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 January 31, 1998

                                       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 000-22354

                         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: 13,828,334 shares outstanding
                              as of March 10, 1998

                                  Page 1 of 12
<PAGE>
                               PART I - FINANCIAL
                                 INFORMATION

Item 1. Financial Statements

MARTEK BIOSCIENCES CORPORATION


Balance Sheets
($ in thousands)
--------------------------------------------------------------------------------
                                               January 31,        October 31,
                                                  1998                1997
--------------------------------------------------------------------------------
                                              (Unaudited)
Assets:
Current assets
     Cash and cash equivalents                     $2,925            $1,977
     Short-term investments and                                  
        marketable securities                      13,189            18,698
     Accounts receivable                            2,169             1,181
     Inventories  (Note 3)                          3,773             2,906
     Prepaid expenses                                 572               318
     Other current assets                             218               273

                                              ----------------------------------
Total current assets                               22,846            25,353
Property, plant and equipment, net                 16,039            15,989
                                              ----------------------------------

                                                  $38,885           $41,342
                                              ==================================


Liabilities and stockholders' equity:
Current liabilities
     Accounts payable                              $1,081            $1,008
     Accrued liabilities                            1,509             1,041
      Current portion of notes payable              1,318             1,314
                                              ----------------------------------
Total current liabilities                           3,908             3,363
Long-term portion of notes payable (Note 2)         2,968             3,292
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; 13,815,759 
        and 13,673,659 shares issued and
        outstanding at January 31, 1998
        and October 31, 1997, respectively          1,381             1,367
     Additional paid-in capital                    79,177            78,908
     Accumulated deficit                          (48,549)          (45,588)
                                              ----------------------------------
Total stockholders' equity                         32,009            34,687
                                              ----------------------------------

                                                  $38,885           $41,342
                                              ==================================

See accompanying notes.






                                  Page 2 of 12

<PAGE>



MARTEK BIOSCIENCES CORPORATION

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

                                              Three months ended January 31,
--------------------------------------------------------------------------------
                                                 1998              1997
--------------------------------------------------------------------------------

Revenues:
     Product sales:
       Nutritional product sales                 $545              $143
       Other product sales                        461               379
                                              ----------------------------------
     Total Product Sales                        1,006               522
   License fees and related revenues            1,143               293
     Royalties                                     58                 4
     Research and development 
       contracts and grants                        58               138
     Third party contract revenue                  22                --
                                              ----------------------------------
Total revenues                                  2,287               957
Costs and expenses:
     Cost of product sales                        834               370
     Research and development                   2,641             2,883
     Selling, general and administrative        1,961             1,578
                                              ----------------------------------
Total costs and expenses                        5,436             4,831
                                              ----------------------------------
Loss from operations                           (3,149)           (3,874)
Other income (expense):
     Miscellaneous income                          21                 8
     Interest income                              264               517
     Interest expense                             (97)             (103)
                                              ----------------------------------
Total other income                                188               422
                                              ----------------------------------

Net loss                                      $(2,961)          $(3,452)
--------------------------------------------------------------------------------

Net loss per share (Note 5)                    $(0.22)           $(0.26)
--------------------------------------------------------------------------------

Weighted average common 
shares outstanding                         13,726,917        13,426,612
--------------------------------------------------------------------------------


See accompanying notes.















                                  Page 3 of 12


<PAGE>





MARTEK BIOSCIENCES CORPORATION

Statements of Cash Flows
(Unaudited - $ in thousands)

                                               Three Months ended January 31,
--------------------------------------------------------------------------------
                                                    1998              1997
--------------------------------------------------------------------------------

Operating activities:
  Net loss                                        $(2,961)          $(3,452)
  Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation and amortization                    333               242
     Changes in assets and liabilities:
        Accounts receivable                          (988)             (651)
        Inventories                                  (867)               64
        Prepaid expenses                             (254)             (342)
        Other current assets                           55               (68)
        Accounts payable                               73               227
        Accrued liabilities                           468              (268)
                                              ----------------------------------
  Net cash used in operating activities            (4,141)           (4,248)

Investing activities:
     Change in short-term investments 
        and marketable securities                   5,509              (261)
     Purchase of property, plant and equipment       (383)             (516)
                                              ----------------------------------
  Net cash provided by (used in)
     investing activities                           5,126              (777)

Financing activities:
     Repayment of notes payable                      (320)              (93)
     Proceeds from the exercise of options            283               293
                                              ----------------------------------
  Net cash (used in) provided by
     financing activities                             (37)              200
                                              ----------------------------------

  Net increase (decrease) in cash and 
     cash equivalents                                 948            (4,825)
  Cash and cash equivalents at beginning 
     of year                                        1,977             8,633
                                              ----------------------------------

  Cash and cash equivalents at end of period       $2,925            $3,808
--------------------------------------------------------------------------------






See accompanying notes.







