SECURITIES AND EXCHANGE COMMISSION
                          Washington, DC  20549

                                FORM 10-K

      (X)      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934
               For the fiscal year ended June 30, 2007

                                    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 Number:  0-17272

                             TECHNE CORPORATION
          (Exact name of Registrant as specified in its charter)

         Minnesota                                  41-1427402
  (State of Incorporation)                (IRS Employer Identification No.)

614 McKinley Place N.E., Minneapolis, MN               55413
(Address of principal executive offices)            (Zip Code)

                     Registrant's telephone number:  (612) 379-8854

      Securities registered pursuant to Section 12(b) of the Act:  None

        Securities registered pursuant to Section 12(g) of the Act:
                     Common Stock, $.01 par value.

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.  Yes (X) No (  )
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. Yes (  )  No (X)

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

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

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
Securities Exchange Act.
 Large accelerated filer (X) Accelerated filer ( ) Non-accelerated filer ( )

Indicate by check mark whether the Registrant is a shell company (as defined
in Exchange Act Rule 12b-2). (   ) Yes    (X) No

The aggregate market value of the Common Stock held by non-affiliates of the
Registrant, based upon the closing sale price on August 27, 2007 as reported
on The Nasdaq Stock Market was approximately $2.0 billion.  Shares of Common
Stock held by each officer and director and by each person who owns 5% or
more of the outstanding Common Stock have been excluded.

Shares of $.01 par value Common Stock outstanding at August 27, 2007:
39,515,164.

                   DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company's Proxy Statement for its 2007 Annual Meeting of
Shareholders are incorporated by reference into Part III.


                             TABLE OF CONTENTS

                                                                     Page
 PART I
   Item 1.   Business                                                  3

   Item 1A.  Risk Factors                                             10

   Item 1B.  Unresolved Staff Comments                                11

   Item 2.   Properties                                               11

   Item 3.   Legal Proceedings                                        12

   Item 4.   Submission of Matters to a Vote of Security Holders      12

             Supplemental Item - Executive Officers of the Company    12

PART II
   Item 5.   Market for the Company's Common Equity, Related
             Stockholder Matters and Issuer Purchases of Equity
             Securities                                               13

   Item 6.   Selected Financial Data                                  14

   Item 7.   Management's Discussion and Analysis of
             Financial Condition and Results of Operations            15

   Item 7A.  Quantitative and Qualitative Disclosures about
             Market Risk                                              24

   Item 8.   Financial Statements and Supplementary Data              25

   Item 9.   Changes in and Disagreements with Accountants
             on Accounting and Financial Disclosure                   41

   Item 9A.  Controls and Procedures                                  41

   Item 9B.  Other Information                                        43

PART III
   Item 10.  Directors, Executive Officers and Corporate Governance   43

   Item 11.  Executive Compensation                                   43

   Item 12.  Security Ownership of Certain Beneficial Owners
             and Management and Related Stockholder Matters           43

   Item 13.  Certain Relationships and Related Transactions, and
             Director Independence                                    43

   Item 14.  Principal Accountant Fees and Services                   44

PART IV
   Item 15.  Exhibits and Financial Statement Schedules               44


SIGNATURES                                                            45

                                       2


                                     PART I

                                ITEM 1.  BUSINESS

OVERVIEW

TECHNE Corporation and Subsidiaries (the Company) are engaged in the
development and manufacture of biotechnology products and hematology
calibrators and controls. These activities are conducted domestically through
its wholly-owned subsidiary, Research and Diagnostic (R&D) Systems, Inc.
Through its wholly-owned U.K. subsidiary, R&D Systems Europe Ltd. (R&D
Europe), the Company distributes biotechnology products throughout Europe.
R&D Systems Europe Ltd. has a sales subsidiary, R&D Systems GmbH, in Germany
and a sales office in France.  In late fiscal 2007, the Company established a
subsidiary, R&D Systems China Co. Ltd. (R&D China), in Shanghai, China, to
distribute biotechnology products throughout China.  The Company anticipates
fulfilling orders for all third-party Chinese distributors from R&D China
beginning in the second quarter of fiscal 2008.

R&D Systems acquired two subsidiaries effective July 1, 2005. Fortron Bio
Science, Inc. (Fortron), a developer and manufacturer of monoclonal and
polyclonal antibodies, antigens and other biological reagents, was relocated
to the Company's Minneapolis, Minnesota facility in the first quarter of
fiscal 2006. Subsequent to June 30, 2007, Fortron was merged into R&D
Systems. The second subsidiary acquired on July 1, 2005, BiosPacific, Inc.
(BiosPacific), located in Emeryville, California, is a worldwide supplier of
biologics to manufacturers of in vitro diagnostic systems and
immunodiagnostic kits. BiosPacific is the primary distributor of Fortron
products. Fortron and BiosPacific had shared a unique strategic relationship
since 1992 that combined Fortron's development and manufacturing excellence
with BiosPacific's marketing and sales expertise.

The Company has three reportable operating segments based on the nature of
products and geographic location: biotechnology, R&D Systems Europe and
hematology. The biotechnology segment consists of R&D Systems' Biotechnology
Division, Fortron, BiosPacific and R&D China, which develop, manufacture and
sell biotechnology research and diagnostic products world-wide. R&D Systems
Europe distributes Biotechnology Division products throughout Europe. The
hematology segment develops and manufactures hematology controls and
calibrators for sale world-wide.


THE MARKET

The Company manufactures and sells products for the clinical diagnostics
market (hematology controls and calibrators) and the biotechnology research
and clinical diagnostics market (cytokines, assays and related products).  In
fiscal 2007, 2006 and 2005, hematology segment revenues accounted for
approximately 7%, 8% and 9%, respectively, of consolidated net sales.
Revenues from the Company's biotechnology segment were 66%, 66% and 62% and
revenues from R&D Europe were 27%, 26% and 29% of consolidated revenues for
fiscal 2007, 2006 and 2005, respectively.


                          Biotechnology Segment

R&D Systems is the world's leading supplier of cytokines and cytokine-related
reagents to the biotechnology research community.  These valuable proteins
exist in minute amounts in different types of cells and can be extracted from
these cells or synthesized through recombinant DNA technology.   Currently
nearly all of the Company's cytokines are produced by recombinant DNA
technology.

The growing interest by academic and commercial researchers in cytokines is
largely due to the profound effect that a tiny amount of a cytokine can have
on cells and tissues of the body.  Cytokines are intercellular messengers.
They act as signals by interacting with specific receptors on the affected
cells and trigger events that can lead to significant changes in a cell,
tissue or organism.  For example, cytokines can signal a cell to acquire the
features necessary for it to take on a more specialized task.  Another
example of cytokine action is the key role played in stimulating cells
surrounding a wound to grow and divide, to attract migratory cells to the
injury site and mediate the healing process.

                                   3

In recent years, R&D Systems has added enzymes and intracellular cell
signaling reagents to its product portfolio.   Enzymes are biological
catalysts that accelerate a variety of chemical reactions in cells.  Most
enzymes, including proteases, kinases and phosphatases, are proteins that
modify the structure and function of other proteins.  Many enzymes are
important markers and therapeutic targets for diseases such as cancer,
Alzheimer's, arthritis, autoimmunity, diabetes, hypertension, obesity, AIDS
and SARS.

R&D Systems markets cytokine assay kits under the tradename Quantikine(R).
These kits are used by researchers to quantify the level of a specific
cytokine in a sample of serum, plasma or other biological fluid.  Cytokine
quantification is an integral component of basic research as well as in the
pharmaceutical discovery and development process.

R&D Systems currently manufactures and sells in excess of 11,000
biotechnology products.

Biotechnology Products

Cytokines and Enzymes.  Cytokines, extracted from natural sources or
produced using recombinant DNA technology, are manufactured to the highest
purity.  Enzymes and related factors including enzyme substrates and
inhibitors are highly purified and characterized to ensure the highest
biological activity.

Antibodies.  Antibodies are proteins produced by the immune system of an
animal that specifically recognize and bind to target molecules.  The
Company's polyclonal antibodies are produced in animals (primarily goats)
and purified from the animals' blood.  Monoclonal antibodies are made by
immortalized cell lines derived from the antibody producing cells of a
rodent.  Monoclonal antibodies are secreted from these cell lines during
cell culture and purified from the cell culture medium.

Assay Kits.  This product line includes R&D Systems' human and animal
Quantikine kits which allow research scientists to quantify the amount of
a specific analyte (cytokine, adhesion molecule, enzyme, etc.)  in a
sample of serum or other biological fluids.

Clinical Diagnostic Kits. R&D Systems has received FDA marketing clearance
for its erythropoietin (EPO), transferrin receptor (TfR) and Beta2-
microglobulin immunoassay diagnostic kits.

Flow Cytometry Products.  This product line includes R&D Systems' labeled
antibodies and Fluorokine(R) kits, which are used to measure the presence or
absence of cell surface receptors for specific cytokines by flow
cytometry.

Intracellular Cell Signaling Products.  This diverse product line provides
reagents to study apoptosis (programmed cell death) and to elucidate
signal transduction pathways.  Products include antibodies, phospho-
specific antibodies, antibody protein arrays, active caspases, kinases,
and phosphatases, and ELISA assays to quantitate and measure the activity
of apoptotic and signaling molecules.


                               Hematology Segment

Hematology controls and calibrators, manufactured and marketed by R&D
Systems, are products composed of the various cellular components of blood
which have been stabilized.  Proper diagnosis of many illnesses requires a
thorough and accurate analysis of a patient's blood cells, which is usually
done with automated or semi-automated hematology instruments.  Controls and
calibrators produced by R&D Systems ensure that these instruments are
performing accurately and reliably.

Blood is composed of plasma, the fluid portion of which is mainly water, and
blood cells, which are suspended in the plasma.  There are three basic types
of blood cells:  red cells, white cells and platelets.   Hemoglobin in red
cells transports oxygen from the lungs throughout the body.  White cells
defend the body against foreign invaders.  Platelets serve as a "plug" to
stem blood flow at the site of an injury by initiating a complex series of
biochemical reactions that lead to the formation of a clot.

                                  4

These fundamental blood components (red cells, white cells and platelets)
differ widely in size and concentration.  As noted above, hematology controls
are used in automated and semi-automated cell counting analyzers to make sure
these instruments are counting blood cells in patient samples accurately.
One of the most frequently performed laboratory tests on a blood sample is a
complete blood count or CBC.  Doctors use this test in disease screening and
diagnosis.  More than one billion of these tests are done world-wide every
year, the great majority with cell counting instruments.  In most
laboratories the CBC consists of the white cell count, the red cell count,
the hemoglobin reading, and the hematocrit reading (the percent of red cells
in a volume of whole blood after it has been centrifuged).  Also included in
a CBC test is the differential, which numbers and classifies the different
types of white cells.

These and other characteristics or "parameters" of a blood sample can be
measured by automated or semi-automated cell counters.  The number of
parameters measurable in a blood control product depends on the type and
sophistication of the instrument for which the control is designed.
Ordinarily, a hematology control is used once to several times a day to make
sure the instrument is reading accurately.  In addition, most instruments
need to be calibrated periodically.  Hematology calibrators are similar to
controls, but go through additional testing to ensure that the calibration
values assigned are within tight specifications and can be used to calibrate
the instrument.

R&D Systems offers a wide range of hematology controls and calibrators for
both impedance and laser type cell counters.  R&D Systems believes its
products have improved stability and versatility and a longer shelf life than
most of those of its competitors.  Hematology control products are also
supplied for use as proficiency testing materials by laboratory certifying
authorities of a number of states and countries.

Hematology Products

Whole Blood CBC Controls/Calibrators.  R&D Systems currently produces
controls and calibrators for the following major brands of analyzers:
Abbott Diagnostics, Beckman Coulter, Bayer Technicon, ABX and Sysmex.

Linearity and Reportable Range Controls.  These products provide a means
of assessing the linearity of hematology analyzers for white blood cells,
red blood cells, platelets and reticulocytes (immature red blood cells).
Because hematology analyzers are single-point calibrated, these products
allow users to determine and validate the reportable range of an
instrument.

Whole Blood Reticulocyte Controls.  These controls are designed for manual
and automated counting of reticulocytes (immature red blood cells).

Whole Blood Flow Cytometry Controls.  These products are controls for flow
cytometry instruments.  These instruments are used to identify and
quantify white blood cells by their surface markers.

Whole Blood Glucose/Hemoglobin Control.  This product is designed to
monitor instruments which measure glucose and hemoglobin in whole blood.

Erythrocyte Sedimentation Rate Control.  This product is designed to
monitor erythrocyte (red blood cell) sedimentation rate tests.

Multi-Purpose Platelet Reference Controls.  These products, Platelet-Trol(R)
II and Platelet-Trol Extended, are designed for use by automated and semi-
automated analyzers which monitor platelet levels.


PRODUCTS UNDER DEVELOPMENT

R&D Systems is engaged in ongoing research and development in all of its
major product lines:  controls and calibrators (hematology) and cytokines,
antibodies, assays and related products (biotechnology).  The Company
believes that its future success depends, to a large extent, on its ability
to keep pace with changing technologies and markets.  At the same time, the
Company continues to examine its production processes to ensure high quality
and maximum efficiency.

                                   5

R&D Systems is planning to release new cytokines, antibodies and cytokine
assay kits in the coming year.  All of these products will be for research
purposes only and therefore do not require FDA clearance.  R&D Systems
developed several new hematology control products in fiscal 2007 and is
continuously working on product improvements and enhancements.  However,
there is no assurance that any of the products in the research and
development phase can be successfully completed or, if completed, can be
successfully introduced into the marketplace.

     Research expenses:         Year Ended June 30,
                               2007     2006     2005
                             -------  -------  -------
     Biotechnology expenses  $19,333  $18,114  $17,609
     Hematology expenses         749      711      770
                             -------  -------  -------
                             $20,082  $18,825  $18,379
                             =======  =======  =======
     Percent of net sales       9.0%     9.3%    10.3%


BUSINESS RELATIONSHIPS

The Company has invested in the preferred stock of ChemoCentryx, Inc. (CCX).
CCX is a technology and drug development company working in the area of
chemokines.  Chemokines are cytokines which regulate the trafficking patterns
of leukocytes, the effector cells of the human immune system.  In conjunction
with the investment and joint research efforts, the Company obtained
exclusive worldwide research and diagnostic marketing rights to chemokine
proteins, antibodies and receptors discovered or developed by CCX.  At July
1, 2004, the Company held a 19.9% interest in CCX.  The Company has evaluated
the cost versus equity method of accounting for its investment in CCX and
determined that it does not have the ability to exercise significant
influence over the operating and financial policies of CCX and therefore,
accounts for its investment on a cost basis. In April 2006, the Company made
an additional $9.0 million investment in CCX in the form of a 5% convertible
note subject to the limitation that the Company's holdings in CCX not exceed
19.9% of the outstanding voting shares.  In June 2006, $4.3 million of the
note was converted into CCX preferred stock. In August 2006, the remainder of
the note and accrued interest were converted into CCX preferred stock.  The
Company's equity interest in CCX after the August 2006 conversion was 19.3%.
The Company's net investment in CCX at June 30, 2007 was $14.3 million and at
June 30, 2006 was $14.2 million, including the convertible note and accrued
interest aggregating $4.8 million.

In fiscal 2004, the Company purchased a 10% interest in Hemerus Medical, LLC
(Hemerus) for $3.0 million. In March 2006, the Company invested an additional
$750,000 in Hemerus, increasing its ownership percentage to 15% and in
January 2007, the Company invested an additional $700,000, increasing its
ownership percentage to 18%.  Hemerus was formed in March 2001 and has
acquired and is developing technology for the separation of leukocytes from
blood and blood components. Hemerus owns two patents and has several patent
applications pending and is currently pursuing FDA clearance to market its
products in the U.S. In parallel with this investment, R&D Systems entered
into a Joint Research Agreement with Hemerus. The research involves joint
projects to explore the use of Hemerus' filter technology to applications
within R&D Systems' Hematology and Biotechnology Divisions. Such
applications, if any, may have commercial potential in other laboratory
environments. The Company accounts for its investment in Hemerus under the
equity method of accounting, as Hemerus is a limited liability corporation.
The Company's net investment in Hemerus was $3.1 million and $3.0 million at
June 30, 2007 and 2006, respectively.

In September 2006, the Company invested $7.2 million for an 18% equity
interest in Nephromics LLC (Nephromics).  Nephromics has licensed technology
related to the diagnosis of preeclampsia and has sublicensed the technology
to several major diagnostic companies for the development of diagnostic
assays.  The Company accounts for its investment in Nephromics under the
equity method of accounting as Nephromics is a limited liability corporation.
The Company's net investment in Nephromics was $6.8 million at June 30, 2007.

                                   6

In fiscal 2002, the Company made an equity investment of $3.0 million in
Discovery Genomics, Inc. (DGI) preferred stock.  The Company currently holds
a 38% equity interest in DGI and warrants to acquire an additional 500,000
shares of DGI preferred stock at $.50 per share, which expire on January 15,
2014.  The Company also received the rights to develop antibodies and
immunoassay kits for proteins discovered by DGI and an exclusive, royalty-
free license to sell such products in the research market.  The Company's
investment was accounted for under the equity method of accounting.  During
fiscal 2004, the Company determined that its investment in DGI was other than
temporarily impaired and wrote off the remaining net investment of $1.5
million.

Original Equipment Manufacturer (OEM) agreements represent the largest market
for hematology controls and calibrators made by R&D Systems.  In fiscal 2007,
2006 and 2005, OEM contracts accounted for $6.0 million, $5.8 million and
$6.8 million, respectively, or 3%, 3% and 4%, respectively, of total
consolidated net sales.


