UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                                
                                
                                
                            FORM 10-Q
                                
                                
  (X)   Quarterly Report Pursuant to Section 13 or 15(d) of the
                 Securities Exchange Act of 1934
          For the quarterly period ended 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 Number:   0-13976
                                
                                
                                
                                
                             AKORN, INC.
       (Exact Name of Registrant as specified in its Charter)



           LOUISIANA                        72-0717400
(State or Other Jurisdiction of           (I.R.S. Employer
   Incorporation or Organization)       Identification No.)

       100 Akorn Drive
   Abita Springs, Louisiana                    70420
(Address of Principal Executive Offices)     (Zip Code)



                         (504) 893-9300
                  (Issuer's telephone number)


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

At May 3, 1996 there were 15,076,427 shares of common stock, no par
value, outstanding.


<PAGE>

               PART I.  FINANCIAL INFORMATION


Item 1.  Financial Statements (Unaudited)

The following financial statements are provided on the page numbers
indicated below:


Condensed Consolidated Balance Sheets -
  March 31, 1996 and June 30, 1995                     2


Condensed Consolidated Statements of Income -
  Three months and nine months ended
  March 31, 1996 and 1995                              4


Condensed Consolidated Statements of Cash Flows -
  Nine months ended March 31, 1996 and 1995            5


Notes to Condensed Consolidated Financial

  Statements                                           6



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



The information called for by this item is provided on page 9.

                           

<PAGE>                           
                           AKORN, INC.

              CONDENSED CONSOLIDATED BALANCE SHEETS

                           (UNAUDITED)

                                         March 31,      June 30,
                                           1996            1995*
                                        ____________  _____________

ASSETS


CURRENT ASSETS
 Cash and cash equivalents               $ 1,183,471    $  767,286
 Short-term investments                      892,290     1,568,793
 Accounts receivable
  (less allowance for bad debts of
  $267,611 and $266,329 at March 31
  and June 30, respectively)               5,218,825     4,918,753
 Inventory                                 7,392,390     5,979,707
 Prepaid expenses and other assets         1,638,839     1,068,338
                                        ____________  _____________
  TOTAL CURRENT ASSETS                    16,325,815    14,302,877



OTHER ASSETS                               1,031,209       957,099



PROPERTY, PLANT AND EQUIPMENT             18,228,049    13,820,135
Accumulated depreciation                  (7,342,308)   (6,750,743)
                                        ____________  _____________
                                          10,885,741     7,069,392
Construction in progress                     636,534     3,926,553
                                        ____________  _____________
                                          11,522,275    10,995,945
                                        ____________  _____________

TOTAL ASSETS                             $28,879,299   $26,255,921
                                        ============  =============


<PAGE>

                                          March 31,      June 30,
                                           1996            1995*
                                        ____________  _____________

LIABILITIES AND SHAREHOLDERS'
EQUITY

CURRENT LIABILITIES
 Short-term borrowings                   $ 550,000    $      -
 Current installments of long-term 
  debt and capital lease obligations       813,705       641,994
 Current portion of pre-funded 
  development costs                        600,000       667,000
 Trade accounts payable                  2,114,914     1,718,893
 Income taxes payable                      707,015       781,824
 Accrued payroll and commissions           503,407       625,839
 Accrued reorganization costs              383,780       727,423
 Deferred royalty                          916,667           -
 Accrued expenses and other liabilities  1,636,163     1,237,232
                                        ____________  _____________
  TOTAL CURRENT LIABILITIES              8,225,651     6,400,205

LONG-TERM DEBT AND
  CAPITAL LEASE OBLIGATIONS              3,730,361     3,900,389

OTHER LONG-TERM LIABILITIES                609,484       957,043

SHAREHOLDERS' EQUITY
 Common stock, no par value--
  authorized 20,000,000 shares; issued
  15,115,673 shares at March 31 and
  June 30; outstanding 14,976,427 and
  14,904,653 shares at March 31 and
  June 30, respectively                 13,701,845   13,701,845
 Treasury stock, at cost--139,246 and
  211,020 shares at March 31 and
  June 30, respectively                   (147,519)    (291,067)
 Retained earnings                       2,759,477    1,500,109
 Unrealized gain on marketable 
  equity securities                            -         87,397
                                       ____________ _____________
  TOTAL SHAREHOLDERS' EQUITY            16,313,803   14,998,284
                                       ____________ _____________
TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY                 $28,879,299  $26,255,921
                                       ============ =============     


*Condensed from audited consolidated financial statements.
  See notes to condensed consolidated financial statements.


<PAGE>
                               
                               AKORN, INC.

               CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                               (UNAUDITED)
                             
                             
                             Three Months ended           Nine Months ended
                                   March 31                     March 31
                            1996           1995           1996         1995
                        _____________  ____________   ___________  ___________

Net sales                $7,624,835    $7,502,580     $22,900,600  $24,427,958
Cost  of sales            5,299,188     4,791,289      14,877,026   14,484,222
                        _____________  ____________   ___________  ___________
  GROSS PROFIT            2,325,647     2,711,291       8,023,574    9,943,736

Selling, general and
 administrative 
  expenses                1,525,783     1,936,062       5,426,698    6,654,320
Research and development    225,794       211,254         689,383      561,618
                        _____________  ____________   ___________  ___________
                          1,751,577     2,147,316       6,116,081    7,215,938
                        _____________  ____________   ___________  ___________
  OPERATING INCOME          574,070       563,975       1,907,493    2,727,798


Interest expense           (121,847)          -          (306,511)       - 
Interest and other 
  income, net               112,028      (237,834)        393,827     (186,176)
                        _____________  ____________   ___________  ___________
                             (9,819)     (237,834)         87,316     (186,176)
  INCOME BEFORE
   INCOME TAXES             564,251       326,141       1,994,809    2,541,622


 Income taxes               208,774        97,842         738,290      922,206
                         _____________  ____________   ___________  ___________

   NET INCOME              $355,477      $228,299      $1,256,519   $1,619,416
                         =============  ============   ===========  ===========


Per Share:


   NET INCOME             $     .02      $    .01      $     .08     $     .10
                         ============  ============   ===========  ===========
  WEIGHTED AVERAGE
   SHARES OUTSTANDING    15,416,397     15,519,988     15,326,343   15,447,119
                         ============  ============   ===========  ===========

See notes to condensed consolidated financial statements.
                                             

<PAGE>
                                             
                                             AKORN,  INC.

                         CONSOLIDATED  STATEMENTS  OF  SHAREHOLDERS'  EQUITY

                                             (UNAUDITED)
                                                                           

<TABLE>                                                                           
<CAPTION>                                    Common Stock                                      Unrealized Loss
                                         _______________________     Retained                   on Noncurrent          
                                            Shares                   Earnings      Treasury       Marketable  
                                         Outstanding     Amount      (Deficit)      Stock       Equity Securities    Total
                                        _____________ ____________ _____________  ___________  _________________  ____________
<S>                                       <C>         <C>            <C>           <C>          <C>                <C>
Nine Months Ended March 31, 1995:

Balances at July 1, 1994                  14,798,217  $13,701,845    $(822,806)    $(503,939)    $   (32,044)      $12,343,056
Net income for the nine months
 ended  March 31                                                     1,619,416                                       1,619,416
Additional unrealized loss on noncurrent
  marketable equity securities                                                                      (275,661)         (275,661)
Write-down of noncurrent
 marketable  equity securities to market
 value                                                                                               307,705           307,705
Exercise of stock options                     34,917                     8,824        69,834                            78,658
Shares issued from treasury in
 connection with the Company's
Employee Stock Purchase Plan                  52,083                    35,072       104,166                           139,238
                                        _____________ ____________ _____________  ___________  _________________  ____________
Balances at March 31, 1995                14,885,217  $13,701,845     $840,506    $ (329,939)    $        -        $14,212,412
                                        ============= ============ =============  ===========  =================  ============

Nine Months Ended March 31, 1994:

Balances at July 1, 1993                  12,781,317  $10,701,845  $(3,561,768)   $ (641,573)     $       -        $ 6,498,504
Net income for the nine months
 ended  March 31                                                     1,222,621                                       1,222,621
Exercise of stock options and
 warrants                                  2,010,000    3,000,000         (700)       20,000                         3,019,300
Shares issued from treasury in
 connection with the Company's
Employee Stock Purchase Plan                  43,509                    13,760        87,018                           100,778
                                        _____________ ____________ _____________  ___________  _________________  ____________
Balances at March 31, 1994                14,834,826  $13,701,845  $(2,326,087)   $ (534,555)     $       -       $ 10,841,203
                                        ============= ============ =============  ===========  =================  ============ 

See notes to condensed consolidated financial statements.
</TABLE>


<PAGE>
                                AKORN, INC.

              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                (UNAUDITED)
                                                 
                                                 Nine months ended March 31,
                                                    1996           1995
                                                _____________ _____________
OPERATING ACTIVITIES
 Net income                                      $1,256,519     $1,619,416
 Adjustments to reconcile net income to net
  cash provided by (used in) operating activities:
   Depreciation and amortization                    628,489        731,077
   Gain on sale of investments                      (79,859)           -
   Realized loss on noncurrent marketable   
    equity securities                                   -          307,705
   Changes in operating assets and liabilities   (1,620,247)    (3,284,838)
                                                _____________ _____________
NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES                               184,902       (626,640)

INVESTING ACTIVITIES
 Purchases of property, plant and equipment      (1,117,895)    (4,047,143)
 Net maturities of investments                      668,965        322,791
 Product licensing costs                            (17,867)      (376,729)
                                                _____________ _____________
NET CASH USED IN INVESTING ACTIVITIES              (466,797)    (4,101,081)

