UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-Q

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

                  For the Quarterly Period Ended April 30, 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 0-22354

                         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)




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. X Yes No


  Common stock, par value $.10 per share:  16,489,729 shares outstanding
                            as of June 8, 1999


                                  Page 1 of 15
<PAGE>

                               PART I - FINANCIAL
                                 INFORMATION

Item 1. Financial Statements

MARTEK BIOSCIENCES CORPORATION
Balance Sheets
($ in thousands)

--------------------------------------------------------------------------------
                                                  April 30,       October 31,
                                                    1999            1998
--------------------------------------------------------------------------------
                                                 (Unaudited)
Assets:
Current assets:
     Cash and cash equivalents                      $1,945           $4,498
     Short-term investments and
        marketable securities                        7,738           13,147
     Accounts receivable                             1,505            1,336
     Inventories  (Note 3)                           5,636            5,002
     Prepaid expenses                                  464              424
     Other current assets                               94               96
                                                  ------------------------------
Total current assets                                17,382           24,503
Property, plant and equipment, net                  15,775           16,233
                                                  ------------------------------

Total Assets                                       $33,157          $40,736
                                                  ==============================


Liabilities and stockholders' equity:
Current liabilities:
     Accounts payable                                 $497             $596
     Accrued liabilities                             1,195            1,566
     Current portion of notes payable                1,400            1,341
                                                  ------------------------------
Total current liabilities                            3,092            3,503
Long-term portion of notes payable (Note 2)          1,236            1,951
Commitments and contingencies (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;  14,934,594
         and 14,879,434 shares issued and
         outstanding at April 30, 1999
         and October 31, 1998, respectively.         1,493            1,488
     Additional paid-in capital                     93,628           92,843
     Accumulated deficit                           (66,292)         (59,049)
                                                  ------------------------------
Total stockholders' equity                          28,829           35,282
                                                  ------------------------------

 Total liabilities and stockholders' equity        $33,157          $40,736
                                                  ==============================

See accompanying notes.

















                               Page 2 of 15

<PAGE>






MARTEK BIOSCIENCES CORPORATION
Statements of Operations
Unaudited - $ in thousands, except per share data)

                                           Three months          Six Months
                                          ended April 30,      ended April 30,
--------------------------------------------------------------------------------
                                          1999      1998        1999      1998
--------------------------------------------------------------------------------

Revenues:
     Product sales:
        Nutritional product sales         $740      $763       $1,415    $1,308
        Stable isotope and other
          product sales                    540       643        1,264     1,104
                                       ------------------     ------------------
     Total product sales                 1,280     1,406        2,679     2,412
     License fees and related revenues     ---       ---          ---     1,165
     Royalties                              80        62          167       120
     Research and development contracts
        and grants                         140       128          207       186
                                       ------------------     ------------------
Total revenues                           1,500     1,596        3,053     3,883
Costs and expenses:
     Cost of product sales               1,100     1,104        2,081     1,938
     Research and development            2,160     2,259        4,723     4,900
     Selling, general and administrative 1,901     2,193        3,616     4,154
                                       ------------------     ------------------
Total costs and expenses                 5,161     5,556       10,420    10,992
                                       ------------------     ------------------
Loss from operations                    (3,661)   (3,960)      (7,367)   (7,109)
Other income (expense):
     Miscellaneous income                   40        21           71        42
     Interest income                       149       196          357       460
     Interest expense                     (148)      (91)        (304)     (188)
                                       ------------------     ------------------
Total other income                          41       126          124       314
                                       ------------------     ------------------
Net loss                               ($3,620)  ($3,834)     ($7,243)  ($6,795)
--------------------------------------------------------------------------------

Net loss per share (Note 5)             ($0.24)   ($0.28)      ($0.49)   ($0.49)
--------------------------------------------------------------------------------

Weighted average common
  shares outstanding                14,934,594 13,865,986  14,919,170 13,795,299
--------------------------------------------------------------------------------


See accompanying notes.













