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 September 30, 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  September  30,  2000:
16,100,000


<PAGE>2

PART 1.  FINANCIAL STATEMENTS


DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES

Consolidated Balance Sheet
September 30, 2000
(Unaudited)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

ASSETS

Current
  Cash and cash equivalents                               $        7,553,866
  Term deposits                                                    2,000,500
  Accounts receivable                                                719,875
  Inventories                                                        901,486
  Prepaid and deposits                                               810,084
                                                          -------------------
Total current assets                                              11,985,811

Fixed assets                                                       3,297,178

Licence and permit                                                 3,878,613
                                                          -------------------
Total assets                                              $       19,161,602
                                                          ===================

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Current
  Bank loans                                              $        2,028,936
  Accounts payable and accrued liabilities                         1,438,442
                                                          -------------------
Total current liabilities                                          3,467,378
                                                          -------------------
Minority interests                                                 1,277,895
                                                          -------------------
Commitments and contingencies (Note 8)

Stockholders' Equity

Share capital
  Authorized:  50,000,000 common shares at
    par value of $0.001 each
  Issued and outstanding:  16,100,000 common shares                   16,100

Additional paid in capital                                        18,501,497

Accumulated other comprehensive income (loss)                       (71,766)

Accumulated deficit                                              (4,029,502)
                                                          -------------------

Total stockholders' equity                                        14,416,329
                                                          -------------------

Total liabilities and stockholders' equity                $       19,161,602
                                                          ===================

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


<PAGE>3

DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES

Consolidated Statement of Stockholders' Equity
Nine-month Period Ended September 30, 2000
(Unaudited)
(Expressed in US Dollars)
-------------------------------------------------------------------------------
<TABLE>
<S>                                 <C>             <C>      <C>          <C>            <C>            <C>           <C>

                                                                                                        Accumulated      Total
                                                              Additional                                  other          Stock-
                                         Common stock          paid-in    Comprehensive     Deficit    comprehensive     holders
                                        Shares      Amount     capital    income (loss)   accumulated   income (loss)    equity
                                    ------------- ---------  ------------ -------------- ------------  --------------  ------------

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
  previously allotted                4,258,000        4,258       (4,258)                          -               -             -

Additional share issuance costs to
   4,258,000 common shares issued                         -       (5,247)                          -               -        (5,247)

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

Exercise warrants for cash           1,000,000        1,000      999,000                           -               -     1,000,000

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

Stock option compensation                    -            -      205,375                           -               -       205,375

Other comprehensive income
 - foreign currency translation              -            -            -      (121,815)            -        (121,815)     (121,815)

Comprehensive income
 - net (loss) for the period                 -            -            -      (766,752)     (766,752)              -      (766,752)
                                    ------------- ---------  ------------ -------------- ------------  --------------  ------------
Comprehensive income (loss)

Balance, September 30, 2000         16,100,000      $16,100  $18,501,497 $    (888,567)  $(4,029,502)   $    (71,766)  $14,416,329
                                    ============= =========  ============ ============== ============  ==============  ============


</TABLE>


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


<PAGE>4

DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES

Consolidated Statement of Operations
(Unaudited)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

<TABLE>
<S>                                           <C>                      <C>                    <C>

                                                     July 1               Nine Months            Nine Months
                                                     2000 to                  Ended                  Ended
                                                   September 30            September 30           September 30
                                                      2000                    2000                   1999
                                              ------------------       -----------------      ------------------

Sales                                         $         739,062        $      2,197,974       $        333,555

Cost of sales                                           185,519                 451,920                104,080
                                              ------------------       -----------------      ------------------
Gross profit                                            553,543               1,746,054                229,475

Selling expenses                                       (596,546)             (1,397,371)              (213,475)

Administrative expenses
 - stock-based compensation                             (17,010)               (205,375)               (12,500)
 - other administrative expenses                       (537,410)             (1,368,465)              (354,632)
                                              ------------------       -----------------      ------------------
Operating loss                                         (597,423)             (1,225,157)              (351,132)

