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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549


FORM 10-K

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

FOR THE FISCAL YEAR ENDED OCTOBER 31, 2003

OR

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


COMMISSION FILE NUMBER: 0-22354

MARTEK BIOSCIENCES CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


|                                |  |                       
|------------------------------- |  | ----------------------
|DELAWARE                        |  | 52-1399362            
|(STATE OR OTHER JURISDICTION OF |  | (I.R.S. EMPLOYER      
|INCORPORATION OR ORGANIZATION)  |  | IDENTIFICATION NUMBER)

6480 DOBBIN ROAD, COLUMBIA, MARYLAND 21045
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANTS TELEPHONE NUMBER INCLUDING AREA CODE: (410) 740-0081

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

|                       |  |                                                  
|---------------------- |  | -------------------------------------------------
|NONE
(TITLE OF CLASS:) |  | NONE
(NAME OF EACH EXCHANGE ON WHICH REGISTERED:)

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

COMMON STOCK, $.10 PAR VALUE
(TITLE OF CLASS)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 last 90 days. [X] Yes [  ] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [  ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). [X] Yes [  ] No

The aggregate market value of Common Stock held by non-affiliates of the
registrant as of April 30, 2003, was $738,046,213.

The number of shares of Common Stock outstanding as of December 31, 2003
was 28,167,466.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of Registrants Annual Report to Stockholders for the
fiscal year ended October 31, 2003 are incorporated by reference into Part II
of this Report. Certain portions of the Registrants Definitive Proxy Statement
for its 2004 Annual Meeting of Stockholders (which will be filed with the
Commission within 120 days after the end of the Registrants 2003 fiscal year)
are incorporated by reference into Part III of this Report.

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PART I

The information in this Form 10-K contains certain forward-looking
statements, including statements related to markets for the Companys products
and trends in its business that involve risks and uncertainties. The Companys
actual results may differ materially from the results discussed in the
forward-looking statements. Factors that might cause such a difference include
those discussed in Managements Discussion and Analysis of Financial Condition
and Results of Operations,Risk Factors and Business as well as those
discussed elsewhere in this Form 10-K.

ITEM 1. BUSINESS.

OVERVIEW

Martek Biosciences Corporation (Martek, We, or the Company) develops and
sells products primarily derived from microalgae. Microalgae are microplants.
We have pioneered the commercial development of microalgae into a portfolio of
high value products and product candidates consisting of the following:

NUTRITIONAL PRODUCTS

Over the past ten years, we have developed production methods and intellectual
property for two important fatty acids. These fatty acids are docosahexaenoic
acid, commonly known as DHA, and arachidonic acid, commonly known as ARA. We
market blends of oils containing these fatty acids as DHASCO® and ARASCO®. We
derive DHA from microalgae and ARA from fungi, using proprietary processes.
Cell membranes throughout the body, especially in the brain, central nervous
system, retina and heart, contain these fatty acids. DHA and ARA may help
develop the eyes and central nervous systems of newborns and promote adult
mental and cardiovascular health. An adult may obtain DHA via foods such as
fish or organ meats and ARA via foods such as red meats, fish and eggs. A
pregnant mother passes DHA and ARA through the placenta to a fetus and a
lactating mother passes DHA and ARA to an infant through breast milk. While
there are currently no universally recognized guidelines for daily consumption
of DHA, a workshop sponsored by various groups, including the National
Institutes of Health, recommended that adults consume at least 220 mgs. of DHA
daily. The World Health Organization has issued similar guidelines for infant
nutrition. The U.S. Department of Agriculture and other organizations in Europe
and Asia have compiled data showing dietary intake in Western-developed
societies is less than one-half of this level. We believe that this possible
dietary deficiency will result in an increase in demand for DHA-supplemented
products. The importance of ARA in the adult diet is not yet known.

Investigators at the National Institutes of Health and other research
centers have observed a relationship between low levels of DHA and a variety of
health risks, including increased cardiovascular problems, cancer, as well as
neurological and visual disorders. We have and continue to sponsor ongoing
studies to further investigate the potential benefit of DHA supplementation on
cardiovascular health, Alzheimers disease and dementia, and pregnancy and
nursing. Additionally, we, as well as others, are conducting research regarding
the impact of DHA supplementation on cancer and certain visual and neurological
disorders. Additional research is needed to assess the impact, if any, that DHA
supplementation will have on these health risks. We are targeting the infant
formula market, the adult nutritional market, and the food and beverage market
for our nutritional oils.

On May 17, 2001, we received notice from the Food and Drug Administration
(FDA) that after completing its review of our generally recognized as safe
(GRAS) notification, the agency had no further questions regarding our
conclusion that our DHASCO® and ARASCO® oil blend is GRAS when used in
specified ratios in infant formulas. Since the first product introduction in
February 2002, supplemented term infant formulas manufactured by four of our
licensees have been marketed in the United States: Mead Johnson Nutritionals,
under the Enfamil®LIPIL® brand of products including term, preterm,
lactose-free and soy based products; the Ross Products Division of Abbott
Laboratories under its Similac®, Isomil®, and NeoSure® brands of products
including term, preterm, lactose-free and soy based products; Nestle under its
Good Start® Supreme DHA & ARA brand and PBM Products Inc.,
using infant formula product manufactured by Wyeth, under the brand Bright
Beginnings and under the private label brand for Wal-Mart, Parents Choice.

Fourteen infant formula manufacturers, including Mead Johnson
Nutritionals, Wyeth, Abbott Laboratories, Nestle, Nutricia, Novartis,
Maarbarot, Heinz-Watties, Laboratorios Ordesa and five companies whose
identity we have agreed not to disclose at this time, have licensed from us the
right to include our nutritional oils in their products. Collectively, these
companies represent more than 70% of the estimated $8.5 to $9.5 billion
worldwide wholesale market for infant formula and almost the entire estimated
$3.0 to $3.5 billion U.S. wholesale market for infant formula, including the
wholesale value of Women, Infant & Children program (W.I.C.) rebates. W.I.C.
is a federal grant program that is state administered for the benefit of
low-income, nutritionally at risk, women, infants and children. Mead Johnson
Nutritionals, Wyeth, Abbott Laboratories, Nestle, Nutricia, Novartis, Maarbarot
and two companies whose identity we have agreed not to disclose at this time
are now marketing term infant formula products containing our oils in over 30
countries and pre-term infant formula products containing our oils in over 60
countries around the world. The five licensees that are not currently marketing
term infant formula products containing our oils represent less than 5% of the
estimated worldwide wholesale market for infant formula. Supplemented term
infant formulas manufactured by Mead Johnson Nutritionals, Abbott Laboratories,
Wyeth and Nestle are currently being marketed in the United States. Adult
supplements containing our nutritional oils are being marketed in the United
States and to a lesser degree in certain European markets.

In April 2002, we purchased OmegaTech, Inc. (OmegaTech or Martek
Boulder), a low-cost algal DHA producer located in Boulder, Colorado. OmegaTech
had been in the fermentable DHA business since 1987, and had accumulated over
100 issued and pending patents protecting its DHA technology. Its products
consist of sales of DHA into the dietary supplement, food, beverage, and animal
feed markets under the DHA Gold® brand. We currently sell nutritional
supplements under the Neuromins® and DHA Gold® brand names. We anticipate
increased sales of our oils in 2004 into markets for pregnant and nursing
mothers, cardiovascular health and food and beverages.

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In June 2003, the Commission of the European Communities authorized the
use of our DHA-S oil which is the type of DHA oil we use in nutritional supplements
and foods for human consumption. The commission declared that our DHA-S oil may
be marketed in the European Community as a
Novel Food ingredient. This Novel Food designation authorizes the use of our
DHA-S as an ingredient in certain foods such as certain dairy products,
including cheese and yogurt (but not milk-based drinks), spreads and dressings,
breakfast cereals, food supplements and medical foods in the European
Community. In August 2003, we submitted a GRAS notification to the FDA
relating to our DHA-S oil for use in food and beverage applications. Although
our oils can be sold for these applications now, GRAS status, if
attained, should increase
customer acceptance in the food and beverage market. We expect to receive
a response from the FDA in fiscal 2004.

OTHER PRODUCTS

We have also developed new fluorescent detection products from microalgae that
connect fluorescent algal proteins to antibodies. Since the compound
itself cannot be seen, the connected antibodies
(with their algal fluors) then attach to a compound of interest to tag or mark
that compound. Compound detection is then made or not made, on whether the
fluor is seen. These
products have potential applications in automated biological screening to find
new compounds or reduce drug discovery time. Our products bring greater speed,
sensitivity and simplicity to existing tests and applications.

Our genomics group has developed key intellectual property that some day
may allow us to transfer the DHA producing genetic material of microalgae into
agricultural products such as safflower or linseed plants for the purpose of
developing healthier seed oils and an inexpensive source of DHA oil. On
December 17, 2003, we executed a collaborative agreement with SemBioSys Genetics,
Inc., a Canadian biotechnology company, to co-develop plant-based DHA products.
If we are successful in our efforts, it will take approximately 5-10 years of
development to bring a plant-based DHA product to the market.

PRODUCTS AND PRODUCT CANDIDATES

NUTRITIONAL OILS

Infant Formula Applications

Certain microalgae and fungi produce large quantities of oils and fats
containing long-chain, polyunsaturated fatty acids, known as PUFAs, that are
important to human nutrition and health. We have identified a strain of
microalgae which produces an oil rich in DHA and have developed the means to
grow it by fermentation. In addition, we have isolated and cultured a strain of
fungus that produces large amounts of ARA.

DHA is the predominant omega-3 fatty acid in the grey matter of the brain
and retinal tissues and is a key component of heart tissue in humans and other
mammals. Children and adults obtain DHA primarily from their diets,
particularly from fish and organ meats, because humans synthesize only small
amounts of DHA from dietary precursors. ARA is an omega-6 fatty acid and is the
principal omega-6 fatty acid found in the brain. ARA is also important in the
brain development of infants and is a precursor to a group of hormone-like
substances important in several vital functions of the body. ARA is found in
common foods such as meat, eggs and milk. Brain development in humans takes
place primarily in the last trimester in utero and in the first 12 months of
postnatal life. For a fetus, DHA and ARA are provided through its mothers
bloodstream via the placenta. For a nursing infant, they are provided via
breast milk. DHA is generally the most abundant omega-3 long-chain PUFA in
human milk. Our DHA and ARA oils for infant formula are blended in ratios
similar to that found in breast milk. DHA and ARA dietary supplementation may
be particularly important for premature and low birth weight infants who may
not get their full in-utero allotment. Although these fatty acids are naturally
present in breast milk, they were not traditionally added to infant formulas.
When added to infant formula, our blended oils containing DHA and ARA provide
the closest available match, with regard to the molecular form of these fatty
acids, to the DHA and ARA in human milk.

We believe that our DHA oils are more desirable for infant formula
applications than fish oil because they are derived from a vegetarian source,
free of undesirable fatty acids such as eicosapentaenoic acid (EPA), and
contaminants such as methylmercury, polychlorinated biphenyls (PCBs) and
dioxins. Additionally, our DHA and ARA oils are in an easily digestible
triglyceride form similar to that found in breast milk and have higher
oxidative stability and longer shelf life than fish oil.

Independent studies have indicated that the mental development and visual
acuity of infants are positively affected by breast feeding and that breast-fed
infants have higher levels of DHA in their brain tissue and enhanced mental
acuity later in life when compared to those fed infant formula not containing
DHA. Further, studies have shown that supplementation of infants with DHA and
ARA fortified formulas may result in improved mental and visual development.
This evidence is from retrospective studies comparing intelligence in
breast-fed versus formula-fed infants and from intervention studies in infants
using DHA and ARA supplemented infant formula. Other studies have failed to
report beneficial effects with DHA and ARA supplemented infant formulas. In
general, these studies tested levels of DHA and ARA lower than levels
recommended by authoritative bodies.

Although not all experts agree on the importance of DHA and ARA oils in
the infant diet, the following are examples of some of the studies that have
found benefits from DHA and ARA supplementation in the infant diet:



| |  |  | In November 2001, results were presented from a multi-center European
study which showed sustained advantages for infants fed formula
supplemented with DHA and ARA. At 6 years of age, children who had
received a DHA and ARA supplemented formula for the first 4 months of
life had significantly lower diastolic blood pressure, were
significantly faster at making correct choices, and showed more
efficient information processing than un-supplemented children. Results
of this study were published in BMJ in May 2003.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | A study, which was partially funded by Martek and reported by
investigators at Baylor College of Medicine in November, 2000, and                                                                                                                                                                                                                                                                                                                                                                                                   

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| |   |  | published in the April 2001 issue of PediatricResearch, supported the
importance of DHA supplementation during breast-feeding by showing that
breast-fed, 30 month-old children whose mothers took a DHA supplement
for four months after delivery scored a mean of eight points higher on a
standard test of psychomotor development than infants whose mothers
received a placebo.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Research published from a National Institutes of Health (NIH)
sponsored study in the March 2000 issue of Developmental Medicine and
Child Neurologyshowed a significant improvement in mental development
in term infants given a commercially available infant formula
supplemented with our DHA and ARA compared to infants fed the same
formula, but without DHA and ARA. In the double-blind study, infants fed
the diet supplemented with our oils showed, at 18 months of age, a mean
increase of 7 points on the Mental Development Index (MDI) of the Bayley
Scales of Infant Development II. Researchers reported that these data
support a long-term cognitive advantage of infant dietary DHA supply
during the first 4 months of life. The significant correlations...support
the hypothesis that early dietary supply of DHA was a significant
determinant of improved performance on the MDI. Although there are
different sources of DHA and ARA, these findings reaffirmed the beneficial
effects of adding Marteks pure source of pre-formed DHA and ARA to infant
formulas at the levels evaluated by the researchers.                                                                                          
|
| |  |  | A NIH sponsored study published in the August 1998 edition of
Pediatric Researchconcluded that early dietary intake of preformed DHA
and ARA appears necessary for optimal development of the brain and eye.
The study reported that healthy, full-term infants fed formula
supplemented with our oils had visual development results consistent
with breast-fed infants, but those fed a standard formula without DHA
and ARA had a deficiency of about one line on an eye chart. The study
also indicated that infant formula without preformed DHA and ARA may put
infants at risk for DHA deficiency, and suggested that the availability
of dietary DHA during the critical developmental period may lead to
persistent changes in the underlying neural structure and/or function of
infants.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  |  | The January 1998 issue of Pediatrics, in an article entitled
Breastfeeding and Later Cognitive and Academic Outcomes by Horwood and
Fergusson (New Zealand), reported that, in an 18-year longitudinal study
of over 1,000 children, those who were breast-fed as infants had both
better intelligence and greater academic achievement than those who were
infant-formula fed children. The authors cited the importance of DHA in
the neurological development of children and recommended the need to
develop improved infant formulas with properties more similar to those
of human breast milk that may lead to improved developmental outcomes in
children. The study indicated that breast-fed babies have a 38% greater
likelihood of completing their high school matriculation than
formula-fed babies even after allowances were made for confounding
social, familial and perinatal factors. Although the study did not
conclude that DHA provided to the breast-fed infants from their mothers
milk was the sole cause of the improved achievement scores, the authors
pointed out recent controlled intervention studies demonstrating similar
outcomes in infants with DHA-supplemented formulas and concluded that:

| |                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | . . . the weight of evidence clearly favors the view that exposure
to breast-feeding is associated with small but detectable increases
in childhood cognitive ability and educational achievement, with it
being likely that these increases reflect the effects of long chain
polyunsaturated fatty acid levels and, particularly, DHA levels on
early neurodevelopment.



| |  |  | Data presented in July 1995 at the Second International Congress of
the International Society for the Study of Fatty Acids and Lipids,
showed that low birth weight infants fed formula supplemented with
Marteks nutritional oils have blood lipid levels of DHA and ARA
comparable to those of breast-fed, low birth weight infants.                                                                           
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | In the November 12, 1994 edition of The Lancet, a scientific journal
published in the United Kingdom, scientists concluded that some
components of breast-milk may have a beneficial effect on brain
development. . . . arachidonic acid [ARA] and docosahexaenoic acid [DHA]
should be considered as essential nutrients for infants because they are
present in structural lipids in brain and nervous tissue.

