<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, 1998
                         ------------------------------------------------------

                                       OR

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

From the transition period from __________________ to __________________


Commission file number        0-4829-03
                      ------------------------------


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


              Delaware                                    59-1212264
- --------------------------------------------------------------------------------
(State or Jurisdiction of Incorporation                 I.R.S. Employer
         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 25, 1999, 34,913,623 shares of common stock were
outstanding, of which 33,438,972 shares were held of record by non-affiliates.
The aggregate market value of shares held by non-affiliates was approximately
$125,396,145 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, 1998 are incorporated by reference into Part III
hereof as provided therein.



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NABI
- --------------------------------------------------------------------------------

                                                                          PART I


ITEM 1.       BUSINESS

OVERVIEW
- --------
Nabi(R) (the "Company") is a fully integrated biopharmaceutical company that
develops and commercializes pharmaceutical products used for the prevention and
treatment of infectious diseases and immunological disorders. On March 25,
1999, the Company announced that its Biologics License Application ("BLA") for
Nabi-HB(TM), was approved by the Food and Drug Administration ("FDA"). Nabi's
current pharmaceutical product portfolio includes WinRho SDF(TM) and
Autoplex(R)T, which have also been approved by the FDA. In addition, the
Company has an extensive pipeline of products under development. Currently five
of Nabi's pharmaceutical products are in clinical trials. The Company is also
one of the largest collectors and suppliers of non-specific and specialty
antibody products (source and specialty plasma) in the world. Nabi collects
these products from an extensive donor base in the United States. Some of these
antibodies are used in the manufacture of Nabi's pharmaceutical products. Most
are supplied to other pharmaceutical companies for the manufacture of numerous
products used throughout the world. The mission of the Company is simple - to
focus its competitive advantages in technology, facilities, people and markets
to deliver products to prevent and treat life-threatening conditions.

During 1998, Nabi's management determined that certain restructuring initiatives
were necessary to sharpen the Company's focus and to improve overall
profitability and cash flow. As part of this process, management and the Board
of Directors re-examined each of the Company's business segments with a view
towards strategic optimization. While sales of non-specific antibody products
were essentially even year over year, there was considerable margin pressure in
this segment of the Company's business. To address this problem, the Company
decided to pursue a shift in its revenue mix towards higher margin specialty
antibody products and to streamline its production of non-specific antibodies.
During 1999, certain antibody collection centers in the United States and the
Company's four centers in Germany will be sold or closed. United States donors
are expected to transfer to nearby Nabi centers or Nabi will seek to increase
production at other lower-cost antibody collection facilities.

Nabi also determined its own product development spending needs to be focused on
clinical trials and marketing programs for currently marketed and late
development stage pharmaceutical products. The Company will actively pursue
strategic alliances to support additional product development activities. As a
result of these decisions, the Company will decrease its rate of internal
spending on preclinical research activities in 1999 and reduced staff
accordingly at its Rockville, Maryland facility in February 1999.

PRODUCTS
- --------
CURRENTLY MARKETED PHARMACEUTICAL PRODUCTS

Revenue generated by Nabi's pharmaceutical products has grown almost six-fold
since 1994. Sales of these products totaled $55 million in 1998 representing a
60% increase over 1997 levels ($34.5 million). In 1998, pharmaceutical products
accounted for more than 20% of the Company's total revenues and approximately
70% of the Company's gross margin. Nabi marketed three pharmaceutical products
during 1998 and 1997. Nabi sold the last of its H-BIG(R) product inventory in
the third quarter of 1998. This product has been replaced by the Company's




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internally developed Nabi-HB(TM), which was approved by the FDA in March, 1999.
Nabi's currently marketed pharmaceutical products are described below:

Nabi-HB(TM)

According to the U.S. Center for Disease Control and Prevention ("CDC"), viral
hepatitis ranks third as a reportable disease, surpassed only by venereal
diseases and chickenpox. Approximately one third of all viral hepatitis cases
are reported as hepatitis B. The hepatitis B virus ("HBV") is a major health
concern globally as it now affects approximately 300 million people worldwide.
Hepatitis B is 100 times more infectious than the human immunodeficiency virus
("HIV"). The CDC estimates that in the United States alone there are one to two
million chronic hepatitis B carriers, 300,000 new hepatitis B infections per
year, 22,000 babies born to hepatitis B positive mothers and 5,000 individuals
who die from hepatitis B or its complications annually.

Nabi-HB(TM) is a human polyclonal antibody product to be used to prevent
hepatitis B following exposure to the disease by sexual or household exposure,
blood transfusion or accidental ingestion, or by transmission from a hepatitis B
antigen-positive mother to a newborn. Nabi launched the product immediately upon
receipt of FDA approval in March, 1999. Cangene Corporation ("Cangene")
currently manufactures Nabi-HB(TM) for the Company.

Additionally, in November 1998, Nabi filed an expanded access Investigational
New Drug application ("IND") for the use of Nabi-HB(TM) to prevent the infection
of transplanted livers in patients with HBV. Nabi is manufacturing a hepatitis B
immune globulin in its Boca Raton manufacturing facility. This product is
currently in clinical studies.

WinRho SDF(TM)

Immune Thrombocytopenia Purpura ("ITP") is an autoimmune disease which manifests
itself in abnormally low platelet levels (Thrombocytopenia) resulting in
bleeding tendencies. The term purpura refers to the appearance of large purple
patches on the body caused by bleeding into the skin and mucous membranes. In
ITP, the body's immune system produces antibodies that attach to platelets
causing them to be removed from circulation, primarily by the spleen. Because
platelets are required for blood clotting, as platelet counts decrease, the
incidence of bleeding episodes increase. In certain cases, such as severe trauma
or spontaneous intracranial hemorrhage, the bleeding can be life threatening. In
the United States, experts estimate that there are 50 per 1,000,000 childhood
cases of ITP and 60 per 1,000,000 adult cases of ITP annually. In children, the
disease is usually acute in onset and is often resolved in six months. In adult
ITP, the onset is insidious and rarely resolves itself spontaneously.
Additionally, ITP is more common in females than males. ITP can occur as either
a primary disease, with an associated condition or secondary to another
underlying disease such as HIV or Lupus.

WinRho SDF(TM) is a human polyclonal antibody product approved for the treatment
of ITP and for the suppression of Rh isoimmunization. WinRho SDF(TM) has been
designated as an Orphan Drug for the treatment of ITP. Nabi began exclusive
marketing of WinRho SDF(TM) in the United States in mid-1995 under a license and
distribution agreement with Cangene Corporation. Nabi is currently conducting
several Phase IV clinical studies involving WinRho SDF(TM), including(a) a
comparison of WinRho SDF(TM) versus IVIG for the treatment of ITP, (b) an
evaluation of WinRho SDF(TM) in the treatment of ITP during pregnancy, and (c) a
comparison of WinRho SDF(TM) versus routine care with Prednisone followed by
splenectomy in the management of ITP. See also "Strategic Alliances" and
"Government and Industry Regulation-Orphan Drug Act."

AutoPlex(R)T

Hemophilia is a blood disorder characterized by a lack of a particular
functional coagulation factor. In the case of hemophilia A, the deficient factor
is Factor VIII. Physicians typically treat hemophilia by replacing the deficient
factor with factor from outside sources. In most cases, replacement therapy is
effective in stopping bleeding episodes. However, the treatment of hemophilia A
is complicated when an inhibitor or



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antibody is produced in response to outside sources of Factor VIII. These
inhibitors combine with the infused Factor VIII and neutralize its activity.

AutoPlex(R)T is a complex blood coagulation factor used to treat hemophilia A
patients who have developed inhibitors to Factor VIII. AutoPlex(R)T "bypasses"
the Factor VIII requirement for clotting by stimulating other components of the
coagulation process. Nabi acquired exclusive rights for AutoPlex(R)T in the
United States, Canada and Mexico from Baxter Healthcare Corporation ("Baxter")
in May 1997.


MARKETED ANTIBODY PRODUCTS

Non-specific Antibodies

Nabi is one of the world's largest suppliers of human non-specific antibody
products (source plasma) to the pharmaceutical and diagnostic industries. In
1998, Nabi derived revenues of $133.1 million from sales of non-specific
antibodies. This was virtually even with 1997 levels of $135.3 million. Sales of
non-specific antibodies in 1998 accounted for 55% of total Company revenues, a
4% decrease from 1997 levels, reflecting the increasing revenue contribution
from pharmaceutical products discussed earlier.

Among other uses, non-specific antibodies are used to manufacture intravenous
immune globulin ("IVIG") that helps the body to fight infections and assists in
the treatment of bone marrow transplantation, B cell chronic lymphocytic
leukemia, hypogammaglobulinemia, Kawasaki syndrome and other chronic immune
deficiencies.

Specialty Antibodies

During 1998, sales of specialty antibodies (specialty plasma) were $55.0
million, a 7% decrease from 1997 sales of $59.0 million. Certain high-margin
specialty antibody product sales increased during 1998, such as anti-D and
hepatitis B, but were more than offset by a reduction in sales of other
lower-margin specialty antibodies for tetanus, cytomegalovirus ("CMV") and
respiratory syncytial virus ("RSV"). Specialty antibody sales in 1998 accounted
for 23% of the Company's total revenue, a 3% decrease from 1997 levels.

These products are derived from plasma that contains high concentrations of
specific antibodies. They are used primarily to manufacture hyperimmune
globulins that can bolster the immunity of patients to help fight a particular
infection or to treat certain immune system disorders. This includes products to
prevent or treat exposure to hepatitis A and B, CMV, and rabies and products to
treat ITP and Rh incompatibility. Specialty antibodies are also used to develop
diagnostic products.

Nabi identifies potential specialty antibody donors through 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 operations and access to its large and diverse donor base of
approximately 275,000 individuals, Nabi believes it has a strategic advantage in
its ability to collect specialty antibodies.

Nabi's principal specialty antibody products include:

 *   ANTI-D. Anti-D antibodies have long been used to prevent Rh-D immunization
     in Rh negative women and subsequent hemolytic disease ("blue baby disease")
     in Rh positive infants. Antibodies collected from donors who have high
     anti-D levels are used to make products to protect the infant (Rh
     isoimmunization) and treat ITP in children and adults. Nabi has proprietary
     donor stimulation and management programs that enhance its ability to
     increase collection of anti-D antibodies.



                                       4

<PAGE>   5

 *   HEPATITIS B ANTIBODIES. Antibodies to HBV are used to manufacture hepatitis
     B immune globulin therapeutic products that provide passive immunity
     against HBV. The specialty antibodies collected by Nabi are also used to
     produce Nabi-HB(TM), the Company's hepatitis B pharmaceutical product. Nabi
     believes that its proprietary donor stimulation and donor management
     programs generally allow Nabi to produce anti-hepatitis B antibodies having
     a higher concentration and broader specificity than competing products.

 *   CMV ANTIBODIES. By screening its large donor population, Nabi can identify
     individuals with high concentrations of CMV antibodies, and can supply
     these antibodies to manufacturers to enhance intravenous immune globulin
     products and to produce CMV-specific immune globulin therapeutic products.

 *   RABIES ANTIBODIEs. Rabies antibodies are used by manufacturers to make
     therapeutic products that provide a short-term protective antibody
     immunity to patients exposed to the rabies virus.


RESEARCH AND DEVELOPMENT PRODUCT PIPELINE

The use of human antibody products increased in the mid-1980's as a result of
the development of intravenous formulations that made administration of larger
therapeutic doses practical for a broad range of specific diseases. As a result,
antibody therapy (also known as passive immunization) has become a growing part
of medical practice. Nabi is developing additional pharmaceutical products for
the prevention and treatment of infectious diseases and their associated
complications through the activation and targeting of the human immune system.
Nabi is focusing the major portion of its efforts on products that contain a
rich mixture of specific antibodies produced naturally by healthy human donors
or stimulated through immunization. These highly purified, human polyclonal
antibody-based products are administered to provide passive immunity against
infection in immune-compromised patients who cannot respond to a vaccine or in
patients who are at immediate risk and therefore do not have time to mount their
own antibody response through vaccination.

Nabi is also developing vaccines to be used as immunizing agents in donors for
the production of antibody products or as stand-alone vaccines for long-term
protection against infection in at risk populations. Nabi is initially
concentrating these development efforts on vaccines for bacterial infections,
particularly those infections that are hospital acquired (nosocomial infections)
or associated with chronic disease. Nabi believes there also may be areas
outside of infectious diseases, for example, in the prevention and treatment of
nicotine addiction, where its conjugate vaccine technologies may also be applied
successfully.

Nabi-StaphVAX(TM) and Nabi-Altastaph(TM)

The World Health Organization ("WHO") estimates that more than 17 million people
die of infectious disease each year. According to the CDC, the mortality rate
for infectious disease increased approximately 60% between 1980 and 1992. In the
early 1980's, the majority of hospital-acquired bloodstream infections were due
to Gram-negative bacteria such as E. COLI and P. AERUGINOSA. However, by 1989,
the combined incidence of Gram-positive infections in the bloodstream such as,
STAPHYLOCOCCUS AUREUS and S. EPIDERMIDIS had increased over 5-fold to a level
twice that of Gram-negative infections. The trend is expected to continue.

Over the past two decades, infectious disease experts have become increasingly
concerned about the emerging Gram-positive bacterial resistance to contemporary
antibiotics, coupled with the increasing prevalence of organisms having greater
virulence. It is currently estimated that up to 40% of S. AUREUS and more than
80% of S. EPIDERMIDIS are methicillin-resistant. Of greater concern is the fact
that a number



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of infections caused by another Gram-positive pathogen, ENTEROCOCCUS, are
resistant to all antibiotics including vancomycin.

Further, for the first time in history, isolates of S. AUREUS with reduced
sensitivity to vancomycin have been identified in the United States and in
Japan. Resistance of a clinical S. EPIDERMIDIS isolate to vancomycin has also
been reported. If vancomycin resistance is broadly transferred to S. AUREUS and
S. EPIDERMIDIS, many clinicians fear a return to the pre-methicillin/vancomycin
era of the 1950's and 1960's when staphylococcal infections were generally
fatal. Adding to the gravity of the situation, drug resistant isolates have
moved from the hospital into the community, threatening those most at risk - the
young and the elderly.

Nabi is developing two products for the prevention and treatment of S. AUREUS
infections. Nabi-StaphVAX(TM) is a capsular polysaccharide-based glycoconjugate
vaccine which targets the two S. AUREUS serotypes (Type 5 and Type 8)
responsible for over 85% of S. AUREUS infections. This bivalent vaccine is based
on patented vaccine technology in-licensed by Nabi from the National Institute
of Health ("NIH"). See also "Strategic Alliances". Nabi-StaphVAX(TM) seeks to
induce specific antibodies in vaccinated individuals that bind to and help kill
invading S. AUREUS bacteria. The second product, Nabi Altastaph(TM) is a
specific human antibody-based product that contains high levels of antibodies
against S. AUREUS Type 5 and Type 8. It is manufactured from specialty
antibodies produced by immunizing healthy donors with Nabi-StaphVAX(TM).

Nabi StaphVAX(TM) and Nabi-Altastaph(TM) rely on completely different mechanisms
of action than those of systemic antibiotics and it is believed, based on
preclinical data, that these products will be effective against even antibiotic
resistant strains of S. AUREUS. In addition, since vaccines and antibodies
present a different mechanism of action from that of antibiotics, Nabi is
attempting to demonstrate that concurrent use of Nabi-StaphVAX(TM) or
Nabi-Altastaph(TM) and antibiotics will act synergistically, or additively, to
combat infection and may reduce the appearance of additional antibiotic
resistant strains of bacteria in the future.

Nabi-StaphVAX(TM) is being developed for patients who are at long term, high
risk of infection and who are immunocompetent and thus able to respond to a
vaccine. The initial clinical target is hemodialysis patients with end stage
renal disease ("ESRD") who are at high risk of S. AUREUS infections due to their
vascular access grafts. Other potential clinical targets for Nabi-StaphVAX(TM)
include: (a) at risk patients such as the elderly who are expected to have long
stays in medical or extended care facilities; (b) patients undergoing planned
surgery who can be vaccinated in advance and in whom staphylococcal infections
can have serious consequences; and (c) prosthetic surgery and vascular graft
patients whose implants are at long-term risk of staphylococcal infections.
Nabi-StaphVAX(TM) is currently in a Phase III pivotal trial in ESRD patients on
hemodialysis. Nabi intends to establish a correlate of protection based on
population antibody titers to expand the clinical indications for this vaccine
beyond the Phase III trial's patient population.

In contrast to Nabi-StaphVAX(TM), which is intended to provide long-term
immunological protection, Nabi-Altastaph(TM) is designed to provide immediate,
on demand protection for patients who are at high, short-term risk of infection
or who are immunocompromised and cannot respond effectively to a vaccine. This
type of prophylactic treatment is likely to be cost effective because a single
dose of intravenously administered human polyclonal antibodies persists in the
bloodstream for several weeks, and may be sufficient to provide protection for
the entire risk period. High-risk populations include low birth weight newborns,
trauma patients and emergency surgical patients. Nabi-Altastaph(TM) is currently
in a Phase I/II trial in neonates to determine its safety and pharmacokinetics.
In addition, Nabi plans to evaluate Nabi-Altastaph(TM) as a therapeutic drug for
the treatment of diagnosed S. AUREUS infections. Clinical studies of
Nabi-Altastaph(TM) in shock-trauma patients in hospital-intensive care units are
in the planning stages.

Previous studies using either rats or mice in several different bacterial
challenge modes have demonstrated the efficacy of active immunization with
Nabi-StaphVAX(TM) and passive immunization with



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Nabi-Altastaph(TM). In the prophylactic settings studied, antibodies to
Nabi-StaphVAX(TM), whether actively acquired (through vaccination) or passively
acquired (through the use of Nabi-Altastaph(TM)), conferred statistically
significant protection against the relevant S. AUREUS challenge strains. In
human clinical trials to date, Nabi-StaphVAX(TM) has been shown to be safe and
immunogenic.

Recently, Nabi identified a serotype of S. AUREUS, named type 336, that accounts
for over 90% of non-type 5 and non-type 8 S. AUREUS clinical infections (about
10-12% of all clinically significant S. AUREUS infections). The Company has
identified, purified and characterized a polysaccharide from type 336 S. AUREUS
and has prepared a glycoconjugate vaccine that is capable of protecting animals
from challenge with clinical isolates of this serotype. During 1998, Nabi was
issued a patent on a S. AUREUS 336 antigen, vaccines made from that antigen, and
antibodies reactive to the antigen. Subsequent generations of Nabi-StaphVAX(TM)
are expected to contain type 336 antigen in addition to type 5 and type 8
antigens. A prototype of this trivalent vaccine against S. AUREUS is currently
in studies in dairy cattle under a Cooperative Research and Development
Agreement ("CRADA") with the U.S. Department of Agriculture. The veterinary
applications of Nabi-StaphVAX(TM) are of interest since S. AUREUS is a major
cause of mastitis in dairy cattle worldwide.

STAPHYLOCOCCUS EPIDERMIDIS and ENTEROCOCCUS SPP. are the next most clinically
common Gram-positive nosocomial bacterial infections after S. AUREUS. Nabi
intends to extend coverage to these two Gram-positive bacteria in subsequent
generations of Nabi-StaphVAX(TM) and Nabi-Altastaph(TM). The Company has filed
patent applications on selected enterococcal antigens and in 1998 was issued a
patent for a protective S. EPIDERMIDIS antigen that it intends to include in a
combination vaccine. From 1996 to 1998 these bacterial antigens have been
undergoing preclinical testing and process development. These activities have
shown that antibodies to these antigens are protective in animal models and
facilitate killing of bacteria by white blood cells (a process called
opsonophagocytosis).

Nabi is currently in discussions with potential corporate partners to assist in
the development of Nabi-StaphVAX(TM), Nabi-Altastaph(TM) and the related
combination vaccines and antibody products described above.

Nabi-Civacir(TM)

Nabi-Civacir(TM) is a human antibody product derived from screened donors. It
contains antibodies that are neutralizing to hepatitis C virus ("HCV"). Nabi
intends to develop Nabi-Civacir for post-exposure prophylaxis of HCV, the
prevention of HCV reinfection of transplanted livers in patients and ultimately
for the treatment of certain stages of chronic HCV infections. Management
believes that approximately 40% to 50% of liver transplants are due to
complications resulting from chronic HCV infections. HCV has significant
economic impact because it causes chronic infections in a large percentage of
those infected and results in significant morbidity and mortality in later
stages of the disease. HCV infection also contributes to frequent
hospitalizations when it occurs in liver transplant patients. There are four
million individuals in the United States and more than 170 million individuals
worldwide infected with HCV.

In 1998, Nabi initiated a series of chimpanzee studies of Nabi-Civacir(TM) in
collaboration with the CDC under a CRADA. The results from these animal studies
suggest that the elevated level of anti-HCV in serum maintained by multiple
infusions of Nabi-Civacir(TM) may be associated with the elimination of virus
from the blood, prevention of acute hepatitis and the possible elimination of
HCV antigen from liver cells after experimental HCV infection. Nabi is currently
in discussions with potential corporate partners to assist in the development of
Nabi-Civacir(TM).



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Nabi-NicVAX(TM)

The use of tobacco products has been associated with increased risk of heart and
lung disease and cancer worldwide. Addiction to nicotine as a result of tobacco
use has been identified as one of the major factors that prevent cigarette
smokers and other tobacco users from giving up this life-threatening activity.
Nabi has begun development of Nabi-NicVAX(TM), a vaccine against nicotine that
is intended to be used to prevent and treat nicotine addiction. Prototypic
versions of the vaccine have been shown to induce high titers of
nicotine-specific antibodies in vaccinated animals. Studies evaluating the
ability of the vaccine to prevent entrance of nicotine into the brain and to
modify animal behavior in response to nicotine were conducted during 1998 and
have generated positive preliminary results. Nabi believes that a nicotine
vaccine that raises high titered, highly specific antibodies that bind to
nicotine with high affinity can also prevent nicotine addiction in humans by
blocking nicotine from reaching drug receptors in the brain. The Company also
believes that Nabi-NicVAX(TM) can be an effective product for those attempting
to give up tobacco by helping to prevent relapse into continued nicotine use.
The Company has filed a patent application on Nabi-NicVAX(TM) and its uses to
prevent and treat nicotine addiction. Nabi is currently in discussions with
potential corporate partners to assist in the development of Nabi-NicVAX(TM).

