SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the quarterly period ended September 30, 2000.

        [ ] Transition report pursuant to Section 13 or 15(d) of the Securities
              Exchange Act of 1934. For the transition period from
                            _________ to ___________

                             Commission File Number
                                     0-25133

                               PHARMANETICS, INC.
                (Exact Name of Registrant as Specified in its Charter)

        North Carolina                                   56-2098302
(State or other jurisdiction of             (IRS Employer Identification Number)
 Incorporation or organization)

       5301 Departure Drive
      Raleigh, North Carolina                              27616
Address of Principal Executive Office)                   (Zip Code)

        Registrant's Telephone Number, Including Area Code 919-954-9871

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 such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. YES [X] NO [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

          Class                            Outstanding as of November 3, 2000
Common Stock, no par value                               7,815,783



<PAGE>

                               PHARMANETICS, INC.

                               INDEX TO FORM 10-Q



PART I.      FINANCIAL INFORMATION                                         PAGE

             Item 1.  Financial Statements

             Consolidated Balance Sheets as of  September 30, 2000
             (unaudited) and December 31, 1999                               3

             Consolidated Statements of Operations for
             the Three Months and Nine Months ended September 30, 2000
             and 1999 (unaudited)                                            4

             Consolidated Statements of Cash Flows for the Nine
             Months ended September 30, 2000 and 1999 (unaudited)            5

             Notes to Unaudited Consolidated Financial Statements            6

             Item 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations                             8

PART II.     OTHER INFORMATION

             Item 6.  Exhibits and Reports on Form 8-K                      10

SIGNATURES                                                                  10


                                       2

<PAGE>

                                   PHARMANETICS, INC.

                           CONSOLIDATED BALANCE SHEETS
                         (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                                             SEPTEMBER 30,          DECEMBER 31,
                                                                                                2000                   1999
                                                                                             -------------         --------------
                                                                                              (UNAUDITED)
<S>                                                                                          <C>                    <C>
ASSETS
Current assets:
      Cash and cash equivalents                                                                 $3,883                 $3,661
      Short term investments, held-to-maturity                                                   8,303                  1,500
      Accounts receivable, net of allowance for doubtful accounts
        of $22 and $30, respectively                                                               720                    966
      Inventories                                                                                1,605                  1,329
      Other current assets                                                                         255                    191
                                                                                                -------               -------

            Total current assets                                                                14,766                  7,647

Property and equipment, net                                                                      3,768                  3,203
Intangible assets, net                                                                             531                    569
Other assets, net                                                                                  225                    228
                                                                                               -------                -------
           Total assets                                                                        $19,290                $11,647
                                                                                               =======                =======

LIABILITIES, REDEEMABLE PREFERRED STOCK AND COMMON SHAREHOLDERS' EQUITY
Current liabilities:
      Accounts payable                                                                           $464                    $210
      Accrued expenses                                                                            822                     172
      Current portion of long term debt and capital lease obligations                             871                     795
                                                                                                -------               -------

            Total current liabilities                                                           2,157                   1,177

Long term debt and capital lease obligations, less current portion                                217                     862

Commitments and contingencies

Series A convertible preferred stock, no par value; authorized 120,000 shares;
  98,500 and 0 shares issued and outstanding at September 30, 2000 and December
  31, 1999, respectively (aggregate liquidation value at September 30, 2000 of
  $9,850,000)                                                                                   8,201                     --

Common shareholders' equity:

Common stock, no par value; authorized 40,000,000 shares; 7,815,783 and
  7,480,919 issued and outstanding at September 30, 2000 and December 31, 1999,
  respectively                                                                                 43,667                  40,092
Accumulated deficit                                                                           (34,952)                (30,484)
                                                                                             --------                --------
           Total common shareholders' equity                                                    8,715                   9,608
                                                                                             --------                --------

           Total liabilities, redeemable preferred stock and common shareholders' equity      $19,290                 $11,647
                                                                                             ========                ========
</TABLE>


The accompanying notes are an integral part of the unaudited consolidated
financial statements.

                                       3

<PAGE>
                               PHARMANETICS, INC.

