SECURITIES AND EXCHANGE COMMISSION


                             Washington, D.C. 20549


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

                                    FORM 10-Q



                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)

                     OF THE SECURITIES EXCHANGE ACT OF 1934


                                       OR


                For the quarterly period ended September 30, 1998


                           Commission File No. 0-15360


                        BIOJECT MEDICAL TECHNOLOGIES INC.
             (Exact name of registrant as specified in its charter)


          Oregon                                    93-1099680
(State of other jurisdiction of                (I.R.S. identification no.)
employer incorporation or organization)



7620 SW Bridgeport Road
Portland, Oregon                                          97224
(Address of principal executive offices)                (Zip code)



(Registrant's telephone number, including areas code)   (503) 639-7221


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 [ ]

At September 30, 1998 there were 28,907,395  outstanding  shares of common stock
of the registrant.

<PAGE>
                                        PART I
                                FINANCIAL INFORMATION



ITEM 1.  FINANCIAL STATEMENTS

     The  following  unaudited  consolidated  financial  statements  of  Bioject
Medical  Technologies Inc. ("BMT"), an Oregon corporation,  and its subsidiaries
have been prepared  pursuant to the rules and  regulations of the Securities and
Exchange Commission. The Company's needle-free injector operations are conducted
by Bioject Inc. (BI), an Oregon  corporation formed in February 1985, which is a
wholly  owned  subsidiary  of  BMT  and  its  blood  glucose  monitoring  system
operations are conducted by Bioject JV Subsidiary Inc.
("JV"),  an Oregon  corporation  formed in October 1997, which is owned 80.1% by
BMT.

     The following 10-Q report reflects the consolidated  results of operations,
cash flows and  financial  position  for the second  quarter of the year  ending
March  31,  1999.  The  results  of  operations  for  interim  periods  are  not
necessarily indicative of the results to be expected for the year.


          -    Consolidated Statements of Operations for the quarters ended
               September 30, 1998 and September 30, 1997

          -    Consolidated Statements of Operations for the six months ended
               September 30, 1998 and September 30, 1997

          -    Consolidated Balance Sheets dated September 30, 1998 and March
               31, 1998

          -    Consolidated Statements of Cash Flows for the quarters ended
               September 30, 1998 and September 30, 1997

          -    Consolidated Statements of Cash Flows for the six months ended
               September 30, 1998 and September 30, 1997


<PAGE>

               BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                          Quarter Ended
                                                           September 30,

                                                     1998            1997
                                                   ----------      ----------

REVENUES:

     Net sales of products                        $  311,401      $  644,853
     Licensing/technology fees                       887,558         125,000
                                                    -----------     ---------
                                                    1,198,959        769,853
                                                    -----------     ---------
EXPENSES:

     Manufacturing                                    499,314        592,643
     Research and development                       1,021,947        218,001
     Selling, general and administrative              899,364        978,822
     Acquired in-process R&D                             --       15,000,000
                                                  ------------   ------------
     Total operating expenses                       2,420,625     16,789,466
                                                  -----------    ------------
     Operating loss                                (1,221,666)   (16,019,613)
        Other income                                   34,449         25,704
                                                  ------------   ------------
     Loss before taxes                             (1,187,217)   (15,993,909)
     Provision for income                              --            --
     Minority interest allocation                      --          2,985,000
                                                  ------------   -----------
     Net loss                                      (1,187,217)   (13,008,909)
     Preferred Stock dividend                         348,912        --
                                                  ------------   ------------

Net loss allocable to common
shareholders                                  $    (1,536,129)  $(13,008,909)
                                                   ===========   ============

Basic and diluted net loss per
common share                                  $          (.05)  $       (.58)
                                                   ===========   ============

Shares used in per share calculation               28,500,670     22,349,517
                                                   ===========    ============

The  accompanying  notes  are an  integral  part  of  these consolidated 
financial statements.

<PAGE>



               BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                     Six-Months Ended
                                                       September 30,

                                                   1998             1997
                                               ------------     -----------

REVENUES:

     Net sales of products                     $  453,812      $   987,467
     Licensing/technology fees                  1,025,559          250,000
                                               -----------      ----------
                                                1,479,371        1,237,467
                                               ------------     ----------
EXPENSES:

     Manufacturing                                770,328        1,051,634
     Research and development                   2,079,664          471,983
     Selling, general and administrative        1,680,512        1,732,664
     Acquired in-process R&D                                    15,000,000
                                               -----------    ------------
      Total operating expenses                  4,530,504       18,256,281
                                               -----------    ------------

Operating loss                                 (3,051,133)     (17,018,814)
        Other (income)                             57,161           32,331
                                               -----------    ------------
     Loss before taxes                         (2,993,972)     (16,986,483)
     Provision for income taxes                      -                -
     Minority interest allocation                                2,985,000
                                               -----------    ------------
     Net loss                                $ (2,993,972)    $(14,001,483)
     Preferred Stock dividend                     695,262                -
                                               -----------    ------------

Net loss allocable to
common shareholders                          $ (3,689,234)    $(14,001,483)

Basic and diluted net loss per common share  $      (.13)     $       (.66)
                                               ===========    =============

Shares used in per share calculation           27,710,790       21,075,640
                                               ===========    =============

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

<PAGE>


                   BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS
                                     (Unaudited)


                                                 September 30,   March 31,
                                                    1998         1998
                                                  -----------   ----------

ASSETS:

CURRENT ASSETS:
     Cash and cash equivalents                  $ 2,972,713   $ 1,900,839
     Accounts receivable, net                       492,930       153,721
     Inventories                                  1,971,044     1,891,970
     Other current assets                            89,897        75,292
                                                   ---------    ----------
          Total current assets                    5,526,584     4,021,822

PROPERTY AND EQUIPMENT, at cost:
     Machinery and equipment                      2,454,963     2,241,904
     Production molds                             1,949,267     1,945,267
     Furniture and fixtures                         184,982       158,477
     Leasehold improvements                         101,615        94,115
                                                   ----------   -----------
                                                  4,690,827     4,439,763
     Less - Accumulated depreciation             (2,306,151)   (1,947,006)
                                                  ----------   ------------
                                                  2,384,676     2,492,757

Other assets                                        484,579       463,031
                                                 -----------   ------------
                                                $ 8,395,839   $ 6,977,610
                                                 ==========    ==========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                          $ 1,501,605     $  497,180
     Accrued payroll                               229,531        218,424
     Other accrued liabilities                     472,104        277,122
     Deferred revenue                              250,000         10,000
                                                 -----------   -----------
          Total current liabilities              2,453,240     1, 002,726

SHAREHOLDERS' EQUITY:
     Preferred stock, no par, 10,000,000
       shares authorized; no shares issued
       and outstanding
     Series A Convertible-692,694 shares,
     $15 stated value                            8,483,685      7,826,157
     Series B Convertible -134,333 shares,
     $15 stated value                            1,529,025      1,491,289
     Common stock, no par, 100,000,000 shares 
      authorized;  issued and outstanding
      28,907,395 and 25,503,038 shares
      at September 30, 1998 and 
      March 31, 1998, respectively              50,518,982     47,557,297
    Accumulated deficit                        (54,589,093)   (50,899,859)

                                              -------------   --------------
          Total shareholders' equity             5,942,599      5,974,884
                                              --------------  --------------
                                               $ 8,395,839    $ 6,977,610
                                                ==========     ==========

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

<PAGE>
                  BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                           Quarter Ended
                                                           September 30,
                                                        1998           1997
                                                     -----------     ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss allocable to common shareholders     $(1,536,129)    $(13,008,909)
     Adjustments to net loss:
        Depreciation and amortization                  207,380          154,415
        Contributed capital for services                13,818           20,705
        Acquired in-process R&D                                      15,000,000
        Preferred stock dividends                      348,912
     Net changes in assets and liabilities:
        Accounts receivable                           (399,024)        (320,236)
        Inventories                                     98,790            9,935
        Other current assets                            (6,858)          17,873
        Accounts payable                             1,077,609          131,656
        Accrued payroll                                 27,768           88,344
        Other accrued liabilities                     (524,553)           6,090
        Deferred revenue                               125,001         (125,000)
                                                    -----------      -----------
     Net cash used in operating activities            (567,286)        1,974,873
                                                    -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Acquisition of blood glucose monitoring technology             (15,000,000)
     Property and equipment                           (104,120)         (17,620)
     Other assets                                      (18,854)         (23,413)
                                                    -----------      -----------
     Net Cash Used in Investing Activities            (122,974)     (15,041,033)
                                                    -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Issuance of long-term debt                                          12,015,000
 Cash proceeds from common stock                     1,084,184          475,000
                                                   --------------    -----------
     Net cash provided by financing activities       1,084,184       12,490,000
                                                    -------------    -----------
CASH AND CASH EQUIVALENTS:
     Net increase (decrease) in cash and
       cash equivalents                                393,924         (576,160)
     Cash and cash equivalents at beginning
       of period                                     2,578,789        1,793,846
                                                   -----------       -----------
     Cash and cash equivalents at end
       of period                                  $  2,972,713      $ 1,217,686
                                                    ==========       ===========

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

<PAGE>
                    BIOJECT MEDICAL TECHNOLOGIES INC.AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (Unaudited)

                                                          Six-Months Ended
                                                            September 30,
                                                        1998            1997
                                                     -----------     ---------

     CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss allocable to common shareholders     $(3,689,234)   $ (14,001,483)
     Adjustments to net loss:
        Depreciation and amortization                  378,627          261,920
        Contributed capital for services                27,636           20,705
        Acquired in process R&D                                      15,000,000
        Preferred stock dividends                      695,262
Net changes in assets and liabilities:
        Accounts receivable                           (339,209)       (224,250)
        Inventories                                    (79,074)         77,286
        Other current assets                           (14,605)        (18,145)
        Accounts payable                             1,004,427          (6,469)
        Accrued payroll                                 11,107          26,879
        Other accrued liabilities                      194,982          37,096
        Deferred revenue                               240,000        (250,000)
                                                    -----------      -----------
     Net cash used in operating activities          (1,570,081)        923,539
                                                    ------------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
       Acquisition of blood glucose monitoring 
        technology                                                 (15,000,000)
       Property and equipment                         (251,064)        (27,848)
       Other assets                                    (41,030)        (34,483)
                                                     -----------    -----------
     Net cash used in investing activities            (292,094)    (15,062,331)
                                                     -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt                                          12,015,000
Cash proceeds from common stock                      2,934,049       1,225,000
                                                    ------------   -------------
     Net cash provided by financing activities:      2,934,049      13,240,000
                                                   -------------   -------------
CASH AND CASH EQUIVALENTS:
     Net increase (decrease) in cash and
       cash equivalents                              1,071,874        (898,792)
     Cash and cash equivalents at beginning
       of period                                     1,900,839       2,116,478
                                                    -------------   ----------
     Cash and cash equivalents at end
       of period                                    $2,972,713     $ 1,217,686
                                                     =========      ==========

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.



<PAGE>
                     BIOJECT MEDICAL TECHNOLOGIES INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   THE COMPANY:

The  consolidated  financial  statements of Bioject  Medical  Technologies  Inc.
(the"Company"),  include  the  accounts  of Bioject  Medical  Technologies  Inc.
("BMT"),an Oregon  Corporation,  its wholly owned  subsidiary,  Bioject Inc., an
Oregon Corporation ("BI"), and its 80.1% owned subsidiary, Bioject JV Subsidiary
Inc.("JV"),  an Oregon corporation.  All significant  intercompany  transactions
have been eliminated. Bioject Inc. commenced operations in 1985. Bioject Medical
Technologies,  Inc. was formed in December 1992 for the purpose of acquiring all
of the capital stock of Bioject Medical Systems Ltd., a Company  organized under
the laws of British Columbia,  Canada, in a stock-for-stock exchange in order to
establish a U.S.  domestic  corporation as the publicly traded parent company of
Bioject Inc. and Bioject Medical  Systems Ltd.  Bioject Medical Systems Ltd. was
terminated in fiscal 1997. Bioject JV Subsidiary Inc. was formed in October 1997
in  connection  with a joint  venture  arrangement  with Elan  Corporation,  plc
("Elan").  All references to the Company include  Bioject  Medical  Technologies
Inc. and its subsidiaries, unless the context requires otherwise.