                                  Page 4 of 12

<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, 1997           13,673,659    $1,367    $78,908  $(45,588)  $34,687
--------------------------------------------------------------------------------

Exercise of stock options     142,100        14        269       ---       283
                                                                                

Net loss                          ---       ---        ---    (2,961)   (2,961)
--------------------------------------------------------------------------------


Balance at
January 31, 1998           13,815,759     $1,381   $79,177  $(48,549)  $32,009
--------------------------------------------------------------------------------


See accompanying notes.
























                                  Page 5 of 12

<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  January 31, 1998 are not
necessarily  indicative  of the results  that may be expected for the year ended
October 31, 1998. 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, 1997.

2.  Commitment and Contingencies

     The Company had  commitments at January 31, 1998 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  January 31,  1998,  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 the
quarter ended January 31, 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.

3. Inventories

Inventories consist of the following:

                                                January 31,    October 31,
                                                  1998            1997   
                                               ------------   ------------
                           Finished products    $2,537,956     $1,661,439
                           Work in process         934,605        909,932
                           Raw materials           300,457        334,081
                                               ------------   ------------
                                                $3,773,018     $2,905,452
                                               ============   ============


     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.
       
                                  Page 6 of 12

<PAGE>
4.  Income Taxes

     At January 31, 1998,  the Company has net operating loss  carryforwards  of
approximately  $61,608,000  for income tax  purposes  that  expire in years 2000
through 2012. 

     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
several  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. Significant components of
the  Company's  deferred  tax  assets  as of  January  31,  1998 and 1997 are as
follows:             

                                                  January 31,    January 31,
                                                     1998           1997
                                                  ----------     ----------
        Deferred tax assets:
            Write-off of patents                    328,000        251,000
            Other deferred tax assets                44,000            ---
            Net operating loss carryforwards     24,643,000     18,228,000
                                                 ----------     ----------
               Total deferred tax assets        $25,015,000    $18,479,000
                                                 ==========     ==========
            Valuation allowance for net
               deferred tax assets             $(25,015,000)  $(18,479,000)
           
            Net deferred tax assets            $       ---    $        ---
                                                 ==========     ==========  

5.  Net loss per share

     In 1997, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial  Accounting  Standards (SFAS) No. 128, Earnings Per Share. SFAS No.
128 replaced the  previously  reported  primary and fully  diluted  earnings per
share with basic and diluted  earnings per share.  Unlike  primary  earnings per
share,  basic  earnings  per share  excludes  any  dilutive  effects of options,
warrants, and convertible securities. Diluted earnings per share is very similar
to the previously  reported fully diluted  earnings per share. The Company's per
share amounts for all periods presented conform to SFAS No. 128 requirements.















                                  Page 7 of 12
<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 statements concerning:  (i) future
revenues and product introductions,  (ii) future production efficiencies for its
nutritional  oils products (iii) future research and development  costs and (iv)
capital needs. Such statements  involve risks and uncertainties that could cause
actual  results to differ due to a variety of risk  factors set forth herein and
from time to time in the  Company's  filings  with the  Securities  and Exchange
Commission,  including  but not  limited  to its report on Form 10-K and its S-3
declared effective on September 26, 1995.

     Since its  inception  in 1985,  Martek has been  engaged  primarily  in the
research  and  development,  manufacturing  and sales of products  derived  from
microalgae. In 1989, the Company began the commercial production and sale of its
products for drug design. 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(TM),  a DHA dietary supplement. Martek has incurred losses
in each year since its inception. At January 31, 1998, the Company's accumulated
deficit was $48,549,000.  The Company expects to continue to expand its research
and  development  effort,  optimize  oil  production  and  increase  its product
marketing  activities.  As a result,  Martek  expects its losses to continue and
possibly  increase  for at least the first  half of 1998,  or until  significant
sales of its  nutritional  oils and  Neuromins(TM)  DHA  products  occur  and/or
significant  royalties from sales of infant formula products containing its oils
are   recognized.    In   addition,    the   Company   expects   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.

