<PAGE>   1
                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                               AMENDMENT NO. 1 TO
                                    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 April 30, 2000

                                       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 0-22354

                         MARTEK BIOSCIENCES CORPORATION
             (Exact name of registrant as specified in its charter)



                               Delaware 52-1399362
           (State of Incorporation) (IRS Employer Identification No.)

                   6480 Dobbin Road, Columbia, Maryland 21045
                    (Address of principal executive offices)

        Registrant's telephone number including area code: (410)740-0081

                                      None
(Former name, former address and former fiscal year, if changed since last
report)



      Common stock, par value $.10 per share: 17,591,679 shares outstanding
                               as of June 8, 2000



<PAGE>   2



                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                         MARTEK BIOSCIENCES CORPORATION
                                 Balance Sheets
                                 ($in thousands)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                      April 30,    October 31,
                                                        2000          1999
--------------------------------------------------------------------------------
                                                     (Unaudited)
<S>                                                    <C>           <C>
Assets:
Current assets
     Cash and cash equivalents                             $3,395        $1,180
     Short-term investments and marketable securities      21,511        15,178
     Accounts receivable                                    1,450         1,116
     Inventories  (Note 3)                                  3,974         5,216
     Other current assets                                   2,111         1,013
                                                    ----------------------------
Total current assets                                       32,441        23,703
Property, plant and equipment, net                         15,106        15,469
                                                    ----------------------------

Total assets                                              $47,547       $39,172
                                                    ============================


Liabilities and stockholders' equity:
Current liabilities
     Accounts payable                                        $518          $693
     Accrued liabilities                                    1,246         1,329
     Current portion of notes payable                       1,236         1,479
     Current portion of unearned revenue (Note 6)           2,133           ---
                                                    ----------------------------
Total current liabilities                                   5,133         3,501
Long-term portion of notes payable (Note 2)                   ---           472
Long-term portion of unearned revenue (Note 6)              2,356           ---
Commitments (Note 2)
Stockholders' equity
     Preferred stock, $.01 par value,
         4,700,000 shares authorized;
         none issued or outstanding                           ---           ---
     Series A junior participating preferred
         stock, $.01 par value, 300,000 shares
         authorized; none issued or outstanding               ---           ---
     Common stock, $.10 par value; 30,000,000
         shares authorized; 17,572,279
         and 16,492,229 shares issued and
         outstanding at April 30, 2000 and
         October 31, 1999, respectively                     1,757         1,649
     Additional paid-in capital                           120,082       107,447
     Accumulated deficit                                  (81,781)      (73,897)
                                                    ----------------------------
Total stockholders' equity                                 40,058        35,199
                                                    ----------------------------
Total liabilities and stockholders' equity                $47,547       $39,172
                                                    ============================
</TABLE>

                             See accompanying notes.



                                      2
<PAGE>   3


                         MARTEK BIOSCIENCES CORPORATION

                            Statements of Operations
             (Unaudited - $ in thousands, except for per share data)

<TABLE>
<CAPTION>
                                            Three months          Six months
                                           ended April 30,      ended April 30,
--------------------------------------------------------------------------------
                                           2000       1999       2000      1999
--------------------------------------------------------------------------------

<S>                                 <C>         <C>       <C>       <C>
Revenues:
     Product sales:
         Nutritional product sales       $1,151       $740     $2,063    $1,415
         Stable isotope and other
          product sales                     481        540      1,157     1,264
                                       --------------------   ------------------
      Total product sales                 1,632      1,280      3,220     2,679
      License fees and related revenues      11        ---         11       ---
      Royalties                             107         80        198       167
      Research and development revenue      618        140        730       207
                                       --------------------   ------------------
Total revenues                            2,368      1,500      4,159     3,053

Costs and expenses:
      Cost of product sales               1,274      1,100      2,502     2,081
      Research and development            3,575      2,160      6,412     4,723
      Selling, general and administrative 1,941      1,901      3,554     3,616
                                       --------------------   ------------------
Total costs and expenses                  6,790      5,161     12,468    10,420
                                       --------------------   ------------------
Loss from operations                     (4,422)    (3,661)    (8,309)   (7,367)