The  Company  commenced  operations  in 1985  for  the  purpose  of  developing,
manufacturing and distributing a new drug delivery system.  Since its formation,
the Company has been engaged principally in organizational,  financing, research
and development,  sales and marketing activities.  In the last quarter of fiscal
1993,the  Company  launched  U.S.  distribution  of its  Biojector  2000 system,
primarily to the hospital and large clinic  market.  The Company's  products and
manufacturing operations are subject to extensive government regulation, both in
the U.S. and abroad.  In the U.S., the development,  manufacture,  marketing and
promotion of medical  devices is  regulated by the Food and Drug  administration
("FDA") under the Federal Food,  Drug, and Cosmetic Act ("FFDCA").  In 1987, the
Company  received  clearance  from the FDA under Section  510(k) of the FFDCA to
market a hand-held  CO2-powered  needle-free injection system. In June 1994, the
Company received clearance from the FDA under Section 510(k) to market a version
of its  Biojector  2000  system  in a  configuration  targeted  at  high  volume
injection  applications.  In October 1996, the Company received 510(k) clearance
for a needle-free  disposable  vial access  device.  In March 1997,  the Company
received  additional 510(k) clearance for certain  enhancements to its Biojector
2000  system.  On March  23,1998 the Company  entered  into a  transaction  with
Vitajet Corporation ("Vitajet") whereby the Company acquired, along with certain
other  assets,  the  rights to the  Vitajet(R),  a  spring-powered,  needle-free
self-injection device which currently has regulatory clearance for administering
injections of insulin.  On September 30, 1997, the Company  entered into a joint
venture agreement with Elan for the development and commercialization of certain
blood glucose  monitoring  technology  which the Company licensed from Elan. The
blood glucose monitoring  technology is also subject to government regulation in
the U.S. by the FDA and abroad by various agencies.

The Company's  revenues to date have been derived  primarily  from licensing and
technology fees for the needle-free injection technology and from sales of the
Biojector  2000 system,  including  Biojector  syringes,  vial  adapters and CO2
cartridges. More recently, the Company has derived modest revenues from sales of
the Vitajet and related  disposable  supplies.  Future revenues will depend upon
i)acceptance  and  use of the  Company's  needle-free  injection  technology  by
healthcare providers;  ii) successful  realization of licensing,  technology and
product revenues under existing and future strategic  corporate  alliances;  and
iii) successful  development,  regulatory  approval and market acceptance of its
blood  glucose  monitoring  technology.   Uncertainties  created  by  government
regulation  and  competition in the  healthcare  industry may impact  healthcare
provider  expenditures and third party payer  reimbursements.  Accordingly,  the
Company cannot predict what impact, if any,  subsequent  healthcare  reforms and
industry trends might have on its business.  In the future the Company is likely
to require substantial additional financing. Failure to obtain such financing on
favorable terms could materially adversely affect the Company's business.

<PAGE>
2.   ACCOUNTING POLICIES:

INVENTORIES
Inventories  are stated at the lower of cost or market.  Cost is determined in a
manner which approximates the first-in,  first out (FIFO) method. Costs utilized
for inventory  valuation  purposes  include labor,  materials and  manufacturing
overhead. Net inventories consist of the following:

                                          September 30,       March 31,
                                             1998               1998
                                          -----------        ----------
           Raw Materials                 $   699,654         $  754,715
           Work in Process                     9,763              9,763
           Finished Goods                  1,261,627          1,127,492
                                          -----------         ----------
                                         $ 1,971,044         $1,891,970
                                          ===========         ==========


USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  at the date of the
financial  statements and the reported  amounts of revenues and expenses  during
the reporting period. Actual results could differ from those estimates.


RECLASSIFICATIONS

Certain reclassifications have been made to the prior year's expenses to conform
to the current year's presentation.


NET LOSS PER SHARE
The  following  common stock  equivalents  are excluded  from earnings per share
calculations as their effect would have been antidilutive:

  Six Months Ended September 30,             1998                1997
                                          ---------           ---------
    Warrants and stock options            8,547,444          10,293,499
    Convertible preferred stock           8,270,270                   -
                                       --------------      --------------
                                         16,817,714          10,293,499
                                         ==========          ==========


3.   RELATED PARTY TRANSACTION

A  significant  portion of the  research and  development  expenses of the blood
glucose  monitoring  business  segment  are  incurred  by Elan and billed to the
Company under a contractual  arrangement between the two companies.  Included in
accounts  payable  and  other  accrued  liabilities  at  September  30,  1998 is
approximately $1.3 million owed to Elan under this arrangement.

<PAGE>

4.   SEGMENT INFORMATION

The Company has adopted  the  segment  reporting  requirements  of SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information. At present,
the Company has two reportable  segments which offer different  products and are
managed  separately.  Each business requires different  technology and marketing
strategies.  The following sets forth the unaudited results of operations of the
Company for its two segments of  operations - needle-free  injection  technology
and blood glucose monitoring technology:


                            Needle-free Injection          Needle-free Injection
                               Quarter Ended                  Six-Months Ended
                                September 30,                   September 30,
                              ------------------         -----------------------
                                1998        1997             1998          1997
                              -------    -------           -------       -------

REVENUES:
  Net sales of products      $  311,401   $ 644,853        $453,812     $987,467
  Licensing/technology fees     887,558     125,000       1,025,559      250,000
                                -------     -------       ---------      -------
                              1,198,959     769,853       1,479,371    1,237,467
                                -------     -------        ---------    --------
EXPENSES:
  Manufacturing                 499,314     592,643         770,328    1,051,634
  Research & development        236,324     218,001         480,910      471,983
  Selling, general
   & administrative             757,074     978,822       1,365,704    1,732,664
                               ---------   ---------       ---------   ---------
  Total operating expenses    1,492,712   1,789,466       2,616,942    3,256,281
                               ---------   ---------       ---------    --------

  Operating loss               (293,753) (1,019,613)     (1,137,571) (2,018,814)
  Other income                   34,449      25,704          57,161      32,331
                                 -------     -------       ---------    -------
   Loss before taxes           (259,304)   (993,909)     (1,080,410) (1,986,483)
   Provision for income taxes         0           0               0           0
                                 -------     -------        --------   ---------
   Net loss                   $(259,304)  $(993,909)    $(1,080,410) (1,986,483)
                                =========   ========      =========   =========


<PAGE>
<TABLE>

                                     Blood glucose Monitoring            Blood glucose Monitoring
                                           Quarter Ended                      Six-Months Ended
                                           September 30,                        September 30,
                                       1998            1997                 1998          1997
                                       ----            ----                 ----          ----


<S>                                <C>              <C>                 <C>            <C>     
REVENUES:

 Net sales of products             $    0           $      0            $      0       $      0
 Licensing/technology fees              0                  0                   0              0
                                        -                  -                   -              -

                                        0                  0                   0              0
                                        -                  -                   -              -

EXPENSES:
 Manufacturing                          0                  0                   0              0
 Research & development              785,623                              1,598,754
 Selling, general
  & administrative                   142,290               0                314,808
 Acquired in-process R&D                              15,000,000                         15,000,000
                                    --------          ----------           ----------    ----------
 Total operating expenses            927,913          15,000,000          1,913,562      15,000,000
                                    --------          ----------           ----------    ----------

 Operating loss                     (927,913)        (15,000,000)        (1,913,562)    (15,000,000)
 Other income                           0                  0                   0              0
                                    --------          ----------           ----------    ----------

 Loss before taxes                  (927,913)        (15,000,000)        (1,913,562)    (15,000,000)
 Provision for income taxes            0                  0                   0              0
 Minority interest allocation                         2,985,000               0           2,985,000
                                     --------          ----------           ----------    ----------

 Net loss                        $  (927,913)      $ (12,015,000)       $(1,913,562)    (12,015,000)
                                 ============       =============        ===========     ===========


</TABLE>

At September 30, 1998,  the blood glucose  monitoring  business  segment had net
property and  equipment,  at cost, of $187,154 and accounts  payable and accrued
expenses of approximately $2.2 million.  The blood glucose  monitoring  business
segment had no other  significant  assets or liabilities  at September  30,1998.
Accordingly,  after  separating the blood glucose  monitoring  business  segment
assets and liabilities,  the accompanying  balance sheets effectively  represent
the assets and liabilities of the needle-free injection business segment. In the
future,  certain  proceeds from the sale of equity or issuance of debt by JV may
be restricted to JV operations.  To the extent that they meet certain  reporting
requirements,  the separate assets, liabilities and equity of the parent and its
subsidiary will be appropriately disclosed.

<PAGE>

5.   NEW ACCOUNTING PRONOUNCEMENT

In June 1997, the FASB issued  Statement of Financial  Accounting  Standards No.
130, "Reporting  Comprehensive  Income" ("SFAS 130"). This statement establishes
standards for reporting and displaying  comprehensive  income and its components
in a full set of general purpose financial statements. The objective of SFAS 130
is to report a measure of all changes in the equity of an enterprise that result
from   transactions   and  other  economic  events  of  the  period  other  than
transactions with owners.  The Company adopted SFAS 130 during the first quarter
of fiscal 1999.  Comprehensive  loss did not differ from currently  reported net
loss in the periods presented.

In June 1998, the FASB issued  Statement of Financial  Accounting  Standards No.
133,  "Accounting  for Derivative  Instruments  and Hedging  Activities"  ("SFAS
133").  SFAS  133  establishes   accounting  and  reporting  standards  for  all
derivative  instruments.  SFAS 133 is effective for fiscal years beginning after
June 15,  1999.  The  Company  does not have  any  derivative  instruments  and,
accordingly,  the  adoption  of SFAS 133 will have no  impact  on the  Company's
financial position or results of operations.


6.   BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS

The accompanying, unaudited consolidated financial statements do not include all
information and footnote disclosures normally included in audited financial
statements.  However,  in the  opinion of  management,  all  adjustments  (which
include  only normal,  recurring  adjustments)  necessary to present  fairly the
financial position,  cash flows, and results of operations have been made. It is
suggested  that  these  statements  be read in  conjunction  with the  financial
statements  included in the Company's  Annual Report on Form 10-K/A for the year
ended March 31, 1998.


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

OVERVIEW

The  Company  is  placing  primary  sales and  marketing  emphasis  on  business
development  efforts  to  seek  relationships  with  major   pharmaceutical  and
biotechnology companies in key niche markets to market its needle-free injection
products for specific  applications  and to develop  other  application-specific
devices  and  companion  syringes.  At the  same  time,  with a  reduced  direct
salesforce,  the Company  continues to focus on maintaining its penetration into
the  public  health  and  flu  immunization  markets  with  its  Biojector  2000
needle-free injection system. The Company is also directing its sales efforts at
creating sales of the Biojector 2000 system to the U.S. military.

In July 1998, the Company  entered into a short-term  agreement with Merck & Co,
Inc. ("Merck"), a worldwide leader in the development, manufacture and sale of a
broad range of human and animal  health  products and  services.  The  agreement
provides  Merck the rights to use the Biojector  2000 jet injection  system with
selected Merck vaccines.  The Company  believes that this agreement is the first
step in establishing a long-term  relationship between the two companies whereby
Merck will use the Company's needle-free injection technology in connection with
certain of its vaccines. In the current quarter, the Company received a $750,000
nonrefundable payment under the current agreement between the Company and Merck.
This is the first payment of a total of $1.5 million  scheduled to be paid under
the agreement.  Also during the current quarter, the Company and Merck commenced
negotiating a long-term relationship between the two companies.  There can be no
assurance that such  long-term  relationship  will be established  and there are
certain  conditions  under which  Merck will not be  obligated  to make  further
payments under the current agreement.  See "Forward Looking Statements."