                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                        (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>

                                                               THREE MONTHS ENDED                    NINE MONTHS ENDED

                                                        SEPTEMBER 30,        SEPTEMBER 30,    SEPTEMBER 30,     SEPTEMBER 30,
                                                            2000                1999             2000               1999
                                                        -----------          -----------      -------------     -------------
<S>                                                     <C>                  <C>              <C>               <C>
Net sales                                                    $743                   $745           $3,609            $2,882
Cost of goods sold                                            788                    764            2,670             2,358
                                                        ----------           -----------      -----------       -----------

  Gross profit (loss)                                         (45)                   (19)             939               524
                                                        ----------           -----------      -----------       -----------
Operating expenses:
    General and administrative                                794                    635            2,400             1,992
    Sales and marketing                                       213                    181              776               545
    Research and development                                1,001                    664            2,628             2,008
                                                      -----------            -----------      -----------       -----------

            Total operating expenses                       (2,053)                 1,480            5,804             4,545
                                                      -----------            -----------      -----------        ----------

Operating loss                                             (1,658)                (1,499)          (4,865)           (4,021)
                                                      -----------            -----------       -----------       ----------

Other income (expense):
    Interest expense                                          (47)                   (75)            (161)             (244)
    Interest income                                           209                     75              532               191
    Grant/royalty income                                      -                       -                19                13
    Development income                                        142                    100              425               100
                                                      -----------            -----------       -----------        ---------

              Other income, net                               304                    100              815                60
                                                      -----------            -----------       -----------        ---------

Net and comprehensive loss from continuing
    operations                                             (1,749)                (1,399)           (4,050)          (3,961)

Discontinued operations:
     Income (loss) from operations of Coeur
       Laboratories, Inc. (net of income taxes)               -                      -                 -                 18
     Loss on disposal of Coeur Laboratories, Inc.
      (less income taxes of $14)                              -                      -                 -               (826)
                                                      -----------            -----------       -----------        ---------

Net and comprehensive loss                                ($1,749)               ($1,399)          ($4,050)         ($4,769)

Dividends on preferred stock                                 (168)                   -                (417)             -

Amortization of beneficial conversion feature of
  Series A convertible preferred stock                        -                      -                (976)             -
                                                      -----------             -----------       -----------     ------------

Net loss applicable to common shareholders                ($1,917)               ($1,399)          ($5,443)         ($4,769)
                                                      ===========             ===========       ===========     ============

Basic and diluted net loss per common share                ($0.25)                ($0.19)           ($0.72)          ($0.64)
                                                      ===========             ===========       ===========     ===========

Average weighted shares outstanding                     7,675,766               7,477,452         7,593,833       7,466,217
                                                      ===========             ===========       ===========     ===========

</TABLE>
The accompanying notes are an integral part of the unaudited consolidated
financial statements.

                                       4
<PAGE>



                               PHARMANETICS, INC.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                                            NINE MONTHS ENDED
                                                                                      September 30       September 30
                                                                                           2000              1999
                                                                                      -------------      ------------
<S>                                                                                   <C>                <C>

Cash flows from operating activities:
      Net loss                                                                          ($ 4,050)        ($ 4,769)
      Adjustments to reconcile net loss to net cash used in operating
           activities:
              Stock based compensation: general and administrative                           -                 51
              Gain on sale of assets                                                         -               (161)
              Depreciation                                                                   733              669
              Amortization of intangible and other assets                                    101              191
              Write off of goodwill                                                          -                809
              Amortization of discount on investment                                        (270)             (40)
              Provision for inventory obsolescence                                            74               50
              Provision for warranty reserve                                                   3               -
      Change in assets and liabilities:
           Accounts receivable                                                               247            1,278
           Inventories                                                                      (349)             150
           Other assets                                                                     (109)            (122)
           Accounts payable and accrued expenses                                             900              106
                                                                                        --------          -------

                 Net cash used in operating activities                                    (2,720)          (1,788)
                                                                                        --------          -------

Cash flows from investing activities:
        Payments for purchase of property and equipment                                   (1,299)            (190)
        Costs incurred to obtain patents and intangibles                                     (14)             (58)
        Proceeds from maturities of investments                                            4,000            3,750
        Purchases of investments                                                         (10,534)          (3,250)
        Proceeds from sale of segment                                                        -              1,661
                                                                                        --------          -------

                 Net cash provided by (used in) investing activities                      (7,847)           1,913
                                                                                        --------          -------

Cash flows from financing activities:
        Principal payments on long-term debt and capital lease
            obligations                                                                     (570)           (553)
        Proceeds from issuance of common stock and warrants                                  139              19
        Proceeds from Series A preferred stock and warrant offering, net of
          offering costs                                                                  11,220              -
                                                                                        --------        --------

                 Net cash provided by (used in) financing activities                      10,789            (534)
                                                                                        --------        --------

                 Net increase (decrease) in cash and cash equivalents                        222            (409)
Cash and cash equivalents at beginning of period                                           3,661           3,998
                                                                                        --------        --------

Cash and cash equivalents at end of period                                              $  3,883        $  3,589
                                                                                        ========        ========

Supplemental disclosure of noncash investing and financing activities:
  Preferred stock issuance costs                                                        $     62             -
  Preferred stock dividends                                                             $    417             -

</TABLE>



The accompanying notes are an integral part of the unaudited consolidated
financial statements.