In addition, DHA and ARA have been recognized as important in the infant
diet and recommended for inclusion in infant formula by an expert panel of the
United Nations Food and Agricultural Organization and The World Health
Organization (FAO/WHO), a NIH and International Society for the Study of Fats
and Lipids sponsored workshop, a panel sponsored by the Child Health
Foundation, and the British Nutrition Foundation (BNF).

Nine of our infant formula licensees have obtained the regulatory
approval, where required, to sell term infant formula products containing our
oils in over 30 countries and pre-term infant formula products containing our
oils in a total of over 60 countries around the world. Supplemented term infant
formulas manufactured by four of our licensees are currently being marketed in
the United States. Our sales of nutritional oils for infant formula were
approximately $107.1 million in 2003, $40.8 million in 2002 and $16.0 million
in 2001.

Applications for Pregnant and Lactating Women

In addition to recommending the inclusion of DHA and ARA in infant formula, the
BNF and FAO/WHO Committees have recognized the importance of DHA and ARA in
pregnancy and lactation.

A study published in the January 2003 edition of Pediatricsfound that
mothers who supplemented their diet with fatty acids rich in docosahexaenoic
acid (DHA) during pregnancy and lactation gave birth to children who scored
higher on standardized intelligence and achievement tests at four years of age
than those whose mothers supplemented with fatty acids that do not contain DHA.
According to the study, data demonstrated that children born to mothers who had
taken cod liver oil, which is rich in DHA and other omega-3 fatty acids, during
pregnancy and lactation scored significantly higher (approximately 4.1 points)
on the Mental Processing Composite of the K-ABC test as compared to children
whose mothers had received corn oil. Additional research is needed to evaluate
DHA supplementation during pregnancy and lactation.

To address these markets, we produce Neuromins® PL, which is a DHA dietary
supplement specifically designed for pregnant and lactating

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women. We are in
discussions with companies in the nutritional market to sell additional
products containing our DHA oil for pregnant and lactating women.

Cardiovascular Health and Other Human Applications

Investigators at universities around the world and at other research centers,
such as the National Institutes of Health, have observed a relationship between
low levels of DHA and a variety of health risks, including increased
cardiovascular problems, cancer, Alzheimers disease and dementia and various
other neurological and visual disorders. We are currently trying to establish
what contribution, if any, supplementation with our oils will make in
addressing these problems. We are sponsoring studies to further investigate the
potential benefit of DHA supplementation on cardiovascular
health and breast cancer, and we, as well as others, are conducting research
regarding the impact of DHA supplementation on cancer and certain visual and
neurological disorders.

The findings of two recently published studies, discussed below,
highlighted the benefits of DHA on cardiovascular health while cautioning on
the intake of DHA from fish sources.

In November 2002, the American Heart Association (AHA) issued a Scientific
Statement entitled Fish Consumption, Fish Oil, Omega-3 Fatty Acids, and
Cardiovascular Disease, published in the November 19, 2002 edition of
Circulation: Journal of the American Heart Association. The Scientific
Statement outlines the findings of a comprehensive report that examined the
cardiovascular health benefit of omega-3 fatty acids from fish sources,
specifically DHA and eicosapentaenoic acid (EPA). The report concluded that
consumption of such omega-3 fatty acids, either through diet or supplements,
reduces the incidence of cardiovascular disease. The statement refers to
studies that have indicated the following to be associated with the intake of
omega-3 fatty acids:



| |  |  | decreased risk of sudden death and arrhythmia,
| | - |  | ----------------------------------------------
|
| |  |  | decreased thrombosis (blood clot),            
|
| |  |  | decreased triglyceride levels,                
|
| |  |  | decreased growth of atherosclerotic plaque,   
|
| |  |  | improved arterial health, and                 
|
| |  |  | lower blood pressure.                         

The Scientific Statement concluded that omega-3 fatty acids have been
shown in epidemiological and clinical trials to reduce the incidence of heart
disease and recommends that healthy individuals eat a variety of fish
(preferably oily) at least twice a week. The statement cautioned, however, that
fish intake must be balanced with concerns about environmental pollutants
because some species of fish may contain significant levels of methylmercury,
polychlorinated biphenyls (PCBs), dioxins, and other contaminants. Both the FDA
and the Environmental Protection Agency have advised children, pregnant
women, women who may become pregnant and nursing mothers to limit their intake
of certain fish. In consideration of the health risks posed by such
contaminants, the authors of the statement conclude by stating, The
availability of high-quality omega-3 fatty acid supplements, free of
contaminants, is an important prerequisite to their extensive use. Marteks
DHA oil is derived from a vegetarian source and is free of contaminants found
in fish oil.

Also, the November 28, 2002 edition of the New England Journal of Medicine
published the results of a study directed by a team of researchers at The Johns
Hopkins University. This study weighed the cardiovascular benefit of DHA
derived from fish consumption, as compared to the cardiovascular health risk
posed by the mercury content in certain fish. Researchers found that, while
high DHA levels were directly correlated with a lower risk for cardiovascular
disease, high mercury levels were directly correlated with the risk of heart
attack. Based on these findings, researchers concluded that, High mercury
content may diminish the cardioprotective effect of fish intake.

On November 18, 2002 the findings of a study were presented at the
Scientific Sessions of the American Heart Association, and published in the
supplement to Circulationabstracts from Scientific Sessions 2002 in November
2002, relating to the effects of Marteks DHA oil on endothelial function in
children with elevated blood lipid levels (hyperlipidemia). Hyperlipidemia in
children is a risk factor for early coronary heart disease. Clinical data
demonstrated that when patients received a specialized diet supplemented with
DHA, they showed improved endothelial function as compared to the specialized
diet alone. Researchers found that, when patients received DHA, they
experienced significant improvements in their arterial flow, indicating that
their arteries had become more flexible. Moreover, these investigators
reported at the Scientific Sessions of the American Heart Association in
November 2003 that DHA supplementation in these same children resulted in a
favorable shift from small, dense LDL particles, known to be highly correlated
with coronary heart disease, to large LDL particles. DHA supplementation also
resulted in a significant favorable increase in HDL particle size. We provided
supplements for this study at no cost and performed the fatty acid analysis.

Further supporting the beneficial role of DHA on lipids, investigators
from Carolinas Medical Center reported their clinical study results at the
Scientific Sessions of the American Heart Association in November 2003. Thirty
eight mildly overweight men and woman were randomized to receive
1,500 mg of
DHA daily for twelve weeks. Those receiving supplementation
experienced a 9 percent increase in beneficial HDL cholesterol, an 11 percent
decrease in triglyceride levels, and a marked decrease in the small LDL
particles that are highly correlated with coronary heart disease. In
addition, large LDL particles were favorably increased. We provided
supplements for this study at no cost.

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Investigators from the University of Maryland also presented their
research at the American Heart Association 2003 Meeting suggesting
that a daily intake of DHA can favorably impact lipids and reduce cardiovascular
disease risk factors in healthy adults. Healthy adults, taking
varying doses
of Neuromins® DHA ranging from 200mg to 1,000mg, experienced dose-dependent
reductions in triglycerides and increases in HDL cholesterol (known as good
cholesterol). According to researchers, DHA supplementation also resulted in
an increase in large particle, but not small particle, LDL cholesterol. Small
LDL particles are associated with an increased risk of cardiovascular disease,
while large LDL particles pose little to no cardiovascular risk. The benefits
were most pronounced in individuals with elevated triglycerides.

Researchers at the University of Guelph, Ontario, Canada reported at the
International Society for the Study of Fatty Acids and Lipids 2002 Annual
Meeting (Montreal, Canada) that DHA supplementation of 32 postmenopausal women
with 2.8g DHA per day for 1 month resulted in a significant 20% reduction in
triglycerides, a 6-10% increase in HDL cholesterol (good cholesterol) and a
7% reduction in heart rate relative to placebo, suggesting that DHA may
favorably influence selected cardiovascular risk factors in postmenopausal
women.

DHA and cancer treatments- The findings of an animal study on the effects of
DHA on human colon cancer cell growth were released by the University of
Nevada, Reno and published in the December 10, 2002 edition of Cancer Letters.
The study concluded that our DHA oil significantly
inhibited the growth of human colon cancer cells in mice. The study found that
while both Marteks DHA oil and fish oil, which contains both DHA and EPA,
inhibited colon cancer cell growth, Marteks DHA had a greater effect.

The potential role of Marteks DHA in cancer treatment has been the
subject of previous preclinical investigations. Researchers from the American
Health Foundation (since renamed The Institute for Cancer Prevention) announced
clinical data demonstrating that Marteks DHA suppressed human breast cancer
metastasis in mice at the 21st Annual Breast Cancer Symposium in December 1998.

DHA and reduction of the risk of Alzheimers disease and age related dementia-
In November 2003 results from a study including subjects from the Framingham
Study suggested that increasing DHA levels in the blood by eating more than two
servings of fish per week was associated with up to a 48 percent reduction in
the risk of dementia in elderly men and women. The study conducted over a ten
year period included 899 men and women with a mean age of 75.

A study published in the July 2003 edition of Archives of Neurology
indicated that weekly consumption of fish and dietary intake of DHA, but not
other omega-3 fatty acids, are associated with a reduced risk of Alzheimers
disease by up to 60 percent. The study examined whether fish consumption and
the associated intakes of omega-3 fatty acids would afford a protective effect
against Alzheimers disease. A total of 815 subjects, aged 65 to 94, who were
initially unaffected by Alzheimers disease, participated in the study and were
followed for an average of 3.9 years for the development of Alzheimers
disease. The study showed that in those individuals consuming the highest
dietary DHA, the risk of developing Alzheimers disease was
reduced by up to 60
percent and the risk of developing Alzheimers disease was not correlated with
eicosapentaenoic acid (EPA) consumption. Additional research is needed to
evaluate the role, if any, of DHA in reducing the risk of developing these
diseases.

We have entered into agreements with Moss Nutrition Products, Inc.,
Nutrition Dynamics and The Key Company for the distribution of our DHA
supplements to mass market retail outlets. Nutraceuticals Corporation, Solgar
Vitamin and Herb Company, Source Naturals, Inc., Natures Way, Inc., NBTY, Inc.,
Vitamin Shoppe Industries, Inc., Whole Foods Market, Inc., and various others
who privately label and distribute Neuromins DHA supplements to natural foods
markets. In addition, we have entered into an agreement with General Nutrition
Company (GNC) to encapsulate our DHA-S oil and bottle the capsules under the
Goldminds brand name. Further, we have an agreement with Vegetable Seedoil
Products (VSP), a European distributor of the DHA-S oil for use in supplements.

In 1999, we began selling bulk DHA oil and powder for additional
applications, including inclusion in childrens chewables and nutritional
drinks. We are continuing to explore additional applications for DHA, including
use in pharmaceuticals and functional foods. In April 2002, we purchased
OmegaTech, a low-cost algal DHA producer located in Boulder, Colorado. Its
products consisted of sales of DHA into the dietary supplement, food, beverage,
and animal feed markets. We are in discussions with several companies in the
nutritional and food and beverage markets to sell products containing our DHA
oil for pregnancy and lactation, and cardiovascular applications. We are also,
along with our customers, developing other DHA delivery methods to address
these potential new markets, including powders, an emulsion, use as a food
ingredient, and use as a pharmaceutical.

Our sales of nutritional oils for adult supplements and food additives
were less than $2 million in each of the last three years.

Animal Feed Applications

We also sell products used in the animal feed market. These products
consist of a DHA-rich algal product that we sell to egg producers and
aquaculture companies. Egg producers fortify their chicken feed with our
product for the purpose of increasing the DHA levels in eggs that may then be
passed on to humans though consumption. Aquaculture companies use our algal
product to improve the survivability of fish larvae. Our sales of products for
animal feed applications totaled $2.1 million in 2003 and $1.1 million in 2002.

ADVANCED DETECTION SYSTEMS

We have identified, isolated and now sell powerful fluorescent dyes from
various microalgae for use in life science applications for detection of
certain biological processes. Our fluorescence technology is a sensitive and
direct method for detection of a specific binding event. That event could be a
receptor mediated binding, cell based binding, antibody driven binding or
essentially any event where one entity recognizes another. Because of
environmental concerns with the use of radioactivity as a sensitive method of
detection, higher sensitivity detection technologies are in demand. The main
advantages of fluorescence as a method of detection is that it is direct, fast,
and relatively simple in that it does not require enzymatic steps for signal
amplification or prolonged development times for signal measurement.

6



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Our fluorescent detection products include the following:

Phycobiliproteins Classical direct fluorescent detection dyes, which we
have produced for several years and fill an existing market in protein
detection and flow cytometry. In 1999, we introduced our own brand of improved
fluorescent dyes (SureLight-APC®) to be used for time resolved fluorescence
applications in the high throughput screening market. In 2001, we have
entered into a supply agreement with PerkinElmer Life Sciences, which has an
extensive line of reagents that are used in this market.