Other income and expense, net               321         41        425       124
                                       --------------------   ------------------

Net loss                                ($4,101)   ($3,620)   ($7,884)  ($7,243)
--------------------------------------------------------------------------------

Net loss per share, basic and diluted    ($0.24)    ($0.24)    ($0.47)   ($0.49)
--------------------------------------------------------------------------------

Weighted average common
  shares outstanding                 17,397,572 14,934,594 16,945,862 14,919,170
--------------------------------------------------------------------------------
</TABLE>


                             See accompanying notes.

                                      3
<PAGE>   4


                         MARTEK BIOSCIENCES CORPORATION

                            Statements of Cash Flows
                          (Unaudited - $ in thousands)

<TABLE>
<CAPTION>
                                                      Six Months ended April 30,
--------------------------------------------------------------------------------
                                                         2000           1999
--------------------------------------------------------------------------------

<S>                                                  <C>            <C>
Operating activities:
     Net loss                                          ($7,884)       ($7,243)
     Adjustments to reconcile net loss to net cash
         used in operating activities:
         Depreciation and amortization                     755            721
         Other non-cash items                              ---            348
         Changes in assets and liabilities:
             Accounts receivable                          (334)          (169)
             Inventories                                 1,242           (634)
             Other current assets                       (1,098)           (38)
             Accounts payable                             (175)           (99)
             Accrued liabilities                           (83)          (371)
             Unearned revenue                            4,489            ---
                                                     ---------------------------
  Net cash used in operating activities                 (3,088)        (7,485)

Investing activities:
         Purchase of short-term investments
            and marketable securities                  (15,583)        (7,173)
         Proceeds from sale of short-term
            investments and marketable securities        9,250         12,582
         Purchase of property, plant and equipment        (392)          (263)
                                                     ---------------------------
  Net cash (used in) provided by investing activities   (6,725)         5,146

Financing activities:
         Proceeds from the issuance of common stock
            in private placement                        10,249            ---
         Proceeds from the exercise of warrants
            and options                                  2,494            442
         Repayment of notes payable                       (715)          (656)
                                                     ---------------------------
  Net cash provided by (used in) financing activities   12,028           (214)
                                                     ---------------------------

  Net increase (decrease) in cash
     and cash equivalents                                2,215         (2,553)
  Cash and cash equivalents at beginning of year         1,180          4,498
                                                     ---------------------------

  Cash and cash equivalents at end of period            $3,395         $1,945
                                                     ===========================
</TABLE>

                             See accompanying notes.


                                      4
<PAGE>   5


                         MARTEK BIOSCIENCES CORPORATION

                       Statements of Stockholders' Equity
                          (Unaudited - $ in thousands)


<TABLE>
<CAPTION>
                                                  Additional
                                 Common Stock      Paid-in   Accumulated
                              Shares      Amount   Capital     Deficit     Total


<S>                            <C>         <C>    <C>        <C>       <C>
Balance at
October 31, 1999                 16,492,229 $1,649 ($107,447) ($73,897) $35,199
--------------------------------------------------------------------------------

Issuance of common stock in
private placement                   845,652     85    10,164       ---   10,249

Exercise of warrants, stock
options and other                   234,398     23     2,471       ---    2,494

Net loss                                ---    ---       ---    (7,884)  (7,884)
--------------------------------------------------------------------------------

Balance at
April 30, 2000                   17,572,279 $1,757  $120,082  ($81,781) $40,058
--------------------------------------------------------------------------------
</TABLE>

                             See accompanying notes.

