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# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

# FORM 10-Q

(Mark One)

[X]  Quarterly Report Pursuant to Section 13 or
15(d) of the Secutities Exchange Act of 1934

For the quarterly period ended June 30,
2002, or

[  ] Transition Report Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from  to

Commission file number 0-21615

# BOSTON BIOMEDICA, INC.(Exact Name of Registrant as Specified in its Charter)

Massachusetts           

             
             
             
             
  04-2652826
          
(State or other Jurisdiction of        
             
             
             
             
             
             
            
(I.R.S. Employer          
          
           
Incorporation or Organization)     
             
             
             
             
             
             
           
 Identification No.)

375 West Street,        
             
             
            
             
             
             
             
             
             
             
     
West Bridgewater, Massachusetts           
           
           

             
             
  02379-1040
    (Address of Principal Executive Offices)
            
            
             
             
             
             
             


(Zip Code)

Registrants telephone number, including area
code(508) 580-1900

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 common
 stock as of August 2, 2002, was 6,778,840.

---

Part I  FINANCIAL INFORMATION
  Item 1. Financial Statements
    Consolidated Statements of Operations:
        Three and Six Months Ended June 30, 2002
    Balance Sheet
    Statement of Cash Flows
    Notes to Financial Statements
  Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Item 3. Quantitative and Qualitative Disclosures About Market Risk

Part II  OTHER INFORMATION
  Item 1. Legal Proceedings
  Item 2. Changes in Securities and Use of Proceeds
  Item 3. Defaults Upon Senior Securities
  Item 4. Submission of Matters to a Vote of Security Holders
  Item 5. Other Information
  Item 6. Exhibits and Reports on Form 8-K
  Signature

# BOSTON BIOMEDICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

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

# BOSTON BIOMEDICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)

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

# BOSTON BIOMEDICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

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

# BOSTON BIOMEDICA, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS

## (1) Basis of
Presentation

The accompanying  unaudited  consolidated  financial statements have been prepared in accordance with generally
accepted  accounting  principles for the interim  financial  information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X.  Accordingly,  they do not include all of the  information and footnotes  required by
generally accepted  accounting  principles for complete  financial  statements.  In the opinion of management,  all
adjustments  (consisting of only normal recurring  adjustments)  considered  necessary for a fair presentation have
been included.  Operating  results for the three and six months ended June 30, 2002 are not necessarily  indicative
of the results that may be expected for the year ending  December 31, 2002. For further  information,  refer to the
consolidated  financial  statements  and  footnotes  thereto  included  in the Form 10-K filing for the fiscal year
ended December 31, 2001 for Boston Biomedica,  Inc. and Subsidiaries (the Company or Boston  Biomedica) and the
Companys Form 10-Q filing for the three months ended March 31, 2002.

Certain amounts  included in the prior years  financial  statements  have been  reclassified to conform to the
current years presentation.

In  February  2001,  the  Company  sold the  business  and  certain  assets  and  liabilities  of BBI  Clinical
Laboratories,  Inc. (BBICL),  a wholly-owned  subsidiary of the Company, to a third party in conjunction with its
decision to exit the clinical laboratory business segment.  The accompanying  financial  statements present BBICLs
remaining net liabilities and results of operations as discontinued operations.

## (2) Recent
Accounting Standards

Statement of Financial  Accounting  Standards  No. 142,  Goodwill  and Other  Intangible  Assets (SFAS 142),
became effective for the Company  beginning January 1, 2002. SFAS 142 requires,  among other things,  the cessation
of the  amortization  of goodwill.  In addition,  the standard  includes  provisions  for the  reclassification  of
certain  existing  recognized  intangibles  as goodwill,  reassessment  of the useful lives of existing  recognized
intangibles,  reclassification  of certain  intangibles out of previously  reported goodwill and the identification
of reporting  units for purposes of assessing  potential  future  impairments  of goodwill.  SFAS 142 also required
the Company to complete a transitional  goodwill  impairment  test six months from the date of adoption.  This test
was performed in the second  quarter and resulted in no goodwill  impairment.  In  accordance  with the adoption of
this pronouncement,  the Company ceased amortization of approximately  $227,000 of goodwill  (approximately  $5,400
quarterly)  attributable to its BBI Source Scientific,  Inc. subsidiary.  The Companys remaining intangible assets
as of January 1, 2002 relate to trademarks,  license and patent costs, and accordingly,  amortization of such costs
over their remaining  estimated useful lives is included in the accompanying  financial  statements for all periods
presented.