Interest income                                         172,370                 391,695                 14,263
                                              ------------------       -----------------      ------------------
Loss before minority interest                          (425,053)               (833,462)              (336,869)

Minority interest                                        62,078                  66,710                 49,610
                                              ------------------       -----------------      ------------------
Net (loss) for the period                     $        (362,975)       $       (766,752)      $       (287,259)
                                              ==================       =================      ==================
(Loss) per share
      Basic and diluted                       $           (0.03)      $           (0.06)      $          (0.03)
                                              ==================       =================      ==================
Weighted average number of
  Common shares outstanding
      Basic and diluted                              12,812,981              12,812,981             10,053,352
                                              ==================       =================      ==================

</TABLE>


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


<PAGE>5

DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES

Consolidated Statement of Cash Flows
Nine-month Periods Ended September 30, 2000 and 1999
(Unaudited)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

<TABLE>
<S>                                                                         <C>                <C>

                                                                                2000                1999
                                                                           -------------       --------------

Cash flows from (used in) operating activities
 Net (loss) for the period                                                 $   (766,752)       $   (287,259)
 Adjustments to reconcile net loss to
   net cash used in operating activities:
   - loan bonus fee                                                                  --                  90
   - stock-based compensation expense                                           205,375              12,500
   - depreciation of fixed assets and amortization of
        Licence and permit                                                      475,404             119,273
   - minority interests                                                         (66,710)            (49,610)
                                                                           -------------       --------------
                                                                               (152,683)           (205,006)
  Changes in non-cash  working  capital  items,
   net of effect of acquisition of subsidiary:
   - accounts receivable                                                        (79,132)           (328,738)
   - inventories                                                               (243,520)           (165,724)
   - prepaid expenses and deposits                                             (342,144)           (354,358)
   - accounts payable and accrued liabilities                                  (531,008)            217,438
                                                                           -------------       --------------
                                                                             (1,348,487)           (836,388)
                                                                           -------------       --------------
Cash flows used in investing activities
  Purchase of fixed assets                                                     (895,857)            (68,857)
  Purchase of term deposits                                                  (2,000,500)                 --
  Purchase of license                                                          (250,000)                 --
  Initial payment on the acquisition of Huaxin,
    net of cash acquired                                                             --          (1,410,448)
                                                                           -------------       --------------
                                                                             (3,146,357)         (1,479,305)
                                                                           -------------       --------------
Cash flows from financing activities
  Loan proceeds                                                               1,412,413           1,205,627
  Proceeds from issuance of shares                                            1,053,500                  --
  Proceeds from shares subscribed and allotted
    in prior period, net of issuance costs                                    8,611,603                  --
 Funds contributed by non-controlling interest                                  403,380                  --
                                                                           -------------       --------------
                                                                             11,480,896           1,205,627
                                                                           -------------       --------------
Foreign exchange gain on cash held
  in foreign currency                                                           (49,448)             53,802
                                                                           -------------       --------------
Increase in cash and cash equivalents                                         6,936,604          (1,056,264)

Cash and cash equivalents, beginning of period                                  617,262           1,380,355
                                                                           -------------       --------------
Cash and cash equivalents, end of period                                   $  7,553,866        $    324,091
                                                                           =============       ==============

</TABLE>


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

<PAGE>6


NOTES TO FINANCIAL STATEMENTS

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  Pharmaceutical  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 3).  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

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.

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.

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


<PAGE>7


NOTES TO FINANCIAL STATEMENTS

2.   Significant Accounting Policies (continued)

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.

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.

Accounting Estimates

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

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.

<PAGE>8


NOTES TO FINANCIAL STATEMENTS

2.   Significant Accounting Policies (continued)

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.

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,   term
               deposits,accounts  receivable,  bank loans,  accounts payable and
               accrued  liabilities  approximate their fair value because of the
               short-term nature 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 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.

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.

