SECURITIES AND EXCHANGE COMMISSION
                   Washington, D.C.  20549


                          FORM 10-K

            FOR ANNUAL AND TRANSITION REPORTS
         PURSUANT TO SECTION 13 OR 15 (d) OF
          THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)

X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
  OF 1934: For the fiscal year ended December 31, 1998

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

                    Commission File Number: 1-9741

                       INAMED CORPORATION
  (Exact Name of Registrant as Specified in Its Charter)

  Delaware                            59-0920629

State of Incorporation    I.R.S. Employer Identification No.

700 Ward Drive, Santa Barbara, California     93111-2919

(Address of Principal Executive Officers)     (Zip Code)

Securities registered pursuant to Section 12(b) of the Act:None

Securities registered pursuant to Section 12(g) of the Act:Common Stock, 
                                                           $.01 par value

Indicate  by  check  mark  whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file  such reports), and (2) has been subject to
such filing requirements for the past 90 days.
                               Yes   X    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.  [X]

The  aggregate  market value of voting stock held by non-affiliates  as  of
March 19, 1999 was $134,314,869.

On March 19, 1999 there were 11,461,613 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The information required  by  Part  III  is  incorporated by reference to a
definitive proxy statement to be filed by the Registrant not later than 
April 30, 1999 pursuant to Regulation 14A.

        This document contains 72 pages.

        Exhibit index located on pages 30-34.




PART I

ITEM 1.         BUSINESS.

        INAMED Corporation ("INAMED" or the "Company")  is a medical device
company which reports  through  one  segment.  The Company operates through  
subsidiaries which are organized under three  business  units.   Through   
two  business  units-U.S.  Plastic  and Reconstructive Surgery and
Inamed  International-the  Company  manufactures  and  markets  saline  and
silicone gel-filled breast implants for plastic and reconstructive  surgery, 
as well as other silicone based products including tissue expanders, facial 
implants and custom  prostheses  for  plastic  and reconstructive surgery.
Through   its   third  business  unit-BioEnterics  Corporation-the  Company
manufactures and markets products  for  the  treatment  of  obesity  and  for
use  by  general  and laparoscopic surgeons.

        The Company  manufactures its products in Santa Barbara, California
and in Arklow, County Wicklow, Ireland, and owns or has exclusive licenses for 
over 40 patents in the United States and overseas.  The Company  believes,  
with  an  approximately  50% U.S. market share and a worldwide market  share 
of approximately 40%, that it is the leading company  in  the $275 million 
worldwide breast implant market.

        In   1998  the  Company  initiated  a  comprehensive  restructuring
program, which included hiring a new senior management team, settling the 
extensive and longstanding product liability litigation relating to silicone 
gel-filled breast implants, and reducing expenses.  As a result of these 
efforts, together with  a 24% increase in sales, during 1998 the Company was 
able to achieve profitability; also, the Company's independent public 
accountants have removed from their report on the Company's 1998 financial 
statements  the "going concern" explanatory paragraph issued
in the prior year.

        The following table  contains  summary  financial information which
highlights the improvements in  profitability  and  working  capital management 
since  the  new  senior management team undertook the restructuring program:

                               1997                  1998       %Change
Income Statement data 
(Dollars, in millions)

Net sales                      106.4                 131.6      23.7%
Gross profit                    68.7                  83.6      21.7%
  Gross margin                  64.6%                 63.6%

Marketing expense               30.0                  33.4      11.3%
 As a % of sales                28.2%                 25.4%
G&A expense                     33.4                  28.2     -15.6%
 As a % of sales                31.4%                 21.4%
R&D expense                      8.9                   9.3       4.5%
 As a % of sales                 8.4%                  7.1%
Restructuring expense            0                     4.2     100.0%
 As a % of sales                 0.0%                  3.2%
Total operating expenses        72.3                  75.1       3.9%
 As a % of sales                68.0%                 57.1%

Operating income (loss)         (3.6)                  8.5
 Operating margin               -3.4%                  6.5%

Balance sheet data:

Cash & equivalents               1.9                  11.9     526.3%
Accounts receivable             14.0                  23.2      65.7%
Inventory                       23.1                  17.9     -22.5%
Accounts payable                14.8                  12.2     -17.6%
Total debt                      32.4                  27.8     -14.2%
Stockholder's equity 
   (deficiency)                (46.7)                (15.6)    -66.5%




        The Company's common stock  is  publicly traded on the OTC Bulletin
Board under the symbol IMDC.  The Company is actively seeking to have its 
common stock listed on a recognized stock exchange, such as Nasdaq or the 
American  Stock  Exchange.   Based  on  the dramatic improvements achieved  
in  1998  and  its substantial market capitalization, the Company
believes that it will ultimately succeed in that effort, although there can 
be no assurance as to whether or when a change in listing status may occur.

Recent Developments

        Beginning in January  1998, there have been a number of significant
developments at the Company:

        Changes in Senior Management.  On  January  23,  1998  the  Company
announced the hiring of Richard  G.  Babbitt as President and Chief Executive 
Officer, and Ilan  K. Reich as Executive Vice President.  At  that time, 
those officers were also elected to the Board of Directors.  On February 11,
1998, the Company  announced  the  resignation of Donald K. McGhan from his
executive and board positions  with  the Company and the election  of  
Richard  G.  Babbitt  as Chairman.  Also at that time, in recognition of 
Mr.  McGhan's  past  contributions,  he  was  named Chairman Emeritus.  On 
June 24, 1998, Jim J. McGhan's employment with the Company and its 
subsidiaries  was terminated.  Jim J. McGhan  was the Chief Operating Officer of
the Company, and he is Donald K. McGhan's son.  At a special meeting  of  
shareholders  held  on December 21, 1998 Jim J. McGhan ceased to serve as a
member of the Board of Directors.  On December  22,  1998  Donald K. McGhan
was relieved of the title of  Chairman  Emeritus.   Also  on  that  date,  
Ilan K. Reich was  elected President, with Richard G. Babbitt retaining the 
titles of Chairman and Chief Executive Officer.

        New Management's Focus. Throughout 1998 the  new  senior  executive
management team focused  on  resolving  the  breast  implant  litigation  and 
returning the Company to profitability.  Both goals have been successfully 
accomplished.

        Settlement of Litigation.  On June 2, 1998, federal  Judge  Sam  C. 
Pointer, Jr. gave preliminary approval of the settlement agreements with the 
Plaintiffs' Class Settlement Counsel and Minnesota Mining & Manufacturing 
Company ("3M").  Under these agreements, the Company agreed to pay an
aggregate of $34.5 million to settle all claims arising from breast implant
products (both silicone gel-filled  and saline) which were implanted before 
June 1, 1993 and to resolve a significant indemnity claim by 3M.  The 
settlement agreement with the plaintiffs is structured as a mandatory limited
fund, non-opt-out   class   action   settlement  covering  the  Company  and 
its subsidiaries.  On February 1, 1999 Judge Pointer granted final approval 
of the settlement.

        On March 3, 1999 the statutory  30-day  period  for  filing appeals
expired, with no notices of appeal being filed with the Federal District Court 
within that  period.  As a result, by June 2, 1999 the Company  will  be 
required to fund the $25.5 million promissory note  which was previously 
issued to the court-supervised  escrow  agent  on  behalf  of  the  plaintiff
class.  The Company has the ability to meet that funding obligation from a 
combination of both cash  on  hand  and  the proceeds to be received upon
the exercise of certain warrants which were issued in contemplation of this
event.  An additional $3 million  of  funding will be needed by June 2, 1999 to 
purchase the 426,323 shares of common stock which were issued last year to 
the court-supervised escrow agent as part of the consideration for the
settlement.  Those  funds will be provided directly by the Company's senior
noteholders.  The Company had assigned its right  to purchase that stock to its 
senior noteholders in April 1998, at the time the settlement agreement was 
signed.

        Emphasis on Profitability.   During  1998 the new senior management
team initiated a restructuring  program  and  reorganized  the Company's  
operations.   This program included the reduction  of overhead through a 10%
headcount  reduction,  elimination  of underutilized corporate offices and  
the  European  sales  headquarters,  entering into a strategic alliance with the
Company's leading supplier of raw materials, moving the corporate  
headquarters  from Las Vegas to Santa Barbara,  and  terminating or selling 
unprofitable business lines.  The new senior management team
also streamlined  the  organizational  structure by replacing 26 autonomous
domestic and international subsidiaries with three business units:   U.S.  
Plastic  and Reconstructive Surgery, Inamed International Corp.  (with  
operations in Europe, Central America and Asia/Pacific),  and BioEnterics 
Corporation (the Company's  obesity  management  subsidiary).   Each  business
unit  has  a president who is responsible for the profitability  of  that  
entity, as well as an executive management staff with responsibilities for
finance,  operations, manufacturing,  sales  and  marketing,  research  and
development, and regulatory affairs.  The Company's corporate staff has been 
refocused to establish and oversee the financial and operational  goals  for  
each  of the business units, enhance manufacturing efficiencies on a 
worldwide basis,  explore  new  business  and  product  opportunities,  and  
set  the strategic direction of the Company.

        Change  of Independent Accountants;  SEC  Action.   In  March  1998
Coopers & Lybrand L..L.P. resigned as the Company's  independent  accountant,
and  in April 1998 the Company retained BDO Seidman  LLP  as  its  new  
independent  accountant.   Due to a variety  of factors, the Company did not 
timely file its Annual Reports on Form 10-K for 1996 and 1997.  In December 
1997 the Company entered  into  a consensual settlement of a lawsuit by the
Securities  and Exchange Commission (the "SEC"), whereby  the  Company 
agreed to file an amendment to its 1996 Form 10-K by March 2, 1998 and to 
thereafter timely file its  required  public  filings.   Due  to  a variety 
of factors, the Company was unable  to  meet  that  deadline  until July 8, 
1998.  The Company has held discussions with the SEC regarding this matter;
however, the  Company  does not know whether, or to what extent, the SEC may
seek sanctions or other remedies based on the Company's failure to meet the
terms of this settlement. The Company understands that the SEC is conducting
an inquiry with respect to certain matters which were publicly disclosed in 
a Form 8-K filing in  March  1998  in connection with the resignation of
Coopers  &  Lybrand  L.L..P., and that it is focusing on the activities  of
prior management.  The Company has been fully cooperating  with  the  SEC's
requests  for  documents  and interviews with accounting employees in 
connection with that inquiry.

Corporate Organization

        The  Company  traces  its  history  to the establishment in 1974 of
McGhan Medical Corporation as   a  manufacturer  of  silicone  implant  
products   for   plastic   and reconstructive surgery.  In 1977, that 
business  was  sold  to  3M.   In  1984,  a  new McGhan Medical Corporation
acquired the assets of 3M's silicone implant product line.  In 1985, this 
entity became a subsidiary of a public company through a merger with a 
Florida corporation (First American Corporation), and in 1986 the name of 
that public company was changed to INAMED Corporation in order  to  better  
reflect its involvement in the medical  field.   The  name  was  chosen to 
promote the recognition of  the concepts "Innovation and Medicine".

        In December 1998, following approval by the Company's stockholders,
INAMED changed its state of incorporation to Delaware  in  order  to  have 
greater latitude in raising capital and conducting acquisitions, and also in 
order to benefit from a more  predictable body of corporate law that is
applied to publicly-traded companies. 

        The Company now operates through three business units.

        The  U.S.  Plastic  and  Reconstructive Surgery group  consists  of
McGhan Medical Corporation, a California corporation.   In 1998 and early 1999 
the Company sold or discontinued a number of smaller business lines which 
were  related  to  the activities of its U.S. plastic surgery business;  it 
also consolidated the separate activities of CUI  Corporation and Flowmatrix 
Corporation into the management  and  corporate  structure  of  McGhan  
Medical.  These changes were undertaken to  improve  manufacturing 
efficiencies, centralize management  and  reduce duplicate administrative
expenses.

        Inamed  International Corp., a new Delaware corporation, was formed
in December 1998 to hold  all  of  the  Company's   international  
manufacturing   and   sales subsidiaries and to direct the activities of the
Company's network of distributors throughout Europe,  the Middle East, South
America  and  the  Asia/Pacific  region.   Its  subsidiaries include McGhan
Limited, an Irish corporation which is engaged in manufacturing, as well as 
direct sales organizations in England, France, Germany, the Netherlands, 
Italy, Spain and Mexico.   During  1998 and early 1999 the Company
discontinued  the  active  operations of its subsidiaries or representative
offices in Belgium, Brazil, Hong  Kong,  Singapore  and Russia,  as  well as
silicone  raw  materials manufacturing (which had been conducted through 
Chamfield  Ltd.) and the European sales headquarters based in Holland.
These  changes  were  undertaken  to  reduce   costs  and  instill  greater
management control and coordination   among   the   disparate   international 
subsidiaries   and distributors.

        BioEnterics Corporation is the Company's third business unit. It is
engaged in the development,  production  and marketing of proprietary 
implantable  devices for the bariatric, general and laparoscopic surgery 
markets  for  the treatment of serious obesity and gastrointestinal disorders,
and  to  minimize  risks  associated  with surgery.   BioEnterics'  primary
product is the LAP-BAND, Adjustable Gastric Banding System.   During 1998 the
Company began to explore an affiliation with a major medical device 
manufacturer,  in  order  to better exploit the future potential of this 
product.

Products and Markets

        Breast   implants  and  related  tissue  expander  products,  which
currently comprise approximately 90%  of the Company's  consolidated  sales,
are  used  for  reconstruction following total or partial removal 
(mastectomy)  of tissue as the result of breast cancer, or for augmentation
in cosmetic surgery.

        Breast Implant Products.  All breast implants consist of a silicone
elastomer (rubber) shell filled with either saline solution (salt water) or 
silicone gel.  In order to meet each woman's individual needs, most breast 
implants  are  produced  in a wide variety of shapes and sizes. The shape of
breast implants  can  be  either  round  or  anatomical.   Round  breast  
implants generally give a woman a round curve in the upper part of her 
breasts,  while  anatomical  breast implants are more likely to give the
woman  a  gentle  slope  which is shaped more like a natural breast.   Both
types of implants are designed to increase breast size. The  surface 
construction of the finished implants provides the surgeon the opportunity to
select from a smooth  silicone  or  a  textured surface sold under the BioCell
or MicroCell tradenames.

        In January 1992 the Food and Drug Administration  ("FDA") requested
that all U.S. manufacturers  stop  selling  their  silicone  gel-filled  
implants   as  a voluntary action and that surgeons refrain  from implanting 
the devices in patients pending further review  of information relating to the
safety of  the products.  Furthermore, in April 1992 the FDA announced that
silicone gel-filled breastimplants  would  be  available  only  under  
controlled  clinical  studies. Accordingly, through 1997 the Company marketed  
and  distributed  its silicone gel-filled breast implants only outside the 
United States,and marketed and distributed saline-filled  breast  implants  
both in the United States and abroad.  Since April  1998  the  Company  has  
been selling certain styles of its silicone gel-filled breast implants in the
United States as part of an adjunct  study  for reconstructive and revision 
surgery.

        Breast reconstructive surgery is the process  by  which  a surgeon
recreates or reconstructs a woman's  breast  following a mastectomy.   
According  to  a member survey published by the American Society  of Plastic 
and Reconstructive Surgeons ("ASPRS"), in 1997 approximately 50,000
reconstruction procedures were performed, as compared with approximately
29,000 in 1992.  The Company believes that the aging U.S. population and the
increased awareness among middle-aged and older women in the United States of 
the dangers and incidence of breast cancer will lead to increased   numbers
of  mastectomies  and  corresponding  increases  in opportunities for 
reconstructive breast implants.   In  addition,  in  October 1998 a federal
law was signed that mandates nationwide insurance  coverage  of
reconstructive  surgery  following  a  mastectomy. Historically, not all health 
insurers covered this procedure.

        Breast augmentation is the process  by  which  breast  implants are
used to enhance the size or shape  of  a woman's breast for cosmetic reasons.  
According to the  ASPRS,approximately 122,000 women had augmentation surgery
in 1997, as compared to approximately 32,000 in 1992.  Typical recipients of
breast  implants for augmentation purposes are women aged 18 to 50 with 
moderate to upper-moderate incomes.   The Company believes that the large 
proportion of the U.S. population currently aged 25 to 40 will  result in 
increased demand for breast implant augmentation surgery in the coming years.

        Breast implants are placed  either  under  a  woman's breast tissue
(subglandular position) or under a woman's pectoralis muscle (sub-muscular 
position).   If the implant is saline-filled, it is usually inserted empty 
and then filled and positioned.  An advantage to  this  type of implant is that
it can usually be   placed   through   a   small   incision.   The  incision  is
made  as inconspicuously as possible in either the fold  of  the  breast  (an 
inframammary incision),  around  the  nipple  (a periareolar incision) 
or under the arm (a transaxillary incision).   If  the  incision  is made under
the arm, endoscopic techniques, involving the use of a probe fitted with a tiny
camera, may be used  to visualize the creation of the surgical pocket.

        Breast  implant  surgery  is  performed in an outpatient  operating
room, either in the surgeon's office or at a hospital.  If done for
augmentation purposes, the surgery is typically performed on an outpatient
basis and general anesthesia  is  most  commonly  used, although local
anesthesia may be an option.   Augmentation surgery usually lasts one to two 
hours during  which the surgeon makes an incision and  creates  a  pocket for 
the implant.  Finally, the incision is closed with stitches and tape. 
Reconstructive surgery generally occurs in a hospital and can often require
more than one operation over a period of several months.

        Tissue  Expanders  and   Other  Products.   The  Company  develops,
manufactures and markets a line of implantable and intraoperative  tissue 
expanders, which are used in connection with reconstructive surgery as the 
result of breast  cancer.   A  typical tissue expander is implanted at a site
where new tissue is desired.  After the device is implanted, fluid  can  be
injected into the injection port which  then flows into the larger expanding 
chamber.  This causes increased pressure under the skin resulting  in  tissue 
growth  over a reduced period of time.  The expanded tissue can then be used
to cover defects, burns and injury  sites  or  prepare  a  healthy site for an
implant with the extra tissue available  without  the trauma of skin grafting. 
The Company  has  further developed its tissue expander product line by 
incorporating a patented integral valve injection area that is located by a 
magnetic detection system to enable  the  doctor  to  determine the location of
the injection port.

        The Company manufactures and markets its BioSpan?  tissue  expander
product line that utilizes  the  BioCell textured surface which allows more
precise surgicalplacement.  Use of the BioSpan tissue  expander  surface 
decreases the risk of severe contraction of the tissue capsule around the 
implant. The Company  produces  the  BioDimensional  system for breast 
reconstruction following radical mastectomy procedures.  The BioSpan tissue 
expanders and BioCell breast implants  used  for  this  system  were  designed
using  computer-assisted modeling to determine the ideal dimensions.   
Computer  imaging  programs  were  also used to evaluate  the expected aesthetic
results. The BioDimensional system matches the specific size tissue expander 
to the breast implant that will be used for the breast reconstruction procedure.

        Obesity  and  General  Surgery Products.  Through  its  BioEnterics
Corporation subsidiary, the Company develops, manufactures and  markets  two  
patented  devices for the treatment of obesity:  the LAP-BAND  Adjustable
 Gastric   Banding   System   and  the  BioEnterics Intragastric Balloon (BIB)
System.  In 1998 approximately $12 million of these products  were  sold to
surgeons and hospitals, primarily  in  Europe  and  Australia, as compared to 
$9.3 million in 1997. The LAP-BAND System is currently undergoing clinical
trials  in  the  United States.  BioEnterics also produces the patented 
EndoLuminar   II   and  MicroEndoLumina?  Transillumination   Systems   for
increasing visibility during laparoscopic procedures,  and  is  developing an 
Anti-Reflux Prosthesis for the laparoscopic treatment of gastroesophageal
reflux disease.

        People who are 100% over one's  ideal  weight or 100 pounds or more
overweight are considered severely or morbidly obese.  Morbid obesity is life 
threatening, leading to cerebrovascular diseases, cardiovascular diseases, 
diabetes and  other health problems.  In the United States it is estimated
that there are 3.1 million to 9.3 million adults who are morbidly obese.  In 
Europe it is estimated that there are 2.5 million to 7.4 million adults who are 
morbidly obese.  On a worldwide basis it is estimated that approximately 1% to 
2% of the  population  is morbidly obese.

        The  failure  of non-surgical weight loss programs to treat  morbid
obesity has led surgeons to devise a variety of weight  loss  operations  for  
the morbidly obese.  One example is the gastric bypass operation,  whereby 
the surgeon makes a direct connection  from  the  upper portion of the stomach 
to a lower segment  of  the  lower intestine.  By creating a path for food which
bypasses part of the stomach and the small bowel, the  operation  causes  food 
to be poorly digested and insufficiently absorbed. Long-term follow-up of 
bypass operations has revealed  serious  nutritional complications.

        Surgeons  have  also  created alternate procedures for weight  loss
that only restrict passage of food through the stomach, such  as  the  vertical
banded gastroplasty.  In this procedure, a non-adjustable band and staples 
are used to create a pouch  at  the  top of the stomach that holds a small
amount of food.  By delaying the emptying of food from the pouch, the small
outlet in the bottom of the pouch causes a feeling of fullness and restricts the
amount of food  which can be eaten at one time.

        The LAP-BAND System is an advanced form of gastric banding used to
treat morbid obesity. During   the   operation,   the   adjustable  silicone  
elastomer  band  is laparoscopically placed around the upper part of the 
stomach, making a small pouch. Most importantly, with the LAP-BAND System the
physician can easily adjust the amount  of  food  which the patient can eat
through non-surgical modification  of  the  pouch  and  outlet  size, fine-
tuning  the  rate  of individual weight loss.  There is no need for large 
incisions and open wounds.  No  cutting  or  stapling of the stomach is 
required and there is no by-passing of the stomach or intestines.  If 
necessary,  the band may be removed laparoscopically, completely reversing the 
procedure.

        The LAP-BAND System has begun to achieve widespread acceptance  in
Europe and Australia,  with  approximately  20,000  units implanted since 1995. 
It is currently undergoing clinical trials in the United States, with complete
submission of the pre-marketing approval application to the FDA expected in 
early 2000.

        The BIB System is a short-term therapy,  designed for patients who
must reduce weight either: a)  in preparation for surgery, whether for the 
LAP-BAND?  System  or  any other surgery which needs to be performed  on  an
obese patient, or b) for moderately obese patients in conjunction with a diet 
and behavior modification program.  The  BIB  System  is  a silicone elastomer
balloon which is filled with saline  after  insertion  into  the patient.  
Placement in the  stomach  is non-surgical, usually requires only 20  to  30  
minutes  and  is  performed  on  an  out-patient  basis  by  an endoscopist,
using local anesthesia. The  BIB  contains a self-sealing  valve  which  
allows  for  personalized adjustment of the volume from 400 ml to 700  ml 
(the  size of a large grapefruit), either at the time of placement or later.  
When the BIB is  deflated,  it  can  easily   be  removed  endoscopically.  The
Company anticipates beginning clinical trials for the BIB? System in the United
States in the second half of 1999.

        The  EndoLumina  and  MicroEndoLumina   Systems  are  illuminated 
medical devices used to light internal organs during various types of general 
surgery.  The primary uses are to aid in surgery of the esophagus, rectum and 
other structures.  In some operations it replaces an endoscope as a source of
light within the body.  Unlike an endoscope, the  EndoLumina  emits  a cool
light and does not risk burning the tissue.  The EndoLumina System was licensed
by the Company and recently redesigned to improve  its  illumination  and  
durability.   It  includes a detachable sterile tip, which is provided for one-
time use.  In 1997 the EndoLumina? System received 510(k) approval from the
FDA for the new design, which is now being marketed in the U.S. and 
internationally.

        The  Anti-Reflux  Prosthesis  (ARPT)  is  designed  to   be  placed
laparoscopically to prevent gastroesophageal  reflux disease, or GERD.  GERD 
results in chronic  injury to the inner lining of the esophagus, causing pain, 
inflammation and sometimes scarring and difficulty in swallowing.  An
improvement  of a previously-marketed  device,  the  ARPT  is  designed  to
facilitate a less traumatic and more durable procedure.

        The LAP-BANDr  System,  BIBr  System  and  ARPr are investigational
devices in the United States, limited to use within clinical studies approved 
by the FDA.

        During  the  past  three years, the Company's proprietary  products
accounted for approximately 98% of annual net sales.

Marketing

        In the United States,  the  Company's  products are sold to plastic
and reconstructive surgeons,cosmetic  surgeons,  facial  and oral surgeons, 
dermatologists,  outpatient surgery centers and hospitals through the Company's 
own staff  of  direct  sales  people  and independent distributors.  The Company
reinforces  its  sales  and  marketing  program  with telemarketing,  which
produces sales by providing follow-up  procedures  on  leads  and distributing
product  information  to potential customers.  The Company supplements its
marketing efforts  with  appearances at trade shows and advertisements in 
trade journals and sales brochures.

        The  Company  sells its products directly and  through  independent
distributors in more than forty countries worldwide, including Europe, Central
and South America, Australia and Asia. Those sales are managed through regional
sales and marketing employees and, in certain countries, through a direct 
sales force.

        During the past three years, no customer accounted for more than 5%
of the Company's revenues.

Competition

        The Company's sole significant  competitor  in the United States is
Mentor Corporation.  All other major competitors discontinued production of 
breast  implants in 1992 largely as a result of regulatory  action by the FDA 
and the ensuing wave of litigation  by  women alleging injury from their
breast implants.   Internationally, the Company competes with several other 
manufacturers, including Mentor  Corporation,  Silimed,  Laboratories  Sebbin,  
L.P.I.,  P.I.P.  and NovaMed.  Several of these manufacturers  have  received 
510(k) approval from the FDA to market saline breast implants in the United 
States.  The Company believes that in 1998 these companies accounted for less 
than 3% of domestic sales of breast implant products.

        The Company believes  that  the  principal  factors  permitting its
products to compete effectively with its competitors are its high-quality
product consistency,  its variety of product designs, management's  knowledge  
of  and  sensitivity  to  market  demands, plastic surgeons' familiarity with 
the Company's  products  and  their  respective brand names, and the  Company's
ability to identify, develop and/or  obtain  license  agreements for  patented  
products  embodying  new technologies.  The Company seeks to avoid marketing its
products on the basis of price, although when necessary or appropriate it will 
do so.

Research and Product Development

        A qualified staff of over  50 doctorates, scientists, engineers and
technicians work in material technology  and  product  design as part  of  the  
Company's  research  and development efforts.  In addition, the Company is 
directing  its  research  toward  new and improved products based on scientific
advances in technology and medical knowledge together with qualified  input 
from the surgical profession.   The  Company  incurred  $9.4  million,  $8.9 
million and $5.7 million in 1998, 1997 and 1996, respectively, on its research 
and development efforts.  These  expenditures represented 7%, 8% and 6% of 
sales in 1998, 1997 and 1996, respectively. 

Patents and License Agreements

        The Company currently owns or has exclusive licenses covering  more
than 40 patents throughout the world.

        It  is  the Company's policy to actively seek patent protection for
its products and/or processes when appropriate.   The  Company  developed  and 
currently owns patents and trademarks for both the product and processes used
to manufacture reduced diffusion breast implants and for the resulting barrier 
coat  breast implants.  Intrashiel is  the  Company's  registered trademark
for the products using this technology.   Beginning  in  1984,  such  patents 
were granted in the United States and various European countries.  In 
addition, trademarks for these products  have  been granted in the United 
States and France.  The Company has license agreements allowing other companies 
to manufacture products  using  the  Company's  select  technology,  such as 
the Company's patented Intrashiel process, in exchange for royalty and other 
compensation or benefits.

        The Company's other patents include those relating  to  its  breast
implants, tissue expanders, textured  surfaces,  injection  ports  and  valve 
systems, and obesity and general surgery products.  The Company  also  has 
various patent assignments or license  agreements  which grant the Company the
right to manufacture and market certain products.

        Substantially  all  of  the  patents  relating  to  products  which 
generate significant revenue have at least five years remaining until 
expiration.

        During  1998  the  Company  undertook  a review of its portfolio of
patents and licenses and determined in several situations that either the  
patent had expired or was invalid, or that the licensor had breached its 
obligations.  Accordingly, the Company is no longer paying several million 
dollars in annual  royalties  under  certain  license agreements and  instead  
is  now engaged in litigation with various licensors over its future 
obligations and whether it is entitled to recover past royalties which were 
paid. The  Company  is also considering suing  various  manufacturers  and  
other parties which it believes have been infringing on the Company's
intellectual property.

        Although the Company believes that its patents are valuable, it has
been the Company's experience that  the  knowledge,  experience  and creativity 
of its product development and marketing staff,  and  trade  secret information 
with respect  to  its  manufacturing processes, materials and product design, 
have been equally  important  in  maintaining  proprietary  product lines.

        As  a  condition  of  employment,  the Company and its subsidiaries
require all employees to execute a confidentiality agreement relating to
proprietary information and patent rights.