                             Page 3  of  15

<PAGE>





MARTEK BIOSCIENCES CORPORATION
Statements of Cash Flows
(Unaudited - $ in thousands)

                                                   Six Months ended April 30,
--------------------------------------------------------------------------------
                                                       1999            1998
--------------------------------------------------------------------------------

Operating activities:
  Net loss                                           ($7,243)        ($6,795)
  Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation and amortization                       721             663
     Other non-cash items                                348             ---
     Changes in assets and liabilities:
        Accounts receivable                             (169)            213
        Inventories                                     (634)         (1,108)
        Prepaid expenses                                 (40)             88
        Other current assets                               2             203
        Accounts payable                                 (99)           (460)
        Accrued liabilities                             (371)            251
                                                 -------------------------------
  Net cash used in operating activities               (7,485)         (6,945)

Investing activities:
     Change in short-term investments
        and marketable securities                      5,409           6,592
     Purchase of property, plant and equipment          (263)           (807)
                                                 -------------------------------
  Net cash provided by investing activities            5,146           5,785

Financing activities:
     Proceeds from the issuance of common stock
        in private placement                             ---          10,010
     Proceeds from the exercise of warrant
        and options                                      442           1,169
     Borrowings on notes payable                         ---             ---
     Repayment of notes payable                         (656)           (647)
                                                 -------------------------------
  Net cash provided by (used in)
     financing activities                               (214)         10,532
                                                 -------------------------------

  Net increase (decrease) in cash
     and cash equivalents                             (2,553)          9,372
  Cash and cash equivalents at beginning of year       4,498           1,977
                                                 -------------------------------

  Cash and cash equivalents at end of period          $1,945         $11,349
                                                 ===============================





See accompanying notes.









                             Page 4 of 15

<PAGE>



MARTEK BIOSCIENCES CORPORATION
Statement of Stockholders' Equity
(Unaudited - $ in thousands)



                                                  Additional
                                Common Stock       Paid-In  Accumulated
                            Shares       Amounts   Capital    Deficit    Total

Balance at
October 31, 1998          14,879,434     $1,488    $92,843   ($59,049)  $35,282
--------------------------------------------------------------------------------
Exercise of stock options
   and other                  55,160          5        785        ---      790

Net loss                         ---        ---        ---     (7,243)  (7,243)
--------------------------------------------------------------------------------
Balance at
April 30, 1999            14,934,594     $1,493    $93,628   ($66,292)  $28,829
--------------------------------------------------------------------------------


See accompanying notes.










































                              Page 5 of 15
<PAGE>





Notes to Financial Statements (Unaudited)

1.  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,  1999 are not  necessarily
indicative  of the results that may be expected  for the year ended  October 31,
1999. 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, 1998.

2.  Notes Payable and Commitment and Contingencies

The Company  had  commitments  at April 30,  1999 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, 1999, would not have a material effect on the financial statements.

The Company has licensed certain technologies and recognized license fee revenue
under  various  agreements.  License fees are not recorded as revenue  until the
earnings  process is complete and amounts are not subject to refund.  In January
1998,  a  license  fee  of  $1,125,000  associated  with  a  pre-1998  licensing
arrangement was recognized.

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 term loans,
which  had an  outstanding  balance  at April  30,  1999 of  approximately  $2.6
million.  These  covenants  outline  minimum  cash,  current ratio and net worth
requirements.  The Company fell below the loan covenant which  outlines  minimum
cash requirements  during the second quarter of 1999 but regained  compliance on
June 1, 1999 when  approximately  $13.8  million in cash was raised in a private
placement (see footnote 6).

3.  Inventories

Inventories consist of the following:
                                                   April 30,      October 31,
                                                     1999            1998

                 Finished products               $1,540,039       $1,406,053
                 Work in process                  3,682,362        3,343,911
                 Raw materials                      413,916          252,026
                                                 ----------       ----------
                                                 $5,636,317       $5,001,990
                                                 ==========       ==========


                             Page 6 of 15
<PAGE>

Inventories include products and materials held for sale as well as products and
materials  that  could  alternatively  be used  in the  Company's  research  and
development activities.

4.  Income Taxes

At  April  30,  1999,  the  Company  has net  operating  loss  carryforwards  of
approximately  $81,114,000  for income tax  purposes  that  expire in years 2000
through 2019.

