<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 June 30, 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 August 3, 1995, 6,745,992 shares of registrant's common stock (par
value, $.01) were outstanding.
                                   
                                   
                                   
                                   
                                   
                                   

<PAGE> 2 of 16                                   
                       ADVANCED MAGNETICS, INC.
                               FORM 10-Q
                      QUARTER ENDED JUNE 30, 1995
                                   
                                   
                                   

                    PART I.  FINANCIAL INFORMATION
                                   
                                   
                                   

                    Item 1 -- Financial Statements
                                   

<PAGE> 3 of 16

<TABLE>
                       ADVANCED MAGNETICS, INC.
                             BALANCE SHEET
                 JUNE 30, 1995 AND SEPTEMBER 30, 1994
                              (Unaudited)
                                   

<CAPTION>
              ASSETS                June 30,       September 30,
                                      1995             1994
<S>                              <C>            <C>                  
Current assets:                                             
Cash and cash equivalents        $  3,477,318   $  6,462,193
Marketable securities (Note B)     35,725,442     33,199,085
Accounts receivable                 1,847,773        248,390
Recoverable income taxes              143,617         90,117
Prepaid expenses                      338,381        112,846
 Total current assets              41,532,531     40,112,631
                                                            
Property, plant and equipment:                              
Land                                  360,000        360,000
Building                            4,320,766      4,316,706
Laboratory equipment                6,763,656      5,598,456
Furniture and fixtures                514,082        324,453
                                   11,958,504     10,599,615
                                                            
Less--accumulated depreciation and  
 amortization                       4,892,038      4,136,092
Net property, plant and equipment   7,066,466      6,463,523
                                                            
Other assets                          145,072         96,546
 Total assets                    $ 48,744,069   $ 46,672,700
                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY
                                                            
Current liabilities:                                        
Accounts payable                 $    599,210   $    273,385
Accrued expenses                      610,114        947,840
 Total current liabilities          1,209,324      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 
 6,741,867 shares at June 30, 
 1995 and 6,712,572 shares at 
 September 30, 1994                    67,419         67,126
Additional paid-in capital         45,009,586     44,660,834
Retained earnings                   1,996,079        723,515
Unrealized gains on marketable        
 securities                           461,661            ---
 Total stockholders' equity        47,534,745     45,451,475
                                                            
Total liabilities and                      
 stockholders' equity            $ 48,744,069   $ 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 NINE-MONTH PERIODS ENDED
                        JUNE 30, 1995 AND 1994
                              (Unaudited)

<CAPTION>
                           Three-Month Period       Nine-Month Period
                             Ended June 30,           Ended June 30,
                            1995        1994         1995        1994
<S>                    <C>         <C>          <C>         <C>                 
Revenues:                                                              
 License fees          $       --- $ 2,500,000  $ 5,000,000 $ 5,505,000
 Royalties                  38,366         ---       38,366      13,461
 Product sales           1,276,172      25,665    2,120,457     226,215
 Interest, dividends                                                 
  and net gains and
  losses on sales        
  of securities            575,172     535,896    1,695,827   1,422,048         
    Total revenues       1,889,710   3,061,561    8,854,650   7,166,724
                                                                       
Cost and expenses:                                                     
 Cost of product sales     256,333       5,133      425,187      44,033
 Research and            
  development  
  expenses               2,578,498   1,671,133    6,158,014   5,020,285
 Credit for purchase                                                 
  of in-process
  research and             
  development (Note F)         ---         ---     (380,000)        ---  
 Selling, general and                                                
  administrative
  expenses                 511,506     576,243    1,299,926   1,520,566
    Total costs and    
    expenses             3,346,337   2,252,509    7,503,127   6,584,884
                                                                       
Other income:                                                          
 Gain on sale of in-                                                 
  vitro product line
  (Note C)                     ---         ---         ---    2,649,580
                                                                       
 Income (loss) before                                                
  provision for
  income taxes          (1,456,627)    809,052   1,351,523    3,231,420
 Provision (benefit)     
  for income taxes        (178,500)    (96,500)    196,500        5,500
 Income (loss) before                                                
  cumulative effect 
  of accounting      
  change                (1,278,127)    905,552   1,155,023    3,225,920
                                                        
 Cumulative effect of                                                
  accounting change 
  (Note B)                     ---         ---     117,540         ---
                                                                       