FINANCING ACTIVITIES
 Repayment of long-term debt                       (288,727)      (905,341)
 Proceeds from sale of stock                        146,397        217,896
 Proceeds from issuance of long-term debt           400,000      3,900,000
 Reductions in capital lease obligations           (109,590)       (15,627)
 Short-term borrowings, net                         550,000        343,000
                                                _____________ _____________
NET CASH PROVIDED BY
  FINANCING ACTIVITIES                              698,080      3,539,928

INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                               416,185     (1,187,793)

Cash and cash equivalents at beginning of period    767,286      1,914,735
                                                _____________ _____________

CASH AND CASH EQUIVALENTS
 AT END OF PERIOD                                $1,183,471     $  726,942
                                                ============= =============
SUPPLEMENTAL DISCLOSURE
 OF CASH FLOW INFORMATION:

Interest paid, net of amount capitalized         $  306,303     $       -
                                                ============= =============

Income taxes paid, net of refunds                $  706,874     $1,092,750
                                                ============= =============

See notes to condensed consolidated financial statements.


<PAGE>
                           AKORN, INC.

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                          (UNAUDITED)



NOTE A - BASIS OF PRESENTATION

The   accompanying  unaudited  condensed  consolidated  financial
statements include the accounts of Akorn, Inc. (the Company)  and
its    wholly    owned    subsidiaries,    Spectrum    Scientific
Pharmaceuticals, Inc. , Walnut Pharmaceuticals,  Inc.  and  Akorn
Manufacturing, Inc. Intercompany transactions and  balances  have
been eliminated in consolidation.

These financial statements have been prepared in accordance  with
generally  accepted accounting principles for  interim  financial
information and with the instructions to Form 10-Q.  Accordingly,
they do not include all the information and footnotes required by
generally  accepted accounting principles for complete  financial
statements.   In  the  opinion  of  management,  all  adjustments
(consisting  of  normal recurring accruals) considered  necessary
for  a  fair presentation have been included.  Operating  results
for   the  nine-month  period  ended  March  31,  1996  are   not
necessarily  indicative of the results that may be  expected  for
the year ending June 30, 1996.  For further information, refer to
the  consolidated financial statements and footnotes for the year
ended  June 30, 1995, included in the Company's Annual Report  on
Form 10-KSB.

NOTE B - INCOME TAXES

The Company is currently in discussions with the Internal Revenue
Service (IRS) regarding the examination of tax returns for  years
1988  through  1993.   The IRS has proposed adjustments  to  such
returns  which would result in additional taxes and interest  due
of  approximately $1.5 million.  Although the Company has  agreed
with approximately $550,000 of the proposed adjustments, (all  of
which was paid during the quarter ended March 31, 1996 and funded
by short-term bank financing), the Company is currently appealing
the  remainder of the assessment. The Company does not  currently
anticipate that the ultimate resolution of this matter will  have
a material adverse effect on the financial statements.

NOTE C - EARNINGS PER SHARE

Earnings per share are based upon the weighted average number  of
common  shares  outstanding.   The computation  of  the  weighted
average  number  of shares outstanding for all periods  presented
includes the dilutive effect of stock options and warrants  using
the treasury stock method.

NOTE D - INVENTORY
The components of inventory are as follows:
                                   
                                    March 31,       June 30,
                                     1996            1995
                                  _____________ _____________
Finished goods                     $3,760,467     $3,742,411
Work in process                    1,618,783      1,042,922
Raw materials and supplies         2,013,140      1,194,374
                                  _____________ _____________
                                   $7,392,390     $5,979,707
                                  ============= =============


<PAGE>

The inventories are reported net of reserves for unsaleable items
of  $493,441 and $344,443 as of March 31, 1996 and June 30, 1995,
respectively.

NOTE E - INVESTMENTS
At   March  31,  1995,  the  cost  of  the  Company's  noncurrent
marketable  equity  securities  exceeded  the  market  value   by
$307,705.   Given the significant decline in market  value  since
June  30,  1994, and Management's assessment that  a  significant
reversal  was  not  imminent,  the  loss  was  determined  to  be
permanent.  Therefore, the unrealized loss previously charged  to
shareholders'  equity was reversed, and the  Company  recorded  a
realized  loss to recognize the decline in value.  This  loss  is
included  in interest and other income (expense) for the  quarter
and nine months ended March 31, 1995.

At  June  30, 1995, the market value of the Company's  marketable
equity  securities  exceeded the cost by $87,397;  therefore,  an
unrealized  gain  was  recorded as a component  of  shareholders'
equity  to  reflect this increase in value.  Subsequent  to  year
end, the Company sold the investment and recorded a realized gain
of  $79,859 during the first quarter of fiscal 1996.  This amount
is included in interest and other income, net in the accompanying
statement of income for the nine months ended March 31, 1996.

NOTE F - INTEREST CAPITALIZATION

Interest  incurred during construction periods is capitalized  as
part of the cost of the expansion project.  During the nine-month
periods  ended  March 31, 1996 and 1995, the Company  capitalized
$34,682 and $179,499, respectively, in interest costs. During the
quarter  ended  March 31, 1995, interest costs totaling  $135,774
were  capitalized. No interest costs were capitalized during  the
third quarter of fiscal 1996.