Manufacturing; Raw Materials

        The Company manufactures its silicone  devices  and  products under
controlled conditions. The manufacturing  process  is  accomplished  in  
conjunction  with specialized equipment for precision measurement, 
quality control, packaging and sterilization.  Quality control procedures 
begin with the Company's  suppliers  meeting  the Company's standards of 
compliance.   The Company's in-house quality control procedures begin  upon  
the  receipt  of raw components and materials and continue throughout  
production,  sterilization  and final packaging.   The  Company maintains 
quality control and production records of each product manufactured  and  
encourages the return of any explanted units for analysis.   All  of the 
Company's domestic activities are  subject  to  FDA regulations and guidelines,
and the  Company's  products   and  manufacturing  procedures  are  continually
monitored and/or reviewed by the FDA.  In 1997 the FDA conducted  a  review  of
the Company's main U.S. manufacturing facilities, and  in  1998  the FDA 
conducted reviews of the Company's  BioEnterics  and International 
manufacturing facilities; in all  instances  the  FDA notified the Company that
it was in compliance with applicable good manufacturing practices.

        Since the 1992 moratorium by  the FDA on silicone gel-filled breast
implants and the ensuing litigation,  traditional  major  commercial   suppliers
of  silicone  raw materials have ceased to supply implant or medical grade 
materials to the Company and other  medical device manufacturers.  Under 
guidelines established by the FDA, the Company has been successful in using
other companies to meet its silicone raw material needs, but at higher prices.  
For  the  past few years, the Company has also  devoted  resources  to  develop
its  own raw materials manufacturing capability through its Chamfield Ltd. 
subsidiary in Ireland, which has  been supplying much of the Company's raw 
materials needs for international production.  In late 1998, the Company entered
into a strategic alliance with a privately-held specialty chemical company, 
 whereby that company will become the Company's exclusive supplier of 
silicone raw materials and take over the operation of the Company's Irish raw
materials  facility.  This alliance includes favorable  long-term  pricing,
reduction of the overhead previously associated with the in-house manufacturing,
and closer technical support for such initiatives as just-in-time  inventory 
and new product development.  This alliance also provides the Company with
the  technical  expertise   necessary  to  become  a  vertically-integrated
manufacturer of virtually all of its silicone raw material needs in the event 
the supplier is unable to meet the Company's requirements due to a major 
catastrophe.   There can be no assurance that there will not be periodic 
disruptions in the source of supply or the quantities  needed  due  to 
regulatory or other factors.

Limited Warranties

        The Company makes every effort to conduct its  product development,
manufacturing, marketing, and service and support activities with careful 
regard  for the consequences to patients. As with  any  medical  device 
manufacturer, the Company occasionally receives communications from surgeons 
or patients with respect to various products claiming the products
were defective and have resulted in injury to the patient.  The Company 
provides a limited warranty to the effect that any product that proves 
defective will be  replaced  with  a  new product of comparable type without 
charge.

        In certain situations the Company also provides  limited  financial
assistance to cover non reimbursed operating room or surgical expenses.  The 
costs of this  program are periodically reviewed to  ascertain  whether  
adequate  reserves  for  future  claims  are  being maintained.  The Company
reserves the right to make changes to this financial assistance policy from
time to time.

Government Regulations

        All of the Company's silicone implant products manufactured or sold
in the United States are classified  as  medical  devices  subject  to  
regulation  by the FDA.  FDA regulations classify medical devices into three 
classes that determine the degree of regulatory  control to which the 
manufacturer of the device is subject.  In general, Class I devices involve 
compliance with labeling and record keeping requirements  and other general 
controls.  Class II devices are subject  to performance standards in addition 
to general  controls.  A notification must be submitted to the FDA prior to 
the commercial sale of some Class I and all  Class  II  products. Class III 
devices require the FDA's Pre-Market Approval (PMA) or an FDA Investigational 
Device  Exemption  (IDE)  before commercial marketing to assure the products' 
safety and effectiveness.  Class II products are subject to fewer 
restrictions than Class III products on their commercial distribution, such as 
compliance  with general controls and performance standards  relating  to  
one  or more aspects of the design, manufacturing, testing and performance or
other characteristics of the product.  The  Company's illumination products are
classified as Class II devices.  Tissue expanders are currently proposed to be 
classified as Class II devices.  The Company's breast implant products are 
classified as Class III devices.  The Company's obesity and anti-reflux 
products are classified as Class III devices.

        In  the  ongoing process of compliance  with  applicable  laws  and
regulations, the Company has incurred, and will  continue  to  incur, 
substantial costs which relate to laboratory and clinical testing of new
products,  data  preparation and filing of  documents  in  the  proper outline 
or format required by the FDA.  Further, the FDA  has  published  a  schedule  
which permits the data required for PMA applications  for  saline-filled  
implants  to  be  submitted   in  phases, beginning with preclinical data that
was  due in 1995, and ending with final submission of prospective  clinical
data in 1998. Although the FDA did  not,  as  anticipated,  call  for  final  
PMA  applications  to be submitted prior to the end of 1998, the Company  has
completed all of the required clinical studies and is prepared to meet a call 
for the final PMA for saline-filled  implants.   The  Company  currently 
anticipates that such a call will be made in the second  quarter  of  1999,  
although  the  date  for  submission   of   PMA applications may be further 
extended by  the FDA.  Neither the timing of such PMA application nor its 
acceptance by the FDA can be assured,  irrespective of the time and money 
that the Company has expended. Should the Company's PMA application  for  
saline-filled  implants  not  be  filed  timely or be denied, it would have a
material adverse  effect  on  the Company's operations and financial position. 
The Company will decide on a product-by-product basis  whether  to  respond to 
any future calls for PMAs and regulatory requirements, requested response or 
Company action.  The  cost  of any such potential PMA filings is unknown until 
the call for a PMA occurs and the Company has an opportunity  to review the 
filing requirements.

        In late 1998 the Company received FDA approval for an IDE  to begin
a clinical trial for silicone gel-filled  implants for augmentation surgery.  
In January 1999 the Company began that trial, which is expected to take  several
months  to  become fully enrolled.  Assuming the current regulatory framework 
remains unchanged, the Company anticipates  filing  a  PMA  based  on  that 
clinical trial by 2002.

        The  Company  is  currently  conducting  a  clinical  study  of the
LAP-BAND System in the United States under an Investigational Device Exemption
(IDE) granted by the  FDA. The Company anticipates   beginning  clinical  
studies  of  the  BIB  System  and  the Anti-Reflux Prosthesis in the United
States in the second  half  of  1999.    The  Company  plans  to submit the
results of the studies as part of PMAs for these products.

        There can be no assurance that other products under development  by
the Company will be classified  as  Class I or Class II products or that 
additional regulations restricting the sale of its present or proposed 
products  will  not  be promulgated by the FDA.  The Company is not aware 
of any changes required by the FDA that would be so restrictive as to remove 
the Company's primary products from the marketplace.

        Medical  device laws and regulations  similar  to  those  described
above are also in effect in many of the countries to which the Company exports 
or sells its products.  These range from comprehensive device approval 
requirements  for  some  or  all  of  the Company's medical device products 
to requests for product data or certifications.

        As  a manufacturer of medical devices, the Company's  manufacturing
processes and facilities are subject to  continual  review  by  the  FDA, 
responsible state or local agencies such as the California State Department 
of Health Services and other regulatory agencies to ensure compliance with 
good manufacturing  practices  and  public  safety  compliance.   The  Company's
manufacturing plants, as users of  certain  solvents,  are  also  subject  to
regulation by the local  Air Pollution Control District and by the 
Environmental Protection Agency. 

Geographic Segment Data

        A description of the Company's net sales,  operating  income (loss)
and identifiable assets within the United States and International, is 
detailed in Note  11  of the Notes to the consolidated financial statements,
attached as Exhibit (a)(1).

Employees

        As  of  December  31, 1998, the Company had 862 employees, of which
604 were in the United States and 258 were at international  operations.  
Except for the Company's manufacturing facility in Ireland, none of the 
Company's employees  are represented by a labor union. The Company offers its
employees competitive benefits and wages comparable  with employees for the
type of business and the location/country in which the employment occurs. The  
Company considers its employee relations to be good throughout its operations.


ITEM 2. PROPERTIES.

        The   Company   leases   all  of  its  office,  manufacturing   and
distribution facilities, as follows: Carpinteria, California (61,000 square  
feet),  Santa  Barbara,  California (187,000 square feet), Arklow County, 
Wicklow,  Ireland  (53,000 square feet).  In addition, the Company has 
leases for space in Las Vegas,  Nevada  and  The Netherlands  which  it  no  
longer  uses  for  its operations.

        The Company's  international  sales  offices,  located  in Germany, 
Italy, United Kingdom, France, Netherlands, Spain and Mexico lease office and
warehouse space ranging from 1,500 square feet to 8,900 square feet.

        The  Company  believes  its  facilities  and the facilities of  its
subsidiaries are generally suitable and adequate to accommodate its current
operations.


ITEM 3. LEGAL PROCEEDINGS.

Breast Implant Litigation

        Final  Order  of Settlement.  Prior to the final  settlement  order
issued by federal Judge Sam C. Pointer, Jr. of the United  States District Court
for the Northern District of Alabama, Southern Division on February 1, 1999,
INAMED and  its  McGhan  Medical  and CUI subsidiaries were defendants in 
tens of thousands of state and federal court lawsuits involving breast implants.
As part of that final order, all of  those  cases  arising  from  breast  
implant  products  (both  silicone gel-filled and saline) which were 
implanted  before  June  1,  1993 were consolidated into a mandatory  class
action settlement and dismissed.

        On March 3, 1999 the statutory  30-day  period  for  filing appeals
expired, with no notices of appeal being filed with the Federal District Court 
within that  period.  As a result, by June 2, 1999 the Company  will  be 
required to fund the $25.5 million promissory note  which was previously 
issued to the court-supervised  escrow  agent  on  behalf  of  the  plaintiff 
class.  The Company has the ability to meet that funding obligation from a 
combination of both cash  on  hand  and  the proceeds to be received upon the
exercise of certain warrants which were issued in contemplation of this event.  
An additional $3 million  of  funding will be needed by June 2, 1999 to purchase
the 426,323 shares of common stock which were issued in September 1998 to the 
court-supervised escrow agent as part of the consideration for the settlement.  
Those funds will be provided directly by the Company's senior noteholders. 
The Company had assigned its right to purchase that stock to its senior 
noteholders in April 1998, at the time the settlement agreement was signed.

        Current  Product  Liability  Exposure.   Currently,  the  Company's
product liability litigation relates almost entirely to saline products which 
were implanted after the 1992  FDA moratorium on silicone gel-filled  implants 
went  into  effect.  These cases are being handled in the ordinary course of
business and will not have a material financial  impact  on  the  Company.   
Outside the United States, where the Company has been selling silicone 
gel-filled implants without interruption, and where the local tort systems do
not encourage or allow contingency fee arrangements, the Company has only a 
minimal number of product liability lawsuits and no material financial exposure.

        History of the Litigation Settlement.  Beginning in 1992  with  the
FDA moratorium on silicone gel-filled  implants,  a  torrent  of  litigation  
was  filed  against  the manufacturers.  The alleged factual basis for  
typical  lawsuits  included  allegations that the plaintiffs' silicone 
gel-filled breast implants caused specified ailments including, among  others,
auto-immune  disease,  lupus, scleroderma, systemic disorders,  joint  
swelling  and  chronic  fatigue.   The  Company  opposed plaintiffs' claims 
in these lawsuits and  other  similar  actions  and  has continually denied any 
wrongdoing or liability.  In addition, the Company believes that a substantial
body  of medical evidence exists which indicates that silicone gel-filled 
implants are not causally related to  any  of  the  above  ailments. Numerous 
studies in the past few years  by  medical  researchers in North America and
Europe have failed  to show a definitive connection between breast implants
and  disease (some critics, however, have assailed the methodologies of these
studies).   Most recently  in  December  1998,  a  science  panel  of 
independent experts appointed by  Judge  Pointer  reached the same 
conclusion.  Nevertheless, the immense volume of lawsuits created a 
substantial  burden  on  the  Company,  both  in terms of ongoing litigation 
costs and the expenses of settlement, in addition to the inherent risk  of  
adverse  jury verdicts in cases that could not be resolved by dismissal or 
settlement.

        Beginning  in  1994  the  Company  sought to resolve breast implant
litigation by participating in a proposed industry-wide class action settlement
(the "Global Settlement") of domestic breast implant litigation.  At that 
time, the Company petitioned  the Court to certify the Company's portion of
the Global Settlement  as  a  mandatory  class under Federal Rule of  Civil  
Procedure 23(b)(1)(B), meaning that claimants could not elect to "opt  out" 
from  the class in order to pursue individual lawsuits against the Company.
Negotiations  with  the plaintiffs' negotiating  committee  over mandatory 
class treatment were tabled, however (and the Company's  petition  consequently
not ruled upon), when an unexpectedly high projection of current disease claims 
and the  subsequent  election  of Dow Corning Corporation to file   for   
protection   under  federal  bankruptcy  laws  necessitated  a substantial 
restructuring of the Global Settlement.

        In late 1995, the Company  agreed  to  participate in a scaled-back 
Revised Settlement Program ("RSP") providing for settlement, on a non-mandatory
basis,  of  claims by domestic claimants who were implanted   before  January 1,
1992  with  silicone  gel-filled  implants manufactured by the Company's,
McGhan  Medical  subsidiary,  and  who  met  specified  disease  and  other 
criteria.  Under the terms of the RSP, 80%  of  the settlement costs relating
to the Company's McGhan Medical implants were to be paid by 3M and Union  
Carbide  Corporation, with the remaining 20% to be paid by the Company.  
However, because the RSP did not provide a vehicle for settling claims other 
than by persons who elected to participate, and because of  continuing  
uncertainty  about  the  Company's ability to fund its obligations under the 
RSP in the absence of a broader settlement also resolving  breast implant 
lawsuits against the  Company  and its CUI subsidiary which would not be covered
by the RSP, the Company continued through 1996 and  1997  to  negotiate  with 
the PNC in an effort to reach a broader resolution through a mandatory  class.
The  PNC  was  advised in  these  negotiations  by  its consultant, Ernst & 
Young LLP, which at the PNC's request conducted  reviews of the Company's 
finances and operations in 1994 and again in 1996 and 1997.

        On  April 2, 1998, the Company and  the  Settlement  Class  Counsel
executed a formal settlement  agreement   (the   "Settlement  Agreement"),  
resolving,  on  a mandatory, non-opt-out basis, all claims arising from 
McGhan Medical and CUI breast implants implanted before June 1, 1993.  The 
Settlement Agreement was preliminarily  approved  by  the  Court on June 2, 
1998.  The Court also issued an injunction staying all pending breast implant 
litigation  against the Company (and its subsidiaries) in federal and state 
courts.  The Company believes that  this stay has alleviated the significant 
financial and managerial burden which these lawsuits had placed on the Company.

        Terms  and  Conditions  of  the  Settlement  Agreement.  Under  the
Settlement Agreement, $31.5 million  of  consideration, consisting of $3 
million of cash, $3 million of common stock and $25.5 million principal  
amount   of   a   6%  subordinated  note  were  deposited  in  a 
court-supervised escrow account in September 1998.  Thereafter, the  Court  
authorized the mailing of a notice of the proposed Settlement to all class 
members and scheduled a fairness  hearing,  which  was held on January 11, 1999.

        Now that the Court has granted final approval of the Settlement and 
that final order has become  non-appealable,  once the Company completes its
funding obligations (by June 2, 1999) the consideration  held  in  the   
escrow  account  will  be  released  to  the court-appointed settlement 
office for distribution to the plaintiff class  in  accordance with an 
allocation plan to be determined by the Court in proceedings to be held in 
mid-1999.

        The Settlement Agreement covers all  domestic  claims  against  the
Company and its subsidiaries  by  persons  who  were  implanted  with McGhan 
Medical or CUI silicone gel-filled or saline implants before June 1, 1993, 
including claims for  injuries  not yet known and claims by other persons 
asserting derivative recovery rights by reason of personal, contractual  or
legal relationships with such implantees.  The Settlement is structured as a 
mandatory, non-opt-out class settlement pursuant to Federal   Rule   of   
Civil   Procedure  23(b)(1)(B),  and  is  modeled  on similarly-structured 
mandatory class settlements  approved  in  the  1993   Mentor  Corporation 
breast  implant litigation, and more recently in the 1997 Acromed Corporation 
pedicle screw litigation.

        The  application  for  preliminary  approval  included  evidentiary
submissions by both the Company and the plaintiffs addressing  requisite 
elements for certification and approval, including the existence, absent 
settlement, of a "limited  fund"  insufficient to respond to the volume of 
individual claims, and the fairness, reasonableness and adequacy  of  the  
Settlement. In connection with a fairness  hearing  held  on January 11, 1999, 
the Company and the plaintiffs submitted additional materials to support 
questions  posed  by  the  Court and to answer various objections which had been
made.


        Resolution of 3M Contractual Indemnity Claims.   The Settlement was
conditioned on resolution of claims asserted by 3M under a contractual 
indemnity provision  which was part of the August 1984 transaction in which 
the Company's McGhan Medical subsidiary purchased 3M's plastic surgery 
business.   To  resolve these claims, on April 16, 1998 the Company and  3M 
entered into a provisional agreement (the "3M  Agreement")  pursuant to which 
the Company will seek to obtain releases, conditional on judicial approval of
the Company's settlement and favorable resolution of any appeals, of  claims
asserted  against  3M  in lawsuits  involving  breast  implants manufactured 
by the Company's McGhan subsidiary.  The 3M Agreement provides for release of 
3M's indemnity claim, again conditional on judicial approval of the Settlement 
and favorable resolution of any appeals, upon achievement of an agreed 
minimum number  of  conditional  releases  for 3M. The 3M Agreement requires 
that  this  condition  be  met  or  waived  before  notice of the Settlement 
is given to the class.

        Under  the  terms of the 3M Agreement (as later amended in  January
1999), the Company paid $3 million to 3M in February  1999,  shortly  after 
the Court granted final approval of the Settlement.  Also under the terms of 
the 3M Agreement the Company will assume certain limited indemnification 
obligations  to  3M beginning in the year 2000, subject  to  a  cap  of  $1 
million annually and $3 million to $6 million in total,  depending  on  the  
resolution of certain cases which were not settled prior to the issuance of 
the final order.

        Allocation and Distribution of Settlement  Proceeds.  Following the
procedures adopted in the Mentor Corporation and Acromed Corporation mandatory 
class settlements, the Settlement leaves allocation  and  distribution  of 
the proceeds to class  members  to  later proceedings to be conducted by the 
Court, and contemplates that  the Court may appoint subclasses or adopt other
procedures in order to ensure that all relevant interests  are  adequately  
represented  in the allocation and distribution process.

        Ongoing   Litigation  Risks.   Although  the  Company  expects  the
Settlement to end as a practical matter its involvement  in the current mass
product liability litigation in the United States over breast implants, there 
remain a number of ongoing litigation risks, including:

        1.      Collateral  Attack.   As  in all class actions, the Company
may be called upon to defend individual lawsuits collaterally attacking  the
Settlement  even  after it becomes non-appealable. However,  the  typically
permissible grounds for such attacks (in general, lack of jurisdiction or 
constitutionally   inadequate   class   notice   or   representation)   are 
significantly narrower than the grounds available on direct appeal.

        2.      Non-Covered   Claims.   The  Settlement  does  not  include
several categories of breast implants which the Company will  be  left  to 
defend in the ordinary course through the tort system. These include lawsuits
relating to breast implants  implanted  on  or after June 1, 1993, and 
lawsuits in foreign  jurisdictions.   The  Company regards lawsuits involving 
post-June 1993 implants (predominantly saline-filled implants) as routine  
litigation  manageable  in the ordinary course of business.  Breast implant 
litigation outside of the United States has to date been  minimal, and the  
Court has with minor exceptions  rejected  efforts  by  foreign  plaintiffs  
to file suit in the United States.


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

On  December 21, 1998, the Company held a Special Meeting  of  Shareholders 
(the "Meeting"),  whereby the shareholders approved (i) the election of five 
(5) directors; (ii) the change of the Company's state of incorporation from 
Florida to Delaware by means of a merger of the Company with and  into a 
wholly owned subsidiary; (iii) the increase in the number of authorized 
shares of common stock  of  the Company from 20,000,000 to 25,000,000; (iv) 
the authorization of the issuance of up to 1,000,000 shares of Preferred Stock;
(v) the adoption of revised Bylaws; (vi) the provision in the Company's  
Certificate of Incorporation and Bylaws for advance notice of shareholder 
proposals and nominations  for  the  election of directors; and (vii) the 
Company's 1998 Stock Option Plan.  The vote on such matters was as follows:

1. Election of Directors


                  Total Vote of Each Nominee    Total Vote Withheld From Each
Nominee
Richard G. Babbitt        8,963,954                         12,097
Ilan K. Reich             8,951,589                         24,462
Harrison E. Bull, Esq.    8,136,054                        839,997
Richard Wm. Talley        8,129,848                        846,203
John E. Williams, M.D.    8,050,298                        925,753

2.      The change of the Company's state of incorporation  from Florida to
Delaware by means of a merger with and into a wholly owned subsidiary:

For                 6,592,836
Against                30,146
Abstaining             35,581
Broker Non-Votes    2,324,174

3.      The increase in the number of authorized shares of common  stock of
the Company from 20,000,000 to 25,000,000:


For                 6,586,150
Against                30,146
Abstaining             35,581
Broker Non-Votes    2,324,174

4.      The  authorization  of  the  issuance of up to 1,000,000 shares  of
preferred stock:

For                 6,344,623
Against               231,268
Abstaining             35,720
Broker Non-Votes    2,364,440

5.      The adoption of revised Bylaws:

For                 6,591,672
Against                 5,950
Abstaining             13,989
Broker Non-Votes    2,364,440

6.      The  adoption of the provision  in  the  Company's  Certificate  of
Incorporation and Bylaws for advance notice of shareholder proposals and 
nominations for the election of directors:

For                 6,590,176
Against                 7,650
Abstaining             13,785
Broker Non-Votes    2,364,440

7.      The approval of the Company's 1998 Stock Option Plan:

For                 8,665,383
Against               297,942
Abstaining             12,726
Broker Non-Votes            0



ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDERS MATTERS.

                The Company's common stock trades on the OTC Bulletin Board
under the symbol IMDC.  The Company's  Common  Stock  was  delisted from the 
Nasdaq SmallCap Market effective June 11, 1997.  On March 19, 1999, the 
Company had  787  stockholders of record. The Company's common stock  price 
at  the close of business of March 19, 1999  was  $13.00  per share.

                The  table  below sets forth the high and low bid prices of
the Company's common stock for the periods indicated.  Quotations  reflect  
prices between dealers, do not reflect retail markups, markdowns  or  
commissions,  and  may  not  necessarily   represent  actual transactions.  
No cash dividends have been paid by the Company during such periods.

                High        Low
1997
1st Quarter   $ 8-3/8     $ 5-1/8
2nd Quarter   $ 7-3/8     $ 2-3/4
3rd Quarter   $ 7-7/8     $ 4-1/4
4th Quarter   $ 5-1/4     $ 3

                High        Low
1998
1st Quarter   $ 5-3/4     $ 3-1/8
2nd Quarter   $ 9-7/16    $ 5
3rd Quarter   $ 8-5/8     $ 5-1/8
4th Quarter   $ 10-1/4    $ 4-5/8


        The  Company  has  never paid a cash dividend.  It is  the  present
policy of the Company to retain earnings to finance the  growth  and 
development of its business and to fund the Settlement. Therefore, the 
Company does not anticipate  paying  cash  dividends  on its common stock in 
the foreseeable future.

        On June 10, 1997, the Company announced that its Board of Directors
unanimously adopted a Stockholder  Rights  Plan (the "Plan") and has declared a 
dividend granting to its stockholders the right to purchase (the "Right")  
for  each  share  of the Company's common stock, $.01 par value, one Common 
Share (a "Common Share") at an initial  price  of  $80.   The record date for 
the Rights was June  13, 1997.  The Plan is designed to protect stockholders 
from  various abusive takeover tactics, including attempts to acquire control of
the Company at an inadequate price which would deny stockholders  the full 
value of their investments.  The Rights are attached to the Common Shares of 
the Company and are  not  exercisable.   They  become  detached from the Common 
Shares and become immediately exercisable after any person or group of  persons
becomes  the beneficial owner of 15% or more  of  the  Common Shares (with 
certain exceptions) or 10 days after any person or group of persons publicly 
announces a tender or exchange offer that would result in the same beneficial 
ownership level.


ITEM 6. SELECTED FINANCIAL DATA.

        The following  table  summarizes certain selected financial data of
the Company and should be read in conjunction with the related  Consolidated  
Financial Statements of the Company and accompanying Notes to Consolidated 
Financial Statements.

                                       Years Ended December 31,
                              (in 000's except share and per share data)

                           1998       1997        1996      1995       1994
Income Statement Data:

Net sales               $ 131,566   $106,381    $93,372    $81,626    $80,385

Restructuring expense      (4,202)        --         --         --         --

Operating income (loss)     8,467     (3,577)    (3,956)    (9,190)    3,578

Litigation settlement          --    (28,150)        --         --        --

Income (loss) before income
  tax expense (benefit) and
  extraordinary charges     5,341    (39,696)    (8,165)    (8,576)    5,007

Income tax expense
   (benefit)               (8,432)(4)  1,881(2)   3,214(1)  (1,683)    2,261

Net income (loss)
 before extraordinary
charges                    13,773    (41,577)   (11,379)    (6,893)    2,746

Extraordinary charges      (1,800)        --         --         --        --

Net income (loss)       $  11,973   $(41,577)  $(11,379)   $(6,893)   $2,746

Net income (loss)
  per share of common
  stock(3)
   Basic                   $ 1.15    $ (4.97)   $ (1.46)   $ (0.91)   $ 0.37
   Diluted                 $ 0.92    $ (4.97)   $ (1.46)   $ (0.91)   $ 0.37

Weighted average 
   common shares
   outstanding         10,387,163  8,371,399  7,811,073  7,544,335  7,410,591

(1)  Includes a write-off of domestic deferred tax assets of $2,006.
(2)  Includes  a  provision  of  $1,000  for the conversion  of  foreign
     intercompany accounts to equity. 
(3)  The  earnings  per  share amounts for all years  presented  have  been 
     restated to comply with the provisions  of  Statement  of   Financial  
     Accounting  Standards  No.  128, "Earnings per Share".
(4)  Reflects the recognition of a $8,000 deferred tax asset based on future
     short-term income projections.


                At December 31,
        (in 000's except share and per share data)

                      1998         1997        1996        1995          1994
Balance Sheet Data:

Working capital 
  (deficiency)       ($ 988)     $ 6,460     $ 4,510     $( 5,548)     $ 1,088

Total assets         80,707       58,842      65,912       50,385       47,810

Long term debt, 
  net of current
  installments       27,767       23,574      34,607          583           51

Subordinated long 
  term debt, related
  party                  --        8,813          --           --           --

Stockholders' 
  (deficiency)
  equity            (15,625)     (46,689)     (9,908)      (1,704)       4,479

Dividends paid           --           --          --           --           --


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
        RESULTS OF OPERATION

This Annual Report contains certain  forward-looking  statements within the 
meaning of Section 27A of the Securities Act of 1933, as amended, and Section 
21E  of  the Securities Exchange Act of 1934, as amended,  which  are  intended 
to  be covered by the safe harbors  created thereby.  Investors are cautioned   
that   all  forward-looking  statements   involve   risks   and uncertainty, 
including without limitation, the ability of the Company  to  continue its 
expansion strategy, changes in costs of raw materials, labor, and employee 
benefits, as well as  general  market  conditions, competition and pricing.  
Although the Company  believes  that  the  assumptions  underlying  the  
forward-looking statements contained herein are reasonable, any of the 
 assumptions could be inaccurate,  and therefore, there can be no assurance 
that  the  forward-looking  statements included in this Annual Report  will 
prove to be accurate.  In light of the significant uncertainties  inherent  in  
the forward-looking statements including herein, the inclusion of such 
information should not be regarded as a representation  by the Company or any
other person that the objectives and plans of the Company will be achieved.

Results of Operations

Commencing in 1992-with the advent of the mass tort litigation arising from
the Company's silicone gel-filled   breast  implant  products-until   early  
1998,  the  Company's financial performance was adversely impacted by the costs 
of managing its litigation problems as well as by the costs of improving 
manufacturing  practices  and  policies  in  accordance  with FDA regulations.
In addition, the Company invested significant resources to increase its 
international  sales and market presence.  Due to these and other factors, 
sales grew during that period although expenses grew at a significantly 
higher  rate,  leading to a steady deterioration in the Company's financial 
performance.

In early 1998, a  new  senior  management  team  was  appointed  and became
focused on two primary objectives:  settling the breast implant litigation and 
making the  Company consistently profitable on par with its peers in the 
medical device industry. 

By  June  1998,  settlement  agreements  with  the  plaintiffs' negotiating 
committee and 3M Corp. had been  reached and preliminarily approved by the 
Court.   As  part  of  this approval the Court also entered an injunction  
staying  virtually  all  of  the  breast  implant litigation against the 
Company, thereby relieving the Company of the substantial monetary and time 
burdens of  defending  the tens of thousands of cases in which it was named 
as a defendant.  On February 1, 1999, the Court entered a final order 
approving  the  settlement;  and  on March 3, 1999 the statutory period for
filing appeals expired, with no notices of appeal having been filed.   In 
order to reflect the costs of the litigation settlement, the Company took a
$28.2 million charge to the  1997  results of operations, in addition to the
$9.2 million charge  taken  in 1993.  Management believes that these  
reserves  properly reflect all of the costs of the litigation settlement.