                                      5
<PAGE>   6


                    Notes to Financial Statements (Unaudited)


1.  Basis of Presentation and Accounting Policies

         Basis of Presentation. The accompanying unaudited financial statements
have been prepared in accordance with generally accepted accounting principles
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 generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the quarter ended April
30, 2000 are not necessarily indicative of the results that may be expected for
the year ended October 31, 2000. For further information, refer to the financial
statements and footnotes thereto included in Martek Biosciences Corporation's
annual report on Form 10-K for the year ended October 31, 1999.

         Revenue Recognition. Revenues on cost reimbursement and fixed price
contracts are generally recognized on the percentage of completion method of
accounting as costs are incurred. Revenue is recognized on product sales when
goods are shipped. Revenue from licensing agreements is recognized in general
over the term of the agreement, or in certain circumstances, when milestones are
met. Revenue recognized in the accompanying Statements of Operations is not
subject to repayment. Revenue received that is related to future performance
under such contracts is deferred and recognized as revenue when earned.

         Foreign Currency Transactions. Foreign currency transactions are
translated into U.S. dollars at prevailing rates. Gains or losses resulting from
foreign currency transactions are included in current period income or loss as
incurred. Currently, all material transactions of the Company are denominated in
U.S. dollars, and the Company has not entered into any material transactions
that are denominated in foreign currencies.

         Inventories. Inventories are stated at the lower of cost or market
including appropriate elements of material, labor and indirect costs and are
valued using the average cost method. Inventories include products and materials
held for sale as well as products and materials that can alternatively be used
in the Company's research and development activities. Inventories identified for
development activities are expensed in the period in which such inventories are
designated for such use.

         Impaiment of Long Lived Assets and Long Lived Assets to be Disposed Of.
The Company reviews long-lived assets and certain identifiable intangibles for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future undiscounted net cash flows expected to be generated by the asset. For
purposes of estimating undiscounted cash flows, the Company does not group cash
flows on different levels as only one significant line of business is
identified. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of assets
exceed the fair value of the assets. Assets to be disposed of are reported at
the lower of the carrying amount or fair value less costs to sell. In the past,
the Company has not incurred any impairment expense.

         Segment Information. The Company currently operates in one business
segment, that being the development and commercialization of novel products from
microalgae. The Company is managed and operated as one business. The entire
business is comprehensively managed by a single management team that reports to
the Chief Executive Officer. The Company does not operate separate lines of
business or separate business entities with respect to its products or product
candidates. Accordingly, the Company does not accumulate discrete financial
information with respect to separate product areas and does not have separately
reportable segments as defined by SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information."


                                      6
<PAGE>   7

         Short-term Investments and Marketable Securities. The Company has
classified all debt securities as available-for-sale. Available-for-sale
securities are carried at specific identification cost and consist of U.S.
government obligations with average maturities of less than six months. Realized
gains and losses and declines in value judged to be other than temporary are
included in other income, with material unrealized gains and losses reported as
a separate component of stockholders' equity.

         Reclassification. Certain amounts in the prior period's financial
statements have been reclassified to conform to the current period presentation.


2.  Notes Payable and Commitments

         The Company had commitments at April 30, 2000 to fund up to $1.5
million of Phase III Small Business Innovation Research ("SBIR") technology
commercialization expenses, provided the technology under existing Phase II SBIR
grants yields commercial opportunities favorable to the Company.

         Costs under U.S. Government contracts are subject to audit by the
appropriate U.S. Government agency. Management believes that cost disallowances,
if any, arising from such audits of costs charged to government contracts
through April 30, 2000, would not have a material effect on the financial
statements.

         The Company has entered into various collaborative research and license
agreements. Under the agreements, the Company is required to fund research or to
collaborate on the development of potential products. Certain of these
agreements also commit the Company to pay royalties upon the sale of certain
products resulting from such collaborations.

         The Company is required to meet certain covenants in relation to its
outstanding term loans, which had an outstanding balance of $1,236,000 at April
30, 2000. These covenants outline minimum cash, current ratio and net worth
requirements. The Company was in compliance with all of these covenants at April
30, 2000.