NOTE G - LITIGATION

The  Company is involved in various litigation and claims arising
in  the  normal  course  of business.  The  Company's  management
believes that any liability the Company may have in these matters
would  not  have a material effect on the consolidated  financial
statements.

NOTE H - PROPOSED ACQUISITION OF INJECTABLE DISTRIBUTION BUSINESS

On  May  7,  1996, the Company signed a definitive  agreement  to
acquire  all of the outstanding common stock of Pasadena Research
Laboratories, Inc. ("PRL") in exchange for 1.4 million shares  of
Akorn,  Inc.  Common  Stock,  in a  transaction  expected  to  be
accounted for as a pooling-of-interests.  The expected  date  for
closing  of  this  transaction  is  June  30,  1996.   PRL  is  a
distributor of niche injectable products.  Akorn plans to utilize
the  PRL  operations  to distribute its own  line  of  injectable
products, while continuing the sale of PRL label products.


<PAGE>

Following is selected unaudited financial information on  a  pro-
forma  basis, assuming the acquisition of PRL was consummated  as
of the date of the financial statements currently reported on:

                         Three Months Ended   Nine Months Ended
                            March 31,             March 31,
                         1996        1995      1996      1995
                       _________  _________  _________ _________
                       (In thousands, except per Share amounts)

Net sales               $ 8,815     $8,636    $25,764   $28,274
                       =========  =========  ========= =========
Net income              $   611     $  403    $ 1,470   $ 1,795
                       =========  =========  ========= =========
Earnings per share      $   .04     $  .02    $   .09   $   .11
                       =========  =========  ========= =========

NOTE I - CHANGE IN ACCOUNTING ESTIMATES

During  the  quarter ended March 31, 1996, the Company  increased
its  estimate for unsaleable inventory by approximately  $300,000
($189,000  or  one cent per share, net of tax).  This  change  in
estimate is reported as an increase in cost of goods sold.

Also,  during  the  quarters ended March 31, 1995  and  1996,  an
evaluation  by the Company resulted in a change in the  estimated
liability related to aged customer credits.  This change resulted
in  a reduction of selling general and administrative expenses of
approximately  $330,000 ($231,000 or one cent per share,  net  of
tax)  for the quarter ended March 31, 1995.  For the same  period
in  1996, the reduction to S,G&A expenses was $85,000 ($54,000 or
less than one cent per share, net of tax).

In  the quarter ended March 31, 1996, the Company decided  to  no
longer  pursue  Abbreviated  New Drug  Applications  (ANDAs)  for
several  products  which  had been produced  in  previously-owned
facilities,  and  for which estimated costs of transferring  such
ANDAs   had  been  accrued.   This  decision  was  based   on   a
reevaluation of the costs of developing such products as compared
to  their  potential  market, given the  emergence  of  alternate
suppliers,  since  the Company suspended their  production.  This
change  in  estimate  was  also based  on  the  Company's  recent
decision  to  enter into the injectable distribution  marketplace
and  the  need  to  free  up R&D resources  for  the  pursuit  of
injectable  ANDAs.  The total amount of the accrual reversed  was
approximately  $316,000 ($199,000 or one cent per share,  net  of
tax).  This is included as a reduction in S,G&A expense.

NOTE J - DEFERRED ROYALTY

In  March  1996,  the  Company received  $1  million  of  prepaid
royalties  from  Pfizer, representing the  guaranteed  amount  of
first  year royalties under the licensing agreement with  Pfizer.
The  Company will recognize this royalty on a straight-line basis
over one year.  One month of royalties, or $83,333 was recognized
in the quarter ended March 31, 1996


<PAGE>
                           AKORN, INC.

 
            MANAGEMENT'S  DISCUSSION AND ANALYSIS

        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

Net Sales
The  following  table sets forth, for the periods indicated,  net
sales by segment (in thousands), excluding intersegment sales:

                         Three Months Ended    Nine Months Ended
                               March 31,             March 31,
                          1996       1995       1996       1995
                        __________ _________  _________ __________

Ophthalmic distribution  $ 5,161    $5,382     $16,282   $17,740
Contract manufacturing     2,464     2,121       6,619     6,688
                        __________ _________  _________ __________ 

Total net sales          $ 7,625    $7,503     $22,901  $ 24,428
                        ========== =========  ========= ==========

Net  sales  increased  2% in the quarter ended  March  31,  1996,
compared  to the same period in 1995, with sales of $7.6  million
versus  $7.5 million.  For the first nine months of fiscal  1996,
sales of $22.9 million were 6% lower than the prior-year sales of
$24.4 million.  The decline in sales for the nine month period is
primarily  due  to  the  absence of the  Company's  lead  allergy
product, AK-Con-A, since the second quarter of fiscal 1995.