                                       5
<PAGE>


                               PHARMANETICS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

Note 1.  Organization and Basis of Presentation

PharmaNetics, Inc. (the "Company") is a holding company incorporated in July
1998 as the parent company of Cardiovascular Diagnostics, Inc. ("CVDI"). CVDI
was incorporated in November 1985 and develops, manufactures and markets rapid
turnaround, point-of-care diagnostic tests to assess blood clot formation and
dissolution. CVDI develops tests based on its proprietary, dry chemistry
diagnostic test system, known as the Thrombolytic Assessment System ("TAS"), to
provide rapid and accurate evaluation of hemostasis at the point of patient
care. Until June 15, 1999 Coeur Laboratories ("Coeur"), which manufactures and
sells disposable power injection syringes, was a wholly-owned subsidiary of
CVDI. On that date, substantially all of the operating assets and liabilities of
Coeur were sold. The consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries, including Coeur through June 15,
1999. All intercompany activity has been eliminated. The consolidated financial
statements included herein as of any date other than December 31 have been
prepared by the Company without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Financial information as of December 31
has been derived from the audited financial statements of the Company, but does
not include all disclosures required by generally accepted accounting
principles. In the opinion of management, the accompanying unaudited
consolidated financial statements include all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the consolidated
financial position, results of operations and cash flows of the Company. For
further information regarding the Company's accounting policies, refer to the
Consolidated Financial Statements and related notes included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999. Results for the
interim period are not necessarily indicative of the results for any other
interim period or for the full fiscal year.

Note 2.  Cash Equivalents

The Company considers all highly liquid investments with an original maturity of
three months or less at the date of purchase to be cash equivalents.

Note 3.  Investments

Investments consist primarily of United States government agency obligations,
notes and commercial paper. The Company invests in high-credit quality
investments in accordance with its investment policy which minimizes the
possibility of loss. Investments with original maturities at date of purchase
beyond three months and which mature at or less than twelve months from the
balance sheet date are classified as current. Investments are considered to be
held-to-maturity and are accounted for in accordance with Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities."

Note 4.  Inventory

Inventories consisted of the following:

                       September 30, 2000              December 31, 1999
                       ------------------              -----------------

Raw materials               $1,506,000                       $1,101,000
Finished goods                  99,000                          228,000
                            ----------                       ----------

                            $1,605,000                       $1,329,000
                            ==========                       ==========


Note 5.  Loss Per Common Share

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share" ("EPS"), the Company is required to present both basic and
diluted EPS on the face of the Statement of Operations. Basic EPS excludes
dilution and is computed by dividing income (loss) applicable to common
shareholders by the weighted average number of common shares outstanding for the
period. Diluted EPS is the same as basic EPS for the Company's quarters and nine
months ended September 30, 2000 and 1999, because, for loss periods, potential
common shares (such as options) are not included in computing diluted EPS since
the effect would be antidilutive.


                                       6
<PAGE>

Note 6.  Distribution Agreement

In August 1998, the Company signed a five-year distribution agreement with
Chiron Diagnostics ("Chiron"), now a part of Bayer Diagnostics ("Bayer"). Bayer
will distribute the Company's PT, aPTT, HMT, and LHMT test cards in North
America and certain South American, European and Asian countries, subject to
minimum annual sales. At the time the distribution agreement was signed, the
Company received an equity investment of $6 million from Chiron.

Note 7.  Discontinued Operations.

On June 15, 1999 the Company sold substantially all of the operating assets and
liabilities of Coeur. The Company retained Coeur's cash, receivables and certain
other assets at the date of sale.

Note 8.  Private Placement

In February 2000, the Company completed a private placement of 120,000 shares of
Series A convertible preferred stock ("Series A"), resulting in net proceeds of
approximately $11,220,000, together with five-year warrants to acquire 240,000
shares of common stock at $10.00 per share. Approximately $1,275,000 of the net
proceeds was allocated to the warrants based on their relative fair value. The
Series A has a dividend of 6% payable quarterly in cash or in shares of common
stock at the option of the Company. As of September 30, 2000, the Series A
dividend had been paid in 26,749 shares of common stock.

