<PAGE> 1 OF 16
                                   
                  SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, DC 20549
                                   
                               FORM 10-Q
                                   
              Quarterly Report Under Section 13 or 15(d)
                of the Securities Exchange Act of 1934
                                   
                                   
(Mark One)

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of The
     Securities Exchange Act of 1934.

     For the quarterly period ended March 31, 1995

                                  OR

[ ]  Transition Report Pursuant to Section 13 or 15(d) of The
     Securities Exchange Act of 1934.

     For the transition period from         to

                                   
                                   
                       Commission File #0-14732

                       ADVANCED MAGNETICS, INC.
        (Exact name of registrant as specified in its charter)
                                   
                                   
          Delaware                                04-2742593
    (State or other jurisdiction of         (I.R.S. Employer Incorporation 
           organization)                         or Identification No.)
             

                           61 Mooney Street
                          Cambridge, MA 02138
               (Address of principal executive offices)
                                   
                                   
   Registrant's telephone number, including area code: 617/497-2070
                                   
                                   
     Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.


Yes  X        No   


At May 3, 1995, 6,727,744 shares of registrant's common stock (par
value, $.01) were outstanding.
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                        

<PAGE> 2 OF 16                                   
                       ADVANCED MAGNETICS, INC.
                               FORM 10-Q
                     QUARTER ENDED MARCH 31, 1995
                                   
                                   
                                   

                    PART I.  FINANCIAL INFORMATION
                                   
                                   
                                   

                    Item 1 -- Financial Statements
                                   
                         
                                   
                                   
                                   
                                   
                                   

<PAGE> 3 OF 16                                   

<TABLE>
                       ADVANCED MAGNETICS, INC.
                             BALANCE SHEET
                 MARCH 31, 1995 AND SEPTEMBER 30, 1994
                              (Unaudited)
                                   
<CAPTION>
             ASSETS                March 31,      September 30,
                                      1995            1994
<S>                               <C>              <C>                  
Current assets:                                                
Cash and cash equivalents         $  4,115,493     $  6,462,193
Marketable securities (Note B)      36,880,078       33,199,085
Accounts receivable                  1,032,726          248,390
Recoverable income taxes                90,117           90,117
Prepaid expenses                       303,886          112,846
  Total current assets              42,422,300       40,112,631
                                                               
Property, plant and equipment:                                 
Land                                   360,000          360,000
Building                             4,320,766        4,316,706
Laboratory equipment                 6,220,504        5,598,456
Furniture and fixtures                 496,613          324,453
                                    11,397,883       10,599,615
                                                               
Less--accumulated depreciation       
  and amortization                   4,617,575        4,136,092
Net property, plant and equipment    6,780,308        6,463,523
                                                               
Other assets                            96,546           96,546
  Total assets                    $ 49,299,154     $ 46,672,700
                                                               
LIABILITIES AND STOCKHOLDERS' EQUITY
                                                               
Current liabilities:                                           
Accounts payable                  $    468,069     $    273,385
Accrued expenses                       418,796          947,840
Income taxes payable (Note D)          375,000              ---
  Total current liabilities          1,261,865        1,221,225
                                                               
Stockholders' equity:                                          
Preferred stock, par value $.01                                
  per share, authorized
  2,000,000 shares; none issued           ---              ---
Common stock, par value $.01 per                               
  share, authorized 15,000,000 
  shares; issued and outstanding 
  6,726,951 shares at March 31, 1995 
  and 6,712,572 shares at              
  September 30, 1994                    67,270           67,126
Additional paid-in capital          44,862,803       44,660,834
Retained earnings                    3,274,205          723,515
Unrealized losses on marketable      
  securities (Note B)                (166,989)              --- 
  Total stockholders' equity        48,037,289       45,451,475
                                                               
Total liabilities and                                        
  stockholders' equity            $ 49,299,154     $ 46,672,700
</TABLE>

The accompanying notes are an integral part of the financial statements.