For  the  quarter  ended March 31, 1996, ophthalmic  distribution
sales  declined 4% over the comparable period in 1995.   For  the
nine  month  period  ended March 31, 1996,  net  sales  for  this
segment  declined 8% as compared to the same period in the  prior
fiscal year.  The decline for the quarter is primarily related to
a  weakness in sales of generic ophthalmic products in the retail
sector.   This was partially due to the effect of harsh  weather,
throughout  the  second and third fiscal quarters,  resulting  in
higher  than  expected  inventory levels at several  wholesalers.
The  decline for the nine-month period was primarily  related  to
the  absence  of  AK-Con-A which accounted for  approximately  $2
million in sales for the prior year nine month period.

Ophthalmic distribution sales, exclusive of AK-Con-A sales,  were
$15.7  million, for the nine-month period ended March  31,  1995.
Excluding AK-Con-A sales, ophthalmic distribution sales  for  the
nine-month period ended March 31, 1996 were 3% greater  than  the
same  period in 1995.  The low rate of growth for the  nine-month
period is partially due to the overstocking in wholesalers  noted
above.

As  previously  announced, AK-Con-A was  converted  to  over-the-
counter  (OTC)  from prescription status by  the  Food  and  Drug
Administration (FDA).  The Company recently obtained approval  of
its  OTC  version of AK-Con-A which has been licensed  to  Pfizer
Inc.(Pfizer).  In March 1996, the Company received $1 million  of
prepaid  royalties  from  Pfizer for the  first  year  under  the
agreement.  The Company will recognize this royalty on a straight-
line  basis  over  one  year. One month of  prepaid  royalty  was
recognized in the quarter ended March 31, 1996.  The Company also
recognized some manufacturing sales in this quarter.


<PAGE>

The  Company has recently received several Abbreviated  New  Drug
Application  approvals  (ANDAs) for ophthalmic  products  at  its
Akorn Manufacturing, Inc. (AMI) facilities.  These approvals  are
expected   to   add  incremental  revenues  to   the   ophthalmic
distribution segment commencing in the fourth quarter  of  fiscal
1996,  as  the  Company  plans to introduce  "commodity  generic"
labels  for  these  products.  Some of these  incremental  sales,
however,  may  be offset by continued increase in competition  in
the ophthalmic generic market.
                                
For  the  quarter  ended  March 31, 1996, contract  manufacturing
sales increased 16% over the comparable period in 1995.  For  the
nine-month period ended March 31, 1996, this segment's sales were
relatively  flat  as compared to the same period  in  1995.   The
increase  in  the  third  quarter was primarily  related  to  the
inclusion  of contract sales to Pfizer and Jordan Pharmaceuticals
under  a previously announced contract agreement.  Contract sales
will  continue  to vary from quarter to quarter as  a  result  of
fluctuations  in ordering patterns from contract customers  which
is  common  to this segment.  In addition, declines  in  contract
revenues  have occurred due to a recent shift by several contract
customers  who,  based  on  economic evaluation,  have  opted  to
transfer  the manufacture of their injectable products  in-house,
or to discontinue the product line entirely.

As  noted in previous Company disclosures, one of these customers
is Akorn's largest contract customer, which accounted for 10% and
13%  of  consolidated  net sales for the quarter  and  nine-month
periods  ended March 31, 1996, respectively.  This  customer  has
transferred  a  portion  of  its contract  business  to  its  own
facilities and has decided to discontinue the remaining  products
currently being manufactured by AMI.

The   transferred   and  discontinued  products   accounted   for
approximately   $1.4   million  and  $2.9   million   in   sales,
respectively,  for AMI in fiscal 1995.  The Company  is  in  late
stage negotiations to acquire the discontinued products.  In  the
meantime,  this  customer has agreed to continue to  order  these
products  and  keep them in the marketplace.  The acquisition  of
these   products  would  help  to  continue  the  current   plant
throughput,   while   obtaining  some  incremental   distribution
profits.

In  October,  1995,  the Company signed a contract  manufacturing
agreement  with Jordan Pharmaceuticals, Inc. (Jordan) to  develop
and  manufacture  three  new  generic  injectable  pharmaceutical
products.   In  addition,  the agreement  secured  the  long-term
manufacture  of three generic injectables currently  produced  by
AMI  for  Jordan.   The three new products are  exempt  from  FDA
approval  under "grandfather" rules, and, as such, the  first  of
the  three new products should be in commercial production during
the  fourth  quarter  of fiscal 1996.  The  combined  contractual
payments  in the first year of the contract, including  fees  for
product  development,  are expected to  approximate  $2  million.
Previously,  Jordan  represented approximately  $900,000  of  the
Company's  contract  business.  This additional  throughput  will
help offset declines from other contract customers noted above.
                                
The   Jordan  agreement  allows  for  Akorn  to  use  information
supporting  the  development of the products to  pursue  recently
announced   strategies  in  the  injectable   marketplace.    The
agreement further provides that best efforts will be used by both
parties to add two new products each year to the agreement, under
the same terms and conditions.


