U.S. Securities and Exchange Commission
                             Washington, D.C. 20549


                                   Form 10-QSB



[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

     For the quarterly period ended March 31, 2000

     Commission file number 0-27937


                           DRAGON PHARMACEUTICAL INC.
        (Exact name of small business issuer as specified in its charter)


            Florida                                    65-0142474
(State or other jurisdiction of              (IRS Employer Identification No.)
 incorporation or organization)

                        543 Granville Street, Suite 1200
                           Vancouver, British Columbia
                                 Canada V6C 1X8
                    (Address of principal executive offices)

                                 (604) 669-8817
                           (Issuer's telephone number)


                  (Former address if changed since last report)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes X No

Number of shares of common stock outstanding as of March 31, 2000:  15,160,000

<PAGE>2

Part I.   Financial Information
Item 1.   Financial Statements



DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Consolidated Balance Sheet
March 31, 2000
(Unaudited)
(Expressed in US Dollars)
-------------------------------------------------------------------------------
                                                        March 31   December 31
                                                          2000         1999
                                                     ------------  ------------
ASSETS

Current
  Cash and cash equivalents                          $  8,158,194  $    617,262
  Term deposit                                          1,513,800             -
  Accounts receivable                                     654,855       640,743
  Inventories                                             745,945       657,966
  Subscriptions receivable                                      -     9,320,000
  Prepaid and deposits                                    886,476       458,940
                                                     ------------  ------------
Total current assets                                   11,959,270    11,694,911

Fixed assets                                            2,583,411     2,642,313

Licence and permit                                      4,110,991     2,402,813
                                                     ------------  ------------
Total assets                                           18,653,672  $ 16,740,037
                                                     ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Current
  Bank loans                                            1,550,763  $    616,523
  Accounts payable and accrued liabilities              1,664,525     2,535,681
  Accounts payable - related parties                       13,638       112,919
  Management fees payable - related parties                 6,000        24,000
                                                     ------------  ------------
Total current liabilities                               3,234,926     3,289,123
                                                     ------------  ------------
Minority interests                                      1,384,969       962,146
                                                     ------------  ------------

Commitments and contingencies (Note 12)

Stockholders' Equity

Share capital
  Authorized:  50,000,000 common shares at
    par value of $0.001 each
  Issued and outstanding:  15,160,000 common shares        15,410        10,735

Additional paid in capital                             17,545,177    15,690,734

Accumulated other comprehensive income                    (29,280)       50,049

Accumulated deficit                                    (3,497,530)   (3,262,750)
                                                     ------------  ------------
Total stockholders' equity                             14,033,777    12,488,768
                                                     ------------  ------------
Total liabilities and stockholders' equity           $ 18,653,672  $ 16,740,037
                                                     ============  ============

The accompanying notes are an integral part of these financial statements.

<PAGE>3


DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Consolidated Statement of Stockholders' Equity
Three-month Period Ended March 31, 2000
(Unaudited)
(Expressed in US Dollars)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                                             Accumulated
                                                                                                               other         Total
                                          Common stock         Additional       Compre-                       compre-        Stock-
                                       ------------------       paid-in         hensive          Deficit      hensive       holders'
                                       Shares      Amount       capital       income (loss)    accumulated     income        equity
-----------------------------------------------------------------------------------------------------------------------------------

<S>                                <C>         <C>         <C>               <C>           <C>            <C>         <C>
Balance, December 31, 1999          10,735,000  $  10,735   $ 15,690,734                    $ (3,262,750)  $  50,049   $ 12,488,768

Issued 4,258,000 common shares       4,258,000      4,258         (4,258)                              -           -              -

Share issuance costs                                     -         (5,247)                             -           -         (5,247)

Exercise stock options for cash        107,000        107         53,393                               -           -         53,500

Exercise warrants for cash              60,000         60         59,940                               -           -         60,000

Allotted 250,000 common shares at
 $6.25 per share                             -        250      1,562,250                               -           -      1,562,500

Stock option compensation                    -          -        188,365                               -           -        188,365

Other comprehensive income
 - foreign currency translation              -          -              -      (79,329)                 -     (79,329)       (79,329)

Comprehensive income
 - net (loss) for the period                 -          -              -     (234,780)          (234,780)          -       (234,780)
-----------------------------------------------------------------------------------------------------------------------------------
Comprehensive income (loss)                                                $ (314,109)
                                                                           ==========
Balance, March 31, 2000             15,160,000  $  15,410   $ 17,545,177                    $ (3,497,530)  $ (29,280)  $ 14,033,777
========================================================================                    =======================================

</TABLE>


The accompanying notes are an integral part of these financial statements.