Each share of the Series A is convertible into ten shares of common stock at
$10.00 per share. The Series A is convertible after May 28, 2000 at the option
of the holder or may be redeemed by the Company upon the occurrence of any of
the following events: (a) the common stock closes at or above $20.00 per share
for 20 consecutive trading days, (b) a completion by the Company of a follow-on
public offering of at least $10 million at a per share price of at least $15.00,
(c) the acquisition of the Company by another entity by means of a transaction
that results in the transfer of 50% or more of the outstanding voting power of
the Company, (d) a sale of all or substantially all of the Company's assets, or
(e) at any time after February 28, 2004.

The holders of the Series A have a liquidation preference of $100 per share plus
any accrued but unpaid dividends then held, such amounts subject to certain
adjustments. The holders also have the right to vote together with the common
stock on an as-converted basis.

On the date of issuance of the Series A, the effective conversion price of the
Series A was at a discount to the price of the common stock into which the
Series A is convertible. In accordance with EITF 98-5 "Convertible Securities
with Beneficial Conversion Features", this discount totaled approximately
$976,000 and was recorded as a preferred stock dividend and amortized over the
three-month period until conversion was possible. The discount has been fully
amortized prior to September 30, 2000.

Note 9.  Development Income

During the quarter ended March 31, 2000, the Company entered into a six-month
collaborative development agreement with Bayer Corporation. In connection with
the agreement, the Company received $425,000 earlier in the year for use in
development and received another $425,000 in the quarter ended September 30,
2000. In accordance with SEC Staff Accounting Bulletin No. 101, the Company will
recognize this amount as income over the period covered by the development
agreement. During the quarter ended September 30, 2000, the Company recognized
$142,000 in income related to this agreement.

Note 10.  Commitments and Contingencies

In March 2000, the Company received a letter from Polyten Plastics LLC
("Polyten"), the parent company of the purchaser of substantially all of the
assets of the Company's Coeur Laboratories subsidiary, tendering a claim for
indemnification against the Company for losses, if any, arising out of claims
filed by Medrad, Inc. against Liebel-Flarsheim Company, Coeur Laboratories, Inc.
and others. The Medrad complaint asserts several claims including federal
trademark dilution and patent infringement in connection with Coeur's
manufacture and sale to Liebel-Flarsheim and Liebel-Flarsheim's subsequent sale
of adapters and syringes for use with medical injection delivery systems
allegedly manufactured by Medrad. On October 12, 2000, Medrad and Coeur reached
a settlement agreement in which Coeur allowed the court to enter an injunction
against Coeur prohibiting it from making or reselling the adapter/syringe
assemblies or anything substantially similar to the assemblies. The Company
believes this restriction will have no material adverse impact on it, because,
following the sale of Coeur assets, the Company and Coeur have had, and continue
to have, no plans to engage in such activities or business. Medrad has waived
any and all potential claims for monetary damages and took a voluntary dismissal
with prejudice of its claims against Coeur.


                                       7
<PAGE>

Note 11.   New Accounting Pronouncements

In June 1998, the FASB issued SFAS 133, Accounting for Derivative Instruments
and Hedging Activities and in July 1999 issued SFAS 137 which deferred the
effective date of SFAS 133, as it pertains to the Company, for fiscal years
beginning after July 1, 2000. This statement is not expected to have a material
impact on the Company.

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 101, or SAB 101, Revenue Recognition in Financial
Statements, which provides guidance on the recognition, presentation and
disclosure of revenue in financial statements filed with the SEC. SAB 101
outlines the basic criteria that must be met to recognize revenue and provides
guidance for disclosures related to revenue recognition policies. It is
effective no later than the fourth fiscal quarter of fiscal years beginning
after December 15, 1999. The Company has evaluated SAB 101 related to its
current agreements and will evaluate the impact of SAB 101 as it enters into
future collaboration agreements.

In April 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44 (FIN 44) which clarifies the application of Accounting
Principles Board Opinion 25 for certain transactions. The interpretation
addresses many issues related to granting or modifying stock options including
changes in accounting for modifications of awards (increased life, reduction of
exercise price, etc.). It was effective July 1, 2000 but certain conclusions
cover specific events that occured after either December 15, 1998 or January 12,
2000. The effects of applying the interpretation are to be recognized on a
prospective basis from July 1, 2000. FIN 44 has not had a material impact on the
Company.