3.  Inventories

    Inventories consist of the following:

<TABLE>
<CAPTION>
                                              April 30,          October 31,
                                                 2000                1999
                                         -----------------    ---------------

<S>                                           <C>                <C>
            Finished Products                  $2,786,279         $2,206,051
            Work in Process                       807,244          2,683,477
            Raw Materials                         380,715            326,737
                                         -----------------    ---------------
                                               $3,974,238         $5,216,265
                                         =================    ===============
</TABLE>


4.  Income Taxes


         At April 30, 2000, the Company has net operating loss carryforwards of
approximately $96,156,000 for income tax purposes that expire in years 2000
through 2020.

         Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. The Company's
total net deferred tax assets, which resulted primarily from net operating
losses, were $38,462,000 and $32,787,000 at April 30, 2000 and 1999,
respectively. Because it is more likely than not that some portion or all of
these deferred tax assets will not be realized, they were fully reserved for by
a valuation allowance at April 30, 2000 and 1999.

                                      7
<PAGE>   8

5.  Private Placement of Common Stock

         On June 1, 1999, 1,528,935 shares of the Company's common stock and
warrants to purchase 458,679 shares of common stock were issued in a private
placement resulting in net proceeds to the Company of approximately $13.8
million. The stock was issued at a thirty day average trading price of $9.03 per
share. The warrants are exercisable for a period of three years from date of
issuance at $10.84 per share.

         On February 8, 2000, the Company exercised its option to close a $10.25
million private financing in which 845,652 shares of the Company's common stock
and warrants to purchase 253,695 shares of common stock were issued to a group
of accredited investors pursuant to a 1998 private placement funding commitment.
The stock was issued at a thirty day average trading price of $12.12 per share.
The warrants are exercisable for a period of three years from date of issuance
at $14.55 per share.

6.  Unearned Revenue

         On March 31, 2000, Martek entered into a worldwide non-exclusive
license agreement with Abbott Laboratories relating to the use of the Company's
proprietary long-chain polyunsaturated fatty acids in infant formulas. The total
consideration received by the Company of $4.5 million, which represents license
fees and royalty prepayments, has been recorded as unearned revenue as of April
30, 2000. Of this amount, $500,000 may be credited against on-going royalties or
Abbott's purchase from the company of its products. The license fees are
non-refundable and will be recognized as revenue on a straight-line basis over
the twenty-five year term of the agreement. The non-refundable royalty
prepayment, as well as potential on-going royalties, will be recognized as
revenue as products are introduced by the licensee in accordance with the terms
of the agreement. The license agreement may be terminated by the licensee upon
proper notification subsequent to the first anniversary of the date upon which
the licensee has made all payments to the Company in accordance with the
agreement. The Company recognized approximately $11,000 in license fee revenue
and no royalty revenues from this agreement during the three month period ended
April 30, 2000.

                                      8
<PAGE>   9
Item  2.  Management's Discussion and Analysis of Financial Condition and
          Results of Operations

General

         This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements concerning Martek's
business and operations, including among other things, statements concerning:
(1) expectations regarding future revenue growth, product introductions,
distribution, sales, applications and potential marketing partnerships; (2)
expectations regarding sales and royalties by and from formula licensees; (3)
expectations regarding Martek's GRAS Notification with the FDA and potential
approval of the Company's licensees to market DHA and ARA oils in U.S. infant
formula; (4) expectations regarding future efficiencies in manufacturing
processes and the cost of production of Martek's nutritional oils; (5)
expectations regarding future research and development costs, and (6)
expectations regarding additional capital expenditures needed in relation to
fermentation and oil processing activities. Forward-looking statements include
those statements containing such words as "will," "should," "could,"
"anticipate," "believe," "plan," "estimate," "expect," "intend," and other
similar expressions. Such statements involve risks and uncertainties and actual
results may differ materially due to a variety of risk factors set forth from
time to time in Martek's filings with the Securities and Exchange Commission.

