<PAGE>
 

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 10-K


(Mark One)

[x]  ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
     For the fiscal year ended December 31, 1995
                         or
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

Commission file number 1-10432
------------------------------

                      ROBERTS PHARMACEUTICAL CORPORATION
                -----------------------------------------------
            (Exact name of registrant as specified in its charter)

          New Jersey                                 22-2429994
 ------------------------------------       -----------------------------
 (State or other jurisdiction                      (I.R.S. Employer
 of incorporation or organization)                  Identification No.)

    Meridian Center II
  4 Industrial Way West
      Eatontown, New Jersey                              07724
 ----------------------------------          -----------------------------
     (Address of principal                              Zip Code
     executive offices)

                        Registrant's telephone number,
                     including area code:  (908) 389-1182

Securities registered pursuant to Section 12(b) of the Act:

                               Name of each exchange
Title of each class             on which registered
-------------------          -------------------------

     None                        Not Applicable

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, $.01 par value per share
    ______________________________________________________________________
                               (Title of class)

    ______________________________________________________________________
                               (Title of class)
<PAGE>
 
     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes   X    No 
                                                ---      ---   

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [ ]

     The aggregate market value of the common stock, $.01 par value per share
(the "Common Stock"), of the Registrant held by non-affiliates of the
Registrant, as determined by reference to the last sale price of the Common
Stock as reported on the Automated Quotation System of the National Association
of Securities Dealers, Inc., National Market System ("NASDAQ National Market
System"), as of March 22, 1996, was $238,183,538.

     As of March 22, 1996, the number of outstanding shares of Common Stock was
18,545,890.

  Documents incorporated by             Part of Form 10-K into which
  reference into this report            document is incorporated
  ------------------------------        ------------------------------

     Proxy Statement for the             Part III
     Annual Meeting of Shareholders
     to be held in May 1996.
 
<PAGE>
 
                                     PART I

ITEM 1.  BUSINESS

(a)  GENERAL DEVELOPMENT OF BUSINESS

     Roberts Pharmaceutical Corporation (the "Company") is an international
pharmaceutical company which licenses, acquires, develops and commercializes
post-discovery drugs in selected therapeutic categories.  The Company was
incorporated under the laws of the State of New Jersey in 1982 and commenced
operations in 1983.  In 1988, its name was changed to Roberts Pharmaceutical
Corporation from VRG International, Inc.  The Company's executive offices are
located at Meridian Center II, 4 Industrial Way West, Eatontown, New Jersey
07724, and its telephone number is (908) 389-1182.  As used herein, the term the
"Company" refers to Roberts Pharmaceutical Corporation and its subsidiaries
unless the context indicates otherwise.

     During the past year, the Company experienced a period of transition with
respect to the development of its business.  In order to achieve a more focused
utilization of the Company's resources in its core business of licensing,
acquiring, developing and selling prescription drugs, the Company has developed
a plan to divest most of its nonprescription pharmaceutical products, certain of
its nonperforming prescription pharmaceutical products, and certain of its
nonpharmaceutical operations.  See "Item 1(c) Description of Business" and "Item
7 Management's Discussion and Analysis of Financial Condition and Results of
Operations."  During the past year, the Company completed certain acquisitions
of prescription pharmaceutical products which affected the Company's decision to
refocus on its core business activities and to discontinue certain business
operations which the Company believes are unrelated to its objective of growing
and developing an international pharmaceutical company.  See "Item 1(c)
Description of Business" and "Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations."

(b)  FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

     For the fiscal years ended December 31, 1993, 1994 and 1995, the Company 
engaged in business in two industry segments:  Product Sales and Contract 
Clinical Research.  In March 1996, the Company announced the adoption of a plan 
to discontinue and divest the businesses comprising the Contract Clinical 
Research Segment, and the Company expects the sale of these business operations 
to be completed before December 1996.  In the foreseeable future, the Company 
anticipates engaging in business mainly in the Product Sales industry segment.
See "Notes to Consolidated Financial Statements - Note 16."