Net income (loss)      $(1,278,127)$   905,552 $ 1,272,563 $ 3,225,920         
                                                                       
Net income (loss) per                                                  
 share before 
 cumulative effect                                                 
 of accounting
 change                $     (0.19)  $    0.13 $     0.17  $      0.47
Cumulative effect of                                                   
 accounting change             ---         ---       0.02          ---
Income (loss) per 
 share                 $     (0.19)  $    0.13 $     0.19  $      0.47
                                                                       
Weighted average number                                                
 of common and common           
 equivalent shares       6,895,251     6,840,411 6,851,389   6,851,370
</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 NINE-MONTH PERIODS ENDED
                        JUNE 30, 1995 AND 1994
                              (Unaudited)
                                   
                                   
<CAPTION>
                                         Nine-Month Periods Ended
                                                 June 30,
                                                                 
                                            1995            1994
<S>                                   <C>            <C>
Cash flows from operating activities:                            
Cash received from customers          $  5,961,705   $  5,712,442
Cash paid to suppliers and employees    (6,984,616)    (6,381,265)
Dividends and interest received          1,255,921        846,451
Income taxes paid                         (250,000)      (205,067)
Income tax refund                             ---         622,849
Net realized gains (losses) on sales of    
 securities                                 (2,428)       169,696
                                                                 
Net cash provided by (used in)
 operating activities                      (19,418)       765,106
                                                                 
Cash flows from investing activities:                            
Proceeds from sales of securities          750,000      5,959,534
Proceeds from U.S. Treasury Notes        
 maturing                                2,987,638            ---
Purchase of securities                  (5,644,725)   (24,629,610)
Capital expenditures                    (1,358,889)      (680,874)
(Increase) in other assets                 (48,526)       (46,296)
                                                                 
Net cash (used in) investing 
 activities                             (3,314,502)   (19,397,246)
                                                                 
Cash flows from financing activities:                            
Proceeds from issuances of common stock    349,045        462,280
Purchase of treasury stock                     ---       (316,589)
                                                                 
Net cash provided by financing             
 activities                                349,045        145,691
                                                                 
Net (decrease) in cash and cash          
 equivalents                            (2,984,875)   (18,486,449)
Cash and cash equivalents at beginning   
 of the period                           6,462,193     25,837,909
                                                                 
Cash and cash equivalents at end of the  
 period                               $  3,477,318   $  7,351,460
</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 NINE-MONTH PERIODS ENDED
                        JUNE 30, 1995 AND 1994
                              (Unaudited)
                                   
                                   
                                   
                                   
<CAPTION>
                                              Nine-Month Periods
                                                Ended June 30,
                                              1995           1994
<S>                                      <C>             <C>                 
Net income                               $ 1,272,563     $ 3,225,920
                                                                    
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                755,946         627,321
Amortization of U.S. Treasury Notes          
 Discount                                    (40,070)            ---
(Increase) in accounts receivable         (1,599,383)       (438,135)
(Increase) decrease in prepaid expenses     (225,535)        313,449
(Decrease) increase in accounts payable      
 and accrued expenses                        368,101        (313,869)
Gain on sale of in-vitro product line            ---      (2,649,580)
(Increase) in recoverable income taxes       (53,500)            ---
                                                                    
Total adjustments                         (1,291,981)     (2,460,814)
                                                                    
Net cash provided by (used in) operating           
 activities                              $   (19,418)    $   765,106
</TABLE>


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


<PAGE> 7 of 16
                       ADVANCED MAGNETICS, INC.

                     NOTES TO FINANCIAL STATEMENTS
                             JUNE 30, 1995
                                   
                                   
A.   Summary of Accounting Policies.

     The balance sheet of Advanced Magnetics, Inc. (the "Company") as
of June 30, 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:

              June 30, 1995    September 30,
                                   1994
                                     
Cost          $  35,263,781    $  33,316,625
                                     
Market        $  35,725,442    $  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 June 30,
1995, net unrealized gains on marketable securities amounted to
$461,661 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 June 30, 1995, 71% of the Company's portfolio was
invested in U. S. Treasury Notes, 6% in corporate bonds, 17% in
preferred stocks and 6% 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 fiscal nine-month periods
ended June 30, 1995 and 1994 was at a different rate than the U. S.
Statutory rate for the following reasons:


<TABLE>
<CAPTION>
                                 Nine-Month Periods
                                   Ended June 30,
                                1995          1994   
<S>                           <C>            <C>                               
U. S. Statutory Tax Rate       34.0%          34.0%  
State income taxes, net of         
 Federal benefit                ---            0.4
Dividend Received Deduction    (5.6)          (8.5)   
Amortization of Purchased      
 Technology                   (12.9)         (19.7)   
Alternative Minimum Tax        13.4            ---   
Utilization of Net Operating   
 Loss                         (15.8)           ---   
Other                           0.3           (5.8)   
                                                      
   Effective Tax Rate          13.4%           0.4%  
</TABLE>


During the fiscal nine months ended June 30, 1995, the net change in
the valuation allowance was a decrease of approximately $498,000.  The
decrease resulted from the realization of certain net operating loss
and purchase technology carryforwards.  During the fiscal nine months
ended June 30, 1994, the net change in the valuation allowance was a
decrease of approximately $582,000.  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 1,200 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.

     On May 9, 1995, the Company entered into a Research and License
Agreement with the General Hospital Corporation, a not-for-profit
Massachusetts Corporation doing business as Massachusetts General
Hospital ("MGH").  The agreement covers organ-specific, receptor-
directed, ultrasmall superparamagnetic iron oxide for use as MRI
contrast agents.  The target organ for the initial collaboration is
the pancreas.  Minimum payment to MGH under the agreement is
$300,000 payable quarterly but payments could exceed this amount
depending on milestone achievements and product sales.  In the
fiscal third quarter ended June 30, 1995, the Company recorded a
$75,000 quarterly research and development expense.


<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 June 30, 1995 as
compared to the quarter ended June 30, 1994.

Revenues

     Total revenues of the Company were $1,889,710 for the third
fiscal quarter ended June 30, 1995 compared to $3,061,561 in the third
fiscal quarter ended June 30, 1994.  The Company's revenues consisted
primarily of direct sales of contrast agent products and investment
income.  The decrease in revenues of $1,171,851 resulted primarily
from the absence of license fee revenues in the third fiscal quarter
ended June 30, 1995 compared to $2,500,000 in the third fiscal quarter
ended June 30, 1994, partially offset by an increase in direct product
sales of $1,276,172 compared to direct product sales of $25,665 in the
third fiscal quarter ended June 30, 1994.

     The third fiscal quarter of 1994 included a non-refundable
license fee of $2,500,000 paid by Sterling Winthrop, Inc., a
subsidiary of Eastman Kodak Company ("Sterling").  The fee was a
milestone payment for the Company's filing of a New Drug Application
(NDA) with the FDA for the magnetic resonance liver imaging contrast
agent Feridex I.V.  The Company terminated its marketing and
distribution agreement for the Feridex I.V. contrast agent with
Sterling on October 6, 1994.

     Product sales for the third fiscal quarter ended June 30, 1995
were $1,276,172 compared to $25,665 for the third fiscal quarter ended
June 30, 1994.  Product sales consisted primarily of $1,224,842 of
Feridex I.V. contrast agent sales to Guerbet S.A., under the name
Endorem (registered trademark).  Product sales for the third fiscal 
quarter ended June 30, 1994 were $25,665 resulting from the initial 
product launch in December 1993 of Lumirem (registered trademark) 
(ferumoxsil), the Company's gastrointestinal imaging contrast agent 
in Europe.

     Royalties revenues for the third fiscal quarter ended June 30,
1995 were $38,366 and were paid by Guerbet S.A. on European product
sales of the Feridex I.V. imaging contrast agent.  There were no
royalties revenues for the third fiscal quarter ended June 30, 1994.



<PAGE> 11 of 16
     Interest, dividends and net gains and losses on sales of
securities were $575,172 for the third fiscal quarter ended June 30,
1995 compared to $535,896 for the third fiscal quarter ended June 30,
1994.  These amounts included an increase from interest and dividends
to $575,172 in the third fiscal quarter ended June 30, 1995 from
$522,844 in the third fiscal quarter ended June 30, 1994.  The
increase was primarily a result of an increase in interest revenue
from the purchase of United States Treasury notes.  There were no
sales of securities in the third fiscal quarter ended June 30, 1995.
In the third fiscal quarter ended June 30, 1994, there was a net gain
on sales of securities of $13,052.