<PAGE> 4 OF 16                                   

<TABLE>
                       ADVANCED MAGNETICS, INC.
                        STATEMENT OF OPERATIONS
            FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED
                        MARCH 31, 1995 AND 1994
                              (Unaudited)
<CAPTION>
                              Three-Month          Six-Month Period
                              Period Ended         Ended March 31,
                               March 31,
                            1995        1994        1995         1994
<S>                    <C>          <C>          <C>          <C>               
Revenues:                                                            
   License fees        $ 5,000,000  $ 2,000,000  $ 5,000,000  $ 3,005,000
   Royalties                   ---          ---          ---       13,461
   Product sales           789,026      138,950      844,285      200,550
   Interest, dividends 
     and net gains and
     losses on sales   
     of securities         438,669      476,985    1,120,655      886,152
    Total revenues       6,227,695    2,615,935    6,964,940    4,105,163
                                                                     
Cost and expenses:                                                   
   Cost of product sales   157,804       26,600      168,854       38,900
   Research and          
   development expenses  1,968,069    1,729,071    3,579,516    3,349,152
   Credit for purchase 
     of in-process
     research and              
     development (Note F)      ---          ---    (380,000)          ---    
   Selling, general and                                              
     administrative
     expenses              472,530      472,106      788,420      944,323
        Total costs and    
          expenses       2,598,403    2,227,777    4,156,790    4,332,375
                                                                     
Other income:                                                        
   Gain on sale of 
     in-vitro product line
     (Note C)                  ---          ---          ---    2,649,580
                                                                    
   Income before provision                                            
     for income taxes    3,629,292      388,158    2,808,150    2,422,368
   Provision for income    
     taxes                 375,000       16,500      375,000      102,000
   Income before                                                     
     cumulative effect of
     accounting change   3,254,292      371,658    2,433,150    2,320,368
                                                                     
   Cumulative effect of                                              
     accounting change 
     (Note B)                  ---          ---      117,540          ---
                                                                     
Net income             $ 3,254,292  $   371,658  $ 2,550,690  $ 2,320,368
                                                                     
Net income per share                                                 
  before cumulative 
  effect of 
  accounting change    $      0.48  $      0.05  $      0.36  $      0.34
Cumulative effect of                                                 
  accounting change            ---          ---         0.01          ---
Income per share       $      0.48  $      0.05  $      0.37  $      0.34
                                                                     
Weighted average number 
of common and common 
equivalent shares        6,835,370    6,853,453    6,828,497    6,857,979
</TABLE>


The accompanying notes are an integral part of the financial statements.

<PAGE> 5 OF 16

<TABLE>
                       ADVANCED MAGNETICS, INC.
                        STATEMENT OF CASH FLOWS
                    FOR THE SIX-MONTH PERIODS ENDED
                        MARCH 31, 1995 AND 1994
                              (Unaudited)
                                   
                                   
<CAPTION>
                                    Six-Month Periods Ended March 31,
                                          1995           1994
<S>                                   <C>            <C>
Cash flows from operating activities:                            
Cash received from customers          $  5,112,799    $  3,092,219
Cash paid to suppliers and employees   (4,080,707)     (4,031,398)
Dividends and interest received          1,045,310         607,029
Income taxes paid                              ---       (136,500)
Net realized gains (losses) on sales        
  of securities                            (2,428)         156,644 
                                                                 
Net cash provided by (used in)           2,074,974       (312,006)
  operating activities
                                                                 
Cash flows from investing activities:                            
Proceeds from sales of securities          750,000       3,666,318
Purchase of securities                 (4,455,519)    (24,615,839)
Capital expenditures                     (798,268)       (309,652)
                                                                 
Net cash (used in) investing            
  activities                           (4,503,787)    (21,259,173)         
                                                                 
Cash flows from financing activities:                            
Proceeds from issuances of common          
  stock                                     82,113         288,651
Purchase of treasury stock                    ---        (299,716)
                                                                 
Net cash provided by (used in)              
  financing activities                      82,113        (11,065)
                                                                 
Net (decrease) in cash and cash         
  equivalents                          (2,346,700)    (21,582,244)
Cash and cash equivalents at beginning  
of the period                            6,462,193      25,837,909
                                                                 
Cash and cash equivalents at end of             
  the period                          $  4,115,493    $  4,255,665
</TABLE>

                                                                 


The accompanying notes are an integral part of the financial statements.

