SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C. 20549

                                FORM 10-Q

 [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
        SECURITIES EXCHANGE ACT OF 1934
           For the quarterly period ended September 30, 1996

                                   OR
   

 [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934
           For the transition period from _________ to ________.


                         COPLEY PHARMACEUTICAL, INC.
            (Exact name of registrant as specified in its charter)



          Delaware                                04-2514637
(State or other jurisdiction of        (IRS Employer Identification No.)  
  incorporation or organization)


            25 John Road                                   
       Canton, Massachusetts                            02021
(Address of principal executive offices)             (Zip Code)


                  Commission file number:  0-20126

Registrant's telephone number, including area code: (617) 821-6111


   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
                      ------                     ------  

The number of shares outstanding of the registrant's only class of common 
stock as of October 31, 1996 was 19,088,579 shares.	

 
                        
<PAGE 2>

                    COPLEY PHARMACEUTICAL, INC.
                             INDEX
           For the Nine Months Ended September 30, 1996



PART I.            FINANCIAL INFORMATION                      PAGE NO.

Item 1.  Condensed Consolidated Financial Statements

         Condensed Consolidated Balance Sheets as of 
          September 30, 1996 and December 31, 1995                     3     

         Condensed Consolidated Statements of Operations
          for the three and nine months ended September 30,
          1996 and 1995                                                4

         Condensed Consolidated Statements of Cash Flows 
          for the nine months ended September 30, 1996 and 1995        5 

         Notes to Condensed Consolidated Financial Statements        6 - 9


Item 2.  Management's Discussion and Analysis of Results of 
          Operations and Changes in Financial Condition             10 - 13


PART II.                OTHER INFORMATION

Item 1.  Legal Proceedings                                            14

Item 6.  Exhibits and Reports on Form 8-K                             14

         Signature                                                    15









<PAGE 3>

PART 1.  Item 1.  Condensed Consolidated Financial Statements
<TABLE>
                       COPLEY PHARMACEUTICAL, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                              Unaudited 
(In thousands, except share data)            SEPTEMBER 30,   DECEMBER 31,
                                                1996            1995
                                             ------------    -----------
<S>                                          <C>            <C> 
ASSETS
Current assets:
Cash and cash equivalents                       $ 13,456       $ 18,950
Trading securities                                   ---            950
Available-for-sale securities                      7,614          5,147
Accounts receivable, trade, net                   27,380         32,639
Accounts receivable, related party                   132            826
Inventories:
  Raw materials                                   14,087         13,634
  Work in process                                  3,452          4,913
  Finished goods                                  10,285          8,679
                                                 -------        -------
Total inventories                                 27,824         27,226
Prepaid income taxes                                 ---          3,259
Current deferred tax assets                        4,494          2,900 
Other current assets                               4,755          4,789
                                                 -------        ------- 
  Total current assets                            85,655         96,686

Property, plant and equipment, net                57,114         55,724
Deferred tax assets                                   79          1,484
Other assets                                       3,384          1,351
                                                 -------        -------
Total assets                                    $146,232       $155,245
                                                 =======        =======

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable, trade                       $  5,509       $ 10,551
  Accounts payable, related party                 10,021         11,191
  Current portion of long-term debt                  300            300
  Accrued compensation and benefits                1,135          2,003
  Accrued rebates                                  5,145          7,980
  Accrued income taxes                               980            ---
  Accrued expenses                                 6,049          5,296
                                                 -------        -------
    Total current liabilities                     29,139         37,321

Long-term debt                                     5,100          5,400

Shareholders' equity:
  Preferred stock, $.01 par value; authorized
    3,000,000 shares; none issued                    ---            ---
  Common stock, $.01 par value; authorized 
    60,000,000 shares; issued 25,370,745 shares      254            254
  Additional paid-in capital                      77,801         77,505
  Unrealized holding (loss) gain on available-
    for-sale securities                              (16)           108
  Retained earnings                               46,528         47,242
  Treasury stock, at cost, 6,282,166 and 
    6,307,045 shares outstanding, at September
    30, 1996 and December 31, 1995,respectively  (12,574)       (12,585)
                                                 -------        -------
   Total shareholders' equity                    111,993        112,524
                                                 -------        -------
Total liabilities and shareholders' equity      $146,232       $155,245
                                                 =======        =======
</TABLE>
[FN]	
The accompanying notes are an integral part of the Condensed Consolidated 
 Financial Statements.