SensiLight dyes Our Sensilight dye technology was developed to match
the sensitivity of chemiluminescent methods. Sensilight dyes are large,
intensely fluorescent combinations of phycobiliproteins that provide extreme
sensitivity with ease of use that is unmatched by other common dyes or
detection systems. A 100-fold improvement in sensitivity has been demonstrated
with the Sensilight dyes over existing direct fluorescent dyes, and multiple
new applications are now accessible by simple, direct fluorescence. Such
increased sensitivity allows:



| |  |  | detection of receptors or small molecules at 100-fold lower concentrations;      
| | - |  | ---------------------------------------------------------------------------------
|
| |  |  | detection with the same level of sensitivity but in 100-fold smaller volumes; and
|
| |  |  | detection with the same level of sensitivity but using much lower cost equipment 

Our Sensilight dyes have demonstrated an increased sensitivity compared to
other direct detection dyes in all applications evaluated thus far. They
provide sensitivity similar to enzymatically amplified or radioactive detection
systems but with fewer steps, generating more rapid results at lower costs. Our
dyes have been used in immunodiagnostic detection, microarrays, flow cytometry,
western blotting and other applications.

Due to these advantages we have entered into a royalty agreement with
minimum sales requirements with EMD Biosciences (Merck KgaA) for the use of
our SensiLight dye in their Easy Assay protein microarray platform. We also
provide one of our SensiLight dyes to Beckman Coulter, Inc. for use in their
A2 protein microarray platform, which they expect to launch in first quarter
2004.

Our sales of advanced detection system products were less than $1 million
in each of the last three years.

ALGAL GENOMICS

Our collection of microalgae provide a rich source of novel genetic material
enabling the production of a variety of valuable nutritional and pharmaceutical
ingredients. Microalgae biochemical pathways and genes have much in common with
higher plants; therefore, microalgal genes will provide a good source of genes
for engineering valuable output traits in higher plants. We have discovered and
isolated a novel biochemical pathway for the production of DHA in microalgae,
which was described in the journal Sciencein 2001. We believe that these genes
will be a preferred source of genes for developing healthier plant seed oils,
such as safflower or linseed, when they are enriched in DHA. The isolation and
application of these algal genes are covered by several issued and pending
patents. The development of DHA-enriched plant seed oils would significantly
expand the overall market opportunity for DHA as a result of the dramatically
improved economics of production. Our proprietary approach enables the direct
production of DHA from simple precursors, avoiding the accumulation of other
non-essential fatty acids. Our novel genes may also enable the economical
production of other valuable bioactive lipids in fermentation microorganisms
and plants. Martek recently announced a collaboration with SemBioSys Genetics
(Calgary, Alberta, Canada) to develop seed oil DHA products using Marteks
proprietary genes and SemBioSys plant oilseed knowledge.

We have combined our understanding of heterotrophic (i.e. without light)
and photoautotrophic (i.e. with light) growth of microalgae with our
proprietary technology in microalgal transformation to develop a unique
technology capable of converting an otherwise autotrophic species of microalgae
into one capable of growing heterotrophically, utilizing sugars for its energy.
We believe that this represents the first time such a transformation has ever
been made. Our Trophic Conversion technology was selected as the feature cover
story in the June 15, 2001 issue of Science,and is the subject of several
patent applications. The technology opens the door to the commercial production
via fermentation of algal species that could only be grown previously using a
photobioreactor system. The favorable production economics associated with
fermentation compared to those of the photobioreactor may allow us to pursue
new algal products not previously believed to be economically feasible and
potentially represents a means to commercially exploit a greater portion of the
kingdom of microalgae.

To date, we have received no revenues from our algal genomics technology.

TECHNOLOGY

We apply our microalgal expertise and culturing technology to our expanding
library of over 3,500 live and preserved microalgal species and related
database to achieve technical and commercial advantages. Certain fundamental
and unique attributes of microalgae allow for the development and production of
our products:



| |  |  | microalgae are a genetically diverse kingdom of organisms that have a
range of physiological and biochemical characteristics; thus, they
naturally produce many different and unusual fats, sugars, proteins and
bioactive compounds that may have commercial applications, such as the
fatty acids that are the principal ingredients in our oils, and highly
sensitive fluorescent diagnostic products;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | microalgae comprise a large, substantially unexplored group of
organisms, and thus provide a virtually untapped genetic resource that
can be screened for a variety of new products, including
pharmaceuticals; and                                                                                                                                                                                      

7



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| |   |  |                                                                                                                                                                                                         
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | many microalgae can be successfully cultivated using conventional
large-scale fermentation techniques and equipment, enabling economical
production of commercial quantities of these valuable products.

Our scientists have discovered microalgal strains which selectively
produce DHA in large amounts and are amenable to large-scale, heterotrophic
culture using common commercial fermentation equipment used in the
pharmaceutical, food and biotechnology industries under GMP(Good Manufacturing
Practices) conditions. These microalgal strains and the conditions applied to
achieve economical production of DHA form an important basis of our
intellectual property. Our scientists also have developed and patented novel
microalgal culturing systems which allow for the commercial production of other
high-value compounds, such as fluorescent pigments, and for the rapid
evaluation and scale-up of other microalgae of potential interest. Proprietary
closed-system, illuminated photobioreactors and numerous techniques for
maintaining microalgal monocultures form the basis of this technology.

Our product development process involves the following primary steps:

Identification of Appropriate Microalgae.We select specific microalgae to
produce potentially marketable compounds through a comprehensive process, which
involves developing a search and screening strategy based upon our extensive
knowledge of microalgal physiology and the unique role played by the target
compound in the survival of selected microalgal species, searching scientific
literature and our proprietary microalgal
database, and performing biochemical analyses, and product-yield experiments on
candidate strains. We currently maintain an increasing in-house collection of
over 3,500 strains of microalgae, which includes representatives of virtually
all of the significant taxonomic microalgal groups. Equally important is our
proprietary microalgal database, which contains biochemical and physiological
data on the strains in the collection. We believe that our microalgal
collection and associated database are among the largest such resources
available in the world. Martek also has access to potentially useful microalgal
strains outside of our collection through agreements with several research
organizations. Coupled with our extensive microalgal expertise, these
resources are used to identify organisms for initial testing. Further testing
ultimately results in the selection of production strains.

Optimization of Microalgae and Growth Conditions.We apply standard
industrial microbiological techniques to microalgae and manipulate culturing
conditions (growth medium composition, temperature, pH and light intensity) to
optimize product yield and productivity. After selecting strains with the best
yields and growth characteristics, we enhance their production through
conventional and commonly employed strain improvement methodologies. We have
not used genetic engineering techniques to develop any of our existing
products, but may use these methods for certain products currently in
development.

Scale-up and Commercial Production.Successful exploitation of the unique
characteristics of microalgae is in large measure dependent upon the
availability of large-scale culturing technology. We have successfully
scaled-up several microalgae capable of producing large amounts of DHA
heterotrophically using common organic nutrients and salts. Heterotrophic
culturing of these DHA-producing microalgae at commercially viable levels
enables significantly lower production costs to be achieved, which were not
possible prior to our achievements. Aspects of our technology for the
heterotrophic growth of DHA-producing microalgae are the subject of several
U.S. patents. Similar patents have been issued in certain countries and are
pending in certain other countries around the world.

For many other product applications, we use our proprietary light-driven,
closed-culture system photobioreactors for microalgal production.
Photobioreactors are closed to the atmosphere and designed to make the most
efficient use of light while keeping contaminating microbes out of the culture.
Using our photobioreactors, we are able to culture isolated microalgal strains
without contamination and to manipulate such strains to influence growth and
biochemical makeup, thus efficiently generating products of interest, including
the culturing of various algae for the production of powerful fluorescent dyes
used in our advanced detection systems. We use a series of photobioreactors of
varying sizes, controls and methods of operation to achieve culturing
consistency. Certain aspects of these photobioreactors are the subject of U.S.
patents.

U.S. Government Research and Development Contracts.Certain of our early
stage technologies were funded in part by Small Business Innovation Research
grants. The U.S. Government will have certain rights in the technology that we
developed with the funding. The U. S. Government may exercise such rights under
certain limited circumstances.

COLLABORATIVE AND LICENSING AGREEMENTS

We have entered into licensing agreements with fourteen infant formula
manufacturers, including Mead Johnson Nutritionals (a subsidiary of
Bristol-Myers Squibb Company), Wyeth, Abbott Laboratories, Nestle, Nutricia,
Novartis, Maarbarot, Heinz-Watties, Laboratorios Ordesa and five companies
whose identity we have agreed not to disclose at this time. Collectively,
these companies represent more than 70% of the worldwide wholesale market for
infant formula. Under all of these agreements, we received up-front license
fees and will receive either a) a flat rate price per kilogram upon the sale of
our oils to our licensees, or b) a transfer price on sales of our oils to our
licensees plus ongoing royalties based on our licensees sales of infant
formula products containing our oils. The most significant license agreements
have remaining terms ranging from approximately 16 to 25 years, contain no
future funding commitments on our part or that of our licensees, and may be
terminated by our licensees upon proper notification pursuant to the terms of
each contract. Licensees have the right to buy other sources of DHA and ARA
oils provided they still make royalty payments to us upon the sale of the final
infant formula product containing the oils if they are covered by our patents.

Under the terms of these licensing agreements, our licensees are
responsible for obtaining Food and Drug Administration (FDA) and all other
necessary regulatory approvals with respect to these nutritional oils. Under
each of our current license agreements, our licensees generally are obligated
to indemnify us against product liability claims relating to our nutritional
oils unless they do not meet agreed-upon specifications.

The infant formula industry represents over $3.5 billion in annual
wholesale sales in the United States and approximately $8.5 - $9.5 billion

8



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worldwide. Our current licensees cover over 70% of the worldwide infant formula
market. Mead Johnson Nutritionals, Wyeth, Abbott Laboratories, Nestle,
Nutricia, Novartis and Maarbarot and two companies whose identity we have
agreed not to disclose at this time, are now marketing term infant formula
products containing our oils in over 30 countries and pre-term infant formula
products containing our oils in over 60 countries around the world. The five
licensees that are not currently marketing term infant formula products
containing our oils represent less than 5% of the estimated worldwide wholesale
market for infant formula. Our sales to infant formula licensees were
approximately $107.1 million in 2003, $40.8 million in 2002 and $16 million in
2001. Mead Johnson Nutritionals, an infant formula licensee, accounted for
approximately 56% of our total product sales in 2003, 54% in 2002 and 30% in
2001. Wyeth, an infant formula licensee, accounted for approximately 13% of our
total product sales in 2003, which is a decrease compared to the 25% in 2002
and 42% in 2001. This decrease was due in part to the decrease in international
sales as a percent of total worldwide sales in 2003.

Under the terms of several of our current license agreements, we are
prohibited from granting a license to any party for the inclusion of our
nutritional oils in infant formula with payment terms or royalty rates that are
more favorable to such licensee than those provided in our agreements with our
current licensees without either the prior written consent of the current
licensees or prospectively offering such new favorable terms to these
licensees. This restriction does not apply to any lump sum payments to us
pursuant to a territorially restricted license under which the reduced payment
is reasonably related to the reduced marketing opportunities available under
such a restricted license.

In December 1996, we entered into a ten year agreement with Royal
Gist-Brocades B.V. (since then integrated into DSM) under which they became our
exclusive contract supplier for nutritional oils containing ARA. DSM is a
multi-billion dollar international group of companies that is active worldwide
in the fields of life science, performance materials and fine chemicals. Under
the agreement, DSM currently provides us with 100% of our crude ARA oil needs on a cost plus
margin basis, provided that their costs are competitive with other potential
sources. The contract does not call for any guaranteed purchase commitments
from us. As such, all purchases are done on an individual purchase order basis.

On November 1, 2001, we sold the assets consisting primarily of
inventory, and technology surrounding our former stable isotope product line to
Spectra Gases, Inc., a privately held New Jersey company. As part of the
agreement, we received approximately $800,000 for the assets of the group. We
also retained an ongoing royalty from future reagent sales for five years up to
a maximum of $500,000, and also received a 9% equity position and royalty
interest in a new company that was formed to pursue the high-end protein
labeling technology. As of October 31, 2003, the value of the investment in the
new company was fully reserved. During 2003, we recognized approximately
$140,000 in royalties as revenue in connection with this arrangement.

We also have a production agreement with C.P. Kelco U.S. Inc. (C.P.
Kelco) that we assumed with the purchase of OmegaTech for the production of
DHA-rich algal biomass, an intermediate form of our DHA oil that we sell to
animal feed companies or process further for use in the adult supplement and
food and beverage markets. This original agreement required us to purchase
approximately $2.4 million of inventory per year through December 31, 2004. In
October 2003 we signed an amendment to extend this agreement for an additional
six months with annual renewal options. At October 31, 2003 we had outstanding
inventory purchase commitments to C.P. Kelco totaling approximately $511,000, a
commitment of $2.4 million for calendar year 2004 and the additional commitment
of approximately $1.4 million for the six months ending June 30, 2005.

In October 2001, we licensed certain technology surrounding our
nutritional products for animal feed uses to Advance Bionutrition (ABN), a
start-up company founded by a former officer of Martek.
The license agreement provides that ABN has a first right of refusal to market DHA for animal feed applications in
exchange for minimum inventory purchases from Martek. In 2002, we also licensed
all animal feed applications of the former OmegaTech strain of algae to ABN
under which ABN retains exclusive rights to market DHA in aquaculture
application in exchange for minimum inventory purchases from Martek. For the
year ended October 31, 2003, we recognized approximately $800,000 in revenues
from sales of products under these agreements.

In connection with the purchase of OmegaTech we assumed an obligation to
pay a minimum of $7 million over the next eight years associated with an
agreement with a third party relating to human and animal applications for
OmegaTechs DHA. On October 31, 2002, we signed an amendment to this agreement,
under which we paid $500,000 and signed a promissory note for $3.3 million in
exchange for the discharge of all future obligations under the agreement. The
first payment under the note of $1.0 million was paid in August 2003 and the
remainder of $2.3 million was paid in December 2003.

The products that we sell that were developed by OmegaTech fall under a
royalty agreement with the University of Denver that requires us to pay the
University of Denver royalties equal to 0.6% of certain eligible revenues.
During 2003, we incurred
approximately $15,000 in royalty expense in connection with this agreement.

