UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549


                                   FORM 10-Q

(Mark One)

  /X/   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
        For the quarterly period ended September 26, 1999

                            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: 0-26126
                        -------
                       SEROLOGICALS CORPORATION
        (Exact Name of Registrant as Specified in its Charter)

                     Delaware                    58-2142225
       (State or other jurisdiction of        (I.R.S. Employer
         incorporation or organization)    Identification Number)

            780 Park North Blvd.
                Suite 110
            Clarkston, Georgia                       30021
          (Address of principal                   (Zip Code)
           executive offices)

                                (404) 296-5595
            (Registrant's Telephone Number Including Area Code)


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         No
                                ------     ------

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

                 Class                      Outstanding at November 5, 1999
                 -----                      -------------------------------
Common Stock, $.01 par value per share                22,304,861


                                      INDEX

                   SEROLOGICALS CORPORATION AND SUBSIDIARIES


PART I.
-------

Item 1.  Financial Statements (Unaudited)

  Condensed Consolidated Balance Sheets -
     December 27, 1998 and September 26, 1999 . . . . . . . . . . . . .3

  Condensed Consolidated Statements of Income (Loss) -
     For the three and nine months ended September 27, 1998
       and September 26, 1999 . . . . . . . . . . . . . . . . . . . . .4

  Condensed Consolidated Statements of Cash Flows -
     For the nine months ended September 27, 1998 and
       September 26, 1999 . . . . . . . . . . . . . . . . . . . . . . .5

Notes to Condensed Consolidated Financial Statements . . . . . . . .6-12

Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations . . . . . . . . . .  13-23

Item 3.  Quantitative and Qualitative Disclosure about Market Risk. . 23


PART II.

Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 24

SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24




PART I.

Item 1.  Financial Statements

                       SEROLOGICALS CORPORATION AND SUBSIDIARIES
                         CONDENSED CONSOLIDATED BALANCE SHEETS
                                    (In thousands)
                                     (Unaudited)
                                                        Dec. 27,    Sept. 26,
                                                          1998        1999
                          ASSETS                        ---------   ---------
CURRENT ASSETS:
 Cash and cash equivalents                               $34,940     $1,488
 Trade accounts receivable, net                           22,072     13,586
 Inventories                                              13,441     36,172
 Other current assets                                      2,563      5,430
                                                         -------    -------
 Total current assets                                     73,016     56,676
                                                         -------    -------
PROPERTY AND EQUIPMENT, net                               16,332     32,587
OTHER ASSETS:		                                          -------    -------
 Goodwill, net                                            51,741     65,662
 Other, net                                                6,242      5,610
                                                         -------    -------
 Total other assets                                       57,983     71,272
                                                         -------    -------
                                                        $147,331   $160,535
                                                         =======    =======
               LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt and capital
  lease obligations                                       $4,406     $1,716
Accounts payable                                           4,028      6,785
Accrued liabilities                                        8,172     16,078
Deferred revenue                                             246        299
                                                         -------    -------
Total current liabilies                                   16,852     24,878
                                                         -------    -------
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS,
less current maturities                                      878     15,622
                                                         -------    -------
OTHER LIABILITIES                                            592        592
                                                         -------    -------
STOCKHOLDERS' EQUITY:
Common stock                                                 243        249
   Additional paid-in capital                             84,983     89,392
Retained earnings                                         43,715     45,091
Accumulated other comprehensive income                        68        373
Less:  treasury stock, at cost                                --    (15,662)
                                                         -------    -------
Total stockholders' equity                               129,009    119,443
                                                         -------    -------
                                                        $147,331   $160,535
                                                         =======    =======

 The accompanying notes are an integral part of these condensed consolidated
                               balance sheets.

                                     3


                 SEROLOGICALS CORPORATION AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
            (in thousands, except share and per share data)
                               (Unaudited)

                                 Nine Months Ended     Three Months Ended
                              Sept. 27,   Sept. 26,   Sept. 27,  Sept. 26,
                                1998         1999       1998       1999
                               ------       ------     ------     ------
Net sales                     $91,506      $90,147     $31,836   $17,886
Costs and expenses:
 Cost of sales                 59,953       62,770      21,425    12,858
 Selling, general and
  administrative expenses      11,527        13,667       3,758     4,469
Interest expense (income),
  net                           (632)           22       (260)        31
Other expense, net (Note 8)    1,995         2,997        535      1,180
Special charges (Note 6)          --         8,575         --      8,575

Income (loss) before          ------        ------     ------     ------
  income taxes                18,663         2,116      6,378     (9,227)
Provision (benefit) for
  income taxes                 6,644           740      2,280     (3,242)
                              ------        ------     ------     ------
Net income (loss)            $12,019        $1,376     $4,098    $(5,985)
                              ======        ======     ======     ======



Net income (loss) per
 common share:
  Basic                        $0.50         $0.06      $0.17     $(0.26)
                              ======        ======     ======     ======
  Diluted                      $0.47         $0.06      $0.16     $(0.26)
                              ======        ======     ======     ======
Weighted average common
and common equivalent
shares outstanding:

  Basic                   23,883,699   24,050,749   24,161,470  23,273,869
                          ==========   ==========   ==========  ==========
  Diluted                 25,792,407   24,852,458   26,047,592  23,273,869
                          ==========   ==========   ==========  ==========


     The accompanying notes are an integral part of these condensed
                        consolidated statements.


                  SEROLOGICALS CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (In thousands)
                                 (Unaudited)

                                             Nine Months Ended
                                           Sept. 27,   Sept. 26,
                                              1998       1999
                                              ----       ----
Operating activities:
Net income                                  $12,019     $1,376

Adjustments to reconcile net
 income to net cash
 provided by operating activities:
   Special charges                               --      8,575
   Depreciation and amortization              4,160      5,871
   Deferred income tax benefit                  (43)        (1)

Changes in operating assets and
 liabilities, net of acquisitions of
 businesses:
   Trade accounts receivable, net            (8,394)     9,243
   Inventories                               (2,563)   (18,597)
   Other current assets                         456       (494)
   Accounts payable                          (1,072)     2,267
   Accrued expenses                           3,248     (3,079)
   Deferred revenue                            (870)        53
                                             ------     ------
    Total adjustments                        (5,078)     3,838
      Net cash provided by                   ------     ------
       operating activities                   6,941      5,214
                                             ------     ------

Investing activities:
 Purchases of property and equipment         (3,746)   (14,945)
 Acquisitions of businesses, net
  of cash acquired                           (4,566)   (27,874)
 Other                                       (2,815)     3,345
      Net cash used in investing             ------     ------
       activities                           (11,127)   (39,474)
                                             ------     ------
Financing activities:
 Net borrowings on revolving line of credit     --      14,767
 Payments on long-term debt and
  capital lease obligations                   (108)        (46)
 Repurchases of common stock                    --     (15,662)
 Proceeds from employee stock plans           5,195      1,749
      Net cash provided by                   ------     ------
       financing activities                   5,087        808
                                             ------     ------
Net increase (decrease) in cash
 and cash equivalents                           901    (33,452)
Cash and cash equivalents,
 beginning of period                         31,812     34,940
                                            -------     ------
Cash and cash equivalents, end of period    $32,713     $1,488
                                            =======     ======

Supplemental Disclosures:
Interest Paid                                  $182       $328
Taxes Paid                                   $4,894     $3,410
Conversion of promissory note
 into common stock                           $1,333     $2,667

     The accompanying notes are an integral part of these condensed
                 consolidated financial statements.