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

                                  INTRODUCTION

This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements. The Company's actual results
might differ materially from those projected in the forward-looking statements
due to any number of factors, including those set forth below under "Factors
That May Affect Future Results". Additional information concerning factors that
could cause actual results to materially differ from those in the
forward-looking statements is contained in the Company's other SEC filings,
copies of which are available upon request from the Company.

The following discussion should be read in connection with the unaudited
Consolidated Financial Statements and Notes thereto appearing elsewhere in this
report. Unless the context indicates otherwise, all references to the Company
include PharmaNetics, Inc., its subsidiary Cardiovascular Diagnostics, Inc.
("CVDI") and Coeur Laboratories, Inc.("Coeur"), a wholly-owned subsidiary of
CVDI until June 15, 1999.

CVDI develops, markets and manufactures a Thrombolytic Assessment System
("TAS"), consisting of a compact, portable analyzer and disposable test cards
which are inserted into the analyzer to perform a variety of hemostasis tests.
In 1996, CVDI signed development and distribution agreements with Dade
International, Inc. ("Dade") and Avecor Cardiovascular to distribute its
products. In August 1998, CVDI signed a global distribution agreement with
Chiron Diagnostics, which is now a part of the diagnostics division of the Bayer
Corporation ("Bayer"), to distribute CVDI's PT, aPTT, HMT, and LHMT test cards
in North America and certain South American, European and Asian countries. At
that time, the Company received an equity investment of $6 million from Chiron.
This distribution agreement has replaced the distribution agreements, including
the Dade agreement, which existed prior to such date.

Given the consolidating hospital market and pricing pressures, the Company's
strategy has evolved towards becoming more focused on the development of
specialty tests for drugs, some with narrow ranges between over- and
under-dosage. The Company believes that rapid diagnostic capabilities improve
patient care and turnover, and that there is a market trend to obtain diagnostic
information faster in order to effect therapy sooner. The Company also believes
that these trends should allow the Company to obtain higher pricing for these
specialty tests. As a result, the Company has exhibited the flexibility of the
TAS platform and the potential to expand its menu of specialty tests by signing
collaboration agreements with pharmaceutical companies to monitor the effects of
new drugs that are in clinical trials. The Company believes that these and other
collaborations for specialty tests will also further demand for analyzers and
routine anticoagulant tests. The Company believes it is well positioned in its
development efforts to expand its menu of tests to monitor developmental drugs
where rapid therapeutic intervention is needed.

On June 15, 1999, the Company sold substantially all of the operating assets and
liabilities of its Coeur Laboratories, Inc. subsidiary. All prior period
financial information has been restated to present the results of operations of
Coeur as a discontinued segment.


                                       8

<PAGE>

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2000 VS SEPTEMBER 30, 1999

Net sales for the quarter ended September 30, 2000 were $743,000 compared to
$745,000 in the same period in 1999. Revenues from the sale of routine test
cards to Bayer increased slightly while sales of analyzers decreased slightly.
Reflecting the essentially unchanged revenues, cost of goods sold for the
quarter ended September 30, 2000 was $788,000 compared to $764,000 in the same
period in 1999. The resulting negative gross profit for the 2000 and 1999
periods was mainly due to fixed manufacturing costs not covered by low unit
volumes of routine test cards and analyzers sold during the quarters.

Total operating expenses for the quarter ended September 30, 2000 were
$2,008,000 compared to $1,480,000 in the third quarter of 1999. General and
administrative expenses were higher in the third quarter of 2000 compared to the
same period in 1999 due to increased personnel costs and increased legal and
professional fees. Sales and marketing expenses increased slightly from 1999
primarily due to higher personnel costs. Research and development expenses
increased due to higher headcount and budgeted increases in payroll costs and
also higher expenditures for clinical trials and studies compared to the third
quarter of 1999.

Other income (expense) for the quarter ended September 30, 2000, which is
composed of interest income, interest expense, royalty income and development
income, was income of $304,000 compared to income of $100,000 in the quarter
ended September 30, 1999. Interest income increased significantly due to higher
cash and investment balances during the quarter as a result of the Series A
preferred stock offering that occurred in February 2000, and development income
from collaborative contracts was slightly higher.

NINE MONTHS ENDED SEPTEMBER 30, 2000 VS SEPTEMBER 30, 1999

Net sales for the nine months ended September 30, 2000 were $3,609,000, an
increase of 25% compared to the same period in 1999. The increase was due to an
approximately 250,000 unit increase in the sales volume of routine test cards
and an increase in analyzers of 227 in 2000 compared to 1999. Cost of goods sold
for the nine months ended September 30, 2000 was $2,670,000 compared to
$2,358,000 for the same period in 1999, primarily due to the increased sales
volume. The gross profit percentage increased compared to the prior year
primarily due to the increased sales volume during 2000.