<PAGE>

Through its joint  venture  with Elan,  the  Company is actively  engaged in the
development of its continuous blood glucose monitoring technology.  To date, the
Company continues to develop and test a clinical  prototype.  During the current
quarter,  the Company hired Mr. Brad Enegren to serve as full-time president and
chief executive  officer of the joint venture.  Mr. Enegren  replaces Mr. Robert
Gonnelli  who has served as interim  president  of the joint  venture  while the
search for a  full-time  president  was taking  place.  In April  1998,  a human
clinical study of six patients with a prototype of the blood glucose  monitoring
device was  conducted.  The Company is  planning  further  preliminary  clinical
studies  in the  spring of 1999.  Based on the  results  of these  studies,  the
Company  intends  to plan  and  conduct  comprehensive  clinical  trials  of the
monitoring  system, the results of which are intended to support its application
to the FDA to market the product in the United  States.  (See  "Forward  Looking
Statements")

The  Company's  revenues  to date have not been  sufficient  to cover  operating
expenses.  The Company  believes  that  increased  revenues  will result from i)
expanded  licensing  and  technology  revenues  from  both  current  and  future
strategic   corporate   relationships;   ii)increased  sales  of  the  Company's
needle-free injection products as the products achieve greater market acceptance
and  penetration,  both  through  continued  direct  sales  efforts  and through
corporate  marketing  relationships;  and iii) revenues from the Company's blood
glucose  monitoring  technology,  provided  that the  Company is  successful  in
completing development of that technology and bringing the technology to market.
See  "Forward-Looking  Statements."  In  addition  to  continuing  to  fund  the
operations of its  needle-free  injection  business,  the Company is required to
fund  substantial,  ongoing  research  and  development  costs  associated  with
developing the blood glucose  monitoring  technology as well as future milestone
payments to Elan  totaling  $15.5  million.  Since no revenue from blood glucose
monitoring  products is  expected  for a number of years,  the  Company  expects
significant  losses unless  licensing  and  technology  revenues from  strategic
corporate  relationships  and revenues from sales of the  Company's  needle-free
products increase substantially. See "Forward Looking Statements."  The level of
revenues required to generate net income will be affected by a number of factors
including  the pricing of the Company's  products,  its ability to attain volume
purchasing  and  manufacturing  efficiencies,  the ability to develop and market
products  pursuant to its  relationships  with companies such as Merck and Elan,
and the impact of inflation on the Company's  manufacturing  and other operating
costs.  There can be no assurance that the Company will be able to  successfully
generate additional,  ongoing licensing and technology revenues or sell products
at  prices  or in  volumes  sufficient  to  achieve  profitability  or to offset
increases in the Company's research and development expenses or other costs.

Revenues  and  results of  operations  have  fluctuated  and can be  expected to
continue to  fluctuate  significantly  from  quarter to quarter and from year to
year.  Various  factors  may  affect  quarterly  and  yearly  operating  results
including  (i)timing  of new  product  introductions  by  the  Company  and  its
competition,  (ii) the cost and length of time required to complete  development
and  commercialization  of, and gain regulatory  clearance for the blood glucose
monitoring  technology,  (iii)  length  of time to  close  product  sales,  (iv)
customer budget cycles,  (v) uncertainties and changes in customer purchases due
to changes in third party reimbursement  policies, (iv) the timing and amount of
payments under  technology  development  and licensing  arrangements,  and (vii)
variations in the amount of manufacturing overhead absorbed into inventory.  The
Company anticipates drawing primarily on current inventories to fill most of its
product  orders  through  the  end of  fiscal  1999.  Accordingly,  the  Company
anticipates  that production  levels,  and related  absorption of  manufacturing
overhead,  for the  remainder  of fiscal 1999 will be  substantially  lower than
production   levels  in  the   corresponding   period  of   fiscal   1998.   See
"Forward-Looking Statements."

Research and development  expense  increased from $218,000 in the second quarter
of fiscal  1998 to $1.02  million in the  second  quarter  of fiscal  1999.  The
increase  was  principally  due to research  and  development  cost of the blood
glucose  monitoring  technology.  The Company incurred  $786,000 of research and
development costs in the current quarter to develop the blood glucose monitoring
technology  as compared  to no  spending in the same  quarter a year ago. In the
quarter ended September 30, 1997, the Company recorded an expense of $15 million
related to acquired  in-process  research and development  relating to the blood
glucose monitoring  technology  acquired from Elan. The acquired  technology had
not yet established  technological feasibility and had no alternate future uses.
Accordingly,  accounting  rules  required  that  the  acquisition  cost  of  the
technology  be charged to expense.  No such  charge was  incurred in the quarter
ended September 30, 1998.

Selling,  general and  administrative  expense  decreased  from  $979,000 in the
second  quarter of fiscal 1998 to $899,000 in the second quarter of fiscal 1999.
Selling expense for the current quarter decreased by $231,000 when compared with
the same period a year ago, a result of reductions in the Company's direct sales
force.  The  savings in selling  expenses  were  partially  offset by a $151,000
increase in administrative expenses,  primarily relating to administrative costs
of the Company's blood glucose monitoring development operations.  There were no
administrative costs associated with the blood glucose monitoring  operations in
second quarter of fiscal 1998.

Other income  consists of earnings on  available  cash  balances and  fluctuates
based on available cash balances.

On a segment basis, the needle-free  injection operations reported a net loss of
$259,000 for the quarter  ended  September  30,1998 as compared to a net loss of
$994,000 for the quarter ended  September 30, 1997. The improved  performance is
the result of increased licensing and technology  revenues,  reduced spending on
sales and marketing and increased  interest earned on comparatively  higher cash
balances.

The blood glucose  monitoring  business  segment reported a net loss of $928,000
for the quarter  ended  September 30, 1998 compared to a net loss of $12 million
for the quarter  ended  September  30, 1997.  The  decreased  loss is due to the
write-off of acquired  in-process  research and  development  cost in the second
quarter of fiscal 1998.

<PAGE>

SIX MONTHS ENDED  SEPTEMBER 30, 1998 COMPARED TO SIX MONTHS ENDED  SEPTEMBER 30,
1997  Revenues  for the six months ended  September  30, 1998 consist of product
sales of $454,000 and licensing and technology  revenues of $1.03 million.  This
compares to $987,000 in product sales and $250,000 in licensing  and  technology
revenues for the six months ended September 30, 1997. The product sales decrease
was due to a  reduction  in  early  orders  in  fiscal  1999 for flu  season,  a
significant  portion  of which  was  attributable  to  certain  customers  using
inventory  acquired but not used in earlier  periods to meet their  current year
flu season  requirements.  The increase in licensing and technology revenues was
primarily due to receipt of a $750,000  payment under the agreement  signed with
Merck in July 1998.

Manufacturing  expense  decreased from $1.05 million for the first six months of
fiscal  1998 to  $770,000  for the six months  ended  September  30,  1998.  The
reduction was primarily  due to lower unit sales  volumes,  resulting in a lower
charge to cost of goods sold.  The decrease in cost of goods sold was  partially
offset by lower  production  levels in the current  fiscal year,  resulting in a
decrease  of $63,000  in the  amount of  manufacturing  overhead  absorbed  into
inventory   during  the  six  months  ended  September  30,  1998.  The  Company
anticipates drawing primarily on current inventories to fill most of its product
orders through the end of fiscal 1999. Accordingly, the Company anticipates that
production  levels, and related  absorption of manufacturing  overhead,  for the
remainder of fiscal 1999 will be substantially  lower than production  levels in
the corresponding period of fiscal 1998.  See "Forward-Looking Statements."

Research and development expense increased from $472,000 in the six months ended
September  30, 1997 to $2.1 million in the first six months of fiscal 1999.  The
increase was principally  due to research and  development  cost relating to the
blood  glucose  monitoring  technology.  The Company  incurred  $1.6  million of
research and development costs in the first six months of fiscal 1999 to develop
the blood glucose  monitoring  technology as compared to no spending in the same
period a year ago. In the period ended September 30, 1997, the Company  recorded
an  expense  of  $15  million  related  to  acquired   in-process  research  and
development  relating to the blood glucose monitoring  technology  acquired from
Elan. The acquired technology had not yet established  technological feasibility
and had no alternate  future uses.  Accordingly,  accounting rules required that
the acquisition cost of the technology be charged to expense. No such charge was
incurred in the six months ended September 30, 1998.

Selling,  general and administrative expense decreased from $1.73 million in the
six months  ended  September  30, 1997 to $1.68  million is the six months ended
September 30, 1998.  As a result of  reductions  in the  Company's  direct sales
force,  selling  expense  for the first six months of fiscal 1999  decreased  by
$398,000  when  compared with the same period a year ago. The savings in selling
expenses were mostly offset by a $345,000 increase in  administrative  expenses,
primarily  relating  to  administrative  costs of the  Company's  blood  glucose
monitoring development operations. There were no administrative costs associated
with the blood glucose monitoring operations in period ended September 30, 1997.

Other income  consists of earnings on  available  cash  balances and  fluctuates
based on available cash balances.

On a segment basis, the needle-free  injection operations reported a net loss of
$1.08  million for the six months ended  September 30, 1998 as compared to a net
loss of $1.98 million for the six months ended  September 30, 1997. The improved
performance  is the  result of  increased  licensing  and  technology  revenues,
reduced  spending  on sales  and  marketing  and  increased  interest  earned on
comparatively higher cash balances.

The  blood  glucose  monitoring  business  segment  reported  a net loss of $1.9
million for the six months ended  September  30, 1998  compared to a net loss of
$12 million for the quarter ended  September 30, 1997. The decreased loss is due
to the write-off of acquired  in-process  research and  development  cost in the
fiscal 1998.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Since its inception in 1985,  the Company has financed its  operations,  working
capital needs and capital  expenditures  from private  placements of securities,
exercises of stock  options and  warrants,  proceeds  received  from its initial
public  offering in 1986,  proceeds  received  from a public  offering of common
stock in November 1993, investment by Elan pursuant to the joint venture between
the Company  and Elan in October  1997,licensing  and  technology  revenues  and
revenues  from  sales of  products.  Net  proceeds  received  from  issuance  of
securities from inception through September 30, 1998 totaled approximately $60.5
million.

During the second quarter of fiscal 1999 the Company raised  approximately $1.08
million  from  issuance  of capital  stock.  $1.06  million  of that  amount was
proceeds  from the  exercise  of warrants  issued in  connection  with  previous
private  placements of the Company's  common stock and $28,000 was proceeds from
the exercise of stock options.

Working  capital at  September  30,  1998 was $2.0  million  compared  with $3.0
million at March 31, 1998.  Cash,  cash  equivalents  and marketable  securities
totaled $3.0 million at September 30, 1998 compared to $1.9 million at March 31,
1998. The increase resulted  primarily from cash proceeds received from issuance
of the Company's common stock pursuant to warrant and stock option exercises and
licensing and technology revenues offset by operating cash requirements, capital
asset purchases and increases in product inventories.

Inventories  increased  from $1.9  million at March 31, 1998 to $2.0  million at
September  30, 1998 due to the volume of syringe  units sold being less than the
volume of syringe units produced.