Section 382 of the Internal Revenue Code limits the utilization of net operating
losses when ownership changes,  as defined by that section,  are greater than 50
percent.  The Company has had significant  ownership  changes over the past five
years, including an initial public offering of its common stock in December 1993
and a follow-on  public offering of its common stock in October 1995,  which may
have caused these limitations to apply.

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
$32,787,000 and $26,624,000 at April 30, 1999 and 1998, respectively. Because of
the uncertainty with the ultimate  realization of these net deferred tax assets,
they were fully  reserved  for by a  valuation  allowance  at April 30, 1999 and
1998.

5.  Capital Acoounts

Private Placement of Common Stock
On April 27, 1998,  655,563 shares of the Company's common stock and warrants to
purchase  196,670  shares of common  stock  were  issued in a private  placement
resulting  in net  proceeds to the Company of  approximately  $10  million.  The
warrants are  exercisable for a period of three years from date of issuance at a
price of $18.76. The investors have also agreed to a two-year funding commitment
to provide up to an additional $10.25 million in financing in the form of common
stock and  warrants,  at the  discretion  of the  Company,  subject  to  certain
conditions,  which  include the stock price being within  twenty  percent of the
initial  issuance price of $15.63.  In consideration  for the additional  $10.25
million two-year funding commitment,  the Company issued warrants to purchase up
to 51,250  shares of  common  stock on April 27,  1999 at $7.51 per share and is
obligated  to again issue  warrants  to  purchase up to 51,250  shares of common
stock on April 27, 2000 if  the  Company  does  not   utilize   the   additional
funding by such date. The cost associated with the additional  warrants has been
calculated  using the  Black-Scholes  option  pricing  model and is  included in
interest expense for the quarter ended April 30, 1999.

Stock Otion Plan
On March 11, 1999 the  Company's  Board of Directors  authorized  an  additional
1,000,000  shares of common stock for issuance  pusuant to the  Company's  Stock
Option Plans. As of April 30, 1999,  2,433,060  options to purchase common stock
were  outstanding of which  1,118,360  were  exercisable at prices from $6.25 to
$34.35.

6.  Subsequent Event

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.





                              Page 7 of 15
<PAGE>


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 the Company's business
and  operations,  including  among  other  things,  statements  concerning:  (1)
expectations  regarding  future  product  introductions,   distribution,  sales,
applications and potential marketing  partnerships;  (2) expectations  regarding
sales and royalties by and from formula  licensees;  (3) expectations  regarding
FDA approval of the Company's  oils for inclusion in U.S.  infant  formula;  (4)
expectations  regarding future  efficiencies in manufacturing  processes and the
cost of production of the Company's  nutritional  oils; (5) future  research and
development costs; (6) Year 2000 business risks; and (7) 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 the
Company'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. The Company's products include:
(1) specialty,  nutritional oils for infant formula, nutritional supplements and
food   ingredients   that  play  a  beneficial  role  in  promoting  mental  and
cardiovascular  health,  and in the  development of the eyes and central nervous
system;   (2)  high  value  stable  isotope  products  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 began to realize 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.  In 1998, Martek first
realized  revenues  from the sale of its new  phycobilisome  fluorescent  marker
products.

Martek has incurred losses in each year since its inception.  At April 30, 1999,
the  Company's  accumulated  deficit was  $66,292,000.  The  Company  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 Neuromins(R) DHA
products occur and/or until  significant  royalties from sales of infant formula
products containing its oils are recognized. In addition, the Company 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 the Company'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 1999 sales will surpass prior year levels.

                                  Page 8 of 15
<PAGE>

Specifically,  management  believes that for fiscal 1999 as a whole:  (1) Infant
formula containing Martek's oils will be introduced in additional countries; (2)
sales and royalties from the Company's  infant formula  licensees will grow; (3)
distribution of the Company's  Neuromins(R) DHA products will expand;  (4) sales
of new high  value  products  from  the  Company's  stable  isotope  group  will
increase; and (5) distribution and sales of diagnostic products will grow.