<PAGE>4


DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Consolidated Statement of Operations
Three-month Period Ended March 31, 2000
(Unaudited)
(Expressed in US Dollars)
-----------------------------------------------------------------------
                                                             January 1
                                                              2000 to
                                                              March 31
                                                                2000
                                                           ------------

Sales                                                      $    661,785

Cost of sales                                                    98,865
                                                           ------------

Gross profit                                                    562,920

Interest income                                                  24,052

Selling expenses                                               (316,884)

Administrative expenses
 - stock-based compensation                                    (188,365)
 - other administrative expenses                               (305,592)
                                                           ------------
Loss before minority interest                                  (223,869)

Minority interest                                               (10,911)
                                                           ------------
Net (loss) for the period                                  $   (234,780)
                                                           ============
(Loss) per share
      Basic and diluted                                    $      (0.02)
                                                           ============
Weighted average common shares outstanding
      Basic and diluted                                      11,807,933
                                                           ============


Comparative figures for the corresponding period in 1999 are not available.  The
Company had nominal operations for the first six months of its fiscal year ended
December 31, 1999.

The accompanying notes are an integral part of these financial statements.


<PAGE>5


DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Consolidated Statement of Cash Flows
Three-month Period Ended March 31, 2000
(Unaudited)
(Expressed in US Dollars)
-------------------------------------------------------------------------------
                                                                   January 1
                                                                    2000 to
                                                                    March 31
                                                                      2000
                                                                  -------------

Cash flows from (used in) operating activities
   Net (loss) for the period                                      $    (234,780)
   Adjustments to reconcile net loss to
     net cash used in operating activities:
     - stock-based compensation expense                                 188,365
     - depreciation of fixed assets and amortization of
          licence and permit                                            122,469
     - minority interests                                                10,911
                                                                  -------------
                                                                         86,965
   Changes in assets and liabilities:
     - accounts receivable                                              (14,112)
     - inventories                                                      (87,979)
     - prepaid expenses and deposits                                   (427,536)
     - accounts payable and accrued liabilities                        (460,287)
                                                                  -------------
                                                                       (902,949)
                                                                  -------------
Cash flows used in investing activities
  Purchase of fixed assets                                              (38,360)
  Purchase of term deposits                                          (1,513,800)
  Purchase of licence                                                  (250,000)
                                                                  -------------
                                                                     (1,802,160)
                                                                  -------------
Cash flows from financing activities
  Loan proceeds                                                         934,240
  Proceeds from shares subscribed and allotted
    in prior period, net of issuance costs                            8,900,103
  Funds contributed by non-controlling interest                         403,380
                                                                  -------------
                                                                     10,237,723
                                                                  -------------
Foreign exchange loss on cash held
  in foreign currency                                                     8,318
                                                                  -------------
Increase in cash and cash equivalents                                 7,540,932

Cash and cash equivalents, beginning of period                          617,262
                                                                  -------------
Cash and cash equivalents, end of period                          $   8,158,194
                                                                  =============

Comparative figures for the corresponding period in 1999 are not available.  The
Company had nominal operations for the first six months of its fiscal year ended
December 31, 1999.

The accompanying notes are an integral part of these financial statements.


<PAGE>6


DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)



1.   Nature of Business

     The Company was formed on August 22, 1989 as First Geneva  Investments Inc.
     under the laws of the State of  Florida.  The  Company  changed its name to
     Dragon  Pharmaceuticals  Inc.  on  August  31,  1998.  Pursuant  to a share
     exchange  agreement,  dated July 29, 1998, the Company acquired 100% of the
     issued and outstanding shares of Allwin Newtech Ltd.  ("Allwin") by issuing
     7,000,000  common shares of the Company.  This transaction is accounted for
     as a reverse  acquisition  (see Note 4).  During  1998,  the  Company was a
     development stage enterprise.

     Allwin  was  incorporated  under  the laws of  British  Virgin  Islands  on
     February  10,  1998.  Pursuant  to  a  Sino-Foreign   Co-operative  Company
     contract,  dated April 18, 1998, Allwin and a Chinese  corporation formed a
     limited  liability  company  under the Chinese law,  named as Sanhe Kailong
     Bio-pharmaceutical Co., Ltd. ("Kailong"), located in Hebei Province, China.
     Allwin has a 75%  interest  in Kailong.  Pursuant  to another  Sino-foreign
     Co-operative  Company  Contract,  dated July 27, 1999, Allwin completed the
     acquisition of a 75% interest in Nanjing Huaxin Bio-pharmaceutical Co. Ltd.
     ("Huaxin").  Kailong  and  Huaxin  are  in the  business  of  research  and
     development, production and sales of pharmaceutical products in China.

2.   Significant Accounting Policies

     (a)  Basis of Consolidation

          These  consolidated  financial  statements include the accounts of the
          Company  and  its  subsidiaries,   Allwin,  Kailong  and  Huaxin.  All
          inter-company transactions and balances have been eliminated.

     (b)  Principles of Accounting

          These  financial  statements  are stated in US  Dollars  and have been
          prepared in accordance with accounting  principles  generally accepted
          in the United States.

<PAGE>7

DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)



     (c)  Fixed Assets

          Depreciation is based on the estimated  useful lives of the assets and
          is computed using the straight-line  method. Fixed assets are recorded
          at cost. Depreciation is provided over the following useful lives:


           Motor vehicle                              10 years
           Land lease                                 Term of lease (50 years)
           Office equipment and furniture             5 years
           Land improvements                          10 years
           Leasehold improvements                     Term of lease (10 years)
           Production equipment                       10 years

     (d)  Foreign Currency Transactions

          The  parent  company,   Allwin,  Kailong  and  Huaxin  maintain  their
          accounting records in their functional currencies (i.e., U.S. dollars,
          U.S. dollars,  Renminbi Yuan, and Renminbi Yuan,  respectively).  They
          translate foreign currency transactions into their functional currency
          in the following manner.