<PAGE> 6 OF 16

<TABLE>
                       ADVANCED MAGNETICS, INC.
                     RECONCILIATION OF NET INCOME
             TO NET CASH PROVIDED BY OPERATING ACTIVITIES
                    FOR THE SIX-MONTH PERIODS ENDED
                        MARCH 31, 1995 AND 1994
                              (Unaudited)
                                   
                                   
                                   
<CAPTION>                                   
                                      Six-Month Periods Ended March 31,
                                            1995            1994
<S>                                     <C>             <C>                
Net income                              $ 2,550,690     $ 2,320,368
                                                                  
Adjustments to reconcile net income to                            
  net cash provided by (used in)
  operating activities:                                
                                                                  
Cumulative effect of accounting change    (117,540)             ---
Credit for purchase of in-process          
  research and development                (380,000)             ---
Depreciation and amortization               481,483         408,316
Amortization of U. S. Treasury Notes        
  Discount                                 (24,924)             ---
(Increase) in accounts receivable         (784,336)       (249,271)
(Increase) in prepaid expenses            (191,040)       (101,301)
Decrease in other assets                        ---           9,443
(Decrease) increase in accounts payable     
  and accrued expenses                      165,641        (49,981)
Gain on sale of in-vitro product line           ---     (2,649,580)
Income taxes payable                        375,000             ---
                                                                  
Total adjustments                         (475,716)     (2,632,374)
                                                                
                                                                  
Net cash provided by (used in)                     
  operating activities                  $ 2,074,974     $ (312,006)
</TABLE>





The accompanying notes are an integral part of the financial statements.

<PAGE> 7 OF 16
                       ADVANCED MAGNETICS, INC.

                     NOTES TO FINANCIAL STATEMENTS
                            MARCH 31, 1995
                                   
                                   
A.   Summary of Accounting Policies.

     The balance sheet of Advanced Magnetics, Inc. (the "Company") as
of March 31, 1995 and the statement of operations and cash flows for
the quarter then ended are unaudited and in the opinion of management,
all adjustments necessary for a fair presentation of such financial
statements have been recorded.  Such adjustments consisted only of
normal recurring items.

     Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted.  The year-end
balance sheet data was derived from audited financial statements, but
does not include disclosures required by generally accepted accounting
principles.  It is suggested that these interim financial statements
be read in conjunction with the Company's most recent Form 10-K and
Annual Report as of September 30, 1994.

B.   Marketable Securities.

     The cost and market value of the marketable securities portfolio
are as follows:

             March 31, 1995    September 30, 1994
                                     
Cost          $  37,047,067    $  33,316,625
                                     
Market        $  36,880,078    $  33,199,085

     The Company adopted Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity
Securities", in its first fiscal quarter ended December 31, 1994.
Prior period financial statements have not been restated.  The
Company's current portfolio consists of securities classified as
available-for-sales securities at fair market value.  At March 31,
1995, unrealized losses on marketable securities amounted to $166,989
and were recorded as a separate component of equity.  The Company
recorded a $117,540 unrealized loss on market value of securities in
the fiscal year ended September 30, 1994.  In the first fiscal quarter
ended December 31, 1994, the Company recorded a cumulative effect of
the accounting change of $117,540 including the reversal of the
reserve for the carrying value of marketable securities.  At March 31,
1995, 72% of the Company's portfolio was invested in U. S. Treasury
Notes, 5% in corporate bonds, 19% in preferred stocks and 4% in common
stocks.

C.   Sale of In-Vitro Product Line.

     On October 15, 1993, the Company sold its in-vitro product line
to PerSeptive Biosystems, Inc. ("PerSeptive") for $4,156,674 in
PerSeptive's common stock, plus an earn out based on 1995 revenues.
The Company recognized a pre-tax gain of $2,649,580 on this sale in
the first fiscal quarter of 1994.

D.   Income Taxes.

     The Company accounts for income taxes in conformance with FAS 109
"Accounting for Income Taxes," which requires the asset and liability
approach for financial accounting and reporting for income taxes.