     Four  of the  Company's  licensees  have  introduced  term  infant  formula
products containing  Martek's oils in Spain,  Israel, and Australia and three of
the Company's  licensees  have  introduced   preterm   infant  formula  products
containing  Martek's DHA and ARA in thirty countries.  Management is not able to
predict,  however,  when, or if, any of these licensees will expand or introduce
new offerings of products containing Martek's oils.  Management does not believe
that broad  introductions  of term infant  formulas  containing  these oils will
occur before the middle of 1998, at the earliest.  Revenues from preterm uses of
Martek's oils will not, alone, significantly reduce Martek's losses. Because the
extent and timing of future oils-related revenues are largely dependent upon the
Company's licensees, the timing or likelihood of future profitability is largely
dependent on factors over which the Company has no control.

Results of Operations - Comparison of Quarters Ended January 31, 1998 and 1997

     Revenues for the quarter ended January 31 were $2,287,000,  a 139% increase
from  revenues  of  $957,000  for the  same  period  in 1997,  primarily  due to
increased  license fees and nutritional  product sales.  The increase in license
fees of $850,000 is due to the recognition of a $1,125,000 fee associated with a
pre-1998 licensing arrangement.  Total product sales during the first quarter of
1998  increased by $484,000,  or 93%, over the first  quarter of 1997.  Sales of
nutritional products,  including Neuromins(TM) capsules,  increased by $402,000,
or 281%,  in the first quarter of 1998 when compared to the same period in 1997.
First quarter sales of other commercial  products  increased by $82,000,  or 22%
from the same period in 1997.  During the first quarter of 1998 royalty  revenue
increased by $54,000,  or over  thirteen-fold when compared to the first quarter
of 1997.  Revenues from research and development  contracts and grants decreased
58% in the first quarter of 1998 over the first quarter of 1997.

                                  Page 8 of 12
<PAGE>
     Cost of product  sales  increased to 83% for the first  quarter of 1998, up
from  71%  for the  first  quarter  of 1997  because  of  both  the  significant
contribution and the delayed timing of royalty income, and continued  production
optimization.  This  increase  resulted  primarily  from  the  cost of  Martek's
nutritional oils sold to infant formula manufacturers which represented a higher
percentage of the product mix in the first quarter of 1998 compared to the first
quarter of 1997.  Infant  formula  royalties may comprise up to half of revenues
from oil sold for such purposes,  however,  there is an approximately nine month
delay  after the initial  sale of oil until these  royalties  are  received  and
recognized as revenue. Accordingly, royalty revenues are not included in product
sales,  thereby  creating  a  significantly  higher  cost  of  goods  sold  as a
percentage  of  revenues  than  would  have  been  the  case if  royalties  were
incorporated  into the  product  price  and  recognized  at the same time as the
product sales. As sales volume  increases,  and  manufacturing  efficiencies and
optimization  occurs,  management  believes  that the cost of  production of its
nutritional  oils  will  decrease.  The  Company  believes  that  a  significant
continued optimization effort will be required for at least the next year. There
can be no  assurance  that the  Company  will be able to  successfully  optimize
production of its nutritional oils in order to manufacture commercial quantities
at  a  reasonable  cost,  or  continue  to  comply  with  applicable  regulatory
requirements,  including GMP, or that its facilities  will be sufficient to meet
the demand for the oils.
 
     Research and development  costs decreased by $242,000,  or 8%, in the first
quarter of 1998 when  compared to the same period in 1997.  Consistent  with the
Company's plans,  nutritional  oils development  costs comprised over 75% of all
R&D costs as a result of the Company's continued development efforts to optimize
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 increased by $383,000, or 24%,
over  the  first  quarter  of 1997  primarily  due to  increased  marketing  and
promotion of the  Company's  product  lines  including  an expanded  advertising
program.  Other income was $234,000  lower during the first quarter of 1998 than
in the first  quarter  of 1997  primarily  due to a  decrease  in the  amount of
interest earned on the investment of funds received in the Company's 1995 public
offering as funds are being used to support Company operations.

