content: Page 1 of 5 pages
                                                          Exhibit Index at page 4
  
  
  
  
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
  
  
  
                                      FORM 8-K
  
  
  
                                   CURRENT REPORT
  
  
  
       Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
  
  
          Date of Report (date of earliest event reported): March 21, 1996
  
  
                             MOLECULAR BIOSYSTEMS, INC.
               (Exact name of registrant as specified in its charter)
  
  
  
                            Delaware 1-10546 36-30878632
                (State or other juris- (Commission file (IRS employer
              diction of incorporation) number) identification number)
  
  
  
                10030 Barnes Canyon Road, San Diego, California 92121
                      (Address of principal executive offices)
  
  
  
         Registrant's telephone number, including area code: (619) 452-0681
  
  
  
  <PAGE>
  
  Item 5.  Other Events
  
           On March 21, 1996, Molecular Biosystems, Inc. (the "Company") announced
  that it and Shionogi & Co., Ltd.  ("Shionogi")  of Osaka,  Japan,  had exchanged
  notices of breach of their License and Cooperative  Development  Agreement dated
  March 1988 (the  "Agreement").  The  Company  also  announced  that it had given
  notice of Shionogi's  failure to make its first annual minimum payment under the
  Agreement.
  
           As  reported  in the  Company's  Quarterly  Report on Form 10-Q for the
  quarter ended  December 31, 1995,  the Company and Shionogi had been  discussing
  the possibility of terminating the Agreement. They were unable to agree on terms
  for cancellation of the Agreement,  and on February 9, 1996, and March 20, 1996,
  respectively,  Shionogi  and  the  Company  served  notices  of  breach  of  the
  Agreement.  The  Company's  notice of breach  claims,  among  other  things that
  Shionogi  violated its  obligations  to diligently  pursue the  development  and
  distribution  of  ALBUNEX(R)   products  in  Shionogi's   exclusive   territory,
  consisting of Japan,  Taiwan and South Korea.  Shionogi's  notice to the Company
  claims, among other things, that the Company failed to supply ALBUNEX(R) meeting
  adequate "quality" standards.
  
           The Company has denied all of the  breaches  claimed by  Shionogi.  The
  product sent to Shionogi at all times met the  Agreement's  specifications.  The
  Company intends to pursue termination of its relationship with Shionogi on terms
  acceptable to the Company,  thus enabling the Company to seek a new  distributor
  for  ALBUNEX(R)  and related  products in the  territory  currently  licensed to
  Shionogi.  The Company is uncertain whether it will be successful in terminating
  its relationship with Shionogi on acceptable terms.  Among the important factors
  that  could  lead  to  an   unsatisfactory   termination   would  be  Shionogi's
  unwillingness  to agree to acceptable  terms, and adverse results in arbitration
  proceedings  concerning  the  parties'  alleged  breaches or defaults  under the
  Agreement.
  
           Under the  Agreement,  the  parties  have 60 days  following  notice of
  claimed  breach either to remedy the breach or to diligently  pursue  reasonable
  steps toward  remedying the breach.  The Company is uncertain  whether  Shionogi
  will cure its breaches of the  Agreement  prior to the  expiration of its 60-day
  cure period or whether the dispute might otherwise be resolved during this time.
  In the  event  of  unresolved  disputes,  the  Agreement  calls  for  commercial
  arbitration in New York, although neither party has demanded arbitration at this
  time.
  
           In the  fiscal  year  ended  March 31,  1995,  the  Company's  sales of
  ALBUNEX(R) to Shionogi were  $700,000;  in fiscal 1996,  sales to date have been
  $250,000.  Shionogi has  continued  to purchase  ALBUNEX(R) , placing its latest
  order March 5, 1996.
  
           This Form 8-K contains  forward-looking  statements  that involve risks
  and  uncertainties.  The actual  results of the dispute could differ  materially
  from those discussed.
  
