BIOJECT MEDICAL TECHNOLOGIES INC, 10-K405, 1996-06-27

BIOJECT MEDICAL TECHNOLOGIES INC
10-K405, 1996-06-27
SURGICAL & MEDICAL INSTRUMENTS & APPARATUS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________

FORM 10-K
(Mark one)

[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended March 31, 1996

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from __________ to ________

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)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered
None None

Securities registered pursuant to Section 12(g) of the Act:

Title of Class
Common Stock, no par value

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]

State the aggregate market value of voting stock held by non-affiliates
of the registrant, as of May 31, 1996: $18,338,321

Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of May 31, 1996: Common Stock, no par value,
15,585,232 shares.
Documents Incorporated by Reference:

Portions of the registrant's definitive Proxy Statement for the 1996 Annual
Shareholders' Meeting are incorporated by reference into Part III

<PAGE>

Table of Contents

PART I

Item 1. Business

Item 2. Properties

Item 3. Legal Proceedings

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

PART II

Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters

Item 6. Selected Consolidated Financial Data

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations

Item 8. Consolidated Financial Statements and Supplementary Data

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure

PART III

Item 10. Directors and Executive Officers of the Registrant

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and
Management

Item 13. Certain Relationships and Related Transactions

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K

<PAGE>
PART I

ITEM 1. BUSINESS

FORWARD-LOOKING STATEMENTS

Certain statements in this Report constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. 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, among others, those described under
"Business -- Risk Factors."

GENERAL

Bioject Medical Technologies Inc. ("Bioject" or the "Company")
develops, manufactures and markets a jet injection system for needle-free
drug delivery. Using this technology for injections virtually eliminates the
associated risk of contaminated needlestick injuries and resulting blood-
borne pathogen transmission, a major concern throughout the healthcare
industry. The Company manufactures and markets a professional jet injection
system, the Biojector (registered trademark) 2000, which allows healthcare
professionals to inject medications through the skin, both intramuscularly
in the deltoid muscle and subcutaneously, without a needle. The Biojector
2000 system consists of two components: a hand-held, reusable jet-injector
(the "Biojector 2000"); and a sterile, single-use disposable syringe
("Biojector syringe"). The system is capable of delivering variable dose
needle-free injections up to 1 ml. Additionally, the Company is developing a
self-injection system for delivery of Betaseron (registered trademark) to
multiple sclerosis patients pursuant to an agreement with Schering AG,
Germany, signed March 28, 1994 and the Company is also developing systems
for Hoffmann-La Roche to use with certain of their products pursuant to an
agreement signed January 10, 1995. See "Research and Product Development."

Currently, medications are administered using various methods, each of
which has advantages and limitations. The leading drug delivery techniques
include oral ingestion, intravenous infusion, subcutaneous and intramuscular
injection, inhalation and transdermal diffusion "patch." Many drugs are
effective only when administered by injection. Studies indicate that there
are more than four billion needle-syringes sold annually in the U.S. The
Company believes that approximately 80% of these syringes are used for
subcutaneous or intramuscular injections up to 1 ml. The deltoid muscle is
the location of choice for intramuscular injections up to 1 ml.

Injections using traditional needle-syringes suffer from many
shortcomings including (i) the risk of needlestick injuries, (ii) the risk
of penetrating a patient's vein and (iii) patients' aversion to needles and
discomfort. The most important of these, the contaminated needlestick
injury, occurs when a needle that has been exposed to a patient's blood
accidentally penetrates a healthcare worker's skin. Contaminated needles
can transmit deadly blood-borne pathogens including such viruses as HIV and
hepatitis B. Published data indicate that the total number of reported
needlestick injuries in the U.S. exceeds 800,000 annually.

In recent years, with the growing awareness of blood-borne pathogen
transmission, safety has become a critical concern for hospitals and
healthcare professionals as well as patients. As a result, pressures on the
healthcare industry to eliminate the risk of contaminated needlestick
injuries have increased. For example, the U.S. Occupational Safety and
Health Administration ("OSHA") issued regulations, effective in 1992, which
require healthcare institutions to treat all blood and other body fluids
as infectious. These regulations require the implementation of "engineering
and work practice controls" to "isolate or remove the blood-borne pathogens
hazard from the workplace." Among the required controls are special
handling and disposal of contaminated "sharps" in biohazardous "sharps"
containers and follow-up testing for victims of needlestick injuries. These
regulations have significantly increased the cost of using needle-syringes.

The costs resulting from needlestick injuries vary widely.
Uncontaminated needlesticks involve relatively little cost, while
investigating and following up contaminated needlestick injuries are much
more expensive. Investigation typically includes identifying the source of
contamination, testing the source for blood-borne pathogens and repeatedly
testing the needlestick victim over an extended period. Some healthcare
providers are requiring additional measures, including presuming that all
needlestick injuries involve contaminated needles unless proven otherwise
and, under certain circumstances, administering prophylactic treatment such
as zidovudine (AZT) or other drugs. The costs associated with treating
needlestick injuries that result in infection by life-threatening pathogens,
such as HIV or hepatitis B, are dramatically higher. In an effort to protect
healthcare workers from needlestick injuries, healthcare facilities have
started adopting more expensive, alternative technologies. One such
technology is an intravenous ("IV") port that permits the injection of
medication directly into the IV line without requiring the use of a sharp
needle for each administration. Another is the "safety syringe," generally
a disposable needle-syringe with a plastic sheath mechanism intended to
cover the needle after use. Despite many efforts to reduce the risk of
needlestick injuries, such injuries remain a major health concern.

The Company's long-term goal is to establish its jet injection
technology as the preferred drug delivery method for all medications
administered by intramuscular or subcutaneous injection. The Company
currently markets the Biojector 2000 system to hospitals, large clinics, and
physician offices, is developing a self-injection device for the delivery of
Betaseron to be marketed by Schering AG and is developing application
specific devices to be marketed by Hoffmann-La Roche. The Company is also
seeking relationships with pharmaceutical and biotechnology companies to
develop other application specific devices and companion syringes.

THE COMPANY

The Company's operations are conducted by Bioject Inc., an Oregon
corporation, which is a wholly owned subsidiary of Bioject Medical Systems
Ltd. Bioject Medical Systems Ltd., a Company organized under the laws of
British Columbia, Canada, is, in turn, wholly owned by Bioject Medical
Technologies Inc., an Oregon corporation (the "Company").

Although Bioject Inc. commenced operations in 1985, the Company was
formed in December 1992 for the sole purpose of acquiring all the capital
stock of Bioject Medical Systems Ltd. in a stock-for-stock exchange in order
to establish a U.S. domestic corporation as the publicly traded parent
company for Bioject Inc. and Bioject Medical Systems Ltd. All references to
the Company herein are to Bioject Medical Technologies Inc. and its
subsidiaries, unless the context requires otherwise. The Company's
executive offices and operations are located at 7620 SW Bridgeport Road,
Portland, Oregon 97224, and its telephone number is (503) 639-7221.

"Biojector" and "Bioject" are trademarks of the Company.

DESCRIPTION OF THE COMPANY'S PRODUCTS

The Company's current product, the Biojector 2000 system, is a
refinement of jet injection technology that enables healthcare professionals
to reliably deliver measured variable doses of medication through the skin,
either intramuscularly to the deltoid muscle or subcutaneously, without a
needle. Giving an injection with a Biojector 2000 system is easy and
straightforward. The healthcare worker checks the CO2 pressure on the easy-
to-read gauge at the rear of the injector, draws up medication into the
plastic syringe discarding the fill needle in a sharps container, inserts
the syringe into the power injector, presses the syringe tip against the
appropriate disinfected surface on the patient's skin, and then presses an
actuator thereby injecting the medication. Medication is expelled rapidly
through a precision molded, small diameter orifice in a thin stream at a
velocity sufficient to penetrate the skin and force the medication into the
tissue at the desired level. The Biojector 2000 system consists of two
components: a hand-held, reusable jet injector; and a sterile, single-use
disposable plastic syringe capable of delivering variable doses of
medication up to 1 ml.

The first component, the Biojector 2000, is a portable hand-held unit
(about the size of a flashlight) which is designed to be easy to use by
healthcare professionals, as well as attractive and non-threatening to
patients. As described in the June 7, 1993 issue of BUSINESSWEEK, the
Biojector 2000 won the 1993 Gold Industrial Design Excellence Award given by
Industrial Designers Society of America for its aesthetically pleasing and
ergonomic design. In July 1994, the Biojector 2000 also received the
Alliance of Children's Hospitals Seal of Approval. The Biojector 2000
injector uses disposable CO2 cartridges as a power source. The CO2
cartridges, which are purchased by the Company from an outside supplier,
give an average of ten injections before requiring replacement. The CO2 gas
provides consistent, reliable pressure in order to push the syringe plunger
and thereby propel the medication. The CO2 does not come into contact with
the patient or medication.

The second component, the Biojector single-use disposable syringe, is
provided in a sterile, peel-open package and consists of a plastic, needle-
free, variable dose syringe containing a plunger, accompanied by a needle
used only for filling. The body of the syringe is transparent and has
graduated markings to aid filling by healthcare workers in the same way as
traditional needle-syringes are filled. However, unlike the traditional
needle-syringe, the Biojector fill needle is designed to be immediately
discarded in a "sharps" container as soon as the syringe is filled, so that
a needle need never come near a patient when an injection is being given.
More importantly, since no needle penetrates the patient's skin, the risk of
contaminated needlestick injury is virtually eliminated. Under OSHA
regulations, used Biojector syringes need not be disposed of in a special
biohazardous "sharps" container.

There are five different Biojector syringes, each of which is intended
for a different injection depth or body type. The syringes are molded using
the Company's patented manufacturing process. The healthcare worker selects
the syringe appropriate for the intended type of injection. One syringe
size is for subcutaneous injections, while the others are designed for
intramuscular injections, depending on the patient's age and body
characteristics.

The current suggested retail list price for the Biojector 2000
professional jet injector is $995, and the suggested retail list price for
syringes is $1.00 a piece. CO2 cartridges are sold for a suggested retail
price of $0.50 per cartridge and average ten injections per cartridge.
Discounts are offered for volume purchases.

The Company has other products in development which are intended to
address other markets or to enhance the Biojector 2000 system. See
"Research and Product Development."

INDUSTRY BACKGROUND

In 1836, LaForgue developed the concept of placing medicine under the
skin by means of a needle lance trochar. In 1853, Wood developed the
hollow-needle hypodermic which was later improved by Hunter, Pravaz and many
others. The basic needle-syringe in use across the healthcare market today
is a direct derivation from the original Wood design and involves a hollow
steel needle of various diameters and lengths attached to a plastic syringe
body and plunger. The entire unit requires special handling and disposal.

The next fundamental improvement in injection technique for parenteral
administration was made approximately 100 years following Wood's development
of the hollow-needle hypodermic. This improvement was the development of a
pneumatically powered hypodermic device which was capable of injecting
medication through the skin without a needle. These early needle-free
injection devices were large and bulky devices which lent themselves to mass
inoculations but were inappropriate for single-shot administrations of
medication in the physician's office, hospital or in the home setting.

During the last 20 years, there have been many attempts to develop
portable one-shot needle-free hypodermic devices. Some of the problems
which arose in these attempts to develop such devices include: (a)
inadequate injection power; (b) little or no control of pressure and depth
of penetration; (c) complexity of design with related difficulties in cost
and performance; (d) difficulties in use, including filling and cleaning;
and (e) the necessity for sterilization between patients.

In recent years, several spring-driven needle-free injectors have been
developed and marketed primarily for the injection of insulin. Each of
these devices requires regular cleaning as well as filling from a separate
medication bottle or vial. Current prices for such injectors range from
approximately $400 to $800 per injector. The Company believes that due to
the cost combined with the difficulties of use, market acceptance of these
devices has been limited.

Also in recent years, various versions of a "safety syringe" have been
designed and marketed. These syringes generally involve as their basic
design a standard or modified needle-syringe with a plastic guard or
sheathing surrounding the needle. Such covering is usually retracted or
removed in order to give the injection. Although the intent of the safety
syringes is to reduce or eliminate needlestick injuries, the syringes
require manipulation after injection and, therefore, still pose the risk
of needlestick injury. They are also bulky and add to contaminated waste
disposal problems.

MARKETING AND COMPETITION

The Company is currently focusing on gaining acceptance of the
Biojector system in the U.S. hospital and large clinic markets. The Company
is also working on arrangements to market the Biojector 2000 system to the
U.S. physician office market and the home healthcare market. The Company
plans eventually to expand into international markets. Different marketing
and distribution approaches are required in each of these markets. As new
products are developed, the Company intends to establish additional channels
of distribution. For example, the Company is developing an injection system
for self-injection by multiple sclerosis patients which is anticipated to be
marketed by Schering AG, and the Company is developing an injection system
for specific applications which is anticipated to be marketed by Hoffmann-La
Roche. Pre-filled Biojector syringes, if developed, would be filled and
marketed by the pharmaceutical or biotechnology companies involved.

The Company employs up to nine sales representatives to be a dedicated
sales force to sell the Company's Biojector 2000 system directly to the
hospital and large clinic markets in key metropolitan areas. Bioject's
direct and national account sales efforts have resulted in the signing of
pricing agreements with certain large group purchasing organizations. Other
than VNAA members, the Company has not had material sales under these
agreements. In addition to signing these agreements, the Company has
received the "Seal of Approval" from the Children's Health Alliance.

In August 1994, Bioject signed an agreement with Homecare Management,
Inc. (HMI), granting HMI exclusive rights to purchase Bioject's Needle-Free
Injection Management System, the Biojector 2000, for use in the home
healthcare market. Sales to HMI commenced in August 1994. In return for
HMI's commitment to purchase a minimum of 8,000 Biojector units over the
ensuing two years, the Company granted volume pricing discounts to HMI.
Throughout the term of the contract the selling price of Biojectors to HMI
exceeded their standard cost. During fiscal 1995 and 1996, the Company sold
approximately 2,100 and 4,300 Biojectors to HMI for total sales revenue
including syringes of $1.1 million and $2.2 million, respectively. HMI had
not placed the great majority of these Biojectors with patients pending
completion of negotiations with pharmaceutical companies for certain pricing
concessions for medication to be administered with the Biojectors. In
January 1996, HMI requested that further shipments under the contract be
suspended. In February 1996, the Company learned from HMI's press releases
that HMI expected to default under its loan, to take significant write-offs
for accounts receivable and inventories, planned operational consolidations,
and would restate certain prior period financial statements. Subsequent to
year end, the Company agreed to repurchase certain of the Biojector
inventories (including up to 6,000 devices) which HMI had on hand for a
total of $660,000 including $322,000 of forgiveness of accounts receivable
and payment of $338,000 in two installments, one-half each in July and
October 1996. The Company was under no obligation to repurchase these
inventories, and the repurchase is at a substantial discount to the original
selling price to HMI.

In January 1995, the Company signed a distribution agreement with
General Injectables & Vaccines, Inc. (GIV) for distribution of Bioject
products to office-based physicians. In September 1995, this program was
terminated and all consigned inventory was returned to the Company.

The sale of new technologies to hospitals and large clinics can be a
lengthy process. Introduction of new technologies to a hospital or large
clinic typically involves screening by many individuals and committees
within the institution, including new product evaluation committees,
infection control officers, medical staff and business office personnel. In
order to shorten the sales cycle, the Company has adopted a strategy that
focuses initially on one or two departments, such as the outpatient clinic
or pediatric specialty unit, that have high volumes of injections. The
Company determines the dynamics driving a sale at each institution, such as:
risk management, budgetary restraints and needs. Bioject sales
representatives then arrange for hospital personnel to conduct a one to two-
week Biojector 2000 evaluation. Bioject sales personnel are present during
the in-service training and much of the evaluation process. During each
evaluation, Company sales representatives submit sales proposals to the
customer.

The medical equipment market is highly competitive, and competition is
likely to intensify. Many of the Company's existing and potential
competitors have been in business longer than the Company and have
substantially greater technical, financial, marketing, sales and customer
support resources. The Company believes the primary competition for the
Biojector 2000 system and other jet injectors it may develop is the
traditional disposable needle-syringe and the "safety syringe." Leading
suppliers of needle-syringes include: Becton-Dickinson & Co., Sherwood
Medical Co., a subsidiary of American Home Products Corp., and Terumo Corp.
of Japan. Manufacturers of traditional needle-syringes compete primarily on
price, which generally ranges from approximately $0.10 to $0.20 per unit.
Manufacturers of "safety syringes" compete on features, quality and price.
"Safety syringes" generally are priced in a range of $0.25 to $0.45 per
unit.

The Company expects to compete with traditional needle-syringes and
"safety syringes" based on healthcare worker safety, ease of use, reduced
cost of disposal, patient comfort, and compliance with OSHA regulations, but
not on purchase price. However, the Company believes that when all indirect
costs (including disposal of syringes and testing, treatment and workers'
compensation expense related to needlestick injuries) are considered, the
Biojector 2000 system will compete effectively. See "Forward Looking
Statements" and "Risk Factors."

The Company is not aware of any competing products with features and
benefits comparable to the Biojector 2000 system. Manufacturers of needle-
syringes, as well as other companies, may develop new products that compete
directly or indirectly with the Company's products. There can be no
assurance that the Company will be able to compete successfully in this
market. See "Risk Factors - Competition," "- Dependence on Single
Technology." A variety of new technologies (for example, transdermal
patches) are being developed as alternatives to injection for drug delivery.
While the Company does not believe such technologies have significantly
affected the use of injection for drug delivery to date, there can be no
assurance that they will not do so in the future.