<PAGE 4>
<TABLE>
                         COPLEY PHARMACEUTICAL, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<CAPTION>
   For the three                                              For the nine
   months ended                                               months ended
   September 30,              (Unaudited)                     September 30,
  1996       1995   (In thousands, except per share data)    1996       1995
-------    -------                                        --------   --------  
<C>       <C>       <S>                                   <C>        <C> 
                    Net sales:
$19,558    $20,450    Manufactured products                $59,607   $ 55,714     
 13,031     18,782    Distributed products                  32,640     49,559
 ------     ------                                          ------    ------- 
 32,589     39,232     Net sales                            92,247    105,273
  
                    Cost of goods sold:
 15,998     16,270    Manufactured products                 48,134     38,158
  8,671     12,155    Distributed products                  21,543     32,079
 ------     ------                                          ------    ------- 
 24,669     28,425     Cost of goods sold                   69,677     70,237
 ------     ------                                          ------    -------

  7,920     10,807       Gross profit                       22,570     35,036

                    Operating expenses:
  3,003      3,804    Research and development              10,205      9,522
                      Selling, marketing and 
  1,416        603       distribution                        5,087      3,767
  3,270      2,256    General and administrative             8,301      7,454
    175     12,827    Recall related and litigation, net       111     16,338
 ------     ------                                          ------    ------- 
     56     (8,683)     Income (loss) from operations       (1,134)    (2,045)

     71        375   Interest and investment income            452        944  
    (63)       (67)  Interest expense                         (182)      (215)
  1,008        249   Other income (expense), net              (311)       228 
 ------     ------                                          ------    ------- 
  1,072     (8,126)     Income (loss) before income taxes   (1,175)    (1,088)

    458     (2,880)   Provision (benefit) for income taxes    (462)      (262)
 ------     ------                                          ------    ------- 
$   614    $(5,246)   Net income (loss)                    $  (713)  $   (826)
 ======     ======                                          ======    =======

                      Weighted average common 
                       shares outstanding:
19,225      19,060      Primary                             19,075     18,949
19,261      19,060      Fully diluted                       19,075     18,949

                      Earnings (loss) per share:
 $0.03      $(0.28)     Primary                             $(0.04)    $(0.04)
 $0.03      $(0.28)     Fully diluted                       $(0.04)    $(0.04)

</TABLE>
[FN]

The accompanying notes are an integral part of the Condensed Consolidated   
  Financial Statements.




<PAGE 5>

<TABLE>
                          COPLEY PHARMACEUTICAL, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>
                                                              For the nine
                                                              months ended 
(Unaudited)                                                   September 30,
(In thousands)                                              1996        1995 
                                                           ------      ------
<S>                                                       <C>          <C>
Cash flows from operating activities:
  Net income (loss)                                       $  (713)     $ (826)
  Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
    Depreciation and amortization                           5,324       3,964
    Realized loss on sales of assets                          952       2,787
    Provision for doubtful accounts                           696         ---
    Change in deferred taxes                                 (189)        (46)
    Tax benefit from stock option exercises                   ---         185
  Changes in operating assets and liabilities:
    Accounts receivable                                     5,257     (12,880)
    Inventories                                              (598)      7,071
    Other current assets                                       34     (12,508)
    Other assets, net of amortization                      (2,046)      1,059
    Accounts payable, trade                                (5,042)      6,213
    Accounts payable, related party                        (1,170)      4,437 
    Accrued income taxes                                    4,239      (1,736)
    Accrued expenses                                       (2,442)      1,371 
                                                           ------      ------
      Net cash provided by (used in) operating 
        activities                                          4,302        (909)
                                                           ------      ------  

Cash flows from investing activities:
  Capital expenditures                                     (7,921)    (15,357)
  Proceeds from sales of property, plant and equipment         10         500
  Purchases of available-for-sale securities               (7,606)    (19,172)
  Proceeds from sales of available-for-sale securities        715      42,385
  Proceeds from maturities of available-for-sale 
    securities                                              5,000       3,224
                                                           ------      ------  
    Net cash (used in) provided by investing activities    (9,802)     11,580 
                                                           ------      ------

Cash flows from financing activities:
  Payments of long-term debt                                 (300)       (300)
  Stock option exercises                                      ---         344
  Issuance of common stock to Employee Stock Purchase Plan    306         301
  Proceeds from short-term borrowings                         ---       4,542
  Payments of short-term borrowings                           ---      (4,542)
                                                           ------      ------
   Net cash provided by financing activities                    6         345
                                                           ------      ------ 

Net (decrease) increase in cash and cash equivalents       (5,494)     11,016 
Cash and cash equivalents at beginning of period           18,950       6,217
                                                           ------      ------ 
Cash and cash equivalents at end of period               $ 13,456     $17,233
                                                           ======      ======


</TABLE>
[FN]
The accompanying notes are an integral part of the Condensed Consolidated 
  Financial Statements.


<PAGE 6>
                            COPLEY PHARMACEUTICAL, INC.
                 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                     For the nine months ended September 30, 1996
 

Note A - General

In the opinion of the Company, the accompanying condensed consolidated 
financial statements contain all normal and recurring adjustments  necessary 
to present fairly the financial position of the Company as of September 30, 
1996 and December 31, 1995 and the results of its operations for the three and
nine months ended September 30, 1996 and 1995, and its cash flows for the nine 
months ended September 30, 1996 and 1995.  While the Company believes that the 
disclosures presented are adequate to make the information not misleading, 
these financial statements should be read in conjunction with the Notes 
included in the Company's Form 10-K for the year ended December 31, 1995. The 
results for the three-month and nine-month periods ended September 30, 1996 
are not necessarily indicative of the results that may be expected for any 
future period.