          At the transaction date, each asset, liability, revenue and expense is
          translated  into the  functional  currency by the use of the  exchange
          rate in effect at that date.  At the period end,  monetary  assets and
          liabilities are translated  into the functional  currency by using the
          exchange rate in effect at that date. The resulting  foreign  exchange
          gains and losses are included in operations.

     (e)  Foreign Currency Translations

          Assets and liabilities of the foreign  subsidiaries  (whose functional
          currency  is  Renminbi  Yuan)  are  translated  into U.S.  dollars  at
          exchange  rates in effect  at the  balance  sheet  date.  Revenue  and
          expenses are translated at average exchange rate. Gain and losses from
          such translations are included in stockholders' equity, as a component
          of other comprehensive income.

     (f)  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


<PAGE>8


DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)


          and expenses during the reporting period.  Actual results could differ
          from those estimates.

     (g)  Income Taxes

          The Company has adopted  Statement of Financial  Accounting  Standards
          ("SFAS") No. 109,  "Accounting  for Income Taxes",  which requires the
          Company  to  recognize  deferred  tax  liabilities  and assets for the
          expected  future tax  consequences of events that have been recognized
          in the  Company's  financial  statements  or  tax  returns  using  the
          liability  method.  Under this method,  deferred tax  liabilities  and
          assets are determined based on the temporary  differences  between the
          financial  statements  and tax bases of assets and  liabilities  using
          enacted tax rates in effect in the years in which the  differences are
          expected to reverse.

     (h)  Comprehensive Income

          In 1998, the Company  adopted SFAS No. 130,  "Reporting  Comprehensive
          Income",  which  establishes  standards  for  reporting and display of
          comprehensive  income,  its components and accumulated  balances.  The
          Company  is   disclosing   this   information   on  its  Statement  of
          Stockholders'  Equity.  Comprehensive  income  comprises equity except
          those  resulting  from  investments  by owners  and  distributions  to
          owners. SFAS No. 130 did not change the current accounting  treatments
          for components of comprehensive income.

     (i)  Financial Instruments and Concentration of Risks

          Fair value of financial  instruments  are made at a specific  point in
          time,  based on  relevant  information  about  financial  markets  and
          specific financial  instruments.  As these estimates are subjective in
          nature,  involving uncertainties and matters of significant judgement,
          they cannot be determined with  precision.  Changes in assumptions can
          significantly affect estimated fair values.

          The carrying value of cash and cash equivalents,  accounts receivable,
          short-term loans, accounts payable and accrued liabilities approximate
          their  fair  value  because  of  the  short-term   maturity  of  these
          instruments.

          The Company is operating in China,  which may give rise to significant
          foreign currency risks from  fluctuations and the degree of volatility
          of  foreign  exchange  rates  between  U.S.  dollars  and the  Chinese
          currency  RMB.  Financial  instruments  that  potentially  subject the
          Company to  concentration  of credit risk consist  principally of cash
          and trade receivables, the balances of which are stated on the balance
          sheet.  The Company places its cash in high credit  quality  financial

<PAGE>9

DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)


          institutions.  Concentration  of  credit  risk with  respect  to trade
          receivables are limited due to the Company's'  large number of diverse
          customers  in  different  locations  in China.  The  Company  does not
          require collateral or other security to support financial  instruments
          subject to credit risk.

     (j)  Licence and Permit

          Licence  and  permit,  in  relation  to the  production  and  sales of
          pharmaceutical  products in China,  is  amortized  on a  straight-line
          basis over ten years.

          The carrying  value of licence and permit is reviewed by management at
          least annually and impairment  losses, if any, are recognized when the
          expected  non-discounted  future operating cash flows derived from the
          related product  licence  acquired are less than the carrying value of
          such licence and permit.  In the event of an impairment in the licence
          and permit,  the discounted cash flows method is used to arrive at the
          estimated fair value of such licence and permit.

     (k)  Cash and Cash Equivalents

          Cash  equivalents  usually  consist of high  liquid  investments  with
          maturities of three months or less. As at December 31, 1999,  cash and
          cash equivalents consist of cash only.

     (l)  Inventories

          Inventories are stated at the lower of cost and replacement  cost with
          respect  to raw  materials  and the  lower of cost and net  realizable
          value with respect to finished goods.  Cost includes direct  material,
          direct labour and  overheads.  Cost is calculated  using the first-in,
          first-out  method.  Net realizable  value  represents the  anticipated
          selling price less further costs for completion and distribution.

     (m)  Revenue Recognition

          Sales revenue is recognized upon the delivery of goods to customers.