<PAGE> 8 OF 16
     The provision for income taxes for the six-month periods ended
March 31, 1995 and 1994 was at a different rate than the U. S.
Statutory rate for the following reasons:

<TABLE>
<CAPTION>
                               Six-Month Period Ended
                                      March 31,
                                1995          1994   
<S>                            <C>             <C>            
U. S. Statutory Tax Rate       34.0%           34.0%  
State income taxes, net of          
  Federal benefit                .0             0.2
Dividend Received Deduction    (5.6)           (6.8)   
Amortization of Purchased        
  Technology                   (12.9)         (11.8)           
Alternative Minimum Tax         13.4             .0   
Utilization of Net Operating            
  Loss                         (15.8)          (7.6)
Other                            0.3           (3.8)   
                                                  
                                                      
   Effective Tax Rate           13.4%           4.2%  
</TABLE>

During the six months ended March 31, 1995, the net change in the
valuation allowance was a decrease of approximately $950,000.  The
decrease resulted from the realization of certain net operating loss
and purchase technology carryforwards.  During the six months ended
March 31, 1994, the net change in the valuation allowance was a
decrease of approximately $682,000.  The decrease resulted from the
realization of certain operating loss and purchase technology
carryforwards which were offset against the gain realization upon sale
of the Company's in-vitro product line.

E.   Legal Proceedings.

     The Company and certain of its officers were sued in an action
in the United States District Court for the District of
Massachusetts on September 3, 1992.  The plaintiff, a former
consultant to the Company, claims that he was incorrectly omitted as
an inventor or joint inventor on six of the Company's patents and on
pending applications, and seeks injunctive relief and unspecified
monetary damages.  The plaintiff filed a related case in the
Superior Court of the Commonwealth of Massachusetts.  The Superior
Court has dismissed some of the claims on summary judgment.  While
the final outcome of these actions cannot be determined, the Company
believes that the plaintiff's claims are without merit and intends
to defend the actions vigorously.

F.   Agreements.

     On August 30, 1994, the Company signed an agreement with
Bristol-Myers Squibb Co. to reacquire the development and marketing
rights to AMI-227 previously licensed to Squibb Diagnostics, a
division of Bristol-Myers Squibb Co. ("Squibb").  As part of the
transaction, Bristol-Myers Squibb Co. returned to the Company a
warrant to purchase 600,000 shares of the Company's common stock,
valued at $240,000.  The Company agreed to pay Bristol-Myers Squibb
Co. $1,000,000 in two cash payments, of which $500,000 was paid on
August 30, 1994 and $500,000 was to be paid upon acceptance of 1,200
vials of the AMI-227 suitable for worldwide preclinical and clinical
studies.  Furthermore, the Company agreed to pay up to $2,750,000
for future royalties based on the Company's sales of AMI-227.  In
connection with the purchase, the Company recorded a charge of
$760,000 in the fourth quarter of fiscal 1994 which represented the
value of the purchase of in-process research and development.  In
the first quarter of fiscal 1995, the Company and Bristol-Myers
Squibb Co. agreed that the 1200 vials of AMI-227 delivered to the
Company by Squibb were not acceptable.  In addition, they agreed
that any future delivery of AMI-227 under the agreement will not be
required and that the Company will not be required to make the
$500,000 payment.  Accordingly, the Company recorded a credit for
$380,000 to the purchase of in-process research and development and
adjusted the value of the warrant to purchase 600,000 shares of the
Company's common stock by $120,000 in the first quarter of fiscal
1995.

<PAGE> 9 OF 16
     On February 1, 1995 the Company entered into an agreement with
Berlex Laboratories, Inc. ("Berlex") granting Berlex a product
license and exclusive marketing rights to the Company's Feridex
I.V. (trademark) magnetic resonance imaging (MRI) contrast agent in the United
States and Canada.  Under the terms of the agreement, Berlex paid a
$5,000,000 non-refundable license fee and will pay an additional
$5,000,000 license fee when the product has been approved for
commercial marketing in the United States by the U. S. Food and Drug
Administration (FDA).  In addition, the Company will receive
payments for manufacturing the product and royalties on future
sales.  The Company submitted a New Drug Application (NDA) for
Feridex I.V. to the FDA in February 1994 which was accepted for
filing in April 1994.