                                  5



                 SEROLOGICALS CORPORATION AND SUBSIDIARIES
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                            SEPTEMBER 26, 1999
                                (UNAUDITED)

1.   ORGANIZATION AND BASIS OF PRESENTATION

     Organization
     Serologicals Corporation (the "Company") is a leading worldwide provider
of biological materials and services to major healthcare companies. The
Company provides value-added antibody-based products that are used as the
active ingredients in therapeutic products for the treatment and management of
diseases such as Rh incompatibility in newborns, rabies and hepatitis and in
diagnostic products such as blood typing reagents and diagnostic test kits. On
December 29, 1998, the Company acquired substantially all of the
assets of Pentex Blood Proteins ("Pentex"), a unit of Bayer Corporation, a
wholly owned subsidiary of Bayer AG.  Located in Kankakee, Illinois, Pentex
supplies a broad line of purified animal and human blood proteins to the
diagnostic and biopharmaceutical industries (Note 2).

     As of November 5, 1999, the Company operated 64 donor centers, 17 of
which specialize in the collection of specialty antibodies and 47 of which
primarily collect source plasma containing non-specialty antibodies from which
a number of products, primarily intravenous immune globulin (IVIG), are
produced. The Company is currently performing a strategic review of its non-
specialty operations, the results of which might include a divestiture of all
or a portion of its 47 non-specialty donor centers. The Company is also engaged
in the development, manufacturing and sale of monoclonal antibodies at its
facilities in the United Kingdom and owns a clinical trial site dedicated to
the management and performance of clinical trials for the pharmaceutical and
biotech industries. On September 14, 1999, the Company entered into a non-
binding letter of intent to divest its clinical trial site, which it expects to
complete in the fourth quarter of 1999.


     Basis of Presentation
     The accompanying unaudited condensed consolidated financial statements
include the accounts of the Company and its subsidiaries.  All significant
intercompany accounts and transactions have been eliminated in consolidation.
The accompanying statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and the
instructions to Form 10-Q.  Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.  In the opinion of management, the
accompanying unaudited condensed consolidated financial statements reflect all
adjustments, which are of a normal recurring nature, to present fairly the
Company's financial position, results of operations and cash flows at the
dates and for the periods presented.  Interim results of operations are not
necessarily indicative of results to be expected for a 12-month period.  The
interim financial statements should be read in conjunction with the audited
consolidated financial statements as of December 27, 1998 and the notes
thereto included in the Company's Annual Report on Form 10-K for the year
ended December 27, 1998.

     Certain prior year amounts have been reclassified to conform to the
current year presentation.

     Earnings (Loss) Per Share
     Basic earnings (loss) per share are calculated by dividing net income
(loss) by the weighted average number of common shares outstanding during the
period. The calculation of the Company's diluted earnings (loss) per share is
similar to basic earnings (loss) per share, except that the numerator is
adjusted by adding back the after-tax amount of interest recognized on
convertible indebtedness, and the weighted average number of shares includes
the dilutive effect of stock options, warrants, convertible indebtedness and
similar instruments. The potentially dilutive effect of stock options,
warrants and convertible indebtedness have been excluded from the calculation
of diluted loss per share for the three months ended September 26, 1999, as
their effect was anti-dilutive.

                                 6

     All share and per share data included herein have been adjusted to
reflect a three-for-two stock split effected in August of 1998.

The following table sets forth the calculation of basic and diluted
earnings (loss) per share (in thousands, except per share amounts):

                                     Nine Months Ended     Three Months Ended
                                Sept. 27   Sept. 26     Sept. 27   Sept. 26
                                   1998       1999        1998      1999
                                   ----       ----        ----      ----
Basic earnings (loss) per share:
  Net income (loss)             $  12,019  $  1,376    $  4,098  $  (5,985)
  Weighted average shares of
   common stock outstanding        23,884    24,051      24,161     23,274
                                ---------  --------    --------  ---------
    Net income (loss) per share $    0.50  $   0.06    $   0.17  $   (0.26)
                                =========  ========    ========  =========
Diluted earnings (loss)
 per share:
  Net income (loss)             $  12,019  $  1,376    $  4,098  $  (5,985)
  Plus:  interest expense on
   convertible indebtedness,
   net of tax                          53        --         (23)        --
    Net income (loss), as       ---------  --------    --------  ---------
     adjusted                   $  12,072  $  1,376    $  4,075  $  (5,985)
                                ---------  --------    --------  ---------
  Weighted average shares of
   common stock outstanding        23,884    24,051      24,161     23,274
  Effect of dilutive securities:
    Stock options and warrants      1,562       801       1,576         --
    Convertible indebtedness          346        --         311         --
  Weighted average shares of    ---------  --------    --------  ---------
    common stock outstanding,
    including dilutive instruments 25,792    24,852      26,048     23,274
                                =========  ========    ========  =========
    Net income (loss) per share   $  0.47   $  0.06     $  0.16   $  (0.26)
                                =========  ========    ========  =========


     Diluted shares outstanding for the three months ended September 26, 1999
exclude approximately 734,000 shares, as the Company incurred a loss in that
period and their inclusion would have been anti-dilutive.  Furthermore,
the effect  of options to purchase approximately 2.5 million shares
and 2.1 million shares have been excluded from the calculation of diluted
shares outstanding for the three and nine months ended September 26, 1999,
respectively, as their exercise price exceeded the average market price of the
Company's common stock in each period and thus their effect was anti-dilutive.


                                      7


      Comprehensive Income (Loss)

     The following table sets forth the calculation of the Company's
     comprehensive income (loss) for the periods indicated below (in thousands):

                                   Nine Months Ended        Three Months Ended
                                   -----------------        ------------------
                                 Sept. 27,   Sept. 26,   Sept. 27,   Sept. 26,
                                    1998       1999        1998        1999
                                   ------     ------      ------      ------
Net income (loss), as reported     $12,019    $1,376      $4,098     $(5,985)
Other comprehensive income
(loss), net of tax:
  Foreign currency translation
   adjustments                          67        31         136         227

Unrealized gains (losses) on securities:
  Unrealized holding (losses)
   gains during period                (422)      501        (154)        554
  Less: reclassification adjustment
   for gains included in net
   income (loss)                        --      (227)         --        (154)
                                    ------    ------       -----       ------
Other comprehensive income (loss),
net of tax                            (355)      305         (18)        627
                                   -------    ------       ------     ------
Comprehensive income (loss)        $11,664    $1,681      $4,080     $(5,358)
                                   =======    ======      ======      ======


2.   ACQUISITION OF PENTEX
     On December 29, 1998, the Company acquired Pentex for $27.5 million (the
"Pentex Acquisition") plus the assumption of certain liabilities, before
recording transaction costs and subject to adjustment based on the closing net
assets of Pentex as of the closing date.  Payment of an additional $1.5
million for the transfer of certain assets purchased in the Pentex Acquisition
has not been finalized. Pentex is engaged in the research, manufacturing,
marketing and sale of quality purified blood protein products primarily to
customers in the diagnostics and biopharmaceuticals industries in the United
States and approximately 25 other countries worldwide.  The Company funded the
acquisition with cash on hand.

     The Pentex Acquisition was accounted for as a purchase in accordance with
APB No. 16, and accordingly, the purchase price has been preliminarily
allocated to the net tangible and identifiable intangible assets acquired
based on their estimated fair values as of the acquisition date.  The excess
of the cost over the estimated fair values of the net tangible and
identifiable intangible assets acquired has been preliminarily allocated to
goodwill.