The Company  believes that its current cash  position,  combined with  revenues,
other cash  receipts,  proceeds from the exercise of stock warrants and options,
proceeds from the issuance of the Company's preferred stock to Elan and proceeds
from the  purchase by Elan of  additional  stock in JV  pursuant  to  agreements
entered into in connection  with the joint  venture,  will be sufficient to fund
the Company's  operations  through the end of fiscal 1999. See "Forward  Looking
Statements." In addition, the Company is considering a number of other potential
financing alternatives.  Even if the Company is successful in raising additional
financing, unforeseen costs and expenses or lower than anticipated cash receipts
from product  sales or licensing and  technology  revenues  could  accelerate or
increase the financing requirements.  The Company has been successful in raising
additional  financing in the past and  believes  that  sufficient  funds will be
available to fund future operations.  See "Forward Looking Statements." However,
there can be no assurance  that the Company's  efforts will be  successful,  and
that  such  additional  financing  will  be  available  on  terms  that  are not
significantly  dilutive  to  existing  shareholders.  Failure  to obtain  needed
additional  capital  on  terms  acceptable  to the  Company,  or at  all,  would
significantly  restrict the Company's operations and ability to continue product
development and would materially  adversely affect the Company's  business.  The
Company has no banking line of credit or other established source of borrowing.

<PAGE>

GOVERNMENTAL REGULATION

No  clearances  from the FDA have been  obtained for marketing the blood glucose
monitoring  technology  presently  being  developed by the Company.  The Company
continues to research whether the FDA will require a 510(k)  premarket  approval
("510(k)") or a premarket  notification ("PMA") device clearance with respect to
any products  developed based on this  technology.  If a medical device does not
qualify for the 510(k) procedure,  the manufacturer must file a PMA application.
A PMA must show that the device is safe and  effective  and is  generally a more
complex  submission  than a  510(k)notification.  A PMA typically  requires more
extensive  testing  before  regulatory  filing and a longer FDA review  process.
Another  developer of a continuous  glucose sensor system which was submitted to
the FDA for clearance under a 510(k)  notification was advised in July 1998 that
the FDA would require  regulatory  submission under the PMA regulatory  pathway.
Based on this  advisory and  discussions  with the FDA, the Company  anticipates
that the FDA will require a PMA application  with respect to products  developed
under the  Company's  blood glucose  monitoring  technology.  Whatever  level of
regulatory  submission  is  required,  the Company  anticipates  that  extensive
testing and  regulatory  review will be required of the Company's  blood glucose
monitoring  product See "Forward Looking  Statements." There can be no assurance
that the  regulatory  review  process will not cause  significant  delays in the
product  development  schedule or that regulatory  clearance will be obtained at
all.


YEAR 2000 ISSUES
The Company is in the process of  assessing  its Year 2000 ("Y2K")  issues.  The
assessment  includes  steps to review and  obtain  vendor  certification  of Y2K
compliance  of current  systems,  testing  system  compliance  and  implementing
corrective action where necessary.  A Y2K team composed of manager-level members
from Manufacturing,  Purchasing,  Information Services and Finance is conducting
the assessment.  Assessment of the compliance of all critical systems, plans for
remedial  action,  if any, and estimates of the cost of such remedial action are
expected to be completed by the end of January 1999. Until the Y2K assessment is
complete,  the cost to address the Company's Y2K issues cannot be estimated with
certainty.

Products
The  Company's  products  do not  incorporate  either  application  or  embedded
software and are therefore not subject to Y2K issues.

Information Systems
The  Company  utilizes  or  will  utilize  by  mid  1999,  packaged  application
strategies  for all  critical  information  systems  functions  which  have been
certified  by the  vendors  as being  Y2K  compliant.  This  includes  financial
software, operating and networking systems, application and data servers, PC and
communications hardware and core office automation software.

Manufacturing  Systems  The  Company  is  currently  in the  process  of gaining
manufacturer   certification  of  Y2K  compliance  for  all  critical  automated
components used in manufacturing the Company's products.

Supplier Base
The Company is in the process of  implementing  a Y2K audit program of suppliers
critical to the  Company's  operations.  Suppliers  will be asked to certify Y2K
compliance of systems  critical to maintaining a continuing  source of supply to
the Company.

Risk
The Company will be at risk from  external  infrastructure  failures  that could
arise  from  Y2K   failures,   including   failure  of   electrical   power  and
telecommunications.  Investigation and assessment of the risk of failure of such
infrastructure is beyond the scope and resources of the Company.

Business  risks to the Company of not  successfully  identifying  Y2K issues and
undertaking  effective  remedial  action  include the inability to ship product,
delay or loss of revenue  and delay in  manufacturing  operations.  The  Company
believes   that  it  will   successfully   identify   critical  Y2K  issues  and
substantially  complete  required  remedial action before the end of 1999. Other
than risks created by infrastructure  failures or by the Company's dealings with
third parties,  where the actions of such third parties are beyond the Company's
control,  the Company believes that it will have no material  business risk from
Y2K issues.  There can be no assurance  that  infrastructure  failures  will not
occur or that  third  parties,  over  which  the  Company  has no  control  will
successfully address their own Y2K issues.


FORWARD LOOKING STATEMENTS

This report  contains  "forward  looking  statements"  within the meaning of the
Private Securities Litigation Reform Act of 1995 concerning, among other things,
the  Company's  strategic  relationship  with  Merck  and Elan,  future  product
development plans and plans for clinical studies in the blood glucose monitoring
business  segment,   anticipated   product  sales  revenues  and  licensing  and
technology  revenues,  expected  sufficiency  of  capital  resources  and future
sources  of working  capital,  and Year 2000  issues.  Certain  forward  looking
statements are identified with a cross-reference  to this section.  Such forward
looking  statements  involve known and unknown  risks,  uncertainties  and other
factors which may cause the actual  results,  performance or achievements of the
Company,  or  industry  results,  to be  materially  different  from any  future
results,  performance,  or  achievements  expressed  or implied by such  forward
looking  statements.  Such risks,  uncertainties  and factors  include,  without
limitation and inclusive of risks,  uncertainties and other factors contained in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations  -  Overview,"   "-Liquidity  and  Capital  Resources"   "-Government
Regulations"  and  "Year  2000  Issues"  as well as:  i) the risk  that  current
strategic  partnerships  will  not  develop  into  long-term,  revenue-producing
relationships;  ii) the risk that research and product  development efforts will
not produce the desired  results;  iii)  uncertainties  relating to the time and
cost required to complete research and development; iv) uncertainties related to
obtaining  necessary clinical data and regulatory  clearances;  v) dependence on
the continued  performance of strategic partners such as Merck and Elan; and vi)
dependence  on the  availability  of  additional  financing at times and in such
amounts as are  necessary to continue to fund the  Company's  operations.  For a
more detailed description and discussion of such risks,  uncertainties and other
factors,  readers of this report are referred to the Company's  filings with the
Securities  and Exchange  Commission,  including the Company's  Annual Report on
Form 10-K/A for the year ended March 31, 1998.

Forward-looking statements are based on the estimates and opinions of management
on the date the statements  are made,  and the Company  assumes no obligation to
update  forward-looking  statements if conditions or  management's  estimates or
opinions should change.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

<PAGE>
                                  PART II
                             OTHER INFORMATION


Item 1.   Legal Proceedings

          None during the quarter ended September 30, 1998.

Item 2.   Changes in Securities

          In December  1996,  the Company  completed  two private  placements of
units,  each unit  consisting  of one share of Common  Stock and one  warrant to
purchase  one share of Common  Stock at an  exercise  price of $1.00.  Preferred
Technology,  Inc. acted as agent in connection  with the first  placement and in
connection  therewith,  received a placement fee and a warrant to acquire shares
of Common Stock at an exercise price per share of $0.828125.  In July and August
1998,  warrants to purchase  1,028,571  shares of Common Stock were exercised at
$1.00 per share and  warrants to  purchase  33,000  shares of Common  Stock were
exercised at $0.828125 per share.

          The warrants and the shares  issued upon exercise of the warrants have
been  issued  pursuant  to an  exemption  from  registration  under  Rule 506 of
Regulation  D and  Section  4(2) of the  Securities  Act.  In relying  upon such
exemption (1) the Company did not engage in any "general solicitation," (ii) the
purchaser represented and the Company reasonably believed that the purchaser was
an accredited  investor and had such  knowledge and  experience in financial and
business  matters such that it was capable of evaluating the merits and risks of
the  prospective  investment  and was  able to bear  the  economic  risk of such
investment,  (iii)  the  purchaser  was  provided  access to all  necessary  and
adequate  information  to enable the  purchaser to evaluate the  financial  risk
inherent in making an investment, and (iv) the purchaser represented that it was
acquiring the shares for itself and not for distribution.

          Aggregate  proceeds to the Company from the warrant  exercises totaled
approximately $1.056 million.

Item 3.   Defaults Upon Senior Securities

          None during the quarter ended September 30, 1998.

Item 4.   Submission of Matters to a Vote of Security Holders

          At the annual general meeting of the  shareholders of the Company held
at 9:00 am on September 10, 1998 in Portland, Oregon, the following matters were
submitted to a vote of the shareholders:

          Election of  directors.  The slate of  directors  was  approved by the
Company's  shareholders with no director receiving less than 22,754,544 votes in
favor and no more than  299,578  withheld.  David de Weese  received  22,755,544
votes in favor and 298,578  votes  withheld;  Grace K. Fey  received  22,755,544
votes  in  favor  and  298,578  votes  withheld;  William  A.  Gouveia  received
22,755,544  votes in favor and 298,578 votes withheld;  Eric Herfindal  received
22,755,544  votes in favor and 298,578 votes withheld;  James C. O'Shea received
22,818,742 votes in favor and 235,380 votes withheld;  Richard Plestina received
22,755,544  votes in favor and 298,578 votes withheld;  John Ruedy, MD, received
22,755,444  votes in favor and 298,678 votes withheld;  and Mike Sember received
22,754,544 in favor and 299,578 votes withheld. Shares voted totaled 23,054,122.

         Amend Articles of  Incorporation  to provide for a classified  Board of
Directors  proposal.  The proposal passed  receiving  11,482,799 votes in favor,
984,275 votes against and 224,766 votes abstaining, out of shares voted totaling
12,691,840.

         Amend Articles of  Incorporation  to require a  super-majority  vote to
later amend certain  provisions of the Articles of Incorporation  proposal.  The
proposal passed receiving 10,804,277 votes in favor,1,667,206  votes against and
220,357 votes abstaining, out of shares voted totaling 12,691,840.

        Amend  the 1992  Stock  Option  Plan to  increase  the  number of shares
available for issuance under the plan proposal.  The proposal  passed  receiving
10,615,225 votes in favor,1,208,791  votes against and 144,947 votes abstaining,
out of shares voted totaling 11,968,963.

       There were 28,449,558 common shares  outstanding as of the date of record
of July 24, 1998.

Item 5.   Other Information

          None during the quarter ended September 30, 1998.

Item 6.   Exhibits and Reports on Form 8-K

          EXHIBITS:

             10.61 Employment Contract between Bioject JV Subsidiary Inc. and
                   Bradley J. Enegren.

             10.62 Confidentiality/Inventions/Noncompetition Agreement between
                   Bioject JV Subsidiary Inc. and Bradley J. Enegren

             27.1  Financial Data Schedule

           REPORTS ON FORM 8K:

            None during the quarter ended September 30, 1998

<PAGE>

                                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.