           A copy of the press release that the Company  issued on March 21, 1996,
  to announce this mater is attached to this Report as Exhibit 10.1.
  
  
  <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 hereunto duly authorized.
  
           Date:  March 21, 1996
  
           Molecular Biosystems, Inc.
  
  
  
  
           By:_________________________________
              Steven Lawson
              Vice President, Legal Affairs
  
  
  <PAGE>
  
  
  
                                    Exhibit Index
  
  
                                                                     Sequentially
                                                                       Numbered
  Exhibit           Description                                          Page
  
  
    10.1            Press release (March 22, 1996)                         5
  
  
  
  <PAGE>
  
  
                                    NEWS RELEASE
  
                     Molecular Biosystems Announces Exchange of
                      Breach Notices with Shionogi & Co., Ltd.
  
  San Diego,  California,  March 22, 1996 -- Molecular Biosystems,  Inc. (NYSE:MB)
  (MBI) today  announced  that it and Shionogi & Co., Ltd. of Osaka,  Japan,  have
  exchanged  notices  of  breach  of their  License  and  Cooperative  Development
  Agreement  dated  March 1988.  MBI also  announced  that it had given  notice of
  Shionogi's failure to make its first annual minimum payment under the Agreement.
  
  The  parties  have  been  unable  to  agree  on terms  for  cancellation  of the
  Agreement,  and on February 9, 1996 and March 21, 1996,  respectively,  Shionogi
  and MBI  served  notices  of breach  of the  Agreement.  MBI's  notice of breach
  claims,   among  others  things,  that  Shionogi  violated  its  obligations  to
  diligently  pursue the  development and  distribution of ALBUNEX(R)  products in
  Shionogi's  exclusive  territory,  consisting of Japan, Taiwan, and South Korea.
  Shionogi's notice to MBI claims,  among other things,  that MBI failed to supply
  ALBUNEX(R) meeting adequate "quality" standards.
  
  MBI has denied all of the breaches claimed by Shionogi. Kenneth J. Widder, MBI's
  Chairman and Chief Executive  Officer  stated,  "The product sent to Shionogi at
  all times met the Agreement's specifications.  MBI intends to pursue termination
  of its relationship  with Shionogi on terms acceptable to MBI, thus enabling MBI
  to seek another  company to distribute  ALBUNEX(R) and to diligently  pursue the
  development of FS069 in the territories currently licensed to Shionogi."
  
  In the fiscal year ended March 31, 1995,  MBI's sales of  ALBUNEX(R) to Shionogi
  were $700,000;  in fiscal 1996,  sales to date have been $250,000.  Shionogi has
  continued to purchase ALBUNEX(R), placing its latest order March 5, 1996.
  
  This news release  contains  forward-looking  statements that involves risks and
  uncertainties.  The actual  results of the dispute  described  herein may differ
  materially  from  those  discussed.  Among the  factors  that  could  lead to an
  unsatisfactory  termination  would  be  Shionogi's  unwillingness  to  agree  to
  acceptable  terms,  or adverse  results in arbitration  proceedings,  if any. No
  arbitration demands have been filed by either party to date.
  
  Molecular Biosystems, Inc., based in San Diego, California, is a world leader in
  the development of ultrasound  contrast agents for medical imaging.  ALBUNEX(R),
  the first FDA approved  ultrasound  imaging  agent is currently  marketed in the
  United States by Mallinckrodt Medical, Inc.  (Mallinckrodt Group Inc. NYSE:MKG).
  MBI shares are listed on the New York Stock Exchange under the symbol "MB."
  