GOVERNMENT REGULATION

All manufacturers of hematology controls and calibrators are regulated under
the Federal Food, Drug and Cosmetic Act, as amended.  All of R&D Systems'
hematology control products are classified as "In Vitro Diagnostic Products"
by the FDA.  The entire hematology control manufacturing process, from
receipt of raw materials to the monitoring of control products through their
expiration date, is strictly regulated and documented.  FDA inspectors make
periodic site inspections of the R&D Systems' hematology control operations
and facilities.  Hematology control manufacturing must comply with Quality
System Regulations (QSR) as set forth in the FDA's regulations governing
medical devices.

Three of R&D Systems' immunoassay kits, EPO, TfR and Beta2-microglobulin,
have FDA clearance to be sold for clinical diagnostic use.  R&D Systems must
comply with QSR for the manufacture of these kits.  Biotechnology products
manufactured in the United States and sold for use in the research market do
not require FDA clearance.

Some of R&D Systems' research groups use small amounts of radioactive
materials in the form of radioisotopes in their product development
activities.  Thus, R&D Systems is subject to regulation and inspection by the
Minnesota Department of Health and has been granted license through August
2008.  The license is renewable annually.  R&D Systems has had no
difficulties in renewing this license in prior years and has no reason to
believe it will not be renewed in the future.  If, however, the license was
not renewed, it would have minimal effect on R&D Systems' business since
there are other technologies the research groups could use to replace the use
of radioisotopes.


AVAILABILITY OF RAW MATERIALS

The primary raw material for the Company's hematology controls is whole
blood.  Human blood is purchased from commercial blood banks while porcine
and bovine blood is purchased from nearby meat processing plants.  After raw
blood is received, it is separated into its components, processed and
stabilized.  Although the cost of human blood has increased due to the
requirement that it be tested for certain diseases, the higher cost of these
materials has not had a serious adverse effect on the Company's business.
R&D Systems does not perform its own testing as the supplier tests all human
blood purchased.  R&D Systems' Biotechnology Division develops and
manufactures the majority of its cytokines from synthetic genes developed in-
house, thus significantly reducing its reliance on outside resources.  R&D
Systems typically has several outside sources for all critical raw materials
necessary for the manufacture of products.


PATENTS AND TRADEMARKS

R&D Systems owns patent protection for certain hematology controls.  R&D
Systems may seek patent protection for new or existing products it
manufactures.  No assurance can be given that any such patent protection will
be obtained.  No assurance can be given that R&D Systems' products do not
infringe upon patents or proprietary rights owned or claimed by others,
particularly for genetically engineered products. R&D Systems has not
conducted a patent infringement study for each of its products.  See Item 3
Legal Proceedings below.

                              7

R&D Systems and R&D Europe have a number of licensing agreements with patent
holders under which they have the non-exclusive right to patented technology
or the non-exclusive right to manufacture and sell certain patented cytokine
and cytokine related products to the research market.  For fiscal 2007, 2006
and 2005, total royalties expensed under these licenses were approximately
$2.6 million in each year.

R&D Systems has obtained federal trademark registration for certain of its
hematology controls and biotechnology product groups.  R&D Systems believes
it has common law trademark rights to certain marks in addition to those
which it has registered.


SEASONALITY OF BUSINESS

Products marketed by R&D Systems and, particularly R&D Europe, historically
experience a slowing of sales or of the rate of sales growth during the
summer months.  R&D Systems also usually experiences a slowing of sales
during the Thanksgiving to New Year holiday period.  The Company believes
this slowing is a result of vacation schedules in Europe and Japan and of
academic schedules in the United States.


SIGNIFICANT CUSTOMERS

No single customer accounted for more than 10% of total revenues during
fiscal 2007, 2006 or 2005.


BACKLOG

There was no significant backlog of orders for the Company's products as of
the date of this report or as of a comparable date for fiscal 2006.  The
majority of the Company's biotechnology products are shipped within one day
of receipt of the customers' order.  The majority of hematology products are
shipped based on a preset, recurring schedule.


COMPETITION

The worldwide market for cytokines and research diagnostic assay kits is
being supplied by a number of biotechnology companies, including BD
Biosciences, Invitrogen Corporation's BioSource Division, PeproTech, Inc.,
Sigma-Aldrich Co., Amersham Biosciences (GE Healthcare), Thermo-Fisher
Scientific, Millipore Corp. and EMD Biosciences, Inc.  R&D Systems believes
that it is the leading worldwide supplier of cytokine related products in the
research marketplace.  R&D Systems believes that the expanding line of its
products, their recognized quality, and the growing demand for these rare and
versatile proteins, antibodies and assay kits, will allow the Company to
remain competitive in the growing biotechnology research and diagnostic
market.

Competition is intense in the hematology control business.  The first control
products were developed in response to the rapid advances in electronic
instrumentation used in hospital and clinical laboratories for blood cell
counting.  Historically, most of the instrument manufacturing companies made
controls for use in their own instruments.  With rapid expansion of the
instrument market, however, a need for more versatile controls enabled non-
instrument manufacturers to gain a foothold.  Today the market is comprised
of manufacturers of laboratory reagents, chemicals and coagulation products
and independent control manufacturers in addition to instrument
manufacturers.  The principal hematology control competitors of R&D Systems'
retail products are Beckman Coulter, Inc., Sysmex, Streck Laboratories,
Abbott Diagnostics, Bio-Rad Laboratories and Bayer Technicon.  R&D Systems
believes it is the third largest supplier of hematology controls in the
marketplace behind Beckman Coulter and Streck Laboratories.

                                8

EMPLOYEES

Through its subsidiaries, Techne Corporation employed 628 full-time and 53
part-time employees as of June 30, 2007, as follows:

                           Full-time  Part-time
                           ---------  ---------
     R&D Systems               562         33
     R&D Europe                 50         19
     BiosPacific                 6          0
     R&D China                  10          1
                               ---         --
                               628         53
                               ===         ==

Included in R&D Europe employees are 8 full-time and 4 part-time employees at
R&D Europe's sales subsidiary in Germany.


ENVIRONMENT

Compliance with federal, state and local environmental protection laws in the
United States, United Kingdom and Germany had no material effect on R&D
Systems or R&D Europe in fiscal 2007.


GEOGRAPHIC AREA FINANICAL INFORMATION

Following is financial information relating to geographic areas (in
thousands):

                                  Year Ended June 30,
                               2007       2006       2005
                             --------   --------   --------
     Net sales
       United States         $127,695   $118,780   $102,239
       Europe                  66,492     57,021     53,780
       Other areas             29,295     26,816     22,633
                             --------   --------   --------
     Total net sales         $223,482   $202,617   $178,652
                             ========   ========   ========

                                   As of June 30,
                               2007       2006       2005
                             --------   --------   --------
     Long-lived assets
       United States         $121,132   $120,383   $102,984
       Other                      914        814        723
                             --------   --------   --------
     Total long-lived assets $122,046   $121,197   $103,707
                             ========   ========   ========

Net sales are attributed to countries based on the location of the
customer/distributor. Long-lived assets are comprised of land, buildings and
improvements, equipment, goodwill and intangible assets.


INVESTOR INFORMATION

The Company is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"). Therefore, the Company files
periodic reports, proxy statements, and other information with the Securities
and Exchange Commission (the "SEC"). Such reports, proxy statements, and
other information may be obtained by visiting the Public Reference Room of
the SEC at 100 F Street, N.E., Room 1580, Washington, DC 20549 or by calling
the SEC at 1-800-SEC-0330. In addition, the SEC maintains an internet site
(http://www.sec.gov) that contains reports, proxy and information statements,
and other information regarding issuers that file electronically.

Financial and other information about the Company is available on its
internet site (http://www.techne-corp.com). The Company makes available on
its internet site, copies of its annual report on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange
Act as soon as reasonably practicable after filing such material
electronically or otherwise furnishing it to the SEC.

                                   9

                         ITEM 1A.  RISK FACTORS


FORWARD-LOOKING STATEMENTS

Statements in this Annual Report on Form 10-K, and elsewhere, that are
forward-looking involve risks and uncertainties which may affect the
Company's actual results of operations. Certain of these risks and
uncertainties which have affected and, in the future, could affect the
Company's actual results are discussed below.  The Company undertakes no
obligation to update or revise any forward-looking statements made due to new
information or future events. Investors are cautioned not to place undue
emphasis on these statements.


RISK FACTORS

The following risk factors should be read carefully in connection with
evaluation of the Company's business and any forward-looking statements made
in this Annual Report on Form 10-K and elsewhere.  Any of the following risks
could materially adversely affect the Company's business, operating results
and financial condition.

The Company's biotechnology products are sold primarily to research
scientists at pharmaceutical and biotechnology companies and at university
and government research institutions. Changes in spending on research by such
companies and in funding of such universities and institutions by government,
including the National Institutes of Health, affects the revenues and
earnings of the Company. The Company carries essentially no backlog of orders
and changes in the level of orders received and filled daily can cause
fluctuations in quarterly net sales and earnings.

Approximately one quarter of the Company's net sales are made through its
European subsidiary, R&D Systems Europe, which makes its sales in foreign
currencies. The Company's net sales and earnings are, therefore, affected by
fluctuations in currency exchange rates.

The Company recently established a subsidiary in China to provide
warehousing, marketing, sales and technical services for the growing Chinese
market.  The Company's ability to recover its investment is dependent upon
its ability to retain current third-party distributors in China and expand
its market share in the region.

The biotechnology industry is subject to rapid and significant technological
changes. While the hematology controls industry historically has been less
subject to rapid change, it too is evolving and is impacted significantly by
changes in the automated testing equipment offered by instrument
manufacturers. Competitors of the Company are numerous and include, among
others, specialized biotechnology firms, medical laboratory instrument and
equipment manufacturers and disposables suppliers, major pharmaceutical
companies, universities and other research institutions. There can be no
assurance that the Company's competitors will not succeed in developing
technologies and products that are more effective than any which have been or
are being developed by the Company or that would render the Company's
technologies and products obsolete or noncompetitive.

The Company's success will depend, in part, on its ability to obtain licenses
and patents, maintain trade secret protection and operate without infringing
the proprietary rights of others. The Company has obtained and continues to
negotiate licenses to produce a number of cytokines and related products
claimed to be owned by others. Since the Company has not conducted a patent
infringement study for each of its products, it is possible that products of
the Company may unintentionally infringe patents of third parties or that the
Company may have to alter its products or processes, pay licensing fees or
cease certain activities because of patent rights of third parties, thereby
causing additional unexpected costs and delays which may have a material
adverse effect on the Company.

The Company's expansion strategies, which include internal development of new
products, collaborations, investments in joint ventures and companies
developing new products related to the Company's business, and the
acquisition of companies for new products and additional customer base, carry
risks that objectives will not be achieved and future earnings will be
adversely affected. Under the equity method of accounting, a percentage of
the losses of certain companies in which the Company invests will be reported
as losses of the Company. The Company may not have control of the expense
levels of such companies and their losses may be greater than those
anticipated by the Company. Additionally, if the Company determines that its
investment in such companies is "other than temporarily" impaired, the
Company may write off its entire investment in such company.

                                 10

Ongoing research and development activities and the production and marketing
of certain of the Company's products are subject to regulation by numerous
governmental authorities in the United States and other countries. The
approval process applicable to clinical diagnostic products of the type that
may be developed by the Company may take a year or more. Delays in obtaining
approvals could adversely affect the marketing of new products developed by
the Company.

Recruiting and retaining qualified scientific and production personnel to
perform research and development work and product manufacturing are critical
to the Company's success. The Company's anticipated growth and its expected
expansion into areas and activities requiring additional expertise will
require the addition of new personnel and the development of additional
expertise by existing personnel. The failure to attract and retain such
personnel could adversely affect the Company's business.


                     ITEM 1B.  UNRESOLVED STAFF COMMENTS

There are no unresolved staff comments as of the date of this report.


                          ITEM 2.  PROPERTIES

The Company owns the facilities its R&D Systems subsidiary occupies in
Minneapolis, Minnesota.  The R&D Systems main complex includes 443,000 square
feet of administrative, research and manufacturing space in several adjoining
buildings.

The Company owns additional property adjacent to its main complex.  The
Company has renovated this property and is currently leasing or plans to
lease approximately 70% of the 176,000 square foot building as retail and
office space and use the remainder as warehouse and storage space.

In fiscal 2005, the Company acquired additional property adjacent to its
Minneapolis facility. A portion of the property is currently leased to third
parties and the Company plans to continue to lease out the building until the
space is needed for its own operations.

The Company owns approximately 649 acres of farmland, including buildings, in
southeast Minnesota.  A portion of the land and buildings are being leased to
third parties as cropland and for a dairy operation. The remaining property
is used by the Company to house goats and sheep for polyclonal antibody
production.

Rental income from the above properties was $686,000, $1.3 million and
$750,000 in fiscal 2007, 2006 and 2005, respectively.

The Company leases the following facilities:

                                                  Square    2007
Company     Location                    Type       Feet     Base Rent
-------     --------                    ----       -------  ---------
R&D Europe  Abingdon, England      Office building  17,000  $495,000
R&D GmbH    Wiesbaden-Nordenstadt,
            Germany                Office space      2,300    43,000
BiosPacific Emeryville,
            California             Office space      3,500    45,000
R&D China   Shanghai, China        Office space      1,300    35,000 (1)
R&D China   Shanghai, China        Warehouse space   3,200     5,000 (2)
---------------
(1) Eight months rent
(2) Three months rent

During fiscal 2007, the Company paid $128,000 rent on a 6,600 square foot
building in Morrisville, North Carolina that had housed the operations of
Fortron.  These operations were transferred to Minneapolis in the first
quarter of fiscal 2006.  This lease agreement expires on October 31, 2007.

The Company believes the owned and leased property discussed above, are
adequate to meet its occupancy needs in the foreseeable future.

                                  11


                        ITEM 3.  LEGAL PROCEEDINGS

On June 29, 2006, Streck Laboratories, Inc. filed a Complaint against the
Company and its subsidiary, Research and Diagnostic Systems, Inc. (R&D
Systems), in the United States District Court for the District of Nebraska.
The Complaint alleges patent infringement involving certain patents issued to
Streck relating to the addition of reticulocytes to hematology controls.  The
Company has reason to believe that R&D Systems and not Streck, first invented
the inventions claimed in these patents and several other patents issued to
Streck.  An interference was declared by the U.S. Patent and Trademark Office
on March 21, 2007 to determine priority of invention between a patent
application filed by R&D and the Streck patents, including each of the
patents involved in the lawsuit.  The Company does not believe the resolution
of the above proceedings will have a material impact on the Company's
consolidated financial statements.


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

No matter was submitted to a vote of the Company's security holders during
the fourth quarter of the Company's 2007 fiscal year.

EXECUTIVE OFFICERS OF THE COMPANY

(a)  The names, ages and positions of each executive officer of the Company
are as follows:

Name             Age  Position                              Officer Since
---------------  ---  ------------------------------------- -------------
Thomas E. Oland   66  Chairman of the Board, President,          1985
                        Treasurer, Chief Executive and
                        Director

Dr. Monica Tsang  60  Vice President, Research (retired)         1995

Marcel Veronneau  53  Vice President, Hematology Operations      1995

Gregory J. Melsen 55  Vice President of Finance and              2004
                        Chief Financial Officer

The term of office of each executive officer is from one annual meeting of
directors until the next annual meeting of directors or until a successor is
elected.  There are no arrangements or understandings among any of the
executive officers and any other person (not an officer or director acting as
such) pursuant to which any of the executive officers was selected as an
officer of the Company.   Dr. Monica Tsang retired from the Company effective
June 30, 2007.

(b)  The business experience of the executive officers during the past five
years is as follows:

Thomas E. Oland has been Chairman of the Board, President, Treasurer and
Chief Executive Officer of the Company since December 1985.  Mr. Oland also
served as Chief Financial Officer of the Company from December 1985 to
December 2004.

Dr. Monica Tsang was elected a Vice President of the Company in March 1995.
Prior thereto, she served as Executive Director of Cell Biology for R&D
Systems' Biotechnology Division and was an employee of R&D Systems since
1985.  Dr. Tsang retired from the Company on June 30, 2007.

Marcel Veronneau was elected a Vice President of the Company in March 1995.
Prior thereto, he served as Director of Operations for R&D Systems'
Hematology Division since joining the Company in 1993.

Gregory J. Melsen joined the Company in December 2004 as Vice President of
Finance and Chief Financial Officer.  From 2002 to 2004, he served as Vice
President and Chief Financial Officer of PLATO Learning, Inc., a publicly
held provider of computer-based and e-learning educational software.  From
1999 to 2001, he held the position of Vice President of Finance, Treasurer
and Chief Financial Officer of American Medical Systems Holdings, Inc., a
publicly traded medical device manufacturer.  Previously, Mr. Melsen was
employed by a public accounting firm for nineteen years, including nine years
as an audit partner.

                                      12

                                   PART II

    ITEM 5.  MARKET FOR THE COMPANY'S COMMON EQUITY, RELATED STOCKHOLDER
                  MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company's common stock trades on The Nasdaq National Market under the
symbol "TECH." The following table sets forth for the periods indicated the
range of the closing price per share for the Company as reported by the
Nasdaq Stock Market.
                          Fiscal 2007 Price   Fiscal 2006 Price
                            High     Low        High     Low
                           ------  ------      ------  ------
     1st Quarter           $52.08  $45.63      $57.94  $46.40
     2nd Quarter            56.75   51.09       58.45   52.38
     3rd Quarter            60.67   54.68       60.14   56.51
     4th Quarter            61.87   54.95       59.68   49.37

As of August 27, 2007, there were approximately 260 shareholders of record.
As of August 27, 2007, there were over 30,000 beneficial shareholders of the
Company's common stock. TECHNE Corporation has never paid cash dividends on
its common stock. Payment of dividends is within the discretion of TECHNE's
Board of Directors, although the Board of Directors plans to retain earnings
for the foreseeable future.