<PAGE>9

NOTES TO FINANCIAL STATEMENTS

2.   Significant Accounting Policies (continued)

Cash and Cash Equivalents

               Cash  equivalents  usually  consist of highly liquid  investments
               which are readily  convertible into cash with maturities of three
               months  or less.  As at  September  30,  2000,  cash  equivalents
               consist of commercial papers and redeemable term deposits.

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.

Revenue Recognition

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

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 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.

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 4,858,000  warrants and  1,555,500  stock  options
               outstanding  at September  30, 2000 are  anti-dilutive,  however,
               they may be dilutive in future.

<PAGE>10

NOTES TO FINANCIAL STATEMENTS

2.     Significant Accounting Policies   (continued)

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 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.  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.


<PAGE>11

NOTES TO FINANCIAL STATEMENTS

3.  Fixed Assets

<TABLE>
<S>                                                <C>        <C>              <C>

                                                              September 30, 2000
                                                  -------------------------------------------
                                                                  Accumulated       Net book
                                                      Cost       depreciation          value
                                                  ----------- ---------------- --------------

       Motor vehicles                              $ 100,296  $        13,601  $      86,695
       Land lease                                    905,775           42,270        863,505
       Office equipment and furniture                189,868           45,284        144,584
       Land improvements                              14,791            4,067         10,724
       Leasehold improvements                      1,028,520           87,680        940,840
       Production equipment                        1,532,494          281,664      1,250,830
                                                  ----------- ---------------- -------------
                                                  $3,771,744  $       474,566  $   3,297,178
                                                  =========== ================ ==============
</TABLE>

       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  $188,614 for the period  ended  September  30,
       2000.

4.   Bank Loans
<TABLE>
   <S>                                                                                             <C>


       RMB 3,000,000, bearing interest at 5.85% per annum and due on
       August 15, 2001                                                                                $   362,310

       RMB 2,000,000, bearing interest at 5.85% per annum and due on July 31, 2001                        241,540

       RMB 7,800,000, bearing interest at 5.85% per annum and due on January 26, 2001.  The loan
       is secured by the  term deposit.                                                                   942,006

       RMB 4,000,000, bearing interest at 5.58% per annum and due on December 12, 2000.  The
       loan is secured by the term deposit.                                                               483,080
                                                                                                       ----------
       Total                                                                                           $2,028,936
                                                                                                       ==========
</TABLE>


       The weighted average interest rate at September 30, 2000 was 5.79%.

<PAGE>12

NOTES TO FINANCIAL STATEMENTS

5.   Income Taxes

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 September 30, 2000, the parent  company,  Kailong and Huaxin
              have estimated losses, for tax purposes,  totalling  approximately
              $1,610,000,  which may be applied  against future taxable  income.
              Accordingly,  there is no tax expense  charged to the Statement of
              Operations for the period ended  September 30, 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.

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

<TABLE>
<S>                                                                             <C>


                                                                               September 30, 2000
                                                                               -------------------
   Tax loss carryforwards                                                      $        547,400
   Stock-based compensation                                                              70,000
   Less: valuation allowance                                                           (617,400)
                                                                               ===================
                                                                               $              -
                                                                               ===================

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


                                                                               September 30, 2000
                                                                               -------------------
   Federal statutory income tax rate                                                     34%
   Change in valuation allowance                                                        (34%)
                                                                               -------------------
   Effective income tax rate                                                              -
                                                                               ===================

</TABLE>

<PAGE>13

NOTES TO FINANCIAL STATEMENTS

6.   Stock Options and Warrants

A summary of the status of the Company's  stock options as of September 30, 2000
and the changes during the period then ended is presented as follows:

<TABLE>
<S>                                                               <C>                 <C>

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

                                                                      1,520,000          $         0.58
   Balance outstanding, December 31, 1999

   Granted                                                              142,500          $         5.40

   Exercised                                                           (107,000)         $         0.50
                                                                       ---------         ---------------
   Balance outstanding, September 30, 2000                           $1,555,500          $         1.03
                                                                     ===========         ===============
   Balance exercisable, September 30, 2000                            1,303,750          $         1.04
                                                                     ===========         ===============
</TABLE>

   The weighted  average  remaining  contractual  life of the options
   outstanding at September 30, 2000 was 3.30 years.