The Company's quarterly and annual operating results are affected by a wide 
variety of factors that could have a material adverse effect on the Company's 
business, financial condition, results of operations and stock price. 
Statements in this Report on Form 10-Q which are not historical facts, so-
called "forward-looking statements,"  are made pursuant to the safe harbor 
provisions of the Private Securities Litigation Reform Act of 1995. Investors 
are cautioned that all forward-looking statements involve risks and 
uncertainties, including those detailed in the Company's filings with the 
Securities and Exchange Commission. See, for example, "Item 7. Management's 
Discussion and Analysis of Financial Condition and Results of Operations - 
Risk Factors and Future Trends" contained in the Company's Report on Form 10-K 
for the fiscal year ended December 31, 1995.

Note B - Related Party Transactions

On July 18, 1995, Hoechst Corporation ("HC"), the Company's 51% fully-diluted 
shareholder, completed its purchase of Marion Merrell Dow, Inc. ("MMD"). This 
transaction resulted in a related party relationship between the Company and 
its customer Rugby Laboratories ("Rugby"), which was a subsidiary of MMD and 
is now a subsidiary of Hoechst Marion Roussel, Inc. ("HMRI"). Net sales to 
Rugby totaled approximately $986,000 and $3.3 million for the nine months 
ended September 30, 1996 and 1995, respectively. Total amounts due from Rugby 
at September 30, 1996 and December 31, 1995, were $132,000 and $826,000, 
respectively.

The Company is a party to a Product Agreement with HC pursuant to which the 
Company is afforded the opportunity under specified conditions to distribute
and market the generic version of certain products sold by HMRI, a majority-
owned subsidiary of HC. For the nine months ended September 30, 1996 and 1995, 
approximately $22.0 million and $31.9 million, respectively, of generic 
versions of products were purchased from HMRI under this Product Agreement.

The Company obtains its comprehensive general liability, product liability, 
excess liability and all risks property insurance coverage through an 
insurance and risk-sharing arrangement with HC and its parent, Hoechst 
Aktiengesellschaft, and its various subsidiaries. Insurance coverage is 
provided by HC through its wholly-owned insurance subsidiary, as well as by 
external parties. Total premiums expensed for these insurance policies 
aggregated approximately $3.8 million and $1.9 million, respectively, for the 
nine months ended September 30, 1996 and 1995. During the third quarter of 
1995, HC's insurance subsidiary, as one of the Company's insurers, funded $16 
million of the initial cash requirement to the Albuterol Settlement Trust 
Fund. See discussion of the albuterol settlement in Note C. 



Note C - Litigation and Contingencies

Albuterol Class Action Lawsuits

In connection with the Company's product recall of albuterol sulfate
inhalation solution, 0.5% ("albuterol"), the Company has been served in 


<PAGE 7>

                             COPLEY PHARMACEUTICAL, INC.
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                   For the nine months ended September 30, 1996


numerous lawsuits in federal and state court, some of which are on behalf of 
numerous claimants. The plaintiffs principally seek compensatory and punitive 
damages and allege that injuries and deaths were caused by inhalation of 
allegedly contaminated product manufactured and distributed by the Company.
 
The federal court lawsuits were consolidated in the United States District 
Court for the District of Wyoming as a multi-district litigation for pre-trial 
purposes under the caption In Re: Copley Pharmaceutical, Inc. "Albuterol" 
Products Liability Litigation. The District Court certified the consolidated
actions as a class action. In August 1995 the Company entered into a 
settlement agreement with the representative class plaintiffs. The settlement 
calls for the Company to receive a general release of all non-death claims in 
return for contributions by the Company and its insurers of a minimum of $65 
million and a maximum of $130 million to settle all non-death claims relating 
to the Company's manufacture, sale and recall of albuterol. An additional $20 
million is allocated under the terms of the settlement to settle claims by 
persons alleging wrongful death, which claims are limited by the settlement to 
compensatory damages only and are subject to nonbinding negotiation and 
arbitration. Within the Company's minimum and maximum contributions, the 
amount to be paid by the Company is subject to revision based upon the number 
and seriousness of individual claims eventually filed. On November 15, 1995, 
the District Court entered its Order giving final approval of the settlement. 
An appeal of this Order, filed by one class member, was dismissed in September 
1996.