     The following unaudited data summarize the pro forma results of
operations for the nine months ended September 27, 1998 as if the Pentex
Acquisition had occurred on the first fiscal day of such period.  Pro forma
results of operations for the nine months ended September 26, 1999 are not
presented herein as the results of operations for the two days subsequent to
the Company's 1998 fiscal year end and prior to the consummation of the Pentex
Acquisition are immaterial to the Company.  The unaudited pro forma
information has been prepared for comparative purposes only and does not
purport to represent what the results of operations would actually have been
had the transaction actually occurred on the date indicated, or what the
results of operations may be in the future (in thousands, except per share
data).

       Net sales                    $ 102,027
       Net income                   $  13,110

       Net income per common share:
         Basic                        $  0.55
                                     ========
         Diluted                      $  0.51
                                     ========


                                    8


3.   LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

     Long-term debt and capital lease obligations at December 27, 1998 and
     September 26, 1999 consisted of the following (in thousands):

                                                  Dec. 27,     Sept. 26,
                                                     1998         1999
                                                  ---------    ---------
Revolving credit agreement, interest at 8.25%      $    --      $14,767

Convertible subordinated note payable in
the original principal amount of $4 million,
interest payable quarterly at 4.5%;
maturing on March 7, 2002                             2,667         --

Convertible subordinated note payable,
interest payable quarterly at 4.0%;
principal payable on September 23, 2000               2,550      2,550

Capital lease obligations at varying interest
rates and terms, maturing through 2001                   67         21
                                                     ------     ------
                                                      5,284     17,338
Less current maturities                               4,406      1,716
                                                     ------     ------
                                                     $  878    $15,622
                                                     ======     ======


     During the second quarter of 1999 and pursuant to the terms of the
related note agreement, the holder of a convertible promissory note in the
original principal amount of $4.0 million opted to convert the outstanding
principal balance of the note of approximately $2.7 million into approximately
213,200 shares of the Company's common stock.

     Subsequent to quarter end, on September 28, 1999, the Company amended its
revolving credit facility (the "Revolver) scheduled to mature on October 16,
2000, increasing the total borrowing capacity from $35 million to $75 million.
The Revolver is payable in full on September 28, 2002 and bears interest at
either a floating rate or Eurodollar interest rate plus a margin that
fluctuates based on the Company's leverage ratio.  The margin on the
Eurodollar rate ranges from 1.25% to 2.0% and the margin on the floating rate
option ranges from 0% to .5%.  The Company is required to pay a fee ranging
from .3% to .5%, depending on the Company's leverage, on the unused portion of
the Revolver. The Revolver also contains certain financial covenants that
require the maintenance of minimum levels of cash flow coverage, debt service
coverage and debt to net worth and also provides for maximum levels of debt to
cash flow and rent expense.


                                    9


4.   SEGMENT INFORMATION

     Statement of Financial Accounting Standards No. 131, "Disclosure about
Segments of an Enterprise and Related Information" ("SFAS No. 131"),
established standards for reporting information about operating segments in
annual financial statements and requires selected information in interim
financial reports. Selected financial information is reported below for the
three and nine months ended September 27, 1998 and September 26, 1999 (in
thousands):

                              Nine Months Ended      Three Months Ended
                             Sept. 27   Sept. 26     Sept. 27   Sept. 26
                                1998     1999          1998       1999
                               ------   ------        ------     ------
Net sales-unaffiliated
  customers:
  Therapeutic Products        $75,676   $60,783      $26,593   $8,630
  Diagnostic Products          15,257    28,723        4,975    9,069
  Corporate/Other                 573       641          268      187
                               ------    ------       ------   ------
  Total                       $91,506   $90,147      $31,836  $17,886
                               ======    ======       ======   ======
Gross profit (loss):
  Therapeutic Products        $22,168   $12,168       $7,190     $350
  Diagnostic Products           9,310    15,570        3,218    4,799
  Corporate/Other                  75      (361)           3    (121)
                               ------    ------       ------   ------
  Total                       $31,553   $27,377      $10,411   $5,028
                               ======    ======       ======   ======

Segment operating income (loss):
  Therapeutic Products        $20,625    $8,222       $6,673  ($1,061)
  Diagnostic Products           6,814    10,868        2,365    3,400
  Corporate/Other              (7,413)   (5,380)      (2,385)  (1,780)
                               ------    ------       ------   ------
  Total                       $20,026   $13,710       $6,653   $  559
                               ------    ------       ------   ------

Reconciling items:
  Other expense, net           $1,995    $2,997      $   535   $1,180
  Interest income, net           (632)       22         (260)      31
  Special charges                  --     8,575           --    8,575
Income (loss) before           ------    ------       ------   ------
  income taxes                $18,663    $2,116       $6,378  ($9,227)
                               ======    ======       ======   ======


     Segment operating income (loss) is defined as earnings (loss) before
income taxes, interest, amortization, foreign currency gains and losses,
special charges and other non-operating income and expenses.
"Corporate/Other" includes general corporate expenses, interest income,
interest expense and other operations that do not otherwise meet the SFAS No.
131 criteria for disclosure.  The Company had no intersegment sales during
1998 or 1999.

     On December 29, 1998, the Company purchased Pentex for $27.5 million in
cash at closing.  The cash used was considered a corporate asset, while the
assets purchased are considered assets of the Diagnostic Products segment.
During the third quarter of 1999, the Company wrote off previously capitalized
software development costs of the Therapeutic Products segment in the amount
of $4.2 million.  There were no other material changes in identifiable assets
disclosed in the Company's Annual Report on Form 10-K for the year ended
December 27, 1998.

                                   10


5.   COMMON STOCK REPURCHASES

     During April 1999, the Company's Board of Directors authorized the
repurchase of up to $20 million of the Company's common stock, subject to
market conditions, prevailing stock prices and the Company's capital
resources.  The Company has funded and expects to fund any future repurchases
with existing cash balances, cash flow from operations and availability under
its revolving credit facility.  As of November 5, 1999, the Company had
repurchased a total of approximately 2.6 million shares of its common stock
for aggregate consideration of approximately $17.0 million.


6.   SPECIAL CHARGES

     The effect of the following items was recorded in the third quarter of
1999 and is reflected in the accompanying Condensed Consolidated Statements of
Income (Loss) under the caption "special charges":

     During 1999, the Company was notified by one of its customers that
certain of the Company's anti-D shipments from the prior year had included
several units of plasma that did not meet this customer's exact product
specifications. The customer has indicated to the Company that the units have
been partially manufactured with other units of plasma and thus have
affected a substantial number of other units.  The Company has tentatively
agreed to reimburse this customer for their cost of the product and has
recorded a liability and related expense in the amount of approximately $2.0
million.

     On September 14, 1999, the Company entered into a non-binding letter of
intent to dispose of its clinical trial site, which it anticipates completing
during the fourth quarter of 1999. Pursuant to the requirements of Statement
of Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" ("FAS 121"), the Company
has recorded an expense of $1.2 million to write down the assets to their fair
value, less costs to sell. The operations of the clinical trial site are
included in the Corporate/Other operating segment (Note 4).

     During the third quarter of 1999, the Company terminated a contract with
a third party software vendor that had been developing a custom donor center
operating system, in favor of an alternative vendor. A result of this
decision, the Company wrote off approximately $4.2 million of previously
capitalized costs.