PATENTS AND PROPRIETARY RIGHTS

The Company believes that technology incorporated in its injection
device, single-dose disposable plastic syringes and products under
development gives it significant advantages over the manufacturers of other
jet injection systems and over prospective competitors seeking to develop
similar systems. The Company attempts to protect its technology through a
combination of trade secrets, confidentiality agreements and procedures and
patent prosecution.

The Company has three U.S. patents which were filed with respect to jet
injection technology incorporated in earlier versions of its jet injection
systems and which expire from July 2007 to November 2008. Six additional
U.S. patents have been issued which protect developments incorporated in the
Biojector 2000 system. These patents incorporate a number of claims
including claims regarding the jet injection system's design, method of
operation, certain aspects of the syringe design and the method of
manufacturing the syringe orifice. The Company has also been granted
patents relating to an electronic self-injection device and a drug mixing
vial, newer technologies not yet incorporated in any product. The Company
has made additional patent filings regarding pre-filled syringe technologies
and adapters for drug vial access. The Company also generally files patent
applications in Canada, Europe and Japan at the times and under the
circumstances it deems filing to be appropriate under the procedures in
place in each jurisdiction. There can be no assurance that any patents
applied for will be granted or that patents held by the Company will be
valid or sufficiently broad to protect the Company's technology or provide a
significant competitive advantage. See "Risk Factors."

The Company also relies on trade secrets and proprietary know-how that
it seeks to protect through confidentiality agreements with its employees,
consultants, suppliers and others. There can be no assurance that these
agreements will not be breached, that the Company would have adequate
remedies for any breach, or that the Company's trade secrets will not
otherwise become known to or be developed independently by competitors. In
addition, the laws of foreign countries may not protect the Company's
proprietary rights to its technology, including patent rights, to the same
extent as the laws of the U.S.

Although the Company believes that it has independently developed its
technology and attempts to assure that its products do not infringe the
proprietary rights of others, if infringement were alleged and proved, there
can be no assurance that the Company could obtain necessary licenses on
terms and conditions that would not have an adverse affect on the Company.
The Company is not aware of any asserted claim that the Biojector 2000 or
any product under development violates the proprietary rights of any person.

If a dispute arises concerning the Company's technology, litigation
that could result in substantial cost to and diversion of effort by the
Company might be necessary to enforce the Company's patents, to protect the
Company's trade secrets or know-how or to determine the scope of the
proprietary rights of others. Adverse findings in any proceeding could
subject the Company to significant liabilities to third parties, require the
Company to seek licenses from third parties or otherwise adversely affect
the Company's ability to manufacture and sell its products.

GOVERNMENTAL REGULATION

The Company's products and manufacturing operations are subject to
extensive government regulations, both in the U.S. and abroad. In the U.S.,
the Food and Drug Administration ("FDA") administers the Federal Food, Drug
and Cosmetic Act (the "FFDCA") and has adopted regulations, including those
governing the introduction of new medical devices, the observation of
certain standards and practices with respect to the manufacturing and
labeling of medical devices, the maintenance of certain records and the
reporting of device-related deaths, serious injuries, and certain
malfunctions to the FDA. Manufacturing facilities and certain Company
records are also subject to FDA inspections. The FDA has broad discretion in
enforcing the FFDCA and the regulations thereunder, and noncompliance can
result in a variety of regulatory steps ranging from warning letters,
product detentions, device alerts or field corrections to mandatory recalls,
seizures, injunctive actions and civil or criminal penalties.

The FFDCA provides that, unless exempted by regulation, medical devices
may not be commercially distributed in the U.S. unless they have been
cleared or approved by the FDA. The FFDCA provides two basic review
procedures for pre-market clearance or approval of medical devices. Certain
products qualify for a submission authorized by Section 510(k) of the FFDCA,
wherein the manufacturer provides the FDA with a premarket notification
("510(k) notification") of the manufacturer's intention to commence
marketing the product. The manufacturer must, among other things, establish
in the 510(k) notification that the product to be marketed is substantially
equivalent to another legally marketed product, (i.e., that it has the same
intended use and that it as safe and effective as a legally marketed device
and does not raise questions of safety and effectiveness that are different
from those associated with the legally marketed device). Marketing may
commence when the FDA issues a letter finding substantial equivalence to
such a legally marketed device. The FDA may require, in connection with the
510(k) submission, that it be provided with animal and/or human test
results. If a medical device does not qualify for the 510(k) procedure, the
manufacturer must file a premarket approval ("PMA") application. A PMA must
show that the device is safe and effective and is generally a much more
complex submission than a 510(k) notification typically requiring more
extensive prefilling testing and a longer FDA review process.

A 510(k) notification is required when a device is being introduced
into the market for the first time. A 510(k) notification is also required
when the manufacturer makes a change or modification to an already marketed
device that could significantly affect safety or effectiveness, or where
there is a major change or modification in the intended use of the device.
When any change or modification is made in a device or its intended use, the
manufacturer is expected to make the initial determination as to whether the
change or modification is of a kind that would necessitate the filing of a
new 510(k) notification. The FDA's regulations provide only limited
guidance in making this determination.

In April 1987, the Company received 510(k) marketing clearance from the
FDA allowing the Company to market a hand-held CO2-powered jet injection
system. Although the Biojector 2000 system incorporates changes from the
system with respect to which the Company's 1987 510(k) marketing clearance
was received and expands its intended use, the Company made the
determination that these were not major changes or modifications in intended
use or changes in the device that could significantly affect the safety
or effectiveness of the device and that, accordingly, the 1987 510(k)
clearance permitted the Company to market the Biojector 2000 system in the
U.S. In June 1994, the Company received clearance from the FDA under
510(k) to market a version of its Biojector 2000 system in a configuration
targeted at high volume injection applications. The Company expects that
the self-injection and other systems under development would require new
510(k) submissions. See "Research and Product Development" and "Forward
Looking Statements". However, there can be no assurance that the FDA will
concur with the Company's determination that the product can be cleared via
a 510(k) submission.

The Company continues to seek arrangements with pharmaceutical
companies to develop pre-filled Biojector syringe applications to permit the
pharmaceutical companies to market their products packaged in Biojector
prefilled containers. See "Research and Product Development." Before pre-
filled Biojector syringes may be distributed for use in the U.S., certain
FDA-mandated stability tests may be required of those pharmaceutical
companies. Pre-filled syringes involve drugs packaged as a component of a
medical device. It is current FDA policy that such pre-filled syringes,
which are considered to be combination products, are evaluated by the FDA as
drugs rather than medical devices. Marketing of pre-filled syringes by
pharmaceutical companies will require prior approval via a New or amended
Drug Application ("NDA") or an Abbreviated New Drug Application ("ANDA").
An NDA is a complex submission required to establish that a drug will be
safe and effective for its intended uses. An ANDA is a less detailed
process which does not require, among other things, that the applicant
provide complete reports of preclinical and clinical studies of safety and
efficacy as are required for NDAs. Assuming that the drugs used in the pre-
filled syringes have previously been approved by the FDA for injection, the
FDA will likely require that ANDAs, rather than NDAs, be submitted. The
Company believes that if a drug to be used in the Company's pre-filled
syringe were already the subject of an approved NDA or ANDA for
intramuscular or subcutaneous injection, the main issue affecting approval
for use in the pre-filled syringe would be the adequacy of the syringe to
store the drug, to assure its stability until used and to safely deliver
the proper dose. See "Forward Looking Statements" and "Risk Factors -
Government Regulation."

The FDA also regulates the Company's quality control and manufacturing
procedures by requiring the Company and its contract manufacturers to
demonstrate compliance with current Good Manufacturing Practice ("GMP")
Regulations. These regulations require, among other things, that (i) the
manufacturing process must be regulated and controlled by the use of written
procedures and (ii) the ability to produce devices which meet the
manufacturer's specifications must be validated by extensive and detailed
testing of every aspect of the process. They also require investigation of
any deficiencies in the manufacturing process or in the products produced
and detailed record-keeping. Further, the FDA's interpretation and
enforcement of these requirements has been increasingly strict in recent
years and seems likely to be even more stringent in the future. Failure to
adhere to GMP requirements would cause the products produced to be
considered in violation of the Act and subject to enforcement action. The
FDA monitors compliance with these requirements by requiring manufacturers
to register with the FDA, and subjecting them to periodic FDA inspections of
manufacturing facilities. If the inspector observes conditions that might
be violative, the manufacturer must correct those conditions or explain them
satisfactorily, or face potential regulatory action that might include
physical removal of the product from the marketplace.

The FDA's Medical Device Reporting Regulation requires that the Company
provide information to the FDA on the occurrence of any death or serious
injuries alleged to have been associated with the use of the Company's
products, as well as any product malfunction that would likely cause or
contribute to a death or serious injury if the malfunction were to recur.
In addition, FDA regulations prohibit a device from being marketed for
unapproved or uncleared indications. If the FDA believes that the company
is not in compliance with these regulations, it can institute proceedings to
detain or seize products, issue a recall, seek injunctive relief or assess
civil and criminal penalties against such company.

The use and manufacture of the Company's products are subject to OSHA
and other federal, state and local laws and regulations relating to such
matters as safe working conditions for healthcare workers and Company
employees, manufacturing practices, environmental protection and disposal of
hazardous or potentially hazardous substances and the policies of hospitals
and clinics relating to compliance therewith. There can be no assurance
that the Company will not be required to incur significant costs to comply
with such laws, regulations or policies in the future, or that such laws,
regulations or policies will not increase the costs or restrictions related
to the use of the Company's products or otherwise have a materially adverse
effect upon the Company's ability to do business. See "Risk Factors."

Laws and regulations regarding the manufacture, sale and use of medical
devices are subject to change and depend heavily on administrative
interpretations. There can be no assurance that future changes in
regulations or interpretations made by the FDA, OSHA or other regulatory
bodies, will not adversely affect the Company.

Sales of medical devices outside of the United States are subject to
foreign regulatory requirements. The requirements for obtaining premarket
clearance or approval by a foreign country may differ from those required
for FDA clearance or approval. Devices having an effective 510(k) clearance
or PMA may be exported without further FDA authorization. FDA authorization
is generally required in order to export other medical devices.

The Company had in place a distribution agreement with Kobayashi
Pharmaceutical Co. Ltd. An application was made to the Japan Ministry of
Health and Welfare to obtain the necessary approvals to market the Biojector
2000 system in Japan which was not carried to completion by Kobayashi. By
mutual consent, the agreement between the companies expired on June 30,
1995.

RESEARCH AND PRODUCT DEVELOPMENT

Research and development efforts are focused on enhancing the Company's
current product offerings and developing both new jet injection technology
and new products. The Company continues to use clinical, magnetic resonance
imaging and tissue studies to determine the reliability and performance of
new and existing products. As of March 31, 1996, the Company's research and
product development staff consisted of 10 employees. During fiscal 1994,
1995 and 1996, the Company spent $1.3 million, $1.4 million, and $1.5
million, respectively, on research and development.

In April 1992, the Company entered into a multi-year agreement with Eli
Lilly and Company ("Lilly") to develop a new, portable, reusable electronic
jet injection system suitable for insulin self-injection. Under terms of the
agreement, Lilly purchased 664,011 shares of the Company's common stock for
$4.0 million and paid a one-time $500,000 fee for access to the Company's
technology. In addition, Lilly paid $1.0 million for Phase I (Proof of
Concept) work, completed in March 1993. The Company also received $575,000
for initial Phase II (Design and Development) work completed in March 1994.
During the last half of fiscal 1994, Lilly conducted its first market
research utilizing three concept models for the insulin self injector.
Following this market research, Lilly presented significant proposed
revisions to the 1992 specifications for the device under development.
Pending resolution of this matter, the project was put on hold. In August
1995 the Company met with Lilly representatives regarding the future
development of an insulin self-injector. Because the Company's injector
design does not meet Lilly's size and cost goals, the Company and Lilly
agreed to suspend any further development of a specialized insulin self
injection device. The Company does not anticipate attempting to complete
development of this device without Lilly's participation. All costs of the
Lilly development contract have previously been expensed as research and
development expenses.

In March 1994, the Company entered into an agreement with Schering AG,
Germany, for the development of a self-injection device for delivery of
Betaseron to multiple sclerosis patients. During fiscal 1995, the Company
developed a proof-of-concept prototype and demonstrated this prototype to
Schering. The Company and Schering finalized product specifications. The
Company also commenced development of the preproduction clinical prototype.
During fiscal 1996, the Company delivered the preproduction clinical
prototypes to Schering and worked on finalizing the production prototype
design. Upon completion of development, the agreement provides that
Schering will have seven-year exclusive rights to market the product world-
wide for beta interferon applications at prices dependent upon specific
volumes. The Company maintains ownership of the underlying technology.
Under terms of the agreement, in April 1994, Schering paid a one-time
$500,000 licensing fee for access to the Company's technology and paid
$600,000 as its contribution toward Phase I of the development. In October
1995 Schering paid $600,000 as its contribution toward Phase II development
and $60,000 of additional costs associated with completion of Phase I.
During fiscal 1997, the agreement provides for Schering to pay $300,000 for
Phase III development costs on the schedule provided for in the agreement.
As defined in the agreement, under certain circumstances, the licensing and
product development fees are convertible by Schering into common stock of
the Company. Schering has the right to cancel the agreement by notice to
the Company before the end of Phase II or at any time during Phase III.

In January 1995, the Company signed a joint development agreement with
Hoffmann-La Roche to develop proprietary drug delivery systems for Roche
products. The agreement provides for Bioject to develop, manufacture and
sell Biojector needle-free drug delivery systems designed to Roche
specifications. In return, Bioject has granted Roche exclusive worldwide
rights to distribute these systems and their components for use with
certain Roche products. Hoffmann-La Roche Inc. is the United States
affiliate of the multinational group of companies headed by Roche Holding of
Basel, Switzerland, one of the world's leading research-intensive healthcare
companies. As of 1995 fiscal year end, the Company had commenced design of
a prototype device and had agreed with Roche on product specifications.
During fiscal 1996, the Company developed and delivered to Roche
preproduction prototypes for testing and developed the clinical
preproduction prototypes which were delivered to Roche in April 1996. In
February 1995, Hoffmann-La Roche paid a one-time licensing fee totalling
$500,000, and the agreement provides that it will pay specified product
development fees on an agreed upon schedule of which $900,000 was paid in
fiscal 1996.

In addition to activities described above, the Company is seeking
arrangements with pharmaceutical and biotechnology companies for the use of
pre-filled syringes to eliminate the filling and measuring procedures
associated with traditional injection of medications. Before pre-filled
Biojector syringes may be distributed for use in the U.S., these companies
must commit to the packaging and distribution of their products in this
manner and to the time and financial resources necessary for FDA review and
approval. This process could be lengthy. See "Business -- Government
Regulation." There can be no assurance that such companies will commit
efforts to develop pre-filled packaging and pursue regulatory approval or
that regulatory approval of pre-filled Biojector syringes will be obtained.

The Company intends to continue research and development efforts
designed to further its understanding of the physics and physiology of jet
injection. These efforts will include further clinical studies to
demonstrate efficacy of jet injection and to evaluate new products and
enhancements to the Company's existing products. To advance these studies,
in April 1994 the Company formed a Department of Clinical Affairs research
group, which initiates and coordinates these studies.

MANUFACTURING

The Company assembles the Biojector 2000 and related syringes from
components purchased from outside suppliers. Prior to introduction of the
Biojector 2000 system in 1993, the Company had not engaged in manufacturing
on a commercial scale. However, in connection with that introduction, the
Company increased its manufacturing capabilities and built inventories to
support anticipated product sales.

During fiscal 1997, the Company's manufacturing activities will be
focused on retesting the devices repurchased from HMI to ensure their
continuing compliance with new product standards and to selectively
upgrading certain of these units to current version configuration.
Manufacturing will also be actively focused on finalizing product
engineering and on planning for, designing and bringing up the new Schering
device and syringe manufacturing lines in advance of product launch.

In order to succeed in expanding manufacturing capacity and reducing
unit production cost, the Company must attract and retain qualified assembly
workers and must establish and maintain relationships with suppliers that
can deliver large numbers of components meeting applicable quality standards
in a timely and reliable manner at acceptable prices.

EMPLOYEES

As of March 31, 1996, the Company had 47 full-time employees with 10
employees engaged in research and product development, 8 in sales and
marketing, 20 in manufacturing and 9 in administration. The Company engages
a limited number of part-time consultants who participate in research
activities. The Company also employs temporary contract workers primarily
for assembly operations, the number of which varies, depending upon
production requirements. As of March 31, 1996, there was one consultant and
one contract/temporary worker employed by the Company. None of the
Company's employees is represented by a labor union.

PRODUCT LIABILITY

The Company believes that its products reliably inject medications both
subcutaneously and intramuscularly when used in accordance with product
guidelines. The Company's current insurance policies provide coverage at
least equal to an aggregate limit of $6 million with respect to certain
product liability claims. The Company has not experienced any product
liability claims to date. There can be no assurance, however, that the
Company will not become subject to such claims, that the Company's current
insurance would cover such claims, or that insurance will continue to be
available to the Company in the future. The Company's business may be
adversely affected by product liability claims.

RISK FACTORS

Investment in securities of the Company involves a high degree of risk.
The following factors, among others, should be considered by investors.

UNCERTAINTY OF MARKET ACCEPTANCE. The Company's success will depend upon
market acceptance of its jet injection drug delivery system, the Biojector
2000 system, and, to other products under development. Currently, the
dominant technology used for intramuscular and subcutaneous injections is
the hollow-needle syringe. Needle-syringes, while low in cost, have
limitations, particularly relating to contaminated needlestick injuries.
Use of the Biojector 2000 system for intramuscular and subcutaneous
injections virtually eliminates the associated risk of these injuries;
however, the cost per injection is significantly higher. As with any new
technology, there can be no assurance that the Biojector 2000 system will
compete successfully. A previous jet injection system manufactured by the
Company did not achieve market acceptance and is no longer being marketed.
The Biojector 2000 was introduced in January 1993. To date the major
portion of sales have been sales to HMI that were not placed in service and
which the Company has agreed to repurchase at a substantial discount to the
original selling price. Failure of the Biojector 2000 system to gain market
acceptance would have a material adverse effect on the Company's financial
condition and results of operations.

