Exhibit 10.39

                  FIRST AMENDMENT TO PATENT SECURITY AGREEMENT

     THIS FIRST  AMENDMENT TO PATENT  SECURITY  AGREEMENT (the  "Amendment")  is
entered  into  as of  this  29th  day  of  May,  2001  by  and  between  UNIGENE
LABORATORIES,  INC.,  a  Delaware  corporation,  having its  principal  place of
business at 110 Little Falls Road, Fairfield,  New Jersey 07004 (the "Company"),
and Jay Levy, a resident of New Jersey (the "Secured Party").

                                   WITNESSETH:

     WHEREAS,  the  Company and the  Secured  Party are parties to that  certain
Patent Security Agreement dated as of March 13, 2001 (the "Agreement")  pursuant
to which the  Company  has  granted  the  Secured  Party a security  interest in
certain of its patents and patent  applications to secure payment by the Company
of the Obligations (as defined in the Agreement); and

     WHEREAS,  the  Secured  Party  has  agreed  to loan  the  Company  $300,000
contemporaneously with execution and delivery hereof (the "Current Loan"); and

     WHEREAS,  in order to more fully secure the payment of the Current Loan and
the other Obligations, the Company and the Secured Party desire to add a certain
patent  application  to the Collateral (as defined in the Agreement) by amending
the Agreement on the terms set forth herein.

     NOW, THEREFORE,  in consideration of the premises, the mutual promises made
herein  and  for  other  good  and  valuable  consideration,   the  receipt  and
sufficiency  of  which is  hereby  acknowledged,  the  parties  hereto  agree as
follows:

1.  Amendment.  The Agreement is hereby  amended by deleting  Exhibit A attached
thereto in its entirety and  substituting  therefore  Exhibit A attached to this
Amendment.

2. No Other Changes.  Except as expressly  amended hereby,  all of the terms and
conditions of the Agreement remain in full force and effect.

3.  Applicable  Law. This  Amendment  shall be construed in accordance  with and
governed  by the laws of the  State  of New  Jersey  without  giving  effect  to
conflicts of laws principles.

4.  Counterparts.  This  Amendment may be executed in two or more  counterparts,
each of which shall constitute an original and all of which shall constitute the
same instrument.



     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Amendment to be
executed on the day and year first above written.




                                    UNIGENE LABORATORIES, INC.


                                    By: /s/ Ronald S. Levy
                                        ---------------------------------------
                                        Name:  Ronald S. Levy
                                        Title: Executive Vice President


                                        /s/ Jay Levy
                                        ---------------------------------------
                                        JAY LEVY






                                   EXHIBIT A

                           UNIGENE U.S. Patent Rights
                           --------------------------




Patent #          Title                                               Date of Patent
--------          -----                                               --------------
                                                                
US 4,689,220      Immunization by Immunogenic Implant                 Aug. 25, 1987

US 4,708,934      Alpha-Amidation Enzyme                              Nov. 24, 1987

US 5,789,234      Expression Systems for Amidating Enzyme             Aug. 04, 1998

US 5,912,014      Oral Salmon Calcitonin Pharmaceutical Products      June 15, 1999

US 6,086,918      Oral Peptide Pharmaceutical Products                July 11, 2000

US 6,103,495      Direct Expression of Peptides into Culture Media    Aug. 15, 2000
                      (Divisional 1)

US 6,210,925      Direct Expression of Peptides into Culture Media    April 3, 2001
                      (Divisional 2)

Application                                                           Filing Date:
#09/776,537       Nasal Calcitonin Formulations                       February 2, 2000

Application
#09/780870        Direct Expression of Peptides into Culture Media    Filing Date:
                                 (Divisional 3)                       February 9, 2001

Application
#09/780643        Direct Expression of Peptides into Culture Media    Filing Date:
                                 (Divisional 4)                       February 9, 2001

Application
#60/250055        Oral Peptide Pharmaceutical Products                Filing Date:
                                 (Provisional)                        November 30, 2000