     During September of 1999, the Company's chief executive officer resigned
from that position and as a director of the Company.  The Company has entered
into separation arrangements with this individual and approximately 15 other
corporate employees.  The Company recorded a liability and related expense of
approximately $1.2 million to cover the costs of the separation benefits
payable to these former employees.

7.   COMMITMENT AND CONTINGENCIES

     During the third quarter of 1999, the Company discovered and notified
a customer that it had inadvertently shipped a unit of source plasma
that did not meet product standards requiring negative test results for
certain viral markers.  The customer has indicated to the Company that the
product has been partially manufactured with other units of plasma and
thus has potentially affected a substantial number of units.  However, the
customer has notified the Company that the manufacturing pool containing this
unit has tested negative for the particular virus, and therefore may be
available for further manufacture into finished product.  While the customer
is seeking FDA approval for the use of this product, it has indicated that
absent such approval it will seek recovery from the Company for up to $3.1
million of costs and damages it has incurred.  As the Company is unable to
determine the probability of damages, if any, for which it may ultimately be
responsible, no liability has been recorded as of September 26, 1999.

                                  11

8.   GOODWILL AND OTHER INTANGIBLE ASSETS

     Owing to increasing margin pressures on its non-specialty antibody
business and other factors, the Company has commenced a strategic review
of these operations, the results of which may include a divestiture of all or
a portion of its 47 non-specialty donor centers.  Primarily as a result of
this continuing review, during the third quarter of 1999 and pursuant to the
requirements of FAS 121, the Company performed a review of the recoverability
of its long-lived assets relating to its non-specialty antibody business.  While
the review indicated that no impairment exists as the expected undiscounted
future cash flows exceeded the current carrying values of the assets, the
Company determined that the useful lives used for amortizing goodwill and other
acquired intangible assets relating to its non-specialty antibody business
were no longer applicable.  As a result, effective as of the beginning of the
third quarter of 1999, the Company reduced the useful lives for amortizing the
goodwill and FDA licenses relating to its non-specialty operations from 25
years to approximately 13 years.  The impact of this change was an increase in
amortization expense for the three and nine months of $390,000.


                                 12


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

Forward Looking Statements

     This Quarterly Report on Form 10-Q contains certain "forward looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, which generally can be identified by the use of terms such as "may,"
"expect," "anticipate," "intend," "estimate," "believe," "continue" or similar
variations or the negative thereof. These forward looking statements include,
without limitation, statements regarding increasing regulatory scrutiny; the
impact on the Company of reduced anti-D orders; the impact on the Company of
current industry supply and demand factors and the supply of and demand for
the Company's individual products; the margin pressure on the Company's non-
specialty antibody product line; the potential outcome of a strategic review
of the Company's non-specialty antibody business; the expected divestiture of
the Company's clinical trial site and the timing thereof; the timing and level
of sales that were deferred as a result of the laboratory issue; the level of
cash flows in the fourth quarter of 1999 and the first quarter of 2000; the
cost and timing of implementation of a donor center software system; the
impact of certain operational adjustments regarding anti-D and other antibody
collections; the level of capital expenditures during 1999; the timing of the
validation of the Pentex expansion and the impact thereof; the impact of the
Year 2000 issue, including the cost, timing and ability of the Company to
address the issue; the impact of various factors on the Company's third and
fourth quarter results; and the sufficiency of capital and liquidity to fund
operations, capital expenditures, stock repurchases, working capital needs and
acquisitions and the possible need for supplemental funding. These forward
looking statements are subject to certain risks and uncertainties, including
the Company's ability to continue to attract and retain qualified donors; the
impact of competition; the available supply of anti-D in the market; the
ability of the Company to obtain customer approval to ship certain products;
the ability of the Company to successfully validate its fractionation facility
expansion; changes in government and industry mandated regulations or customer
specifications; changes in the markets for the Company's products and services
and other factors discussed in Part I of the Company's Annual Report on Form
10-K for the year ended December 27, 1998, which could cause actual results to
differ materially.

Overview and Recent Developments

     The Company is a leading worldwide provider of biological materials and
services to major healthcare companies. The Company provides value-added
antibody-based products that are used as the active ingredients in therapeutic
products for the treatment and management of diseases such as Rh
incompatibility in newborns, rabies and hepatitis and in diagnostic products
such as blood typing reagents and diagnostic test kits. Through its protein
fractionation facility, the Company also provides a variety of proteins used
in diagnostic reagents and tissue culture media components for use as
additives in biotech products.  As of November 5, 1999, the Company operated
64 donor centers, 17 of which specialize in the collection of specialty
antibodies and 47 of which primarily collect source plasma containing non-
specialty antibodies from which a number of products, primarily IVIG, are
produced. The Company is currently performing a strategic review of its non-
specialty operations, the results of which might include a divestiture of all
or a portion of its 47 non-specialty donor centers. The Company is also engaged
in the development, manufacturing and sale of monoclonal antibodies at its
facilities in the United Kingdom and owns a clinical trial site dedicated to
the management and performance of clinical trials for the pharmaceutical and
biotech industries. On September 14, 1999, the Company entered into a non-
binding letter of intent to divest its clinical trial site, which it expects to
complete in the fourth quarter of 1999.

     On December 29, 1998, the Company acquired Pentex for $27.5 million.
Payment of an additional $1.5 million for the transfer of
certain assets purchased in the Pentex Acquisition has not been finalized.
Pentex provides a full range of over 100 distinct animal protein products
derived from different animal species.  A number of these products, such as
bovine serum albumin (BSA), are primarily supplied to healthcare companies for
use in diagnostic reagents. The Company also provides a line of highly purified
animal proteins known as tissue culture media components that are used
primarily by biopharmaceutical companies as nutrient additives in cell culture
media.  One example of these media components is Bovine EX-CYTE(R), Growth
Enhancement Media Supplement, which is produced through a patented
manufacturing process.  The Company accounted for the acquisition as a purchase
in accordance with Accounting Principles Board Opinion Number 16.

                                13

     For management purposes, the operations of the Company's subsidiaries are
organized into two primary operating segments, Therapeutic Products and
Diagnostic Products. These segments are based primarily on the differing
nature of the ultimate end use of the Company's products, the differing
production and other value-added processes performed by the Company with
respect to the products and, to a lesser extent, the differing customer bases
to which each reportable segment sells its products.

     The activities of the Therapeutic Products segment primarily include the
collection and sale of specialty and nonspecialty human antibodies that are
used as the active ingredients in therapeutic products for the treatment and
management of diseases such as Rh incompatibility in newborns, hepatitis and
rabies.  The activities of the Diagnostic Products segment include the
Company's monoclonal antibody production facilities and certain human-sourced,
polyclonal antibodies.  While an increasing number of Pentex-branded products
are being used in therapeutic end products, the management of this business
is performed within the Company's diagnostic business unit and, accordingly, is
included in the Diagnostic Products reportable business segment.  The antibodies
and other proteins provided by the Diagnostic Products segment are used in
diagnostic products such as blood typing reagents and diagnostic test kits
and as nutrient additives in biotech products.