RENs

Nabi has exclusively licensed from the University of Maryland a novel,
proprietary, platform technology which permits the synthesis of so-called Ring
Expanded Nucleoside ("RENs") and Nucleotide ("RENt") analogs with the potential
for antiviral and anti-tumor cell activity. Using this technology, a number of
active compounds have been prepared by Nabi through its collaboration with the
University under a series of Maryland Industrial Partnership ("MIPS") grants. A
lead compound, Nabi 3700.001, has been selected for further development. This
drug has been initially shown to have an acceptable toxicity profile and to have
good anti-viral activity and specificity against hepatitis B virus IN VITRO. In
1998, the University of Maryland was issued a U.S. patent with claims
encompassing the composition and synthesis of RENs and RENt compounds; these
patent rights have been assigned to Nabi. See also "Strategic Alliances". Nabi
is currently in discussions with potential corporate partners to assist in the
development of the RENs technology.

The following is a summary of Nabi's currently marketed products and products
under development:


<TABLE>
<CAPTION>
==================================================================================================================================
        PRODUCTS                 INDICATIONS OR POTENTIAL APPLICATIONS                               STATUS
==================================================================================================================================
<S>                     <C>                                                               <C>
NABI-HB(TM)             Post exposure prevention of hepatitis B infection                 CURRENTLY MARKETED and planned
                                                                                          Phase IV clinical trials

                        Prevention of hepatitis B virus reinfection in                    Phase II clinical trials &
                        liver transplant patients                                         expanded access to transplant
                                                                                          patients under IND.

WINRHO SDF(TM)          Treatment of ITP                                                  CURRENTLY MARKETED and in Phase IV
                                                                                          clinical trials

AUTOPLEX(R)T            Treatment of hemophilia patients with                             CURRENTLY MARKETED
                        inhibitors to Factor VIII

==================================================================================================================================

</TABLE>






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<TABLE>
==================================================================================================================================
<S>                       <C>                                                         <C>
NON-SPECIFIC ANTIBODIES   Intermediate for production of                              CURRENTLY MARKETED as
                          non-specific antibodies (i.e., standard IVIG)               bulk intermediate products

SPECIALTY                 Intermediate for production of specific                     CURRENTLY MARKETED as
ANTIBODIES                antibodies (e.g., tetanus, rabies, HBV                      bulk intermediate products
                          and anti-D antibodies)

NABI-STAPHVAX(TM)         Prevention and treatment OF S. AUREUS infections;           In Phase III clinical trials in
                                                                                      ESRD patients on hemodialysis

                          Next generation products also address                       In preclinical development
                          S. EPIDERMIDIS and Enterococcal infections

NABI-ALTASTAPH(TM)        Prevention OF S. AUREUS infections;                         In Phase I/II clinical trials
                                                                                      in premature infants

                          Next generation products to also address                    In preclinical development
                          S. EPIDERMIDIS and Enterococcal infections

NABI-CIVACIR(TM)          Prevention of hepatitis C virus-reinfection                 In preclinical development
                          in liver transplant patients,
                          post- exposure prophylaxis & treatment of chronic
                          hepatitis C virus infection

NABI-NICVAX(TM)           Prevention and treatment of nicotine                        In research
                          addiction associated with tobacco use

RENS                      Treatment of viral infections                               In research

                          Treatment of cancer                                         In research

==================================================================================================================================
</TABLE>



STRATEGIC ALLIANCES
- -------------------

Nabi is actively pursuing strategic alliances to assist in the development of
its product pipeline. The Company's current key strategic alliances are
discussed below.

CANGENE CORPORATION

Under a license and distribution agreement with Cangene, has exclusive marketing
rights for, and shares in the profits from sales of WinRho SDF(TM) in the
United States. Cangene, which holds the FDA licenses for the product, is
required to supply the necessary quantities of WinRho SDF(TM) to support such
sales. The Cangene agreement terminates in 2005, and requires Nabi among other
things, to meet specified sales goals or make specified payments to Cangene in
order to maintain exclusivity.

During 1997, Nabi entered into an agreement with Cangene with respect to the
manufacture of Nabi-HB(TM). See also "Supply and Manufacturing -
Pharmaceuticals". In addition, Cangene has exclusive marketing rights for
Nabi-HB(TM) in Canada provided it meets specified sales goals. Nabi shares in
the profits from sales of Nabi-HB(TM) in Canada. The term of the Canadian
marketing agreement with Cangene for Nabi-HB(TM) is co-extensive with the terms
of the manufacturing agreement for Nabi-HB(TM).




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OTHER LICENSES

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-StaphVAX(TM) and Nabi-Altastaph(TM)
products. The license terminates with respect to each country on the date that
the NIH's patent rights expire in such country.

Under a license agreement with the University of Maryland, Nabi has exclusive
rights to patents relating to ring expanded nucleoside and nucleotide analogs,
and is obligated to pay the University a royalty based on net sales. The license
terminates with respect to each country on the date that the patent rights
expire in such country.

CUSTOMER RELATIONSHIPS
- ----------------------

Nabi sells its pharmaceutical products to wholesalers, distributors, and home
healthcare companies and sells its antibody products to pharmaceutical and
diagnostic manufacturers, most of which have been customers of Nabi for many
years.

Customers to which sales exceeded 10% of Nabi's annual consolidated sales in the
last three fiscal years ending December 31, 1998 were: Baxter and Bayer
Corporation ("Bayer") in 1998; Bayer and Baxter in 1997; Baxter, Bayer and
Biotest Pharma GmbH ("Biotest") in 1996. Aggregate sales of antibody products to
these customers were approximately $89 million, $93 million and $107 million, or
37%, 41% and 45% of total sales for the years ended December 31, 1998, 1997 and
1996, respectively.

Nabi generally sells its antibody products under contracts ranging from one to
five years that 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, but generally does provide for price
increases/decreases to reflect changes in customer specifications and new
governmental regulations. Consequently, Nabi's profit margins may be adversely
or beneficially affected if changes in the cost of collecting antibody products
rise or fall during the year.

SUPPLY AND MANUFACTURING
- ------------------------

PHARMACEUTICAL PRODUCTS

Nabi has completed construction of a biopharmaceutical manufacturing facility
that is designed to allow the Company to manufacture, formulate, process and
package pharmaceutical products. Nabi anticipates completion of all requisite
validation studies and clinical trials by the end of 1999 and submission of a
BLA for the facility to produce pharmaceutical products subsequently thereafter.

In 1997, Nabi entered into an agreement with Cangene under which Cangene
manufactures Nabi-HB(TM) for the Company. This agreement with Cangene has a
three year term that commenced on the date Nabi received FDA approval to market
Nabi-HB(TM), although either party may terminate the agreement upon 12 months
notice. Nabi collects and supplies the specialty antibodies necessary for the
manufacture of Nabi-HB(TM).

Nabi is required to purchase its requirements of WinRho SDF(TM) from Cangene
which has granted Nabi exclusive marketing rights to the product in the United
States, under an agreement which terminates in 2005.



                                       10

<PAGE>   11

In 1997, Nabi acquired from Baxter the exclusive rights to AutoPlex(R)T in the
United States, Canada and Mexico. In connection with the acquisition, Baxter
agreed to manufacture Autoplex(R)T until May 2000 or at such later time as may
be determined under the terms of a consent order entered into between Baxter and
the Federal Trade Commission ("FTC"), but in any event four months after Nabi
receives approval from the FDA to manufacture AutoPlex(R)T. The FTC could
require Nabi to return to Baxter Nabi's rights to AutoPlex(R)T if Nabi does not
obtain FDA approval to manufacture the product by May 2000 or to a later date
agreed to by the FTC. If Baxter thereafter sells these rights, Nabi and Baxter
will share equally the proceeds of any such sale and under certain circumstances
Baxter will be required to make a specified payment to Nabi.

Nabi manufactures its clinical supplies of products under development at its
facilities in Boca Raton and Miami, Florida and Rockville, Maryland.

ANTIBODY COLLECTION PROCESS

Nabi currently collects and processes antibody products from 69 collection
centers located across the United States and Germany. Each Nabi-owned 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.
Prospective 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, antibodies
are collected from suitable donors by means of a process known as
plasmapheresis. As described earlier, during the fourth quarter of 1998, Nabi
decided to sell or close a number of its antibody collection centers in the U.S.
and the Company's four centers in Germany.

PATENTS AND PROPRIETARY RIGHTS
- ------------------------------

Nabi's continued success will depend, in part, on its abilities to obtain and
protect patent rights, trade secrets and other intellectual property. Nabi has
acquired title or licenses to a number of patents or patent applications and has
filed ten patent applications of its own. See also "Factors to Be Considered -
Uncertainty of Legal Protection Afforded by Patents and Proprietary Rights".

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, including England, Germany and Australia. 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.

PHARMACEUTICAL PRODUCTS

Human polyclonal antibody 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 and
the filing of an Investigational New Drug ("IND") application with the FDA,
which must be accepted by the FDA before human clinical studies may commence.
After human clinical studies, the FDA must approve a BLA. In addition to
obtaining FDA approval for each product, the FDA must approve the manufacturing
facilities for the product. Biological products, once 



                                       11

<PAGE>   12

approved, have no provision allowing competitors to market generic versions.
Each biological product 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 be approved by the FDA
before human clinical trials may begin. The initial human clinical evaluation
called Phase I trials, generally involve administration of a product to a small
number of normal healthy volunteers to test for safety. Phase II trials involve
administration of a product to a limited number of patients with a particular
disease to determine dosage and safety, as well as provide indications of
efficacy. Phase III trials examine the 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 all
trials are submitted in the form of a BLA 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.

For BLA approval, the FDA requires, among other things, that the prospective
manufacturer's methods conform to the agency's Good Manufacturing Practice
("cGMP") regulations, which must be followed at all 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.

ANTIBODY PRODUCTS

The collection, storage and testing of antibody based products is regulated by
the FDA. Any person operating a plasma collection facility in the United States
must have an Establishment License Application ("ELA") and individual Product
License Application ("PLA") issued by the FDA and each center must be inspected
and approved by the FDA. In the future, the ELA and PLA will be replaced by a
single application, the BLA. Nabi holds Establishment Licenses and Product
Licenses issued by the FDA covering all Nabi-owned collection centers located in
the United States. In addition, collection centers require FDA approval to
collect each specialty antibody. Nabi is also subject to and is required to be
in compliance with applicable regulatory requirements in foreign countries where
it exports products.

Nabi continually pursues its commitment to quality and compliance with
applicable FDA regulations and other regulatory requirements through its own
internal training and quality assurance programs. As part of its commitment to
quality, Nabi has embraced the Quality Plasma Program ("QPP") which was
initiated by the American Blood Resources Association, an industry group that
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 antibodies that have been collected in QPP certified centers. All
of Nabi's domestic-owned centers are QPP certified centers.

ORPHAN DRUG ACT

Under the Orphan Drug Act, the FDA may designate a product 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 



                                       12

<PAGE>   13

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 BLA approved
for a given drug for its use in treating a given rare disease may receive
marketing exclusivity. WinRho SDF(TM) has received Orphan Drug protection for
the treatment of ITP. See also "Factors to Be Considered - Uncertainty of Orphan
Drug Designation".

OTHER

Nabi's Miami-based FDA-approved testing laboratory is licensed by the State of
Florida Department of Health and Rehabilitative Services, 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.

COMPETITION
- -----------

Nabi believes that Nabi-HB(TM) will be able to achieve a significant share of
the domestic market and that Nabi's access to the vaccines and specialty
antibodies necessary for the manufacture of Nabi-HB(TM) will allow it to
maintain its market share. See also "Supply and Manufacturing - Pharmaceutical
Products".

Nabi believes that WinRho SDF(TM) has a significant and growing share of the
domestic market for ITP treatment. Competing therapeutic modalities include the
use of steroids; intravenous immune globulins ("IVIG"); and splenectomy (a
surgical procedure to remove the spleen). Each of these therapies has
significant drawbacks associated with its use, and Nabi believes that WinRho
SDF(TM) can be used for long-term treatment of chronic ITP. WinRho SDF(TM) costs
less and requires less time to administer versus intravenous immune globulin.
WinRho SDF(TM) presents no surgical risks compared to splenectonomy and has
consistently demonstrated its ability to elicit a platelet response when
compared to the alternative ITP therapies. WinRho SDF(TM) is also designed to
suppress Rh isoimmunization. There are competitive therapeutic products licensed
for Rh isoimmunization indications in the United States, however these products
are administered intermuscularly ("IM") compared to WinRho SDF(TM) which is
administered intravenously ("IV"). These products are typically less expensive
than WinRho SDF(TM) and, as a result, Nabi does not anticipate significant sales
of WinRho SDF(TM) for Rh isoimmunization.

Autoplex(R)T competes in the anti-inhibitor segment of the hemophilia A
marketplace. Autoplex(R)T and other competitive agents are used to treat
patients that have developed inhibitors (an immunity) to Factor VIII, the
standard therapy for people suffering from hemophilia A. There are two
pharmaceutical products currently on the market that compete with AutoPlex(R)T.

Nabi and other independent suppliers of antibody products, sell these products
principally to pharmaceutical companies that process this raw material into
finished products. Although these pharmaceutical companies generally own
plasmapheresis centers, in the aggregate they purchase a substantial portion of
their antibody requirements from independent suppliers. There is competition
among these independent suppliers. Nabi attempts to compete for sales by
maintaining competitive pricing and by providing customers with high-quality
products and superior customer service. Management believes Nabi has the ability
to continue to compete successfully in these areas.

Nabi competes for donors with pharmaceutical companies which obtain antibodies
for their own use through their own collection centers, other commercial
collectors of antibody products, 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 compensation and
outstanding donor service, by implementing programs to attract donors through
education as to the uses for collected antibodies, by encouraging groups to have
their members become antibody donors for fund raising purposes and by improving
the attractiveness of Nabi's collection facilities.



                                       13

<PAGE>   14

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

EMPLOYEES
- ---------

Nabi employed approximately 2,100 persons at December 31, 1998. 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 that 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.

COSTS OF RESEARCH AND DEVELOPMENT

Nabi has incurred and expects to continue incurring significant expenses
associated with its pharmaceutical 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. Nabi currently does not have
the financial resources to fund all of its pharmaceutical product development
activities and has elected to focus its spending on those products which Nabi is
already marketing or which are in the late stage of development. Nabi is
actively pursuing strategic alliances to assist in the development and
commercialization of its pharmaceutical products. There can be no assurance that
Nabi's efforts will be successful, and if they are not, Nabi will not be able to
continue to aggressively develop its early stage products. Nabi's ability to
continue to fund its ongoing research and development activities is dependent on
its ability to generate revenues from its pharmaceutical products or obtain
financing. There can be no assurance, therefore, that Nabi will be able to
continue to funds its research and development activities even at its reduced
target level and if Nabi is required to further reduce the funding for its
research and development activities,this could have a material adverse effect on
the ability of Nabi to realize its objective of becoming a fully integrated
developer, manufacturer and marketer of pharmaceutical products.

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 pharmaceutical 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 


                                       14

<PAGE>   15

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 pharmaceutical 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 pharmaceutical products and obtain necessary regulatory approvals could
have a material adverse effect on Nabi's business, financial condition and
results of operations.

COMPETITIVE MARKET FOR PHARMACEUTICAL PRODUCTS

Nabi could lose its exclusive marketing rights to WinRho SDF(TM) if it fails
to achieve specified performance criteria including sales goals and compensatory
payments. Nabi may lose its rights to Autoplex(R)T if it abandons its efforts to
obtain FDA approval to manufacture the product or does not timely obtain such
approval. If Nabi successfully develops additional pharmaceutical products,
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 compete with many other companies that may
have extensive and well-funded marketing and sales operations. The failure of
Nabi to successfully market new pharmaceutical products or the loss of exclusive
rights to market WinRho SDF(TM) or Autoplex(R)T could have a material adverse
effect on Nabi's business, financial condition and results of operations.

UNCERTAINTY OF MARKET ACCEPTANCE

There can be no assurance that any of Nabi's 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 payers. The failure of any pharmaceutical
product under development to gain market acceptance could have a material
adverse effect on Nabi's business, financial condition and results of
operations.

FACTORS AFFECTING ANTIBODY PRODUCTS SUPPLY AND DEMAND

In response to continuing concerns over the safety of blood-derived products,
the FDA began to step up inspections and citations of manufacturers of blood and
plasma products in 1996 and 1997. The FDA maintained that this industry had not
paid sufficient attention to Good Manufacturing Practices and should address
deficiencies. Several of these manufacturers received serious citations and some
entered into consent decrees with the FDA that involved temporary closures of
facilities or cutbacks in production. These FDA actions caused several
manufacturers of blood-derived products, most of whom are customers of Nabi, to
reduce their need for non-specific and specific antibodies provided by Nabi.
This reduced demand for non-specific and specific antibodies on the part of
these manufacturers has resulted in a temporary reduction of Nabi's sales of
these products.

In 1997, the establishment of Team Biologics by the FDA ushered in a new era of
more stringent controls and regulation affecting the collectors of human
antibody products. Increased regulatory and quality



                                       15

<PAGE>   16

assurance personnel were required to ensure compliance with the new regulations.
Implementation of more sophisticated information technology systems, as well as
more thorough and sensitive testing of both donors and of plasma also became
necessary. These changes resulted in increased cost to Nabi in providing
non-specific and specialty antibodies to its customers.

Concern over the safety of antibody products has resulted in the adoption of
more rigorous screening procedures by regulatory authorities and manufacturers
of antibody 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. In addition, Nabi's efforts to increase
production to meet demand has resulted in higher costs to attract and retain
donors during a period of low unemployment in the United States.

The worldwide supply of plasma has fluctuated historically. Future changes in
government regulation relating to the collection and use of antibodies, its
fractionation or any negative public perception about the antibody collection
process or the safety of products derived from blood or plasma could further
adversely affect the overall supply of or demand for antibodies. Fluctuations in
the demand for or supply of antibody products 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. Many of Nabi's clinical trials
are at a relatively early stage and, except for Nabi-HB(TM), WinRho SDF(TM) and
Autoplex(R)T, 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. Currently, Autoplex(R)T is manufactured by Baxter. If Nabi does not
obtain FDA approval to manufacture Autoplex(R)T on a timely basis, the assets
and marketing rights associated with Autoplex(R)T could revert to Baxter. There
can be no assurance that Nabi will be able to obtain the necessary approvals for
manufacturing or marketing of any of its products. Failure to obtain additional
FDA approvals of products currently marketed or FDA approval for products under
development could have a material adverse effect on Nabi's business, financial
condition and results of operations. If a product is approved, its 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.

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 that 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 antibody collection, storage, labeling and distribution
activities also are subject to strict regulation and licensing by the FDA.
Nabi's 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



                                       16

<PAGE>   17

as a result of such inspections. The failure of Nabi or its 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 antibodies
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.

Nabi has received permission from the FDA to conduct certain donor stimulation
programs. No assurance can be given, however, that the FDA will permit Nabi to
begin 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
pharmaceutical products to be produced using such immunizing agents, the overall
regulatory approval process for Nabi's pharmaceutical 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 does not currently manufacture any of the pharmaceutical products which it
markets and is dependent upon third parties to manufacture these products for
Nabi. The failure by Nabi's manufacturers to meet Nabi's needs for these
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 that is designed to
allow Nabi to manufacture, formulate and package pharmaceutical products. Nabi
has validated this facility and is completing the required clinical trials for
licensure by the FDA. Nabi anticipates that the facility will be able to produce
Nabi-HB(TM) for commercial sale til 2001 and Autoplex(R)T thereafter. 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 that
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 of a new biopharmaceutical manufacturing
facility and related processes in Boca Raton, Florida. Nabi anticipates
completion of all requisite clinical studies and documentation by the end of
1999 and filing for approval of FDA licensure for this facility subsequently
thereafter. No assurance can be given that Nabi will be able to obtain such
licensure and failure to obtain such licensure on a timely basis or at all would
have a material adverse effect on business, financial condition and results of
operations. The new facility is designed to process specialty antibodies into
pharmaceutical products. However, Nabi has not previously owned or operated such
a facility and has no direct experience in commercial, large-scale manufacturing
of pharmaceutical products. There can be no assurance that when FDA licensure is
received, Nabi will have product to manufacture so that the facility can be
operated efficiently and profitably. 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.



                                       17

<PAGE>   18

POTENTIAL ADVERSE EFFECT OF LITIGATION

Nabi is currently one of several defendants in several 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. 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
fractionates 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 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 is pursuing strategic alliances with third parties for the development of
certain of its pharmaceutical products. No assurance can be given that Nabi will
be successful in these efforts or, if successful, that the collaborators will
conduct their activities in a timely manner. If Nabi is not successful in its
efforts, Nabi will not be able to continue to aggressively develop its early
stage products. Even if Nabi is successful, if any of Nabi's collaborative
partners breach or terminate their agreements with Nabi or otherwise fail to
conduct their collaborative activities in a timely manner, the 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. 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.

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


                                       18

<PAGE>   19

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 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 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 with different
indications. However, only the sponsor of the first approved PLA for a given
drug indication 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
SDF(TM) 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 SDF(TM) 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.




                                       19

<PAGE>   20

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 pharmaceutical 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 that would lessen or eliminate the
need for human antibodies. 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 antibody donors with pharmaceutical companies that may obtain
antibodies for their own use, other commercial collection companies and
non-profit organizations such as the American Red Cross and community blood
banks that 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 their time and inconvenience, providing outstanding customer
service to its donors, implementing programs designed to attract donors through
education as to the uses for collected antibodies, encouraging groups to have
their members become antibodies donors and improving the attractiveness of
Nabi's antibodies collection facilities. Nabi also competes with other
independent antibody suppliers that sell antibodies principally to
pharmaceutical companies that process antibodies 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 SIGNIFICANT ANTIBODY PRODUCT SALES

During the 1998, 1997 and 1996 fiscal years, antibody product 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 37%, 41% 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
antibodies 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 pharmaceutical 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 healthcare insurers and other organizations.
Significant uncertainty exists as to the reimbursement status of newly approved
healthcare 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 pharmaceutical products and
could result in the termination of production of otherwise commercially viable
products. Government and other third-party payers are increasingly attempting to
contain healthcare 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 



                                       20

<PAGE>   21

provide any coverage for disease indications for which the FDA has not granted
marketing approval. Also, the trend towards managed healthcare in the United
States and the concurrent growth of organizations such as HMOs, which could
control or significantly influence the purchase of healthcare services and
products, as well as legislative proposals to reform healthcare or reduce
government insurance programs, may all result in lower prices for Nabi's
products. The cost containment measures that healthcare providers are
instituting and the impact of any healthcare 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
healthcare 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.

Most of Nabi's antibody product 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 antibodies rise during a given year and Nabi is not
able to pass on the increased costs until the next annual pricing renegotiation.