HISTORY OF LOSSES; UNCERTAIN PROFITABILITY. Since its formation in 1985,
the Company has incurred significant annual operating losses and negative
cash flow. At March 31, 1996 the Company had an accumulated deficit of
$30.0 million. The Company's revenues to date have been derived primarily
from licensing and technology fees, and from product sales, which were
principally sales to dealers for the stocking of inventories and to HMI.
There can be no assurance that the Company will be able to generate
significant revenues or achieve profitability. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

NEED FOR ADDITIONAL FINANCING. The Company anticipates that the cash on
hand at March 31, 1996 combined with revenues and other cash receipts, will
be sufficient to meet the cash requirements of the Company's operations
through fiscal 1997. See "Forward Looking Statements." Additional
financing will be required at the beginning of fiscal 1998. However, the
Company may require additional capital sooner for a number of reasons,
including poor operating results, unanticipated expenses, growth which is
more rapid than anticipated, or new product development programs. 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 growth and materially adversely affect the
Company's business. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

LIMITED MANUFACTURING EXPERIENCE; NEED TO REDUCE UNIT COST. The Company has
limited experience manufacturing its products in commercial quantities. The
Company has increased its production capacity for the Biojector 2000 system
through automation of, and changes in, production methods. The current cost
per injection of the Biojector 2000 system is substantially higher than that
of traditional needle-syringes, its principal competition. A key element of
the Company's business strategy is to reduce the overall system cost through
automating production and packaging. The Company has experienced and may
continue to experience setbacks and delays in its cost reduction efforts
including failure to deliver reduced cost parts to specifications. There
can be no assurance that the Company will be able to develop and implement
effective high volume production or achieve necessary unit cost reductions.
Failure to do either would adversely affect the Company's financial
condition and results of operations. See "Management's Discussion and
Analysis of Financial Condition and Results of Operation" and
"Manufacturing."

GOVERNMENTAL REGULATION. 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 are 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 jet injection
system. The FFDCA provides that new premarket notifications under Section
510(k) of the FFDCA are required to be filed when, among other things, there
is a major change or modification in the intended use of a device or a
change or modification to a legally marketed device that could significantly
affect its safety or effectiveness. A device manufacturer is expected to
make the initial determination as to whether the change to its device or its
intended use is of a kind that would necessitate the filing of a new 510(k)
notification. Although the Biojector 2000 system incorporates changes from
the system with respect to which the Company's 1987 510(k) marketing
clearance was received and expands its intended use, the Company made the
determination that these were not major changes or modifications in intended
use or changes in the device that could significantly affect the safety or
effectiveness of the device and that, accordingly, the 1987 510(k) clearance
permitted the Company to market the Biojector 2000 system in the U.S. In
June 1994, the Company received clearance from the FDA under 510(k) to
market a version of its Biojector 2000 system in a configuration targeted at
high volume injection applications.

Future changes to manufacturing procedures could necessitate the filing of a
new 510(k) notification. Also, future products, product enhancements or
changes, or changes in product use may require clearance under Section
510(k), or they may require FDA premarket approval ("PMA") or other
regulatory approvals. PMAs and these other regulatory approvals generally
involve more extensive prefilling testing that a 510(k) clearance and a
longer FDA review process. Under current FDA policy, applications involving
prefilled syringes would he evaluated by the FDA as drugs rather than
devices, requiring NDAs or ANDAs. See "Governmental Regulation." Depending
on the circumstances, drug regulation can be more bureaucratic and time
consuming than device regulation.

FDA regulatory processes are time consuming and expensive, and there can be
no assurance that product applications submitted by the Company will be
cleared or approved by the FDA. In addition, the Company's products must be
manufactured in compliance with Good Manufacturing Practices ("GMP")
specified in regulations under the FDA Act. The FDA has broad discretion in
enforcing the FDA Act, and noncompliance with the Act could result in a
variety of regulatory actions ranging product detentions, device alerts
or field corrections, to mandatory recalls, seizures, injunctive actions,
and civil or criminal penalties.

Distribution of the Company's products in countries other than the U.S. may
be subject to regulation in those countries. An application was made to the
Japan Ministry of Health and Welfare to obtain necessary approvals to market
the Biojector 2000 system in Japan which was not carried to completion by
the Company's then Japanese distributor. See "Governmental Regulation."

UNCERTAINTY IN HEALTHCARE INDUSTRY; GOVERNMENT HEALTHCARE REFORM.
The healthcare industry is subject to changing political, economic and
regulatory influences that may affect the procurement practices and
operations of healthcare facilities. During the past several years, the
healthcare industry has been subject to increased government regulation of
reimbursement rates and capital expenditures. Among other things, third
party payers are increasingly attempting to contain healthcare costs by
limiting both coverage and reimbursement levels for healthcare products and
procedures. Because the price of the Biojector 2000 system exceeds the
price of needle injection systems, cost control policies of third party
payers, including government agencies, may adversely affect use of the
Biojector 2000 system.

DEPENDENCE ON THIRD-PARTY RELATIONSHIPS. The Company is dependent on third
parties for distribution of the Biojector 2000 system to certain market
segments, for the manufacture of component parts, and for assistance with
the development and distribution of its future Betaseron self-injection and
application specific systems.

The Company intends to seek relationships to distribute to the physician
office market in the future. Past dealer relationships have not been
successful. There can be no assurance that the Company's future dealers
will provide sufficient sales support to establish the Company's current
product. See "Marketing and Competition."

The Company's current manufacturing processes for the Biojector 2000 jet
injector and disposable syringes consist primarily of assembly of component
parts supplied by outside suppliers. Certain of these components are
currently obtained from single sources, with some components requiring
significant production lead times. In the past, the Company has experienced
delays in the delivery of certain components, although to date no such
delays have had a material adverse effect on the Company's operations.
There can be no assurance that the Company will not experience delays in the
future, or that such delays would not have a material adverse effect on the
Company's financial condition and result of operations. See
"Manufacturing."

The Company has entered into agreements with certain major pharmaceutical
companies for development and distribution of its jet injection systems.
These companies have the right to terminate these agreements at certain
phases as defined in the agreements. There can be no assurance these
companies interest and participation in the projects will continue. Failure
to receive additional funding from these companies could adversely affect
the development and production of the products involved and,
correspondingly, the Company's financial condition and results of
operations. See "Research and Product Development."

ABILITY TO MANAGE GROWTH. If the Company's products achieve market
acceptance, the Company expects to achieve rapid growth. This growth
strategy will require expanded customer services and support, increased
personnel throughout the Company, expanded operational and financial
systems, and the implementation of new control procedures. There can be no
assurance that the Company will be able to attract qualified personnel or
successfully manage expanded operations. As the Company expands, it may
from time to time experience constraints that would adversely affect its
ability to satisfy customer demand in a timely fashion. Failure to manage
growth effectively could adversely affect the Company's financial condition
and results of operations.

COMPETITION. The medical equipment market is highly competitive and
competition is likely to intensify. The Company's products compete
primarily with traditional needle-syringes, "safety syringes" and also with
other alternative drug delivery systems. While the Company believes its
products provide a superior drug delivery method, there can be no assurance
that the Company will be able to compete successfully with existing drug
delivery products. Many of the Company's competitors have longer operating
histories as well as substantially greater financial, technical, marketing
and customer support resources than the Company. There can be no assurance
that one or more of these competitors will not develop an alternative drug
delivery system that competes more directly with the Company's products, or
that the Company's products would be able to compete successfully with such
a product. See "Marketing and Competition."

DEPENDENCE ON SINGLE TECHNOLOGY. The Company's strategy has been to focus
its development and marketing efforts on its jet injection technology. This
focus renders the Company particularly sensitive to competing products and
alternative drug delivery systems. The Company believes that healthcare
providers' desire to minimize the use of the traditional needle-syringe has
stimulated development of a variety of alternative drug delivery system such
as "safety syringes," jet injection systems and transdermal diffusion
"patches." In addition, pharmaceutical companies frequently attempt to
develop drugs for oral delivery instead of injection.

While the Company believes that for the foreseeable future there will
continue to be a significant need for injections, there can be no assurance
that alternative drug delivery methods will not be developed which are
preferable to injection. See "Marketing and Competition."

PATENTS AND PROPRIETARY RIGHTS. The Company relies on a combination of
trade secrets, confidentiality agreements and procedures, and patent
prosecution to protect its proprietary technologies. The Company has been
granted six patents in the United States and two patents in certain other
countries covering certain technology embodied in its current jet injection
system and certain manufacturing processes. Additional patent applications
are pending in the U.S and certain foreign countries. There can be no
assurance that the claims contained in any patent application will be
allowed, or that any patent will provide adequate protection for the
Company's products and technology. In the absence of patent protection, the
Company may be vulnerable to competitors who attempt to copy the Company's
products or gain access to its trade secrets and know-how. In addition, the
laws of foreign countries may not protect the Company's proprietary rights
to this technology to the same extent as the laws of the U.S. The Company
believes that it has independently developed its technology and attempts to
ensure that its products do not infringe the proprietary rights of others,
and the Company knows of no infringement claims. However, any such claims
could have a material adverse affect on the Company's financial condition
and results of operations. See "Patents and Proprietary Rights."

PRODUCT LIABILITY. Producers of medical devices may face substantial
liability for damages in the event of product failure or if it is alleged
the product caused harm. The Company currently maintains product liability
insurance and has not experienced any product liability claims to date.
There can be no assurance, however, that the Company will not be subject to
such claims, that the Company's current insurance would cover such claims
and that adequate insurance will continue to be available on acceptable
terms to the Company in the future. The Company's business could be
adversely affected by product liability claims. See "Product Liability."

DEPENDENCE UPON KEY EMPLOYEES. The Company's success is dependent upon the
retention of its executive officers and other key employees. Competition
exists for qualified personnel, and the Company's success will depend in
part upon attracting and retaining such personnel. Failure in these efforts
could have a material adverse effect on the Company's business, financial
condition or results of operations.

SHARES ELIGIBLE FOR FUTURE SALE. Of the 15,585,232 shares of common stock
currently outstanding, 1,500,000 of these shares were held in escrow for WAM
Partnership, a limited partnership of which Mr. Carl Wilcox is the managing
partner. Subsequent to year end, the shares were released from escrow and
may be sold. In November and December of 1995, the Company completed a
private placement of 2,303,009 units (each unit representing one share of
common stock and a warrant to purchase one share of common stock). The
Company also granted a warrant to its placement agent in the private
placement to purchase 137,086 shares of common stock. The shares issued in
the private placement were registered for resale on a Registration Statement
on Form S-3. The Company also granted registration rights with respect to
the shares issuable upon exercise of the warrants. Sales of substantial
numbers of shares of common stock in the public market, or the availability
of such shares for sale, could adversely affect the market price for the
common stock and make it more difficult for the Company to raise funds
through equity offerings in the future.

POSSIBLE ADVERSE EFFECTS ON TRADING MARKET. The Common Stock is quoted on
the NASDAQ National Market. There are a number of continuing requirements
that must be met in order for the Common Stock offered hereby to remain
eligible for quotation on the NASDAQ National Market or the NASDAQ Small Cap
Market. The failure to meet these maintenance criteria in the future could
result in the delisting of the Company's Common Stock from NASDAQ. In such
event, trading, if any, in the Common Stock may then continue to be
conducted in the non-NASDAQ over-the-counter market. As a result, an
investor may find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Company's Common Stock. In
addition, if the Common Stock were delisted from trading on NASDAQ and the
trading price of the Common Stock were less than $5.00 per share, trading in
the Common Stock would be subject to the requirements of certain rules
promulgated under the Exchange Act, which require broker-dealers to make
additional disclosures and to implement additional procedures in connection
with any trades involving a stock defined as a penny stock. The additional
burdens imposed upon broker-dealers may discourage broker-dealers from
effecting transactions in penny stocks, which could reduce the liquidity of
the shares of Common Stock and thereby have a material adverse effect on the
trading market for the securities.

POSSIBLE VOLATILITY OF STOCK PRICE. The market for the Company's common
stock and for the securities of other early stage, small market-
capitalization companies is highly volatile. The Company believes that
factors such as quarter-to-quarter fluctuations in financial results, new
product introductions by the Company or its competition, public
announcements, changing regulatory environments, sales of Common Stock by
certain existing shareholders and substantial product orders could
contribute to the volatility of the price of the Company's Common Stock,
causing it to fluctuate dramatically. General economic trends such as
recessionary cycles and changing interest rates may also adversely affect
the market price of the Company's Common Stock. See "Market for the
Registrant's Common Equity and Related Stockholder Matters."

Item 2. PROPERTIES

The Company's principal offices are located in Portland, Oregon in
approximately 24,000 square feet of leased office and manufacturing space
under a lease which expires in September 1997. The monthly minimum lease
obligation for this facility is approximately $15,000. These facilities
include the Company's sales and administration offices and equipment,
research and engineering facilities, a clean room assembly area, assembly
line, testing facilities and a warehouse area.

During fiscal 1995, the Company leased additional warehouse space
totalling approximately 5,000 square feet for finished goods storage and
shipments to customers. This lease, which also expires in September 1997,
has minimum monthly lease obligations totalling $1,900.

The Company believes its current facilities will be sufficient to
support its operations for the coming year. The Company has options to
renew both leases for additional five-year terms. As the Company requires
additional space to accommodate growth in its sales and manufacturing
activities, it is the Company's intention to lease additional facilities
adjacent to or near its present operations. The Company believes that, if
necessary, it will be able to obtain facilities at rates and under terms
comparable to those under the current leases.

Item 3. LEGAL PROCEEDINGS

None

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

None.

<PAGE>
PART II

Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

The Company's Common Stock is traded on the NASDAQ National Market
under the Symbol "BJCT." Prior to November 3, 1993, the Company's Common
Stock was quoted on the NASDAQ Small Cap Market under the symbol "BJCT."
The following table sets forth the high and low closing sale prices of the
Company's Common Stock on the NASDAQ National Market since November 2, 1993,
and the high and low closing bid prices for the Company's Common Stock on
the Small Cap Market through November 2, 1993, for the quarters indicated.
The prices reflected for the periods through November 2, 1993 reflect inter-
dealer quotations without retail mark-ups, mark-downs, or commissions and,
therefore, may not necessarily reflect actual transactions.
<TABLE>
<CAPTION>
High Low
_____ _____
<S> <C> <C>
Fiscal Year Ending March 31, 1994:

First Quarter $6.00 $3.88
Second Quarter 6.00 4.00
Third Quarter (through November 2, 1993) 5.25 4.50
Third Quarter (since November 2, 1993) 5.75 4.25
Fourth Quarter 5.13 3.50

Fiscal year Ended March 31, 1995:

First Quarter 3.00 2.00
Second Quarter 4.13 3.25
Third Quarter 3.63 2.81
Fourth Quarter 2.50 1.50

Fiscal Year Ended March 31, 1996:

First Quarter 3.00 1.44
Second Quarter 2.97 1.19
Third Quarter 2.81 1.81
Fourth Quarter 1.94 1.25
</TABLE>

The closing sale price on March 29, 1996, as reported on the NASDAQ National
Market, was $1.3125 per share.

The Company has declared no dividends during its history and has no
intention of declaring a dividend in the foreseeable future. As of March
31, 1996 the number of shareholders of record of the Company's Common Stock
was 1,468.

Item 6. SELECTED CONSOLIDATED FINANCIAL DATA

FINANCIAL DATA

The statement of operations and balance sheet data set forth below for
the five fiscal years in the period ended March 31, 1996 have been derived
from the consolidated financial statements of the Company. The selected
consolidated financial data set forth below should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and with the detailed consolidated financial
statements and notes thereto included elsewhere in this Report.

SUMMARY FINANCIAL INFORMATION
(in thousands, except per share data)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995 1994 1993 1992
______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:

Revenues $4,209 $2,924 $1,463 $1,146 $ 17
Operating expenses 9,640 8,580 5,858 4,449 3,550
Net loss (5,431) (5,656) (4,395) (3,303) (3,533)
Net loss per share (0.39) (0.43) (0.39) (0.34) (0.43)
Shares used in per
share calculation 14,074 13,167 11,230 9,686 8,222
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31,
1996 1995 1994 1993 1992
______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>

Balance Sheet Data:

Working capital $4,327 $6,404 $12,593 $4,264 $2,135
Total assets 7,519 9,498 13,836 5,727 2,577
Long-term debt - - - - -
Shareholders' equity 6,027 7,964 13,377 4,752 2,409
</TABLE>

The Company has declared no dividends during its history and has no
intention of declaring a dividend in the foreseeable future.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Operating losses have resulted in an accumulated deficit of
approximately $30.0 million as of March 31, 1996. In fiscal 1994, 1995 and
1996, the Company incurred significantly increased costs associated with the
production and sales of the Biojector 2000 system, including sales and
marketing efforts, manufacturing ramp-up and inventory build-up. The
Company has been working on a product cost reduction program which commenced
phase-in during fiscal 1996. Because of the significant changes in the
Company's operations relating to introduction of the Biojector 2000 system
and manufacturing changes, the financial position, results of operations and
cash flows of the Company presented on an historical basis may not be
indicative of future results. The Company's ability to achieve and sustain
profitability will depend in part upon customer acceptance of the Biojector
2000 system, sustained product performance, implementing product cost
reductions and attaining revenues sufficient to support profitable
operations.