In
December 2003, the Company executed a collaboration agreement with
SemBioSys Genetics, Inc., a Canadian biotechnology company, to co-develop DHA
products from plants. The Companys future minimum commitment is approximately $1
million over eighteen months.

We have also entered into various additional collaborative research and
license agreements. Under these agreements, we are required to fund research or
to collaborate on the development of potential products. As of October 31,
2003, we were not committed to fund any future development activities under
these arrangements. Certain of these agreements also commit us to make payments
upon the occurrence of certain milestones and pay royalties upon the sale of
certain products resulting from such collaborations.

MANUFACTURING

We manufacture oils rich in DHA at our fermentation and oil processing
facilities located in Winchester, KY, and Kingstree, SC by conventional
fermentation processes. We acquired the Winchester facility in 1995 and the
Kingstree facility in 2003 through the acquisition of FermPro Manufacturing,
LP. The oils that we produce in these facilities are certified kosher by the
Orthodox Union and are certified Halal by the Islamic Food and Nutrition
Council of America. After completing an expansion of our Winchester facility in
2003, we currently have the production capacity to produce between
$140 - $150
million in annual sales of our nutritional oils. We are in the process of an
extensive expansion at the Kingstree facility for the fermentation and
processing of our nutritional oils. This expansion should more than triple our
production capacity in phases over the next 1218 months. We also believe that
production optimization efforts will continue at our plants for the next
several years as new technologies and additional algal strains are tested to
further increase output and reduce costs.

9



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We also have several contractual agreements with third party manufacturers
to produce our nutritional oils. C.P. Kelco, among others, produces the type of
DHA oil (DHA-S) for use in nutritional supplements and foods. Our ARA oil is
currently produced by DSM at its plant in Capua, Italy. DSM recently completed
expansion of these facilities and is in the process of converting existing
facilities in Belvidere, NJ to the production of ARA. We expect to begin to
receive ARA from the Belvidere facility in the second quarter of fiscal 2004
and anticipate this site will provide approximately 50% or more of our ARA
supply in the future. ARA is further processed at our plant in Winchester and
we plan to begin similar processing of ARA at our Kingstree facility in mid-2004. Our goal
is to have production capacity for DHA and ARA oils equivalent to approximately
$300 million in annualized sales by the end of 2004 and equivalent to
approximately $500 million in annualized sales by mid 2005. To meet demand in
excess of these levels, we will need to do one or more of the following:



| |  |  | further expand our production facilities in Winchester and Kingstree;               
| | - |  | ------------------------------------------------------------------------------------
|
| |  |  | build another production facility to manufacture our oils; and                      
|
| |  |  | enter into additional agreements with third party manufacturers to produce our oils.

The commercial success of our nutritional oils will depend, in part, on
our ability to manufacture these oils or have them manufactured at large scale
and at a commercially acceptable cost. If the production expansion in Kingstree
does not proceed as planned, if DSM is not able to complete the
production conversion in Belvidere, or if market demand subsides due to our
inability to meet demand for our products, our results could be negatively
impacted. There can also be no assurance that we will be able to successfully
optimize production of our nutritional oils, or continue to comply with
applicable regulatory requirements, including GMP requirements. Under the terms
of several of our infant formula licenses, our licensees may elect to
manufacture these oils themselves. We are currently unaware of any of our
licensees producing our oils or preparing to produce our oils, and estimate
that it would take a licensee at least one year or more to implement our
process of making our oils.

SOURCES OF SUPPLY

Our raw material suppliers for production of DHA oil include major chemical
companies and food ingredient suppliers. We have identified and validated
several sources for each of our major ingredients and have not had problems
obtaining adequate quantities of any of these materials. Crude ARA oil is
provided to us by DSM, a third-party processor. DSM, through a fermentation
process, produces a fungal biomass rich in ARA oil, which is then sent to a
sub-contractor for extraction of the oil. After extraction, the crude ARA oil
is sent to our production facilities for final processing. If DSM fails to
supply us with required amounts under the contract, we would not be able to
meet our customers demands. In the case of short-term
production issues, we do
not currently have an alternate source and the result would be some disruption
to our customers. In the case of long-term production issues, we would either
have to manufacture the ARA containing oil at our plant, which would reduce our
DHA containing oil production capacity, or enter into other third party
manufacturer supply agreements. Although we feel that DSM can fill our ARA
needs for at least the next several years, demand may rise in the future to a
level that there is no guarantee that DSM will be able to adequately supply all
of our ARA needs over the long-term. Additional capacity may need to be
obtained, either within DSM or at another facility.

RESEARCH AND DEVELOPMENT

The primary focus of our research and development activities has been the
development and optimization of manufacturing processes for our nutritional
oils. Martek performs research and development at three facilities: Columbia,
MD, Winchester, KY and Boulder, CO. Over 65% of the Companys research and
development expenditures in 2003 were associated with development activity at
the Columbia, MD lab directed toward improving the quality, sensory properties
and stability of our nutritional oils, optimizing production characteristics of
microalgal strains, investigating the clinical health benefits of DHA and ARA
fatty acids, and exploring the biochemical pathways utilized by microalgae to
produce DHA. Additional research and development expenses incurred at our
Winchester, KY laboratory and manufacturing facility were directed towards
increasing our production yields, reducing waste and continuing to improve the
quality of our oils. Research conducted at our lab in Boulder, CO is focused on
developing feasible approaches to the expression of nutritional fatty acids,
especially DHA, in plant oilseeds, investigating the feasibility of utilizing
our proprietary genes to produce other bioactive compounds with application in
the healthcare fields and developing new ingredient forms and applications
technology for DHA-enriched food products. We incurred research and development
expense of approximately $12.2 million in 2003, $11.6 million in 2002 and $12.7
million in 2001.

SALES AND MARKETING

Marteks nutritional oils are marketed and sold primarily to the infant
formula, nutritional supplement and functional foods industries. Infant
formula manufacturers are required to purchase a license from Martek in order
to use its DHA and ARA oils in infant formula. To date, Martek has entered into
license agreements with fourteen infant formula manufacturers who represent
more than 70% of the worlds wholesale infant formula market. Neuromins® DHA,
the Companys line of dietary supplements, are sold through many leading
supplement manufacturers and are available in nutritional and health products
stores nationwide. Martek also sells its supplement line directly to consumers
and healthcare professionals through a toll-free customer service center.
Martek has been successful in adding its DHA to several food and
beverage products in in-house trials, as well as to a nutritional bar
currently on the market. Martek
is currently marketing food and beverage and animal
feed applications to both U.S. and
international companies. Several egg producers, including Gold Circle
Farm®,
are producing eggs using
Marteks animal feed ingredient and these eggs are sold in several grocery stores chains
in the U.S. and Europe.

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Consumer marketing efforts are performed primarily by Marteks customers
although we do play a supportive role. Our infant formula licensees market
their DHA and ARA supplemented formulas directly to the consumer and healthcare
professional. Marteks nutritional supplement and functional foods customers
also coordinate their own advertising campaigns. Martek supports these efforts
through trade show participation and targeted direct mail campaigns and limited
national advertising.

Marteks line of advanced detection products is designed for use in a wide
range of drug discovery and research applications. These products are marketed
to large pharmaceutical research institutions through distributors, such as
PerkinElmer Life Sciences Products and Kirkegaard & Perry Laboratories, who
have entered into distribution agreements with Martek. Our distributors perform
most of the marketing surrounding this product line. Martek supports their
efforts by attending industry trade shows.

COMPETITION

The health care and biological sciences industries are characterized by rapidly
evolving technology and intense competition. Our competitors include major
pharmaceutical, chemical and specialized biotechnology companies, many of whom
have financial, technical and marketing resources significantly greater than
us. In addition, many specialized biotechnology companies have formed
collaborations with large, established companies to support research,
development and commercialization of products and technologies that may be
competitive with our products and technologies. Academic institutions,
governmental agencies and other public and private research organizations are
also conducting research and development activities that may be competitive
with our products. These organizations are seeking patent protection, and may
commercialize products and technologies on their own or through joint ventures
that are competitive with our products and technologies. The existence of
products and technologies of which we are not aware, or those that may be
developed in the future, may adversely affect the marketability of the products
and technologies that we have developed.

The development of a DHA-containing fish oil for infant formula
applications provides an alternative to our DHA nutritional oil. Fish oil is
significantly less costly than our DHA oil, and therefore presents a
substantial competitive threat to our DHA product line. Although fish oil is a
lower cost product relative to our DHA, it has odor, stability and taste
characteristics that may limit its usefulness in food products. Several large
companies, including BASF and F. Hoffman-LaRoche Ltd., have developed
microencapsulated fish oil products that have resolved much of the odor,
stability and taste issues associated with fish oil, but that have considerably
increased the cost of the product.

Published reports, however, have cited a number of fish oils as containing
chemical toxins not present in our oils. In addition, the combination of either
fish oil or microencapsulated fish oil with a microbial source of ARA for use
in infant formula would likely infringe upon our patent position in several
countries. Several large companies are promoting ARA oil, but we are currently
unable to evaluate whether any of these companies have the ability to produce
ARA oil, or whether these companies will present a competitive threat to our
ARA sales in the future.

The Ross Products Division of Abbott Laboratories submitted a GRAS
notification on January 2, 2002 seeking FDA concurrence that its fish oil
source of DHA and its fungal source of ARA are GRAS when used as ingredients in
infant formula. At this time, the notification continues to be under
consideration by the FDA.

Small
amounts of DHA and ARA can be derived from egg yolk lipids, but
DHA and ARA of this type are not in the same molecular form as that found in breast-milk
(i.e., phospholipid vs. triglyceride). DHA and ARA derived from egg yolks are
currently being added to infant formula by Milupa, which was acquired by Numico
in 1995 and DHA from egg yolks is also being added to baby food by Beechnut. We
believe that the processes to produce DHA and ARA from egg lipids are more
costly than the processes that we use for producing DHA and ARA from microbial
sources. Furthermore, the addition of DHA and ARA from egg yolks at levels
equivalent to those found in human breast milk will result in dietary levels of
lecithin and cholesterol far in excess of those found in human breast milk.

We believe that our nutritional oils have the following advantages over
fish oil and other currently available sources of DHA and ARA for use in infant
formula, as food ingredients, or as nutritional supplements:



| |  |  | our oils do not have the odor, stability, taste characteristics, or
impurities that may limit the usefulness of DHA derived from fish oil;                                          
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | our oils can be blended in a variety of mixtures in precise ratios
for specific applications, whereas the composition of fish oils may
vary;                                        
|
| |  |  | each of our oils is comprised of a fatty acid blend that has no
undesirable fatty acids in significant quantities such as EPA, which is
found in fish oil;                          
|
| |  |  | our oils do not contain substances found in certain fish oils such as
methylmercury, polychlorinated biphenyls (PCBs), dioxins, and other
contaminants;                             
|
| |  |  | our oils have a higher oxidative stability and longer shelf life than
fish oil and are, therefore, amenable to the spray drying process
required for powdered formula; and          
|
| |  |  | our DHA and ARA-enriched oils are in an easily digestible
triglyceride form similar to that found in breast milk, but different
from the phospholipid form found in egg yolk lipids;

11



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| |  |  | our oils can be produced in large quantities under controlled
conditions satisfying strict regulatory scrutiny.
| | - |  | ---------------------------------------------------------------------------------------------------------------

At this time, our oils are the only DHA and ARA oils cleared by the FDA
for inclusion in infant formula in the U.S.

Nurtinova,
one of the operating units of Celanese Ventures is actively marketing
a DHA-rich microalgal oil to the food and beverage
and dietary supplement markets in the U.S. and overseas.
On September 23, 2003, Martek filed a patent infringement lawsuit in the
US District Court in Delaware that alleges that Nutrinova and
Celanese have been making, using, offering to sell, selling and/or importing
into the United States DHA marketed under the brand name DHActive that is made
by a process and employs compositions that infringe our patents. Nutrinova and
Celanese filed counterclaims alleging inequitable conduct and invalidity,
unenforceability and/or noninfringement of all Martek U.S. patents and rights.
We filed a second patent infringement suit against Nutrinova and
Celanese in Germany on
January 16, 2004. The
complaint alleges infringement of our European patent relating to
DHA-containing oils.

There may be other competitive sources of DHA and ARA of which we are not
aware. The fact that many of the companies mentioned above are larger, more
experienced and better capitalized than us raises the significant risk that
these companies may be able to use their resources to develop less costly
sources of DHA and ARA than our current technology permits.

In the area of advanced detection, our major competitors consist of life
science reagent suppliers such as Amersham Pharmacia, Molecular Probes, Prozyme
and Cyanotech. Our diagnostic products compete primarily on the basis of
product efficacy, safety, patient convenience, reliability, price and
proprietary position.

Our competitive position will also depend on our ability to attract and
retain qualified scientific and other personnel, develop effective proprietary
products, implement production and marketing plans, obtain patent protection
and secure adequate capital resources.

PATENTS, LICENSES AND PROPRIETARY TECHNOLOGY

We have received numerous patents protecting our nutritional products
technology, including the fermentation methods of producing our DHA and ARA
oils, as well as the blending of DHA and ARA oils for use in infant formula. In
1994, we received a U.S. patent covering certain blends of a microbial oil
enriched with DHA and a microbial oil enriched with ARA, as well as the use of
such blends in infant formulas. In 1995, we received a U.S. patent covering a
process for making an edible oil containing DHA and the edible oil made by such
process as well as a U.S. patent covering an infant formula comprising a
specified edible oil containing DHA. In 1996 we received two additional U.S.
patents covering our nutritional oils technology. The first patent protects
pharmaceutical compositions and dietary supplements comprising a single cell
oil in concentrations of at least 20% DHA in a triglyceride form made using our
method of producing DHA oil. The second patent clarifies that our patent
coverage includes the blending, in infant formula and nutritional supplements,
of microbially derived ARA oil with low EPA fish oils. Fish oil is a potential
competitive source of DHA to Marteks algal-derived DHA oil. This patent will
make it more difficult for low EPA fish oils to be combined with microbial
sources of ARA oils without violating our patents. A U.S. patent was granted in
1997, which protects the production, use and sale of oils rich in ARA (30% or
greater concentration). In 1998, a U.S. patent was issued protecting our
DHA-rich algal biomass. DHA-rich algal biomass is the raw product of the DHA
fermentation process and represents an inexpensive source of DHA that may
potentially be a low cost product itself. We also have been awarded a number of
foreign patents covering various aspects of our nutritional oils, including
European patents covering our DHA and ARA-rich oils, as well as the blending of
these oils for use in infant formula.