YEAR 2000

Nabi continues to assess the potential impact of the Year 2000 computer
processing issue on its management and information systems. Key financial and
operational systems have been evaluated for Year 2000 compliance. During 1998, a
cross-functional team was established to identify and address Year 2000 issues
for other information systems, equipment, other business systems and external
supplier and customer relationships.

Nabi has completed its initial assessment phase of addressing Year 2000 issues.
The Company is currently testing systems and equipment, and is concurrently
renovating or replacing any systems or equipment as needed. In addition, Nabi
has initiated communications with key external suppliers and customers. Nabi's
goal is to complete all significant required validation of changes to systems,
equipment or processes and contingency planning by the end of the third quarter
of 1999.

At this time, based on the work completed to date, Nabi believes that its
software, equipment and other systems are Year 2000 compliant or that it will be
able to renovate or replace, in a timely manner, any element, which if not Year
2000 compliant could be expected to have a significant, adverse effect on our
ability to deliver products and services. However, no assurance can be given
that the Company's efforts will be successful. If they are not, the Company's
operations or financial condition may be materially and adversely affected.




                                       21

<PAGE>   22



I
TEM 2.       PROPERTIES

A majority of the space occupied by Nabi is primarily used to collect antibody
products, and is leased from non-affiliates under leases expiring through 2010.
A majority of these leases contain renewal options that permit Nabi to renew the
leases for varying periods up to five years at the then fair rental value. 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 collection facilities located
in Arizona, Indiana, Minnesota and Washington. Nabi's collection centers range
in size from approximately 2,000 to 20,000 square feet.

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

Nabi owns a facility that houses its executive offices and its biopharmaceutical
manufacturing facility in Boca Raton, Florida. Nabi will commence commercial
manufacturing in this location after it obtains FDA licensure.


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 several 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.
Several similar suits previously pending against Nabi, including a purported
class action, have been dismissed.

Nabi denies all claims against it in these suits and intends to defend these
cases vigorously. Nabi believes that any such litigation will not have a
material adverse effect on its business, financial position or results of
operations.




                                       22

<PAGE>   23




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                          60              Chairman of the Board, President and
                                                       Chief Executive Officer

BRUCE K. FARLEY                        48              Senior Vice President, Manufacturing Operations

THOMAS H. MCLAIN                       41              Senior Vice President, Corporate Services
                                                       and Chief Financial Officer

DAVID D. MUTH                          45              Senior Vice President, Business Operations

ROBERT B. NASO, PH.D.                  54              Senior Vice President, Quality Regulatory
                                                       and Product Development

LORRAINE M. BREECE                     46              Senior Director of Finance 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.

BRUCE K. FARLEY has served as Senior Vice President, Manufacturing Operations
since February 1999, when he joined Nabi. Previously, Mr. Farley was Executive
Vice President and Chief Operating Officer of Meris Laboratories, where he led
the Company through a strategic reorganization and sale. From 1983 to 1996, he
was employed by Laboratory Corporation of America (formerly National Health
Laboratories) in numerous positions of increasing general management and
operational responsibility as Vice President, Divisional Manager Northwest
(Seattle), Vice President, Chief Operating Officer, Esoteric and Drugs of Abuse
Testing (Nashville), Divisional Manager, California (San Diego), and Regional
Manager (Houston).

THOMAS H. MCLAIN has served as Senior Vice President, Corporate Services and
Chief Financial Officer of Nabi since June 1998. Previously, from 1988 to 1998,
Mr. McLain was employed by Bausch & Lomb, Inc. where, as Staff Vice President,
Business Process Reengineering, he led a cross functional team to restructure
the global finance and purchasing organizations.He also held various positions
of increasing responsibility in finance at Bausch & Lomb, including Staff Vice
President, Accounting and Reporting and Assistant Corporate Controller.

DAVID D. MUTH has served as Senior Vice President of Business Operations since
March 1998. Since November 1996, he was Senior Vice President of Sales,
Marketing and Business Development and responsible for growing Nabi's
pharmaceutical business. Mr. Muth joined Nabi in August 1996 as the Senior Vice
President of Business Development. Previously, he was Senior Vice President of
Business Development at Duramed Pharmaceuticals, Inc. from February 1995 to May
1996. From 1978 to 1995, Mr. Muth was employed at Johnson and Johnson where he
held numerous positions of increasing responsibility in Business Development,
Sales, Marketing, New Product Development and Finance at the Corporate
Headquarters in New Brunswick, New Jersey, at Ethicon Inc. in Sommerville, New
Jersey and at Ortho McNeal Pharmaceuticals in Raritan, New Jersey.





                                       23

<PAGE>   24

ROBERT B. NASO, PH.D.has served as Senior Vice President Quality, Regulatory and
Product Development, since August 1998. He 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 Biologics,
Inc. beginning in May 1992, and became Vice President of Research and
Development in October 1994. From 1983 to 1992, Dr. Naso was employed at Johnson
and Johnson where he held various positions of increasing responsibility in
research and development.

LORRAINE M. BREECE has served as Senior Director of Finance and Chief Accounting
Officer since April 1991.



                                       24

<PAGE>   25


NABI
- --------------------------------------------------------------------------------

                                                                         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.

                                                    HIGH           LOW
                                                  -----------------------
       1998
      -------------------------------------------------------------------
                  First Quarter                     4 7/8       2 5/8
                  Second Quarter                    4 1/2       2 21/32
                  Third Quarter                     3 3/4       1 7/8
                  Fourth Quarter                    3 7/16      1
       1997
      -------------------------------------------------------------------
                  First Quarter                    12 3/8       6 13/16
                  Second Quarter                    7 1/2       5 15/16
                  Third Quarter                     8 3/16      5 7/16
                  Fourth Quarter                    7 5/8       3 5/16



The number of record holders of Nabi's common stock at December 31, 1998 was
1,501.

        No cash dividends have been previously paid on Nabi's common stock and
none are anticipated in 1999. Nabi's credit agreement also restricts dividend
payments.






                                       25

<PAGE>   26




ITEM 6.       SELECTED FINANCIAL DATA - FIVE YEARS ENDED DECEMBER 31, 1998

The following table sets forth selected consolidated financial data for Nabi for
the five years ended December 31, 1998 that were derived from Nabi's
consolidated financial statements, which have been audited by
PricewaterhouseCoopers 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,
                                                           ----------------------------------------------------------------------
                                                               1998           1997           1996          1995          1994
                                                           ---------      ---------       ---------      ---------      ---------
<S>                                                        <C>            <C>             <C>            <C>            <C>      
STATEMENT OF OPERATIONS DATA:
Sales                                                      $ 243,087      $ 228,744       $ 239,909      $ 195,928      $ 164,426
Cost of products sold                                        178,366        180,533         181,914        152,148        131,192
                                                           ---------      ---------       ---------      ---------      ---------

Gross profit                                                  64,721         48,211          57,995         43,780         33,234
Selling, general and administrative expense                   31,151         25,012          21,095         26,816         16,467
Research and development expense                              21,822         19,126          16,721         20,132         17,599
Royalty expense                                               10,946          6,617           5,253          3,490          1,426
Other operating expense                                        2,169          3,087           3,757          3,015          2,234
Non-recurring charges                                         14,605          5,680              --             --             --
                                                           ---------      ---------       ---------      ---------      ---------

Operating income (loss)                                      (15,972)       (11,311)         11,169         (9,673)        (4,492)
Interest income                                                   48            272           1,275          1,064            354
Interest expense                                              (5,681)        (4,712)         (3,987)        (1,931)        (3,254)
Other, net                                                      (105)           (70)           (511)          (334)           (28)
                                                           ---------      ---------       ---------      ---------      ---------

Income (loss) before benefit (provision) for income
     taxes and extraordinary charge                          (21,710)       (15,821)          7,946        (10,874)        (7,420)
Benefit (provision) for income taxes                             (47)         4,668           6,214         (6,687)        (5,774)
                                                           ---------      ---------       ---------      ---------      ---------

Income (loss) before extraordinary charge                    (21,757)       (11,153)         14,160        (17,561)       (13,194)
Extraordinary charge                                              --             --            (932)            --           (717)
                                                           ---------      ---------       ---------      ---------      ---------
Net income (loss)                                          $ (21,757)     $ (11,153)      $  13,228      $ (17,561)     $ (13,911)
                                                           =========      =========       =========      =========      =========

Basic earnings (loss) per share:
     Income (loss) before extraordinary charge             $   (0.62)     $   (0.32)      $    0.41      $   (0.52)     $   (0.47)
     Extraordinary charge                                         --             --           (0.03)            --          (0.03)
                                                           ---------      ---------       ---------      ---------      ---------
     Net income (loss)                                     $   (0.62)     $   (0.32)      $    0.38      $   (0.52)     $   (0.50)
                                                           =========      =========       =========      =========      =========

Diluted earnings (loss) per share:
    Income (loss) before extraordinary charge             $   (0.62)     $   (0.32)      $    0.40      $   (0.52)     $   (0.47)
    Extraordinary charge                                         --             --           (0.03)            --          (0.03)
                                                           =========      =========       =========      =========      =========
    Net income (loss)                                      $   (0.62)     $   (0.32)      $    0.37      $   (0.52)     $   (0.50)
                                                           =========      =========       =========      =========      =========

BALANCE SHEET DATA:
     Working capital                                       $  39,720      $  63,933       $  63,630      $  14,690      $  52,208
     Total assets                                            218,300        225,906         202,142        137,975        132,089
     Notes payable, including current maturities             118,044        121,081          83,465         42,894         27,557
     Total stockholders' equity                               54,189         75,663          86,061         69,442         85,319




</TABLE>




                                       26

<PAGE>   27




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, 1998 should be read in
conjunction with the Consolidated Financial Statements and Notes thereto and
with the information contained under "Factors to be Considered" in Item 1.

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,
                                                                 ----------------------------
                                                                  1998        1997       1996
                                                                 -------     ------     -----
<S>                                                                <C>        <C>       <C>   
Sales                                                              100.0%     100.0%    100.0%
Cost of products sold                                               73.4       78.9      75.8
                                                                 -------     ------     -----

Gross profit margin                                                 26.6       21.1      24.2
Selling, general and administrative expense                         12.8       10.9       8.8
Research and development expense                                     9.0        8.4       7.0
Royalty expense                                                      4.5        2.9       2.2
Other operating expense                                              0.9        1.3       1.6
Non-recurring charges                                                6.0        2.5        --
                                                                 -------     ------     -----

Operating income (loss)                                             (6.6)      (4.9)      4.6
Interest income                                                       --         --       0.5
Interest expense                                                    (2.3)      (2.0)     (1.6)
Other, net                                                            --         --      (0.2)
                                                                 -------     ------     -----

Income (loss) before benefit (provision) for income taxes
    and extraordinary charge                                        (8.9)      (6.9)      3.3
Benefit (provision) for income taxes                                  --        2.0       2.6
Extraordinary charge                                                  --         --      (0.4)
                                                                 =======     ======     =====
Net income (loss)                                                   (8.9)%     (4.9)%     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,
                                         -----------------------------------------------------------------------------------
SEGMENT                                            1998                            1997                         1996
                                         -------------------------       -----------------------      ----------------------
<S>                                      <C>              <C>            <C>            <C>           <C>            <C>  
Antibody Products:
     - Non-specific antibodies           $133,141             54.8%      $135,331           59.2%     $  121,025         50.5%
     - Specialty antibodies                54,963             22.6         58,943           25.8          92,479         38.5
                                         --------        ---------       --------       --------      ----------       ------
                                          188,104             77.4        194,274           85.0         213,504         89.0
Pharmaceutical Products                    54,983             22.6         34,470           15.0          26,405         11.0
                                         --------        ---------       --------      ---------      ----------       ------
        TOTAL                            $243,087            100.0%      $228,744          100.0%     $  239,909        100.0%
                                         ========        =========       ========       ========      ==========       ======
</TABLE>




                                       27

<PAGE>   28


                            1998 AS COMPARED TO 1997

SALES. Sales for 1998 increased by $14.3 million, or 6%, to $243.1 million
compared to $228.7 million for 1997. The increase was primarily attributable to
a substantial increase in pharmaceutical sales based on strong demand for WinRho
SDF(TM) and Autoplex(R)T. Pharmaceutical sales in 1998 also included sales of
H-BIG(R) during the first three fiscal quarters until Nabi essentially exhausted
its inventory of this product. Nabi's successor product, Nabi-HB(TM), was
launched immediately after the announcement of FDA approval, on March 25, 1999.
This significant improvement in pharmaceutical sales was offset by an overall 3%
decline in antibody product (plasma) sales. Certain high-margin specialty
antibody sales increased during 1998, such as anti-D and hepatitis B, but these
revenue gains were more than offset by decreased market demand for other lower
margin specialty antibody products. While non-specific antibody (source plasma)
shipments increased in 1998, sales declined due to lower pricing under contracts
which were negotiated in late 1997 when there was a general disruption in the
plasma industry. Antibody product revenues also benefited from a short-term
opportunity to provide laboratory testing services for a plasma fractionator
during 1998.

GROSS PROFIT MARGIN. Gross profit and related margin for 1998 was $64.7 million
or 26.6%, compared to $48.2 million or 21.1% in 1997. The significant
improvement in the gross profit margin resulted from increased contribution from
sales of high-margin pharmaceutical products and certain high-margin specialty
antibodies, offset by the effects of reduced margins earned on non-specific
antibody sales. Gross profits and related margins on antibody product sales were
adversely impacted by several factors in 1998: lower contract prices for
non-specific antibodies, higher fees paid to donors to increase production to
meet demand, higher costs to meet new regulatory and quality requirements and
underabsorption of fixed overhead as a result of reduced production levels. The
impact of these factors was partially offset by a reduction in certain expenses
associated with process improvement initiatives within antibody operations.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and administrative
expense was $31.2 million or 12.8% of sales in 1998, compared to $25.0 million
or 10.9% of sales in 1997. The increase was primarily attributable to the
expansion of the Company's sales force and promotional activity expenses
associated with increasing pharmaceutical product sales. In addition,
incremental expenditures were incurred in 1998 associated with ongoing support
of new information systems that were implemented enterprise wide in mid 1997.

RESEARCH AND DEVELOPMENT EXPENSE. Research and development expense was $21.8
million or 9% of sales in 1998, compared to $19.1 million or 8.4% of sales in
1997. The increase in expenses relates primarily to the higher costs associated
with the advancement of clinical trials for Nabi-HB(TM), Nabi-StaphVAX(TM) and
Nabi-Altastaph(TM)

ROYALTY EXPENSE. Royalty expense was $10.9 million, or 4.5% of sales in 1998,
compared to $6.6 million, or 2.9% of sales in 1997. This increase in expense is
attributable to higher sales of pharmaceutical products.

NON-RECURRING CHARGES. Results for 1998 include approximately $14.6 million of
non-recurring charges. The 1998 charges were comprised of certain restructuring
costs ($13.0 million) and costs relating to litigation ($1.6 million). During
the fourth quarter of 1998, Nabi's management determined that certain
restructuring initiatives were necessary to sharpen the Company's focus and to
improve overall profitability and cash flow. As part of this process, management
and the Board of Directors re-examined each of the Company's business segments
with a view towards strategic optimization. While sales of antibody products
were essentially flat year over year, there was considerable margin pressure in
this segment of the Company's overall business. To address this problem, the
Company decided to pursue a shift in its revenue mix towards higher margin
specialty antibody products and streamline its production of non-specific
antibodies. During 1999, certain antibody collection centers in the United
States and the


                                       28

<PAGE>   29

Company's four centers in Germany will be sold or closed. Unites States donors
are expected to transfer to nearby Nabi centers or Nabi will seek to increase
production at other lower-cost antibody collection facilities.

Nabi also determined its own product development spending needs to be focused on
clinical trials and marketing programs for currently marketed and late
development stage pharmaceutical products. The Company will actively pursue
strategic alliances to support additional product development activities. As a
result of these decisions, the Company will decrease its rate of internal
spending on preclinical research activities in 1999 and reduced staff
accordingly at its Rockville, Maryland facility in February 1999. Also included
in the restructuring charge is the write-off of the Company's vaccine pilot
plant in Maryland.

The additional non-recurring charge of $1.6 million relates to management's
estimate of the Company's costs incurred in connection with its ongoing
litigation with the general contractor for the Boca Raton, Florida manufacturing
facility. This litigation was initiated by Nabi.

INTEREST AND OTHER EXPENSE, NET. Interest and other expense, net for 1998 was
$5.7 million, compared to $4.5 million in 1997. The increase was primarily
attributable to higher average outstanding borrowings as compared to 1997.
Capitalized interest relating primarily to construction of Nabi's
biopharmaceutical manufacturing facility in Boca Raton, Florida during 1998 was
approximately $3.8 million as compared to $2.4 million during 1997.

OTHER FACTORS. The provision for income taxes was $47,000 for 1998, compared to
a benefit of $4.7 million in 1997. The benefit for 1997 relates to the refund of
income taxes previously paid on taxable income in prior years. The effective tax
rate differs from the statutory rate of 35% due primarily to the establishment
of a valuation allowance for net operating loss carryforwards generated in 1998.

                            1997 AS COMPARED TO 1996

SALES. Sales for 1997 were $228.7 million compared to $239.9 million for 1996.
Overall, revenues for the year were adversely affected by a 9.0% decline in
antibody sales attributable to several factors, notably the general disruption
in the industry caused by regulatory problems experienced by the major plasma
processors and a shift in demand from certain specialty antibodies to
non-specific antibodies. While the industry disruption had not impacted the
continued strong demand for products produced from non-specific antibodies, it
had led to decreased fractionation capacity, a decreased ability to process raw
plasma and an increase of plasma inventories in 1997. The decline in antibody
revenue was partially offset by a 31% increase in pharmaceutical product
revenues over the prior year largely due to an increased demand for WinRho
SDF(TM) and sales of Autoplex(R)T, a product which was acquired from Baxter in
May 1997.

GROSS PROFIT MARGIN. Gross profit and related margin for 1997 was $48.2 million
or 21.1%, compared to $58 million or 24.2% in 1996. Gross profit margins were
adversely affected by several factors, including a less favorable sales mix of
specialty and non-specific antibodies; under absorption of fixed overhead as a
result of reduced production levels in response to the general disruption in the
plasma industry and certain expenses associated with process improvement
initiatives within antibody operations. The increase in sales of higher margin
pharmaceutical products partially offset the overall decline in gross profit
margin.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and administrative
expense was $25.0 million or 10.9% of sales in 1997, compared to $21.1 million
or 8.8% of sales in 1996. The increase was primarily attributable to sales and
marketing expenses associated with increased pharmaceutical product sales and
expenses associated with the implementation and ongoing support of new
information systems.



                                       29

<PAGE>   30

RESEARCH AND DEVELOPMENT EXPENSE. Research and development expense was $19.1
million or 8.4% of sales in 1997, compared to $16.7 million or 7.0% of sales in
1996. The increase in expenses relates primarily to the cost of clinical studies
associated with the development of Nabi-HB(TM), Nabi-StaphVAX(TM) and
Nabi-Altastaph(TM).

ROYALTY EXPENSE. Royalty expense was $6.6 million, or 2.9% of sales in 1997,
compared to $5.3 million, or 2.2% of sales in 1996. This increase in expense is
attributable to higher sales of pharmaceutical products.

NON-RECURRING CHARGES. Nabi recognized approximately $5.7 million of
non-recurring charges during 1997. These charges included $3.9 million of asset
impairment losses, principally associated with Nabi's investment in Michigan
Biologic Products Institute ("MBPI"), an alternative contract manufacturing
facility for the production of Nabi-HB(TM). The project was abandoned during the
third quarter as Nabi entered into an agreement with Cangene Corporation for the
manufacturing of Nabi-HB(TM). Streamlining initiatives within plasma operations,
principally involving center closings, contributed the remaining $1.8 million in
non-recurring charges.

INTEREST AND OTHER EXPENSE, NET. Interest and other expense, net for 1997 was
$4.5 million, compared to $3.2 million in 1996. The increase was primarily
attributable to higher average outstanding borrowings and lower average
outstanding investments as compared to 1996. Capitalized interest relating
primarily to construction of Nabi's biopharmaceutical manufacturing plant in
Boca Raton, Florida during 1997 was approximately $2.4 million as compared to
$1.8 million during 1996.

OTHER FACTORS. The income tax benefit of $4.7 million for 1997, compares to a
benefit of $6.2 million in 1996. The benefit for 1997 relates to the expected
recovery of income taxes previously paid on taxable income in prior years. The
benefit recognized in 1996 was primarily due to the release of valuation
allowances associated with certain net operating loss ("NOL") carryforwards and
other deferred tax assets acquired through the Merger.

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.

LIQUIDITY AND CAPITAL RESOURCES

On March 1, 1999, Nabi amended its credit agreement to allow for retroactive
application as of December 31, 1998. The amendment provided for the waiver of
existing defaults of the financial covenants at the end of the year, the
amendment of certain financial covenants and the extension of the Company's $5
million term loan for twelve months to March 31, 2000. Borrowings under the
revolving credit and term loan agreement were $37.5 million and additional
availability was approximately $7.6 million at December 31, 1998. The credit
agreement is secured by substantially all of Nabi's assets, requires the
maintenance of certain financial covenants and prohibits the payment of
dividends.

As of December 31, 1998, Nabi's current assets exceeded current liabilities by
$39.7 million as compared to a net working capital position of $63.9 million at
December 31, 1997. Cash and cash equivalents at December 31, 1998 were $1
million compared to $3.4 million at December 31, 1997. The primary source of
cash during 1998 was from operations, including reductions in inventories and
the collection of significant refunds of income taxes. Net cash provided by
operating activities was $18.2 million representing an improvement of $43.8
million from the prior year. The primary uses of cash were capital expenditures
primarily associated with the Company's manufacturing facility in Boca Raton,
Florida.




                                       30

<PAGE>   31
 Projected capital expenditures for 1999 consist of costs associated with the
Boca Raton manufacturing facility including capitalized interest, development of
information systems (with Year 2000 expenditures prioritized over other systems
development expenditures) and antibody collection center renovations. Nabi
believes that cash flow from operations and its available bank credit facilities
will be sufficient to meet its anticipated cash requirements for the remainder
of 1999. It is Nabi's objective to generate positive cash flow in the future and
reduce debt through the repayment of borrowings under its revolving credit
agreement or through possible repurchases under its 6.5% Convertible
Subordinated Notes. The Company is also in the process of seeking additional
cash to fund the development of its pharmaceutical product pipeline from
strategic alliances and additional funding from new or existing credit
facilities.