(c)  DESCRIPTION OF BUSINESS

     The Company was founded to take advantage of the large and growing
opportunity to license, acquire, develop and commercialize post-discovery drugs
in selected therapeutic categories.  The Company has organized its drug
development, acquisition and marketing activities to focus on late-stage
development drugs in Phase II or Phase III clinical trials and currently
marketed prescription pharmaceutical products which (i) do not meet the
strategic objectives or profit thresholds of larger pharmaceutical companies or
(ii) are made available by government agencies and research institutions.  The
therapeutic categories targeted by the Company are Cardiovascular, Respiratory,
Gynecology/Endocrinology, Urology, Oncology and Gastroenterology.

                                      -2-
<PAGE>
 
  The Company currently markets approved pharmaceutical products in the United
States, Canada, the United Kingdom, Ireland, the Benelux countries and several
other European countries.  The Company has operating subsidiaries in the United
States, Canada and the United Kingdom.  The Company has determined not to
establish a separate operating subsidiary in France and will instead attempt to
conduct its business in France through a licensing agreement with a company
operating in France.

     The Company has a broad product portfolio with two New Drug Applications
("NDAs") pending with the U.S. Food and Drug Administration (the "FDA").
PROAMATINE(TM) has an NDA pending for orthostatic hypotension, a condition of 
low blood pressure.  PROAMATINE is also in Phase II trials for stress urinary
incontinence.  AGRELIN(R) has an NDA pending for thrombocytosis, a condition of
excessive platelet production.  The Company has five additional late-stage
development products.  These products are MAXIVENT(R), in Phase III trials for
asthma; SOMAGARD(R), in Phase III trials for central precocious puberty and
prostate cancer, and in a Phase II stage of development for endometriosis;
DIRAME(R)  in Phase III trials for pain management; RADINYL, in Phase III trials
as a radiosensitizer; and STANATE(TM), in Phase II/III trials for neonatal
jaundice.  The Company has obtained approval to sell PROAMATINE for the
treatment of orthostatic hypotension in Ireland (under the name MIDON(R)) and in
Canada (under the name AMATINE(R)), and has obtained approval to sell SOMAGARD
for the treatment of central precocious puberty in the United Kingdom and for
the treatment of prostate cancer in Ireland.

     During the initial stages of the growth and development of its business,
the Company has marketed and sold certain over-the-counter nonprescription
pharmaceuticals, particularly cough and cold and gastro-intestinal products.
See "Nonprescription Pharmaceutical Products."  The Company has also engaged in
certain other diversified nonpharmaceutical business activities, such as
providing home and outpatient medical care, marketing and selling medical
products to industrial companies, and conducting clinical research for other
pharmaceutical companies with respect to the safety and efficacy of their
products.  See "Homecare and Medical Products" and "Contract Clinical Research."
While sales of nonprescription pharmaceutical products and the operations of the
nonpharmaceutical businesses have played important roles in the initial stages
of the growth and development of the Company, the Company has determined that a
continuation of this diversity of operations is inconsistent with its objective
of consolidating its resources in order to focus the Company's business
operations on licensing, acquiring, developing, marketing and selling
prescription pharmaceutical products.  Accordingly, in August 1995, the Company
announced its decision to divest and seek purchasers for certain non-core
business activities, including certain nonprescription pharmaceuticals, certain
nonperforming prescription pharmaceuticals, and its home care and medical
products divisions ("Homecare").  See "Nonprescription Pharmaceutical Products,"
"Homecare and Medical Products" and "Item 7 Management's Discussion and Analysis
of Financial Condition and Results of Operations."  Further, in March 1996,
the Company announced its decision to discontinue and divest the Company's 
clinical research business operations, which are conducted through its
subsidiary VRG International, Inc. ("VRG"), as a result of (i) the desire to
focus the Company's resources on prescription pharmaceuticals, (ii) the
substantial reduction of clinical research work under contract as a result of
the completion of the clinical research studies under the agreements with
Yamanouchi U.S.A. Inc., and (iii) the absence

                                      -3-
<PAGE>
 
of any other significant clinical research contracts, coupled with the fact that
contract clinical research operations are now more highly dependent for
customers on other pharmaceutical companies which the Company believes have been
hesitant to contract with it since such firms view the Company as a rival and
competitor.  See "Contract Clinical Research" and "Item 7 Management's
Discussion and Analysis of Financial Condition and Results of Operations."