In August 1994, Bioject signed an agreement with Homecare Management,
Inc. (HMI), granting HMI exclusive rights to purchase Bioject's Needle-Free
Injection Management System (trademark), the Biojector 2000, for use in the
home healthcare market. In return for HMI's commitment to purchase a minimum
of 8,000 Biojector units over the ensuing two years, the Company granted
volume pricing discounts to HMI. During the term of the contract, the
selling price of Biojectors to HMI exceeded their standard cost. During
fiscal 1995 and 1996, the Company sold approximately 2,100 and 4,300
Biojectors to HMI for total sales revenue including syringes of $1.1 million
and $2.2 million, respectively. HMI did not place the great majority of
these Biojectors with patients pending completion of negotiations with
pharmaceutical companies for certain pricing concessions for medication to
be administered with the Biojectors. In January 1996 HMI requested that
Bioject suspend shipments to HMI. In February 1996, the Company learned
from HMI's press releases that HMI expected to default under its loan, to
take significant write-offs for accounts receivable and inventories, planned
operational consolidations, and would restate certain prior period financial
statements. Subsequent to year end, although not obligated to do so, the
Company agreed to repurchase certain of the HMI inventories, including up to
6,000 Biojector units, for cash and forgiveness of accounts receivable
totalling $660,000. The repurchase of these inventories was on at a
substantial discount to the original selling price to HMI.

In March 1994, the Company entered into an agreement with Schering AG,
Germany, for the development of a self-injection device for delivery of
Betaseron to multiple sclerosis patients. During fiscal 1995, the Company
developed a proof-of-concept prototype and demonstrated this prototype to
Schering. The Company and Schering finalized product specifications. The
Company also commenced development of the preproduction clinical prototype.
During fiscal 1996, the Company delivered the preproduction clinical
prototypes to Schering and worked on finalizing the production prototype
design. Upon completion of development, the agreement provides that
Schering will have a seven-year exclusive right to market the product world-
wide for beta interferon applications at prices dependent upon specific
volumes. The Company maintains ownership of the underlying technology.
Under terms of the agreement, in April 1994, Schering paid a one-time
$500,000 licensing fee for access to the Company's technology and paid
$600,000 as its contribution toward Phase I of the development. In October
1995 Schering paid $600,000 as its contribution toward Phase II development
and $60,000 of additional costs associated with completion of Phase I.
During fiscal 1997, the agreement provides for Schering to pay $300,000 for
Phase III development costs on the schedule provided for in the agreement.
As defined in the agreement, under certain circumstances, the licensing and
product development fees are convertible by Schering into common stock of
the Company. Schering has the right to cancel the agreement by notice to
the Company before the end of Phase II or at any time during Phase III.

In January 1995, the Company signed a joint development agreement with
Hoffmann-La Roche to develop proprietary drug delivery systems for Roche
products. The agreement provides for Bioject to develop, manufacture and
sell Biojector needle-free drug delivery systems designed to Roche
specifications. In return, Bioject has granted Roche exclusive worldwide
rights to distribute these systems and their components for use with certain
Roche products. Hoffmann-La Roche Inc. is the United States affiliate of
the multinational group of companies headed by Roche Holding of Basel,
Switzerland, one of the world's leading research-intensive healthcare
companies. As of 1995 fiscal year end, the Company had commenced design of
a prototype device and had agreed with Roche on product specifications.
During fiscal 1996, the Company developed and delivered to Roche
preproduction prototypes for testing and developed the clinical
preproduction prototypes which were delivered to Roche in April 1996. In
February 1995, Hoffmann-La Roche paid a one-time licensing fee totalling
$500,000 and the agreement provides that it will pay specified product
development fees on an agreed upon schedule of which $700,000 was paid in
fiscal 1996.

Throughout fiscal 1994 and 1995, the Company's manufacturing processes
were primarily manual. These processes did not permit the Company to
produce its products at costs which would allow it to operate profitably.
During fiscal 1996, the Company implemented a plan to increase manufacturing
capacity and refine production methods to meet anticipated future demand and
to reduce product costs. For the Biojector 2000, cost reduction efforts
included converting from a two piece to a one piece housing, converting to
continuous process manufacturing and implementing volume purchasing programs
from suppliers. For the Biojector syringes, these efforts included
increasing supplier mold capacity and automating final assembly and
packaging. During fiscal 1997, the Company's manufacturing activities will
be focused on retesting the devices repurchased from HMI to ensure their
continuing compliance with new product standards and to electively upgrading
certain of these units to current version configuration. Manufacturing will
also be actively focused on finalizing product engineering and on planning
for, designing and bringing up the new Schering device and syringe
manufacturing lines in advance of product launch.

The Company's revenues to date have not been sufficient to cover
operating expenses. However, the Company believes that if its products
achieve market acceptance and the volume of sales increases, and its product
costs are reduced, its costs of goods as a percentage of sales will decrease
and eventually the Company will generate net income. See "Forward Looking
Statements" and "Business - Risk Factors." The level of sales 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 efficiencies that
can be attained through volume and automated manufacturing, 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
implement its manufacturing cost reduction program or sell its products at
prices or in volumes sufficient to achieve profitability or offset increases
in its costs should they occur.

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) length of time to close product sales, (ii) customer budget
cycles, (iii) implementation of cost reduction measures, (iv) uncertainties
and changes in purchasing due to third party payor policies and proposals
relating to national healthcare reform, (v) timing and amount of payments
under technology development agreements and (vi) timing of new product
introductions by the Company and its competition.

Subsequent to year end, the British Columbia Securities Commission
informed the Company that its Executive Director (formerly the
Superintendent of Brokers) consented to the release of all shares originally
held in escrow pursuant to an escrow agreement dated May 30, 1986. This
means that the 1.5 million shares of common stock which had been held under
this escrow arrangement since the Company's initial public offering in July
1986 are now held by the owners of the shares without risk of cancellation
and may be sold. As previously disclosed, a non-cash charge to compensation
expense is required to be recorded for approximately 150,000 of the shares
being released from the escrow account. Such charge totalling $210,938 will
be recorded in the financial statements in the first quarter of fiscal 1997.

In the future, the Company may incur a non-cash charge to compensation
expense in connection with the issuance of 100,000 shares of Common Stock to
the Company's Chief Executive Officer. Under terms of his employment
agreement, the Company's Chairman will receive 100,000 shares of common
stock when the Company first achieves two consecutive quarters of positive
earnings per share. Upon issuance of such shares the Company will record a
non-cash charge to compensation at the fair market value of the stock on the
last day of the quarter in which the shares are earned.

During the next fiscal year, the Company will continue to focus its
efforts on expanding sales, reducing the cost of its products, developing
the self-injectors for Schering and Hoffmann-La Roche, pursuing additional
alliances with pharmaceutical companies and conserving its fiscal resources.
The Company does not expect to report net income from operations in fiscal
1997. See "Forward Looking Statements" and "Risk Factors."

RESULTS OF OPERATIONS

Product sales increased from $513,000 in fiscal 1994 to $1.5 million in
fiscal 1995 and to $3.1 million in fiscal 1996. Sales in fiscal 1994
consisted primarily of sales to hospital and physician office dealers for
stocking orders. Sales in fiscal 1995 consisted of $1.1 million of sales to
Health Management Inc., and the remainder to hospitals, large clinics,
individual physician offices and certain selected distributors. Sales in
fiscal 1996 consisted of $2.3 million of sales to HMI with the remainder
primarily to public health and flu immunization clinics.

License and technology fees varied from $950,000 in fiscal 1994 to $1.4
million in fiscal 1995 and $1.2 million in fiscal 1996. All of the fiscal
1994 fees related to amounts payable to the Company under a product
development agreement with Lilly. The fiscal 1995 fees included a one-time
$500,000 licensing fee for access to the Company's technology received from
Schering and a similar one-time $500,000 licensing fee received from
Hoffmann-La Roche with the balance of the fiscal 1995 fees consisting of
product development revenues recognized in connection with the Schering
agreement. The fiscal 1996 fees consisted entirely of product development
revenues recognized for work performed under
the Schering and Hoffmann-La Roche agreements.

Manufacturing expense increased from $1.8 million in fiscal 1994 to
$3.4 million in fiscal 1995, and $5.2 million in fiscal 1996 due to
increased sales and, therefore, to increases in the total costs of product
sold. The increase from fiscal 1994 to 1995 also reflects excess labor and
materials expenses and greater manufacturing overhead costs due to the
addition of manufacturing engineering staff. The increase from 1995 to 1996
reflects increased regulatory and quality assurance staff to support the
higher level of manufacturing and increased depreciation expense associated
with the automated assembly equipment installed during fiscal 1996.

Research and development expense increased slightly from $1.3 million
in fiscal 1994 to $1.4 million in fiscal 1995 and $1.5 million in fiscal
1996. Fiscal 1994 expenditures related primarily to product support for the
Biojector 2000 and expanded research and development efforts associated with
the Lilly agreement. Fiscal 1995 expenditures related to work associated
with development of the Schering device and to initial work on the Hoffmann-
La Roche device. Fiscal 1996 expenditures related entirely to work
performed under the Schering and Hoffmann-La Roche agreements.

Selling, general and administrative expense totalled $3.0 million, $4.2
million, and $3.2 million in fiscal 1994, 1995 and 1996, respectively. The
increase from fiscal 1994 to 1995 related to several factors including
expenses incurred in connection with C.E.O. transition totalling
approximately $780,000 (or $0.06 per share) and to increases in legal,
insurance, bad debt and certain promotional expenses. The decrease from
fiscal 1995 to 1996 resulted from the CEO transition expenses incurred in
fiscal 1995 that were not repeated in fiscal 1996 and from planned reduction
in overhead personnel.

Other income consists of earnings on available cash balances. Other
income totalled $252,000 in fiscal 1994, $428,000 in fiscal 1995, and
$211,000 in fiscal 1996 and varied as a result of changes in cash balances
and interest rates.

LIQUIDITY AND CAPITAL RESOURCES

Since its inception in 1985, the Company has financed its operations,
working capital needs and capital expenditures primarily from private
placements of securities, exercises of stock options, proceeds received from
its initial public offering in 1986, proceeds received from a public
offering of Common Stock in November 1993, licensing and technology revenues
and more recently from sales of products and a private placement of common
stock completed in fiscal 1996 with net proceeds of approximately $3.5
million. Net proceeds received upon issuance of securities from inception
through March 31, 1996 totalled approximately $36.0 million. The Company
has no long-term debt.

Cash, cash equivalents and marketable securities totalled $11.9 million
at March 31, 1994, $6.0 million at March 31, 1995, and $4.1 million at March
31, 1996, which represented a decrease of $5.9 million from 1994 to 1995 and
a decrease of $1.9 million from 1995 to 1996. The decrease from 1994 to 1995
resulted from operating losses and from capital expenditures primarily for
manufacturing operations. The decrease from 1995 to 1996 resulted from
operating losses and capital expenditures offset in part by net proceeds
from a private placement of common stock and warrants in November and
December 1995.

Inventories increased from $1.1 million at March 31, 1995 to $1.3
million at March 31, 1996 due to the build-up of inventories to support
anticipated future product sales.

The Company has fixed commitments for facilities rent, equipment leases
and the repurchase of certain inventories which total approximately $922,000
for fiscal 1997.

The Company expects to expend approximately $2.0 million for capital
equipment in fiscal 1997. Substantially all of these expenditures are
related to ramp-up of manufacturing for the Schering product launch. Based
on its discussions with Schering, the Company anticipates that up to $1.6
million of these expenditures will be funded by interest bearing loans to
$1.6 million to be provided by Schering with repayment by Bioject over
a period of 4 to 5.5 years.

The Company believes that its current cash position and loans from
Schering combined with revenues and other cash receipts will be adequate to
fund the Company's operations through fiscal 1997. See "Forward Looking
Statements." Thereafter, the Company is likely to require additional
financing. However, unforeseen costs and expenses or lower than anticipated
cash receipts from product sales or research and development activities
could accelerate the financing requirement. 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 such financing will be
available on favorable terms or at all. Failure to obtain additional
financing when required would significantly restrict the Company's
operations and ability to continue product development, and materially
adversely affect the Company's business. The Company has no banking line of
credit or other established source of borrowing.

EFFECT OF NEWLY ADOPTED ACCOUNTING STANDARDS

In October 1995, the Financial Accounting Standards Board issued Statement
No. 123, Accounting for Stock-Based Compensation (SFAS 123), which
establishes a fair value-based method of accounting for stock-based
compensation plans and requires additional disclosures for those companies
that elect not to adopt the new method of accounting. The Company will
continue to account for stock options under APB Opinion No. 25, Accounting
for Stock Issued to Employees. SFAS 123 disclosure requirements become
applicable for the Company in fiscal 1997.

In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets To Be Disposed Of"(SFAS 121), which requires the Company to review
for impairment of its long-lived assets and certain identifiable intangibles
whenever events or changes in circumstances indicate that the carrying
amount of an asset might not be recoverable. In certain situations, an
impairment loss would be recognized. SFAS 121 will become effective for the
Company's year ending March 31, 1997. The Company has studied the
implications of SFAS 121 and, based on its initial evaluation, does not
expect it to have a material impact on the Company's financial condition or
results of operations.

<PAGE>

Item 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TABLE OF CONTENTS TO FINANCIAL STATEMENTS

Report of Independent Public Accountants

Consolidated Balance Sheets at March 31, 1996 and 1995

Consolidated Statements of Operations for the years ended
March 31, 1996, 1995 and 1994

Consolidated Statements of Shareholders' Equity for the years
ended March 31, 1996, 1995 and 1994

Consolidated Statements of Cash Flows for the years ended
March 31, 1996, 1995 and 1994

Notes to Consolidated Financial Statements

Supplementary Data (none required)

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of
Bioject Medical Technologies Inc.:

We have audited the accompanying consolidated balance sheets of Bioject
Medical Technologies Inc. (an Oregon corporation) and subsidiaries as of
March 31, 1996 and 1995, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the three years
in the period ended March 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Bioject Medical
Technologies Inc. and subsidiaries, as of March 31, 1996 and 1995, and the
results of their operations and their cash flows for each of the three years
in the period ended March 31, 1996, in conformity with generally accepted
accounting principles.

/S/ ARTHUR ANDERSEN LLP

Portland, Oregon

May 2, 1996
(except Note 4, with respect to Escrowed Shares for which the date is
June 3, 1996)

<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31,
1996 1995
____________ __________
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,098,251 $ 2,057,384
Securities available for sale 993,056 3,989,468
Accounts receivable, net of allowance for
doubtful accounts of $55,000 and $14,000,
respectively 424,859 730,723
Inventories 1,255,945 1,108,708
Other current assets 45,714 52,149
____________ ___________
Total current assets 5,817,825 7,938,432
____________ ___________

PROPERTY AND EQUIPMENT, at cost:
Machinery and equipment 1,428,001 624,012
Production molds 777,353 390,127
Furniture and fixtures 163,116 142,769
Leasehold improvements 73,854 62,622
Equipment and molds under construction 0 625,694
____________ ___________
2,442,324 1,845,224
Less - accumulated depreciation (1,048,638) (548,238)
____________ ___________
1,393,686 1,296,986
____________ ___________
OTHER ASSETS 307,105 262,504
____________ ___________
$ 7,518,616 $ 9,497,922
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 550,174 $ 807,878
Accrued payroll 158,225 250,737
Other accrued liabilities 216,924 319,005
Deferred revenue 566,000 156,000
____________ ___________
Total current liabilities 1,491,323 1,533,620
____________ ___________
COMMITMENTS (Note 5)

SHAREHOLDERS' EQUITY:
Preferred stock, no par, 10,000,000 shares
authorized; no shares issued and outstanding - -
Common stock, no par, 100,000,000 shares
authorized; issued and outstanding 15,585,232
and 13,259,074 shares at March 31, 1996 and
1995, respectively 36,001,158 32,507,095
Accumulated deficit (29,973,865) (24,542,793)
____________ ___________
Total shareholders' equity 6,027,293 7,964,302
____________ ___________
$ 7,518,616 $ 9,497,922
============ ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.

