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.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (check(Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

The number of shares outstanding of the registrant’s Common Stock, $.01 par value, as of February 2,May 1, 2006 was 13,176,47113,190,546 shares.

NOTE A – FINANCIAL INFORMATION

Lifecore Biomedical, Inc. (referred to in this report as “Lifecore” or the “Company”) manufactures biomaterials and surgical devices for use in various surgical markets and provides specialized contract aseptic manufacturing services through its two divisions, the Hyaluronan Division and the Oral Restorative Division. The Company’s manufacturing facility is located in Chaska, Minnesota. The Hyaluronan Division markets its products through original equipment manufacturers and contract manufacturing alliances in ophthalmologic, orthopedic surgery, veterinary medicine and gynecologic fields. The Oral Restorative Division markets its products through direct sales in the United States, Italy, Germany, Sweden and France and through distributors in other foreign countries.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading.

In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position of the Company as of DecemberMarch 31, 2005,2006, the results of operations for the three month and sixnine month periods ended DecemberMarch 31, 20052006 and 2004,2005, and cash flows for the sixnine month periods ended DecemberMarch 31, 20052006 and 2004.2005. The results of operations and cash flows for the sixnine months ended DecemberMarch 31, 20052006 are not necessarily indicative of the results for the full year or of the results for any future periods. The unaudited condensed consolidated balance sheet as of June 30, 2005 has been derived from audited financial statements as of that date.

In preparation of the Company’s consolidated financial statements, management is required to make estimates and assumptions that affect reported amounts of assets and liabilities and related revenues and expenses during the reporting periods. Actual results could differ from the estimates used by management.

NOTE B – INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or market. Inventories consist mainly of finished hyaluronan powder, aseptic units and oral restorative products and related raw materials. The Company’s inventory has been reduced to the lower of cost or market for obsolete, excess or unmarketable inventory. The lower of cost or market adjustment is based on management’s review of inventories on hand compared to estimated future usage and sales. The portion of finished hyaluronan powder inventory not expected to be consumed within the next 12 months is classified as a long-term asset. The finished hyaluronan inventory is maintained in a frozen state and has a shelf life of ten years. Inventories consist of the following:

NOTE C – INTANGIBLE ASSETS

Intangibles consist primarily of the cost of goodwill related to acquisitions, patents and distribution rights and licenses. All intangibles relate to the Oral Restorative Division.

Also included within intangibles are costs incurred to register patents and trademarks, which are capitalized as incurred. Amortization of these costs commences when the related patent or trademark is granted. The costs are amortized over the estimated useful life of the patent or trademark, not to exceed 17 years.

Goodwill is tested for impairment on a quarterlyan annual basis, or when there is an indication that an impairment has occurred, and is written down when impaired by applying a fair value based test. Purchased intangible assets other than goodwill are amortized over their useful lives unless these lives are determined to be indefinite. There was no impairment recorded for the sixnine month period ended DecemberMarch 31, 2005.2006.

     Intangibles consisted of the following at:

NOTE E – STOCK BASEDSTOCK-BASED COMPENSATION – (continued)

Prior to adopting SFAS 123R, the Company accounted for stock-based compensation under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees.” The Company has applied the modified prospective method in adopting SFAS 123R. Accordingly, periods prior to adoption have not been restated. The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to the comparable periods in the prior fiscal year.

NOTE E – STOCK BASEDSTOCK-BASED COMPENSATION – (continued)

The Company’s stock options generally vest ratably over four years of service and have a contractual life of 10 years. The Company has authorized 5,000,000 shares for grant under the 1990, 1996 and 2003 Stock Option Plans. Option transactions under the 1990 and 1996 Stock Option Plans during the sixnine month period ended DecemberMarch 31, 20052006 are summarized as follows (no stock options have been granted under the 2003 Plan):

NOTE E – STOCK BASEDSTOCK-BASED COMPENSATION – (continued)