<PAGE> 10 OF 16

I
tem 2 -  Management's Discussion and Analysis of Financial
Condition and Results of Operations.

Overview
     Since its inception, Advanced Magnetics, Inc. (the "Company") has
focused its efforts on developing its core magnetic particle
technology, primarily to develop MRI contrast agents.  Advanced
Magnetics has funded its operations with cash from license fees from
corporate partners, royalties, sales of its in-vitro products, fees
from contract research performed for third parties, the proceeds of
financings, and income earned on invested cash.  The Company has
received substantial license fee revenues from licenses of both its
MRI contrast agent technology and its in-vitro clinical laboratory
technology.  The Company has also received royalty revenues under
licenses of its in-vitro clinical laboratory technology.

     A substantial portion of the Company's expenses consists of
research and development expenses.  The Company expects its research
and development expenses to increase as it funds clinical trials and
associated toxicology and pharmacology studies and as it devotes
resources to developing additional contrast agents and new therapeutic
drugs.

     The Company's revenues and operating results can vary
substantially from period to period.  In particular, the timing of the
receipt by the Company of license fees has historically caused
substantial variations in operating results from period to period.  In
addition, variations in revenues and expenses resulting from clinical
trials, additional license or corporate partnering arrangements,
timing of regulatory approvals and royalty payments may cause
significant future variations in period to period results.


Results of Operations for the quarter ended March 31, 1995 as
compared to the quarter ended March 31, 1994.

Revenues

     Total revenues of the Company were $6,227,695 in the second
fiscal quarter ended March 31, 1995 compared to $2,615,935 in the
second fiscal quarter ended March 31, 1994.  The Company's revenues
consisted primarily of license fees, direct sales of products and
investment income.  The increase in revenues of $3,611,760 compared to
the second fiscal quarter ended March 31, 1994 resulted primarily from
an increase in license fees of $3,000,000 and an increase in direct
product sales of $650,076.  On February 1, 1995, the Company received
a $5,000,000 non-refundable license fee payment from Berlex under an
agreement granting Berlex a product license and exclusive marketing
rights to the Company's Feridex I.V. MRI contrast agent in the United
States and Canada.  The second fiscal quarter of 1994 included a non-
refundable license fee of $2,000,000 paid by Squibb Diagnostics, a
division of Bristol-Myers Squibb, Inc. ("Squibb Diagnostics").

     Product sales for the second fiscal quarter ended March 31, 1995
were $789,026 compared to $138,950 for the second fiscal quarter ended
March 31, 1994.  The initial product launch in Europe of Endorem
(registered trademark) (ferumoxide), the Company's liver imaging contrast 
agent, began in January 1995 and accounted for all the Company's 
recognition of the product sales for the second fiscal quarter ended 
March 31, 1995.  Product sales for the second fiscal quarter ended 
March 31, 1994 of $138,950 were for the initial product launch in Europe 
in December 1993 of Lumirem (registered trademark) (ferumoxsil), the 
Company's gastrointestinal imaging agent.

     Interest, dividends and net gains and losses on sales of
securities were $438,669 for the second fiscal quarter ended March 31,
1995 compared to $476,985 for the second fiscal quarter ended March
31, 1994.  These amounts included an increase in revenue from interest
and dividends to $441,097 in the second fiscal quarter ended March 31,
1995 from $320,341 in the second fiscal quarter ended March 31, 1994.
The increase was primarily a result of an increase in interest revenue
from the purchase of United States Treasury notes.  In the second
fiscal quarter ended March 31, 1995, net gains and losses on sales of
securities were a net loss of $2,428 compared to a net gain of
$156,644 in the second fiscal quarter ended March 31, 1994.