<PAGE>

BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended March 31,
1996 1995 1994
_______________________________________
<S> <C> <C> <C>
REVENUES:

Net sales of products $ 3,059,018 $1,479,948 $ 513,134
Licensing/technology fees 1,150,000 1,444,000 949,500
___________ __________ __________
4,209,018 2,923,948 1,462,634
___________ __________ __________

EXPENSES:

Manufacturing 5,195,914 3,394,089 1,801,051
Research and development 1,486,607 1,427,861 1,284,839
Selling, general and administrative 3,168,618 4,186,549 3,023,862
Other (income) expense (211,049) (428,402) (251,632)
___________ ___________ __________
9,640,090 8,580,097 5,858,120
___________ ___________ __________

LOSS BEFORE TAXES (5,431,072) (5,656,149) (4,395,486)

PROVISION FOR INCOME TAXES - - -
___________ ___________ ___________

NET LOSS $(5,431,072) $(5,656,149) $(4,395,486)
=========== =========== ===========

NET LOSS PER SHARE $ (0.39) $ (0.43) $ (0.39)
============ =========== ===========

SHARES USED IN PER SHARE CALCULATION 14,074,349 13,167,301 11,229,670
============ =========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements

<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON STOCK
________________________ Accumulated
Shares Amount Deficit Total
__________ ___________ ____________ ___________
<S> <C> <C> <C> <C>
BALANCES, MARCH 31, 1993 9,889,310 $19,242,737 $(14,491,158) $ 4,751,579

Issuance of common stock for cash
under stock option agreements from
April 1993 through January 1994 263,264 918,228 - 918,228

Issuance of common stock under a
public offering of stock dated
November 1, 1993 3,001,500 12,032,693 - 12,032,693

Issuance of common stock in
exchange for services 4,000 19,500 - 19,500

Extension of stock option
expiration date - 50,625 - 50,625

Net loss - - (4,395,486) (4,395,486)
________ __________ ____________ ___________

BALANCES, MARCH 31, 1994 13,158,074 32,263,783 (18,886,644) 13,377,139

Issuance of common stock in
exchange for services 101,000 243,312 - 243,312

Net loss - - (5,656,149) (5,656,149)
__________ __________ ____________ ___________

BALANCES, MARCH 31, 1995 13,259,074 32,507,095 (24,542,793) 7,964,302

Issuance of common stock in
exchange for services 23,149 39,962 - 39,962

Issuance of Common Stock under
a private placement dated
November 21, 1995 2,303,009 3,454,101 - 3,454,101

Net loss - - (5,431,072) (5,431,072)
__________ ___________ ____________ ___________

BALANCES, MARCH 31, 1996 15,585,232 $36,001,158 $(29,973,865) $ 6,027,293
========== =========== ============ ============

</TABLE>

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

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

<TABLE>
<CAPTION>
For the Year Ended March 31,
1996 1995 1994
____________________________________________
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $(5,431,072) $(5,656,149) $(4,395,486)
Adjustments to net loss:
Depreciation and amortization 520,714 247,183 138,396
Contributed capital for services 39,962 243,312 70,125
Net changes in assets
and liabilities:
Accounts receivable 305,864 (561,616) (163,859)
Inventories (147,237) (144,982) (559,734)
Other current assets 6,435 (6,773) 37,681
Accounts payable (257,704) 593,498 (162,488)
Accrued payroll (92,512) 52,436 34,843
Other accrued liabilities (102,080) 273,305 (15,243)
Deferred revenue 410,000 156,000 (374,500)
__________ ___________ ___________
Net Cash Used in Operating Activities (4,747,630) (4,803,786) (5,390,265)
__________ ___________ ___________

CASH FLOWS FROM INVESTING ACTIVITIES:
Securities purchased (1,977,856) (6,951,390) (6,833,208)
Securities sold 4,974,268 9,795,130 1,610,922
Property and equipment (597,100) (956,487) (348,187)
Other assets (64,916) (65,723) (86,808)
__________ ___________ ___________
Net Cash Provided By (Used In)
Investing Activities 2,334,396 1,821,530 (5,657,281)
__________ ___________ ___________

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from common stock 3,454,101 - 12,950,921
__________ ___________ ___________
Net Cash Provided by Financing
Activities 3,454,101 - 12,950,921
__________ ___________ ___________

CASH AND CASH EQUIVALENTS:
Net increase (decrease) in cash
and cash equivalents 1,040,867 (2,982,256) 1,903,375
Cash and cash equivalents at
beginning of year 2,057,384 5,039,640 3,136,265
__________ ___________ ___________

Cash and cash equivalents at
end of year $3,098,251 $ 2,057,384 $ 5,039,640
========== =========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.

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

1. THE COMPANY:

The consolidated financial statements of Bioject Medical Technologies Inc.
and its subsidiaries (the "Company"), include the accounts of Bioject
Medical Technologies Inc. ("BMT") and its wholly owned subsidiaries, Bioject
Medical Systems Ltd. ("BMSL") and Bioject Inc. ("BI"). All significant
intercompany transactions have been eliminated. BMT was incorporated on
December 17, 1992 under the laws of the State of Oregon for the purpose of
acquiring all of the outstanding common shares of BMSL in exchange for an
equivalent number of common shares of BMT stock under a plan of U.S.
reincorporation approved by the Company's shareholders on November 20, 1992.
BMSL was incorporated on February 14, 1985, under the laws of British
Columbia, and BI was incorporated on February 8, 1985, under the laws of the
State of Oregon.

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, 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 jet injection system. In June 1994, the Company received
clearance from the FDA under 510(k) to market a version of its Biojector
2000 system in a configuration targeted at high volume injection
applications.

The Company's revenues to date have been derived primarily from licensing
and technology fees and more recently from sales of the Biojector 2000
system and Biojector syringes to public health clinics and to Health
Management Inc. with whom the Company signed an two-year distribution
agreement in fiscal 1995. Subsequent to year end this agreement was
cancelled. Although not obligated to do so, the Company agreed to
repurchase a portion of the goods sold (see Note 5). Future revenues will
depend upon acceptance and use by healthcare providers of the Company's jet
injection technology. Uncertainties over government regulation and
competition in the healthcare industry may impact healthcare provider
expenditures and third party payer reimbursements and, accordingly, the
Company cannot predict what impact, if any, subsequent healthcare reforms
might have on its business. In the future the Company may require additional
financing. Failure to obtain such financing on favorable terms could
adversely affect the Company's business.

2. ACCOUNTING POLICIES:

CASH EQUIVALENTS
The Company considers cash equivalents to consist of short-term, highly
liquid investments with an original maturity of less than three months.

SECURITIES AVAILABLE FOR SALE
Effective in fiscal 1995, the Company adopted Financial Accounting Standards
Board Statement No. 115, Accounting for Certain Investments in Debt and
Equity Securities (SFAS 115). Under provisions of SFAS 115, the Company is
required to classify and account for its security investments as trading
securities, securities available for sale or securities held to maturity
depending on the Company's intent to hold or trade the securities at time of
purchase. As of March 31, 1996 and 1995, all securities held by the Company
consisting entirely of short-term debt instruments were available for sale
and, accordingly, are stated on the balance sheet at their fair market value
which approximate cost. Realized gains or losses are determined on the
specific identification method and are reflected in the accompanying
financial statements. There were no significant realized gains or losses for
fiscal 1995 and 1996.

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:
<TABLE>
<CAPTION>
March 31,
1996 1995
__________ __________
<S> <C> <C>
Raw Materials $ 697,694 $ 641,782
Work in Process 12,467 23,208
Finished Goods 545,784 443,718
__________ __________
$1,255,945 $1,108,708
========== ==========
</TABLE>

PROPERTY AND EQUIPMENT
For financial statement purposes, depreciation expense on property and
equipment is computed on the straight-line method using the following lives:

Furniture and Fixtures............................5 years
Machinery and Equipment...........................5 years
Computer Equipment................................3 years
Production Molds..................................3 years

Leasehold improvements are amortized on the straight-line method over the
shorter of the remaining terms of the lease or the estimated useful lives of
the assets.

OTHER ASSETS
Other assets include costs incurred for the application of patents, net of
amortization on a straight-line basis over 17 years. Accumulated
amortization totalled $114,713 and $94,400 at March 31, 1996 and 1995,
respectively. Amortization expense for the years ended March 31, 1996, 1995
and 1994 totalled $20,313, $31,086, and $19,962, respectively.

ACCOUNTING FOR LONG-LIVED ASSETS
In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets To Be Disposed Of"(SFAS 121), which requires the Company to review
for impairment of its long-lived assets and certain identifiable intangibles
whenever events or changes in circumstances indicate that the carrying
amount of an asset might not be recoverable. In certain situations, an
impairment loss would be recognized. SFAS 121 will become effective for the
Company's year ending March 31, 1997. The Company has studied the
implications of SFAS 121 and, based on its initial evaluation, does not
expect it to have a material impact on the Company's financial condition or
results of operations.

REVENUE RECOGNITION FOR PRODUCT SALES
The Company records revenue from sales of its products upon shipment. In
fiscal 1996 and 1995, sales to one customer accounted for 75% and 74% of net
sales of products, respectively. In addition, 67% and 80% of accounts
receivable at March 31, 1996 and 1995, respectively, were due from this
customer.

RESEARCH AND DEVELOPMENT AND LICENSING/TECHNOLOGY REVENUES
Licensing fees are recognized as revenue when due and payable. Product
development revenue is deferred upon receipt and is recognized as revenue as
qualifying expenditures are incurred. Expenditures for research and
development are charged to expense as incurred.

In April 1992, the Company entered into a joint development agreement with
Eli Lilly and Co., that provided for the development and marketing of
application specific products. The agreement included a $500,000 licensing
fee and a provision for partial funding of the product development expenses
related to the program. The Company has received Phase I funding of
$1,000,000 and initial Phase II funding of $575,000 as part of the joint
product development effort. This product development revenue had been fully
recognized at March 31, 1994. This project has been on hold since spring
1994 pending resolution of Lilly's request to modify product specifications.
Because the Company's injector design does not meet Lilly's size and cost
goals, the Company and Lilly agreed to suspend any further development of a
specialized insulin self injection device and the Company does not
anticipate attempting to complete development of this device without Lilly's
participation. All costs of the Lilly development contract have previously
been expensed as research and development expenses. There were no product
development revenues received or recognized in fiscal 1995 and 1996.

In March 1994, the Company entered into a joint development agreement with
Schering AG, a major pharmaceutical manufacturer, for the development of
application specific products. Under terms of the agreement, the Company
received a $500,000 licensing fee in April 1994 and will receive partial
funding of product development expenses on an agreed schedule. As defined in
the agreement, under certain circumstances, the licensing and product
development fees are convertible by the pharmaceutical company into common
stock of the Company. The Board of Directors has reserved up to 285,715
shares for such potential conversion. In fiscal 1995, the Company received a
total of $1.1 million from the pharmaceutical company, composed of $500,000
in licensing fees which were recognized as revenue during fiscal 1995 and
$600,000 of Phase I product development revenues, $444,000 of which were
recognized as revenue in fiscal 1995. In the third quarter of fiscal 1996,
the Company received an additional $660,000. In fiscal 1996, $751,000 has
been recognized as revenue.

In January 1995, the Company entered into a joint development agreement with
Hoffmann-La Roche, a major pharmaceutical manufacturer, for the development
of application specific products. The Company received a licensing fee
totalling $500,000 which was recognized as revenue in fiscal 1995. The
Company will also receive specified product development fees on an agreed
upon schedule. In fiscal 1996, the Company received $900,000, of which
$399,000 has been recognized as revenue.

INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, Accounting For Income Taxes (SFAS
109). Under the liability method specified by SFAS 109, the deferred tax
assets and liabilities are determined based on the temporary differences
between the financial statement and tax bases of assets and liabilities as
measured by the enacted tax rates for the years in which the taxes are
expected to be paid. At March 31, 1996, the Company had total deferred tax
assets of approximately $10 million, consisting principally of available net
operating loss carryforwards. No benefit for these operating losses has been
reflected in the accompanying financial statements as they do not satisfy
the recognition criteria set forth in SFAS 109. Total deferred tax
liabilities were insignificant as of March 31, 1996.

As of March 31, 1996, BMT has net operating loss carryforwards of
approximately $584,000 available to reduce future federal taxable income,
which expire in 2011. BI has net operating loss carryforwards of
approximately $31 million available to reduce future federal taxable income,
which expire in 2001 through 2011. Approximately $3.0 million of BI's
carryforwards were generated as a result of deductions related to exercises
of stock options. When utilized, this portion of BI's carryforwards, as tax
effected, will be accounted for as a direct increase to contributed capital
rather than as a reduction of that year's provision for income taxes. BMSL
has a net operating loss carryforward of approximately $575,000 (Cdn)
available to reduce future Canadian taxable income, which expires in 1996
through 2003. The principal differences between net operating loss
carryforwards for tax purposes and the accumulated deficit result from
capitalization of certain start-up costs and deductions related to the
exercise of stock options for income tax purposes.

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.

STOCK OPTION ACCOUNTING
In October 1995, the Financial Accounting Standards Board issued Statement
No. 123, Accounting for Stock-Based Compensation (SFAS 123), which
establishes a fair value-based method of accounting for stock-based
compensation plans and requires additional disclosures for those companies
that elect not to adopt the new method of accounting. The Company will
continue to account for stock options under APB Opinion No. 25, Accounting
for Stock Issued to Employees. SFAS 123 disclosure requirements become
applicable for the Company in fiscal 1997.

NET LOSS PER SHARE
Net loss per share is computed based on the weighted average number of
common shares outstanding during the period. The effects of common stock
equivalents have not been included in the calculation as they would be anti-
dilutive.

3. 401(K) RETIREMENT BENEFIT PLAN:

The Company has a 401(k) Retirement Benefit Plan for its employees. All
employees subject to certain age and length of service requirements are
eligible to participate. The plan permits certain voluntary employee
contributions to be excluded from the employees' current taxable income
under provisions of the Internal Revenue Code Section 401(k) and regulations
thereunder. Effective January 1, 1996, the Company amended the plan to
provide for voluntary employer matches of employee contributions up to 6% of
salary and for discretionary profit sharing contributions to all employees.
Such employer matches and contributions may be in either cash or Company
common stock. For calendar 1996, the Company has agreed to match 25% of
employee contributions up to 6% of salary with Company stock. In fiscal
1996, the Company recorded an expense of $4,800 related to voluntary
employer matches under the 401(k) Plan.

4. SHAREHOLDERS' EQUITY:

PREFERRED STOCK
The Company has authorized 10 million shares of preferred stock, without par
value, to be issued from time to time with such designations and preferences
and other special rights and qualifications, limitations and restrictions
thereon, as permitted by law and as fixed from time to time by resolution of
the Board of Directors.

COMMON STOCK
Holders of common stock are entitled to one vote for each share held of
record on all matters to be voted on by shareholders. No shares have been
issued subject to assessment, and there are no preemptive or conversion
rights and no provision for redemption, purchase or cancellation, surrender
or sinking or purchase funds. Holders of common stock are not entitled to
cumulate their shares in the election of directors. As described in Note 2,
up to 285,715 shares of the Company's common stock have been reserved
for issuance.

ESCROWED SHARES
As a result of the Company's initial public offering on the Vancouver Stock
Exchange, 1.5 million shares of the Company were held in escrow pursuant to
an Escrow Agreement dated May 30, 1986, among the Company, WAM Partnership
and the escrow agent, Montreal Trust Company. WAM Partnership is owned by
Carl E. Wilcox, former Chairman and C.E.O., and J. Thomas Morrow, former
Director, and managed by Mr. Wilcox. Both Mr. Wilcox and Mr. Morrow are
founders of the Company. The Escrow Agreement provided that these escrowed
shares would be released from escrow based on two times the excess of
cumulative cash flow for five consecutive years (as defined in the
agreement) over 25% of the per share price in the Company's initial public
offering, multiplied by the number of shares in escrow, calculated on an
annual basis. Alternatively, the shares could be released by making
application and obtaining consent of the Superintendent of Brokers of
British Columbia based on demonstrating company value. Under the escrow
agreement, any shares not released by July 14, 1996 would be cancelled.

In connection with Mr. Wilcox's resignation as Chairman and C.E.O. of the
Company (see Note 6), the Board of Directors granted Mr. Wilcox a special
power of attorney to exclusively perform all acts necessary to obtain
extension of the escrow and/or release of the WAM Partnership escrow shares.
In addition, the Board agreed to pay up to $10,000 of costs associated with
such extension and/or release.

On June 3, 1996, the British Columbia Securities Commission informed the
Company that its Executive Director (formerly the Superintendent of Brokers)
consented to the release of all shares originally held in escrow. This
means that the 1.5 million shares of common stock which had been held under
this escrow arrangement are now held by the owners of the shares without
risk of cancellation and may be sold. Upon release, approximately 150,000
of these shares are considered to have been contributed back to the Company
and reissued to certain former employees in consideration for past services
rendered on behalf of the Company. The Company will record the shares as
contributed capital with a corresponding non-cash charge to compensation
expense at the fair market value of the stock on the date of issuance.
Accordingly, non-cash charge of $210,938 will be recorded in the financial
statements in the first quarter of fiscal 1997 (quarter ending June 30,
1996).

STOCK OPTIONS
Options may be granted to directors, officers and employees of the Company
by the Board of Directors under terms of the Bioject Medical Technologies
Inc. 1992 Stock Incentive Plan (the "Plan"), which was approved by the
Company's shareholders on November 20, 1992 and adopted by the Board
effective December 17, 1992. Under the terms of the Plan, eligible employees
may receive statutory and nonstatutory stock options, stock bonuses and
stock appreciation rights for purchase of shares of the Company's common
stock at prices and vesting as determined by a committee of the Board.
Except for options whose terms were extended, options granted under a prior
plan maintain their previous option price, vesting and expiration dates. As
amended in fiscal 1995, a total of up to 3,000,000 shares of the Company's
common stock including options outstanding at the date of initial
shareholder approval of the Plan may be granted under the Plan. In September
1993, the Option Committee of the Board of Directors extended the expiration
date of certain options granted to one employee. The difference between the
option price and the fair market value at the date of extension aggregated
$50,625, and has been reflected as compensation expense in the consolidated
financial statements in fiscal 1994. Options outstanding at March 31, 1996
expire through May 25, 2005.

Stock option activity is summarized as follows:
<TABLE>
<CAPTION>
Exercise
Shares Price Amount
_________ ____________ __________
<S> <C> <C> <C>
Balances March 31, 1993 1,368,100 $3.20 - 5.00 $5,363,634
Options granted 108,500 3.35 - 5.00 509,813
Options exercised (263,264) 3.20 - 5.00 (918,228)
Options canceled or expired (144,711) 3.35 - 5.00 (530,967)
_________ ____________ ___________
Balances March 31, 1994 1,068,625 3.20 - 5.00 4,424,252
Options granted 1,427,250 2.60 - 4.75 5,387,632
Options exercised - - -
Options canceled or expired (952,225) 3.00 - 5.00 (3,904,917)
_________ ____________ ___________
Balances March 31, 1995 1,543,650 2.60 - 5.00 5,906,967
Options granted 1,316,439 1.25 - 4.50 3,129,177
Options exercised - - -
Options canceled or expired (1,161,150) 2.34 - 5.00 (4,302,332)
__________ ____________ ___________
Balances March 31, 1996 1,698,939 $1.25 - 4.50 $ 4,733,812
========== ============ ===========
</TABLE>

At March 31, 1996, 1,043,312 of the total options outstanding were vested
and exercisable.