The following table sets forth the repurchases of Company Common Stock for
the quarter ended June 30, 2007.

                                                          Maximum Approximate
                                                          Dollar Value
                                         Total Number of  of Shares
                                        Shares Purchased  that May Yet
               Total Number  Average   as Part of         Be Purchased
               Of Shares    Price Paid Publicly Announced Under the Plans
Period         Purchased    Per Share  Plans or Programs  or Programs
------------   ------------ ---------- ------------------ -------------------
4/1/07-4/30/07      0           --             0             $6.8 million
5/1/07-5/31/07      0           --             0             $6.8 million
6/1/07-6/30/07      0           --             0             $6.8 million

In May 1995, the Company announced a plan to purchase and retire its Common
Stock.  Repurchases of $40 million were authorized as follows:  May 1995 - $5
million; April 1997 - $5 million; January 2001 - $10 million; October 2002 -
$20 million.  The plan does not have an expiration date.

The following chart compares the cumulative total shareholder return on the
Company's Common Stock with the S&P Midcap 400 Index and the S&P 400
Biotechnology Index.  The comparison assumes $100 was invested on the last
trading day before July 1, 2002 in the Company's Common Stock and in each of
the foregoing indices and assumes reinvestment of dividends.

                     COMPARISION OF CUMALATIVE FIVE YEAR TOTAL RETURN
                               INDEXED RETURNS

                                         Years Ending
Company/Index       June 2003    June 2004  June 2005  June 2006  June 2007
---------------     ---------    ---------  ---------  ---------  ---------
TECHNE CORP           107.55       153.97     162.69     180.44     202.73
S&P MIDCAP 400 INDEX   99.29       127.07     144.90     163.71     194.00
S&P 400 BIOTECHNOLOGY 124.64       140.63     131.99     134.48     141.08


                                    13


                     ITEM 6.  SELECTED FINANCIAL DATA
              (Dollars in thousands, except per share data)

                               2007    2006 (1)   2005     2004     2003
                             --------  -------- -------- -------- --------
Income and Share Data:
  Net sales                  $223,482  $202,617 $178,652 $161,257 $145,011
  Gross margin                176,815   156,899  141,839  126,370  109,615
  Selling, general and
   administrative expenses     30,965    27,604   24,476   21,725   19,377
  Research and development
   Expenses                    20,082    18,825   18,379   20,773   20,581
  Operating income            124,154   108,503   97,763   82 273   67,718
  Earnings before income
   taxes                      128,931   111,163   99,887   82,541   69,555
  Net earnings                 85,111    73,351   66,132   52,928   45,396
  Diluted earnings per share $   2.15  $   1.85 $   1.62 $   1.27 $   1.08
  Average common and common
   equivalent shares -
   diluted  (in thousands)     39,513    39,594   40,920   41,697   42,031
  Share price:
   High                      $  61.87  $  60.14 $  47.25 $  43.45 $  34.75
   Low                       $  45.63  $  46.40 $  33.11 $  28.11 $  18.95

Balance Sheet and Cash
 Flow Data:
  Cash, cash equivalents
   and short-term available-
   for-sale investments (3)  $164,774  $108,846 $ 97,134 $ 93,735 $118,763
  Receivables (3)              30,966    25,078   23,722   21,099   19,179
  Inventories (3)               8,757     9,024    7,758    7,457    6,332
  Working capital (3)         195,645   131,856  120,965  114,606  138,707
  Total assets (3)            454,844   370,512  295,263  325,460  263,277
  Long-term debt, less
   current portion (3)             --    12,198   13,378   14,576   15,852
  Net cash provided by
   operating activities        90,503    85,589   74,433   65,553   55,238
  Capital expenditures          8,076     4,603   11,410    3,710   15,194

Financial Ratios:
  Return on average equity      21.9%     24.1%    23.4%    19.8%    20.5%
  Return on average assets      20.6%     22.0%    21.3%    18.0%    18.1%
  Current ratio                 12.38      8.34     9.63     9.52    13.86
  Quick ratio                   11.38      7.45     8.62     8.53    12.76
  Price to earnings ratio (2)      27        28       28       34       28

Employee Data:
  Full-time employees (3)         628       577      538      534      525

(1) The Company acquired Fortron Bio Science, Inc. and BiosPacific,
    Inc. on July 1, 2005.

(2) Common share price at end of fiscal year (June 30) divided by the
    diluted earnings per share for the respective fiscal year.

(3) Amounts at June 30 of each respective fiscal year.


The Company has not declared any cash dividends in the past, and it is not
anticipated that it will declare any dividends in the foreseeable future.

                                     14


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

Overview

TECHNE Corporation and Subsidiaries (the Company) are engaged in the
development and manufacture of biotechnology products and hematology
calibrators and controls. These activities are conducted domestically through
its wholly-owned subsidiary, Research and Diagnostic (R&D) Systems, Inc.
Through its wholly-owned U.K. subsidiary, R&D Systems Europe Ltd. (R&D
Europe), the Company distributes biotechnology products throughout Europe.
R&D Systems Europe Ltd. has a sales subsidiary, R&D Systems GmbH, in Germany
and a sales office in France. In late fiscal 2007, the Company established a
subsidiary, R&D Systems China Co. Ltd. (R&D China), in Shanghai, China, to
distribute biotechnology products throughout China. The Company anticipates
fulfilling orders for all third-party Chinese distributors from R&D China
beginning in the second quarter of fiscal 2008.

R&D Systems acquired two subsidiaries effective July 1, 2005. Fortron Bio
Science, Inc. (Fortron), a developer and manufacturer of monoclonal and
polyclonal antibodies, antigens and other biological reagents, was relocated
to the Company's Minneapolis, Minnesota facility in the first quarter of
fiscal 2006. Subsequent to June 30, 2007, Fortron was merged into R&D
Systems. The second subsidiary acquired on July 1, 2005, BiosPacific, Inc.
(BiosPacific), located in Emeryville, California, is a worldwide supplier of
biologics to manufacturers of in vitro diagnostic systems and
immunodiagnostic kits. BiosPacific is the primary distributor of Fortron
products. Fortron and BiosPacific had shared a unique strategic relationship
since 1992 that combined Fortron's development and manufacturing excellence
with BiosPacific's marketing and sales expertise.

The Company has three reportable operating segments based on the nature of
products and geographic location: biotechnology, R&D Systems Europe and
hematology. The biotechnology segment consists of R&D Systems' Biotechnology
Division, Fortron, BiosPacific and R&D China, which develop, manufacture and
sell biotechnology research and diagnostic products world-wide. R&D Systems
Europe distributes Biotechnology Division products throughout Europe. The
hematology segment develops and manufactures hematology controls and
calibrators for sale world-wide.

Overall Results

Consolidated net earnings increased 16.0% for fiscal 2007 as compared to
fiscal 2006. Increased consolidated net sales and higher gross margins were
the primary reason for the improvement. Consolidated net sales increased
10.3% from fiscal 2006. The consolidated gross margin percentage increased
from 77.4% of consolidated net sales in fiscal 2006 to 79.1% in fiscal 2007
partly due to less purchase accounting impact in fiscal 2007 related to
inventory acquired from Fortron and BiosPacific. The favorable impact on
fiscal 2007 as compared to fiscal 2006 consolidated net earnings from changes
in exchange rates used to convert R&D Europe results from British pound
sterling to U.S. dollars was $1.6 million (2.2%).

Consolidated net earnings increased 10.9% for fiscal 2006 as compared to
fiscal 2005. The primary reason for the improvement in fiscal 2006 net
earnings was increased consolidated net sales. Consolidated net sales in
fiscal 2006 increased 13.4% from fiscal 2005. The acquisitions of Fortron and
BiosPacific on July 1, 2005 increased consolidated net sales and consolidated
net earnings by approximately $9.4 million (5.2%) and $515,000 (0.8%),
respectively, for fiscal 2006. The consolidated gross margin percentage
decreased from 79.4% of consolidated net sales in fiscal 2005 to 77.4% in
fiscal 2006 primarily due to purchase accounting related to inventory
acquired from Fortron and BiosPacific. The unfavorable impact on fiscal 2006
as compared to fiscal 2005 consolidated net earnings from changes in exchange
rates used to convert R&D Europe results from British pound sterling to U.S.
dollars was $659,000 (1.0%) for the year ended June 30, 2006.

Results of Operations

Net sales (in thousands):

                            Year Ended June 30,
                         2007      2006      2005
                       --------  --------  --------
Biotechnology          $146,614  $134,424  $111,153
R&D Europe               61,766    52,954    51,315
Hematology               15,102    15,239    16,184
                       --------  --------  --------
                       $223,482  $202,617  $178,652
                       ========  ========  ========

                                   15

Consolidated net sales for fiscal 2007 were $223.5 million, an increase of
$20.9 million (10.3%) from fiscal 2006. Excluding the effect of changes from
the prior year in foreign currency exchange rates used to convert R&D Europe
net sales from British pound sterling to U.S. dollars, consolidated net sales
increased 7.7% in fiscal 2007.

Biotechnology net sales in fiscal 2007 increased $12.2 million (9.1%) from
fiscal 2006. Approximately $1.2 million of the increase in biotechnology net
sales for fiscal 2007 was the result of price increases. The majority of the
remainder of the biotechnology net sales increase was from increased
Biotechnology Division U.S. retail sales volume. Sales to
pharmaceutical/biotechnology customers and academic customers, the two
largest segments of the U.S. market showed the greatest revenue growth over
fiscal 2006. R&D Europe net sales increased $8.8 million (16.6%) in fiscal
2007. R&D Europe's net sales in British pound sterling increased 6.6% in
fiscal 2007. Hematology net sales in fiscal 2007 decreased $137,000 (1.0%)
due to decreased retail sales.

Consolidated net sales for fiscal 2006 were $202.6 million, an increase of
$23.9 million (13.4%) from fiscal 2005. Excluding the effects of the
acquisitions of Fortron and BiosPacific and of changes from the prior year in
foreign currency exchange rates used to convert R&D Europe net sales from
British pound sterling to U.S. dollars, consolidated net sales increased 9.5%
in fiscal 2006.

Biotechnology net sales in fiscal 2006 increased $23.3 million (20.9%) from
fiscal 2005. Net sales by Fortron and BiosPacific accounted for $9.4 million
of the biotechnology net sales increase for fiscal 2006. Approximately $1.3
million of the increase in biotechnology net sales for fiscal 2006 was the
result of price increases. The majority of the remainder of the biotechnology
net sales increase was from increased Biotechnology Division U.S. retail
sales volume. Sales to pharmaceutical/biotechnology customers and academic
customers, the two largest segments of the U.S. market showed the greatest
revenue growth over fiscal 2005. R&D Europe net sales increased $1.6 million
(3.2%) in fiscal 2006. R&D Europe's net sales in British pound sterling
increased 7.8% in fiscal 2006. The decrease in Hematology Division net sales
in fiscal 2006 was the result of the reduction in sales to one OEM customer
beginning in January 2005. Sales to this customer were $33,000 and $1.6
million in fiscal 2006 and 2005, respectively.

Gross margins, as a percentage of net sales, were as follows:

                            Year Ended June 30,
                         2007      2006      2005
                       --------  --------  --------
Biotechnology             79.9%     78.3%     80.7%
R&D Europe                52.9%     50.0%     53.2%
Hematology                43.1%     43.6%     46.5%
Consolidated              79.1%     77.4%     79.4%

The biotechnology gross margin percentages for fiscal 2007 and 2006 were
affected by purchase accounting related to inventory on hand at the
acquisition date of Fortron and BiosPacific in fiscal 2006. Included in cost
of sales for fiscal 2007 and 2006 were $455,000 and $1.7 million,
respectively related to inventory purchase accounting. The increase in R&D
Europe's gross margin percentage in fiscal 2007 was mainly the result of
favorable exchange rates between a weaker U.S. dollar and stronger British
pound sterling.

The biotechnology gross margin percentage for fiscal 2006 as compared to
fiscal 2005, was negatively impacted 2.1% by the inclusion of Fortron and
BiosPacific gross margins. The gross margin percentage for Fortron and
BiosPacific, which was negatively affected by purchase accounting related to
inventory acquired, was 34.4% for fiscal 2006. The decrease in R&D Europe's
gross margin percentage in fiscal 2006 as compared to fiscal 2005, was mainly
the result of unfavorable exchange rates between a stronger U.S. dollar and
weaker British pound sterling. The decrease in hematology gross margin
percentage was the result of lower sales volume to offset fixed manufacturing
costs.

Selling, general and administrative expenses increased $3.4 million (12.2%)
and $3.1 million (12.8%) in fiscal 2007 and 2006, respectively. Selling,
general and administrative expenses were as follows (in thousands):

                             Year Ended June 30,
                         2007      2006      2005
                       --------  --------  --------
Biotechnology           $17,460   $15,442   $13,517
R&D Europe                8,756     7,784     7,866
Hematology                1,690     1,625     1,808
Corporate                 3,059     2,753     1,285
                       --------  --------  --------
                        $30,965   $27,604   $24,476
                       ========  ========  ========

                                   16

Biotechnology selling, general and administrative expenses increased $2.0
million (13.1%) in fiscal 2007. The majority of the increase was due to
increased wages, benefits and profit sharing of $1.3 million as a result of
additional sales, marketing and administrative personnel added since the
prior year. R&D Europe selling, general and administrative expenses increased
$972,000 (12.5%) primarily due to the change in exchange rates from the prior
year used to convert from British pound sterling to U.S. dollars. In British
pound sterling, R&D Europe selling, general and administrative expenses
increased 2.8% in fiscal 2007 from fiscal 2006.

Biotechnology selling, general and administrative expenses increased $1.9
million (14.2%) in fiscal 2006 as compared to fiscal 2005. The majority of
the increase was due to $1.3 million of Fortron and BiosPacific expenses
after their acquisition at the beginning of fiscal 2006. Corporate selling,
general and administrative expenses included $1.6 million of stock option
expense from the adoption of Statement of Financial Accounting Standards
(SFAS) No. 123R in fiscal 2006.

Research and development expenses increased $1.3 million and $446,000 in
fiscal 2007 and 2006, respectively, as compared to prior-year periods. The
increases were primarily the result of the development of new cytokines,
antibodies and assay kits by R&D Systems' Biotechnology Division. Research
and development expenses are composed of the following (in thousands):

                             Year Ended June 30,
                         2007      2006      2005
                       --------  --------  --------
Biotechnology           $19,333   $18,114   $17,609
Hematology                  749       711       770
                       --------  --------  --------
                        $20,082   $18,825   $18,379
                       ========  ========  ========

Amortization of intangible assets. The Company allocated approximately $12.8
million to goodwill and $7.1 million to other intangible assets arising from
the acquisitions of Fortron and BiosPacific in fiscal 2006. In fiscal 2007
the amount of goodwill from the acquisitions was reduced $240,000 due to the
realization of pre-acquisition deferred tax assets. The other intangible
assets acquired in fiscal 2006, mainly technologies, trade names and customer
and supplier relationships, are being amortized over lives of one to eight
years and amortization expense of approximately $1.1 million was recorded in
each of fiscal 2007 and 2006 related to these assets.

Interest expense and income. Interest expense in fiscal 2007, 2006 and 2005
was $1.1 million, $1.0 million and $822,000, respectively. Through October
2006, the Company had a floating interest rate mortgage note outstanding.
Fiscal 2007 interest expense included $651,000 of prepayment penalty and
$78,000 of unamortized loan origination fees. Interest income for fiscal
2007, 2006 and 2005 was $8.4 million, $4.7 million and $4.1 million,
respectively. The increases from the prior years were due to higher cash and
investment balances and increased interest rates earned.

Other non-operating expense (income) consists of foreign currency transaction
gains and losses, rental income, building expenses related to rental property
and the Company's share of losses by equity method investees as follows (in
thousands):
                                          Year Ended June 30,
                                      2007      2006      2005
                                    --------  --------  --------
Foreign currency losses (gains)       $   82    $  (30)   $  (94)
Rental income                           (686)   (1,286)     (750)
Real estate taxes, depreciation
  and utilities                        2,212     1,982     1,701
Losses by equity method investees        966       418       306
                                    --------  --------  --------
                                      $2,574    $1,084    $1,163
                                    ========  ========  ========

The Company has two equity method of accounting investments in limited
liability corporations, Hemerus Medical, LLC (Hemerus) and Nephromics, LLC
(Nephromics). In fiscal 2004, the Company purchased a 10% interest in Hemerus
for $3 million. In March 2006, the Company invested an additional $750,000 in
Hemerus, increasing its ownership percentage to 15% and in January 2007, the
Company invested an additional $700,000, increasing its ownership percentage
to 18%. The Company's net investment in Hemerus at June 30, 2007 and 2006 was
$3.1 million and $3.0 million, respectively. Hemerus' success is dependent in
part, upon receiving FDA clearance to market its products. If such clearance
is not received, the Company would potentially recognize an impairment loss
to the extent of its remaining net investment. In September 2006, the Company
invested $7.2 million for an 18% equity interest in Nephromics. At June 30,
2007, the Company's net investment in Nephromics was $6.8 million. The
Company has financial exposure to any losses of Nephromics to the extent of
its net investment in the Company.

                                    17

Income taxes for fiscal 2007, 2006 and 2005 were provided at rates of
approximately 34.0%, 34.0% and 33.8%, respectively, of consolidated earnings
before income taxes. U.S. federal taxes have been reduced by the credit for
research and development expenditures, the benefit for extraterritorial
income through December 2006 and, in fiscal 2007 and 2006, the manufacturer's
deduction provided for under the American Jobs Creation Act of 2004. Foreign
income taxes have been provided at rates which approximate the tax rates in
the countries in which R&D Europe operates. Without significant business
developments, the Company expects income tax rates for fiscal 2008 to range
from 33.5% to 34.5%.