The settlement agreement required that the $150 million maximum contribution 
be funded by an initial $50 million cash deposit and issuance of letters of 
credit for the remaining balance, to be held by the Albuterol Settlement Trust 
Fund ("the Settlement Fund") as security for potential future payments. The 
Company paid $5.1 million to the Settlement Fund and obtained $17.1 million in 
irrevocable letters of credit during 1995 to cover its uninsured obligation to 
fund the settlement agreement. When the order approving the settlement becomes 
final and nonappealable, the Company will be required to make an additional 
$2.25 million cash deposit with a corresponding reduction to its outstanding 
letters of credit. The Company accrued for this cash deposit in 1995. These 
cash contributions totaling $7.35 million will be nonrefundable pursuant to 
the terms of the settlement agreement.

The period for filing initial proofs of claim with the Special Master 
appointed to oversee the Settlement Fund closed on January 3, 1996 and
approximately 5,220 claims were filed. Another 310 claims, approximately, were 
filed late. In addition, approximately 860 clients of Jacoby & Meyers, 
representing nearly all of that firm's clients who are not alleging a death 
caused by albuterol, have agreed to be treated as if they were class members 
and class counsel have agreed that these claimants will be paid out of the 
Settlement Fund.

Recourse to the remaining letters of credit will not occur until all claims 
are processed and settlement amounts are recommended by the Special Master, 
and is contingent on the number of claims filed within certain categories. 
Although the total number of claims filed against the Settlement Fund is less 
than the number of claims for which the settling parties anticipated would be 
necessary to require the maximum funding of the Settlement Fund, at this time 
the Company is unable to determine how many of these claims will be awarded 
damages by the Special Master and, if awarded damages, how much will be given 
to various claimants. In addition, administrative fees and class action 
attorney fees and expenses will be paid out of the Settlement Fund. 
Accordingly, the Company cannot predict the total amount to be paid out of the 
Settlement Fund.

The settlement is also subject to certain other contingencies and does not 
cover certain individuals who previously opted out of the class action. The
Company continues to be a defendant in lawsuits that were brought by or on 
behalf of approximately 65 people who properly opted out of the class action. 
The Company denies liability in these cases and is vigorously defending 
itself. The Company reserved $1.1 million during 1995 for the estimated 
uninsured costs associated with these cases. The reserve was based on the 
number of outstanding opt-out claims, anticipated insurance coverage and 
recent settlement amounts. Actual settlement or judgment amounts may differ 
from the amounts estimated. There can be no assurance that the Company will 
prevail in these lawsuits or that an adverse outcome would not result in 
significant monetary damages or have a material adverse effect on the 
Company's financial condition or results of operations.


<PAGE 8>
                             COPLEY PHARMACEUTICAL, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                    For the nine months ended September 30, 1996


Grand Jury Investigation

The Company has received grand jury subpoenas from the United States 
Attorney's Office in Massachusetts for documents related to its albuterol and 
Brompheril (registered trademark) products, which were recalled by the Company 
in December 1993 and September 1994, respectively, and extending beyond these 
products. The Company is complying with the subpoenas and has cooperated with 
federal authorities. This investigation is ongoing and at this time management 
is unable to determine the ultimate impact on the Company's financial 
condition and results of operations. Accordingly, no amounts have been accrued 
for any uninsured costs in the Company's financial statements at September 30, 
1996. An adverse determination by applicable authorities could result in 
sanctions and/or fines which could have a material adverse effect on the 
Company's financial condition or results of operations.


Shareholders' Lawsuit 

In April 1993, three former shareholders of the Company filed a lawsuit 
against the Company and certain of its officers and directors in the United
States District Court for the Southern District of New York. Ladenburg, 
Thalmann & Co., Inc., a former financial advisor to the plaintiffs, was also 
named as a defendant in the complaint. The complaint alleges that the Company 
and certain of its officers and directors committed fraud and breached their 
fiduciary duties to the plaintiffs in connection with the Company's November 
1991 repurchase of shares then representing the equivalent of 168,750 current 
shares of common stock from the plaintiffs by making false and misleading 
statements and failing to disclose material facts regarding the Company and 
its prospects.

The complaint seeks monetary damages in excess of $10 million, rescission of 
the November 1991 share repurchase, unspecified punitive damages and costs, 
disbursements and attorney's fees. The Company filed a motion for summary 
judgment in August 1994 which was granted in part and denied in part in an 
opinion dated October 11, 1995. The case is awaiting trial.

The Company and its officers and directors believe that they have meritorious 
defenses to any claims by the former shareholders based on the November 1991 
repurchase, that any such claims are without merit, and that the Company and 
its officers and directors should prevail in any such lawsuits. However, there 
can be no assurance that the Company and its officers and directors will 
prevail in any such lawsuits or that an adverse outcome would not result in 
significant monetary damages or have a material adverse effect on the 
Company's financial condition or results of operations.	


