<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.   20549
                                   FORM 10-K
(Mark One)


        [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended              December 31, 1996
                           ----------------------------------------------------

                                       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               0-4829-03
                         -----------------------------------------------------


                                      NABI
                    ----------------------------------------
                              (Name of Registrant)


             Delaware                                    59-1212264
- -------------------------------------------------------------------------------
(State or Jurisdiction of                               I.R.S. Employer
Incorporation or Organization)                     Identification Number



       5800 Park of Commerce Boulevard N.W., Boca Raton, Florida  33487
- -------------------------------------------------------------------------------
     Securities Registered Pursuant to Section 12(g) of the Act:

                     COMMON STOCK, PAR VALUE $.10 PER SHARE


     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  [X]  Yes [ ]  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. [ ]

As of March 20, 1997, 34,715,116 shares of common stock were outstanding, of 
which 33,187,166 shares were held of record by non-affiliates. The aggregate 
market value of shares held by non affiliates was approximately $296,610,296 
based on the closing price per share of such common stock on such date as 
reported by the NASDAQ National Market.

                      Documents Incorporated by Reference

     Portions of NABI's definitive Proxy Statement for its annual meeting of
shareholders which NABI intends to file within 120 days after the end of NABI's
fiscal year ended December 31, 1996 are incorporated by reference into Part III
hereof as provided therein.


<PAGE>   2



                                     PART I



ITEM 1. BUSINESS


OVERVIEW

     NABI is a vertically integrated biopharmaceutical company that supplies
human blood plasma and develops and commercializes therapeutic products for the
prevention and treatment of infectious diseases and immunological disorders.
NABI is one of the world's largest suppliers of source plasma and specialty
plasma which are sold to pharmaceutical and diagnostic companies or used in
NABI's proprietary products.  NABI collects plasma from an extensive donor base
through 80 collection centers in the United States and 4 collection centers
in Germany.  During 1995 and 1996 NABI collected and processed approximately
2,020,000 and 2,322,000 liters of plasma, respectively.  NABI also is
developing a broad portfolio of therapeutic products to prevent and treat
immune disorders and infectious diseases that includes two products approved by
the United States Food and Drug Administration (the "FDA") and 13 products that
are in development, including 6 in clinical trials.  NABI has completed
construction, and has commenced validation, of a new biopharmaceutical
manufacturing facility designed to process plasma into immunotherapeutic
products.  In addition, NABI manufactures and markets human blood plasma-based
diagnostic products and provides testing services on plasma and blood samples 
supplied by third parties.

     On November 29, 1995, Univax Biologics, Inc. ("Univax"), a publicly traded
biopharmaceutical company developing and marketing products for the prevention
and treatment of infectious diseases and their associated complications through
the activation and targeting of the human immune system, was merged into NABI
(the "Merger").


TRADEMARKS

NABI(R), WinRho SD (R), H-BIG(R), HIV-IG (TM), HyperGAM+CF (TM), StaphVAX (TM),
StaphGAM (TM), H-BIG IV (TM), CMV NeutraGAM (TM), QS-21 Stimulon (TM), H-CIG IV
(TM), NeoGAM (TM), NorMLCera-Plus(R), ViroSure (TM), Sero-HIV(R), Sero-HCV(TM)
and Sero-HBV(TM) are trademarks that are either owned or licensed by NABI.


INDUSTRY BACKGROUND

Source and Specialty Plasma

     Plasma is the liquid portion of blood which contains various proteins, as
distinguished from formed elements of the blood such as red blood cells, white
blood cells and platelets.  According to Marketing Research Bureau, an
independent market research company, the worldwide market for plasma-based
products was approximately $4.6 billion in 1994.  Plasma is obtained in the
United States through donations from individuals at approximately 450 plasma
collection centers.  The market factors influencing the plasma industry have
included: (i) the expanded use of immunotherapeutic products to prevent and
treat disease, (ii) extensive public concern over the safety of the blood
supply, with subsequent political demand for tighter scrutiny of blood product
suppliers and a resulting reduction in blood collection, and (iii) an increase
in regulatory control over the collection and testing of plasma.

     Plasma is composed of three primary proteins: albumin, anti-hemophilic
factor ("AHF") and immune globulin.  After collection, plasma is
fractionated, or separated, into these three proteins.  The therapeutic market
for each of these proteins at any one time drives overall demand for plasma.
The primary uses of these proteins are as follows:


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- -    Albumin is the protein used to restore plasma volume subsequent to shock,
     trauma, surgery and burns.

- -    AHF is the clotting factor in plasma used to treat hemophilia and clotting
     disorders.

- -    Immune globulin is the component of plasma that carries antibodies to fight
     disease.  Therapeutic uses include the treatment of tetanus, rabies,
     hepatitis, immune thrombocytopenic purpura ("ITP") and acquired or
     congenital immune disorders.

     Plasma which contains high concentrations of specific antibodies is known
as specialty plasma and is distinguished from source plasma, which does not
have such high concentrations.  Specialty plasma is used primarily to
manufacture plasma-based immunotherapeutic products which bolster the immunity
of patients to fight a particular infection or to treat certain immune system
disorders.  Following advances in intravenous therapy in the mid-1980s, use of
specialty plasmas for therapeutic purposes significantly increased.  Among the
current uses for specialty plasmas are the production of products to prevent or
treat hepatitis, ITP, Rh incompatibility in newborns, cytomegalovirus ("CMV")
infections, tetanus and rabies.  Specialty plasmas are also widely used for
diagnostic and tissue culture purposes.

     Specialty plasmas can be obtained by screening the normal donor population
for individuals who have an acceptable level of the desired antibody due to
previous exposure to the pathogen.  This screening approach is only feasible if
high concentrations of the desired antibodies occur naturally in a significant
percentage of the donor population.  An alternative approach is to stimulate
donors with an immunizing agent specifically directed at the targeted pathogen.
Such donor stimulation can create a steadier supply of plasma with high levels
of the desired types of antibodies. Specialty plasma is fractionated into its
three component proteins and the resulting immunoglobulin is used to
manufacture immunotherapeutic products. Donor stimulation has been used
successfully for years for the collection of specialty plasmas containing
antibodies active against tetanus, rabies, hepatitis B and Rh incompatibility.

Immunotherapeutics

     Immunotherapeutic products include plasma-based immunoglobulin therapeutic
products and vaccines. Immunotherapeutic products which are produced from
specialty plasma contain a rich mixture of antibodies produced by healthy
donors naturally or in response to exposure to particular component substances
produced by a virus or bacteria. These specific polyclonal antibodies ("SPA"s)
are administered to provide passive immunity against infection in immune-
compromised patients or patients who are immediately at risk and therefore do 
not have time to mount their own antibody response.

     NABI believes that plasma-based immunotherapeutic products have a high
benefit-to-cost ratio and have a high level of physician acceptance based on
past usage.  Immunotherapeutic products offer numerous clinical advantages.
They are produced naturally from a human source, and their safety has been well
documented over several decades of clinical experience.

     The use of plasma-based immunotherapeutic products increased in the
mid-1980s as a result of the development of intravenous formulations which made
administration of larger therapeutic doses practical for a broad range of
specific diseases.  As a result, immunoglobulin therapy has become a growing
part of medical practice.  According to Market Research Bureau, in 1994, the
market was approximately $983 million.

     Vaccines play an important role in the development and production of
immunotherapeutic products.  They can be used as stimulating agents to cause the
human body to produce SPAs.  They also can provide long-term protection against
exposure to a specific disease-causing substance or pathogen.  When invaded by
viruses, bacteria or other disease-causing organisms, the human body mounts an
immune response, producing antibodies that target and help kill the invading
pathogen.  This natural immune response to an infection is termed "active
immunity." Vaccines induce active immunity in the absence of an actual infection
by presenting to the immune system dead or weakened organisms or purified
components derived from the organism's surface.  The immune system develops an
active immune response to the vaccine and "remembers" that response just as it
does

                                       3




<PAGE>   4

for a natural infection.  Vaccines can provide significant long-term protection
because this "immune memory" results in a stronger and more rapid immune
response upon subsequent exposure to the pathogen.  Vaccines are powerful tools
in the fight against infectious disease and have been largely responsible for
the elimination of smallpox, polio, diphtheria, whooping cough and certain
other diseases as major causes of death in the United States.

     In contrast to viral vaccines, bacterial vaccines generally cannot be
based on dead or weakened organisms because bacteria produce many toxins that
are dangerous even if the bacteria are no longer infective.  Moreover, because
of certain structural characteristics, protein-based bacterial vaccines are not
likely to be broadly useful. One solution is to exploit the complex
carbohydrates present on the surface of most bacteria.

STRATEGY

     NABI's objective is to become a leader in the development and marketing of
proprietary plasma-based immunotherapeutic products and vaccines.  The key
elements of NABI's strategy include the following:

     Leverage NABI's Plasma Business into the Higher Margin Immunotherapeutics
Business.  NABI intends to continue the expansion of its historical lower
margin plasma business into the higher margin plasma-based immunotherapeutics
business.  NABI intends to build upon its expertise in the plasma business and
on the consistent revenues and critical raw materials generated by that
business.  Through the Merger, NABI significantly increased the number of
immunotherapeutic products it has in development.

     Capitalize on Fully Integrated Development Capabilities.  NABI's 84 plasma
collection centers in the United States and Germany make NABI one of the world's
largest suppliers of plasma to the pharmaceutical and diagnostic industries.
NABI's 112 persons' research and development team based in Rockville, Maryland
has the capabilities to develop multiple product opportunities simultaneously,
and bring products through the clinical development and FDA approval processes.
NABI also has an experienced sales and marketing organization currently
consisting of 19 salespersons, and a distribution network adding about 100 more
salespersons.  In addition, NABI has completed construction and has begun
validation of a new biopharmaceutical manufacturing facility in Boca Raton,
Florida designed to process specialty plasma into immunotherapeutic products.
NABI anticipates that it will receive requisite validation and FDA licensure of
this facility in late 1998 or early 1999.  NABI intends to capitalize on this
fully integrated development capability to become a leader in the plasma-based
immunotherapeutics industry.

     Focus on Products that Prevent and Treat Infectious Diseases.  NABI is
focusing its efforts on SPA-based immunotherapeutic products, such as H-BIG IV,
WinRho SD, StaphGAM and CMV NeutraGAM, for immediate short-term protection
against infectious diseases and their associated complications.  In support of
these efforts, NABI is developing vaccines, such as StaphVAX and StaphVax A/E,
to be used as stimulating agents in humans to produce antibodies for its
immunotherapeutic products and, potentially, as long-term protection against
infection.

     Pursue Selected Product Strategic Alliance Opportunities.  NABI has
developed strategic alliances with Chiron Vaccines ("Chiron") and others
to complement its in house research and development and product marketing
capabilities, and intends to seek additional strategic alliances with others
where appropriate.  See "-Strategic Alliances, Licenses and Royalty
Obligations."

PRODUCTS AND PRODUCTS UNDER DEVELOPMENT

Source Plasma

     NABI is one of the world's largest suppliers of human blood plasma to the
pharmaceutical and diagnostic industries.  During 1995 and 1996, NABI derived
revenues of $108.3 million and $121.0 million, respectively, from the sale of
source plasma, representing 63.9% and 58.2%, respectively, of NABI's total
revenues from the sale of plasma.


                                       4




<PAGE>   5


Specialty Plasma

     During 1995 and 1996, NABI derived revenues of $61.2 million and $86.8
million, respectively, from the sale of specialty plasma, representing 36.1%
and 41.8%, respectively, of NABI's total revenues from the sale of plasma.

     NABI identifies potential specialty plasma donors through internal
screening and testing procedures.  NABI also has developed FDA-licensed programs
to vaccinate potential donors to stimulate their production of specific
antibodies.  Through NABI's nationwide operating base and access to its large
and diverse donor base, NABI believes it has a strategic advantage in its
ability to collect specialty plasmas.

     NABI's principal specialty plasmas include:

- -    Anti-Tetanus Plasma.  NABI is a major supplier of tetanus-rich plasma to
     manufacturers of tetanus immunotherapeutic products, which provide a
     short-term boost in immunity to patients exposed to tetanus.

- -    Hepatitis B Plasma.  NABI provides anti-hepatitis B plasma to manufacturers
     of hepatitis B immunotherapeutic products which provide passive immunity
     to hepatitis B.  Anti-hepatitis B plasma collected by NABI is also used to
     produce H-BIG, NABI's own hepatitis B immunotherapeutic product.  NABI
     believes that its proprietary donor stimulation and management programs
     generally allow NABI to produce anti-hepatitis B plasma having a higher
     concentration of antibody than competing products.

- -    Anti-D Plasma.  Specialty plasma containing anti-D antibody has long been
     used when there is a mismatch between a mother's Rh factor and that of her
     fetus.  Plasma collected from donors who have natural levels of anti-D
     antibody or who have been vaccinated to raise their anti-D antibody levels
     is used to make products to protect the infant. NABI has proprietary donor
     stimulation and management programs which enhance its ability to increase
     collection of anti-D plasma.  WinRho SD, an immunotherapeutic product that
     NABI markets in the United States, is produced from anti-D plasma.

- -    HAV Plasma.  Plasma which is rich in antibodies against the hepatitis A
     virus ("HAV") is available from the small percentage of the population
     that has been exposed to the hepatitis A virus.  HAV plasma is used to
     augment general intravenous immunotherapeutic products to provide
     protection from this virus.

- -    CMV Plasma.  Many potential CMV antibody-positive donors have been exposed
     to CMV.  By screening its large donor population, NABI can identify
     individuals with high concentrations of CMV antibodies in their plasma,
     and supply the plasma to product manufacturers to enhance intravenous
     products and to produce specific CMV immunoglobulin therapeutic products.

- -    Rabies Plasma.  NABI is a major supplier of rabies antibody-rich plasma to
     manufacturers of rabies immunotherapeutic products, which provide a
     short-term boost in immunity to patients exposed to the rabies virus.

Immunotherapeutic Products

     NABI is developing and marketing products for the prevention and treatment
of infectious diseases and their associated complications through activation
and targeting of the human immune system.  NABI is focusing its efforts
principally on SPA-based immunotherapeutic products.  NABI also is developing
vaccines to be used principally as stimulating agents in humans to produce
antibodies for immunotherapeutic products and also, potentially, as long-term
protection against infection.  NABI is concentrating its vaccine development
efforts on vaccines for bacterial infections, particularly those that are
hospital-acquired or associated with chronic disease. NABI is developing a
broad product line that includes two currently marketed immunotherapeutic
products approved by the FDA and 13 products that are in development, including
six products in clinical trials.


                                       5




<PAGE>   6


     NABI believes that it has research capability in the development of
bacterial vaccines based on carbohydrates, carbohydrate/protein compounds and
recombinant DNA technology.  NABI's specific capabilities in the development of
carbohydrates and carbohydrate/protein compound bacterial vaccines include,
among others, broad expertise in the molecular and cellular biology of
bacterial pathogens, and the ability to develop cell lines and manufacturing
processes that maximize the production of carbohydrates and proteins.

     NABI's research and development capabilities have been enhanced as a
result of the Merger by NABI's succession to collaborations with several of the
major academic and government research laboratories active in this area.  NABI
has also licensed the use of proprietary proteins and enhancing agents which it
believes will enhance the development of highly immune-stimulating vaccines.


IMMUNOTHERAPEUTIC PRODUCTS AND PRODUCTS UNDER DEVELOPMENT

     The following table summarizes NABI's pipeline of products on the market
or in development.



<TABLE>
<CAPTION>
      PRODUCTS               POTENTIAL APPLICATIONS                                STATUS
==================================================================================================================
<S>                    <C>                                  <C>
H-BIG                  Hepatitis B                          Product License Application ("PLA")
                                                            approved; marketing
- ------------------------------------------------------------------------------------------------------------------
WinRho SD              ITP and Rh isoimmunization           PLA approved; marketing
- ------------------------------------------------------------------------------------------------------------------
WinRho SD              Additional autoimmune conditions     Phase IV clinical trial in progress
- ------------------------------------------------------------------------------------------------------------------
HIV-IG                 HIV/AIDS transmission from mother    Phase III clinical trial in progress in
                       to fetus                             collaboration with the National Institutes of
                                                            Health (the "NIH")
- ------------------------------------------------------------------------------------------------------------------
HIV-IG                 HIV/AIDS therapy in children         Phase II clinical trial in progress in collaboration
                                                            with the NIH
- ------------------------------------------------------------------------------------------------------------------
StaphVAX               Staph A infections (vaccine)         Phase II clinical trial completed; follow-on
                                                            dosing studies in hemodialysis patients completed
- ------------------------------------------------------------------------------------------------------------------
StaphGAM               Staph A infections                   Donor stimulation in progress; Phase I/II
                                                            with purified antibody to begin in 1997
- ------------------------------------------------------------------------------------------------------------------
H-BIG IV               Hepatitis B reinfection in liver     Bioequivalence trial completed; pivotal
                       transplant patients                  clinical trial to begin in 1997
- ------------------------------------------------------------------------------------------------------------------
CMV NeutraGAM          CMV in renal transplant patients     Donor stimulation in progress and Phase I/II
                                                            clinical trial to begin in 1997
- ------------------------------------------------------------------------------------------------------------------
H-CIG IV               Hepatitis C reinfection in liver     Preclinical; donor screening in progress
                       transplant patients
- ------------------------------------------------------------------------------------------------------------------
StaphVAX A/E           Staph epi infections (vaccine)       Preclinical
- ------------------------------------------------------------------------------------------------------------------
StaphGAM A/E           Staph A and Staph epi infections     Preclinical
- ------------------------------------------------------------------------------------------------------------------
NeoGAM                 Staph A and Staph epi infections in  Preclinical
                       neonates
- ------------------------------------------------------------------------------------------------------------------
Other vaccines and
other anti microbials  Various                              Preclinical
- ------------------------------------------------------------------------------------------------------------------
</TABLE>



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<PAGE>   7


H-BIG

     Despite the availability of hepatitis B vaccines, hepatitis B infection
has spread rapidly and now affects approximately 300 million people worldwide.
The Centers for Disease Control and Prevention (the "CDC") recommends that
newborn infants of mothers who are hepatitis B-positive be inoculated with both
hepatitis B immune globulin and a hepatitis B vaccine.  NABI estimates that the
worldwide market for the current formulation and indications of H-BIG is
estimated to be approximately $200 million.  H-BIG is an intramuscular SPA
product used following exposure by blood transfusion, accidental ingestion,
transmission from a hepatitis B antigen-positive mother or sexual exposure.
NABI believes that H-BIG which has been marketed since 1977, was the first
hepatitis B plasma-based immunotherapeutic product to be licensed by the FDA.
NABI has marketed H-BIG since September 1992 when it acquired the product from
Abbott Laboratories ("Abbott").  NABI is obligated to pay a royalty to Abbott
on net sales of H-BIG through September 2002.  

WinRho SD

     WinRho SD is an SPA product designed for the treatment of ITP and the
suppression of Rh isoimmunization.  ITP is a blood disorder characterized by
abnormally low platelet levels due to platelet destruction by the patient's own
immune system.  Because platelets are required for blood clotting, the disorder
can result in uncontrolled bleeding, either spontaneously or in response to
even minor trauma.  In certain cases, such as severe trauma or spontaneous
intracranial hemorrhage, the bleeding can be life-threatening.  ITP can occur
as either a primary disease with no other associated condition, or secondary to
another underlying disease, such as HIV infection or lupus.  Unless associated
with HIV infection, ITP in children is generally an acute condition which
resolves itself within six months with or without therapy.  In adults, whether
primary or secondary to HIV infection, the disease is generally chronic in
nature.

     Management estimates that in the United States, there are currently
approximately 130,000 individuals who suffer from primary ITP or ITP secondary
to HIV infection.  Approximately 20,000 of these cases are primary ITP; the
remaining 110,000 patients suffer from chronic ITP secondary to HIV infection,
which represents 11% of the estimated one million HIV-positive individuals in
the United States today.

     Current therapies for ITP include steroids, standard IVIG, splenectomy and
chemotherapeutic agents.  These therapies all have significant drawbacks.
Steroids and chemotherapy result in many undesirable side effects and cannot be
used for long-term maintenance.  Standard IVIG must be given in large doses,
which are expensive, require several hours to administer and often lead to
adverse reactions.  Splenectomy procedures subject patients to the inherent
risks of surgery plus a resulting life-long susceptibility to severe infection.
Zidovudine ("AZT") or other antiviral drugs also can be used to treat ITP in
HIV-positive patients, but only 50% of treated patients show a significant
platelet response to these drugs.  NABI believes that the effective use of
WinRho SD avoids many of these drawbacks including the need for a splenectomy.
Unlike steroids and chemotherapy, WinRho SD can be used for long-term treatment
of chronic ITP.  Also, compared to standard IVIG, WinRho SD is relatively less
expensive and also is less time-consuming in its administration.  In addition,
the product presents no surgical risk and, unlike AZT, has demonstrated
consistency in its ability to elicit a platelet response.

     Rh isoimmunization occurs when a woman with Rh negative blood type becomes
pregnant with an Rh positive fetus.  The woman's immune system recognizes the
fetal blood cells as foreign and develops antibodies that can attack the fetus
and threaten future Rh pregnancies.  Rh isoimmunization can be suppressed by
treating the mother with antibodies that suppress this toxic reaction.  There
are currently three competitive immunotherapeutic products licensed in the
United States for the suppression of Rh isoimmunization.  These products are
typically priced at lower levels than WinRho SD and, as a result, NABI does not
anticipate significant sales of WinRho SD for Rh isoimmunization.

     NABI commenced marketing WinRho SD, for which it has exclusive marketing
rights in the United States only, in mid-1995 under a license and distribution
agreement with Cangene Corporation, formerly Rh Pharmaceuticals, Inc.
("Cangene").  WinRho SD for the treatment of ITP has been designated an Orphan
Drug.

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<PAGE>   8

NABI plans to conduct in 1997 three Phase IV clinical trials for WinRho SD for
the following indications:  acute pediatric ITP, splenectomy sparing in chronic
ITP of adults and refractory platelet alloimmunization.  See "-Strategic
Alliances, Licenses and Royalty Obligations" and "-Government and Industry
Regulation-Orphan Drug Act."

HIV-IG

     In the United States, approximately 15% to 30% of the infants born to
HIV-infected mothers become infected.  Approximately 7,000 such infants are
born at risk of contracting HIV/AIDS from their HIV positive mothers in the
United States each year.  The CDC estimates that there are approximately 3,500
children with AIDS in the United States and an additional 7,000 to 10,000 that
are HIV positive.  More than 80% of these HIV/AIDS infections resulted from the
transmission of the virus from the mother to child at birth.  In addition,
recent World Health Organization data show that young women are a rapidly
growing subgroup of HIV infection, making the need for prevention of vertical
transmission especially pressing.

     HIV-IG is an experimental product currently manufactured by NABI for
potential prophylactic and therapeutic use in treating HIV/AIDS.  HIV-IG is
prepared from the plasma of HIV-antibody positive individuals who are otherwise
healthy and have displayed a strong immune response to the HIV virus.  The
plasma is extensively tested and virally inactivated during processing.  The
antibodies within the plasma are then purified and concentrated in preparation
for administration to patients.  HIV-IG has been granted Orphan Drug status for
use in the prevention of vertical perinatal transmission of HIV/AIDS from
mother to child.  See "-Government and Industry Regulation-Orphan Drug Act."
NABI acquired HIV-IG from Abbott in 1992 and will pay a royalty on any
commercial sales of the product.  See "-Strategic Alliances, Licenses and
Royalty Obligations-Other Licenses and Royalty Obligations."

     AZT is used to reduce the transmission of the HIV virus from mother to the
unborn child, and is currently being used in conjunction with HIV-IG in a Phase
III clinical trial presently being conducted by the National Heart, Lung and
Blood Institute, in collaboration with the National Institute of Child Health
and Human Development and the National Institute of Allergy and Infectious
Disease (collectively, the "Institutes").  However, the therapeutic goal of
HIV-IG is to further lessen the transmission of the virus, and therefore HIV-IG
would, if effective, prove to be more beneficial than AZT used alone.  Other
approaches to the problem of HIV transmission from mother to unborn child are
being developed by competitors and are in early experimental stages, and it is
too early to discern the benefits and drawbacks of such approaches.

     The Phase III clinical trial being conducted by the Institutes is intended
to determine whether HIV-IG will prevent the vertical transmission of HIV/AIDS
from HIV-positive mothers to their unborn children.  This trial is expected to
be completed in 1999.  The cost to the Institutes of this trial is estimated to
be in excess of $20 million. Participants in this trial receive HIV-IG together
with AZT while a control group receives a non-HIV-specific immune globulin and
AZT.

StaphGAM and StaphVAX

     Staphylococcal bacteria, especially Staphylococcus aureus ("Staph A")
and Staphylococcus epidermis ("Staph epi"), are an increasing cause of
bacterial infections in hospitalized patients and patients with chronic
disease.  These two species are responsible for the vast majority of all
staphylococcal infections.  Persons who are at a high risk of contracting
staphylococcal infections include the following patient groups:

     Kidney Dialysis Patients.   Patients on chronic dialysis due to kidney
failure are constantly at risk for staph infections due to their in-dwelling
catheters.  Continuous ambulatory peritoneal dialysis ("CAPD") patients have
a 50% risk of contracting an infection each year, of which 50% are due to
staphylococcal bacteria (15% Staph A and 35% Staph epi).  Hemodialysis patients
have a significantly lower risk of infection (only 15% each year).  In the
hemodialysis patient group, 75% of the infections are due to Staphylococci (50%
Staph A and 25% Staph epi).  In the United States there are currently 30,000
CAPD patients and 160,000 hemodialysis patients.