  Investor Contacts:         Gerard A. Wills, Chief Financial Officer
                             Stephen F. Keane, Director, Investor Relations
                             619 824-2212
metadata_documents: [{"type": "8-K", "sequence": "1", "description": "FORM 8-K", "secsgml_size_bytes": 8072}]
metadata_filer: {"company-data": {"conformed-name": "MOLECULAR BIOSYSTEMS INC", "cik": "0000719598", "assigned-sic": "2835", "irs-number": "363078632", "state-of-incorporation": "DE", "fiscal-year-end": "0331"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-12648", "film-number": "96538479"}, "business-address": {"street1": "10030 BARNES CANYON RD", "city": "SAN DIEGO", "state": "CA", "zip": "92121-2789", "phone": "6194520681"}, "mail-address": {"street1": "10030 BARNES CANYON ROAD", "city": "SAN DIEGO", "state": "CA", "zip": "92121"}}
text: Page 1 of 5 pages
                                                          Exhibit Index at page 4
  
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
  
       Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
          Date of Report (date of earliest event reported): March 21, 1996
  
                             MOLECULAR BIOSYSTEMS, INC.
               (Exact name of registrant as specified in its charter)
  
                            Delaware 1-10546 36-30878632
                (State or other juris- (Commission file (IRS employer
              diction of incorporation) number) identification number)
  
                10030 Barnes Canyon Road, San Diego, California 92121
                      (Address of principal executive offices)
  
         Registrant's telephone number, including area code: (619) 452-0681
  Item 5.  Other Events
  
           On March 21, 1996, Molecular Biosystems, Inc. (the "Company") announced
  that it and Shionogi & Co., Ltd.  ("Shionogi")  of Osaka,  Japan,  had exchanged
  notices of breach of their License and Cooperative  Development  Agreement dated
  March 1988 (the  "Agreement").  The  Company  also  announced  that it had given
  notice of Shionogi's  failure to make its first annual minimum payment under the
  Agreement.
  
           As  reported  in the  Company's  Quarterly  Report on Form 10-Q for the
  quarter ended  December 31, 1995,  the Company and Shionogi had been  discussing
  the possibility of terminating the Agreement. They were unable to agree on terms
  for cancellation of the Agreement,  and on February 9, 1996, and March 20, 1996,
  respectively,  Shionogi  and  the  Company  served  notices  of  breach  of  the
  Agreement.  The  Company's  notice of breach  claims,  among  other  things that
  Shionogi  violated its  obligations  to diligently  pursue the  development  and
  distribution  of  ALBUNEX(R)   products  in  Shionogi's   exclusive   territory,
  consisting of Japan,  Taiwan and South Korea.  Shionogi's  notice to the Company
  claims, among other things, that the Company failed to supply ALBUNEX(R) meeting
  adequate "quality" standards.
  
           The Company has denied all of the  breaches  claimed by  Shionogi.  The
  product sent to Shionogi at all times met the  Agreement's  specifications.  The
  Company intends to pursue termination of its relationship with Shionogi on terms
  acceptable to the Company,  thus enabling the Company to seek a new  distributor
  for  ALBUNEX(R)  and related  products in the  territory  currently  licensed to
  Shionogi.  The Company is uncertain whether it will be successful in terminating
  its relationship with Shionogi on acceptable terms.  Among the important factors
  that  could  lead  to  an   unsatisfactory   termination   would  be  Shionogi's
  unwillingness  to agree to acceptable  terms, and adverse results in arbitration
  proceedings  concerning  the  parties'  alleged  breaches or defaults  under the
  Agreement.
  
           Under the  Agreement,  the  parties  have 60 days  following  notice of
  claimed  breach either to remedy the breach or to diligently  pursue  reasonable
  steps toward  remedying the breach.  The Company is uncertain  whether  Shionogi
  will cure its breaches of the  Agreement  prior to the  expiration of its 60-day
  cure period or whether the dispute might otherwise be resolved during this time.
  In the  event  of  unresolved  disputes,  the  Agreement  calls  for  commercial
  arbitration in New York, although neither party has demanded arbitration at this
  time.
  