Statement  of  Financial  Accounting  Standards  No.  143,  "Accounting  for  Asset  Retirement   Obligations"
(SFAS 143),  is  effective  January  1, 2003.  SFAS 143  addresses  the  financial  accounting  and  reporting  for
obligations  and retirement  costs related to the retirement of tangible  long-lived  assets.  The adoption of SFAS
143 is not expected to have a significant impact on the Companys financial statements.

Statement  of  Financial  Accounting  Standards  No.  144,  "Accounting  for the  Impairment  or  Disposal  of
Long-Lived  Assets" (SFAS 144),  became  effective  January 1, 2002.  SFAS 144  supersedes  FASB Statement No. 121,
"Accounting  for the  Impairment  of  Long-Lived  Assets  and for  Long-Lived  Assets to Be  Disposed  Of," and the
accounting and reporting  provisions  relating to the disposal of long-lived  assets.  The adoption of SFAS 144 did
not have a significant impact on the Companys financial statements.

## (3)
Inventories

## (4) Segment
Reporting and Related Information

Operating segments are components of an enterprise for which separate  financial  information is available that
is  evaluated  regularly  by  senior  management  in  deciding  how to  allocate  resources  and in  assessing  the
performance of each segment.  The Company is organized  into segments  along  business lines and senior  management
regularly reviews financial results for all business lines, focusing primarily on revenue and operating income.

The  Company  had four  operating  segments  as of June 30,  2002.  The  Diagnostics  segment  serves  the
worldwide in vitro  diagnostics  industry,  including users and regulators of their test kits, with quality control
products,  and test kit components.  The Biotech segment is a research and development center providing support for
the other BBI business units, as well as contract  research,  molecular and cell biology  services,  and repository
services for the government and life sciences  industry.  The Laboratory  Instrumentation  segment sells diagnostic
instruments  primarily to the worldwide in vitro diagnostic  industry on an OEM basis,  and also performs  in-house
instrument  servicing.  The PCT  segment  consists of  research  and  development  primarily  in  pressure  cycling
technology  ("PCT").  The Company  performs  research in the development of PCT, with particular focus in the areas
of nucleic acid extraction and pathogen  inactivation.  While the PCT segments research and development  operation
does not currently have any significant  product or service revenue,  the Company expects to commercialize  certain
PCT products  later in 2002.  Revenue to date in the PCT segment  consists of both private and public (NIH) funding
of  segment  research.  Most  of the  expenditures  incurred  by this  segment  are for  research  and  development
expenses,  general management  expenses and patent costs. See Note 7 with respect to discontinued  operations which
are no longer classified as an operating segment of the Company.

The Companys  underlying  accounting  records are maintained on a legal entity basis for government and public
reporting  requirements.  Inter-segment  sales are recorded on a "third party best price" basis and are significant
in measuring segment  operating  results.  The following  segment  information has been prepared in accordance with
the internal accounting policies of the Company, as described above.

Operating segment revenue
 was as follows:

Operating segment (loss) income was as follows:

Identifiable corporate and operating segment assets are all located in the United States as follows:

## (5)
Computation of Net Income (Loss) per Share

Basic  earnings per share is computed by dividing net income  (loss) by the weighted  average  number of common
shares  outstanding.  Diluted  earnings per share is computed by dividing net income (loss) by the weighted average
number of common shares  outstanding plus additional  common shares that would have been outstanding if potentially
dilutive  common  shares had been  issued.  For the  purposes of this  calculation,  stock  options are  considered
common stock  equivalents  in periods in which they have a dilutive  effect.  Stock  options that are  antidilutive
are excluded  from the  calculation.  Potentially  dilutive  securities  having a net effect of 336,682 and 250,354
common  shares,  for the three and six months ended June 30, 2002 and 1,121,695 and 1,033,755  common  shares,  for
the three and six months ended June 30, 2001,  were not included in the  computation of diluted  earnings per share
because to do so would have been antidilutive.

The earnings  (loss) per share  computation  for the first six months of 2002  reflects the issuance of 600,000
additional  shares  of  common  stock in the first  quarter  of 2002 to a group of  investors;  these  shares  were
subscribed to and paid for in December  2001.  The income (loss) per share  computation  for the first half of 2001
reflects  both the issuance of 801,325  additional  shares of common stock in the first quarter of 2001, as certain
holders of the  Debentures  exercised  their rights to convert  $1,210,000  of such  Debentures  into shares of the
Companys common stock, and the issuance of 68,355  additional  shares of common stock associated with the exercise
of stock options,  warrants and purchases  made pursuant to the employee stock purchase plan. In addition,  on June
15, 2001 the Company and  Paradigm  Group,  LLC entered into an agreement  to  permanently  settle their  disputes.
Under the terms of the  agreement,  Paradigm  Group,  LLC  rescinded  their  exercise of the common stock  purchase
warrants,  which have since expired,  and the Company  retains the 500,000 shares  associated  with their exercise.
These shares were included in the total shares  outstanding as well as in the  calculation  of earnings  (loss) per
share from  February  17, 2000 (the date of  exercise)  through  June 15, 2001 (the date of the  agreement).  As of
June 30,  2001 these  shares  were  legally  considered  treasury  stock  however in the third  quarter of 2001 the
Company took the necessary measures to cancel these shares and restore these shares to authorized only status.