Marion Merrell Dow, Inc. Bulk Diltiazem Lawsuit

In November 1992, a lawsuit was filed against the Company by MMD and Tanabe 
Seiyaku Co., Ltd. ("Tanabe") in the United States District Court for the 
District of Massachusetts captioned Marion Merrell Dow, Inc. and Tanabe 
Seiyaku Co., Ltd. v. Copley Pharmaceutical, Inc. and Orion Corporation 
Fermion. MMD and Tanabe allege that the Company and Orion Corporation Fermion 
("Orion"), the manufacturer of the Company's bulk diltiazem, are infringing a 
process patent for one method of manufacturing bulk diltiazem. MMD and Tanabe 
have alleged that they are the exclusive licensee and patentee, respectively, 
of such process patent. The complaint seeks a permanent injunction and trebled 
unspecified monetary damages. The Company has denied all liability in its 
answer to the complaint. On May 10, 1993, the Court ordered the case 
administratively closed, staying the case until further notice. On June 27, 
1995, the parties jointly moved the Court for an Order further staying the 
action until 30 days after completion of the related International Trade 
Commission proceeding discussed below.

<PAGE 9> 
                            COPLEY PHARMACEUTICAL, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                   For the nine months ended September 30, 1996

                           
International Trade Commission Complaint

On February 25, 1993, the Company, together with a number of other off-patent 
pharmaceutical manufacturers and certain chemical manufacturers, was named as 
a respondent in a complaint filed by MMD and Tanabe before the United States 
International Trade Commission ("the ITC") captioned Complaint of Marion 
Merrell Dow, Inc. and Tanabe Seiyaku Co., Ltd. Pursuant to Section 337 of the 
Tariff Act of 1930. The complaint seeks an order (i) prohibiting the 
importation of, among other things, the bulk diltiazem purchased by the 
Company from Orion, and (ii) requiring the Company to immediately stop selling 
its current diltiazem product, which incorporates bulk diltiazem supplied by 
Orion, based on the alleged infringement by Orion of a process patent for one 
method of manufacturing bulk diltiazem.

On June 1, 1995, the ITC issued its Final Determination ordering the 
investigation terminated with the finding of no violation of Section 337, of 
no patent infringement and taking no position on the issue of patent validity 
and enforceability. On July 20, 1995, MMD and Tanabe filed an appeal with the 
United States Court of Appeals for the Federal Circuit seeking review of the 
ITC's Final Determination. This appeal has been fully briefed and argued and 
the parties are awaiting a decision.	

Orion has agreed at its expense to defend the Company in this action and the 
MMD Bulk Diltiazem Lawsuit discussed previously and to indemnify the Company 
for any damages that might be assessed as a result of the Company's sale of 
diltiazem obtained from Orion. Although the Company's management believes that 
these complaints are without merit, that the Company and Orion have 
meritorious defenses to these actions, and that the Company should prevail in 
these lawsuits, there can be no assurance that the Company will prevail or 
that an adverse outcome would not have a material adverse effect on the 
Company's financial condition or results of operations.


Other Legal Proceedings

The Company is subject to other legal proceedings and claims which arise in 
the ordinary course of business. In the opinion of management, the results of 
such proceedings will not have a material adverse effect on the Company's 
financial condition or results of operations.



Note D - Restructuring Charges in the Fourth Quarter

In response to increasing pricing pressures and eroding margins, the Company 
is restructuring its operations resulting in an estimated $3.0 million to $4.0 
million before tax charge, or $0.09 per share to $0.13 per share after taxes, 
in the fourth quarter of 1996. The restructuring includes the consolidation of 
warehouse, manufacturing and office sites as well as the write-off of 
underutilized and idle equipment. Some reduction in the work force will also 
occur. 



<PAGE 10>
                               COPLEY PHARMACEUTICAL, INC.
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
                             CHANGES IN FINANCIAL CONDITION         


Item 2.  Management's Discussion and Analysis of Results of Operations and 
         Changes in Financial Condition


Results of Operations
<TABLE>



Net Sales
---------------------------------------------------------------------------------------
<CAPTION>
  For the quarter                                           For the nine
      ended                        (In thousands)           months ended 
   September 30,      Increase                              September 30,     Increase
  1996       1995    (Decrease)      (Unaudited)           1996       1995   (Decrease)
---------------------------------------------------------------------------------------
<C>        <C>         <C>       <S>                    <C>         <C>       <C> 
$19,558    $20,450      (4.4)%   Manufactured products   $59,607   $ 55,714     7.0 %    
 13,031     18,782     (30.6)%   Distributed products     32,640     49,559   (34.1)%
 ------     ------                                        ------     ------
$32,589    $39,232     (16.9)%     Net sales             $92,247   $105,273   (12.4)%
=======================================================================================
</TABLE>



Net sales for the third quarter of 1996 were $32.6 million, compared to $39.2 
million for the same period in 1995. The Company's sales continue to be 
adversely affected by the significant price decrease on glyburide, the 
Company's major distributed product, as well as price erosion experienced 
across the Company's product line. Additionally, another manufacturer launched 
a new product which competes directly with a major manufactured product, 
miconazole nitrate vaginal cream, the off-patent version of R.W. Johnson's 
Monistat (registered trademark) 7, which is a seven-day treatment for vaginal 
yeast infections. The launching of this new product, which is a three-day 
treatment, negatively impacted the Company's sales and unit volume during the 
third quarter. The Company expects this negative impact to continue.