         Martek, founded in 1985, is a leader in the development and
commercialization of high value products derived from microalgae, including
nutritional products, pharmaceutical research and development tools and
diagnostics. Martek develops, manufactures and sells products from microalgae.
Martek's products include: (1) specialty, nutritional oils for infant formula,
nutritional supplements and food ingredients that may play a beneficial role in
promoting mental and cardiovascular health, and in the development of the eyes
and central nervous system in newborns; (2) stable isotope products and
technologies to visualize molecular interactions for drug discovery and
development; and (3) new, powerful fluorescent markers for diagnostics, rapid
miniaturized screening and gene and protein detection. In 1989, Martek began to
realize revenues from sales of its stable isotope products. In 1992, Martek
realized its first revenues from license fees related to its nutritional oils
containing docosahexaenoic acid ("DHA") and arachidonic acid ("ARA") and sales
of sample quantities of these oils. In 1995, Martek recognized its first
product and royalty revenues from sales of infant formula containing these
oils, and in 1996, Martek began to realize revenues from the sale of
Neuromins(R), a DHA dietary supplement.

         Martek has incurred losses in each year since its inception. At April
30, 2000, Martek's accumulated deficit was $81,781,000. Martek expects to
continue its development, production optimization and product marketing
activities and as a result, expects losses to continue for at least the next
year, or until significant sales of its nutritional oils and/or Neuromins(R) DHA
products occur. In addition, Martek expects to continue to experience
quarter-to-quarter and year-to-year fluctuations in revenues, expenses and
losses, some of which may be significant. The timing and extent of such
fluctuations will depend, in part, on the timing and receipt of oils-related
revenues. Because the extent and timing of future oils-related revenues are
largely dependent upon Martek's licensees and/or other future third-party
collaborators, the timing or likelihood of future profitability is largely
dependent on factors over which the Company has no control.

Management Outlook and Regulatory Issues

         Management believes that while quarterly results may show fluctuations
in product sales, the outlook for future revenue growth remains positive and
that fiscal 2000 sales will surpass prior year levels. Specifically, management
believes that for fiscal 2000 as a whole: (1) term infant formula containing
Martek's oils will be introduced in additional countries; (2) sales and
royalties related to Martek's nutritional oils will continue to grow; and (3)
sales of new high value products from Martek's stable isotope group will
increase.

                                      9

<PAGE>   10

         Management believes that recent scientific evidence further supports
the contention that humans throughout life will benefit from DHA
supplementation. This could represent a far larger market for DHA than the
market for infants. To realize this market, Martek is pursuing long-term
marketing partnerships with large nutritional products and/or pharmaceutical
companies to promote Martek's non-infant formula nutritional oil products.
Because of this objective, certain shorter-term marketing arrangements of lesser
scope have not been entered into, thus modestly sacrificing short-term product
sales. On March 31, 2000, Martek entered into a worldwide non-exclusive license
agreement with Abbott Laboratories relating to use of the Company's proprietary
long-chain polyunsaturated fatty acids in infant formulas. The total
consideration received by the Company of $4.5 million, which represents license
fees and royalty prepayments, has been recorded as unearned revenue as of April
30, 2000. Of this amount, $500,000 may be credited against on-going royalties or
Abbott's purchase from the Company of its products. The license fees are
non-refundable and will be recognized as revenue on a straight-line basis over
the twenty-five year term of the agreement. The non-refundable royalty
prepayment, as well as potential on-going royalties, will be recognized as
revenue as products are introduced by the licensee in accordance with the terms
of the agreement. The license agreement may be terminated by the licensee upon
proper notification subsequent to the first anniversary of the date upon which
the licensee has made all payments to the Company in accordance with the
agreement. The Company recognized approximately $11,000 in license fee revenue
and no royalty revenues from this agreement during the three month period ended
April 30, 2000. Martek now has license agreements with manufacturers making
approximately 85% of U.S. and 60% of worldwide infant formula. Management
believes that broad introductions of infant formula containing Martek's
nutritional oils and/or a strategic alliance with a large scale nutritional
products and/or pharmaceutical company will occur in the future. However,
management is unable to accurately predict when such events will occur.