     (n)  Stock-based Compensation

          The Company  adopted the  disclosure-only  provisions  of Statement of
          Financial  Accounting  Standards No. 123 (SFAS 123),  "Accounting  for
          Stock-based Compensation".  SFAS 123 encourages, but does not require,
          companies to adopt a fair value based method for  determining  expense
          related to stock-based compensation.  The Company continues to account

<PAGE>10

DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)


          for stock-based  compensation  issued to employees and directors using
          the intrinsic value method as prescribed under  Accounting  Principles
          Board Opinion (APB) No. 25, "Accounting for Stock Issued to Employees"
          and related Interpretations.

     (o)  Loss Per Share

          Loss per share is computed using the weighted average number of shares
          outstanding  during the  period.  The  Company  adopted  SFAS No. 128,
          "Earnings  per  share".  Diluted  loss per share is equal to the basic
          loss  per  share  because  common  stock  equivalents   consisting  of
          6,738,000  warrants and 1,549,900  stock options  outstanding at March
          31, 2000 are anti-dilutive, however, they may be dilutive in future.

     (p)  New Accounting Pronouncements

          (i)  The  Financial  Accounting  Standards  Board  ("FASB") has issued
               Interpretation  No. 44 in March  2000,  which  addresses  certain
               practice issues  regarding  Accounting  Principles  Board ("APB")
               Opinion No. 25,  Accounting  for Stock Issued to  Employees.  The
               effective date of the interpretation is July 1, 2000.

               If the terms of an option  (originally  accounted  for as a fixed
               option) are  modified  during the option term to directly  change
               the exercise  price,  the modified option should be accounted for
               as a variable option. Variable grant accounting should be applied
               to the modified  option from the date of the  modification  until
               the date of  exercise.  Consequently,  the final  measurement  of
               compensation  expense  would occur at the date of  exercise.  The
               cancellation of an option and the issuance of a new option with a
               lower exercise price shortly thereafter (e.g., within six months)
               to the be same  individual  should be  considered  in substance a
               modified (variable) option.

               The Company has no such  modified  option and,  accordingly,  the
               pronouncement  would have nil effect on the  Company's  financial
               statements.

          (ii) In June 1998,  the Financial  Accounting  Standards  Board issued
               SFAS No. 133, "Accounting for Derivative  Instruments and Hedging
               Activities".  SFAS No. 133 requires  companies  to recognize  all
               derivatives  contracts  as either  assets or  liabilities  in the
               balance  sheet and to  measure  them at fair  value.  If  certain
               conditions are met, a derivative may be  specifically  designated
               as a hedge, the objective of which is to match the timing of gain
               or  loss   recognition  on  the  hedging   derivative   with  the
               recognition  of (i) the  changes  in the fair value of the hedged
               asset or liability  that are  attributable  to the hedged risk or
               (ii) the earnings  effect of the hedged  forecasted  transaction.

<PAGE>11

DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)


               For a derivative not designated as a hedging instrument, the gain
               or loss is recognized in income in the period of change. SFAS No.
               133  is  effective  for  all  fiscal  quarters  of  fiscal  years
               beginning after June 15, 2000.

               Historically,  the  Company  has  not  entered  into  derivatives
               contracts  either  to hedge  existing  risks  or for  speculative
               purposes.  Accordingly,  the Company does not expect  adoption of
               the new  standards  on  July 1,  2000  to  affect  its  financial
               statements.

3.   Acquisition of Allwin Newtech Ltd.

     Pursuant to a share  exchange  agreement,  dated July 29, 1998, the Company
     issued  7,000,000  shares in  exchange  for all the issued and  outstanding
     shares of Allwin.  The transaction  resulted in the former  shareholders of
     Allwin  owning the  majority  of the issued and  outstanding  shares of the
     Company.  Accounting principles applicable to reverse acquisition have been
     applied to record this transaction.  Under this basis of accounting, Allwin
     has been  identified as the acquirer  and,  accordingly,  the  consolidated
     entity  is  considered  to  be  a  continuation  of  Allwin  with  the  net
     liabilities of the Company deemed to have been assumed by Allwin for a fair
     market value of $1,636.

     The net  liabilities  of the Company  acquired by Allwin are  summarized as
     follows:

          Current liabilities                        $1,636
                                                     ======

4.   Acquisition of Nanjing Huaxin Bio-pharmaceutical Co. Ltd. ("Huaxin")

     Huaxin, a Chinese  company,  which the Company owns 75%, was formed in 1999
     to acquire  the  following  assets and  liabilities  from  another  Chinese
     company  engaged  in  the  development,  production  and  sale  of  certain
     pharmaceutical  products in China. The Company paid  US$3,000,000  cash for
     its 75%  interest.  The  allocation  of the  acquisition  costs,  based  on
     appraised values, are as follows:

        Cash and cash equivalents     RMB       750,000          US$    90,909
        Inventories                           2,808,382                340,410
        Fixed assets                         12,397,202              1,502,691
        Licence and permit                   20,602,798              2,497,309
        Accounts payable                     (3,558,382)              (431,319)
        ----------------------------------------------------------------------
        Net asset                     RMB    33,000,000          US$ 4,000,000
        ======================================================================
        75% thereof                   RMB    24,750,000          US$ 3,000,000
        ======================================================================

<PAGE>12

DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)