Management believes that recent scientific evidence 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,  the Company is pursuing a long-term  marketing  partnership with a
large  nutritional  products and/or  pharmaceutical  company to promote Martek's
non-infant formula nutritional oil products. Because of this objective,  certain
shorter-term  marketing  arrangements  of lesser scope have been  avoided,  thus
modestly  sacrificing  short-term product sales.  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, or if, such events will occur.

Four of the Company's  infant  formula  licensees  have obtained the  regulatory
approval, where required, to sell infant formula supplemented with Martek's oils
in over 50 countries for term or pre-term infant formula  products.  The Company
and its licensees are in the process of responding to certain  questions  raised
by the FDA in  connection  with  evaluating  Martek's oils for inclusion in U.S.
infant formula.  While  management  believes that approval should  ultimately be
obtained,  there is no assurance that the Company and its licensees will be able
to adequately  respond to the FDA's questions,  that the licensees will continue
to press forward, that clearances will in fact be granted, that the process will
not involve  significant  delays that may  materially  and adversely  affect the
timing and extent of potential future  introductions of the Company's  products,
or that once and if approval is obtained, a licensee will actually market a U.S.
infant formula product containing the Company's oils.  Nevertheless,  management
anticipates  that for  fiscal  year  1999  infant  formula  products  containing
Martek's oils will continue to be introduced in additional  countries around the
world and overall  product sales,  including  sales from infant formula  related
products, will increase over sales from the prior year.

Results of  Operations -  Comparison  of Quarters and Six Months Ended April 30,
1999 and 1998

Revenues  for the quarter  ended April 30, 1999 were  $1,500,000,  a 6% decrease
from  revenues  of  $1,596,000  for the same  period in 1998.  Revenues  for the
six-month period ended April 30, 1999 were $3,053,000, a decrease of $830,000 or
21%,  from the same  period  in 1998,  due  primarily  to the  recognition  of a
non-recurring  $1.1 million  license fee in January,  1998.  Total product sales
during the second  quarter of fiscal 1999  decreased  by $126,000 or 9% from the
second  quarter  of  fiscal  1998,  and  increased  by  $267,000  or 11% for the
six-month  period  ended April 30,  1999 from the same period in 1998.  Sales of
Neuromins(R)  capsules increased 5% for the quarter ended April 30, 1999 and 30%
for the 6 months ended April 30, 1999 when compared to the same periods in 1998.
Although  the volume of the  Company's  oil  shipments  increased  by 24% in the
second  quarter of fiscal  1999 over the second  quarter of fiscal  1998,  sales
decreased  by 6% due to the high level of sales to infant  formula  licensees in
the second  quarter of fiscal 1999 compared to the second quarter of fiscal 1998
on which future royalties will be recognized.  The current method of recognizing
royalties at a future date leads to initially  low revenues  when oil is sold to
infant  formula  licensees,  since  these  oils are sold to the  licensees  at a
discount  and there is  generally  a six to nine month time lag from the date of
the initial sale until the date that the royalty revenue is recognized. Overall,
sales of  nutritional  products  decreased by 3% for the quarter ended April 30,
1999 over the quarter ended April 30, 1998 and increased $107,000 or over 8% for
the first six months of fiscal  1999 when  compared  to the same period in 1998.
Sales of products  for drug  discovery  and  diagnostics  decreased  16% for the
quarter  ended  April 30, 1999 and  increased  $160,000 or 14% for the first six
months of fiscal 1999,  when compared to the same periods in 1998.  The decrease
in the second  quarter of fiscal 1999 was primarily due to price  competition in
the reagents market. It is expected that intense price

                               Page 9 of 15
<PAGE>

competition on the Company's  stable isotope reagent  products will continue for
at least the remainder of fiscal 1999 and could  adversely  impact total reagent
sales. The Company is actively looking for ways to reduce its reagent production
costs and  increase  yields of high-end  co-products  in an effort to offset the
impact of this  price  competition.  Royalty  revenues  increased  by 29% in the
quarter  ended April 30,  1999  compared to the same period in 1998 and over 39%
for the first six  months of fiscal  1999  compared  to the first six  months of
fiscal  1998.  Revenues  from  research  and  development  contracts  and grants
increased  by 9% in the quarter  ended April 30, 1999 when  compared to the same
period in 1998 and  increased  11% for the six months  ended April 30, 1999 from
the same period in 1998.