During fiscal 2005, the Company granted 60,000 restricted common stock awards to its officers; 50,000 of the shares were awarded at a price of $9.30 and 6,667 of those shares were forfeited during the year ended June 30, 2005, and 10,000 of the shares were awarded at a price of $10.79. During the current quarter, the Company granted 7,000 restricted common stock awards to a new officer at a price of $15.42. The restricted shares awarded in fiscal 2005 will vest at the earlier of four years from the date of issuance or upon achievement of financial performance criteria for fiscal years 2005, 2006 and 2007. The restricted shares awarded in fiscal 2006 will vest at the earlier of three years from the date of issuance or upon achievement of financial performance criteria for fiscal years 2006 and 2007. The Company achieved the financial performance criteria in fiscal 2005, and as a result, 20,000 shares vested. The employee forfeits unvested shares upon the termination of employment prior to the end of the vesting period. Stock compensation expense recognized related to these grants totaled $40,000$73,000 and $21,000$85,000 during the three month periods ended DecemberMarch 31, 20052006 and 2004,2005, respectively, and $80,000$153,000 and $21,000$106,000 during the sixnine month periods ended DecemberMarch 31, 20052006 and 2004,2005, respectively.

NOTE F – ACCUMULATED OTHER COMPREHENSIVE INCOME

The Company has $619,000$566,000 of accumulated currency translation adjustment which reduces shareholders’ equity at DecemberMarch 31, 2005.2006. Total comprehensive income was $1,400,000$2,246,000 and $2,532,000$1,930,000 for the three month periods ended DecemberMarch 31, 20052006 and 2004,2005, respectively, and total comprehensive income was $2,473,000$4,719,000 and $3,902,000$5,832,000 for the sixnine month periods ended DecemberMarch 31, 2006 and 2005, and 2004, respectively.

NOTE G – NET INCOME PER SHARE

The Company’s basic net income per share amounts have been computed by dividing net income by the weighted average number of outstanding common shares. The Company’s diluted net income per share is computed by dividing net income by the weighted average number of outstanding common shares and common share equivalents relating to stock options and restricted stock, when dilutive. For the three and sixnine month periods ended DecemberMarch 31, 2005, 522,2582006, 391,346 and 459,704370,799 common share equivalents, respectively, were included in the computation of diluted net income per share. For the three and sixnine month periods ended DecemberMarch 31, 2004, 324,6162005, 677,086 and 175,941322,958 common share equivalents, respectively, were included in the computation of diluted net income per share.

Options to purchase 333,543 and 490,543517,043 shares of common stock with a weighted average exercise price of $17.41 and $16.30$16.27 for the three month and sixnine month periods ended DecemberMarch 31, 2005, respectively,2006, and options to purchase 626,668319,043 and 1,018,918587,543 shares of common stock with a weighted average exercise price of $14.75$17.53 and $12.41$15.20 for the three month and sixnine month periods ended DecemberMarch 31, 2004,2005, respectively, were outstanding but were not included in the calculation of diluted net income per share because the options’ exercise prices were greater than the average market price of the Company’s common stock during those periods. Although these options were antidilutive for the periods presented, they may be dilutive in future period calculations.

Segment assets and the basis of segmentation are consistent with that reported at June 30, 2005. Segment information for sales and income from operations are as follows:

NOTE L – LEGAL PROCEEDINGS

The Company is named as a defendant in 7467 pending lawsuits, all of which allege that the plaintiffs suffered injuries due to the defective nature of INTERGEL Solution manufactured by the Company and marketed by ETHICON. Under the terms of its Conveyance, License, Development and Supply Agreement dated August 8, 1994 with ETHICON, ETHICON is obligated to indemnify and hold the Company harmless from all claims related to the sale and use of INTERGEL Solution, unless it is ultimately determined that a plaintiff’s injuries were caused by a breach of the Company’s limited contractual warranty to ETHICON. The Company believes that ETHICON is obligated to fully indemnify the Company in connection with all of the pending claims relating to INTERGEL Solution. The Company also has product liability insurance that it believes would cover its exposure, if any, related to these claims.

NOTE M – RECLASSIFICATIONS

Certain 20042005 amounts have been reclassified to conform to the 20052006 presentation.