## (6) Related Party Transaction

As of December 31, 2001,  the Company had entered into a one year loan of $525,000 to its Chief  Executive
Officer  (CEO),  renewable  at the  Companys  option,  and  collateralized  by  90,000  of his  shares of Boston
Biomedica  common  stock.  Interest on the loan was payable  monthly at the annual rate of 7%. The loan is shown on
the balance  sheet as a decrease to  stockholders  equity as of December 31, 2001.  In January  2002,  the loan was
repaid in full.  The loan was  replaced by the  Companys  pledge of a  $1,000,000  interest  bearing  deposit at a
financial  institution  to provide  additional  security for loans in the aggregate  amount of $2,418,000  from the
financial  institution  to an entity  controlled  by the CEO. The loans are  personally  guaranteed by the CEO. The
Companys  pledge is  secured  by a junior  subordinated  interest  in the  collateral  provided  by the CEO to the
financial  institution.  Such  collateral  includes all of his real  property  and common stock  holdings in Boston
Biomedica,  Inc. The original loan and subsequent  pledge of $1,000,000  were made to assist the CEO in refinancing
indebtedness  related to, among other things,  his divorce  settlement  and to enable him to avoid the need to sell
his common stock holdings in Boston  Biomedica,  Inc. on the open market to satisfy his debts.  The Companys Board
of Directors and, with respect to the decision to pledge the $1,000,000  cash  collateral,  a special  committee of
the independent  directors,  evaluated a number of alternatives and concluded that the original loan to the CEO and
the subsequent  pledge were the best  alternative and in the best interests of the Companys  stockholders  because
it would,  among other  things,  avoid  selling  pressure on the  Companys  common stock and relieve the financial
pressures on the CEO that could  otherwise  divert his  attention  from the Company.  The  Companys  pledge of the
$1,000,000 deposit is reflected on the Companys balance sheet as restricted cash.

## (7)
Disposition of Assets

In February 2001, the Company exited the clinical  laboratory  testing  services  market and sold the business
and certain assets of BBI Clinical Laboratories,  Inc., a wholly-owned  subsidiary of the Company, to a third party
for an adjusted  purchase price of  $8,958,000.  The Company has retained  certain other assets and  liabilities of
BBICL,  primarily property,  plant and equipment,  together with the facility lease subsequent to the closing date,
which the  Company is  attempting  to  sublease.  The  Company  has  written  down all of the  retained  assets not
otherwise  redistributed  to other business units to their  estimated net realizable  value.  In accordance  with a
transition  services  agreement,  the Company  operated the clinical  laboratory  testing business on behalf of the
buyer during the period February 20, 2001 through  December 2001,  although most operations  ceased activity by the
end of June 2001;  substantially  all costs  associated with operating the business  subsequent to the closing date
were borne by the purchaser.

The Company has  recorded  its  estimate of  remaining  short and long term  accrued  liabilities  to exit the
clinical  laboratory  testing  business,  totaling  approximately  $1,203,000  as  of  June  30,  2002.  The  major
components of this accrual are estimated lease exit and facility  related costs  ($620,000) and certain health care
claims and other regulatory audit adjustments  ($418,000),  with the remainder for other miscellaneous costs associated with exiting
this business segment.

The Company  recorded a gain of $4,334,000  net of taxes of $969,000 in the fiscal year ended 2001,  which
may be  subject  to future  adjustments  as the  Company  completes  the  process  of  exiting  this  business  and
permanently  closing the  facility.  The  remaining  closing  costs include an estimate to dispose of any remaining
assets and retire all existing  liabilities  including the facility  lease.  The Company will utilize certain prior
period net operating loss  carryforwards,  previously  reserved for by the Company,  to partially offset the income
tax  effect  of this  gain.  All  financial  data  presented  in the  accompanying  financial  statements  reflects
discontinued operations of this segment of the business for all periods presented.