Also in 1998, as  the framework for the litigation settlement began to fall
into place, the new management team undertook  a  strategic  review of the 
Company's operations and businesses. Based on that effort a restructuring 
plan was implemented  beginning in the third quarter of 1998.  This plan
included an approximate 10% worldwide reduction in headcount,  the  closing
of certain administrative offices  and  the exiting or discontinuance of 
certain smaller unprofitable product lines.  The plan also included a renewed
focus  on  new  product development (so as to provide a foundation for future
sales growth),  and a new emphasis on improving  manufacturing  efficiencies
and reducing expenses generally.   During  the third and fourth quarters of 
1998, a total of $4.2 million was expensed as a restructuring  charge  to 
recognize   various   costs   associated   with implementing that plan.

By  the  end  of  1998  the transition from a history of unprofitability to
profitable operations was successfully   accomplished.    Operating   profit   
before   restructuring expense-which is defined as income from continuing  
operations  before  interest,  foreign  exchange gains and losses, taxes, 
litigation settlement and extraordinary charges-was $12.7 million in 1998, 
as compared to an operating loss of $3.6 million in 1997.  Moreover, based 
on the turnaround in  profitability, the resolution of the breast implant 
litigation  and the financing alternatives available to fund the settlement,
the Company's independent public accountants,  BDO  Seidman LLP, removed from
their audit report for the 1998 financial statements the "going concern"
explanatory  paragraph  issued in the prior year.

Summary  financial  table.   Set  forth  below  is  a table which shows the
individual components of the Company's actual results of operations, both in
dollars  (in thousands) and as a percent of net sales;
and including the percentage increase (decrease) from the prior year.

                           1998                1997            1996
                                   % Inc.              %Inc.          %Inc.
(in 000's)
Sales                   131,566   23.7%      106,381   13.9%   93,372  14.4%
Cost of Goods Sold       47,954   27.4%       37,643    6.7%   35,295  17.0%

Gross Profit             83,612   21.6%       68,738   18.4%   58,077  12.8%
As a % of sales            63.6%                64.6%            62.2%

Marketing                33,364   11.2%       30,002   19.6%   25,088    7.0%
As a % of sales            25.4%                28.2%            26.9%
G&A                      28,213  -15.7%       33,450    7.0%   31,252   -4.8%
As a % of sales            21.4%                31.4%            33.5%
R&D                       9,366    5.7%         8,863  55.7%    5,693   29.6%
As a % of sales             7.1%                 8.3%            6.1%
Restructuring expense     4,202  100.0%            -              -
As a % of sales             3.2%                 0.0%            0.0%

Operating expenses       75,145    3.9%       72,315   16.6%    62,033    2.3%
As a % of sales            57.1%                68.0%             66.4%

Operating income/(loss)   8,467               (3,577)           (3,956)
As a % of sales             6.4%                -3.4%             -4.2%

Litigation settlement        -               (28,150)               -
Net interest expense &
  debt costs             (3,812)              (6,173)           (4,277)
Income (loss) before
  income taxes and 
  extraordinary charges   5,341              (39,696)           (8,165)


 

        Sales.  While the Company's revenues are subject to adjustments due
to changes in price or volume  of  units  sold,  revenue  increases  from 1996 
through  1998  were primarily a result of increased volume.  Based on 
publicly available information, the Company believes that the markets for its
products  are  growing,  and  that it is increasing  its  market  share  in
relation to competitors.

        Sales in the United States accounted for 65%,  63% and 65% of total
net sales in 1998, 1997 and 1996, respectively.  International sales accounted 
for 35%, 37% and 35% of total net sales in 1998, 1997 and 1996, respectively. 
The accelerated growth in 1998 in U.S.sales was due primarily to the 
introduction of silicone gel-filled  implants  for  reconstructive  and 
revision surgery, which improved the  overall  sales  mix,  as  well  as  
increased  sales  of the Company's anatomical and smooth-shaped breast 
implants.

        Cost of goods sold.  The largest factors in the variation from year
to year in cost of goods sold as a percentage of net sales are the cost of 
raw materials and  the  yield  of finished goods from the Company's  
manufacturing  facilities.  Both factors were fairly stable from 1996 through
1998.  In late 1998 the Company entered into  a  long-term  strategic  
alliance  with  its largest supplier of raw materials, which should result in 
improved cost savings in the coming years.

        Marketing   expenses.    The  increase  in  marketing  expenses  is
generally correlated to increased sales, based on commissions  to sales 
representatives and other payments to third parties with sales-based payment 
arrangements.  Marketing  expenses  are  also affected by the overhead 
associated with supporting various sales and marketing functions, and by  
participation  in trade conventions and shows. In   1998,   the  Company  
began  its  efforts  to  reevaluate  and,  where appropriate, reduce these 
expenses through budgeting  and  planning.  As a result, marketing expenses 
declined as a percentage of sales to 25% in 1998 from 28% in 1997 and 27% in 
1996.

        General and administrative  expenses.  G&A expenses are affected by
overall headcount in various  administrative  functions and  the  legal,  
accounting  and  other outside services which were necessary  to defend the 
Company  in  the  breast  implant  litigation  and negotiate a settlement. 
Also, in 1997 G&A expenses were affected by the legal and accounting costs 
necessary to complete the audits for 1996 and  1997.   The  number and cost 
for employees engaged in general and administrative positions increased in 
1997  and  early  1998,  at  a rate greater than the increase in gross profit
dollars. However,   beginning   with   the   implementation   of   new  
management's restructuring plan in mid-1998, these were reduced; thereby 
resulting in the significant decline in general and administrative expenses
for  1998  as  compared to 1997.  As a result, G&A expenses declined  as  a
percentage of sales to just 21% in 1998 from 32% in 1997 and 33% in 1996.

        Research  and  development  expenses.   R&D  expenditures increased
slightly for 1998 as compared to 1997; while as a percentage of sales, R&D  
expenses  were 7% in 1998 as compared to 8% in 1997 and 6% in 1996.  The Company
invested $3.5 million, $2.4 million and $1.5 million at its BioEnterics  
subsidiary  in  connection  with  the  development  of obesity products.  
Now that that business unit  has  begun  to  achieve  profitability,  the 
Company anticipates that overall R&D expenditures will be lower as a 
percentage of sales in the coming years.   In  1998, the Company began 
considering various options  to  seek  a  partner  to assist in the 
development of BioEnterics' business.

        Interest expense.  Net interest  expense declined from $6.2 million
in 1997 and $4.3 million in 1996 to $3.8 million in 1998 due to lower overall 
debt and reduced penalty charges, as detailed below. Net interest expense of 
approximately $6.2 million  in 1997 was impacted by the incurrence of penalty
charges totaling $1.6 million due to the Company's failure  to  provide  an
effective registration statement to  the  holders of the 4% convertible 
debentures issued earlier that year, offset by a reduction in interest
expense due  to  the  retirement  of  $15 million of the 11% senior secured
convertible notes with the proceeds that had been held in an escrow  account.
Additionally,  in 1997 the Company accrued (but did  not  pay) interest on 
approximately $9.9 million of 10.5% subordinated notes which were incurred
primarily in  the later half of the year to fund its working capital needs.
In July 1998, the Company converted all of  those  10.5% subordinated notes into
common stock; and as of April 1998 all of the 4% debentures were converted  
into  common  stock and the Company is no longer incurring any penalty 
charges.  Also, in September 1998 the Company  refinanced its $19.6 million
of senior debt to increase the  maturity  from  March 1999 to September 2000,
and  also  borrowed  $8 million, at 10% interest rate, until the same date.

        Foreign currency  translation  loss.   Historically  the  Company's
subsidiaries have incurred significant intercompany debts (totaling more than 
$29 million for non-U.S. subsidiaries), which are eliminated  in  the  
consolidated  financial  statements.   However,  those intercompany debts, 
which are denominated  in  various  foreign  currencies,  give  rise  to  
translation adjustments.  In 1998, the new management  team  evaluated 
various alternatives for reducing the Company's foreign currency exposure, 
and concluded  to  convert  substantially  all  of  the  non-U.S. intercompany 
debts (particularly in countries  with volatile local currencies) to the 
capital of the respective subsidiaries.  The fourth quarter of 1997 included  a 
provision of $1 million for expenses arising from those debt conversions.  
Beginning in 1999, virtually all of the Company's sales will be denominated in 
either dollars or euros, and the Company is considering  a  hedging  program 
to  provide protection against fluctuations in the euro in relation to budgeted
sales.

        Operating Income (Loss).  The operating loss for 1997 reflected the
significant selling, general and administrative expenses which the Company 
bore  under prior management.  Beginning in 1998 the new senior management team 
undertook a restructuring  program which was designed to reverse the  
Company's  poor  operating performance and significantly  improve  the
Company's operating margin.  The positive results  of  that  program are 
reflected in the $12.7 million of operating profit (excluding restructuring 
expense) for 1998.

        Income Tax Expense (Benefit).  The  tax  expense  in 1997 pertained
primarily to foreign operations.  In 1998 the Company had an income tax 
benefit  of $8.4 million which primarily pertained to the recognition of an 
$8 million deferred tax asset based on an estimate of short-term future
forecasted taxable income.  The Company has a remaining deferred  tax asset
of approximately $15.5 milion which has a 100% valuation allowance.

Financial Condition

        Liquidity.  During 1998, the new senior management team focused  on
reversing the significant negative  cash  flow of the prior two years.  Based
on the operating profit and net income for 1998 and improved inventory turns,
net cash provided by operating activities totaled $2.7 million for 1998, as
compared to net cash  used  in  operating  activities  of $13.9 million and
$19.2 million for 1997 and 1996, respectively.   The  swing  from  using  
cash  in  operating activities  to providing cash from operating activities,
totaling approximately $16.6 million, is  the  result  of  the efforts which 
were undertaken to reduce costs and  inventory  and  thereby  improve  cash  
flow.  As further reductions in cost of goods, G&A  and  R&D outlined above 
continue to take effect, the Company  believes that cash flow from
operations will continue to improve.

        The  Company  has  funded  its  cash  needs  from 1996 through 1998
through a series of debt and equity transactions, including:

  $35 million of proceeds received upon the issuance of  11% senior secured
convertible notes in a private  placement transaction completed in January 
1996. Of  the  proceeds received, $14.8 million was placed  in  an escrow 
account to be released within one year, following court approval of a 
mandatory non-opt-out  class  settlement  of the breast implant litigation.
Inasmuch as that condition was not met, in July 1997 the Company returned  
those escrowed funds to the senior noteholders, in exchange for warrants to 
purchase $13.9 million of common stock at $8.00 per share (subsequently 
adjusted to $7.50 per share).  The  conversion  price  of the 11% senior 
secured convertible  notes was originally $10 per share.  In July 1997, the 
Company and the senior noteholders agreed  to  change  the  conversion price to
$5.50 per share at 103% of the principal balance as part of an overall 
restructuring  plan which included the waiver of past defaults.  In
September 1998 the Company and the senior Noteholders  agreed to extend the
maturity of this debt  from March 31, 1999 to September 30, 2000 and to 
exchange  this  debt for non-convertible junior  secured  debt  and  warrants  
to purchase common stock at $5.50 per share.  Under certain circumstances, 
the interest rate of these  notes  can be reduced to 9%.  At December 31, 
1998, $19.6 million of the 11% senior notes was outstanding.

  $3 million of proceeds received in June 1996 upon  the  sale  of  344,333
shares of common stock in a Regulation S transaction to non-U.S. investors, 
at a price of $8.7125 per share.

  $5.7  million of proceeds received in January 1997 upon the issuance  of
$6.2 million principal amount of 4% convertible debentures, due January 30, 
2000. These debentures were convertible at 85% of  the market price of the 
common stock less an additional discount of 6%.  As of April 6, 1998, all of
these  debentures  had  been  converted  into an aggregate of 1,724,017 
shares of common  stock  at  prices  ranging  from  $2.60  to  $4.44  per 
share.   No debentures are currently outstanding.

  $9.9  million  of  proceeds received periodically from April 1997  until
January 1998 from an entity affiliated  with the Company's  former  chairman. 
That  indebtedness  was denoted as the Company's 10.5%  subordinated  notes.
By  the  terms  of  the  11%  senior  secured convertible notes, the 10.5%
subordinated  notes  were  junior  in right of payment and liquidation and,
accordingly, no interest or principal  payments  were made with respect 
thereto.   In  July  1998  the Company and its former chairman agreed to 
convert  all  of the 10.5% subordinated notes (including accrued interest) 
into 860,000 shares of common stock and  a warrant to purchase 260,000 shares
at $12.40 per share. At the time, the Company's common stock  was trading at 
approximately $7.50 per share.

 $8 million of proceeds received in September  1998  from  the issuance of
the Company's 10% senior  secured  notes,  due September 30, 2000.  Under the
terms  of  that loan, $3 million was placed  in a court-supervised  escrow  
account  to  satisfy  the  Company's deposit obligation under the settlement 
agreement for the breast implant litigation, and the balance was reserved for
allocation to specific working capital and capital expenditure projects.

        Previously,  the  Company's  Dutch  subsidiary had a line of credit
with a major Dutch bank, which  was  collateralized  by  the  accounts 
receivable,  inventories  and certain other assets of that subsidiary.  As 
part of the restructuring  program undertaken in 1998, that line of credit 
was repaid in its entirety and cancelled.

        The  Company  currently  has  a  net  operating  loss  ("NOL")  for
financial statement purposes of approximately   $53   million.    The  
Company  has  federal   tax   credit carryforwards of approximately $2
million  and  state  NOL  and credit carryforwards  of  approximately  $5.2
million and $570,000 respectively.  The federal  credit  carryforward amounts
will  expire  in various years beginning in 2008.  If the  Company  has a 
change in ownership as defined by Internal Revenue Code Section 382, use of
these carryforward amounts could be limited.

        A significant  portion  of  the  cost  of the litigation settlement
expenses discussed in Note 14 will be  deductible  for  federal and state 
income tax purposes  when  qualified consideration is deposited in a
court supervised escrow  account.   To the extent the settlement gives rise
to a federal NOL, such NOL may be carried back 10 years.

        The difference between the NOL for financial reporting purposes and
federal income tax purposes results from differences in  accounting for 
allowance for returns, accrued litigation settlements and other accrued 
liabilities and allowances  not  currently deductible for tax purposes. In 
1997 the Company  had  provided  a 100% valuation allowance on deferred  tax  
assets substantially resulting from the NOL carryforwards discussed  above.   
In 1998 the Company recognized $8 million as an income tax benefit with 
respect to that NOL carryforward.  The $8 million deferred tax asset was 
recognized based on shot-term future forecasted taxable  income.  At 
December 31, 1998 the Company has an approximately $15.5 million deferred ta
asset  which  has a 100% valuation allowance.

        Breast Implant Settlement.  Under the terms of the final settlement
order entered by the Court on  February  1,  1999  with respect to the breast
implant litigation,  the Company will be obligated to pay the plaintiffs 
$25.5 million  (plus  accrued  interest)  by  June  2, 1999. Previously, in 
October 1998, the Company had funded a portion of its payment obligation to the
plaintiffs by depositing $3 million of cash and 426,323 shares of common 
stock.  While the Company is obligated to repurchase that common stock for 
$3 million by June 2, 1999, it had assigned that right  to the senior 
noteholders in April  1998  as  part  of  the  negotiations  leading  to  the
preliminary settlement agreement.  Also, in February  1999  the Company paid 
$3 million to 3M Corp. in satisfaction  of its current obligations under
the settlement agreement with that company.

        The  Company  plans  to  meet  its  funding  obligation  under  the
settlement agreement in a complete and timely  manner from a combination of 
both cash on hand and the proceeds to be received upon the exercise of 
certain  warrants,  which were issued in contemplation of this event.  The 
Company reserves the right to explore utilizing other  equity and/or debt 
financing sources in the public or private markets  in  order  to  meet its 
funding obligation  under  the  settlement agreement and to repay or
refinance its existing senior debt.

Capital Expenditures

        Expenditures on property and equipment approximated $3.7 million in
1998, compared to $5.1  million  in 1997 and  $4  million  in  1996.   The  
majority  of  the expenditures in each year were for building improvements,  
computer  equipment  and  production  equipment  to increase capacity and
efficiency.    During   1999   and   2000  the  Company  expects  to  spend
approximately $4 million annually on various capital projects, including  
management  information systems and improvements to manufacturing 
capabilities and new manufacturing facilities.   Funding  for these capital 
expenditures is expected to be through cash provided by operating activities.

Significant Fourth Quarter Adjustments

        During  the fourth quarter of the year ended December 31, 1998, the
Company recorded significant adjustments  which  increased  net income by 
$6.2 million.  The adjustments were to recognize  an  extraordinary charge of 
$1.8 million  for  the  issuance  of warrants in the restructuring of the 
Company's 11%  notes  (which  occurred  in  the  fourth  quarter).   In 
addition, an income tax benefit of  $8  million  was  established  to  
recognize  a  portion of the benefit expected to be received from the
Company's substantial net operating loss carryforward.

        During the fourth quarter of the year ended December  31, 1997, the 
Company recorded significant  adjustments  which  decreased  income  by 
$29.7 million.   The adjustments were to recognize   the  latest  
developments  in  the  Company's  breast   implant litigation and the 
anticipated settlement as well as income tax expense for the foreign 
subsidiaries.

        During  the fourth quarter of the year ended December 31, 1996, the
Company recorded significant  adjustments  which  decreased  income  by  
$3.8  million.  The adjustments were to increase the write off  of  the  
deferred  tax  assets  of  $2  million, to increase provision for product 
returns by $0.9 million and to increase provision for product liability  and
record royalty expenses under international royalty agreements.

        The  Company's new management has installed procedures  to  monitor
quarterly financial statements to ensure there are minimal adjustments.  
These include a review by the Company's independent public accountants of the
quarterly financial statements.

Impact of Inflation

        The Company  believes that inflation has had a negligible effect on
operations over the past four years.  The Company believes that it can offset 
inflationary increases in the cost of materials and labor by increasing sales 
prices and improving operating efficiencies. 

Impact of Year 2000

       The Company has conducted  a  review  to identify which of its 
computer and other business operating  systems will be affected by the  "Year
2000"  problem  and  has developed a project plan and schedule to solve this
issue.  Among the functions and systems impacted could be inventory and 
accounting systems, electronic data interchange, and mechanical systems
operating everything from office  building  environmental controls to 
telephone switches and fax machines.  The Company is on schedule to be Year
2000  compliant  by  July 31, 1999.  The Company believes that the costs of
modifications, upgrades, or replacements of software,  hardware, or capital
equipment which would not be incurred but for Year 2000 compatibility 
requirements  have  not and will not have a material impact on the Company's
financial position or results of operations. 

The Company is also engaged in communications with its significant business
partners, suppliers  and  customers  to determine the extent to which the 
Company  is vulnerable to such third parties' failure to address  their  own  
Year  2000  issues.  The Company's assessment of the impact of its  Year 2000 
issues includes an assessment of the Company's vulnerability to such third 
parties.  The Company  is  seeking assurances from its significant business 
partners, suppliers and customers that their computer  applications  will not
fail due to Year 2000 problems.  Nevertheless, the Company does not control,
and can give no assurances as to the substance or success of the Year 2000
compliance  efforts  of such independent  third  parties  and  the  Company
believes that there is a risk that certain of these  third  parties  on  
whom  the Company's finances and operations depend will experience Year 2000
problems that could affect the  financial  position or results of operations
of the Company.   These  risks  include,  but  are  not  limited to, the 
potential inability of suppliers to correctly or  timely  provide necessary 
services, materials and  components  for  the Company's operations and the 
inability  of  lenders,  lessors  or  other  sources  of  the Company's
necessary capital and liquidity to make funds available to the Company when 
required.

New Accounting Standards

        In  June  1998,  the  Financial  Accounting Standards Board  issued
Statement of Financial  Accounting  Standards  No.  133,  "Accounting   for  
Derivative Instruments and Hedging Activities," which requires entities to 
recognize all derivatives as either assets or liabilities in the statement
of  financial  position  and  measure  these instruments at fair value.  
SFAS No. 133 is effective for all fiscal years beginning after June  15, 1999.
The Company is currently reviewing SFAS No. 133 and has of yet been unable 
to fully evaluate  the  impact,  if any, it may have on future operating 
results or financial statement disclosures. 

ITEM 7(a).      MARKET RISKS

                Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                See Exhibit (a)(1)

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

        On  March  11,  1998,  the Company announced the resignation of its
outside auditor, Coopers & Lybrand, L.L.P. as of March 6, 1998.   All  
developments and related issues in connection with the resignation of Coopers 
& Lybrand, L.L.P. are  contained  in  the  Form  8-K Current Report of the
Company,  as  filed  with  the S.E.C. on March 16, 1998, and amended by the
Form 8-K/A filed with the S.E.C. on March 27, 1998, which are incorporated 
herein by reference.

ITEM 10.        DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

        The information required  in  this  item  is incorporated herein by
reference to portions of the Proxy Statement for Annual Meeting of 
Shareholders  to  be  filed  with the Securities and Exchange
Commission  within  120 days of the close of the fiscal year ended December
31, 1998.

ITEM 11.        EXECUTIVE COMPENSATION.

        The information  required  in  this  item is incorporated herein by
reference to portions of the Proxy Statement for Annual Meeting of Shareholders
to  be  filed  with the Securities and Exchange Commission  within  120 days
of the close of the fiscal year ended December 31, 1998.

ITEM 12.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT.

        The information  required  in  this  item is incorporated herein by
reference to portions of the Proxy Statement for Annual Meeting of Shareholders
to  be  filed  with the Securities and Exchange Commission  within  120 days
of the close of the fiscal year ended December 31, 1998.

ITEM 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

        The   information   required   in   this   item  is incorporated 
herein by reference to portions of the Proxy  Statement  for  Annual Meeting
of Shareholders to be filed with  the Securities and Exchange Commission 
within 120 days  of  the close of the fiscal year ended December 31, 1998.


PART IV

ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)(1)        Consolidated Financial Statements:               Page(s)

              Report of Independent Accountants                F-1
              Consolidated Balance Sheets as of
              December 31, 1998, and 1997                      F-2

              Consolidated Statements of Operations for the
              Years ended December 31, 1998, 1997 and 1996     F-4

              Consolidated Statements of Stockholders'
              Deficiency for the years ended December 31,
              1998, 1997 and 1996                              F-6

              Consolidated Statements of Cash Flows for the
              Years ended December 31, 1998, 1997 and 1996     F-7

              Notes to Consolidated Financial Statements       F-9



(a)(2)        Consolidated Financial Statement Schedules:

              Schedule II - Valuation and Qualifying Accounts  F-34


        All other schedules are omitted because the required information is
not present or is not present in amounts sufficient to  require  submission
of  the  schedule or because the information required  is  given  in  the  
consolidated  financial  statements  or notes thereto.