<PAGE>

On  May  7,  1996  the Company signed a definitive  agreement  to
acquire   Pasadena  Research  Labs,  Inc.  (PRL),  a  specialized
distributor of injectables, based in southern California.   Under
the proposed transaction, Akorn will issue 1.4 million shares  of
its  common stock, in exchange for all of the outstanding  shares
of  PRL, in a pooling-of-interests transaction. It is anticipated
that the transaction will be closed in June 1996. The acquisition
of  PRL  would form the cornerstone of Akorn's strategy to expand
its  presence  in  the  injectable market.  This,  together  with
Akorn's  current  injectable contract  manufacturing  operations,
will create a $13 - $14 million injectable division presently.

Commensurate  with the signing of the definitive  agreement,  the
Company   has  reorganized  its  operations  into  two   distinct
divisions,  the Ophthalmic Division and the Injectable  Division.
It  is  anticipated  that  in  future filings,  separate  segment
reporting will be made for these two divisions.

Gross Profit
Consolidated  gross profit declined 14% to $2.3  million  in  the
quarter  ended  March 31, 1996 compared to $2.7 million  for  the
same  period of the previous year.  For the first nine months  of
fiscal 1996, gross profit of $8.0 million was 19% lower than  the
comparable fiscal 1995 amount of $9.9 million.

During  the  quarter ended March 31, 1996, the Company  increased
its  estimate for unsaleable inventory by approximately $300,000.
This  change in estimate is reported as an increase  in  cost  of
goods sold.  Excluding this change in estimate, gross profit  for
the  quarter  and  nine-month period ended  March  31,  1996  was
approximatley   $2.6  million  and  $8.3  million,  respectively.
Exclusive  of  the change in estimate, gross profit  declined  3%
(150  basis points) and 16% (430 basis points), respectively  for
the  quarter  and  nine-month periods ended  March  31,  1996  as
compared to the same periods in 1995.

The  loss  of AK-Con-A sales, (Akorn's highest margin product  at
75%),  and  higher product costs imposed by some suppliers,  were
the  primary reasons for the decline in gross profit and  margins
for the nine months ended March 31, 1996.  In addition, continued
increases in competition, resulting in price suppression  in  the
ophthalmic  generic market effected gross profit and  margins  in
the  current  quarter and nine month periods.   For  the  quarter
ended  March  31,  1996,  the Company's  gross  margin  was  also
impacted  by  a  higher percentage of wholesaler  chargebacks  to
gross  sales.   Gross margins are expected to  remain  relatively
stable  for  the  remainder of fiscal 1996 as the royalties  from
Pfizer  are  expected  to  offset any negative  impact  of  price
competition.

Selling, General and Administrative Expenses
Selling, general and administrative (S,G&A) expenses declined 21%
during the quarter ended March 31, 1996, as compared to the  same
period in 1995.  For the first nine months of fiscal 1996,  S,G&A
expenses  were  18% lower than the comparable  period  in  fiscal
1995.

During  the quarters ended March 31, 1996 and 1995, the  Company,
based  on  evaluations made by management, changed the  estimated
liability related to aged customer credits.  This resulted  in  a
reduction in S,G&A expenses of approximately $85,000 and $330,000
for the respective periods.  Also, in the quarter ended March 31,
1996,  the  Company decided to no longer pursue  Abbreviated  New
Drug  Applications (ANDAs) for several products  which  had  been
produced  in previously-owned facilities, and for which estimated
costs of transferring such ANDAs had been accrued.  This decision
was  based on the cost of the ANDAs versus the future incremental
profit to be derived from the sales of these products, given  the
emergence  of  alternate suppliers, since the  Company  suspended
production.


<PAGE>

This  change  in estimate was also based on the Company's  recent
decision  to  enter into the injectable distribution  marketplace
and  the  need  to  free  up R&D resources  for  the  pursuit  of
injectable  ANDAs.  The total amount of the accrual reversed  was
approximately  $316,000 and is included as a reduction  in  S,G&A
expense.

Without  these  changes  in  estimate,  the  Company  would  have
realized S,G&A expenses of $1.9 million and $2.3 million for  the
quarters  ended  March  31, 1996 and 1995,  respectively,  a  15%
decline.   For  the nine months ended March 31,  1996  and  1995,
S,G&A,  exclusive  of  these adjustments  would  have  been  $5.8
million  and  $7.0  million,  respectively,  representing  a  17%
decline.  The reduction in S,G&A expenses is partly due to  lower
sales  and  partly due to the plan, implemented  in  the  quarter
ended March 31, 1995, to reduce certain S,G&A expenses.

The  percentage of S,G&A expenses to sales, excluding the effects
of  the  changes in estimates, were 25% and 30% for the  quarters
ended  March  31, 1996 and 1995, respectively.  These percentages
were 25% and 29% for the nine- month periods ended March 31, 1996
and  1995,  respectively.  The Company continues to  monitor  the
required   level   of  S,G&A  expenses  in  relation   to   sales
performance.

Research and Development
Research   and  development  expenses  increased  7%   and   23%,
respectively  for  the quarter and nine months  ended  March  31,
1996,  as  compared to the same periods in 1995.   This  increase
reflects the change in the mix of products under development to a
lower  concentration  of  products  for  which  costs  have  been
previously accrued.