WARRANTS
Warrant activity is summarized as follows:
<TABLE>
<CAPTION>
Exercise
Shares Price Amount
_________ ____________ __________
<S> <C> <C> <C>
Balances March 31, 1993 60,000 $ 4.50 $ 270,000
Warrants exercised - - -
Warrants canceled or expired - - -
_________ ____________ __________
Balances March 31, 1994 60,000 4.50 270,000
Warrants exercised - - -
Warrants canceled or expired (60,000) 4.50 (270,000)
_________ ____________ __________
Balances March 31, 1995 - - -
Warrants issued 2,440,095 1.97 - 2.00 4,875,906
Warrants exercised - - -
Warrants canceled or expired - - -
_________ ____________ __________
Balances March 31, 1996 2,440,095 $1.97 - 2.00 $4,875,906
========= ============ ==========
</TABLE>
Of the total outstanding warrants, 575,752 expire February 28, 1998 and the
remaining balance expire November 21, 2000.

5. COMMITMENTS:

BI has operating leases for its manufacturing, sales and administrative
facilities and warehouse facilities with options to renew for an additional
five-year term upon expiration. BI also leases office equipment under
operating leases for periods up to five years. At March 31, 1996, future
minimum payments under noncancellable operating leases with terms in excess
of one year are as follows:

<TABLE>
<CAPTION>
Year Ending March 31, Facilities Equipment
__________ _________
<S> <C> <C>
1997 $210,516 $51,384
1998 105,258 41,408
1999 - 20,118
</TABLE>

Lease expense for the years ended March 31, 1996, 1995 and 1994 totalled
$220,770, $214,099, and $232,557, respectively.

Subsequent to year end, the Company committed to repurchase certain
inventories from one customer. The purchase price totalled $660,000 of which
$322,000 has been satisfied and the balance is to be paid in two equal
installments in July and October 1996.

6. RELATED PARTY TRANSACTIONS:

On January 12, 1995, the Board of Directors announced the resignation of the
Company's Chairman and Chief Executive Officer, Carl E. Wilcox. In
consideration for Mr. Wilcox's long service to the Company, the Board
granted Mr. Wilcox 100,000 shares of common stock valued at $241,000 and
cash compensation totalling $247,000. The Board also vested 200,000
previously granted option shares at $4.00 per share and extended the
expiration date to January 14, 1998. The Board granted Mr. Wilcox
a special power of attorney to exclusively perform all acts necessary to
obtain extension and/or release of the WAM Partnership escrow shares. On
June 3, 1996, the British Columbia Securities Commission informed the
Company that release of the escrow shares had been granted (see Note 4). The
Board also agreed to pay Mr. Wilcox $20,000 per year for two years under a
covenant not-to-compete. The value of the severance agreement totalling
$488,000 was recorded as general and administrative expense in the
accompanying financial statements in fiscal 1995.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

<PAGE>
PART III

The Company has omitted from Part III the information that will appear
in the Company's definitive proxy statement for its annual meeting of
shareholders to be held on September 19, 1996 (the "Proxy Statement"), which
will be filed within 120 days after the end of the Company's fiscal year
pursuant to Regulation 14A.

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this Item is incorporated by reference to
the information under the caption "DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT" in the Proxy Statement.

Item 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference to
the information under the caption " "EXECUTIVE COMPENSATION AND OTHER
TRANSACTIONS" in the Proxy Statement.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item is incorporated by reference to the
information under the caption "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT" in the Proxy Statement.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is incorporated by reference to the
information under the caption "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS" in the Proxy Statement.

PART IV

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

(a) The following documents are filed as a part of this report:

(1) Consolidated Financial Statements and Report of
Independent Public Accountants are included under
Item 8, in Part II.

(2) Consolidated Financial Statement Schedules and Report
of Independent Public Accountants on those schedules:

None required

(3) Exhibits: The following exhibits are filed as part
of this report. An asterisk (*) beside the exhibit number
indicates the subset of the exhibits containing each
management contract, compensatory plan, or arrangement
required to be identified separately in this report.

Exhibit
Number Exhibit Description
_______ _________________________________________________________________
<S> <C>
3.1 Articles of Incorporation of Bioject Medical Technologies Inc.
incorporated by reference to the same exhibit number of the
Company's Form 10-K for the year ended January 31, 1993.

3.2 Amended and Restated By-laws of Bioject Medical Technologies Inc.
Incorporated by reference to the same exhibit number of the
Company's Form 10-Q for the quarter ended September 30, 1994.

4.3* Bioject Medical Technologies Inc. 1992 Stock Incentive Plan, as
amended through September 21, 1994

10.4 Lease Agreement dated March 21, 1989 between Spieker-Hosford-
Eddy-Souther #174, Limited Partnership and Bioject Inc. for the
Portland, Oregon facility incorporated by reference to the same
exhibit number of Company's Form 10-K for the year ended January
31, 1989.

10.4.1 Amended Lease Agreement dated June 18, 1992 between Bridgeport
Woods Investors (successors in interest to Spieker-Hosford-Eddy-
Souther #174 Limited Partnership) and Bioject Inc. for the
Portland, Oregon facility incorporated by reference to the same
exhibit number of the Company's Form 10-K for the year ended
January 31, 1993.

10.7* Executive Employment Contract with Peggy J. Miller, dated
January 18, 1993 incorporated by reference to the same exhibit
number of the Company's Form 10-K for the year ended
January 31, 1993.

10.8* Executive Employment Contract with J. Michael Redmond, dated
February 8, 1996.

10.13 Employment Agreement with Richard B. Hollis dated December 5,
1991 Incorporated by reference to the same exhibit number of the
Company's Form 8 dated May 30, 1989 amending the Company's
Form 10-K for the year ended January 31, 1989.

10.14 Common Stock Purchase Agreement between Eli Lilly and Company
and Bioject Medical Systems Ltd. dated April 29, 1992
incorporated by reference to the same exhibit number of Company's
Form 8, dated May 28, 1992, amending Company's Form 10-K for the
year ended January 31, 1992.

10.15 Joint Venture Agreement, between Astra Pharma, Inc. and Bioject
Medical Systems Ltd. and Bioject Inc. incorporated by reference
to the same exhibit number of Company's Form 8, dated October 9,
1992, amending Company's Form 10-K for the year ended January 31,
1992. Confidential treatment has been granted with respect to
certain portions of this exhibit pursuant to an Application for
Confidential Treatment filed with the Commission under Rule 24b-2
under the Securities Exchange Act of 1934, as amended.

10.17 Development and Licensing Agreement between Eli Lilly & Company
and Bioject Inc., dated April 29, 1992 incorporated by reference
to the same exhibit number of Company's Form 8, dated October 9,
1992, amending Company's Form 10-Q for the quarter ended
April 30, 1992. Confidential treatment has been granted with
respect to certain portions of this exhibit pursuant to an
Application for Confidential Treatment filed with the Commission
under Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

10.17.1 Amendment to Development and Licensing Agreement between Eli
Lilly and Company and Bioject Inc., effective May 5, 1993
incorporated by reference to the same exhibit number of Company's
Form S-1, No. 33-68846, dated November 1, 1993. Confidential
treatment has been granted with respect to certain portions of
this exhibit pursuant to an Application for Confidential
Treatment filed with the Commission under Rule 406 under the
Securities Act of 1933, as amended.

10.20* Employment Contract with Carl E. Wilcox, dated November 14, 1991
incorporated by reference to the same exhibit number of Company's
Form S-1, No. 33-68846, dated November 1, 1993.

10.20.1* Resignation Agreement with Carl E. Wilcox dated February 28, 1995
incorporated by reference to exhibit number 10.24 of the
Company's Form 8 dated March 24, 1995.

10.20.2* Amendment to Resignation Agreement with Carl E. Wilcox dated
August 19, 1995 incorporated by reference to the same exhibit
number of the Company's Form 10-Q for the quarter ended
September 30, 1995.

10.21* Employment Agreement with Steven F. Peterson dated April 17, 1991
incorporated by reference to the same exhibit number of Company's
Form S-1, No. 33-68846, dated November 1, 1993.

10.22* Escrow Agreement -- Property among Montreal Trust of Vancouver,
Bioject Medical Systems Ltd. and WAM Partnership incorporated by
reference to the same exhibit number of Company's Form S-1,
No. 33-68846, dated November 1, 1993.

10.23 Development and Licensing Agreement between Schering, AG, Bioject
Inc. and Bioject Medical Technologies Inc. dated March 28, 1994
incorporated by reference to the same exhibit number of the
Company's Form 10-K for the year ended March 31, 1994.

10.25 Purchase Agreement between Homecare Management, Inc. and Bioject
Inc. dated August 2, 1994. Confidential treatment has been
granted with respect to certain portions of this exhibit pursuant
to an Application for Confidential Treatment filed with the
Commission under Rule 24b-2 under the Securities Act of 1934.

10.26 Heads of Agreement between Hoffmann-La Roche Inc. and Bioject
Inc. dated January 10, 1995. Confidential treatment has been
granted with respect to certain portions of this exhibit pursuant
to an Application for Confidential Treatment filed with the
Commission under Rule 24b-2 under the Securities Act of 1934.

10.27* Employment Agreement with James C. O'Shea dated October 3, 1995
incorporated by reference to the same exhibit number of the
Company's Form 10-Q for the quarter ended September 30, 1995.

10.28 Form of Amended and Restated Registration Rights Agreement
between Bioject Medical Technologies Inc. and the participants in
the 1995 private placement incorporated by reference to exhibit
4.2 of the Company's Registration Statement on Form S-3
(No. 33-80679).

10.29 Form of Amended and Restated Series "A" Common Stock Purchase
Warrant incorporated by reference to exhibit 4.3 of the Company's
Registration Statement on Form S-3 (No. 33-80679).

10.30 Form of Series "B" Common Stock Purchase Warrant incorporated by
reference to exhibit 4.4. of the Company's Registration Statement
on Form S-3 (No. 33-80679).

10.31 Form of Amended and Restated Series "C" Common Stock Purchase
Warrant incorporated by reference to exhibit 4.5 of the Company's
Registration Statement on Form S-3 (No. 33-80679).

21.1 List of Subsidiaries incorporated by reference to Exhibit No.
22.1 of Company's Form 10-K for the year ended January 31, 1993.

23.2 Consent of Independent Public Accountants

27.1 Financial Data Schedule

</TABLE>

(b) Forms 8K filed since last report:

Form 8-K filed January 26, 1996 reporting third quarter
results and suspension of shipments to HMI

<PAGE>
SIGNATURES

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

BIOJECT MEDICAL TECHNOLOGIES INC.
(Registrant)

By: /S/ JAMES C. O'SHEA
James C. O'Shea
Chairman of the Board, President
and Chief Executive Officer

Pursuant to the request of the Securities Exchange Act of 1934,
this report has been signed below on behalf of the Registrant and
in the capacities indicated on the dates shown.

SIGNATURE TITLE

/S/ JAMES C. O'SHEA Chairman of the Board, President
James C. O'Shea and Chief Executive Officer

/S/ PEGGY J. MILLER Vice President, Chief Financial
Peggy J. Miller Officer and Secretary/Treasurer

/S/ WILLIAM A. GOUVEIA Director
William A. Gouveia

/S/ JOHN RUEDY, M.D. Director
John Ruedy, M.D.

/S/ CECIL E. SPEARMAN Director
Cecil E. Spearman

/S/ GRACE K. FEY Director
Grace K. Fey

<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>

Exhibit
Number Exhibit Description
_______ ________________________________________________________________
<S> <C>

10.8 Executive Employment Contract with J. Michael Redmond, dated
February 8, 1996.

23.2 Consent of Independent Public Accountants

27.1 Financial Data Schedule

</TABLE>

EXHIBIT 10.8

EXECUTIVE EMPLOYMENT AGREEMENT

THIS AGREEMENT (hereafter the "Agreement") is dated and made effective this
8th day of FEBRUARY, 1996 and is made by and between:

BIOJECT INC. ("BI"), a corporation incorporated under the laws of the State
of Oregon having its principal offices at 7620 SW Bridgeport Road,
Portland, Oregon 97224;

(hereafter referred to as "Company")

AND:

MR. MICHAEL REDMOND, an individual residing at:
10 Canterbury Road
Windham, New Hampshire 03087

(hereafter referred to as "Executive")

RECITALS

1. Company is engaged in the business of manufacturing and marketing
the Biojector Jet Injection System, a medical device that injects
medication through a patient's skin without the use of a needle, and in
producing sterile, single-use medication ampules for use with the
Biojector.

2. Company desires to employ and retain the unique experience,
abilities and services of Executive as Vice President of Sales and
Marketing for Company;

3. Company has agreed to employ Executive on a full-time basis and
Executive has agreed to enter into such employment, on the terms and
conditions set forth in this Agreement; and

4. For purposes of this Agreement, the "parties" refers to Company and
Executive.

NOW THEREFORE, in consideration thereof and of the covenants and conditions
contained herein, the parties agree as follows:

SECTION 1 - EMPLOYMENT

1.1 Employment.

Company agrees to employ Executive full-time as its Vice President of Sales
and Marketing. Executive accepts such employment on the terms and
conditions set forth in this Agreement and agrees to devote his full time
and attention (periods of illness and vacation excepted), skill and efforts
to the performance of his duties under this Agreement.

Executive agrees not to continue nor undertake any other employment or
self-employment during his employment with Company. Executive further
agrees not to participate in any activities during his employment that may
conflict with the best interests of Company.

1.2 Board Approval.

Company represents that upon full execution of this Agreement, the
appointment and employment of Executive to the positions referred to in
Section 1.1 will be properly effected in compliance with all Company Bylaws
including any required approval by the Board of Directors of Company.

1.3 Definitions.

As used in this Agreement:

a. "Confidential Information" means any of Company's customers,
employees, products, processes, services, financial information, marketing
techniques, merchandising, business strategies or plans, research,
development, systems, inventions or any other trade secret or information
in existence at any time during Executive's employment with Company.

b. "Conflicting Product" means any product, process or service of
any individual or organization other than Company, in existence or under
development, which resembles or competes with any product, process or
service of Company, including a product, process or service with which
Executive worked on or obtained Confidential Information, at any time prior
to the termination of his employment with Company.

c. "Conflicting Organization" means any individual, entity or
organization engaged or preparing to become engaged in research,
development, production, marketing or selling of a Conflicting Product.

d. "Inventions" means discoveries, concepts, and ideas, whether
patentable or not and including, but not limited to, procedures, processes,
methods, formulas, and techniques, as well as improvements thereof or know-
how related thereto, concerning any present or prospective activities of
Company which Executive obtains as a result of his employment with Company.

SECTION 2 - EMPLOYMENT DUTIES

2.1 Duties.

Executive is hereby employed full-time by Company as the Vice President of
Sales and Marketing. In that capacity, Executive shall have overall
responsibility for, and diligently oversee, the collective efforts of the
Company's sales and marketing staff. This activity shall include, but not
be limited to: designing and implementing strategic plans for sales and
marketing within the United States of America and Canada; recruiting,
directing and mentoring members of the Company's field sales team;
researching and closing new major accounts; and, developing new markets
for the Company's current and future products. Executive further agrees
that in all aspects of such employment, Executive shall comply with the
policies, standards and regulations of Company established from time to
time, and shall perform his duties faithfully, intelligently, to the best
of his ability, and in the best interests of Company.

2.2 Reporting.

In carrying out his job duties and responsibilities under this Agreement,
Executive shall report to the Chairman and Chief Executive Officer of
Company.

2.3 Location.

Executive shall perform his job duties and responsibilities under this
Agreement through the principal offices of Company in Portland, Oregon,
and at any other geographical location reasonably necessary from time to
time to ensure the efficient and proper operation of Company. As specified
in the Company's written employment offer, dated February 1, 1996, the
Executive will not be required to relocate to Portland, Oregon. If, due to
the Company's growth, this relocation is required at a later date, the
Company agrees to pay reasonable and customary expenses associated with the
relocation. If relocation is required, these expenses would include, but
not be limited to: real estate commission, transportation of household
goods, travel expenses, temporary living expenses and perdiem, and house-
hunting expenses.

2.4 Compliance With SEC Reporting and Trading Restrictions.

It is understood that BMT is a reporting company within the requirements of
the Securities and Exchange Commission ("SEC"). Executive agrees to fully
comply with all reporting and trading restrictions in carrying out his job
duties and responsibilities for Company and in exercising or trading any
BMT stock or options.

Executive specifically agrees to comply with Section 16(b) of the
Securities Exchange Act of 1934, which prohibits officers and designated
insiders from exercising options granted by BMT earlier than six months
from the date of grant or from selling shares of BMT if they have bought
shares within six months previously, or from buying shares if they have
sold shares within six months previously.

SECTION 3 - COMPENSATION

3.1 Base Salary.

In consideration for all services rendered by Executive to Company, Company
shall pay Executive a minimum annual gross base salary of one hundred
thousand dollars ($100,000), beginning February 8, 1996, payable bi-weekly
and in accordance with Company's usual payroll policies and procedures.
This salary is subject to annual increases or other periodic and necessary
adjustments (which will not reduce the minimum annual gross base salary to
less than $100,000) at the sole discretion of Company's Chairman and Board
of Directors, considering Executive's achievements during the previous 12
months, business conditions, cost-of-living, and other factors.