(a)(3)       Exhibits:
Exhibit      Description
2.1          Agreement and Plan of Merger dated as of December 22, 1998 by 
             and between INAMED Corporation and INAMED Corporation (Delaware).
             (Incorporated herein by  reference  to  Exhibit 2.1 of the 
             Company's Current Report on Form  8-K filed with the Commission
             on December 30, 1998.)
3.1          Registrant's Articles of Incorporation, as amended December 22, 
             1998.
3.2          Registrant's By-Laws, as amended December 22, 1998.
4.1          Specimen Stock Certificate for INAMED Corporation Common Stock, 
             par value $.01 per Share.  (Incorporated  herein  by  reference 
             to Exhibit 3.3 of the Company's Financial Report on Form 10-K 
             for the year ended December 31, 1995 (Commission File No. 0-7101).)
4.2          Warrant Agreement dated as of  July 2, 1997 between INAMED 
             Corporation and U.S.  Stock Transfer Corporation. (Incorporated  
             herein  by  reference  to Exhibit 10.6 of the  Company's  Current 
             Report on Form 8-K filed with the Commission on July 9, 1997.)
10.1         Stock Option Plan, together with  form  of Incentive Stock Option 
             Agreement and Nonstatutory Stock Option Agreement. 
             (Incorporated herein by reference to Exhibit 10.1 of the 
             Company's Financial Report  on  Form  10-K for the year ended
             December 31, 1995 (Commission File No. 0-7101).)
10.2         Stock Award Plan.  (Incorporated herein by reference to Exhibit
             10.2 of the Company's  Financial  Report on Form 10-K for the 
             year ended  December  31, 1995 (Commission File No. 0-7101).)
10.3         Non-Employee  Directors'   Stock  Option  Plan.   (Incorporated 
             herein  by reference to Exhibit 10.3 of the Company's  Financial  
             Report  on Form 10-K for the year ended December 31, 1995 
             (Commission File No. 0-7101).)
10.4         Form   of   INAMED   Corporation   February  27,  1997  Letter   
             Agreement. (Incorporated herein by reference to Exhibit 10.4  of
             the  Company's Financial Report on Form 10-K for the year ended 
             December 31, 1996.)
10.5         Form of INAMED Corporation 4% Convertible Debenture.  
             (Incorporated  herein by reference  to  Exhibit  10.5 of the 
             Company's Financial Report on Form 10-K for the year ended 
             December 31, 1996.)
10.6         Form of Registration Rights Agreement. (Incorporated herein by 
             reference to Exhibit 10.6 of the Company's  Financial  Report  
             on Form 10-K for the year ended December 31, 1996.)
10.7         Form of Convertible Debenture Agreement. (Incorporated  herein by 
             reference to Exhibit 10.7 of the Company's Financial Report on 
             Form 10-K  for  the  year ended December 31, 1996.)
10.8         Rights Agreement, dated as of June 2, 1997, between INAMED 
             Corporation and U.S.  Stock  Transfer  Corporation,  which  
             includes  the  form  of  Rights Certificate as Exhibit A and the
             Summary of Rights to Purchase Common Stock as Exhibit B. 
             (Incorporated  herein  by reference to Exhibit 4.1 of the Company's
             Current Report on Form 8-K filed with the Commission on May 23,
             1997.)
10.9         Form of Letter from the Board of Directors of INAMED Corporation 
             to Shareholders to be mailed with copies of the Summary of 
             Rights appearing as Exhibit  B  to Exhibit 1 hereto.   
             (Incorporated  herein  by  reference  to Exhibit 99.2 of the 
             Company's  Current  Report on Form 8-K filed with the Commission
             on May 23, 1997.)
10.10        Amendment No. 1 to Rights Agreement, dated as of June 13, 1997,
             between INAMED  Corporation and U.S. Stock Transfer Corporation.
             (Incorporated herein by reference to Exhibit  10.10  of  the  
             Company's Financial Report on Form 10-K for the year ended 
             December 31, 1996.)
10.11        Letter Agreement dated as of July 2, 1997 by and among INAMED 
             Corporation, Appaloosa Management L.P., and Donald K. McGhan.
             (Incorporated herein by reference to Exhibit 10.1 of the 
             Company's Current Report on Form 8-K filed with the Commission 
             on July 9, 1997.)
10.12        Second Supplemental Indenture, dated as of July 2, 1997, between 
             INAMED Corporation and Santa Barbara Bank & Trust. (Incorporated
             by reference to Exhibit 10.2 of the Company's Current Report on 
             Form 8-K filed with the Commission on July 9, 1997.)
10.13        Letter of Representation of INAMED Corporation  dated as of 
             July 2, 1997 in favor of holders of 11% Secured Convertible 
             Notes due 1999.  (Incorporated herein by reference to Exhibit 
             10.3 of the Company's Current Report on Form 8-K filed with
             the Commission on July 9, 1997.)
10.14        Consent and Waiver of certain holders of 11% Secured Convertible 
             Notes due 1999  dated  as  of  July 8, 1997.  (Incorporated herein
             by  reference  to Exhibit 10.4 of the Company's Current  Report on 
             Form 8-K filed with the Commission on July 9, 1997.)
10.15        Letter executed by Appaloosa Investment Limited Partnership, 
             Ferd L.P. and Palomino Fund Ltd. withdrawing the notice of 
             default under the Indenture.
             (Incorporated herein by  reference to Exhibit 10.5 of the 
             Company's Current Report on Form 8-K filed with the Commission 
             on July 9, 1997.)
10.16        Amendment No. 2 to Rights Agreement, dated as of July 2, 1997, 
             between INAMED  Corporation and U.S.  Stock  Transfer  
             Corporation.   (Incorporated herein by reference  to  Exhibit  
             10.7 of the Company's Current Report on Form 8-K filed
             with the Commission on July 9, 1997.)
10.17        Form of Note Purchase Agreement.   (Incorporated  herein  by  
             reference  to Exhibit 99.1  of the Company's Current Report on 
             Form 8-K filed with the Commission on April 19, 1996.)
10.18        Indenture  between  the  Registrant  and  Santa  Barbara  Bank  & 
             Trust, as trustee. (Incorporated herein by reference to 
             Exhibit 99.2 of the Company's  Current Report on Form 8-K filed
             with the Commission on April 19, 1996.)
10.19        Form of 11% Secured Convertible Note due 1999.  (Incorporated 
             herein by reference to Exhibit 99.3 of the Company's Current 
             Report on Form 8-K filed with the Commission on April 19, 1996.)
10.20        Security  Agreement  between the Registrant and Santa Barbara Bank
             & Trust, as trustee.   (Incorporated  herein  by  reference  
             to  Exhibit  99.4  of  the Company's Current Report on Form 8-K
             filed with the Commission on April 19, 1996.)
10.21        Guarantee and  Security  Agreement  between  certain  
             subsidiaries  of  the Registrant and  Santa  Barbara  Bank  &
             Trust,  as  trustee.  (Incorporated herein by reference to
             Exhibit 99.5 of the Company's Current Report on Form 8-K filed 
             with the Commission on April 19, 1996.)
10.22        Guarantee  Agreement between certain subsidiaries  of  the  
             Registrant  and Santa Barbara Bank  &  Trust,  as  trustee.  
             (Incorporated herein by reference to Exhibit 99.6 of the 
             Company's Current  Report on Form 8-K filed with the Commission
             on April 19, 1996.)
10.23        Loan Purchase Agreement between  First  Interstate  Bank  of 
             California and Santa Barbara  Bank  & Trust, as trustee.  
             (Incorporated herein by  reference  to Exhibit 99.7 of the 
             Company's Current Report on Form 8-K dated filed with the
             Commission on April 19, 1996.)
10.24        Escrow Agreement between the Registrant and Santa Barbara Bank 
             & Trust, as trustee.   (Incorporated  herein  by  reference  to
             Exhibit  99.8  of  the Company's Current Report on Form 8-K filed 
             with the Commission on April 19, 1996.)
10.25        Escrow Agreement between the Registrant and Santa Barbara Bank &
             Trust, as trustee.   (Incorporated  herein  by  reference  to  
             Exhibit  99.9  of  the Company's Current Report on Form 8-K filed 
             with the Commission on April 19, 1996.)
10.26        Settlement Agreement dated April 2, 1998. (Incorporated herein by 
             reference to Exhibit 10.26 of the Company's Current Report on 
             Form 8-K filed with the Commission on April 17, 1998.)
10.27        Letter Agreement with Appaloosa Management, L.P. dated April 2, 
             1998.  (Incorporated herein by reference to Exhibit 10.27 of the
             Company's Current Report on Form 8-K filed with the Commission 
             on April 17, 1998.)
10.28        Letter Agreement  with  Donald  K. McGhan dated July 8, 1998. 
             (Incorporated herein by reference to Exhibit 99.3 of the  
             Company's  Current  Report on Form 8-K filed with the Commission
             on July 14, 1998.)
10.29        Form  of 10% Senior Secured Note due March 31, 1999.  
             (Incorporated  herein by reference to Exhibit 99.3 of the 
             Company's Current Report on Form 8-K filed with the Commission 
             on October 15, 1998.)
10.30        Note Purchase Agreement Among INAMED Corporation, certain 
             purchasers and Appaloosa Management, L.P., as Collateral Agent, 
             dated as of September, 30, 1998 (Incorporated  herein  by  
             reference  to Exhibit 99.4 of the Company's Current Report on 
             Form 8-K filed with the Commission on October 15, 1998.)
10.31        Form of Warrant (Incorporated herein by reference to Exhibit 
             99.5 of the Company's Current Report on Form 8-K filed with  the 
             Commission on October 15, 1998.)
10.32        Security Agreement by INAMED Corporation and Appaloosa 
             Management, L.P., as  Collateral Agent, dated as of September, 
             30, 1998 (Incorporated  herein by reference to Exhibit 99.6 of 
             the Company's Current Report on Form 8-K filed with the 
             Commission on October 15, 1998.)
10.33        Guarantee  and  Security  Agreement  between  certain  
             subsidiaries  of the Registrant and Appaloosa Management, L.P., 
             as Collateral Agent, dated as of September, 30, 1998 
             (Incorporated herein by reference to Exhibit 99.7 of the 
             Company's Current Report on Form 8-K filed with the Commission 
             on October 15, 1998.)
10.34        Guarantee  Agreement by certain subsidiaries of the Registrant 
             in favor  of the holders of the Registrant's 10% Senior Secured
             Notes Due March 31, 1999 and Appaloosa Management, L.P., as 
             Collateral Agent, dated as of September, 30, 1998 (Incorporated
             herein  by  reference  to Exhibit 99.8 of the Company's Current
             Report on Form 8-K filed with the Commission on October 15, 1998.)
10.35        Intercreditor  Agreement between Appaloosa Investment  
             Partnership I, L.P., as  Collateral Agent and Santa Barbara Bank
             and Trust, dated  as  of September, 30, 1998  (Incorporated  
             herein  by  reference to Exhibit 99.9 of the Company's Current
             Report on Form 8-K filed with the Commission on October 15, 1998.)
10.36        Registration  Rights  Agreement, dated as  of September, 30, 1998
             (Incorporated herein  by  reference  to  Exhibit 99.10 of the 
             Company's Current Report on Form 8-K filed with the Commission 
             on October 15, 1998.) 
10.37        Amendment No. 3 to Rights Agreement, dated as of September, 30, 
             1998  between   INAMED   Corporation  and   U.S.   Stock   
             Transfer   Corporation (Incorporated herein by reference  to  
             Exhibit  99.11  of the Company's Current Report on Form 8-K
             filed with the Commission on October 15, 1998.)
10.38        Form of 11% Senior Subordinated Secured Note due March 31, 1999 
             or September 1, 2000.  (Incorporated herein by  reference  to  
             Exhibit 99.1 of the Company's Current Report on Form 8-K filed 
             with the Commission on November 19, 1998.)
10.39        Subordinated Indenture between INAMED Corporation and Santa 
             Barbara Bank and Trust, as Trustee, dated as of November 5, 
             1998.  (Incorporated  herein by reference to Exhibit 99.2 of the
             Company's Current Report on Form 8-K filed with the Commission 
             on November 19, 1998.)
10.40        Form of Exchange Warrant. (Incorporated herein by reference to 
             Exhibit 99.3 of the Company's Current Report on Form 8-K filed 
             with the Commission on November 19, 1998.)
10.41        Form of Warrant. (Incorporated herein by reference to Exhibit 99.4
             of the Company's Current Report on Form 8-K filed with the 
             Commission on November 19, 1998.)
10.42        Subordinated Security Agreement between INAMED Corporation and 
             Santa Barbara  Bank  and  Trust,  as  trustee,  dated  as  of  
             November  5, 1998. (Incorporated herein by reference to Exhibit 
             99.6 of the Company's Current Report on Form 8-K filed with the 
             Commission on November 19, 1998.)
10.43        Subordinated  Guarantee and Security Agreement between certain 
             subsidiaries of the Registrant and Santa Barbara Bank and Trust,
             as trustee, dated as of November 5, 1998. (Incorporated herein 
             by reference to Exhibit 99.7 of the Company's Current Report on 
             Form 8-K filed with the Commission on November 19, 1998.)
10.44        Subordinated Guarantee  Agreement by certain subsidiaries of the
             Registrant in favor of the holders of the  Registrant's  11%  
             Senior Subordinated Secured Notes due March 31, 1999 or September
             1, 1999, dated as of November 5, 1998. (Incorporated herein by 
             reference to Exhibit 99.8  of the Company's Current Report
             on Form 8-K filed with the Commission on November 19, 1998.)
10.45        Registration Rights Agreement INAMED Corporation and Santa 
             Barbara Bank and Trust,  as trustee, dated as of November 5, 
             1998. (Incorporated  herein  by reference to Exhibit 99.9 of 
             the Company's Current Report on Form 8-K filed with the 
             Commission on November 19, 1998.)
10.46        1998 Employee Stock Option Plan.
21           Registrant's Subsidiaries
27           Financial Data Schedule
99.1         Order and Final Judgement Certifying INAMED Settlement Class, 
             Approving Class Settlement, and Dismissing Claims against 
             INAMED and Released Parties dated February 1, 1999.


        (b)     Reports on Form 8-K:

                Form 8-K dated October 2, 1998
                Form 8-K dated November 5, 1998
                Form 8-K dated December 28, 1998


        SIGNATURES


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

                                INAMED CORPORATION



March 26, 1999                  By: /s/ Richard G. Babbitt
                                    Richard  G. Babbitt, Chairman of the Board
                                    and Chief Executive Officer

        Pursuant  to  the  requirements of the Securities Exchange  Act  of
1934, this report has been signed below by the following  persons  on  behalf
of  Registrant  in  the capacities and on the dates indicated:


/s/ Richard G. Babbitt         Chairman of the Board, Chief Executive Officer
Richard G. Babbitt             and Director (Principal Executive Officer)

/s/ Ilan K. Reich              President and Director
Ilan K. Reich

/s/ Tom K. Larson, Jr.         Vice President, Finance and Administration and
Tom K. Larson, Jr.             Chief Financial Officer (Principal Accounting
                               Officer)

/s/ James E. Bolin             Director
James E. Bolin

/s/ Harrison E. Bull, Esq.     Director
Harrison E. Bull, Esq.

/s/ John F. Doyle              Director
John F. Doyle

/s/ Richard Wm. Talley         Director
Richard Wm. Talley

/s/ David A. Tepper            Director
David A. Tepper

/s/ John E. Williams, M.D.     Director
John E. Williams, M.D.




STATEMENT OF MANAGEMENT RESPONSIBILITY


To the Stockholders of INAMED Corporation & Subsidiaries

The  Management  of  INAMED Corporation and Subsidiaries is responsible for
the preparation, integrity and objectivity  of  the  consolidated  financial  
statements and other financial information presented   in   this  report.   
The  accompanying  consolidated  financial statements have been prepared
in conformity with  generally  accepted  accounting principles and properly
reflect the effects of certain estimates and judgements made by management.

The Company's management maintains an effective  system of internal control
that is designed to provide reasonable assurance that assets are safeguarded  
and  transactions are properly recorded and executed in accordance with 
management's authorization.  The  system is continuously monitored by direct 
management review and the independent accountants. 

The  Company's  consolidated  financial  statements  for  the  years  ended
December 31, 1998, 1997 and  1996  have  been audited by BDO Seidman, LLP, 
independent accountants.  Their audits were conducted in accordance  with  
generally  accepted  auditing standards, and included a review of financial 
controls and test of accounting records and  procedures  as  they considered
necessary in the circumstances.

The  Audit  Committee  of the Board of Directors, which consists of outside
directors, meets regularly with  management and the  independent  
accountants  to  review  accounting, reporting, auditing and internal  
control  matters.  The committee has direct and private access to the 
independent accountants.



/s/ Richard G. Babbitt
Richard G. Babbitt
Chairman, Chief Executive Officer



/s/ Tom K. Larson Jr.
Tom K. Larson Jr.
Vice President, Finance and Administration and
Chief Financial Officer


February 12, 1999




REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


The Stockholders and Board of Directors
INAMED Corporation and Subsidiaries:

We have audited the  accompanying  consolidated  balance  sheets  of INAMED
Corporation and Subsidiaries as of December 31, 1998 and 1997, and the related 
consolidated statements of operations,  stockholders' deficiency and cash 
flows for each of the  three years in the period ended December 31, 1998.   
We  have  also  audited  the  schedule  listed  in the accompanying index for
the same   periods.    These   financial   statements   and  schedule  
are  the responsibility of the Company's management.  Our responsibility is 
to express an opinion on these financial statements and schedule based on 
our audits.

We  conducted  our  audits in accordance with generally  accepted  auditing
standards.  Those standards require that  we  plan and perform the audit to 
obtain reasonable assurance about whether the financial statements and  
schedule  are  free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements and schedule.  An audit also includes  assessing  the accounting
principles used and significant estimates made by management, as well as 
evaluating the overall presentation of the financial  statements and schedule.
We believe that our audits  provide  a reasonable basis for our opinion.

In our opinion  the  consolidated  financial  statements  referred to above
present fairly, in all material respects, the financial position of INAMED 
Corporation and  Subsidiaries at December 31, 1998 and 1997, and the results
of their operations and their cash flows  for each of the three years in the
period  ended  December  31,  1998,  in  conformity with generally accepted
accounting principles.  Also,  in  our  opinion,  the schedule presents  
fairly,  in  all  material respects, the information set forth therein for 
each of the three years in the period ended December 31, 1998. 

BDO Seidman, LLP

New York, New York
February 12, 1999, except
for Note 14 which is as of
March 3, 1999


                      INAMED CORPORATION AND SUBSIDIARIES

                       Consolidated Balance Sheets
                                In (000's)


                                                         December 31,
Assets                                          1998                   1997

Current Assets:
   Cash and cash equivalents               $  11,873            $  1,946
   Trade accounts receivable, net of 
     allowances for doubtful accounts and 
     returns of $6,158 and $5,221             23,169               13,979
   Related party notes receivable                 --                  129
   Inventories                                17,855               23,117
   Prepaid expenses and other current assets   1,337                1,413
        Income tax refund receivable             726                  472
        Deferred income taxes                  8,000                   --
                                             -------              -------
         Total current assets                 62,960               41,056
Property and equipment, at cost:

   Machinery and equipment                    14,170               12,585
   Furniture and fixtures                      3,418                4,541
   Leasehold improvements                     11,986               10,996
                                             -------              -------
                                              29,574               28,122
Less, accumulated depreciation  
  and amortization                           (16,751)             (14,639)
                                             -------              ------- 
         Net property and equipment           12,823               13,483

Notes receivable, net of allowances of $467    2,769                2,799

Intangible assets, net                         1,015                1,164

Other assets                                   1,140                  340
                                             -------              -------
Total assets                            $     80,707            $  58,842
                                             -------              -------
                                             -------              -------


See accompanying notes to consolidated financial statements.


                           INAMED CORPORATION AND SUBSIDIARIES

                            Consolidated Balance Sheets
                            In (000's except share data)


                                                        December 31,
Liabilities and Stockholders' Deficiency        1998                 1997

Current liabilities:
  Current installments of long-term debt     $     51          $       30
  Notes payable to bank                         1,186                 659
  Accounts payable                             12,226              14,759
  Accrued liabilities:
      Salaries, wages, and payroll taxes        2,681               2,683
      Interest                                  2,032               3,146
      Self-insurance                            3,649               3,602
      Other                                     4,523               2,667
  Royalties payable                             5,061               4,156
  Income taxes payable                          1,318               2,894
  Accrued litigation settlement                 5,721                  --
  Note payable, escrow agent                   25,500                  --
                                              -------             -------
        Total current liabilities              63,948              34,596
                                              -------             -------

Convertible and other long-term debt           27,767              23,574

Subordinated notes payable, related party          --               8,813

Deferred grant income                           1,235                 993

Deferred income taxes                             382                 220

Accrued litigation settlement                      --              37,335

Commitments and contingencies

Redeemable common stock, $.01 par value
    426,323 shares issued and outstanding
    stated at redemption value $7.04 per share  3,000                   --

Stockholders'  deficiency:
    Common stock, $.01 par value.  Authorized 
     20,000,000 shares; issued and outstanding 
     11,010,290 and 8,885,076                     110                    89
    Additional paid-in capital                 37,605                19,027
    Accumulated other comprehensive adjustments   269                  (223)
    Accumulated deficit                       (53,609)              (65,582)
                                              -------               -------
        Stockholders' deficiency              (15,625)              (46,689)
                                              -------               -------
Total liabilities and stockholders' 
  deficiency                                $  80,707             $  58,842
                                              -------               -------
                                              -------               -------

See accompanying notes to consolidated financial statements.

                            INAMED CORPORATION AND SUBSIDIARIES

                            Consolidated Statements of Operations
                          In (000's except share and per share data)

                        Years ended December 31, 1998, 1997 and 1996


                                  1998           1997          1996
 
Net sales                   $  131,566     $  106,381      $  93,372
Cost of goods sold              47,954         37,643         35,295
                               -------        -------        -------
       Gross profit             83,612         68,738         58,077
                               -------        -------        -------
Operating expense:
   Marketing                    33,364         30,002         25,088
   General and administrative   28,213         33,450         31,252
   Research and development      9,366          8,863          5,693
   Restructuring expense         4,202             --             --
                               _______        _______        _______

    Total operating expenses    75,145         72,315         62,033
                               -------        -------        -------        
                
    Operating profit (loss)      8,467         (3,577)        (3,956)
                               -------        -------        -------
Other income (expense):
     Litigation settlement          --        (28,150)            --
     Net interest expense and 
        debt costs              (3,812)        (6,173)        (4,277)
     Foreign currency transactions 
       gains (losses)              686         (1,796)            68
                               -------        -------        -------
Other expense                   (3,126)       (36,119)         (4,209)

Income (loss) before income tax
  expense (benefit) and extraordinary 
  charges                       5,341         (39,696)         (8,165)

Income tax expense (benefit)   (8,432)          1,881           3,214
                              -------         -------         -------
Income (loss) before
   extraordinary charges       13,773         (41,577)        (11,379)

Extraordinary charges          (1,800)             --              --
                              -------         -------         -------
Net income (loss)           $  11,973       $ (41,577)      $ (11,379)
                              -------         -------         -------
                              -------         -------         -------

Income (loss) before extraordinary charges
   per share of common stock
        Basic               $    1.33       $   (4.97)      $  (1.46)
        Diluted             $    1.05       $   (4.97)      $  (1.46)


Income (loss) from extraordinary charges
   per share of common stock
        Basic               $    (0.18)     $     (0.00)    $  (0.00)    
        Diluted             $    (0.13)     $     (0.00)    $  (0.00)


Net income (loss) per share of common stock
        Basic               $     1.15      $     (4.97)    $  (1.46)
        Diluted             $     0.92      $     (4.97)    $  (1.46)


Weighted average shares outstanding:
        Basic               10,387,163      8,371,399       7,811,073
        Diluted             14,185,244      8,371,399       7,811,073


See accompanying notes to consolidated financial statements.

                       INAMED CORPORATION AND SUBSIDIARIES

             Consolidated Statements of Stockholders' Deficiency
                                 In (000's)

                 Years ended December 31, 1998, 1997 and 1996


                                          Accumulated
                                Additional  Other                      Total
                Common   Stock  Paid-in Comprehensive  Accumulated Stockholders'
                Shares   Amount Capital   Adjustments    Deficit    Deficiency


Balance, January 
   1, 1996      7,603  $    76 $ 9,964    $  882      $ (12,626)    $ (1,704)
Comprehensive income (loss):
Net loss         --       --      --         --        (11,379)     (11,379)
Translation 
  adjustment     --       --      --       (451)            --         (451)
                                                                    -------
Total comprehensive income                                          (11,830)
                                                                    =======  
Repurchases and retirement
 of common stock --       --      (3)        --             --           (3)
Issuance of 
 common stock
 (exercise of stock 
  options)       32       --      45         --             --           45
Issuance of common stock
  (Regulation S 
  Transaction) 344         3   2,997         --             --        3,000
Issuance of common stock
  (conversions debt 
  to equity)    58         1     583         --             --          584


Balance, December 
  31, 1996   8,037        80  13,586        431        (24,005)      (9,908)

Comprehensive income (loss):
  Net loss     --         --      --         --        (41,577)      (41,577)
  Translation 
   adjustment  --         --      --       (654)            --          (654)
                                                                     -------
Total comprehensive income                                           (42,231)
                                                                     ======= 
Repurchases and retirement of
 common stock (11)        --     (55)        --             --           (55)
Issuance of common stock
 (exercise of stock 
  options)     71          1     102         --             --           103
Issuance of common stock
 (conversions of debt to
   equity)    616          6   2,261         --             --         2,267
Issuance of common stock
 (waiver of covenant 
   defaults)  172          2   1,415         --             --         1,417
Issuance of Warrants 
  & Options    --         --   1,718         --             --         1,718


Balance, December 
  31, 1997  8,885         89  19,027       (223)       (65,582)      (46,689)

Comprehensive income:
  Net         --          --     --          --         11,973        11,973
  Translation 
   adjustment --          --     --         492             --           492
                                                                     -------
  Total comprehensive income                                          12,465
                                                                     =======
Issuance of common stock
  (exercise of stock 
   options)  33           --     47          --             --            47
Issuance of common stock
  (conversions of debt 
   to equity)1,990        20 15,188          --             --         15,208
Issuance of common 
  stock     102            1    555          --             --            556
Issuance of Warrants 
  & Options  --           --  2,788          --             --          2,788


Balance, December 
  31, 1998 11,010     $ 110 $37,605       $ 269       $(53,609)     $ (15,625)




See accompanying notes to consolidated financial statements.

                           INAMED CORPORATION AND SUBSIDIARIES

                          Consolidated Statements of Cash Flows
                      Years ended December 31, 1998, 1997 and 1996
                                       In (000's)

                                  1998         1997          1996

Cash flows from operating activities:
Net income (loss)             $ 11,973    $ (41,577)      $  (11,379)
  Net cash provided by (used for)
        operating activities:
  Depreciation and amortization 3,769         2,379            3,000
  Non-cash debt costs           2,538         1,487               --
  Non-cash compensation to 
    directors                     250           231               --
  Provision (credits) for 
    doubtful accounts, notes 
    and returns                   936         (785)           (1,216)
  Provision for obsolescence of 
    inventory                     156          264               563
  Deferred income taxes        (8,104)         (35)            2,030
  Changes in current assets and liabilities:
    Trade accounts receivable  (9,471)      (3,265)              119
    Notes receivable             (150)        (101)               87
    Inventories                 5,659       (4,491)           (3,910)
    Prepaid expenses and other
     current assets             (174)         (294)              212
    Other assets                (636)         (105)             (173)
    Accounts payable, accrued 
     and other liabilities       633         3,116            (8,565)
    Income taxes payable      (1,612)        1,091                (6)
    Accrued litigation 
     settlement               (3,114)       28,183                --
                             -------       -------            -------
        Net cash provided by 
         (used for) operating 
         activities            2,653      (13,902)            (19,238)
                             -------      -------             -------
Cash flows from investing activities:
   Disposal of fixed assets    1,621           --                 (44)
   Loss on Investments           --            --                 100
   Purchase of property and 
    equipment                (3,678)       (5,106)             (4,039)
                            -------       -------             -------
     Net cash used in
      investing activities   (2,057)       (5,106)             (3,983)
                           --------       -------             -------

Cash flows from financing activities:
 Restricted cash in escrow for 
   litigation settlement   $     --      $  14,796          $ (14,796)
   Increases in notes payable 
     and long-term debt         638             --                271
   Increases in convertible 
     notes payable and 
     debentures payable       8,000          5,648             34,516
   Principal repayment of notes 
     payable and long-term debt  --        (13,816)              (197)
   Decrease in related party 
     receivables                128            105                149
   Increase (decrease) in related 
     party payables           1,038          8,813             (1,759)
   Grants received, gross       308             --                210
   Issuance of common stock     104             48              3,043
                            -------        -------            -------

Net cash provided by 
  financing activities       10,216         15,594             21,437
                            -------        -------            ------- 
Effect of exchange rate 
  changes on cash              (885)         4,437               (100)
                            -------        -------            -------
Net increase (decrease) in cash
   and cash equivalents      9,927           1,023             (1,884)

Cash and cash equivalents at 
   beginning of year         1,946             923              2,807
                           -------         -------            -------

Cash and cash equivalents at 
   end of year            $ 11,873        $  1,946           $    923
                           =======         =======            =======

Supplemental disclosure of cash flow
    information:
        Cash paid during the year for:
        Interest          $  4,562       $   3,745           $   3,519
        Income taxes      $  1,138       $     988           $   1,336


See accompanying notes to consolidated financial statements.

(1) Basis of Presentation and Summary of Significant Accounting Policies

The accompanying consolidated  financial statements include the accounts of
INAMED Corporation  and  each of its wholly-owned  subsidiaries  (the  
"Company").  Intercompany transactions are eliminated in consolidation.

The Company

INAMED Corporation's  subsidiaries  are organized into three business units
(for financial reporting purposes all business units  are  considered  to be 
one segment): United States Plastic and Reconstructive Surgery (consisting 
primarily  of McGhan Medical Corporation, Flowmatrix Corporation and CUI 
Corporation, which develop,  manufacture and sell medical devices   and   
components);    BioEnterics  Corporation,  which  develops, manufactures and
sells medical devices and associated  instrumentation  to the bariatric and
general surgery fields;  and  International  (consisting  primarily  of  two 
manufacturingcompanies based in Ireland--McGhan  Limited  and  Chamfield  Ltd.
-and  sales  subsidiaries  in various countries, including  The  Netherlands,
Germany, Italy, United Kingdom, France,  Spain and Mexico, which sell 
products for both the plastic and bariatric surgery fields).


Revenue Recognition

The Company recognizes  revenue  in  accordance with Statement of Financial
Accounting Standards  No.  48, "Revenue Recognition  When  Right  of  Return  
Exists". Revenues are recorded net of estimated  returns  and allowances when
product is shipped. The Company ships product with the right of return  and 
has provided an estimate of the allowance for returns  based on historical 
returns.  Because  management  can  reasonably estimate future returns, the 
product  prices  are  substantially  fixed  and  the  Company recognizes net 
sales when  the  product is shipped. The estimated allowance for returns is 
based on the historical trend of returns, year-to-date sales and other factors.

Inventories

Inventories  are  stated at the lower of cost or market using the first-in,
first-out (FIFO) convention.  The Company  provides  a provision for 
obsolescence based upon historical experience.

Current Vulnerability Due to Certain Concentrations

The Company has limited sources of supply  for certain raw materials, which
are significant to its manufacturing process.  A change in suppliers could 
cause a delay in manufacturing and  a  possible  loss  of  sales, which would
adversely  affect  operating results.


(1)     Basis  of  Presentation   and  Summary  of  Significant  Accounting
        Policies (continued)

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and
amortization.  Significant improvements and betterments  are capitalized while 
maintenance and repairs are charged to operations as incurred.

Depreciation of property and equipment is computed  using the straight-line
method based on  estimated  useful  lives  ranging  from  five to ten years.   
Leasehold improvements are amortized on the straight-line basis over their  
estimated  economic useful lives or the lives of the leases, whichever is 
shorter. 

Intangible and Long-Term Assets

Intangible  and  long-term  assets  are  stated  at  cost  less accumulated
amortization, and are being amortized on a straight-line basis over their 
estimated  useful lives ranging from 5 to 17 years.

The Company classifies as goodwill the cost in excess of fair value  of the
net assets acquired in purchase transactions.  The Company periodically 
evaluates  the realizability of long-lived  assets  and  goodwill in 
accordance with Statement of Financial Account Standards No.  121, 
"Accounting for the  Impairment  of  Long-Lived  Assets  and  for Long-Lived 
Assets to be Disposed  of"  (SFAS  No. 121).  This statement requires that 
long-lived assets and certain identifiable  intangible assets  to  be  held
and  used  be  reviewed  for impairment whenever events or changes  in  
circumstances  indicate  that the carrying amount of such assets may not be 
recoverable. The carrying value of long-term  assets is periodically
reviewed by management, and impairment losses, if any, are recognized when 
the expected non-discounted future operating cash flows derived from such  
assets  are  less than their carrying value.  Impairment  of  long-lived  
assets  is  measured  by the difference between the discounted future cash 
flows expected to be generated from  the  long-lived asset against the 
carrying value of the long-lived asset.  Fair value of long-lived assets is
determined by the amount  at which the asset could be bought or sold in a 
current transaction between willing parties.  Based  upon its most recent 
analysis, no impairment of long-lived assets exists at December 31, 1998.

Research and Development

Research and development costs are expensed when incurred.

Advertising costs

Advertising costs  are  charged  to  operations  in  the  year incurred and
totaled approximately $677, $426 and $441 in 1998, 1997 and 1996, respectively.


(1)     Basis   of  Presentation  and  Summary  of  Significant  Accounting
        Policies (continued)

Income Taxes

The Company accounts for its income taxes using the liability method, under
which deferred taxes  are determined  based  on  the  differences  between  
the  financial reporting and tax bases of  assets and liabilities, using 
enacted tax rates in effect for the years in which the differences  are 
expected to reverse.  Valuation allowances are established when necessary
to reduce deferred tax assets to the amount expected to be realized.

The Company has  provided a valuation allowance against deferred tax assets
on its U.S. operations (see Note 8).

Use of Estimates

In preparing financial  statements  in  conformity  with generally accepted
accounting principles, the Company is required to make estimates  and 
assumptions that affect the reported amounts of assets and liabilities and 
the disclosure of contingent assets and liabilities  at  the  date  of  the 
financial statements and  revenues  and expenses during the reporting period. 
Actual results could differ from those estimates.

Earnings Per Share

During 1997, the Financial Accounting  Standards  Board issued Statement of
Financial Accounting  Standards  No. 128, "Earnings per Share",   ("SFAS  
No.  128"), which provides for the calculation of "basic"  and "diluted" 
earnings per share.  SFAS No. 128 became effective for financial statements 
issued for periods ending after December 15, 1997. Basic earnings per share 
includes no dilution and is computed by dividing income available to common
shareholders by the weighted  average  number  of common shares outstanding
for the period.  Diluted earnings per share reflect, in  periods in which they 
have a dilutive effect, the effect of common shares issuable upon exercise of
common stock equivalents. The assumed conversion of the notes payable and 
exercise  of  the  warrants and options would have  been  anti-dilutive  and,
therefore,  were  not  considered  in  the computation of diluted earnings 
per share for the years ended December 31, 1997 and 1996. 

(1)     Basis   of  Presentation  and  Summary  of  Significant  Accounting
        Policies (continued)

Earnings Per Share (continued)

Computation of Per Share Earnings
                                                     Year Ended
Diluted:                                        December 31, 1998

Net income                                           $11,973

Interest and convertible debt
        assuming conversion at
        beginning of the year                          1,112
                                                     -------
Net income for diluted calculation                   $13,085

Weighted average shares outstanding                   10,387

Shares outstanding assuming conversion
        at the beginning of the year:
                Convertible debt                       3,318
                Stock options                            192
                Warrants                               1,723(1)

Less assumed repurchase of shares                     (1,434)
                                                     -------
Shares outstanding                                    14,186

Per share amount                                       $0.92

(1)The calculation excludes 2,701 warrants that are anti-dilutive.