     During April 1999, the Company was notified by two of its international
customers that their fractionation facilities used in the manufacture of anti-
D immune globulin would be closed for extended periods of time for various
quality control enhancements, due in part to changing regulatory requirements,
and in one case, the validation of manufacturing procedures relating to the
customer's product. The Company does not expect to generate a sufficient level
of incremental shipments to offset the reduced demand from these customers in
the near term. Primarily as a result of these reduced orders, coupled with an
apparent increase in availability of this raw material from other suppliers,
the Company announced in April 1999 that it expected shipments of anti-D
antibodies for 1999 to be approximately 25-30% lower than the previous year.
The Company does not expect a recovery in shipments at least throughout the
remainder of 1999 or into the first nine months of 2000.

     During the third quarter of 1999, the Company discovered during an
internal quality assurance audit that a limited number of product tests
performed at its central testing laboratory in Clarkston, Georgia had not been
performed in strict accordance with the Company's standard operating
procedures regarding sample storage requirements.  Pending a full
investigation of the matter, the Company ceased shipping all products that
had been tested at its laboratory, including those tested after
the deviation from standard operating procedures had been identified and
corrected.  While the affected units that were ultimately deemed unusable and
thus written off amounted to less than $400,000,  the unaffected units
representing approximately $19 million in sales have been on hold pending final
Company and customer approval. As of November 5, 1999, the Company had
commenced shipping on a limited basis, and expects substantially all of the
remaining units to be shipped by year-end.

     During the third quarter of 1999, the Company recorded special charges
totaling approximately $8.6 million.  These charges consisted of (i) $2.0
million in product claims; (ii) a $1.2 million non-cash write-down of the
Company's clinical trial site, which it intends to sell; (iii) a $4.2 million
non-cash write-off of capitalized software development costs resulting from the
cancellation of a custom development project in favor of an alternative vendor
that the Company believes offers a less expensive solution that can be
implemented in a shorter time period; and (iv) $1.2 million of separation and
other employee benefits related to the resignation of the Company's former
chief executive officer and a corporate office reorganization.

     Increasing regulatory scrutiny continues to be a significant factor
shaping the biologics industry, resulting in more detailed and frequent Food
and Drug Administration (FDA) inspections of the Company's and its customers'
operations, a potentially greater number of observations, deficiency notices
and warning letters per inspection, and more product recalls and temporary or
permanent closures of facilities.  One factor contributing to this trend is
the FDA's implementation of an approach to inspections of donor centers and
laboratory testing and manufacturing facilities, including the Company's
customers', entitled "Team Biologics".  Under this approach, substantially all
such inspections are performed by highly trained field investigators who focus
extensively on the FDA's current good manufacturing practices (cGMP) and
quality systems.  This approach was first applied to plasma fractionators and
subsequently to other biologic product areas, including certain of the

                                  14

Company's operations.  Several large fractionators, including certain of the
Company's customers, have been affected in varying degrees, from complete
shutdowns of manufacturing facilities to operating under a consent decree to
bring their facilities into compliance.  Furthermore, the Company believes
certain manufacturers have experienced a longer than anticipated FDA approval
process of new, relocated or expanded manufacturing and laboratory testing
facilities.

     On occasion, the Company has received notifications and warning letters
from the FDA related to possible deficiencies in the Company's compliance with
cGMP and other FDA requirements.  To date, the Company believes that it has
adequately addressed or corrected such deficiencies and that it is in
substantial compliance with all relevant laws and regulations.  However, since
all of the Company's operations have not yet been fully subjected to Team
Biologics inspections, it is unable to determine what impact, if any, such
inspections will have on the Company and its operations when they occur.

     Another trend the industry is currently experiencing is the continuing
imposition of more rigorous donor screening and other standards by the FDA and
certain regulatory bodies in foreign countries, in particular those governing
the manufacture and sale of plasma-based products in Germany, which represents
a significant portion of the Company's sales.  Furthermore, the Company's
customers and certain industry trade organizations continue to impose stricter
standards.  Such standards, including donor age restrictions, the elimination
of one-time and certain other infrequent donors, restrictions on donors who
have traveled to certain foreign countries and the introduction of new testing
techniques have reduced the pool of, and increased the competition for,
potential donors. Furthermore, the Company believes that, owing in part to the
general strength of the national economy, the financial incentives provided
particularly to donors of non-specialty antibodies are potentially becoming
relatively less attractive, further decreasing the pool of potential donors.

     While the Company continues to be adversely impacted by reduced
collections of non-specialty antibodies, increased collection costs of certain
of its products, delayed or reduced shipments of certain products and the
other factors identified above, it believes that the current supply and demand
factors affecting the industry may serve to enhance the pricing of non-
specialty antibodies in the future.  Furthermore, due in part to the strength
of the end-use demand, the Company remains optimistic about the longer-term
potential for specialty antibodies, including anti-hepatitis, anti-rabies and
anti-D.

     In contrast to these constraints impacting the supply of antibodies, in
particular non-specialty antibodies, current demand for certain of the
antibodies the Company offers has increased for a variety of reasons,
including increased demand for the end products into which they are
manufactured, expanded use of the various end products and increased
manufacturing capacity of certain fractionators as they are able to bring
their facilities into compliance. These factors have led to recent, and in
some cases critical, shortages of certain plasma-based products, most notably
IVIG.

     In order to meet this increased demand for, and to improve the
profitability of, its non-specialty antibody business, the Company is
pursuing various alternatives to increase production at its non-specialty
donor centers.  However, the Company believes that the non-specialty antibody
business may no longer match its strategic objectives of providing high
margin, value-added products to the pharmaceutical, biotech and diagnostic
industries.  As a result, the Company is performing a strategic review of its
non-specialty operations, the results of which might include a divestiture of
all or a portion of its 47 non-specialty donor centers. However, there can be
no assurance that the Company's efforts will be successful, or that any
further impact related to any of the factors discussed above will not have a
material adverse effect on the Company or its operations.

                                  15


Results of Operations

     The following discussion and analysis of the Company's financial
condition and results of operations should be read in conjunction with the
Condensed Consolidated Financial Statements and Notes thereto.

     The following table sets forth certain operating data of the Company
as a percentage of net sales for the periods indicated below.

                              Nine Months Ended      Three Months Ended
                             -------------------    --------------------
                             Sept. 27, Sept. 26,    Sept. 28,  Sept. 26,
                               1998      1999         1998       1999
                               ----      ----         ----       ----
Net sales                     100.0%     100.0%       100.0%     100.0%
Gross profit                   34.5%      30.4%        32.7%      28.1%
Selling, general and
  administrative expenses      12.6%      15.2%        11.8%      25.0%
Net income (loss)              13.1%       1.5%        12.9%     (33.5%)


Three Months Ended September 27, 1998 and September 26, 1999

NET SALES

Consolidated

     Consolidated net sales decreased approximately $14.0 million, or 43.8%,
from $31.8 million in 1998 to $17.9 million in 1999.  The decrease was
primarily attributable to shipping delays affecting approximately $19 million
in sales, offset by approximately $5.5 million of sales related to the Pentex
Acquisition completed at the beginning of the fiscal year. The shipping
delays affected virtually all product tested at the Company's central
testing laboratory, including specialty, certain non-specialty and clinical
diagnostic antibody products.


Therapeutic Products

     Net sales of Therapeutic Products decreased approximately $18.0 million,
or 67.5%, from $26.6 million in 1998 to $8.6 million in 1999.  The decrease
was primarily attributable to the shipping delays resulting from the
Company's central testing laboratory issue. Total net sales of specialty
antibodies decreased approximately $9.0 million, or 79.1%, from $11.4 million
in 1998 to $2.4 million in the current year, while total net sales of non-
specialty antibodies decreased approximately $9.0 million, or 58.9 %, from
$15.2 million in 1998 to $6.3 million in 1999.  The sales of non-specialty
antibodies were affected by the laboratory issue to a lesser degree than sales
of specialty antibodies, as certain of the Company's non-specialty antibody
collections are tested by third party sources, primarily the customers of the
product.