Total operating expenses for the nine months ended September 30, 2000 were
$5,804,000 compared to $4,545,000 for the same period in 1999. This increase is
primarily the result of budgeted payroll increases, increased headcount in
several departments including administration and research and development,
increased facility and maintenance costs, increased marketing studies earlier in
the year and higher clinical costs during 2000 compared to 1999.

Other income (expense) for the nine months ended September 30, 2000 increased by
$755,000 over the prior year due to increased interest income recognized as the
result of higher cash and investment balances resulting from the issuance of
Series A convertible preferred stock in February 2000 and higher development
income recognized related to the collaboration agreements compared to 1999.

LIQUIDITY AND CAPITAL RESOURCES

In February 2000, the Company completed a private placement of 120,000 shares of
Series A convertible preferred stock, resulting in net proceeds of approximately
$11,220,000, together with five-year warrants to acquire 240,000 shares of
common stock at $10 per share. The preferred stock has a dividend of 6% payable
quarterly in cash or in shares of common stock at the option of the Company. The
Company plans to use the proceeds to fund its operations and to fund continued
development of new specialty test cards.

At September 30, 2000, the Company had cash and cash equivalents and investments
of $12.2 million and working capital of $12.6 million, as compared to $5.2
million and $6.5 million, respectively, at December 31, 1999. During the nine
months ended September 30, 2000, the Company used cash in operating activities
of $2,720,000. The use of cash was primarily due to funding the net operating
loss of the Company. The Company's Series A preferred stock offering accounted
for the majority of the net cash provided by financing activities during the
nine months ended September 30, 2000, and this cash was mainly used to purchase
cash equivalents and short-term investments and finance capital expenditures.

The Company has signed a new lease agreement with respect to its executive
offices and manufacturing facility. The Company plans to move into this new
facility in stages during early 2001.

The Company expects to incur additional operating losses during the remainder of
2000 and into 2001. The Company's working capital requirements will depend on
many factors, primarily the volume of future orders of TAS products from the
Company's distributors, primarily Bayer Diagnostics. In addition, the Company
expects to incur costs associated with clinical trials for


                                       9
<PAGE>
development of new test cards. The Company may acquire other products,
technologies or businesses that complement the Company's existing and planned
products, although the Company currently has no understanding, commitment or
agreement with respect to any such acquisitions. Management believes that its
existing capital resources and cash flows from operations, including that from
its distribution agreement with Bayer Diagnostics, will be adequate to satisfy
its planned capital requirements through 2000. The Company plans to consider
external sources of financing as needed. In addition to debt financing such as a
working capital line of credit, the Company may consider equity financing such
as another private placement, a follow-on public offering of common stock or
additional equity infusions from collaborative partners.

FACTORS THAT MAY AFFECT FUTURE RESULTS

A number of uncertainties exist that may affect the Company's future operating
results and stock price, including: risks associated with development of new
tests, particularly specialty tests that rely on development, regulatory
approval, commercialization and market acceptance of collaborators' new drugs;
market acceptance of TAS; the Company's continuing losses and the resulting
potential need for additional capital in the future; managed care and continuing
market consolidation, which may result in price pressure, particularly on
routine tests; and FDA regulations and other regulatory guidelines affecting the
Company and/or its collaborators. The market price of the common stock could be
subject to significant fluctuations in response to variations in the Company's
quarterly operating results as well as other factors which may be unrelated to
the Company's performance. The stock market in recent years has experienced
extreme price and volume fluctuations that often have been unrelated or
disproportionate to the operating performance of and announcements concerning
public companies. Such broad fluctuations may adversely affect the market price
of the Company's common stock. Securities of issuers having relatively limited
capitalization or securities recently issued in an initial public offering are
particularly susceptible to volatility based on short-term trading strategies of
certain investors.

PART II.   OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a)    Exhibits

       27.1 Financial Data Schedule

(b)    Reports on Form 8-k

       None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                              PHARMANETICS, INC.

Date:  November 13, 2000                      By:  /s/ James McGowan
                                              -----------------------------
                                              James McGowan
                                              Chief Financial Officer
                                              (Principal Financial Officer)


                                              By:  /s/ Paul Storey
                                              -----------------------------
                                              Paul Storey
                                              Director of Finance
                                              (Principal Accounting Officer)

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