Stock options outstanding as at September 30, 2000:

<TABLE>
     <S>                         <C>                      <C>                <C>

                                      Underlying           Exercise Price
       Number of Options               Shares                Per Share         Expiry Date
       -----------------              ----------           ---------------   -------------------

            800,000                    800,000                $0.50           December 16, 2003
             50,000                     50,000                $0.50           June 15, 2001
            275,000                    275,000                $0.50           November 5, 2004
            235,000                    235,000                $0.50           November 9, 2004
             60,000                     60,000                $2.50           November 9, 2004
             28,000                     28,000                $0.50           January 5, 2005
            107,500                    107,500                $7.00           February 22, 2005

Share purchase warrants outstanding as at September 30, 2000:


              Number                  Underlying          Exercise Price
           of Warrants                  Shares              Per Share            Expiry Date
          ------------               ------------         ----------------    -------------------
              600,000                    600,000               $2.50           October 28, 2000
            4,258,000                  4,258,000               $2.50           January 1, 2001

</TABLE>



<PAGE>14

NOTES TO FINANCIAL STATEMENTS

6.   Stock Options and Warrants (continued)

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 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.  $85,050 were
              charged to income in 2000.

<PAGE>15

NOTES TO FINANCIAL STATEMENTS

6.   Stock Options and Warrants (continued)


              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.


              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.


              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:

<TABLE>
   <S>               <C>           <C>         <C>          <C>            <C>             <C>

                                                                                             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
</TABLE>


<PAGE>16

NOTES TO FINANCIAL STATEMENTS

7.  Related Party Transactions

       The Company incurred the following expenses to the directors:

                                    2000               1999
                                   -------            -------
       Management fees             $54,000            $72,000

8.   Commitments


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

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$664,235).  RMB  1,000,000  (US$120,770)  is payable  upon the
signing of the agreement.  The Company paid a deposit of RMB 500,000 (US$60,385)
in  1999.   The  Company  is  committed  to  pay  the  remaining  RMB  5,000,000
(approximately US$603,850).

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$543,480). During the period, the Company paid a deposit of RMB
4,000,000  (US$483,080).  The  Company is  committed  to pay the  remaining  RMB
500,000 (approximately US$60,400) according to the agreement.

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$362,310)  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$    362,310
 2002                      3,000,000         362,310
 2003                      3,000,000         362,310
 2004                      3,000,000         362,310
 2005                      3,000,000         362,310
 2006 - 2009              10,375,000       1,252,990
 ------------------- ---------------- ---------------
 Total                RMB 52,375,000  US$  3,064,540
 =================== ================ ===============

9.   Non-cash Financing Activities

During the period,  250,000  common shares were allotted for the  acquisition of
additional 20% interest of Kailong.

<PAGE>17

NOTES TO FINANCIAL STATEMENTS

10.   Subsequent Events

       Subsequent to the period end, 600,000 warrants were exercised for 600,000
shares at $2.50 per share.

11.   Comparative Figures

Certain  1999  comparative  figures have been  reclassified  to conform with the
financial statement presentation adopted for 2000.


<PAGE>18

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 in the Company's  Form
10-KSB for the fiscal year ended December 31, 1999.

Overview

The Company (or  "Dragon")  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  Erythropietin  ("EPO") in China. The Company increased
the  efficiencies  in Nanjing  Huaxin  Biotech  Co.  Ltd.  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 calendar1999.

On March 30, 2000,  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.  To
date, due to administrative  delays, the shares have not yet been issued but are
represented as common shares allotted on the Company's financial statements.

On June 6, 2000 Dragon incorporated Allwin Biotrade Inc. ("Biotrade").  Biotrade
was incorporated for the purpose of marketing and distributing biopharmaceutical
products  outside  China.  On  September  15,  2000 Dragon  incorporated  Dragon
Pharmaceuticals (Canada) Inc. ("Dragon Canada").  Dragon Canada was incorporated
for the purpose of researching and developing new biopharmaceutical products.