Diagnostic Products

     Net sales of Diagnostic Products increased approximately $4.1 million, or
82.3%, from $5.0 million in 1998 to $9.1 million in 1999.  The increase was
primarily attributable to the Pentex Acquisition completed at the beginning of
the current fiscal year, offset by decreases in certain other diagnostic
products.   Sales of Pentex products, including bovine serum albumin (BSA) and
the EX-CYTE (R) product line, were approximately $5.5 million during 1999, the
first period of ownership by the Company. Total net sales of monoclonal
antibodies decreased approximately $705,000, or 22.2%, from $3.2 million in
1998 to $2.5 million in the third quarter of 1999. The remaining net sales,
primarily human-sourced antibodies used in blood typing reagents and
diagnostic test kits, decreased approximately $679,000, or 37.7%, from $1.8
million in 1998 to $1.1 million in 1999.

                                    16

GROSS PROFIT

Consolidated

     Consolidated gross profit decreased approximately $5.4 million, or 51.7%,
from $10.4 million in the third quarter of 1998 to $5.0 million during 1999.
This decrease was primarily the result of decreased sales resulting from the
Company's central testing laboratory issue, offset in part by the Pentex
Acquisition. The Company estimates that the gross profit related to these
deferred sales is approximately $4 million.  Gross profit as a percentage of
net sales ("gross margin") decreased from 32.7% in 1998 to 28.1% in the
current year.  The decrease was primarily attributable to the write-off of
approximately $400,000 of inventory deemed unusable owing to the issues at the
Company's central testing laboratory, and the increase in certain non-
inventory related fixed costs, such as depreciation, as a percentage of sales.

Therapeutic Products

     Gross profit from Therapeutic Products decreased approximately $6.8
million, or 95.1%, from $7.2 million in 1998 to $350,000 in the third quarter
of 1999.  This decrease was primarily attributable to the shipping delays
resulting from the Company's laboratory issue, the vast majority of which was
therapeutic products. Gross margins on Therapeutic Products decreased from
27.0% to 4.1%, due in large part to a decrease in sales of higher margin
specialty antibodies as a percentage of total therapeutic sales, from 43% in
1998 to 27% in the current year, the $400,000 inventory write off and the
increase of certain non-inventory related fixed costs, such as depreciation,
as a percentage of net sales.  Gross profit and gross margin were also
negatively impacted by increased per liter production costs of non-specialty
antibodies resulting from cost increases and decreased collection volume at many
of the Company's non-specialty donor centers.

Diagnostic Products

     Gross profit from Diagnostic Products increased approximately $1.6
million, or 49.1%, from $3.2 million in 1998 to $4.8 million in 1999,
primarily attributable to the Pentex Acquisition, offset in part by lower
sales of certain other diagnostic products.  Gross margins on Diagnostic
Products decreased from 64.7% in 1998 to 52.9% during 1999, primarily as a
result of product mix.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses increased approximately
$711,000, or 18.9%, from $3.8 million in the third quarter of 1998 to $4.5
million in 1999. The increase was primarily attributable to ongoing selling,
general and administrative expenses incurred as a result of the Pentex
Acquisition and marginal increases in general corporate overhead, offset by
decreased product and service development expenses.

OTHER EXPENSE, NET

     Other expense, net, increased approximately $645,000, or 120.6%, from
$535,000 in 1998 to $1.2 million in 1999.  Of the increase, $390,000 resulted
from a decrease in the useful lives used for intangible assets relating to
the Company's non-specialty antibody operations (see Note 8 to Condensed
Consolidated Financial Statements), and $193,000 was due to the amortization
of goodwill and other intangible assets acquired in the Pentex Acquisition.

                                  17

INTEREST EXPENSE (INCOME), NET

     Interest expense (income), net decreased approximately $291,000, or
111.9%, from net interest income of $260,000 in 1998 to net interest expense
of $31,000 in 1999.  The decrease was due primarily to the use of $27.5
million in cash for the Pentex Acquisition on December 29, 1998 and the
resulting loss of interest income, and to interest expense incurred on the
Company's revolving line of credit used primarily to fund working capital
needs and repurchases of the Company's common stock.


Nine Months Ended September 27, 1998 and September 26, 1999

NET SALES

Consolidated

     Consolidated net sales decreased approximately $1.4 million, or 1.5%,
from $91.5 million in 1998 to $90.1 million in 1999.  The decrease was
primarily attributable to shipping delays affecting approximately $19 million
in sales, offset by approximately $15.9 million in sales related to the
Pentex Acquisition completed at the beginning of the fiscal year.

Therapeutic Products

     Net sales of Therapeutic Products decreased approximately $14.9 million,
or 19.7%, from $75.7 million in 1998 to $60.8 million in 1999. The decrease
was primarily attributable to the shipping delays resulting from the Company's
central testing laboratory issue and to the reduced orders of anti-D from two
international customers. Total net sales of specialty antibodies decreased
approximately $12.0 million, or 34.5%, from $34.8 million in 1998 to $22.8
million in the current year, while total net sales of non-specialty antibodies
decreased approximately $2.9 million, or 7.0 %, from $40.9 million in 1998 to
$38.0 million in 1999.  The sales of non-specialty antibodies were affected to
a lesser degree than sales of specialty antibodies, as certain of the
Company's non-specialty antibody collections are tested by third party
sources, primarily the customers of the product.  Furthermore, prior to the
shipping delays, an increasing number of non-specialty antibodies were sold on
a "gross" pricing basis, for which the increased selling price is reflective
of the Company's handling of laboratory testing services and certain
collection related supplies that were previously provided or otherwise borne
by the customer on a net basis.

Diagnostic Products

     Net sales of Diagnostic Products increased approximately $13.5 million,
or 88.3%, from $15.3 million in 1998 to $28.7 million in 1999.  Of the
increase, $15.9 million was attributable to the Pentex Acquisition completed
at the beginning of the current fiscal year, offset by marginally lower
sales of certain other diagnostic products. Total net sales of monoclonal
antibodies decreased approximately $1.0 million, or 11.0%, from $9.1 million
in 1998 to $8.1 million in the first nine months of 1999. The remaining net
sales, primarily human-sourced antibodies used in blood typing reagents and
diagnostic test kits, decreased approximately $1.4 million, or 22.7%, from
$6.1 million in 1998 to $4.7 million in 1999.

GROSS PROFIT

Consolidated

     Consolidated gross profit decreased approximately $4.2 million, or 13.2%,
from $31.6 million in 1998 to $27.4 million during 1999. This decrease was
primarily the result of decreased sales resulting from the Company's central
testing laboratory issue and to the reduced orders from two international


                                 18


customers of higher margin anti-D antibodies, offset by the Pentex
Acquisition. The Company estimates that the gross profit related to the
deferred sales resulting from the laboratory issue is approximately
$4 million.  Gross margin decreased from 34.5% in 1998 to 30.4% in 1999.  The
decrease was primarily attributable to lower gross margins on non-specialty
antibodies and, to a lesser extent, lower gross margins on the sale of
diagnostic products, primarily a result of product mix.  Gross margins were
also adversely impacted by the increase in the percentage of non-specialty
antibodies sold on a gross basis, as there was relatively insignificant gross
profit attributed to this additional revenue.