<PAGE> 11 OF 16
Costs and Expenses

     The cost of product sales for the first fiscal quarter ended
March 31, 1995 was $157,804 compared to $26,600 for the second fiscal
quarter ended March 31, 1994.  The cost of product sales was 20% of
sales for both fiscal second quarters.  The Company has produced
products for sale on a made to order basis only.  Research and
development expenses for the second fiscal quarter ended March 31,
1995 were $1,968,069, an increase of 14% compared to $1,729,071 for
the second fiscal quarter ended March 31, 1994.  The increase in
research and development expense was primarily due to expenditures for
the newly formed Clinical Development Group in the Company's
Princeton, New Jersey office and human clinical trials for certain of
the Company's development stage products.  General and administrative
expenses for the second fiscal quarter ended March 31, 1995 were
$472,530, consistent with general and administrative expenses of
$472,106 for the second fiscal quarter ended March 31, 1994.

Earnings

     For the reasons stated above, net income for the second fiscal
quarter ended March 31, 1995 was $3,254,292 or $0.48 per share
compared to net income of $371,658 or $0.05 per share for the second
fiscal period ended March 31, 1994.


Results of Operations for the Six Months Ended March 31, 1995 as
Compared to the Six Months Ended March 31, 1994

Revenues

     Total revenues for the six-month period ended March 31, 1995
increased 70% to $6,964,940 compared to $4,105,163 for the six-month
period ended March 31, 1994.

     License fee revenues increased approximately $2,000,000 for the
six-month period ended March 31, 1995 as a result of a $5,000,000
payment received on February 1, 1995 from Berlex under an agreement
granting Berlex a product license and exclusive marketing rights to
the Company's Feridex I.V. MRI contrast agent in the United States
and Canada.  License fees revenues for the six-month period ended
March 31, 1994 were $3,005,000 and included a non-refundable license
fee of $3,000,000 paid by Squibb Diagnostics.

     There were no royalty revenues received in the six-month period
ended March 31, 1995 compared to $13,461 for the six-month period
ended March 31, 1994.

     Product sales of $844,285 for the six-month period ended March
31, 1995 were primarily for the initial product launch in Europe of
Endorem (registered trademark) (ferumoxide), the Company's liver 
imaging contrast agent.  Product sales of $200,550 for the six-month 
period ended March 31, 1994 were primarily for the launch in Europe 
of Lumirem (registered trademark) (ferumoxsil), the Company's 
gastrointestinal imaging contrast agent.

     Interest, dividends and gains and losses on sales of securities
resulted in a gain of $1,120,655 in the six-month period ended March
31, 1995 compared to a gain of $886,152 in the six-month period
ended March 31, 1994.  These amounts include interest and dividend
revenues of $1,123,083 for the six-month period ended March 31, 1995
compared to $729,508 for the six-month period ended March 31, 1994.
The increase was primarily a result of an increase in interest
revenue from the purchase of United States Treasury notes.  Net
gains (losses) from sales of marketable securities was a loss of
$2,428 for the six-month period ended March 31, 1995 compared to a
net gain of $156,644 for the six-month period ended March 31, 1994.

<PAGE> 12 OF 16
Costs and Expenses

     The cost of product sales for the  six-month period ended March
31, 1995 related primarily to the sales in Europe of Endorem 
(registered trademark) (ferumoxide), the Company's liver imaging 
contrast agent.  The cost of products sales for the six-month period 
ended March 31, 1994 related primarily to the sales in Europe of Lumirem 
(registered trademark) (ferumoxsil), the Company's gastrointestinal 
imaging contrast agent.  The cost of product sales for both six-month 
periods was 20% of sales.  The Company produces products for sale on a 
made-to-order basis only.  Research and development expenses for the 
six-month period ended March 31, 1995 increased 7% to $3,579,516 from 
$3,349,152 for the six-month period ended March 31, 1994.  The increase 
in research and development expenses was primarily due to expenditures 
for the newly formed Clinical Development Group in the Company's Princeton, 
New Jersey office and human clinical trials for several of the Company's
development stage products.  In the first fiscal quarter, the
Company and Bristol-Myers Squibb Co. agreed that the 1,200 vials of
AMI-227 delivered were not acceptable.  In addition, they agreed
that any future delivery of AMI-227 under the agreement will not be
required and that the Company will not be required to make the
$500,000 payment.  Accordingly, the Company recorded a credit for
$380,000 to the purchase of in-process research and development as 
well as a $120,000 adjustment to the value of the warrant to 
purchase 600,000 shares of the Company's Common Stock.  General 
and administrative expenses for the six-month period ended
March 31, 1995 of $788,420 decreased 17% from $944,323 for the six-
month period ended March 31, 1994.  The decrease was primarily due
to a decrease in legal and consulting fees.