                                    BIOJECT MEDICAL TECHNOLOGIES INC.
                                    (Registrant)



Date:  November 13, 1998            /S/ James O'Shea
                                    ---------------------------------
                                    James O'Shea
                                    Chairman, Chief Executive Officer
                                    and President



                                    /S/ Michael A. Temple
                                    ---------------------------------
                                    Michael A. Temple
                                    Vice President and Chief Financial Officer

<PAGE>


                                  EXHIBIT INDEX

EXHIBIT
NUMBER         EXHIBIT DESCRIPTION


10.61     Employment Contract between Bioject JV Subsidiary Inc. and
          Bradley J. Enegren.

10.62     Confidentiality/Inventions/Noncompetition Agreement between 
          Bioject JV Subsidiary Inc. and Bradley J. Enegren

27.1      Financial Data Schedule
[{"type": "10-Q", "sequence": "1", "description": "THIRD QUARTER REPORT", "secsgml_size_bytes": 64920}]
{"company-data": {"conformed-name": "BIOJECT MEDICAL TECHNOLOGIES INC", "cik": "0000810084", "assigned-sic": "3841", "irs-number": "931099680", "state-of-incorporation": "OR", "fiscal-year-end": "0331"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-15360", "film-number": "98749747"}, "business-address": {"street1": "7620 S W BRIDGEPORT RD", "city": "PORTLAND", "state": "OR", "zip": "97224", "phone": "5036397221"}, "mail-address": {"street1": "7620 S W BRIDGEPORT ROAD", "city": "PORTLAND", "state": "OR", "zip": "97224"}, "former-company": {"former-conformed-name": "BIOJECT MEDICAL SYSTEMS LTD", "date-changed": "19920703"}}
SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

                For the quarterly period ended September 30, 1998

                           Commission File No. 0-15360

                        BIOJECT MEDICAL TECHNOLOGIES INC.
             (Exact name of registrant as specified in its charter)

          Oregon                                    93-1099680
(State of other jurisdiction of                (I.R.S. identification no.)
employer incorporation or organization)

7620 SW Bridgeport Road
Portland, Oregon                                          97224
(Address of principal executive offices)                (Zip code)

(Registrant's telephone number, including areas code)   (503) 639-7221

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 [ ]

At September 30, 1998 there were 28,907,395  outstanding  shares of common stock
of the registrant.
PART I
                                FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

     The  following  unaudited  consolidated  financial  statements  of  Bioject
Medical  Technologies Inc. ("BMT"), an Oregon corporation,  and its subsidiaries
have been prepared  pursuant to the rules and  regulations of the Securities and
Exchange Commission. The Company's needle-free injector operations are conducted
by Bioject Inc. (BI), an Oregon  corporation formed in February 1985, which is a
wholly  owned  subsidiary  of  BMT  and  its  blood  glucose  monitoring  system
operations are conducted by Bioject JV Subsidiary Inc.
("JV"),  an Oregon  corporation  formed in October 1997, which is owned 80.1% by
BMT.

     The following 10-Q report reflects the consolidated  results of operations,
cash flows and  financial  position  for the second  quarter of the year  ending
March  31,  1999.  The  results  of  operations  for  interim  periods  are  not
necessarily indicative of the results to be expected for the year.

          -    Consolidated Statements of Operations for the quarters ended
               September 30, 1998 and September 30, 1997

          -    Consolidated Statements of Operations for the six months ended
               September 30, 1998 and September 30, 1997

          -    Consolidated Balance Sheets dated September 30, 1998 and March
               31, 1998

          -    Consolidated Statements of Cash Flows for the quarters ended
               September 30, 1998 and September 30, 1997

          -    Consolidated Statements of Cash Flows for the six months ended
               September 30, 1998 and September 30, 1997
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                          Quarter Ended
                                                           September 30,

                                                     1998            1997
                                                   ----------      ----------

REVENUES:

     Net sales of products                        $  311,401      $  644,853
     Licensing/technology fees                       887,558         125,000
                                                    -----------     ---------
                                                    1,198,959        769,853
                                                    -----------     ---------
EXPENSES:

     Manufacturing                                    499,314        592,643
     Research and development                       1,021,947        218,001
     Selling, general and administrative              899,364        978,822
     Acquired in-process R&D                             --       15,000,000
                                                  ------------   ------------
     Total operating expenses                       2,420,625     16,789,466
                                                  -----------    ------------
     Operating loss                                (1,221,666)   (16,019,613)
        Other income                                   34,449         25,704
                                                  ------------   ------------
     Loss before taxes                             (1,187,217)   (15,993,909)
     Provision for income                              --            --
     Minority interest allocation                      --          2,985,000
                                                  ------------   -----------
     Net loss                                      (1,187,217)   (13,008,909)
     Preferred Stock dividend                         348,912        --
                                                  ------------   ------------

Net loss allocable to common
shareholders                                  $    (1,536,129)  $(13,008,909)
                                                   ===========   ============

Basic and diluted net loss per
common share                                  $          (.05)  $       (.58)
                                                   ===========   ============

Shares used in per share calculation               28,500,670     22,349,517
                                                   ===========    ============

The  accompanying  notes  are an  integral  part  of  these consolidated 
financial statements.
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                     Six-Months Ended
                                                       September 30,

                                                   1998             1997
                                               ------------     -----------

REVENUES:

     Net sales of products                     $  453,812      $   987,467
     Licensing/technology fees                  1,025,559          250,000
                                               -----------      ----------
                                                1,479,371        1,237,467
                                               ------------     ----------
EXPENSES:

     Manufacturing                                770,328        1,051,634
     Research and development                   2,079,664          471,983
     Selling, general and administrative        1,680,512        1,732,664
     Acquired in-process R&D                                    15,000,000
                                               -----------    ------------
      Total operating expenses                  4,530,504       18,256,281
                                               -----------    ------------

Operating loss                                 (3,051,133)     (17,018,814)
        Other (income)                             57,161           32,331
                                               -----------    ------------
     Loss before taxes                         (2,993,972)     (16,986,483)
     Provision for income taxes                      -                -
     Minority interest allocation                                2,985,000
                                               -----------    ------------
     Net loss                                $ (2,993,972)    $(14,001,483)
     Preferred Stock dividend                     695,262                -
                                               -----------    ------------

Net loss allocable to
common shareholders                          $ (3,689,234)    $(14,001,483)

Basic and diluted net loss per common share  $      (.13)     $       (.66)
                                               ===========    =============

Shares used in per share calculation           27,710,790       21,075,640
                                               ===========    =============

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS
                                     (Unaudited)

                                                 September 30,   March 31,
                                                    1998         1998
                                                  -----------   ----------

ASSETS:

CURRENT ASSETS:
     Cash and cash equivalents                  $ 2,972,713   $ 1,900,839
     Accounts receivable, net                       492,930       153,721
     Inventories                                  1,971,044     1,891,970
     Other current assets                            89,897        75,292
                                                   ---------    ----------
          Total current assets                    5,526,584     4,021,822

PROPERTY AND EQUIPMENT, at cost:
     Machinery and equipment                      2,454,963     2,241,904
     Production molds                             1,949,267     1,945,267
     Furniture and fixtures                         184,982       158,477
     Leasehold improvements                         101,615        94,115
                                                   ----------   -----------
                                                  4,690,827     4,439,763
     Less - Accumulated depreciation             (2,306,151)   (1,947,006)
                                                  ----------   ------------
                                                  2,384,676     2,492,757

Other assets                                        484,579       463,031
                                                 -----------   ------------
                                                $ 8,395,839   $ 6,977,610
                                                 ==========    ==========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                          $ 1,501,605     $  497,180
     Accrued payroll                               229,531        218,424
     Other accrued liabilities                     472,104        277,122
     Deferred revenue                              250,000         10,000
                                                 -----------   -----------
          Total current liabilities              2,453,240     1, 002,726

SHAREHOLDERS' EQUITY:
     Preferred stock, no par, 10,000,000
       shares authorized; no shares issued
       and outstanding
     Series A Convertible-692,694 shares,
     $15 stated value                            8,483,685      7,826,157
     Series B Convertible -134,333 shares,
     $15 stated value                            1,529,025      1,491,289
     Common stock, no par, 100,000,000 shares 
      authorized;  issued and outstanding
      28,907,395 and 25,503,038 shares
      at September 30, 1998 and 
      March 31, 1998, respectively              50,518,982     47,557,297
    Accumulated deficit                        (54,589,093)   (50,899,859)

                                              -------------   --------------
          Total shareholders' equity             5,942,599      5,974,884
                                              --------------  --------------
                                               $ 8,395,839    $ 6,977,610
                                                ==========     ==========

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                           Quarter Ended
                                                           September 30,
                                                        1998           1997
                                                     -----------     ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss allocable to common shareholders     $(1,536,129)    $(13,008,909)
     Adjustments to net loss:
        Depreciation and amortization                  207,380          154,415
        Contributed capital for services                13,818           20,705
        Acquired in-process R&D                                      15,000,000
        Preferred stock dividends                      348,912
     Net changes in assets and liabilities:
        Accounts receivable                           (399,024)        (320,236)
        Inventories                                     98,790            9,935
        Other current assets                            (6,858)          17,873
        Accounts payable                             1,077,609          131,656
        Accrued payroll                                 27,768           88,344
        Other accrued liabilities                     (524,553)           6,090
        Deferred revenue                               125,001         (125,000)
                                                    -----------      -----------
     Net cash used in operating activities            (567,286)        1,974,873
                                                    -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Acquisition of blood glucose monitoring technology             (15,000,000)
     Property and equipment                           (104,120)         (17,620)
     Other assets                                      (18,854)         (23,413)
                                                    -----------      -----------
     Net Cash Used in Investing Activities            (122,974)     (15,041,033)
                                                    -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Issuance of long-term debt                                          12,015,000
 Cash proceeds from common stock                     1,084,184          475,000
                                                   --------------    -----------
     Net cash provided by financing activities       1,084,184       12,490,000
                                                    -------------    -----------
CASH AND CASH EQUIVALENTS:
     Net increase (decrease) in cash and
       cash equivalents                                393,924         (576,160)
     Cash and cash equivalents at beginning
       of period                                     2,578,789        1,793,846
                                                   -----------       -----------
     Cash and cash equivalents at end
       of period                                  $  2,972,713      $ 1,217,686
                                                    ==========       ===========

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
BIOJECT MEDICAL TECHNOLOGIES INC.AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (Unaudited)

                                                          Six-Months Ended
                                                            September 30,
                                                        1998            1997
                                                     -----------     ---------

     CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss allocable to common shareholders     $(3,689,234)   $ (14,001,483)
     Adjustments to net loss:
        Depreciation and amortization                  378,627          261,920
        Contributed capital for services                27,636           20,705
        Acquired in process R&D                                      15,000,000
        Preferred stock dividends                      695,262
Net changes in assets and liabilities:
        Accounts receivable                           (339,209)       (224,250)
        Inventories                                    (79,074)         77,286
        Other current assets                           (14,605)        (18,145)
        Accounts payable                             1,004,427          (6,469)
        Accrued payroll                                 11,107          26,879
        Other accrued liabilities                      194,982          37,096
        Deferred revenue                               240,000        (250,000)
                                                    -----------      -----------
     Net cash used in operating activities          (1,570,081)        923,539
                                                    ------------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
       Acquisition of blood glucose monitoring 
        technology                                                 (15,000,000)
       Property and equipment                         (251,064)        (27,848)
       Other assets                                    (41,030)        (34,483)
                                                     -----------    -----------
     Net cash used in investing activities            (292,094)    (15,062,331)
                                                     -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt                                          12,015,000
Cash proceeds from common stock                      2,934,049       1,225,000
                                                    ------------   -------------
     Net cash provided by financing activities:      2,934,049      13,240,000
                                                   -------------   -------------
CASH AND CASH EQUIVALENTS:
     Net increase (decrease) in cash and
       cash equivalents                              1,071,874        (898,792)
     Cash and cash equivalents at beginning
       of period                                     1,900,839       2,116,478
                                                    -------------   ----------
     Cash and cash equivalents at end
       of period                                    $2,972,713     $ 1,217,686
                                                     =========      ==========

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
BIOJECT MEDICAL TECHNOLOGIES INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   THE COMPANY:

The  consolidated  financial  statements of Bioject  Medical  Technologies  Inc.
(the"Company"),  include  the  accounts  of Bioject  Medical  Technologies  Inc.
("BMT"),an Oregon  Corporation,  its wholly owned  subsidiary,  Bioject Inc., an
Oregon Corporation ("BI"), and its 80.1% owned subsidiary, Bioject JV Subsidiary
Inc.("JV"),  an Oregon corporation.  All significant  intercompany  transactions
have been eliminated. Bioject Inc. commenced operations in 1985. Bioject Medical
Technologies,  Inc. was formed in December 1992 for the purpose of acquiring all
of the capital stock of Bioject Medical Systems Ltd., a Company  organized under
the laws of British Columbia,  Canada, in a stock-for-stock exchange in order to
establish a U.S.  domestic  corporation as the publicly traded parent company of
Bioject Inc. and Bioject Medical  Systems Ltd.  Bioject Medical Systems Ltd. was
terminated in fiscal 1997. Bioject JV Subsidiary Inc. was formed in October 1997
in  connection  with a joint  venture  arrangement  with Elan  Corporation,  plc
("Elan").  All references to the Company include  Bioject  Medical  Technologies
Inc. and its subsidiaries, unless the context requires otherwise.