5.   Fixed Assets

                                                     March 31, 2000
                                       ----------------------------------------
                                                      Accumulated     Net book
                                           Cost       depreciation      value
     --------------------------------------------------------------------------

     Motor vehicle                     $    54,334     $   4,790    $    49,544
     Land lease                            908,650        33,317        875,333
     Office equipment and furniture        119,007        32,303         86,704
     Land improvements                      14,838         3,339         11,499
     Leasehold improvements                725,969        51,241        674,728
     Production equipment                1,107,360       221,757        885,603
     --------------------------------------------------------------------------
                                       $ 2,930,158     $ 346,747    $ 2,583,411
     ==========================================================================

                                                     December 31, 1999
                                       ----------------------------------------
                                                      Accumulated     Net book
                                           Cost       depreciation      value
     --------------------------------------------------------------------------

     Motor vehicle                     $    41,039     $   2,655    $    38,384
     Land lease                            924,784        29,285        895,499
     Office equipment and furniture        114,182        24,292         89,890
     Land improvements                      14,755         3,020         11,735
     Leasehold improvements                729,791        33,915        695,876
     Production equipment                1,109,181       198,252        910,929
     --------------------------------------------------------------------------
                                       $ 2,933,732     $ 291,419    $ 2,642,313

      The  government  of China  granted a land lease to Kailong for a period of
      fifty (50) years,  starting June 8, 1998.  All fixed assets are located in
      China.

      Depreciation expense was $122,469 for the period ended March 31, 2000.

<PAGE>13

DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)


6.   Bank Loans

     RMB 3,000,000, bearing interest at 5.85% per annum
     and due on August 4, 2000                                      $   363,460

     RMB 2,000,000, bearing interest at 5.85% per annum
     and due on September 21, 2000                                      242,307

     RMB 7,800,000, bearing interest at 5.85% per annum
     and due on January 21, 2001.  The loan is secured by
     US$1,500,000 term deposit.                                         944,996
     --------------------------------------------------------------------------
     Total                                                          $ 1,550,763
     ==========================================================================

     The weighted average interest rate at March 31, 2000 was 5.85%.

7.   Income Taxes

     (a)  Kailong and Huaxin are subject to income taxes in China on its taxable
          income  as  reported  in  its  statutory  accounts  at a tax  rate  in
          accordance   with  the  relevant   income  tax  laws   applicable   to
          Sino-foreign equity joint venture  enterprises.  However,  pursuant to
          the same  income tax laws,  Kailong  and Huaxin are fully  exempt from
          income tax for five years starting from their first profit-making year
          followed by a 15% corporation tax rate for the next three years.

          Allwin is not subject to income taxes.

          As at March 31,  2000,  the parent  company,  Kailong  and Huaxin have
          estimated   losses,   for  tax   purposes,   totalling   approximately
          $1,153,000,  which  may be  applied  against  future  taxable  income.
          Accordingly,  there is no tax  expense  charged  to the  Statement  of
          Operations  for the period  ended  March 31,  2000 The  potential  tax
          benefits  arising  from these  losses  have not been  recorded  in the
          financial  statements.  The Company evaluates its valuation  allowance
          requirements on an annual basis based on projected future  operations.
          When  circumstances  change and this  causes a change in  management's
          judgement about the  realizability of deferred tax assets,  the impact
          of the change on the  valuation  allowance is  generally  reflected in
          current income.

<PAGE>14

DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)


     (b)  The  tax  effect  of  temporary  differences  that  give  rise  to the
          Company's deferred tax asset (liability) are as follows:

                                                                 March 31 2000
          --------------------------------------------------------------------

          Tax loss carryforwards                                  $   392,000
          Stock-based compensation                                     64,000
          Less: valuation allowance                                  (456,000)
          -------------------------------------------------------------------
                                                                  $         -
          ===================================================================

          A reconciliation  of the federal statutory income tax to the Company's
          effective income tax rate is as follows:

                                                                 March 31 2000
          --------------------------------------------------------------------

          Federal statutory income tax rate                                34%
          Change in valuation allowance                                   (34%)
          -------------------------------------------------------------------
          Effective income tax rate                                         -
          ===================================================================

8.   Stock Options and Warrants

     (a)  A summary of the status of the Company's stock options as of March 31,
          2000 and the  changes  during the period  then ended is  presented  as
          follows:

                                                               Weighted Average
                                                      Shares    Exercise Price
          ---------------------------------------------------------------------

          Balance outstanding, December 31, 1999    1,520,000      $  0.58
          Granted                                     142,500      $  5.40
          Exercised                                  (107,000)     $  0.50
                                                    ---------      -------
          Balance outstanding, March 31, 2000       1,555,500      $  1.03
                                                    =========      =======
          Balance exercisable, March 31, 2000       1,303,750      $  1.04
                                                    =========      =======

          The  weighted  average  remaining  contractual  life  of  the  options
          outstanding at March 31, 2000 was 4.37 years.