Costs and Expenses

     The cost of product sales for the third fiscal quarter ended June
30, 1995 was $256,333 compared to $5,133 for the third fiscal quarter
ended June 30, 1994.  The cost of product sales was 20% of sales for
both third quarters.  The Company produced products for sale on a made-
to-order basis only.  Research and development expenses for the third
fiscal quarter ended June 30, 1995 were $2,578,498, an increase of 54%
compared to $1,671,133 for the third fiscal quarter ended June 30,
1994.  The increase in research and development expenses was primarily
due to expenditures for the Clinical Development Group in the
Company's Princeton, New Jersey office, human clinical trials for
certain of the Company's development stage products and a $200,000
milestone payment by the Company to Hafslund Nycomed A.S. of Oslo,
Norway under an agreement concerning certain patent rights within the
superparamagnetic subgroup of MRI contrast agent field.  General and
administrative expenses for the third fiscal quarter ended June 30,
1995 were $511,506, a decrease of 11% compared to $576,243 for the
third fiscal quarter ended June 30, 1994.  The decrease was primarily
due to a decrease in legal and consulting fees.

Earnings

     For the reasons stated above, there was a net loss of $1,278,127,
or $(0.19) per share, for the third fiscal quarter ended June 30, 1995
compared to net income of $905,552, or $0.13 per share, for the third
fiscal quarter ended June 30, 1994.


Results of Operations for the Nine Months Ended June 30, 1995 as
Compared to the Nine Months Ended June 30, 1994

Revenues

     Total revenues for the nine-month period ending June 30, 1995
increased 24% to $8,854,650 from $7,166,724 for the nine-month period
ended June 30, 1994.

     License fee revenues for the fiscal nine-month period ended June
30, 1995 were $5,000,000 compared to $5,505,000 for the fiscal nine-
month period ended June 30, 1994.  There was 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 fee revenues for the fiscal nine-month period ended
June 30, 1994 included a non-refundable license fee of $3,000,000 paid
by Squibb Diagnostics and a non-refundable milestone license fee of
$2,500,000 paid by Sterling.

     Product sales for the fiscal nine-month period ended June 30,
1995 were $2,120,457 compared to $226,215 for the fiscal nine-month
period ended June 30, 1994.  Product sales included $2,013,868 of
Feridex I.V. contrast agent sales to Guerbet S.A., the Company's
European licensee.  The product sales for the fiscal nine-month period
ended June 30, 1994 were primarily for the launch of Lumirem 
(registered trademark) (ferumoxsil), the Company's gastrointestinal 
imaging contrast agent in Europe by Guerbet S.A.



<PAGE> 12 of 16
     Royalties revenues for the fiscal nine-month period ended June
30, 1995 were $38,366 compared to $13,461 for the fiscal nine-month
period ended June 30, 1994.

     Interest, dividends and gains and losses on sales of securities
resulted in a gain of $1,695,827 in the fiscal nine-month period ended
June 30, 1995 compared to a gain of $1,422,048 in the fiscal nine-
month period ended June 30, 1994.  These amounts include interest and
dividend revenues of $1,698,255 for the fiscal nine-month period ended
June 30, 1995 compared to $1,252,352 for the fiscal nine-month period
ended June 30, 1994.  The increase was primarily a result of an
increase in interest revenue from the purchase of United States
Treasury notes.  Net gains (losses) for the sales of marketable
securities was a loss of $(2,428) for the fiscal nine-month period
ended June 30, 1995 compared to a net gain of $169,696 for the fiscal
nine-month period ended June 30, 1994.

Costs and Expenses

     The cost of product sales for the fiscal nine-month period
ended June 30, 1995 related primarily to the sale in Europe of
Endorem (ferumoxide), the Company's liver imaging contrast agent.
The cost of products sales for the fiscal nine-month period ended
June 30, 1994 related primarily to the sale in Europe of Lumirem
(ferumoxsil), the Company's gastrointestinal imaging contrast agent.
The cost of product sales for both nine-month periods was 20% of
sales.  The Company produced products for sale on a made-to-order
basis only.  Research and development expenses for the fiscal nine-
month period ended June 30, 1995 increased 23% to $6,158,014 from
$5,020,285 for the fiscal nine-month period ended June 30, 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, human clinical trials
for several of the Company's development stage products and a
$200,000 milestone payment by the Company to Hafslund Nycomed S.A.
of Oslo, Norway.  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 fiscal nine-month period ended June 30, 1995 of
$1,299,926 decreased 15% from $1,520,566 for the fiscal nine-month
period ended June 30, 1994.  The decrease was primarily due to a
decrease in legal and consulting fees.

Other

     In the fiscal nine-month period ended June 30, 1994, the
Company recognized a pre-tax gain of $2,649,580 from the sale of its
in-vitro product line to PerSeptive Biosystems, Inc. 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 $1,155,023.