Cost of product  sales  increased to 86% of revenues  from product sales for the
second  quarter of fiscal 1999 from 79% for the second  quarter of fiscal  1998.
For the six-month period ended April 30, 1999 cost of product sales decreased to
78% of revenues from product  sales,  down from 80% for the same period in 1998.
Cost of sales will continue to fluctuate  based on the mix of sales,  with lower
margins  experienced  when the mix  includes  higher  volumes of sales to infant
formula manufacturers. There is an approximate six to nine month delay after the
initial sale of oil 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.  In  addition,  oil
production  costs  remain high due to the current low volume of  production  and
because the production process requires further  optimization.  As sales volumes
increase,  and manufacturing  efficiencies and optimization  occurs,  Management
believes  that the cost of  production  of the  nutritional  oils  products will
decrease.

Research  and  development  costs  decreased  by  $99,000,  or 4%, in the second
quarter of fiscal 1999 as compared to the second quarter of fiscal 1998. For the
six-month period ended April 30, 1999,  research and development costs decreased
$177,000  or 4% when  compared  to the  same  period  in 1998.  These  decreases
resulted  from the  conversion  of certain  development  efforts  to  production
efforts. Consistent with the Company's plans, nutritional oils development costs
accounted for over 75% of all research and development  costs as a result of the
Company's  continued  development  efforts  to refine  its  production  process.
Research  and  development  costs may  increase  in the  future  as the  Company
evaluates new technologies  and continues  efforts to optimize the efficiency of
its large-scale fermentation and oil extraction processes.

Selling,  general and  administrative  expenses  decreased by $292,000,  or 13%,
during the second  quarter of fiscal 1999 and  decreased  by $538,000 or 13%, in
the six months ended April 30, 1999 over the second quarter and six months ended
April 30, 1998, respectively.  These cost decreases were primarily the result of
lower  advertising  expenses  due to the  timing of print and other  advertising
campaigns.  Other income was $85,000  lower during the second  quarter of fiscal
1999 than in the second  quarter of fiscal 1998 and $190,000  lower in the first
six  months of fiscal  1999 than in the first six months of fiscal  1998.  These
decreases  are due  primarily to an increase in interest  expense as a result of
the  warrants  issued in  relation to the April 27, 1998  private  placement  of
common stock (see  footnote 5), and a decrease in the amount of interest  earned
on investments as funds received in the Company's  various fund raising  efforts
are being used to support operations.

As a result of the foregoing, net loss for the second quarter of fiscal 1999 was
$3,620,000, or $.24 per share, compared to a net loss of $3,834,000, or $.28 per
share for the second  quarter of fiscal 1998.  Net loss for the six months ended
April 30,  1999,  was  $7,243,000  or $.49 per share,  compared to a net loss of
$6,795,000 or $.49 per share for the same period in 1998.

Recent Accounting Pronouncements

In June 1997, the FASB issued SFAS No. 130,  "Reporting  Comprehensive  Income,"
which requires  companies to report by major components and in total, the change
in its net assets during the period from  non-owner  sources.  This Statement is
effective  for the annual  reporting  of companies  with fiscal years  beginning
after December 15, 1997.  Adoption of SFAS No. 130 will not impact the reporting
of the Company.

                             Page 10 of 15

<PAGE>

The FASB also recently  issued SFAS No. 131,  "Disclosures  about Segments of an
Enterprise  and  Related  Information,"  which  establishes  annual and  interim
reporting  standards for a company's  operating segments and related disclosures
about its products, services, geographic areas and major
customers.  This Statement must be adopted in the annual reporting for companies
with fiscal years beginning  after December 15, 1997.  Adoption of this standard
is not  expected  to  have a  significant  impact  on  the  Company's  financial
position,  results  of  operations,  cash  flows,  or  the  presentation  of its
disclosures.