YEAR 2000

During 1997, the Company implemented a current version of SAP software. This
system is used for most computer processing related to purchasing, accounts
payable, invoicing, accounts receivable, inventory, fixed assets and financial
reporting. The vendor of this software has advised Nabi that it has provided
Nabi with the appropriate updates for the system to be Year 2000 compliant. In
addition, Nabi is in the process of updating donor management systems in
approximately one-fifth of the Company's antibody collection centers which are
not currently Year 2000 compliant.

During the third quarter of 1998, Nabi established a cross-functional team to
coordinate the Company's efforts in addressing Year 2000 issues beyond SAP and
the donor management systems. These efforts are focused in four major areas:
other information systems, equipment, other business systems and external
supplier and customer relationships.

The Company's program to address Year 2000 preparedness has four overlapping
phases: (1) the identification and assessment of business critical systems,
equipment and business relationships, (2) the testing of Year 2000 readiness for
internal systems and equipment and the inquiry/audit of Year 2000 readiness for
external suppliers and customers, (3) the renovation or replacement of systems,
equipment or business relationships that will not be Year 2000 compliant,
including re-testing as required, and finally, (4) contingency planning to
mitigate the potential effect of issues which may be so deeply embedded in
systems, equipment and processes that they are beyond the Company's ability to
identify and control.

Nabi has completed its initial assessment phase of addressing the Year 2000
issue. The Company is currently testing systems and equipment, and is
concurrently renovating or replacing any systems or equipment as needed. In
addition, Nabi has initiated communications with its key customers and critical
suppliers and is currently in the process of assessing the responses being
received. Nabi's goal is to complete all significant required validation of
changes to systems, equipment or processes and contingency planning by the end
of the third quarter of 1999.

The Company will utilize both internal and external resources in its Year 2000
efforts. The additional cost to achieve Year 2000 compliance is currently
estimated at $3 to $5 million dollars, including expense and capital
expenditures, not all of which are incremental to the Company's operations.
These expenditures will primarily be incurred during 1999 and will be funded by
a combination of operating cash flows, bank credit facilities, and operating
lease agreements. Approximately 25% of Nabi's 1999 information technology
planned expenditures will be directly attributable to Year 2000 remediation
efforts.

The Company's efforts in these areas are ongoing. As of March 1999, based on the
work completed to date, Nabi believes that its software, equipment and other
systems are Year 2000 compliant or that it will be able to renovate or replace,
in a timely manner, any element, which if not Year 2000 compliant could be
expected to have a significant, adverse effect on our ability to deliver
products or services. However, there can be no assurance that the Company's
efforts will be successful. If they are not, the Company's operations or
financial condition may be materially and adversely affected.



                                       31

<PAGE>   32


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.










                                       32

<PAGE>   33


NABI

- --------------------------------------------------------------------------------

                                                                        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, 1998 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, 1998 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, 1998 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, 1998 and such information is incorporated herein
by reference.






                                       33

<PAGE>   34


NABI

- --------------------------------------------------------------------------------


                                                                      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 30th day of March,
1999.

                                       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,                          March 30, 1999
- ----------------------------------                   President, Chief Executive Officer
David J. Gury                                        


/S/ THOMAS H. MCLAIN                                 Senior Vice President, Corporate                March 30, 1999
- ----------------------------------                   Services and Chief Financial Officer
Thomas H. McLain                                     


/S/ LORRAINE M. BREECE                               Chief Accounting Officer,                       March 30, 1999
- ----------------------------------                   Senior Director of Finance
Lorraine M. Breece                                   


/S/ DAVID L. CASTALDI                                Director                                        March 30, 1999
- ----------------------------------            
David L. Castaldi


/S/ JOSEPH C. COOK, JR.                              Director                                        March 30, 1999
- ----------------------------------            
Joseph C. Cook, Jr.


/S/ BRIAN H. DOVEY                                   Director                                        March 30, 1999
- ----------------------------------            
Brian H. Dovey


/S/ GEORGE W. EBRIGHT                                Director                                        March 30, 1999
- ----------------------------------            
George W. Ebright


/S/ RICHARD A. HARVEY, JR.                           Director                                        March 30, 1999
- ----------------------------------            
Richard A. Harvey, Jr.


/S/ LINDA JENCKES                                    Director                                        March 30, 1999
- ----------------------------------            
Linda Jenckes


/S/ DAVID A. THOMPSON                                Director                                        March 30, 1999
- ----------------------------------            
David A. Thompson


</TABLE>



                                       34

<PAGE>   35

 NABI

- --------------------------------------------------------------------------------

                                                                         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 NO.
                                                                                                                 --------
<S>                                                                                                               <C>
         Report of Management.................................................................................    36

         Report of the Audit Committee........................................................................    37

         Report of Independent Certified Public Accountants...................................................    38

         Consolidated Balance Sheet at December 31, 1998 and 1997.............................................    39

         Consolidated Statement of Operations for the years ended December 31, 1998, 1997
         and 1996.............................................................................................    40

         Consolidated Statement of Changes in Stockholders' Equity for the years ended
         December 31, 1998, 1997 and 1996.....................................................................    41

         Consolidated Statement of Cash Flows for the years ended December 31, 1998, 1997
         and 1996.............................................................................................    42

         Notes to Consolidated Financial Statements...........................................................    43

(A) (2) FINANCIAL STATEMENT SCHEDULES

         Schedule II - Valuation and Qualifying Accounts and Reserves.........................................    61

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

(A) (3) EXHIBITS..............................................................................................    62

(B) REPORTS ON FORM 8-K

None.

</TABLE>



                                       35

<PAGE>   36



NABI

- --------------------------------------------------------------------------------
                                                            REPORT OF MANAGEMENT

                                               

The following consolidated financial statements of Nabi were prepared by the
Company's management, which is responsible for their reliability and
objectivity. The statements have been prepared in conformity with generally
accepted accounting principles and, as such, include amounts based on informed
estimates and judgments of management with consideration given to materiality.
Financial information elsewhere in this annual report is consistent with that in
the consolidated financial statements.

Management is further responsible for maintaining a system of internal controls
to provide reasonable assurance that Nabi's books and records reflect the
transactions of the Company; that assets are safeguarded; and that management's
established policies and procedures are followed. Management systematically
reviews and modifies the system of internal controls to improve its
effectiveness. The internal control system is augmented by the communication of
accounting and business policies throughout the Company; the careful selection,
training and development of qualified personnel; the delegation of authority and
establishment of responsibilities.

Independent accountants are engaged to audit the consolidated financial
statements of the Company and issue a report thereon. They have informed
management and the audit committee of the Board of Directors that their audits
were conducted in accordance with generally accepted auditing standards which
require a review and evaluation of internal controls to determine the nature,
timing and extent of audit testing. The Report Of Independent Certified Public
Accountants is included in this report.

The recommendations of the independent accountants are reviewed by management.
Control procedures have been implemented or revised as appropriate to respond to
these recommendations. In management's opinion, as of December 31, 1998, the
internal control system was functioning effectively and accomplished the
objectives discussed herein.

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


/s/ Thomas H. McLain                        Senior Vice President, Corporate
- -------------------------------             Services and Chief Financial Officer
Thomas H. McLain                                          


/s/ Lorraine M. Breece                      Chief Accounting Officer,
- -------------------------------             Senior Director of Finance 
Lorraine M. Breece                                        



                                       36

<PAGE>   37

   
    

NABI

- --------------------------------------------------------------------------------
                                                   REPORT OF THE AUDIT COMMITTEE

                                           

The audit committee of the Board of Directors, which held two meetings during
1998, is composed of three outside directors. The chair of the committee is
David L. Castaldi. The other members are Joseph C. Cook and Linda Jenckes.

The audit committee meets with the Company's independent accountants and
management to provide reasonable assurance that management fulfills its
responsibilities in the preparation of the financial statements and in the
maintenance of an effective system of internal controls. The audit committee
reviews the performance and fees of the independent accountants, recommends
their appointment and meets with them, without management present, to discuss
the scope and results of their audit work. The independent accountants have full
access to the audit committee.



/s/ David L. Castaldi
- -------------------------------
David L. Castaldi
Chair, Audit Committee





                                       37

<PAGE>   38


NABI

- --------------------------------------------------------------------------------

                              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,
1998 and 1997, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1998, 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/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Miami, Florida
March 26, 1999





                                       38

<PAGE>   39


NABI

PART 1 FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
                                                     Consolidated Balance Sheets



<TABLE>
<CAPTION>


                                                                                 December 31,     December 31,
(Amounts in Thousands)                                                               1998            1997
                                                                                  ---------       ---------
<S>                                                                               <C>             <C>      
Assets

Current assets:
           Cash and cash equivalents                                              $   1,016       $   3,397
           Trade accounts receivable, net                                            40,029          36,060
           Inventories, net                                                          38,203          43,387
           Prepaid expenses and other assets                                          6,227          16,128
                                                                                  ---------       ---------
                      Total current assets                                           85,475          98,972

Property and equipment, net                                                          99,018          89,187

Other assets:
           Excess of acquisition cost over net assets acquired, net                  16,165          17,123
           Intangible assets, net                                                     7,032           8,104
           Other, net                                                                10,610          12,520
                                                                                  ---------       ---------
Total assets                                                                      $ 218,300       $ 225,906
                                                                                  =========       =========

Liabilities and stockholders' equity

Current liabilities:
           Trade accounts payable                                                 $  14,964       $  15,989
           Accrued expenses                                                          30,710          17,396
           Notes payable                                                                 81           1,654
                                                                                  ---------       ---------
                      Total current liabilities                                      45,755          35,039

Notes payable                                                                       117,963         114,828

Other                                                                                   393             376
                                                                                  ---------       ---------
Total liabilities                                                                   164,111         150,243
                                                                                  ---------       ---------

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;
             34,903 and 34,801 shares issued and outstanding, respectively            3,490           3,480
           Capital in excess of par value                                           137,911         137,780
           Accumulated deficit                                                      (86,734)        (64,977)
           Accumulated other comprehensive loss                                        (478)           (620)
                                                                                  ---------       ---------
Total stockholders' equity                                                           54,189          75,663
                                                                                  ---------       ---------
Total liabilities and stockholders' equity                                        $ 218,300       $ 225,906
                                                                                  =========       =========



</TABLE>


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





                                       39

<PAGE>   40
NABI

- --------------------------------------------------------------------------------
                                           Consolidated Statements of Operations



<TABLE>
<CAPTION>


                                                                               For the Years Ended December 31,
                                                                          -----------------------------------------
(Amounts In Thousands, Except Per Share Data)                                 1998          1997            1996
                                                                          ---------       ---------       ---------
<S>                                                                       <C>             <C>             <C>      
Sales                                                                     $ 243,087       $ 228,744       $ 239,909
Costs and expenses:
    Costs of products sold                                                  178,366         180,533         181,914
    Selling, general and administrative expense                              31,151          25,012          21,095
    Research and development expense                                         21,822          19,126          16,721
    Royalty expense                                                          10,946           6,617           5,253
    Other operating expense, principally freight & amortization               2,169           3,087           3,757
    Non-recurring charges                                                    14,605           5,680              --
                                                                          ---------       ---------       ---------
Operating income (loss)                                                     (15,972)        (11,311)         11,169

Interest income                                                                  48             272           1,275
Interest expense                                                             (5,681)         (4,712)         (3,987)
Other, net                                                                     (105)            (70)           (511)
                                                                          ---------       ---------       ---------

Income (loss) before benefit (provision)
   for income taxes and extraordinary charge                                (21,710)        (15,821)          7,946

Benefit (provision) for income taxes                                            (47)          4,668           6,214
                                                                          ---------       ---------       ---------

Income (loss) before extraordinary charge                                   (21,757)        (11,153)         14,160

Extraordinary charge                                                             --              --            (932)
                                                                          =========       =========       =========
Net income (loss)                                                         $ (21,757)      $ (11,153)      $  13,228
                                                                          =========       =========       =========
Basic earnings (loss) per share:
    Earnings (loss) before extraordinary charge                           $   (0.62)      $   (0.32)      $    0.41
    Extraordinary charge                                                         --              --           (0.03)
                                                                          =========       =========       =========
    Net earnings (loss)                                                   $   (0.62)      $   (0.32)      $    0.38
                                                                          =========       =========       =========
Diluted earnings (loss) per share:
    Earnings (loss) before extraordinary charge                           $   (0.62)      $   (0.32)      $    0.40
    Extraordinary charge                                                         --              --           (0.03)
                                                                          =========       =========       =========
    Net earnings (loss)                                                   $   (0.62)      $   (0.32)      $    0.37
                                                                          =========       =========       =========
Weighted average number of shares outstanding                                34,885          34,737          34,387
                                                                          =========       =========       =========

</TABLE>



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






                                       40

<PAGE>   41

<TABLE>
<CAPTION>
NABI
- ----------------------------------------------------------------------------------------------------------------------------------
                                                                        CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                                                             FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

                                                                                                        ACCUMULATED
                                                                  COMMON STOCK                             OTHER   
                                                  COMMON STOCK     WARRANTS      CAPITAL IN             COMPREHENSIVE
                                             -----------------------------------  EXCESS OF ACCUMULATED     INCOME   STOCKHOLDERS'
(IN THOUSANDS)                               SHARES    AMOUNT    SHARES   AMOUNT  PAR VALUE   DEFICIT       (LOSS)      EQUITY
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>       <C>          <C>   <C>     <C>        <C>             <C>        <C>    
BALANCE AT DECEMBER 31, 1995                33,942    $  3,394     109   $   --  $133,116   ($67,052)       ($ 16)     $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
Foreign currency translation adjustments        --          --      --       --        --         --          (86)        (86)
Other                                           --          --      --       --         3         --           --           3
                                            ------    --------      --- -------   -------    --------   ---------      -------
BALANCE AT DECEMBER 31, 1996                34,614       3,461      100      --   136,525    (53,824)        (102)      86,060

Stock options exercised                        185          19      --       --       427         --           --          446
Tax benefit from stock options exercised        --          --      --       --       477         --           --          477
Net loss for the year                           --          --      --       --        --    (11,153)          --      (11,153)
Foreign currency translation adjustments        --          --      --       --        --         --         (518)        (518)
Other                                            2          --      --       --       351         --           --          351
                                            ------    --------      --- -------   -------    --------   ---------      -------
BALANCE AT DECEMBER 31, 1997                34,801       3,480      100      --   137,780    (64,977)        (620)      75,663

Stock options exercised                         97          10       --      --       105         --           --          115
Tax benefit from stock options exercised        --          --       --      --         5         --           --            5
Net loss for the year                           --          --       --      --        --    (21,757)          --      (21,757)
Foreign currency translation adjustments        --          --       --      --        --         --          142          142
Other                                            5          --       --      --        21         --           --           21
                                            ------    --------      --- -------   -------    --------   ---------      -------
BALANCE AT DECEMBER 31, 1998                34,903    $  3,490      100 $    --  $137,911   ($86,734)       ($478)     $54,189
                                            ======    ========      === =======   =======    ========   =========      =======
</TABLE>


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

                                       41

<PAGE>   42

NABI

<TABLE>
<CAPTION>

- ----------------------------------------------------------------------------------------------------------------------
                                                                                 Consolidated Statements of Cash Flows


                                                                                     For The Years Ended December 31,
                                                                                 --------------------------------------
(Dollars in Thousands)                                                             1998           1997           1996
                                                                                 --------       --------       --------
<S>                                                                              <C>            <C>            <C>     
Cash flow from operating activities:
  Net income (loss)                                                              $(21,757)      $(11,153)      $ 13,228
  Adjustments to reconcile net income (loss) to net cash provided
   (used) by operating activities:
     Depreciation and amortization                                                 11,502          9,856          7,883
     Non-recurring charges                                                         13,039          5,680             --
     Deferred income taxes                                                             --          2,503         (6,369)
     Tax benefit from stock options exercised                                           5            477          1,211
     Extraordinary charge                                                              --             --            932
     Compensation under employee stock plan                                            --             --            165
     Other                                                                            459          1,179            916

  Change in assets and liabilities:
     Decrease (increase) in trade accounts receivable                              (3,949)         1,066        (10,589)
     Decrease (increase) in inventories                                             5,184        (15,096)        (5,749)
     Decrease (increase) in prepaid expenses and other assets                       9,912        (12,259)        (1,396)
     Decrease (increase) in other assets                                            1,298         (2,633)        (1,106)
     Increase (decrease) in accounts payable and accrued liabilities                2,515         (5,246)         7,121
                                                                                 --------       --------       --------
     Total adjustments                                                             39,965        (14,473)        (6,981)
                                                                                 --------       --------       --------
Net cash provided (used) by operating activities                                   18,208        (25,626)         6,247
                                                                                 --------       --------       --------

Cash flow from investing activities:
     Purchases of short-term investments                                               --             --        (18,190)
     Proceeds from maturity of short-term investments                                  --          8,850          9,724
     Capital expenditures                                                         (18,931)       (36,367)       (23,085)
                                                                                 --------       --------       --------
Net cash used by investing activities                                             (18,931)       (27,517)       (31,551)
                                                                                 --------       --------       --------
Cash flow from financing activities:
     Net proceeds from issuance of convertible subordinated notes                      --             --         77,884
     Borrowing (repayments) under line of credit, net                              (1,783)        34,246         (6,760)
     Repayments of term debt                                                         (261)          (614)       (28,933)
     Borrowings under term debt                                                     5,000             --             --
     Other debt                                                                    (4,729)         3,949         (4,237)
     Proceeds from the exercise of options                                            115            446          1,872
                                                                                 --------       --------       --------
Net cash provided (used) by financing activities                                   (1,658)        38,027         39,826
                                                                                 --------       --------       --------
Net increase (decrease) in cash and cash equivalents                               (2,381)       (15,116)        14,522
Cash and cash equivalents at beginning of period                                    3,397         18,513          3,991
                                                                                 --------       --------       --------
Cash and cash equivalents at end of period                                       $  1,016       $  3,397       $ 18,513
                                                                                 ========       ========       ========
Supplemental cash flow information:
     Interest paid                                                               $  8,336       $  6,295       $  3,605
                                                                                 ========       ========       ========
     Income taxes paid (refunded), net                                           $ (7,645)      $    350       $   (264)
                                                                                 ========       ========       ========


</TABLE>


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








                                       42

<PAGE>   43




NABI

- --------------------------------------------------------------------------------
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1   BUSINESS AND ORGANIZATION

Nabi is a fully integrated  biopharmaceutical company that develops and
commercializes pharmaceutical products for the prevention and treatment of
infectious diseases and immunological disorders, and supplies antibody products
(source and specialty plasma) to major healthcare companies.

NOTE 2   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts 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 1997 and 1996 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 the financial statement and tax basis of assets and
liabilities. Deferred tax assets are accounted for under the provisions of
Statement of Financial Accounting Standards ("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
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 PER SHARE: Basic earnings per share is determined based on the weighted
average number of common shares outstanding during the year. Diluted earnings
per share is determined based on the weighted average number of common shares
and potentially dilutive securities outstanding during the year.


                                       43

<PAGE>   44


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, 1998 and
1997, because of the relatively short maturity of these instruments.

CASH EQUIVALENTS & 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.

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:

                    ASSET                                LIFE

          ---------------------------------------------------------------------

          Buildings                        35 - 39 Years
          Furniture and fixtures           5 - 8 Years
          Information systems              3 - 10 Years
          Machinery and equipment          3 - 8 Years
          Leasehold improvements           Lesser of lease term or economic life

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 and is evaluated periodically in relation to the operating performance
and future undiscounted cash flows of the underlying assets.

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 and are evaluated periodically in relation to
the operating performance and future undiscounted cash flows of the underlying
assets.

STOCK-BASED COMPENSATION: In 1996, the Company adopted the disclosure-only
provisions of SFAS No. 123, "Accounting for Stock-Based Compensation", which
establishes a fair value based method of accounting. Upon adoption, Nabi
retained its intrinsic value method of accounting for stock-based compensation.

COMPREHENSIVE INCOME: Effective January 1, 1998, the Company adopted SFAS No.
130, "Reporting Comprehensive Income". As a result, certain balance sheet
reclassifications were made to previously reported amounts to achieve the
required presentation of comprehensive income. The Company's difference between
net income and comprehensive income relates to the changes in foreign currency
translation adjustments.




                                       44

<PAGE>   45

NOTE 3   RECENT ACCOUNTING PRONOUNCEMENTS

In April 1998, Statement of Position ("SOP") No. 98-5, "Reporting on the Costs
of Start-Up Activities" was issued. This SOP requires that all start-up or
pre-operating costs be expensed as incurred and is effective for fiscal years
beginning after December 15, 1998. Adoption of this SOP did not have a material
impact on the financial statements for Nabi for the year ending December 31,
1998.

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information", which is
effective for fiscal years beginning after December 15, 1997. This statement
requires disclosure of certain information about operating segments and
geographic areas of operation. The Company adopted SFAS 131, in the fourth
quarter of 1998. Disclosures required by this new statement are included in Note
20.

NOTE 4   TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable are comprised of the following:


<TABLE>
<CAPTION>
                                                                    DECEMBER 31,
                                                         ------------------------------------
                                                            1998                   1997
                  ---------------------------------------------------------------------------
<S>                                                          <C>                    <C>
                  Trade accounts receivable                  $40,250                $36,463
                  Allowance for doubtful accounts               (221)                  (403)
                                                         =============          =============
                          TOTAL                              $40,029                $36,060
                                                         =============          =============
</TABLE>




NOTE 5   INVENTORIES

The components of inventories are as follows:


<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                         -----------------------------------
                                                            1998                  1997
                  --------------------------------------------------------------------------
<S>                                                         <C>                    <C>
                  Finished goods                            $36,975                $40,029
                  Work in process                             1,964                    212
                  Raw materials                               3,772                  3,787
                                                         -------------          ------------
                                                             42,711                 44,028
                  Less reserves                              (4,508)                  (641)
                                                         -------------          ------------
                          TOTAL                             $38,203                $43,387
                                                         =============          ============
</TABLE>



Inventory reserves at December 31, 1998 increased substantially from the prior
year. The principal increase was due to reserves for certain antibody product
damaged in transit which was fully recovered under Nabi's insurance policy. The
remaining increase related to conformance lots for Nabi-HB(TM) subject to
potential outdating, and obsolescence of various antibody products.