                QUARTERLY FINANCIAL INFORMATION (Unaudited)
                  (in thousands, except per share data)

                        Fiscal 2007                      Fiscal 2006
              First   Second  Third  Fourth    First   Second  Third  Fourth
               Qtr.    Qtr.    Qtr.   Qtr.      Qtr.    Qtr.    Qtr.    Qtr.
             ------- ------- ------- -------  ------- ------- ------- -------
Net sales    $52,351 $52,509 $60,197 $58,425  $47,709 $48,029 $54,813 $52,066
Gross margin  41,114  41,795  48,178  45,728   36,613  37,334  42,708  40,244
Earnings
 before taxes 29,712  28,230  36,847  34,142   25,490  24,899  31,162  29,612
Income taxes  10,081   9,567  12,954  11,218    8,489   8,385  10,815  10,123
Net earnings  19,631  18,663  23,893  22,924   17,001  16,514  20,347  19,489
Basic earnings
 per share      0.50    0.47    0.61    0.58     0.44    0.42    0.52    0.50
Diluted earnings
 per share      0.50    0.47    0.60    0.58     0.43    0.42    0.52    0.49

Liquidity and Capital Resources

Cash, cash equivalents and available-for-sale investments at June 30, 2007
were $256.2 million compared to $186.5 million at June 30, 2006. The Company
has an unsecured line of credit of $750,000 available at June 30, 2007 which
expires on October 31, 2007. The interest rate charged on the line of credit
is a floating rate at the one month London interbank offered rate (Libor)
plus 1.75%. There were no borrowings on the line in the current or prior
fiscal year.

Management of the Company expects to be able to meet its foreseeable future
cash and working capital requirements for operations, facility expansion and
capital additions through currently available funds, cash generated from
operations and maturities of available-for-sale investments.

Cash flows from operating activities. The Company generated cash from
operations of $90.5 million, $85.6 million and $74.4 million in fiscal 2007,
2006 and 2005, respectively. The increase in cash generated from operating
activities in fiscal 2007 as compared to fiscal 2006 was the result of
increased net earnings of $11.8 million partially offset by decreases in
income taxes payable and the excess tax benefit from stock option exercises
aggregating $2.0 million in 2007 compared to a $3.1 million increase in
fiscal 2006, and an increase in trade and other receivables of $5.0 million
compared to an increase of $2.2 million in fiscal 2006. The $5.1 million
decrease in income taxes payable in fiscal 2007 as compared to fiscal 2006
was the result of higher U.S. federal and state income tax deposits. The
increase in trade and other receivable in fiscal 2007 as compared to fiscal
2006 was the result of increased sales.

The increase in cash generated from operating activities in fiscal 2006 was
the result of increased net earnings of $7.2 million and an increase in
income taxes payable net of the excess tax benefit from stock option
exercises in fiscal 2006 of $3.1 million compared to an increase in fiscal
2005 of $307,000. The increase in income taxes payable in fiscal 2006 was the
result of lower U.S. federal and state income tax deposits.

Cash flows from investing activities. Capital additions consist of the
following (in thousands):

                                   Year Ended June 30,
                               2007      2006      2005
                             --------  --------  --------
Laboratory, manufacturing,
 and computer equipment       $ 2,484   $ 2,225   $ 1,712
Renovation/construction         5,592     2,378     1,348
Property purchase                  --        --     8,350
                             --------  --------  --------
                              $ 8,076   $ 4,603   $11,410
                             ========  ========  ========

In fiscal 2006, the Company began construction of additional laboratory space
at its Minneapolis facility. Included in fiscal 2007 and 2006 capital
additions were approximately $5.6 million and $1.5 million, respectively,
related to this construction. The remaining construction cost is estimated at
$3.0 million and is expected to be complete in the second quarter of fiscal
2008. Construction is expected to be financed through currently available
funds and cash generated from operating activities. The additional
construction in fiscal 2006 and 2005 relate mainly to additional facilities
to house goats and sheep used in the production of antibodies. In fiscal
2005, the Company acquired property adjacent to its Minneapolis facility for
$10.4 million. Two million of the purchase price had been deposited in escrow
in fiscal 2002. The land and building purchases and construction were all
financed through cash on hand, cash generated from operations and maturities
of short-term available-for-sale investments.

Capital additions for laboratory, manufacturing and computer equipment
planned for fiscal 2008 are expected to be approximately $3.6 million and are
expected to be financed through currently available cash and cash generated
from operations.

                                18

The Company's net purchases of (proceeds from) available-for-sale investments
in fiscal 2007, 2006 and 2005 were $23.8 million, $36.8 million and ($65.1)
million, respectively. The Company's investment policy is to place excess
cash in municipal and corporate bonds with the objective of obtaining the
highest possible return with the lowest risk, while keeping funds accessible.

In fiscal 2007, the Company invested $7.2 million in Nephromics for an 18%
equity interest and invested an additional $700,000 in Hemerus, increasing
its ownership percentage to 18%. The investments were financed through cash
and equivalents on hand.

In fiscal 2006, the Company invested an additional $750,000 in Hemerus,
increasing its ownership percentage from 10% to 15%. In April 2006, the
Company made an additional $9 million investment in ChemoCentryx, Inc. (CCX),
a technology and drug development company, in the form of a 5% convertible
note subject to the limitation that the Company's holdings in CCX not exceed
19.9% of the outstanding voting shares. In June 2006, $4.3 million of the
note was converted into shares of CCX preferred stock. In August 2006, the
balance of the convertible note and accrued interest were converted into
shares of CCX preferred stock and the Company's equity interest in CCX
decreased to 19.3%. The Company's net investment in CCX at June 30, 2007 and
2006 was $14.3 and $14.2 million, respectively.

The Company acquired Fortron and BiosPacific effective July 1, 2005 for an
aggregate purchase price of $20 million. Cash acquired in the transactions
was $413,000. The net acquisition cost of $19.6 million was financed through
cash and equivalents on hand at July 1, 2005.

Cash flows from financing activities. The Company received $2.7 million,
$12.5 million and $6.6 million for the exercise of options for 78,000,
739,000 and 252,000 shares of common stock in fiscal 2007, 2006 and 2005,
respectively. The Company also received $1.4 million for the exercise of
warrants to purchase 120,000 shares of common stock in fiscal 2005. The
Company recognized excess tax benefits from stock option exercises of
$534,000 and $8.0 million in fiscal 2007 and 2006, respectively.

In fiscal 2007, 2006 and 2005, the Company purchased 24,400, 22,541 and 6,410
shares of common stock, respectively, for its employee Stock Bonus Plans at a
cost of $1.2 million, $1.3 million and $260,000, respectively.

In March 2005, the Company repurchased approximately 2.9 million shares of
its common stock under an accelerated stock buyback ("ASB") transaction for
an initial value of approximately $100 million ($34.45 per share). The
repurchase of the shares was funded with a portion of the Company's cash and
available-for-sale investments. The ASB agreement was subject to a market
price adjustment provision based upon the volume weighted average price
during the nine-month period ending in December 2005. In December 2005, the
Company settled the ASB agreement with a payment of $26.0 million using cash
and equivalents on hand as of the settlement date.

In October 2006, the Company paid off its mortgage debt. The total payment of
$13.8 million included a prepayment penalty of $651,000 which is included in
interest expense in the consolidated statement of earnings for fiscal 2007.

The Company has never paid cash dividends and currently has no plans to do so
in fiscal 2008.

Contractual Obligations

The following table summarizes the Company's contractual obligations and
commercial commitments as of June 30, 2007 (in thousands):

                                       Payments Due by Period
                                   Less than  1-3     4-5    After
                          Total     1 Year   Years   Years   5 Years
                         -------   -------  ------- -------  -------
Operating leases          $5,471    $  814   $1,455  $1,154   $2,048
Minimum royalty payments     144       144       --      --       --
                         -------   -------  ------- -------  -------
                          $5,615   $   958   $1,455  $1,154   $2,048
                         =======   =======  ======= =======  =======

Off-balance Sheet Arrangements

The Company is not a party to any off-balance sheet transactions,
arrangements or obligations that have, or are reasonably likely to have, a
material effect on the Company's financial condition, changes in the
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources.

                                  19

Critical Accounting Policies

Management's discussion and analysis of the Company's 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 of America. The preparation of these
financial statements requires management to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses,
and related disclosure of contingent assets and liabilities. On an ongoing
basis, management evaluates its estimates. Management bases its estimates on
historical experience and on various other assumptions that are believed to
be reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ
from these estimates under different assumptions or conditions.

The Company has identified the policies outlined below as critical to its
business operations and an understanding of results of operations. The
listing is not intended to be a comprehensive list of all accounting
policies.

Valuation of accounts receivable. The Company performs ongoing credit
evaluations of its customers and adjusts credit limits based upon payment
history and the customers' current creditworthiness, as determined by
management's review of their current credit information. The Company
continuously monitors collections and payments from its customers and
maintains a provision for estimated credit losses based upon the Company's
historical experience and any specific customer collection issues
that have been identified. While such credit losses have historically been
within the Company's established provisions, if the financial condition of
the Company's customers were to deteriorate, resulting in an impairment of
their ability to make payments, additional allowances may be required. Gross
trade receivables totaled $29.7 million and the allowance for doubtful
accounts was $141,000 at June 30, 2007.

Valuation of inventory. Inventories are stated at the lower of cost (first-
in, first-out method) or market. The Company regularly reviews inventory on
hand for slow-moving and obsolete inventory, inventory not meeting quality
control standards and inventory subject to expiration.

To meet strict customer quality standards, the Company has established a
highly controlled manufacturing process for proteins and antibodies. New
protein and antibody products require the initial manufacture of multiple
batches to determine if quality standards can be consistently met. In
addition, the Company will produce larger batches of established products
than current sales requirements due to economies of scale. The manufacturing
process for proteins and antibodies, therefore, has and will continue to
produce quantities in excess of forecasted usage. The Company values its
manufactured protein and antibody inventory based on a two-year forecast. The
establishment of a two-year forecast requires considerable judgment. Protein
and antibody quantities in excess of the two-year usage forecast are
considered impaired and not included in the inventory value. Through
March 31, 2006, due to changes in the Company's forecast, reserves for
previously written off inventories may have been reversed in subsequent
periods. Inventory reserves reversed through March 31, 2006 were not material
to the Company's consolidated results of operations, consolidated financial
position, assets or stockholders' equity as of and for each of the periods
presented. Subsequent to March 31, 2006, the Company changed its policy and
no longer reverses reserves on previously unvalued inventories. This change
in valuation method did not have a material impact on the Company's fiscal
2007 and 2006 consolidated financial statements. The value of protein and
antibody inventory reserved at June 30, 2007 was $13.9 million.

Valuation of goodwill. The Company is required to perform an annual review
for impairment of goodwill in accordance with Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets. Goodwill
is considered to be impaired if it is determined that the carrying value of
the reporting unit exceeds its fair value. Assessing the impairment of
goodwill requires the Company to make judgments regarding the fair value of
the net assets of its reporting units and the allocation of the carrying
value of shared assets to the reporting units. The Company's annual
assessment included comparison of the carrying value of the net assets of the
Company's biotechnology operations to its share of the Company's market
capitalization at year end. A significant change in the Company's market
capitalization or in the carrying value of net assets of the biotechnology
operations could result in an impairment charge in future periods. Goodwill
at June 30, 2007 was $25.1 million.

                                   20

Valuation of intangible and other long-lived assets. The Company reviews the
carrying value of intangible and other long-lived assets for impairment
whenever events or changes in circumstances indicate the carrying amount of
an asset may not be recoverable. This assessment requires the Company to make
assumptions and judgments regarding the fair value of these asset groups.
Asset groups are considered to be impaired if their carrying value exceeds
the asset groups' ability to continue to generate income from operations and
positive cash flow in future periods. If asset groups are considered
impaired, the amount by which the carrying value exceeds its fair value would
be expensed as an impairment loss. Intangible asset net carrying values at
June 30, 2007 were $5.1 million. Property and equipment net carrying values
were $91.5 million at June 30, 2007.

Valuation of investments. The Company has made equity investments in several
start-up and early development stage companies, among them CCX, Hemerus,
Nephromics and Discovery Genomics, Inc. (DGI). The accounting treatment of
each investment (cost method or equity method) is dependent upon a number of
factors, including, but not limited to, the Company's share in the equity of
the investee and the Company's ability to exercise significant influence over
the operating and financial policies of the investee. In determining which
accounting treatment to apply, the Company must make judgments based upon the
quantitative and qualitative aspects of the investment.

The Company periodically assesses its equity investments for impairment.
Development stage companies, of the type the Company has invested in, are
dependent on their ability to raise additional funds to continue research and
development efforts and on receiving patent protection and/or FDA clearance
to market their products. If such funding were unavailable or inadequate to
fund operations or if patent protection or FDA clearance were not received,
the Company would potentially recognize an impairment loss to the extent of
its remaining net investment. The Company's net investments at June 30, 2007
in CCX, Hemerus and Nephromics were $14.3 million, $3.1 million and $6.8
million, respectively. The Company's investment in DGI was written off in
fiscal 2004.

Share-based compensation. The Company adopted SFAS No. 123R, Share-Based
Payment, as of July 1, 2005. SFAS 123R focuses primarily on accounting for
transactions in which an entity obtains employee services through stock-based
payment transactions. The Statement requires the measurement of the cost of
employee services received in exchange for the award of equity instruments
based on the fair value of the award at the date of grant. Determining the
appropriate fair value model and calculating the fair value of share-based
payment awards requires the input of highly subjective assumptions, including
the expected life of the stock-based payment awards and stock price
volatility. The Company uses the Black-Scholes model to value stock option
awards. The assumptions used in calculating the fair value of stock-based
payment awards represent the Company's best estimates, but these estimates
involve inherent uncertainties and the application of judgment. As a result,
if factors change and different assumptions are used, stock-based
compensation expense could be materially different in the future. In
addition, the Company is required to estimate the expected term and
forfeiture rate, and only recognize expense for those shares expected to
vest. If the actual forfeiture rate is materially different from the
estimate, stock-based compensation expense could be significantly different
from what has been recorded in the current period. As of June 30, 2007, the
Company had outstanding stock options for 423,000 shares of common stock. Of
those outstanding common stock options, 365,000 shares had vested as of
June 30, 2007, and 58,000 shares were unvested. As of June 30, 2007,
unrecognized compensation expense was $813,000. Any significant increase in
future stock-based awards could materially impact earnings.

Income taxes. The Company operates within multiple taxing jurisdictions and
is subject to audit in these jurisdictions. These audits can involve complex
issues, which may require an extended period of time to resolve. In fiscal
2005, the Company reached a settlement with the State of Minnesota for
$525,000 for fiscal years 2000 to 2002. The settlement was fully accrued for
at June 30, 2004.

                                   21

Assessment of claims or pending litigation. The Company is routinely subject
to claims and involved in legal actions which are incidental to the business
of the Company. Although it is difficult to predict the ultimate outcome of
these matters, management believes that any ultimate liability will not
materially affect the consolidated financial position or results of
operations of the Company. As additional information becomes available, the
Company will assess the potential liabilities related to claims or pending
litigation and revise estimates as needed. Such revisions could materially
impact the Company's consolidated financial position or results of
operations.

Recent Accounting Pronouncements

In May 2005, the Financial Accounting Standards Board (FASB) issued SFAS No.
154, Accounting Changes and Error Corrections. The Statement replaces APB
Opinion No. 20, Accounting Changes and SFAS No. 3, Reporting Accounting
Changes in Interim Financial Statements. SFAS No. 154 requires companies to
apply voluntary changes in accounting principles retrospectively whenever
practicable. The requirement is effective for the Company in fiscal 2007.
Adoption of the Statement did not have an impact on the Company's
consolidated financial statements.

In June 2006, the FASB issued Interpretation No. 48 (FIN 48), Accounting for
Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109.
FIN 48 requires disclosures of additional quantitative and qualitative
information regarding uncertain tax positions taken for tax-return purposes
that have not been recognized for financial reporting, along with analysis of
significant changes during each period. The Interpretation is effective for
the Company in fiscal 2008. The Company is currently evaluating the
provisions of FIN 48, but it is not expected to have a material impact on the
Company's consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. The
Statement establishes a single authoritative definition of fair value, sets
out a framework for measuring fair value, and requires additional disclosures
about fair value measurements. SFAS No. 157 applies only to fair value
measurements that are already required or permitted by other accounting
standards and is effective for the Company in fiscal 2009. The Company is
currently evaluating the impact of adopting SFAS No. 157, but it is not
expected to have a material impact on the Company's consolidated financial
statements.

In September 2006, the Securities and Exchange Commission released Staff
Accounting Bulletin 108 (SAB 108). SAB 108 provides interpretative guidance
on how the effects of the carryover or reversal of prior year misstatements
should be considered in quantifying a current year misstatement. SAB 108 is
effective for the Company for fiscal year 2007. Adoption of SAB 108 did not
have an impact on the Company's consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. The Statement permits entities to
choose to measure certain financial instruments at fair value. Unrealized
gains and losses on items for which the fair value option has been elected
are reported in earnings at each subsequent reporting date. SFAS No. 159 is
effective for the Company in fiscal 2009. The Company is currently evaluating
the impact of adopting SFAS No. 159, but it is not expected to have a
material impact on the Company's consolidated financial statements.