Income Taxes

     The income tax provision for the fiscal nine-month period ended
June 30, 1995 was $196,500 or 13.4% of income before taxes.  The
income tax provision for the fiscal nine-month period ended June 30,
1994 was $5,500 (Note D).

Earnings

     For the reasons stated above, net income for the fiscal nine-
month period ended June 30, 1995 was $1,272,563, or $0.19 per share,
compared to net income of $3,225,920, or $0.47 per share, for the
fiscal nine-month period ended June 30, 1994.


<PAGE> 13 of 16
Liquidity and Capital Resources

     At June 30, 1995, the Company's cash and cash equivalents
totaled $3,477,318, representing a decrease of $2,984,875 from cash
and cash equivalents at September 30, 1994.  Additionally, the
Company had marketable securities of $35,725,442 at June 30, 1995
compared to $33,199,085 at September 30, 1994.  Cash used in
operating activities was $19,418 for the fiscal nine-month period
ended June 30, 1995 compared to $765,106 cash provided by operating
activities for the fiscal nine-month period ended June 30, 1994.
Cash used in investing activities was $3,314,502 for the fiscal nine-
month period ended June 30, 1995 compared to $19,397,246 for the
fiscal nine-month period ended June 30, 1994.  Cash used in
investing activities for the fiscal nine-month period ended June 30,
1995 includes the purchase of United States Treasury notes at a cost
of $4,003,516.  Cash used in investing activities for the fiscal
nine-month period ended June 30, 1994 included the purchase of
United States Treasury notes at a cost of $22,290,547.  Cash
provided by financing activities for the fiscal nine-month period
ended June 30, 1995 was $349,045 which resulted from issuance of
common stock under employee stock option and purchase plans.  Cash
used by financing activities for the fiscal nine-month period ended
June 30, 1994 was $145,691.

     Capital expenditures for the fiscal nine-month period ended
June 30, 1995 were $1,358,889 compared to $680,874 in the fiscal
nine-month period ended June 30, 1994.  The increase in capital
expenditures for the fiscal nine-month period ended June 30, 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 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  August 9, 1995             By  /s/ Jerome Goldstein
                                     Jerome Goldstein, President,
                                     Treasurer and Chairman of the
                                     Board of Directors
                                     
                                     
Date  August 9, 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 Nine-Month Periods Ended June 30, 1995 and 1994
                              (unaudited)
                                   
                                   


<TABLE>
<CAPTION>
                          Three-Month Periods      Nine-Month Periods
                            Ended June 30,           Ended June 30,

                           1995        1994         1995        1994
 <S>                    <C>          <C>          <C>          <C>              
 Weighted average number                                              
  of shares issued and           
  outstanding           6,731,245    6,697,203    6,724,384    6,684,084
                                                                      
 Assumed exercise of                                                  
  options reduced
  by the number of                                                  
  shares which
  could have been                                                   
  purchased with
  the proceeds of       
  those options           164,006       96,266      127,005      106,937
                                                                      
                                                                      
 Assumed exercise of                                                  
  warrants reduced by 
  the number of shares
  could have been                                                   
  purchased with
  the proceeds of           
  those warrants              ---       46,942          ---       60,349    
                                                                      
 As adjusted            6,895,251    6,840,411    6,851,389    6,851,370
</TABLE>








<TABLE> <S> <C>

<ARTICLE> 5
       
<S>                                        <C>
<PERIOD-TYPE>                              3-MOS
<FISCAL-YEAR-END>                          SEP-30-1994
<PERIOD-END>                               JUN-30-1995
<CASH>                                       3,477,318
<SECURITIES>                                35,725,442
<RECEIVABLES>                                1,847,773
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                            41,532,531
<PP&E>                                      11,958,504
<DEPRECIATION>                               4,892,038
<TOTAL-ASSETS>                              48,744,069
<CURRENT-LIABILITIES>                        1,209,324
<BONDS>                                              0
<COMMON>                                    45,077,005
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<OTHER-SE>                                   2,457,740
<TOTAL-LIABILITY-AND-EQUITY>                48,744,069
<SALES>                                      1,276,172
<TOTAL-REVENUES>                             1,889,710
<CGS>                                          256,333
<TOTAL-COSTS>                                3,346,337
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                            (1,456,627)
<INCOME-TAX>                                 (178,500)
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                               (1,278,127)
<EPS-PRIMARY>                                    (.19)
<EPS-DILUTED>                                        0
        

</TABLE>