In summary, revenues from discontinued operations,  net of intercompany  eliminations,  were $973,000, in
the period  January 1, 2001 to February 20, 2001.  Operating  income (loss) from  discontinued  operations  were $0
for the three and six months  ended June 30,  2002 and $0 and  ($136,000)  for the three and six months  ended June
30, 2001,  respectively.  Income (loss) from discontinued operations was $0 for the three and six months ended June
30, 2002 and $0 and $3,964,000 for the three and six months ended June 30, 2001 respectively.

## ITEM 2.  MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
                AND RESULTS OF OPERATIONS

## Overview

In February 2001,  the Company exited the clinical  laboratory  testing  services  market and sold the business
and certain assets of BBI Clinical Laboratories,  Inc., a wholly-owned  subsidiary of the Company, to a third party
for an adjusted  purchase price of $8,958,000.  Additional  information  relative to this  transaction is contained
hereunder in the caption entitled  Discontinued  Operations  included in Results of Operations for the six months
ended June 30, 2002 and 2001.

## RESULTS OF OPERATIONSTHREE MONTHS ENDED JUNE 30, 2002 AND 2001

Revenue

Total revenue from continuing operations increased 6.5%, or $356,000, to $5,856,000 in the second quarter of 2002
from $5,500,000 in the second quarter of 2001. The increase in revenue was the result of an increase in product
revenue of 9.4%, or $308,000, to $3,588,000 in the second quarter of 2002 from $3,280,000 in the second quarter
of 2001, coupled with a slight increase in service revenue of 2.2%, or $48,000, to $2,268,000 in the second
quarter of 2002 from $2,220,000 in the second quarter of 2001.

Product  Revenue.   The increase of $308,000 in product revenue was due primarily to an increase of approximately $579,000 at the
Diagnostic segment partially offset by a lower level of both instrument sales at the Laboratory Instrumentation
segment (due to strong sales to existing customers in the second quarter of 2001) and product sales at the
Biotech segment.  The Diagnostic segment increase was attributed to strong custom OEM product revenue.

Service  Revenue.              The $48,000  increase in service revenue was primarily  related to growth in the repository  operations at
the Biotech segment.

Gross Profit

Overall gross profit  increased 6.3%, or $140,000,  to $2,378,000 in the second quarter of 2002 from $2,238,000
in the second  quarter of 2001.  Product  gross profit  increased  2.4%,  or $42,000,  to  $1,804,000 in the second
quarter of 2002 from  $1,762,000  in the second  quarter of 2001;  product  gross  margin  declined to 50.3% in the
second  quarter of 2002 from 53.7% in the  second  quarter of 2001.  Services  gross  profit  increased  $97,000 or
20.3% to $574,000 in the second  quarter of 2002 from $477,000 in the second  quarter of 2001,  while service gross
margin increased to 25.3% in the second quarter of 2002 from 21.5% in the second quarter of 2001.

Product Gross Margin

The decrease in product gross margin at the Diagnostics segment was primarily due to a greater proportion of
second quarter 2002 revenue derived from lower margin OEM products.  In addition, a slight decrease at the
Laboratory Instrumentation segment product margin was associated with a lower level of instrument sales over a
relatively fixed cost structure and increased costs associated with a facility lease renewal effective in 2002.

Service Gross Margin

The service gross margin increase was due to increased service revenues associated with the PCT segment partially
offset by a decline in service gross margin at the Biotech segment due to a lower level of billable hours
associated with government reimbursable contract work and higher facility operating costs at the Biotech segment
in the second quarter of 2002.

Research and Development

Research and development  expenditures  increased 10.9%, or $62,000,  to $631,000 in the second quarter of 2002
from $569,000 in the second quarter of 2001.  The increased level of research and development expenditures in the
second quarter of 2002 was associated  with ongoing PCT related  projects,  expenditures  on an AccuChart web based
data management software program for quality control products  customers,  and diagnostic products projects at both
the Diagnostics and Biotech segments.

Selling and Marketing

Selling and  marketing  expenses  increased by 18.0%,  or $124,000,  to $814,000 in the second  quarter of 2002
from  $690,000  in the second  quarter of 2001.  The  Company  continued  to incur  additional  new  marketing  and
promotion  related  costs in the  second  quarter  of 2002  associated  with its  planned  introduction  of the PCT
Barocycler into commercial  service later in year 2002,  coupled with the filling of a new marketing  position at
the Biotech segment in 2002.