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
September 30, 1999 and September 30, 2000.

Revenues.  Revenue results primarily from the sale of EPO in China.  Revenue for
the three months period ending  September 30, 2000, was $739,062 and revenue for
the nine months ended September 30, 2000 was  $2,197,974.  Cost of sales for the
three  months  ended  September  30,  2000,  of  $185,519 is  attributed  to the
production costs of the pharmaceutical  products. The cost of sales for the nine
months ended  September 30, 2000,  was  $451,920.  During the three months ended

<PAGE>19


September 30, 2000, Dragon had interest income of $172,370.  Interest income for
the nine months ended  September  30, 2000,  was  $391,695.  Interest  income is
related primarily to interest earned on cash received from the private placement
of common stock received during the last quarter of 1999.

Expenses.  Total  expenses for the three months ended  September 30, 2000,  were
$1,115,966.  The major expense incurred in the second quarter of 2000 related to
the selling of  pharmaceutical  products and  represented  approximately  53% of
total expenses. The remaining major expense items are represented by Significant
expenses for the three months ended September 30, 2000, included depreciation of
intangible assets of $90,636,  office and miscellaneous expenses of $54,418, and
salaries and benefits of $73,559.  Management  fees of $28,054  include  $18,000
paid to one director for services  during the third quarter ended  September 30,
2000. The  depreciation of intangible  assets relates to the amortization of the
drug license to produce EPO.

Total  expenses  for the nine  month  period  ended  September  30,  2000,  were
$2,971,211.  The  expenses  relating to the selling of  pharmaceutical  products
represented  approximately  47%.  Other major  expenses  included  stock  option
compensation (7%) and other administrative expenses (46%).

Net  and  Comprehensive   Loss.  Dragon  had  a  net  loss  of  $425,053  and  a
comprehensive  loss of $362,975 for the three month period ending  September 30,
2000.  Calculated  in the  comprehensive  loss  for the  period  was a  minority
interest gain of $62,078.

The Company's net loss for the nine month period ended  September 30, 2000,  was
$833,462. The comprehensive loss for the same period was $766,752 which includes
a minority interest gain of $66,710.

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 nine
months ended  September  30, 2000.  The loss per share for the nine month period
ending September 30, 2000, was $0.06. 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 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 may finance future  operations  through  additional equity
financings,  if  necessary.  As of September  30, 2000,  the  Company's  working
capital was $8,518,433.  As of December 31, 1999, the Company's  working capital
was $8,405,788.

In September  1998, the Company raised $1 million  through the sale of 2,000,000
shares of common stock. The proceeds raised were used working capital.  In April
1999,  the Company  entered into a $600,000  loan  agreement.  The $600,000 loan
beared interest at 8% and matured in six 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

<PAGE>20


lender. In September 1999 the Company exercised its option to extend the loan by
a period of six months. This debt was subsequently converted into common stock.

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.
Administrative expenses.

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.

One million  common  shares were issued  through the  exercise of warrants  that
expired on June 30, 2000. These warrants were issued to shareholders through the
acquisition  of Allwin  Newtech  on August 17,  1998.  Gross  proceeds  from the
exercise of the warrants were $1,000,000.

PART II. OTHER INFORMATION

Items 1, 3, and 4

None.

Item 2.(c)

On October 14, 1999,  Dragon  Pharmaceutical  sold,  in the  aggregate,  600,000
shares of Common Stock at $2.50 per share to two investors located in Hong Kong.
Further,  as part  of the  securities  purachse  agreement,  investors  received
warrants to purchase  600,000  shares of common stock in the  aggregate at $2.50
per share. Each warrant is exercisable for a period of one year. The issuance of
these shares of common stock and warrants were to investors residing outside the
United  States and were exempt  pursuant to  Regulation  S. The company paid one
individual who resides outside the United States a finder's fee in the amount of
$105,000.  On October  13 and 17,  2000,  these two  investors  exercised  their
warrants to purchase 600,000 shares of common stock. The exercise of the warrant
was exempt from registration pursuant to Regulation S.