Market Risk

At the end of fiscal 2007, the Company had an investment portfolio of fixed
income securities, excluding those classified as cash and cash equivalents,
of $120.5 million (see Note B of Notes to Consolidated Financial Statements).
These securities, like all fixed income instruments, are subject to interest
rate risk and will decline in value if market interest rates increase.

                                      22

The Company operates internationally, and thus is subject to potentially
adverse movements in foreign currency rate changes. The Company is exposed to
market risk from foreign exchange rate fluctuations of the Chinese yuan, the
euro and the British pound sterling to the U.S. dollar as the financial
position and operating results of the Company's Chinese subsidiary, U.K.
subsidiary and European operations are translated into U.S. dollars for
consolidation. At the current level of R&D Europe operating results, a 10%
increase or decrease in the average exchange rate used to translate operating
results into U.S. dollars would have an approximate $1.8 million effect on
annual consolidated operating income. Month-end exchange rates between the
British pound and the U.S. dollar were as follows:

                             Year Ended June 30,
                         2007      2006      2005
                       --------  --------  --------
High                      $2.00     $1.87     $1.92
Low                        1.87      1.72      1.79
Average                    1.95      1.78      1.86

The Company's exposure to foreign exchange rate fluctuations also arises from
transferring funds from the U.K. subsidiary to the U.S. subsidiary and from
transferring funds from the German subsidiary and French sales office to the
U.K. subsidiary. At June 30, 2007 and 2006, the Company had $1.1 million and
$257,000, respectively, of dollar denominated intercompany debt at its U.K.
subsidiary and the U.K. subsidiary had $525,000 and $509,000, respectively,
of dollar denominated intercompany debt from its European operations. These
intercompany balances are revolving in nature and are not deemed to be long-
term balances. The Company's U.K. subsidiary recognized net foreign currency
losses of 42,000 British pound sterling ($82,000) for the year ended June 30,
2007 and net foreign currency gains of 17,000 British pound sterling
($30,000) and 135,000 British pound sterling ($251,000) for the years ended
June 30, 2006 and 2005, respectively. The Company's German subsidiary
recognized net foreign currency losses of 125,000 Euro ($157,000) for the
year ended June 30, 2005. The Company does not enter into foreign exchange
forward contracts to reduce its exposure to foreign currency rate changes on
intercompany foreign currency denominated balance sheet positions.

Forward-looking Information

Statements in this Annual Report, and elsewhere, that are forward-looking
involve risks and uncertainties which may affect the Company's actual results
of operations. Certain of these risks and uncertainties which have affected
and, in the future, could affect the Company's actual results are discussed
below.

The Company's biotechnology products are sold primarily to research
scientists at pharmaceutical and biotechnology companies and at university
and government research institutions. Changes in spending on research by such
companies and in funding of such universities and institutions by government,
including the National Institutes of Health, affects the revenues and
earnings of the Company. The Company carries essentially no backlog of orders
and changes in the level of orders received and filled daily can cause
fluctuations in quarterly revenues and earnings.

Approximately one quarter of the Company's sales are made through its
European subsidiary, R&D Systems Europe, which makes its sales in foreign
currencies. The Company's revenues and earnings are, therefore, affected by
fluctuations in currency exchange rates.

The Company recently established a subsidiary in China to provide
warehousing, marketing, sales and technical services for the growing Chinese
market. The Company's ability to recover its investment is dependent upon its
ability to retain current third-party distributors in China and expand its
market share in the region.

The biotechnology industry is subject to rapid and significant technological
change. While the hematology controls industry historically has been less
subject to rapid change, it too is evolving and is impacted significantly by
changes in the automated testing equipment offered by instrument
manufacturers. Competitors of the Company are numerous and include, among
others, specialized biotechnology firms, medical laboratory instrument and
equipment manufacturers and disposables suppliers, major pharmaceutical
companies, universities and other research institutions. There can be no
assurance that the Company's competitors will not succeed in developing
technologies and products that are more effective than any which have been or
are being developed by the Company or that would render the Company's
technologies and products obsolete or noncompetitive.

The Company's success will depend, in part, on its ability to obtain licenses
and patents, maintain trade secret protection and operate without infringing
the proprietary rights of others. The Company has obtained and is negotiating
licenses to produce a number of cytokines and related products claimed to be
owned by others. Since the Company has not conducted a patent infringement
study for each of its products, it is possible that products of the Company
may unintentionally infringe patents of third parties or that the Company may
have to alter its products or processes, pay licensing fees or cease certain
activities because of patent rights of third parties, thereby causing
additional unexpected costs and delays which may have a material adverse
effect on the Company.

                                 23

The Company's expansion strategies, which include internal development of new
products, collaborations, investments in joint ventures and companies
developing new products related to the Company's business, and the
acquisition of companies for new products and additional customer base, carry
risks that objectives will not be achieved and future earnings will be
adversely affected. Under the equity method of accounting, a percentage of
the losses of certain companies in which the Company invests will be reported
as losses of the Company. The Company may not have control of the expense
levels of such companies and their losses may be greater than those
anticipated by the Company. Additionally, if the Company determines that its
investment in unconsolidated companies is "other than temporarily" impaired,
the Company may write off its entire investment in such company.

Ongoing research and development activities and the production and marketing
of certain of the Company's products are subject to regulation by numerous
governmental authorities in the United States and other countries. The
approval process applicable to clinical diagnostic products of the type that
may be developed by the Company may take a year or more. Delays in obtaining
approvals could adversely affect the marketing of new products developed by
the Company.

Recruiting and retaining qualified scientific and production personnel to
perform research and development work and product manufacturing are critical
to the Company's success. The Company's anticipated growth and its expected
expansion into areas and activities requiring additional expertise will
require the addition of new personnel and the development of additional
expertise by existing personnel. The failure to attract and retain such
personnel could adversely affect the Company's business.

The Company undertakes no obligation to update or revise any forward-looking
statements made due to new information or future events. Investors are
cautioned not to place undue emphasis on these statements.


             ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
                             ABOUT MARKET RISK

See discussion under "Market Risk" in Item 7. Management's Discussion and
Analysis of Financial Conditions and Results of Operations.

                                   24


           ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                    CONSOLIDATED STATEMENTS OF EARNINGS
                     TECHNE Corporation and Subsidiaries
                     (in thousands, except per share data)

                                                 Year Ended June 30,
                                              2007      2006     2005
                                            --------  --------  --------
Net sales                                   $223,482  $202,617  $178,652
Cost of sales                                 46,667    45,718    36,813
                                            --------  --------  --------
Gross margin                                 176,815   156,899   141,839
                                            --------  --------  --------
Operating expenses:
Selling, general and administrative           30,965    27,604    24,476
Research and development                      20,082    18,825    18,379
Amortization of intangible assets              1,614     1,967     1,221
                                            --------  --------  --------
  Total operating expenses                    52,661    48,396    44,076
                                            --------  --------  --------
Operating income                             124,154   108,503    97,763
                                            --------  --------  --------
Other expense (income):
Interest expense                               1,083       964       822
Interest income                               (8,434)   (4,708)   (4,109)
Other non-operating expense, net               2,574     1,084     1,163
                                            --------  --------  --------
  Total other income                          (4,777)   (2,660)   (2,124)
                                            --------  --------  --------
Earnings before income taxes                 128,931   111,163    99,887
Income taxes                                  43,820    37,812    33,755
                                            --------  --------  --------
Net earnings                                $ 85,111  $ 73,351  $ 66,132
                                            ========  ========  ========
Earnings per share:
  Basic                                     $   2.16  $   1.88  $   1.64
  Diluted                                   $   2.15  $   1.85  $   1.62
Weighted average common shares outstanding:
  Basic                                       39,406    39,049    40,359
  Diluted                                     39,513    39,594    40,920

              See Notes to Consolidated Financial Statements.

                                     25

                          CONSOLIDATED BALANCE SHEETS
                    TECHNE Corporation and Subsidiaries
               (in thousands, except share and per share data)

                                                             June 30,
                                                          2007      2006
                                                        --------  --------
Assets
Current assets:
 Cash and cash equivalents                              $135,485  $ 89,634
 Short-term available-for-sale investments                29,289    19,212
 Trade accounts receivable, less allowance for
  doubtful accounts of $141 and $120, respectively        29,559    23,769
 Other receivables                                         1,407     1,309
 Inventories                                               8,757     9,024
 Deferred income taxes                                     7,446     6,121
 Prepaid expenses                                            895       753
                                                        --------  --------
     Total current assets                                212,838   149,822
 Available-for-sale investments                           91,433    77,660
 Property and equipment, net                              91,535    88,772
 Goodwill                                                 25,068    25,308
 Intangible assets, net                                    5,099     6,713
 Deferred income taxes                                     4,362     4,638
 Investments in unconsolidated entities                   24,165    17,195
 Other assets                                                344       404
                                                        --------  --------
                                                        $454,844  $370,512
                                                        ========  ========
Liabilities and Stockholders' Equity
Current liabilities:
 Trade accounts payable                                 $  5,098  $  3,627
 Salaries, wages and related accruals                      6,013     5,148
 Other accounts payable and accrued expenses               1,836     1,833
 Income taxes payable                                      4,246     6,129
 Current portion of long-term debt                            --     1,229
                                                        --------  --------
     Total current liabilities                            17,193    17,966
Long-term debt, less current portion                          --    12,198
                                                        --------  --------
     Total liabilities                                    17,193    30,164
                                                        --------  --------
Commitments and contingencies (Note H)
Stockholders' equity:
 Undesignated capital stock, no par; authorized
  5,000,000 shares; none issued or outstanding                --        --
 Common stock, par value $.01 a share; authorized
  100,000,000 shares; issued and outstanding
  39,455,677 and 39,376,782 shares, respectively             395       394
 Additional paid-in capital                              109,993   105,041
 Retained earnings                                       314,339   229,228
 Accumulated other comprehensive income                   12,924     5,685
                                                        --------  --------
     Total stockholders' equity                          437,651   340,348
                                                        --------  --------
                                                        $454,844  $370,512
                                                        ========  ========

                   See Notes to Consolidated Financial Statements.

                                         26

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                              AND COMPREHENSIVE INCOME
                    TECHNE Corporation and Subsidiaries
                                  (in thousands)


                                                                              Accumulated
                                                                              Other
                                                        Additional            Compre-
                                        Common  Stock   Paid-in     Retained  hensive
                                        Shares  Amount  Capital     Earnings  Income         Total
                                        ------  ------  ----------  --------  ------------  --------
                                                                         

Balance at June 30, 2004 (Note A)       41,155   $ 412    $ 72,060  $219,628  $ 5,325       $297,425
 Comprehensive income:
  Net earnings                              --      --          --    66,132       --         66,132
  Other comprehensive
   income, net of tax:
   Foreign currency
    translation adjustments                 --      --          --        --   (1,464)        (1,464)
   Unrealized losses on available-
    for-sale investments                    --      --          --        --     (231)          (231)
                                                                                            --------
 Comprehensive income                                                                         64,437
 Common stock issued for exercise
  of warrant                               120       1       1,425        --       --          1,426
 Common stock issued for exercise
  of options                               269       3       6,750        --       --          6,753
 Surrender and retirement of stock
  to exercise options                       (4)     (1)         --      (166)      --           (167)
 Repurchase and retirement of
  common stock                          (2,903)    (29)         --  (103,645)      --       (103,674)
 Contribution to Stock Bonus Plan           --      --         308        --       --            308
 Tax benefit from exercise of
  stock options                             --      --       1,361        --       --          1,361
                                        ------  ------  ----------  --------  ------------  --------
Balances at June 30, 2005               38,637     386      81,904   181,949    3,630        267,869
 Comprehensive income:
  Net earnings                              --      --          --    73,351       --         73,351
  Other comprehensive
   income, net of tax:
   Foreign currency
    translation adjustments                 --      --          --        --    2,539          2,539
   Unrealized losses on available-
    for-sale investments                    --      --          --        --     (484)          (484)
                                                                                            --------
 Comprehensive income                                                                         75,406
 Common stock issued for
  exercise of options                      742       8      12,633        --       --         12,641
 Surrender and retirement of
  stock to exercise options                 (2)     (0)         --       (91)      --            (91)
 Repurchase and retirement of
  common stock                              --      --          --   (25,981)      --        (25,981)
 Stock-based compensation expense           --      --       1,628        --       --          1,628
 Tax benefit from exercise of
  stock options                             --      --       8,876        --       --          8,876
                                        ------  ------  ----------  --------  ------------  --------
Balances at June 30, 2006               39,377     394     105,041   229,228    5,685        340,348
 Comprehensive income:
  Net earnings                              --      --          --    85,111       --         85,111
  Other comprehensive
   income, net of tax:
   Foreign currency
    translation adjustments                 --      --          --        --    6,879          6,879
   Unrealized gains on available-
    for-sale investments                    --      --          --        --      360            360
                                                                                           ---------
 Comprehensive income                                                                         92,350
 Common stock issued for
  exercise of options                       81       1       2,850        --       --          2,851
 Surrender and retirement of stock to
  exercise options                          (2)     (0)       (111)       --       --           (111)
 Stock-based compensation expense           --      --       1,576        --       --          1,576
 Tax benefit from exercise of
  stock options                             --      --         637        --       --            637
                                        ------  ------  ----------  --------  ------------  --------
Balances at June 30, 2007               39,456   $ 395    $109,993  $314,339  $12,924       $437,651
                                        ======  ======  ==========  ========  ============  ========


                             See Notes to Consolidated Financial Statements.

                                          27

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       TECHNE Corporation and Subsidiaries
                                (in thousands)
                                                 Year Ended June 30,
                                              2007      2006     2005
                                            --------  --------  --------
Cash flows from operating activities:
 Net earnings                               $ 85,111  $ 73,351  $ 66,132
 Adjustments to reconcile net earnings to
  net cash provided by operating activities:
  Depreciation and amortization                6,994     6,955     6,108
  Deferred income taxes                         (797)     (937)      672
  Stock-based compensation expense             1,576     1,628        --
  Excess tax benefit from stock
   option exercises                             (534)   (7,989)       --
  Losses by equity method investees              966       418       306
  Other                                          168       129       104
 Change in operating assets and liabilities,
  net of acquisitions:
  Trade accounts and other receivables        (5,004)   (2,153)   (1,034)
  Inventories                                    205     1,111      (325)
  Prepaid expenses                              (117)      169        51
  Trade, other accounts payable
   and accrued expenses                        1,380       253       153
  Salaries, wages and related accruals         2,055     1,554     1,959
  Income taxes payable                        (1,500)   11,100       307
                                            --------  --------  --------
     Net cash provided by operating
      activities                              90,503    85,589    74,433

Cash flows from investing activities:
 Additions to property and equipment          (8,076)   (4,603)  (11,410)
 Purchase of available-for-sale investments  (49,405)  (94,985) (146,870)
 Proceeds from maturities of available-for-
  sale investments                            17,515     8,150    33,256
 Proceeds from sale of available-for-sale
  investments                                  8,074    50,058   178,760
 Increase in other long-term assets             (125)       --      (461)
 Acquisitions, net of cash acquired               --   (19,587)       --
 Increase in investments in
  unconsolidated entities                     (7,900)   (9,750)       --
                                            --------  --------  --------
     Net cash (used in) provided by
      investing activities                   (39,917)  (70,717)   53,275

Cash flows from financing activities:
 Issuance of common stock                      2,740    12,550     8,012
 Excess tax benefit from stock
  option exercises                               534     7,989        --
 Purchase of common stock for
  stock bonus plans                           (1,222)   (1,292)     (260)
 Repurchase of common stock                       --   (25,981) (103,674)
 Payments on long-term debt                  (13,427)   (1,189)   (1,241)
                                            --------  --------  --------
     Net cash used in financing activities   (11,375)   (7,923)  (97,163)
                                            --------  --------  --------
Effect of exchange rate changes on cash
 and cash equivalents                          6,640     2,341    (1,402)
                                            --------  --------  --------
Net increase in cash and cash equivalents     45,851     9,290    29,143
Cash and cash equivalents at
 beginning of year                            89,634    80,344    51,201
                                            --------  --------  --------
Cash and cash equivalents at end of year    $135,485  $ 89,634  $ 80,344
                                            ========  ========  ========

             See Notes to Consolidated Financial Statements.

                                    28

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     TECHNE Corporation and Subsidiaries

               Years Ended June 30, 2007, 2006 and 2005

A.	Description of business and summary of significant accounting policies:

Description of business: TECHNE Corporation and Subsidiaries (the Company)
are engaged in the development and manufacture of biotechnology products and
hematology calibrators and controls. These activities are conducted
domestically through its wholly-owned subsidiary, Research and Diagnostic
(R&D) Systems, Inc. Through its wholly-owned U.K. subsidiary, R&D Systems
Europe Ltd. (R&D Europe), the Company distributes biotechnology products
throughout Europe. R&D Systems Europe Ltd. has a sales subsidiary, R&D
Systems GmbH, in Germany and a sales office in France. In late fiscal 2007,
the Company established a subsidiary, R&D Systems China Co. Ltd. (R&D China),
in Shanghai, China, to distribute biotechnology products throughout China.

R&D Systems acquired two subsidiaries effective July 1, 2005. Fortron Bio
Science, Inc. (Fortron), a developer and manufacturer of monoclonal and
polyclonal antibodies, antigens and other biological reagents, was relocated
to the Company's Minneapolis, Minnesota facility in the first quarter of
fiscal 2006. Subsequent to June 30, 2007, Fortron was merged into R&D
Systems. The second subsidiary acquired on July 1, 2005, BiosPacific, Inc.
(BiosPacific), located in Emeryville, California, is a worldwide supplier of
biologics to manufacturers of in vitro diagnostic systems and
immunodiagnostic kits. BiosPacific is the primary distributor of Fortron
products. Fortron and BiosPacific had shared a unique strategic relationship
since 1992 that combined Fortron's development and manufacturing excellence
with BiosPacific's marketing and sales expertise.