The  Company  also continues its development of  a  non-steroidal
anti-inflammatory drug for ophthalmic use licensed  from  Pfizer.
It  is  anticipated that the majority of these development costs,
which  are expected to be funded substantially by monies obtained
from Pfizer, will be incurred over the next 12 to 15 months.

With the acquisition of PRL, the Company expects to increase  its
mix of injectable ANDA filings.  PRL has several filings underway
through joint venture arrangements.  It is anticipated that these
arrangements  would  continue and that  the  Company  would  also
continue to develop other injectable ANDAs for manufacture at its
Decatur  facilities.  Due  to  the factors  noted  above,  it  is
anticipated  that  the Company's R&D expenditures  will  increase
over  the  next twelve months.  However, the level  of  R&D  will
continue to be monitored in light of operating performance.

Interest and Other Income/Expense
Interest  costs incurred during the entire prior fiscal year  and
through  July  1995  were capitalized as  part  of  the  cost  of
construction related to the Company's expansion project  at  AMI.
The expansion is now complete and the first production of product
from  the  new  clean  room  began in the  current  quarter.   In
addition,  the Company has under construction, additions  related
to the expansion of its R&D facilities and the installation of  a
hot  loop  for  its water for injection.  The R&D  additions  are
substantially  complete  and  the  hot  loop  project  should  be
completed  over  the  next two quarters.  A portion  of  interest
expense   associated  with  this  project  is  expected   to   be
capitalized during the construction period.


<PAGE>

March  31, 1996 are $90,000 and $240,000, respectively,  in  fees
associated   with   the   international  licensing   of   certain
technologies  in  two separate agreements. Under the  agreements,
Akorn  will  provide product information to be used in  obtaining
approvals  for  these products for manufacture  and  distribution
internationally.  In addition, Akorn will manufacture the product
for  international distribution for a period  of  time  and  will
receive  a royalty stream on international sales of the  product.
The  Company  is  in  discussions with other companies  regarding
similar arrangements in other international markets.

Also included in interest and other income (expense) for the nine
month period ended March 31, 1996 is a gain of $80,000 recognized
on  the sale of the Company's only equity investment.  The  prior
year  quarter  and  nine month periods include  a  $308,000  loss
related  to  an other than temporary decline in the  fair  market
value of this equity investment.

Income Taxes
The  effective tax rates for the quarter ended March 31, 1996 and
1995  was 37% and 30%, respectively.  For the nine month  periods
ended  March  31, 1996 and 1995, the effective rate was  37%  and
36%,  respectively.  The decline in the effective  rate  for  the
quarter  ended  March 31, 1995 as compared to  the  current  year
rate,  reflects changes associated with lower anticipated  income
levels  for  fiscal  year 1995 and minor adjustments  related  to
filed tax returns.

The  Company  has  been in discussions with the Internal  Revenue
Service  (IRS) regarding the examination of tax returns  for  the
periods of 1988 through 1993. The IRS has proposed adjustments to
such  returns, some of which the Company has agreed to  and  some
which  the Company will appeal.  The agreed issues were  paid  in
full  in the quarter ended March 31, 1996.  Short-term bank  debt
totaling  $550,000  was  used to pay  these  agreed  items.   The
Company   does   not  currently  anticipate  that  the   ultimate
resolution  of the unagreed matters will have a material  adverse
effect on the financial statements.

Net Income
As  a  result  of  the factors noted above, net  income  for  the
quarter  ended March 31, 1996 increased to $355,000 or two  cents
per  share compared to the prior year amount of $228,000  or  one
cent  per share.  Net income for the first nine months of  fiscal
1996  declined  to $1.3 million or eight cents per  share  versus
$1.6  million  or  ten  cents per share in  the  comparable  1995
period.  Weighted average shares used in the calculation  of  per
share amounts were relatively unchanged from year to year.

Financial Condition and Liquidity
The net cash provided by operating activities for the nine months
ended  March 31, 1996 was $185,000 compared to net cash  used  of
$627,000 for the corresponding period in 1995.  While the Company
remains   profitable,  significant  investments   in   inventory,
primarily  for raw materials and components associated  with  new
ophthalmic  products  and research and development  efforts  have
been made.  In addition, several contract customers have recently
required  AMI to inventory some components which were  previously
supplied  by  these  customers.  Prior  to  the  introduction  of
ophthalmics,   raw   material  and  component  inventories   were
relatively  insignificant,  as such  inventories  were  generally
supplied  by  contract customers.  All ophthalmic  manufacturing,
however,  requires  AMI  to  inventory  the  raw  materials   and
components,  thus  resulting  in the  noted  increases.   Further
increases in raw material and component inventory will  be  based
on future product approvals.


<PAGE>

In 1996, the Company will continue to fund the payment of certain
previously accrued research and development activities, including
the site transfer of ANDAs and development of the NSAID discussed
previously.  Management believes that existing cash,  cash  flows
from  operations, and available working capital lines  of  credit
are sufficient to handle these short-term needs.