3.2 Bonus Compensation.

Executive shall be entitled to participate in any net profits pool, profit
sharing or deferred compensation plan or program that may be established by
Company during the duration of Executive's employment with Company,
provided that Executive's entitlement will depend on the terms and
conditions of any such pool, plan or program.

3.3 Reimbursement of Business Expenses.

Company will reimburse Executive for all reasonable out-of-pocket business
expenses necessarily incurred by Executive in the performance of his job
duties and responsibilities under this Agreement, upon Executive's
presentation of vouchers, bills and receipts verifying such expenses and in
accordance with Company's reimbursement policies as established from time
to time.

3.4 Paid Holidays, Vacation and Sick Leave Benefits.

Executive will receive paid holidays, vacation and sick leave benefits in
accordance with Company's benefits policy in effect from time to time and
set forth in Company's Policy Manual.

Company agrees to calculate Executive's accrual of vacation and sick leave
benefits according to the maximum accrual formula available to employees
having the longest duration of employment with Company in effect at the
time.

3.5 Other Benefits.

Executive shall be entitled to participate in and receive benefits under
any retirement plan, pension plan, profit sharing plan, stock option or
stock purchase plan, life insurance plan, health and dental plan,
disability plan, or any other employee benefit plan or arrangement made
available by Company to its employees from time to time, subject to the
eligibility, contribution and other requirements of such plans and
arrangements.

Executive shall receive an additional auto allowance of five hundred
dollars ($500) per month, which will be paid as part of the first paycheck
each month.

3.6 Disability.

Company will comply with all requirements of the Americans with
Disabilities Act of 1990 ("ADA") in effect during Executive's employment.
In addition and apart from compliance with the ADA, Company agrees to pay
Executive partial compensation in the event Executive should become
"disabled", as that term is expressly defined in this Section 3.6, during
his employment with Company. As defined for purposes of this Section 3.6
only, "disabled" means: (1) any illness, health condition, accident, injury
or other cause beyond Executive's control that prevents him from performing
the majority of his essential job duties and responsibilities for a period
of more than sixty (60) consecutive work days or for more than sixty (60)
work days in the aggregate during any 12-month period; and (2) during the
period Executive receives disability pay under this Section 3.6, Executive
is unable to engage in any substantial gainful employment for which the
employee is suited on the basis of age, education and experience. Company
and Executive agree that whether Executive is disabled under the terms of
this Section will be determined by an evaluation conducted by a physician
selected by Executive from a list of physicians provided by Company.

In the event it is determined that Executive is disabled as specifically
defined in Section 3.6, Company agrees to pay Executive all base salary
compensation and bonus previously earned and due Executive, together with a
salary at seventy-five percent (75%) of his then-current salary during the
duration of his disability up to a maximum six (6) month period from the
disability date. Should Executive continue to be disabled beyond six (6)
months, as reevaluated and determined by a physician selected by Executive
from a list of physicians provided by Company, the Company will pay
Executive salary at a rate of fifty percent (50%) of his then-current
salary for an additional period up to six (6) months. During the period
such disability payments are made (up to a maximum of twelve (12) months),
Company agrees to continue Executive's health and dental insurance and
other previously granted benefits coverage (excepting accrual of vacation
and sick leave time). Should payments to Executive under worker's
compensation and/or Company paid disability insurance policies or programs,
when combined with the payments described herein, exceed the benefits
described in this Section 3.6, Company will reduce its payment to Executive
under this Section by the calculated excess amount. Company and Executive
agree that during the term of Executive's disability as defined herein,
Company may require periodic reevaluation and medical certification of
Executive's disability by a physician selected by Executive from a list of
physicians provided by Company.

SECTION 4 - DURATION OF EMPLOYMENT

4.1 Term.

Subject to Sections 4.2 through 4.5 below, the parties agree that
Executive's employment with Company under this Agreement commenced on
February 8, 1996 and shall continue for an initial term of one year.
Thereafter, Executive's employment under this Agreement will automatically
renew for additional one-year periods, subject to the termination
provisions contained in Sections 4.2 through 4.6 below. Notwithstanding
those periods, this Agreement will remain enforceable and in effect until
all the parties' rights and obligations have been satisfied, terminated or
have expired, as provided herein.

4.2 Termination by Company.

a. By Company for Cause. Executive agrees that his employment
with Company may be terminated immediately for cause at the discretion of
the Chairman and Board of Directors of Company. "Cause" is defined to
mean: (A) the willful and continued failure by Executive substantially to
perform his duties and obligations to the Company (other than any such
failure resulting from any illness, medical condition or physical or mental
incapacity) which failure continues after Company has given written notice
to Executive; (B) the willful engaging by Executive in misconduct which is
significantly injurious to Company, monetarily or otherwise; (C) the
material breach by Executive of any of his obligations as set forth in
Section 6 of this Agreement; (D) the engaging by Executive in any fraud,
dishonesty, or any other act of misconduct in the performance of
Executive's duties on behalf of Company; (E) the commission by Executive of
a civil or criminal offense which may adversely affect Company's reputation
or interests, as determined by the Board of Directors, regardless of any
legal proceeding; or (F) the action or conduct by Executive resulting in
his being indicted or sanctioned in his personal capacity, or resulting in
his entering into a consent decree, in connection with an investigation of,
allegation of wrongdoing by, or other formal proceeding against Executive,
by the United States Food and Drug Administration, the United States
Securities and Exchange Commission or other federal or state agency,
whether related to the business of Company or to any other employment or
activity of Executive, past, present or future. For purposes of this
definition, no act, or failure to act, on Executive's part will be
considered "willful" unless done, or omitted to be done, by Executive in
bad faith and without reasonable belief that his action or omission was in
the best interests of Company.

Termination of Executive's employment for cause will become effective five
(5) business days after a written notice of intent to terminate Executive's
employment is given to Executive by Company's Board of Directors or,
alternatively, at Company's option, by paying Executive all compensation
due him in lieu of part or all of the five (5) business days notice.

Upon termination by Company for cause as stated in Section 4.2.a. herein,
Company shall pay Executive all earned but unpaid base salary compensation
(prorated to the date of such termination), together with any earned but
unpaid bonus compensation as described in Section 3.2 herein, all accrued
but unused vacation time, and any not yet reimbursed business expenses
incurred for services provided through the date of termination, as provided
for in Section 3.3 of this Agreement. All other compensation and benefits
shall cease accrual on Executive's termination date.

b. By Company Without Cause and With or Without Notice.
Executive agrees that Company may terminate his employment at any time, for
any reason and without cause by giving Executive fifteen (15) calendar days
prior written notice or alternatively, at Company's option, by paying
Executive all compensation due him in lieu of part or all of the fifteen
(15) calendar days notice.

Upon termination by Company without cause and with or without notice as
stated in Section 4.2.b. above, Company will pay Executive all earned but
unpaid base salary compensation (prorated to the date of such termination),
together with any earned but unpaid bonus compensation as described in
Section 3.2 herein, all accrued but unused vacation time, and any not yet
reimbursed business expenses incurred for services provided through the
date of termination, as provided for in Section 3.3 of this Agreement.

Company will also, within thirty (30) calendar days after Executive's
termination by Company under Section 4.2.b., pay to Executive an additional
sum (hereafter "Additional Pay") not less than Executive's then-current
gross base salary compensation for a period of four (4) months, commencing
on the day of Executive's termination. If Executive's termination occurs
at any point during the first twelve (12) months of his employment, the
amount of Additional Pay will be equal to the remainder of Executive's
annual gross base salary, but in no case less than four (4) months gross
base salary. As a prior condition to Executive's receipt of this
Additional Pay, Executive shall reconfirm, in writing, his agreement that
any and all disputes arising out of or related to his employment with
Company, his termination of employment or a breach of this Agreement will
be resolved in compliance with the dispute resolution process described in
Section 8.6 herein and that any action on his part to institute legal
proceedings in any court of law to resolve such disputes will result in a
full and complete forfeiture of his right to the Additional Pay described
in this Section 4.2.b. (and entitle Company to recover any and all
Additional Pay paid to Executive). All other compensation and benefits
shall cease accrual on Executive's termination date.

In addition, Company will, within thirty (30) days, vest that group of
stock options which are scheduled to vest during that twelve (12) month
period of Executive's employment to Executive. This vesting will follow
the schedule described in paragraph 5.1, a, and 5.1, b, of Agreement.

4.3 Termination by Executive.

Executive may terminate this Agreement at any time by giving sixty (60)
calendar days prior written notice to Company.

Upon termination by Executive as provided in Section 4.3 herein, Company
will pay Executive all earned but unpaid base salary compensation (prorated
to the date of such termination), together with any earned but unpaid bonus
compensation as described in Section 3.2 herein, all accrued but unused
vacation time, and any not yet reimbursed business expenses incurred for
services provided through the date of termination, as provided for in
Section 3.3 of this Agreement. All other compensation and benefits shall
cease accrual on Executive's termination date.

4.4 Termination Upon Disability.

Executive's employment with Company will terminate upon Executive's
disability as defined in this Section 4.4. "Disability" is defined to mean
a disability of Executive which renders him unable, with or without
reasonable accommodation, to perform any of his essential job functions.
Upon termination of Executive's employment with Company due to disability
as defined in this Section 4.4, Company will pay Executive all earned but
unpaid base salary compensation (prorated to the date of such termination),
together with any earned but unpaid bonus compensation as described in
Section 3.2 herein, all accrued but unused vacation time, and any not yet
reimbursed business expenses incurred for services provided through the
date of termination, as provided for in Section 3.3 of this Agreement.
Unless Executive qualifies for disability pay under Section 3.6 of this
Agreement, Executive will only be entitled to worker's compensation and/or
payments under Company paid disability insurance policies or programs if
Executive qualifies under the terms and conditions of such policies or
programs. All other compensation and benefits shall cease accrual upon
Executive's date of termination due to disability. The provisions in
Section 4.2.b. of this Agreement are not applicable.

4.5 Termination Upon Death.

Executive's employment with Company shall terminate immediately upon
Executive's death. Upon termination of Executive's employment with Company
due to death, Company shall pay to Executive's estate Executive's base
salary compensation otherwise earned and payable to Executive pursuant to
Section 3.1, together with any earned but unpaid bonus compensation as
described in Section 3.2 herein, all accrued but unused vacation time, and
any not yet reimbursed business expenses incurred for services provided
through the date of termination, as provided for in Section 3.3 of this
Agreement.

In addition, Company shall pay Executive's estate a sum equal to
Executive's then-current base salary from the date of termination through
the last day of the calendar month in which Executive's death occurs and
for a period of sixty (60) calendar days thereafter ("Additional Death
Payment"). As a prior condition to Executive's receipt of this Additional
Death Payment, Executive's estate or personal representative shall execute
a general release of all claims which will have the effect of discharging
any and all liability of Company to Executive arising out of or related to
Executive's employment with Company, the termination of Executive's
employment and/or any alleged breach of this Agreement. This Additional
Death Payment will constitute a complete settlement of any and all disputes
arising out of or related to Executive's employment with Company, the
termination of Executive's employment and/or any alleged breach of this
Agreement. All other compensation and benefits shall cease accrual upon
Executive's date of termination due to death.

4.6 Termination Upon Company Reorganization, Merger or Sale.

In the event Executive's employment is terminated on or prior to one (1)
year after the effective date of: (1) a consolidation or merger of BMT,
BMSL and/or BI with another corporation or entity; (2) the sale to a third
party of stock of BMT, BMSL or BI which, when issued and outstanding, will
constitute more than 50% of the issued and outstanding stock of BMT, BMSL,
or BI, respectively; (3) the sale of all or substantially all of the assets
of BMT, BMSL and/or BI to a third party; or (4) the liquidation,
dissolution, reorganization or commencement of any proceeding under
federal or state bankruptcy or insolvency laws by BMT, BMSL and/or BI,
Company will pay Executive all earned but unpaid base salary compensation
(prorated to the date of such termination), together with any earned but
unpaid bonus compensation as described in Section 3.2 herein, all accrued
but unused vacation time, and any not yet reimbursed business expenses
incurred for services provided through the date of termination, as provided
for in Section 3.3 of this Agreement.

In addition, upon termination of Executive's employment with Company
pursuant to Section 4.6 herein, Executive will be entitled to the following
(hereafter "Additional Section 4.6 Pay"): (1) within thirty (30) calendar
days of termination pursuant to Section 4.6 herein, a sum equal to
Executive's then-current gross base salary compensation for a period of
four (4) months; and (2) all stock options granted to Executive, pursuant
to Section 5.1 of this Agreement or any other options previously granted
Executive, will become immediately vested and exercisable. As a prior
condition to Executive's receipt of this Additional Section 4.6 Pay,
Executive shall execute a general release of all claims which will have the
effect of discharging any and all liability of Company to Executive arising
out of or related to Executive's employment with Company, the termination
of Executive's employment and/or any alleged breach of this Agreement.
This Additional Section 4.6 Pay will constitute a complete settlement of
any and all disputes arising out of or related to Executive's employment
with Company, the termination of Executive's employment and/or any alleged
breach of this Agreement. All other compensation and benefits shall cease
accrual upon Executive's date of termination pursuant to Section 4.6
herein.

In the event it is determined that such payments in the preceding paragraph
are determined to be contingent on a change in control as defined in
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"),
and a determination is made that the aggregate amount of any payments made
to Executive under this Section 4.6 constitutes an "excess parachute
payment" as defined in Section 280G of the Code and is therefore subject to
the excise tax provisions of Section 4999 of the Code, or any successor
sections thereof, Executive shall be entitled to receive from Company, in
addition to any other amounts payable hereunder, a lump sum payment equal
to one hundred percent (100%) of such excise tax and any taxes owed on such
lump sum payment. Such amount shall be payable to Executive as soon as
practicable after such determination is made. Executive and Company shall
mutually and reasonably determine whether or not such payments are subject
to the provisions of Sections 280G and 4999 of the Code.

Company agrees to request any successor or successors to all or
substantially all of the business and/or assets of Company (whether direct
or indirect, by purchase, merger, consolidation, liquidation or otherwise),
upon or prior to such succession, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that Company would
be required to perform it if no such succession had taken place. A copy of
such assumption and agreement will be delivered to Executive promptly after
its execution by the successor. Company in no manner warrants that such
agreement can and will be obtained from such successor. Failure by Company
to obtain such agreement from successor will entitle Executive to benefits
and pay from Company in the same amounts as Executive would be entitled in
Section 4.6 herein upon termination.

4.7 Return of Company Property Upon Termination.

Upon termination of Executive's employment with Company, regardless of how
termination may be effected, or whenever termination is requested by
Company or Executive, Executive agrees to immediately turn over to Company
all of Company's property, including any Confidential Information or
Inventions as defined in Section 1.3 herein, and any Company items used by
Executive in rendering services hereunder or otherwise, that may be in
Executive's possession, custody or control. The obligations of Executive
as set forth in Section 6 of this Agreement shall survive any termination
of Executive.

SECTION 5 - STOCK OPTIONS

5.1 Grant of Stock Options.

Executive and Company have entered into a Bioject Officer/Insider Stock
Option Agreement granting Executive the following stock options:

a. An option to purchase one hundred thousand (100,000) shares of
BMT Common Stock at a strike price (not to exceed $1.50 per share)
determined by the Stock Option Committee of the Board of Directors of BMT.
The options shall vest at the following rate, and shall have a term of
seven (7) years once vested:

For 33,333 option shares, the options shall become vested and exercisable
on February 8, 1997. For 33,333 option shares, the options shall become
vested and exercisable on February 8, 1998. For 33,334 option shares, the
options shall become vested and exercisable on February 8, 1999.

b. An additional twenty-five thousand (25,000) shares of BMT
Common Stock shall be granted at the start of the Company's fiscal year
1997, at a strike price determined by the Stock Option Committee of the
Board of Directors of BMT, Inc. These options will vest based on the
Executive meeting certain sales and other performance goals, and will have
a term of eight years once vested. These options are subject to the
provisions of BMT's stock option plan.

SECTION 6 - PROTECTION OF COMPANY PROPERTY

6.1 Intellectual Properties.

a. Company Ownership. All ownership, copyright, patent, trade
secrecy and other rights and all works, programs, manuals, ideas,
Inventions, improvements, discoveries, processes, or other properties
("Intellectual Properties") made or conceived by Executive during the term
of his employment, shall be the sole property of Company, whether developed
independently by Executive or jointly with others, whether developed or
conceived during regular work hours or at Company's facilities, and whether
or not Company uses, registers, or markets such properties. In accordance
with Company's policy and Oregon law, this Agreement does not apply to, and
Executive has no obligation to assign to Company, any Invention for which
no Company trade secrets, and no equipment, supplies, or facilities of
Company were used, and which was developed entirely on Executive's own
time, unless: (i) the Invention relates directly to Company's business;
(ii) the Invention relates to Company's existing or demonstrably
anticipated research or development work; or (iii) the Invention results
from Executive's work for Company.

b. Disclosure Duty. To determine whether Executive has an
obligation to assign particular Intellectual Properties to Company,
Executive shall promptly make full written disclosure to Company of all
Intellectual Properties that he developed, or on which he is working during
the term of his employment with Company and during the one-year period
thereafter. Executive agrees to assist Company as it may request during
and after the term of his employment to provide further evidence, perfect,
and/or enforce Company's rights in, and ownership of, the covered
Intellectual Properties. Executive's obligation in this respect includes,
without limitation, execution of additional instruments of conveyance and
assistance to Company with applications for patents, copyright, or other
registrations.

c. Infringement Warranty. Executive warrants that to the best of
his knowledge, any and all items, technology, and Intellectual Properties
of any nature developed or provided by Executive under this Agreement, or
which in any way benefit Company, will be original to Executive, and will
not infringe in any respect on the rights or property of others. Executive
will not, without prior written approval of Company, use any equipment,
supplies, facilities, or proprietary information of any other party.
Executive warrants that he is entirely free to contract for employment with
Company, and to perform his duties under this Agreement, without any
conflict with other commitments, agreements, understandings or duties,
whether to prior employers, or others. Executive will indemnify Company
for all losses, claims, attorney fees, and other expenses which may arise
from any breach of this warranty.