General and Administrative

General and  administrative  costs increased  32.4%,  or $289,000,  to $1,180,000 in the second quarter of 2002
from $891,000 in the second quarter of 2001,  due primarily to higher than expected  health care and facility costs
incurred  in the second  quarter  of 2002.  In the  second  quarter of 2001,  the  Company  also  benefited  by the
reversal of an $80,000 legal expense accrual  associated with the June 2001 legal settlement  reached with Paradigm
Group,  LLC. In the second  quarter of 2001, the Company  increased its provision for doubtful  accounts by $82,000
based on a significant deterioration in the financial condition of a customer in its Diagnostics segment.

Operating Income (Loss) from continuing operations

Operating (loss) from continuing operations amounted to $(247,000) in the second quarter of 2002 compared to
operating income of $89,000 in the second quarter of 2001. The Diagnostics segments operating income increased
to $549,000 in the second quarter of 2002 from $465,000 in the second quarter of 2001, associated with a 22.4%
increase in product revenue at the Diagnostics segment.  The Biotech segments operating loss increased to
$(243,000) in the second quarter of 2002 from $(39,000) in the second quarter of 2001, due to lower revenues
coupled with increased facility related costs and sales and marketing costs.  The operating loss of the PCT
segment increased to $(447,000) in the second quarter of 2002 from $(303,000) in the same period of 2001 due to
additional costs associated increased research and development and patent costs associated with the final phases
of product development and advanced prototype manufacture.

Interest Expense

Net interest expense was relatively unchanged in the second quarter of 2002 as compared to the second quarter of
2001.  Both the second quarter of 2002 and 2001 included interest expense associated with the Companys
outstanding mortgage.

Income Taxes

In the year 2000, the Company established a full valuation allowance for its deferred tax assets in accordance
with Statement of Financial Accounting Standards No. 109 and in consideration of three consecutive years of
losses; accordingly, the Company has not recognized an income tax benefit associated with the loss from
continuing operations in the second quarter of 2002.  The Company made estimated state tax payments of $5,900 in
the second quarter of 2001.

(Loss) Income from Continuing Operations

(Loss) from continuing operations amounted to $(294,000) for the quarter ended June 30, 2002 as compared to
income of $38,000 for the quarter ended June 30, 2001, as a result of the items discussed above.

## SIX MONTHS ENDED JUNE 30, 2002 AND 2001

Revenue

Total revenue from continuing operations increased 3.1%, or $327,000, to $10,809,000 in the first six months of
2002 from $10,482,000 in the first six months of 2001. The increase in revenue was the result of an increase in
product revenue of 1.9%, or $122,000, to $6,564,000 in the first six months of 2002 from $6,442,000 in the first
six months of 2001, coupled with a 5.1% increase in service revenue or $205,000, to $4,245,000 in the first six
months of 2002 from $4,040,000 in the first six months of 2001.

Product  Revenue.   The increase of $121,000 in product revenue was due primarily to an increase of approximately $498,000 at the
Diagnostic segment, substantially offset by decreases of product sales at the Biotech segment and lower
instrument sales at the Laboratory Instrumentation segment (the latter segment experienced strong sales to
existing customers in the first half of 2001).  The Diagnostics segment experienced higher levels of sales of its
Basematrix, biologics and reagents products in the first six months of 2002 as compared to the same period last
year.

Service  Revenue.              The $205,000 increase in service revenue was primarily related to growth in the repository operations at the
Biotech segment and increased grant revenue at the Companys PCT segment.  This follows an increase in revenues
at the Biotech segment in the first half of 2001 associated with revenues related to work initiated on a vaccine
contract by a new collaborator.

Gross Profit

Overall gross profit increased 0.7%, or $31,000, to $4,263,000 in the first six months of 2002 from $4,232,000 in
the first six months of 2001.  Product gross profit decreased 2.0%, or $67,000, to $3,273,000 in the first six
months of 2002 from $3,340,000 in the first six months of 2001;  product gross margin declined to 49.9% in the
first six months of 2002 from 51.9% in the first six months 2001.  Services gross profit increased to $990,000 in
the first six months of 2002 from $892,000 in the first six months of 2001, while service gross margin increased
to 23.3% in the first six months of 2002 from 22.1% in the first six months of 2001.

Product Gross Margin

A decrease in product gross margin was associated with increased sales of higher margin catalog products in the
first half of 2001 at the Diagnostics segment and higher raw material costs in the first half of 2002; a decrease
in high margin product sales at the Biotech segment in the first half of 2002; and  lower revenues over a
relatively fixed cost structure (which includes increased costs associated with a facility lease renewal
effective in 2002) at the Laboratory Instrumentation segment.

Service Gross Margin

The service gross margin increase was due to increased service revenues associated with the PCT segment.  This
increase was partially offset by an unfavorable mix shift to lower margin government contracts combined with a
lower level of billable hours associated with government reimbursable contract work and higher facility operating
costs at the Biotech segment in the first half of 2002.