The Company's diluted per share amounts were anti-dilutive in 1997 and 1996
and are therefore not computed above.

Foreign Currency Translation

The functional currencies  of  the Company's foreign subsidiaries are their
local currencies, and accordingly, the assets and  liabilities  of these 
foreign subsidiaries are translated at the rate  of exchange at the balance 
sheet date.  Revenues  and  expenses  have been translated at the  average 
rate of exchange in effect during the periods. For the year ended December
31, 1998,  the  foreign subsidiaries have incurred significant intercompany
debts, which are denominated  in  various   foreign  currencies.   The  
translation  of  the intercompany debts 


(1)     Basis  of  Presentation   and  Summary  of  Significant  Accounting
        Policies (continued)

Foreign Currency Translation (continued)

resulted in a foreign currency translation  gain  (loss)  of $686, ($1,796)
and $68 in 1998, 1997 and 1996, respectively.  Unrealized translation 
adjustments  do not reflect the results of operations   and  are  included  
in  the  accumulated  other  comprehensive adjustments account as a 
component  of  stockholders'  deficiency,  while transaction gains and losses 
are reflected in the consolidated statement of operations. To date,  the  
Company has not entered into hedging  transactions  to  protect  against  
changes  in  foreign  currency exchange rates.

Stock-Based Compensation

The  Company  has  adopted  the  disclosure-only  option under Statement of
Financial Accounting  Standards No. 123, "Accounting for Stock  Based  
Compensation", ("SFAS No. 123") as of December  31, 1996.  Pro-forma 
information regarding net income and earnings per share using the fair value 
method is required by SFAS No. 123. 

Statement of Cash Flows

For purposes of the statement  of  cash  flows,  the  Company considers all
highly liquid debt instruments  and other short-term investments with an 
initial  maturity  of three months or less to be cash equivalents.    As  at  
December 31, 1998, a total of $9,200 was invested in short-term deposits 
maturing in thirty days or less.

Concentrations of Credit Risk

Certain  financial  instruments  potentially   subject   the   Company   to
concentrations of credit risk. These  financial  instruments  consist  
primarily  of trade receivables and short-term cash investments.

The Company places its short-term cash investments with high credit quality
financial institutions and, by policy, limits the amount of credit  exposure 
to  any one financial institution.    Concentrations   of  credit risk with
respect  to  trade receivables are limited due to a large customer base and 
its dispersion across different types of healthcare professionals and 
geographic areas.  The Company  maintains an allowance for losses based
on the expected collectability of all receivables.

Financial Instruments

The  fair value of cash and cash equivalents  and  receivables  approximate
their carrying value due to their short-term maturities.  The fair value of 
long-term debt instruments, including  the  current  portion,  approximates
the  carrying value and is estimated based on the current rates offered to 
the Company for debt of similar maturities. 


(1)     Basis  of  Presentation  and  Summary  of  Significant   Accounting
        Policies (continued)

New Accounting Standards

In June 1998, the Financial Accounting Standards Board issued Statement  of
Financial Accounting  Standards  No.  133, "Accounting for Derivative 
Instruments and Hedging Activities," which requires entities to recognize all
derivatives as either assets or liabilities in the statement of financial 
position  and  measure these instruments at fair value.  SFAS No. 133 is 
effective for all fiscal years beginning  after  June 15, 1999.  The Company
is currently reviewing  SFAS  No. 133 and has of yet been unable to fully  
evaluate  the impact, if any, it may have on future operating results or 
financial statement disclosures.

Reclassification

Certain reclassifications were made to 1997 and 1996 consolidated financial
statements to conform to the 1998  presentation.   There  was  no effect on net
income or stockholders' deficiency as a result of these reclassifications.

(2)     Accounts and Notes Receivable

        Accounts and notes receivable consist of the following:

                                            December 31,
                                       1998            1997

Accounts receivable                   $   29,327      $  19,200
Allowance for doubtful accounts           (1,402)          (865)
Allowance for returns and credits         (4,756)        (4,356)
                                        ________       ________

Net accounts receivable                $  23,169       $  13,979

Notes receivable                       $   3,236       $   3,266
Allowance for doubtful notes                (467)           (467)
                                        ________        ________

Net notes receivable                   $   2,769       $   2,799

(3)     Inventories

Inventories are summarized as follows:
   
                                  December 31,
                             1998             1997

Raw materials            $  3,764        $  4,671
Work in progress            3,931           3,799
Finished goods             11,329          16,161
                          _______         _______

                           19,024          24,631
Less allowance for
 obsolescence              (1,169)         (1,514)
                          _______         _______

                        $  17,855       $  23,117


(4)     Intangible Assets

ntangible  assets  primarily  consist of patents,  trademarks  and
goodwill net of accumulated amortization of approximately $4,107 and  $3,733
amounting  to  $1,015 and $1,164 at December 31, 1998 and 1997.


(5)     Lines of Credit


For  the  years  ended  December  31,  1998 and 1997, the Company's foreign
subsidiaries financed approximately $1,186 and $659 which  was  secured  by 
its accounts receivable.

The  Company's weighted average interest rate on short-term borrowings  was
7% in both 1998 and 1997.



(6)     Long-Term Debt

Long-term debt is summarized as follows:

                                                         December 31,
                                               1998                    1997
 
10% Senior Secured Note payable,  maturing
   September, 2000, interest payable
   quarterly, December 31, March 31, June 30,
   and September 30  (a)                      $  7,948             $     --

11% Secured Convertible Note payable,
   maturing September, 2000, interest payable
   quarterly, January 1, April 1, July 1,
   and October 1  (b)                               57                19,691

11% Junior Secured Note payable,  maturing
   September, 2000, interest payable
   quarterly, January 1, April 1, July 1,
   and October 1  (b)                           19,549                    --

4% Convertible Debenture payable, maturing
    January 2000 interest payable March 31, June 30,
    September 30 and December 31  (c)               --                  3,857

Capital lease obligations, collateralized by related
   equipment                                       264                     56
                                               -------                -------
                                                27,818                 23,604

Less, current installments                         (51)                   (30)
                                               -------                -------
                                             $  27,767              $  23,574


The following is a summary of the Company's significant long-term debt:

(a) In  September,  1998  $8  million  of  proceeds  were received from the
issuance of the Company's 10% senior secured notes, due September 30, 2000.  
Under  the terms of that loan, $3 million was  placed in a court-supervised 
escrow account to satisfy  the  Company's deposit obligation under  the  
settlement agreement for the breast implant litigation, and the balance was 
reserved for  allocation   to  specific  working  capital  and  capital  
expenditure projects.  Along with the debt the Company issued  590,000 
warrants which resulted in a $52 charge to debt costs.

(6)     Long-Term Debt (continued)

(b)  During January 1996,  $35,000  of  proceeds  were  received  upon  the
issuance of 11% senior secured  convertible  notes,  due  March  31,  1999, in 
a private placement transaction. Of that amount, $14,800 was placed in an 
escrow account  to  be released within one year, following court approval of 
a mandatory non-opt-out class settlement  of  the  breast implant litigation.
Inasmuch  as  that condition was not met, in July 1997 the Company returned
those escrowed funds to the senior  Noteholders,  in  exchange  for  warrants 
to purchase $13,900 of common stock  at  $8.00  per  share  (subsequently  
adjusted  to $7.50 per share), resulting in a charge of $864  to  debt costs
for  1997.  The conversion price of the  11%  senior secured convertible notes
was originally $10 per share.   In  July  1997  the  Company and the senior 
Noteholders agreed to change the conversion price to $5.50 per share at 103% of 
principal balance as part of an overall restructuring plan which included the
waiver of  past defaults. The conversion price of $5.50 per share was above 
market value. In September 1998  the  Company and the senior Noteholders 
agreed to extend the maturity of this debt from March  31, 1999 to September 
30, 2000 and to exchange this debt for non-convertible junior secured debt and
warrants to purchase common stock at $5.50 per share.  Under certain 
circumstances, the interest rate of these  notes  can  be reduced to 9%.  
The Company recorded an extraordinary charge of $1,800 net of taxes of 
$1,200  related  to  the exchange of the 11% senior secured convertible 
notes for non-convertible junior secured debt and  warrants.   At December 
31, 1998, $19.6 million of the 11% senior notes were outstanding.

(c) During January 1997, $5,700 of proceeds were received upon the issuance
of $6,200 principal amount  of  4%  convertible  debentures,  due  January  
30,  2000.    These debentures were convertible  at  85% of the market price
of the common stock.  On March 31, 1997 the Company was in default of certain
covenants.  The default required the Company to reduce the conversion price by 
6%.  In addition,  the  Company  incurred 3% liquidated damages per month on 
the outstanding principal balance.  These transactions  resulted in $396
and $1,202 of debt and interest expenses in 1997. As of April 6, 1998, all of 
these debentures had been converted into  an  aggregate  of 1,724,017 shares
of common stock at prices  ranging from $2.60 to $4.44 per share.  No 
debentures are currently outstanding.

In addition,  commencing  during  April 1997 and continuing
through January 1998, an entity controlled by the Company's former Chairman 
loaned $9,900 to the Company to provide it with working capital to fund its 
operations.  At December  31, 1997, the Company owed $8,800 (see note 12).  
The loan agreement discussed in (a) above precluded  the payment of interest 
and principal on this 10.5% subordinated note without the consent of the 
senior Noteholders. In July 1998 the Company and its former chairman agreed 
to convert all  of the 10.5% subordinated  notes (including accrued interest)
into 860,000 shares of common stock and a warrant to purchase 260,000 shares
at $12.40 per share.   At  the time, the Company's common stock was trading at 
approximately $7.50 per share.

(6)     Long-Term Debt (continued)

The  aggregate  installments  of long-term debt as of December  31,
1998 are as follows:

                           Year ending December 31:

                            1999      $      51
                            2000         27,609
                            2001             60
                            2002             57
                            2003             41
                                        -------
                                      $  27,818


(7)     Deferred Grant Income

Deferred grant income represents grants  received from the Irish Industrial
Development Authority  (IDA)  for  the  purchase  of capital  equipment  and  
is  being amortized to income over the life of the related assets.  
Amortization  for the years ended December 31, 1998, 1997 and  1996 was 
approximately $110,  $454 and $96, respectively. 

IDA  grants  are  subject  to  revocation  upon a change  of  ownership  or
liquidation of McGhan Limited.  If the grant were revoked, the Company  would 
be liable on demand from the IDA for all sums received and deemed to have 
been received  by  the  Company in respect to the grant.  In the event of 
revocation of the grant, the Company could  be liable for the amount of
approximately $2,407 and $1,418 at December 31, 1998 and 1997.

(8)        Income Taxes

The  Company  currently  has  a net  operating  loss  (NOL)  for  financial
reporting purposes of approximately $53,000.

The Company has federal tax credit  carryforwards  of  approximately $1,958
and state net operation loss ("NOL") and credit carryforwards of approximately
$5,200 and $570, respectively.   The  federal  credit  carryforward amounts 
will  expire  in various years beginning in 2008.  If the Company has a 
change in  ownership  as defined by Internal Revenue Code Section 382, use of
these carryforward amounts could be limited. 

A  significant  portion  of the cost of the litigation settlement  expenses
discussed in Note 14 will be deductible for federal and state income tax 
purposes when qualified consideration is deposited  in  a  court supervised  
escrow  account.   To  the  extent  the settlement gives rise to a
federal NOL, such NOL may be carried back 10 years.


(8)     Income Taxes (continued)

The primary components of temporary differences which compose the Company's
net deferred tax assets as of December 31, 1998 and 1997 are as follows:

                                     December 31,        December 31,
                                        1998                 1997

Allowance for returns                 $  1,618        $  1,742
Allowance for doubtful accounts            103             346
Allowance for inventory obsolescence       402             605
Accrued liabilities                      2,097           1,673
Allowance for doubtful notes               187             187
Litigation reserve                      13,781          14,821
Net operating losses and credits         2,996           8,200
Debt costs                               1,646             568
Uniform capitalization adjustments         648              --
                                       -------         -------
Deferred tax assets                     23,478          28,142
Valuation allowance                    (15,478)        (28,142)
                                       -------         -------
Deferred tax assets                  $   8,000       $      --

The Company's deferred  tax  assets  have  been  reduced  with  a valuation
allowance of $15,478  as  at  December  31,  1998.   The Company has 
recognized a $8,000 deferred tax asset based on future short-term income 
projections.   Although the Company has a history of prior losses, these 
losses were primarily attributable  to costs related to the breast implant
litigation.   The  remaining valuation allowance is necessary  due  to  the
uncertainty of future income estimates.

Income tax expense for  1997  pertains primarily to foreign operations. The
Company recorded a provision in 1997 for  foreign  taxes  of  $1,000 related 
to the planned capitalization of intercompany balances with foreign 
subsidiaries.  In  addition  to taxes on foreign operations, income tax 
expense for 1996 includes providing a 100% valuation allowance on the 
deferred tax assets not previously allowed for of $2,006. 

The  1998  tax  benefit  differs from the amount computed using the Federal
statutory income tax rate due to the utilization  of  NOL's  to offset current 
years taxable income and the recording of a $8,000 deferred tax asset.  
Provision  has not been made for U.S. or additional foreign  taxes  on  
undistributed earnings of foreign subsidiaries.   Those earnings have been
and will continue to  be  permanently  reinvested.   These  earnings  could
become subject to additional tax if they were remitted as dividends, if foreign
earnings were loaned to the Company or a U.S. affiliate, or if the Company 
should sell its stock in the foreign subsidiaries.   It is not practicable to
determine the amount of additional tax, if any, that might be payable on the
foreign  earnings.  The  cumulative amount of reinvested earnings was
approximately $5,686 and $5,460 at December 31, 1998 and 1997.

(9)     Royalties

The  Company  has  obtained the right to produce,  use  and  sell  patented
technology through various license agreements.   The Company pays royalties 
ranging from 5% to 10% of the related net sales, depending upon  sales levels.
Royalty  expense  under these agreements was  approximately  $6,626,  $5,689
and $6,302 for the years ended December 31, 1998, 1997 and 1996, respectively,
and  is  included  in  marketing expense.  The license agreements expire at 
the expiration of the related patents. 

(10)    Stockholders' Equity

The  Company has adopted several incentive and non-qualified  stock  option
plans.  Under the terms  of  the plans, 1,160,354 shares of common stock are 
reserved for issuance to key employees.

Activity under these  plans for the years ended December 31, 1998, 1997 and
1996:

                     1998                    1997               1996
                         Wgtd.Avg.               Wgtd.Avg.          Wgtd. Avg.
                Shares  Exer.Price      Shares  Exer.Price  Shares  Exer.Price

Options 
outstanding
at beginning 
of year         71,500  $ 2.46          115,000    $ 1.46    146,500   $1.46
Granted        470,000    6.18           30,000      3.81         --      --
Exercise       (30,000)   1.45          (73,500)     1.45    (31,500)   1.45
Expired         (1,500)   2.49               --        --         --      --
               _______                 ________             ________

Options outstanding
at end of year 510,000    5.95           71,500      2.46    115,000    1.46

Options exercisable
at end of year  60,000    2.63           71,500      2.46     90,000    1.47


(10)    Stockholders' Equity (continued)

        The following table  summarizes  information  about  stock  options
outstanding at December 31, 1998:
                        Options Outstanding            Options Exercisable
                            Weighted
Range of                    Average       Weighted                 Weighted
Exercise     Number       Remaining       Average       Number      Average
Prices   Outstanding Contractual Life Exercise Price Exercisable Exercise Price
$1.45         40,000      4.94           $1.45            30,000       $1.45
 6.50        440,000      9.75            6.50              --            --
3.75 to 3.875 30,000      5.71            3.81            30,000        3.81
-----------------------------------------------------------------------------
             510,000      9.14           $5.95            60,000       $2.63


The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" (APB 25) and related interpretations in 
accounting for its employee stock options.

Pro  forma  information  regarding  net  income  and earnings per share  is
required by SFAS 123,  and  has  been  determined as if the Company had  
accounted  for  its employee stock options under the fair  value method of 
SFAS 123.  The fair value for these options was estimated at the date of  grant
using a Black-Scholes option pricing model with the following weighted-average
assumptions for 1998,  risk-free  interest rates of 4.09%; volatility factor 
of the  expected market price of the Company's Common Stock  of  34.8%; and a
weighted- average expected life of the option of 9.14 years.

Under  the  accounting  provisions of FASB Statement 123, the Company's net
income and earnings per share would  have  been  reduced  to  the pro forma 
amonts for 1998.  (The effects on  pro  forma  net  income  for  1997  and 
1996 are not material  and  are therefore not shown.)

                                        1998

Net income                              $10,618
Net income per common share
        Basic                           $1.02
        Diluted                         $0.75

In  1998,  the Company issued 4,750,916 warrants  in  connection  with  the
restructuring of the 11% junior secured  notes  and the issuance of the 10% 
senior secured notes (see Note 6). In addition, the Company issued  260,000  
warrants  in  connection with the conversion of its 10.5%  subordinated note
into equity (see Note 12).  Compensatory  warrants totaling 995,000  were 
issued during 1998; 845,000 to executive officers and 150,000 to non-


(10)    Stockholders' Equity (continued)

employee directors.

In 1997, the  Company  issued  1,846,071  warrants  in  connection with the
restructuring of the $35,000  convertible  debt  and  500,000  warrants in 
connection  with  the issuance of the $6,200 convertible debenture (see Note
6).   Compensatory warrants totaling 175,000 were also issued to non-employee
directors. 

                          Shares   Exercise   Expiration    Fair Market Value
                                    Price       Date            on Grant Date

1998
Warrants granted in 1998   400,000   $ 3.95  January 22, 2008    $   769,000
Warrants granted in 1998   400,000     3.525 January 31, 2008        726,000
Warrants granted in 1998   150,000     5.51  March 4, 2005           211,000
Warrants granted in 1998    25,000     5.51  March 15, 2005           60,000
Warrants granted in 1998    20,000     5.51  July 29, 2008            40,000
Warrants granted in 1998   260,000    12.40  July 8, 2002            330,000
Warrants granted in 1998   500,001     7.50  September 1, 2000       356,000
Warrants granted in 1998   590,000     6.50  September 1, 2000        52,000
Warrants granted in 1998 3,660,915     5.50  September 1, 2002     3,000,000


1997

Warrants granted in 1997 1,846,071   $ 7.50  March 30, 2000       $  864,000
Warrants granted in 1997   500,000     9.81  January 15, 2000        623,000
Warrants granted in 1997   175,000     5.51  April 1, 2004           180,000

The Company estimates the fair value of each stock  option  and  warrant at
the grant date by using   the   Black-Scholes   option-pricing   model   with 
the  following weighted-average assumptions  used  for  grants  in 1998: no 
dividends paid for  all  years; expected volatility of 34.8%; risk-free 
interest rates ranging  from  5.71% to 4.06%; and expected lives ranging from
0.58 years to 9 years. For 1997: no dividends paid  for all years; expected 
volatility of 34.8%; risk-free interest rates ranging from 6.17% to 5.87%;  
and  expected  lives ranging from 2.6 years to 6.7 years.

In  1998  and  1997, the Company has recorded $2,538 and $1,487 as interest
and other debt costs and $250 and  $231  as  compensation  expense  for 
warrants issued to executives and directors.

The exercise price of all options outstanding under the  stock option plans
range from $1.45 to  $6.50  per  share.  All options exercised in 1996, 1997 
and  1998  were exercised at a price of $1.45.  At December  31,  1998,  there 
were 143,900 shares available for future grant under these plans.  Under 
certain plans, the  Company  granted  options at $1.45, which was below 

(10)    Stockholders' Equity (continued)

the  fair  market  value  of  the  common stock at the date of grant.   The
Company recorded compensation expense for the difference  between  the fair 
market value and the exercise price of the related outstanding options.

        In  1984,  McGhan Medical Corporation adopted  an  incentive  stock
option plan (the "1984 Plan").  Under the terms  of  the 1984 Plan, 100,000 
shares of common stock were reserved for issuance to key employees at prices
not less than the market value of the stock at the date  the  option  is  
granted.   In  1985, INAMED  Corporation  agreed  to substitute options to
purchase its shares (on a two-for-one basis)  for  those  of McGhan Medical
Corporation.  In 1998,  10,000  options were granted under the 1984 Plan.  No  
options  were granted under this plan during 1997 or 1996.

        In 1986,  the  Company adopted an incentive and non-qualified stock
option plan (the "1986 Plan").  Under the terms  of  the 1986 Plan, 300,000 
shares of common stock have been reserved  for issuance to key employees.   
In  1998,  20,000  options  were granted under the 1986 Plan.  No options were 
granted under this plan during 1997 or 1996. 

In 1987, the  Company  adopted  an  incentive  stock  award plan (the "1987
Plan").  Under the terms of the 1987 Plan, 300,000 shares of common stock  were
reserved  for issuance to employees  at  the  discretion  of  the  Board of 
Directors. No shares were awarded under the 1987  Plan during 1998, 1997 or 
1996.  At December  31,  1998,  there  were 119,612 shares available for 
future grant under the 1987 Plan.

In 1993,  the  Company  adopted  a  Non-Employee Director Stock Option Plan
which authorized the Company to issue up to  150,000  shares  of  common stock 
to directors who are  not  employees of or consultants to the Company and who 
are  thus  not eligible to receive stock option  grants  under  the Company's
stock option plans.  Pursuant to this Plan, each non-employee director is 
automatically  granted an option to purchase 5,000 shares of common stock on 
the  date of his or her initial appointment or election as a director, and an
option  to purchase an additional 5,000 shares  of  common  stock  on  each
anniversary of his or her initial  grant  date  providing  he  or  she  is  
still serving as a director.  The exercise price per share is the fair market 
value per share on the date of  grant.   No shares were awarded under this 
plan in 1998.  A total of 30,000 options were issued during 1997 under this 
plan and  the Company recorded  stock  compensation  expense  of  $51  for  
thisissuance.  At December  31,  1998  there  were 120,000 options available 
for future grant under this plan.
 
In 1998, the Company adopted  a  non-qualified stock option plan (the "1998
Plan").  Under the  terms of the 1998 Plan, 450,000  shares  of  common  stock
have  been reserved for issuance  to  key  employees.   In  1998,  440,000 
options were granted to approximately 70 employees under the 1998 Plan at $6.50 
per share.  The current market price of the Company's  common  stock  at  
that  time  was  $5.8125.   The  options  are exercisable for ten (10  years
after  the option grant date and vest ratably over  three  (3) years.

(11)    Geographic Segment Data
                            U.S.    International   Elimination   Consolidated
Year ended December 31, 1998
Net sales to unaffiliated 
 customers                 $  85,889   $  45,677                   $ 131,566
Intersegment sales             9,204      29,020    $ (38,224)         ____
                              ----------------------------------------------
Total net sales            $  95,093   $  74,697    $ (38,224)     $ 131,566
                              ==============================================
Operating profit           $  20,071   $   3,845                   $  23,916
                              ==============================================
General corporate expenses    (6,792)        ___                      (6,792)
Restructuring expense                                                 (4,202)
Depreciation and amortization (2,832)       (937)                     (3,769)
Net interest expense                                                  (3,812)
                                                                      ------  
Profit/(loss) before income 
taxes and extraordinary 
charges                    $   6,057   $    (716)                  $   5,341
                              ==============================================
Long lived assets          $  46,987   $  32,705                   $  79,692
                              ==============================================
Year ended December 31, 1997
Net sales to unaffiliated 
  customers                $ 66,778    $  39,603                   $ 106,381
Intersegment sales            7,857       33,785    $ (41,642)           ___
                             -----------------------------------------------
Total net sales            $ 74,635    $  73,388    $ (41,642)     $ 106,381
                             ===============================================   
Operating profit           $  1,101    $   3,349                   $   4,450
                             ===============================================
General corporate expenses   (7,444)         ___                      (7,444)
Litigation settlement expense                                        (28,150)
Depreciation and amortization(2,025)        (354)                     (2,379)
Net interest expense                                                  (6,173)
                                                                      ------
Profit/(loss) before 
income taxes               $(42,246)    $  2,550                    $(39,696)
                             ===============================================
Long lived assets          $ 28,148     $ 29,530                    $ 57,678
                             ===============================================

Year ended December 31, 1996
Net sales to unaffiliated 
  customers                $ 60,831     $ 32,541                     $ 93,372
Intersegment sales            5,587       25,235     $ (30,822)           ___
                             ------------------------------------------------
Total net sales            $ 66,418     $ 57,776     $ (30,822)      $ 93,372
                             ================================================
Operating profit           $  2,147     $  2,206                     $  4,353
General corporate expenses   (5,241)        ___                        (5,241)
Depreciation and amortization(2,257)        (743)                      (3,000)
Net interest expense                                                   (4,277)
                                                                       ------
Profit/(loss) before 
  income taxes             $ (9,489)    $  1,324                     $ (8,165)
                            =================================================
Long lived assets          $ 39,222     $ 25,280                     $ 64,502
                            =================================================

The international classification  above  includes  the  Netherlands, United
Kingdom, Italy, France, Belgium,  Germany,  Ireland,  Spain,  Mexico,  Brazil  
and Hong  Kong.  The individual operations were   not  material  and  are  
therefore  included  in  the  international classification.
 
(12)    Related Party Transactions

From   April   1997   until   January  1998,  International Integrated 
Industries, LLC ("Industries"), an entity affiliated with Mr. Donald K. McGhan,
the Company's former Chairman, Chief Executive Officer and President and a 
greater than 10% stockholder,  lent the Company an aggregate of $9,900, of 
which $8,800 was included in liabilities at December  31,  1997. That 
indebtedness is denoted as the Company's 10.5% subordinated notes.  By the 
terms of  the 11% senior secured convertible notes, the 10.5% subordinated 
notes are junior in right of payment and liquidation and, accordingly, no 
interest or principal payments can be made with respect thereto  without  
the  consent of the senior Noteholders.  In July 1998 the Company and its
former chairman agreed to  convert  all  of  the  10.5%  subordinated notes
(including accrued interest)  into  860,000 shares of common stock and a 
warrant  to  purchase 260,000 shares at $12.40 per share.   At  the time, the 
Company's common stock was trading at approximately $7.50 per share.  
Interest  expense  with respect to this note totaled $535 and $386 in 1998 
and 1997.

In  1997,  the  Company  entered  into  an agreement  with  Medical  Device
Alliance, Inc. ("MDA") to sell  furniture,  artwork and equipment which  the  
Company  was  acquiring through a capital sublease with Wells  Fargo  Bank  
for  a total purchase price of $300.  The Company recorded a gain on sale of 
assets of approximately  $9  in  1997  in  respect  to this transaction. In 
1997, the Company  also  entered  into  an  agreement to sublease approximately
5,000 square feet of office space in Las Vegas for $10 per month,  from  
MDA on a month to month basis. This sublease was terminated as of June 30, 
1998.  Donald K.  McGhan  is  the Chairman of MDA.

In 1996 and 1997, the Company performed administrative services for
MDA and other related parties.  The Company believes the value of these 
services is approximately $150,000.  The reimbursement for these services 
was recognized as part of the  July,  1998 debt restructuring with 
International Integrated Industries, LLC (see Note 6). 

In  1997,  the Company signed a distribution agreement with LySonix
Inc., a subsidiary of MDA, to sell ultrasonic surgery  equipment  in  the  
European and Latin American regions. Special incentive discounts were offered
to the Company for the introduction of the product in 1997. Net sales in 1998
and 1997 were approximately $606  and $300.  In 1998, the terms of the 
original agreement were revised so that the Company would  obtain the goods
on a consignment  basis  and  not  have  an  obligation  with LySonix until  
the products were sold.  This agreement and its revision have been reviewed and
approved by the Company's current management.

Included  in  general  and  administrative expense  on  the  income
statement in 1997 and 1996 is $1,600  and $1,500 in aircraft rental  expenses 
paid  to  Executive  Flite Management, Inc., a company that is controlled by
the family of Mr. Donald K. McGhan. No signed contract exists and the Company
was  billed  based  on  its  usage.   In 1998, the Company discontinued the 
use of such corporate aircraft.

(12)    Related Party Transactions (continued)

The Company incurred $140 and $253 during 1997 and  1996 for flight
related services with McGhan Management Corporation.  Mr. Donald K. McGhan and 
his  wife  are the majority shareholders of McGhan Management Corporation.

The Company believes it obtained full and fair reimburement for the foregoing
aircraft rental and   flight   related  services  expenses  through  the  July,
1998  debtrestructuring with International Integrated Industries, L.L.C. 
(see Note 6).

(13)    Employee Benefit Plans

Effective  January   1,   1990,   the  Company  adopted  a  401(k)  Defined
Contribution Plan (the "Plan") for all U.S. employees.  Participants  may 
contribute  to the Plan and the Company may,   at   its   discretion,  match  
a  percentage  of  the  participant's contribution as specified in the
Plan's provisions.  Participants direct their own investments and the funds
are managed by a trustee.  The Company has no liability for future contributions
and has not contributed to the Plan since 1993.