Therapeutic Products

     Gross profit from Therapeutic Products decreased approximately $10.0
million, or 45.1%, from $22.2 million in 1998 to $12.2 million in 1999,
primarily as a result of reduced sales resulting from the laboratory issue and
to the reduced orders from two international customers of higher margin anti-D
antibodies. Gross margins on Therapeutic Products decreased from 29.3% to
20.0%, due in large part to a decrease in sales of higher margin specialty
antibodies as a percentage of total therapeutic sales, from 46% in 1998 to 38%
in the current year and and an increase in the per liter production costs of
non-specialty antibodies resulting from cost increases and lower collection
volume.

Diagnostic Products

     Gross profit from Diagnostic Products increased approximately $6.3
million, or 67.2%, from $9.3 million in 1998 to $15.6 million in 1999,
primarily attributable to the Pentex Acquisition, offset in part by lower
gross profit from certain other diagnostic products.  Gross margins on
Diagnostic Products decreased from 61.0% in 1998 to 54.2% during 1999,
primarily a result of product mix.


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses increased approximately $2.1
million, or 18.6%,  from $11.5 million in 1998 to $13.7 million in 1999. The
increase was primarily attributable to ongoing selling, general and
administrative expenses incurred as a result of the Pentex Acquisition and
marginal increases in general corporate overhead, offset by decreased product
and service development expenses.

OTHER EXPENSE, NET

     Other expense, net, increased approximately $1.0 million, or 50.2%, from
$2.0 million in 1998 to $3.0 million in 1999. Of the increase, $578,000 was
due to the amortization of goodwill and other intangible assets acquired in
the Pentex Acquisition and $390,000 resulted from a decrease in the useful
lives used for intangible assets relating to the Company's non-specialty
antibody operations.

INTEREST INCOME, NET

     Interest income, net decreased approximately $654,000, or 103.5%, from
net interest income of $632,000 in 1998 to net interest expense of $22,000 in
1999. The decrease was due primarily to the use of $27.5 million in cash for
the Pentex Acquisition on December 29, 1998 and the resulting loss of interest
income, and to interest expense incurred on the Company's revolving line of
credit used primarily to fund working capital needs and repurchases of the
Company's common stock.

                                   19

Liquidity and Capital Resources

     The following table sets forth certain indicators of financial condition
and liquidity of the Company as of December 27, 1998 and September 26, 1999:

                                                    Dec. 27,        Sept. 26,
                                                     1998             1999
                                                   -------          -------
Cash and cash equivalents                          $34,940          $1,488

Working capital                                     56,164          31,798

Total long-term debt and capital lease obligations   5,284          17,338

Stockholders' equity                               129,009         119,443

Total debt to equity ratio                            4.1%           14.5%


     Cash and cash equivalents and working capital decreased approximately
$33.5 million and $24.4 million, respectively, from December 27, 1998,
primarily due to the use of $27.5 million of cash on hand for the Pentex
Acquisition, $15.7 million in repurchases of the Company's common stock,
funding increases in working capital and capital expenditures, offset in
part by operating cash flow and borrowings on the Revolver (as defined below).

     The Company currently has two principal sources of near-term liquidity:
(i) cash generated by operations, and (ii) available borrowing capacity under
the Revolver.  Owing to the shipping delays the Company has
experienced as a result of the issue at its central testing laboratory, the
Company's primary cash needs have been to fund the increase in certain product
inventories.  However, management believes the Company's liquidity and capital
resources are sufficient to meet its working capital, capital expenditure,
stock repurchase and other anticipated cash requirements over the next twelve
months and may be available for use in acquisitions. Furthermore, the Company
anticipates a substantial positive cash flow from operations during the fourth
quarter of 1999 and the first quarter of 2000 as the sales deferred from the
third quarter are expected to be realized as the plasma operations are
normalized.

     During April 1999, the Company's Board of Directors authorized the
repurchase of up to $20 million of the Company's common stock, subject to
market conditions, prevailing stock prices and the Company's capital
resources.  The Company expects to fund any future repurchases primarily with
cash flow from operations and availability under the Revolver.  As of November
5, 1999, the Company had repurchased a total of approximately 2.6 million
shares of its common stock for aggregate consideration of approximately $17.0
million.

     Net cash provided by operating activities in 1999 was $5.2 million versus
$6.9 million in the previous year.  This decrease was attributable to $10.6
million in lower net income, offset by $8.6 million in non-cash special
charges, $1.7 million of additional non-cash depreciation and amortization
expense and a $1.4 million smaller investment in working capital.  The
investment in working capital in 1999 was net of a $9.2 million source of
cash from a decrease in accounts receivable and a $18.6 million use of cash
from an increase in inventories, both primarily resulting from the shipping
delays encountered in the third quarter.

     Net cash used in investing activities during 1999 was $39.5 million as
compared to $11.1 million in 1998.  Investing activities in 1999 consisted
primarily of the Pentex Acquisition, related transaction costs and capital
expenditures relating primarily to the expansion of the Pentex manufacturing
facility and a custom software project.  Investing activities in 1998
primarily consisted of the acquisition of four non-specialty donor centers
and a clinical trial site and capital expenditures.


                                20

     The Company expects capital expenditures for the remainder of the year
of approximately $1.9 million, primarily relating to information technology
initiatives and the renovation or relocation of a number of donor centers.

     Net cash provided by financing activities was $808,000 in 1999 as compared
to $5.1 million in 1998. Financing activities in 1999 primarily consisted of
approximately $15.7 million of common stock repurchases, offset by borrowings
on the Revolver and proceeds from the exercise of stock options.  Financing
activities in 1998 consisted primarily of proceeds from the exercise of stock
options.

     Total long-term debt and capital lease obligations increased
approximately $12.1 million, from $5.3 million at December 28, 1998 to $17.3
million at September 26, 1999.  The increase was primarily from borrowings on
the Revolver to fund short-term working capital needs and the Company's share
repurchase program, offset in part by the conversion of approximately $2.7
million principal amount of a convertible note into approximately 213,200
shares of the Company's common stock.

     Subsequent to quarter end, on September 28, 1999, the Company amended its
revolving credit facility (the "Revolver) scheduled to mature on October 16,
2000, increasing the total borrowing availability from $35 million to $75
million.  The Revolver is payable in full on September 28, 2002 and bears
interest at either a floating rate or Eurodollar interest rate plus a margin
that fluctuates on the basis of the Company's leverage ratio.  The margin on
the Eurodollar rate ranges from 1.25% to 2.0% and the margin on the floating
rate option ranges from 0% to .5%.

Outlook

Therapeutic Products

     Demand for non-specialty antibodies remains strong and generally exceeds
the Company's ability to supply targeted amounts to its customers.  However,
the Company expects continued margin pressure on this product line unless and
until it is able to increase its collections of this product and its selling
prices to its customers. Furthermore, the Company believes that the non-
specialty antibody business may no longer match its strategic objectives of
providing high margin, value-added products to the pharmaceutical, biotech and
diagnostic industries.  As a result, the Company is performing a strategic
review of its non-specialty operations, the results of which might include a
divestiture of all or a portion of its 47 non-specialty donor centers.
However, there can be no assurance that the Company will be successful in any
of these efforts, that it will be able to regain historical levels of
profitability for this product line or that any further impact from the
factors affecting the business will not have a material adverse effect on the
Company or its operations.