The  Company  commenced  operations  in 1985  for  the  purpose  of  developing,
manufacturing and distributing a new drug delivery system.  Since its formation,
the Company has been engaged principally in organizational,  financing, research
and development,  sales and marketing activities.  In the last quarter of fiscal
1993,the  Company  launched  U.S.  distribution  of its  Biojector  2000 system,
primarily to the hospital and large clinic  market.  The Company's  products and
manufacturing operations are subject to extensive government regulation, both in
the U.S. and abroad.  In the U.S., the development,  manufacture,  marketing and
promotion of medical  devices is  regulated by the Food and Drug  administration
("FDA") under the Federal Food,  Drug, and Cosmetic Act ("FFDCA").  In 1987, the
Company  received  clearance  from the FDA under Section  510(k) of the FFDCA to
market a hand-held  CO2-powered  needle-free injection system. In June 1994, the
Company received clearance from the FDA under Section 510(k) to market a version
of its  Biojector  2000  system  in a  configuration  targeted  at  high  volume
injection  applications.  In October 1996, the Company received 510(k) clearance
for a needle-free  disposable  vial access  device.  In March 1997,  the Company
received  additional 510(k) clearance for certain  enhancements to its Biojector
2000  system.  On March  23,1998 the Company  entered  into a  transaction  with
Vitajet Corporation ("Vitajet") whereby the Company acquired, along with certain
other  assets,  the  rights to the  Vitajet(R),  a  spring-powered,  needle-free
self-injection device which currently has regulatory clearance for administering
injections of insulin.  On September 30, 1997, the Company  entered into a joint
venture agreement with Elan for the development and commercialization of certain
blood glucose  monitoring  technology  which the Company licensed from Elan. The
blood glucose monitoring  technology is also subject to government regulation in
the U.S. by the FDA and abroad by various agencies.

The Company's  revenues to date have been derived  primarily  from licensing and
technology fees for the needle-free injection technology and from sales of the
Biojector  2000 system,  including  Biojector  syringes,  vial  adapters and CO2
cartridges. More recently, the Company has derived modest revenues from sales of
the Vitajet and related  disposable  supplies.  Future revenues will depend upon
i)acceptance  and  use of the  Company's  needle-free  injection  technology  by
healthcare providers;  ii) successful  realization of licensing,  technology and
product revenues under existing and future strategic  corporate  alliances;  and
iii) successful  development,  regulatory  approval and market acceptance of its
blood  glucose  monitoring  technology.   Uncertainties  created  by  government
regulation  and  competition in the  healthcare  industry may impact  healthcare
provider  expenditures and third party payer  reimbursements.  Accordingly,  the
Company cannot predict what impact, if any,  subsequent  healthcare  reforms and
industry trends might have on its business.  In the future the Company is likely
to require substantial additional financing. Failure to obtain such financing on
favorable terms could materially adversely affect the Company's business.
2.   ACCOUNTING POLICIES:

INVENTORIES
Inventories  are stated at the lower of cost or market.  Cost is determined in a
manner which approximates the first-in,  first out (FIFO) method. Costs utilized
for inventory  valuation  purposes  include labor,  materials and  manufacturing
overhead. Net inventories consist of the following:

                                          September 30,       March 31,
                                             1998               1998
                                          -----------        ----------
           Raw Materials                 $   699,654         $  754,715
           Work in Process                     9,763              9,763
           Finished Goods                  1,261,627          1,127,492
                                          -----------         ----------
                                         $ 1,971,044         $1,891,970
                                          ===========         ==========

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  at the date of the
financial  statements and the reported  amounts of revenues and expenses  during
the reporting period. Actual results could differ from those estimates.

RECLASSIFICATIONS

Certain reclassifications have been made to the prior year's expenses to conform
to the current year's presentation.

NET LOSS PER SHARE
The  following  common stock  equivalents  are excluded  from earnings per share
calculations as their effect would have been antidilutive:

  Six Months Ended September 30,             1998                1997
                                          ---------           ---------
    Warrants and stock options            8,547,444          10,293,499
    Convertible preferred stock           8,270,270                   -
                                       --------------      --------------
                                         16,817,714          10,293,499
                                         ==========          ==========

3.   RELATED PARTY TRANSACTION

A  significant  portion of the  research and  development  expenses of the blood
glucose  monitoring  business  segment  are  incurred  by Elan and billed to the
Company under a contractual  arrangement between the two companies.  Included in
accounts  payable  and  other  accrued  liabilities  at  September  30,  1998 is
approximately $1.3 million owed to Elan under this arrangement.
4.   SEGMENT INFORMATION

The Company has adopted  the  segment  reporting  requirements  of SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information. At present,
the Company has two reportable  segments which offer different  products and are
managed  separately.  Each business requires different  technology and marketing
strategies.  The following sets forth the unaudited results of operations of the
Company for its two segments of  operations - needle-free  injection  technology
and blood glucose monitoring technology:

                            Needle-free Injection          Needle-free Injection
                               Quarter Ended                  Six-Months Ended
                                September 30,                   September 30,
                              ------------------         -----------------------
                                1998        1997             1998          1997
                              -------    -------           -------       -------

REVENUES:
  Net sales of products      $  311,401   $ 644,853        $453,812     $987,467
  Licensing/technology fees     887,558     125,000       1,025,559      250,000
                                -------     -------       ---------      -------
                              1,198,959     769,853       1,479,371    1,237,467
                                -------     -------        ---------    --------
EXPENSES:
  Manufacturing                 499,314     592,643         770,328    1,051,634
  Research & development        236,324     218,001         480,910      471,983
  Selling, general
   & administrative             757,074     978,822       1,365,704    1,732,664
                               ---------   ---------       ---------   ---------
  Total operating expenses    1,492,712   1,789,466       2,616,942    3,256,281
                               ---------   ---------       ---------    --------

  Operating loss               (293,753) (1,019,613)     (1,137,571) (2,018,814)
  Other income                   34,449      25,704          57,161      32,331
                                 -------     -------       ---------    -------
   Loss before taxes           (259,304)   (993,909)     (1,080,410) (1,986,483)
   Provision for income taxes         0           0               0           0
                                 -------     -------        --------   ---------
   Net loss                   $(259,304)  $(993,909)    $(1,080,410) (1,986,483)
                                =========   ========      =========   =========
Blood glucose Monitoring            Blood glucose Monitoring
                                           Quarter Ended                      Six-Months Ended
                                           September 30,                        September 30,
                                       1998            1997                 1998          1997
                                       ----            ----                 ----          ----
REVENUES:

 Net sales of products             $    0           $      0            $      0       $      0
 Licensing/technology fees              0                  0                   0              0
                                        -                  -                   -              -

                                        0                  0                   0              0
                                        -                  -                   -              -

EXPENSES:
 Manufacturing                          0                  0                   0              0
 Research & development              785,623                              1,598,754
 Selling, general
  & administrative                   142,290               0                314,808
 Acquired in-process R&D                              15,000,000                         15,000,000
                                    --------          ----------           ----------    ----------
 Total operating expenses            927,913          15,000,000          1,913,562      15,000,000
                                    --------          ----------           ----------    ----------

 Operating loss                     (927,913)        (15,000,000)        (1,913,562)    (15,000,000)
 Other income                           0                  0                   0              0
                                    --------          ----------           ----------    ----------

 Loss before taxes                  (927,913)        (15,000,000)        (1,913,562)    (15,000,000)
 Provision for income taxes            0                  0                   0              0
 Minority interest allocation                         2,985,000               0           2,985,000
                                     --------          ----------           ----------    ----------

 Net loss                        $  (927,913)      $ (12,015,000)       $(1,913,562)    (12,015,000)
                                 ============       =============        ===========     ===========
At September 30, 1998,  the blood glucose  monitoring  business  segment had net
property and  equipment,  at cost, of $187,154 and accounts  payable and accrued
expenses of approximately $2.2 million.  The blood glucose  monitoring  business
segment had no other  significant  assets or liabilities  at September  30,1998.
Accordingly,  after  separating the blood glucose  monitoring  business  segment
assets and liabilities,  the accompanying  balance sheets effectively  represent
the assets and liabilities of the needle-free injection business segment. In the
future,  certain  proceeds from the sale of equity or issuance of debt by JV may
be restricted to JV operations.  To the extent that they meet certain  reporting
requirements,  the separate assets, liabilities and equity of the parent and its
subsidiary will be appropriately disclosed.
5.   NEW ACCOUNTING PRONOUNCEMENT

In June 1997, the FASB issued  Statement of Financial  Accounting  Standards No.
130, "Reporting  Comprehensive  Income" ("SFAS 130"). This statement establishes
standards for reporting and displaying  comprehensive  income and its components
in a full set of general purpose financial statements. The objective of SFAS 130
is to report a measure of all changes in the equity of an enterprise that result
from   transactions   and  other  economic  events  of  the  period  other  than
transactions with owners.  The Company adopted SFAS 130 during the first quarter
of fiscal 1999.  Comprehensive  loss did not differ from currently  reported net
loss in the periods presented.

In June 1998, the FASB issued  Statement of Financial  Accounting  Standards No.
133,  "Accounting  for Derivative  Instruments  and Hedging  Activities"  ("SFAS
133").  SFAS  133  establishes   accounting  and  reporting  standards  for  all
derivative  instruments.  SFAS 133 is effective for fiscal years beginning after
June 15,  1999.  The  Company  does not have  any  derivative  instruments  and,
accordingly,  the  adoption  of SFAS 133 will have no  impact  on the  Company's
financial position or results of operations.

6.   BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS

The accompanying, unaudited consolidated financial statements do not include all
information and footnote disclosures normally included in audited financial
statements.  However,  in the  opinion of  management,  all  adjustments  (which
include  only normal,  recurring  adjustments)  necessary to present  fairly the
financial position,  cash flows, and results of operations have been made. It is
suggested  that  these  statements  be read in  conjunction  with the  financial
statements  included in the Company's  Annual Report on Form 10-K/A for the year
ended March 31, 1998.

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

OVERVIEW

The  Company  is  placing  primary  sales and  marketing  emphasis  on  business
development  efforts  to  seek  relationships  with  major   pharmaceutical  and
biotechnology companies in key niche markets to market its needle-free injection
products for specific  applications  and to develop  other  application-specific
devices  and  companion  syringes.  At the  same  time,  with a  reduced  direct
salesforce,  the Company  continues to focus on maintaining its penetration into
the  public  health  and  flu  immunization  markets  with  its  Biojector  2000
needle-free injection system. The Company is also directing its sales efforts at
creating sales of the Biojector 2000 system to the U.S. military.