         Four of Martek's infant formula licensees have obtained the regulatory
approval, where required, to sell infant formula supplemented with the Company's
oils in over 60 countries for term or pre-term infant formula products. Martek
and its licensees are in the process of responding to certain questions raised
by the FDA in connection with evaluating the Company's oils for inclusion in
U.S. infant formula. Additionally, during February 2000, Martek filed a
Generally Recognized As Safe ("GRAS") Notification with the FDA for the use of
its DHA and ARA in infant formula. Management believes that the data establish
that its sources of ARA and DHA are GRAS when used in infant formula.
Management also believes that the FDA review of the GRAS notification will have
a favorable outcome. In the event that the FDA review results in a favorable
outcome, each licensee will still need to obtain a separate FDA authorization
before marketing an infant formula with the Company's sources of DHA and ARA in
the U.S. Management believes that this regulatory process will take a minimum
of three to six additional months. There can be no assurance that the FDA will
have a favorable review of the GRAS notification, that a licensee will pursue
the regulatory authorization to market an infant formula containing Martek's
DHA and ARA in the U.S., that the FDA will authorize the marketing of such an
infant formula, or that the regulatory process will not involve significantly
longer delays that may materially and adversely affect the timing and
introduction of infant formula's containing Martek's products. Nevertheless,
management anticipates that during the next twelve months, new infant formula
products containing Martek's oils will continue to be introduced in various
countries around the world and overall product sales, including sales from
infant formula related products, will increase over the prior year.


Results of Operations - Comparison of Quarters and Six Months Ended April 30,
2000 and 1999

         Revenues for the quarter ended April 30, 2000 were $2,368,000, a 58%
increase from revenues of $1,500,000 for the same period in 1999. Revenues for
the six-month period ended April 30, 2000 were $4,159,000, an increase of
$1,106,000 or 36%, from the same period in 1999. These increases were primarily
due to increased nutritional product sales and development revenues from a
third-party. Total product sales during the quarter ended April 30, 2000
increased by $352,000 or 28% from the same period in 1999, and increased by
$541,000 or 20% for the six-month period ended April 30, 2000 from the same
period in 1999. Sales of nutritional products increased by $411,000 or 56% for
the quarter ended April 30, 2000 over the quarter ended April 30, 1999 and
increased $648,000 or 46% for the six months period ended April 30, 2000 when
compared to the same period in 1999. 19% of the 56% increase during the quarter
resulted from product sales to a licensee under an all-inclusive flat pricing


                                     10
<PAGE>   11
arrangement. This contrasted to the Company's traditional sales to licensees
where an initial transfer price is charged and a trailing royalty is received
six to nine months later. The Company is in the process of offering all of its
infant formula licensees an all-inclusive flat price for bulk oil, which would
incorporate a slightly discounted royalty up-front into the sales price of the
Company's oils. If the traditional transfer price had been billed for all bulk
oil sales during the quarter ended April 30, 2000, total nutritional product
sales would have been $135,000 lower, and would have increased only 37% compared
to the quarter ended April 30, 1999. Sales of products for drug discovery and
diagnostics decreased 11% for the quarter ended April 30, 2000 and decreased by
8% for the six months ended April 30, 2000, when compared to the same periods in
1999. These decreases are primarily due to Martek's de-emphasis on the sale of
low margin reagent products. Martek is actively looking for ways to reduce its
stable isotope production cost and increase yields of stable isotope
co-products. Royalty revenues increased by 34% for the quarter ended April 30,
2000 compared to the same quarter in 1999 and 19% for the six months ended April
30, 2000 compared to the first six months of fiscal year 1999. Management
anticipates that royalty revenues may decline in the future if Martek increases
sales of bulk oil to infant formula licensee under all-inclusive pricing
arrangements. Revenues from research and development work increased by $478,000
in the quarter ended April 30, 2000 when compared to the same quarter in 1999
and increased $523,000 for the six months ended April 30, 2000 from the same
period in 1999, mainly due to a third-party development project completed during
the second quarter of 2000 at Martek's Winchester plant.