                                       45

<PAGE>   46


NOTE 6   PREPAID EXPENSES AND OTHER ASSETS

The components of prepaid expenses and other current assets are summarized
below:


<TABLE>
<CAPTION>
                                                                                    DECEMBER 31,
                                                                          -----------------------------------
                                                                             1998                  1997
                  -------------------------------------------------------------------------------------------
<S>                                                                             <C>                  <C>   
                  Federal and state income tax receivable                       $182                 $7,767
                  Other prepaid items                                          6,045                  8,361
                                                                          =============          ============
                          TOTAL                                               $6,227                $16,128
                                                                          =============          ============
</TABLE>




NOTE 7   PROPERTY AND EQUIPMENT

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


<TABLE>
<CAPTION>
                                                                                      DECEMBER 31,
                                                                          -----------------------------------
                  DOLLARS IN THOUSANDS                                         1998                  1997
                  -------------------------------------------------------------------------------------------
<S>                                                                          <C>                    <C>    
                  Information systems                                        $21,968                $19,066
                  Leasehold improvements                                      20,747                 17,523
                  Machinery and equipment                                     18,075                 16,882
                  Land and buildings                                           8,852                  8,634
                  Furniture and fixtures                                       5,052                  5,122
                  Construction in progress                                    56,297                 46,776
                                                                         -------------           ------------
                          Total property and equipment                       130,991                114,003
                  Less accumulated depreciation and amortization             (31,973)               (24,816)
                                                                         -------------           ------------
                          TOTAL                                              $99,018                $89,187
                                                                         =============           ============
</TABLE>


Construction in progress consists primarily of costs incurred in connection with
construction of Nabi's biopharmaceutical manufacturing facility in Boca Raton,
Florida and includes deferred validation costs of $16,268 and $9,370 at December
31, 1998 and 1997, respectively. Capitalized interest associated with the
pharmaceutical facility and system development projects was approximately $8,902
and $5,149 at December 31, 1998 and 1997, respectively.

The pharmaceutical facility requires FDA licensure to produce pharmaceutical
products for sale in the U.S. The anticipated costs of completion to prepare the
facility for its intended use are estimated to be approximately $14,000 and
$15,000 in 1999 and 2000, respectively.

Machinery and equipment includes certain assets which have been accounted for as
capital leases with a net book value of $169 and $421 at December 31, 1998 and
1997, respectively.

Depreciation and amortization expense during 1998, 1997 and 1996 includes
amortization of assets under capital leases of approximately $191, $447 and
$743, respectively.













                                       46


<PAGE>   47




NOTE 8   OTHER ASSETS

Other assets consist of the following:


<TABLE>
<CAPTION>
                                                                                      DECEMBER 31,
                                                                          -----------------------------------
                  DOLLARS IN THOUSANDS                                       1998                  1997
                  -------------------------------------------------------------------------------------------
<S>                                                                          <C>                    <C>    
                  Excess of acquisition cost over net
                    assets acquired                                          $21,442                $21,396
                  Less accumulated amortization                               (5,277)                (4,273)
                                                                          -------------          ------------
                                                                             $16,165                $17,123
                                                                          =============          ============

                  Intangible assets                                          $12,601                $12,576
                  Less accumulated amortization                               (5,569)                (4,472)
                                                                          -------------          ------------
                                                                              $7,032                 $8,104
                                                                          =============          ============

                  Other                                                      $12,631                $13,894
                  Less accumulated amortization                               (2,021)                (1,374)
                                                                          -------------          ------------
                          TOTAL                                              $10,610                $12,520
                                                                          =============          ============

</TABLE>


NOTE 9   ACCRUED EXPENSES

Accrued expenses consist of the following:


<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,
                                                                          ------------------------------
                  DOLLARS IN THOUSANDS                                       1998            1997
                  --------------------------------------------------------------------------------------
<S>                                                                            <C>           <C>    
                  Employee compensation and benefits                           $5,682        $ 5,127
                  Accrued royalties and product costs                           3,422          3,741
                  Accrued interest                                              2,424          2,389
                  Accrued restructuring costs                                  13,214          1,365
                  Other                                                         5,968          4,774   
                                                                          --------------  --------------
                          TOTAL                                               $30,710        $17,396
                                                                          ==============  ==============


</TABLE>


NOTE 10   NOTES PAYABLE

Notes payable consist of the following:


<TABLE>
<CAPTION>
                                                                                  DECEMBER 31,
                                                                          ------------------------------
                  DOLLARS IN THOUSANDS                                       1998            1997
                  --------------------------------------------------------------------------------------
<S>                                                                           <C>             <C>    
                  Bank indebtedness:
                     Revolving credit facility                                $32,463         $34,246
                     Term debt                                                  5,000              --
                                                                          --------------  --------------
                                                                               37,463          34,246
                  6.5% Convertible Subordinated Notes                          80,500          80,500
                  Equipment term notes                                             81             343
                  Other                                                            --           1,393
                                                                          --------------  --------------
                  Total notes payable                                         118,044         116,482
                  Current maturities                                              (81)         (1,654)
                                                                          --------------  --------------
                  Notes payable, long-term                                   $117,963        $114,828
                                                                          ==============  ==============
</TABLE>





                                       47

<PAGE>   48

At December 31, 1998, the annual aggregate maturities of debt through the year
2003 and thereafter were $81; $5,000; $0; $32,463; $80,500; and $0.

At December 31, 1998, Nabi's credit agreement provided for a $45,000 revolving
credit facility subject to certain borrowing base restrictions as defined in the
agreement which matures in September 2002. Availability under the new facility
was approximately $7,600 at December 31, 1998. As of the same date, Nabi was not
in compliance with certain financial covenants. On March 1, 1999, Nabi amended
its credit agreement to allow for retroactive application as of December 31,
1998. The amendment provided for the waiver of existing defaults of the
financial covenants at the end of the year, the amendment of certain financial
covenants and the extension of the $5,000 term loan to March 2000. Nabi
currently believes that it can comply with the amended covenants during 1999 and
the remaining term of the credit agreement. This credit agreement is secured by
substantially all assets, including a mortgage on the manufacturing facility,
and contains covenants prohibiting dividend payments and requiring the
maintenance of certain financial covenants.

Equipment term notes outstanding at December 31,1998 have a weighted-average
interest rate of 5.39%, are payable in installments through 1999 and are secured
by equipment having a net book value of approximately $169 at December 31, 1998.

During the first quarter of 1996, Nabi issued $80,500 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 $10,000
term loan, $18,000 in flexible term notes and approximately $12,200 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 in the first quarter
of 1996.

At December 31, 1998, the fair value of Nabi's 6.5% Convertible Subordinated
Notes was approximately $50,011. 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 11   STOCKHOLDERS' EQUITY

WARRANTS

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 $20,000 in subordinated
notes. The warrants are exercisable at $9.82 per share and expire on December
31, 2000.

STOCK OPTIONS

Nabi maintains four 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 four 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.



                                       48


<PAGE>   49

During May 1995, the stockholders of Nabi adopted the Stock Plan for
Non-Employee Directors (the "Directors Plan"). Nabi has 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.

At December 31, 1998, there were options outstanding under all Nabi's stock
plans to acquire 5.0 million shares of its common stock of which 2.3 million
were then exercisable. As of the same date, 3.4 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, 1998 is presented below:


STOCK OPTION ACTIVITY
- ---------------------


<TABLE>
<CAPTION>
                                                                      OPTIONS          EXERCISE PRICE
                                                                 ----------------------------------------
                                                                   (In Thousands)
         ------------------------------------------------------------------------------------------------
<S>                                                                       <C>           <C>           
         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
            Granted                                                     1,001           $4.25 - $11.13
            Exercised or canceled                                        (345)          $1.03 - $13.75
                                                                 ------------------  --------------------
         BALANCE AT DECEMBER 31, 1997                                   3,773            $.19 - $13.75
            Granted                                                     1,959           $2.63 - $4.06
            Exercised or canceled                                        (741)           $.19 - $13.75
                                                                 ==================  ====================
         BALANCE AT DECEMBER 31, 1998                                   4,991            $.19 - $13.75
                                                                 ==================  ====================
</TABLE>



STOCK OPTIONS OUTSTANDING
- -------------------------


<TABLE>
<CAPTION>
                                                     OUTSTANDING                                EXERCISABLE
                                   ------------------------------------------------------------------------------------
                                                     Average          Average                               Average
                                      Options         Years          Exercise             Options          Exercise
 EXERCISE PRICE RANGE             (In Thousands)    Remaining          Price            (In Thousands)       Price
- -----------------------------------------------------------------------------------------------------------------------
<S>                                    <C>             <C>             <C>                   <C>             <C>  
$0.19 - $4.25                          2,190           8.0             $3.29                 541             $3.05
$5.06 - $7.59                          1,095           5.5              6.76                 988              6.76
$8.39 - $11.125                          946           7.5             10.74                 386             10.37
$12.97 - $13.75                          760           6.9             13.73                 424             13.71
                                   --------------  -------------- -----------------   --------------  -----------------
               TOTAL                   4,991           7.0             $8.63               2,339             $8.47
                                   ==============  ============== =================   ==============  =================
</TABLE>




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. Proforma compensation expense has been
determined based upon the estimated fair market value of the options at the date
of grant.


<TABLE>
<CAPTION>
                                                                   1998              1997             1996
         --------------------------------------------------------------------------------------------------------
<S>                                                              <C>               <C>               <C>    
         Net income (loss)                                      $(25,779)         $(12,658)         $12,230
         Basic earnings (loss) per share                          $(0.74)           $(0.36)           $0.36
         Diluted earnings (loss) per share                        $(0.74)           $(0.36)           $0.35
</TABLE>





                                       49

<PAGE>   50
 The estimated fair value of each option grant is estimated using the
Black-Scholes option-pricing model with the following ranges of assumptions:
expected term of two to five years; expected volatility of 57% - 93%; and
risk-free interest rates of 4% - 8%. The weighted-average estimated fair value
of options granted during 1998, 1997 and 1996 was $2.32, $6.48 and $5.93,
respectively.



NOTE 12   COMPREHENSIVE INCOME

Effective January 1, 1998, Nabi adopted SFAS 130 which establishes new rules for
the reporting of comprehensive income.

The components of comprehensive income for the years ended December 31, 1998,
1997 and 1996 are as follows:


<TABLE>
<CAPTION>
                                                     FOR THE YEARS ENDED DECEMBER 31,
                                          ----------------------------------------------------
AMOUNTS IN THOUSANDS                            1998                 1997          1996
- ----------------------------------------------------------------------------------------------
<S>                                            <C>                 <C>            <C>    
Net income (loss)                              $(21,757)           $(11,153)      $13,228
Foreign currency
  translation adjustments                           142                (518)          (86)
                                          -----------------   ----------------  --------------
Comprehensive Income                           $(21,615)           $(11,671)      $13,142
                                          =================   ================  ==============
</TABLE>



NOTE 13   NON-RECURRING CHARGES

In December 1998, the Board of Directors approved a plan to sell or close
certain antibody collection centers, including the Company's German operations.
In addition, the Board approved actions to reduce product development activities
at the Company's Rockville, Maryland facility. Nabi will primarily focus its
ongoing research and development efforts on support for products which are
currently marketed or in later stages of development. Nabi is actively seeking
corporate and government partners to fund further development of the remaining
products in its research and development pipeline.

In connection with the plan, Nabi recorded a net restructuring charge of $13,164
in the fourth quarter of 1998. The restructuring charge is comprised of $2,529
in termination benefits resulting from the elimination of 103 positions within
the antibody operations and 36 positions in Rockville; $3,682 for non-cancelable
lease obligations; $5,058 for write-downs of leasehold improvements, equipment
and furniture and fixtures, of which $4,797 is non-cash; and $967 in non-cash
write-downs of intangible assets. The write-downs are based upon management's
assessment of fair value. Nabi anticipates completion of the plan during 1999.


















                                       50

<PAGE>   51




A summary of the Company's restructuring activity for 1997 and 1998 is presented
below:

<TABLE>
<CAPTION>

AMOUNTS IN THOUSANDS
- ------------------------------------------------------------------------------------------------------------
<S>                                                                                            <C>
BALANCE AT DECEMBER 31, 1996                                                                   $          --

ACTIVITY DURING 1997:
        Restructuring accrual associated with the disposition of antibody centers                      1,800
        Termination benefit payments                                                                      (9)
        Non-cancelable lease obligation payments and other cash outflows                                 (52)
        Non-cash write downs of fixed and intangible assets                                             (283)
        Change in estimated restructuring charge                                                         (91)
                                                                                               -----------------
BALANCE AT DECEMBER 31, 1997                                                                          $1,365
ACTIVITY DURING 1998:
        Restructuring accrual associated with disposition of antibody centers
               and the reduction of product development activities                                    13,164
        Termination benefit payments                                                                    (354)
        Non-cancelable lease obligation payments and other cash outflows                                (742)
        Non-cash write downs of fixed and intangible assets                                              (98)
        Change in estimated restructuring charge                                                        (121)
                                                                                               -----------------
BALANCE AT DECEMBER 31, 1998                                                                         $13,214
                                                                                               =================

</TABLE>


In addition, Nabi recorded a $1,563 non-recurring charge which represents
management's estimate of the costs incurred in connection with the Company's
ongoing litigation with the general contractor for its biopharmaceutical
manufacturing facility in Boca Raton, Florida. This litigation was initiated by
Nabi.

During 1997, Nabi recognized approximately $5,680 of non-recurring charges.
These charges included $3,880 of asset impairment losses, principally associated
with Nabi's investment in Michigan Biologic Products Institute ("MBPI"), an
alternative contract fractionation facility for the production of Nabi-HB(TM).
The project was abandoned during the third quarter as Nabi entered into an
Nabi-HB(TM) manufacturing agreement with Cangene Corporation. Streamlining
initiatives within antibody operations principally involving center closings
contributed to the remaining $1,800 in non-recurring charges.



NOTE 14   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,
                                                          -------------------------------------------------------
                                                               1998                1997               1996
- -----------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                 <C>                  <C>
Domestic                                                      $(16,595)           $(15,348)            $6,172
Foreign                                                         (5,115)               (473)             1,774
                                                          ----------------   -----------------   ----------------
        TOTAL                                                 $(21,710)           $(15,821)            $7,946
                                                          ================   =================   ================
</TABLE>











                                       51


<PAGE>   52


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


<TABLE>
<CAPTION>
                                                                    FOR THE YEARS ENDED DECEMBER 31,
                                                          -----------------------------------------------------
                                                               1998               1997              1996
- ---------------------------------------------------------------------------------------------------------------
<S>                                                              <C>               <C>               <C>   
Current
         Federal                                                 $ --              $6,929            $(529)
         State                                                    (47)                (60)            (231)
                                                          ----------------   ----------------  ----------------
                                                                  (47)              6,869             (760)
                                                          ----------------   ----------------  ----------------

Deferred
         Federal                                                    7              (1,631)           7,719
         State                                                      4                 (75)             484
                                                          ----------------   ----------------  ----------------
                                                                   11              (1,706)           8,203
                                                          ----------------   ----------------  ----------------
Benefit charged directly to equity from exercise
         of stock options and warrants                             (5)               (477)          (1,211)

Acquired tax benefit used to reduce intangible
         assets                                                    (6)                (18)             (18)
                                                          ----------------   ----------------  ----------------
               TOTAL                                             $(47)             $4,668           $6,214
                                                          ================   ================  ================
</TABLE>



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


<TABLE>
<CAPTION>

                                                                       FOR THE YEARS ENDED DECEMBER 31,
                                                                ------------------------------------------------
                                                                   1998                1997            1996
- ----------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>                 <C>             <C>    
Deferred tax assets:
        NOL carryforward                                            $22,543             $17,987         $17,429
        Capitalized research and development                          7,619               9,003          10,387
        Non-recurring charge                                          3,162                  --              --
        Research tax credit                                           3,368               2,882           3,078
        Inventory reserve and capitalization                          1,695                 482           2,044
        Amortization                                                  2,167               2,349           2,185
        Bad debt reserve                                                 80                 145             233
        Depreciation                                                    653                 678             719
        Alternative minimum tax credit                                  900                 703              --
        Other                                                         1,089                 928             525
                                                                ------------       -------------    ------------
                                                                     43,276              35,157          36,600
Valuation allowance                                                 (36,508)            (28,324)        (27,251)
                                                                ------------       -------------    ------------
Deferred tax assets                                                   6,768               6,833           9,349

Deferred tax liabilities:
        Amortization                                                   (945)               (906)           (906)
        Other                                                           (13)                 (4)            (17)
                                                                ------------       -------------    ------------
Deferred tax liabilities                                               (958)               (910)           (923)
                                                                ------------       -------------    ------------

Net deferred tax assets                                              $5,810              $5,923          $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 NOL carryforwards, capitalized research and development
expense and research tax credit 













                                       52


<PAGE>   53
carryforwards. Nabi's NOLs and research tax credit carryforwards expire in
varying amounts through the year 2018.

Pursuant to SFAS 109, Nabi recognized approximately $7,400 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 ultimate realization of the remaining deferred tax
assets is largely dependent on Nabi's ability to generate sufficient future
taxable income. Nabi believes that the valuation allowance at December 31, 1998
is appropriate, given its historical loss experience and other factors
including, but not limited to, the uncertainty of future taxable income
expectations beyond Nabi's strategic planning horizon.

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


<TABLE>
<CAPTION>
                                                                FOR THE YEARS ENDED DECEMBER 31,
                                                           -------------------------------------------
                                                               1998          1997            1996
 -----------------------------------------------------------------------------------------------------
<S>                                                           <C>           <C>              <C>  
 Federal statutory rate                                       (35.0)%       (35.0)%          35.0%
 State income taxes, net of federal benefit                     0.1           0.1            (2.9)
 Goodwill and other amortization                                0.8           1.1            (0.2)
 Foreign trade income                                            --           1.0           (12.8)
 Merger transaction cost                                         --          (0.9)           (0.6)
 Increase (reduction) in valuation allowance                   37.7           5.5           (92.9)
 Tax credits                                                   (3.1)          0.2            (3.3)
 Other                                                         (0.3)         (1.5)           (0.5)
                                                           -------------  ------------   -------------
                    TOTAL                                       0.2%        (29.5)%         (78.2)%
                                                           =============  ============   =============
</TABLE>




NOTE 15   EARNINGS PER SHARE

The following is a reconciliation between basic and diluted earnings per share
before extraordinary item for the years ended December 31, 1998, 1997 and 1996:



<TABLE>
<CAPTION>
                                                                               EFFECT OF
                                                               BASIC      DILUTIVE SECURITIES:      DILUTED
                                                                EPS          STOCK OPTIONS            EPS
- ------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                                <C>      
1998
Income (Loss) Before Extraordinary Charge                       ($21,757)                   --     ($21,757)
Shares                                                            34,885                    --       34,885
Per Share                                                         ($0.62)                            ($0.62)
- ------------------------------------------------------------------------------------------------------------
1997
Income (Loss) Before Extraordinary Charge                       ($11,153)                   --     ($11,153)
Shares                                                            34,737                    --       34,737
Per Share                                                         ($0.32)                            ($0.32)
- ------------------------------------------------------------------------------------------------------------
1996
Income (Loss) Before Extraordinary Charge                        $14,160                    --      $14,160
Shares                                                            34,387                   995       35,382
Per Share                                                          $0.41                    --        $0.40
- ------------------------------------------------------------------------------------------------------------
</TABLE>






                                       53


<PAGE>   54


NOTE 16   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 $6,868, $6,785 and $6,293 for the years ended
December 31, 1998, 1997 and 1996, respectively.

As of December 31, 1998, 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:

          YEAR ENDING DECEMBER 31,
          ------------------------------------------------------------------
          1999                                                   $6,116
          2000                                                    5,072     
          2001                                                    4,356
          2002                                                    3,528
          2003                                                    2,296
          Thereafter                                              3,283 
                                                          ------------------
          Total minimum lease commitments                       $24,651
                                                          ==================


NOTE 17   RELATED PARTY TRANSACTIONS

Effective September 30, 1992, Nabi acquired H-BIG(R) (hepatitis B immune
globulin) a proprietary antibody-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.

Related party transactions with Abbott for the years ended December 31, 1998,
1997 and 1996 are summarized below:

<TABLE>
<CAPTION>

                                                                          1998           1997           1996
         --------------------------------------------------------------------------------------------------------
<S>                                                                       <C>             <C>            <C>   
         Sales of antibody products and testing services                   $2,949         $2,720         $3,027
         Purchases of diagnostic, pharmaceutical and testing products      12,606         14,028         10,390
         Product royalty obligations                                        2,311          2,489          2,617
         Rental payments and other                                          1,030          1,030            919
</TABLE>


At December 31, 1998 and 1997, trade accounts receivable from Abbott totaled
$301 and $499 respectively, and accounts payable to Abbott aggregated $2,167 and
$894, respectively.

At December 31, 1998, notes receivable from corporate officers aggregated $431,
bear interest at the prime rate and mature on December 31, 1999.







                                       54

<PAGE>   55

NOTE 18   STRATEGIC ALLIANCES, LICENSES AND ROYALTY 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
is obligated to make future payments under these agreements if certain
contractual conditions are achieved. In addition, under a certain collaboration
agreement, Nabi recorded research support reimbursements of $2,148 in 1996. This
collaboration agreement terminated in 1996.

As discussed in Note 17, Nabi is obligated to pay Abbott royalties based upon
its H-BIG(R) product sales.

In connection with an exclusive licensing and distribution agreement with
Cangene Corporation ("Cangene") to market and distribute WinRho SDF(TM) in the
U.S. through March 2005, Nabi was obligated to expend a minimum of $3,000 for
sales and marketing expenses in each of the fiscal years ended May 1996 and
1997. In addition, Nabi has agreed to loan Cangene fifty percent (50%) of the
cost of capital improvements to its manufacturing facility up to $3,000, of
which $2,380 was advanced at December 31, 1998. Under the agreement which
terminates in 2005, provided that Nabi achieves specified sales or makes
specified payments, Nabi has exclusive marketing rights for and shares in the
profits from sales of WinRho SDF(TM) in the United States.

During 1997, Nabi entered into an agreement with Cangene with respect to the
manufacture of Nabi-HB(TM). In addition, Cangene has exclusive marketing rights
for Nabi-HB(TM) in Canada provided it meets specified sales goals. Nabi will
share in the profits from sales of Nabi-HB(TM) in Canada. The term of the
Canadian marketing agreement with Cangene for Nabi-HB(TM) is co-extensive with
the terms of the manufacturing agreement for Nabi-HB(TM). Nabi is obligated to
purchase approximately $6,800 of Nabi-HB(TM) over the three years following
receipt of regulatory approval.

In 1997, Nabi acquired from Baxter the exclusive rights to AutoPlex(R)T in the
United States, Canada and Mexico. In connection with the acquisition, Baxter
agreed to manufacture Autoplex(R)T until May 2000 or at such later time as may
be determined under the terms of a consent order entered into between Baxter and
the Federal Trade Commission ("FTC"), but in any event four months after Nabi
receives approval from the FDA to manufacture AutoPlex(R)T. The FTC could
require Nabi to return to Baxter Nabi's rights to AutoPlex(R)T, if Nabi does not
obtain FDA approval to manufacture the product by May 2000 or to a later date
agreed to by the FTC. If Baxter thereafter sells these rights, Nabi and Baxter
will share equally the proceeds of any such sale and under certain circumstances
Baxter will be required to make a specified payment to Nabi. Upon FDA licensure
to manufacture the product, Nabi is obligated to pay $1,000 to Baxter, subject
to recovery of fifty percent (50%) of expenditures incurred to license the
product in excess of $6,000. Baxter is also a significant antibody products
customer and a principal supplier of antibody collection supplies to Nabi.