In July 1998, the Company  entered into a short-term  agreement with Merck & Co,
Inc. ("Merck"), a worldwide leader in the development, manufacture and sale of a
broad range of human and animal  health  products and  services.  The  agreement
provides  Merck the rights to use the Biojector  2000 jet injection  system with
selected Merck vaccines.  The Company  believes that this agreement is the first
step in establishing a long-term  relationship between the two companies whereby
Merck will use the Company's needle-free injection technology in connection with
certain of its vaccines. In the current quarter, the Company received a $750,000
nonrefundable payment under the current agreement between the Company and Merck.
This is the first payment of a total of $1.5 million  scheduled to be paid under
the agreement.  Also during the current quarter, the Company and Merck commenced
negotiating a long-term relationship between the two companies.  There can be no
assurance that such  long-term  relationship  will be established  and there are
certain  conditions  under which  Merck will not be  obligated  to make  further
payments under the current agreement.  See "Forward Looking Statements."
Through its joint  venture  with Elan,  the  Company is actively  engaged in the
development of its continuous blood glucose monitoring technology.  To date, the
Company continues to develop and test a clinical  prototype.  During the current
quarter,  the Company hired Mr. Brad Enegren to serve as full-time president and
chief executive  officer of the joint venture.  Mr. Enegren  replaces Mr. Robert
Gonnelli  who has served as interim  president  of the joint  venture  while the
search for a  full-time  president  was taking  place.  In April  1998,  a human
clinical study of six patients with a prototype of the blood glucose  monitoring
device was  conducted.  The Company is  planning  further  preliminary  clinical
studies  in the  spring of 1999.  Based on the  results  of these  studies,  the
Company  intends  to plan  and  conduct  comprehensive  clinical  trials  of the
monitoring  system, the results of which are intended to support its application
to the FDA to market the product in the United  States.  (See  "Forward  Looking
Statements")

The  Company's  revenues  to date have not been  sufficient  to cover  operating
expenses.  The Company  believes  that  increased  revenues  will result from i)
expanded  licensing  and  technology  revenues  from  both  current  and  future
strategic   corporate   relationships;   ii)increased  sales  of  the  Company's
needle-free injection products as the products achieve greater market acceptance
and  penetration,  both  through  continued  direct  sales  efforts  and through
corporate  marketing  relationships;  and iii) revenues from the Company's blood
glucose  monitoring  technology,  provided  that the  Company is  successful  in
completing development of that technology and bringing the technology to market.
See  "Forward-Looking  Statements."  In  addition  to  continuing  to  fund  the
operations of its  needle-free  injection  business,  the Company is required to
fund  substantial,  ongoing  research  and  development  costs  associated  with
developing the blood glucose  monitoring  technology as well as future milestone
payments to Elan  totaling  $15.5  million.  Since no revenue from blood glucose
monitoring  products is  expected  for a number of years,  the  Company  expects
significant  losses unless  licensing  and  technology  revenues from  strategic
corporate  relationships  and revenues from sales of the  Company's  needle-free
products increase substantially. See "Forward Looking Statements."  The level of
revenues required to generate net income will be affected by a number of factors
including  the pricing of the Company's  products,  its ability to attain volume
purchasing  and  manufacturing  efficiencies,  the ability to develop and market
products  pursuant to its  relationships  with companies such as Merck and Elan,
and the impact of inflation on the Company's  manufacturing  and other operating
costs.  There can be no assurance that the Company will be able to  successfully
generate additional,  ongoing licensing and technology revenues or sell products
at  prices  or in  volumes  sufficient  to  achieve  profitability  or to offset
increases in the Company's research and development expenses or other costs.

Revenues  and  results of  operations  have  fluctuated  and can be  expected to
continue to  fluctuate  significantly  from  quarter to quarter and from year to
year.  Various  factors  may  affect  quarterly  and  yearly  operating  results
including  (i)timing  of new  product  introductions  by  the  Company  and  its
competition,  (ii) the cost and length of time required to complete  development
and  commercialization  of, and gain regulatory  clearance for the blood glucose
monitoring  technology,  (iii)  length  of time to  close  product  sales,  (iv)
customer budget cycles,  (v) uncertainties and changes in customer purchases due
to changes in third party reimbursement  policies, (iv) the timing and amount of
payments under  technology  development  and licensing  arrangements,  and (vii)
variations in the amount of manufacturing overhead absorbed into inventory.  The
Company anticipates drawing primarily on current inventories to fill most of its
product  orders  through  the  end of  fiscal  1999.  Accordingly,  the  Company
anticipates  that production  levels,  and related  absorption of  manufacturing
overhead,  for the  remainder  of fiscal 1999 will be  substantially  lower than
production   levels  in  the   corresponding   period  of   fiscal   1998.   See
"Forward-Looking Statements."

Research and development  expense  increased from $218,000 in the second quarter
of fiscal  1998 to $1.02  million in the  second  quarter  of fiscal  1999.  The
increase  was  principally  due to research  and  development  cost of the blood
glucose  monitoring  technology.  The Company incurred  $786,000 of research and
development costs in the current quarter to develop the blood glucose monitoring
technology  as compared  to no  spending in the same  quarter a year ago. In the
quarter ended September 30, 1997, the Company recorded an expense of $15 million
related to acquired  in-process  research and development  relating to the blood
glucose monitoring  technology  acquired from Elan. The acquired  technology had
not yet established  technological feasibility and had no alternate future uses.
Accordingly,  accounting  rules  required  that  the  acquisition  cost  of  the
technology  be charged to expense.  No such  charge was  incurred in the quarter
ended September 30, 1998.

Selling,  general and  administrative  expense  decreased  from  $979,000 in the
second  quarter of fiscal 1998 to $899,000 in the second quarter of fiscal 1999.
Selling expense for the current quarter decreased by $231,000 when compared with
the same period a year ago, a result of reductions in the Company's direct sales
force.  The  savings in selling  expenses  were  partially  offset by a $151,000
increase in administrative expenses,  primarily relating to administrative costs
of the Company's blood glucose monitoring development operations.  There were no
administrative costs associated with the blood glucose monitoring  operations in
second quarter of fiscal 1998.

Other income  consists of earnings on  available  cash  balances and  fluctuates
based on available cash balances.

On a segment basis, the needle-free  injection operations reported a net loss of
$259,000 for the quarter  ended  September  30,1998 as compared to a net loss of
$994,000 for the quarter ended  September 30, 1997. The improved  performance is
the result of increased licensing and technology  revenues,  reduced spending on
sales and marketing and increased  interest earned on comparatively  higher cash
balances.

The blood glucose  monitoring  business  segment reported a net loss of $928,000
for the quarter  ended  September 30, 1998 compared to a net loss of $12 million
for the quarter  ended  September  30, 1997.  The  decreased  loss is due to the
write-off of acquired  in-process  research and  development  cost in the second
quarter of fiscal 1998.
SIX MONTHS ENDED  SEPTEMBER 30, 1998 COMPARED TO SIX MONTHS ENDED  SEPTEMBER 30,
1997  Revenues  for the six months ended  September  30, 1998 consist of product
sales of $454,000 and licensing and technology  revenues of $1.03 million.  This
compares to $987,000 in product sales and $250,000 in licensing  and  technology
revenues for the six months ended September 30, 1997. The product sales decrease
was due to a  reduction  in  early  orders  in  fiscal  1999 for flu  season,  a
significant  portion  of which  was  attributable  to  certain  customers  using
inventory  acquired but not used in earlier  periods to meet their  current year
flu season  requirements.  The increase in licensing and technology revenues was
primarily due to receipt of a $750,000  payment under the agreement  signed with
Merck in July 1998.

Manufacturing  expense  decreased from $1.05 million for the first six months of
fiscal  1998 to  $770,000  for the six months  ended  September  30,  1998.  The
reduction was primarily  due to lower unit sales  volumes,  resulting in a lower
charge to cost of goods sold.  The decrease in cost of goods sold was  partially
offset by lower  production  levels in the current  fiscal year,  resulting in a
decrease  of $63,000  in the  amount of  manufacturing  overhead  absorbed  into
inventory   during  the  six  months  ended  September  30,  1998.  The  Company
anticipates drawing primarily on current inventories to fill most of its product
orders through the end of fiscal 1999. Accordingly, the Company anticipates that
production  levels, and related  absorption of manufacturing  overhead,  for the
remainder of fiscal 1999 will be substantially  lower than production  levels in
the corresponding period of fiscal 1998.  See "Forward-Looking Statements."

Research and development expense increased from $472,000 in the six months ended
September  30, 1997 to $2.1 million in the first six months of fiscal 1999.  The
increase was principally  due to research and  development  cost relating to the
blood  glucose  monitoring  technology.  The Company  incurred  $1.6  million of
research and development costs in the first six months of fiscal 1999 to develop
the blood glucose  monitoring  technology as compared to no spending in the same
period a year ago. In the period ended September 30, 1997, the Company  recorded
an  expense  of  $15  million  related  to  acquired   in-process  research  and
development  relating to the blood glucose monitoring  technology  acquired from
Elan. The acquired technology had not yet established  technological feasibility
and had no alternate  future uses.  Accordingly,  accounting rules required that
the acquisition cost of the technology be charged to expense. No such charge was
incurred in the six months ended September 30, 1998.

Selling,  general and administrative expense decreased from $1.73 million in the
six months  ended  September  30, 1997 to $1.68  million is the six months ended
September 30, 1998.  As a result of  reductions  in the  Company's  direct sales
force,  selling  expense  for the first six months of fiscal 1999  decreased  by
$398,000  when  compared with the same period a year ago. The savings in selling
expenses were mostly offset by a $345,000 increase in  administrative  expenses,
primarily  relating  to  administrative  costs of the  Company's  blood  glucose
monitoring development operations. There were no administrative costs associated
with the blood glucose monitoring operations in period ended September 30, 1997.

Other income  consists of earnings on  available  cash  balances and  fluctuates
based on available cash balances.

On a segment basis, the needle-free  injection operations reported a net loss of
$1.08  million for the six months ended  September 30, 1998 as compared to a net
loss of $1.98 million for the six months ended  September 30, 1997. The improved
performance  is the  result of  increased  licensing  and  technology  revenues,
reduced  spending  on sales  and  marketing  and  increased  interest  earned on
comparatively higher cash balances.

The  blood  glucose  monitoring  business  segment  reported  a net loss of $1.9
million for the six months ended  September  30, 1998  compared to a net loss of
$12 million for the quarter ended  September 30, 1997. The decreased loss is due
to the write-off of acquired  in-process  research and  development  cost in the
fiscal 1998.
LIQUIDITY AND CAPITAL RESOURCES

Since its inception in 1985,  the Company has financed its  operations,  working
capital needs and capital  expenditures  from private  placements of securities,
exercises of stock  options and  warrants,  proceeds  received  from its initial
public  offering in 1986,  proceeds  received  from a public  offering of common
stock in November 1993, investment by Elan pursuant to the joint venture between
the Company  and Elan in October  1997,licensing  and  technology  revenues  and
revenues  from  sales of  products.  Net  proceeds  received  from  issuance  of
securities from inception through September 30, 1998 totaled approximately $60.5
million.

During the second quarter of fiscal 1999 the Company raised  approximately $1.08
million  from  issuance  of capital  stock.  $1.06  million  of that  amount was
proceeds  from the  exercise  of warrants  issued in  connection  with  previous
private  placements of the Company's  common stock and $28,000 was proceeds from
the exercise of stock options.

Working  capital at  September  30,  1998 was $2.0  million  compared  with $3.0
million at March 31, 1998.  Cash,  cash  equivalents  and marketable  securities
totaled $3.0 million at September 30, 1998 compared to $1.9 million at March 31,
1998. The increase resulted  primarily from cash proceeds received from issuance
of the Company's common stock pursuant to warrant and stock option exercises and
licensing and technology revenues offset by operating cash requirements, capital
asset purchases and increases in product inventories.

Inventories  increased  from $1.9  million at March 31, 1998 to $2.0  million at
September  30, 1998 due to the volume of syringe  units sold being less than the
volume of syringe units produced.