<PAGE>15

DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)


     (b)  Stock options outstanding as at March 31, 2000:


                                       Exercise Price
          Number of Options              Per Option           Expiry Date
          -----------------            --------------         -----------
               800,000                     $0.50             December 16, 2003
                50,000                     $0.50             June 15, 2001
               275,000                     $0.50             November 5, 2004
               235,000                     $0.50             November 9, 2004
                60,000                     $2.50             November 9, 2004
                28,000                     $0.50             January 5, 2005
               107,500                     $7.00             February 22, 2005

     (c)  Share purchase warrants outstanding as at March 31, 2000:


                                       Exercise Price
          Number of Warrants             Per Warrant           Expiry Date
          ------------------           ---------------         -----------
              1,880,000                     $0.50             June 30, 2000
                600,000                     $2.50             October 28, 2000
              4,258,000                     $2.50             January 1, 2001

     (d)  On December  16, 1998,  the Company  adopted a Stock Option Plan ("the
          1998  Plan")  for grant of  options  to  directors  of the  Company to
          purchase up to 1,200,000 common stocks. Options granted under the 1998
          Plan will be  exercisable  from the date of grant for a period of five
          years at an  exercise  price of $0.50 per share.  Half of the  options
          granted vested immediately at the date of grant. The remaining half of
          the options granted would vest upon the Company  achieving the ability
          to produce commercially acceptable and revenue generating products.

          On  November  5, 1999,  the  Company  granted  options to another  two
          directors of the Company to purchase up to 200,000 common stocks under
          the same conditions as the 1998 Plan.

          On June 15, 1999, the Company  adopted another Stock Option Plan ("the
          1999 A Plan") for the grant of options to an  employee  of the Company
          to purchase up to 50,000 common  stocks at an exercise  price of $0.50
          per share.  Options  granted under the 1999 A Plan will be exercisable
          from  the  date  of  grant  for a  period  of two  years.  Half of the

<PAGE>16

DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)


          respective  options  granted vested  immediately at the date of grant.
          The  remaining  half  of the  options  granted  would  vest  upon  the
          Company's  share price  closes at a price of US $5 or greater for five
          (5) consecutive days.

          On November 5, 1999 and November 9, 1999, the Company  adopted another
          Stock  Option  Plan  ("the  1999 B Plan")  for the grant of options to
          employees  of the Company to purchase up to 75,000  common  stocks and
          235,000 common stocks, respectively.  Options granted under the 1999 B
          Plan were vested immediately and will be exercisable from the dates of
          grant for a period  of five  years at an  exercise  price of $0.50 per
          share.

          On November 9, 1999,  the Company  adopted  another  Stock Option Plan
          ("the  1999 C Plan")  for the grant of  options  to  employees  of the
          Company to purchase up to 60,000 common stocks.  Options granted under
          the 1999 C Plan were vested  immediately and will be exercisable  from
          the date of grant for a period of five years at an  exercise  price of
          $2.50 per share.

          On January 14, 2000, the Company's share price closed at a price of $5
          for  five  consecutive  days  at  $5.313  per  share.  Therefore,  the
          remaining  25,000 common  stocks  granted under the 1999 A Plan became
          vested. $120,325 were charged to income in 2000.

          On January 5, 2000,  the Company  adopted  another  Stock  Option Plan
          ("the  2000 A Plan")  for the grant of  options  to  employees  of the
          Company to purchase up to 35,000 common stocks at an exercise price of
          $0.50 per share for a period of five years.  Options granted under the
          2000 A Plan  vest over a period  of  two-year  period at a rate of 20%
          upon grant,  40% on the first  anniversary of grant, 40% on the second
          anniversary of grant. $68,040 were charged to income in 2000.

          On February 22, 2000,  the Company  adopted  another Stock Option Plan
          ("the 2000 B Plan") for the grant of  options  to an  employee  of the
          Company to purchase up to 7,500 common stocks at an exercise  price of
          $7 per share for a period of five years.  Half of the options  granted
          under the 2000 B Plan were vested  immediately  and the remaining half
          will be exercisable  when the Company's  share price closes at a price
          of $9 for five consecutive days. No compensation expenses were charged
          to  income  on the  3,750  common  stocks  vested  immediately  as the
          exercise  price  equals to the fair market value at the date of grant.
          The compensation expense of the remaining 3,750 common stocks would be
          recognized based upon the excess of the fair market value of the stock
          on the vesting date over its exercise price of $7 per share.

<PAGE>17

DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)

          On February 22, 2000,  the Company  adopted  another Stock Option Plan
          ("the 2000 C Plan") for the grant of  options  to an  employee  of the
          Company to purchase up to 100,000  common stocks at an exercise  price
          of $7 per share for a period of five years. All of the options granted
          under  the  2000 C  Plan  were  vested  immediately.  No  compensation
          expenses  were charged to income as the  exercise  price equals to the
          fair market value at the date of grant.

