Citizens Bank of Massachusetts bears interest at a rate equal to
           the prime  lending  rate plus one percent.  As a result,  the Company
           does have  exposure to changes in interest  rates.  For  example,  if
           interest rates increase by one percentage  point from current levels,
           the Company would incur  incremental  interest expense of $1 thousand
           through the scheduled maturity of the term loan on February 1, 2002.






                                       15


<PAGE>


                           PART II - OTHER INFORMATION





ITEM 1 - LEGAL PROCEEDINGS

           The company in the ordinary course of its business has brought patent
           infringement  actions  against  companies  that it believes have sold
           chromium  picolinate in violation of the Company's patent rights.  As
           of this date, the Company is evaluating bringing additional actions.




ITEM 6  -  EXHIBITS AND REPORTS ON FORM 8-K

    (a) EXHIBITS

          None

    (b) REPORTS

          None.







                                       16


<PAGE>


                                NUTRITION 21, INC

                                    SIGNATURES


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




                                                        NUTRITION 21, INC.
                                                    ------------------------
                                                            Registrant






Date:  November 13, 2001      By:    /s/ GAIL MONTGOMERY
                                    -------------------------------------
                                    Gail Montgomery
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)


                                     /s/ ALAN J. KIRSCHBAUM
                                    -------------------------------------
                                    Alan J. Kirschbaum
                                    Sr. Vice President, Finance and
                                    Administration and Chief Financial Officer
                                    (Principal Financial Officer)






                                       17