                                       8




<PAGE>   9


     Severe Trauma Patients.  Patients suffering from severe trauma (i.e.,
Level I trauma center intensive care unit ("ICU") admissions) are at a 40%
risk of acquiring an infection while in the hospital.  Approximately 30% of
these infections are due to staphylococcal bacteria (20% Staph A and 10% Staph
epi).  The majority of these infections occur within the first week after
admission, but there is also a substantial long-term risk of infection in these
patients due to the extended hospital stays often required.  It currently is
estimated that approximately 3% of the 3.6 million trauma victims admitted to
hospitals each year in the United States are Level I trauma center ICU
admissions.

     Cardiac Surgery Patients.  Approximately 500,000 patients undergo cardiac
surgery each year in the United States.  Infections of the sternum appear in
approximately 6% of patients following cardiac surgery, of which about 25%, or
1.5% overall, are deep infections of the sternum requiring surgical
intervention. Approximately 60% of these infections are due to staphylococcal
bacteria (40% Staph A and 20% Staph epi).  The majority of these infections
occur within one to two weeks of surgery, but the use of prosthetic devices
such as valve replacements in cardiac surgery and the use of synthetic dacron
grafts in arterial replacements present long-term infection risk.

     Vascular Graft Patients.  Approximately 180,000 patients undergo vascular
graft surgery annually in the United States.  The incidence of infection
following vascular graft surgery is approximately 2%, of which 60% are due to
staphylococcal bacteria (30% Staph A and 30% Staph epi).  Although this rate of
infection is reasonably low compared to other risk groups, the consequences of
infection in this population can be severe.  There is nearly a 25% mortality
associated with vascular graft infections and another 25% of patients require
amputation of the affected limb.  Moreover, in this patient group, there is a
demonstrated risk of late stage infections appearing 11 to 12 months after
surgery.

     Prosthetic Surgery Patients.  There are approximately 420,000 orthopedic
joint replacement surgeries performed in the United States each year.  These
patients run a 1% to 5% risk of contracting an infection while recovering from
surgery, 60% of which are due to staphylococcal bacteria (30% Staph A and 30%
Staph epi). Again, although the incidence is very low, the consequences can be
severe and often require removal of the artificial joint.  Moreover, there is a
significant long-term risk that prosthetic joints will become infected even
several years after surgery.

     Low Birth Weight Neonates (LBWN).  There are approximately 430,000
pre-term infants born in the United States each year.  Of these, some 50,000
are considered LBWN.  This group is highly susceptible to invasive
staphylococcal disease and 17% of infection in these infants are caused by
Staph A.

     It currently is estimated that 40% to 60% of the staphylococcal infections
occurring in United States hospitals are caused by bacterial strains that are
resistant to every currently available antibiotic except vancomycin. Of even
greater concern is the increase in the bacteria that are resistant to all
current antibiotics, including vancomycin.  The percentage of hospital-acquired
enterococcal infections that are resistant to vancomycin has increased from
0.3% in 1989 to nearly 10% in 1993, with the rate approaching 15% in ICUs.
Because, like Staphylococci, Enterococci is a gram-positive bacterium, this
vancomycin resistance could, at any time, be transferred to the staphylococcal
bacteria present in hospitals. Such transfer has, in fact, recently been
demonstrated in the research laboratory. If vancomycin resistance continues to
grow, NABI believes certain bacterial infections could become untreatable.

     StaphGAM contains high levels of antibodies against the two most important
clinical strains of Staph A. StaphGAM is designed to provide immediate,
on-demand protection for patients who suddenly find themselves at high,
short-term risk of Staph A infection or for patients who are immune-compromised
and cannot respond effectively to a vaccine.  Consequently, this SPA product
might be used in patients who are at short and long-term risk of contracting
Staph A infections.  Even in those patient groups in which the incidence of
staphylococcal infection is relatively low, such as cardiac surgery patients,
the consequences of an infection can be so severe that NABI believes that
administration of the SPA product to all patients may be deemed medically
appropriate.

     NABI is producing StaphGAM by stimulating healthy plasma donors with an
immunizing agent.  NABI began a preliminary donor stimulation program with this
immunizing agent in July 1994, which was recently

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<PAGE>   10

concluded.  A six-month follow-on donor stimulation trial was initiated in
September 1995.  NABI expects to commence in 1997 a Phase I/II clinical trial
using StaphGAM in low birth weight neonates.

     NABI's goal is to use the same immunizing agent that stimulates antibodies
in healthy plasma donors for the production of StaphGAM as a vaccine in high
risk patient populations.  This vaccine, StaphVAX, is a carbohydrate/protein
compound intended to elicit high levels of antibodies against the two bacterial
strains responsible for over 90% of clinically important Staph A infections.
StaphVAX is based on patented vaccine technology in-licensed by NABI from the
NIH. See "-Strategic Alliances, Licenses and Royalty Obligations."  A Phase
II trial using StaphVAX in continuous ambulatory peritoneal dialysis patients
was completed in 1995.  The clinical trial showed the vaccine to be safe but
ineffective. Two possible explanations for the inability of StaphVAX to prevent
infections related to peritoneal dialysis in vaccinated patients are that the
immunogenicity of the vaccine was too low due to suboptimal vaccine dosing or
that antibodies in the bloodstream are unable to affect infection in certain
anatomic areas, such as the peritoneum. Like peritoneal dialysis patients,
hemodialysis patients with kidney disease also have high Staph A infection
rates.  In contrast to CAPD patients, however, the Staph A infections
contracted by hemodialysis patients are primarily bloodborne and may be more
accessible to Staph A antibodies.  As a result, NABI designed and initiated a
Phase II clinical trial with StaphVAX in hemodialysis patients in 1996.
Results of this trial indicated that higher doses of StaphVAX in patients with
end stage renal disease were able to induce levels of antibodies similar to
that achieved in normal healthy volunteers.  This result led NABI to
reformulate StaphVAX to permit higher dosing. NABI anticipates beginning Phase
III clinical studies of the reformulated StaphVAX in hemodialysis patients in
1997.

H-BIG IV

     One of the severe side effects of hepatitis B infection is deterioration
of the liver, resulting in the need for liver transplantation.  NABI believes
that up to 20% of the current eligible liver transplant population is comprised
of hepatitis B patients.  These patients are at high risk for liver reinfection
with the hepatitis B virus once the transplant is completed.  Reinfection
causes the process of liver deterioration to recur, and, as a result, most
transplant centers consider hepatitis B-infected patients to be poor candidates
for transplantation.  A significant number of transplant centers have policies
precluding these patients from the transplant population, given the relative
scarcity of available livers and poor prognosis for such patients.  Due to
these policies, liver transplants of hepatitis B-infected patients represented
only 5% of the approximately 3,900 liver transplants performed in the United
States in 1995.

     There are no products similar to H-BIG IV available in the United States.
In Europe, however, certain manufacturers are currently producing substantially
similar products.  If H-BIG IV proves successful and receives FDA approval, and
subsequent approval in the United States medical community results in the
relaxation of prohibitions against conducting liver transplants in hepatitis B
patients, management estimates that the number of hepatitis B patients
receiving liver transplants could double each year.

     NABI believes treatment with H-BIG IV will greatly reduce the risk of
hepatitis B re-infection in liver transplant patients by providing the patient
with additional resistance to the disease and therefore will increase the
number of liver transplants given to hepatitis B patients.  Prevention of
hepatitis B reinfection is likely to require a series of intravenous treatments
with large amounts of H-BIG IV immediately following transplantation and
maintenance doses for extended periods of undetermined length, compared to
current indications for H-BIG which require only a single intramuscular
injection of a small amount of antibody.  Such large doses of H-BIG IV are
anticipated because liver transplant patients receive large quantities of drugs
that suppress the immune system to prevent rejection of their transplanted
organs.  As a result, hepatitis B patients require amounts of antibody that are
sufficient to provide virtually 100% of the antibody required to neutralize
their infections.

     NABI filed an Investigation for New Drug ("IND") application for H-BIG IV
in July 1994 for the specific indication of use for hepatitis B liver
transplant cases.  In 1997, NABI intends to begin human clinical trials
studying safety and pharmacokinetic tests in liver transplant patients.  H-BIG
IV has been granted Orphan Drug status.  See "-Government and Industry
Regulation - Orphan Drug Act."


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<PAGE>   11


CMV NeutraGAM

     CMV, a member of the herpes virus family, is widely prevalent throughout
the world. Although most infections are without symptoms, CMV causes
significant clinical disease in individuals with weakened immune systems,
including transplant recipients and HIV infected individuals, and is the most
common cause of virally produced birth defects (such as congenital deafness and
mental retardation). CMV commonly affects renal transplant recipients and is a
significant risk factor which could result in fever after a transplant,
followed by leukopenia, graft failure and death.  There were approximately
10,000 kidney transplants performed in the United States in 1994 and
approximately 9,000 in Europe.  It is estimated that 50% to 80% of these
patients can develop CMV infection.  In addition, CMV infection is a known
complication in bone marrow transplant recipients, of which there were
approximately 3,500 in the United States and 3,500 in Europe in 1994.  CMV is
also a major risk in other solid organ transplant patients, including those
undergoing heart, liver or small bowel transplants. Approximately 8,000 people
underwent solid organ transplants (excluding kidney transplants) in the United
States in 1994, and approximately 2,000 in Europe. In heart transplant
recipients, CMV may play a role in the development of accelerated coronary
graft atherosclerosis which is responsible for the majority of late cardiac
graft failure and resulting patient morbidity and mortality.

     Preliminary laboratory evaluation of antibody concentration in plasma of
subjects immunized with a Chiron CMV vaccine candidate indicates that the
plasma contains significantly higher levels of CMV neutralizing antibodies than
currently available screened plasma used in other manufacturers' products.  The
higher levels of specific antibody may allow the product to be administered in
lower doses with a potential for fewer side effects, shorter infusion times or
improved efficacy.  The higher concentration product might also allow the
product to be injected directly into muscle.  NABI expects to begin Phase I/II
clinical trials with CMV NeutraGAM in 1997.

H-CIG IV

     H-CIG IV is designed to prevent reinfection in liver transplant patients
who test positive for hepatitis C antibody at the time of transplant.  NABI
believes that hepatitis C infection is actually more prevalent among liver
transplant patients than hepatitis B.  Hepatitis C was an under-recognized
contributor to morbidity and hospitalization in liver transplant patients until
recently when a diagnostic test specific for hepatitis C became widely
available.  Hepatitis C is not as lethal as hepatitis B; however, it does have
significant economic impact because it contributes to frequent hospitalizations
when it occurs in liver transplant patients.

     NABI expects to initiate a study in chimpanzees of H-CIG IV in 1997.
Because NABI's H-CIG IV is the first product to provide hepatitis C antibody for
clinical use, no data exists to predict the efficacy and the dose level of H-CIG
IV that will produce the best combination of safety and efficacy, other than
experience with H-BIG IV.  NABI has applied for Orphan Drug status for H-CIG IV.

StaphVAX A/E, StaphGAM A/E, NeoGAM

     NABI plans to develop a second generation vaccine product, StaphVAX A/E,
which is directed to both Staph A and Staph epi. Staph epi is the second most
clinically significant Staphylococcus species. The Staph epi components of
StaphVAX A/E are undergoing preclinical testing and process development. The
vaccine is expected to contain the two previously identified Staph A
carbohydrates and one to three Staph epi antigens present on the surface of the
bacteria.  It recently has been shown that antibodies to these Staph Epi
antigens bind the Staph epi strains responsible for over 90% of Staph epi
infections.

     In connection with StaphVAX A/E, NABI plans to develop a second-generation
SPA product, StaphGAM A/E, containing antibodies to both Staph A and Staph epi.
Development of this product is expected to involve stimulating donors with
immunizing agents against both Staph A and Staph epi.

     NABI also plans to develop an additional SPA product, NeoGAM, which
contains antibodies to both Staph A and Staph epi, and is specifically targeted
at the prevention of infections in low birth weight neonates.  Such

                                       11




<PAGE>   12

neonates have a 25% overall rate of infection and a 60% rate of progression to
sepsis.  NeoGAM is being designed to contain antibodies against the bacteria
responsible for approximately 50% of these infections.

Diagnostic Products and Services

     NABI is a supplier of infectious disease, quality assurance and specialty
plasma-based products to in-vitro diagnostic (IVD) manufacturers, regulatory
agencies and testing laboratories. NABI seroconverter panels and
reactive/disease-state plasma are utilized by IVD manufacturers in the
development and production of test assays.  NABI also offers a Clinical Trial
Service to assist IVD manufacturers with regulatory submissions.

     Regulatory agencies in the U.S.A. and Europe also use NABI's products to
evaluate test kits for licensure. Once test kits reach the end-user testing
laboratory, NABI's ViraSure external run controls and proficiency panels are
used to assure testing for blood screening and infectious disease diagnostics.


STRATEGIC ALLIANCES, LICENSES AND ROYALTY OBLIGATIONS

     Strategic alliances were an important element of Univax's corporate
strategy. In its research and development and marketing programs, Univax
established collaborations with a number of leading infectious disease
specialists and government laboratories. NABI intends to continue this
collaborative approach to research and development with respect to certain of
its products, thereby allowing NABI to make efficient use of its research
resources and leverage the fundamental discoveries emerging from basic research
institutions throughout the United States.

     As a result of the Merger, NABI succeeded to the key strategic alliances
of Univax described below.

Cangene

     Under a license and distribution agreement with Cangene, NABI has
exclusive marketing rights for, and shares in the profits from sales of, WinRho
SD in the United States.  Cangene, which holds the FDA licenses for the
product, is required to supply the necessary quantities of WinRho SD to support
such sales.  In addition, Cangene has a license to sell in Canada certain of
NABI's current products in development. The Cangene agreement terminates in
2005, although NABI may lose its exclusive rights to market WinRho SD if NABI
fails to meet specified sales goals or make specified payments to Cangene.


Chiron

     In November 1995, Univax entered into an agreement with Chiron (the
"Chiron Agreement") pursuant to which Chiron has agreed to supply exclusively
to NABI Chiron's CMV vaccine for use as an immunizing agent in humans to
produce immunotherapeutic products.  The Chiron Agreement also grants NABI
options or rights of first negotiation for exclusive rights to 14 other Chiron
vaccines for use in humans to produce immunotherapeutic products.  In addition,
the Chiron Agreement grants NABI access to Chiron's adjuvant, MF 59, for donor
immunization.  NABI has made an initial payment to Chiron and is obligated to
make milestone payments and to

                                       12




<PAGE>   13

share profits from the sale of immunotherapeutic products. NABI will be
responsible for all development, manufacturing and worldwide distribution of
these products.  NABI may terminate the Chiron Agreement on a
product-by-product basis in which event NABI shall transfer to Chiron all of
NABI's rights with respect to the product as to which the Chiron Agreement has
been terminated.  Similarly, Chiron may terminate its obligations to supply
immunizing agents to NABI on a product-by-product basis, in which event Chiron
shall grant to NABI a license of the technology necessary for NABI to
manufacture the applicable immunizing agent and the financial arrangements in
the Chiron Agreement with respect to such agent shall continue.

Cambridge Biotech Corporation

     In April 1993, Univax entered into a licensing agreement with Cambridge
Biotech Corporation ("Cambridge Biotech"). The agreement with Cambridge
Biotech provides NABI with exclusive rights to incorporate Cambridge Biotech's
patented QS-21 Stimulon adjuvant in a wide range of bacterial immunizing agents
used to stimulate plasma donors to produce antibodies.  NABI will be
responsible for, and provide funding in connection with, completing product
development, conducting clinical trials, obtaining regulatory approvals and
marketing products resulting from use of the adjuvant.  NABI must reach annual
mandatory funding levels during the course of product development, and sales
levels after product licensure, in order to maintain the exclusivity of the
license with respect to each product.  Cambridge Biotech will be responsible
for manufacturing the adjuvant. NABI will pay milestone fees on a per product
basis if development of any product reaches certain development phases, and
royalty payments once any products are commercialized. NABI has the right to
manufacture the adjuvant and obtain from Cambridge Biotech all information
necessary to engage in such manufacturing in the event that Cambridge Biotech
fails to satisfy its obligations under the agreement.

Other Licenses and Royalty Obligations

     As part of the purchase price for the acquisitions of H-BIG and HIV-IG,
NABI is obligated to pay Abbott a royalty based on net sales of H-BIG through
September 2002 and a royalty based on net sales of HIV-IG in each country for
which NABI acquired patent rights to HIV-IG from Abbott.  The HIV-IG royalty
obligation terminates on a country-by-country basis beginning 20 years after
NABI's first commercial sale of the product in the country or such shorter
period in any country as may be required under applicable law. If NABI employs
the viral inactivation step currently contemplated for the manufacture of
H-BIG, it also will be obligated to pay a royalty to the New York Blood Center,
Inc. based upon net sales of this product.

     Under a license agreement with the NIH, NABI has exclusive rights to the
NIH's patent relating to a carbohydrate/protein conjugate vaccine against
staphylococcus, and is obligated to pay the NIH a royalty based on net sales.
The licensed patent rights cover NABI's StaphVAX and StaphGAM products.  The
license terminates with respect to each country on the date that the NIH's
patent rights expire in such country.

     In June 1996, NABI's collaborative agreement with Genzyme Corporation was
terminated based on a mutual agreement to halt the Phase II trial of
HyperGAM+CF after an interim analysis of the data did not show efficacy in
reducing the number of acute pulmonary exacerbations in trial participants.

RESEARCH AND DEVELOPMENT

     NABI has approximately 112 employees involved in research and development
programs. Research and development expenses were 10.3% and 7.0% of sales in
1995 and 1996 respectively.


                                       13




<PAGE>   14


MARKETING AND SALES

Plasma

     NABI sells plasma to approximately 20 pharmaceutical and diagnostic
product manufacturers, most of which have been customers of NABI for many
years.  These customers constitute most of the worldwide purchasers of human
blood plasma.  NABI markets its plasma through its internal sales staff.

     Customers to which sales exceeded 10% of NABI's annual consolidated sales
in the last three fiscal years ending December 31, 1996 were: Baxter Healthcare
Corporation ("Baxter"), Immuno Trading AG ("Immuno") and Centeon Pharma GmbH in
1994; Baxter, Bayer Corporation ("Bayer") and Immuno in 1995; and Baxter, Bayer
and Biotest Pharma GmbH in 1996.  Aggregate sales of source and specialty 
plasma to these customers were approximately $81 million, $92 million and $107
million, or 49%, 47% and 45% of total sales for the years ended December 31, 
1994, 1995 and 1996, respectively.

     NABI generally sells its plasma under contracts ranging from one to five
years which, with the exception of the Baxter contract discussed below, allow
for annual pricing renegotiations.  Pricing for product deliveries is generally
mutually agreed to prior to the beginning of the contract year and fixed for
that year, subject to price changes to reflect changes in customer
specifications or price adjustments to compensate NABI for increased costs
associated with new governmental testing regulations. Consequently, NABI may be
adversely or beneficially affected if changes in donor fees or other costs of
producing and selling plasma rise or fall during the year.

     Effective January 1, 1994, NABI entered into two separate agreements with
terms of five years and three years, respectively, to supply source plasma to
Baxter.  Under these agreements, Baxter purchased an aggregate of 551,000
liters of source plasma in 1996 and is obligated to purchase an aggregate of
approximately 450,000 liters of source plasma during 1997.  Under the five-year
agreement with Baxter, which covered 414,000 liters of the plasma sold to
Baxter in 1996, the price NABI will receive for plasma adjusts periodically to
reflect changes in NABI's principal costs for the collection of plasma.

Immunotherapeutics

     NABI currently has a marketing and sales staff of approximately 32
individuals.  Of this number, 13 people are part of the field sales force and
the remainder are responsible for marketing, reimbursement and customer service
activities. Inventory maintenance and distribution to pharmacies is handled by
regional stocking distributors that specialize in the sale and distribution of
blood products and other biologics.  These distributors have extensive
telemarketing operations, have been trained in the sale of NABI products by the
NABI sales and marketing staff and have a combined field sales force of
approximately 100 individuals.  NABI also has distribution arrangements with
selected home healthcare companies.  In addition, certain of NABI's
collaborators have marketing responsibilities in connection with the
immunotherapeutic products that are intended to result from the collaborations.
See "-Strategic Alliances, Licenses and Royalty Obligations."

     Although NABI believes that the markets for WinRho SD and H-BIG can be
addressed effectively with a relatively small sales force, to the extent that
NABI itself undertakes to market other products or is unable to continue
third-party marketing of such other products, significant additional
expenditures, management resources and time may be required to develop a larger
sales force.  There can be no assurance that NABI will be able to enter into
additional marketing agreements or that it will be successful in gaining market
acceptance for its products.

Diagnostic Products and Services

     NABI markets diagnostic products and services through its own sales
organization and, through independent distributors in the United States, Europe
and Asia.


                                       14




<PAGE>   15


SUPPLY AND MANUFACTURING

Plasma Collection Process

     NABI currently collects and processes plasma from 84 plasma collection
centers located in 31 states and Germany, including nine independently owned
centers which under contract supply their entire plasma collection output to
NABI. Each United States center is licensed and regulated by the FDA.  Most of
NABI's centers are located in urban areas and many are near universities and
military bases.  During 1996, NABI processed a monthly average of approximately
3,000 collection procedures per center.

     Prospective plasma donors are required to complete an extensive medical
questionnaire and are subject to laboratory testing and a physical examination
under the direction or supervision of a physician.  Following this screening,
plasma is collected from suitable donors by means of a process known as
plasmapheresis.  During this process, whole blood is withdrawn from the donor,
the plasma is separated from the donor's red blood cells by means of
centrifugation and the donor's red blood cells are returned to the donor.  This
procedure, which can be manual or automated, is performed under medical
supervision.  The donor may donate plasma as frequently as twice a week because
the red blood cells have been returned to the donor.  After collection, each
unit of plasma is frozen and stored.  If properly handled and maintained, FDA
regulations permit the use of plasma which has been stored for up to 10 years.
NABI extensively tests each unit of plasma for a number of infectious diseases
at either of its central testing laboratories in Miami and Detroit before
shipment to the customer.

     Effective recruitment, management and retention of donors are essential to
NABI's plasma business.  NABI seeks to attract and retain its donor base by
utilizing competitive financial incentives which NABI offers for the donation
of the plasma, by providing outstanding customer service to its donors, by
implementing programs designed to attract donors through education as to the
uses of plasma, by encouraging groups to have their members become plasma
donors and by improving the attractiveness of NABI's plasma collection
facilities.  NABI has also expanded its donor base by adding collection centers
through acquisitions.  Since January 1994, NABI has acquired 33 plasma
collection centers and added 3 other centers through a contract for their
entire supply of plasma.

Immunotherapeutics

     NABI collects and supplies the specialty plasma necessary for the
manufacture of H-BIG.  In August 1995, NABI entered into an agreement with
Michigan Biologic Products Institute ("MBPI") (formerly, Michigan Department of
Public Health) pursuant to which MBPI, subject to receiving FDA approval, will
formulate, process and package H-BIG.  NABI anticipates receiving product from
MBPI by late 1997 or early 1998, although there can be no assurance that product
will be available at this time.  Abbott, NABI's previous manufacturer of H-BIG,
has supplied NABI with a sufficient inventory of H-BIG to satisfy NABI's
historical requirements for the product through 1997, assuming no rejection of,
or delay in, release of lots of H-BIG by the FDA.  See "-Factors to be
Considered-Dependence upon Third Parties to Manufacture Product" and "Factors to
be Considered-Government Regulation; Uncertainty of Regulatory Approvals."
NABI's agreement with MBPI has a five-year term commencing upon the date MBPI
receives FDA approval, although either party may terminate the agreement upon 12
months' notice.  NABI has completed construction, and has begun FDA validation,
of a biopharmaceutical manufacturing facility which is designed to allow NABI to
formulate, process and package H-BIG.  NABI does not anticipate that the
facility will be able to produce H-BIG for commercial sale at least until 1998.

     NABI is required to purchase its requirements of WinRho SD from Cangene,
which has granted to NABI exclusive marketing rights to the product in the
United States. NABI does not have manufacturing rights for WinRho SD.

     NABI manufactures its clinical supplies of HIV-IG, StaphGAM, CMV and its
diagnostic products at its facility in Miami, Florida. NABI manufactures
vaccines for clinical trials at its pilot production facility in Rockville,
Maryland.


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<PAGE>   16


PATENTS AND PROPRIETARY RIGHTS

     NABI's success will depend, in part, on its abilities to obtain or
in-license patents, and to protect trade secrets and other intellectual
property rights. NABI has acquired title or licenses to a number of patents or
patent applications of others and has filed two patent applications of its own.
There can be no assurance that existing patent applications will mature into
issued patents, that NABI will be able to obtain additional licenses to patents
of others or that NABI will be able to develop additional patentable technology
of its own.  See "-Strategic Alliances, Licenses and Royalty Obligations" and
"-Factors to Be Considered-Uncertainty of Legal Protection Afforded by Patents
and Proprietary Rights."