We also own patents and applications that cover algae fermentation
processes, lipid extraction/purification, genomic-based approaches to lipid
production, arachidonic acid production and use, animal feeding protocols, and
food applications for PUFAs, as a result of the OmegaTech purchase in 2002.
From 1992 to 2001, six U.S. patents were issued covering the use of algae in
the production of omega-3 PUFAs (e.g. DHA), and the use of such PUFAs in such
products as human food, animal feed, aquaculture and the resulting fortified
meat, seafood, milk and eggs. Additional patent applications directed to this
technology are still pending. From 1994 to 2003, eight U.S. patents were issued
covering the fermentation of microorganisms in low chloride fermentation
medium. Small microorganisms, the use of such microorganisms in aquaculture,
and the resulting products are also claimed. Additional patent applications
covering this technology are still pending. From 1996 to 2003, five U.S.
patents were issued covering the use and production of ARA using a variety of
fungi.Additional patent applications covering this technology are still
pending. Other U.S. patents have been issued and a number of patents are
pending worldwide.

Our success is dependent in part on our ability to obtain and maintain
patent protection for our products, maintain trade secret protection and
operate without infringing the proprietary rights of others. Our policy is to
aggressively protect our proprietary technology through patents, where
appropriate, and in other cases, through trade secrets. Additionally, in
certain cases, we rely on the licenses of patents and technology of third
parties. We hold approximately 62 U.S. patents, covering various aspects of our
technology, which will expire on various dates between 2007 and 2021. We have
filed, and intend to file, applications for additional patents covering both
our products and processes as appropriate. Currently, we have approximately 493
issued patents and pending applications worldwide. There can be no assurance
that:



| |  |  | any patent applications filed by, assigned to, or licensed to us will be granted;                                             
| | - |  | ------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | we will develop additional products that are patentable;                                                                      
|
| |  |  | any patents issued to or licensed by us will provide us with any competitive advantages or adequate protection for inventions;

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| |  |  | any patents issued to or licensed by us will not be challenged, invalidated or circumvented by others; or                                 
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | issued patents, or patents that may be issued, will provide
protection against competitive products or otherwise be commercially
valuable.

Furthermore, patent law relating to the scope of claims in the fields of
health care and biosciences is still evolving, and our patent rights are
subject to this uncertainty. Our patent rights on our products therefore might
conflict with the patent rights of others, whether existing now or in the
future. Alternatively, the products of others could infringe our patent rights.
The defense and prosecution of patent claims are both costly and time
consuming, even if the outcome is ultimately in our favor. An adverse outcome
could subject us to significant liabilities to third parties, require disputed
rights to be licensed from third parties or require us to cease selling the
affected products.

We are the exclusive licensee of two U.S. patents and numerous foreign
patent applications covering production, sale and use of our Sensilight dyes.
We are the licensee of two PCT applications covering the fractionation of
lipids.

We currently have several challenges to our European patents covering our
DHA oils, ARA oils and DHA and ARA blended oils and these challenges are
described in Item 3 of Part I.

It is
our corporate policy to vigorously protect its substantial
investment in the research and development of its products and to
continue to enforce its patent and other intellectual property
rights against third parties who engage in the unauthorized
manufacture, sale or use of the Companys technology.

We expect that, in the future, as our nutritional oils continue to be
commercialized, opposition to our intellectual property by our competitors will
continue and most likely increase. We believe that additional challenges to our
suite of U.S. patents may arise in the future. We will likely incur substantial
costs in the future protecting and defending our patent and other
intellectual rights.

If we fail to maintain patent protection for our nutritional oils, it
would have a material adverse effect on our ability to gain a competitive
advantage for these oils and may have a material adverse effect on our results
of operations, particularly future sales of our nutritional oils and future
license fees related to sales of infant formula containing these oils. In
particular, if we fail to maintain patent protection, it would permit our
competitors to produce products that would be directly competitive with our
nutritional oils using similar or identical processes, and it is possible that
our current infant formula manufacturers under license or those which may be
under license in the future may choose formula ingredients from these
competitors if they choose to include the ingredients in their formulas at all.

We also rely on trade secrets and proprietary know-how, which we seek to
protect in part by confidentiality agreements with our collaborators, employees
and consultants. There can be no assurance that these agreements will not be
breached, that we will have adequate remedies for any such breach or that our
trade secrets will not otherwise become known or be independently developed by
competitors.

GOVERNMENT REGULATION AND PRODUCT TESTING

Our products and our manufacturing and research activities are subject to
varying degrees of regulation by a number of state and federal regulatory
authorities in the United States, including the Food and Drug Administration
(FDA) pursuant to the Federal Food, Drug and Cosmetic Act (the FDC Act).
The products developed by us are subject to potential regulation by FDA as food
ingredients, dietary supplements, drugs and/or medical devices. The regulatory
status of any product is largely determined by its intended use.

Drugs and medical devices generally may not be marketed without first
obtaining FDA authorization to do so. New infant formulas also are subject to
premarket notification requirements. Although there are no premarket
authorization requirements for whole foods per se, there are premarket approval
requirements for food additives. Specifically exempt from the food additive
definition and, therefore, the premarket approval requirements, are generally
recognized as safe (GRAS) food ingredients. Dietary supplements for the most
part are not subject to premarket authorization requirements, although there is
a premarket notification requirement for certain new dietary ingredients that
were not marketed as dietary supplements prior to October 1994. The FDA has
established detailed GMP, labeling and other requirements for drugs, medical
devices, infant formulas, foods and dietary supplements. The requirements for
drugs, medical devices and infant formulas generally are much more stringent
than the requirements for foods and dietary supplements.

Our infant formula licensees are responsible for obtaining the requisite
regulatory clearances to market their products containing our oils. Sales of
our products outside the United States are subject to foreign regulatory
requirements that may vary widely from country to country. Seven of our infant
formula licensees have obtained the regulatory approval, where required, to
sell term or pre-term infant formula supplemented with our oils in over 60
countries:



|  |           |  |  |   |             |  |  |   |           |  |  |   |             |  |  |   |              |  |  |   |                |  | 
|- | --------- |  |  | - | ----------- |  |  | - | --------- |  |  | - | ----------- |  |  | - | ------------ |  |  | - | -------------- |  | 
| | Argentina |  |  |  | Ecuador     |  |  |  | Iceland   |  |  |  | Malta       |  |  |  | Qatar        |  |  |  | UAE            |  | 
| | Australia |  |  |  | Egypt       |  |  |  | Indonesia |  |  |  | Mauritius   |  |  |  | Russia       |  |  |  | United Kingdom |  | 
| | Bahrain   |  |  |  | El Salvador |  |  |  | Ireland   |  |  |  | Mexico      |  |  |  | Saudi Arabia |  |  |  | United States  |  | 
| | Belgium   |  |  |  | Finland     |  |  |  | Israel    |  |  |  | Netherlands |  |  |  | Seychelles   |  |  |  | Uruguay        |  | 
| | Bolivia   |  |  |  | France      |  |  |  | Jamaica   |  |  |  | New Zealand |  |  |  | Singapore    |  |  |  | Venezuela      |  | 
| | Canada    |  |  |  | Greece      |  |  |  | Jordan    |  |  |  | Nicaragua   |  |  |  | South Africa |  |  |  | Vietnam        |  | 
| | Chile     |  |  |  | Guatemala   |  |  |  | Kenya     |  |  |  | Oman        |  |  |  | Spain        |  |  |  | Zimbabwe       |  | 
| | China     |  |  |  | Guyana      |  |  |  | Kuwait    |  |  |  | Panama      |  |  |  | Switzerland  |  | 
| | Colombia  |  |  |  | Haiti       |  |  |  | Lebanon   |  |  |  | Peru        |  |  |  | Taiwan       |  | 
| | Cyprus    |  |  |  | Honduras    |  |  |  | Malawi    |  |  |  | Philippines |  |  |  | Trinidad     |  | 
| | Dominica  |  |  |  | Hungary     |  |  |  | Malaysia  |  |  |  | Portugal    |  |  |  | Turkey       |  | 

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On May 17, 2001, we received notice from the FDA that after completing its
review of our generally recognized as safe (GRAS) notification, the agency
had no further questions regarding the conclusion that our DHASCO® and ARASCO®
oil blend is GRAS when used in specified ratios in infant formulas. The first
DHA and ARA supplemented infant formula introduced was Mead Johnsons Enfamil®
LIPIL® in February 2002. It is now supported by other DHA and ARA supplemented
Mead Johnson products within their preterm, lactose-free and soy based product
lines. The Ross Products Division of Abbott Laboratories has launched its DHA and
ARA supplemented line, Similac® Advance®, which includes term, preterm,
lactose-free and soy based products. Nestle has launched a supplemented formula
under the Good Start® Supreme DHA & ARA brand. Finally, Bright Beginnings and
private label brands, such as Wal-Marts Parents Choice, are produced by
Wyeth Nutritionals and distributed by PBM Products, Inc.

The Federal Dietary Supplement Health and Education Act of 1994 (DSHEA)
regulates the use and marketing of dietary supplements. We are currently
marketing several lines of DHA dietary supplements  Neuromins®, Neuromins® PL
and DHAGold®. In addition, we are researching and developing new applications
for our DHA and ARA oils. We believe that our DHA and ARA are not subject to
premarket notification requirements when marketed for use as dietary
supplements. There can be no assurance that the FDA would agree that a
premarket notification is not required or that we will be able to comply with
the requirements of DSHEA or any regulations that the FDA may promulgate
thereunder.

In
August 2003, we submitted to the FDA a GRAS notification relating to
our DHA oil for use in food and beverage applications. Although our oils can be
sold for these applications now, GRAS status should increase customer
acceptance as well as our potential customer base for sales of our oils in the
food and beverage market. We expect to receive a response from the FDA in
fiscal 2004.

Our fluorescent detection and other products derived from microalgae are
subject to potential regulation by FDA as either medical devices or as a
combination medical device/drug product to the extent that they are used in the
diagnosis, mitigation, treatment, cure or prevention of diseases. Such
classification would subject the products to premarket clearances and/or
regulatory approvals. There can be no assurances that Martek or our licensees
or collaborators would be able to develop the extensive safety and efficacy
data needed to support such FDA premarket authorizations or that FDA ultimately
would authorize the marketing of such products on a timely basis, if at all.

For potential pharmaceutical uses of products derived from microalgae,
there can be no assurance that required clinical testing will be completed
successfully within any specified time period, if at all, with respect to our
products. Additionally, there is no assurance that Martek or our licensees or
collaborators will be able to develop the extensive data needed to establish
the safety and efficacy of these products for approval for drug uses, or that
such drug products will not be subject to regulation as biological products or
as controlled substances, which would affect marketing and other requirements.

Many of our products are in research or development phases. We cannot
predict all of the regulatory requirements or issues that may apply to or arise
in connection with our products. Changes in existing laws, regulations or
policies and the adoption of new laws, regulations or policies could prevent us
or our licensees or collaborators from complying with such requirements.

Due to the cost and time commitment associated with the FDA regulatory
process, we will decide on a product-by-product basis whether to handle
relevant clearance and other requirements independently or to assign such
responsibilities to our licensees or future collaborative partners. There can
be no assurance that Martek or our licensees or collaborators will be able to
obtain such regulatory clearances, if required, on a timely basis or at all.
Delays in receipt of, or failure to receive, such clearances, the loss of
previously received approvals or clearances, or failure to comply with existing
or future regulatory requirements would have a material adverse effect on our
business, financial condition and results of operations.

In connection with the manufacture of certain of our products, we are
required to adhere to applicable current GMP requirements as required by the
FDA. GMP regulations specify component and product testing standards, control
quality assurance requirements, and records and other documentation controls.
The GMP requirements for foods, infant formulas, drugs and medical devices vary
widely. As the manufacturer of DHA and ARA that are marketed as dietary
supplements and used as ingredients in infant formulas sold in the United
States, we are subject to GMP and various other requirements applicable to
infant formulas and dietary supplements. There can be no assurance that we will
be able to continue to manufacture our nutritional oils in accordance with
relevant infant formula and dietary supplement requirements for commercial use.
Ongoing compliance with GMP and other applicable regulatory requirements is
monitored through periodic inspections by state and federal agencies, including
the FDA and comparable agencies in other countries. A determination that we are
in violation of such GMP and other regulations could lead to the imposition of
civil penalties, including fines, product recalls or product seizures, and, in
the most egregious cases, criminal sanctions.

As large scale manufacturing facilities, our plants in Winchester, KY and
Kingstree, SC are required to abide by applicable federal, state environmental
and safety laws, including regulations established by the Environmental
Protection Agency (U.S. EPA) and the Occupational Safety and Health Administration
(OSHA). In addition to the normal standards for heavy industrial manufacturing
facilities, our solvent extraction process includes the use of n-hexane, which
is extremely flammable and subject to emission requirements. Ongoing compliance
with environmental and safety laws is monitored by periodic inspections by the
U.S. EPA and OSHA. If we fail to abide by these laws we could receive fines, or if
the violations were serious enough, our operations could be shut down until the
problems are fixed. Such penalties could have a material adverse effect on our
ability to manufacture our nutritional oils, and our financial results could be
negatively impacted.

The Federal Trade Commission (FTC) regulates certain aspects of the
advertising and marketing of our products. Under the Federal Trade Commission
Act, a company must be able to substantiate both the express and implied claims
that are conveyed by an advertisement. It is not uncommon for the FTC to
conduct an investigation of the claims that are made about products in new and
emerging areas of science that involve a potentially vulnerable population such
as infants. In May 2002, we received a letter from the FTC notifying us that
they were conducting a non-public inquiry into the advertising and promotional
activities surrounding our DHA and ARA products. While we have no reason to
believe that their inquiry will have an adverse effect on us, we could be
required to alter our advertising claims or take other remedial steps if the
FTC does not find our advertising claims to be adequately substantiated.

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EMPLOYEES

As of October 31, 2003, we had 384 full-time employees, of whom one has an M.D.
and 22 of whom have Ph.D.s. Approximately 75 employees are engaged in research
and development and contract related research and development activities, 243
are engaged in production or production development related activities and 66
are in administrative, business development, and sales and marketing positions.
We consider relations with our employees to be good. None of our
employees is covered by a collective bargaining agreement.