Impact of Year 2000

The Company uses a number of computer software programs and operating systems in
its internal  operations,  including  applications  used in  financial  business
systems and  various  administrative  functions.  Management  believes  that the
business risk associated with these internal  information systems is minimal and
has completed more than 95% of its Year 2000 compliance  implementation  work on
them. The Company is also  evaluating its  non-information  technology  systems,
including the various equipment in operation at the oil production facilities in
Winchester,  Kentucky. Management has completed more than 95% of this evaluation
and subsequent  implementation,  and believes that the business risk  associated
with this equipment is minimal.  Management believes that its compliance work on
the  Company's  information  and  non-information  technology  systems  will  be
completed by the third quarter of fiscal year 1999.  However, if significant new
non-compliance  issues  are  identified,  the  process  may be  delayed  and the
Company's  operations  and  financial  condition  may  be  materially  adversely
affected.

Additionally,  Martek's third party  relationships  are being reviewed to assess
their Year 2000  status and  potential  impact on the  Company.  The Company has
completed  approximately  95% of this review and, where potential  business risk
has been  identified,  is requesting  additional  information from certain third
parties to obtain  assurance  that they are year 2000  compliant.  To date,  the
Company's  third  party  suppliers  have  represented  that  they are Year  2000
compliant  or are in the process of becoming  compliant  by December  31,  1999.
Although  Management has identified multiple suppliers for most of the goods and
services purchased from third parties, there can be no guaranty that the failure
of any  individual  supplier to  adequately  address the Year 2000 issue for the
products or services  that they  provide to the Company will not have a material
adverse impact on the Company's  operations and financial  results.  Contingency
plans will be developed if it appears that the Company or its suppliers will not
be Year 2000 compliant,  and such  non-compliance is expected to have a material
adverse impact on the Company's operations.

Based on currently available  information,  Management believes that total costs
associated with Year 2000 issues will be less than $200,000, and that it will be
able to manage the Year 2000 transition  without any material  adverse effect on
the Company's operations,  liquidity or capital resources. However, there can be
no assurance that Year 2000 issues will not require a significant  commitment of
resources to resolve potential problems.

 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,   through  April  30,  1999,   the  Company  has  raised
approximately   $84  million  from  public  and  private  sales  of  its  equity
securities,  including  approximately  $10 million  from a private  placement in
1998. The 1998 private  placement  investors  also agreed to a two-year  funding
commitment  to provide up to an  additional  $10.25  million in financing in the
form of common stock and warrants at the  discretion of the Company,  subject to
certain conditions, which include the stock price being within twenty percent of
the 1998 initial issuance price of $15.63. In consideration for  the  additional
$10.25 million two-year  funding  commitment, the  Company  issued  warrants  to
purchase up to 51,250 shares of  common  stock  on  April 27, 1999 at  $7.51 per
share and is obligated to again issue warrants to purchase up to  51,250  shares
of common stock on April 27, 2000 if the Company does not utilize the additional
funding by such date.

Through  April  30,  1999  Martek  has  incurred  an   accumulated   deficit  of
$66,292,000.  The Company's  balance of cash and cash  equivalents  at April 30,
1999 was $1,945,000. In addition, at April 30, 1999,

                              Page 11 of 15

<PAGE>

Martek had $7,738,000 in short-term investments and marketable securities. These
investments  and  securities  consist  of  U.S.  government  securities  and are
available to meet the future cash needs of the Company.  Cash, cash equivalents,
short-term  investments and marketable  securities  decreased  $7,962,000 in the
first six months of 1999,  primarily  due to the Company's  continued  operating
losses.  On June 1, 1999 the Company raised  additional  funds of  approximately
$13.8 million from a private placement of common stock (see footnote 6).

Martek may require  substantial  additional  funds in the future to continue its
research and development  programs,  to conduct preclinical and clinical studies
and to  commercialize  its  nutritional  oils,  Neuromins(R)DHA,  and its  other
products  under  development.  The ultimate  levels of these  expenditures  will
depend,  in part,  on whether the  Company  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 preclinical 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 the Company'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 the Company decides
to manufacture and continues to manufacture  itself); and the costs of marketing
and  commercializing  the  Company's  products.  The continued  development  and
optimization of the Company's  production facility has had, and will continue to
have,  a  material  effect  upon  Martek's   liquidity  and  capital  resources.
Additional plant  modifications  costing at least $500,000 are expected for  the
remainder of 1999. Expenditures  beyond 1999  will depend in part on  production
capacity  needs, and the extent of  development and  implementation  of  process
improvements.