     NABI has been notified by the European Patent Office that NABI has been
allowed a patent for HIV-IG, giving NABI commercial protection in 12 European
countries until the year 2008.  NABI also has patents for HIV-IG in Australia,
New Zealand and Japan, and has patent applications for HIV-IG pending in various
other foreign countries.  NABI jointly owns these HIV-IG patents and
applications with the University of Minnesota, which is entitled to practice
the technology contained in the patent and sell a product based on the patent
in such countries to the same extent as NABI. NABI has no pending patent
application for HIV-IG in the United States. An unrelated third party holds a
United States patent for a product similar to HIV-IG.  If this patent
withstands any challenge by NABI or others, NABI may be required to obtain a
license from the patent holder in order to market HIV-IG in the United States.
While NABI believes that, if necessary, it will be able to obtain such a
license on commercially acceptable terms, there can be no assurance that NABI
will be successful.  If NABI is successful in perfecting Orphan Drug status for
HIV-IG prior to the unrelated patent holder, such holder would be barred from
selling a product for the same indication as HIV-IG for seven years
notwithstanding its patent.

GOVERNMENT AND INDUSTRY REGULATION

     The collection, processing and sale of NABI's products as well as its
research, preclinical development and clinical trials are subject to regulation
for safety and efficacy by numerous governmental authorities in the United
States and other countries.  Domestically, the federal Food, Drug and Cosmetic
Act, the Public Health Service Act, and other federal and state statutes and
regulations govern the collection, testing, manufacture, safety, efficacy,
labeling, storage, record keeping, approval, advertising and promotion of
NABI's products.  NABI believes that it is in substantial compliance with all
applicable regulations.

Plasma

     The collection, storage and testing of plasma is regulated by the FDA. Any
person operating a plasma collection facility in the United States must have an
Establishment License and individual Product Licenses issued by the FDA and
each plasma center must be inspected and approved by the FDA. NABI holds
Establishment Licenses and Product Licenses issued by the FDA covering all
NABI-owned collection centers located in the United States.  In addition,
plasma collection centers require FDA approval to collect each specialty
plasma.

     FDA regulations applicable to plasma collection centers require that
prospective plasma donors must be given a complete medical examination no more
than one week prior to an initial donation and that repeat donors be reexamined
at least once per year.  On the day of a donation a donor must have a normal
temperature, have systolic and diastolic blood pressures within normal limits,
have a minimum weight of 110 pounds and be free from any infectious disease or
history of viral hepatitis.  Plasma collection centers are also required to
maintain detailed records of all donations and storage and shipping activities,
and every container of blood or source plasma must bear a label that includes a
donor identification number, an expiration date and any product information
that a manufacturer might require for use of the product.  Each unit of plasma
is accompanied by a document containing test results for hepatitis, HIV, liver
function and any other pertinent special test results. FDA regulations also
prescribe the frozen temperatures at which plasma must be stored and limit or
prohibit, depending upon the circumstances, sales of plasma which has not been
maintained at proper temperature. NABI undergoes regular, unscheduled
inspections by the FDA to ascertain its compliance with that agency's
regulations and guidelines.  From time to time NABI receives notices of
deficiencies from the FDA as a result of such inspections.


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<PAGE>   17


     NABI continually pursues its commitment to quality and compliance with
applicable FDA regulations through its own internal quality assurance programs.
NABI continuously trains all levels of its employees, from managers and
regional managers through individual employees in each of its centers.  At
least once each year on a formal basis, and more frequently on an informal
basis, NABI performs regulatory and quality assurance audits of each of its
facilities.  As part of its commitment to quality, NABI has embraced the
Quality Plasma Program ("QPP") which was initiated by the American Blood
Resources Association, a trade group which establishes standards for
plasmapheresis centers.  QPP imposes standards for plasmapheresis centers in
addition to those presently required by the FDA.  QPP certification is proving
increasingly significant, because many customers will only purchase plasma
which has been collected in QPP certified centers.  All of NABI's
domestic-owned centers are QPP certified centers.  While plasma collection
costs have increased and the available donor supply has been affected
industry-wide as a result of the QPP as well as additional blood plasma testing
requirements imposed by the FDA, NABI believes that additional testing and
standards may ultimately benefit NABI because it may be better able to satisfy
the higher standards than some of its competitors which may not have the
technical and financial resources to meet new standards.

     Concern over blood safety has led to movements in a number of European and
other countries to restrict the importation of plasma and plasma components
collected outside the country's borders or, in the case of certain European
countries, outside of Europe.  To date, these efforts have not led to any
meaningful restriction on the importation of plasma and plasma components and
have not adversely affected NABI.  There can be no assurance, however, that
such restrictions will not be imposed in the future and that NABI will not be
adversely affected.  As a partial response to this risk, NABI acquired or
established four plasma collection centers in Germany.  The German centers
currently do not collect material amounts of plasma in relation to the demand
for plasma from NABI's European customers.  While NABI currently intends to
increase its European plasma collections, there can be no assurance that it
will be successful or that it will be able to serve all or most of the needs of
its foreign customers from European plasma collections.

Immunotherapeutics

     Immunoglobulin products currently are classified as "biological
products" under FDA regulations.  The steps required before a biological
product may be marketed in the United States generally include preclinical
studies, the filing of an IND application with the FDA, which must become
effective pursuant to FDA regulations before human clinical studies may
commence, and FDA approval of a PLA.  In addition to obtaining FDA approval for
each product, an Establishment License Application ("ELA") must be filed and
the FDA must approve the manufacturing facilities for the product.  Biological
products, once approved, have no provision allowing competitors to market
generic versions.  Each biological product, even if it basically has the same
composition and is for the same indication, must undergo the entire development
process in order to be approved.

     Preclinical studies are conducted on laboratory animals to evaluate the
potential efficacy and safety of a product. The results of preclinical studies
are submitted as part of the IND application, which must become effective
pursuant to FDA regulations before human clinical trials may begin. The initial
human clinical evaluation, Phase I trials, generally involve administration of
a product to a small number of healthy persons.  The product is tested for
safety, dosage, tolerance, metabolism and pharmacokinetic properties. Phase II
trials generally involve administration of a product to a limited number of
patients with a particular disease to determine dosage, efficacy and safety.
Phase III trials generally examine the clinical efficacy and safety of a
product in an expanded patient population at geographically dispersed clinical
sites.  The FDA reviews the clinical plans and the results of trials and can
discontinue the trials at any time if there are significant safety issues.  The
results of the preclinical and clinical trials are submitted after completion
of the Phase III trials in the form of a PLA for approval to commence
commercial sales.  The approval process is affected by several factors,
including the severity of the disease, the availability of alternative
treatments, and the risks and benefits demonstrated in clinical trials. The FDA
also may require post-marketing surveillance to monitor potential adverse
effects of the product.  The regulatory process can be modified by Congress or
the FDA in specific situations.

     Among the requirements for product license approval is the requirement
that the prospective manufacturer's methods conform to the FDA's Good
Manufacturing Practice ("cGMP") regulations, which must be followed at all

                                       17




<PAGE>   18

times. In complying with standards set forth in these regulations, manufacturers
must continue to expend time, money and effort in the area of production and
quality control to ensure full technical compliance.

     The testing and approval process is likely to require substantial time and
effort.  There can be no assurance that any approval will be granted on a
timely basis, if at all.  Most of NABI's clinical trials are at a relatively
early stage and, except for WinRho SD and H-BIG, no approval from the FDA or
any other governmental agency for the manufacturing or marketing of any of its
products under development has been granted.  The FDA may deny a PLA if
applicable regulatory criteria are not satisfied, require additional testing or
information, or require post-marketing testing and surveillance to monitor the
effects of NABI's products.  In addition, the FDA may require samples of any
lot of the product for testing and may deny release of the lot if the product
fails the testing.  Product approvals may be withdrawn if compliance with
regulatory standards is not maintained or if problems occur following initial
marketing.

     NABI anticipates following different regulatory approval paths for
immunizing agents to be used solely to stimulate antibody production for
immunotherapeutic products as contrasted with immunizing agents it is
developing as vaccine products.  For immunizing agents to be used solely to
stimulate antibody production for immunotherapeutic products, NABI intends to
conduct donor stimulation trials to demonstrate the safety and immunogenicity
of the immunizing agents in subjects who donate plasma.  Upon satisfactory
completion of such trials, donor stimulation programs will be initiated to
provide immunotherapeutic products to be used in Phase I/II and Phase III
clinical trials conducted by NABI.  Upon satisfactory completion of the Phase
III polyclonal antibody trials, PLA approval would be sought concurrently for
the immunotherapeutic product for the applicable disease indication and for the
immunizing agent used to produce the immunotherapeutic product, with donor
stimulation as the only approved indication requested for the immunizing agent.
NABI intends to follow the customary Phase I through Phase III approval
procedures for immunizing agents it is developing as vaccine products.  NABI
has received permission from the FDA to conduct donor stimulation programs
using the Staph A and CMV immunizing agent.  No assurance can be given,
however, that the FDA will permit NABI to begin donor stimulation using other
immunizing agents before obtaining regulatory approval of the immunizing agents
as vaccine products.  If the FDA were to require NABI to secure such regulatory
approvals for the immunizing agents to be used in donor stimulation before
commencing clinical trials on the immunotherapeutic products to be produced
using such immunizing agents, the overall regulatory approval process for
NABI's immunotherapeutic products could be longer than that normally required
for biological products.

     Sales of pharmaceutical products outside the United States are subject to
foreign regulatory requirements that vary widely from country to country.
Whether or not FDA approval has been obtained, approval of a product by
comparable regulatory authorities of foreign countries must be obtained prior
to the commencement of marketing the product in those countries.  The time
required to obtain such approval may be longer or shorter than that required
for FDA approval.

Orphan Drug Act

     Under the Orphan Drug Act, the FDA may designate a product or products as
having Orphan Drug status to treat a "rare disease or condition," which
currently is defined as a disease or condition that affects populations of less
than 200,000 individuals in the United States, or, if victims of a disease
number more than 200,000, for which the sponsor establishes that it does not
realistically anticipate its product sales in the United States will be
sufficient to recover its costs.  If a product is designated an Orphan Drug,
then the sponsor is entitled to receive certain incentives to undertake the
development and marketing of the product.  In addition, the sponsor that
obtains the first marketing approval for a designated Orphan Drug for a given
indication effectively has marketing exclusivity for a period of seven years.
There may be multiple designations of Orphan Drug status for a given drug and
for different indications.  However, only the sponsor of the first PLA for a
given drug for its use in treating a given rare disease may receive marketing
exclusivity.  WinRho SD has received Orphan Drug protection for the treatment of
ITP and has obtained Orphan Drug status for certain other indications and
certain other of NABI's products under development have obtained Orphan Drug
status.  See "-Factors to Be Considered-Uncertainty of Orphan Drug Designation."


                                       18




<PAGE>   19


Other

     NABI's Miami-based FDA-approved diagnostic testing laboratory is licensed
by the Health and Rehabilitative Services of Florida, and the states of
Maryland, New York, Pennsylvania and West Virginia.  The laboratory is licensed
pursuant to Medicare regulations and regulations of the U.S. Health Care
Finance Administration's Clinical Laboratory Improvement Act of 1988.

     NABI also is subject to government regulations enforced under the
Occupational Safety and Health Act, the Environmental Protection Act, the Clean
Air Act, the Clean Water Act, the National Environmental Policy Act, the Toxic
Substances Control Act, the Resource Conservation and Recovery Act, the Medical
Waste Tracking Act and other national, state or local restrictions.

COMPETITION

Plasma

     NABI and other independent plasma suppliers sell plasma principally to
pharmaceutical companies that process plasma into finished products.  Although
these pharmaceutical companies generally own plasmapheresis centers, in the
aggregate they purchase a substantial portion of their plasma requirements from
independent suppliers.  There is intense competition among independent plasma
collectors.  NABI attempts to compete for sales by providing customers with
substantial quantities of products, by stressing its ability to meet delivery
schedules and by providing high-quality products.  Management believes NABI has
the ability to continue to compete successfully in these areas.

     NABI competes for donors with pharmaceutical companies which obtain plasma
for their own use through their own plasma collection centers, other commercial
plasma collection companies and non-profit organizations such as the American
Red Cross and community blood banks which solicit the donations of blood.  NABI
competes for donors by providing competitive financial incentives which NABI
offers to donors to compensate them for their time and inconvenience, by
providing outstanding customer service to its donors, by implementing programs
designed to attract donors through education as to the uses for collected
plasma, by encouraging groups to have their members become plasma donors and by
improving the attractiveness of NABI's plasma collection facilities.

     Most of the plasma which NABI collects, processes and sells to its
customers is used in the manufacture of therapeutic products to treat certain
diseases.  Several companies are attempting to develop and market products to
treat some of these diseases based upon technology which would lessen or
eliminate the need for human blood plasma.  Such products, if successfully
developed and marketed, could adversely affect the demand for plasma. Products
utilizing technology developed to date have not proven as cost-effective and
marketable to healthcare providers as products based on human blood plasma.
However, NABI is unable to predict the impact on its business of future
technological advances.

     NABI believes that significant barriers to entry exist in the plasma
collection industry.  In order to commence a plasma collection business, an
organization must establish a center, a process which NABI believes takes from
15 to 24 months to complete due to the need for regulatory approvals.  Once a
center has been licensed by the FDA, a separate FDA license must then be
obtained for each specialty plasma to be collected.  This, in turn, lengthens
the approval process.  Once the center is operational, a stable donor base must
be established and cultivated.  Repeat donors are critical to success for both
quality control and economic reasons.  A significant volume of donated plasma,
and sophisticated screening and immunization procedures, also are necessary in
order to provide the diversity of plasma products demanded by the market.
Further, due to increasing quality requirements and more stringent testing
procedures, as well as the need to automate for cost-effectiveness, there is an
increasing need for economies of scale which generally only large firms can
provide.


                                       19




<PAGE>   20


Immunotherapeutics

     NABI believes that H-BIG has a significant share of the domestic market
and that NABI's access to the vaccine and specialty plasma necessary for the
manufacture of H-BIG will allow it to maintain its market share. NABI's main
competitor in marketing H-BIG has been Bayer AG ("Bayer"), a major
multinational pharmaceutical company.  Bayer has purchased some of the
specialty plasma used in the manufacture of its hepatitis B immune globulin
product from NABI.  Bayer also is a significant customer of NABI for source
plasma.


PRODUCT LIABILITY AND INSURANCE

     The processing and sale of NABI's plasma and plasma-based and
immunotherapeutic products involve a risk of product liability claims.  See
"Item 3 - Legal Proceedings." NABI currently maintains commercial general
(including product and professional liability) insurance.  There can be no
assurance that the coverage limits of NABI's insurance policy and/or any rights
of indemnification and contribution that NABI may have will offset existing or
future claims.  A successful claim against NABI with respect to an uninsured
liability or in excess of insurance coverage and not subject to indemnification
could have a material adverse effect on NABI's business, financial condition
and results of operations.


EMPLOYEES

     NABI employed approximately 2,400 persons at December 31, 1996. NABI
believes that the relations between NABI's management and its employees are
generally good.


FACTORS TO BE CONSIDERED

     The parts of this Annual Report on Form 10-K titled "Item 1 - Business,"
"Item 3 - Legal Proceedings" and "Item 7 - Management's Discussion and Analysis
of Financial Condition and Results of Operations" contain certain
forward-looking statements which involve risks and uncertainties.  In addition,
officers of NABI may from time to time make certain forward-looking statements
which also involve risks and uncertainties.  Set forth below is a discussion of
certain factors that could cause NABI's actual results to differ materially from
the results projected in such forward-looking statements.

Uncertainty Associated with Rapid Expansion of Immunotherapeutic Efforts

     Although NABI's objective has been to become a fully integrated developer,
manufacturer and marketer of immunotherapeutic products, NABI's historic
business primarily has been the collection and sale of plasma.  Prior to its
November 1995 merger with Univax , NABI had four immunotherapeutic products
(three of which are under development).  Two of these products (one of which is
under development) were acquired from Abbott.  The Merger accelerated this shift
to immunotherapeutic products by adding 10 products (one of which is being
marketed, eight of which are under development and one of which is no longer
being developed) to NABI's product portfolio as well as a large research and
development group and an expanded sales and marketing team.  Independently, NABI
has completed construction, and has begun validation, of a new biopharmaceutical
manufacturing facility which is intended to enable NABI to manufacture for the
first time on a commercial scale certain of its immunotherapeutic products.
Although immunotherapeutic products offer higher margins than the collection and
sale of plasma, these products require significant product development
activities and expenditures, may not be successfully developed (or if
successfully developed, may not be successfully commercialized), require
rigorous manufacturing specifications and practices, and are exposed to
significant competition and the uncertainty of technological change.  The effect
of these risks on NABI may be magnified by NABI's rapid expansion into the
immunotherapeutics business. There can be no assurance that NABI's
immunotherapeutic product activities will be successful, and to the extent they
are not, NABI's business, financial condition and results of operations will be
materially adversely affected.

                                       20




<PAGE>   21



Impact of Merger on Financial Results

     The Merger with Univax was consummated as a pooling of interests for
financial accounting purposes and, accordingly, the historical financial
statements for both companies have been combined for all historical periods.
The transaction and related costs of the Merger (approximately $6 million) were
expensed in the fourth fiscal quarter of 1995.  As a result of the pooling of
interests accounting treatment, NABI reported a substantial loss for the fourth
quarter and for 1995.  On a combined basis, after giving effect to the Merger,
NABI also has had significant net losses for the year ended December 31, 1994.
There can be no assurance that, in order to continue the profitability
experienced in 1996, NABI will not be required to reduce research and
development and other expenses associated with the development and
commercialization of higher margin immunotherapeutic products. A significant
reduction in such research, development and other expenses could have a
material adverse effect on the development and commercialization of
immunotherapeutic products currently under development and could have a
material adverse effect on the ability of NABI to realize the anticipated
long-term benefits of the Merger.

     NABI expects to incur significant expenses associated with its
immunotherapeutic product development activities, including the cost of
clinical trials relating to product development and marketing expenses relating
to product introduction.  Any revenues generated from products under
development will not be realized for several years. Other material and
unpredictable factors which could adversely affect operating results include:
the uncertainty of clinical trial results; the uncertainty, timing and costs
associated with product approvals and commercialization; the issuance and use
of patents and proprietary technology by NABI or its competitors; the effect of
technology and other business acquisitions or transactions; the increasing
emphasis on controlling health care costs and potential legislation or
regulation of health care prices; and actions by collaborators, customers and
competitors.

Uncertainty of New Product Development

     NABI's future success will depend on its ability to achieve scientific and
technological advances and to translate such advances into commercially
competitive products on a timely basis. NABI's immunotherapeutic products under
development are at various stages of research and development, and substantial
further development, preclinical testing and clinical trials will be required
to determine their technical feasibility and commercial viability.  The
proposed development schedules for these products may be affected by a variety
of factors, including technological difficulties, proprietary technology of
others, reliance on third parties and changes in government regulation, many of
which factors are not within the control of NABI.  Positive results for a
product in a clinical trial do not necessarily assure that positive results
will be obtained in future clinical trials or that government approval to
commercialize the product will be obtained.  In addition, any delay in the
development, introduction or marketing of NABI's products under development
could result either in such products being marketed at a time when their cost
and performance characteristics would not be competitive in the marketplace or
in a shortening of their commercial lives.  There can be no assurance that
NABI's immunotherapeutic products under development will prove to be
technologically feasible, commercially viable and able to obtain necessary
regulatory approvals and licenses on a timely basis, if at all.  The failure of
NABI to successfully and timely develop and commercialize several of its
immunotherapeutic products and obtain necessary regulatory approvals could have
a material adverse effect on NABI's business, financial condition and results
of operations.

Limited Marketing Experience with Immunotherapeutic Products

     NABI currently markets and sells two immunotherapeutic products: WinRho SD
and H-BIG.  No assurance can be given that the market for WinRho SD can be
addressed effectively by NABI's current sales force and distribution network.
NABI will lose its exclusive rights to market WinRho SD in the United States if
it does not meet specific sales goals or pay specified amounts to Cangene. If
NABI successfully develops additional immunotherapeutic products, significant
additional expenditures, management resources and time may be required to
develop a larger sales force, unless NABI elects to have a third party market
any or all of such products.  If NABI so elects, there can be no assurance that
NABI will be able to find a partner on acceptable terms or at all, or that any
such partner will be successful in its efforts.  If NABI succeeds in bringing
one or more products to market, it will

                                       21




<PAGE>   22

compete with many other companies that currently have extensive and well-funded
marketing and sales operations. There can be no assurance that NABI's marketing
and sales efforts will be able to compete successfully against such other
companies.  The failure of NABI to effectively and efficiently market existing
and new immunotherapeutic products or the loss of exclusive rights to market
WinRho SD in the United States would have a material adverse effect on NABI's
business, financial condition and results of operations.

Uncertainty of Market Acceptance

     One of NABI's existing immunotherapeutic products, WinRho SD, has been
marketed in the United States only since mid-1995, and no assurance can be
given that physicians, patients or third-party payors will accept and utilize
this product to a significant extent.  Further, there can be no assurance that,
if approved for marketing, any of NABI's other products in development will
achieve market acceptance. The degree of market acceptance will depend upon a
number of factors, including the receipt of regulatory approvals, the
establishment and demonstration in the medical community of the clinical
efficacy and safety of NABI's products and their potential advantages over
existing treatment methods, the prices of such products, and reimbursement
policies of government and third-party payors. The failure of WinRho SD or any
immunotherapeutic product under development to gain market acceptance could
have a material adverse effect on NABI's business, financial condition and
results of operations.

Fluctuations in Plasma Supply and Demand

     The basic raw material essential to NABI's business is human blood plasma.
NABI has historically derived substantially all of its revenues from the
collection and sale of plasma components and will continue to depend on plasma
revenues until such time, if ever, that the revenues generated by the
manufacture and sale of immunotherapeutic products increase significantly.
Currently, the supply of plasma is sufficient to meet demand (although this has
not always been true), with the exception of certain specialty plasmas.  The
worldwide demand for plasma has increased primarily as a result of an increase
in both the number and use of products which require plasma components for
their manufacture.  Concern over the safety of blood products, including
plasma, has resulted in the adoption of more rigorous screening procedures by
regulatory authorities and manufacturers of plasma-based products.  These
procedures, which include a more extensive investigation into a donor's
background and new tests, have disqualified numerous potential donors and
discouraged other donors who may be reluctant to undergo the screening
procedures.  Future changes in government regulation relating to the collection
and use of plasma or any negative public perception about the plasma collection
process could further adversely affect the number and type of available donors
and, consequently, the overall plasma supply.  Future fluctuations in the
demand for or supply of plasma could have a material adverse effect on NABI's
business, financial condition and results of operations.

Government Regulation; Uncertainty of Regulatory Approvals

     NABI's research, preclinical development, clinical trials, manufacturing
and marketing of its products are subject to extensive regulation by numerous
government authorities in the United States.  The process of obtaining FDA and
other required regulatory approvals is lengthy and expensive, and the time
required for such approvals is uncertain.  The approval process is affected by
several factors, including the severity of the disease, the availability of
alternative treatments, and the risks and benefits demonstrated in clinical
trials.  The FDA also may require post-marketing surveillance to monitor
potential adverse effects of the product.  The regulatory process can be
modified by Congress or the FDA in specific situations.  Most of NABI's
clinical trials are at a relatively early stage and, except for H-BIG and
WinRho SD, no approval from the FDA or any other government agency for the
manufacturing or marketing of any of its products under development has been
granted.  There can be no assurance that NABI will be able to obtain the
necessary approvals for manufacturing or marketing of any of its products under
development.  Failure to obtain additional FDA approvals of products under
development would have a material adverse effect on NABI's business, financial
condition and results of operations. If approved, failure to comply with
applicable regulatory requirements could, among other things, result in fines,
suspension or revocation of regulatory approvals, product recalls or seizures,
operating restrictions, injunctions and criminal prosecutions.


                                       22




<PAGE>   23


     Distribution of NABI's products outside the United States is subject to
extensive government regulation.  These regulations, including the requirements
for approvals or clearance to market, the time required for regulatory review
and the sanctions imposed for violations, vary from country to country. There
can be no assurance that NABI will obtain regulatory approvals in such
countries or that it will not be required to incur significant costs in
obtaining or maintaining its foreign regulatory approvals.  In addition, the
export by NABI of certain of its products which have not yet been cleared for
domestic commercial distribution may be subject to FDA export restrictions.
Failure to obtain necessary regulatory approvals, the restriction, suspension
or revocation of existing approvals or any other failure to comply with
regulatory requirements would have a material adverse effect on NABI's
business, financial condition and results of operations.

     NABI's United States plasma collection, storage, labeling and distribution
activities also are subject to strict regulation and licensing by the FDA.
NABI's plasma collection centers in the United States are subject to periodic
inspection by the FDA, and from time to time NABI receives notices of
deficiencies from the FDA as a result of such inspections.  The failure of NABI
or its plasma collection centers to continue to meet regulatory standards or to
remedy any such deficiencies could result in corrective action by the FDA,
including closure of one or more collection centers and fines or penalties.  In
addition, before new plasma collection centers are opened, the collection
centers and their procedures and personnel must meet certain regulatory
standards to obtain necessary licenses.  New regulations may be enacted and
existing regulations or their interpretation or enforcement are subject to
change.  Therefore, there can be no assurance that NABI will be able to
continue to comply with any regulations or that the costs of such compliance
will not have a material adverse effect on NABI's business, financial condition
and results of operations.

     The current process for producing H-BIG does not contain a viral
inactivation step. Consequently, the FDA requires lots of H-BIG to be tested
for viral contamination before the lots can be released for commercial sale.
Although NABI believes that H-BIG poses no significant risk of viral
contamination, and has each lot of H-BIG independently tested to determine
safety, rejection of lots of H-BIG by the FDA or delay by the FDA in the
release of lots for commercial sale could have a material adverse effect on
NABI's business, financial condition and results of operation. NABI is pursuing
the development of a manufacturing process for H-BIG which includes viral
inactivation and expects to market a virally inactivated product in late 1997
or early 1998.  There can be no assurance that NABI will be successful in these
efforts.