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Our Directors are as follows:

Gordon S. MacklinMember  Audit Committee, Nominating and Governance
Committee.
Age 75 Mr. Macklin serves as a director of MedImmune, Inc.
(biotechnology), Overstock.com (internet sales), White Mountains Insurance
Group, Inc., and is a director, trustee, or managing general partner, as the
case may be, of 48 of the investment companies in the Franklin Templeton Group
of Funds. Mr. Macklin was formerly the Deputy Chairman of White Mountains
Insurance Group, Inc., Chairman of White River Corporation (financial
services), President of the National Association of Securities Dealers, Inc.
(19701987) and Chairman of Hambrecht and Quist Group (19871992). Mr. Macklin
has been a director of the Company since 1998. His term expires in 2006.

Robert J. FlanaganMember  Nominating and Governance Committee.
Age 48 Mr. Flanagan is Executive Vice President of Clark Enterprises,
Inc. (Clark), one of the largest privately-held construction companies in the
United States. Prior to joining Clark, Mr. Flanagan was the Treasurer,
Secretary and member of the Board of Directors of the Baltimore Orioles, Inc.
and was also employed as a member of Arthur Andersens audit division in the
Washington, D. C. office. Certified as a public accountant in Washington, D.
C., Mr. Flanagan received a bachelors degree in business administration from
Georgetown University and a masters degree in taxation from the American
University School of Business. Mr. Flanagan has been a director of the Company
since April 2002. His term expires in 2006.

Dr. Richard J. Radmer
Age 61 Dr. Radmer, a founder of Martek, has served since 1985 as a
director. He served as President and Chief Scientific Officer of the Company
through March 2003 and is currently an employee of the Company on a part-time
basis. Prior to 1985, he worked for 17 years at Martin Marietta Corp. where he
headed the Biosciences Department which performed research to develop new
products from microalgae, among other activities. He has served as an Adjunct
Associate Professor and Associate Member of the Graduate Faculty at the
University of Maryland. Dr. Radmer received a Ph.D. in biology, an M.S. in
botany and a B.S. in biochemistry from the University of Chicago. He completed
his Ph.D. studies while in residence at Harvard University. His term expires in
2006.

Jules Blake, Ph.D.
Age 79 Dr. Blake served as Vice President of Research and Development,
and later Vice President, Corporate Scientific Affairs, for Colgate-Palmolive from 1973 until 1989. Following his retirement in 1989, Dr. Blake
accepted an appointment as Industrial Research Institute Fellow at the Office
of Science and Technology Policy, Executive Office of the President, where he
served until 1991. Dr. Blake also serves as a director for Gene Logic, Inc.
(biotechnology). Dr. Blake has been a director of the Company since 1990. His
term expires in 2005.

Ann L. Johnson, M.D.Member  Compensation Committee.
Age 67 Dr. Johnson has served as a physician on the neonatology staff
of Mills Peninsula Hospital since 1992. Dr. Johnson has a private practice in
psychiatry and psychopharmacology. Dr. Johnson has been a director of the
Company since March 1995. Her term expires in 2005.

Sandra Panem, Ph.D.Member  Audit Committee.
Age 57 Dr. Panem is a partner in Cross Atlantic Partners, an
investment company specializing in biotechnology and healthcare. Prior to 1999,
Dr. Panem was President of Vector Fund Management, L.P. (VFM), which focused
on later-stage companies. Prior to joining VFM, she served as Vice President
and Portfolio Manager for the Oppenheimer Global BioTech Fund, a mutual fund
that invested in public and private biotechnology companies. Prior to joining
Oppenheimer, Dr. Panem was a Vice President at Salomon Brothers Venture
Capital, a fund focused on early and later-stage life sciences and technology
investments. Dr. Panem has been a director of the Company since May 1995. Prior
to that time, she served as a director from June 1990 until February 1993. Dr.
Panem also serves as a director for Bioject, Inc. (healthcare equipment
manufacturer). Her term expires in 2005.

Henry Linsert, Jr.Chairman, Chief Executive Officer and Director
Age 63 Mr. Linsert joined Martek as Chairman of the Board in 1988 and
became Chief Executive Officer in 1989. From 1987 to 1988 he was primarily
engaged as President of American Technology Investments Corp., a consulting
company specializing in the development and financing of early stage companies
in the Mid-Atlantic area. He was President and Chief Executive Officer of
Suburban Capital Corporation, a venture capital subsidiary of Sovran Financial
Corporation (now Bank of America), from 1983 to 1987. Prior to 1983, Mr.
Linsert was Vice President of Inverness Capital Corporation, a small business
investment company, and Vice President of First Virginia Bank. He also served
as a Captain in the U.S. Marine Corps and as an artillery officer in Vietnam.
He received an M.A. in economics from George Washington University and a B.A.
from Duke University. His term expires in 2005.

Douglas J. MacMaster, Jr.Member  Compensation Committee, Nominating and
Governance Committee.
Age 73 Mr. MacMaster served in various management positions at Merck &
Co., Inc. (Merck) from 1961 to 1988, at which time he was appointed Senior
Vice President responsible for ten divisions, including Manufacturing and
Technology, and Pharmaceutical Manufacturing.

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Mr. MacMaster retired from Merck
in 1991 and currently serves as a director for Neose Technologies, Inc.
(biotechnology) and Stratton Mutual Funds. Mr. MacMaster has been a director of
the Company since 1993. His term expires in 2004.

John H. MaharMember  Compensation Committee.
Age 69 Mr. Mahar has served as President of Hillside Management, a
consulting firm, since 1992. From 1991 to 1992, Mr. Mahar was a Vice President
at Salomon Brothers Inc., serving as a principal for the Venture Capital Fund.
From 1985 to 1991, Mr. Mahar was Executive Vice President and Chief Operating
Officer of Elf Technologies, Inc., a venture capital firm. Mr. Mahar was
reelected as a director of the Corporation in February 1993. Prior to that
time, he served as a director of the Company from 1988 until 1991. His term
expires in 2004.

Eugene H. RotbergMember  Audit Committee, Nominating and Governance
Committee.
Age 74 Since 1990, Mr. Rotberg has been an independent advisor to
international development and financial institutions. From 1987 to 1990, Mr.
Rotberg was Executive Vice President and a member of the Executive Committee at
Merrill Lynch & Co., Inc. From 1969 to 1987, Mr. Rotberg was Vice President and
Treasurer of the World Bank. Mr. Rotberg has been a director of the Company
since 1992. His term expires in 2004.

Executive Officers (in addition to Mr. Linsert):

Steve DubinPresident
Age 50 Mr. Dubin joined Martek in 1992, where he served in various management
positions, including CFO, Treasurer, Secretary, General Counsel and Senior Vice
President of Business Development. In 2000 he moved to a part-time position of
Senior Advisor  Business Development, a role he filled until his recent
election to President of the Company in September 2003. He also spent time
during 2000 through 2003 co-founding and co-managing a Maryland-based,
angel-investing club that funds early-stage, high-potential businesses. He was
also Of Counsel to the law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C. during part of 2001 and 2002. Prior to 1992, Mr. Dubin worked in the
financing and management of early-stage businesses and, over a period of 12
years, served in various positions at Suburban Bank, now part of Bank of
America, including Vice President and Treasurer of their venture capital
subsidiary, Suburban Capital Corporation. In this last position, he helped lead
Marteks initial round of institutional financing in 1986. Mr. Dubin received a
Bachelor of Science Degree in accounting from the University of Maryland,
College Park. He received a Juris Doctor Degree from the National Law Center at
the George Washington University in Washington, D.C. Mr. Dubin is a licensed
CPA and a member of the Maryland Bar.

Thomas C. FisherSenior Vice President, Operations
Age 57 Mr. Fisher joined Martek in 1991 and was named Senior Vice
President of Operations in 1992 after 18 years with Merck and Dupont-Merck. Mr.
Fishers last position was Vice President for Technical Operations at
Dupont-Merck, and in that capacity he was responsible for world-wide
pharmaceutical production, quality control and engineering. During his tenure
at Merck, Mr. Fisher was Director of Biological Manufacturing and held
management positions in sterile operations, development and quality control.
Mr. Fisher received an M.S. in genetics from West Virginia University and a
B.S. in biology from Waynesburg College.

Jerome C. KellerSenior Vice President, Sales & Marketing
Age 61 Mr. Keller joined Martek in September 1997 as Senior Vice
President of Sales and Marketing. Prior to joining Martek, Mr. Keller had been
consulting after spending a 25-year career at Merck, most recently as Vice
President of Sales from 1986 to 1993. In this position, he was responsible for
all U.S. sales operations, including the direction of a support staff of 4,500
personnel and a sales volume of $4.2 billion. Some of the products introduced
under Mr. Keller included Pepcid, Mefoxin, Primaxin, Vasotec, Mevocor, Zocor,
Proscor and Prilosec. Mr. Keller has a M.S.
degree from the University of Pittsburgh and a B.S. degree from Duquesne
University.

George P. BarkerSenior Vice President, General Counsel and Secretary
Age 64 Mr. Barker joined Martek in June 2000 as Senior Vice President,
General Counsel and Secretary. Prior to joining Martek, Mr. Barker was Senior
Vice President of Howard County General Hospital, Inc: A Member of Johns
Hopkins Medicine and its affiliate Howard County Health Services, Inc. In this
position, Mr. Barker had both legal and business responsibilities. From 1982 to
1991, Mr. Barker was Senior Vice President for Development, General Counsel and
Secretary of The Enterprise Development Company, a real estate development
company located in Columbia, Maryland. Prior to 1982, Mr. Barker held positions
as a partner of a Baltimore, Maryland, law firm and Associate General Counsel
and Assistant Secretary of The Rouse Company, a real estate development company
also located in Columbia, Maryland. Mr. Barker has an A.B. degree from
Princeton University and a LL.B. degree from Columbia University.

Peter L. BuzyChief Financial Officer and Treasurer
Age 44 Mr. Buzy joined Martek in March 1998 as Chief Financial Officer.
Prior to joining Martek, Mr. Buzy spent 13 years with the accounting firm of
Ernst & Young LLP, most recently as an audit partner in the Northern Virginia
High Technology/Life Sciences Practice. Mr. Buzy is a Certified Public
Accountant and a member of the American Institute of Certified Public
Accountants. He received his B.S. in accounting from Salisbury State
University.

James H. Flatt Ph.D.Senior Vice President, Research and Development
Age 44 Dr. Flatt joined Martek in April 2002 as Senior Vice President,
Research and Development. Prior to joining Martek, Dr. Flatt was the Vice
President of Research and Development for OmegaTech, Inc., a DHA producer in
Boulder, Colorado that was acquired by Martek in April 2002. In his position
with OmegaTech, Dr. Flatt managed all corporate research and development,
including discovery, ingredient technology, food and analytical sciences and
process development. Prior to joining OmegaTech, Dr. Flatt held a position at
Proctor and Gamble and, most recently, was Vice President of Fermentation and
Process Research for the Kelco division of Merck, where he led the development
and commercialization of several major new products and processing
technologies. Dr. Flatt is the author of six patents and numerous professional
papers. He received his B.S. in chemical engineering from the Massachusetts
Institute of Technology, his M.S. in chemical engineering from the University
of California  Berkeley, and his Ph.D. in chemical and biochemical engineering
from the University of Wisconsin  Madison.

16



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##### 



COMPANY

Martek was incorporated in Delaware in 1985. Marteks principal executive
offices are located at 6480 Dobbin Road, Columbia, MD 21045. Our telephone
number is (410) 740-0081 and our website address is http://www.martekbio.com.
We make our annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to these reports available on our
website free of charge as soon as practicable after we file with the SEC.

17



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##### 



ITEM 2. PROPERTIES.

We lease an aggregate of approximately 43,000 square feet of laboratory,
manufacturing, technical and administrative space in Columbia, Maryland,
approximately 7,250 square feet of which is currently being subleased. Our
lease expires in late 2004, with an option to extend the lease through 2009 at
the expiration of the initial lease. We are currently evaluating our options.

We also lease an aggregate of approximately 14,000 square feet of
laboratory, technical and administrative space in Boulder, Colorado. The lease
expires in May 2005.

We own a fermentation and oil processing facility in Winchester, KY where
we produce oils rich in DHA and ARA using our proprietary technology. The
facility is located on eight acres and occupies approximately 78,000 square
feet holding three 267,000 liter, two 140,000 liter and one 90,000 liter
production fermentation vessels and supporting equipment.

We also own a fermentation and oil processing facility in Kingstree, SC
where we produce oils rich in DHA using our proprietary technology. The
facility is located on more than five hundred acres and occupies approximately
234,000 square feet currently holding  150,000 liter and 125,000
liter fermentation vessels primarily for DHA fermentation,  150,000
liter, 60,000 liter and  12,000 liter fermentation vessels currently
used for contract manufacturing and a 130,000 liter fermentation
vessel that is used for both DHA and contract manufacturing. As
part of our expansion we are adding eight 267,000 liter production fermentation
vessels for DHA production and approximately 75,000 additional square
feet.

ITEM 3. LEGAL PROCEEDINGS.

Aventis S.A. and Nagase & Co. Ltd. are challenging our European patent
covering our DHA-containing oils. At a hearing in October 2000, the Opposition
Division of the European Patent Office (EPO) revoked our patent on the grounds
that it was not novel. We immediately appealed this ruling, and in July 2002 we
received a positive ruling from an Appeal Board of the EPO, setting aside the
prior decision to revoke this patent. The patent has now been returned to the
Opposition Division for a determination as to whether it has met the legal
requirement of inventive step. The patent is in full force and effect and its
status should not change during the appeal process. The appeal process may not
be completed until some time in 2006.

With respect to our ARA patent issued by the EPO, BASF AG, F. Hoffman 
LaRoche AG, and Suntory Limited have filed their grounds for opposing this
patent with the Opposition Division of the EPO. The validity of the patent is
unaffected by these filings. A hearing at the Opposition Division is scheduled
for July 2004. The opposition process is not expected to be completed until
sometime in 2006.

With respect to our blended-oil (blend of DHA and ARA oils for use in
various applications, including infant formula) patent issued by the EPO, BASF
AG, F. Hoffman  LaRoche AG, Friesland Brands B.V., and Suntory Limited have
filed their grounds for opposing this patent with the Opposition Division of
the EPO. The validity of the patent is unaffected by these filings. A
hearing at the Opposition Division is now scheduled to be held in
November 2004. The opposition process is not expected to be completed until
sometime in 2006.