The Company  believes that its current cash  position,  combined with  revenues,
other cash  receipts,  proceeds from the exercise of stock warrants and options,
proceeds from the issuance of the Company's preferred stock to Elan and proceeds
from the  purchase by Elan of  additional  stock in JV  pursuant  to  agreements
entered into in connection  with the joint  venture,  will be sufficient to fund
the Company's  operations  through the end of fiscal 1999. See "Forward  Looking
Statements." In addition, the Company is considering a number of other potential
financing alternatives.  Even if the Company is successful in raising additional
financing, unforeseen costs and expenses or lower than anticipated cash receipts
from product  sales or licensing and  technology  revenues  could  accelerate or
increase the financing requirements.  The Company has been successful in raising
additional  financing in the past and  believes  that  sufficient  funds will be
available to fund future operations.  See "Forward Looking Statements." However,
there can be no assurance  that the Company's  efforts will be  successful,  and
that  such  additional  financing  will  be  available  on  terms  that  are not
significantly  dilutive  to  existing  shareholders.  Failure  to obtain  needed
additional  capital  on  terms  acceptable  to the  Company,  or at  all,  would
significantly  restrict the Company's operations and ability to continue product
development and would materially  adversely affect the Company's  business.  The
Company has no banking line of credit or other established source of borrowing.
GOVERNMENTAL REGULATION

No  clearances  from the FDA have been  obtained for marketing the blood glucose
monitoring  technology  presently  being  developed by the Company.  The Company
continues to research whether the FDA will require a 510(k)  premarket  approval
("510(k)") or a premarket  notification ("PMA") device clearance with respect to
any products  developed based on this  technology.  If a medical device does not
qualify for the 510(k) procedure,  the manufacturer must file a PMA application.
A PMA must show that the device is safe and  effective  and is  generally a more
complex  submission  than a  510(k)notification.  A PMA typically  requires more
extensive  testing  before  regulatory  filing and a longer FDA review  process.
Another  developer of a continuous  glucose sensor system which was submitted to
the FDA for clearance under a 510(k)  notification was advised in July 1998 that
the FDA would require  regulatory  submission under the PMA regulatory  pathway.
Based on this  advisory and  discussions  with the FDA, the Company  anticipates
that the FDA will require a PMA application  with respect to products  developed
under the  Company's  blood glucose  monitoring  technology.  Whatever  level of
regulatory  submission  is  required,  the Company  anticipates  that  extensive
testing and  regulatory  review will be required of the Company's  blood glucose
monitoring  product See "Forward Looking  Statements." There can be no assurance
that the  regulatory  review  process will not cause  significant  delays in the
product  development  schedule or that regulatory  clearance will be obtained at
all.

YEAR 2000 ISSUES
The Company is in the process of  assessing  its Year 2000 ("Y2K")  issues.  The
assessment  includes  steps to review and  obtain  vendor  certification  of Y2K
compliance  of current  systems,  testing  system  compliance  and  implementing
corrective action where necessary.  A Y2K team composed of manager-level members
from Manufacturing,  Purchasing,  Information Services and Finance is conducting
the assessment.  Assessment of the compliance of all critical systems, plans for
remedial  action,  if any, and estimates of the cost of such remedial action are
expected to be completed by the end of January 1999. Until the Y2K assessment is
complete,  the cost to address the Company's Y2K issues cannot be estimated with
certainty.

Products
The  Company's  products  do not  incorporate  either  application  or  embedded
software and are therefore not subject to Y2K issues.

Information Systems
The  Company  utilizes  or  will  utilize  by  mid  1999,  packaged  application
strategies  for all  critical  information  systems  functions  which  have been
certified  by the  vendors  as being  Y2K  compliant.  This  includes  financial
software, operating and networking systems, application and data servers, PC and
communications hardware and core office automation software.

Manufacturing  Systems  The  Company  is  currently  in the  process  of gaining
manufacturer   certification  of  Y2K  compliance  for  all  critical  automated
components used in manufacturing the Company's products.

Supplier Base
The Company is in the process of  implementing  a Y2K audit program of suppliers
critical to the  Company's  operations.  Suppliers  will be asked to certify Y2K
compliance of systems  critical to maintaining a continuing  source of supply to
the Company.

Risk
The Company will be at risk from  external  infrastructure  failures  that could
arise  from  Y2K   failures,   including   failure  of   electrical   power  and
telecommunications.  Investigation and assessment of the risk of failure of such
infrastructure is beyond the scope and resources of the Company.

Business  risks to the Company of not  successfully  identifying  Y2K issues and
undertaking  effective  remedial  action  include the inability to ship product,
delay or loss of revenue  and delay in  manufacturing  operations.  The  Company
believes   that  it  will   successfully   identify   critical  Y2K  issues  and
substantially  complete  required  remedial action before the end of 1999. Other
than risks created by infrastructure  failures or by the Company's dealings with
third parties,  where the actions of such third parties are beyond the Company's
control,  the Company believes that it will have no material  business risk from
Y2K issues.  There can be no assurance  that  infrastructure  failures  will not
occur or that  third  parties,  over  which  the  Company  has no  control  will
successfully address their own Y2K issues.

FORWARD LOOKING STATEMENTS

This report  contains  "forward  looking  statements"  within the meaning of the
Private Securities Litigation Reform Act of 1995 concerning, among other things,
the  Company's  strategic  relationship  with  Merck  and Elan,  future  product
development plans and plans for clinical studies in the blood glucose monitoring
business  segment,   anticipated   product  sales  revenues  and  licensing  and
technology  revenues,  expected  sufficiency  of  capital  resources  and future
sources  of working  capital,  and Year 2000  issues.  Certain  forward  looking
statements are identified with a cross-reference  to this section.  Such forward
looking  statements  involve known and unknown  risks,  uncertainties  and other
factors which may cause the actual  results,  performance or achievements of the
Company,  or  industry  results,  to be  materially  different  from any  future
results,  performance,  or  achievements  expressed  or implied by such  forward
looking  statements.  Such risks,  uncertainties  and factors  include,  without
limitation and inclusive of risks,  uncertainties and other factors contained in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations  -  Overview,"   "-Liquidity  and  Capital  Resources"   "-Government
Regulations"  and  "Year  2000  Issues"  as well as:  i) the risk  that  current
strategic  partnerships  will  not  develop  into  long-term,  revenue-producing
relationships;  ii) the risk that research and product  development efforts will
not produce the desired  results;  iii)  uncertainties  relating to the time and
cost required to complete research and development; iv) uncertainties related to
obtaining  necessary clinical data and regulatory  clearances;  v) dependence on
the continued  performance of strategic partners such as Merck and Elan; and vi)
dependence  on the  availability  of  additional  financing at times and in such
amounts as are  necessary to continue to fund the  Company's  operations.  For a
more detailed description and discussion of such risks,  uncertainties and other
factors,  readers of this report are referred to the Company's  filings with the
Securities  and Exchange  Commission,  including the Company's  Annual Report on
Form 10-K/A for the year ended March 31, 1998.

Forward-looking statements are based on the estimates and opinions of management
on the date the statements  are made,  and the Company  assumes no obligation to
update  forward-looking  statements if conditions or  management's  estimates or
opinions should change.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.
PART II
                             OTHER INFORMATION

Item 1.   Legal Proceedings

          None during the quarter ended September 30, 1998.

Item 2.   Changes in Securities

          In December  1996,  the Company  completed  two private  placements of
units,  each unit  consisting  of one share of Common  Stock and one  warrant to
purchase  one share of Common  Stock at an  exercise  price of $1.00.  Preferred
Technology,  Inc. acted as agent in connection  with the first  placement and in
connection  therewith,  received a placement fee and a warrant to acquire shares
of Common Stock at an exercise price per share of $0.828125.  In July and August
1998,  warrants to purchase  1,028,571  shares of Common Stock were exercised at
$1.00 per share and  warrants to  purchase  33,000  shares of Common  Stock were
exercised at $0.828125 per share.

          The warrants and the shares  issued upon exercise of the warrants have
been  issued  pursuant  to an  exemption  from  registration  under  Rule 506 of
Regulation  D and  Section  4(2) of the  Securities  Act.  In relying  upon such
exemption (1) the Company did not engage in any "general solicitation," (ii) the
purchaser represented and the Company reasonably believed that the purchaser was
an accredited  investor and had such  knowledge and  experience in financial and
business  matters such that it was capable of evaluating the merits and risks of
the  prospective  investment  and was  able to bear  the  economic  risk of such
investment,  (iii)  the  purchaser  was  provided  access to all  necessary  and
adequate  information  to enable the  purchaser to evaluate the  financial  risk
inherent in making an investment, and (iv) the purchaser represented that it was
acquiring the shares for itself and not for distribution.

          Aggregate  proceeds to the Company from the warrant  exercises totaled
approximately $1.056 million.

Item 3.   Defaults Upon Senior Securities

          None during the quarter ended September 30, 1998.

Item 4.   Submission of Matters to a Vote of Security Holders

          At the annual general meeting of the  shareholders of the Company held
at 9:00 am on September 10, 1998 in Portland, Oregon, the following matters were
submitted to a vote of the shareholders:

          Election of  directors.  The slate of  directors  was  approved by the
Company's  shareholders with no director receiving less than 22,754,544 votes in
favor and no more than  299,578  withheld.  David de Weese  received  22,755,544
votes in favor and 298,578  votes  withheld;  Grace K. Fey  received  22,755,544
votes  in  favor  and  298,578  votes  withheld;  William  A.  Gouveia  received
22,755,544  votes in favor and 298,578 votes withheld;  Eric Herfindal  received
22,755,544  votes in favor and 298,578 votes withheld;  James C. O'Shea received
22,818,742 votes in favor and 235,380 votes withheld;  Richard Plestina received
22,755,544  votes in favor and 298,578 votes withheld;  John Ruedy, MD, received
22,755,444  votes in favor and 298,678 votes withheld;  and Mike Sember received
22,754,544 in favor and 299,578 votes withheld. Shares voted totaled 23,054,122.

         Amend Articles of  Incorporation  to provide for a classified  Board of
Directors  proposal.  The proposal passed  receiving  11,482,799 votes in favor,
984,275 votes against and 224,766 votes abstaining, out of shares voted totaling
12,691,840.

         Amend Articles of  Incorporation  to require a  super-majority  vote to
later amend certain  provisions of the Articles of Incorporation  proposal.  The
proposal passed receiving 10,804,277 votes in favor,1,667,206  votes against and
220,357 votes abstaining, out of shares voted totaling 12,691,840.

        Amend  the 1992  Stock  Option  Plan to  increase  the  number of shares
available for issuance under the plan proposal.  The proposal  passed  receiving
10,615,225 votes in favor,1,208,791  votes against and 144,947 votes abstaining,
out of shares voted totaling 11,968,963.

       There were 28,449,558 common shares  outstanding as of the date of record
of July 24, 1998.

Item 5.   Other Information

          None during the quarter ended September 30, 1998.

Item 6.   Exhibits and Reports on Form 8-K

          EXHIBITS:

             10.61 Employment Contract between Bioject JV Subsidiary Inc. and
                   Bradley J. Enegren.

             10.62 Confidentiality/Inventions/Noncompetition Agreement between
                   Bioject JV Subsidiary Inc. and Bradley J. Enegren

             27.1  Financial Data Schedule

           REPORTS ON FORM 8K:

            None during the quarter ended September 30, 1998
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.

                                    BIOJECT MEDICAL TECHNOLOGIES INC.
                                    (Registrant)

Date:  November 13, 1998            /S/ James O'Shea
                                    ---------------------------------
                                    James O'Shea
                                    Chairman, Chief Executive Officer
                                    and President

                                    /S/ Michael A. Temple
                                    ---------------------------------
                                    Michael A. Temple
                                    Vice President and Chief Financial Officer
EXHIBIT INDEX

EXHIBIT
NUMBER         EXHIBIT DESCRIPTION

10.61     Employment Contract between Bioject JV Subsidiary Inc. and
          Bradley J. Enegren.

10.62     Confidentiality/Inventions/Noncompetition Agreement between 
          Bioject JV Subsidiary Inc. and Bradley J. Enegren

27.1      Financial Data Schedule