     NABI has received permission from the FDA to conduct donor stimulation
programs using the Staph A and CMV immunizing agents.  No assurance can be
given, however, that the FDA will permit NABI to begin donor stimulation using
other immunizing agents before obtaining regulatory approval of the immunizing
agents as vaccine products.  If the FDA were to require NABI to secure such
regulatory approvals for the immunizing agents to be used in donor stimulation
before commencing clinical trials on the immunotherapeutic products to be
produced using such immunizing agents, the overall regulatory approval process
for NABI's immunotherapeutic products would be significantly delayed, which
could have a material adverse effect on NABI's business, financial condition
and results of operations.

Dependence Upon Third Parties to Manufacture Products

     NABI collects and supplies the specialty plasma necessary for the
manufacture of H-BIG.  In August 1995, NABI entered into an agreement with the
MBPI pursuant to which MBPI, subject to receiving FDA approval, will formulate,
process and package H-BIG.  NABI anticipates receiving product from MBPI by
late 1997 or early 1998, although there can be no assurance that product will
be available at that time.  Abbott, NABI's previous manufacturer of H-BIG, has
supplied NABI with a sufficient inventory of H-BIG to satisfy NABI's historical
requirements for the product through 1997, assuming no rejection of, or delay
in, release of lots of H-BIG by the FDA.  NABI's agreement with MBPI has a
five-year term commencing upon the date MBPI receives FDA approval, although
either party may terminate the agreement upon 12 months' notice.  NABI is
required to purchase its requirements of WinRho SD from Cangene, which has
granted to NABI exclusive marketing rights to the product in the United States.
NABI does not have manufacturing rights for WinRho SD.  The failure by any of
NABI's current or future manufacturers to meet NABI's needs for products or
delays in the receipt of deliveries could have a material adverse effect on
NABI's business, financial condition and results of operations.  NABI has
constructed a biopharmaceutical manufacturing facility which is designed to
allow NABI to

                                       23




<PAGE>   24

formulate, process and package H-BIG. Although NABI has commenced validation of
this facility, because the facility will require complete validation and
licensure by the FDA, NABI does not anticipate that the facility will be able
to produce H-BIG for commercial sale until 1998.  Moreover, manufacturing
products at a single site may present risks if a disaster (such as a fire or
hurricane) causes interruption of manufacturing capability. In such an event,
NABI will have to resort to alternative sources of manufacturing which could
increase its costs as well as result in significant delays while required
regulatory approvals are obtained.  Any such delays or increased costs could
have a material adverse effect on NABI's business, financial condition and
results of operations.

Limited Manufacturing Capability and Experience

     NABI has completed construction and has commenced validation of a new
biopharmaceutical manufacturing facility in Boca Raton, Florida.  NABI
anticipates that it will validate in 1997 and receive FDA licensure for this
facility in 1998.  No assurance can be given that NABI will be able to validate
or obtain such licensure.  Failure to validate and obtain such licensure on a
timely basis or at all would have a material adverse effect on NABI's business,
financial condition and results of operations.  The new facility is designed to
process specialty plasma into NABI's immunotherapeutic products.  However, NABI
has not previously owned or operated such a facility and has no direct
experience in commercial, large-scale manufacturing of immunotherapeutic
products.  The failure of NABI to successfully operate its new manufacturing
facility would have a material adverse effect on NABI's business, financial
condition and results of operations.

Potential Adverse Effect of Litigation

     NABI is currently one of several defendants in numerous suits generally
based upon claims that the plaintiffs became infected with HIV as a result of
using HIV-contaminated products made by various defendants other than NABI or
as a result of family relations with those so infected.  These suits allege,
among other things, that NABI or its predecessors supplied HIV-contaminated
plasma to the defendants who produced the products in question.  One of the
suits purports to be a class action.  NABI denies all claims made against it
and intends to vigorously defend the cases.  No assurance can be given that
additional lawsuits relating to infection with HIV will not be brought against
NABI by persons who have become infected with HIV or plasma fractionators or
that cross-complaints will not be filed in existing lawsuits.  In addition,
there can be no assurance that lawsuits based on other causes of action will
not be filed or that NABI will be successful in the defense of any or all
existing or potential future lawsuits.  Defense of suits can be expensive and
time-consuming, regardless of the outcome, and an adverse result in one or more
suits, particularly those related to HIV, could have a material adverse effect
on NABI's business, financial condition and results of operations.

Risk of Product Liability; Limited Insurance

     The processing and sale of NABI's plasma and plasma-based products,
including immunotherapeutic products, involve a risk of product liability
claims, and NABI currently is a party to litigation involving such claims.  In
addition, there can be no assurance that infectious diseases will not be
transmitted by NABI's products and therefore create additional product
liability claims.  Product liability insurance for the biopharmaceutical
industry generally is expensive to the extent it is available at all.  There
can be no assurance that NABI will be able to maintain such insurance on
acceptable terms or that it will be able to secure increased coverage if the
commercialization of its products progresses.  Moreover, there can be no
assurance that the existing coverage of NABI's insurance policy and/or any
rights of indemnification and contribution that NABI may have will offset
existing or future claims.  A successful claim against NABI with respect to
uninsured liabilities or in excess of insurance coverage and not subject to any
indemnification or contribution could have a material adverse effect on NABI's
business, financial condition and results of operations.

Dependence on Strategic Alliances

     NABI currently has strategic alliances with Cangene, Chiron and others for
the manufacturing, development, marketing and sale of immunotherapeutic
products.  NABI intends to pursue strategic alliances with third parties for
the development, marketing and sale of certain of its other immunotherapeutic
products. No assurance can be given

                                       24




<PAGE>   25

that NABI will be successful in these efforts or, if successful, that the
collaborators will conduct their activities in a timely manner.  Certain of
NABI's collaborators, including Chiron, have the right to terminate their
collaborative agreements with NABI. If any of NABI's existing or future
collaborative partners breach or terminate their agreements with NABI or
otherwise fail to conduct their collaborative activities in a timely manner,
the preclinical or clinical development or commercialization of products could
be delayed, and NABI may be required to devote significant additional resources
to product development and commercialization, or terminate certain development
programs.  Failure to enter into successful strategic alliances or the
termination of existing alliances could have a material adverse effect on
NABI's business, financial condition and results of operations.  In addition,
there can be no assurance that disputes will not arise in the future with
respect to the ownership of rights to any technology developed with third
parties.  These and other possible disagreements between collaborators and NABI
could lead to delays in the collaborative research, development or
commercialization of certain products or could require or result in litigation
or arbitration, which would be time-consuming and expensive, and could have a
material adverse effect on NABI's business, financial condition and results of
operations.

     NABI's collaborative partners may develop, either alone or with others,
products that compete with the development and marketing of NABI's products.
Competing products, either developed by the collaborative partners or to which
the collaborative partners have rights, may result in those partners'
withdrawal of support with respect to certain of NABI's products, which could
have a material adverse effect on NABI's business, financial condition and
results of operations.

Foreign Restrictions on Importation of Plasma

     Export sales of plasma for the 1994, 1995 and 1996 fiscal years
represented approximately 38%, 36% and 39% respectively, of NABI's sales for
those periods.  NABI's export sales primarily are to European customers.
Concern over blood safety has led to movements in a number of European and
other countries to restrict the importation of plasma and plasma components
collected outside such countries' borders or, in the case of certain European
countries, outside Europe.  NABI believes that, to date, these efforts have not
led to any meaningful restriction on the importation of plasma and plasma
components and have not adversely affected NABI. Such restrictions, however,
continue to be debated and there can be no assurance that such restrictions
will not be imposed in the future.  If imposed, such restrictions could have a
material adverse effect on the demand for NABI's plasma and on NABI's business,
financial condition and results of operations.

Uncertainty of Legal Protection Afforded by Patents and Proprietary Rights

     The patent positions of biotechnology firms generally are highly uncertain
and involve complex legal and factual questions.  There can be no assurance
that existing patent applications will mature into issued patents, that NABI
will be able to obtain additional licenses to patents of others or that NABI
will be able to develop additional patentable technology of its own.  Because
patent applications in the United States are not disclosed by the Patent and
Trademark Office until patents issue, and because publication of discoveries in
the scientific or patent literature often lags behind actual discoveries, NABI
cannot be certain that it was the first creator of inventions covered by its
pending patent applications or that it was the first to file patent applications
for such inventions.  There can be no assurances that any patents issued to NABI
will provide it with competitive advantages or will not be challenged by others.
Furthermore, there can be no assurance that others will not independently
develop similar products, or, if patents are issued to NABI, design around such
patents.

     A number of pharmaceutical companies, biotechnology companies,
universities and research institutions have filed patent applications or
received patents relating to products or processes competitive with or similar
to those of NABI.  Some of these applications or patents may be competitive
with NABI's applications, or conflict in certain respects with claims made
under NABI's applications.  Such a conflict could result in a significant
reduction of the coverage of NABI's patents, if issued.  In addition, if
patents that contain competitive or conflicting claims are issued to others and
such claims are ultimately determined to be valid, NABI may be required to
obtain licenses to these patents or to develop or obtain alternative
technology.  If any licenses are required, there can be no assurance that NABI
will be able to obtain any such licenses on commercially favorable terms, if at
all. NABI's failure to obtain a license to any technology that it may require
to commercialize its products could have a material adverse

                                       25




<PAGE>   26

effect on NABI's business, financial condition and results of operations.
Litigation, which could result in substantial cost to NABI, may also be
necessary to enforce any patents issued to NABI or to determine the scope and
validity of third-party proprietary rights.

     NABI has been notified by the European Patent Office that NABI has been
allowed a patent for HIV-IG, giving NABI commercial protection in 12 European
countries until the year 2008.  NABI also has patents for HIV-IG in Australia,
New Zealand and Japan, and has patent applications for HIV-IG pending in 
various other foreign countries.  NABI jointly owns these HIV-IG patents and
applications with the University of Minnesota, which is entitled to practice
the technology contained in HIV-IG and sell HIV-IG product to the same extent
as NABI.  NABI has no pending patent application for HIV-IG in the United
States.  An unrelated third party which currently holds a United States patent
may claim that its patent is infringed by HIV-IG.  If such patent withstands
any challenge by NABI or others, NABI will be required to obtain a license from
the patent holder in order to market HIV-IG in the United States.  While NABI
believes that, if necessary, it will be able to obtain such a license on
commercially acceptable terms, there can be no assurance that NABI will be
successful.

     NABI also relies on secrecy to protect its technology, especially where
patent protection is not believed to be appropriate or obtainable. NABI
maintains strict controls and procedures regarding access to and use of its
proprietary technology and processes.  However, there can be no assurance that
these controls or procedures will not be violated, that NABI would have
adequate remedies for any violation, or that NABI's trade secrets will not
otherwise become known or be independently discovered by competitors.

Uncertainty of Orphan Drug Designation

     If a product is designated an Orphan Drug by the FDA, then the sponsor is
entitled to receive certain incentives to undertake the development and
marketing of the product.  In addition, the sponsor that obtains the first
marketing approval for a designated Orphan Drug for a given indication
effectively has marketing exclusivity for a period of seven years.  There may
be multiple designations of Orphan Drug status for a given drug and for
different indications.  However, only the sponsor of the first approved PLA for
a given drug for its use in treating a given rare disease may receive marketing
exclusivity.  While it may be advantageous to obtain Orphan Drug status for
eligible products, there can be no assurance that the precise scope of
protection that is currently afforded by Orphan Drug status will be available
in the future or that the current level of exclusivity will remain in effect.
Congress has considered legislation that would amend the Orphan Drug Act to
limit the scope of marketing exclusivity granted to Orphan Drug products.
WinRho SD has received Orphan Drug marketing exclusivity for the treatment of
ITP (and has obtained Orphan Drug status for certain other indications) and
certain other of NABI's products under development have Orphan Drug status.
There can be no assurance that NABI will succeed in obtaining Orphan Drug
marketing exclusivity for products that have Orphan Drug status or that Orphan
Drug marketing exclusivity with respect to WinRho SD or other products, if
obtained, will be of material benefit to NABI. Furthermore, another
manufacturer could obtain an Orphan Drug designation as well as approval for
the same product for a different indication or a different product for the same
indication.

Intense Competition; Uncertainty of Technological Change

     Competition in the development of biopharmaceutical products is intense,
both from biotechnology and pharmaceutical companies, and is expected to
increase. Many of NABI's competitors have greater financial resources and
larger research and development staffs than NABI, as well as substantially
greater experience in developing products, obtaining regulatory approvals, and
manufacturing and marketing pharmaceutical products.  Competition with these
companies involves not only product development, but also acquisition of
products and technologies from universities and other institutions.  NABI also
competes with universities and other institutions in the development of
immunotherapeutic products, technologies and processes and for qualified
scientific personnel.  There can be no assurance that NABI's competitors will
not succeed in developing technologies and products that are more effective or
affordable than those being developed by NABI. In addition, one or more of
NABI's competitors may achieve product commercialization of or patent
protection for competitive products earlier than NABI, which would preclude or
substantially limit sales of NABI's products. Further, several companies are
attempting to develop and market products to treat certain diseases based upon
technology which would lessen or

                                       26




<PAGE>   27

eliminate the need for human blood plasma.  The successful development and
commercialization by any competitor of NABI of any such product could have a
material adverse effect on NABI's business, financial condition and results of
operations.

     NABI competes for plasma donors with pharmaceutical companies which may
obtain plasma for their own use, other commercial plasma collection companies
and non-profit organizations such as the American Red Cross and community blood
banks which solicit the donation of blood.  A number of these competitors have
access to greater financial, marketing and other resources than NABI. NABI
competes for donors by means of offering financial incentives to donors to
compensate them for lost time and inconvenience, providing outstanding customer
service to its donors, implementing programs designed to attract donors through
education as to the uses for collected plasma, encouraging groups to have their
members become plasma donors and improving the attractiveness of NABI's plasma
collection facilities.  NABI also competes with other independent plasma
suppliers that sell plasma principally to pharmaceutical companies that process
plasma into finished products. If NABI is unable to maintain and expand its
donor base, its business, financial condition and results of operations will be
materially and adversely affected.

Dependence on Small Number of Customers for Plasma Sales

     NABI sells its source and specialty plasma to approximately 20
pharmaceutical and diagnostic product manufacturers.  These customers
constitute most of the worldwide purchasers of human blood plasma. During the
1994, 1995 and 1996 fiscal years, plasma sales to customers purchasing more
than 10% of NABI's consolidated sales (which did not exceed three customers in
any such period), accounted for approximately 49%, 47% and 45% respectively, of
NABI's consolidated sales for each period.  The loss of any major customer or a
material reduction in a major customer's purchases of plasma could have a
material adverse effect upon NABI's business, financial condition and results
of operations.

Uncertainty of Product Pricing and Reimbursement

     NABI's ability to commercialize its immunotherapeutic products and related
treatments will be dependent in part upon the availability of, and NABI's
ability to obtain, adequate levels of reimbursement from government health
administration authorities, private health care insurers and other
organizations.  Significant uncertainty exists as to the reimbursement status
of newly approved health care products, and there can be no assurance that
adequate third-party coverage will be available, if at all. Inadequate levels
of reimbursement may prohibit NABI from maintaining price levels sufficient for
realization of an adequate return on its investment in developing new
immunotherapeutic products and could result in the termination of production of
otherwise commercially viable products. Government and other third-party payors
are increasingly attempting to contain health care costs by limiting both the
coverage and level of reimbursement for new products approved for marketing by
the FDA and by refusing, in some cases, to provide any coverage for disease
indications for which the FDA has not granted marketing approval.  Also, the
trend towards managed health care in the United States and the concurrent
growth of organizations such as HMOs, which could control or significantly
influence the purchase of health care services and products, as well as
legislative proposals to reform health care or reduce government insurance
programs, may all result in lower prices for NABI's products.  The cost
containment measures that health care providers are instituting and the impact
of any health care reform could have an adverse effect on NABI's ability to
sell its products and may have a material adverse effect on NABI's business,
financial condition and results of operations.

     There can be no assurance that reimbursement in the United States or
foreign countries will be available for NABI's products, or, if available, will
not be decreased in the future, or that reimbursement amounts will not reduce
the demand for, or the price of, NABI's products. The unavailability of
third-party reimbursement or the inadequacy of the reimbursement for medical
treatments using NABI's products could have a material adverse effect on NABI's
business, financial condition and results of operations. Moreover, NABI is
unable to forecast what additional legislation or regulation, if any, relating
to the health care industry or third-party coverage and reimbursement may be
enacted in the future or what effect such legislation or regulation would have
on NABI's business.


                                       27




<PAGE>   28


     Most of NABI's plasma sales are made pursuant to contracts having initial
terms ranging from one to five years.  These contracts generally provide for
annual pricing renegotiations.  Once established, the pricing generally remains
fixed for the year subject to price changes to reflect changes in customer
specifications or price adjustments to compensate NABI for increased costs
associated with new governmental testing requirements. As a result, NABI's
business, financial condition and results of operations would be adversely
affected if, due to changes in government regulation or other factors, its
costs of collecting and selling plasma rise during a given year and NABI is not
able to pass on the increased costs until the next annual pricing
renegotiation.



I
TEM 2. PROPERTIES

     The Company occupies approximately 786,000 square feet.  A majority of the
space primarily used to collect plasma is leased under leases expiring through
2010. All leases are with parties not affiliated with NABI. A majority of these
leases contain renewal options which permit NABI to renew the leases for
periods of two to five years at the then fair rental value. One of NABI's
plasma collection centers currently operates on a month-to-month lease
arrangement.  NABI believes that in the normal course of its business it will
be able to renew or replace its existing leases. NABI also owns four plasma
collection centers located in Arizona, Indiana, Minnesota and Washington.
NABI's plasma collection centers range in size from approximately 1,000 to
25,000 square feet and generally are located in population centers of 80,000 to
250,000 people.

     NABI leases office, laboratory, warehouse and pilot manufacturing space in
Miami, Florida and Rockville, Maryland.

     NABI has completed construction, and has begun validation, of a new 77,000
square foot facility in Boca Raton, Florida. Approximately 47,000 square feet
will be devoted to manufacturing, of which approximately 15,000 square feet is
currently unoccupied and reserved for possible future expansion. The remainder
of the facility houses certain administrative operations and executive offices.



ITEM 3. LEGAL PROCEEDINGS

     NABI is a party to litigation in the ordinary course of business. NABI
does not believe that any such litigation will have a material adverse effect
on its business, financial position or results of operations.

     In addition, NABI is a co-defendant with various other parties in numerous
suits filed in the U.S. by, or on behalf of, individuals who claim to have been
infected with HIV as a result of either using HIV-contaminated products made by
the defendants other than NABI or having familial relations with those so
infected.  The claims against NABI are based on negligence and strict
liability. One of the suits, filed in the Circuit Court for the Eleventh
Judicial Circuit of Dade County, Florida on May 23, 1995 (Case No. 95-10489 CA
02), purports to be a class action.  The defendants in this suit, other than
NABI, include Bayer Corporation, Armour Pharmaceutical Company, Rhone-Poulenc
Rorer, Inc., Baxter Healthcare Corporation, Alpha Therapeutic Corporation and
The National Hemophilia Foundation.

     NABI denies all claims against it in these suits and intends to defend the
cases vigorously.  Although NABI does not believe that any such litigation will
have a material adverse effect on its business, financial position or results
of operations, the defense of these lawsuits can be expensive and
time-consuming, regardless of the outcome, and an adverse result in one or more
of these lawsuits could have a material adverse effect on NABI's business,
financial condition, and results of operations.

                                       28




<PAGE>   29




ITEM 3A.  EXECUTIVE OFFICERS OF THE REGISTRANT

      The executive officers of NABI are as follows:



<TABLE>
<CAPTION>
     NAME                       AGE                       POSITION
     ====================================================================================
     <S>                        <C>  <C>
     David J. Gury                    58   Chairman of the Board, President and
                                           Chief Executive Officer

     John C. Carlisle                 50   Executive Vice President, Chief Operating Officer
                                           and Director

     Alfred J. Fernandez              48   Senior Vice President and Chief Financial Officer

     David D. Muth                    44   Senior Vice President, Business Development,
                                           Sales and Marketing

     Pinya Cohen, Ph.D.               61   Senior Vice President, Quality Assurance and
                                           Regulatory Affairs

     Robert B. Naso, Ph.D.            52   Senior Vice President, Research and Development

     Stephen W. Weston                49   Senior Vice President, Donor Management

     Frank J. Malinoski, M.D., Ph.D.  42   Senior Vice President, Medical and Clinical Affairs

     Lorraine M. Breece               44   Controller and Chief Accounting Officer
</TABLE>


     David J. Gury has served as NABI's Chairman of the Board, President and
Chief Executive Officer since April 3, 1992. Previously, since May 21, 1984, he
was NABI's President and Chief Operating Officer. He has been a director of
NABI since 1984. From July 1977 until his employment by NABI, Mr. Gury was
employed by Alpha Therapeutic Corporation (formerly Abbott Scientific Products,
"Alpha") as Director of Plasma Procurement (through October 1980), General
Manager, Plasma Operations (through October 1981) and Vice President, Plasma
Supply (through May 1984). In these capacities, Mr. Gury had executive
responsibilities for plasma procurement and operation of plasmapheresis
centers.

     John C. Carlisle has served as Executive Vice President and Chief
Operating Officer since March 1994 and was elected a director in August 1995.
Mr. Carlisle joined NABI in January 1994 and previously, from August 1989 to
January 1994 he was President and Chief Executive Officer of Premier
BioResources, Inc. ("PBI").  From June 1981 to August 1989 he served as
Director of Plasma Supply for Alpha.

     Alfred J. Fernandez is Senior Vice President and Chief Financial Officer
of NABI, has served in that capacity since November 1995 and has served as an
executive officer of NABI since April 5, 1989. Previously, Mr. Fernandez had
been associated with Rachlin & Cohen, Certified Public Accountants, in Miami,
Florida as Director of Accounting and Audit Services since January 1988. Mr.
Fernandez was employed by the Chattahoochee Financial Corporation in Atlanta,
Georgia from May 1986 to September 1987 as Executive Vice President and Chief
Financial Officer, with responsibility over all financial, accounting and
investment functions. For more than five years prior to that time, Mr.
Fernandez served as a Senior Manager with Price Waterhouse, an international
public accounting firm.

     David D. Muth is Senior Vice President, Business Development, Sales and
Marketing, and has served in that capacity since November 1996.  Mr. Muth
joined NABI in August 1996 and previously he was Senior Vice President,
Business Development at Duramed Pharmaceuticals, Inc. in Cincinnati, Ohio from
February 1995 to May 1996.  From 1978 to 1995, he was employed by Ortho McNeil
Pharmaceuticals Corporation, a division of Johnson

                                       29




<PAGE>   30

& Johnson in New Brunswick, New Jersey as Director, Corporate Development (1992
- - 1995) and numerous positions of increasing responsibilities in both sales and
marketing (1978 - 1992).  Prior to that time, Mr. Muth held financial positions
at Paine Webber and Dun & Bradstreet.

     Robert B. Naso, Ph.D. joined NABI in November 1995 as Senior Vice
President, Research and Development and General Manager, Rockville Operations.
Previously, he was Vice President of Research at Univax beginning in May 1992,
and became Vice President of Research and Development in October 1994. From
1983 to 1992, Dr. Naso was a manager and director of pharmaceutical and vaccine
research and development at the R.W. Johnson Pharmaceutical Research Institute,
a division of Ortho Pharmaceutical Corporation and the Johnson & Johnson
Biotechnology Center, a division of the R.W. Johnson Pharmaceutical Research
Institute.

     Pinya Cohen, Ph.D. is Senior Vice President, Quality Assurance and
Regulatory Affairs, has served in that capacity since November 1995 and has
served as an executive officer since August 1992. From 1990 to 1992, he was
Vice President, Regulatory Affairs for Connaught Laboratories, Inc..  From 1976
to 1979, Dr. Cohen was Director, Quality Control and Regulatory Affairs and
from 1979 to 1990 was Vice President, Quality Control and Regulatory Affairs at
Merieux Institute, Inc.  From 1972 to 1976, he was Director of the Plasma
Derivatives Branch, Bureau of Biologics, FDA and prior to that time, from 1964
to 1972, he was Director of the Plasma Derivatives Branch, Division of
Biologics Standards, the NIH.

     Stephen W. Weston is Senior Vice President, Donor Management, and has
served in that capacity since November 1995 and has served as an executive
officer since April 1992. Prior to that time, he was Vice President, Finance
and Chief Financial Officer for TSI Security Acquisition Corporation in
Deerfield Beach, Florida since August 1990. From September 1988 to July 1990,
Mr. Weston was employed by ConPharma Home Healthcare, Inc. in Buffalo, New York
as Vice President, Finance and Chief Financial Officer. For more than four
years prior to that time, Mr. Weston served as Vice President, Finance and
Chief Financial Officer of NABI.

     Frank J. Malinoski, M.D., Ph.D.  is Senior Vice President, Medical and
Clinical Affairs, and has served in that capacity since March 1997.  Dr.
Malinoski joined NABI in March 1996 as Vice President, Medical and Clinical
Affairs.  Previously from 1992 to 1996, he was Director, Clinical Research for
Lederle-Praxis Biologicals in Rochester, New York.  Prior to that time, from
1986 to 1992, Dr. Malinoski conducted clinical research with the U.S. Army
Medical Research Institute of Infectious Diseases.