     (e)  Pro-forma information regarding Loss for the period and Loss per Share
          is required under SFAS 123, and has been  determined as if the Company
          has  accounted  for its stock  options  under the fair value method of
          SFAS 123.  If  compensation  cost for the stock  option  plan had been
          determined based on the fair value at the grant dates for awards under
          the plan,  consistent with the alternative method set forth under SFAS
          123,  the  Company's  loss for the period,  basic and diluted loss per
          share  would have been  increased  on a pro-forma  basis as  indicated
          below:

                                                                     2000
                                                                     ----
           Net loss for the period:
           - as reported                                         $   (234,780)
           - pro-forma                                             (1,043,822)
           ------------------------------------------------------------------
           Basic and diluted loss per share:
           - as reported                                                (0.02)
           - pro-forma                                                  (0.09)
           ------------------------------------------------------------------

<PAGE>18

DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)


          The fair value of each option  grant is estimated on the date of grant
          using  the  Black-Scholes  option-pricing  model  with  the  following
          weighted-average  assumptions used for the grants awarded in 1998,1999
          and 2000, respectively:

                                                                     Weighted
           Number of                          Risk Free  Expected    Average
  Year      Options    Dividend   Expected     Interest   Lives     Fair Value
Granted     Granted     Yields   Volatility     Rate     in Years   of Options
-------  ------------  --------  ----------   ---------  --------   ----------

 1998     1,200,000       0%         56%        5.50%       5.00       $1.13
 1999       620,000       0%         98%        4.75%       4.76       $1.918
 2000       142,500       0%        108%        5.20%       5.00       $6.67

9.   Related Party Transactions

     The Company incurred the following expenses to the directors:

                                                                    March 31
                                                                      2000
                                                                 --------------
         Management fees                                             $18,000
                                                                 ==============
10.  Commitments

     (a)  During the period,  the Company and the other  shareholder  of Kailong
          entered into an agreement that the Company will pay US$250,000  (paid)
          and issue  250,000  common shares to increase its interest to 95%. The
          Company is, therefore, committed to issue the 250,000 common shares.

     (b)  The  Company  has capital  expenditure  commitments  of US $115,000 to
          purchase certain bio-technology equipment.

     (c)  The  Company has entered  into a drug  licence and related  technology
          transfer  agreement in August,  1999 for a total transfer price of RMB
          5,500,000  (approximately  US$678,000).  RMB 1,000,000 (US$123,304) is
          payable upon the signing of the agreement.  The Company paid a deposit
          of RMB 500,000  (US$61,652)  in 1999.  The Company is committed to pay
          the remaining RMB 5,000,000 (approximately US$605,770).

<PAGE>19

DRAGON PHARMACEUTICALS INC. & SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2000
-------------------------------------------------------------------------------
(Unaudited)
(Expressed in US Dollars)


     (d)  The  Company  entered  into  a  drug  licence  ("rhTPO")  and  related
          technology  transfer  agreement in August,  1999 for a total  transfer
          price of RMB 4,500,000 (approximately US$545,200).  During the period,
          the Company paid a deposit of RMB 4,000,000 (US$484,600).  The Company
          is  committed  to  pay  the  remaining   RMB  500,000   (approximately
          US$60,600) according to the agreement.

     (e)  The Company has entered into an operating lease agreement with respect
          to Huaxin's  production  plant in Nanjing,  China for an amount of RMB
          3,000,000  (approximately  US$363,460)  per annum until June 11, 2009.
          Minimum payments  required for the next five years under the agreement
          are as follows:


              2001                   RMB  3,000,000        US$   363,460
              2002                        3,000,000              363,460
              2003                        3,000,000              363,460
              2004                        3,000,000              363,460
              2005                        3,000,000              363,460
              2006 - 2009                10,375,000            1,257,000
              ----------------------------------------------------------
              Total                  RMB 25,375,000        US$ 3,074,300
              ============================== ===========================

11.  Subsequent Event

     Subsequent to the period end,  67,800  warrants  were  exercised for 33,900
     shares at $1.00 per share.

12.  Non-cash Financing Activities

     During the period,  250,000 common shares were allotted for the acquisition
     of additional 20% interest of Kailong (see Note 10a).

<PAGE>20

Item 2.  Management's Discussion and Analysis or Plan of Operation


The  following  discusses  the  Company's  financial  condition  and  results of
operations based upon the Company's consolidated financial statements which have
been prepared in accordance with generally accepted  accounting  principles.  It
should be read in conjunction  with the Company's  financial  statements and the
notes  thereto  and  other  financial  information  included  elsewhere  in  the
Company's Form 10-KSB for the fiscal year ended December 31, 1999.

Overview

The  Company  was formed on August 22,  1989,  under the name First  Geneva Inc.
First  Geneva  Investment's  business  was to evaluate  businesses  for possible
acquisition.  On July 28,  1998,  First Geneva  Investment  entered into a share
exchange  agreement with Allwin  Newtech.  Allwin Newtech was formed in 1998 for
the purpose of developing and marketing  pharmaceutical drugs for sale in China.
Prior to the  acquisition of Allwin  Newtech,  First Geneva  Investments  had no
operations.  On September 21, 1998, First Geneva Investments changed its name to
Dragon Pharmaceutical Inc.

On July 27, 1999,  Dragon  acquired a 75% interest in Nanjing Huaxin Biotech Co.
Ltd. which  manufactures EPO in China. The Company increased the efficiencies in
the production of EPO by improving a proprietary  high-yield mammalian cell line
and  "vectoring  process"  which  has been  developed  by  Dragon.  The  Company
successfully achieved commercial production during the last quarter of 1999.