6.2 Confidentiality.

Executive acknowledges that Company's business and future success depends
on the preservation of trade secrets and other confidential, proprietary
information concerning Company, its affiliates, suppliers, and customers
("Secrets"). These Secrets and Confidential Information include, without
limitation: product designs, computer software, product configuration
knowledge, market surveys, customer lists and needs, product and marketing
plans, procedural and technical manuals and practices, pricing methods,
proposal terms, contract renewal dates, information about the
qualifications of other employees, and other such business information.
Executive agrees to protect and preserve these Secrets and Confidential
Information as confidential both during and indefinitely after the term of
his employment, whether the Secrets or Confidential Information are
contained in a tangible medium, or merely remembered.

Executive agrees that all tangible material containing or in any way
disclosing any Confidential Information or Secrets are Company's exclusive
property. Executive agrees to return all Company documents, equipment, or
other tangible things that reflect Confidential Information or Secrets
immediately upon Executive's termination of employment, or at any earlier
request of Company.

6.3 Non-Competition.

a. Executive hereby agrees that he will not, during the period of
his employment with Company, and for three (3) years thereafter, either
directly or indirectly, enter into the employment of, render services to,
or acquire any interest whatsoever in any Conflicting Organization or other
business which competes with Company, or which is planning to compete.
Executive acknowledges that Company's business includes, without
limitation, the manufacture and marketing of the Biojector Jet Injection
System and the production of sterile, single-use medication ampules for use
with the Biojector, as well as other types of business Company may choose
to undertake during or shortly after the course of Executive's employment.
Executive further acknowledges that Company's business is conducted
throughout North America and Europe and in such other areas to which
Company may expand during the course of Executive's employment or shortly
thereafter. Accordingly, Executive agrees that he will not compete with
Company in any of these areas nor assist others in doing so. Nothing in
this paragraph shall prevent Executive from owning an interest in any
company that is not a Conflicting Organization and otherwise does not
compete with Company.

b. Executive further agrees that during the period stated above,
he will not directly or indirectly call on, or otherwise solicit, or accept
business from any actual or identified potential customer, Conflicting
Organization or Conflicting Product of Company that is not for the benefit
of, or in the best interest of Company, nor will he assist others in doing
so. Executive further agrees that he will not, during the period stated
above, encourage or solicit any other employee of Company to leave such
employment for any reason, nor will he assist others to do so.

c. Executive agrees that he will during the term of his
employment with Company, promptly and fully disclose to Company any
business opportunity coming to Executive's attention, or conceived or
developed in whole or in part by Executive, which relates to Company's
business, or anticipated business. Executive will not at any time exploit
such business opportunities for his own gain or that of any person or
entity other than Company.

d. Executive acknowledges that the covenants in Section 6.3
herein are reasonable in relation to his position and the nature of
Company's business, and that compliance with such covenants after his
employment ends will not prevent him from pursuing his livelihood.
Nonetheless, should any court or arbitrator(s) find that any provision of
these covenants is unreasonable in any respect, the parties agree that the
covenants shall be interpreted, limited, and enforced to the maximum extent
which the court or arbitrator(s) deems reasonable.

SECTION 7 - INDEMNITY OF OFFICERS AND DIRECTORS

7.1 Indemnification.

Company shall indemnify Executive against any liability and reasonable
expenses incurred by Executive in connection with any proceeding to which
Executive is a party because of his employment with Company as Vice
President of Sales and Marketing in accordance with the provisions set
forth in Company's articles of incorporation, bylaws or general or specific
action of Company's board of directors. Executive's right to
indemnification and advancement of expenses provided herein will survive
Executive's termination of employment with Company as Vice President of
Sales and Marketing and shall inure to the benefit of Executive's heirs,
executors and administrators.

The right to advancement of expenses provided in Section 7.2 below shall be
in addition to any other rights to which Executive is entitled under
Company's articles of incorporation, bylaws or general or specific action
of Company's board of directors.

7.2 Advancement of Expenses.

Company shall pay for or reimburse Executive for all reasonable expenses
incurred by Executive in advance of the final disposition of a proceeding
to which Executive was a party and incurred such expenses because of his
employment as the Vice President of Sales and Marketing of Company provided
that Company shall have first received from Executive:

a. An affidavit from Executive that he has a good faith belief
that he met the applicable standards of conduct which, when determined,
will entitle Executive to indemnification; and

b. An undertaking by or on behalf of Executive representing an
unlimited general obligation of Executive to repay such advanced expenses
if it is not ultimately determined that Executive is entitled to be
indemnified by Company.

7.3 Insurance.

If available on terms and conditions acceptable to Company, Company shall
purchase and maintain during the term of Executive's employment as Vice
President of Sales and Marketing of Company, directors and officers
liability insurance for Executive against any liability asserted against
and incurred by Executive in his capacity as Vice President of Sales and
Marketing of Company.

SECTION 8 - MISCELLANEOUS

8.1 Assignments Prohibited.

Executive may not assign any of his rights nor delegate any of his duties
hereunder. Company may assign this Agreement and delegate its duties
hereunder as provided for in Section 4.6 of this Agreement or to any of its
affiliates at any time owned by, or under common ownership with Company.

8.2 Exclusive Agreement.

This Agreement comprises the entire agreement of Executive and Company. It
may be changed only by further written agreement, signed by both parties.
This Agreement supersedes and merges within it all prior agreements and
understandings between these parties, whether written or oral, express or
implied. Each party to this Agreement acknowledges that no inducements,
promises, or agreements, orally or otherwise, have been made by any party,
or anyone acting on behalf of any party, which are not embodied in this
Agreement. In interpreting and construing this Agreement, the fact that
one or the other of Executive or Company may have drafted this Agreement or
any provision hereof shall not be given any weight or relevance.

8.3 Waiver.

No waiver of any provision of this Agreement shall be valid unless in
writing and signed by both parties, nor shall any waiver or failure to
enforce any right hereunder constitute a waiver of that right or of any
other right under this Agreement.

8.4 Separate and Severable.

The parties agree that the provisions in this Agreement are separable and
that in the event any provision is deemed ineffective or unenforceable,
they are severable from the remaining provisions of the Agreement, which
provisions shall remain binding on the parties.

8.5 Certain Remedies.

The harm to Company from any breach of Executive's obligations under
Section 6 of this Agreement may be difficult to determine and may be wholly
or partially irreparable. Thus, Executive agrees that if he fails to abide
by any provision contained in Section 6 of this Agreement, Company is
entitled to immediate issuance by the Circuit Court of Multnomah County or
other court with jurisdiction over the parties of a temporary retraining
order and preliminary and permanent injunctions. If any bond from Company
is required in connection with obtaining such equitable relief herein, the
parties agree that a reasonable value of such bond will be no more than
$5,000. Executive further agrees that any gross revenues obtained in
violation of Section 6 of this Agreement shall be held in constructive
trust for Company and a complete accounting of such revenues delivered to
Company pending completion of the dispute resolution process set forth in
Section 8.6 below. Any money damages claimed by Executive's breach of his
obligations under Section 6 herein must be asserted in and will be
recoverable through the dispute resolution process set forth in Section 8.6
below. Nothing in this Section 8.5 limits the obligations of the parties
to resolve all other disputes through the dispute resolution process set
forth in Section 8.6 herein. The provisions of Section 8.6 of this
Agreement will not apply to any judicial or court proceeding which seeks
equitable relief to enforce the provisions of Section 6 of this Agreement.

8.6 Choice of Law; Resolution of Disputes.

Company desires to provide its employees with a fair, cost-effective and
expedient forum for the resolution of any and all disputes between Company
and its employees. Accordingly, except as provided in Section 8.5 above,
Company shall provide, and Company and Executive agree to comply with, the
following two-step dispute resolution process.

a. Mediation. Company and Executive agree to submit to
mediation, at no administrative cost to Executive, any dispute of the
parties arising out of or related to: (1) Executive's employment with
Company; (2) the termination of Executive's employment with Company; or (3)
any breach of this Agreement (excepting the injunctive relief provided in
Section 8.5 above) (hereafter "Dispute"). Such Dispute includes, but is
not limited to, any alleged violations of federal, state and/or local
statutes including any claims of discrimination based on race, color,
religion, sex, national origin, age, disability, marital status, veteran or
other status protected under federal or state law, harassment claims,
employee benefit claims, claims based on any purported breach of duty
arising in contract or tort, including breach of contract, breach of the
covenant of good faith and fair dealing, violation of public policy or any
other alleged violation of statutory, contractual or common-law rights of
either party arising out of or relating to the Dispute as defined above
(excluding claims for workers' compensation or unemployment insurance).

(i) Notice of Mediation. Prior to submitting such Dispute
to mediation, the parties shall attempt in good faith to settle the Dispute
themselves. In the event mediation is necessary, the aggrieved party must
deliver to the other party written notice of its intent to submit the
Dispute to mediation within ninety (90) calendar days of the date when the
Dispute first arose, or the termination of Executive's employment,
whichever is later. "The date when the Dispute first arose" is defined to
mean when a party discovered, or should have discovered with reasonable
diligence, the facts on which the Dispute is based. A party's failure to
timely request mediation hereunder shall constitute an irrevocable waiver
of that party's right to raise any claims in any forum, including
arbitration as set forth in Section 8.6.b. below, arising out of the
Dispute described herein. The limitations period set forth herein is
mandatory, does not operate to lengthen any applicable state or federal
statute of limitations and is not subject to any tolling, equitable or
otherwise.

(ii) Location; Mediator Selection; Costs. The mediation
will be conducted in Multnomah County through the mediation services of
Arbitration Service of Portland, Inc. ("ASP"), except as such rules are
modified herein. The mediation will be conducted by one neutral mediator
selected and agreed to by the parties or, if no agreement can be reached,
by a mediator selected in accordance with the then effective mediation
rules of ASP. The mediation will be conducted as promptly as possible and
in no event later than sixty (60) calendar days from the date written
notice is provided pursuant to Section 8.6.a.(i) herein. No discovery will
be allowed against either party prior to mediation. Company will pay the
mediator's fees and other administrative costs of the mediation process.
The parties shall bear their own respective attorney fees and other costs.

b. Arbitration. In the event the Dispute is not successfully
resolved through mediation, the parties agree that such Dispute will be
resolved exclusively through final and binding arbitration in Multnomah
County, Oregon, through a mutually agreed upon arbitration service or, if
no agreement can be reached, through the arbitration services of ASP in
accordance with its then effective arbitration rules, except as such rules
are modified herein.

(i) Notice of Arbitration. To initiate the arbitration
process, the aggrieved party must deliver to the other party written notice
of its intent to submit the Dispute to arbitration no later than sixty (60)
calendar days after the conclusion of the mediation described above or, if
no mediation occurs, after the deadline provided for mediation in Section
8.6.a.(ii) herein. A party's failure to timely request arbitration
hereunder shall constitute an irrevocable waiver of that party's right to
raise any claims in any forum arising out of the Dispute described herein.
The limitations period set forth herein is mandatory, does not operate to
lengthen any applicable state or federal statute of limitations and is not
subject to any tolling, equitable or otherwise.

(ii) Selection of Arbitrator(s). The Dispute will be
decided by one arbitrator unless a party requests in writing a panel of
three arbitrators. Where a sole arbitrator is to preside, the arbitrator
will be selected by mutual agreement of the parties, or absent agreement,
in accordance with the then effective ASP arbitration rules. For a three-
arbitrator panel, each party will select one arbitrator at which point
those two arbitrators will mutually select a third arbitrator. If the
third arbitrator cannot be mutually agreed upon, the third arbitrator will
be selected in accordance with the then effective ASP rules.

(iii) Permissible Discovery. The parties shall cooperate to
the fullest extent practicable in the voluntary exchange of documents and
information to expedite the arbitration. The parties agree to limit
discovery in the arbitration to three (3) requests for production of
documents in accordance with Rule 43 of the Oregon Rules of Civil Procedure
("ORCP") and the taking of up to three (3) depositions by each party in
accordance with ORCP 39. All discovery must be completed within thirty
(30) calendar days prior to the date set for the arbitration hearing. Upon
the request of any party and within fourteen (14) calendar days of the
request, the designated arbitrator(s) shall conduct a preliminary hearing
to determine a defense raised by a party that the arbitration claims have
not been commenced within the time limited by statute or this Agreement.
The arbitrator(s) will render a written ruling on such defense within ten
(10) calendar days after such preliminary hearing.

(iv) Power of Arbitrator(s); Applicable Law. The
arbitrator(s) shall have the same authority to award remedies and damages
as provided to a judge and/or jury under applicable law. The arbitrator(s)
shall not have the power to alter, amend, or modify any provision of this
Agreement. The arbitrator(s) shall have the power to decide only the
Dispute submitted to the arbitrator(s). Except as provided herein, Oregon
State law (excluding choice of law provisions) and applicable federal law
will govern and be applied by the arbitrator(s) in deciding all substantive
aspects of the Dispute, and all procedural issues not covered by the ASP
arbitration rules.

(v) Opinion and Award. The arbitrator(s) shall issue a
written opinion and award within thirty (30) calendar days of closing
arguments or the receipt of post-hearing briefs, whichever is later. The
opinion and award must be signed and dated and decide all Disputes and
related issues submitted by the parties. The Dispute(s) to be decided
shall be sufficiently identified by the claimant and respondent in their
pleadings. Sufficient identification of the Dispute includes a detailed
description of the Dispute, the date when the Dispute first arose, the
names and telephone numbers of any coworkers or supervisors with knowledge
of the dispute, and the relief requested by the claimant and respondent.
Any Dispute not identified in those pleadings is outside the scope of the
arbitrator(s)' jurisdiction and any award involving such Dispute is subject
to a motion to vacate. The opinion and award shall set forth the legal
principles supporting each part of the opinion. The arbitrator(s) shall
only be permitted to award those remedies in law or equity which are
requested by the parties in the pleadings and which the arbitrator(s)
determines to be supported by credible, relevant evidence. Judgment on the
award rendered pursuant to such arbitration may be entered in any court
having jurisdiction thereof.

(vi) Fees and Costs. The arbitrator's fees and other
administrative costs of the arbitration process shall be shared equally
between the parties. Each party will be responsible for one-half the cost
to have a court reporter attend and transcribe the arbitration hearing.
The parties shall bear their own respective attorney fees and costs of
discovery, depositions and witness fees.

8.7 Notices.

All notices or other communication required or permitted hereunder shall be
given in writing and delivered in person, transmitted by facsimile, or sent
by registered or certified mail, postage prepaid, or by reliable courier
service to the parties at the respective addresses stated below, or to such
other address as a party may subsequently specify in writing. Notices will
be effective upon the earlier of receipt or the fifth business day after
sending.

To Executive: Mr. Michael Redmond
10 Canterbury Road
Windham, New Hampshire 03087

To Company: Bioject, Inc.
7620 S. W. Bridgeport Road
Portland, Oregon 97224
Attn: Chief Executive Officer

(Agreement continues on next page with employee acknowledgement)

8.8 Employee Acknowledgment.

Executive confirms that he has carefully read and reviewed this Agreement.
Executive acknowledges that he has been advised to consult with an
attorney, and has had the opportunity to do so, before signing this
Agreement. Employee acknowledges that he fully understands all of the
terms and conditions contained in this Agreement and that he signs this
Agreement of his own free will and volition.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of day, month and year first above written.

EXECUTIVE: COMPANY:

Bioject Medical Technologies Inc.

/s/ Michael Redmond By: /s/ James C. O'Shea
___________________________ ______________________________
Michael Redmond James C. O'Shea, Chairman
and Chief Executive Officer
Bioject Medical Systems Ltd.

WITNESS: Bioject Medical Systems, Ltd.

/s/ KURT O. LYNAM By: /s/ James C. O'Shea
___________________________ ______________________________

(Witness' Signature) James C. O'Shea, Chairman
and Chief Executive Officer

Bioject, Inc.

By: /s/ James C. O'Shea
______________________________

James C. O'Shea, Chairman
and Chief Executive Officer

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation
of our reports included in this Form 10-K into the Company's previously filed
Registration Statement on Form S-3, File No. 33-80679 and Registration
Statements on Form S-8, File Nos. 33-94400, 33-56454 and 33-42156.

/S/ ARTHUR ANDERSEN LLP

Portland, Oregon
June 26, 1996

<ARTICLE> 5
<LEGEND>
EXHIBIT 27.1

THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND THE CONSOLIDATED STATEMENTS OF OPERATIONS
FILED AS PART OF THE ANNUAL REPORT ON FORM 10-K AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT ON FORM 10-K.
</LEGEND>
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 3,098,251
<SECURITIES> 993,056
<RECEIVABLES> 424,859
<ALLOWANCES> 55,000
<INVENTORY> 1,255,945
<CURRENT-ASSETS> 5,817,825
<PP&E> 2,442,324
<DEPRECIATION> 1,048,638
<TOTAL-ASSETS> 7,518,616
<CURRENT-LIABILITIES> 1,491,323
<BONDS> 0
0
0
<COMMON> 36,001,158
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 7,518,616
<SALES> 3,059,018
<TOTAL-REVENUES> 4,209,018
<CGS> 5,195,914
<TOTAL-COSTS> 5,195,914
<OTHER-EXPENSES> 4,444,176
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,431,072)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,431,072)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,431,072)
<EPS-PRIMARY> (0.39)
<EPS-DILUTED> (0.39)

</TABLE>