During the third quarter of 1996, the Company launched prochlorperazine 
maleate tablets, the off-patent version of SmithKline Beecham's 
Compazine(registered trademark).  More recently, the Company announced the 
Food and Drug Administration approval for its Abbreviated New Drug Application 
to manufacture and market cholestyramine powder.  Cholestyramine powder is the 
off-patent version of Bristol-Myers Squibb Company's Questran (registered 
trademark). 

The Company's net sales were $92.2 million for the nine-month period ended 
September 30, 1996 as compared to $105.3 million for the same period in 1995. 
Although the Company has launched six new products and has experienced steady 
growth in unit sales during 1996, net sales declined due to intensified 
pricing pressure experienced on the Company's product line.





<TABLE>
Gross Profit
---------------------------------------------------------------------------------------
<CAPTION>
  For the quarter                                           For the nine
      ended                        (In thousands)           months ended 
   September 30,      Increase                              September 30,     Increase
  1996       1995    (Decrease)      (Unaudited)           1996       1995   (Decrease)
---------------------------------------------------------------------------------------
<C>        <C>        <C>        <S>                     <C>        <C>       <C>
$ 3,560    $ 4,180     (14.8)%   Manufactured products   $11,473    $17,556   (34.6)%   
                                 As a % of manufactured
   18.2%      20.4%               products net sales        19.2%      31.5%
---------------------------------------------------------------------------------------
$ 4,360    $ 6,627     (34.2)%   Distributed products    $11,097    $17,480   (36.5)%
                                 As a % of distributed
   33.5%      35.3%               products net sales        34.0%      35.3%  
---------------------------------------------------------------------------------------
$ 7,920    $10,807     (26.7)%   Gross profit            $22,570    $35,036   (35.6)%
   24.3%      27.5%              As a % of net sales        24.5%      33.3%
=======================================================================================
</TABLE>




<PAGE 11>
                              COPLEY PHARMACEUTICAL, INC.
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
                        CHANGES IN FINANCIAL CONDITION (Continued)        


The Company's gross profit was $7.9 million, or 24.3% of net sales, for the 
third quarter of 1996 as compared to $10.8 million, or 27.5% of net sales, for 
the same period in 1995. The decrease was primarily attributable to narrowing 
margins caused by price erosion on the Company's products and an $837,000 
charge related to short-dated inventory of a product in a currently saturated 
market.  The Company's gross profit for the third quarter of 1995 reflected a 
$2.5 million write-off of albuterol materials inventory  following 
management's decision not to reintroduce this recalled product.

For the nine-month period ended September 30, 1996, the Company's gross profit 
was $22.6 million, or 24.5% of net sales, as compared to $35.0 million or 
33.3% of net sales a year earlier. Intensified price competition, lower 
margins on products manufactured in the previous year but not sold until the 
current year, and the $1.5 million cumulative charge related to short-dated 
inventory of a product in a currently saturated market have all depressed the 
Company's gross profit.  The current environment of intensified price 
competition is anticipated to continue. 




<TABLE>
Operating Expenses
---------------------------------------------------------------------------------------
<CAPTION>
  For the quarter                                            For the nine
      ended                        (In thousands)            months ended 
   September 30,      Increase                               September 30,    Increase
  1996       1995    (Decrease)      (Unaudited)             1996      1995  (Decrease)
---------------------------------------------------------------------------------------
<C>        <C>         <C>      <S>                       <C>       <C>       <C> 
 $3,003    $ 3,804     (21.1)%  Research and development   $10,205   $ 9,522      7.2 %   
    9.2%       9.7%             As a % of net sales           11.1%      9.0%
---------------------------------------------------------------------------------------
                                Selling, marketing and   
 $1,416    $   603       135 %   distribution              $ 5,087   $ 3,767     35.0 %
    4.3%       1.5%             As a % of net sales            5.5%      3.6% 
---------------------------------------------------------------------------------------
 $3,270    $ 2,256      44.9 %  General and administrative $ 8,301   $ 7,454     11.4 %
   10.0%       5.8%             As a % of net sales            9.0%      7.1%
---------------------------------------------------------------------------------------
                                Recall related and 
 $  175    $12,827     (98.6)%   litigation, net            $  111   $16,338    (99.3)%
    0.5%      32.7%             As a % of net sales            0.1%     15.5% 
=======================================================================================
</TABLE>



For the three months ended September 30, 1996, research and development 
expenses were $3.0 million as compared to $3.8 million for the prior year 
comparable period. Spending for the third quarter of 1995 included higher 
product validation costs related to the two products launched late in the 
quarter and the one product launched in October 1995. For the nine-month 
period, research and development expenses were $10.2 million as compared to 
$9.5 million reported in the prior year. The spending increase was primarily 
due to increased personnel expenses.	