The discussion and analysis of our financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions in certain circumstances that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the Company’s financial statements. Management bases its estimates and judgments on historical experience, observance of trends in the industry, information provided by customers and other outside sources and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The Company recognizes revenue when the product is shipped or otherwise accepted by unaffiliated customers, pursuant to customers orders, the price is fixed and collection is reasonably assured. The Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition”Recognition,” provides guidance on the application of generally accepted accounting principles to selected revenue recognition issues. The Company has concluded that its revenue recognition policy is appropriate and in accordance with generally accepted accounting principles and SAB No. 101.

Accounts receivable are reduced by an allowance for amounts that may become uncollectible in the future. The Company extends credit to customers in the normal course of business but generally does not require collateral or any other security to support amounts due. Management performs on-going credit evaluations of the Company’s customers and bases the estimated allowance on these evaluations.

Inventories are stated at the lower of cost (first-in, first-out method) or market and have been reduced to the lower of cost or market for obsolete, excess or unmarketable inventory. The lower of cost or market adjustment is based on management’s review of inventories on hand compared to estimated future usage and sales.

Intangibles and certain other long-lived assets with a definite life are amortized over their useful lives. Useful lives are based on management’s estimates of the period that the assets will generate revenue.

The Company reviews goodwill for impairment on a regularan annual basis at least quarterly, or upon a triggering event.

Management has reviewed goodwill and other intangibles for impairment and has concluded that such assets are appropriately valued at the financial statement dates.

Income taxes are accounted for under the provisions of Statement of Financial Accounting Standards or SFAS No. 109 (“SFAS 109”), “Accounting for Income Taxes.” Under this method, deferred tax assets and liabilities are determined based upon the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to affect taxable income. The tax consequences of events

The Company manufactures biomaterials and medical devices for use in various surgical markets and provides related specialized contract aseptic manufacturing services. The Company operates through two business units, the Hyaluronan Division and the Oral Restorative Division.

The Company’s Hyaluronan Division is principally involved in the development and manufacture of products utilizing hyaluronan, a naturally occurring polysaccharide that is widely distributed in the extracellular matrix of connective tissues in both animals and humans.

The Hyaluronan Division primarily sells into three medical segments: 1) Ophthalmic, 2) Orthopedic, and 3) Veterinary. In addition, the Company developed and owns the global marketing rights for a product using its patented ferric hyaluronan adhesion prevention technology. The product, FeHA, (formerly labeled as GYNECARE INTERGEL Adhesion Prevention Solution), has been clinically proven to reduce the incidence of post-surgical adhesions following surgical trauma. The product was voluntarily withdrawn from the market in March 2003 in order to assess information obtained from postmarketing experience with the product. The Company is currently evaluating regulatory requirements and opportunities for distribution partners to market the FeHA product.

Three Months Ended DecemberMarch 31, 20052006 Compared to Three Months Ended DecemberMarch 31, 2004:2005:

General and administrative. Consolidated general and administrative expenses increased by $344,000$60,000 or 22%4% in the current quarter as compared to the same quarter of last fiscal year. The increase is primarily relatedwas due to $181,000 ofstock-based compensation expense associated with the adoption of SFAS 123R and higher insurance costs.123R.

Other income (expense). Net other income, as shown on the Consolidated Statements of Operations, decreased $297,000increased $10,000 for the current quarter as compared to the same quarter of last fiscal year. The decrease isincrease was primarily due to the Ethicon, Inc. paymentan increase in interest income of $250,000 received during the second quarter of fiscal 2005 and$136,000 resulting from a higher cash balance, offset by decreases in currency transaction gains realized on Euro denominated intercompany transactions of $162,000, offset by an increase in interest income of $125,000 resulting from a higher cash balance.$122,000.

Provision for income taxes.Provision for income taxes was $840,000$1,391,000 and $136,000$129,000 for the three months ended DecemberMarch 31, 20052006 and 2004,2005, respectively. The effective rate for the prior year periods wereperiod was significantly lower than the comparable 2005 periods in fiscal 2006 due to reversingrecognizing a tax benefit for the fullpartial release in the deferred tax asset valuation allowance related to domesticfor the net operating losses which was recordedutilized in the fourth quarter of fiscal 2005.prior year period. As a result, the Company’s statement of earnings will reflectreflects more normal tax charges throughout fiscal 2006 and beyond. However, with the exception of the Alternative Minimum Tax and certain state taxes, the Company will not use cash for domestic income taxes until its net operating losses are fully realized on its tax returns. The Company accounts for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes.”

Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to affect taxable income. The Company believes that in fiscal 2006 its tax rate will be approximately 37%38%, even though the actual amount of taxes paid will be reduced significantly by the utilization of the net operating loss carryforward.

Marketing and sales. Consolidated marketing and sales expenses increased by $977,000$1,948,000 or 14%18% in the current period as compared to the same period of last fiscal year. The increase was due mainly to costs associated with the launch of the new Prima Implant System, the expansion of the oral restorative’s domestic sales force and international operations.operations and stock-based compensation expense associated with the adoption of SFAS 123R.

General and administrative. Consolidated general and administrative expenses increased by $664,000$569,000 or 22%12% in the current period as compared to the same period of last fiscal year. The increase is related to $371,000$328,000 of stock-based compensation expense associated with the adoption of SFAS 123R and higher insurance costs.

Other income (expense). Net other income, as shown on the Consolidated Statements of Operations, increased $50,000$60,000 for the current period as compared to the same period of last fiscal year. The increase iswas primarily due to no bond retirement expense of $290,000 in the 2005 period and an increase in interest income of $250,000$386,000 resulting from a higher cash balance and higher interest rates, offset by decreases in currency transaction gains realized on Euro denominated intercompany transactions of $271,000$393,000 and the Ethicon, Inc. payment of $250,000 received during the second quarter of fiscal 2005.

Provision for income taxes.Provision for income taxes was $1,403,000$2,794,000 and $230,000$359,000 for the sixnine months ended DecemberMarch 31, 20052006 and 2004,2005, respectively. The effective rate for the prior year periods wereperiod was significantly lower than the comparable 2005 periods in fiscal 2006 due to reversingrecognizing a tax benefit for the fullpartial release in the deferred tax asset valuation allowance related to domesticfor the net operating losses which was recordedutilized in the fourth quarter of fiscal 2005.prior year period. As a result, the Company’s statement of earnings will reflectreflects more normal tax charges throughout fiscal 2006 and beyond. However, with the exception of the Alternative Minimum Tax and certain state taxes, the Company will not use cash for domestic income taxes until its net operating losses are fully realized on its tax returns.

The Company accounts for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes.”

The Company’s Annual Report on Form 10-K, as amended, for the year ended June 30, 2005 contains a detailed discussion of the Company’s liquidity and capital resources. Investors should read the 2005 Form 10-K, as amended, in conjunction with this Quarterly Report on Form
Form 10-Q.

For the sixnine month period ended DecemberMarch 31, 2005,2006, the Company had negativepositive cash flow of $185,000$3,626,000 due to an inventory build related to the new product launch and the timing of customer payments.operating activities. The Company has had positive cash flow in fiscal years 2005, 2004 and 2003. Charges for unused manufacturing capacity associated with the Company’s hyaluronan production have continued to negatively impact operating results in the current fiscal year. Also, marketing and sales expenses for the oral restorative products are expected to continue at a high level due to continued international expansion and increased personnel costs associated with expanding the sales force.

The Company has a $5,000,000 credit facility with a bank which has a maturity date of December 31, 2006. The agreement allows for advances against eligible accounts receivable, subject to a borrowing base certificate and compliance with covenants. Under the credit facility, interest will accrue at the prime rate minus .5% or LIBOR plus 2.25%, at the Company’s option. At DecemberMarch 31, 20052006 and June 30, 2005, there were no balances outstanding under the line of credit.