Estimates: The preparation of consolidated financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Risk and uncertainties: There are no concentrations of business transacted
with a particular customer or supplier nor concentrations of revenue from a
particular product or geographic area that would severely impact the Company
in the near term.

Principles of consolidation: The consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries. All
intercompany accounts and transactions have been eliminated.

Translation of foreign financial statements: Assets and liabilities of the
Company's foreign operations are translated at year-end rates of exchange and
the foreign statements of earnings are translated at the average rate of
exchange for the year. Gains and losses resulting from translating foreign
currency financial statements are not included in operations but are
accumulated in other comprehensive income. Foreign currency transaction gains
and losses are included in operations.

Revenue recognition: The Company recognizes revenue when persuasive evidence
of an arrangement exists, delivery has occurred or services have been
rendered, the price is fixed or determinable and collectibility is reasonably
assured. Payment terms for shipments to end-users are net 30 days. Payment
terms for distributor shipments may range from 30 to 90 days. Products are
shipped FOB shipping point. Freight charges billed to end-users are included
in net sales and freight costs are included in cost of sales. Freight charges
on shipments to distributors are paid directly by the distributor. Any claims
for credit or return of goods must be made within 10 days of receipt.
Revenues are reduced to reflect estimated credits and returns.

Research and development: Research and development expenditures are expensed
as incurred. Development activities generally relate to creating new
products, improving or creating variations of existing products, or modifying
existing products to meet new applications.

Advertising costs: Advertising expenses (including production and
communication costs) for fiscal 2007, 2006 and 2005 were $2.8 million, $2.6
million and $2.6 million, respectively. The Company expenses advertising
expenses as incurred.

                                29

Income taxes: The Company uses the asset and liability method of accounting
for income taxes. Deferred tax assets and liabilities are recognized to
record the income tax effect of temporary differences between the tax basis
and financial reporting basis of assets and liabilities. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes
the enactment date.

Cash and equivalents: Cash and cash equivalents include cash on hand and
highly-liquid investments with original maturities of three months or less.

Available-for-sale investments: Available-for-sale investments consist mainly
of debt instruments with original maturities of generally greater than three
months to three years. The Company considers all of its marketable securities
available-for-sale and reports them at fair market value. Fair market values
are based on quoted market prices. Unrealized gains and losses on available-
for-sale securities are excluded from income, but are included in other
comprehensive income. If an "other than temporary" impairment is determined
to exist, the difference between the value of the investment security
recorded in the financial statements and the Company's current estimate of
the fair value is recognized as a charge to earnings in the period in which
the impairment is determined.

Inventories: Inventories are stated at the lower of cost (first-in, first-out
method) or market. The Company regularly reviews inventory on hand for slow-
moving and obsolete inventory, inventory not meeting quality control
standards and inventory subject to expiration.

To meet strict customer quality standards, the Company has established a
highly controlled manufacturing process for proteins and antibodies. New
protein and antibody products require the initial manufacture of multiple
batches to determine if quality standards can be consistently met. In
addition, the Company will produce larger batches of established products
than current sales requirements due to economies of scale. The manufacturing
process for proteins and antibodies, therefore, has and will continue to
produce quantities in excess of forecasted usage. The Company values its
manufactured protein and antibody inventory based on a two-year usage
forecast. Protein and antibody quantities in excess of the two-year usage
forecast are considered impaired and not included in the inventory value.
Through March 31, 2006, due to changes in the Company's forecast, reserves
for previously written off inventories may have been reversed in subsequent
periods. Inventory reserves reversed through March 31, 2006 were not material
to the Company's consolidated results of operations, consolidated financial
position, assets or stockholders' equity as of and for each of the periods
presented. Subsequent to March 31, 2006, the Company changed its policy and
no longer writes up previously unvalued inventories. This change in valuation
method did not have a material impact on the Company's fiscal 2007 and 2006
consolidated financial statements. Sales of previously impaired protein and
antibody inventory for fiscal years 2007 and 2006 were not material.

Depreciation and amortization: Equipment is depreciated using the straight-
line method over an estimated useful life of five years. Buildings, building
improvements and leasehold improvements are amortized over estimated useful
lives of five to forty years.

Goodwill and intangible assets: At June 30, 2007 the Company had net
unamortized goodwill of $25.1 million. The Company completed its annual
impairment testing of goodwill and concluded that no impairment existed as of
June 30, 2007. The Company's annual assessment included comparison of the
carrying value of the net assets of the Company's biotechnology operations to
its share of the Company's market capitalization at year end. Other
intangible assets are being amortized over their estimated useful lives.

                                 30

Impairment of intangible and other long-lived assets: The Company reviews the
carrying value of intangible and other long-lived assets for impairment
whenever events or changes in circumstances indicate the carrying amount of
an asset may not be recoverable. Recoverability of assets groups subject to
impairment analysis require the Company to make assumptions and judgments
regarding the fair value of these asset groups. Asset groups are considered
to be impaired if their carrying value exceeds the groups' ability to
continue to generate income from operations and positive cash flow in future
periods. If asset groups are considered impaired, the amount by which the
carrying value exceeds its fair value would be expensed as an impairment
loss. As of June 30, 2007, the Company has determined that no impairment
exists.

Investments in unconsolidated entities: The Company has made equity
investments in several start-up and early development stage companies, among
them Nephromics, LLC (Nephromics), Hemerus Medical, LLC (Hemerus),
ChemoCentryx, Inc. (CCX) and Discovery Genomics, Inc. (DGI). The accounting
treatment of each investment (cost method or equity method) is dependent upon
a number of factors, including, but not limited to, the Company's share in
the equity of the investee and the Company's ability to exercise significant
influence over the operating and financial policies of the investee.

Share-based compensation: As permitted through June 30, 2005 by Statement of
Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based
Compensation, the Company elected to continue following the guidance of
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued
to Employees, for measurement and recognition of stock-based transactions
with employees. Through June 30, 2005, no compensation cost had been
recognized for stock options granted to employees under the plans. In
December 2004, the Financial Accounting Standards Board (FASB) issued SFAS
No. 123 (Revised 2004) (SFAS No. 123R), Share-Based Payment. The Statement is
a revision of SFAS No. 123 and supercedes APB No. 25. SFAS 123R focuses
primarily on accounting for transactions in which an entity obtains employee
services through stock-based payment transactions. The Statement requires a
public entity to measure the cost of employee services received in exchange
for the award of equity instruments based on the fair value of the award at
the date of grant.

The Company adopted SFAS No. 123R as of July 1, 2005 using the modified
prospective transition method. Under that transition method, compensation
cost recognized in fiscal 2007 and 2006 includes: (1) compensation cost for
all stock-based payments granted prior to, but not yet vested as of June 30,
2005, based on the grant date fair value calculated in accordance with the
original provisions of SFAS No. 123, and (2) compensation cost for all stock-
based payments granted subsequent to June 30, 2005, based on the grant-date
fair value calculated in accordance with the provisions of SFAS No. 123R.
Compensation cost is recognized using a straight-line method over the vesting
period and is net of estimated forfeitures. Stock-based compensation cost is
included within the same line item on the consolidated statement of earnings
as cash compensation paid to the optionee. Results for prior periods have not
been restated.

As a result of adopting SFAS No. 123R, compensation expense for each of the
years ended June 30, 2007 and 2006 was $1.6 million. The negative impact on
net earnings for each of the years ended June 30, 2007 and 2006 was $1.1
million. The adoption of SFAS No. 123R had a $0.03 negative impact on basic
and diluted earnings per share for each of the years ended June 30, 2007 and
2006.

If compensation cost for employee options granted under the Company's stock
option plans had been determined based on the fair value at the grant dates,
consistent with the methods provided in SFAS No. 123 the Company's net
earnings and earnings per share would have been as follows (in thousands,
except per share data):

                                 31

                                                   Year Ended
                                                  June 30, 2005
                                                  -------------
Net earnings:
 As reported                                           $ 66,132
 Less employee stock-based compensation,
  net of tax effect                                       1,530
 Plus employee stock-based compensation
  expense included in net earnings                           --
                                                       --------
Pro forma                                              $ 64,602
                                                       ========
Basic earnings per share:
 As reported                                           $   1.64
 Less employee stock-based compensation,
  net of tax effect                                        0.04
 Plus employee stock-based compensation
  expense included in net earnings                           --
                                                       --------
 Pro forma                                             $   1.60
                                                       ========
Diluted earnings per share:
 As reported                                           $   1.62
 Less employee stock-based compensation,
  net of tax effect                                        0.04
 Plus employee stock-based compensation
  expense included in net earnings                           --
                                                       --------
 Pro forma                                             $   1.58
                                                       ========

In fiscal 2007, the Company concluded that errors aggregating $3.1 million,
net of taxes, were made in the determination of stock-based compensation
expense in periods prior to fiscal 2003. None of the stock-based compensation
at issue was granted to or otherwise benefited any director or officer of the
Company. The Company has revised its previously issued consolidated financial
statements for this amount by recording a reduction in retained earnings and
an increase in additional paid-in capital as of July 1, 2004, which resulted
in no net impact on total stockholders' equity.

Derivative instruments and hedging activities: The Company has no free-
standing or embedded derivatives. All contracts that contain provisions
meeting the definition of a derivative also meet the requirements of, and
have been designated as, normal purchases or sales. The Company's policy is
to not use free-standing derivatives and to not enter into contracts with
terms that cannot be designated as normal purchases or sales.

Recent accounting pronouncements: In May 2005, the Financial Accounting
Standards Board (FASB) issued SFAS No. 154, Accounting Changes and Error
Corrections. The Statement replaces APB Opinion No. 20, Accounting Changes
and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements.
SFAS No. 154 requires companies to apply voluntary changes in accounting
principles retrospectively whenever practicable. The requirement is effective
for the Company in fiscal 2007. Adoption of the Statement did not have an
impact on the Company's consolidated financial statements.

In June 2006, the FASB issued Interpretation No. 48 (FIN 48), Accounting for
Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109.
FIN 48 requires disclosures of additional quantitative and qualitative
information regarding uncertain tax positions taken for tax-return purposes
that have not been recognized for financial reporting, along with analysis of
significant changes during each period. The Interpretation is effective for
the Company in fiscal 2008. The Company is currently evaluating the
provisions of FIN 48, but it is not expected to have a material impact on the
Company's consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. The
Statement establishes a single authoritative definition of fair value, sets
out a framework for measuring fair value, and requires additional disclosures
about fair value measurements. SFAS No. 157 applies only to fair value
measurements that are already required or permitted by other accounting
standards and is effective for the Company in fiscal 2009. The Company is
currently evaluating the impact of adopting SFAS No. 157, but it is not
expected to have a material impact on the Company's consolidated financial
statements.

In September 2006, the Securities and Exchange Commission released Staff
Accounting Bulletin 108 (SAB 108). SAB 108 provides interpretative guidance
on how the effects of the carryover or reversal of prior year misstatements
should be considered in quantifying a current year misstatement. SAB 108 is
effective for the Company for fiscal year 2007. Adoption of SAB 108 did not
have an impact on the Company's consolidated financial statements.

                                  32

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. The Statement permits entities to
choose to measure certain financial instruments at fair value. Unrealized
gains and losses on items for which the fair value option has been elected
are reported in earnings at each subsequent reporting date. SFAS No. 159 is
effective for the Company in fiscal 2009. The Company is currently evaluating
the impact of adopting SFAS No. 159, but it is not expected to have a
material impact on the Company's consolidated financial statements.

Reclassifications: Certain reclassifications have been made to prior years
consolidated financial statements to conform to the current year
presentation. These reclassifications had no impact on net earnings or
stockholders' equity as previously reported.

B.	Available-for-sale investments:

At June 30, 2007 and 2006, the amortized cost and market value of the
Company's available-for-sale securities by major security type were as
follows (in thousands):
                                                    June 30,
                                             2007               2006
                                    ------------------  ------------------
                                      Cost     Market     Cost    Market
                                    --------  --------  --------  --------
State and municipal debt securities $120,798  $120,505  $ 97,308  $ 96,549
Marketable equity security               400       217       400       323
                                    --------  --------  --------  --------
                                     121,198   120,722    97,708    96,872
Net unrealized losses                   (476)       --      (836)       --
                                    --------  --------  --------  --------
                                    $120,722  $120,722  $ 96,872  $ 96,872
                                    ========  ========  ========  ========

Gross unrealized gains and losses on state and municipal debt securities were
$12,000 and $305,000, respectively, at June 30, 2007. Gross unrealized gains
and losses on state and municipal debt securities were $1,000 and $760,000,
respectively, at June 30, 2006.

At June 30, 2007, the Company's investments in an unrealized loss position
that have been determined to be temporarily impaired were as follows (in
thousands):

                              Period of Unrealized Loss
                        Less Than       Greater Than
                        One Year         One Year              Total
                    ------------------ ------------------ ------------------
                    Fair    Unrealized Fair    Unrealized Fair   Unrealized
                    Value   Losses     Value   Losses     Value   Losses
                    ------- ---------- ------- ---------- ------- ----------
State and municipal
 debt securities    $26,834   $ 106    $64,934   $ 199    $91,768   $ 305
Marketable equity
 security                --      --        217     183        217     183
                    ------- ---------- ------- ---------- ------- ----------
                    $26,834   $ 106    $65,151   $ 382    $91,985   $ 488
                    ======= ========== ======= ========== ======= ==========

The unrealized losses on the Company's investments in state and municipal
debt securities were caused by interest rate increases. Because the Company
has the ability and intent to hold these investments until a recovery of fair
value, which may be at maturity, the Company does not consider these
investments to be other-than-temporarily impaired at June 30, 2007.

Contractual maturities of available-for-sale state and municipal debt
securities are shown below (in thousands). Expected maturities may differ
from contractual maturities because borrowers may have the right to recall or
prepay obligations with or without call or prepayment penalties.

Year Ending June 30, 2007:
--------------------------
Due within one year         $ 29,289
Due in one to three years     91,216
                            --------
Total debt securities        120,505
Marketable equity security       217
                            --------
                            $120,722
                            ========

The Company's investment in marketable equity securities is not material and
consists of an investment in the common stock of a publicly-held company
primarily focused on the development and sale of cancer diagnostic and
research products and services. The investee was considered a development
stage company through September 2005.

Long-term available-for-sale investments include $18.7 million of auction
rate-securities at June 30, 2007.

                                     33

Proceeds from maturities or sales of available-for-sale securities were $25.6
million, $58.2 million and $212.0 million during fiscal 2007, 2006 and 2005,
respectively. There were no material gross realized gains or losses on these
sales. Realized gains and losses are determined on the specific
identification method.

C.  Inventories:

Inventories consist of (in thousands):

                                            June 30,
                                        2007     2006
                                      -------  -------
Raw materials                         $ 3,821  $ 3,561
Finished goods                          4,811    5,344
Supplies                                  125      119
                                      -------  -------
                                      $ 8,757  $ 9,024
                                      =======  =======

D.  Property and equipment:

Property and equipment consist of (in thousands):

                                           June 30,
                                        2007      2006
                                      --------  --------
Cost:
Land                                  $  4,214  $  4,214
Buildings and improvements             100,617    88,399
Building construction in progress        3,205     9,965
Laboratory equipment                    20,657    19,473
Office and computer equipment            4,407     3,711
Leasehold improvements                     975       843
                                      --------  --------
                                       134,075   126,605
Less accumulated depreciation
 and amortization                       42,540    37,833
                                      --------  --------
                                      $ 91,535  $ 88,772
                                      ========  ========

E.  Goodwill and intangible assets:

Goodwill and intangible assets consist of (in thousands):

                                                    June 30,
                                  Useful Life     2007      2006
                                  -----------   --------  --------
Goodwill                              N/A       $ 51,374  $ 51,614
Less accumulated amortization                     26,306    26,306
                                                --------  --------
                                                $ 25,068  $ 25,308
                                                ========  ========

Customer relationships             2-10 years   $ 20,200  $ 20,200
Technology                         8-16 years      4,213     4,213
Trade names and trademarks            5 years      1,396     1,396
Supplier relationships                1 year          14        14
                                                --------  --------
                                                  25,823    25,823
Less accumulated amortization                     20,724    19,110
                                                --------  --------
                                                $  5,099  $  6,713
                                                ========  ========

The Company reduced goodwill by $240,000 in fiscal 2007 due to the
realization of pre-acquisition deferred tax assets of Fortron.

The estimated future amortization expense for intangible assets as of
June 30, 2007 is as follows (in thousands):

Year Ending June 30:
--------------------
2008                  $1,136
2009                     960
2010                     960
2011                     681
2012                     681
Thereafter               681
                      ------
                      $5,099
                      ======

F.	Investments in unconsolidated entities:

In September 2006, the Company invested $7.2 million for an 18% equity
interest in Nephromics. Nephromics has licensed technology related to the
diagnosis of preeclampsia and has sublicensed the technology to several major
diagnostic companies for the development of diagnostic assays. The Company
accounts for its investment in Nephromics under the equity method of
accounting as Nephromics is a limited liability corporation. The Company's
net investment in Nephromics was $6.8 million at June 30, 2007.

In fiscal 2004, the Company purchased a 10% interest in Hemerus for $3
million. In March 2006, the Company invested an additional $750,000 in
Hemerus, increasing its ownership percentage to 15% and in January 2007, the
Company invested an additional $700,000, increasing its ownership percentage
to 18%. Hemerus was formed in March 2001 and has acquired and is developing
technology for the separation of leukocytes from blood and blood components.
Hemerus owns two patents and has several patent applications pending and is
currently pursuing FDA clearance to market its products in the U.S. In
parallel with this investment, R&D Systems entered into a Joint Research
Agreement with Hemerus. The research involves joint projects to explore the
use of Hemerus's filter technology in applications within R&D Systems'
Hematology and Biotechnology Divisions. Such applications, if any, may have
commercial potential in other laboratory environments. The Company accounts
for its investment in Hemerus under the equity method of accounting as
Hemerus is a limited liability corporation. The Company's net investment in
Hemerus was $3.1 and $3.0 million at June 30, 2007 and 2006, respectively.