NOTE 19   COMMI(TM)ENTS 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, 1998, Nabi and its subsidiaries were also parties to certain
routine claims and litigation occurring in the normal course of business,
including the ongoing litigation with the general contractor for its
manufacturing facility as more fully discussed in Note 13. Management believes
that the ultimate




                                       55

<PAGE>   56

resolution of these matters will not have a material adverse effect on Nabi's
financial position or results of operations.

At December 31, 1998, Nabi had outstanding purchase commitments in the normal
course of business with various suppliers. Under an agreement with a principal
supplier, Nabi is obligated to purchase goods aggregating approximately $16,457
in fiscal 1999. Nabi is also committed to purchase the entire antibody
production of certain contract centers through varying dates ending March 31,
2000.

NOTE 20   INDUSTRY SEGMENT INFORMATION

Nabi adopted SFAS 131 in the fourth quarter of 1998. Prior year segment
information has been restated to a comparative basis.

During 1998, Nabi strategically examined each of its business segments with a
view toward optimization; as a result, Nabi's organizational structure was
consolidated into two reportable segments. They are the antibody products and
pharmaceutical products segments. The antibody products segment consists of the
collection and sale of non-specific and specialty antibody products, the
production and sale of antibody-based control and diagnostic products and
laboratory testing services. The pharmaceutical products segment consists of the
production and sale of proprietary therapeutic products and research and
development efforts for the pharmaceutical product line.

The accounting policies for each of the segments are the same as those described
in the summary of significant accounting policies. There are no intersegment
revenues or allocations of corporate overhead costs. Nabi evaluates the
performance of each segment based on operating profit or loss; interest expense
and income taxes are not allocated.



























                                       56

<PAGE>   57


Information regarding Nabi's operations and assets for the two industry segments
is as follows: 


<TABLE>
<CAPTION>

(IN THOUSANDS)                                                  1998               1997            1996
- ------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                <C>             <C>     
SALES:
     Antibody products                                          $188,104           $194,274        $213,504
     Pharmaceutical products                                      54,983             34,470          26,405
                                                            -------------       ------------    ------------
                                                                $243,087           $228,744        $239,909
                                                            =============       ============    ============
OPERATING INCOME (LOSS):
     Antibody products                                           ($4,473)            $1,990         $20,460
     Pharmaceutical products                                     (11,499)           (13,301)         (9,193)
                                                            -------------       ------------    ------------
                                                                ($15,972)          ($11,311)        $11,267
                                                            =============       ============    ============
DEPRECIATION AND AMORTIZATION EXPENSE:
     Antibody products                                            $8,340             $6,687          $5,075
     Pharmaceutical products                                       2,427              2,520           2,293
                                                            -------------       ------------    ------------
                                                                 $10,767             $9,207          $7,368
                                                            =============       ============    ============
NON-RECURRING CHARGE:
     Antibody products                                            $5,855             $1,839             $--
     Pharmaceutical products                                       8,750              3,841              --
                                                            -------------       ------------    ------------
                                                                 $14,605             $5,680             $--
                                                            =============       ============    ============
ASSETS:                                                                                                      
     Antibody products                                          $129,572           $141,588                  
     Pharmaceutical products                                      78,725             65,280                  
                                                            -------------       ------------                 
                                                                $208,297           $206,868                  
                                                            =============       ============                 

EXPENDITURES FOR ADDITIONS TO LONG-LIVED ASSETS:
     Antibody products                                            $4,377            $20,226                
     Pharmaceutical products                                      14,147             16,071                
                                                            -------------       ------------                
                                                                 $18,524            $36,297                
                                                            =============       ============                  

</TABLE>




















                                       57

<PAGE>   58


A reconciliation of reportable segment selected financial information to the
total combined amounts of the selected financial information is as follows:


<TABLE>
<CAPTION>
(IN THOUSANDS)                                                          1998                1997            1996
- ---------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                 <C>             <C>     
INCOME (LOSS) BEFORE BENEFIT (PROVISION) FOR
  INCOME TAXES AND EXTRAORDINARY CHARGE:
     Reportable segment operating income                                ($15,972)           ($11,311)        $11,267
     Unallocated interest expense                                         (5,681)             (4,712)         (3,987)
     Unallocated other income and expense, net                               (57)                202             666
                                                                     ------------        ------------    ------------
       Consolidated income (loss) before benefit
         (provision) for income taxes and extraordinary
         charge                                                         ($21,710)           ($15,821)         $7,946
                                                                     ============        ============    ============
DEPRECIATION AND AMORTIZATION EXPENSE:
     Reportable segment depreciation & 
       amortization expense                                              $10,767              $9,207          $7,368
     Unallocated (corporate) depreciation & amortization
       expense                                                               735                 649             515 
                                                                    ============        ============    ============
       Consolidated depreciation & amortization expense                  $11,502              $9,856          $7,883
                                                                     ============        ============    ============

ASSETS:
     Reportable segment assets                                          $208,297            $206,868     
     Unallocated (corporate) assets                                       10,003              19,038     
                                                                     ------------        ------------   
       Consolidated assets                                              $218,300            $225,906   
                                                                     ============        ============  

</TABLE>























                                       58

<PAGE>   59


Information regarding sales and long-lived assets by geographic area for the
years ended December 31, 1998 is as follows:


<TABLE>
<CAPTION>

(IN THOUSANDS)                                                          1998                1997            1996
- ---------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                 <C>             <C>     
SALES:
     Domestic                                                           $177,870            $163,502        $135,832
     Foreign                                                              65,217              65,242         104,077
                                                                     ------------        ------------    ------------
       Total                                                            $243,087            $228,744        $239,909
                                                                     ============        ============    ============
LONG-LIVED ASSETS:
     Domestic                                                           $131,317            $125,201        $101,799
     Foreign                                                               1,508               1,733           2,242
                                                                     ------------        ------------    ------------
       TOTAL                                                            $132,825            $126,934        $104,041
                                                                     ============        ============    ============

</TABLE>





Foreign revenue is based upon customer location.

Sales in 1998 from two customers of Nabi's antibody products segment exceeded
10% of total sales, representing $44,920 and $44,215, respectively. Sales in
1997 from two customers of Nabi's antibody product segment exceeded 10% of total
sales, representing $59,244 and $34,128, respectively. Sales in 1996 from three
customers of Nabi's antibody products segment exceeded 10% of total sales,
representing $38,959, $38,537 and $29,446, respectively.

































                                       59

<PAGE>   60

<TABLE>
<CAPTION>
NABI
- --------------------------------------------------------------------------------------------------------------------
                                                             NOTE 21 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

                     -----------------------------------------------------------------------------------------------
                                                                   NET             BASIC EARNINGS   DILUTED EARNINGS
                                              GROSS              INCOME                (LOSS)            (LOSS)
                           SALES              MARGIN             (LOSS)              PER SHARE          PER SHARE
                     -----------------------------------------------------------------------------------------------
<S>                        <C>                <C>                 <C>                   <C>                <C>    
1998
1st Quarter                $58,614            $14,025             ($1,918)              ($0.06)            ($0.06)
2nd Quarter                 61,178             17,636                (517)               (0.01)             (0.01)
3rd Quarter                 58,713             16,193              (3,757)               (0.11)             (0.11)
4th Quarter(1)              64,582             16,867             (15,565)               (0.44)             (0.44)
                     ------------------------------------------------------------------------------------------------
                          $243,087            $64,721            ($21,757)              ($0.62)            ($0.62)
                     ================================================================================================

1997
1st Quarter                $56,377            $13,192              $1,350                $0.04              $0.04
2nd Quarter                 57,915             14,969               2,013                 0.06               0.06
3rd Quarter(2)              52,849              9,479              (7,889)               (0.23)             (0.23)
4th Quarter(3)              61,603             10,571              (6,627)               (0.19)             (0.19)
                     ------------------------------------------------------------------------------------------------
                          $228,744            $48,211            ($11,153)              ($0.32)            ($0.32)
                     ================================================================================================
</TABLE>



(1)  During the fourth quarter of 1998, Nabi recognized approximately $14.6
     million of non-recurring charges.  The charges were comprised of certain
     restructuring costs ($13.0 million) and costs relating to litigation ($1.6
     million).  See Note 13.
(2)  During the third quarter of 1997, Nabi recognized approximately $5.7
     million of non-recurring charges.  These charges included $3.9 million of
     asset impairment losses, principally associated with Nabi's investment in
     Michigan Biologic Products Institute ("MBPI"), an alternative contract
     fractionation facility for the production of Nabi-HB(TM). The project was
     abandoned during the third quarter as Nabi entered into an Nabi-HB(TM)
     manufacturing agreement with Cangene Corporation.  Streamlining initiatives
     within antibody operations principally involving center closings
     contributed the remaining $1.8 million in non-recurring charges.

(3)  During the fourth quarter of 1997, Nabi incurred a charge of approximately
     $1.8 million related to physical inventory adjustments, and approximately
     $0.7 million related to the write-off of accounts receivable from a foreign
     plasma fractionator which is in bankruptcy proceedings.



                                       60















<PAGE>   61


<TABLE>
<CAPTION>
NABI
- ----------------------------------------------------------------------------------------------------------------------------------
 
                                                                     SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

                                                                  ADDITIONS                  DEDUCTIONS
                                                     -------------------------------------------------------
                                    BALANCE AT          CHARGED TO        CHARGED TO      WRITE-OFFS CHARGED   BALANCE AT END
         CLASSIFICATION         BEGINNING OF PERIOD  COSTS AND EXPENSES  OTHER ACCOUNTS     AGAINST RESERVE       OF PERIOD
- ------------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S>                                   <C>                 <C>               <C>                 <C>                <C>
YEAR ENDED DECEMBER 31, 1998:
    Allowance for doubtful accounts   $   403            $   (20)           $    --             $  162             $   221

    Deferred tax asset valuation
      allowance                       $28,324            $    --            $ 8,184             $   --             $36,508

    Inventory reserve                 $   641            $ 3,286            $ 1,342             $  761             $ 4,508


YEAR ENDED DECEMBER 31, 1997:
    Allowance for doubtful accounts   $   647            $ 1,013            $    --             $1,257             $   403

    Deferred tax asset valuation
      allowance                       $27,251            $    --            $ 1,073             $   --             $28,324

    Inventory reserve                 $ 5,555            $ 1,648            $    --             $6,562             $   641

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>























                                       61


<PAGE>   62



NABI
- --------------------------------------------------------------------------------
                                                                   EXHIBIT INDEX

<TABLE>
<CAPTION>

                                                                                                          PAGE NO.
                                                                                                          --------


<S>               <C>                                                                                        <C>
   3.1            Restated Certificate of Incorporation of Nabi (incorporated by reference to Nabi's 
                  Annual Report on Form 10-K for the year ended December 31, 1995).......................... 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 (incorporated by reference to Nabi's Annual Report on Form 10-K for the year ended 
                  December 31, 1995)........................................................................ 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 (incorporated by
                  reference to Nabi's Annual Report on Form 10-K for the year ended December 31, 1995)...... N/A

   10.1           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

   10.2           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

   10.3           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

   10.4           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

   10.5           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

   10.6           1990 Equity Incentive Plan (incorporated by reference to Nabi's Proxy Statement dated
                  April 22, 1997) .......................................................................... N/A

   10.7           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

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

   10.9           Employment Agreement dated January 1, 1997 between John C. Carlisle
                  and Nabi (incorporated by reference to Nabi's Annual Report on Form 10-K for the year 
                  ended December 31, 1996).................................................................. N/A

</TABLE>





                                       62

<PAGE>   63

<TABLE>
<CAPTION>


<S>               <C>                                                                                        <C>
   10.11          $50 Million Loan and Security Agreement dated as of September 12, 1997 between
                  Nabi, certain Financial Institutions and NationsBank, N.A. (incorporated by
                  reference to Nabi's Quarterly Report on Form 10-Q for the quarter ended September
                  30, 1997)..................................................................................N/A

   10.12          Rights Agreement dated as of August 1, 1997, as Amended between Nabi and Registrar
                  and Transfer Company (incorporated by reference to Nabi's Annual Report on Form
                  10-K for the year ended December 31, 1997).................................................N/A

   10.13          Amendment No. 1 and Waiver dated as of November 14, 1997 to Loan and Security
                  Agreement dated as of September 12, 1997 (incorporated by reference to Nabi's
                  Annual Report on Form 10-K for the year ended December 31, 1997)...........................N/A

   10.14          Amendment No. 2 and Waiver dated as of March 30, 1998 to Loan and Security
                  Agreement dated as of September 12, 1997 (incorporated by reference to Nabi's
                  Quarterly Report on Form 10-Q for the quarter ended March 31, 1998)........................N/A

   10.15          Addendum to Employment Agreement dated January 15, 1998 between David D. Muth and
                  Nabi (incorporated by reference to Nabi's Quarterly Report on Form 10-Q for the
                  quarter ended June 30, 1998)...............................................................N/A

   10.16          Employment Agreement dated June 1, 1998 between Thomas H. McLain and Nabi
                  (incorporated by reference to Nabi's Quarterly Report on Form 10-Q for the quarter
                  ended June 30, 1998) ......................................................................N/A

   10.17          Employment Agreement dated August 1, 1998 between Dr. Robert B. Naso and Nabi
                  (incorporated by reference to Nabi's Quarterly Report on Form 10-Q for the quarter
                  ended September 30, 1998)..................................................................N/A

   10.18*         Employment Agreement dated August 19, 1996 between David D. Muth and Nabi................64-68


   10.19*         Change in Control: Executive Compensation Package Agreement dated September 28,
                  1998 between David J. Gury and Nabi......................................................69-75

   10.20*         Employment Agreement dated February 9, 1999 between Bruce K. Farley
                  and Nabi.................................................................................76-80

   10.21*         Amendment No. 3 and Waiver dated as of March 1, 1999 to Loan and
                  Security Agreement dated as of September 12, 1997........................................81-88

   10.22*         1998 Non-Qualified Employee Stock Option Plan............................................89-94

   21*            Subsidiaries of the Registrant...........................................................95-96

   23*            Consent of Independent Certified Public Accountants......................................97-98

   27*            Financial Data Schedule.....................................................................99
</TABLE>


- ----------------
* FILED HEREWITH










                                                 63





<PAGE>   1


EXHIBIT 10.18
- -------------------------------------------------------------------------------
















                              EMPLOYMENT AGREEMENT
                              DATED AUGUST 19, 1996
                                     BETWEEN
                             DAVID D. MUTH AND NABI


























                                       64




<PAGE>   2


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




                         EFFECTIVE AS OF AUGUST 19, 1996

Mr. David D. Muth
1483 Greystone Lane
Milord, Ohio 45150

Dear David:

You have agreed to serve as a Senior Vice President Business Development for
Nabi. The following are the terms of such employment:

1. TERM: You will serve as a Senior Vice President Business Development, of
Nabi, a period beginning as of the date hereof and ending on July 31, 1999,
unless your employment is sooner terminated as provided below (the "Employment
Period").

2. SALARY: Your salary will be $180,000.00 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 15.33 hours per month, beginning September 15,
1996.

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.

(B) During the Employment Period, you shall serve as a Nabi Senior Vice
President Business Development. You shall have such duties as are delegated to
you by the person to whom you report









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<PAGE>   3

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 thirty (30) 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 six (6) months of
your annual base salary as in effect at the time of such termination ("Severance
Pay") and maintain in effect for a six (6) 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 six (6) 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.

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 







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<PAGE>   4

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, their 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 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 







                                       67

<PAGE>   5

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:

By:     /s/ David D. Muth                  
   --------------------------------
        David D. Muth
        1483 Greystone Lane
        Milford, Ohio 45150


























                                       68



<PAGE>   1


EXHIBIT 10.19
- --------------------------------------------------------------------------------
















                                CHANGE IN CONTROL
                         EXECUTIVE COMPENSATION PACKAGE
                            DATED SEPTEMBER 18, 1998
                                     BETWEEN
                             DAVID J. GURY AND NABI




























                                       69

<PAGE>   2


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




                       EFFECTIVE AS OF SEPTEMBER 18, 1998

David J. Gury
2360 N. W. 43rd Street
Boca Raton, FL  33431

Dear David:

         The Compensation Committee (the "Committee") of the Board of Directors
of Nabi (the "Board") has determined that it is in the best interests of the
Corporation and its shareholders for the Corporation to agree, as provided
herein, to pay you termination compensation in the event you should leave the
employ of the Corporation under the circumstances described below.

         The Committee recognizes that the continuing possibility of a sale or
change of control of the Corporation is unsettling to you. Therefore, these
arrangements are being made to help assure a continuing dedication by you to
your duties to the Corporation by diminishing the inevitable distraction to you
from the personal uncertainties and risks created by a pending sale or change of
control of the Corporation. In particular, the Committee believes it important,
should the Corporation receive proposals from third parties with respect to its
future, to enable
 you, without being influenced by the uncertainties of your own
situation, to assess and advise the Board whether such proposals would be in the
best interests of the Corporation and its shareholders and to take such other
action regarding such proposals as the Board might determine to be appropriate.
The Committee also wishes to demonstrate to executives of the Corporation that
the Corporation is concerned with the welfare of its executives and intends to
see that loyal executives are treated fairly.

        1. In view of the foregoing and in further consideration of your
continued employment with the Corporation, the Corporation will pay to you as
termination compensation a lump sum amount, determined as provided below, in the
event that (a) within six months after a Change of Control of the Corporation
you die, become disabled or terminate your employment with the Corporation for
Good Reason, (b) within twelve months after a Change of Control of the
Corporation your employment with the Corporation is terminated by the
Corporation for any reason other than Cause, or (c) within the period beginning
on the sixth monthly anniversary of a Change of Control of the Corporation and
ending on the twelfth monthly anniversary thereof, you terminate your employment
with the Corporation for any reason (including, without limitation, death or
disability). The lump sum compensation so payable (hereinafter referred to as
the "Lump Sum Amount") shall be an amount equal to three (3) times the sum of
(a) the higher of (i) your current annual base salary and (ii) your annual base
salary immediately prior to the Change or Control plus (b) the average amount of
any and all bonuses payable to or received by you with respect to the three full
calendar years prior to the Change of Control. The Lump Sum Amount shall be paid
to you within five days after the date of termination of your employment
(hereinafter referred to as the "Termination Date").

         2. In addition, in the event your employment with the Corporation
terminates under circumstances entitling you to receive the Lump Sum Amount:

                  (a) Any compensation and other amounts previously deferred by
         you, together with accrued interest thereon, if any, to which you are
         entitled, and any accrued vacation pay not yet paid by the Corporation,
         shall be paid to you within five days of the Termination Date.




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<PAGE>   3

                  (b) All other amounts accrued or earned by you through the
         date of such termination and amounts otherwise owing under the
         Corporation's plans and policies shall be paid to you within five days
         of the Termination Date.

                  (c) The Corporation shall maintain in full force and effect,
         for the continued benefit of you and/or your family for three years
         after the Termination Date, all employee welfare benefit plans and any
         other employee benefit programs or arrangements (including, without
         limitation, medical and dental insurance plans, disability and life
         insurance plans and car allowance programs) in which you were entitled
         to participate immediately prior to the Change of Control, provided
         that your continued participation is possible under the general terms
         and provisions of such plans and programs. In the event that your
         participation in any such plan or program is barred, the Corporation
         shall arrange to provide you with benefits substantially similar to
         those which you are entitled to receive under such plans and programs.
         At the end of the period of coverage, you shall have the option to have
         assigned to you at no cost and with no apportionment of prepaid
         premiums, any assignable insurance policy owned by the Corporation and
         relating specifically to you.

                  (d) Seventy-five percent (75%) of all outstanding stock
         options which you hold and which are not then vested and exercisable
         shall vest and become exercisable immediately upon a Change of Control
         and, together with all other vested stock options which you hold, will
         remain exercisable for the full term of such options. Notwithstanding
         the foregoing, in the event of a Change of Control caused by a business
         combination involving the Corporation which is intended to be accounted
         for as a "pooling of interests", and with respect to which the
         independent auditors for the Corporation issue an opinion to the
         Corporation and to you that, but or the acceleration of vesting of the
         foregoing options or other benefits in anticipation of the business
         combination transaction, the transaction will qualify for pooling of
         interests accounting treatment (the acceleration provision contained in
         this Agreement being the sole impediment to pooling of interest
         accounting treatment), then the Corporation and the acquiring or
         surviving entity may convert the unvested stock options which are the
         subject of the opinion into an option to purchase shares of stock in
         the acquiring or surviving entity (as the case may be) on a fair and
         equitable basis and, in such case, the vesting of such unvested options
         which are the subject of the opinion will not accelerate as provided
         hereunder (but shall continue to vest over the original vesting period,
         without the requirement of continued employment).

                  (e) The Corporation at its expense shall provide you with
         professional outplacement services of your choosing and shall reimburse
         you for incidental outplacement expenses (such as resume mailing and
         clerical support but not interview traveling), all such outplacement
         benefits not to exceed an out-of-pocket cost to the Corporation of
         $50,000, and shall further provide you at the Corporation's expense for
         a period of twelve months following termination of employment or the
         date you secure other employment, whichever first occurs, with suitable
         office accommodations and full-time secretarial and clerical support
         and assistance.

                  (f) You shall not be required to mitigate the amount of any
         payment provided for in this Agreement by seeking other employment or
         otherwise, nor shall the amount of any payment provided for in this
         Agreement be reduced by any compensation earned by you as the result of
         employment by another employer after the Termination Date, or
         otherwise. The Corporation's obligation to make the payments provided
         for in this Agreement and otherwise to perform its obligations
         hereunder shall not be affected by any set-off, counterclaim,
         recoupment, defense or other claim, right or action which it may have
         against you or others.