On August 19, 2004, the Company issued variable rate industrial revenue bonds. The proceeds from these bonds were used to retire the existing 10.25% fixed rate industrial revenue bonds on September 1, 2004. The aggregate principal amount of the new bonds was $5,630,000, and the bonds bear interest at a variable rate set weekly by the bond remarketing agent (3.51%(3.36% as of DecemberMarch 31, 2005)2006). In addition, the Company pays an annual remarketing fee equal to .125% and an annual letter of credit fee of 1.0%. The bonds are collateralized by a bank letter of credit which is secured by a first mortgage on the facility. The Company is required to make monthly principal and interest payments to a sinking fund. The terms of the agreement require the Company to comply with various financial covenants including minimum tangible net worth, liabilities to tangible net worth ratio and net income (loss). As of DecemberMarch 31, 20052006 and June 30, 2005, the Company was in compliance with all covenants.

The Company’s ability to generate positive cash flow from operations and achieve ongoing profitability is dependent upon the continued expansion of revenue from its hyaluronan and oral restorative businesses. Growth in the Hyaluronan Division is unpredictable due to the complex governmental regulatory environment for new medical products, the early stage of certain of these markets and the uncertainty associated with the future market status of the Company’s adhesion prevention product. Similarly, expansion of the Company’s Oral Restorative Division sales is also dependent upon increased revenue from new and existing customers, as well as successfully competing in a more mature market. The Company expects its cash generated from anticipated operations and the available funds under the line of credit to satisfy cash flow needs in the near term. No assurance can be given that the Company will maintain positive cash flow from operations. While the Company’s capital resources appear adequate today, the Company may seek additional financing in the future. If additional financing is necessary, no assurance can be given that such financing will be available and, if available, will be on terms favorable to the Company and its shareholders.

The Company does not have any material “off-balance sheet” financing activities.

The Company’s oral restorative business is seasonal in nature. Historically, sales for the Oral Restorative Division are lower in the first quarter than throughout the rest of the year, as a result of European holidays during the summer months.

Statements included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Form 10-Q, in future filings by the Company with the Securities and Exchange Commission and in the Company’s press releases and oral statements made with the approval of authorized executive officers, that are not historical or current facts, should be considered “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may, among other things, relate to market acceptance and demand for the Company’s products, future product development plans and timing, the results of clinical trials, FDA clearances and the related timing of such, the potential size of the markets for the Company’s products, future product introductions, future revenues, expense levels, tax rates and capital needs and the Company’s ability to successfully negotiate acceptable agreements with its corporate partners. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected or in the future could affect the Company’s actual results and could cause its actual financial performance to differ materially from that expressed in any forward-looking statement: (i)(1) obtaining the necessary regulatory approvals for new hyaluronan and oral restorative products; (ii)(2) the Company’s reliance on corporate partners to develop new products on a timely basis and to market the Company’s existing and new hyaluronan products effectively; (iii)(3) intense competition in the markets for the Company’s principal products; and (iv)(4) the uncertainty associated with the future market status of the Company’s adhesion prevention product. Investors are referred to a more detailed discussion of the risks presented in Exhibit 99.1 to the Company’s Annual Report on Form 10-K, as amended, for the fiscal year ended June 30, 2005.

The Company invests its excess cash in money market mutual funds, bank certificates of deposits and highly rated short-term corporate debt securities. All investments are held to maturity. The market risk on such investments is minimal.

Receivables from sales to foreign customers are denominated in U.S. dollars. Transactions at the Company’s foreign subsidiaries are denominated in European Euros at Lifecore Biomedical SpA, Lifecore Biomedical GmbH and Lifecore Biomedical SAS and are denominated in Swedish Krona at Lifecore Biomedical AB. The Company is exposed to foreign currency exchange rate risk arising from transactions in the normal course of business from sales to its foreign subsidiaries. Because the Company’s products are manufactured or sourced primarily from the United States, a stronger U.S. dollar generally has a negative impact on results from operations outside the United States while a weaker dollar generally has a positive effect. The Company does not use derivative financial instruments to manage foreign currency fluctuation risk.

On August 19, 2004, the Company issued variable rate industrial revenue bonds. The proceeds from these bonds were used to retire the existing 10.25% fixed rate industrial revenue bonds on September 1, 2004. The aggregate principal amount of the new bonds was $5,630,000, and the bonds bear interest at a variable rate set weekly by the bond remarketing agent (3.51%(3.36% as of DecemberMarch 31, 2005)2006). A ten percent change in this variable rate would result in approximately $18,000$17,000 of additional interest expense annually.