Item 5

Acquisition Agreement with Alphatech Bioengineering Limited

         On October  6, 2000,  we entered  into an  acquisition  agreement  with
Alphatech  Bioengineering  Limited, a Hong Kong corporation owned by Mr. Longbin
Liu and Mr.  Philip Yuen.  Mr. Liu is our president and one of our directors and
Mr. Yuen is one of our directors.  Under the terms of the acquisition agreement,
we have agreed to purchase for $4 million Alphatech  Bioengineering's rights and
technology  relating  to the  production  of  Hepatitis  B vaccine  through  the
application  of  genetic  techniques  on  hamster  ovary  cells,  including  the


<PAGE>21

culturing  of  such  cells,  which  act  as a host  expression  system  for  the
production of Hepatitis B vaccine  protein,  and the purification of Hepatitis B
vaccine protein from the culture of the cells.

         In connection with entering into the acquisition  agreement,  Alphatech
Bioengineering has made certain  representations  regarding the development of a
cell-line of hamster ovary cells which act as a host  expression  system for the
production of Hepatitis B vaccine protein including:

     o    the cell-line of hamster  ovary cells has been  developed to the stage
          where the hamster ovary cells have the capacity to express Hepatitis B
          vaccine protein at levels in excess of 5 mg/liter;

     o    the technology includes industrial scale fermentation and purification
          methods  that are  suitable for use in the  commercial  production  of
          Hepatitis B vaccine protein for incorporation in a Hepatitis B vaccine
          for humans; and

     o    within three months of a production  facility of  sufficient  capacity
          being fully operational for industrial  production,  to the reasonable
          satisfaction  of  Alphatech  Bioengineering,  and staffed and equipped
          with a bioreactor system and purification  process for the Hepatitis B
          vaccine  protein:

          o    the  technology  will have the  capacity  to support a  sustained
               production at the production facility of at least 1,000,000 doses
               per year of Hepatitis B vaccine protein;

          o    production  facility of Hepatitis B vaccine protein will yield at
               least 5 mg/liter  from the  bioreactor  and the  recovery  of the
               purified  Hepatitis B vaccine  protein of  acceptable  commercial
               quality meeting the standard of the State Drug  Administration of
               China from media which  would yield at least 50% or 2.5  mg/liter
               in the first three batches of commercial production; and

          o    the direct production costs in China,  based upon current prices,
               for the first one million doses of Hepatitis B vaccine, including
               all costs directly associated with the manufacture of Hepatitis B
               vaccine protein, will be less than US$1.00 per dose.

         In the event any of the representations and warranties made by Alphtech
Bioengineering are breached by Alphatech Bioengineering,  we will have the right
to require Alphatech  Bioengineering to reimburse us for the $4 million purchase
price.

         Alphatech  Bioengineering's  rights  and  technology  relating  to  the
production of Hepatitis B vaccine is in the  developmental  stage, and Alphatech
Bioengineering has no commercial  production of or sales of Hepatitis B vaccine.
The acquisition of Alphatech  Bioengineering's rights and technology relating to
the  development of Hepatitis B vaccine is subject to customary  representations
and conditions.  The aquisition was completed on October 23, 2000.

<PAGE>22


Item 6.

(a)  Exhibit  10.10  Acquisition  Agreement  among  Hogan  Pharmaceutical  Inc.,
     Alphatech Bioengineering Limited, Mr. Longbin Liu and Mr. Philip Yuen.

     (i)  Incorporated by reference to the Company's pre-effective amendment No.
          3 to  registration  statement on Form SB-2 (SEC filing No.  333-37064)
          filed on October 20, 2000.

(b)  Exhibit 27. Financial Data Schedule

(c)  Reports on 8-K


                                   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:  November 9, 2000                /s/ DR. KEN CAI
                                            ------------------------------------
                                            Dr. Ken Cai
                                            Chief Financial Officer
                                            (and authorized to sign on behalf
                                            of the registrant)