Selling, marketing and distribution expenses increased to $1.4 million for the 
third quarter of 1996 as compared to $0.6 million for the same period in 1995. 
The third quarter of 1995 was uncharacteristically low due to the timing of 
product promotional expenses. For the nine-month period ended September 30, 
1996, selling, marketing and distribution expenses increased to $5.1 million 
from $3.8 million reported in the prior year. The  increase was primarily 
attributable to higher advertising and promotional expenses resulting from the 
intensified competitive environment.

General and administrative expenses were $3.3 million for the third quarter of 
1996 as compared to $2.3 million for the same period in 1995. For the nine-
month period ended September 30, 1996, general and administrative expenses 
totaled $8.3 million compared to $7.5 million a year earlier.  The increases 
were primarily attributable to charges recorded as  a result of a major 
customer's filing for bankruptcy protection during the third quarter and for 
severance packages for employees who resigned during the quarter.

Net recall related and litigation expenses in 1996 were primarily legal 
expenses incurred by the Company for representation in its various outstanding 
legal proceedings offset by  $3.6 million of negotiated insurance recoveries. 
Net recall and litigation expenses in 1995 included the following:  $5.1 
million contributed to Albuterol Settlement Trust Fund;  $2.75 million cost to 
settle the shareholder class action litigation;  $2.9 million in write-offs of 
albuterol-related equipment; and approximately $5.6 million in legal expenses 
for representation in the albuterol sulfate inhalation solution, 0.5% product 
liability claims.


<PAGE 12>
                              COPLEY PHARMACEUTICAL, INC.
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
                        CHANGES IN FINANCIAL CONDITION (Continued)
  


<TABLE>
Interest and Other Income, Net 	
---------------------------------------------------------------------------------------
<CAPTION>
  For the quarter                                            For the nine
       ended                       (In thousands)            months ended 
    September 30,     Increase                               September 30,    Increase
  1996       1995    (Decrease)      (Unaudited)            1996       1995  (Decrease)
---------------------------------------------------------------------------------------
<C>        <C>        <C>        <S>                       <C>         <C>      <C>
                                 Interest and investment                                  
$   71      $375       (81.1)%     income                   $ 452     $ 944     (52.1)%
---------------------------------------------------------------------------------------
$  (63)     $(67)       (6.0)%   Interest expense           $(182)    $(215)    (15.3)%
---------------------------------------------------------------------------------------
$1,008      $249         ---     Other income (expense)     $(311)    $ 228       ---  
=======================================================================================
</TABLE>




Interest and investment income totaled $71,000 for the third quarter of 1996 
compared to $375,000 for the same period in 1995. For the nine-month period 
ended September 30, 1996, interest and investment income totaled $452,000 as 
compared to $944,000 a year earlier. The decreases were primarily attributable 
to decreased average cash available to invest.

Other income of $1.0 million for the third quarter of 1996 was primarily 
comprised of the settlement of an insurance claim.  For the nine months ended 
September 30, 1996, other expenses included expenses incurred in connection 
with the evaluation of a possible business consolidation which the Company 
has decided not to pursue at this time, substantially offset by the settlement 
of an unrelated insurance claim.




<TABLE>  
Taxes and Net Income (Loss)
---------------------------------------------------------------------------------------
<CAPTION>
  For the quarter                                            For the nine
      ended                        (In thousands)            months ended 
   September 30,      Increase                               September 30,    Increase
  1996       1995    (Decrease)      (Unaudited)            1996       1995  (Decrease)
---------------------------------------------------------------------------------------
<C>        <C>         <C>       <S>                        <C>       <C>      <C>
 $ 458    $(2,880)       116%    Income tax expense         $(462)    $(262)   (76.3)%   
---------------------------------------------------------------------------------------
  42.7%     (35.4)%              Effective tax rate         (39.3)%   (24.1)%
---------------------------------------------------------------------------------------
 $ 614    $(5,246)       112%    Net income (loss)          $(713)    $(826)    13.7 %
=======================================================================================
</TABLE>



For the third quarter of 1996, the Company's effective income tax (benefit) 
rate was 42.7% versus (35.4)% for the prior year comparable period.  For the 
nine-month period ended September 30, 1996, the effective income tax (benefit) 
rate was (39.3)% versus (24.1)% a year earlier. The tax rate differences 
resulted from the change in the projected profitability of the Company in 1996 
versus 1995.

For the third quarter of 1996, the Company's net income totaled $614,000 or 
$0.03 per share as compared to a net loss of $5.2 million or $0.28 per share 
for the same period in 1995. Excluding net recall related and litigation 
expenses, net income would have been $719,000 or $0.04 per share, and $2.5 
million or $0.13 per share, for the third quarter of 1996 and 1995, 
respectively. The Company's profitability continues to be adversely affected 
by intensified price competition.  Other factors affecting the quarterly 
results included the negative impact of the filing for bankruptcy by a major 
customer offset by the settlement of an unrelated insurance claim.