                                 34

The Company has invested in the preferred stock of CCX, a technology and drug
development company. At July 1, 2004, the Company held a 19.9% equity
interest in CCX. The Company has evaluated the cost versus equity method of
accounting for its investment in CCX and determined that it does not have the
ability to exercise significant influence over the operating and financial
policies of CCX and therefore, accounts for its investment on a cost basis.
In April 2006, the Company made an additional $9 million investment in CCX in
the form of a 5% convertible note subject to the limitation that the
Company's holdings in CCX not exceed 19.9% of the outstanding voting shares.
In June 2006, $4.3 million of the note was converted into CCX preferred
stock. In August 2006, the remainder of the note and accrued interest were
converted into CCX preferred stock. The Company's equity interest in CCX
after the August 2006 conversion was 19.3%. The Company's net investment in
CCX at June 30, 2007 was $14.3 million and at June 30, 2006 was $14.2
million, including the convertible note and accrued interest aggregating $4.8
million.

In fiscal 2002, the Company made an equity investment of $3 million in DGI
preferred stock. The Company holds a 38% equity interest in DGI and accounted
for this investment under the equity method of accounting through fiscal
2004. During fiscal 2004, the Company determined that its investment in DGI
was other than temporarily impaired and wrote off the remaining net
investment of $1.5 million. The Company has been issued warrants for 500,000
shares of DGI preferred stock at $.50 per share, which expire on January 15,
2014.

Except for the April 2006 CCX convertible note, the Company does not provide
loans, guarantees or other financial assistance to Nephromics, Hemerus, CCX
or DGI and has no obligation to provide additional funding.

G.  Debt:

The Company's short-term line of credit facility consists of an unsecured
line of credit of $0.8 million at June 30, 2007. The line of credit expires
on October 31, 2007. The interest rate charged on the line of credit is a
floating rate at the one-month London interbank offered rate (Libor) plus
1.75%. The floating rate on the line of credit was 7.1% at June 30, 2007.
There were no borrowings on the line outstanding as of June 30, 2007 and
2006.

On October 31, 2006, the Company repaid its mortgage debt. The total payment
of $13.8 million included the mortgage principal balance, accrued interest
and a 5% prepayment penalty of $651,000. The prepayment penalty and $78,000
of unamortized loan origination fees are included in interest expense for
fiscal 2007.

H.  Commitments and contingencies:

The Company leases buildings, vehicles and various data processing, office
and laboratory equipment under operating leases. These leases provide for
renewal or purchase options during or at the end of the lease periods. At
June 30, 2007, aggregate net minimum rental commitments under noncancelable
leases having an initial or remaining term of more than one year are payable
as follows (in thousands):

Year Ending June 30:
--------------------
2008                  $  814
2009                     752
2010                     703
2011                     626
2012                     528
Thereafter             2,048
                      ------
                      $5,471
                      ======

Total rent expense was approximately $762,000, $710,000 and $654,000 for the
years ended June 30, 2007, 2006 and 2005, respectively.

The Company is routinely subject to claims and involved in legal actions
which are incidental to the business of the Company. Although it is difficult
to predict the ultimate outcome of these matters, management believes that
any ultimate liability will not materially affect the consolidated financial
position or results of operations of the Company.

                                 35

I.  Stockholders' equity:

Stock option plans: The Company has stock option plans which provide for the
granting of stock options to employees (the TECHNE Corporation 1997 Incentive
Stock Option Plan) and to employees, officers, directors and consultants (the
TECHNE Corporation 1998 Nonqualified Stock Option Plan). The plans are
administered by the Board of Directors, or a committee designated by the
Board, which determines the persons who are to receive awards under the
plans, the number of shares subject to each award and the term and exercise
price of each option. The maximum term of options granted under all plans is
ten years. The number of shares of common stock authorized to be issued and
available for grant at June 30, 2007 are as follows (in thousands):

                                   Available
                       Authorized  for Grant
                       ----------  ---------
1997 Plan                 3,200       2,350
1998 Plan                 1,600         925

The fair value of options granted under the Company's stock option plans were
estimated on the date of grant using the Black-Scholes option-pricing model
with the following assumptions used:

                                                 Year Ended June 30,
                                              2007      2006     2005
                                            --------  --------  --------

Dividend yield                                    --        --        --
Expected volatility                          25%-47%   32%-53%   40%-57%
Risk-free interest rates                   4.5%-5.1% 4.0%-5.1% 3.1%-3.9%
Expected lives                               6 years   6 years   6 years

The Company has not paid cash dividends and does not have any plans to do so,
therefore an expected dividend yield of zero was used to estimate fair value
of options granted. The expected annualized volatility is based on the
Company's historical stock price over a period equivalent to the expected
life of the option granted. The risk-free interest rate is based on U.S.
Treasury constant maturity interest rate with a term consistent with the
expected life of the options granted. Separate groups of employees that have
similar historical exercise behavior with regard to option exercise timing
and forfeiture rates are considered separately in determining option fair
value.

Stock option activity under the Plans for the three years ended June 30,
2007, consist of the following (shares in thousands):

                                        Weighted
                                        Average   Weighted Avg. Aggregate
                                        Exercise  Contractual   Intrinsic
                              Shares    Price     Live (Yrs.)   Value
                              ------    --------  ------------- ---------
Outstanding at June 30, 2004   1,337    $ 23.60
Granted                           64      39.08
Forfeited or expired              (2)     36.50
Exercised                       (269)     25.14
                              ------
Outstanding at June 30, 2005   1,130      24.11
Granted                           43      53.95
Forfeited or expired             (10)     52.41
Exercised                       (742)     17.04
                              ------
Outstanding at June 30, 2006     421      38.89
Granted                           84      58.01
Forfeited or expired              (1)     65.00
Exercised                        (81)     35.32
                              ------
Outstanding at June 30, 2007     423      43.29       5.08      $6.0 million
                              ======
Exercisable at June 30:
2005                           1,059     $23.09
2006                             382      38.39
2007                             365      41.23       4.75      $5.8 million

The weighted average fair value of options granted during fiscal 2007, 2006
and 2005 was $24.18, $28.07 and $20.42, respectively. The total intrinsic
value of options exercised during fiscal 2007, 2006 and 2005 were $1.9
million, $28.6 million and $4.8 million, respectively. Stock option exercises
are satisfied through the issuance of new shares. The total fair value of
options vested during fiscal 2007, 2006 and 2005 were $1.8 million, $1.9
million and $2.3 million, respectively.

Stock-based compensation cost of $1.6 million was included in selling,
general and administrative expense in each of fiscal 2007 and 2006. As of
June 30, 2007, there was $813,000 of total unrecognized compensation cost
related to nonvested stock options which will be expensed over fiscal years
2008 through 2010.

                                  36

Stock repurchase: In March 2005, the Company repurchased approximately 2.9
million shares of its common stock under an accelerated stock buyback ("ASB")
transaction for an initial value of approximately $100 million ($34.45 per
share). The transaction was completed under a privately negotiated contract
with an investment bank. The investment bank borrowed the 2.9 million shares
to complete the transaction and purchased the replacement shares in the open
market over a nine-month period beginning in March 2005. The ASB agreement
was subject to a market price adjustment provision based upon a volume
weighted average price during the nine-month period. Approximately 1.8
million of the shares repurchased were subject to a collar, which effectively
set a minimum price the Company was obligated to pay for such shares. The
collar was established in exchange for an up-front payment of $3.5 million.
The Company had the option to settle the ASB agreement in cash or shares of
the Company's common stock and, accordingly the contract was classified as
equity. The ASB agreement was settled in December 2005 for a cash payment of
$26.0 million, which resulted in a total price paid per share of
approximately $44.67.

J.  Income taxes:

The provisions for income taxes consist of the following (in thousands):

                                                 Year Ended June 30,
                                              2007      2006     2005
                                            --------  --------  --------
Earnings before income taxes consist of:
 Domestic                                   $101,154  $ 90,011  $ 78,302
 Foreign                                      27,777    21,152    21,585
                                            --------  --------  --------
                                            $128,931  $111,163  $ 99,887
                                            ========  ========  ========
Taxes on income consist of:
 Currently payable:
  Federal                                   $ 32,244  $ 29,564  $ 24,675
  State                                        3,741     2,382     1,831
  Foreign                                      8,632     6,803     6,574
 Net deferred:
  Federal                                       (594)     (912)      270
  State                                         (217)      (66)      301
  Foreign                                         14        41       104
                                            --------  --------  --------
                                            $ 43,820  $ 37,812  $ 33,755
                                            ========  ========  ========

The following is a reconciliation of the federal tax calculated at the
statutory rate of 35% to the actual income taxes provided (in thousands):

                                                  Year Ended June 30,
                                               2007      2006     2005
                                             --------  --------  --------
Computed expected federal income tax expense $ 45,126  $ 38,907  $ 34,960
State income taxes, net of federal benefit      2,380     1,527     1,164
Extraterritorial income tax benefit              (454)   (1,008)   (1,102)
Research and development tax credits             (265)      (91)     (239)
Qualified production activity deduction        (1,029)     (879)       --
Tax-exempt interest                            (1,270)     (671)     (693)
(Decrease) increase in deferred tax
  valuation allowance                            (109)      (99)        7
Other                                            (559)      126      (342)
                                             --------  --------  --------
                                             $ 43,820  $ 37,812  $ 33,755
                                             ========  ========  ========

Temporary differences comprising deferred taxes on the consolidated balance
sheets are as follows (in thousands):

                                                  June 30,
                                               2007      2006
                                             --------  --------
Inventory reserves                           $  5,216  $  4,332
Inventory costs capitalized                     1,405     1,149
Unrealized profit on intercompany sales           692       579
Intangible asset amortization                   3,651     4,797
Depreciation                                    1,582     1,190
Excess tax basis in equity investments          2,942     2,905
Foreign tax credit carryforward                   376       522
Deferred compensation                           1,010       482
Other                                             332       308
Valuation allowance                            (3,318)   (3,427)
                                             --------  --------
  Total deferred tax assets                    13,888    12,837

Intangible asset amortization                  (1,162)   (1,301)
Other                                            (918)     (777)
                                             --------  --------
  Total deferred tax liabilities               (2,080)   (2,078)
                                             --------  --------
  Net deferred tax assets                    $ 11,808  $ 10,759
                                             ========  ========

A deferred tax valuation allowance is required when it is more likely than
not that all or a portion of deferred tax assets will not be realized. The
Company has provided a valuation allowance for the potential capital loss
carryover resulting from the excess tax basis in equity investment and on the
foreign tax credit carryforward. The Company believes that it is more likely
than not that the recorded deferred tax asset, net of valuation allowance,
will be realized.

                                   37

Undistributed earnings of the Company's foreign subsidiaries amounted to
approximately $85.3 million as of June 30, 2007. Deferred taxes have not been
provided on such undistributed earnings, as it is the Company's intent to
indefinitely reinvest the undistributed earnings in the foreign operations.

K.  Earnings per share:

The number of shares used to calculate earnings per share are as follows (in
thousands, except per share data):

                                                  Year Ended June 30,
                                               2007      2006     2005
                                             --------  --------  --------
Net earnings used for basic and diluted
 earnings per share                          $ 85,111  $ 73,351  $ 66,132
                                             ========  ========  ========

Weighted average shares used in
 basic computation                             39,406    39,049    40,359
Dilutive effect of forward contract                --       250       139
Dilutive stock options and warrants               107       295       422
                                             --------  --------  --------
Weighted average shares used in
 diluted computation                           39,513    39,594    40,920
                                             ========  ========  ========
Basic EPS                                    $   2.16  $   1.88  $   1.64
Diluted EPS                                  $   2.15  $   1.85  $   1.62

The dilutive effect of stock options and warrants in the above table excludes
all options for which the aggregate exercise proceeds exceeded the average
market price for the period. The number of potentially dilutive option shares
excluded from the calculation were 13,000, 7,000 and 208,000 at June 30,
2007, 2006 and 2005, respectively.

L.  Segment information:

The Company has three reportable operating segments based on the nature of
products and geographic location: biotechnology, R&D Systems Europe and
hematology. The biotechnology segment consists of R&D Systems' Biotechnology
Division, Fortron, BiosPacific and R&D China, which develop, manufacture and
sell biotechnology research and diagnostic products world-wide. R&D Systems
Europe distributes Biotechnology Division products throughout Europe. The
hematology segment develops and manufactures hematology controls and
calibrators for sale world-wide. No customer accounted for more than 10% of
the Company's net sales for the years ended June 30, 2007, 2006 and 2005.

The accounting policies of the segments are the same as those described in
Note A. In evaluating segment performance, management focuses on sales and
earnings before taxes.

Following is financial information relating to the operating segments (in
thousands):
                                                  Year Ended June 30,
                                               2007      2006     2005
                                            --------  --------  --------
External sales
 Biotechnology                              $146,614  $134,424  $111,153
 R&D Systems Europe                           61,766    52,954    51,315
 Hematology                                   15,102    15,239    16,184
                                            --------  --------  --------
Total external sales                         223,482   202,617   178,652
Intersegment sales - Biotechnology            26,070    23,957    21,590
                                            --------  --------  --------
Total sales                                  249,552   226,574   200,242
Less intersegment sales                      (26,070)  (23,957)  (21,590)
                                            --------  --------  --------
Total consolidated net sales                $223,482  $202,617  $178,652
                                            ========  ========  ========
Earnings before taxes
 Biotechnology                              $102,398  $ 89,687  $ 76,234
 R&D Systems Europe                           27,792    21,152    21,585
 Hematology                                    4,498     4,506     5,168
 Corporate and other                          (5,757)   (4,182)   (3,100)
                                            --------  --------  --------
Total earnings before taxes                 $128,931  $111,163  $ 99,887
                                            ========  ========  ========
Assets
 Biotechnology                              $216,282  $172,827  $133,518
 R&D Systems Europe                          108,110    79,725    64,254
 Hematology                                   23,189    17,727    16,656
 Corporate and other                         110,263   102,287    82,820
 Intersegment eliminations                    (3,000)   (2,054)   (1,985)
                                            --------  --------  --------
Total assets                                $454,844  $370,512  $295,263
                                            ========  ========  ========
Depreciation and amortization
 Biotechnology                              $  3,702  $  3,952  $  3,163
 R&D Systems Europe                              261       240       274
 Hematology                                      267       305       330
 Corporate and other                           2,764     2,458     2,341
                                            --------  --------  --------
Total depreciation and amortization         $  6,994  $  6,955  $  6,108
                                            ========  ========  ========
Capital purchases
 Biotechnology                              $  5,644  $  3,076  $  1,893
 R&D Systems Europe                              247       304       253
 Hematology                                      207       190       212
 Corporate and other                           1,978     1,033     9,052
                                            --------  --------  --------
Total capital purchases                     $  8,076  $  4,603  $ 11,410
                                            ========  ========  ========
                                   38

Corporate and other reconciling items include the results of unallocated
corporate expenses and assets, and the operations of the Company's equity
investments in Nephromics and Hemerus.

Following is financial information relating to geographic areas (in
thousands):
                                                  Year Ended June 30,
                                               2007      2006     2005
                                            --------  --------  --------
External sales
 United States                              $127,695  $118,780  $102,239
 Other areas                                  95,787    83,837    76,413
                                            --------  --------  --------
Total external sales                        $223,482  $202,617  $178,652
                                            ========  ========  ========
Long-lived assets
 United States                              $121,132  $120,383  $102,984
Other areas                                      914       814       723
                                            --------  --------  --------
Total long-lived assets                     $122,046  $121,197  $103,707
                                            ========  ========  ========

External sales are attributed to countries based on the location of the
customer/distributor. Long-lived assets are comprised of land, buildings and
improvements, equipment, goodwill and intangible assets.

M.  Benefit plans:

Profit sharing plans: The Company has Profit Sharing and Savings Plans for
non-union U.S. employees, which conform to IRS provisions for 401(k) plans.
The Company may make profit sharing contributions at the discretion of the
Board of Directors. Operations have been charged for contributions to the
plans of $1.4 million, $1.2 million and $1.2 million for the years ended
June 30, 2007, 2006 and 2005, respectively. The Company operates a defined
contribution pension plan for employees of R&D Systems Europe. Operations
have been charged for contributions to the plan of $153,000, $128,000 and
$113,000 for the years ended June 30, 2007, 2006 and 2005, respectively.

Stock bonus plans: The Company also has Stock Bonus Plans covering non-union
employees. The Company may make contributions to the plans in the form of
common stock, cash or other property at the discretion of the Board of
Directors. The Company purchases its common stock at market value for
contribution to the plans. For the years ended June 30, 2007, 2006 and 2005
operations have been charged for contributions to the plan of $1.5 million,
$1.2 million and $1.3 million, respectively.

Performance incentive program: Under certain employment agreements with
executive officers, the Company recorded bonuses of $130,000, $125,000 and
$90,000 for the years ended June 30, 2007, 2006 and 2005, respectively. In
addition, options for 2,505, 1,745 and 26,631 shares of common stock were
granted to the executive officers during fiscal 2007, 2006 and 2005,
respectively.