Certain  foreign  subsidiaries   sponsor   defined   benefit   or   defined
contribution plans.  The two largest  are summarized below.  The remaining 
plans, covering approximately 50 non-U.S. employees,  were  instituted  at 
various times during 1991 through 1997 and the accumulated assets and 
obligations are immaterial.   These  plans  are  funded annually according to 
plan provisions with aggregate contributions of $189, $125 and $86 for the 
years ended December 31, 1998, 1997 and 1996, respectively.

Effective  February  1,  1990,  a  certain  subsidiary  adopted  a  Defined
Contribution Plan for all non-production  employees.   Upon  commencement of 
service, these employees become eligible to participate in the plan  and 
contribute to the plan up to 5% of their compensation. The Company's matching
contribution is  equal  to  10% of the participant's compensation. The 
employee is immediately and fully vested in the Company's contribution. The
Company's contributions to the plan approximated $292,  $303  and  $254 for
the years ended December 31, 1998, 1997 and 1996, respectively.

Effective  January  1, 1990, a certain foreign subsidiary adopted a Defined
Benefit Plan for all employees.  As of September  30,  1998,  this subsidiary 
was closed and all employees were dismissed.   At  December  31, 1998 all 
obligations  with  respect  to  the pension plan have been
paid and no further liability  exists.  At December 31, 1997, there were 30
active employees covered, none retired and seven  deferred  pensioners.   
For the year ended December 31, 1997, the plan had net periodic pension cost 
of $46, plan  assets  at  fair market value of $371, a  projected  benefit 
obligation of $415, a vested benefit amount of $212, and an unfunded
liability of $60.  The plan  has  assumed  a  6% discount rate, 6% expected
long-term rate of return on plan assets and a 3.5% salary increase rate.

(14)   Litigation

Breast Implant Litigation

Final  Order of Settlement.  Prior to the  final  settlement  order issued by 
federal Judge Sam C. Pointer, Jr. on  February  1,  1999,  INAMED and its McGhan
Medical and CUI subsidiaries were defendants  in  tens  of  thousands of 
state  and  federal  court  lawsuits involving breast implants. As part of 
that final order, all of those cases arising from breast implant products (both
silicone gel-filled and saline) which  were  implanted  before  June  1,  1993 
were consolidated into a mandatory class action settlement and dismissed.

On  March  3,  1999 the statutory 30-day period for filing appeals expired,
with no notices of appeal being filed  with the Federal District Court within 
that period.  As a result, by June 2, 1999 the Company will be required to fund
the $25.5 million promissory note which was previously issued to  the  
court-supervised  escrow  agent on behalf of the plaintiff class.  The
Company has the ability to meet that funding obligation  from a combination
of both cash on hand and the proceeds to be received upon the exercise of  
certain warrants which were issued in contemplation of this event. (See 
Note 6).  An additional  $3 million of funding will be needed by June 2, 1999
to purchase the 426,323 shares of common stock  which  were issued in
September  1998  to  the  court-supervised  escrow  agent  as  part  of the
consideration for the settlement.  The common stock is callable at the option 
of the holders  and has therefore been classified  as  redeemable  common 
stock on the balance sheet with a $3,000  assigned value.
Those funds will be provided  directly by the Company's senior noteholders.
The Company had assigned its right to purchase  that  stock  to  its  senior 
noteholders inApril 1998, at the time the settlement agreement was signed.

Current  Product  Liability  Exposure.   Currently,  the  Company's
product liability litigation relates almost entirely to saline products which 
were implanted  after the 1992 FDA moratorium on silicone  gel-filled  
implants  went  into effect.  These cases  are  being handled in the ordinary
course of business and will not have a  material  financial  impact  on the
Company.  Outside the United  States,  where  the  Company  has  been selling 
silicone gel-filled implants without interruption and where the local tort 
systems  do  not  encourage  or allow contingency fee arrangements,  the 
Company  has only a minimal number of product liability lawsuits and no
material financial exposure.

History of the Litigation  Settlement.   Beginning in 1992 with the
FDA moratorium on silicone gel-filled  implants,  a  torrent  of  litigation
was  filed  against  the manufacturers.  The alleged factual   basis   for  
typical  lawsuits  included  allegations  that   the plaintiffs' silicone 
gel-filled breast implants caused specified  ailments  including,  among  
others, auto-immune disease, lupus, scleroderma, systemic disorders, joint 
swelling and chronic  fatigue.   The Company opposed plaintiffs'  claims  in
these  lawsuits  and other similar actions and has continually denied any
wrongdoing  or  liability.   In  addition,  the  Company  believes  that  a
substantial body of medical evidence exists which indicates that silicone  
gel-filled  implants are not causally related to any 


(14)   Litigation (continued)

of the above ailments.  Numerous studies in the past few years  by  medical
researchers in North  America  and  Europe  have  failed  to  show a 
definitive connection between breast implants and  disease  (some critics, 
however, have assailed  the  methodologies  of these studies).   Most
recently in December 1998, a science panel of independent experts appointed
by Judge Pointer reached  the  same conclusion.  Nevertheless, the immense 
volume of lawsuits created a substantial burden on  the  Company,  both in 
terms of ongoing litigation costs and the expenses of settlement, in addition
to the  inherent  risk  of adverse jury verdicts in cases that could not be 
resolved by dismissal or settlement. 

Beginning  in  1994  the  Company sought to resolve breast  implant litigation
by participating in a proposed industry-wide class action settlement (the 
"Global Settlement") of domestic breast implant litigation.  At that time,
the  Company  petitioned  the  Court to certify the Company's portion of the
Global Settlement as a mandatory class under Federal Rule of Civil Procedure
23(b)(1)(B),  meaning that claimants could not elect to "opt out" from  the
class in order to pursue individual  lawsuits  against  the  Company.   
Negotiations with the plaintiffs' negotiating committee  over  mandatory  
class treatment were tabled, however  (and  the Company's petition
consequently not ruled upon),  when  an  unexpectedly  high  projection  of
current disease claims and  the  subsequent  election  of  Dow  Corning  
Corporation  to  file for protection under federal bankruptcy  laws  
necessitated  a  substantial  restructuring of the Global Settlement.

In late 1995, the Company agreed to participate  in  a  scaled-back Revised 
Settlement Program ("RSP")  providing  for settlement, on a non-mandatory 
basis, of claims  by domestic claimants who were implanted before January 1,
1992 with silicone gel-filled implants manufactured by the Company's McGhan  
Medical subsidiary, and who met specified disease and other criteria.
Under the terms of the  RSP,  80%  of the settlement costs relating to the
Company's McGhan Medical implants were to be paid by 3M  and Union Carbide 
Corporation, with the remaining 20% to be paid by the Company.  However,  
because the RSP did not provide a vehicle for settling  claims  other  than 
by persons who elected  to  participate,  and because of continuing 
uncertainty about the Company's  ability  to fund its obligations under the 
RSP in the absence of a broader settlement also resolving breast  implant 
lawsuits  against  the Company and its CUI subsidiary  which  would  not  
be covered by the RSP, the Company continued through 1996 and 1997 to 
negotiate with the PNC in  an  effort to reach a broader resolution
through a mandatory class.  The PNC was advised in these negotiations  
by its consultant, Ernst & Young LLP, which at the PNC's request conducted 
reviews of the  Company's finances and operations in 1994 and again in 1996
and 1997.

On  April  2,  1998, the Company and the Settlement  Class  Counsel
executed a formal settlement  agreement  (the   "Settlement   Agreement"), 
resolving,  on  a mandatory, non-opt-out basis,  all  claims arising from 
McGhan Medical  and  CUI  breast  implants implanted before June 1, 1993. 
The  Settlement Agreement was preliminarily approved by the Court on June 2,
1998.

(14)      Litigation (continued)

The Court also issued  an  injunction  staying  all  pending breast implant
litigation against the Company  (and its subsidiaries) in federal and state 
courts.   The  Company believes that this stay has alleviated  the  
significant financial and managerial burden which these lawsuits had
placed on the Company.

Terms and Conditions of the  Settlement  Agreement.  Under  the  Settlement
Agreement, $31.5 million  of consideration, consisting of $3 million of cash,
$3 million  of common stock and $25.5 million principal  amount  of  a  6%  
subordinated note were deposited in a court supervised escrow account in 
September 1998.  Thereafter,  the  Court  authorized  the mailing of a notice
of the  proposed  Settlement  to  all  class  members and scheduled a 
fairness hearing, which was held on January 11, 1999.

Now that the Court has granted final approval of the Settlement and
that final order has become non-appealable, once the Company completes  
its  funding obligations (by June 2, 1999) the consideration held in the escrow
account will be  released to the court-appointed settlement  office  for  
distribution to the plaintiff class in  accordance with an allocation plan to
be determined by the Court in proceedings to be held in mid-1999.

        The Settlement Agreement  covers  all  domestic  claims against the
Company and its subsidiaries  by  persons  who  were implanted with McGhan 
Medical  or  CUI silicone gel-filled or saline implants before June 1, 1993,
including claims for injuries not yet known and claims by other persons 
asserting derivative recovery  rights  by reason of personal, contractual or
legal relationships  with  such implantees.  The Settlement is  structured as a
mandatory, non-opt-out class settlement pursuant  to  Federal Rule of Civil 
Procedure 23(b)(1)(B), and is modeled on similarly-structured  mandatory 
class  settlements  approved  in  the  1993 Mentor Corporation breast  
implant  litigation,   and   more  recently  in  the  1997  Acromed
Corporation pedicle screw litigation.

        The  application  for  preliminary  approval  included  evidentiary
submissions by both the Company and the plaintiffs addressing  requisite 
elements for certification and approval, including  the  existence,  absent
settlement,   of   a   "limited   fund" insufficient to respond to the
volume  of individual claims, and the fairness, reasonableness and adequacy
of the Settlement.  In connection with a fairness hearing held on 
January 11, 1999 the Company and the plaintiffs submitted  additional 
materials to support questions posed by the Court and to answer various
objections which had been made.

Resolution  of 3M Contractual Indemnity Claims.  The Settlement was
conditioned on resolution of claims asserted by  3M under a contractual 
indemnity provision which was part of the August 1984 transaction in which 
the Company's McGhan Medical subsidiary purchased 3M's plastic surgery 
business.  To resolve  these  claims, on April 16, 1998 the Company and 3M 
entered into a provisional agreement (the "3M Agreement")  pursuant  to  
which  the Company will seek to obtain   releases,  conditional  on  judicial  
approval  of  the  Company's settlement and favorable 

(14)     Litigation (continued)

resolution  of  any  appeals,  of  claims  asserted  against 3M in lawsuits
involving breast implants manufactured by the Company's McGhan subsidiary.  
The 3M Agreement provides for release of  3M's  indemnity claim, again 
conditional on judicial  approval  of  the Settlement and favorable 
resolution  of any appeals, upon achievement of an agreed minimum number of 
conditional releases for  3M.   The 3M Agreement requires that this condition 
be met or waived before notice of the Settlement is given to the class.

Under the terms  of  the  3M Agreement (as later amended in January
1999), the Company paid $3 million to 3M in February 1999,  shortly  after  
the Court granted final approval of the Settlement.   Also  under the terms 
of the 3M Agreement  the  Company  will assume certain limited 
indemnification  obligations  to  3M  beginning  in  the year 2000, subject 
to a cap of $1 million  annually and $3 million to $6 million in total, 
depending  on  the resolution of certain cases which were not settled 
prior to the issuance of the final order.

Allocation  and Distribution of Settlement Proceeds.  Following the procedures
adopted in the Mentor Corporation and Acromed Corporation mandatory class 
settlements, the Settlement leaves allocation and  distribution  of  the  
proceeds  to class members to later proceedings to be conducted  by  the  
Court,  and  contemplates  that  the Court may  appoint subclasses or adopt
other  procedures  in  order  to  ensure  that all relevant  interests  are
adequately represented in the allocation and distribution process.

Ongoing  Litigation  Risks.   Although   the  Company  expects  the Settlement
to end as a practical matter its involvement in the current mass product 
liability litigation in the United States over breast  implants,  there  
remain  a  number  of  ongoing litigation  risks, including:

1.      Collateral Attack.  As in all class  actions,  the  Company may be 
called upon to defend individual  lawsuits  collaterally  attacking the 
Settlement even after  it becomes non-appealable. However, the typically 
permissible grounds  for  such  attacks (in general, lack of jurisdiction or
constitutionally   inadequate   class   notice   or   representation)   are
significantly narrower than the grounds available on direct appeal.

2.      Non-Covered  Claims.   The  Settlement  does   not  include several 
categories of breast implants  which  the Company will be left to defend in 
the ordinary  course through the tort system.  These include lawsuits 
relating to breast implants implanted on or after June 1, 1993, and  lawsuits
in foreign  jurisdictions.   The  Company  regards  lawsuits involving 
post-June 1993 implants  (predominantly  saline-filled  implants)  as  
routine  litigation manageable in the ordinary course of business.  Breast 
implant litigation outside of the United States has to date been minimal, and
the  Court  has  with  minor  exceptions  rejected efforts by foreign 
plaintiffs to file suit in the United States.



(14)        Litigation (continued)

Accounting Treatment.  In 1993, the Company recorded a $9,152  reserve  for
litigation.  For the year  ended  December 31, 1997, the Company booked an 
additional reserve of $28,150.  The litigation reserve  as of December 31, 
1997 of $37,335 includes the cost of the non-opt-out settlement agreement of
$31,500, other settlements of $4,885 and legal fees and other related 
expenses of $950.

At December 31, 1998  the  litigation  reserve  was  $5,721  consisting  of
accruals for other settlements  of  $4,885  and legal fees and other 
related expenses of $836. The reduction of the December 31, 1997 litigation
reserve  was  due  to  the issuance of the 6% $25,500 note payable to the 
escrow agent, $3,000 of redeemable common stock,  and the payment of $3,000 
cash as prescribed in the settlement agreement.

(15)     Commitments and Contingencies

The  Company  leases  facilities  under operating leases.  The  leases  are
generally on an all-net  basis,  whereby the Company pays  taxes,  maintenance
and  insurance.  Leases that expire  are  expected  to  be  renewed  or  
replaced  by  leases  on  other properties.  Rent expense aggregated $4,589, 
$4,664 and $4,650 for the years ended December 31, 1998, 1997 and 1996, 
respectively.

Minimum lease  commitments  under  all noncancelable leases at December 31,
1998 are as follows:
                Year ending December 31:

                        1999     $   4,253
                        2000         3,487
                        2001         2,822
                        2002         2,411
                        2003         1,930
                        Thereafter   7,625
                                   -------
                                 $  22,528
(16)    Sale of Subsidiaries

In 1993, the Company sold its wholly-owned  subsidiary,  Specialty Silicone
Fabricators, Inc. (SSF),  a  manufacturer  of  silicone  components  for  the 
medical  device industry, for $10.8 million.   The  consideration  consisted 
of  $2.7  million  in  cash,  the forgiveness of $2.2 million in intercompany
notes due to SSF, and $5.9 million in structured  notes.  The receivable
included a note in the amount of $2,425 due February 1995 and a note in the
amount of $3,466 due on August  31,  2003,  accruing  interest quarterly 
at a rate of prime, not to exceed 11%. The notes have been reflected on the 
balance  sheet  net of a discount of $644.  In addition, the Company has 
recorded an allowance for doubtful  notes  as  of December 31,

(16)    Sale of Subsidiaries (continued)

1996 of $1,067.  In 1997, the Company reduced this allowance on the note by
$600 and recorded   the   resulting   income   effectively reducing general 
and administrative expenses by the  same  amount.   The  reduction  of the 
allowance was in part based  on negotiations with SSF.  The notes are 
collateralized by all of the assets of the merger.  The Company has filed
a  UCC-1 and its position is subordinated  only  to  that  of  the  primary
lender.

(17) Supplemental Schedule of Non-Cash Investing and Financing Activities

Year ended December 31, 1998:

The Company issued 1,112,173 shares of common stock and recorded a
corresponding  $4,080  reduction of convertible debt in connection with the 4%
Convertible Debentures converted to equity.

The Company issued 66,117 shares of common stock as payment of $261 of
accrued  debt costs related  to  the  1997  default  of  certain  financial
covenants related to the $6,200 convertible debenture.

The  Company   issued   16,052  shares  of  common  stock  and  recorded  a
corresponding $86 reduction of convertible  notes  payable  in  connection  
with  the 11% Convertible Notes converted to equity.

The   Company   issued  90,744  shares  of  common  stock  and  recorded  a
corresponding $500 reduction of royalties payable.

The  Company  issued  $25,500  of  notes  payable  and  426,323  shares  of
redeemable common stock at  an  aggregate  stated  value  of  $3,000  and  
recorded  a corresponding $28,500  reduction in the accrued litigation 
settlement.

Year ended December 31, 1997:

The Company issued 615,958 shares of common stock and recorded a
corresponding  $2,267  reduction of convertible debt in connection with the 4%
Convertible Debentures converted to equity.

The Company accrued debt  costs  of  $396 related to the default of certain
financial covenants related to the $6,200 convertible  debenture.   During  
1997, the Company issued 36,711 shares of common stock as payment of $135 
of the accrued debt costs.


(17)    Supplemental   Schedule   of   Non-Cash   Investing  and  Financing
        Activities


Year ended December 31, 1996:

The  Company  issued  58,400  shares  of  common  stock  and   recorded   a
corresponding $540  reduction  of  convertible  notes  payable in connection
with the 11% Secured Convertible Notes converted to common stock.

The  Company  recorded  an  accounting/finance   charge   of   $1,417   and
corresponding liability in connection with the 5% bonus shares given to the 
11% Secured Convertible  Noteholders  for  their  consent  and waiver of 
default of the operating income  covenant  in  the  first  quarter  of  1996.
The   liability  was extinguished upon the issuance of the shares in 
January 1997.

The Company recorded a debt conversion charge of $44 in connection with the
10% conversion inducement offered to the 11% Secured Convertible Noteholders.


(18)     Quarterly Summary of Operations (unaudited)

The  following is a summary of selected quarterly financial data  for  1998
and 1997:



                                         Quarter

 
                   First            Second          Third        Fourth
Net Sales:
  1998            $ 30,052         $ 36,928       $ 32,130      $ 32,457
  1997              26,417           29,686         24,206        26,072
Gross Profit:
  1998              17,760           25,926         20,204        19,722
  1997              17,139           20,504         16,220        14,875
Net Income (loss):
  1998              (1,285)           3,773           (461)        9,946
  1997                (277)             269           (908)      (40,661)
Net Income (loss) per share:
  1998 Basic         (0.14)            0.38          (0.04)         0.87
  1998 Diluted       (0.14)            0.30          (0.04)         0.72

  1997 Basic 
  and Diluted        (0.03)            0.03          (0.11)        (4.73)


(18)    Quarterly Summary of Operations (continued)

Significant Fourth Quarter Adjustments, 1998


During  the fourth quarter of the year ended December 31, 1998, the Company
recorded significant   adjustments  which  increased  net  income  by  
$6,200.   The adjustments were as follows:

        Extraordinary charge for issuance of
           Warrants                             $       (1,800)
        Income Tax Benefit                               8,000


The  Company  incurred   the   extraordinary  charge  in  relation  to  the
restructuring of the Company's 11% junior subordinated  notes,  which  
occurred  in  the  fourth quarter of 1998.

An income tax benefit was established to recognize a portion of the benefit
expected to be received from the Company's substantial net operating loss 
carryforward.

Significant Fourth Quarter Adjustments, 1997


During  the fourth quarter of the year ended December 31, 1997, the Company
recorded significant adjustments which decreased income by $29,700.  The 
adjustments were as follows:

        Litigation related expenses             $    28,200
        General & administrative expenses
             Related to litigation                      500
        Income Tax Expense                            1,000


The Company's  litigation  settlement expense was adjusted to recognize the
latest developments in the breast implant litigation.


(18)    Quarterly Summary of Operations (continued)


Significant Fourth Quarter Adjustments, 1996


During the fourth quarter of  the year ended December 31, 1996, the Company
recorded significant adjustments to the results of operations which decreased
income by $3,842. The adjustments  were as follows:

        Income Tax Expense                        $ 2,006
        Provision for product returns                 934
        Provision for product liability               254
        Royalty expense                               648

The Company's provision for product  returns  was adjusted to recognize the
return of goods previously sold to customers based on historical results.

The Company's income tax expense was adjusted to write off the deferred tax
assets previously carried on the domestic subsidiaries financial statements.

During 1996, the provision for product liability  was  increased by $254 to
recognize the potential impact of the Company's limited product warranty.  
The Company's royalty expense  was  also  increased  in  the  fourth  quarter 
of 1996 by $648  to recognize the royalty expense for products sold 
internationally under various license agreements. 


Schedule II
                       INAMED CORPORATION AND SUBSIDIARIES
                        Valuation and Qualifying Accounts
                  Years ended December 31, 1998, 1997, and 1996
                                  (in 000's)

                              Beginning                          End of period
Description                   of period   Additions  Deductions   Balance

Year ended December 31, 1998:
  Allowance for returns       $ 4,356      $   400        __        $ 4,756
  Allowance for doubtful 
    accounts                      865          537        __          1,402
  Allowance for obsolescence    1,514           __     $  345         1,169
  Valuation allowance for 
    deferred tax assets        28,142           __     12,664        15,478
  Self-insurance accrual        3,602           47         __         3,649
  Allowance for doubtful Notes    467           __         __           467
  Litigation reserve           37,335           __      31,614        5,721


Year ended December 31, 1997:
  Allowance for returns         4,697           __         341        4,356
  Allowance for doubtful accounts 714          151          __          865
  Allowance for obsolescence    1,326          188          __        1,514
  Valuation allowance for 
    deferredtax assets         12,026       16,116          __       28,142
  Self-insurance accrual        1,373        2,229          __        3,602
  Allowance for doubtful Notes  1,067           --         600          467
  Litigation reserve            9,152       28,183          __       37,335


Year ended December 31, 1996:
  Allowance for returns         5,676          934       1,913        4,697
  Allowance for doubtful accounts 965          101         352          714
  Allowance for obsolescence      759          567          __        1,326
  Valuation allowance for 
    deferred tax assets         7,377        4,649          __       12,026
  Self-insurance accrual        1,131          270          28        1,373
  Allowance for doubtful Notes  1,067           __          __        1,067
  Litigation reserve            9,152           __          __        9,152











Exhibit 3.1

                RESTATED CERTIFICATE OF INCORPORATION

                                OF

                  INAMED CORPORATION (Delaware)
                

This  Restated Certificate of Incorporation (the "Certificate")  of  INAMED
CORPORATION (Delaware)
(the "Corporation"),  was  duly  adopted  by  the Board of Directors of the
Corporation on December 22, 1998 and
the stockholders of the Corporation on December  21,  1998   in  accordance
with Sections 228, 242 and 245 of the
General  Corporation Law of the State of Delaware. The original Certificate
of Incorporation was filed on
November 17, 1998.

The text of the Certificate of Incorporation is hereby restated and further
amended to read in its entirety
as follows:


FIRST:          The name of the corporation is INAMED Corporation.

SECOND: The  address  of  the  registered  office of the Corporation in the
State of Delaware shall be
at Corporation Trust Center, 1209 Orange Street, City of Wilmington, County
of New Castle, Delaware 19801.
The name and address of the Corporation's registered  agent in the State of
Delaware is The Corporation Trust
Company,  1209  Orange Street, City of Wilmington, County  of  New  Castle,
Delaware 19801.

THIRD:  The purpose  of  the  Corporation is to engage in any lawful act or
activity for which corporations
may now or hereafter be organized  under the General Corporation Law of the
State of Delaware.

FOURTH: 1.      The total number of  shares  of stock which the Corporation
shall have authority
to  issue  is  Twenty-Six  Million  (26,000,000)  shares,   consisting   of
Twenty-Five Million (25,000,000) shares of
Common  Stock,  par  value  $.01  per  share  (the "Common Stock"), and One
Million (1,000,000) shares of
Preferred Stock, par value $.01 per share (the "Preferred Stock").

2.      Shares of Preferred Stock may be issued from time to time in one or
more
series as may be established from time to time  by  resolution of the Board
of Directors of the Corporation (the
"Board of Directors"), each of which series shall consist of such number of
shares and have such distinctive
designation  or  title  as shall be fixed by resolution  of  the  Board  of
Directors prior to the issuance of any shares of
such series. Each such class  or  series of Preferred Stock shall have such
voting powers, full or limited, or no
voting powers, and such preferences  and  relative, participating, optional
or other special rights and such
qualifications, limitations or restrictions  thereof, as shall be stated in
such resolution of the Board of Directors
providing for the issuance of such series of Preferred Stock.  The Board of
Directors is further authorized to
increase or decrease (but not below the number  of  shares of such class or
series then outstanding) the number of
shares of any series subsequent to the issuance of shares of that series.

FIFTH:  In  furtherance  and not in limitation of the powers  conferred  by
statute and subject to Article
Sixth hereof, the Board of  Directors  is  expressly  authorized  to adopt,
repeal, rescind, alter or amend in any
respect the Bylaws of the Corporation (the "Bylaws").

SIXTH:  Notwithstanding  Article  Fifth  hereof, the Bylaws may be adopted,
rescinded, altered or amended
in any respect by the stockholders of the  Corporation,  but  only  by  the
affirmative vote of the holders of not less
than  a  majority  of  the voting power of all outstanding shares of voting
stock regardless of class and voting
together as a single voting class.

SEVENTH:        The business  and  affairs  of  the  Corporation  shall  be
managed by and under the direction
of the Board of Directors.  Except as may otherwise be provided pursuant to
Section 2 of Article Fourth hereof in
connection  with  rights  to  elect  additional  directors  under specified
circumstances which may be granted to the
holders of any series of Preferred Stock, the exact number of  directors of
the Corporation shall be determined
from time to time by a Bylaw or Amendment thereto provided that  the number
of directors shall not be reduced to
less  than  three (3), except that there need be only as many directors  as
there are stockholders in the event that the
outstanding shares are held of record by fewer than three (3) stockholders.
Elections of directors need not be by
written ballot unless the Bylaws of the Corporation shall so provide.

EIGHTH: Each  director  shall  serve  until  his  successor  is elected and
qualified or until his death,
resignation  or removal; no decrease in the authorized number of  directors
shall shorten the term of any incumbent
director; and  additional  directors,  elected  pursuant  to  Section  2 of
Article Fourth hereof in connection with rights
to  elect such additional directors under specified circumstances which may
be granted to the holders of any series
of Preferred Stock, shall not be included in any class, but shall serve for
such term or terms and pursuant to such
other  provisions  as  are  specified  in  the  resolution  of the Board of
Directors establishing such series.   Any
stockholder proposals and nominations for the election of a director  by  a
stockholder shall be delivered to the
Corporate  Secretary  of  the Corporation no less than ninety (90) days nor
more than one hundred twenty (120)
days in advance of the first  anniversary  of  the Company's annual meeting
held in the prior year, provided,
however, in the event the Company shall not have  had  an annual meeting in
the prior year, such notice shall be
delivered  no less than ninety (90) days nor more than one  hundred  twenty
(120) days in advance of May 15 of the
current year.   Such  stockholder  nominations  must contain (a) as to each
person whom the stockholder proposes to
nominate for election or re-election as a director  at  the annual meeting:
(w) the name, age, business address and
residence address of the proposed nominee, (x) the principal  occupation or
employment or the proposed nominee,
(y)  the  class  and  number  of shares of capital stock of the Corporation
which are beneficially owned by the
proposed nominee, and (z) any other  information  relating  to the proposed
nominee that is required to be disclosed
in solicitations for proxies for election of directors pursuant to Rule 14a
under the Securities Exchange Act of
1934, as amended; and (b) as to the stockholder giving notice  of  nominees
for election at the annual meeting, (x)
the  name  and  record  address  of  the stockholder, and (y) the class and
number of shares of capital stock of the
Corporation which are beneficially owned by the stockholder.

NINTH:  Except  as  may otherwise be provided  pursuant  to  Section  2  of
Article Fourth hereof in
connection  with rights  to  elect  additional  directors  under  specified
circumstances which may be granted to the
holders of any  series  of  Preferred  Stock,  newly  created directorships
resulting from any increase in the number of
directors, or any vacancies on the Board of Directors resulting from death,
resignation, removal or other causes,
shall  be  filled  solely  by  the  affirmative vote of a majority  of  the
remaining directors then in office, even though
less  than a quorum of the Board of Directors.   Any  director  elected  in
accordance with the preceding sentence
shall hold  office  for  the  remainder  of  the  full term of the class of
directors in which the new directorship was
created or the vacancy occurred and until such director's  successor  shall
have been elected and qualified or until
such director's death, resignation or removal, whichever first occurs.

TENTH:  Except  for  such  additional  directors  as  may be elected by the
holders of any series of
Preferred Stock pursuant to the terms thereof established  by  a resolution
of the Board of Directors pursuant to
Article  Fourth  hereof,  any  director may be removed from office with  or
without cause and only by the affirmative
vote of the holders of not less  than  50%  of  the  voting  power  of  all
outstanding shares of voting stock entitled to
vote  in  connection with the election of such director regardless of class
and voting together as a single voting
class.

ELEVENTH:       Meetings  of  stockholders  of  the Corporation may be held
within or without the State of
Delaware, as the Bylaws may provide.  The books of  the  Corporation may be
kept (subject to any provision of
applicable law) outside the State of Delaware at such place  or  places  as
may be designated from time to time by
the Board of Directors or in the Bylaws.