For the nine-month period ended September 30, 1996, the Company reported a net 
loss of $713,000 or $0.04 per share as compared to a net loss of $826,000 or 
$0.04 per share for the same period in 1995.  Sluggish sales and narrowing 
margins both caused by intensified pricing competition continued to depress 
the Company's profitability.  The net loss reported for 1995 was primarily 
caused by unusual and significant expenses incurred related to the settlement 
and defense of various litigation matters and the decision not to reintroduce 
a recalled product.  


<PAGE 13>
                              COPLEY PHARMACEUTICAL, INC.
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
                        CHANGES IN FINANCIAL CONDITION (Continued)


Changes in Financial Condition

Capital Resources and Liquidity
<TABLE>
<CAPTION>      
                                      Unaudited
                                     September 30,       December 31,
(In thousands)                           1996                1995
                                     -------------       ------------
<S>                                   <C>                  <C>
Cash and short-term investments         $ 21,070           $ 25,047
Working capital                           56,516             59,365
Long-term debt                             5,100              5,400
Shareholders' equity                     111,993            112,524

</TABLE>

Working capital decreased $2.9 million from $59.4 million at December 31, 1995 
to $56.5 million at September 30, 1996. The decrease was primarily due to the 
net operating losses experienced by the Company during the first half of 1996 
as well as investment in planned capital expenditures. 

On July 31, 1996 the Company amended its working capital line of credit 
agreement to increase its maximum borrowing capacity from $20.0 million to 
$30.0 million. At September 30, 1996 the Company had $17.1 million in stand-
by letters of credit related to the Albuterol Settlement Trust Fund 
outstanding under this working capital line of credit agreement. These 
stand-by letters of credit were obtained by the Company pursuant to the 
requirements of the Albuterol Settlement Trust Fund to cover its uninsured 
obligation. Recourse to the letters of credit are contingent on the number of 
claims filed within certain categories and will not occur until all claims 
are processed and settlement amounts are recommended by the Special Master.

The Company believes that its current cash resources, cash generated from 
operations and the amount available under its amended working capital line of 
credit will be sufficient to meet its anticipated operating needs for the next
twelve months. However, there can be no assurance that events in the future 
will not require the Company to seek additional capital sooner, or, if so 
required, that such capital will be available on terms favorable or acceptable 
to the Company, if at all. 

Restructuring Charges in the Fourth Quarter

In response to increasing pricing pressures and eroding margins, the Company 
is restructuring its operations resulting in an estimated $3.0 million to $4.0 
million before tax charge, or $0.09 per share to $0.13 per share after taxes, 
in the fourth quarter of 1996. The restructuring includes the consolidation of
warehouse, manufacturing and office sites as well as the write-off of 
underutilized and idle equipment. Some reduction in the work force will also 
occur. 

Factors Affecting Future Results

The Company's quarterly and annual operating results are affected by a wide 
variety of factors that could have a material adverse effect on the Company's 
business, financial condition, results of operations and stock price. 
Statements in this Report on Form 10-Q which are not historical facts, so-
called "forward-looking statements,"  are made pursuant to the safe harbor 
provisions of the Private Securities Litigation Reform Act of 1995. Investors 
are cautioned that all forward-looking statements involve risks and 
uncertainties, including those detailed in the Company's filings with the 
Securities and Exchange Commission. See, for example, "Item 7. Management's 
Discussion and Analysis of Financial Condition and Results of Operations - 
Risk Factors and Future Trends" contained in the Company's Report on Form 10-K 
for the fiscal year ended December 31, 1995.


<PAGE 14> 

PART II.  OTHER INFORMATION

Item 1.		Legal Proceedings

See descriptions of legal proceedings in Note C of Notes to Condensed 
Consolidated Financial Statements in Part I of this Form 10-Q, which are 
hereby incorporated by reference herein.



Item 6.	Exhibits and Reports on Form 8-K

          	(a)  Exhibits

            		  27  Financial Data Schedule
			
		(b)  Reports on Form 8-K

                 Form 8-K dated July 9, 1996 - Item 5: Other Events.  The
                  Company announced that Kenneth N. Larsen will assume the 
                  office of the President on an interim basis in place of Dr. 
                  Gabriel R. Cipau, who has resigned all positions in the 
                  Company.

                 Form 8-K dated September 6, 1996 - Item 5: Other Events.  
                  The Company announced that Ken E. Starkweather has accepted 
                  the position of Vice President - Finance, succeeding Barbara 
                  Sherrill, who has resigned all positions in the Company.






<PAGE 15>
                                  SIGNATURE 



Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.





    Signature                         Title                        Date

/s/ Ken E. Starkweather      
-------------------------       Vice President-Finance       November 14, 1996
    Ken E. Starkweather       (Principal Financial Officer
                               and duly authorized officer
                                  of the Registrant)