Management  believes  that,  with  the  cash  raised  in the  private  placement
financing  which closed on June 1, 1999,  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 the
Company'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 the Company and on favorable terms.  There can be no assurance that
such funds will be available to the Company on acceptable terms, if at all.


Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not Applicable

                                  Page 12 of 15




<PAGE>




                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

None

Item 2.  Changes in Securities.

On June 1, 1999, the Company sold 1,528,935 shares of common stock and  warrants
to purchase  an additional 458,679  shares  of common  stock  for  an  aggregate
cash consideration of approximately $13.8 million.

The following  information  relates to the issuance of Martek securities as part
of the Common Stock and Warrant Purchase Agreement dated June 1, 1999:


                                     Shares of
          Name of                     Martek      Number of warrants to purchase
        Shareholder                common stock      shares of Martek common
                                     received            stock received


Black Bear Fund I, L.P.                166,128              49,838
Black Bear Fund II, L.P.                16,059               4,818
Black Bear Offshore L.T.D.             168,897              50,669
Black Bear Pacific Master
Fund Unit Trust                         36,548              10,964
George Haywood                         332,257              99,677
State of Wisconsin                     443,009             132,903
MFS Mid Cap Growth Fund (EXOT)         143,978              43,193
MFS Mid Cap Growth Fund (OTC)           77,527              23,258
MFS New Discovery Fund (NDF)           110,752              33,226
MFS Sun Life New Discovery Fund (NWD)    5,538               1,661
MFS New Discovery Fund (UND)               554                 166
Ramius Capital Group L.L.C.             27,688               8,306
                                     ---------           ---------
                                     1,528,935             458,679


The  warrants  are  exercisable  for a period  of three  years  from the date of
initial issuance at $10.84/share. The common stock and warrants were  issued  in
reliance on the exemption set forth in Section 4(2)  of the  Securities  Act  of
1933.

Item 3.  Defaults Upon Senior Securities.

Not Applicable. The Company is required to meet certain covenants in relation to
its  term  loans,  which  had  an  outstanding   balance  at  April 30, 1999  of
approximately $2.6 million. These covenants outline minimum cash, current  ratio
and  net  worth requirements. The  Company  fell below the  loan covenant  which
outlines  minimum  cash  requirements  during  the  second  quarter of 1999  but
regained compliance on June 1, 1999 when approximately $13.8 million in cash was
raised in a private placement (see footnote 6). The lender  subsequently  waived
the cash requirement as of April 30, 1999.















                                  Page 13 of 15

<PAGE>

Item 4.  Submission of Matter to a vote of Security Holders.

The Company's  Annual  Meeting of  Stockholders  was held on March 11, 1999.
The following  members were elected to the Company's Board of Directors
to hold office for the periods indicated below:

                                    Elected Until
                                    Annual Meeting
         Nominee                      To Be Held           In Favor    Withheld

         Jules Blake                    2002              13,168,062    27,315
         Henry Linsert, Jr.             2002              13,153,994    41,383
         Ann L. Johnson                 2002              13,165,904    29,473
         Sandra Panem                   2002              13,166,279    29,098

Directors Continuing in Office:

         Douglas J. MacMaster, Jr.
         John H. Mahar
         Eugene H. Rotber
         Gordon S. Macklin
         Richard J. Radmer
         William D. Smart

Item 5.  Other Information.

None

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits: 27.01 Financial Data Schedule

               99.1    Cautionary  Statements  for  Purposes of the "Safe
                       Harbor"   Provisions  of  the  Private  Securities
                       Litigation Reform Act of 1995

(b) Reports on Form 8-K: Form 8-K filed on June 9, 1999 and incorporated  herein
    by reference.













                                  Page 14 of 15
<PAGE>

                                   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.



                        MARTEK BIOSCIENCES CORPORATION
                                (Registrant)







Date:  June 14, 1999             /s/Peter L. Buzy
      ---------------            ----------------------------
                                 Peter L. Buzy, Chief Financial
                                 and Accounting Officer






























                             Page 15 of 15