On March 30, 2000, the Allwin Newtech (a wholly owned subsidiary of the Company)
entered  into an  agreement  to increase  its equity  interest in Sanhe  Kailong
Bio-pharmaceutical  Co.,  Ltd. from 75% to 95%. The Company paid $250,000 and is
committed to issue 250,000 common shares to increase its equity interest.

Results of Operations

The Company initiated  quarterly financial reporting in September 1999. For this
reason,  no comparison is available  between the three month period ending March
31, 1999 and March 31,  2000.  The  following  is  management's  discussion  and
analysis.  Because  the  Company  is  beginning  production,  it  should  not be
indicative for the anticipated  results of operation for the year ended December
31, 2000.

Revenues.  Revenue results primarily from the sale of EPO in China.  Revenue for
the three months  period  ending March 31, 2000 was  $661,785.  Cost of sales of
$98,865 is attributed to the production  costs of the  pharmaceutical  products.
During the first quarter of 2000 Dragon had interest income of $24,052. Interest
income is related primarily to interest earned on cash received from the private
placement of common stock during the last quarter of 1999.

<PAGE>21


Expenses.  Total expenses for the first three months of 2000 were $810,841.  The
major  expense  incurred in the first  quarter of 2000 related to the selling of
pharmaceutical  products and  represented  approximately  39% of total expenses.
Other  major  expenses  included  stock  option  compensation  (23%)  and  other
administrative expenses.

Significant expenses included  depreciation of intangible assets of $62,227, bad
debt write offs of $24,038,  and loan  interest of $25,471.  Management  fees of
$24,000 include $18,000 paid to one director for services.  The  depreciation of
intangible  assets  relates to the  amortization  of the drug license to produce
EPO.

Net  and  Comprehensive   Loss.  Dragon  had  a  net  loss  of  $223,869  and  a
comprehensive  loss of $234,780  for the 3 month  period  ending March 31, 2000.
Calculated in the comprehensive loss for the period was a minority interest loss
of $10,911.

Basic and Diluted Net Loss Per Share

The  Company's net loss per share has been computed by dividing the net loss for
the period by the weighted average number of shares outstanding during the first
quarter  of 2000.  The loss per share for the period  was  $0.02.  Common  stock
issuable  upon the  exercise of common stock  options and common stock  warrants
have been excluded from the net loss per share  calculations  as their inclusion
would be anti-dilutive.

Liquidity and Capital Resources

Dragon is a development stage pharmaceutical and  biotechnological  company that
has commenced the manufacture and marketing of pharmaceutical  products in China
through  its 75% equity  interest in Nanjing  Huaxin  Biotech.  Previously,  the
Company has raised funds through equity financings to fund its operations and to
provide working capital.  The Company  currently has no plans for further equity
financings.   However,   the  Company  may  finance  future  operations  through
additional equity financings,  if necessary. As of March 31, 1999, the Company's
working capital was $8,724,344.

There has been little change to the Company's  working  capital of $8,405,788 as
at December 31, 1999. As at December 31, 1999, the Company showed  Subscriptions
Receivable  totaling  $9,320,000.  All  Subscriptions  Receivables were received
during the first  quarter of 2000 as  reflected in the increase in cash and cash
equivalents.

In September  1998, the Company raised $1 million  through the sale of 2,000,000
shares of common stock. The proceeds raised were for working  capital.  In April
1999,  the Company  entered into a $600,000  loan  agreement.  The $600,000 loan
bears  interest  at 8% and is due in 6 months  with the right of the  Company to
extend the maturity  date by an additional  six months in September  1999. As an
additional  inducement,  the Company issued 90,000 shares of common stock to the
lender. In September 1999 the Company exercised its option to extend the loan by
a period of 6 months. This debt was subsequently converted into common stock.

<PAGE>22

On October 14, 1999, the Company  entered into  securities  purchase  agreements
with two investors located in Hong Kong. Under the terms of this agreement,  the
investors purchased,  in the aggregate,  600,000 shares of common stock at $2.50
per share, with the Company raising in the aggregate $1.5 million.

On December 31, 1999, the Company closed a private placement raising $10,645,000
through the issue of  4,258,000  shares of common  stock at a price of $2.50 per
share.   $600,000  of  the  gross  proceeds  from  the  December  1999  offering
represented the conversion of the outstanding debt by the lenders into shares of
common stock of the Company at a price of $2.50 per share.

PART II.       OTHER INFORMATION

Items 1, 3, 4 and 5

None.

Item 2.

Please see liquidity and capital resources section under Part I, Item 2.

Item 6.

(a)     Exhibit 27.  Financial Data Schedule

(b)     Reports on 8-K

None.

<PAGE>23

                                   SIGNATURES


In accordance with 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.


                                            DRAGON PHARMACEUTICAL INC.
                                                 (Registrant)



Dated:  May 12, 2000                         DR. KEN CAI
                                             ---------------------------------
                                             Dr. Ken Cai
                                             Chief Financial Officer