                               BUSINESS SEGMENTS

     Over the past several years, the Company has operated in two business
segments: Product Sales and Contract Clinical Research.  However, in connection
with the adoption by the Company of the plan to discontinue and divest the
Contract Clinical Research segment, and the expected sale of such operations
before December 1996, the Company anticipates, in the foreseeable future, that
its business operations will focus almost entirely on Product Sales.  See "Item
7 Management's Discussion and Analysis of Financial Condition and Results of
Operations."  A detailed description of each of the Product Sales and Contract
Clinical Research business segments is set forth below.

PRODUCT SALES SEGMENT

 PRESCRIPTION PHARMACEUTICAL PRODUCTS

     As the Company reaches a new phase in its development and growth as a
pharmaceutical company, the Company plans to concentrate its business operations
primarily on licensing, acquiring, developing, marketing and selling
prescription pharmaceutical products.  To enhance the Company's presence in its
targeted therapeutic categories, the Company has acquired marketed prescription
pharmaceutical products from various pharmaceutical companies.  These product
lines generate cash flow, which contributes partial financial support to the
Company's drug development activities, and provide enhanced product sales
opportunities for the Company's sales force.  In addition, the sale of
prescription pharmaceutical products has enabled the Company to establish
marketing channels in its targeted therapeutic categories which the Company
expects to use to market its late-stage development products after such products
are approved for sale.

     Over the last five years, the Company has acquired the United States and/or
foreign product rights for many prescription pharmaceutical products from
various pharmaceutical manufacturers such as Pharmacia-Upjohn, Inc., Procter &
Gamble Pharmaceuticals, Inc. ("Procter & Gamble"), Bristol-Myers Squibb Company
("Bristol-Myers Squibb"), Glaxo Canada, Inc. ("Glaxo Canada"), Du Pont Merck
Pharmaceutical Company ("Du Pont Merck"), Merck and Co., Inc. ("Merck"),
Wyeth/Ayerst, G.D. Searle & Co. ("G.D. Searle") and SmithKline Beecham plc
("SmithKline Beecham").  Certain of these products are: CHERACOL(R) (with
codeine), a cough/cold product, FURACIN(R), for burn wounds and skin graft
infections, FUROXONE(R), for diarrhea, DUVOID(R), for treatment of urinary
retention, MEPTID(R), an analgesic, BARATOL(R), for use in treatment of
hypertension and peripheral circulatory disorders, ISORDIL(R), an anti-anginal
agent, COMHIST(R), for treatment of allergies, QUIBRON(R), a bronchodilator drug
used for asthma, PRO-BANTHINE(R), an antispasmodic drug, NORETHIN(TM), an oral
contraceptive agent, ETHMOZINE(R) and NORPACE(R), antiarrhythmic cardiovascular
drugs, TRANDATE(R), an

                                      -4-
<PAGE>
 
anti-hypertensive agent, BETNOVATE(R), a dermatological product, SALUTENSIN(R),
SALURON(R) and NITRODISC(TM), cardiovascular products, FLORINEF(R), for
adrenocortical insufficiency, MUCOMYST(R), for abnormal mucous secretion, K-
LYTE(R), for potassium depletion, ELTROXIN(TM), a thyroid drug used for 
treatment of hypothyroidism, MAXOLON(R), a gastro-intestinal agent used for 
treatment of nausea and vomiting associated with cancer chemotherapy, 
MINTEC(R), a gastro-intestinal drug used for symptomatic relief of irritable 
bowel and spastic colon syndromes in adults, and ESTRACE(R), a line of 
estrogen replacement therapy products used for symptomatic relief of 
menopausal symptoms and for the prevention of osteoporosis.

     In February 1995, the Company entered into an exclusive marketing, sales
and distribution agreement with Merck whereby the Company was appointed the
exclusive distributor in the United States of the product NOROXIN(R), an
antibiotic used for the treatment of urinary tract infections.  The agreement is
for an initial term of five years and may be extended for an additional two year
period upon agreement of the parties.  In connection with this arrangement, the
Company has agreed to increase its domestic professional sales force
significantly.  See "Marketing."  The agreement requires that the Company
purchase all its requirements of finished goods from Merck at agreed upon prices
and requires the Company to guaranty certain minimum payments to Merck.  These
minimum payments decrease over the term of the agreement.  In addition, the
agreement requires the Company to make additional payments to Merck based upon
sales levels achieved.  The Company commenced the marketing, sale and physical
distribution of NOROXIN under the Company's label and trade dress in April 1995.
 