         Cost of product sales decreased to 78% of revenues from product sales
for the quarter ended April 30, 2000, down from 86% for the same period of
1999. For the six-month period ended April 30, 2000 cost of product sales
remained at 78% of revenues from product sales, the same as the six-month
period ended April 30, 1999. The majority of the decrease in the second quarter
of the current fiscal year is due to the higher margin achieved on the sale of
approximately $315,000 in bulk oil to an infant formula licensees during the
quarter at an all-inclusive price. Cost of sales will continue to fluctuate on
a quarter-to-quarter basis based on the mix of sales, with lower margins
experienced when the mix includes higher volumes of sales to infant formula
manufacturers under Martek's existing royalty-bearing arrangements. Martek is
in the process of offering all of its infant formula licensees an all-inclusive
flat price for bulk oil, which would incorporate a slightly discounted royalty
up-front into the sales price of the Company's oils. The overall economics of
an all-inclusive price closely match those of Martek's existing royalty bearing
arrangements, however, the all-inclusive flat price positively impacts the
Company's margins at the time of initial sale. For those licensees who continue
to purchase oil under a royalty arrangement rather than pay an all-inclusive
initial price, a transfer price is paid to Martek for the oil at the time of
purchase and a trailing royalty is earned at the time of the final product sale
by the licensee. Under this arrangement, there is an approximate six to nine
month delay after the initial sale of oil by Martek until royalties are
received and recognized as revenue, creating a significantly higher cost of
goods sold as a percentage of revenues than would be the case if royalties were
incorporated into the product price and recognized as revenue at the time of
the product sale. For the quarter ended April 30, 2000, approximately half of
Martek's oil sales to licensees were made under existing royalty agreements,
and half were made using all-inclusive pricing with no future royalties due.

         In general, the high cost of sales incurred during the first half of
the fiscal year 2000 reflects the cost of inventory manufactured over the last
approximately 12 months when certain production efficiencies had not yet been
realized due to the low volume of production and because the production process
had not been optimized. Management believes that during the remainder of the
fiscal year 2000, as sales volumes increase and manufacturing efficiencies are
realized, the cost of production of the nutritional oils products will decrease,
resulting in a positive impact on Martek's sales margins.

         Research and development costs increased by $1,415,000, or 66%, in the
quarter ended April 30, 2000 as compared to the same period in 1999. For the
six-month period ended April 30, 2000, research and development costs increased
$1,689,000 or 36% when compared to the same period in 1999. The majority of the
increase for the quarter ended April 30, 2000 relates to the continued
refinement of Martek's fermentation and oil extraction processes and other R&D
efforts related to production of the Company's oils at the Winchester plant. In
addition, approximately $420,000 in expenses were incurred relating to a
third-party development project at Martek's Winchester Plant during the quarter
ended April 30, 2000. Management believes that as sales volumes increase and
production optimization occurs, development costs related to Martek's Winchester
plant will decrease, reducing the Company's overall R&D expenditures.


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<PAGE>   12
         Selling, general and administrative expenses increased by $40,000, or
2%, during the quarter ended April 30, 2000 and decreased by $62,000 or 2%, in
the six months ended April 30, 2000 over the second quarter and six months ended
April 30, 1999, respectively.

         As a result of the foregoing, net loss for the quarter ended April 30,
2000 was $4,101,000, or $.24 per share, compared to a net loss of $3,620,000, or
$.24 per share for the same period in 1999. Net loss for the six months ended
April 30, 2000, was $7,884,000 or $.47 per share, compared to a net loss of
$7,243,000 or $.49 per share for the same period in 1999.