N.  Supplemental disclosures of cash flow information and noncash investing
and financing activities:

The Company paid and received cash for the following items (in thousands):

                                                  Year Ended June 30,
                                               2007      2006     2005
                                            --------  --------  --------
Income taxes paid                           $ 46,192  $ 27,731  $ 26,794
Interest paid                                  1,090       947       807

In fiscal 2007, stock options for 3,000 shares of common stock were exercised
by the surrender of 1,810 shares of common stock at fair market value of
$111,000. In fiscal 2006, stock options for 2,500 shares of common stock were
exercised by the surrender of 1,517 shares of common stock at fair market
value of $91,000. In fiscal 2005, stock options for 17,106 shares of common
stock were exercised by the surrender of 4,139 shares of common stock at fair
market value of $167,000.

O.  Accumulated other comprehensive income:

Accumulated other comprehensive income (loss) consists of (in thousands):

                                                  Year Ended June 30,
                                               2007      2006     2005
                                            --------  --------  --------
Foreign currency translation adjustments    $ 13,400  $  6,521  $  3,982
Unrealized losses on available-
 for-sale investments                           (476)     (836)     (352)
                                            --------  --------  --------
                                            $ 12,924  $  5,685  $  3,630
                                            ========  ========  ========

                                    39


              REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders TECHNE Corporation
Minneapolis, Minnesota

We have audited the accompanying consolidated balance sheets of TECHNE
Corporation and Subsidiaries (the Company) as of June 30, 2007 and 2006, and
the related consolidated statements of earnings, stockholders' equity and
comprehensive income, and cash flows for each of the years in the three-year
period ended June 30, 2007. In connection with our audits of the consolidated
financial statements, we also have audited the accompanying financial
statement schedule included at Item 15A(2).  These consolidated financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedule based on
our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of TECHNE
Corporation and Subsidiaries as of June 30, 2007 and 2006, and the results of
their operations and their cash flows for each of the years in the three-year
period ended June 30, 2007, in conformity with U.S. generally accepted
accounting principles. Also, in our opinion, the accompanying financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.

As disclosed in Note A to the consolidated financial statements, the Company
adopted the provisions of Financial Accounting Standards Board Statement No.
123 (Revised 2004), Share-Based Payment, in fiscal 2006.

We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the effectiveness of TECHNE
Corporation's internal control over financial reporting as of June 30, 2007,
based on criteria established in Internal Control-Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO), and our report dated August 27, 2007 expressed an unqualified opinion
on the effective operation of internal control over financial reporting.

/s/ KPMG

Minneapolis, Minnesota
August 27, 2007


                                   40



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

None.


                  ITEM 9A.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company conducted an
evaluation, under the supervision and with the participation of the principal
executive officer and principal financial officer, of the Company's
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-
15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")).  Based
on this evaluation, the principal executive officer and principal financial
officer concluded that the Company's disclosure controls and procedures are
effective to ensure that information required to be disclosed by the Company
in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms.

Changes in Internal Controls

There was no change in the Company's internal control over financial
reporting during the Company's most recently completed fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.

Management's Annual Report on Internal Control over Financial Reporting

The management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is defined
in Exchange Act Rule 13a-15(f). As of June 30, 2007, management, under the
supervision of the chief executive officer and chief financial officer,
assessed the effectiveness of the Company's internal control over financial
reporting based on the criteria for effective internal control over financial
reporting established in "Internal Control-Integrated Framework," issued by
the Committee of Sponsoring Organizations (COSO) of the Treadway Commission.
Based on the assessment, management determined that the Company maintained
effective internal control over financial reporting as of June 30, 2007.

KPMG LLP, the independent registered public accounting firm that audited the
consolidated financial statements of the Company included in this Annual
Report on Form 10-K, has issued an audit report on the effectiveness of the
Company's internal control over financial reporting as of June 30, 2007. The
report, which expresses an unqualified opinion on the effectiveness of the
Company's internal control over financial reporting as of June 30, 2007,
follows.

                               41

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
TECHNE Corporation

We have audited TECHNE Corporation and Subsidiaries' (the Company) internal
control over financial reporting as of June 30, 2007, based on criteria
established in Internal Control - Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).
TECHNE Corporation's management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in the
accompanying report entitled "Management's Annual Report on Internal Control
Over Financial Reporting". Our responsibility is to express an opinion on the
Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk. Our audit also included
performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion.

A company's internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles.  A company's
internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of
the assets of the company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company's assets that could have a
material effect on the financial statements.

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements.  Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

In our opinion, TECHNE Corporation and subsidiaries maintained, in all
material respects, effective internal control over financial reporting as of
June 30, 2007, based on criteria established in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission.

We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheets
of TECHNE Corporation and subsidiaries as of June 30, 2007 and 2006, and the
related consolidated statements of earnings, stockholders' equity and
comprehensive income, and cash flows for each of the years in the three-year
period ended June 30, 2007, and our report dated August 27, 2007 expressed an
unqualified opinion on those consolidated financial statements.


/s/  KPMG LLP

Minneapolis, Minnesota
August 27, 2007

                                    42


                            ITEM 9B.  OTHER INFORMATION

None.

                                   PART III

       ITEM 10.  DIRECTORS,  EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Other than "Executive Officers of the Company" which is set forth at the end
of Part I of this Form 10-K, the information required by Item 10 is
incorporated herein by reference to the sections entitled "Election of
Directors",  "Corporate Governance" and "Compliance With Section 16(a) of the
Securities Exchange Act" in the Company's proxy statement for its 2007 Annual
Meeting of Shareholders which will be filed with the Securities and Exchange
Commission pursuant to Regulation 14A within 120 days after the close of the
fiscal year for which this report is filed.


                       ITEM 11.  EXECUTIVE COMPENSATION

The information required by Item 11 is incorporated herein by reference to
the section entitled "Executive Compensation Discussion and Analysis" in the
Company's proxy statement for its 2007 Annual Meeting of Shareholders which
will be filed with the Securities and Exchange Commission pursuant to
Regulation 14A within 120 days after the close of the fiscal year for which
this report is filed.


               ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
              OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information about the Company's equity compensation plans at June 30, 2007 is
as follows (shares in thousands):

                                                          Number of
                         Number of         Weighted-      Securities
                         Securities to be  Average        Remaining
                         Issued Upon       Exercise Price Available for
                         Exercise of       of Outstanding Future Issuance
                         Outstanding       Options,       Under Equity
                         Options, Warrants Warrants and   Compensation
Plan Category            and Rights        Rights         Plans
------------------------ ----------------- -------------- ---------------
Equity compensation
 plans approved by
 Stockholders (1)              423             $43.29         3,275
Equity compensation
 plans not approved
 by Stockholders                --                 --            --
-----------------
(1) Includes the Company's 1997 Incentive Stock Option Plan and 1998
    Nonqualified Stock Option Plans.

The remaining information required by Item 12 is incorporated by reference to
the sections entitled "Principal Shareholders" and "Management Shareholdings"
in the Company's proxy statement for its 2007 Annual Meeting of Shareholders
which will be filed with the Securities and Exchange Commission pursuant to
Regulation 14A within 120 days after the close of the fiscal year for which
this report is filed.


     ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
                         DIRECTOR INDEPENDENCE

The information required by Item 13 is incorporated by reference to the
section entitled "Board Independence" in the Company's proxy statement for
its 2007 Annual Meeting of Stockholders which will be filed with the
Securities and Exchange Commission pursuant to Regulation 14A within 120 days
after the close of the fiscal year for which this report is filed.

There were no reportable related party transactions during fiscal 2007.

                                    43


               ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 16 is incorporated herein by reference to
the section entitled "Audit Fees" in the Company's proxy statement for its
2007 Annual Meeting of Shareholders which will be filed with the Securities
and Exchange Commission pursuant to Regulation 14A within 120 days after the
close of the fiscal year for which this report is filed.


                                  PART IV

             ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

A.  (1)  List of Financial Statements.

     The following Consolidated Financial Statements are filed as part of
     this Report:

     Consolidated Statements of Earnings for the Years Ended
         June 30, 2007, 2006 and 2005

     Consolidated Balance Sheets as of June 30, 2007 and 2006

     Consolidated Statements of Stockholders' Equity and Comprehensive
          Income for the Years Ended June 30, 2007, 2006 and 207

     Consolidated Statements of Cash Flows for the Years Ended
          June 30, 2007, 2006 and 2005

     Notes to Consolidated Financial Statements for the Years
          Ended June 30, 2007, 2006 and 2005

     Report of Independent Registered Public Accounting Firm


    (2) Financial Statement Schedules.

                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNT
                 YEARS ENDED JUNE 30, 2007, 2006 AND 2005
                               (in 000's)

                      Balance at       Provision                   Balance at
                      Beginning    Charged/(Credited)  Accounts    End of
                      of Year          to Income       Written Off Year
                      -----------  ------------------  ----------- ----------
Year ended
 June 30, 2007:
  Allowance for
   doubtful accounts     $120              $44           $  (23)      $141

Year ended
 June 30, 2006:
  Allowance for
   doubtful accounts      118               28              (26)       120

Year ended
 June 30, 2005:
  Allowance for
   doubtful accounts      233               23             (138)       118


    (3)  Exhibits.

     See Exhibit Index immediately following signature page.

                                     44


                                 SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) 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.

                                       TECHNE CORPORATION

Date:  August 27, 2007                 /s/ Thomas E. Oland
                                       ----------------------------
                                       By:  Thomas E. Oland
                                       Its:   President


Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.

Date                                   Signature and Title
----                                   ----------------------------
August 27, 2007                        /s/ Thomas E. Oland
                                       ----------------------------
                                       Thomas E. Oland
                                       Chairman of the Board, President,
                                       Treasurer, Chief Executive Officer
                                       and Director

August 27, 2007                        /s/ Roger C. Lucas, Ph.D.
                                       ----------------------------
                                       Dr. Roger C. Lucas
                                       Vice Chairman and Director

August 27, 2007                        /s/ Howard V. O'Connell
                                       ----------------------------
                                       Howard V. O'Connell, Director

August 27, 2007                        /s/ G. Arthur Herbert
                                       ----------------------------
                                       G. Arthur Herbert, Director

August 27, 2007                        /s/ Randolph C. Steer, Ph.D., M.D.
                                       ----------------------------
                                       Dr. Randolph C. Steer, Director

August 27, 2007                        /s/ Robert V. Baumgartner
                                       ----------------------------
                                       Robert V. Baumgartner, Director

August 27, 2007                        /s/ Charles A. Dinarello, M.D.
                                       ----------------------------
                                       Dr. Charles A. Dinarello, Director

August 27, 2007                        /s/ Karen A. Holbrook, Ph.D.
                                       ----------------------------
                                       Dr. Karen A. Holbrook, Director

August 27, 2007                        /s/ Gregory J. Melsen
                                       ----------------------------
                                       Gregory J. Melsen, Chief Financial
                                       Officer

                                     45


                               EXHIBIT INDEX
                      for Form 10-K for the 2007 Fiscal Year
Exhibit
Number   Description
-------  -----------
3.1      Restated Articles of Incorporation of Company, as amended to date-
         incorporated by reference to Exhibit 3.1 of the Company's Form 10-Q
         for the quarter ended September 30, 2000*

3.2      Restated Bylaws, as amended to date--incorporated by reference to
         Exhibit 3.2 of the Company's Form 10, dated October 27, 1988*

10.1**   Employee Agreement with Respect to Inventions, Proprietary
         Information, and Unfair Competition with Thomas E. Oland--incorporated
         by reference to Exhibit 10.2 of the Company's Form 10, dated October
         27, 1988*

10.2**   Company's Profit Sharing Plan--incorporated by reference to
         Exhibit 10.6 of the Company's Form 10, dated October 27, 1988*

10.3**   Company's Stock Bonus Plan--incorporated by reference to Exhibit
         10.7 of the Company's Form 10, dated October 27, 1988*


10.4**   Employment Agreement, dated March 6, 1996, with Monica Tsang--
         incorporated by reference to Exhibit 10.25 of the Company's Form 10-K
         for the year ended June 30, 1996*

10.5**   1997 Incentive Stock Option Plan--incorporated by reference to
         Exhibit 10.24 of the Company's Form 10-K for the year ended June 30,
         1997*

10.6     Form of Stock Option Agreement for 1997 Incentive Stock Option
         Plan--incorporated by reference to Exhibit 10.25 of the Company's Form
         10-K for the year ended June 30, 1997*

10.7     Investment Agreement between ChemoCentryx, Inc. and Techne
         Corporation dated November 18, 1997--incorporated by reference to
         Exhibit 10.1 of the Company's Form 10-Q for the quarter ended December
         31, 1997*

10.8**   1998 Nonqualified Stock Option Plan--incorporated by reference to
         Exhibit 10.1 of the Company's Form 10-Q for the quarter ended September
         30, 1998*

10.9     Form of Stock Option Agreement for 1998 Nonqualified Stock Option
         Plan--incorporated by reference to Exhibit 10.2 of the Company's Form
         10-Q for the quarter ended September 30, 1998*

10.10**  Extension, dated March 31, 1999, to Employment Agreement with
         Monica Tsang, Ph.D.--incorporated by reference to Exhibit 10.2 of the
         Company's Form 10-Q for the quarter ended March 31, 1999*

10.11**  Extension, dated March 31, 1999, to Employment Agreement with
         Marcel Veronneau--incorporated by reference to Exhibit 10.3 of the
         Company's Form 10-Q for the quarter ended March 31, 1999*

10.12    Combination Mortgage, Security Agreement and Fixture Financing
         Statement dated July 1, 1999 between the Company and TCF National
         Bank Minnesota (TCF)--incorporated by reference to Exhibit 10.36 of
         the Company's Form 10-K for the year ended June 30, 1999*

10.13    Promissory Note from the Company to TCF dated July 1, 1999 in the
         principal amount of $20,400,000-- incorporated by reference to Exhibit
         10.37 of the Company's Form 10-K for the year ended June 30, 1999*

------------
*Incorporated by reference; SEC File No. 0-17272
**Management contract or compensatory plan or arrangement

                                      46


Exhibit
Number   Description
-------  -----------
10.14    Investment Agreement between the Company and Discovery Genomics, Inc.
         dated August 2, 2001--incorporated by reference to Exhibit 10.30 of the
         Company's for 10-K for the year ended June 30, 2001.

10.15    Research and License Agreement between R&D Systems and Discovery
         Genomics, Inc. dated August 2, 2001--incorporated by reference to
         Exhibit 10.31 of the Company's 10-K for the year ended June 30, 2001.

10.16    Investors Rights Agreement dated February 2, 2001 among ChemoCentryx,
         Inc., the Company and certain investors amending the Investment
         Agreement between ChemoCentryx, Inc. and the Company dated November 18,
         1997--incorporated by reference to Exhibit 10.32 of the Company's 10-K
         for the year ended June 30, 2001.

10.17    Letter Agreement dated February 2, 2001 between ChemoCentryx, Inc. and
         the Company amending the terms of warrants held by the Company--
         incorporated by reference to Exhibit 10.33 of the Company's 10-K for
         the year ended June 30, 2001.

10.18**  Extension, dated August 28, 2001, to Employment Agreement with
         Monica Tsang, Ph.D.--incorporated by reference to Exhibit 10.35 of the
         Company's 10-K for the year ended June 30, 2001.

10.19**  Extension, dated August 28, 2001, to Employment Agreement with
         Marcel Veronneau--incorporated by reference to Exhibit 10.36 of the
         Company's 10-K for the year ended June 30, 2001.

10.20    Correction/Amendment to Investment Agreement dated April 23, 2002,
         between Techne Corporation and Discovery Genomics, Inc.-incorporated
         by reference to Exhibit 10.39 of the Company's 10-K for the year
         ended June 30, 2002.

10.21    Form of Indemnification Agreement entered into with each director
         and executive officer of the Registrant incorporated by reference
         to Exhibit 10.1 of the Company's 10-Q for the quarter ended December
         31, 2002.

10.22**  Extension, dated June 30, 2004, to Employment Agreement with
         Monica Tsang, Ph.D.--incorporated by reference to Exhibit 10.41 of the
         Company's 10-K for the year ended June 30, 2004.

10.23**  Extension, dated June 30, 2004, to Employment Agreement with
         Marcel Veronneau.--incorporated by reference to Exhibit 10.42 of the
         Company's 10-K for the year ended June 30, 2004.

10.24**  Employment Agreement, dated December 17, 2004, with Gregory J.
         Melsen--incorporated by reference to Exhibit 10.1 of the Company's 8-K
         dated December 17, 2004.

10.25**  Description of Officer's Incentive Bonus Plan-incorporated by
         reference to Exhibit 10.30 of the Company's 10-K for the year
         ended June 30, 2005.

10.26    Amended and Restated Investors Rights Agreement dated June 13, 2006
         among ChemoCentryx, Inc and the Company and certain investors-
         incorporated by reference to Exhibit 10.31 of the Company's 10-K for
         the year ended June 30, 2006.




-------------
*Incorporated by reference; SEC File No. 0-17272
**Management contract or compensatory plan or arrangement

                                       47



Exhibit
Number   Description
-------  -----------

21       Subsidiaries of the Company:
                                                     State/Country of
             Name                                    Incorporation
             ---------                               ---------------------
             Research and Diagnostic Systems, Inc.   Minnesota
             BiosPacific, Inc.			 Minnesota
             Fortron Bio Science, Inc. (1)	         Minnesota
             R&D Systems Europe Ltd.                 Great Britain
             R&D Systems GmbH                        Germany
             R&D Systems China Co. Ltd.		 China

             (1) merged into Research and Diagnostic Systems, Inc. in July 2007.

23       Consent of KPMG LLP, Independent Registered Public Accounting Firm

31.1     Section 302 Certification

31.2     Section 302 Certification

32.1     Section 906 Certification

32.2     Section 906 Certification



-------------
*Incorporated by reference; SEC File No. 0-17272
**Management contract or compensatory plan or arrangement


                                      48