     In March 1995, the Company agreed to pay $29.5 million to SmithKline
Beecham to acquire the United States rights to TIGAN(R), a drug used to control
nausea and vomiting, and the worldwide rights to EMINASE(R), a thrombolytic
agent used in the treatment of acute myocardial infarction to dissolve blood
clots obstructing coronary arteries.  The purchase price is to be paid out over
a five year period and includes inventories, trademarks, NDAs, product licenses,
product know-how, customer lists and marketing materials.  SmithKline Beecham
has agreed to manufacture the products for the Company and to provide certain
other services to the Company.  From late 1994 until the date of acquisition of
these products, the Company was the exclusive distributor of TIGAN and EMINASE
pursuant to distribution agreements with SmithKline Beecham.

 NONPRESCRIPTION PHARMACEUTICAL PRODUCTS

     In order to facilitate the growth of the Company's business, the Company
has always focused a part of its operations on the acquisition, marketing and
sale of nonprescription pharmaceutical products.  The Company also actively
engaged in the development of product line extensions for certain of its
nonprescription pharmaceuticals.  For example, the Company extended its CHERACOL
product line to include CHERACOL(R) Nasal Spray, CHERACOL(R) Throat Spray and
CHERACOL(R) Throat Discs, and its PROCORT(TM) product line to include PROCORT 1%
Maximum Strength and PROCORT 1% Spray.  Some of the nonprescription
pharmaceutical products acquired from various pharmaceutical companies and
marketed by the Company are CHERACOL D(R) and CHERACOL PLUS(R), cough/cold
products, HALTRAN(R), an analgesic, ENTROTABS(R) and ENTEROSAN(R), gastro-
intestinal

                                      -5-
<PAGE>
 
products, COLACE(R) and PERI-COLACE(R), used in the treatment of gastro-
intestinal disorders, SQUIBB(R) mineral oil, SQUIBB(R) Glycerin Suppositories
and SQUIBB(R) Cod Liver Oil.

     In August 1995, the Company identified the nonprescription pharmaceuticals
as a non-core business activity and made the decision to divest these products,
except for COLACE and PERI-COLACE which are well known, high volume products
that do not require significant promotional outlays to establish and maintain
consumer brand recognition and the demand for which is not susceptible to
uncontrollable seasonal factors.

  LATE-STAGE DEVELOPMENT PRODUCTS

     The Company has a portfolio of seven late-stage development products.
Rights to these late-stage development products were acquired by the Company
after substantial value had been added to the products through research
activities conducted by others.  The Company's objective is to continue the
development of these late-stage products and bring them to market.  Sales of
products acquired from other pharmaceutical companies, and sales of the
Company's prescription and nonprescription pharmaceutical products, have enabled
the Company to develop a marketing and sales infrastructure to facilitate sales
of these late-stage products, if approved.

 THERAPEUTIC CATEGORY - CARDIOVASCULAR

     PROAMATINE(TM).  In 1985, the Company acquired from Hafslund Nycomed 
Pharma AG ("Hafslund Nycomed Pharma") exclusive marketing rights in the United
States, Canada, the United Kingdom and Ireland to PROAMATINE (midodrine), 
formerly AMATINE(R), a drug used for the treatment of orthostatic hypotension 
and other blood pressure disorders.

     Orthostatic hypotension is a condition involving the sudden drop in blood
pressure upon assuming an upright posture, resulting in dizziness, weakness or
unconsciousness.  Current therapies used to treat the condition are associated
with significant adverse side effects such as potassium reduction, fluid
retention and cardiac and central nervous system disorders.  PROAMATINE has an
NDA pending for orthostatic hypotension.  In March 1996, the FDA requested
additional information regarding the Company's NDA for PROAMATINE.  The FDA
noted that while PROAMATINE has a clear pressor effect in both the supine and
standing positions, the Company must provide further data before the drug can be
approved for the treatment of orthostatic hypotension.  The Company is reviewing
the details of the FDA's request for further data and how to satisfy the
apparent deficiency.  No FDA approved treatment for orthostatic hypotension is
currently available.