Other

     In the six month period ended March 31, 1994, the Company
recognized a pre-tax gain of $2,649,580 from the sale of its in-
vitro product line to PerSeptive on October 15, 1993.

     The company adopted Statement of Financial Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities",
in the first quarter of fiscal 1995.  As a result, the Company
recorded a cumulative effect for the accounting change of $117,540.
Income before the cumulative effect was $2,433,150.

Income Taxes

     The income tax provision for the six-month period ended March
31, 1995 was $375,000 or 13.4% of income before taxes.  The income
tax provision for the six-month period ended March 31, 1994 was
$102,000 or 4.2% of income before taxes (Note D).

Earnings

     For the reasons stated above, net income for the six-month
period ended March 31, 1995 was $2,550,690 or $0.37 per share
compared to net income of $2,320,368 or $0.34 per share for the six-
month period ended March 31, 1994.

Liquidity and Capital Resources

     At March 31, 1995, the Company's cash and cash equivalents
totaled $4,115,493, representing a decrease of $2,346,700 from cash
and cash equivalents at September 30, 1994.  Additionally, the
Company had marketable securities of $36,880,078 at March 31, 1995
compared to $33,199,085 at September 30, 1994.  Cash provided by
operating activities was $2,074,974 for the six-month period ended
March 31, 1995 compared to $312,006 cash used in operating
activities for the six-month period ended March 31, 1994.  Cash
provided by operating activities for the six-month period ended
March 31, 1995 was primarily due to the $5,000,000 license fee paid
by Berlex under a product license agreement granting Berlex
exclusive marketing rights to the Company's Feridex I.V. MRI
contrast agent.  Cash used in investing activities was $4,503,787
for the six-month period ended March 31, 1995 compared to
$21,259,173 for the six-month period ended March 31, 1994.  Cash
used in investing activities for the six-month period ended March
31, 1995 includes the purchase of United States Treasury notes at a cost of

<PAGE> 13 OF 16
$4,003,516.  Cash used in investing activities for the six-month
period ended March 31, 1994 included the purchase of United States
Treasury notes at a cost of $22,290,547.  Cash provided by financing
activities for the six-month period ended March 31, 1995 was $82,113
which resulted from issuance of common stock under employee stock
option plans..  Cash used by financing activities for the six-month
period ended March 31, 1994 was $11,065.

     Capital expenditures for the six-month period ended March 31,
1995 were $798,268 compared to $309,652 in the six-month period
ended March 31, 1994.  The increase in capital expenditures for the
six-month period ended March 31, 1995 was primarily attributable to
an upgrade in the Company's magnetic resonance imaging equipment and
for the expenses associated with the newly formed Clinical
Development Group in the Company's Princeton, New Jersey office.
The Company has not planned any near term additional acquisitions or
major equipment expenditures and believes its available cash and
cash equivalents and marketable securities are sufficient to meet
its anticipated needs through fiscal 1996.

     The Company expects that its expenditures for research and
development for the 1995 fiscal year will increase significantly
compared to the fiscal year ended September 30, 1994.  The expected
increase in research and development expenses is due to the newly
formed Clinical Development Group responsible for human clinical
trials for the Company's development stage products and the funding
for the development of additional contrast agents and antiviral
therapeutics for treatment of hepatitis.

     Management believes that the Company's current operations are
not materially impacted by the effects of inflation.




<PAGE> 14 OF 16

P
ART II.  OTHER INFORMATION


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

     On February 7, 1995, the Company held its Annual Meeting of
Stockholders.  At the meeting, the stockholders acted upon the
following proposals:  (i) election of directors and (ii)
ratification of the firm of Coopers & Lybrand LLP as independent
auditors for the fiscal year ending September 30, 1995.  All of the
above matters were approved by the stockholders.