Research and Development

Research and development expenditures increased 33.4%, or $348,000, to $1,389,000 in the first six months of 2002
from $1,041,000 in the first six months of 2001.  The increased level of research and development expenditures in
the first six months of 2002 was primarily associated with building several PCT Barocyclers for use at test
sites.

Selling and Marketing

Selling and marketing expenses  increased by 20.1%, or $289,000,  to $1,730,000 in the first six months of 2002
from  $1,441,000  in the first six  months of 2001.  The  Company  incurred  significant  marketing  and  promotion
related costs in the first six months of 2002 primarily  associated with its  introduction of the PCT  Barocycler
at the Pittsburgh  Conference  industry trade show and related ongoing marketing efforts,  coupled with the filling
of a new marketing position at the Biotech segment in 2002.

General and Administrative

General and  administrative  costs increased 16.5%, or $316,000,  to $2,226,000 in the first six months of 2002
from  $1,910,000 in the first six months of 2001,  due  primarily to higher than expected  health care and facility
costs incurred in the first six months of 2002,  whereas in the first six months of 2001, the Company  benefited by
the reversal of an $80,000  legal  expense  accrual  associated  with the June 2001 legal  settlement  reached with
Paradigm Group,  LLC. In the second quarter of 2001, the Company  increased its provision for doubtful  accounts by
$82,000 based on a significant deterioration in the financial condition of a customer in its Diagnostics segment.

Operating Loss

Operating loss from continuing operations amounted to $(1,083,000) in the first six months of 2002 compared to an
operating loss of $(160,000) in the first six months of 2001. The Diagnostics segments operating income
increased to $687,000 in the first six months of 2002 from $669,000 in the first six months 2001 due to an
increase in product revenues partially offset by a lower product gross margin.  The Biotech segments operating
loss increased to $(376,000) in the first six months of 2002 from $(90,000) in the first six months of 2001,
primarily due to both increased research and development costs and sales and marketing costs.  The operating loss
of the PCT segment increased to $(1,239,000) in the first six months of 2002 from $(582,000) in the first six
months of 2001 due to increased research and development and patent costs associated with the final phases of
product development and advanced prototype manufacture.

Interest Expense

Net interest expense decreased to $98,000 in the first six months of 2002 from $273,000 in the first six months
of 2001.  The Company redeemed the remaining $2,040,000 (face value) of outstanding 3% Senior Subordinated
Convertible Debentures (Debentures), which were originally issued in August 2000, plus accrued interest and a
premium of $190,000 (which was charged to interest expense) in the first six months of 2001.  Interest expense in
the first six months of 2001 also included interest on the Companys line of credit, which was terminated by the
Company in February 2001.  Both the first six months of 2002 and 2001 included interest expense associated with
the Companys outstanding mortgage.

Income Taxes

In the year 2000, the Company established a full valuation allowance for its deferred tax assets in accordance
with Statement of Financial Accounting Standards No. 109 and in consideration of three consecutive years of
losses; accordingly, the Company has not recognized an income tax benefit associated with the loss from
continuing operations in the first six months of 2002 and 2001, as these tax assets have been fully reserved
for.  The Company made estimated state tax payments of approximately $16,000 in the first six months of 2001.

Loss from Continuing Operations

Loss from continuing operations amounted to $(1,181,000) for the six months ended June 30, 2002 as compared to
$(449,000) for the six months ended June 30, 2001 as a result of the items discussed above.

Discontinued Operations

On February 20, 2001, the Company sold the business and certain assets and liabilities of its wholly-owned
subsidiary BBICL to a third party.  The Company retained certain other assets and liabilities of BBICL, primarily
property, plant and equipment, together with the facility lease subsequent to the closing date, which the Company
is attempting to sublease.  The Company wrote down all of the retained assets not otherwise redistributed to
other business units to their estimated net realizable value.

The Company has recorded its estimate of remaining short and long term accrued liabilities to exit the clinical
laboratory testing business, totaling approximately $1,203,000 as of June 30, 2002.  The major components of this
accrual are estimated lease exit and facility related costs ($620,000) and health care claims and other
regulatory audit adjustments ($418,000), with the remainder for other miscellaneous costs associated with exiting
this business segment.