TWELFTH:        For   the   purposes   of   this  Restated  Certificate  of
Incorporation, the terms "affiliate,"
"associate," "control,"  "interested stockholder,"  "owner,"  "person"  and
"voting stock" shall have the meanings
set forth in Section 203(c) of the Delaware General Corporation Law.

THIRTEENTH:     The  provisions set forth in this Article Thirteenth and in
Articles Fourth, Fifth, Sixth,
Seventh, Eighth, Ninth,  Tenth  and  Eleventh  hereof  may not be repealed,
rescinded, altered or amended in any
respect,  and  no  other  provision  or  provisions  may  be adopted  which
impair(s) in any respect the operation or
effect of any such provision, except by the affirmative vote of the holders
of a majority of the voting power of all
outstanding shares of voting stock regardless of class and  voting together
as a single voting class, and, where such
action  is  proposed  by  an interested stockholder or by any associate  or
affiliate of an interested stockholder, the
affirmative vote of the holders  of  a  majority of the voting power of all
outstanding shares of voting stock,
regardless  of class and voting together as  a  single  class,  other  than
shares held by the interested stockholder which
proposed (or  the affiliate or associate of which proposed) such action, or
any affiliate or associate of such
interested stockholder.

FOURTEENTH:     The  Corporation  reserves  the  right  to  adopt,  repeal,
rescind, alter or amend in any
respect  any  provision contained in this Certificate in the manner now  or
hereafter prescribed by applicable law,
and all rights conferred on stockholders herein are granted subject to this
reservation. Notwithstanding the
preceding sentence,  the  provisions  set  forth in Articles Fourth, Fifth,
Sixth, Seventh, Eighth, Ninth, Tenth,
Eleventh and Fourteenth may not be repealed,  rescinded, altered or amended
in any respect, and no other
provision or provisions may be adopted which impair(s)  in  any respect the
operation or effect of any such
provision,   unless  such  action  is  approved  as  specified  in  Article
Fourteenth hereof.

FIFTEENTH:      No  director  of  the  Corporation  shall  be liable to the
Corporation or its stockholders for
monetary  damages  for breach of fiduciary duty as a director,  except  for
liability (a) for any breach of the
director's duty of loyalty  to the Corporation or its stockholders, (b) for
acts or omissions not in good faith or
which involve intentional misconduct  or  a  knowing  violation of law, (c)
under Section 174 of the Delaware
General Corporation Law, or (d) for any transaction from which the director
derived an improper personal
benefit.  If the Delaware General Corporation Law hereafter  is  amended to
authorize the further elimination or
limitation of the liability of directors, then the liability of a  director
of the Corporation, in addition to the
limitation  on personal liability provided herein, shall be limited to  the
fullest extent permitted by the amended
Delaware General  Corporation  Law.   Any  repeal  or  modification of this
Section by the stockholders of the
Corporation  shall be prospective only and shall not adversely  affect  any
limitation on the personal liability of a
director of the  Corporation  existing  at  the  time  of  such  repeal  or
modification.

SIXTEENTH:      No  contract  or  other transaction of the Corporation with
any other person, firm or
corporation, or in which this corporation  is interested, shall be affected
or invalidated by: (a) the fact that any one
or more of the directors or officers of the Corporation is interested in or
is a director or officer of such other firm
or  corporation;  or,  (b) the fact that any director  or  officer  of  the
Corporation, individually or jointly with others,
may be a party to or may be interested in any such contract or transaction,
so long as the contract or transaction is
authorized, approved or  ratified at a meeting of the Board of Directors by
sufficient vote thereon by directors not
interested therein, to which such fact of relationship or interest has been
disclosed, or the contract or transaction
has  been  approved  or  ratified   by  vote  or  written  consent  of  the
stockholders entitled to vote, to whom such fact of
relationship or interest has been disclosed,  or so long as the contract or
transaction is fair and reasonable to the
Corporation.   Each  person who may become a director  or  officer  of  the
Corporation is hereby relieved from any
liability that might otherwise  arise by reason of his contracting with the
Corporation for the benefit of himself or
any firm or corporation in which he may in any way be interested.

IN WITNESS WHEREOF INAMED CORPORATION  has caused this Restated Certificate
of
Incorporation to be executed by its President  and to be attested to by its
Secretary as of the 22 day of December,
1998.

INAMED CORPORATION


By:/s/ Richard G. Babbitt
Richard G. Babbitt
Chairman, Chief Executive Officer and President


By: /s/ Carol A. Brennan
Carol A. Brennan
Secretary

Exhibit 3.2


        BYLAWS
        OF

        INAMED CORPORATION
        (A DELAWARE CORPORATION)

The following are the Bylaws of INAMED CORPORATION  (Delaware),  a Delaware
corporation (the
"Corporation"),  effective as of December 21, 1998, after approval  by  the
Corporation's Board of Directors and
stockholders:

        ARTICLE I

        Offices


Section 1.01.  Principal  Executive Office.  The principal executive office
of the Corporation shall be
located at 3800 Howard Hughes  Boulevard,  Suite  900,  Las  Vegas,  Nevada
89109.  The Board of Directors of the
Corporation  (the  "Board  of  Directors")  may change the location of said
principal executive office.

Section 1.02.  Other Offices.  The Corporation  may  also have an office or
offices at such other place or
places, either within or without the State of Delaware,  as  the  Board  of
Directors may from time to time determine
or as the business of the Corporation may require.

        ARTICLE II

        Meetings of Stockholders

Section  2.01.  Annual Meetings.  The annual meeting of stockholders of the
Corporation shall be held at
a date and at such time as the Board of Directors shall determine.  At each
annual meeting of stockholders,
directors  shall  be  elected  in accordance with the provisions of Section
3.03 hereof and any other proper business
may be transacted.

Section 2.02.  Special Meetings.   Special meetings of stockholders for any
purpose or purposes may be
called at any time by a majority of the Board of Directors, by the Chairman
of the Board, the President or by
holders of not less than ten percent  (10%)  of  the  voting  power  of all
outstanding shares of voting stock regardless
of  class  and  voting together as a single voting class.  The term "voting
stock" as used in these Bylaws shall have
the meaning set forth in Section 203(c) of the Delaware General Corporation
Law.  Special meetings may not be
called by any other  person or persons.  Each special meeting shall be held
at such date and time as is requested by
the person or persons calling the meeting, within the limits fixed by law.

Section 2.03.  Place of  Meetings.   Each  annual  or  special  meeting  of
stockholders shall be held at such
location  as  may  be  determined  by the Board of Directors or, if no such
determination is made, at such place as
may be determined by the Chairman of  the  Board.   If  no  location  is so
determined, any annual or special meeting
shall be held at the principal executive office of the Corporation.

Section  2.04.   Notice  of  Meetings.   Written  notice  of each annual or
special meeting of stockholders
stating the date and time when, and the place where, it is to be held shall
be delivered either personally or by mail
to stockholders entitled to vote at such meeting not less than ten (10) nor
more than sixty (60) days before the date
of  the meeting.  The purpose or purposes for which the meeting  is  called
may, in the case of an annual meeting,
and shall,  in  the  case of a special meeting, also be stated.  If mailed,
such notice shall be directed to a stockholder
at his address as it shall  appear  on  the stock books of the Corporation,
unless he shall have filed with the Secretary
of  the Corporation a written request that  notices  intended  for  him  be
mailed to some other address, in which case
such notice shall be mailed to the address designated in such request.

Section  2.05.   Conduct  of  Meetings.  All annual and special meetings of
stockholders shall be conducted
in accordance with such rules and  procedures as the Board of Directors may
determine subject to the requirements
of  applicable  law and, as to matters  not  governed  by  such  rules  and
procedures, as the chairman of such meeting
shall determine.   The  chairman  of  any  annual  or  special  meeting  of
stockholders shall be the Chairman of the
Board.   The  Secretary,  or  in  the  absence  of  the Secretary, a person
designated by the Chairman of the Board,
shall act as secretary of the meeting.

Section 2.06.  Quorum.  At any meeting of stockholders  of the Corporation,
the presence, in person or
by proxy, of the holders of record of a majority of the shares  then issued
and outstanding and entitled to vote at
the  meeting  shall  constitute  a  quorum for the transaction of business;
PROVIDED, HOWEVER, that this Section
2.06  shall  not affect any different requirement  which  may  exist  under
statute, pursuant to the rights of any
authorized  class   or  series  of  stock,  or  under  the  Certificate  of
Incorporation of the Corporation, as amended or
restated from time to  time (the "Certificate"), for the vote necessary for
the adoption of any measure governed
thereby.

In the absence of a quorum, the stockholders present in person or by proxy,
by majority vote and without
further notice, may adjourn the meeting from time to time until a quorum is
attained.  At any reconvened meeting
following such adjournment at which a quorum shall be present, any business
may be transacted which might have
been transacted at the meeting as originally notified.

Section 2.07.  Votes Required.   The  affirmative vote of a majority of the
shares present in person or
represented  by  proxy  at a duly called meeting  of  stockholders  of  the
Corporation, at which a quorum is present
and entitled to vote on the  subject matter, shall be sufficient to take or
authorize action upon any matter which
may properly come before the meeting, except that the election of directors
shall be by plurality vote, unless the
vote of a greater or different  number  thereof  is required by statute, by
the rights of any authorized class of stock
or by the Certificate.
Unless the Certificate or a resolution of the Board of Directors adopted in
connection with the issuance of
shares of any class or series of stock provides for  a  greater  or  lesser
number of votes per share, or limits or denies
voting  rights,  each  outstanding  share  of stock, regardless of class or
series, shall be entitled to one (l) vote on each
matter submitted to a vote at a meeting of stockholders.

Section 2.08.  Proxies.  A stockholder may vote  the shares owned of record
by him either in person or
by proxy executed in writing (which shall include  writings  sent by telex,
telegraph, cable or facsimile
transmission)  by  the  stockholder  himself  or  by  his  duly  authorized
attorney-in-fact.  No proxy shall be valid after
three  (3)  years  from  its  date,  unless the proxy provides for a longer
period.  Each proxy shall be in writing,
subscribed by the stockholder or his duly  authorized attorney-in-fact, and
dated, but it need not be sealed,
witnessed or acknowledged.

Section 2.09.  Action by Written Consent.  Any  action that may be taken at
any annual or special meeting
of stockholders may be taken without a meeting, without  prior  notice  and
without a vote, if a consent in writing,
setting  forth  the  action  so  taken,  shall  be signed by the holders of
outstanding stock having not less than the
minimum number of votes that would be necessary to  authorize  or take such
action at a meeting at which all
shares  entitled  to  vote thereon were present and voted.  Notice  of  the
taking of such action shall be given promptly
to each stockholder that  would  have  been  entitled  to vote thereon at a
meeting of stockholders and that did not
consent thereto in writing.

Section  2.10.   List  of  Stockholders.  The Secretary of the  Corporation
shall prepare and make (or cause
to be prepared and made), at  least  ten  (10) days before every meeting of
stockholders, a complete list of the
stockholders  entitled  to vote at the meeting,  arranged  in  alphabetical
order and showing the address of, and the
number of shares registered  in  the  name of, each stockholder.  Such list
shall be open to the examination of any
stockholder,  for  any  purpose germane to  the  meeting,  during  ordinary
business hours, for a period of at least ten
(10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall
be specified in the notice  of the meeting, or, if not so specified, at the
place where the meeting is to be held.  The
list shall also be produced and  kept  at the time and place of the meeting
during the duration thereof, and may be
inspected by any stockholder who is present.

Section  2.11.  Inspectors of Election.   In  advance  of  any  meeting  of
stockholders, the Board of Directors
may appoint  Inspectors  of  Election  to  act  at  such  meeting or at any
adjournment or adjournments thereof.  If such
Inspectors are not so appointed or fail or refuse to act, the  chairman  of
any such meeting may (and, upon the
demand  of  any  stockholder  or  stockholder's  proxy, shall) make such an
appointment.

The number of Inspectors of Election shall be one  (1)  or  three  (3).  If
there are three (3) Inspectors of
Election, the decision, act or certificate of a majority shall be effective
and shall represent the decision, act or
certificate  of  all.   No  such  Inspector  need  be  a stockholder of the
Corporation.

Subject  to  any  provisions  of  the  Certificate  of  Incorporation,  the
Inspectors of Election shall determine
the  number  of  shares outstanding, the voting power of each,  the  shares
represented at the meeting, the existence
of a quorum and the  authenticity,  validity  and  effect  of proxies; they
shall receive votes, ballots or consents, hear
and determine all challenges and questions in any way arising in connection
with the right to vote, count and
tabulate  all votes or consents, determine when the polls shall  close  and
determine the result; and finally, they shall
do such acts as may be proper to conduct the election or vote with fairness
to all stockholders.  On request, the
Inspectors  shall  make a report in writing to the secretary of the meeting
concerning any challenge, question or
other matter as may  have  been  determined  by  them and shall execute and
deliver to such secretary a certificate of
any fact found by them.

Section  2.13  Notice  of Stockholder Action. Any stockholder  proposal  or
nomination for the election of a
director by a stockholder  shall be delivered to the Corporate Secretary of
the Corporation no less than ninety (90)
days nor more than one hundred  twenty  (120)  days in advance of the first
anniversary of the Company's annual
meeting held in the prior year, provided, however, in the event the Company
shall not have had an annual meeting
in the prior year, such notice shall be delivered  no less than ninety (90)
days nor more than one hundred twenty
(120)  days  in  advance of May 15 of the current year.   Such  stockholder
nominations must contain (a) as to each
person  whom  the  stockholder   proposes   to  nominate  for  election  or
re-election as a director at the annual meeting:
(w) the name, age, business address and residence  address  of the proposed
nominee, (x) the principal occupation
or employment or the proposed nominee, (y) the class and number  of  shares
of capital stock of the Corporation
which  are  beneficially  owned  by the proposed nominee, and (z) any other
information relating to the proposed
nominee that is required to be disclosed  in  solicitations for proxies for
election of directors pursuant to Rule 14a
under the Securities Exchange Act of 1934, as amended;  and  (b)  as to the
stockholder giving notice of nominees
for election at the annual meeting, (x) the name and record address  of the
stockholder, and (y) the class and
number of shares of capital stock of the Corporation which are beneficially
owned by the stockholder.


        ARTICLE III

        Directors

Section  3.01.   Powers.  The business and affairs of the Corporation shall
be managed by and be under
the direction of the  Board  of  Directors.   The  Board of Directors shall
exercise all the powers of the Corporation,
except  those that are conferred upon or reserved to  the  stockholders  by
statute, the Certificate of Incorporation or
these Bylaws.

Section 3.02.  Number.  The number of directors shall be fixed from time to
time by resolution of the
Board of  Directors but shall not be less than three (3) nor more than nine
(9).

Section 3.03.   Election  and  Term  of  Office.  Each director shall serve
until his successor is elected and
qualified or until his death, resignation  or  removal,  no decrease in the
authorized number of directors shall
shorten  the  term  of  any  incumbent  director, and additional  directors
elected in connection with rights to elect such
additional directors under specified circumstances  which may be granted to
the holders of any series of Preferred
Stock shall not be included in any class, but shall serve  for such term or
terms and pursuant to such other
provisions  as  are  specified in the resolution of the Board of  Directors
establishing such series.

Section 3.04.  Election  of  Chairman  of the Board.  At the organizational
meeting immediately following
the annual meeting of stockholders, the directors shall elect a Chairman of
the Board from among the directors
who  shall hold office until the corresponding  meeting  of  the  Board  of
Directors in the next year and until his
successor  shall  have  been  elected  or  until his earlier resignation or
removal.  Any vacancy in such office may be
filled for the unexpired portion of the term  in  the  same  manner  by the
Board of Directors at any regular or special
meeting.

Section  3.05.   Removal.  Any director may be removed from office only  as
provided in the Certificate of
Incorporation.

Section  3.06.  Vacancies  and  Additional  Directorships.   Newly  created
directorships resulting from
death, resignation,  disqualification,  removal  or  other  cause  shall be
filled solely by the affirmative vote of a
majority of the remaining directors then in office, even though less than a
quorum of the Board of Directors.  Any
director  elected  in  accordance  with  the  preceding sentence shall hold
office for the remainder of the full term of
the class of directors in which the new directorship  was  created  or  the
vacancy occurred and until such director's
successor shall have been elected and qualified.  No decrease in the number
of directors constituting the Board of
Directors shall shorten the term of any incumbent director.

Section 3.07.  Regular and Special Meetings.  Regular meetings of the Board
of Directors shall be held
immediately  following the annual meeting of the stockholders; without call
at such time as shall from time to time
be fixed by the  Board  of  Directors; and as called by the Chairman of the
Board in accordance with applicable law.

Special meetings of the Board of Directors shall be held upon call by or at
the direction of the Chairman
of the Board, the President or  any two (2) directors, except that when the
Board of Directors consists of one (1)
director, then the one director may  call  a  special  meeting.   Except as
otherwise required by law, notice of each
special meeting shall be mailed to each director, addressed to him  at  his
residence or usual place of business, at
least  three  days  before  the  day on which the meeting is to be held, or
shall be sent to him at such place by telex,
telegram, cable, facsimile transmission  or  telephoned or delivered to him
personally, not later than the day before
the day on which the meeting is to be held.  Such  notice  shall  state the
time and place of such meeting, but need
not  state  the  purpose or purposes thereof, unless otherwise required  by
law, the Certificate of Incorporation or
these Bylaws ("Bylaws").

Notice of any meeting  need  not  be given to any director who shall attend
such meeting in person (except
when the person attends a meeting for  the express purpose of objecting, at
the beginning of the meeting, to the
transaction of any business because the  meeting  is not lawfully called or
convened) or who shall waive notice
thereof, before or after such meeting, in a signed writing.

Section  3.08.   Quorum.   At  all meetings of the Board  of  Directors,  a
majority of the fixed number of
directors shall constitute a quorum for the transaction of business, except
that when the Board of Directors
consists of one (1) director, then  the  one  director  shall  constitute a
quorum.

In  the  absence  of a quorum, the directors present, by majority vote  and
without notice other than
by announcement, may  adjourn  the meeting from time to time until a quorum
shall be present.  At any reconvened
meeting following such an adjournment  at  which a quorum shall be present,
any business may be transacted which
might have been transacted at the meeting as originally notified.

Section 3.09.  Votes Required.  Except as otherwise  provided by applicable
law or by the Certificate of
Incorporation, the vote of a majority of the directors present at a meeting
duly held at which a quorum is present
shall be sufficient to pass any measure.

Section  3.10.   Place and Conduct of Meetings.  Each regular  meeting  and
special meeting of the Board of
Directors shall be  held at a location determined as follows:  The Board of
Directors may designate any place,
within or without the  State  of  Delaware, for the holding of any meeting.
If no such designation is made: (a) any
meeting  called  by a majority of the  directors  shall  be  held  at  such
location, within the county of the Corporation's
principal executive  office,  as  the  directors  calling the meeting shall
designate; and (b) any other meeting shall be
held  at  such  location, within the county of the Corporation's  principal
executive office, as the Chairman of the
Board may designate  or,  in  the  absence  of  such  designation,  at  the
Corporation's principal executive office.
Subject  to  the  requirements  of  applicable law, all regular and special
meetings of the Board of Directors shall be
conducted in accordance with such rules  and  procedures  as  the  Board of
Directors may approve and, as to matters
not  governed by such rules and procedures, as the chairman of such meeting
shall determine.  The chairman of
any regular  or  special meeting shall be the Chairman of the Board, or, in
his absence, a person designated by the
Board of Directors.  The  Secretary, or, in the absence of the Secretary, a
person designated by the chairman of the
meeting, shall act as secretary of the meeting.

Section  3.11.   Fees  and Compensation.   Directors  shall  be  paid  such
compensation as may be fixed from
time to time by resolution  of  the Board of Directors: (a) for their usual
and contemplated services as directors; (b)
for their services as members of  committees  appointed  by  the  Board  of
Directors, including attendance at
committee meetings as well as services which may be required when committee
members must consult with
management  staff;  and  (c)  for extraordinary services as directors or as
members of committees appointed by the
Board of Directors, over and above those services for which compensation is
fixed pursuant to items (a) and (b) in
this Section 3.11.  Compensation  may  be in the form of an annual retainer
fee or a fee for attendance at meetings,
or both, or in such other form or on such  basis  as the resolutions of the
Board of Directors shall fix.  Directors
shall  be  reimbursed  for  all  reasonable expenses incurred  by  them  in
attending meetings of the Board of Directors
and  committees  appointed by the Board  of  Directors  and  in  performing
compensable extraordinary services.
Nothing contained  herein  shall be construed to preclude any director from
serving the Corporation in any other
capacity, such as an officer, agent, employee, consultant or otherwise, and
receiving compensation therefor.

Section 3.12.  Committees of  the  Board  of Directors.  To the full extent
permitted by applicable law, the
Board of Directors may from time to time establish  committees,  including,
but not limited to, standing or special
committees and an executive committee with authority and responsibility for
bookkeeping, with authority to act as
signatories  on Corporation bank or similar accounts and with authority  to
choose attorneys for the Corporation and
direct litigation  strategy, which shall have such duties and powers as are
authorized by these Bylaws or by the
Board of Directors.  Committee members, and the chairman of each committee,
shall be appointed by the Board
of Directors.  The Chairman  of  the Board, in conjunction with the several
committee chairmen, shall make
recommendations to the Board of Directors  for  its final action concerning
members to be appointed to the several
committees of the Board of Directors. Any member  of  any  committee may be
removed at any time with or
without  cause  by  the Board of Directors.  Vacancies which occur  on  any
committee shall be filled by a resolution
of the Board of Directors.   If any vacancy shall occur in any committee by
reason of death, resignation,
disqualification,  removal or otherwise,  the  remaining  members  of  such
committee, so long as a quorum is present,
may continue to act until such vacancy is filled by the Board of Directors.
The Board of Directors may, by
resolution, at any time  deemed  desirable,  discontinue  any  standing  or
special committee.  Members of standing
committees,  and  their  chairmen,  shall  be elected yearly at the regular
meeting of the Board of Directors which is
held  immediately  following  the  annual  meeting  of  stockholders.   The
provisions of Sections 3.07, 3.08, 3.09 and
3.10 of these Bylaws shall apply, MUTATIS MUTANDIS,  to  any such Committee
of the Board of Directors.

        ARTICLE IV

        Officers

Section 4.01.  Designation, Election and Term of Office.   The  Corporation
shall have a Chairman of the
Board,  a  President,  Treasurer,  such  senior  vice  presidents  and vice
presidents as the Board of Directors deems
appropriate,  a Secretary and such other officers as the Board of Directors
may deem appropriate.  These officers
shall be elected  annually  by the Board of Directors at the organizational
meeting immediately following the annual
meeting of stockholders, and  each such officer shall hold office until the
corresponding meeting of the Board of
Directors in the next year and  until his successor shall have been elected
and qualified or until his earlier
resignation, death or removal.  Any vacancy in any of the above offices may
be filled for the unexpired portion of
the term by the Board of Directors at any regular or special meeting.

Section  4.02.   Chairman of the Board.   The  Chairman  of  the  Board  of
Directors shall preside at all
meetings of the directors  and  shall  have such other powers and duties as
may from time to time be assigned to him
by the Board of Directors.

Section  4.03.  President.  The President  shall  be  the  chief  executive
officer of the Corporation and shall,
subject to  the  power of the Board of Directors, have general supervision,
direction and control of the business and
affairs of the Corporation.   He  shall  preside  at  all  meetings  of the
stockholders and, in the absence of the
Chairman of the Board, at all meetings of the directors.  He shall have the
general powers and duties of
management usually vested in the office of president of a corporation,  and
shall have such other duties as may be
assigned to him from time to time by the Board of Directors.

Section  4.04.  Treasurer.  The Treasurer shall keep and maintain, or cause
to be kept and maintained,
adequate and  correct  books  and  records of account of the properties and
business transactions of the Corporation,
including  accounts  of its assets, liabilities,  receipts,  disbursements,
gains, losses, capital, retained earnings and
shares.  The books of  account  shall  at  all  reasonable times be open to
inspection by the directors.

The Treasurer shall deposit all moneys and other  valuables in the name and
to the credit of the
Corporation with such depositaries as may be designated  by  the  Board  of
Directors.  He shall disburse the funds
of  the  Corporation  as  may  be  ordered by the Board of Directors, shall
render to the President and directors,
whenever they request it, an account  of  all  of  his  transactions as the
Treasurer and of the financial condition of the
Corporation, and shall have such other powers and perform such other duties
as may be prescribed by the Board
of Directors or the Bylaws.

Section  4.05.   Secretary.   The Secretary shall keep the minutes  of  the
meetings of the stockholders, the
Board of Directors and all committees.   He  shall  be the custodian of the
corporate seal and shall affix it to all
documents which he is authorized by law or the Board  of  Directors to sign
and seal.  He also shall perform such
other duties as may be assigned to him from time to time by  the  Board  of
Directors or the Chairman of the Board
or President.

Section  4.06.   Assistant Officers.  The President may appoint one or more
assistant secretaries and such
other assistant officers  as  the  business of the Corporation may require,
each of whom shall hold office for such
period, have such authority and perform  such  duties  as  may be specified
from time to time by the President.

Section 4.07.  When Duties of an Officer May Be Delegated.   In the case of
absence or disability of an
officer of the Corporation or for any other reason that may seem sufficient
to the Board of Directors, the Board of
Directors or any officer designated by it, or the President, may,  for  the
time of the absence or disability, delegate
such officer's duties and powers to any other officer of the Corporation.

Section  4.08.   Officers Holding Two or More Offices.  The same person may
hold any two (2) or more
of the above-mentioned offices.

Section 4.09.  Compensation.   The  Board of Directors shall have the power
to fix the compensation of all
officers and employees of the Corporation.
Section 4.10.  Resignations.  Any officer  may resign at any time by giving
written notice to the Board of
Directors, to the President, or to the Secretary  of  the Corporation.  Any
such resignation shall take effect at the
time  specified  therein  unless  otherwise  determined  by  the  Board  of
Directors.  The acceptance of a resignation by
the Corporation shall not be necessary to make it effective.

Section  4.11.   Removal.   Any officer of the Corporation may be  removed,
with or without cause, by the
affirmative vote of a majority  of  the  entire  Board  of  Directors.  Any
assistant officer of the Corporation may be
removed,  with  or  without  cause,  by  the  President or by the Board  of
Directors.

        ARTICLE V

        Indemnification of Directors, Officers
        Employees end other Corporate Agents

Section  5.01.   Action,  Etc.  Other  Than  By  Or In  The  Right  of  The
Corporation.  The Corporation shall
indemnify any person who was or is a party or is threatened  to  be  made a
party to any threatened, pending or
completed   action,   suit   or   proceeding,   whether   civil,  criminal,
administrative or investigative (other than an action
by or in the right of the Corporation) by reason of the fact  that he is or
was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the  Corporation
as a director, officer, employee, trustee
or agent of another corporation, partnership, joint venture, trust or other
enterprise (all such persons being
referred  to  hereinafter  as  an  "Agent"),  against  expenses  (including
attorneys' fees), judgments, fines and amounts
paid  in  settlement  actually and reasonably incurred by him in connection
with such action, suit or proceeding if he
acted in good faith and  in a manner he reasonably believed to be in or not
opposed to the best interests of the
Corporation, and with respect  to any criminal action or proceeding, had no
reasonable cause to believe his
conduct was unlawful.  The termination of any action, suit or proceeding by
judgment, order, settlement,
conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not,
of itself, create a presumption
that  the  person did not act in good  faith  and  in  a  manner  which  he
reasonably believed to be in or not opposed to
the best interests  of  the  Corporation, and, with respect to any criminal
action or proceeding, that he had
reasonable cause to believe that his conduct was unlawful.

Section 5.02.  Action, Etc., By  Or  In  The Right of The Corporation.  The
Corporation shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed
action or suit by or in the right of the Corporation  to procure a judgment
in its favor by reason of the fact that he
is  or was an Agent against expenses (including attorneys'  fees)  actually
and reasonably incurred by him in
connection  with  the  defense  or  settlement of such action or suit if he
acted in good faith and in a manner he
reasonably believed to be in or not opposed  to  the  best interests of the
Corporation, except that no indemnification
shall be made in respect of any claim, issue or matter  as  to  which  such
person shall have been adjudged to be
liable  to  the  Corporation  by  a  court of competent jurisdiction, after
exhaustion of all appeals therefrom, unless and
only to the extent that the court in which  such action or suit was brought
shall determine upon application that,
despite the adjudication of liability but in  view of all the circumstances
of the case, such person is fairly and
reasonably entitled to indemnity for such expenses  which  such court shall
deem proper.

Section   5.03.    Determination   of   Right   of   Indemnification.   Any
indemnification under Sections 5.01 or
5.02 (unless ordered by a court) shall be made by the  Corporation  only as
authorized in the specific case upon a
determination   that   indemnification  of  the  Agent  is  proper  in  the
circumstances because the Agent has met the
applicable standard of conduct  set forth in Sections 5.01 and 5.02 hereof,
which determination is made (a) by the
Board of Directors, by a majority  vote of a quorum consisting of directors
who were not parties to such action,
suit or proceeding, or (b) if such a  quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or
(c) by the stockholders.