     Votes "FOR" represent affirmative votes and do not include
abstentions or broker non-votes.  In cases where a signed proxy was
submitted without designation, the shares represented by the proxy
were voted "FOR" each proposal in the manner described in the Proxy
Statement.  On the record date (December 16, 1994), 6,720,115 shares
of the Company's common stock were issued and outstanding.

     Voting results were as follows:

<TABLE>
<CAPTION>
          Matter              For    Against  Withheld  Abstain
                                                       
1.  Election of Directors                              
     <S>                   <C>          <C>     <C>       <C>
     Thomas Coor           5,621,276    N/A     48,658    N/A
     Jerome Goldstein      5,621,826    N/A     48,108    N/A
     Leslie Goldstein      5,596,312    N/A     73,622    N/A
     Richard L McIntire    5,621,862    N/A     48,072    N/A
     Edward B. Roberts     5,621,862    N/A     48,072    N/A
     Roger E. Travis       5,621,862    N/A     48,072    N/A
     George M. Whitesides  5,621,862    N/A     48,072    N/A
</TABLE>

2.  Ratification of        
      Independent Auditors 5,624,382   10,476     N/A    35,076



Item 6.  Exhibits

     Statement Recomputation of Per Share Earnings is filed as Part
II, Exhibit 11, of this report.

                                   

<PAGE> 15 OF 16                                   

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.







                                   ADVANCED MAGNETICS, INC.
                                   
                                   
Date      May 3, 1995           By /s/  Jerome Goldstein
                                   Jerome Goldstein, President,
                                   Treasurer and Chairman of the
                                   Board of Directors
                                   
                                   
Date      May 3, 1995           By /s/  Anthony P. Annese
                                   Anthony P. Annese, 
                                   Vice President and
                                   Principal Accounting
                                   Officer







<PAGE> 16 OF 16
                       ADVANCED MAGNETICS, INC.
                                   
                                   
      Exhibit 11 - Statement Recomputation of Per Share Earnings
       Attached to and made part of Part II of Form 10-Q for the
    Three-Month and Six-Month Periods Ended March 31, 1995 and 1994
                              (unaudited)
                                   

<TABLE>
<CAPTION>
                         Three-Month Periods    Six-Month Periods
                           Ended March 31,       Ended March 31,
                           1995       1994       1995        1994
 <S>                    <C>         <C>         <C>        <C>                   
 Weighted average number                                          
   of shares issued and             
   outstanding          6,724,796   6,689,383   6,720,831   6,677,417
                                                                  
 Assumed exercise of                                              
   options reduced
   by the number of                                              
   shares which
   could have been                                               
   purchased with
   the proceeds of        
   those options          110,574     102,389     107,666     111,875
                                                                  
                                                                  
 Assumed exercise of                                              
   warrants reduced 
   by the number of 
   shares could have 
   been purchased with
   the proceeds of           
   those warrants            ---       61,681        ---      68,687
                                                                  
 As adjusted           6,835,370    6,853,453  6,828,497   6,857,979
</TABLE>

                            










<TABLE> <S> <C>

<ARTICLE> 5
       
<S>                                        <C>
<PERIOD-TYPE>                              3-MOS
<FISCAL-YEAR-END>                          SEP-30-1994
<PERIOD-END>                               MAR-31-1995
<CASH>                                       4,115,493
<SECURITIES>                                36,880,078
<RECEIVABLES>                                1,032,726
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                            42,422,300
<PP&E>                                      11,397,883
<DEPRECIATION>                               4,617,575
<TOTAL-ASSETS>                              49,299,154
<CURRENT-LIABILITIES>                        1,261,865
<BONDS>                                              0
<COMMON>                                        67,270
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<OTHER-SE>                                  48,137,008
<TOTAL-LIABILITY-AND-EQUITY>                49,299,154
<SALES>                                        789,026
<TOTAL-REVENUES>                             6,227,695
<CGS>                                          157,804
<TOTAL-COSTS>                                2,598,403
<OTHER-EXPENSES>                             2,440,419
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                              3,629,292
<INCOME-TAX>                                   375,000
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                 3,254,292
<EPS-PRIMARY>                                      .48
<EPS-DILUTED>                                        0
        

</TABLE>