Revenues from discontinued operations, net of intercompany eliminations, were $973,000, in the period January 1,
2001 to February 20, 2001.  Operating (losses) from discontinued operations was $0 for the three and six months
ended June 30, 2002 and were $0 and $(136,000) for the three and six months ended June 30, 2001, respectively.
The Company recorded a gain of $4,334,000, net of taxes of $969,000, in 2001.  Income (loss) from discontinued
operations was $0 for the three and six months ended June 30, 2002 and $0 and $3,964,000 for the three and six
months ended June 30, 2002, respectively. The Company will utilize prior period net operating loss carryforwards,
previously reserved for by the Company in year 2000, to partially offset the tax effect of this gain.
Additionally, the Company took a tax benefit of $564,000 related to stock option exercises that was not
previously recorded as the Company was in a loss position; this tax benefit was recorded as a credit to
additional paid-in capital in the first quarter of 2001.

In accordance with a transition services agreement, the Company operated the clinical laboratory business on
behalf of the buyer during the period February 20, 2001 through December 2001 although most operations ceased
activity by the end of June 2001. All of the revenues generated by, and substantially all costs associated with
operating the business subsequent to the closing date of the transaction are the responsibility of the purchaser.
A portion of the proceeds from this sale were used to redeem all outstanding Debentures and to retire the
Companys line of credit in the first quarter of 2001.

Net Income (Loss)

The Company had a net (loss) of ($1,181,000) in the first six months of 2002 as compared to net income of
$3,516,000 in the first six months of 2001.  In the first six months of 2001, the Company recorded an after-tax
gain of $3,964,000 associated with discontinued operations.

## LIQUIDITY AND
FINANCIAL CONDITION

The Company's working capital position amounted to $9,376,000 (including restricted cash of $1,003,000) as of March 31, 2002 from
$9,407,000 as of December 31, 2001.

Net cash used in operations for the six months ended June 30, 2002 was $454,000 as compared to $121,000 during
the same period last year.   The operational use of cash during the first six months of 2002 was primarily the
result of the year to date operating loss incurred in the first six months of 2002 and the buildup of raw
materials inventory partially offset by favorable cash collections of receivables.  In the first six months of
2001, increased collections on accounts receivable and the receipt of an income tax refund were more than offset
by the operating loss incurred in the first six months of 2001, the reversal of non-cash interest expense and
declines in both accounts payable and accrued expenses.

Net cash used in investing activities for the six months ended June 30, 2002 was $405,000 compared to $132,000
during the same period last year. The increase of cash used for investing in the first six months of 2002 was due
to the purchase of a DNA Sequencer at the Companys Biotech subsidiary and the construction of several
preproduction PCT Barocyclers   as demonstration units.

Cash used in financing activities for the six months ended June 30, 2002 was $390,000 compared to cash used of
$7,303,000 during the same period last year.  As discussed further below, the Company pledged $1,000,000 via a
deposit in an interest bearing account at a financial institution in the first six months of 2002; this was
partially offset by repayment to the Company of a loan by its Chief Executive Officer (CEO).  In the first six
months of 2001, the Company used proceeds from the sale of certain assets of BBICL to pay off in full the
remaining $5,762,635 balance on its line of credit and all remaining outstanding 3% Senior Subordinated
Convertible Debentures.

As of December 31, 2001, the Company had entered into a one year loan of $525,000 to its CEO, renewable at the
Companys option, and collateralized by 90,000 of his shares of Boston Biomedica common stock.  Interest on the
loan was payable monthly at the annual rate of 7%.  As of December 31, 2001, the loan is shown on the balance
sheet as a decrease to stockholders equity.  In January 2002, the loan was repaid in full. The loan was replaced
by the Companys pledge of a $1,000,000 interest bearing deposit at a financial institution to provide additional
security for loans in the aggregate amount of $2,418,000 from the financial institution to an entity controlled
by the CEO.  The loans are personally guaranteed by the CEO.  The Companys pledge is secured by a junior
subordinated interest in the collateral provided by the CEO to the financial institution. Such collateral
includes all of his real property and common stock holdings in Boston Biomedica, Inc.  The original loan and
subsequent pledge of $1,000,000 were made to assist the CEO in refinancing indebtedness related to, among other
things, his divorce settlement and to enable him to avoid the need to sell his common stock holdings in Boston
Biomedica, Inc. on the open market to satisfy his debts.  The Companys Board of Directors and, with respect to
the decision to pledge the $1,000,000 cash collateral, a special committee of the independent directors,
evaluated a number of alternatives and concluded that the original loan to the CEO and the subsequent pledge were
the best alternative and in the best interests of the Companys stockholders because it would, among other
things, avoid selling pressure on the Companys common stock and relieve the financial pressures on the CEO that
could otherwise divert his attention from the Company.