     As a result of the  foregoing,  net loss for the first  quarter of 1998 was
$2,961,000, or $.22 per share, compared to a net loss of $3,452,000, or $.26 per
share for first quarter of 1997.

Recent Accounting Pronouncements

     In 1997,  the FASB issued SFAS No. 128,  Earnings  Per Share.  SFAS No. 128
replaced the previously  reported  primary and fully diluted  earnings per share
with basic and diluted  earnings per share.  Unlike primary  earnings per share,
basic earnings per share excludes any dilutive effects of options, warrants, and
convertible  securities.  Diluted  earnings  per  share is very  similar  to the
previously  reported fully diluted  earnings per share.  The Company's per share
amounts for all periods presented conform to SFAS No. 128 requirements.

     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.  The FASB
also 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.  Both Statements are effective
for fiscal years beginning after December 15, 1997.  Adoption of these standards
will not impact the Company's financial position,  results of operations or cash
flows, and any effect, while not yet determined by the Company,  will be limited
to the presentation of its disclosures.

                                  Page 9 of 12
<PAGE>
Impact of Year 2000

     Management is studying the implications of the Year 2000 on its information
systems.  However,  based on the business  risk  associated  with the  Company's
information systems, Management does not anticipate that the year 2000 will have
a  significant  impact on its  information  systems  or result in a  significant
commitment  of  resources to resolve  potential  problems  associated  with this
event.

Liquidity and Capital Resources

     Cash, cash equivalents,  short-term  investments and marketable  securities
decreased by $4,561,000 in the first quarter of 1998 resulting in a cash balance
of  $2,925,000  and a balance  of  $13,189,000  in  short-term  investments  and
marketable securities at January 31, 1998. Capital expenditures of $382,000 were
made in the first  quarter of 1998, a  significant  portion of which  represents
upgrades  to  the  Company's  fermentation  and  oil  processing  facilities  in
Winchester,  Kentucky.  Management expects additional capital expenditures of at
least  $1,600,000  in  1998  as a  result  of  escalating  fermentation  and oil
processing activities at the facility.

     Martek may require  substantial  additional  funds to continue its research
and  development  programs,  to  conduct preclinical and clinical studies and to
commercialize its nutritional oils, Neuromins(TM),  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:  the speed at which Martek's infant formula licensees
incorporate Martek's oils into their term infant formula products;  the progress
of preclinical and clinical studies;  the time and costs of obtaining regulatory
clearance for those products subject to regulatory clearance, the costs involved
in filing,  protecting  and enforcing  patents and other  intellectual  property
rights;   competing   technological  and  market  developments;   the  costs  of
manufacturing  facilities for those products the Company  chooses to manufacture
itself;  the costs of  commercializing  its  products;  and the extent of future
facilities expansion and collaborative  partnerships.  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 $1,600,000 are expected in 1998.
Expenditures  beyond 1998 will depend in part on production  capacity needs, the
extent of development and implementation of process improvements and the success
of previously implemented improvements.

     Management believes its existing capital resources, consisting primarily of
cash,  short-term  investments and marketable  securities will provide  adequate
capital  for at  least  the  next  12  months.  However,  due  to the  Company's
expectations  of growth and the rapidly  changing nature of the markets in which
it competes,  no prediction can be made with certainty of the Company's need for
additional  capital or its liquidity  position  over the long term.  The Company
intends to seek additional  funding through  commercial and government  research
and   development   contracts   and  grants,   product  sales  and  license  fee
arrangements. Management is also likely to pursue other methods of financing its
activities  in  1998,  including   asset-based   borrowing,   equity  issuances,
additional lease financing and 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.






                                  Page 10 of 12
<PAGE>
                           PART II - OTHER INFORMATION

                                                      

Item 1.  Legal Proceedings.

The Company is not a party to any material legal proceedings.

Item 2.  Changes in Securities.

None

Item 3.  Defaults Upon Senior Securities.

Not Applicable

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

None

Item 5.  Other Information.

None

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits: None

(b) Reports on Form 8-K: None






















                                  Page 11 of 12
<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:  March 17, 1998      /s/ Peter L. Buzy
       --------------      -----------------------------------------------------
                           Peter L. Buzy, Chief Financial and Accounting Officer






                                  Page 12 of 12