        3. For purposes of this Agreement:

                  (a) "Change of Control" shall mean (i) the acquisition by any
         person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
         the Securities Exchange Act of 1934, as amended) (the "Exchange Act"),
         except for an employee benefit plan sponsored by the Corporation, of
         beneficial ownership (within the meaning of Section Rule 13d-3
         promulgated under the Exchange Act) of 15% or more of (A) the
         outstanding shares of common stock of the Corporation or (B) the
         combined voting power of the then outstanding voting securities of the
         Corporation which are entitled to vote generally in the election of
         directors, (ii) individuals who, as of January 1, 1998, 




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<PAGE>   4

         are members of the Corporation's Board (or directors whose subsequent
         nomination or election was approved by a vote of at least a majority of
         such incumbents, but excluding any individual whose initial assumption
         of office occurs as a result of an actual or threatened solicitation to
         which Rule 14a-11 or Regulation 14A promulgated under the Exchange Act
         applies, or other actual or threatened solicitation of proxies or
         consents) cease for any reason to constitute a majority of the Board or
         (iii) approval by the Corporation's shareholders of a reorganization,
         merger, consolidation, or share exchange, unless the holders of the
         Corporation's common stock immediately prior to the transaction own a
         majority of the votes entitled to be cast for the election of Directors
         immediately following such transaction or (iv) approval by the
         Corporation's shareholders of a liquidation or dissolution, or a sale,
         lease, exchange or other disposition (in one transaction or a series of
         transactions) of all, or substantially all, of the assets of the
         Corporation, provided, however, that a sale, in a single transaction or
         series of related transactions, of all or substantially all of the
         assets of the Corporation's plasma collection operations shall not
         constitute a Change of Control.

                  (b) "Good Reason" shall be deemed to exist under any of the
                  following circumstances:

                           (i) failure by the Corporation to fully perform the
                  terms of this Agreement or your then existing employment
                  agreement, other than an isolated, insubstantial and
                  inadvertent failure not occurring in bad faith and remedied by
                  the Corporation promptly (but not later than five days) after
                  receiving notice thereof from you;

                           (ii) the Corporation's requiring you to be based or
                  to perform services at a site or location more than 25 miles
                  from the site or location where you are based at the time of
                  the Change of Control (but in all events such site or location
                  shall be the headquarters of the Corporation), except for
                  travel reasonably required in the performance of your
                  responsibilities (which does not materially exceed the level
                  of travel required of you in the six-month period immediately
                  preceding the Change of Control);

                           (iii) any failure by the Corporation to obtain an
                  assumption and agreement to perform this Agreement by a
                  successor;

                           (iv) the assignment to you of any duties inconsistent
                  in any respect with your position as Chairman, President (if
                  you are President of the Corporation at the time of the Change
                  of Control) and Chief Executive Officer of the Corporation or
                  your authority, duties or responsibilities as contemplated by
                  your then existing employment agreement (including status,
                  offices, title and reporting relationships), or any other
                  action by the Corporation which results in a diminution in
                  such position, authority, duties or responsibilities,
                  excluding for this purpose an isolated, insubstantial and
                  inadvertent action not taken in bad faith and which is
                  remedied by the Corporation promptly (but not more than five
                  days) after receipt of notice thereof given by you; or

                           (v) failure by the Corporation to continue in effect
                  any benefit, retirement or compensation plan (including all
                  plans of any nature described in this Agreement) in which you
                  are participating at the time of a Change of Control (or plans
                  providing substantially similar or greater benefits), or the
                  Corporation has taken action which would adversely affect your
                  participation in or reduce your benefits under any of such
                  plans or deprive you of any fringe benefit or perquisite
                  enjoyed by you at the time of the Change of Control.

                  (c) "Cause" means cause as defined in your Employment
         Agreement effective as of January 1, 1993 (the "Employment Agreement")

         For purposes of this Agreement, any good faith determination of "Good
Reason" made by you shall be conclusive.

        4. (a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the
Corporation to you or for your benefit, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise (a
"Payment"), 



                                       72

<PAGE>   5
 would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code") or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
you shall be entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by you of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax, imposed
upon the Gross-Up Payment, you retain an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments.

               (b) Subject to the provisions of Section 4(c), all determinations
required to be made under this Section 4, including whether a Gross-Up Payment
is required and the amount of such Gross-Up Payment, shall be made by Arthur
Andersen LLP (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Corporation and you within 15 business days of the date
your employment with the Corporation terminates, or such earlier time as is
requested by the Corporation. If the Accounting Firm determines that no Excise
Tax is payable by you, it shall furnish you with an opinion that you have
substantial authority not to report any excise tax on your federal income tax
return. Any determination by the Accounting Firm shall be binding upon the
Corporation and you except as provided elsewhere in this Section 4. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Corporation should have
been made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Corporation exhausts its remedies pursuant to
Section 4(c) and you thereafter are required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Corporation to
you or for your benefit.

               (c) You shall notify the Corporation in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Corporation of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten business days after you know of such
claim and shall apprise the Corporation of the nature of such claim and the date
on which such claim is requested to be paid. You shall not pay such claim prior
to the expiration of the thirty-day period following the date on which you give
such notice to the Corporation (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Corporation
notifies you in writing prior to the expiration of such period that it desires
to contest such claim, you shall:

                           (i) give the Corporation any information reasonably
         requested by the Corporation relating to such claim,

                           (ii) take such action in connection with contesting
         such claim as the Corporation shall reasonably request in writing from
         time to time, including, without limitation, accepting legal
         representation with regard to such claim by an attorney reasonably
         selected by the Corporation.

                           (iii) cooperate with the Corporation in good faith in
         order effectively to contest such claim, and

                           (iv) permit the Corporation to participate in any
         proceedings relating such claim; 

         provided, however, that the Corporation shall bear and pay directly all
         costs and expenses (including additional interest and penalties)
         incurred in connection with such contest and shall indemnify and hold
         you harmless, on an after-tax basis, for any Excise Tax or income tax,
         including interest and penalties with respect thereto, imposed as a
         result of such representation and payments of costs and expenses.
         Without limitation on the foregoing provisions of this Section 4(c),
         the Corporation shall control all proceedings taken in connection with
         such contest and, at its sole option, may pursue or forgo any and all
         administrative appeals, proceedings, hearings and conferences with the
         taxing authority in respect of such claim and may, at its sole option,
         either direct you to pay the tax claimed and sue for a refund or
         contest the claim in any permissible manner, and you agree to prosecute
         such contest to a determination before any administrative tribunal, in
         a court of initial jurisdiction and in one or more appellate courts, as
         the Corporation shall determine; provided, however, that (i) if the
         Corporation directs you to pay such claim and sue for a refund, the
         Corporation shall advance the amount of such payment to you, on an
         interest-free basis and shall indemnify and hold you harmless, on an
         after-tax basis, from 








                                       73


<PAGE>   6

         any Excise Tax or income tax, including interest or penalties with
         respect thereto, imposed with respect to such advance or with respect
         to any imputed income with respect to such advance; and (ii) any
         request by the Corporation that you extend the statute of limitations
         relating to payment of taxes for your taxable year with respect to
         which such contested amount is claimed to be due is limited solely to
         such contested amount. Furthermore, the Corporation's control of the
         contest shall be limited to issues with respect to which a Gross-Up
         Payment would be payable hereunder and you shall be entitled to settle
         or contest, as the case may be, any other issue raised by the Internal
         Revenue Service or any other taxing authority.

         (d) If, after the receipt by you of an amount advanced by the
Corporation pursuant to Section 4(c), you become entitled to receive any refund
with respect to such claim, you shall (subject to the Corporation's complying
with the requirements of Section 4(c) promptly pay to the Corporation the amount
of such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by you of an amount advanced by the
Corporation pursuant to Section 4(c), a determination is made that you shall not
be entitled to any refund with respect to such claim and the Corporation does
not notify you in writing of its intent to contest such denial of refund prior
to the expiration of thirty days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

        5. Anything in this Agreement to the contrary notwithstanding, if your
employment with the Corporation is terminated prior to the date on which a
Change of Control occurs, and it is reasonably demonstrated by you that such
termination (a) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (b) otherwise arose in
connection with or in anticipation of a Change of Control, then for all purposes
of this Agreement, a Change of Control shall be deemed to have occurred the date
immediately prior to the date of such termination.

        6. This Agreement shall be binding upon and inure to the benefit of you,
your estate and the Corporation and any successor or assign of the Corporation,
but neither this Agreement nor any rights arising hereunder may be assigned or
pledged by you. If you should die while any amount would still be payable to you
hereunder if you had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
your devisee, legatee, or other designee or, if there be no such designee, to
your estate.

        7. For purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth on the first page of this Agreement (all notices to the Corporation to
be directed to the attention of the President of the Corporation with a copy to
the Secretary of the Corporation) or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt. The failure
by you to set forth in any notice of termination of employment any fact or
circumstances which contributes to a showing of Good Reason shall not waive any
of your rights hereunder or preclude you from asserting such fact or
circumstance in enforcing your rights hereunder.

        8. No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
you and such officer as may be specifically designated by the Board. No waiver
by either party hereto at any time of any breach by the other party hereto of,
or compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the time or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Florida without regard to principles of conflicts of laws.

        9. The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation (other than
any successor solely to all or substantially all of the assets of the
Corporation's plasma collection operations) to expressly assume and agree to
perform this Agreement in the same manner and 










                                       74

<PAGE>   7

to the same extent that the Corporation would be required to perform it if no
such succession had taken place. As used in this Agreement, "Corporation" shall
mean the Corporation as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

        10. Nothing in this Agreement shall prevent or limit your continuing or
future participation in any benefit, bonus, incentive or other plan or program
provided by the Corporation and for which you may qualify. Amounts which are
vested benefits or which you are otherwise entitled to receive under any plan or
program of the Corporation at or subsequent to any Change of Control shall be
payable in accordance with such plan or program unless required to be paid
earlier in accordance with this Agreement.

        11. If you assert any claim in any contest (whether initiated by you or
by the Corporation) as to the validity, enforceability or interpretation of any
provision of this Agreement, the Corporation shall pay your legal expenses (or
cause such expenses to be paid) including, without limitation, your reasonable
attorney's fees, on a quarterly basis, upon presentation of proof of such
expenses in a form acceptable to the Corporation, provided that you shall
reimburse the Corporation for such amounts, plus simple interest thereon at the
90-day United States Treasury Bill rate as in effect from time to time,
compounded annually, if a court of competent jurisdiction shall find that you
did not have a good faith and reasonable basis to believe that you would prevail
as to at least one material issue presented to such court.

        12. This Agreement shall supersede the provisions of the Employment
Agreement to the extent this Agreement and the Employment Agreement are
inconsistent, and in the event of any inconsistency between this Agreement and
the Employment Agreement, this Agreement shall control. In all other respects,
the Employment Agreement shall continue in full force and effect in accordance
with its terms.

        13. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

        14. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

         If you are in agreement with the foregoing, please so indicate by
signing and returning to the Corporation the enclosed copy of this letter,
whereupon this letter shall constitute a binding agreement under seal between
you and the Corporation.

                                         NABI
                                         5800 Park of Commerce Boulevard, N.W.
                                         Boca Raton, Florida 33487


                                         By:  /s/ John C. Carlisle   
                                              --------------------------------
                                              John C. Carlisle
                                              Chief Operating Officer and
                                              Executive Vice President

Accepted and agreed:


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













                                       75




<PAGE>   1


EXHIBIT 10.20
- --------------------------------------------------------------------------------
















                              EMPLOYMENT AGREEMENT
                             DATED FEBRUARY 9, 1999
                                     BETWEEN
                            BRUCE K. FARLEY AND NABI
































                                       76


<PAGE>   2


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



                        EFFECTIVE AS OF FEBRUARY 9, 1999





Mr. Bruce K. Farley
21109 SE 27th Street
Issaquah, Washington 98029

Dear Bruce:

You have agreed to serve as Senior Vice President, Manufacturing Operations for
Nabi. The following are the terms of such employment:

1. TERM: You will serve as Senior Vice President, Manufacturing Operations of
Nabi for a period beginning as of the date hereof and ending on February 9,
2002, unless your employment is sooner terminated as provided below (the
"Employment Period").

2. SALARY: Your salary will be $190,000.00 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 15.33 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.

(B) During the Employment Period, you shall serve as Nabi's Senior Vice
President, Manufacturing Operations Officer. You shall have such duties as are
delegated to you by the person to whom you report 














                                       77

<PAGE>   3

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 30 (thirty) 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 coverage, 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.
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 





                                       78

<PAGE>   4

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 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.








                                       79


<PAGE>   5

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:

By:  /s/ Bruce K. Farley         
     ---------------------------------
     Bruce K. Farley
     21109 SE 27th Street
     Issaquah, Washington 98029



































                                       80



<PAGE>   1


EXHIBIT 10.21
- --------------------------------------------------------------------------------
















                           AMENDMENT NO. 3 AND WAIVER
                               DATED MARCH 1, 1999
                                       TO
                           LOAN AND SECURITY AGREEMENT
                         DATED AS OF SEPTEMBER 12, 1997


































                                       81


<PAGE>   2


                                                                  EXECUTION COPY

                           AMENDMENT NO. 3 AND WAIVER
                            DATED AS OF MARCH 1, 1999

                                       TO

                           LOAN AND SECURITY AGREEMENT
                         DATED AS OF SEPTEMBER 12, 1997

         THIS AMENDMENT NO. 3 AND WAIVER dated as of March 1, 1999 (this
"Amendment") is made between NABI, a Delaware corporation (the "Borrower"), the
financial institutions party from time to time to the Loan Agreement referred to
below (the "Lenders"), and NATIONSBANK, N.A., a national banking association, as
agent for the Lenders (in that capacity, together with any successors in that
capacity, the "Agent").

                             PRELIMINARY STATEMENTS

         The Borrower, the Lenders, and the Agent are parties to a Loan and
Security Agreement dated as of September 12, 1997, as amended by Amendment No. 1
and Waiver dated November 14, 1997 and Amendment No. 2 and Waiver dated March
30, 1998 (the "Loan Agreement"; terms defined in the Loan Agreement and not
otherwise defined herein being used herein as therein defined).

         Defaults have occurred and are continuing under the Loan Agreement by
reason of the Borrower's failure to maintain (i) a minimum consolidated Fixed
Charge Coverage Ratio of at least .89 to 1 for the four
 Fiscal Quarters ending
on December 31, 1998, as required under Section 10.1(a) of the Loan Agreement
and (ii) a minimum consolidated Net Worth of at least $62,000,000 as at December
31, 1998 as required by Section 10.1(d) of the Loan Agreement (the "Existing
Default"), as a result of which the Lenders are entitled to exercise the rights
and remedies provided for in the Loan Agreement.

         The Borrower has requested that the Lenders waive the Existing
Defaults, modify certain financial covenants and amend certain other provisions
of the Loan Agreement, and the Lenders have agreed, upon and subject to the
terms, conditions and provisions of this Amendment.

                             STATEMENT OF AGREEMENT

         NOW, THEREFORE, in consideration of the Loan Agreement, the Loans made
by the Lenders and outstanding thereunder, the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

         Section 1. AMENDMENT TO LOAN AGREEMENT. The Loan Agreement is hereby
amended, subject to the provisions of Section 4 of this Amendment

         (a)   by amending Section 1.1 DEFINITIONS thereof

                  (i) by amending the definition of "APPLICABLE MARGIN" to read 
         in its entirety as follows:

                  "APPLICABLE MARGIN" means 1.00%.

                  (ii) by amending the definition of "MAINTENANCE CAPEX" by
         substituting the phrase "$1,250,000 per Fiscal Quarter and $5,000,000
         per Fiscal Year" for the sum "10,000,000" appearing therein.

                  (iii) by amending the definition of "EURODOLLAR AVAILABILITY
         DATE" by substituting "Termination Date" for the date "April 1, 1999"
         appearing therein.







                                       82


<PAGE>   3

         (b) by amending Section 2B.3 by substituting the date "March 31, 2000"
for the date "March 31, 1999" appearing therein.

         (c) by adding a new Section 3.19 to read as follows:

                  Section 3.19. PREPAYMENT FEE. If the Borrower prepays the
         Loans in whole or in part prior to the Termination Date for any reason,
         the Borrower shall pay to the Agent for the Ratable benefit of the
         Lenders on such date, as liquidated damages and compensation for the
         costs of making funds available to the Borrower under this Agreement,
         and not as a penalty, an amount equal to 1.00% of, in the case of a
         prepayment in part, the principal amount of such prepayment or, in the
         case of a prepayment in full, the sum of (i) the aggregate outstanding
         principal amount of the Term Loan plus (ii) the Revolving Credit
         Facility then in effect:

         For the purposes of this Section 3.19,

         (a) the Revolving Credit Loans shall be deemed to have been prepaid in
part only

                           (i) on any day that the Borrower voluntarily reduces
                  the Revolving Credit Facility, and

                           (ii) on the last day of each twelve-month period (the
                  "CURRENT PERIOD") that commences on the last day of a month
                  during which the Borrower receives cash in the form of equity
                  or as proceeds of Debt; and

         (b)   the amount of such deemed prepayment shall be

                           (i) in the case of a deemed prepayment under clause
                  (a)(i) above, the amount by which the Borrower voluntarily
                  reduces the Revolving Credit Facility, and

                           (ii) in the case of a deemed prepayment under clause
                  (a)(ii) above, the lesser of (A) the amount of such cash
                  received and (B) the amount (not less than zero) obtained by
                  subtracting from (x) the average month-end amount of Revolving
                  Credit Loans outstanding as of each month end during the
                  twelve-month period ending on the last day of the month in
                  which the Borrower receives such cash infusion, (y) the
                  average month-end amount of Revolving Credit Loans outstanding
                  as of each month end during the Current Period.

         (d) by amending Section 10.15 MINIMUM COLLATERAL AVAILABILITY by
substituting the sum "$6,000,000" for the sum "$5,000,000" appearing therein.

         (e) by amending Section 10.1 FINANCIAL RATIOS in its entirety to read
as follows:

                  SECTION 10.1  FINANCIAL RATIOS.  Permit

                  (a) [Reserved]

                  (b) MINIMUM FIXED CHARGE COVERAGE. The consolidated Fixed
         Charge Coverage Ratio of the Borrower and its Consolidated Subsidiaries
         as of the end of any Fiscal Quarter ending during any period described
         below to be less than the ratio set forth below opposite such period:

         Period                                                    Ratio
         ------                                                    -----

         the four consecutive Fiscal Quarters ending               .89 to 1
         December 31, 1998

         the two consecutive Fiscal Quarters ending
         June 30, 1999                                             .54 to 1;

         the three consecutive Fiscal Quarters ending
         September 30, 1999                                        1.05 to 1;


                                       83


<PAGE>   4

         the four consecutive Fiscal Quarters ending
         December 31, 1999                                         1.40 to 1; or

         each four consecutive Fiscal Quarter period
         ending thereafter                                         1.40 to 1.

                  (c) MINIMUM EBITDA Consolidated EBITDA of the Borrower and its
         Consolidated Subsidiaries for each fiscal period set forth below to be
         less than the amount set forth opposite such fiscal period:

                  Fiscal Period                                    Amount
                  -------------                                    ------

                  the Fiscal Quarter ending March 31, 1999         $1.00

                  the Fiscal Year ending December 31, 2000         $32,000,000

                  the Fiscal Year ending December 31, 2001         $36,000,000

                  (d) MINIMUM CONSOLIDATED NET WORTH. Permit consolidated Net
         Worth of the Borrower and its Consolidated Subsidiaries calculated at
         the end of any Fiscal Quarter ending on or after December 31, 1998 to
         be less than an amount equal to the sum of $50,000,000 PLUS 50% of the
         consolidated Net Income (without deduction for losses) of the Borrower
         and its Consolidated Subsidiaries, on a cumulative basis, for the
         period beginning on January 1, 1999 and ending on the last day of such
         Fiscal Quarter.

         (f) by amending Section 10.5 CAPITAL EXPENDITURES by replacing the
schedule set forth therein with the following schedule:




























                                       84

<PAGE>   5


<TABLE>
<CAPTION>

                  Fiscal Year                          Amount
                  -----------                          ------
<S>               <C>                                  <C>        
                  1998                                 $33,500,000

                  1999                                 $24,000,000

                  2000                                 $17,000,000

                  2001                                 $37,700,000

                  2002                                 $21,000,000

                  Each Fiscal Year thereafter          such amount as may be agreed by the
                                                       Borrower and the Required Lenders
</TABLE>


         Section 2. AMENDMENT TO TERM NOTES. The Term Notes are hereby amended,
subject to the provisions of Section 4 of this Amendment, by substituting the
date March 31, 2000 for the date March 31, 1999 appearing in the first paragraph
thereof.

         Section 3. WAIVER OF EXISTING DEFAULTS; CONSENT. On the Amendment
Effective Date (as hereinafter defined) the Lenders hereby waive the Existing
Defaults and consent to the sale or closing by the Borrower and its Subsidiaries
of the plasma centers located in Germany and the sale, closing or reduction of
operation of up to eight plasma centers operated in the United States and the
sublease of buildings at the Rockville, Maryland facility vacated as a result of
the reduction of operations there.

         Section 4. EFFECTIVENESS OF AMENDMENT. This Amendment shall become
effective retroactively to December 31, 1998 as of the first date (the
"Amendment Effective Date") on which the Lenders shall have received four copies
each of the following documents:

         (a) this Amendment duly executed and delivered by the Borrower, each
Lender and the Agent;

         (b) a certificate of the Secretary of the Borrower having attached
thereto the articles or certificate of incorporation and bylaws of the Borrower
as in effect on the Amendment Effective Date attached thereto (or containing the
certification of such Secretary that no amendment or modification of such
articles or certificate or bylaws has become effective since the last date on
which such documents were delivered to the Lenders pursuant to the Loan
Agreement), all corporate and partnership action, including shareholders' or
partners' approval, if necessary, taken by the Borrower and/or its shareholders
or partners to authorize the execution, delivery and performance of this
Amendment, and to the further effect that the incumbency certificate delivered
in connection with the occurrence of the Effective Date remains in effect,
unchanged;

         (c) a certificate of the president or any vice-president of the
Borrower on behalf of the Borrower stating that, to the best of his knowledge
and based on an examination reasonably believed by him to be sufficient to
enable him to make an informed statement,

                  (i) after giving effect to the waiver set forth in Section 2
         of this Amendment, all of the representations and warranties made or
         deemed to be made under the Loan Agreement are true and correct in all
         material respects as of the date hereof, and

                  (ii) after giving effect to the waiver set forth in Section 2
         of this Amendment, no Default or Event of Default exists, and the Agent
         shall be satisfied as to the truth and accuracy thereof;

         (d) the Confirmation of Guarantors attached hereto as ANNEX A duly
executed and delivered by each Guarantor;

         (e) the payment of an amendment fee to the Agent for the Ratable
benefit of the Lenders in the amount of $125,000; and





                                       85


<PAGE>   6

         (f) such other documents and instruments as the Agent or any Lender may
reasonably request.