In  addition  to  these  short-term needs,  the  Company  may  be
required to pay additional interest and taxes in connection  with
the examination by the IRS of tax returns for the periods of 1988
through  1993.  The proposed adjustments by the IRS would  result
in  additional  interest and taxes currently due of approximately
$1.5 million.  To date, the Company and the IRS have agreed upon

issues  resulting in approximately $600,000 of current net  taxes
and  interest due.  Payment of the agreed upon items was made  in
the  current  quarter and has been financed with short-term  bank
debt. Payment of the remaining unsettled issues, if any, would be
based on the timing of the appeals process and the success of the
Company  in arguing its position with the IRS.  The Company  does
not  currently anticipate any adverse financial statement  effect
from this proposed assessment.

The  Company  invested $1.1 million in new  property,  plant  and
equipment  during  the nine-month period ended  March  31,  1996,
compared  to  $4.0  million in the prior year comparable  period.
The current year additions were primarily related to expansion of
the  Company's R&D facilities and the hot loop noted above, while
the  prior  year additions were associated with the expansion  of
the Company's manufacturing facilities, including the addition of
a high-speed ophthalmic line.

The  Company  has the following availability under existing  bank
financing arrangements:


    -   A $2.0 million Line of Credit for working capital purposes.
         This is expected to increase to $2.5 million in availability 
         as a result of the PRL acquisition.

    -   $1,250,000 remaining available under construction loan
         agreements and commitments.

The  Company  has plans for capital improvements of approximately
$1.5  million  to $2 million for the remainder of calendar  1996.
Such  expenditures will be financed through internal  cash  flows
and  $1,250,000 remaining available under bank commitments.   The
timing  of expenditures will be staged to ensure compliance  with
debt covenant requirements.

Financing  activities provided $698,000 and $3.5 million  in  the
nine-month  periods ended March 31, 1996 and 1995,  respectively.
The  increases in both periods is primarily related to  draws  on
the  various  bank  financing  arrangements  in  support  of  the
Company's capital projects and working capital needs.

In  connection  with  the  negotiations with  its  lead  contract
customer, discussed previously, the Company has a commitment from
its  commercial bank to lend up to $1.5 million for  the  product
line acquisition should it occur.


<PAGE>
                   

 
                  PART II.  OTHER INFORMATION



Item 1.  Legal Proceedings

      Certain  legal proceedings in which the registrant,  Akorn,
      Inc.  (the "Company"), is involved are described in Item  3
      to  the  Company's  Form 10-KSB for the fiscal  year  ended
      June  30,  1995 and in Note R to the consolidated financial
      statements included in that report.


Item 2.  Changes in Securities

      Not applicable.


Item 3.  Defaults Upon Senior Securities

      Not applicable.


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

      None.


Item 5.  Other Information

      Not applicable.


Item 6.  Exhibits and Reports on Form 8-K

      (a)    Exhibits
         
             (99.1) Press release issued by Akorn, Inc. on May 7, 1996
                    announcing its third quarter 1996 financial results
                    and the acquisition of Pasadena Research Labs, Inc.,
                    incorporated by reference to Form 8-K dated May 9, 1996.
      
      (b)    Reports on Form 8-K

            None

<PAGE>                           

                           SIGNATURES

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

                          AKORN, INC.




                    /s/ Barry D. LeBlanc
                  ____________________________
                        Barry D. LeBlanc
                    Executive Vice President
                   (Duly Authorized Officer)




                    /s/ Eric M. Wingerter
                  _______________________________
                       Eric M. Wingerter
          Vice President - Finance and Administration
                 (Principal Financial Officer)





Date:   May 7, 1996








<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE PERIOD ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          JUN-30-1996
<PERIOD-END>                               MAR-31-1996
<CASH>                                       1,183,471
<SECURITIES>                                   892,290
<RECEIVABLES>                                5,486,436
<ALLOWANCES>                                   267,611
<INVENTORY>                                  7,392,390
<CURRENT-ASSETS>                            16,638,839
<PP&E>                                      18,864,583
<DEPRECIATION>                               7,342,308
<TOTAL-ASSETS>                              28,879,299
<CURRENT-LIABILITIES>                        8,225,651
<BONDS>                                      3,730,361
<COMMON>                                    13,701,845
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<OTHER-SE>                                   2,611,958
<TOTAL-LIABILITY-AND-EQUITY>                28,879,299
<SALES>                                     22,900,600
<TOTAL-REVENUES>                            22,900,600
<CGS>                                       14,877,026
<TOTAL-COSTS>                               14,877,026
<OTHER-EXPENSES>                             6,104,081
<LOSS-PROVISION>                                12,000
<INTEREST-EXPENSE>                             306,511
<INCOME-PRETAX>                              1,994,809
<INCOME-TAX>                                   738,290
<INCOME-CONTINUING>                          1,256,519
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                 1,259,519
<EPS-PRIMARY>                                      .08
<EPS-DILUTED>                                        0
        

</TABLE>