     Lorraine M. Breece is NABI's Controller and Chief Accounting Officer, and
has served in that capacity since April 1991. Previously, she had been
associated with Trammell Crow Company as Controller and Consultant since
October 1989. Prior to that time, from March 1984 to October 1989, Ms. Breece
was employed by Levitt Corporation as Controller.

                                       30




<PAGE>   31



                                    PART II




ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS


     NABI's common stock is quoted on the NASDAQ National Market under the
symbol "NABI." The following table sets forth for each period indicated the
high and low sale prices for the common stock (based upon intra-day trading) as
reported by the NASDAQ National Market.




<TABLE>
<CAPTION>
                                         HIGH    LOW
                                         ----   -----
     <S>   <C>                          <C>     <C>
     1995
           First Quarter                  9 3/8  6 1/4
           Second Quarter                10 3/8  8
           Third Quarter                 11 3/4  7 3/4
           Fourth Quarter                11      7 7/8
     1996
           First Quarter                 14 3/4  9 1/2
           Second Quarter                14 5/8  8 3/4
           Third Quarter                 12 3/8  6 7/8
           Fourth Quarter                12 1/8  7 3/8
</TABLE>


     The number of record holders of NABI's common stock at December 31, 1996
was 1,619.

     No cash dividends have been previously paid on NABI's common stock and
none are anticipated in 1997. NABI's loan agreement with its principal lender
also restricts dividend payments.


                                       31




<PAGE>   32



ITEM 6. SELECTED FINANCIAL DATA - FIVE YEARS ENDED DECEMBER 31, 1996

     The following table sets forth selected consolidated financial data for
NABI for the five years ended December 31, 1996 that were derived from NABI's
consolidated financial statements, which have been audited by Price Waterhouse
LLP, independent accountants. On November 29, 1995, Univax, a publicly traded
biopharmaceutical company, was merged with and into NABI in a tax-free,
stock-for-stock transaction. The Merger was accounted for as a pooling of
interests and accordingly, all prior period financial information has been
combined.

     The data should be read in conjunction with, and are qualified by
reference to, NABI's Consolidated Financial Statements and the Notes thereto
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations."  All amounts in the following table are expressed in thousands,
except for per share data.


<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31,
                                          ----------------------------------------------------------------
                                            1992          1993          1994          1995          1996
                                          --------      --------      --------      --------      --------
<S>                                       <C>           <C>           <C>           <C>           <C>
STATEMENT OF OPERATIONS DATA:
Sales                                     $82,254       $101,574      $164,426      $195,928      $239,909
Cost of products sold                      71,137         81,607       131,192       152,148       181,914
                                          ------        --------      --------      --------      --------

Gross profit                               11,217         19,967        33,234        43,780        57,995
Reseach and development expense            11,235         17,089        17,599        20,132        16,721
Selling, general and administrative
 expense                                   10,080         12,284        16,467        26,816        21,095
Royalty expense                               347          1,545         1,426         3,490         5,253
Other operating expense                     2,101          1,842         2,234         3,015         3,757
                                          -------        -------       -------       -------       -------
Operating income (loss)                   (12,546)       (12,793)       (4,492)       (9,673)       11,169
Interest income                             1,653          1,187           354         1,064         1,275
Interest expense                           (2,604)        (3,282)       (3,254)       (1,931)       (3,987)
Other, net                                    (65)           (24)          (28)         (334)         (511)
                                          -------        -------       -------       -------       -------
Income (loss) before (provision)
 benefit income taxes and
 accounting change/extraordinary
 charge                                   (13,562)       (14,912)       (7,420)      (10,874)        7,946
(Provision) benefit for income taxes           (5)        (1,988)       (5,774)       (6,687)        6,214
                                           -------        -------       -------       -------       -------
Income (loss) before accounting
 charge/extraordinary charge              (13,567)       (16,900)      (13,194)      (17,561)       14,160
Accounting change/extraordinary                
 charge                                        --            100          (717)          ---          (932)
                                          -------       --------      --------      --------      --------

Net income (loss)                        ($13,567)      $(16,800)     ($13,911)     $(17,561)      $13,228
                                         ========       ========      ========      ========      ========
Earnings (loss) per share:
  Income (loss) before accounting
   charge/extraordinary charge             $(0.65)        $(0.76)       $(0.47)       $(0.52)        $0.40
  Accounting change/extraordinary
   charge                                     ---           0.01         (0.03)          ---         (0.03)
                                          -------       --------      --------      --------      --------
  Net income (loss)                        $(0.65)        $(0.75)       $(0.50)       $(0.52)        $0.37
                                          =======       ========      ========      ========      ========

Weighted average number of shares and
 common share equivalents                  20,850         22,328        28,042        33,574        35,629

BALANCE SHEET DATA:
  Working capital                         $36,384       $ 39,806      $ 52,208      $ 14,690      $ 63,630
  Total assets                             89,958         91,459       132,089       137,975       202,142
  Notes payable, including current
   maturities                              19,969         21,202        27,557        42,894        83,465
  Contingent purchase price obligation,
   including current maturities             6,943          7,056           ---           ---           ---
  Total stockholders' equity               52,678         51,635        85,319        69,442        86,061
</TABLE>





                                       32




<PAGE>   33



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

     The following discussion and analysis of NABI's financial condition and
results of operations for the three years ended December 31, 1996 should be
read in conjunction with the Consolidated Financial Statements and Notes
thereto.

     On November 29, 1995, Univax, a publicly traded biopharmaceutical company,
was merged with and into NABI in a tax-free, stock-for-stock transaction. The
Merger was accounted for as a pooling of interests and accordingly, all prior
period financial information has been combined.


RESULTS OF OPERATIONS

     The following table sets forth NABI's results of operations for the
respective periods expressed as a percentage of sales:



<TABLE>
<CAPTION>
                                                        YEAR ENDED DECEMBER 31,
                                                     =============================
                                                       1994      1995       1996
                                                     --------  ---------  --------
<C>                                                  <C>       <C>        <C>
Sales                                                 100.0%      100.0%    100.0%
Cost of products sold                                  79.8        77.7      75.8
                                                     ------    --------   -------
Gross profit margin                                    20.2        22.3      24.2
Research and development expense                       10.7        10.3       7.0
Selling, general and administrative expense            10.0        13.7       8.8
Royalty expense                                         0.9         1.7       2.2
Other operating expense                                 1.3         1.5       1.6
                                                     ------    --------   -------
Operating income (loss)                                (2.7)       (4.9)      4.6
Interest income                                         0.2         0.5       0.5
Interest expense                                       (2.0)       (1.0)     (1.6)
Other, net                                              ---        (0.2)     (0.2)
                                                     ------    --------   -------
Income (loss) before provision for income taxes and
extraordinary charge                                   (4.5)       (5.6)      3.3
Benefit (provision) for income taxes                   (3.5)       (3.4)      2.6
Extraordinary charge                                   (0.4)        ---      (0.4)
                                                     ------    --------   -------
Net income (loss)                                      (8.4)%      (9.0)%     5.5%
                                                     ======    =========  =======
</TABLE>


     Information concerning NABI's sales by industry segment, for the respective
periods, is set forth in the following table. All dollar amounts set forth in
the table are expressed in thousands.



<TABLE>
<CAPTION>
                                                YEAR ENDED DECEMBER 31,
                                  ====================================================
                                        1994              1995              1996
                                  ----------------  ----------------  ----------------
<S>                               <C>       <C>     <C>       <C>     <C>       <C>
Plasma - Source                   $ 98,630   60.0%  $108,327   55.3%  $121,025   50.4%
       - Specialty                  45,057   27.4     61,178   31.2     86,807   36.2
                                  --------  -----   --------  -----   --------  -----
                                   143,687   87.4    169,505   86.5    207,832   86.6
Immunotherapeutic products           9,295    5.6     18,590    9.5     26,405   11.0
Diagnostic products and services    11,444    7.0      7,833    4.0      5,672    2.4
                                  --------  -----   --------  -----   --------  -----
Total                             $164,426  100.0%  $195,928  100.0%  $239,909  100.0%
                                  ========  =====   ========  =====   ========  =====
</TABLE>



                                       33




<PAGE>   34


                            1996 AS COMPARED TO 1995


     Sales.  Sales for 1996 increased 22% to $239.9 million compared to $195.9
million in 1995, reflecting an increase in plasma sales of $38.3 million and an
increase in immunotherapeutic product sales of $7.8 million, both of which were
offset by a decrease in diagnostic products and services sales of $2.2 million.
The 22.6% increase in plasma sales was primarily attributable to increased
specialty plasma sales. Increased sales of immunotherapeutic products was
primarily due to an increase in H-BIG sales.

     Gross profit margin.  Gross profit and related margin for 1996 was $58
million or 24.2%, compared to $43.8 million or 22.3% in 1995.  An improved
sales mix resulting primarily from increased sales of higher-margin specialty
plasma and immunotherapeutic products accounted for the improved profitability.

     Research and development expense.  Research and development expense was
$16.7 million or 7.0% of sales in 1996 compared to $20.1 million or 10.3% of
sales in 1995. The decrease in expenses relates primarily to the discontinuation
of clinical trials for HyperGAM+CF during June 1996.

     Selling, general and administrative expense.  Selling, general and
administrative expense was $21.1 million or 8.8% of sales in 1996, compared to
$26.8 million or 13.7% of sales in 1995. The decrease was primarily
attributable to approximately $6 million in non-recurring merger expenses
associated with the Univax Merger in 1995.

     Other factors.  The benefit for income taxes was $6.2 million in 1996,
compared to a provision of $6.7 million in 1995. The benefit was primarily due
to the release of valuation allowances associated with certain net operating
loss (NOL) carryforwards and other deferred tax assets acquired in the Merger.
In 1995, the provision for income taxes reflected non-deductible merger
expenses and pre-merger income which could not be offset by pre-merger losses
incurred by Univax.

     Net income for 1996 includes an extraordinary charge of $.9 million, or
$.03 per share, due to the write-off of debt issue costs associated with NABI's
early repayment of its outstanding bank debt through the application of a
portion of the net proceeds of the 6.5% Convertible Subordinated Notes issued
during the first quarter of 1996.


                            1995 AS COMPARED TO 1994


     Sales.  Sales for 1995 increased 19.2% to $195.9 million compared to
$164.4 million in 1994, reflecting an increase in plasma sales of $25.8 million
and an increase in immunotherapeutic product sales of $9.3 million, offset by a
decrease in diagnostic products and services sales of $3.6 million. The 18%
increase in plasma sales was primarily attributable to increased plasma sales,
primarily specialty plasmas.  Sales of immunotherapeutic products increased
primarily due to an increase of $4.3 million in H-BIG sales and $4.4 million in
WinRho SD sales which NABI began marketing in mid-1995.

     Gross profit margin.  Gross profit and related margin for 1995 was $43.8
million or 22.3%, compared to $33.2 million or 20.2% in 1994.  An improved
sales mix resulting primarily from increased sales of higher-margin specialty
plasmas and immunotherapeutic products accounted for the improved
profitability.

     Research and development expense.  Research and development expense was
$20.1 million or 10.3% of sales in 1995 compared to $17.6 million or 10.7% of
sales in 1994. The increase in expenses relates primarily to clinical trial
expenses associated with the HyperGAM+CF program, initial expenses associated
with new product development and recognition of a reserve for development stage
inventories which have no assurance of commercial viability.


                                       34




<PAGE>   35


     Selling, general and administrative expense.  Selling, general and
administrative expense was $26.8 million or 13.7% of sales in 1995, compared to
$16.5 million or 10% of sales in 1994. The increase was primarily attributable
to approximately $6 million in merger expenses related to the Univax Merger and
additional sales and marketing expenses incurred related to the product launch
of WinRho SD in mid-1995.

     Other factors.  The provision for income taxes increased to $6.7 million
in 1995, compared to $5.8 million in 1994, primarily due to NABI's stand-alone
pre-tax income, which could not be offset by pre-merger losses, and
non-deductible merger expenses incurred in 1995.

     Net loss for 1994 reflects an extraordinary charge of $.7 million or $.03
per share, which reflects the write-off of deferred debt discount and debt
issue costs associated with NABI's early retirement of its 11% Senior
Subordinated Notes in October 1994.

LIQUIDITY AND CAPITAL RESOURCES

     During the first quarter of 1996, NABI issued $80.5 million of 6.5%
Convertible Subordinated Notes due 2003 in a private placement. A portion of
the net proceeds was used to repay a majority of NABI's outstanding bank
indebtedness aggregating approximately $22.2 million on February 8, 1996 and
$18 million was used to retire all outstanding flexible term notes.

     At December 31, 1996, NABI's credit agreement, provided for a $20 million
revolving credit facility maturing on December 31, 1998.  NABI had no
outstanding balance as of December 31, 1996 under the revolving credit facility
which is secured by substantially all of NABI's assets. The credit agreement
contains covenants requiring the maintenance of various financial ratios and
prohibits the payment of dividends.

     At December 31, 1996, NABI's working capital of $63.6 million compared to
working capital of $14.7 million on December 31, 1995. The increase in working
capital is principally due to the net proceeds from the issuance of the 6.5%
Convertible Subordinated Notes.

     Projected capital expenditures for 1997 include validation costs for the
manufacturing facilities, development of financial and donor management systems
and plasma center renovations. NABI believes that cash and investments on hand
at year end 1996, its available bank line of credit and cash flow from
operations will be sufficient to meet its anticipated cash requirements for
fiscal 1997.



I
TEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Financial Statements and information required by Item 8 are listed in
the Index, presented as Item 14, and included herein.



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

   None.



                                       35




<PAGE>   36



                                    PART III




ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information called for by this Item and not provided in Item 3A will
be contained in NABI's Proxy statement, which NABI intends to file within 120
days following the end of NABI's fiscal year ended December 31, 1996 and such
information is incorporated herein by reference.



ITEM 11. EXECUTIVE COMPENSATION

     The information called for by this Item will be contained in NABI's Proxy
Statement which NABI intends to file within 120 days following the end of
NABI's fiscal year ended December 31, 1996 and such information is incorporated
herein by reference.



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information called for by this Item will be contained in NABI's Proxy
Statement which NABI intends to file within 120 days following the end of
NABI's fiscal year ended December 31, 1996 and such information is incorporated
herein by reference.



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information called for by this Item will be contained in NABI's Proxy
Statement which NABI intends to file within 120 days following the end of
NABI's fiscal year ended December 31, 1996 and such information is incorporated
herein by reference.


                                       36




<PAGE>   37



                                    PART IV




ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(A) (1) FINANCIAL STATEMENTS

     The following consolidated financial statements of NABI and its
subsidiaries are included pursuant to Item 8 hereof.


<TABLE>
<CAPTION>
                                                                                                   PAGE #


     <S>                                                                                                   <C>
     Report of Independent Certified Public Accountants ...............................................    42

     Consolidated Statement of Operations for the years ended December 31, 1994, 1995 and 1996 ........    43

     Consolidated Balance Sheet at December 31, 1995 and 1996..........................................    44

     Consolidated Statement of Changes in Stockholders' Equity for the years ended
     December 31, 1994, 1995 and 1996..................................................................    45

     Consolidated Statement of Cash Flows for the years ended December 31, 1994, 1995 and 1996 ........    46

     Notes to Consolidated Financial Statements........................................................    47
</TABLE>


(A) (2) FINANCIAL STATEMENT SCHEDULES

<TABLE>
     <S>                                                                                                   <C>
     Schedule II - Valuation and Qualifying Accounts and Reserves......................................    62

</TABLE>


     All other schedules omitted are not required, inapplicable or the
     information required is furnished in the financial statements or notes
     therein.

                                       37




<PAGE>   38


(A) (3)  EXHIBITS


<TABLE>
<CAPTION>
                                                                                          PAGE #
                                                                                          ------
<S>   <C>                                                                                  <C>
2      Agreement and Plan of Merger dated August 28, 1995 between NABI and
       Univax Biologics, Inc. (incorporated by reference to NABI's Registration
       Statement on Form S-4; Commission File No. 33-63497).........................       N/A

3.1    Restated Certificate of Incorporation of NABI................................       N/A

3.2    By-Laws (incorporated by reference to NABI's Registration Statement on
       Form S-4; Commission File No. 33-63497)......................................       N/A

4.1    Specimen Stock Certificate (incorporated by reference to NABI's
       Registration Statement on Form S-2; Commission File No. 33-83096)............       N/A

4.2    Indenture between NABI and State Street Bank and Trust Company, dated as
       of February 1, 1996..........................................................       N/A

4.3    Registration Rights Agreement by and between NABI and Robertson, Stephens
       & Company LLC and Raymond James & Associates, Inc., dated as of February
       1, 1996 .....................................................................       N/A

10.1   Third Amended and Restated Revolving Credit and Term Loan Agreement
       between NationsBank, National Association (South) (f/k/a NationsBank of
       Florida, National Association) ("NationsBank") and NABI dated December 1,
       1994 (incorporated by reference to NABI's Annual Report on Form 10-K for
       the year ended December 31, 1994)...........................................        N/A

10.2   Waiver and Amendment, dated December 30, 1994, of Section 8.09(e) of
       Third Amended and Restated Revolving Credit, Term Loan and Reimbursement
       Agreement between NationsBank and NABI dated as of December 1, 1994
       (incorporated by reference to NABI's Registration Statement on Form S-4;
       Commission File No. 33-63497)...............................................        N/A

10.3   Amendment No. 1 to Third Amended and Restated Revolving Credit Term Loan
       and Reimbursement Agreement between NationsBank and NABI dated March 31,
       1995 (incorporated by reference to NABI's Registration Statement on Form
       S-4; Commission File No. 33-63497)                                                  N/A

10.4   Amendment Nos. 3 and 4 to Third Amended and Restated Revolving Credit
       Term Loan and Reimbursement Agreement between NABI and NationsBank dated
       as of November 29, 1995 and December 20, 1995, respectively.................        N/A

10.5   Shareholder Agreement effective as of September 30, 1992 between NABI and
       Abbott Laboratories (incorporated by reference to NABI's Annual Report on
       Form 10-K for the year ended December 31, 1992).............................        N/A

10.6   Shareholder Agreement between CGW Southeast Partners I, L.P. and NABI
       dated January 25, 1994 (incorporated by reference to NABI's Registration
       Statement on Form S-2; Commission File No. 33-83096)........................        N/A

10.7   Plasma Supply Agreement dated January 1, 1994 between Baxter Healthcare
       Corporation and NABI (confidential treatment) (incorporated by reference
       to NABI's Registration Statement on Form S-2; Commission File No. 33-83096).        N/A
</TABLE>



                                       38




<PAGE>   39


<TABLE>
<S>   <C>                                                                                  <C>
10.8   Plasma Supply Agreement II dated January 1, 1994 between Baxter
       Healthcare Corporation, Hyland Division, and NABI (confidential
       treatment) (incorporated by reference to NABI's Registration Statement on
       Form S-2; Commission File No. 33-83096).....................................        N/A


10.9   Agreement effective January 1, 1994 between NABI and Immuno Trading AG
       (confidential treatment) (incorporated by reference to NABI's
       Registration Statement on Form S-2; Commission File No. 33-83096)...........        N/A

10.10  Plasma Supply Agreement dated September 8, 1992 and letter dated November
       1, 1993 from Behringwerke AG to NABI (confidential treatment)
       (incorporated by reference to NABI's Registration Statement on Form S-2;
       Commission File No. 33-83096)...............................................        N/A

10.11  Supply Agreement dated May 1, 1993 between NABI and Intergen Company L.P.
       (confidential treatment) (incorporated by reference to NABI's
       Registration Statement on Form S-2; Commission File No. 33-83096)...........        N/A

10.12  Lease Agreements dated December 11, 1990, as modified on May 23, 1994
       between NABI and Angelo Napolitano, Trustee, for certain real property
       located at 16500 N.W. 15th Avenue, Miami, Florida (incorporated by
       reference to NABI's Registration Statement on Form S-2; Commission File
       No. 33-83096)...............................................................        N/A

10.13  Lease Agreement dated March 31, 1994 between NABI and Angelo Napolitano,
       Trustee, for certain real property located at 16500 N.W. 15th Avenue,
       Miami, Florida (incorporated by reference to NABI's Registration
       Statement on Form S-2; Commission File No. 33-83096)........................        N/A

10.14  Employment Agreement dated January 1, 1993 between NABI and David J. Gury
       (incorporated by reference to NABI's Annual Report on Form 10-K for the
       year ended December 31,1992)................................................        N/A

10.15  Employment Agreement dated January 27, 1994 between John C. Carlisle and
       NABI (incorporated by reference to NABI's Registration Statement on Form
       S-2; Commission File No. 33-83096)..........................................        N/A

10.16  Employment Agreement effective August 1, 1995 between NABI and Alfred J.
       Fernandez (incorporated by reference to NABI's Registration Statement on
       Form S-4; Commission File No. 33-63497).....................................        N/A

10.17  Employment Agreement effective August 1, 1995 between NABI and Stephen W.
       Weston (incorporated by reference to NABI's Registration Statement on
       Form S-4; Commission File No. 33-63497).....................................        N/A

10.18  Employment Agreement effective December 1, 1995 between NABI and Robert
       B. Naso (incorporated by reference to NABI's Annual Report on Form 10-K
       for the year ended December 31, 1995).......................................        N/A

10.19  Employment Agreement effective December 1, 1995 between NABI and Thomas
       P. Stagnaro (incorporated by reference to NABI's Annual Report on Form
       10-K for the year ended December 31, 1995)..................................        N/A

10.20  Separation Agreement effective January 5, 1996 between NABI and Raj Kumar
       (incorporated by reference to NABI's Annual Report on Form 10-K for the
       year ended December 31, 1995)...............................................        N/A
</TABLE>



                                       39




<PAGE>   40


<TABLE>
<S>   <C>                                                                                  <C>
10.21  1990 Equity Incentive Plan (incorporated by reference to NABI's
       Registration Statement on Form S-4; Commission File No. 33-63497)...........        N/A

10.22  Amended and Restated Incentive Stock Option Plan adopted in 1993
       (incorporated by reference to NABI's Annual Report on Form 10-K for the
       year ended December 31, 1992)...............................................        N/A

10.23  Stock Plan for Non-Employee Directors (incorporated by reference to
       NABI's Proxy Statement dated April 26, 1995)................................        N/A

10.24  Amendment No. 5 to Third Amended and Restated Revolving Credit Term Loan
       and Reimbursement Agreement between NationsBank and NABI dated March 31,
       1996 (incorporated by reference to NABI's Quarterly Report on Form 10-Q
       for the quarter ended March 31,1996)........................................        N/A

10.25* Letter Amendment to Third Amended and Restated Revolving Credit Term Loan
       and Reimbursement Agreement between NationsBank and NABI dated August 1,
       1996 .......................................................................      66-68

10.26* Employment Agreement dated January 1, 1997 between John C. Carlisle and
       NABI........................................................................      69-73

21*    Subsidiaries of the Registrant..............................................      74-75

23*    Consent of Independent Certified Public Accountants.........................      76-77
</TABLE>



- ----------------
* Filed herewith



(B) REPORTS ON FORM 8-K

     None.


                                       40




<PAGE>   41



                                   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 on this 25th day
of March, 1997.

                                   NABI


                                   By:  /s/   David J. Gury
                                     ------------------------------------
                                        David J. Gury
                                        Chairman of the Board, President and
                                          Chief Executive Officer


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




<TABLE>
<CAPTION>
        SIGNATURES                        TITLE                    DATE
        ----------                        -----                    ----
<S>                         <C>                                <C>
/s/  David J. Gury          Chairman of the Board, President,
- --------------------------  Chief Executive Officer            March 25, 1997
David J. Gury

/s/ Alfred J. Fernandez     Senior Vice President,
- --------------------------  Chief Financial Officer            March 25, 1997
Alfred J. Fernandez

/s/ John C. Carlisle        Senior Executive Vice President
- --------------------------  Director                           March 25, 1997
John C. Carlisle

/s/ Lorraine M. Breece
- --------------------------  Chief Accounting Officer           March 25, 1997
Lorraine M. Breece

/s/ Joseph C. Cook, Jr.
- --------------------------  Director                           March 25, 1997
Joseph C. Cook, Jr.

/s/ Richard A. Harvey, Jr.
- --------------------------  Director                           March 25, 1997
Richard A. Harvey, Jr.

/s/ David L. Castaldi
- --------------------------  Director                           March 25, 1997
David L. Castaldi

/s/ David A. Thompson
- --------------------------  Director                           March 25, 1997
David A. Thompson

/s/ Paul Bogikes
- --------------------------  Director                           March 25, 1997
Paul Bogikes

/s/ George W. Ebright
- --------------------------  Director                           March 25, 1997
George W. Ebright

/s/ Brian H. Dovey
- --------------------------  Director                           March 25, 1997
Brian H. Dovey
</TABLE>



                                       41




<PAGE>   42




               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Board of Directors
and Stockholders of
NABI



     In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) and (2) present fairly, in all material
respects, the financial position of NABI and its subsidiaries at December 31,
1995 and 1996, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1996 in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of NABI's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.