Liquidity and Capital Resources

         Martek has financed its operations primarily from the issuance and sale
of equity securities, debt financing, revenues received under research and
development contracts and grants, product sales and receipt of license fees.
Since its inception, Martek has raised approximately $117 million from public
and private sales of its equity securities, including approximately $13.8
million from a private placement of stock in May, 1999 and $10.25 million in
February, 2000 related to a 1998 funding commitment.

         Through April 30, 2000 Martek has incurred an accumulated deficit of
$81,781,000. Martek's balance of cash and cash equivalents at April 30, 2000 was
$3,395,000. In addition, at April 30, 2000, Martek had $21,511,000 in short-term
investments and marketable securities. These investments and securities, which
consist of U.S. Government securities with average maturities of less than six
months, are available to meet the future cash needs of the Company. Cash, cash
equivalents, short-term investments and marketable securities increased
$8,548,000 during the first six months of 2000, primarily due to the funds
received from the private placement of Martek's common stock and warrants in
February, 2000.

         Martek will require substantial additional funds to continue its
research and development programs, to conduct pre-clinical and clinical studies,
to maintain compliance with its loan covenants, and to commercialize its
nutritional oils, Neuromins(R) DHA, and its other products under development.
The ultimate levels of funding required will depend, in part, on whether Martek
seeks independently, or with other parties through collaborative agreements, to
develop, manufacture and market its products. The capital requirements of Martek
will depend, among other things, on one or more of the following factors: growth
in the Company's infant formula and nutritional product sales; the extent and
progress of its research and development programs; the progress of pre-clinical
and clinical studies; the time and costs of obtaining regulatory clearances for
those products subject to such clearances; the costs involved in filing,
protecting and enforcing patent claims; competing technological and market
developments; the cost of capital expenditures at Martek's manufacturing
facilities; the cost of acquiring additional and/or operating existing
manufacturing facilities for its various products and potential products
(depending on which products Martek decides to manufacture and continues to
manufacture itself), and the costs of marketing and commercializing Martek's
products. The continued development and optimization of Martek's production
facility has had, and will continue to have, a material effect upon the
Company's liquidity and capital resources. Additional plant modifications
costing at least $750,000 are expected in fiscal 2000. Plant expenditures beyond
2000 will depend in part on production capacity needs, and the extent of
development and implementation of process improvements.

         Management believes that its existing capital resources will provide
adequate capital for at least the next 18 months. However, Management believes
that additional funds will be needed in the longer term to continue Martek's
research and development, manufacturing and marketing efforts. Management
intends to seek additional funding through commercial and government research
and development contracts and grants, product sales and license fee
arrangements, asset-based borrowing, equity issuances, additional lease
financing and/or collaborative arrangements with partners if such methods are
available to Martek and on favorable terms. There can be no assurance that such
funds will be available to Martek on acceptable terms, if at all.



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<PAGE>   13


                           PART II- OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

i.       Exhibit 10.30 License Agreement, dated March 31, 2000 between Martek
         and Abbott Laboratories. *

ii.      Exhibit 27.01 Financial Data Schedule (as filed with the Form 10-Q on
         June 14, 2000).

iii.     Cautionary Statements for purposes of the "safe harbor" provisions of
         the Private Securities Litigation Reform Act of 1995 filed as exhibit
         99.1 to the Company's Form 10-Q, dated March 15, 2000, and incorporated
         by reference herein.

(b)      Reports on Form 8-K:

         Form 8-K, Filed April 17, 2000 (announcing the non-exclusive license
         agreement between Martek and Abbott Laboratories).


* Confidential portions of this exhibit have been omitted in reliance on Rule
24b-2 of the Securities Exchange Act of 1934. The confidential portions have
been submitted separately to the Securities and Exchange Commission.


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<PAGE>   14



                                   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.


Date:  December 8, 2000                     MARTEK BIOSCIENCES CORPORATION
                                            (Registrant)





                                            /s/ PETER L. BUZY
                                            ------------------------------
                                            Peter L. Buzy, Chief Financial
                                            and Accounting Officer






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