     In 1990, the Company was granted approval by the Irish National Drugs
Advisory Board to market PROAMATINE for use in the treatment of orthostatic
hypotension in Ireland, where the drug is sold under the name MIDON.  In 1991,
the Company obtained regulatory approval in Canada for the sale of PROAMATINE
for use in the treatment of orthostatic hypotension in Canada, where the drug is
sold under the name AMATINE.  AMATINE is sold in Canada by the Company's
licensee, Knoll Pharma Inc. ("Knoll")

                                      -6-
<PAGE>
 
(formerly Boots Pharmaceuticals Ltd.).  PROAMATINE is currently in Phase III
clinical trials in the United Kingdom.

     The Company has commenced studies to evaluate the efficacy of PROAMATINE
for use in the treatment of other forms of hypotension, including hemodialysis-
induced hypotension and familial dysautonomia.  If such studies are successful,
the Company intends to apply for FDA and foreign regulatory approval of such
uses.

      AGRELIN(R).  In 1991, the Company obtained an exclusive worldwide license
from Bristol-Myers Squibb to develop, market and sell AGRELIN (anagrelide),
which is being developed as an oral treatment for thrombocytosis, a blood
disorder characterized by high blood platelet counts and an abnormally high
incidence of adverse blood clotting events including heart attack and stroke.
There is evidence that some patients with increased platelet counts have
thrombosis or hemorrhage which can be treated successfully by lowering the
platelet count.  AGRELIN is intended to inhibit excessive platelet production
and reduce the morbidity and mortality of heart attack and stroke in
thrombocytosis patients.  Current therapies used to reduce excessive platelet
production have distinct disadvantages, such as carcinogenesis, leukopenia and
anemia.  Based on the results of Phase III clinical trials, the Company believes
that AGRELIN does not have the disadvantages associated with the other therapies
because it only affects the production of platelets and has no effect on other
blood cells.  AGRELIN has an NDA pending for thrombocytosis.  The Company has
received notice from the FDA that the Company's NDA for AGRELIN was officially
accepted for filing, effective January 29, 1996.  According to regulations,
unless extended for administrative reasons, the FDA now is obliged to complete
the NDA review and determine the approvability of AGRELIN within 180 days.

     AGRELIN is currently in Phase III trials in Canada and Europe.  AGRELIN has
been accepted by the European Community regulatory authorities as a "List B"
Product, which includes those products considered to be major therapeutic
advances.  The Company plans to combine its United States and European data for
submission to the European Community regulatory authorities through the European
Community concertation procedure ("CPMP"), commencing with the United Kingdom.
If approved by the member states using the CPMP procedure, AGRELIN would receive
simultaneous approval throughout the European Community.

 THERAPEUTIC CATEGORY - RESPIRATORY

      MAXIVENT(R).  In 1984, the Company obtained an exclusive license from ABC
Laboratories of Italy ("ABC") to develop and market MAXIVENT (doxofylline) in
the United States, Canada and Japan and, in 1989, obtained a nonexclusive
license to develop and market the drug in the United Kingdom and Ireland.
MAXIVENT is an oral bronchodilator intended for use in the treatment of asthma.

     Common asthma is a condition involving the periodic constriction of the
airways resulting in labored and often painful breathing.  Treatment is
generally provided by means of bronchodilator drugs which relieve the
constriction of the airways and, in turn, the distress of an attack.  The most
commonly used oral bronchodilator is theophylline, a drug with good efficacy but
which is capable of producing certain undesirable side effects such as

                                      -7-
<PAGE>
 
disturbances in heart rhythm, central nervous system irritability, convulsions,
gastro-intestinal distress and excess urination.  Phase II clinical studies and
Phase III clinical trials indicate that MAXIVENT appears to be comparable in
efficacy to theophylline; however, unlike theophylline, MAXIVENT does not appear
to produce a high incidence of adverse side effects.

     The Company has completed Phase III trials and anticipates filing an NDA
for MAXIVENT during 1996.  MAXIVENT has been approved for commercial sale in
Italy and is currently being sold in that country under the tradename "ANSIMAR"
by the Company's unaffiliated licensor, ABC.