Prior to our purchase of OmegaTech, Aventis Research and Technologies GmbH
& Co. KG, and Nagase Biochemicals challenged OmegaTechs European patent
covering its DHAcontaining oils. At a hearing in December, 2000, the
Opposition Division of the EPO upheld some of the claims and revoked other
claims. OmegaTech immediately appealed this ruling, as did Aventis. During the
appeal process the patent will remain in full force and effect. The appeal
process may not be completed until sometime in 2006.

In
connection with Markets Food and audit nutritional business
applications, we are aggressively pursuing a potential competiton for
patent infurgement. On September 23, 2003, we filed a patent infringement lawsuit in the US
District Court in Delaware against Nutrinova Inc., Nutrinova Nutrition
Specialties & Food Ingredients GmbH, Celanese Ventures GmbH, and Celanese AG
alleging infringement of two of our U.S. patents. The lawsuit alleges that
Nutrinova and Celanese have been making, using, offering to sell, selling
and/or importing into the United States DHA marketed under the brand name
DHActive that is made by a process and employs compositions that infringe the
patents. On October 24, 2003. Nutrinova and Celanese filed counterclaims
alleging inequitable conduct and invalidity, unenforceability and/or
noninfringement of all our U.S. patents and rights.
We filed a second patent infringement suit involving Nutrinova in Germany on
January 16, 2004. Named as defendants were Nutrinova Nutrition Specialties and
Food Ingredients GmbH and Celanese Ventures GmbH. The complaint alleges
infringement of our European patent relating to DHA-containing oils.

On May 31, 2002, we received a letter from the staff of the Federal Trade
Commissions Bureau of Consumer Protection, Division of Advertising Practices,
indicating that the staff is conducting an inquiry into our advertising and
promotional activities and promotional activities relating to its DHA and ARA
products. The letter requested that we voluntarily provide the staff with
certain information to assist it in its inquiry. The letter does not assert
that there has been any violation of law or regulation. We have voluntarily
provided the staff with this information and with information subsequently
requested by the agency.

In addition, from time to time, Martek is a party to litigation or
administrative proceedings relating to claims arising from its operations in
the normal course of business. Management believes that the ultimate resolution
of any such litigation or administrative proceedings currently pending against
Martek is unlikely, either individually or in the aggregate, to have a material
adverse effect on Marteks results of operations or financial condition.

We are not a party to any other material legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were voted upon during the fourth quarter of 2003.

18



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##### 



PART II

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The information set forth under the caption Price Range of Common Stock
and Stock Description and Form 10-K on page 32 of our Annual Report to
Stockholders for the fiscal year ended October 31, 2003, are incorporated by
reference herein. We have not declared any cash dividends during the three-year
period ending October 31, 2003. Dividend payment is restricted under the
Companys Loan and Security Agreement dated January 26, 2004.

ITEM 6. SELECTED FINANCIAL DATA.

The information set forth under the caption Selected Financial Data on
page 6 of our Annual Report to Stockholders for the fiscal year ended October
31, 2003 is incorporated by reference herein.

ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The information set forth under the caption Managements Discussion and
Analysis of Financial Condition and Results of Operations on
pages 7 through
15 of our Annual Report to Stockholders for the fiscal year ended October 31,
2003, is incorporated by reference herein.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Quantitative and qualitative disclosures regarding market risk are not
required because the underlying risk items are not material.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our 2003 Audited Financial Statements and Report of Independent Auditors
by Ernst & Young LLP set forth on pages 16 through 31 of our Annual Report to
Stockholders for the fiscal year ended October 31, 2003, are incorporated by
reference herein.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

a) Evaluation of Disclosure Controls and Procedures.The Chief Executive
Officer and the Chief Financial Officer of Martek Biosciences Corporation have
evaluated the effectiveness of the disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e)) under the Securities Exchange Act of
1934, as amended (the Exchange Act), as required by paragraph (b) of Rules
13a-15 and 15d-15 under the Exchange Act, and have concluded as of the end of
the period covered by this report that the disclosure controls and procedures
were effective.

b) Changes in Internal Controls.There have been no changes in our
internal controls over financial reporting in connection with the evaluation
required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that
occurred during Marteks last fiscal quarter that materially affect or is
reasonably likely to materially affect the internal controls over financial
reporting.

19



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##### 



PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Information relating to our Directors and Executive Officers is set forth
in Part I of this report under the caption Item 1  Business Directors and
Executive Officers of the Registrant. The additional information required by
this item is hereby incorporated by reference from the information to be
contained in our 2004 Definitive Proxy Statement.

Additional information on compliance with Section 16(a) of the Exchange
Act is incorporated herein by reference to the Companys 2004 Definitive Proxy
Statement.

As part of our system of corporate governance, our Board of Directors has
adopted a code of ethics that is specifically applicable to our chief executive
officer, president, chief financial officer and controller. This code of ethics
is available on our website at
http://media.corporate-ir.net/media_files/nsd/matk/codeofconduct.pdf

ITEM 11. EXECUTIVE COMPENSATION.

The information required by this item is hereby incorporated by reference
from the information to be contained in our 2004 Definitive Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information required by this item is hereby incorporated by reference
from the information to be contained in our 2004 Definitive Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information required by this item is hereby incorporated by reference
from the information to be contained in our 2004 Definitive Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information required by this item is hereby incorporated by reference
from the information to be contained in our 2004 Definitive Proxy Statement.

20



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##### 



PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)(1) Financial Statements

The following Financial Statements and Report of Independent Auditors set
forth on the pages indicated in our Annual Report to Stockholders for the year
ended October 31, 2003 are incorporated into Item 8 of Part II of this Report:

|                                                                                                    |  |                             |    | 
|--------------------------------------------------------------------------------------------------- |  | --------------------------- | -- | 
|                                                                                                    |  | Page(s) in Company's Annual
|                                                                                                    |  | Report to Stockholders     
|                                                                                                    |  |                            
|Consolidated Balance Sheets as of October 31, 2003 and 2002                                         |  |                             | 16 | 
|Consolidated Statements of Operations for the Years Ended October 31, 2003, 2002 and 2001           |  |                             | 17 | 
|Consolidated Statements of Stockholders Equity for the Years Ended October 31, 2003, 2002 and 2001 |  |                             | 18 | 
|Consolidated Statements of Cash Flows for the Years Ended October 31, 2003, 2002 and 2001           |  |                             | 19 | 
|Notes to Consolidated Financial Statements                                                          |  |                             | 20 | 
|Report of Independent Auditors                                                                      |  |                             | 31 | 

(a)(2) Financial Statement Schedules

Financial statement schedules have been omitted since they are either not
required, not applicable, or the information is otherwise included in the
consolidated financial statements or the notes to consolidated financial
statements.

(a)(3) Exhibits

See
Index to Exhibits on pages 24 through 26. The Exhibits listed in the
accompanying Index to Exhibits are filed or incorporated by reference as part
of this report.

b) Reports on Form 8-K

Form 8-K (Item 5 and Item 7 reported) filed on October 3, 2003

21



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##### 



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized on January 29,
2004.

| |  |                                                         |  |                       
| |  | ------------------------------------------------------- |  | ----------------------
| |  | MARTEK BIOSCIENCES CORPORATION                         
| |  |                                                         |  |                       
| |  | By                                                      |  | /s/ Henry Linsert, Jr.
| |  |                                                         |  |                       
| |  | Henry Linsert, Jr.
Chief Executive Officer and Director

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Henry Linsert, Jr. and Peter L. Buzy, and each of them
individually, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and his name, place and stead
in any and all capacities, to sign the report and any and all amendments to
this report, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, full power and authority to
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or their substitutes, may lawfully do or cause to be done by virtue
thereof.

Pursuant to the requirement of the Securities Exchange Act of 1934, this Report
has been signed by the following persons in the capacities and on the date
indicated.

|                                                         |  |                                                                    |  |                 
|-------------------------------------------------------- |  | ------------------------------------------------------------------ |  | ----------------
|Signatures                                               |  | Title                                                              |  | Date            
|                                                         |  |                                                                    |  |                 
|/s/ Henry Linsert, Jr.

Henry Linsert, Jr.               |  | Chief Executive
Officer and Director
(Principal Executive
Officer) |  | January 29, 2004
|                                                         |  |                                                                    |  |                 
|/s/ Peter L. Buzy

Peter L. Buzy                         |  | Principal Financial
and Accounting
Officer                         |  | January 29, 2004
|                                                         |  |                                                                    |  |                 
|/s/Jules Blake

Jules Blake                              |  | Director                                                           |  | January 29, 2004
|                                                         |  |                                                                    |  |                 
|/s/ Robert J. Flanagan

Robert J. Flanagan               |  | Director                                                           |  | January 29, 2004
|                                                         |  |                                                                    |  |                 
|/s/ Ann L. Johnson

Ann L. Johnson                       |  | Director                                                           |  | January 29, 2004
|                                                         |  |                                                                    |  |                 
|/s/ Gordon S. Macklin

Gordon S. Macklin                 |  | Director                                                           |  | January 29, 2004
|                                                         |  |                                                                    |  |                 
|/s/ Douglas J. MacMaster, Jr.

Douglas J. MacMaster, Jr. |  | Director                                                           |  | January 29, 2004

22



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##### 



|                                         |  |          |  |                 
|---------------------------------------- |  | -------- |  | ----------------
|Signatures                               |  | Title    |  | Date            
|                                         |  |          |  |                 
|/s/ John H. Mahar

John H. Mahar         |  | Director |  | January 29, 2004
|                                         |  |          |  |                 
|/s/ Sandra Panem

Sandra Panem           |  | Director |  | January 29, 2004
|                                         |  |          |  |                 
|/s/ Richard J. Radmer

Richard J. Radmer |  | Director |  | January 29, 2004
|                                         |  |          |  |                 
|/s/ Eugene H. Rotberg

Eugene H. Rotberg |  | Director |  | January 29, 2004

23



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##### 



EXHIBIT INDEX

|        |  |                                                                                                                                                                                                                                                                                                              
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT |  |                                                                                                                                                                                                                                                                                                              
|NUMBER  |  | DESCRIPTION                                                                                                                                                                                                                                                                                                  
|        |  |                                                                                                                                                                                                                                                                                                              
|3.01    |  | Revised Restated Certificate of Incorporation of Registrant.                                                                                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                              
|3.02    |  | Amendment to the Restated Certificate of Incorporation, effective March 14, 1995 (filed as Exhibit 3.1 to
the Companys Registration Statement on Form S-3, File No. 33-89760, filed March 15, 1995, and
incorporated by reference herein).                                                                  
|        |  |                                                                                                                                                                                                                                                                                                              
|3.03    |  | Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock
(filed as Exhibit 4 to the Companys Form 8-K, File No. 0-22354, filed January 29, 1996, and incorporated
by reference herein).                                                                          
|        |  |                                                                                                                                                                                                                                                                                                              
|3.04    |  | Amended By-Laws of Registrant.                                                                                                                                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                              
|3.05    |  | Amendment to By-Laws, effective March 14, 1995 (filed as Exhibit 3.2 to the Companys Registration
Statement on Form S-3, File No. 33-89760, filed March 15, 1995, and incorporated by reference herein).                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                              
|3.06    |  | Amendment to Bylaws effective March 2, 2001 (filed as exhibit 3.06 to the Companys 2001 Form 10-K, File
No. 22354, and Incorporated by reference herein).                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                                                                              
|3.07    |  | Certificate of Amendment to the Restated Certificate of Incorporation of Martek Biosciences Corporation
(filed as exhibit 3.07 to the Companys quarterly report on Form 10-Q, File No. 22354, for the quarter
ended January 31, 2002, and incorporated by reference herein).                                
|        |  |                                                                                                                                                                                                                                                                                                              
|3.08    |  | Martek Biosciences Corporation Amendment to By-laws effective April 25, 2002 (filed as exhibit 3.08 to
the Companys quarterly report on Form 10-Q, File No. 22354, for the quarter ended April 30, 2002, and
incorporated by reference herein).                                                             
|        |  |                                                                                                                                                                                                                                                                                                              
|4.01    |  | Specimen Stock Certificate for Common Stock.                                                                                                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                              
|4.02    |  | Common Stock and Warrant Purchase Agreements, dated May 19, June 1, June 6, and June 8, 1995, by and
among the Company and the Selling Stockholders (filed as Exhibit 4.2 to the Companys Registration
Statement on Form S-3, File No. 33-93580, filed June 16, 1995, and incorporated by reference herein).
|        |  |                                                                                                                                                                                                                                                                                                              
|4.03    |  | Warrant No. 1 issued pursuant to Common Stock and Warrant Purchase Agreements and Schedule of Warrants
(filed as Exhibit 4.3 to the Companys Registration Statement on Form S-3, File No. 33-93580, filed June
16, 1995, and incorporated by reference herein).                                             
|        |  |                                                                                                                                                                                                                                                                                                              
|4.04    |  | Form of Rights Agreement dated as of January 24, 1996 between the Company and Registrar and Transfer
Company, as Rights Agent (filed as Exhibit 1 to the Companys Form 8-K, File No. 0-22354, filed January
29, 1996, and incorporated by reference herein).                                                
|        |  |                                                                                                                                                                                                                                                                                                              
|4.05    |  | Form of First Amendment to Rights Agreement between the Company and Registrar and Transfer Company, as
Rights Agent (filed as Exhibit 99.1 to the Companys Form 8-K, File No. 0-22354, filed November 9, 1998
and incorporated by reference herein).                                                        
|        |  |                                                                                                                                                                                                                                                                                                              
|10.01   |  | Form Indemnification Agreement for directors.                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                              
|10.02   |  | 1986 Stock Option Plan, as amended.                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                              
|10.03   |  | 1992 Registration Rights Agreement between the Company and Preferred Stockholders.                                                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                              
|10.04   |  | Employment Agreement, dated May 4, 1990, between the Company and Henry Linsert, Jr. +                                                                                                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                              
|10.08   |  | Form of Proprietary Information, Inventions and Non-Solicitation Agreement.                                                                                                                                                                                                                                  
|        |  |                                                                                                                                                                                                                                                                                                              
|10.12   |  | Collaborative Research and License Agreement, dated April 30, 1993, as amended June 11, 1993, between the
Company and the Trustees of Columbia University.                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                                                                              
|10.13   |  | Lease, commencement date October 15, 1992, between the Company and Aetna Life Insurance Company, as
modified on August 5, 1993.                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                              
|10.14   |  | License Agreement, dated September 10, 1992, between the Company and Bestuurcentrum Der Verenigde
Bedrijven Nutricia B.V.*                                                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                                                                              
|10.14A  |  | Exhibits to September 10, 1992 License Agreement between the Company and Bestuurcentrum Der Verenigde
Bedrijven Nutricia B.V.*                                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                              
|10.15   |  | License Agreement, dated October 28, 1992, between the Company and Mead Johnson & Company.*                                                                                                                                                                                                                  
|        |  |                                                                                                                                                                                                                                                                                                              
|10.15A  |  | Exhibits to October 28, 1992 License Agreement between the Company and Mead Johnson & Company.*                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                              
|10.16   |  | License Agreement, dated January 28, 1993 between the Company and American Home Products Corporation
represented by the Wyeth-Ayerst Division (Domestic Version) and American Home Products Corporation
represented by its agent Wyeth-Ayerst International (International Version).*                        
|        |  |                                                                                                                                                                                                                                                                                                              
|10.16A  |  | Exhibits to January 28, 1993 License Agreements between the Company and American Home Products
Corporation represented by the Wyeth-Ayerst Division (Domestic Version) and American Home Products
Corporation represented by its agent Wyeth-Ayerst International (International Version).*                  
|        |  |                                                                                                                                                                                                                                                                                                              
|10.18   |  | Lease Modification Agreement, dated October 14, 1993 between the Company and Aetna Life Insurance Company.                                                                                                                                                                                                   