(a) Evaluation of disclosure controls and procedures.

Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a – 15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

(b) Changes in internal control over financial reporting.

During the fiscal period covered by this report, there has been no change in the Company’s internal control over financial reporting (as defined in Rule 13a – 15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company is named as a defendant in 7467 currently pending lawsuits, involving alleged injuries to 7769 women. As of January 30, 2006, Lifecore has been served in all but one of the cases, on dates ranging from September 15, 2003 until December 28, 2005. Fifty-eightFifty-five of the pending cases are proceeding in Florida state court. The balance of the pending lawsuits have been filed in various states including California, Connecticut, Louisiana, Minnesota, New Jersey, Pennsylvania and Wisconsin. Lifecore is aware that five cases have been settled by Ethicon. Another eight plaintiffs have voluntarily dismissed their claims. One case,Shumbo-Poissant v. Ethicon, Inc., et al. (Conn.), was dismissed on summary judgment.

The lawsuits allege that the plaintiffs suffered injuries due to the defective nature of GYNECARE INTERGEL Adhesion Prevention Solution (“INTERGEL Solution”) which was developed and manufactured by the Company. The other defendants in these lawsuits are ETHICON, Inc., which was the Company’s exclusive worldwide marketing partner for INTERGEL Solution through its division, GYNECARE Worldwide, and Johnson & Johnson, the parent company of ETHICON. Most of the lawsuits also name Vital Pharma, Inc. as a defendant; Vital Pharma acted as the contract packager for the INTERGEL solution.Solution. The plaintiffs in these actions are individuals who were patients in medical procedures during which INTERGEL Solution was used and who were allegedly injured due to the defective nature of INTERGEL Solution.

The Company anticipateshad previously anticipated that the lawsuit captionedRenee Contratto v. Ethicon, Inc., d/b/a Gynecare Worldwide, Johnson & Johnson, Lifecore Biomedical, Inc. and Vital Pharma, Inc.Inc, which was the first such lawsuit served on the Company, will. (N.D. Cal.) would be the first of these lawsuitslawsuit to go to trial. The trial of that matter has been delayed, and is now set for January 2007. Defendants have filed motions to exclude the plaintiff’s expert testimony, and motions for summary judgment seeking dismissal of the Contratto matter on various legal grounds. Those motions are pending before the Court. The Florida lawsuits are scheduled for a mandatory mediation involving all of the Florida cases during the last week of June 2006. The first-filed Florida case, was filedBlack v. Ethicon, Inc., et al., is currently scheduled for trial in U.S. District Court for the Northern Districtfall of California and was served on2006, if the Company on September 15, 2003.mediation is unsuccessful.

ETHICON began marketing INTERGEL Solution outside the United States in June 1998 for reducing the incidence of post-surgical adhesions. INTERGEL Solution was approved by the FDA for the U.S. market in November 2001. INTERGEL Solution was voluntarily withdrawn from the market by ETHICON in March 2003 in order to assess information obtained from postmarketingpost-marketing experience with the product, including allegations of adverse events associated with off-label use in non-conservative surgical procedures (such as hysterectomies).

ETHICON is defending the Company in all of these lawsuits. Under the terms of the Company’s Conveyance, License, Development and Supply Agreement dated August 8, 1994 with ETHICON, ETHICON is obligated to indemnify and hold the Company harmless from all claims related to the sale and use of INTERGEL Solution, unless it is ultimately determined that a plaintiff’s injuries were caused by a breach of the Company’s limited contractual warranty to ETHICON under that agreement. The Company believes that ETHICON will be obligated to fully indemnify the Company in connection with all of the pending claims relating to INTERGEL Solution.

Pursuant to the terms of its agreement with Vital Pharma, the Company’s insurer is covering Vital Pharma’s defense costs. This has been done with a full reservation of rights by the Company. The Company has also asserted that ETHICON is obligated to pay for Vital Pharma’s defense costs, pursuant to the agreement between ETHICON and the Company.

The Company has also received four claim letters alleging claims similar to the lawsuits. ETHICON is responding to the claim letters on behalf of the Company.

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.