/s/ Price Waterhouse LLP
- ------------------------
PRICE WATERHOUSE LLP
Miami, Florida
February 28, 1997



                                       42




<PAGE>   43


                                      NABI
                      CONSOLIDATED STATEMENT OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)




<TABLE>
<CAPTION>
                                                                        FOR THE YEARS ENDED DECEMBER 31,
                                                                     -------------------------------------
                                                                       1994          1995           1996
                                                                     ---------    ----------     ---------
<S>                                                                  <C>           <C>           <C>
SALES                                                                $ 164,426     $ 195,928     $ 239,909
COSTS AND EXPENSES:
    Costs of products sold                                             131,192       152,148       181,914
    Research and development expense                                    17,599        20,132        16,721
    Selling, general and administrative expense                         16,467        26,816        21,095
    Royalty expense                                                      1,426         3,490         5,253
    Other operating expense, principally amortization and freight        2,234         3,015         3,757
                                                                     ---------     ---------     ---------

OPERATING INCOME (LOSS)                                                 (4,492)       (9,673)       11,169

INTEREST INCOME                                                            354         1,064         1,275
INTEREST EXPENSE                                                        (3,254)       (1,931)       (3,987)
OTHER, NET                                                                 (28)         (334)         (511)
                                                                     ---------     ---------     ---------

INCOME (LOSS) BEFORE BENEFIT (PROVISION) FOR
    INCOME TAXES AND EXTRAORDINARY CHARGE                               (7,420)      (10,874)        7,946

BENEFIT (PROVISION) FOR INCOME TAXES                                    (5,774)       (6,687)        6,214
                                                                     ---------     ---------     ---------

INCOME (LOSS) BEFORE EXTRAORDINARY CHARGE                              (13,194)      (17,561)       14,160

EXTRAORDINARY CHARGE                                                      (717)         --            (932)
                                                                     ---------     ---------     ---------
NET INCOME (LOSS)                                                    $( 13,911)    $( 17,561)    $  13,228
                                                                     =========     =========     =========

EARNINGS (LOSS) PER SHARE:
    Earnings (loss) before extraordinary charge                      $(   0.47)    $(   0.52)    $    0.40
    Extraordinary charge                                                 (0.03)         --           (0.03)
                                                                     ---------     ---------     ---------
    Net earnings (loss)                                              $(   0.50)    $(   0.52)    $    0.37
                                                                     =========     =========     =========
WEIGHTED AVERAGE NUMBER OF SHARES AND
    COMMON SHARE EQUIVALENTS                                            28,042        33,574        35,629
                                                                     =========     =========     =========
</TABLE>



The accompanying Notes are an integral part of these Financial Statements.


                                       43




<PAGE>   44



                                      NABI
                           CONSOLIDATED BALANCE SHEET
                           --------------------------
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                               DECEMBER 31,
                                                                         -----------------------
                                                                            1995        1996
                                                                         ---------     ---------
ASSETS
<S>                                                                      <C>           <C>
CURRENT ASSETS
    Cash and cash equivalents                                            $   3,991     $  18,513
    Short-term investments                                                    --           8,797
    Trade accounts receivable, net                                          28,213        38,127
    Inventories, net                                                        22,646        28,395
    Prepaid expenses and other assets                                        2,380         4,269
                                                                         ---------     ---------
                 TOTAL CURRENT ASSETS                                       57,230        98,101

PROPERTY AND EQUIPMENT, NET                                                 42,697        60,587
OTHER ASSETS
   Excess of acquisition cost over net assets acquired, net                 18,882        18,072
   Intangible assets, net                                                   11,048         9,684
   Other, net                                                                8,118        15,698
                                                                         ---------     ---------
TOTAL ASSETS                                                             $ 137,975     $ 202,142
                                                                         =========     =========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Trade accounts payable                                               $   7,588     $   9,800
    Accrued expenses                                                        17,788        22,484
    Notes payable                                                           17,164         2,187
                                                                         ---------     ---------
                 TOTAL CURRENT LIABILITIES                                  42,540        34,471

NOTES PAYABLE                                                               25,730        81,278

OTHER                                                                          263           332
                                                                         ---------     ---------
TOTAL LIABILITIES                                                           68,533       116,081
                                                                         ---------     ---------

COMMITMENTS AND CONTINGENCIES                                                 --            --

STOCKHOLDERS' EQUITY
    Convertible preferred stock, par value $.10 per share:
         5,000 shares authorized; no shares outstanding                       --            --
    Common stock, par value $.10 per share: 75,000 shares authorized;
        33,942 and 34,614 shares issued and outstanding, respectively        3,394         3,461
    Capital in excess of par value                                         133,100       136,424
    Accumulated deficit                                                    (67,052)      (53,824)
                                                                         ---------     ---------
TOTAL STOCKHOLDERS' EQUITY                                                  69,442        86,061
                                                                         ---------     ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $ 137,975     $ 202,142
                                                                         =========     =========
</TABLE>


              The accompanying Notes are an integral part of these
                             Financial Statements.



                                      44


<PAGE>   45
                                     NABI
          CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
             FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
                                (IN THOUSANDS)


<TABLE>
<CAPTION>
                          PREFERRED                            COMMON STOCK     
                            STOCK        COMMON STOCK            WARRANTS       CAPITAL IN               RECEIVABLE 
                        -------------   ---------------      ----------------   EXCESS OF  ACCUMULATED      FROM     STOCKHOLDERS'
                        SHARES AMOUNT   SHARES   AMOUNT      SHARES   AMOUNT    PAR VALUE    DEFICIT     STOCKHOLDER    EQUITY
                        ------ ------   ------   ------      ------   -------   ---------  -----------   -----------   --------
<S>                       <C>   <C>     <C>      <C>          <C>     <C>        <C>         <C>            <C>        <C>
BALANCE AT
DECEMBER 31, 1993         --    --      23,734   $2,374       1,525   $ 2,314    $ 81,612    $(34,499)      $(166)     $ 51,635

Issuance of common
 stock                    --    --       8,406      840        --        --        45,985        --          --          46,825
Compensation related
   to restricted
   stock issued under
   employee stock plan    --    --        --       --          --        --            51        --          --              51
Issuance of common
 stock pursuant to
 employee stock plan      --    --          12        1        --        --            89        --          --              90
Acquisition and
 retirement
 of treasury stock        --    --         (35)      (3)       --        --          (215)       --          --            (218)
Stock options
 exercised                --    --         429       43        --        --           428        --          --             471
Warrants exercised        --    --         750       75        (750)     (908)      3,270        --          --           2,437
Tax benefit
 from stock
 options exercised        --    --        --       --          --        --           368        --          --             368
Repurchase
 of warrants              --    --        --       --          (766)   (1,406)       --        (1,081)       --          (2,487)
Collection of note
 receivable               --    --        --       --          --        --          --          --           166           166
Issuance of note                        
 receivable               --    --        --       --          --        --          --          --          (126)         (126)
Net loss for                            
 the year                 --    --        --       --          --        --          --       (13,911)       --         (13,911)
Other                     --    --        --       --          --        --            18        --          --              18
                          ---   ---     ------   ------       -----   -------    --------    --------       -----      --------
BALANCE AT
DECEMBER 31, 1994         --    --      33,296    3,330           9      --       131,606     (49,491)       (126)       85,319

Compensation related
  to restricted stock
  issued under
  employee stock plan     --    --        --       --          --        --             5        --          --               5
Stock options exercised   --    --         700       70        --        --         1,127        --          --           1,197
Issuance of common stock                                               
 pursuant to employee                                                  
 stock plan               --    --          22        2        --        --           102        --          --             104
Tax benefit from stock                                                 
 options exercised        --    --        --       --          --        --           819        --          --             819
Acquisition and                                                        
 retirement                                                            
 of treasury stock        --    --         (76)      (8)       --        --          (555)       --          --            (563)
Issuance of warrants      --    --        --       --           100      --          --          --          --            --
Collection of note                                                     
 receivable               --    --        --       --          --        --          --          --           126           126
Net loss for the year     --    --        --       --          --        --          --       (17,561)       --         (17,561)
Other                     --    --        --       --          --        --            (4)       --          --              (4)
                          ---   ---     ------   ------       -----   -------    --------    --------       -----      --------
BALANCE AT                                      
DECEMBER 31, 1995         --    --      33,942    3,394         109      --       133,100     (67,052)       --          69,442
                                                
Compensation related                            
 to restricted stock                            
  issued under employee                         
  stock plan              --    --          14        1        --        --           164        --          --             165
Stock options                                   
 exercised                --    --         704       71        --        --         2,526        --          --           2,597
Tax benefit from stock
 options exercised        --    --        --       --          --        --         1,211        --          --           1,211
Acquisition and
 retirement of
 treasury stock           --    --         (50)      (5)       --        --          (495)       --          --            (500)
Warrants exercised        --    --           4     --            (9)     --          --          --          --            --
Net income for
 the year                 --    --        --       --          --        --          --        13,228        --          13,228
Other                     --    --        --       --          --        --           (82)       --          --             (82)
                          ---   ---     ------   ------       -----   -------    --------    --------       -----      --------

BALANCE AT
DECEMBER 31, 1996         --    --      34,614   $3,461         100      --      $136,424    $(53,824)       --        $ 86,061
                          ===   ===     ======   ======       =====   =======    ========    ========       =====      ========
</TABLE>


                           The accompanying Notes are
                an integral part of these Financial Statements.



                                       45

<PAGE>   46


                                      NABI
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                       FOR THE YEARS ENDED DECEMBER 31,
                                                                     -------------------------------------
                                                                        1994          1995         1996
                                                                     ----------    ----------    ---------
<S>                                                                  <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                                $ (13,911)    $ (17,561)    $  13,228
    Adjustments to reconcile net income (loss) to net
      cash (used) provided by operating activities:
         Depreciation and amortization                                   6,319         6,959         7,883
         Imputed interest and amortization of debt
          discount and premiums                                            928            14          --
         Compensation under employee stock plan                            105           657           165
         Deferred income taxes                                            (197)         (806)       (6,369)
         Tax benefit from stock options exercised                          368           819         1,211
         Extraordinary charge                                              717          --             932
         Other                                                           1,372           105           916
    Change in assets and liabilities:
      Decrease (increase) in trade accounts receivable                  (8,981)       (4,743)      (10,589)
      Decrease (increase) in inventories                                (7,673)       (1,401)       (5,749)
      Decrease (increase) in prepaid expenses                             (411)          369        (1,396)
      Decrease (increase) in other assets                               (2,118)       (2,578)       (1,106)
      Increase (decrease) in accounts payable and
       accrued expenses                                                  3,882         5,495         7,121
                                                                     ---------     ---------     ---------
      Total adjustments                                                 (5,689)        4,890        (6,981)
                                                                     ---------     ---------     ---------
NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES                       (19,600)      (12,671)        6,247
                                                                     ---------     ---------     ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Cash of business acquired, net of transaction costs                  614          --            --
      Cash consideration for business acquisition                         --          (6,425)         --
      Capital expenditures                                              (8,330)      (24,387)      (23,085)
      Collections on note receivable from stockholder                      166           126          --
      Purchases of short-term investments                              (27,926)       (4,036)      (18,190)
      Sales and redemptions of short-term investments                   25,175        22,885         9,724
                                                                     ---------     ---------     ---------
NET CASH USED BY INVESTING ACTIVITIES                                  (10,301)      (11,837)      (31,551)
                                                                     ---------     ---------     ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Net proceeds from issuance of convertible
       subordinated debentures                                            --            --          77,884
      Net proceeds from sale and issuance of common stock               38,618           612          --
      Proceeds from exercise of options and warrants                     2,610           419         1,872
      Repurchase of warrants                                            (2,487)         --            --
      Repayments under line of credit, net                                (488)         (626)       (6,760)
      Borrowings of term debt                                            8,781         2,683          --
      Repayments of term debt                                           (9,245)       (3,071)      (10,933)
      Repayment of subordinated debt                                    (7,000)         --            --
      Borrowings (repayments) of flexible term notes                     5,063        12,936       (18,000)
      Contingent purchase price obligation payments                     (8,213)         --            --
      Other debt                                                         1,147         3,414        (4,237)
                                                                     ---------     ---------     ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES                               28,786        16,367        39,826
                                                                     ---------     ---------     ---------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                    (1,115)       (8,141)       14,522
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                        13,247        12,132         3,991
                                                                     ---------     ---------     ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                           $  12,132     $   3,991     $  18,513
                                                                     =========     =========     =========

SUPPLEMENTAL CASH FLOW INFORMATION:
   Interest paid                                                     $   2,436     $   2,190     $   3,605
                                                                     =========     =========     =========
   Income taxes paid (refunded), net                                 $   4,247     $   7,190     ($    264)
                                                                     =========     =========     =========
</TABLE>


              The accompanying Notes are an integral part of these
                             Financial Statements.



                                       46




<PAGE>   47


                                      NABI

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1   BUSINESS AND ORGANIZATION

     NABI is a fully integrated biopharmaceutical company that supplies human
blood plasma and develops and commercializes therapeutic products for the
prevention and treatment of infectious diseases and immunological disorders.

     On November 29, 1995, Univax Biologics, Inc. ("Univax"), a publicly traded
biopharmaceutical company, was merged with and into NABI. Under the terms of
the agreement and plan of merger, Univax's common stockholders received .79
shares of NABI common stock for each Univax common share. Additionally,
Univax's preferred stockholders received 1.047 shares of NABI common stock for
each Univax preferred share.  NABI issued an aggregate of 14,173,508 shares of
its common stock for the outstanding shares of Univax common and preferred
stock. The merger was accounted for as a pooling of interests and qualified as
a tax free reorganization under Internal Revenue Service regulations.


NOTE 2   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Principles of consolidation:  The consolidated financial statements
include the assets of NABI and its subsidiaries.  All significant intercompany
accounts and transactions are eliminated in consolidation.

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

     Basis of presentation:  Certain items in the 1994 and 1995 consolidated
financial statements have been reclassified for comparative purposes.  All
dollar amounts are expressed in thousands of dollars except amounts related to
per share data.

     Revenue recognition:  Revenue is recognized when title and risk of loss
are transferred to the customer, generally as products are shipped. Cash
collections in excess of amounts earned on billings are recorded as deferred
revenue and recognized as services are rendered or products are shipped.

     Research and development expense:  Research and development costs are
expensed as incurred. Amounts payable to third parties under collaborative
product development agreements are recorded at the earlier of the milestone
achievement or as payments become contractually due.  Reimbursements from third
parties for research and development activities are recorded as a reduction in
research and development expense.

     Income taxes: The provision for income taxes includes federal and state
income taxes currently payable and the change in amounts deferred because of
temporary differences between financial statement and tax basis of assets and
liabilities.

     Deferred tax assets are accounted for under the provisions of SFAS No. 109
"Accounting for Income Taxes," which requires a valuation allowance when it is
"more likely than not" that some portion of the deferred tax assets will not be
realized. The pronouncement further states that "forming a conclusion that a 
valuation

                                       47




<PAGE>   48

                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




allowance is not required is difficult" when there is persuasive evidence to
the contrary, such as cumulative losses in recent years.  NABI periodically
evaluates the probability of future taxable income including the occurrence of
intervening events which affect the probability of future taxable income and
adjusts its valuation allowance accordingly.

     Earnings (loss) per share:   Earnings (loss) per share is determined based
on the weighted average number of common shares and common share equivalents
outstanding during the year. Anti-dilutive common share equivalents are
excluded from the calculation.

     Financial instruments:  The carrying amounts of financial instruments
including cash and cash equivalents, short-term investments, accounts
receivable, accounts payable and short-term debt approximated fair value as of
December 31, 1995 and 1996, because of the relatively short maturity of these
instruments.

     Cash equivalents and short-term investments:  Cash equivalents consist of
money market funds and bankers acceptances with a maturity of three months or
less. Short-term investments consist of securities issued or guaranteed by the
U.S. Treasury and U.S. Government Agency Securities.

     Short-term investments are classified as available-for-sale based on
management's assessment of its intent and ability to hold these investments.

     Inventories:  Inventories are stated at the lower of cost or market with
cost determined on the first-in first-out (FIFO) method for substantially all
inventories.

     Property and equipment:  Property and equipment are carried at cost.
Depreciation is recognized on the straight-line method over the estimated
useful lives of the assets. Depreciable lives of property and equipment are as
follows:


<TABLE>
<CAPTION>
      ASSET                    LIFE
      -----                    ----
      <S>                      <C>
      Buildings                35-39 years
      Furniture and fixtures   5-8 years
      Machinery and equipment  3-8 years
      Leasehold improvements   Lesser of lease term or economic life
</TABLE>


     Maintenance and repairs are expensed as incurred. Major renewals and
betterments are capitalized as additions to property and equipment. Gain or
loss upon the retirement or sale of property and equipment is reflected
currently in the results of operations.

     Excess of acquisition cost over net assets acquired:  Excess of
acquisition cost over net assets acquired (goodwill) represents the excess of
cost over the fair value of identifiable assets acquired in business
acquisitions. Goodwill is amortized ratably from the date of acquisition over
periods ranging from 10 to 25 years.

     Intangible assets:  Intangible assets represent the fair value of assets
acquired in business, product and plasma center acquisitions including customer
lists, donor lists, trademarks and trademark registrations, and non-competition
agreements. These costs are amortized ratably from the date of acquisition over
periods ranging from 3 to 25 years.

     Impairment of long-lived assets:  During 1996, NABI adopted Statement of
Financial Accounting Standards No. 121, ("SFAS 121"), "Accounting for
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of."  SFAS
121 requires that long-term assets, including related goodwill, be reviewed for
impairment and written down to fair value whenever events or changes in
circumstances indicate that the carrying value may not be recoverable.


                                       48




<PAGE>   49

                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



     Stock based compensation:  In October 1995, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards No.
123, ("SFAS 123"), "Accounting for Stock-Based Compensation."  SFAS 123, the
disclosure provisions of which must be implemented for fiscal years beginning
subsequent to December 15, 1995, establishes a fair value based method of
accounting for stock based compensation plans, the effect of which can either
be disclosed or recorded.  NABI adopted the disclosure-only provisions of SFAS
123 in 1996 and upon adoption, retained its intrinsic value method of
accounting for stock- based compensation.


NOTE 3   SHORT-TERM INVESTMENTS

     The following is a summary of securities available for sale as of December
31, 1996:



<TABLE>
<CAPTION>
         (In thousands)              FAIR VALUE
                                     ----------
         <S>                           <C>
         U.S. Treasury Bill            $4,955
         U.S. Government Agencies       3,842
                                       ------
         Total                         $8,797
                                       ======
</TABLE>


     The fair value of the above securities approximates carrying value at
December 31, 1996.

     During the second quarter of 1996, NABI reclassified its short-term
investments from held-to-maturity to available-for-sale based on a reassessment
of its intent and ability to hold these securities to maturity.  At the date of
the reclassification the fair value of short-term investments was approximately
$16.6 million which approximated amortized cost.


NOTE 4   TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable are comprised of the following:


<TABLE>
<CAPTION>
                                             DECEMBER 31,
                                          ------------------
                                            1995      1996
                                          --------  --------
         <S>                              <C>       <C>
         Trade accounts receivable        $28,458   $38,774
         Allowance for doubtful accounts     (245)     (647)
                                          -------   -------
                                          $28,213   $38,127
                                          =======   =======
</TABLE>


NOTE 5   INVENTORIES

The components of inventories are as follows:


<TABLE>
<CAPTION>
                             DECEMBER 31,
                          ------------------
                            1995      1996
                          --------  --------
         <S>              <C>       <C>
         Finished goods   $19,054   $23,610
         Work in process    1,255     1,836
         Raw materials      6,405     8,504
                          -------   -------
                           26,714    33,950
         Less: reserves    (4,068)   (5,555)
                          -------   -------
                          $22,646   $28,395
                          =======   =======
</TABLE>



                                       49




<PAGE>   50

                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)





NOTE 6   PROPERTY AND EQUIPMENT

Property and equipment and related allowances for depreciation and amortization
are summarized below:



<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                         --------------------
                                                           1995       1996
                                                         ---------  ---------
         <S>                                             <C>        <C>
         Land and buildings                              $  5,551   $  7,155
         Furniture and fixtures                             3,691      4,907
         Machinery and equipment                           19,443     21,531
         Leasehold improvements                            12,055     15,106
         Construction in progress                          18,311     32,298
                                                         --------   --------
           Total property and equipment                    59,051     80,997
         Less accumulated depreciation and amortization   (16,354)   (20,410)
                                                         --------   --------
                                                         $ 42,697   $ 60,587
                                                         ========   ========
</TABLE>


     Machinery and equipment includes certain assets which have been accounted
for as capital leases with a net book value of $1,894 and $1,056 at December
31, 1995 and 1996, respectively.

     Depreciation and amortization expense during 1994, 1995 and 1996 includes
amortization of assets under capital leases of approximately $887, $861 and
$743, respectively.

     Construction in progress consists primarily of costs incurred in
connection with construction of NABI's biopharmaceutical facility and includes
capitalized interest of $932 and $2,757 at December 31, 1995 and 1996,
respectively.


NOTE 7   OTHER ASSETS

Other assets consist of the following:




<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              ------------------
                                                                1995      1996
                                                              --------  --------
         <S>                                                  <C>       <C>
         Excess of acquisition cost over net assets acquired  $22,156   $22,204
         Less accumulated amortization                         (3,274)   (4,132)
                                                              -------   -------
                                                              $18,882   $18,072
                                                              =======   =======

         Intangible assets                                    $15,372   $15,733
         Less accumulated amortization                         (4,324)   (6,049)
                                                              -------   -------
                                                              $11,048   $ 9,684
                                                              =======   =======

         Other                                                $10,409   $20,330
         Less accumulated amortization                         (2,291)   (4,632)
                                                              -------   -------
                                                              $ 8,118   $15,698
                                                              =======   =======
</TABLE>



                                       50




<PAGE>   51

                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)





NOTE 8   ACCRUED EXPENSES

Accrued expenses consist of the following:



<TABLE>
<CAPTION>
                                                    DECEMBER 31,
                                              ------------------------
                                                1995            1996
                                              --------        --------
         <S>                                   <C>             <C>
         Employee compensation and benefits    $ 4,437         $ 6,919
         Accrued interest                          443           2,210
         Accrued chargebacks                     1,219           1,956
         Accrued royalties and product costs     2,631           3,282
         Other                                   9,058           8,117
                                               -------         -------
                                               $17,788         $22,484
                                               =======         =======
</TABLE>


NOTE 9   NOTES PAYABLE

Notes payable consist of the following:



<TABLE>
<CAPTION>
                                                 DECEMBER 31,
                                              -------------------
                                                1995       1996
                                              ---------  --------
         <S>                                  <C>        <C>
         Bank indebtedness:
           Term loan                          $ 10,000       ---
           Revolving credit facility             6,760       ---
           Flexible term notes                  18,000       ---
           Other                                 5,469   $ 1,573
                                              --------   -------
                                                40,229     1,573
         6.5% Convertible subordinated notes       ---    80,500
         Equipment term notes                    1,877       957
         Other                                     788       435
                                              --------   -------
         Total notes payable                    42,894    83,465
         Current maturities                    (17,164)   (2,187)
                                              --------   -------
         Notes payable, long-term             $ 25,730   $81,278
                                              ========   =======
</TABLE>


     At December 31, 1996, the annual aggregate maturities of debt through the
year 2001 and thereafter were $2,187; $538; $240; $0; and $80,500,
respectively.

     During the first quarter of 1996, NABI issued $80.5 million of 6.5%
Convertible Subordinated Notes due February 1, 2003 ("Notes") in a private
placement. The Notes are convertible into NABI common stock at a conversion
price of $14 per share at any time on or after May 6, 1996, unless previously
redeemed or repurchased. At any time on or after February 4, 1999, the Notes
may be redeemed at NABI's option without premium. A total of 5,750,000 shares
of common stock have been registered and reserved for issuance upon conversion
of the Notes. NABI utilized a portion of the net proceeds of the offering to
repay a $10 million term loan, $18 million in flexible term notes and
approximately $12.2 million under a revolving credit facility.

     In connection with the early repayment of the outstanding bank debt
through the application of the net proceeds of the Notes, NABI incurred an
extraordinary charge of approximately $932,000 in the first quarter of 1996.

     At December 31, 1996, NABI's existing credit agreement provided for a $20
million revolving credit facility maturing on December 31, 1998. This agreement
is secured by substantially all assets and contains covenants

                                       51




<PAGE>   52

                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




prohibiting dividend payments and requiring the maintenance of various
financial ratios.  Other bank indebtedness includes amounts due for
transactional float under the revolving credit facility.

     Equipment term notes outstanding at December 31,1996 have a
weighted-average interest rate of 5.75%, are payable in installments through
1999 and are secured by equipment having a net book value of approximately $1.1
million at December 31, 1996.

     At December 31, 1996, the fair value of NABI's convertible subordinated
notes was approximately $75.4 million.  The fair value was estimated using an
independently quoted market price.  The carrying value of all other long-term
notes payable approximated fair value based upon quoted market prices for the
same or similar debt issues.


NOTE 10   STOCKHOLDERS' EQUITY

Common Stock

     Effective November 29, 1995, NABI issued approximately 14.2 million shares
of its common stock in exchange for all of the outstanding common and preferred
stock of Univax.  The exchange ratio was .79 to 1 for the common shares and
1.047 to 1 for the preferred shares.

     On January 27, 1994, NABI issued approximately 2.3 million shares of
common stock in connection with an acquisition.  In September 1994, NABI sold
approximately 3.1 million shares of common stock in a public offering to
institutional investors yielding net proceeds of $21,534. In October 1994, NABI
completed an underwritten public offering of its common stock in which
approximately 2.9 million shares were sold by NABI. Net proceeds to NABI from
the offering were approximately $19,300 and were used to satisfy various debt
obligations.  In connection with the early retirement of debt in October 1994,
NABI incurred an extraordinary charge of $717 or $.03 per share resulting from
the immediate recognition and expense of the debt discount and deferred debt
issue costs associated with the obligation.