     Due in large part to the previously announced reduced demand from two of
its international customers, the Company expects 1999 sales of anti-D
antibodies to be 25-30% lower than the previous year, and does not expect a
recovery throughout the remainder of 1999 or into the first nine months of
2000.  Furthermore, additional operational adjustments may be required,
including reducing the level of anti-D specialty antibody collections, which
could adversely affect the per unit production costs of anti-D and other
specialty therapeutic products.

     Demand for the Company's other specialty antibody products, anti-
hepatitis and anti-rabies, continues to be strong and is expected to increase
in 2000.  The Company expects the demand for anti-hepatitis to exceed its
current production capabilities and is pursuing various strategies to increase
its production, particularly at its 17 specialty donor centers.

     Subsequent to quarter end, the Company commenced shipping product tested
at its central testing laboratory on a limited basis.  The Company expects
that substantially all of the remaining units deferred as a result of the
laboratory issue, representing approximately $19 million in sales, will be


                                  21

shipped in the fourth quarter of 1999.  However, the resumption of certain of
these shipments is contingent on, among other items, customer review and
approval.

Diagnostic Products

     The Company anticipates moderate increases in sales of monoclonal and
polyclonal antibodies used in blood typing reagents and antibodies used in
diagnostic test kits.  The Company expects demand for its Pentex line of
blood protein products to increase, in particular the EX-CYTE(R) line of
tissue culture media.  To increase its capacity and ability to satisfy this
increased demand, the Company recently completed a $13 million expansion of
its manufacturing facilities in Kankakee, Illinois.  The Company expects to
complete validation and commence shipping product produced in the expanded
facility in the fourth quarter of 1999.

     The Company is developing a line of monoclonal antibodies to be used in
diagnostic test kits, which were historically derived from human donors.
While sales to date have not been significant, the Company believes that this
product line could provide additional opportunities for growth in Diagnostic
Products.

Year 2000 Issue

     The Year 2000 issue results from computer-based systems that use two
digits rather than four to define the applicable year. If not corrected, many
computer applications could fail or create erroneous results after December
31, 1999, or before, to the extent a system references future dates.  This
Year 2000 issue is believed to affect the majority of all companies and
organizations worldwide, including the Company.

     The Company has developed and implemented a plan to achieve Year 2000
readiness. This plan's activities are intended to remediate the Year 2000
issue for any non-compliant critical information technology ("IT") systems and
non-IT devices in use by the Company so that the Company may continue its
operations without interruption or with minimal disruption. The Company's plan
also includes communication with customers, suppliers, outsource laboratories,
financial institutions and other third parties with which it has a material
relationship to determine the expected degree of their Year 2000 compliance,
and to monitor their progress towards Year 2000 readiness. The Company's Year
2000 plan includes five primary phases: (1) inventory, (2) assessment, (3)
remediation, (4) testing/validation, and (5) implementation. The Company has
used a risk-based analysis of its operations to identify those items that are
critical to the Company and at risk.

     To date, the Company has successfully completed all phases with regards
to its critical IT systems and Phases 1-4 with regards to its non-critical IT
systems.  The Company expects to complete the last phases with respect to the
one remaining non-critical system by December 3, 1999.  While the Company had
originally intended to implement a custom-developed donor center operating
system that would have replaced its non-compliant inventory maintenance
systems, parallel remediation efforts of these systems have eliminated any
impact of the cancellation of this software project as it relates to Year 2000
compliance.

     The Company is also analyzing all non-IT systems that are material to its
operations that could contain date-sensitive embedded technology, such as its
automated plasmapheresis machines and plasma storage freezers. The Company has
completed all phases of its Year 2000 plan with respect to these systems,
which revealed no compliance issues of any significance.

     While the Company currently markets its products to over 200 customers
worldwide, approximately 84% of the Company's net sales during 1998 were made
to its top ten customers.  Furthermore, certain plasmapheresis and other
supplies critical to its operations are purchased from a limited number of
suppliers. As a result of these concentrated risks, the inability of any of
the Company's major suppliers to provide it with critical supplies, or any
prolonged delay or other disruption in the manufacturing, laboratory testing
or other processes of the Company's customers and outsource laboratories,
could have a material adverse effect on the Company.  The Company has
communicated with all material third parties to determine the status of their

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Year 2000 compliance. None of the responses received suggests that any of
these third parties expect the Year 2000 issue to cause an interruption in its
operations that would have a material adverse impact on the Company.  However,
because these third parties are exposed to the risk of failure not only of
their own systems, but of other third parties, the ultimate effect of the Year
2000 issue is subject to a high degree of uncertainty.  Furthermore, due to
the inherent lack of control over these third parties, the Company is able to
give no assurance as to the current readiness or success of these parties'
Year 2000 compliance.

     Based on the information known to date, the Company believes that the
most likely worst-case Year 2000 scenario would entail an interruption in its
business, including disruption in the collection or manufacturing of
antibodies due to the inability to obtain critical supplies, and loss of
revenue due to the inability of the Company's customers to further manufacture
the Company's products or to provide the required laboratory testing services.
The Company could also be significantly affected by the failure of
infrastructure services such as electricity.  While the Company is unable to
quantify the effect of such a scenario, it could potentially have a material
adverse impact on the Company's results of operations, liquidity or financial
condition.

     Based on the analysis the Company has completed to date, it expects the
cost of its Year 2000 compliance program to be approximately $200,000, the
majority of which has already been incurred.  The Company believes that it
will be able to complete the remaining phases of its Year 2000 compliance plan
by the end of 1999 and does not currently anticipate any material disruption
of its operations as the result of any failure by the Company to be in
compliance.  Furthermore, the Company has developed a contingency plan
addressing the potential noncompliance of material third parties, primarily
suppliers. The Company has also developed a contingency plan for certain
infrastructure services such as electricity, based on its existing contingency
plan for reacting to natural disasters.


  Item 3.  Quantitative and Qualitative Disclosures about Market Risk

     There have been no material changes regarding the Company's market risk
position from the information provided in its Annual Report on Form 10-K for
the fiscal year ended December 27, 1998.  The quantitative and qualitative
disclosures about market risk are discussed under the caption "Market Risk" in
Item 7-Management's Discussion and Analysis of Financial Condition and Results
of Operations, contained in the Company's Form 10-K.


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PART II.

Item 6.  Exhibits and Reports on Form 8-K

     a.   Exhibits:

            Exhibit 10.1:  Third Amended and Restated Credit Agreement dated as
                           of September 28, 1999.
            Exhibit 27:  Financial Data Schedule

     b.   Reports on Form 8-K:

          1.)  On August 9, 1999, the Company filed a Current Report on
               Form 8-K, in which it reported under Item 5-Other Events, on
               July 26, 1999 its board of directors had adopted a stockholders
               rights plan.

          2.)  On September 10, 1999, the Company filed a Current
               Report on Form 8-K, in which it reported under Item 5-Other
               Events, that it expected a loss in its third fiscal quarter of
               1999 due to shipping delays, other product related issues and
               certain one-time, non-cash charges.


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.


                                          SEROLOGICALS CORPORATION
                                          ------------------------
                                          (Registrant)


Date:  November 12, 1999              By:  /s/ Peter J. Pizzo, III
                                          -----------------------
                                          Peter J. Pizzo, III
                                          Chief Financial Officer
                                          (Principal Financial and
                                           Accounting Officer)



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