         Section 5. REPRESENTATIONS AND WARRANTIES. The Borrower hereby makes
the following representations and warranties to the Agent and the Lenders, which
representations and warranties shall survive the delivery of this Amendment and
the making of additional Loans under the Loan Agreement as amended hereby:

         (a) AUTHORIZATION OF AGREEMENTS. The Borrower has the right and power,
and has taken all necessary action to authorize it, to execute, deliver and
perform this Amendment and each other agreement contemplated hereby to which it
is a party in accordance with their respective terms. This Amendment and each
other agreement contemplated hereby to which it is a party have been duly
executed and delivered by the duly authorized officers of the Borrower and each
is, or each when executed and delivered in accordance with this Amendment will
be, a legal, valid and binding obligation of the Borrower, enforceable in
accordance with its terms.

         (b) COMPLIANCE OF AGREEMENTS WITH LAWS. The execution, delivery and
performance of this Amendment and each other agreement contemplated hereby to
which the Borrower is a party in accordance with their respective terms do not
and will not, by the passage of time, the giving of notice or otherwise,

                  (i) require any Governmental Approval or violate any 
         Applicable Law relating to the Borrower or any of its Subsidiaries,

                  (ii) conflict with, result in a breach of or constitute a
         default under the articles or certificate of incorporation or by-laws
         or any shareholders' agreement of the Borrower or any of its
         Subsidiaries, any material provisions of any indenture, agreement or
         other instrument to which the Borrower, any of its Subsidiaries or any
         of Borrower's or such Subsidiaries' property may be bound or any
         Governmental Approval relating to the Borrower or any of its
         Subsidiaries, or

                  (iii) result in or require the creation or imposition of any
         Lien upon or with respect to any property now owned or hereafter
         acquired by the Borrower other than the Security Interest.

         Section 6. EXPENSES. The Borrower agrees to pay or reimburse on demand
all costs and expenses, including, without limitation, reasonable fees and
disbursements of counsel, incurred by the Agent in connection with the
negotiation, preparation, execution and delivery of this Amendment.

         Section 7. EFFECT OF AMENDMENT. From and after the Amendment Effective
Date, all references in the Loan Agreement and in any other Loan Document to
"this Agreement," "the Loan Agreement," "hereunder," "hereof" and words of like
import referring to the Loan Agreement, shall mean and be references to the Loan
Agreement as amended by this Amendment. Except as expressly amended hereby, the
Loan Agreement and all terms, conditions and provisions thereof remain in full
force and effect and are hereby ratified and confirmed. The execution, delivery
and effectiveness of this Amendment shall not, except as expressly provided
herein, operate as a waiver of any right, power or remedy of the Lenders under
any of the Loan Documents, nor constitute a waiver of any provision of any of
the Loan Documents.

         Section 8.  COUNTERPART EXECUTION; GOVERNING LAW.

         (a) EXECUTION IN COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
Delivery of an executed signature page of any party hereto by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof.

         (b) GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Georgia.





                                       86

<PAGE>   7


         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.


<TABLE>
<CAPTION>

<S>                                  <C>
[CORPORATE SEAL]                     BORROWER:

Attest:                              NABI

By:                                  By: /s/ Thomas H. McLain
   ----------------------------          -------------------------------------------
     Name:                                Name: Thomas H. McLain
          ---------------------                 ------------------------------------
     Title:                               Title: Sr. V.P., Corporate Services and CFO
           --------------------                  ------------------------------------
                                     AGENT:

                                     NATIONSBANK, N.A.

                                     By: /s/ Andrew A. Doherty
                                         -------------------------------------------
                                          Name: Andrew A. Doherty
                                                ------------------------------------
                                          Title: Vice President, Business Credit
                                                 -----------------------------------

                                     LENDERS:

                                     NATIONSBANK, N.A.

                                     By: /s/ Andrew A. Doherty
                                         -------------------------------------------
                                          Name: Andrew A. Doherty
                                                ------------------------------------
                                          Title: Vice President, Business Credit
                                                 -----------------------------------


                                     BANKBOSTON, N.A.

                                     By: /s/ John C. Todd, Jr.
                                         -------------------------------------------
                                          Name: John C. Todd, Jr.
                                                ------------------------------------
                                          Title: Director
                                                 -----------------------------------

</TABLE>




















                                       87



<PAGE>   8


                                                                         ANNEX A



                     CONSENT AND CONFIRMATION OF GUARANTORS

         The undersigned, each in their capacity as a Guarantor under the
Subsidiary Guaranty dated as of September 12, 1997 (as modified or amended to
date, the "Subsidiary Guaranty"), in favor of the Lenders, hereby confirms, for
the benefit of the Borrower and the Lenders, that (1) such Guarantor is a
Subsidiary of Borrower, (2) such Guarantor has received a copy of Amendment No.
3 and Waiver dated as of March 1, 1999 and consents thereto and (3) the
Subsidiary Guaranty of which such Guarantor is the maker constitutes a
continuing unconditional, guaranty of the Secured Obligations under and as
defined in the Subsidiary Guaranty. Each of the undersigned is and continues to
be liable under the Subsidiary Guaranty in accordance with the terms thereof,
notwithstanding the execution and delivery of the aforesaid Amendment.

Dated:  March 1, 1999

                              BIOMUNE CORPORATION


[Corporate Seal]              By: /s/ Thomas H. McLain
                                  --------------------------------------------
                                  Name: Thomas H. McLain
                                        --------------------------------------
                                  Title: Sr. V.P., Corporate Services and CFO
                                         -------------------------------------

                                                    NABI FINANCE, INC.

[Corporate Seal]              By: /s/ Thomas H. McLain
                                  --------------------------------------------
                                  Name: Thomas H. McLain
                                        --------------------------------------
                                  Title: Sr. V.P., Corporate Services and CFO
                                         -------------------------------------


























                                       88




<PAGE>   1


EXHIBIT 10.22
- --------------------------------------------------------------------------------














                                      1998
                    NON-QUALIFIED EMPLOYEE STOCK OPTION PLAN



























                                       89

<PAGE>   2


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

                                      1998
                    NON-QUALIFIED EMPLOYEE STOCK OPTION PLAN


1.      PURPOSE

         The purpose of this 1998 Non-Qualified Employee Stock Option Plan (the
"Plan") is to advance the interests of Nabi (the "Company") by enhancing the
ability of the Company and its subsidiaries to attract and retain employees,
consultants or advisers who are in a position to make significant contributions
to the success of the Company, to reward them for their contributions and to
encourage them to take into account the long-term interests of the Company.

         The Plan provides for the award of options to purchase shares of the
Company's common stock ("Stock"). Options granted pursuant to the Plan shall be
non-qualified options and not incentive stock options as defined in Section 422
of the Internal Revenue Code of 1986.

2.      ELIGIBILITY FOR AWARDS

         Persons eligible to receive awards under the Plan shall be all
employees, consultants and advisers of the Company and its subsidiaries who, in
the opinion of the Board, are in a position to make a significant contribution
to the success of the Company and its subsidiaries. Directors and
 officers of
the Company shall not be eligible to receive awards under the Plan. A subsidiary
for purposes of the Plan shall be a corporation in which the Company owns,
directly or indirectly, stock possessing 50% or more of the total combined
voting power of all classes of stock. Persons selected for awards under the Plan
are referred to herein as "participants".

3.      ADMINISTRATION

         The Plan shall be administered by the Board of Directors (the "Board")
of the Company. The Board shall have authority, not inconsistent with the
express provisions of the Plan, (a) to grant awards consisting of options to
such participants as the Board may select; (b) to determine the time or times
when awards shall be granted and the number of shares of Stock subject to each
award; (c) to determine the terms and conditions of each award; (d) to prescribe
the form or forms of any instruments evidencing awards and any other instruments
required under the Plan and to change such forms from time to time; (e) to
adopt, amend and rescind rules and regulations for the administration of the
Plan; and (f) to interpret the Plan and to decide any questions and settle all
controversies and disputes that may arise in connection with the Plan. Such
determination of the Board shall be conclusive and shall bind all parties.
Subject to Section 8, the Board shall also have the authority, both generally
and in particular instances, to waive compliance by a participant with any
obligation to be performed by the participant under an award, to waive any
condition or provision of an award, and to amend or cancel any award (and if an
award is canceled, to grant a new award on such terms as the Board shall
specify), except that the Board may not take any action with respect to an
outstanding award that would adversely affect the rights of the participant
under such award without such participant's consent. Nothing in the preceding
sentence shall be construed as limiting the power of the Board to make
adjustments required by Section 5(c) and Section 6(i).

         The Board may, in its discretion, delegate some or all of its powers
with respect to the Plan to a committee (the "Committee"), in which event all
references in this Plan (as appropriate) to the Board shall be deemed to refer
to the Committee. The Committee, if one is appointed, shall consist of at least
two directors. A majority of the members of the Committee shall constitute a
quorum, and all determinations 









                                       90



<PAGE>   3

of the Committee shall be made by a majority of its members. Any determination
of the Committee under the Plan may be made without notice or meeting of the
Committee by a writing signed by a majority of the Committee members.

4.      EFFECTIVE DATE AND TERM OF PLAN

         The Plan shall become effective on the date on which it is approved by
the Board.

         No awards shall be granted under the Plan after the completion of ten
years from the date on which the Plan was adopted by the Board, but awards
previously granted may extend beyond that date.

5.      SHARES SUBJECT TO THE PLAN

         (a) Number of Shares. Subject to adjustment as provided in Section
5(c), the aggregate number of shares of Stock that may be delivered upon the
exercise of awards granted under the Plan shall be 2,400,000. If any award
granted under the Plan terminates without having been exercised in full, or upon
exercise is satisfied other than by delivery of Stock, the number of shares of
Stock as to which such award was not exercised shall be available for future
grants within the limits set forth in this Section 5(a).

         (b) Shares to be Delivered. Shares delivered under the Plan shall be
authorized but unissued Stock or, if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in its
treasury. No fractional shares of Stock shall be delivered under the Plan.

         (c) Changes in Stock. In the event of a stock dividend, stock split or
combination of shares, recapitalization or other change in the Company's capital
stock, the number and kind of shares of Stock subject to awards then outstanding
or subsequently granted under the Plan, the exercise price of such awards, the
maximum number of shares of Stock that may be delivered under the Plan, and
other relevant provisions shall be appropriately adjusted by the Board, whose
determination shall be binding on all persons.

         The Board may also adjust the number of shares subject to outstanding
awards and the exercise price and the terms of outstanding awards to take into
consideration material changes in accounting practices or principles,
extraordinary dividends, consolidations or mergers (except those described in
Section 6(i)), acquisitions or dispositions of stock or property or any other
event if it is determined by the Board that such adjustment is appropriate to
avoid distortion in the operation of the Plan.

6.      TERMS AND CONDITIONS OF OPTIONS

         (a) Exercise Price of Options. The exercise price of each option shall
be determined by the Board but shall not be less, in the case of an original
issue of authorized stock, than par value.

         (b) Duration of Options. Options shall be exercisable during such
period or periods as the Board may specify. The latest date on which an option
may be exercised (the "Final Exercise Date") shall be the date that is ten years
from the date the option was granted or such earlier date as the Board may
specify at the time the option is granted.

         (c) Exercise of Options.

                      (i) Options shall become exercisable at such time or times
                      and upon such conditions as the Board shall specify. In
                      the case of an option not immediately exercisable in full,
                      the Board may at any time accelerate the time at which all
                      or any part of the option may be exercised.

                      (ii) Options may be exercised only in writing. Written
                      notice of exercise must be signed by the proper person and
                      furnished to the Company, together with (A) such documents
                      as the Board requires and (B) payment in full as specified
                      below in Section 6(d) for the number of shares for which
                      the option is exercised.




                                       91


<PAGE>   4

                      (iii) The delivery of Stock upon the exercise of an option
                      shall be subject to compliance with (A) applicable federal
                      and state laws and regulations, (B) if the outstanding
                      Stock is at the time listed on any stock exchange, the
                      listing requirements of such exchange, and (C) Company
                      counsel's approval of all other legal matters in
                      connection with the issuance and delivery of such Stock.
                      If the sale of Stock has not been registered under the
                      Securities Act of 1933, as amended, the Company may
                      require, as a condition to exercise of the option, such
                      representations or agreements as counsel for the Company
                      may consider appropriate to avoid violation of such Act
                      and may require that the certificates evidencing such
                      Stock bear an appropriate legend restricting transfer.

                      (iv) The Board shall have the right to require that the
                      participant exercising the option remit to the Company an
                      amount sufficient to satisfy any federal, state, or local
                      withholding tax requirements (or make other arrangements
                      satisfactory to the Company with regard to such taxes)
                      prior to the delivery of any Stock pursuant to the
                      exercise of the option. If permitted by the Board, either
                      at the time of the grant of the option or the time of
                      exercise, the participant may elect, at such time and in
                      such manner as the Board may prescribe, to satisfy such
                      withholding obligation by (A) delivering to the Company
                      Stock (which in the case of Stock acquired from the
                      Company shall have been owned by the participant for at
                      least six months prior to the delivery date) having a fair
                      market value equal to such withholding obligation, or (B)
                      requesting that the Company withhold from the shares of
                      Stock to be delivered upon the exercise a number of shares
                      of Stock having a fair market value equal to such
                      withholding obligation.

                      (v) If an option is exercised by the executor or
                      administrator of a deceased participant, or by the person
                      or persons to whom the option has been transferred by the
                      participant's will or the applicable laws of descent and
                      distribution, the Company shall be under no obligation to
                      deliver Stock pursuant to such exercise until the Company
                      is satisfied as to the authority of the person or persons
                      exercising the option.

         (d) Payment for and Delivery of Stock. Stock purchased upon exercise of
an option under the Plan shall be paid for as follows:

                      (i) in cash or by personal check, certified check, bank
                      draft or money order payable to the order of the Company;
                      or

                      (ii) if so permitted by the Board, (A) through the
                      delivery of shares of Stock (which, in the case of Stock
                      acquired from the Company, shall have been held for at
                      least six months prior to delivery) having a fair market
                      value on the last business day preceding the date of
                      exercise equal to the purchase price or (B) by delivery of
                      a promissory note of the participant to the Company, such
                      note to be payable on such terms as are specified by the
                      Board or (C) by delivery of an unconditional and
                      irrevocable undertaking by a broker to deliver promptly to
                      the Company sufficient funds to pay the exercise price or
                      (D) by any combination of the permissible forms of
                      payment; provided, that if the Stock delivered upon
                      exercise of the option is an original issue of authorized
                      Stock, at least so much of the exercise price as
                      represents the par value of such Stock shall be paid by a
                      personal check or promissory note of the person exercising
                      the option.

         (e) Rights as Shareholder. A participant shall not have the rights of a
shareholder with regard to awards under the Plan except as to Stock actually
received by the participant under the Plan.

         (f) Nontransferability of Awards; Restrictions on Stock. Except as the
Board may otherwise determine, no award may be transferred other than by will or
by the laws of descent and distribution, and during a participant's lifetime an
award may be exercised only by the participant.









                                       92

<PAGE>   5

         The Board, in its discretion, may at the time an award is granted make
Stock delivered under the award subject to such restrictions and conditions,
including restrictions on resale and buy-back rights, as it deems appropriate.

         (g) Death. Except as otherwise provided in the award by the Board at
the time of grant, if a participant dies, each option held by the participant
immediately prior to death may be exercised, to the extent it was exercisable
immediately prior to death, by the participant's executor or administrator or by
the person or persons to whom the option is transferred by will or the
applicable laws of descent and distribution, at any time within the one-year
period (or such longer or shorter period as the Board may determine) beginning
with the date of the participant's death but in no event beyond the Final
Exercise Date.

         (h) Termination of Service other than by Death. Except as otherwise
provided in the award by the Board at the time of grant, if an employee's
employment with the Company and its subsidiaries terminates for any reason other
than by death, all options held by the employee that are not then exercisable
shall terminate. Options that are exercisable on the date employment terminates
shall continue to be exercisable for a period of 90 days (or such longer period
as the Board may determine, but in no event beyond the Final Exercise Date)
unless the employee (i) was discharged for cause or (ii) resigned and within 30
days thereafter the Board determines that the participant's conduct prior to his
or her resignation warranted a discharge for cause. After completion of the
post-termination exercise period, such options shall terminate to the extent not
previously exercised, expired or terminated. For purposes of this Section 6(h),
(i) employment shall not be considered terminated (A) in the case of sick leave
or other bona fide leave of absence approved for purposes of the Plan by the
Board, so long as the employee's right to reemployment is guaranteed either by
statute or by contract, or (B) in the case of a transfer of employment between
the Company and a subsidiary or between subsidiaries and (ii) "cause" shall mean
willful misconduct by the participant or willful failure to perform his or her
responsibilities in the best interests of the Company (including, without
limitation, breach by the participant of any provision of any employment,
advisory, consulting, nondisclosure, non-competition or other agreement between
the participant and the Company or any subsidiary of the Company).

         In the case of a participant who is not an employee, provisions
relating to the exercisability of options following termination of service shall
be specified in the award. If not so specified, all options held by such
participant that are not then exercisable shall terminate upon termination of
service. Options that are exercisable on the date the participant's service as a
consultant or adviser terminates shall continue to be exercisable for a period
of 90 days (or such longer period as the Board may determine, but in no event
beyond the Final Exercise Date) unless the consultant or adviser (i) was
terminated for cause or (ii) resigned and within 30 days thereafter the Board
determines that the participant's conduct prior to his or her resignation
warranted a discharge for cause. After completion of the post-termination
exercise period, such options shall terminate to the extent not previously
exercised, expired or terminated.

         (i) Merger, Consolidation, Asset Sale, Liquidation, etc. In the event
of a consolidation or merger or sale of all or substantially all of the assets
of the Company in which outstanding shares of Stock are exchanged for
securities, cash or other property of any other corporation or business entity
or in the event of a liquidation of the Company, the Board, or the board of
directors of any corporation assuming the obligations of the Company, may, in
its discretion, take any one or more of the following actions, as to outstanding
options: (i) provide that such options shall be assumed, or equivalent options
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof), (ii) upon written notice to the optionees, provide that all
unexercised options will terminate immediately prior to the consummation of such
transaction unless exercised by the optionee within a specified period following
the date of such notice, (iii) in the event of a merger under the terms of which
holders of the Stock will receive upon consummation thereof a cash payment for
each share surrendered in the merger (the "Merger Price"), make or provide for a
cash payment to the optionees equal to the difference between (A) the Merger
Price times the number of shares of Stock subject to such outstanding options
(to the extent then exercisable at prices not in excess of the Merger Price) and
(B) the aggregate exercise price of all such outstanding options in exchange for
the termination of such options, and (iv) provide that all or any outstanding
options shall become exercisable in full and all restrictions on outstanding
awards shall terminate immediately prior to such event.












                                       93


<PAGE>   6

         The Company may grant options under the Plan in substitution for
options held by employees of another corporation who become employees of the
Company, or a subsidiary of the Company, as the result of a merger or
consolidation of the employing corporation with the Company or a subsidiary of
the Company, or as a result of the acquisition by the Company, or one of its
subsidiaries, of property or stock of the employing corporation. The Company may
direct that substitute options be granted on such terms and conditions as the
Board considers appropriate in the circumstances.

7.      EMPLOYMENT RIGHTS

         Neither the adoption of the Plan nor the grant of awards shall confer
upon any participant any right to continue as an employee of, or consultant or
adviser to, the Company or any subsidiary of the Company or affect in any way
the right of the Company or any such subsidiary to terminate his or her
employment by the Company or any subsidiary of the Company at any time. Except
as specifically provided by the Board in any particular case, the loss of
existing or potential profit in awards granted under this Plan shall not
constitute an element of damages in the event of termination of the relationship
of a participant even if the termination is in violation of an obligation of the
Company or any subsidiary of the Company to the participant by contract or
otherwise.

8.   EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION

         Neither adoption of the Plan nor the grant of awards to a participant
shall affect the Company's right to make awards to such participant that are not
subject to the Plan, to issue to such participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued.

         The Board may at any time discontinue granting awards under the Plan.
With the consent of the participant (except as otherwise provided in the Plan),
the Board may at any time cancel an existing award in whole or in part and grant
another award for such number of shares as the Board specifies. The Board may at
any time or times amend the Plan or any outstanding award for the purpose of
satisfying changes in applicable laws or regulations or for any other purpose
that may at the time be permitted by law, or may at any time terminate the Plan
as to further grants of awards, but no such amendment shall adversely affect the
rights of any participant (without the participant's consent) under any award
previously granted.
























                                       94



<PAGE>   1



EXHIBIT 21
- --------------------------------------------------------------------------------
















                         SUBSIDIARIES OF THE REGISTRANT
























                                       95

<PAGE>   2


NABI
- --------------------------------------------------------------------------------
                                                  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

     Nabi BioMedical GmbH.....................................................................Germany
</TABLE>























                                       96





<PAGE>   1


EXHIBIT 23
- --------------------------------------------------------------------------------
















                             CONSENT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS

























                                       97

<PAGE>   2


NABI
- --------------------------------------------------------------------------------
                             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,
No. 33-64092, No. 33-65069, No. 333-56037 and No. 333-56071) of Nabi and its
subsidiaries of our report dated March 26, 1999, appearing in this Form 10-K.










/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Miami, Florida
March 26, 1999



































                                       98





<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1998 AND THE CONSOLIDATED STATEMENT
OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1998
<PERIOD-START>                             JAN-01-1998
<PERIOD-END>                               DEC-31-1998
<CASH>                                           1,016
<SECURITIES>                                         0
<RECEIVABLES>                                   40,029<F1>
<ALLOWANCES>                                         0
<INVENTORY>                                     38,203<F1>
<CURRENT-ASSETS>                                85,475
<PP&E>                                          99,018<F1>
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                 218,300
<CURRENT-LIABILITIES>                           45,755
<BONDS>                                        118,044
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                         3,490
<OTHER-SE>                                      50,699
<TOTAL-LIABILITY-AND-EQUITY>                   218,300
<SALES>                                        243,087
<TOTAL-REVENUES>                               243,087
<CGS>                                          178,366
<TOTAL-COSTS>                                  178,366
<OTHER-EXPENSES>                                80,693
<LOSS-PROVISION>                                     0<F2>
<INTEREST-EXPENSE>                               5,681
<INCOME-PRETAX>                                (21,710)
<INCOME-TAX>                                        47
<INCOME-CONTINUING>                            (21,757)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   (21,757)
<EPS-PRIMARY>                                   ($0.62)
<EPS-DILUTED>                                   ($0.62)
<FN>
<F1>RECEIVABLES, INVENTORY AND PP&E REPRESENT NET AMOUNTS.
<F2>LOSS PROVISION INCLUDED IN OTHER EXPENSES.
</FN>
        

</TABLE>