     Effective January 1995, NABI increased its authorized common stock from 20
million to 50 million and in November 1995 to 75 million shares.

Warrants

     At December 31, 1993, NABI had warrants outstanding for the purchase of
approximately 1.5 million shares of its common stock with exercise prices of
$3.25 per share, subject to anti-dilution adjustments. In connection with the
October 1994 public offering discussed above, warrants to purchase 750,000
shares were exercised and warrants to purchase 766,000 shares were repurchased
by NABI.

     In November 1995, NABI issued a warrant to purchase 100,000 shares of its
common stock to an affiliate of its principal bank lender in connection with an
agreement whereby NABI had the right to issue up to $20 million in subordinated
notes.  The warrants are exercisable at $9.82 per share and expire on December
31, 2000.

Stock Purchase Plan

     During 1991, NABI adopted an employee stock purchase plan which was
terminated effective November 29, 1995 in connection with the Univax merger.
The plan provided for the purchase of common stock by employees at a price
equal to 85% of the fair market value of such stock.  Under this plan, 41,830
common shares were issued to employees.


                                       52




<PAGE>   53

                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


Stock Options

     NABI maintains three stock option plans for its employees. Under these
plans, NABI has granted options to certain employees entitling them to purchase
shares of common stock within ten years. The options vest over periods ranging
from six months to five years from the date of grant and are granted with
exercise prices equal to or greater than the fair market value of the
underlying common stock on the date of grant.

     NABI has granted 300,200 non-qualified options to its consultants and
directors under terms and conditions similar to the employee stock option
plans.

     During May 1995, the stockholders of NABI adopted the Stock Plan for
Non-Employee Directors (the "Directors Plan"). NABI granted options under the
Director's Plan to certain directors entitling them to purchase shares of NABI
common stock within five years, vesting at six months after the date of grant
and at an option price equal to the fair market value of the underlying common
stock at the date of grant. Also, during May 1995, the stockholders of Univax
approved the 1995 Director's Stock Option Plan (the "Univax Director's Plan")
for the former directors of Univax.  Under the Univax Director's Plan, options
to purchase 27,650 shares of common stock were granted, all of which were
exercised prior to the effective date of the Univax merger upon which date the
plan was terminated.

     At December 31, 1996, there were options outstanding under all NABI's
stock plans to acquire 3.1 million shares of its common stock of which 1.3
million were then exercisable. As of the same date, 1.3 million shares of
common stock are reserved for future issuance under the plans.  Stock options
granted and outstanding under these plans as of December 31, 1996 is presented
below:

     STOCK OPTION ACTIVITY



<TABLE>
<CAPTION>                                    OPTIONS
                                          (IN THOUSANDS)   EXERCISE PRICE
                                          --------------   --------------
        <S>                                    <C>         <C>
        BALANCE AT DECEMBER 31, 1993           2,787        $.19-$12.97
         Granted                                 991       $2.64-$10.76
         Exercised or canceled                  (724)       $.19-$12.97
                                              ------       ------------
        BALANCE AT DECEMBER 31, 1994           3,054       $ .19-$12.97
         Granted                               1,029       $5.38-$11.00
         Exercised or canceled                (1,029)       $.19-$12.97
                                              ------       ------------
        BALANCE AT DECEMBER 31, 1995           3,054        $.19-$12.97
         Granted                                 975       $8.63-$13.75
         Exercised or canceled                  (912)       $.19- $3.75
                                              ------       ------------
        BALANCE AT DECEMBER 31, 1996           3,117        $.19-$13.75
                                              ======        ===========
</TABLE>



                                       53




<PAGE>   54

                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     STOCK OPTIONS OUTSTANDING



<TABLE>
<CAPTION>
                                  OUTSTANDING                    EXERCISABLE
                      -----------------------------------  ------------------------
                                       AVERAGE   AVERAGE                   AVERAGE
                         OPTIONS        LIFE     EXERCISE     OPTIONS      EXERCISE
EXERCISE PRICE RANGE  (IN THOUSANDS)  REMAINING   PRICE    (IN THOUSANDS)   PRICE
- --------------------  -------------   ---------  --------  --------------  --------
<S>                       <C>            <C>     <C>           <C>          <C>
  $0.19 -  $3.56            673          4.0     $ 2.36          602        $ 2.35
  $5.06 -  $7.59          1,295          6.9       6.75          554          6.78
  $8.39 - $11.00            251          6.8       9.00          142          9.21
 $12.97 - $13.75            898          6.5      13.73           30         13.25
                          -----          ---     ------        -----        ------
      Total               3,117          6.1     $ 7.96        1,328        $ 7.89
                          =====          ===     ======        =====        ======
</TABLE>


     In connection with the merger of Univax into NABI, certain employees'
stock options were vested in connection with the termination of their
employment.

     NABI has recorded compensation in connection with these plans of $105,
$657 and $165 in 1994, 1995 and 1996, respectively.

     The following information reflects NABI's proforma earnings (loss)
information as if compensation expense associated with NABI's stock plans had
been recorded under the provisions of SFAS 123. Compensation expense has been
determined based upon the fair market value at the date of grant.



<TABLE>
<CAPTION>
                              1995      1996
                            ---------  -------
<S>                         <C>        <C>
 Net income (loss)          ($17,781)  $12,230
 Earnings (loss) per share    ($0.53)  $  0.34
</TABLE>


     The fair value of each option grant is estimated using the Black-Scholes
option-pricing model with the following ranges of assumptions: expected term of
2 - 5 years; expected volatility of 57% - 58%; and risk-free interest rates of
5% - 8%.  The weighted-average fair value of options granted during 1995 was
$3.60 and $5.93 for 1996.


     NOTE 11   INCOME TAXES

     Income (loss) before benefit (provision) for income taxes and
extraordinary charge was taxed under the following jurisdictions:



<TABLE>
<CAPTION>
              FOR THE YEARS ENDED DECEMBER 31,
            -------------------------------------
               1994         1995         1996
            -----------  -----------  -----------
<S>           <C>          <C>          <C>
 Domestic     $(6,612)     $(9,148)       $6,172
 Foreign         (808)      (1,726)        1,774
              -------     --------        ------
 Total        $(7,420)    $(10,874)       $7,946
              =======     ========        ======
</TABLE>



                                       54



<PAGE>   55

                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)





The benefit (provision) for income taxes consists of the following:



<TABLE>
<CAPTION>
                                                      FOR THE YEARS ENDED DECEMBER 31,
                                                    -------------------------------------
                                                       1994         1995         1996
                                                    -----------  -----------  -----------
<S>                                                   <C>          <C>          <C>
 Current
  Federal                                             $(4,928)     $(5,926)      $ (529)
  State                                                  (657)        (730)        (231)
                                                      -------      -------       ------
                                                       (5,585)      (6,656)        (760)
                                                      -------      -------       ------
 Deferred
  Federal                                                 180          771        7,719
  State                                                    17           35          484
                                                      -------      -------       ------
                                                          197          806        8,203
                                                      -------      -------       ------
 Benefit charged directly to equity from exercise
 of stock options and warrants                           (368)        (819)      (1,211)

 Acquired tax benefit used to reduce intangible
 assets                                                   (18)         (18)         (18)
                                                      -------      -------       ------
                                                      $(5,774)     $(6,687)      $6,214
                                                      =======      =======       ======
</TABLE>



                                       55




<PAGE>   56
                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)





     Deferred tax assets (liabilities) are comprised of the following:


<TABLE>                                                                       
<CAPTION>                     
                                                                              December 31,                    
                                                               ---------------------------------------------   
                                                                  1994            1995             1996        
                                                               -----------     -----------     ------------   
      <S>                                                         <C>             <C>              <C>        
      DEFERRED TAX ASSETS:                                                                                     
             NOL carryforward                                     $17,528         $18,338          $17,429    
             Capitalized research and development                   6,162          12,712           10,387    
             Research tax credit                                    2,190           2,801            3,078    
             Inventory reserve and capitalization                     452           1,518            2,044    
             Amortization                                             911           1,090            2,185    
             Bad debt reserve                                         197             126              233    
             Depreciation                                             142             523              719    
             Accrued vacation                                         151             259              142    
             Foreign tax credits                                      111             111               35    
             Other                                                    674             223              348    
                                                                  --------        -------          -------   
                                                                   28,518          37,701           36,600    
      Valuation allowance                                         (26,676)        (34,635)         (27,251)   
                                                                  -------         -------          -------   
      Deferred tax assets                                           1,842           3,066            9,349    
                                                                                                               
      DEFERRED TAX LIABILITIES:                                                                                
             Amortization                                            (533)           (937)            (906)   
             Other                                                    (27)            (72)             (17)   
                                                                  -------         -------          -------   
      Deferred tax liabilities                                       (560)         (1,009)            (923)   
                                                                  =======         =======          =======   
      Net deferred tax assets                                     $ 1,282         $ 2,057          $ 8,426    
                                                                  =======         =======          =======   
</TABLE>


     In November 1995, Univax was merged with and into NABI. The merger
qualifies as a tax free reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended. Univax's pre-merger deferred tax
assets are available to offset the future taxable income of NABI, subject to
certain annual and change of control limitations. The Univax pre-merger deferred
tax assets primarily include net operating loss carryforwards ("NOL"),
capitalized research and development expense and research tax credit
carryforwards. The NOLs and research tax credit carryforwards expire in varying
amounts through the year 2010.

     Pursuant to SFAS No. 109 "Accounting for Income Taxes," NABI recognized
approximately $7.4 million of certain deferred tax assets during 1996 primarily
as a result of releasing a portion of the valuation allowance previously
established against these assets acquired in the NABI/Univax merger.  The
residual deferred tax assets are fully reserved at December 31, 1996.  The
ultimate realization of the remaining deferred tax assets is largely dependent
on NABI's ability to generate sufficient future taxable income. Management
believes that the valuation allowance at December 31, 1996 is appropriate,
given NABI's historical loss experience prior to 1996 and other factors
including but not limited to the uncertainty of future taxable income
expectations beyond NABI's strategic planning horizon.

                                       56




<PAGE>   57

                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


     The significant elements contributing to the difference between the
federal statutory tax rate and the effective tax rate are as follows:



<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31,
                                                     ----------------------------
                                                       1994      1995      1996
                                                     --------  --------  --------
         <S>                                         <C>       <C>       <C>
         Federal statutory rate                       (35.0)%   (35.0)%    35.0%
         State income taxes, net of federal benefit     5.7       4.1      (2.9)
         Goodwill and other amortization                1.7       2.3      (0.2)
         Foreign trade income                          (3.5)     (5.1)    (12.8)
         Foreign loss (benefit)                         3.9       5.7       ---
         Merger transaction cost                        ---      19.0      (0.6)
         Pre-merger losses                             20.7      14.9       ---
         Reduction in valuation allowance               ---       ---     (92.9)
         Tax credits                                    ---       ---      (3.3)
         Capitalized research and development          80.7      60.2       ---
         Other                                          3.6      (4.6)     (0.5)
                                                     ------    ------    ------
                                                       77.8%     61.5%    (78.2)%
                                                     ======    ======    ======
</TABLE>


     The Internal Revenue Service completed its audit of NABI's 1992, 1993 and
1994 federal income tax returns during 1996 without material change.


NOTE 12   LEASES

     NABI conducts a majority of its operations under operating lease
agreements. Certain laboratory and office equipment leases are accounted for as
capital leases.  The majority of the related lease agreements contain renewal
options which enable NABI to renew the leases for periods of two to five years
at the then fair rental value at the end of the initial lease term. Management
expects that the leases will be renewed or replaced in the normal course of
business.

     Rent expense was approximately $3,854, $5,225 and $6,293 for the years
ended December 31, 1994, 1995 and 1996, respectively.

     As of December 31, 1996, the aggregate future minimum lease payments under
all non-cancelable operating leases with initial or remaining lease terms in
excess of one year are as follows:



<TABLE>
<CAPTION>
         YEAR ENDING DECEMBER 31,
         ------------------------
         <S>                                <C>
         1997                               $ 5,762
         1998                                 5,216
         1999                                 4,511
         2000                                 3,846
         2001                                 3,259
         Thereafter                           5,180
                                            -------
         Total minimum lease commitments    $27,774
                                            =======
</TABLE>



                                       57




<PAGE>   58

                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)





NOTE 13   RELATED PARTY TRANSACTIONS

     Effective September 30, 1992, NABI acquired H-BIG (hepatitis B immune
globulin) a proprietary plasma-based product from Abbott Laboratories
("Abbott"), in consideration of 2 million shares of NABI common stock valued
at $3,854 and royalties based upon product sales. The shares of NABI common
stock issued to Abbott were not registered under the federal securities laws
and therefore were subject to restrictions on transfer. With respect to its
investment in NABI, Abbott has agreed to various standstill measures, including
agreements not to acquire additional shares without approval of NABI's Board of
Directors and to vote its shares on most matters in the same proportion as
other stockholders.

     In November 1992, Abbott transferred to NABI all of its rights to HIV-IG
(HIV immune globulin), an experimental product, which may prevent the
transmission of AIDS to unborn infants whose mothers are HIV-positive.
Consideration for the product will be future royalties based upon commercial
sales.

     Related party transactions with Abbott for the years ended December 31,
1994, 1995 and 1996 are summarized below:



<TABLE>
<CAPTION>
                                                             1994     1995    1996
                                                            -------  ------  -------
<S>                                                         <C>      <C>     <C>
 Sales of plasma-related products and testing services      $ 6,103  $4,574  $ 3,027
 Purchases of diagnostic, therapeutic and testing products   11,260   8,516   10,390
 Product royalty obligations                                  1,426   1,977    2,617
 Rental payments and other                                      120   1,048      919
</TABLE>


     At December 31, 1995 and 1996, trade accounts receivable from Abbott
totaled $845 and $311 respectively, and accounts payable to Abbott aggregated
$650 and $1,554, respectively.


NOTE 14   PRODUCT DEVELOPMENT AND LICENSING AGREEMENTS

     NABI has entered into product development and licensing agreements with
certain collaborators. Under these agreements, NABI has made payments for
contract initiation, milestone achievements, cost reimbursements and profit
sharing and it is obligated to make future payments under these agreements if
certain contractual conditions are achieved.  In addition, NABI has received
equity funding, milestone payments and development cost reimbursements under a
certain collaborative agreement.

     In connection with an exclusive licensing agreement to market and
distribute WinRho SD in the U.S. through March 2005, NABI is obligated to
expend a minimum of $3,000 for marketing and selling expenses in each of the
years ending May 1996 and 1997. In addition, NABI has agreed to loan the
manufacturer of WinRho SD fifty percent of the cost of capital improvements to
its manufacturing facility up to $3,000, of which $1,864 was advanced at
December 31, 1996.

     During the years ended December 31, 1994 and 1995, NABI incurred
obligations under these agreements of $250 and $2,400, respectively, including
a contract initiation payment of $1,500.

     During the years ended December 31, 1994, 1995 and 1996, NABI recorded
research support reimbursements under a certain collaboration agreement of
$2,759, $6,036 and $2,148 respectively. This collaboration agreement terminated
in 1996.



                                       58




<PAGE>   59

                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)





NOTE 15   COMMITMENTS AND CONTINGENCIES

     NABI has been named with various other defendants in numerous suits filed
in the U.S., by or on behalf of, individuals who claim to have been infected
with HIV as a result of either using HIV-contaminated products made by the
defendants other than NABI or having familial relations with those so infected.
NABI denies all allegations against it, and intends to defend the cases
vigorously.  At December 31, 1996, NABI and its subsidiaries were also parties
to certain routine claims and litigation occurring in the normal course of
business.  Management believes that the ultimate resolution of these matters
will not have a material adverse effect on NABI's financial position or results
of operations.

     At December 31, 1996, NABI had outstanding purchase commitments with a
principal supplier which expire through September 1999. Under the agreement,
NABI is obligated to purchase goods from the supplier aggregating approximately
$21,942 in fiscal 1997 through fiscal 1998 and $16,457 in fiscal 1999.

     NABI is committed to purchase the entire plasma production of certain
contract centers through October 31, and December 31, 1999.


NOTE 16   INDUSTRY SEGMENT INFORMATION

     NABI operates in four principal industry segments. Plasma consists of the
operation of plasma collection centers for the collection and processing of
source and specialty plasmas. Immunotherapeutic products consists of
proprietary plasma-based immune globulin therapeutic products. Diagnostic
products and services is composed primarily of the production and sale of human
plasma-based control and diagnostic products and the performance of laboratory
testing services. Research and development includes expenses incurred under
collaborative product development agreements net of periodic reimbursements for
a portion of NABI's research activities and attainment of specified milestones.
Corporate and other includes the elimination of income on inter-segment sales,
unallocated general corporate expenses and interest, including amortization of
debt discount.

     Net export sales in 1994, 1995 and 1996 were $62,122, $70,679 and $93,774
respectively, and represented 38%, 36% and 39% of consolidated sales for those
years, respectively. Export sales are primarily to Europe. Plasma sales to
unaffiliated customers (Baxter, Immuno and Centeon for 1994; Baxter, Bayer and
Immuno for 1995; and Baxter, Bayer and Biotest for 1996) exceeding 10% of
consolidated sales aggregated 49%, 47% and 45% of sales in 1994, 1995 and 1996,
respectively.


                                       59




<PAGE>   60

                                      NABI

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


Information regarding NABI's operations and identifiable assets in the different
industry segments is as follows:


<TABLE>
<CAPTION>
                                                   1994          1995          1996
                                                ---------     ---------     ---------
<S>                                             <C>           <C>           <C>
SALES:
     Plasma                                     $143,687      $169,505      $207,832
     Immunotherapeutic products                    9,295        18,590        26,405
     Diagnostic products and services             11,444         7,833         5,672
                                                --------      --------      --------
                                                $164,426      $195,928      $239,909
                                                ========      ========      ========


OPERATING (LOSS) PROFIT:
     Plasma                                     $ 19,424      $ 23,091      $ 30,218
     Immunotherapeutic products                    4,433         4,595         8,498
     Diagnostic products and services              2,910         2,189         2,058
     Research and development                    (17,599)      (20,208)      (17,353)
     Corporate and other                         (13,660)      (19,340)      (12,252)
                                                --------      --------      --------
                                                $ (4,492)     $ (9,673)     $ 11,169
                                                ========      ========      ========

IDENTIFIABLE ASSETS:
     Plasma                                     $ 72,250      $ 85,954      $ 99,000
     Immunotherapeutic products                   11,108        27,927        40,224
     Diagnostic products and services              6,210         5,638         6,277
     Research and development                      6,978         6,988         5,801
     Corporate and other                          35,543        11,468        50,840
                                                --------      --------      --------
                                                $132,089      $137,975      $202,142
                                                ========      ========      ========

CAPITAL EXPENDITURES:
     Plasma                                     $  2,576      $  2,529      $  6,010
     Immunotherapeutic products                    1,620        15,667         9,974
     Diagnostic products and services                282         1,004           898
     Research and development                      1,382         1,124           532
     Corporate and other                           2,470         4,063         5,671
                                                --------      --------      --------
                                                $  8,330      $ 24,387      $ 23,085
                                                ========      ========      ========

DEPRECIATION AND AMORTIZATION EXPENSE:
     Plasma                                     $  3,254      $  3,781      $  4,147
     Immunotherapeutic products                      252           382           381
     Diagnostic products and services                411           391           436
     Research and development                      1,770         1,883         1,915
     Corporate and other                             632           522         1,004
                                                --------      --------      --------
                                                $  6,319      $  6,959      $  7,883
                                                ========      ========      ========
</TABLE>







                                       60




<PAGE>   61

                                      NABI

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)






NOTE 17   SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   PER SHARE DATA
                                                                        -------------------------------------
                                                                         INCOME
                                                  INCOME                 (LOSS)
                                                  (LOSS)                 BEFORE
                                                  BEFORE       NET       EXTRA-      EXTRA-           NET
                                    GROSS     EXTRADORDINARY  INCOME    ORDINARY    ORDINARY        INCOME
                      SALES         MARGIN        CHARGE      (LOSS)     CHARGE     CHARGE          (LOSS)
==============================================================================================================
<S>                  <C>           <C>           <C>        <C>         <C>         <C>             <C>
1995
1st Quarter          $ 46,303      $ 9,293       $ (1,830)  $ (1,830)   $(0.05)         ---         $(0.05)
2nd Quarter            47,462       10,428         (2,529)    (2,529)    (0.08)         ---          (0.08)
3rd Quarter            48,241       10,970         (2,709)    (2,709)    (0.08)         ---          (0.08)
4th Quarter            53,922       13,089        (10,493)   (10,493)    (0.31)         ---          (0.31)(1)
                     --------      -------       --------   --------    ------       ------         ------
                     $195,928      $43,780       $(17,561)  $(17,561)   $(0.52)         ---         $(0.52)
                     ========      =======       ========   ========    ======       ======         ======

1996
1st Quarter          $ 58,552      $13,713       $  1,417   $    485    $ 0.04       $(0.03)         $0.01
2nd Quarter            57,682       14,057          1,642      1,642      0.05          ---           0.05
3rd Quarter            57,635       12,873          1,095      1,095      0.03          ---           0.03 (2)
4th Quarter            66,040       17,352         10,006     10,006      0.28          ---           0.28 (3)
                     --------      -------       --------   --------    ------       ------         ------
                     $239,909      $57,995       $ 14,160   $ 13,228    $ 0.40       $(0.03)        $ 0.37
                     ========      =======       ========   ========    ======       ======         ======
</TABLE>





(1)  During the fourth quarter of 1995, NABI established a reserve of
approximately $2.5 million to reserve for development stage inventories which
have no assurance of commercial viability. In addition, NABI recorded a charge
of approximately $6 million in the fourth quarter of 1995 related to the
NABI/Univax merger.

(2)  During the third quarter of 1996, NABI recorded a charge of approximately
$2 million resulting from its voluntary withdrawal of certain lots of H-BIG
distributed prior to 1996 in response to implementation of second generation
polymerase chain reaction (PCR) testing requirements mandated by the Food and
Drug Administration in June 1996.

(3)  During the fourth quarter of 1996, NABI recognized a tax benefit of
approximately $6.5 million reflecting the recognition of certain tax benefits
principally associated with the NABI/Univax merger.