24



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##### 



|        |  |                                                                                                                                                                                                                                                                                                                                                   
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT |  |                                                                                                                                                                                                                                                                                                                                                   
|NUMBER  |  | DESCRIPTION                                                                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.20   |  | Second Lease Modification Agreement, dated September 27, 1994,
between the Company and Aetna Life Insurance Company (filed as
Exhibit 10.20 to the Companys 1995 Form 10-K, File No. 0-22354,
and incorporated by reference herein).                                                                                                             
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.22   |  | Directors Stock Option Plan (filed as Exhibit 4.1(b) to the
Companys Registration Statement on Form S-8, File No. 33-79222,
filed May 23, 1994, and incorporated by reference herein).                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.23   |  | Manufacturing Agreement, dated December 31, 1996, between the
Company and DSM Food Specialties (formerly Royal Gist-Brocades
B.V.)* (filed as exhibit 10.23 to the Companys Annual Report on
Form 10-K for the fiscal year ended October 31, 1996).                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.24   |  | Martek Biosciences Corporation 1997 Stock Option Plan (filed as
Exhibit 4.1(e) to the Companys Registration Statement on Form
S-8, File No. 333-27671, filed May 22, 1997, and incorporated by
reference herein).                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.25   |  | Third Amendment of Lease, dated August 1, 1997 between the Company
and M.O.R Columbia Limited Partnership (filed as exhibit 10.25 to
the Companys 1997 10-K, File No. 000-22354, and incorporated by
reference herein).                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.26   |  | Fourth Amendment of Lease, dated August 5, 1998 between the and
M.O.R Columbia Limited Partnership (filed as exhibit 10.26 to the
Companys 1998 Form 10-K, File No. 22354, and incorporated by
reference herein).                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.28   |  | Common Stock and Warrant Purchase Agreement, dated April 27, 1998,
by and among the Company and the Selling Stockholders (filed as
exhibit 99.2 to the Companys Form 8-K, File No. 22354, dated
April 27, 1998 and incorporated by reference herein).                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.29   |  | Common Stock and Warrant Purchase Agreement, dated May 28, 1999,
by and among the Company and the Selling Stockholders (filed as
exhibit 99.2 to the Companys Form 8-K, File No. 22354, dated June
9, 1999 and incorporated by reference herein).                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.30   |  | License Agreement, dated March 31, 2000 between the Company and
Abbott Laboratories * (filed as exhibit 10.30 to the Companys
quarterly report on Form 10-Q for the quarter ended April 30,
2000, and incorporated by reference herein).                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.32   |  | Martek Biosciences Corporation 2001 Stock Option Plan (filed as
Exhibit 10.01 to the Companys Registration Statement on Form S-8,
filed on November 16, 2001, and incorporated by reference herein).                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.33   |  | Common Stock and Warrant Purchase Agreement, dated February 28,
2001 by and among the Company and the Selling Stockholders (filed
as exhibit 99.2 to the Companys Form 8-K, File No. 22354, dated
March 2, 2001 and incorporated by reference herein).                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.34   |  | Common Stock Purchase Agreement, dated December 17, 2001 by and
among the Company and The Gordon S. Macklin Family Trust (filed as
exhibit 10.34 to the Companys 2001 Form 10-K, File No. 22354, and
Incorporated by reference herein).                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.35   |  | Form of Common Stock Purchase Agreement, dated December 17, 2001
by and among the Company and the Selling Stockholders Trust (filed
as exhibit 10.35 to the Companys 2001 Form 10-K, File No. 22354,
and Incorporated by reference herein).                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.36   |  | Martek Biosciences Corporation Amended And Restated Management
Cash Bonus Incentive Plan effective April 25, 2002 (filed as
exhibit 10.36 to the Companys quarterly report on Form 10-Q, File
No. 22354, for the quarter ended April 30, 2002, and incorporated
by reference herein).                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.37   |  | OmegaTech, Inc. 1996 Stock Option Plan, as amended on April 26,
2001 (filed as exhibit 10.37 to the Companys quarterly report on
Form 10-Q, File No. 22354, for the quarter ended April 30, 2002,
and incorporated by reference herein).                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.39   |  | Employment Agreement dated April 25, 2002 between the Company and
James Flatt (filed as exhibit 10.39 to the Companys quarterly
report on Form 10-Q, File No. 22354, for the quarter ended April
30, 2002, and incorporated by reference herein). +                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.41   |  | Settlement Terms Related to Arbitration of License Agreement Dated
September 15, 1993 between Pharmacia Corporation, on behalf of
Monsanto, and OmegaTech dated May 10, 2000 (filed as exhibit 10.41
to the Companys quarterly report on Form 10-Q, File No. 22354,
for the quarter ended April 30, 2002, and incorporated by
reference herein).*
|        |  |                                                                                                                                                                                                                                                                                                                                                   
|10.42   |  | Manufacturing Agreement between C.P. Kelco U.S. Inc. and
OmegaTech, Inc. dated October 19, 2001 (filed as exhibit 10.42 to
the Companys quarterly report on Form 10-Q, File No. 22354, for
the quarter ended April 30, 2002, and incorporated by reference
herein).                                                                              

25



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##### 



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|NUMBER  |  | DESCRIPTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.43   |  | Agreement and Plan of Merger, dated March 25, 2002, by and among Martek Biosciences Corporation, OmegaTech, Inc. and OGTAQ
Corp. (filed as Exhibit 99.2 to the Companys Current Report on Form 8-K, File No. 22354, filed on May 3, 2002 and
incorporated by reference herein).                                                                                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.44   |  | First Amendment to the Agreement and Plan of Merger dated as of March 25, 2002 by and among OmegaTech, Inc., Martek
Biosciences Corporation, and OGTAQ Corp., dated April 24, 2002 by and among Martek Biosciences Corporation, OmegaTech, Inc.,
OGTAQ Corp. and Robert Zuccaro, in his capacity as the Stockholders Representative (filed as Exhibit 99.3 to the Companys
Current Report on Form 8-K, File No. 22354, filed on May 3, 2002 and incorporated by reference herein).                                                                  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.45   |  | Martek Biosciences Corporation 2002 Stock Incentive Plan (filed as Exhibit 1 to the Companys Definitive Proxy, Schedule
14A, filed on February 8, 2002 and incorporated by reference herein).                                                                                                                                                                                                                                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.46   |  | Addendum 3 to Martek Biosciences Corporation/Gist-Brocades S.p.A. ARA Purchase and Production Agreement dated June 14, 2002
(filed as exhibit 10.46 to the Companys quarterly report on Form 10-Q, File No. 22354, for the quarter ended July 31, 2002,
and incorporated by reference herein).*                                                                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.47   |  | Second Amendment to the Agreement and Plan of Merger dated as of March 25, 2002, as amended on April 24, 2002, by and among
OmegaTech, Inc., Martek Biosciences Corporation and OGTAQ Corp., entered into as of July 27, 2002 by and among Martek,
Martek Biosciences Boulder Corporation (formerly called OmegaTech, Inc.) and Robert Zuccaro, in his capacity as the
Stockholders Representative. (filed as Exhibit 99.2 to the Companys Current Report on Form 8-K, File No. 22354, filed on
July 31, 2002 and incorporated by reference herein).
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.48   |  | Amendment No. 3 to Settlement Terms Related to Arbitration of License Agreement dated as of December 20, 2002 by and among
Monsato Company and Martek Biosciences Boulder Corporation. (filed as
Exhibit 10.48 to the Companys annual report on Form 10-K, File
No. 22354, for the year ended October 31, 2002, and incorporated by
reference herein).                                                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.49   |  | Loan and Security Agreement Between Martek Biosciences Corporation, a Delaware Corporation, Martek Biosciences Boulder
Corporation, a Delaware Corporation, borrower and Allfirst Bank, lender, $10,000,000.00 Revolving Line of Credit, Dated:                                                                                                                                                                                                                                                                                                       
|        |  | February 25, 2003 (filed as exhibit 10.49 to the Companys quarterly report on Form 10-Q, File No. 22354, for the quarter
ended January 31, 2003, and incorporated by reference herein).                                                                                                                                                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.50   |  | License and Supply Agreement, dated June 13, 2003 between the Company and Nestec Ltd. (filed as exhibit 10.50 to the
Companys quarterly report on Form 10-Q, File No.22354, for the quarter ended July 31, 2003, and incorporated by reference
herein).                                                                                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.51   |  | Asset Sale and Purchase Agreement dated July 21, 2003 by and among FermPro Manufacturing, LP, a Georgia limited partnership,
Astral Technologies, Inc., a South Carolina corporation and Martek Biosciences Corporation (filed as exhibit 10.51 to the
Companys quarterly report on Form 10-Q, File No. 22354, for the quarter ended July 31, 2003, and incorporated by reference
herein).                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.52   |  | Amendment No. 1 to Asset Sale and Purchase Agreement by and among FermPro Manufacturing, LP, a Georgia limited partnership,
Astral Technologies, Inc., a South Carolina corporation and Martek Biosciences Corporation (filed as exhibit 10.52 to the
Companys quarterly report on Form 10-Q, File No. 22354, for the quarter ended July 31, 2003, and incorporated by reference
herein).                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.53   |  | Amendment No. 2 to Asset Sale and Purchase Agreement by and among FermPro Manufacturing, LP, a Georgia limited partnership,
Astral Technologies, Inc., a South Carolina corporation and Martek Biosciences Corporation (filed as exhibit 10.53 to the
Companys quarterly report on Form 10-Q, File No. 22354, for the quarter ended July 31, 2003, and incorporated by reference
herein).                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.54   |  | Joinder Agreement by and among FermPro Manufacturing, LP, a Georgia limited partnership, Astral Technologies, Inc., a South
Carolina corporation and Martek Biosciences Corporation (filed as exhibit 10.54 to the Companys quarterly report on Form
10-Q, File No. 22354, for the quarter ended July 31, 2003, and incorporated by reference herein).                                                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.55   |  | Martek Biosciences Corporation 2003 New Employee Stock Option Plan (filed as exhibit 10.55 to the Companys quarterly report
on Form 10-Q, File No. 22354, for the quarter ended July 31, 2003, and incorporated by reference herein).                                                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.58   |  | Purchase Money Promissory Note by and among FermPro Manufacturing LP, a Georgia limited partnership, and IBIS Limited
Partnership, a North Carolina limited partnership, as amended (filed as exhibit 10.58 to the Companys quarterly report on
Form 10-Q, File No. 22354, for the quarter ended July 31, 2003, and incorporated by reference herein).                                                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.59   |  | Collaboration Agreement Between Martek Biosciences Corporation and SemBioSys Genetics, Inc., a Canadian corporation, dated
December 1, 2003. Filed herewith.***/**                                                                                                                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.60   |  | Amendment to Manufacturing Agreement by and between CP Kelco U.S., Inc. and Martek Biosciences Boulder Corporation, dated
October 1, 2003. Filed herewith.***/**                                                                                                                                                                                                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.61   |  | Promissory Note payable to the order of Genencor International, Inc.,
a Delaware Corporation, dated January 26, 2004***/**                                                                                                                                                                                                                                                                                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.62   |  | Loan and Security Agreement between Martek Biosciences Corporation, a Delaware Corporation, as Borrower, and Manufacturers
And Traders Trust Company, as Administrative Agent, and as Sole Book Runner, and Bank of America, N.A., as Syndication
Agent, and SunTrust Bank as Documentation Agent, and Manufacturers And Traders Trust Company And Various Other Financial
Institutions Now or Hereafter Party Hereto As Lenders, dated
January 26, 2004. Filed herewith.**                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|13.01   |  | Portions of the Annual Report to Stockholders of the Company for the year ended October 31, 2003.**                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|21.01   |  | Subsidiaries of the Registrant. **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|23.01   |  | Consent of Ernst & Young LLP, Independent Auditors.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|24.01   |  | Power of Attorney of the Board of Directors (included on signature page of this report).**                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|31.01   |  | Certification of Chief Executive Officer Pursuant to Rule
13a-14a/15d-14a.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|31.02   |  | Certification of Chief Financial Officer Pursuant to Rule
13a-14a/15d-14a.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|32.01   |  | Written Statement of Chief Executive Officer Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.**                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|32.02   |  | Written Statement of Chief Financial Officer Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.**                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|99.01   |  | Cautionary Statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform act of 1995.**                                                                                                                                                                                                                                                                                                                                                                                                                         

| |     |  |                                                                                                                                                                                                                                                                                                                                                                                               
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | 
| | *** |  | Confidential treatment was requested for certain portions of these
agreements. The confidential portions were filed separately with the Commission.                                                                                                                                                                                                                                           
| |     | 
| | *   |  | Confidential treatment was granted by the Securities and Exchange Commission for certain portions of these agreements. The confidential portions were filed separately with the Commission.                                                                                                                                                                                                   
| |     | 
| | **  |  | Filed herewith. Exhibits 10.59, 10.60 and 10.61 contain a list briefly identifying the contents of all omitted schedules and Martek will furnish supplementally a copy of any omitted schedule to the
Commission at its request. Unless otherwise noted, all other Exhibits are incorporated by reference as an Exhibit to the Registrants Registration Statement on Form S-1 (No. 33-68522).
| |     | 
| | +   |  | Denotes management contract or compensatory arrangement required to be filed as an exhibit to this form.                                                                                                                                                                                                                                                                                      

26