Section  5.04.   Indemnification  Against  Expenses  of  Successful  Party.
Notwithstanding the other
provisions  of  this  Article V, to the  extent  that  an  Agent  has  been
successful on the merits or otherwise, including
the dismissal of an action without prejudice or the settlement of an action
without admission of liability, in defense
of any action, suit or  proceeding  referred  to  in  Sections 5.01 or 5.02
hereof, or in defense of any claim, issue or
matter therein, such Agent shall be indemnified against expenses, including
attorneys' fees actually and reasonably
incurred by such Agent in connection therewith.

Section 5.05.  Advances of Expenses.  Except as limited  by Section 5.06 of
this Article V, expenses
incurred  by an Agent in defending any civil or criminal action,  suit,  or
proceeding shall be paid by the
Corporation  in  advance  of  the final disposition of such action, suit or
proceeding, if the Agent shall undertake to
repay such amount if it shall ultimately  be determined that such person is
not entitled to be indemnified as
authorized in this Article V. Notwithstanding  the  foregoing,  no  advance
shall be made by the Corporation if a
determination is reasonably and promptly made by the Board of Directors  by
a majority vote of a quorum of
disinterested directors, or (if such a quorum is not obtainable or, even if
obtainable, a quorum of disinterested
directors  so  directs)  by independent legal counsel in a written opinion,
that, based upon the facts known to the
Board of Directors or counsel  at the time such determination is made, such
person acted in bad faith and in a
manner that such person did not believe to be in or not opposed to the best
interest of the Corporation, or, with
respect  to any criminal proceeding,  that  such  person  believed  or  had
reasonable cause to believe his conduct was
unlawful.

Section  5.06.    Right  of  Agent  to  Indemnification  Upon  Application;
Procedure Upon Application.  Any
indemnification or advance under this Article V shall be made promptly, and
in any event within ninety days,
upon the written request of the Agent, unless a determination shall be made
in the manner set forth in the second
sentence of Subsection  5.05  hereof  that such Agent acted in a manner set
forth therein so as to justify the
Corporation's not indemnifying or making  an  advance  to  the  Agent.  The
right to indemnification or advances as
granted by this Article V shall be enforceable by the Agent in any court of
competent jurisdiction, if the Board of
Directors  or  independent legal counsel denies the claim, in whole  or  in
part, or if no disposition of such claim is
made within ninety  (90) days.  The Agent's expenses incurred in connection
with successfully establishing his
right to indemnification, in whole or in part, in any such proceeding shall
also be indemnified by the Corporation.

Section  5.07.   Other   Rights  and  Remedies.   The  indemnification  and
advancement of expenses provided
by, or granted pursuant to, this Article V shall not be deemed exclusive of
any other rights to which an Agent
seeking indemnification or  advancement  of  expenses may be entitled under
any Bylaw, agreement, vote of
stockholders or disinterested directors or otherwise,  both as to action in
his official capacity and as to action in
another  capacity  while  holding such office, and shall, unless  otherwise
provided when authorized or ratified,
continue as to a person who  has  ceased  to be an Agent and shall inure to
the benefit of the heirs, executors and
administrators of such a person.  All rights  to indemnification under this
Article V shall be deemed to be provided
by  a contract between the Corporation and the Agent  who  serves  in  such
capacity at any time while these Bylaws
and other  relevant  provisions of the Delaware General Corporation Law and
other applicable law, if any, are in
effect.  Any repeal or  modification thereof shall not affect any rights or
obligations then existing.

Section  5.08.   Insurance.    Upon  resolution  passed  by  the  Board  of
Directors, the Corporation may
purchase and maintain insurance  on  behalf  of any person who is or was an
Agent against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the
Corporation would have the power to indemnify  him  against  such liability
under the provisions of this Article V.

Section 5.09.  Constituent Corporations.  For the purposes of  this Article
V, references to "the
Corporation"  shall include, in addition to the resulting corporation,  all
constituent corporations (including all
constituents of constituents) absorbed in a consolidation or merger as well
as the resulting or surviving
corporation,  which,   if   the  separate  existence  of  such  constituent
corporation had continued, would have had power
and  authority  to  indemnify  its  Agents,  so  that  any  Agent  of  such
constituent corporation shall stand in the same
position  under  the provisions of  the  Article  V  with  respect  to  the
resulting or surviving corporation as that Agent
would have with respect  to  such  constituent  corporation if its separate
existence had continued.

Section  5.10.   Other  Enterprises,  Fines, and Serving  at  Corporation's
Request.  For purposes of this
Article V, references to "other enterprises" shall include employee benefit
plans; references to "fines" shall
include any excise taxes assessed on a  person with respect to any employee
benefit plan; and references to
"serving at the request of the Corporation"  shall include any service as a
director, officer, employee or agent of
the  Corporation  which imposes duties on, or involves  services  by,  such
director, officer, employee or agent with
respect to any employee  benefit  plan,  its participants or beneficiaries;
and a person who acted in good faith and in
a manner he reasonably believed to be in the  interest  of the participants
and beneficiaries of an employee benefit
plan  shall be deemed to have acted in a manner "not opposed  to  the  best
interests of the Corporation" as referred
to in this Article V.

Section  5.11.   Savings  Clause.  If this Article V or any portion thereof
shall be invalidated on any ground
by  any  court  of  competent  jurisdiction,  then  the  Corporation  shall
nevertheless indemnify each Agent as to
expenses (including attorneys' fees),  judgments, fines and amounts paid in
settlement with respect to any action,
suit   or   proceeding,   whether   civil,  criminal,   administrative   or
investigative, and whether internal or external,
including a grand jury proceeding and  an  action  or suit brought by or in
the right of the Corporation, to the full
extent permitted by any applicable portion of this Article V that shall not
have been invalidated, or by any other
applicable law.

        ARTICLE VI

        Stock

Section  6.01.  Certificates.  Except as otherwise provided  by  law,  each
stockholder shall be entitled to a
certificate  or  certificates  which shall represent and certify the number
and class (and series, if appropriate) of
shares of stock owned by him in the Corporation.  Each certificate shall be
signed in the name of the Corporation
by  the Chairman of the Board or  a  Vice-Chairman  of  the  Board  or  the
President or a Vice President, together with
the Treasurer  or  an Assistant Treasurer, or the Secretary or an Assistant
Secretary.  Any or all of the signatures
on any certificate may  be a facsimile. In case any officer, transfer agent
or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to
be such officer, transfer agent or
registrar before such certificate  is  issued,  it  may  be  issued  by the
Corporation with the same effect as if such
person were such officer, transfer agent or registrar at the date of issue.

Section  6.02.   Transfer of Shares.  Shares of stock shall be transferable
on the books of the Corporation
only by the holder  thereof,  in person or by his duly authorized attorney,
upon the surrender of the certificate
representing  the  shares  to be transferred,  properly  endorsed,  to  the
Corporation's transfer agent, if the
Corporation has a transfer agent, or to the Corporation's registrar, if the
Corporation has a registrar, or to the
Secretary, if the Corporation has neither a transfer agent nor a registrar.
The Board of Directors shall have
power and authority to make such other rules and regulations concerning the
issue, transfer and registration of
certificates of the Corporation's stock as it may deem expedient.

Section 6.03.  Transfer Agents  and  Registrars.   The Corporation may have
one or more transfer agents
and one or more registrars of its stock whose respective  duties  the Board
of Directors or the Secretary may, from
time  to  time,  define.   No  certificate  of  stock  shall be valid until
countersigned by a transfer agent, if the
Corporation has a transfer agent, or until registered by  a  registrar,  if
the Corporation has a registrar.  The duties
of transfer agent and registrar may be combined.

Section  6.04.   Stock  Ledgers.   Original  or  duplicate  stock  ledgers,
containing the names and addresses of
the stockholders of the Corporation and the number of shares of each  class
of stock held by them, shall be kept at
the  principal  executive office of the Corporation or at the office of its
transfer agent or registrar.

Section 6.05.  Record Dates.  The Board of Directors may fix, in advance, a
date as the record date for
the purpose of determining  stockholders  entitled to notice of, or to vote
at, any meeting of stockholders or any
adjournment thereof, or stockholders entitled  to  receive  payment  of any
dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or in
order to make a determination of stockholders for any other proper purpose.
Such date in any case shall be not
more  than  sixty  (60) days, and in case of a meeting of stockholders, not
less than ten (10) days, prior to the date
on which the particular action requiring such determination of stockholders
is to be taken. Only those stockholders
of record on the date  so  fixed  shall be entitled to any of the foregoing
rights, notwithstanding the transfer of any
such stock on the books of the Corporation after any such record date fixed
by the Board of Directors.

Exhbit 10.46


INAMED CORPORATION

        1998 STOCK OPTION PLAN



1.      Purpose of the Plan.

This 1998 Stock Option Plan (the "Plan")  is  intended  as an incentive, to
retain in the
employ  of  INAMED  CORPORATION (the "Company") and any Subsidiary  of  the
Company, within the meaning
of Section 424(f) of  the  United  States Internal Revenue Code of 1986, as
amended (the "Code"), persons of
training, experience and ability, to  attract  new  employees, consultants,
officers and directors,  whose services are
considered  valuable,  to  encourage  the  sense of proprietorship  and  to
stimulate the active interest of such persons in
the development and financial success of the Company and its Subsidiaries.

It is further intended that options (the "Options") granted pursuant to the
Plan shall be Options
not intended to qualify as an incentive stock  option within the meaning of
Section 422 of the Code.

The  Company  intends  that the Plan meet the requirements  of  Rule  16b-3
("Rule 16b-3")
promulgated under the Securities  Exchange  Act  of  1934,  as amended (the
"Exchange Act") and that transactions
of the type specified in subparagraphs (c) to (f) inclusive of  Rule  16b-3
by officers and directors of the Company
pursuant to the Plan will be exempt from the operation of Section 16(b)  of
the Exchange Act.  In all cases, the
terms,  provisions,  conditions  and  limitations  of  the  Plan  shall  be
construed and interpreted consistent with the
Company's intent as stated in this Section 1.

2.      Administration of the Plan.

The  Board  of  Directors of the Company (the "Board") shall administer the
Plan unless and until
the Board delegates  administration to a Committee.  The Board may delegate
administration of the Plan to a
Committee or Committees  of  one  or  more  members  of  the Board.  In the
discretion of the Board, a Committee
may  consist  solely  of  two  or more Outside Directors (as such  term  is
defined in Section 162(m) of the Code), or
solely of two or more Non-Employee  Directors  (as  such term is defined in
Rule 16b-3).  If administration is
delegated to a Committee, the Committee shall have, in  connection with the
administration of the Plan, the powers
theretofore  possessed  by the Board (and references in this  Plan  to  the
Board shall thereafter be to the Committee),
subject, however, to such resolutions, not inconsistent with the provisions
of the Plan, as may be adopted from
time to time by the Board.  The Board may abolish the Committee at any time
and revest in the Board the
administration of the Plan.

Subject to the provisions  of the Plan, the Board shall have the authority,
in its discretion: (1) to
grant Options; (2) to determine, upon review of relevant information and in
accordance with Section 5 of the
Plan, the Fair Market Value  of  the  Common Stock of the Company, $.01 par
value per share ("Common Stock");
(3) to determine the exercise price per  share  of  Options  to be granted,
which exercise price shall be determined in
accordance  with Section 5 of the Plan; (4) to determine the recipients  to
whom, and the time or times at which,
Options shall be granted and the number of shares to be represented by each
Option; (5) to interpret the provisions
and supervise  the  administration of the Plan; (6) to prescribe, amend and
rescind rules and regulations relating to
the Plan; (7) to determine  the terms and provisions of each Option granted
(which need not be identical) and, with
the consent of the holder thereof,  modify  or  amend  each  Option; (8) to
accelerate or defer (with the consent of the
recipient of the Option (the "Optionee")) the exercise date of  any Option,
consistent with the provisions of Section
5  of  the  Plan;  (9) to authorize any person to execute on behalf of  the
Company any instrument required to
effectuate the grant of an Option previously granted by the Board; and (10)
to make all other determinations
deemed necessary or advisable for the administration of the Plan.


All decisions, determinations  and  interpretations  of  the Board shall be
final and binding on all
Optionees and any other holders of any Options granted under the Plan.


                In the event that for any reason the Board is unable to act
or if the Board at the time of any
grant, award or other acquisition under the Plan of Options or Common Stock
does not consist of two or more
Non-Employee Directors, then any such grant, award or other acquisition may
be approved or ratified in any
other manner contemplated by subparagraph (d) of Rule 16b-3.

3.      Designation of Optionees.

The persons eligible for participation in the Plan as recipients of Options
(the "Optionees") shall
include  employees,  consultants  and  directors  of  the  Company  or  any
Subsidiary.  In selecting Optionees, and in
determining  the number of shares to be covered by each Option  granted  to
Optionees, the Board may consider the
office or position  held  by the Optionee or the Optionee's relationship to
the Company, the Optionee's degree of
responsibility for and contribution  to  the  growth  and  success  of  the
Company or any Subsidiary, the Optionee's
length  of  service,  age, promotions, potential and any other factors that
the Board may consider relevant.  An
Optionee  who has been granted  an  Option  hereunder  may  be  granted  an
additional Option or Options, if the Board
shall so determine.

4.      Common Stock Reserved for the Plan.

Subject to  adjustment  as provided in Section 7 hereof, a total of 450,000
shares of the Common
Stock shall be subject to  the Plan.  The shares of Common Stock subject to
the Plan shall consist of unissued
shares or previously issued  shares  held by any Subsidiary of the Company,
and such amount of shares of Common
Stock shall be and is hereby reserved for such purpose.  Any of such shares
of Common Stock that may remain
unsold and that are not subject to outstanding  Options  at the termination
of the Plan shall cease to be reserved for
the  purposes  of the Plan, but until termination of the Plan  the  Company
shall at all times reserve a sufficient
number of shares  of  Common  Stock  to  meet the requirements of the Plan.
Should any Option expire or be
cancelled prior to its exercise in full or  should  the number of shares of
Common Stock to be delivered upon the
exercise  in  full of an Option be reduced for any reason,  the  shares  of
Common Stock theretofore subject to such
Option may be subject to future Options under the Plan.

5.      Terms and Conditions of Options.

Options granted under the Plan shall be subject to the following conditions
and shall contain such
additional terms  and  conditions,  not  inconsistent with the terms of the
Plan, as the Board shall deem desirable:

(a)     Option Price.  The purchase price  of  each  share  of Common Stock
purchasable
under an Option shall be determined by the Board at the time  of grant, but
shall not be less than 85% of the Fair
Market Value (as defined below) of such share of Common Stock on  the  date
the Option is granted; provided,
however, that if an option granted to the Company's Chief Executive Officer
or to any of the Company's other
four   most   highly   compensated  officers  is  intended  to  qualify  as
performance-based compensation under Section
162(m) of the Code, the  exercise  price  of  such Option shall not be less
than 100% of the Fair Market Value of
such share of Common Stock on the date the Option is granted.  The exercise
price for each Option shall be
subject to adjustment as provided in Section 7  below.   Fair  Market Value
means the closing price of publicly
traded  shares  of  Common Stock on a national securities exchange  or  the
over-the-counter Bulletin Board market
("OTC Bulletin Board"),  or, if not so listed or regularly quoted, the mean
between the closing bid and asked
prices of publicly traded  shares  of  Common Stock in the over-the-counter
market, or, if such bid and asked prices
shall not be available, as reported by any  nationally recognized quotation
service selected by the Company, or as
determined by the Board in a manner consistent  with  the provisions of the
Code.  Anything in this Section 5(a) to
the  contrary notwithstanding, in no event shall the purchase  price  of  a
share of Common Stock be less than the
minimum price permitted under rules and policies of any national securities
exchange or the OTC Bulletin Board
if and  so  long  as the Common Stock is listed on any such exchange or the
OTC Bulletin Board.

(b)     Option Term.   The term of each Option shall be fixed by the Board,
but no
Option shall be exercisable  more  than 10 years after the date such Option
is granted.

(c)     Exercisability.  Options shall be exercisable at such time or times
and subject
to such terms and conditions as shall  be  determined  by  the Board at the
time of grant.  Unless the Board shall
decide otherwise, Options shall vest ratably over three (3) years.

(d)     Method of Exercise.  Options to the extent then exercisable  may be
exercised
in whole or in part at any time during the option period, by giving written
notice to the Company specifying the
number of shares of Common Stock to be purchased, accompanied by payment in
full of the purchase price, in
cash,  by check or such other instrument as may be acceptable to the Board.
Payment in full or in part may also
be made  by  (i) exchanging Common Stock owned by the Optionee which is not
the subject of any pledge or
security interest,  (ii) the Optionee's written selection to have shares of
Common Stock withheld by the Company
from the shares of Common Stock otherwise to be received with such withheld
shares of Common Stock having a
Fair Market Value on  the  date  of exercise equal to the exercise price of
the Option, or (iii) by a combination of
the  forgoing,  provided that the combined  value  of  all  cash  and  cash
equivalents and the Fair Market Value of any
shares surrendered to the Company is at least equal to such exercise price.
An Optionee shall have the right to
dividends and other  rights  of  a  stockholder  with  respect to shares of
Common Stock purchased upon exercise of an
Option after (i) the Optionee has given written notice of  exercise and has
paid in full for such shares and (ii)
becomes  a  stockholder of record with respect thereto.  The provisions  of
this subsection 5(d) are subject to any
Option provisions  governing  the  minimum  number of shares as to which an
Option may be exercised.

Neither the recipient of an Option nor any person  to  whom  an  Option  is
transferred in
accordance  with  the  Plan shall be deemed to be the holder of, or to have
any of the rights of a holder with respect
to, any shares subject to  such  Option  unless  and  until such person has
satisfied all requirements for exercise of the
Option pursuant to its terms.

(e)     Non-transferability of Options.  Options may be  transferred to the
extent
provided  in  the  Option Agreement; provided that if the Option  Agreement
does not expressly permit the transfer
of an Option, the Option  shall  not be transferable except by will, by the
laws of descent and distribution or
pursuant to a domestic relations order  satisfying the requirements of Rule
16 of the Exchange Act and shall be
exercisable during the lifetime of the person to whom the Option is granted
only by such person or any transferee
pursuant to a domestic relations order.  Notwithstanding the foregoing, the
person to whom the Option is granted
may, by delivering written notice to the Company, in a form satisfactory to
the Company, designate a third party
who,  in  the  event  of  the death of the Optionee,  shall  thereafter  be
entitled to exercise the Option.  Any attempt to
transfer,  assign,  pledge or  otherwise  dispose  of,  or  to  subject  to
execution, attachment or similar process, any
Option contrary to the  provisions hereof shall be void and ineffective and
shall give no right to the purported
transferee.

(f)     Termination by Death.   Unless otherwise determined by the Board at
grant, if
any Optionee's employment with or  service to the Company or any Subsidiary
terminates by reason of death, the
Option may thereafter be exercised,  to  the extent then exercisable (or on
such accelerated basis as the Board shall
determine at or after grant), by the legal  representative of the estate or
by the legatee of the Optionee under the
will of the Optionee, for a period of one year after the date of such death
or until the expiration of the stated term
of such Option as provided under the Plan, whichever period is shorter.


(g)     Termination by Reason of Disability.   Unless  otherwise determined
by the
Board at grant, if any Optionee's employment with or service to the Company
or any Subsidiary terminates by
reason of total and permanent disability (as defined in Section 22(e)(3) of
the Code, "Disability"), any Option held
by  such  Optionee  may  thereafter  be  exercised,  to the extent  it  was
exercisable at the time of termination due to
Disability (or on such accelerated basis as the Board shall determine at or
after grant), but may not be exercised
after 30 days after the date of such termination of employment  or  service
or the expiration of the stated term of
such  Option, whichever period is shorter; provided, however, that, if  the
Optionee dies within such 30 day period,
any  unexercised   Option   held  by  such  Optionee  shall  thereafter  be
exercisable to the extent to which it was
exercisable at the time of death for a period of one year after the date of
such death or for the stated term of such
Option, whichever period is shorter.

(h)     Other Termination.  Unless  otherwise  determined  by  the Board at
grant, if any
Optionee's  employment  with  or  service  to the Company or any Subsidiary
terminates for any reason other than
death or Disability, the Option shall thereupon  terminate, except that the
portion of any Option that was
exercisable on the date of such termination of employment  may be exercised
for the lesser of 30 days after the
date of termination or the balance of such Option's term if  the Optionee's
employment or service with the
Company  or any Subsidiary is terminated by the Company or such  Subsidiary
without cause (the determination as
to whether  termination  was  for  cause  to  be  made  by the Board).  The
transfer of an Optionee from the employ of
the  Company  to  a  Subsidiary,  or vice versa, or from one Subsidiary  to
another, shall not be deemed to constitute a
termination of employment for purposes of the Plan.

6.      Effective Date of Plan and Term of Plan

The Plan is subject to approval, at  a  duly  held  shareholders'  meeting,
within twelve (12) months
after the date the Board approves the Plan, by the affirmative vote  of the
holders of a majority of the voting shares
of  the  Company represented in person or by proxy and entitled to vote  at
the meeting. Options may be granted,
but not exercised,  before  such  shareholder approval. If the shareholders
fail to approve the Plan within the
required time period, any Options granted under the Plan shall be void, and
no additional Options may thereafter
be granted. The Plan shall continue until such time as it may be terminated
by action of the Board; provided,
however, that no Options may be granted  under  this  Plan  on or after the
tenth anniversary of approval of the Plan
by the Board, but Options theretofore granted may extend beyond that date.

7.      Adjustments Upon Changes in Capitalization or Merger.

(a)     Subject to any required action by the stockholders of  the Company,
the number of
shares  of Common Stock covered by each outstanding Option, and the  number
of shares of Common Stock which
have been authorized for issuance under the Plan but as to which no Options
have yet been granted or which have
been returned  to the Plan upon cancellation or expiration of an Option, as
well as the price per share of Common
Stock covered by  each  such  outstanding  Option, shall be proportionately
adjusted for any increase or decrease in
the number of issued shares of Common Stock  resulting  from a stock split,
reverse stock split, stock dividend,
combination or reclassification of the Common Stock of the  Company  or the
payment of a stock dividend with
respect to the Common Stock or any other increase or decrease in the number
of issued shares of Common Stock
effected  without  receipt  of  consideration  by  the  Company;  provided,
however, that conversion of any convertible
securities  of  the  Company  shall  not  be  deemed to have been "effected
without receipt of consideration." Such
adjustment shall be made by the Board, whose determination  in that respect
shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company  of  shares
of Common Stock of any class, or
securities  convertible  into  shares  of  Common Stock of any class, shall
affect, and no adjustment by reason thereof
shall be made with respect to, the number or  price  of  shares  of  Common
Stock subject to an Option.


(b)     Unless otherwise provided by the Board at the time of grant, in the
event of: (i) a
dissolution, liquidation or sale of substantially all of the assets of  the
Company; (ii) a merger or consolidation in
which  the Company is not the surviving corporation; (iii) a reverse merger
in which the Company is the surviving
corporation   but  the  shares  of  Common  Stock  outstanding  immediately
preceding the merger are converted by
virtue  of  the  merger  into  other  property,  whether  in  the  form  of
securities, cash or otherwise; or (iv) the
acquisition by any  person,  entity  or group within the meaning of Section
13(d) or 14(d) of the Exchange Act, or
any comparable successor provisions (excluding any employee benefit plan or
related trust sponsored or
maintained  by  the  Company  or any affiliate  of  the  Company),  of  the
beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the  Exchange  Act,  or  comparable  successor
rule) of securities of the Company
representing  at  least  fifty  percent  (50%) of the combined voting power
entitled to vote in the election of directors,
then,  with  respect  to Options held by Optionees,  the  vesting  of  such
Options (and, if applicable, the time during
which such Options may be exercised) shall be accelerated immediately prior
to such event and the Options shall
terminate if not exercised  (if  applicable)  twenty  days  following  such
acceleration.

8.      Purchase for Investment.

Unless  the  Options  and  shares  covered by the Plan have been registered
under the United States
Securities Act of 1933, as amended (the  "Securities  Act"), or the Company
has determined that such registration
is  unnecessary, each person exercising an Option under  the  Plan  may  be
required by the Company to give a
representation  in  writing  that  he  is  acquiring the shares for his own
account for investment and not with a view
to, or for sale in connection with, the distribution of any part thereof.

9.      Taxes.

The Company may make such provisions as it may deem appropriate, consistent
with applicable
law, in connection with any Options granted  under the Plan with respect to
the withholding of taxes or any other
tax matters.

10.     Amendment and Termination.

The  Board  may  amend,  suspend, or terminate the  Plan,  except  that  no
amendment shall be made
that would impair the rights  of  any Optionee under any Option theretofore
granted without his  consent, and
except that no amendment shall be made  which,  without the approval of the
stockholders of the Company would:

(a)     materially increase the number of shares  that  may be issued under
the Plan,
except as provided in Section 7;

(b)     materially  increase the benefits accruing to the  Optionees  under
the Plan;

(c)     materially  modify   the   requirements   as   to  eligibility  for
participation in the
Plan; or

(d)     extend the term of any Option beyond that provided  for  in Section
5(b).

The   Board  may  amend  the  terms  of  any  Option  theretofore  granted,
prospectively or
retroactively,  but  no  such  amendment  shall  impair  the  rights of any
Optionee without his consent.  The Board may
also  substitute  new  Options  for  previously  granted Options, including
options granted under other plans applicable
 to  the participant and previously granted Options  having  higher  option
prices, upon such terms as the Board may
deem appropriate.

11.     Government Regulations.

The Plan,  and  the  grant  and  exercise  of  Options  hereunder,  and the
obligation of the Company to
sell  and  deliver  shares  under  such  Options,  shall  be subject to all
applicable laws, rules and regulations, and to
such  approvals  by  any  governmental agencies, or by national  securities
exchanges or the OTC Bulletin Board if
and so long as the Common Stock  is  listed on any such exchange or the OTC
Bulletin Board, as may be required.


12.     General Provisions.

(a)     Certificates.   All  certificates   for   shares  of  Common  Stock
delivered under the
Plan shall be subject to such stop transfer orders  and  other restrictions
as the Board may deem advisable under the
rules,  regulations and other requirements of the Securities  and  Exchange
Commission, or other securities
commission having jurisdiction, any applicable Federal, provincial or state
securities law, any stock exchange
upon which the Common Stock is then listed and the Board may cause a legend
or legends to be placed on any
such certificates to make appropriate reference to such restrictions.

(b)     Employment Matters.  The adoption of the Plan shall not confer upon
any
Optionee of the Company or any Subsidiary any right to continued employment
or, in the case of an Optionee who
is a director,  continued  service  as  a  director,  with the Company or a
Subsidiary, as the case may be, nor shall it
interfere  in  any way with the right of the Company or any  Subsidiary  to
terminate the employment of any of its
employees, the service  of  any of its directors or the retention of any of
its consultants or advisors at any time.

(c)     Limitation of Liability.   No member of the Board or the Committee,
or any
officer or employee of the Company acting  on  behalf  of  the Board or the
Committee, shall be personally liable for
any  action, determination, or interpretation taken or made in  good  faith
with respect to the Plan, and all members
of the  Board  or the Committee and each and any officer or employee of the
Company acting on their behalf shall,
to the extent permitted  by  law, be fully indemnified and protected by the
Company in respect of any such action,
determination or interpretation.

(d)     Registration of Common  Stock.  Notwithstanding any other provision
in the
Plan, no Option may be exercised  unless  and  until the Common Stock to be
issued upon the exercise thereof has
been  registered under the Securities Act and applicable  state  securities
laws, or is, in the opinion of counsel to the
Company,  exempt from such registration in the United States or exempt from
the prospectus and registration
requirements  under  applicable  provincial legislation.  The Company shall
not be under any obligation to register
under applicable federal or state  securities  laws  any Common Stock to be
issued upon the exercise of an Option
granted  hereunder,  or  to  comply  with  an  appropriate  exemption  from
registration under such laws or the laws of
any province in order to permit the exercise of an Option and  the issuance
and sale of the Common Stock subject
to  such Option.  However, the Company may in its sole discretion  register
such Common Stock at such time as
the Company shall determine.  If the Company chooses to comply with such an
exemption from registration, the
Common Stock issued under the Plan may, at the direction of the Board, bear
an appropriate restrictive legend
restricting the transfer or pledge of the Common Stock represented thereby,
and the Committee may also give
appropriate stop transfer instructions to the Company's transfer agents.




Exhibit 21

        List of Subsidiaries of INAMED Corp.

        Biodermis Corporation
        Biodermis Ltd.
        Bioenterics Corporation
        Bioenterics Latin America S.A. de C.V.
        Bioenterics Ltd.
        Bioplexus Corporation
        Bioplexus Ltd.
        Chamfield Ltd.
        CUI Corporation
        Flowmatrix Corporation
        Inamed Development Company
        Inamed do Brasil, LTDA
        Inamed International Corp.
        Inamed Japan
        Inamed Medical Group
        McGhan LTD.
        McGhan Medical Asia Pacific
        McGhan Medical Benelux B.V.
        McGhan Medical B.V.
        McGhan Medical B.V.B.A.
        McGhan Medical Corporation
        McGhan Medical GmbH
        McGhan Medical Ltd.
        McGhan Medical Mexico, S.A. de C.V.
        McGhan Medical, S.A.
        McGhan Medical S.A.R.L.
        McGhan Medical S.R.L.
        Medisyn Technologies Corporation
        Medisyn Technologies Ltd.