           In the  fiscal  year  ended  March 31,  1995,  the  Company's  sales of
  ALBUNEX(R) to Shionogi were  $700,000;  in fiscal 1996,  sales to date have been
  $250,000.  Shionogi has  continued  to purchase  ALBUNEX(R) , placing its latest
  order March 5, 1996.
  
           This Form 8-K contains  forward-looking  statements  that involve risks
  and  uncertainties.  The actual  results of the dispute could differ  materially
  from those discussed.
  
           A copy of the press release that the Company  issued on March 21, 1996,
  to announce this mater is attached to this Report as Exhibit 10.1.
  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 hereunto duly authorized.
  
           Date:  March 21, 1996
  
           Molecular Biosystems, Inc.
  
           By:_________________________________
              Steven Lawson
              Vice President, Legal Affairs
  Exhibit Index
  
                                                                     Sequentially
                                                                       Numbered
  Exhibit           Description                                          Page
  
    10.1            Press release (March 22, 1996)                         5
  NEWS RELEASE
  
                     Molecular Biosystems Announces Exchange of
                      Breach Notices with Shionogi & Co., Ltd.
  
  San Diego,  California,  March 22, 1996 -- Molecular Biosystems,  Inc. (NYSE:MB)
  (MBI) today  announced  that it and Shionogi & Co., Ltd. of Osaka,  Japan,  have
  exchanged  notices  of  breach  of their  License  and  Cooperative  Development
  Agreement  dated  March 1988.  MBI also  announced  that it had given  notice of
  Shionogi's failure to make its first annual minimum payment under the Agreement.
  
  The  parties  have  been  unable  to  agree  on terms  for  cancellation  of the
  Agreement,  and on February 9, 1996 and March 21, 1996,  respectively,  Shionogi
  and MBI  served  notices  of breach  of the  Agreement.  MBI's  notice of breach
  claims,   among  others  things,  that  Shionogi  violated  its  obligations  to
  diligently  pursue the  development and  distribution of ALBUNEX(R)  products in
  Shionogi's  exclusive  territory,  consisting of Japan, Taiwan, and South Korea.
  Shionogi's notice to MBI claims,  among other things,  that MBI failed to supply
  ALBUNEX(R) meeting adequate "quality" standards.
  
  MBI has denied all of the breaches claimed by Shionogi. Kenneth J. Widder, MBI's
  Chairman and Chief Executive  Officer  stated,  "The product sent to Shionogi at
  all times met the Agreement's specifications.  MBI intends to pursue termination
  of its relationship  with Shionogi on terms acceptable to MBI, thus enabling MBI
  to seek another  company to distribute  ALBUNEX(R) and to diligently  pursue the
  development of FS069 in the territories currently licensed to Shionogi."
  
  In the fiscal year ended March 31, 1995,  MBI's sales of  ALBUNEX(R) to Shionogi
  were $700,000;  in fiscal 1996,  sales to date have been $250,000.  Shionogi has
  continued to purchase ALBUNEX(R), placing its latest order March 5, 1996.
  
  This news release  contains  forward-looking  statements that involves risks and
  uncertainties.  The actual  results of the dispute  described  herein may differ
  materially  from  those  discussed.  Among the  factors  that  could  lead to an
  unsatisfactory  termination  would  be  Shionogi's  unwillingness  to  agree  to
  acceptable  terms,  or adverse  results in arbitration  proceedings,  if any. No
  arbitration demands have been filed by either party to date.
  
  Molecular Biosystems, Inc., based in San Diego, California, is a world leader in
  the development of ultrasound  contrast agents for medical imaging.  ALBUNEX(R),
  the first FDA approved  ultrasound  imaging  agent is currently  marketed in the
  United States by Mallinckrodt Medical, Inc.  (Mallinckrodt Group Inc. NYSE:MKG).
  MBI shares are listed on the New York Stock Exchange under the symbol "MB."
  
  Investor Contacts:         Gerard A. Wills, Chief Financial Officer
                             Stephen F. Keane, Director, Investor Relations
                             619 824-2212