                                       61




<PAGE>   62
                                      NABI
 
         SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                 (IN THOUSANDS)



<TABLE>
<CAPTION>
                                                                       ADDITIONS                  DEDUCTIONS
                                                            --------------------------------  -------------------
                                          BALANCE AT        CHARGED TO          CHARGED TO     WRITE-OFFS CHARGED     BALANCE
                                          BEGINNING         COSTS AND        OTHER ACCOUNTS-        AGAINST            AT END
          CLASSIFICATION                  OF PERIOD          EXPENSES           PROVISION           RESERVE          OF PERIOD
          --------------                  -----------       ----------       ---------------   ------------------    ---------
<S>                                        <C>               <C>                <C>               <C>                <C>
YEAR ENDED DECEMBER 31, 1994:
 Allowance for doubtful
 accounts                                  $   125           $    422              --                 --             $   547
                                           =======           ========           =======           ========           =======

 Deferred tax asset
  valuation allowance                      $16,855               --             $ 9,821               --             $26,676
                                           =======           ========           =======           ========           =======

 Inventory reserve                         $   379           $    801              --             $    284           $   896
                                           =======           ========           =======           ========           =======

YEAR ENDED DECEMBER 31, 1995:
 Allowance for doubtful accounts           $   547           ($    86)             --             $    216           $   245
                                           =======           ========           =======           ========           =======

 Deferred tax asset valuation
  allowance                                $26,676               --             $ 7,959               --             $34,635
                                           =======           ========           =======           ========           =======

 Inventory reserve                         $   896           $  4,186              --             $  1,014           $ 4,068
                                           =======           ========           =======           ========           =======

YEAR ENDED DECEMBER 31, 1996:
 Allowance for doubtful accounts           $   245           $    675              --             $    273           $   647
                                           =======           ========           =======           ========           =======

 Deferred tax asset valuation
  allowance                                $34,635               --             ($7,309)          $     75           $27,251
                                           =======           ========           =======           ========           =======

 Inventory reserve                         $ 4,068           $  3,419              --             $  1,932           $ 5,555
                                           =======           ========           =======           ========           =======
</TABLE>










                                       62




<PAGE>   63





                                 EXHIBIT INDEX

<TABLE>
<CAPTION>

                                                                                           PAGE #
<S>    <C>
2      Agreement and Plan of Merger dated August 28, 1995 between NABI and
       Univax Biologics, Inc. (incorporated by reference to NABI's Registration
       Statement on Form S-4; Commission File No. 33-63497)................................. N/A

3.1    Restated Certificate of Incorporation of NABI........................................ N/A

3.2    By-Laws (incorporated by reference to NABI's Registration Statement on
       Form S-4; Commission File No. 33-63497).............................................. N/A

4.1    Specimen Stock Certificate (incorporated by reference to NABI's
       Registration Statement on Form S-2; Commission File No. 33-83096).................... N/A

4.2    Indenture between NABI and State Street Bank and Trust Company, dated as
       of February 1, 1996.................................................................. N/A

4.3    Registration Rights Agreement by and between NABI and Robertson, Stephens
       & Company LLC and Raymond James & Associates, Inc., dated as of February
       1, 1996 ............................................................................. N/A

10.1   Third Amended and Restated Revolving Credit and Term Loan Agreement
       between NationsBank, National Association (South) (f/k/a NationsBank of
       Florida, National Association) ("NationsBank") and NABI dated December 1,
       1994 (incorporated by reference to NABI's Annual Report on Form 10-K for
       the year ended December 31, 1994).................................................... N/A

10.2   Waiver and Amendment, dated December 30, 1994, of Section 8.09(e) of
       Third Amended and Restated Revolving Credit, Term Loan and Reimbursement
       Agreement between NationsBank and NABI dated as of December 1, 1994
       (incorporated by reference to NABI's Registration Statement on Form S-4;
       Commission File No. 33-63497)........................................................ N/A

10.3   Amendment No. 1 to Third Amended and Restated Revolving Credit Term Loan
       and Reimbursement Agreement between NationsBank and NABI dated March 31,
       1995 (incorporated by reference to NABI's Registration Statement on Form
       S-4; Commission File No. 33-63497)................................................... N/A

10.4   Amendment Nos. 3 and 4 to Third Amended and Restated Revolving Credit
       Term Loan and Reimbursement Agreement between NABI and NationsBank dated
       as of November 29, 1995 and December 20, 1995, respectively.......................... N/A

10.5   Shareholder Agreement effective as of September 30, 1992 between NABI and
       Abbott Laboratories (incorporated by reference to NABI's Annual Report on
       Form 10-K for the year ended December 31, 1992)...................................... N/A

10.6   Shareholder Agreement between CGW Southeast Partners I, L.P. and NABI
       dated January 25, 1994 (incorporated by reference to NABI's Registration
       Statement on Form S-2; Commission File No. 33-83096)................................. N/A

10.7   Plasma Supply Agreement dated January 1, 1994 between Baxter Healthcare
       Corporation and NABI (confidential treatment) (incorporated by reference
       to NABI's Registration Statement on Form S-2; Commission File No.
       33-83096)............................................................................ N/A

</TABLE>


                                       63




<PAGE>   64




<TABLE>
<S>    <C>
10.8   Plasma Supply Agreement II dated January 1, 1994 between Baxter
       Healthcare Corporation, Hyland Division, and NABI (confidential
       treatment) (incorporated by reference to NABI's Registration Statement on
       Form S-2; Commission File No. 33-83096).............................................. N/A

10.9   Agreement effective January 1, 1994 between NABI and Immuno Trading AG
       (confidential treatment) (incorporated by reference to NABI's
       Registration Statement on Form S-2; Commission File No. 33-83096).................... N/A

10.10  Plasma Supply Agreement dated September 8, 1992 and letter dated November
       1, 1993 from Behringwerke AG to NABI (confidential treatment)
       (incorporated by reference to NABI's Registration Statement on Form S-2;
       Commission File No. 33-83096)........................................................ N/A

10.11  Supply Agreement dated May 1, 1993 between NABI and Intergen Company L.P.
       (confidential treatment) (incorporated by reference to NABI's
       Registration Statement on Form S-2; Commission File No. 33-83096).................... N/A

10.12  Lease Agreements dated December 11, 1990, as modified on May 23, 1994
       between NABI and Angelo Napolitano, Trustee, for certain real property
       located at 16500 N.W. 15th Avenue, Miami, Florida (incorporated by
       reference to NABI's Registration Statement on Form S-2; Commission File
       No. 33-83096)........................................................................ N/A

10.13  Lease Agreement dated March 31, 1994 between NABI and Angelo Napolitano,
       Trustee, for certain real property located at 16500 N.W. 15th Avenue,
       Miami, Florida (incorporated by reference to NABI's Registration
       Statement on Form S-2; Commission File No. 33-83096)................................. N/A

10.14  Employment Agreement dated January 1, 1993 between NABI and David J. Gury
       (incorporated by reference to NABI's Annual Report on Form 10-K for the
       year ended December 31,1992)......................................................... N/A

10.15  Employment Agreement dated January 27, 1994 between John C. Carlisle and
       NABI (incorporated by reference to NABI's Registration Statement on Form
       S-2; Commission File No. 33-83096)................................................... N/A

10.16  Employment Agreement effective August 1, 1995 between NABI and Alfred J.
       Fernandez (incorporated by reference to NABI's Registration Statement on
       Form S-4; Commission File No. 33-63497).............................................. N/A

10.17  Employment Agreement effective August 1, 1995 between NABI and Stephen W.
       Weston (incorporated by reference to NABI's Registration Statement on
       Form S-4; Commission File No. 33-63497).............................................. N/A

10.18  Employment Agreement effective December 1, 1995 between NABI and Robert
       B. Naso (incorporated by reference to NABI's Annual Report on Form 10-K
       for the year ended December 31, 1995)................................................ N/A

10.19  Employment Agreement effective December 1, 1995 between NABI and Thomas
       P. Stagnaro (incorporated by reference to NABI's Annual Report on Form
       10-K for the year ended December 31, 1995)........................................... N/A

10.20  Separation Agreement effective January 5, 1996 between NABI and Raj Kumar
       (incorporated by reference to NABI's Annual Report on Form 10-K for the
       year ended December 31, 1995)........................................................ N/A

</TABLE>



                                       64



<PAGE>   65




<TABLE>
<S>    <C>
10.21  1990 Equity Incentive Plan (incorporated by reference to NABI's
       Registration Statement on Form S-4; Commission File No. 33-63497).................... N/A

10.22  Amended and Restated Incentive Stock Option Plan adopted in 1993
       (incorporated by reference to NABI's Annual Report on Form 10-K for the
       year ended December 31, 1992)........................................................ N/A

10.23  Stock Plan for Non-Employee Directors (incorporated by reference to
       NABI's Proxy Statement dated April 26, 1995)......................................... N/A

10.24  Amendment No. 5 to Third Amended and Restated Revolving Credit Term Loan
       and Reimbursement Agreement between NationsBank and NABI dated March 31,
       1996 (incorporated by reference to NABI's Quarterly Report on Form 10-Q
       for the quarter ended March 31,1996)................................................. N/A

10.25* Letter Amendment to Third Amended and Restated Revolving Credit Term Loan
       and Reimbursement Agreement between NationsBank and NABI dated August 1, 1996...... 66-68

10.26* Employment Agreement dated January 1, 1997 between John C. Carlisle and NABI....... 69-73

21*    Subsidiaries of the Registrant..................................................... 74-75

23*    Consent of Independent Certified Public Accountants................................ 76-77

27     Financial Data Schedule (for SEC use only).
</TABLE>





- -------------------
* Filed herewith


                                       65








<PAGE>   1




                                                              EXHIBIT 10.25









                                LETTER AMENDMENT

            TO THIRD AMENDED AND RESTATED REVOLVING CREDIT TERM LOAN
                          AND REIMBURSEMENT AGREEMENT

                          BETWEEN NATIONSBANK AND NABI

                              DATED AUGUST 1, 1996





































                                       66

<PAGE>   2









NationsBank


August 1, 1996


Mr. Alfred J. Fernandez
Chief Financial Officer
NABI
5800 Park of Commerce Blvd., N.W.
Boca Raton, FL  33487

RE:  THIRD AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT (THE
"AGREEMENT") DATED AS OF DECEMBER 1, 1994 BETWEEN NATIONSBANK, N.A. (SOUTH)
(F/K/A NATIONSBANK OF FLORIDA, N.A.) AS LENDER AND AGENT AND NABI (F/K/A NORTH
AMERICAN BIOLOGICALS, INC.) AS BORROWER.

Dear Mr. Fernandez:

Reference is hereby made to the Agreement between NationsBank and NABI.  Unless
otherwise defined herein, all capitalized terms used shall have the meanings
set forth in the Agreement.

1)   Borrower has requested and NationsBank has agreed to a waiver of Section
     8.11 of the Agreement, specifically to permit the Borrower to re-purchase
     the lesser of (i) up to 1,724,322 shares or, (ii) five percent (5%) of its
     outstanding Common Stock, at a maximum purchase price of $12 per share,
     effective as of the date of this letter.

2)  NationsBank hereby agrees to amend Sections 8.01 and 8.04 as follows:

         SECTION 8.01:  CONSOLIDATED TANGIBLE NET WORTH
         Permit Consolidated
 Tangible Net Worth to be less than $28,000,000 on
         September 30, 1996, such amount to be increased at the end of each
         fiscal quarter, beginning with the fiscal quarter ending December 31,
         1996 by at least 50% of Consolidated Net Income greater than zero for
         the immediately preceding fiscal quarter.

         SECTION 8.04:  CONSOLIDATED LEVERAGE RATIO
         Permit as at the quarters ending on the dates set forth below the
         Consolidated Leverage Ratio to be more than the ratios set forth
         opposite such date, respectively:


<TABLE>
<CAPTION>
             PERIOD                                   RATIO
             ------                                   -----
             <S>                                      <C>
             March 31, 1996                           5.25 to 1.00
             June 30, 1996                            4.25 to 1.00
             September 30, 1996                       4.25 to 1.00
             December 31, 1996                        4.00 to 1.00
             March 31, 1997                           3.75 to 1.00
             June 30, 1997 through December 31, 1997  3.50 to 1.00
             Each fiscal quarter thereafter           3.00 to 1.00
</TABLE>



                                       67




<PAGE>   3




NationsBank hereby agrees to such waiver and amendment subject to the
satisfaction and conditions set forth in this letter.  The provisions of this
waiver and amendment shall only become effective upon receipt by NationsBank of
duly executed copies of this letter.  Except as expressly waived, amended or
otherwise specifically provided, all of the terms or conditions of the Agreement
and each document executed in connection therewith shall remain unamended,
unmodified and unwaived and shall continue to be in full force and effect in
accordance with their respective terms.

The waiver and amendment set forth herein shall be limited precisely as provided
for herein to the provisions expressly waived or amended herein and shall not be
deemed a waiver of, amendment of, consent to or modification of any other term
or provision of the Agreement or any transaction of future transaction on the
part of the Borrower requiring NationsBank consent under the Agreement.

Please acknowledge your agreement to the foregoing by executing below.


NATIONSBANK, N.A. (SOUTH)


By:     /s/ Allison Freeland
    -------------------------------------------------

Its:    Vice President
    -------------------------------------------------






READ AND AGREED TO:

By:   /s/ Alfred J. Fernandez
   --------------------------------------------------

Its:  Senior Vice President & Chief Financial Officer
    -------------------------------------------------





                                       68






<PAGE>   1









                                                                  EXHIBIT 10.26





                              EMPLOYMENT AGREEMENT

                             DATED JANUARY 1, 1997

                       BETWEEN JOHN C. CARLISLE AND NABI






























                                       69



<PAGE>   2





                                      NABI
                     5800 PARK OF COMMERCE BOULEVARD, N.W.
                           BOCA RATON, FLORIDA  33487



EFFECTIVE AS OF JANUARY 1, 1997

Mr. John C. Carlisle
10401 Reo Lindo
Delray Beach, Florida 33446

Dear John:

You have agreed to serve as Executive Vice President, Chief Operating Officer
for NABI.  The following are the terms of such employment:

1.   TERM:  You will serve as Executive Vice President, Chief Operating
     Officer of NABI a period beginning as of the date hereof and ending on
     December 31, 1999, unless your employment is sooner terminated as provided
     below (the "Employment Period").

2.   SALARY:  Your salary will be $240,000.00 per year, payable bi-weekly
     during the Employment Period.  Your salary will be subject to
     discretionary annual increases as determined by NABI's Board of Directors.

3.   BONUS:  You will be entitled to participate in NABI's VIP Management
     Incentive Program.

     Unless the Employment Period is terminated for "cause" pursuant to Section
     7(B)(b) below, bonus compensation shall be pro rated in respect of any
     calendar year during which the Employment Period terminates based on the
     amount of bonus compensation which would have been payable with
 respect to
     such year based on your original VIP Management Incentive Program
     participation, divided by 12, times the number of full calendar months
     during the relevant year you were employed prior to the termination of the
     Employment Period.  If the Employment Period is terminated pursuant to
     Section 7(B)(b) below, no bonus compensation is payable with respect to
     the calendar year during which it is terminated.

     Bonus payments shall be payable within 120 days after the end of the
     relevant calendar year.

4.   AUTO ALLOWANCE:  You, while an employee under the terms of this
     Agreement, shall receive an auto allowance of not less than $900.00 per
     month.

5.   BENEFITS:  You will be eligible to participate in NABI's 401(k),
     medical/dental insurance, life insurance, executive long term disability
     program, Supplemental Executive Retirement Plan (SERP), and other benefit
     programs upon the effective date of this Agreement.  You will accrue Paid
     Leave Bank (PLB) time at the rate of 18.67 hours per month.

6.   DUTIES AND EXTENT OF SERVICES:

     (A)  During the Employment Period, you agree to devote substantially all of
     your working time, and such energy, knowledge, and efforts as is necessary
     to the discharge and performance of your duties provided for in this
     Agreement and such other reasonable duties and responsibilities consistent
     with your position as are assigned to you from time to time by the person
     to whom you report.  You shall be located primarily in NABI's Boca Raton,
     Florida, facilities, but shall travel to other locations from time to time
     as shall be reasonably required in the course of performance of your
     duties.



                                       70




<PAGE>   3




     (B)  During the Employment Period, you shall serve as NABI's Executive Vice
     President, Chief Operating Officer.  You shall have such duties as are
     delegated to you by the person to whom you report provided that such duties
     shall be reasonably consistent with those duties assigned to executive
     officers having similar titles in organizations comparable to NABI.

7.   TERMINATION:

     (A)  The Employment Period shall terminate upon your death.  You may also
     terminate the Employment Period upon 180 days' prior written notice to
     NABI. Any termination pursuant to this Section 7(A) shall not affect any
     bonus compensation applicable to the year of such termination, provided
     that any bonus compensation payable pursuant to Section 3 of this Agreement
     shall be pro rated as provided for in Section 3.

     (B)  NABI may terminate the Employment Period in the event of (a) your
     disability that prevents you from performing your obligations pursuant to
     this Agreement for any three (3) consecutive months or (b) for "cause",
     which is defined as (i) commission of fraud or embezzlement or other
     felonious acts by you, (ii) your refusal to comply with reasonable
     directions in connection with the performance of your duties as provided
     for in Section 6 of this Agreement after notice of such failure is
     delivered to you, (iii) failure to comply with the provisions of Section 8
     or 9 of this Agreement or (iv) your gross negligence in connection with the
     performance of your duties as provided for in this Agreement, which gross
     negligence causes material damage to NABI, provided that, in the event of
     termination under this clause (B), you shall receive ten (10) days notice
     of such failure prior to termination and a determination must be made by
     NABI's Board of Directors or a duly appointed committee of the Board, after
     you are afforded an opportunity to be heard, that it is, at the date of
     such termination, reasonable to conclude that grounds for such termination
     under this clause (B) still exists.

     (C)  NABI may otherwise terminate the Employment Period upon thirty (30)
     days' prior notice to you. In the event of such termination based on the
     effective date of such termination, NABI will pay you severance pay of
     twelve (12)  months of your annual base salary as in effect at the time of
     such termination ("Severance Pay") and maintain in effect for a twelve (12)
     month period all then existing benefits, (subject to the limitations of the
     applicable plans), including but not limited to, the auto allowance, life
     insurance, short and long term disability programs, health care coverages,
     and SERP benefits. Severance Pay provided for in this paragraph shall be
     made in twelve (12) equal monthly installments.  If you terminate your
     employment with NABI within thirty (30) days of the expiration of the
     Employment Period, you shall be entitled to receive Severance Pay under
     Section 7C unless during the thirty (30) day period prior to the expiration
     of the Employment Period, NABI offered to renew this Agreement on terms no
     less favorable to you than the terms then in effect.

     (D)  If your employment terminates pursuant to Section 7B(a) or Section 7C,
     all non-vested stock options, restricted stock or similar incentive equity
     instruments pursuant to the Company's 1990 Equity Incentive Plan and/or
     successor plans (the "Options") shall immediately vest.  All such "Options"
     shall be exercisable for one (1) year past termination date, except that no
     "Options" shall be exercisable beyond the original "Option" expiration
     date. To the extent the terms of any "Options" are inconsistent with this
     Agreement, the terms of this Agreement shall control.

     (E)  Your confidentiality and non-competition agreements set forth in
     Sections 8 and 9 below shall survive the termination of your employment
     regardless of the reasons therefor.

8.   CONFIDENTIALITY:  You acknowledge that your duties as described in
     Section 6 of this Agreement will give you access to trade secrets and
     other confidential information of NABI and/or its affiliates, including
     but not limited to information concerning production and marketing of
     their respective products, customer lists, and other information relating
     to their present or future operations (all of the foregoing, whether or not
     it qualifies as a "trade secret" under applicable law, is collectively
     called "Confidential Information").  You recognize that Confidential
     Information is proprietary to each such entity and gives each of them
     significant competitive advantage.

                                       71



<PAGE>   4




     Accordingly, you shall not use or disclose any of the Confidential
     Information during or after the Employment Period, except for the sole and
     exclusive benefit of the relevant company. Upon any termination of the
     Employment Period, you will return to the relevant company's office all
     documents, computer tapes, and other tangible embodiments of any
     Confidential Information.  You agree that NABI would be irreparably injured
     by any breach of your confidentiality agreement, that such injury would not
     be adequately compensable by monetary damages, and that, accordingly, the
     offended company may specifically enforce the provisions of this Section by
     injunction or similar remedy by any court of competent jurisdiction without
     affecting any claim for damages.

9.   NON-COMPETITION:

     (A)  You acknowledge that your services to be rendered are of a special and
     unusual character and have a unique value to NABI the loss of which cannot
     adequately be compensated by damages in an action at law.  In view of the
     unique value of the services, and because of the Confidential Information
     to be obtained by or disclosed to you, and as a material inducement to NABI
     to enter into this Agreement and to pay to you the compensation referred to
     above and other consideration provided, you covenant and agree that you
     will not, during the term of your employment by NABI and for a period of
     one (1) year after termination of such employment for any reason
     whatsoever, you will not, directly or indirectly, (a) engage or become
     interested, as owner, employee, consultant, partner, through stock
     ownership (except ownership of less than five percent of any class of
     securities which are publicly traded), investment of capital, lending of
     money or property, rendering of services, or otherwise, either alone or in
     association with others, in the operations, management or supervision of
     any type of business or enterprise engaged in any business which is
     competitive with any business of NABI (a "Competitive Business"), (b)
     solicit or accept orders from any current or past customer of NABI for
     products or services offered or sold by, or competitive with products or
     services offered or sold by, NABI, (c) induce or attempt to induce any such
     customer to reduce such customer's purchase of products or services from
     NABI, (d) disclose or use for the benefit of any Competitive Business the
     name and/or requirements of any such customer or (e) solicit any of NABI's
     employees to leave the employ of NABI or hire or negotiate for the
     employment of any employee of NABI.

     (B)  You have carefully read and considered the provisions of this Section
     and Section 8 and having done so, agree that the restrictions set forth
     (including but not limited to the time period of restriction and the world
     wide areas of restriction) are fair and reasonable (even if termination is
     at our request and without cause) and are reasonably required for the
     protection of the interest of NABI, its officers, directors, and other
     employees.  You acknowledge that upon termination of this Agreement for any
     reason, it may be necessary for you to relocate to another area, and you
     agree that this restriction is fair and reasonable and is reasonably
     required for the protection of the interests of NABI, its officers,
     directors, and other employees.

     (C)  In the event that, notwithstanding the foregoing, any of the
     provisions of this Section or Section 8 shall be held to be invalid or
     unenforceable, the remaining provisions thereof shall nevertheless continue
     to be valid and enforceable as though invalid or unenforceable parts had
     not been included therein.  In the event that any provision of this Section
     relating to time period and/or areas of restriction shall be declared by a
     court of competent jurisdiction to exceed the maximum time period or areas
     such court deems reasonable and enforceable, said time period and/or areas
     of restriction shall be deemed to become, and thereafter be, the maximum
     time period and/or area which such court deems reasonable and enforceable.

     (D)  With respect to the provisions of this Section, you agree that
     damages, by themselves, are an inadequate remedy at law, that a material
     breach of the provisions of this Section would cause irreparable injury to
     the aggrieved party, and that provisions of this Section 9 may be
     specifically enforced by injunction or similar remedy in any court of
     competent jurisdiction without affecting any claim for damages.

10.  MISCELLANEOUS:  This Agreement and the rights and obligations of the
     parties pursuant to it and any other instruments or documents issued
     pursuant to it shall be construed, interpreted and enforced in accordance
     with the laws of the State of Florida, exclusive of its choice-of-law
     principles.  This
                                       72



<PAGE>   5





     Agreement shall be binding upon and inure to the benefit of the parties
     hereto, and their respective successors and assigns.  The provisions of
     this Agreement shall be severable and the illegality, unenforceability or
     invalidity of any provision of this Agreement shall not affect or impair
     the remaining provisions hereof, and each provision of this Agreement shall
     be construed to be valid and enforceable to the full extent permitted by
     law.  In any suit, action or proceeding arising out of or in connection
     with this Agreement, the prevailing party shall be entitled to receive an
     award of the reasonable related amount of attorneys' fees and disbursements
     incurred by such party, including fees and disbursements on appeal.  This
     Agreement is a complete expression of all agreements of the parties
     relating to the subject matter hereof, and all prior or contemporaneous
     oral or written understandings or agreements shall be null and void except
     to the extent set forth in this Agreement.

     This Agreement cannot be amended orally, or by any course of conduct or
     dealing, but only by a written agreement signed by the party to be charged
     therewith.  All notices required and allowed hereunder shall be in writing,
     and shall be deemed given upon deposit in the Certified Mail, Return
     Receipt Requested, first-class postage and registration fees prepaid, and
     correctly addressed to the party for whom intended at its address set forth
     under its name below, or to such other address as has been most recently
     specified by a party by one or more counterparts, each of which shall
     constitute one and the same agreement.  All references to genders or number
     in this Agreement shall be deemed interchangeably to have a masculine,
     feminine, neuter, singular or plural meaning, as the sense of the context
     required.

     If the foregoing confirms your understanding of our agreements, please so
     indicate by signing in the space provided below and returning a signed copy
     to us.
                                         NABI
                                         5800 PARK OF COMMERCE BOULEVARD, N.W.
                                         BOCA RATON, FLORIDA 33487



                                         BY:  /s/  DAVID J. GURY
                                            -----------------------
                                              DAVID J. GURY
                                              CHIEF EXECUTIVE OFFICER


ACCEPTED AND AGREED:


/s/ JOHN C. CARLISLE
- -----------------------------------
JOHN C. CARLISLE
10401 REO LINDO
DELRAY BEACH, FLORIDA 33446

                                       73





<PAGE>   1










                                                                     EXHIBIT 21





                         SUBSIDIARIES OF THE REGISTRANT













                                       74



<PAGE>   2





                         SUBSIDIARIES OF THE REGISTRANT





     Set forth below is a listing of all of the existing subsidiaries of the
Registrant.  The Registrant owns 100% of the stock of each of the subsidiaries
listed below.





<TABLE>
<CAPTION>
       SUBSIDIARIES                     STATE OR NATION OF INCORPORATION
       ------------                     --------------------------------
       <S>                                         <C>

       NABI Foreign Sales, Ltd. .................. Barbados, West Indies

       BioMune Corporation......................................Delaware

       NABI Finance, Inc. ......................................Delaware

       North American Biologicals GmbH...........................Germany

            BIOPLAS GmbH.........................................Germany

            N.A.B.I. BioMedical GmbH.............................Germany

       Univax Plasma, Inc. .....................................Delaware
</TABLE>




                                       75








<PAGE>   1









                                                                      EXHIBIT 23





              CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS










                                       76



<PAGE>   2








              CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



     We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statements on Form S-3 (No. 33-10148, No.
33-24117, No. 33-47239, No. 33-75868 and No. 333-2253) and the Registration 
Statements on Form S-8 (No. 33-42223, No. 33-42224, No. 33-05219, No. 33-60795
and No. 33-65069) of NABI and its subsidiaries of our report dated February 28,
1997, appearing in this Form 10-K.





/s/ Price Waterhouse LLP
- ------------------------
PRICE WATERHOUSE LLP
Miami, Florida
March 25, 1997










                                       77







<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1996 AND THE CONSOLIDATED STATEMENT
OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JAN-01-1996
<PERIOD-END>                               DEC-31-1996
<EXCHANGE-RATE>                                      1
<CASH>                                          18,513
<SECURITIES>                                     8,797
<RECEIVABLES>                                   38,127<F1>
<ALLOWANCES>                                         0
<INVENTORY>                                     28,395<F1>
<CURRENT-ASSETS>                                98,101
<PP&E>                                          60,587<F1>
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                 202,142
<CURRENT-LIABILITIES>                           34,471
<BONDS>                                         83,465
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                         3,461
<OTHER-SE>                                      82,600
<TOTAL-LIABILITY-AND-EQUITY>                   202,142
<SALES>                                        239,909
<TOTAL-REVENUES>                               239,909
<CGS>                                          181,914
<TOTAL-COSTS>                                  181,914
<OTHER-EXPENSES>                                46,826
<LOSS-PROVISION>                                     0<F2>
<INTEREST-EXPENSE>                               3,987
<INCOME-PRETAX>                                  7,946
<INCOME-TAX>                                    (6,214)
<INCOME-CONTINUING>                             14,160
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                    932
<CHANGES>                                            0
<NET-INCOME>                                    13,228
<EPS-PRIMARY>                                     0.37
<EPS-DILUTED>                                        0
<FN>
<F1>RECEIVABLES, INVENTORY AND PP&E REPRESENT NET AMOUNTS.
<F2>LOSS PROVISION INCLUDED IN OTHER EXPENSES.
</FN>
        

</TABLE>