As of June 30, 2002, the Company believes its cash and working capital resources, coupled with internally
generated funds from operations, will be sufficient to fund operations and anticipated capital expenditures for
the next year.  It is anticipated that there may be additional working capital requirements in connection with
PCT commercialization.   If necessary, the Company will consider various sources of additional financing,
including but not limited to, strategic alliances and private placements of debt or equity securities, which
could result in dilution to the Company's stockholders.  If adequate funds are not available, the Company may be
required to reduce its fixed costs and delay, scale back, or eliminate certain of its activities, any of which
could have an adverse long term effect on its business, financial condition or results of operations.

## CONTRACTUAL OBLIGATIONS

As of June 30, 2002, there have been no significant changes in the Companys contractual obligations previously
disclosed as of December 31, 2001.

## FORWARD-LOOKING
STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements concerning the Company's financial
performance and business operations. The Company wishes to caution readers of this Quarterly Report on Form 10-Q
that actual results might differ materially from those projected in any forward-looking statements.

Factors which might cause actual results to differ materially from those projected in the forward-looking
statements contained herein include the following: due to operational, scientific or technical difficulties in
the implementation of its strategies and changes in customer demand, the Companys sales to IVD test kit
manufacturers and sales of ACCURUN and other quality control products may not continue to be as strong as in
2001; the Company may not be successful in developing Pressure Cycling Technology into commercially viable
products and services, including those in the areas of sample preparation and inactivation,  or such activities
may take longer than currently expected; Pressure Cycling Technology may also not be adaptable to any other
commercially viable applications; certain Pressure Cycling Technology applications may not fall within the claims
of the Company's eight issued U.S. patents; individuals and groups utilizing Pressure Cycling Technology may not
be required to license such technology from the Company; the Companys inability to develop the end-user market
for quality control products; the Companys inability to grow the sales of Source Scientific, Inc. to the extent
anticipated; the uncertainty of the renewal and full funding of contracts with National Institutes of Health
(NIH);  the Companys inability to obtain an adequate supply of the unique and rare specimens of plasma and serum
necessary for certain of its products; the potential for significant reductions in purchases by any of the
Company's major customers; and if expenses are higher than anticipated, or if revenues are lower than
anticipated, the Company will require additional capital sooner than expected however, there can be no assurance that
the Company will be able to obtain additional financing or capital, or that it will be successful in eliminating or scaling back certain of its activities. Certain of these and other factors
which might cause actual results to differ materially from those projected are more fully set forth under the
caption "Risk Factors" in the Company's most recent Registration Statements on Form S-3 (SEC File No.s 333-94379
and 333-46426) and in its annual report on Form 10-K for the year ended December 31, 2001 and its quarterly report on Form 10-Q
for the quarter ended March 31, 2002.

## ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the reported market risks since December 31, 2001.

## PART II. OTHER
INFORMATION

## ITEM 1. LEGAL
PROCEEDINGS

Not Applicable

## ITEM 2.
CHANGES IN SECURITIES AND USE OF PROCEEDS

Not Applicable

## ITEM 3.
DEFAULTS UPON SENIOR SECURITIES

Not Applicable

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

The Company held its Annual Meeting of Stockholders on June 27, 2002 (the "Meeting").  A total of 5,874,646
shares, or 86.75%, of the Common Stock issued, outstanding and entitled to vote as of the record date, were
represented in person or by proxy, at the meeting.  At the meeting, one proposal was acted upon.  The result of
the proposal was as follows:

1.            Richard T.  Schumacher  and Kevin W. Quinlan  were  reelected  as Class III  Directors of the Company,  to
     serve as such  until the 2005  Annual  Meeting  of  Stockholders  and until  their  successors  have been duly
     elected and qualified, with 5,860,867 shares voting in favor, 13,779 votes withheld.

The terms of office of Directors William A. Wilson, Francis E. Capitanio and Calvin A. Saravis, continued after
the Meeting.

## ITEM 5. OTHER
INFORMATION

Not Applicable

## ITEM 6.
EXHIBITS AND REPORTS ON FORM 8K

## (a) Exhibits

## (b) Reports on Form 8-K.

There were no reports filed by the Company on Form 8-K in the second quarter of 2002.

# SIGNATURES

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

BOSTON BIOMEDICA, INC.


             
             
             
             
             
             
             
             
             
    (Registrant)



        Date:  
August 13, 2002          
         
             
             
             
         
By:/s/ Kevin W. Quinlan


            
             
             
             
             
             
             
             
     Kevin W. Quinlan,
            
             
             
             
             
             
             
             
     President and Chief Operating Officer
            
             
             
             
             
             
             
             
     (Principal Accounting and Financial Officer)