 THERAPEUTIC CATEGORY - GYNECOLOGY/ENDOCRINOLOGY

    SOMAGARD(R).  In 1988, the Company acquired rights from the Salk Institute
to manufacture and market SOMAGARD (deslorelin) in the United States and in
certain foreign countries, including the United Kingdom and Canada.  SOMAGARD is
being developed for the treatment of central precocious puberty in children, an
endocrine disorder that results in premature release of hormones, and
endometriosis in women.  Published reports of long-term studies conducted by the
National Institutes of Health have indicated that the administration of SOMAGARD
inhibits the release of hormones which cause the abnormal maturation process and
causes a return to normal growth rates.  The Company has completed Phase III
trials and anticipates filing an NDA in 1996 for SOMAGARD for use in the
treatment of central precocious puberty.

     The Company currently markets the product SUPPRELIN(R) (histrelin), an
orphan drug, for central precocious puberty.  See "Government Regulation."  The
Company believes that SOMAGARD will complement SUPPRELIN.  A depot formulation
of SOMAGARD is being developed which will require less frequent injections.  The
Company intends to market SOMAGARD, if approved by the FDA, to endocrinologists
and managed healthcare organizations through the marketing channels that it has
established for SUPPRELIN.

     SOMAGARD also is being developed as a treatment for endometriosis.  A
number of Phase II clinical trials for this indication have been conducted and
the Company plans to commence Phase III clinical trials.  Endometriosis is a
gynecologic abnormality which may result in pain, infertility and sexual and
bowel dysfunction.  Published reports of studies conducted by the National
Institutes of Health indicate that SOMAGARD relieves pain and restores normal
sexual and bowel function in women with this condition.

      STANATE(TM).  In 1994, the Company acquired the exclusive worldwide rights
from The Rockefeller University to develop, manufacture, market and sell
STANATE(TM) (SN-mesoporpyrin), which is being developed for the treatment of
hyperbilirubinemia in neonates, a condition caused by an accumulation of
excessive levels of bilirubin produced by the liver.  Unless treated,
hyperbilirubinemia can result in jaundice, brain damage and death.

     Bilirubin is excreted by the liver pursuant to a metabolic step requiring
the presence of an enzyme which, studies have shown, is not fully functional in
many early term and full term neonates.  STANATE is intended to inhibit the
accumulation of excessive levels of

                                      -8-
<PAGE>
 
bilirubin in neonates and to provide neonate enzyme systems with an opportunity
to mature and take over the normal elimination of bilirubin.

     The most common treatment for hyperbilirubinemia in neonates involves
phototherapy which requires exposure to a light source in order to stimulate the
temporary excretion of bilirubin by the kidneys.  Phototherapy is often not
fully effective and requires many hours and sometimes several days of exposure
to light with resulting maternal separation, extensive nursing supervision and
related time-sensitive costs.  In contrast, STANATE is administered by injection
and clinical studies have shown that one dose is generally all that is necessary
for treatment purposes.  STANATE is currently in Phase II/III clinical trials.

 THERAPEUTIC CATEGORY - UROLOGY

      PROAMATINE.  In addition to its use in the treatment of blood pressure
disorders, PROAMATINE is currently sold in several countries by unaffiliated
third parties to treat stress urinary incontinence, the involuntary loss of
urine from the bladder.  There is no approved therapy for stress urinary
incontinence in the United States.  PROAMATINE is an alpha agonist which
increases the tension of the urinary sphincter, thereby preventing the
involuntary loss of urine from the bladder.  The Company is conducting a Phase
II clinical program in the United States for the use of PROAMATINE in the
treatment of stress urinary incontinence.

  THERAPEUTIC CATEGORY - ONCOLOGY

      RADINYL.  In 1985, the Company obtained from the United States government
rights to manufacture and sell the product RADINYL (etanidazole), a
radiosensitizer being developed to enhance the anticancer effects of radiation
therapy and a chemosensitizer being developed to increase the effectiveness of
other anticancer drugs.

     For use in conjunction with radiotherapy, RADINYL is currently in Phase III
clinical trials in patients with advanced head and neck cancer.  The patients
enrolled in these trials in the United States and Europe were randomized to
receive either RADINYL in conjunction with radiotherapy or radiotherapy alone.
There is a five-year review period for each patient following the course of
radiotherapy.  The review period for the U.S. trials will be complete in the
Fall of 1996 and the review period for the European trials was completed at the
end of 1995.

     Phase I and Phase II clinical studies are being conducted with RADINYL to
determine its potential in increasing the effectiveness of other anticancer
drugs in the treatment of brain, lung, prostate and bladder cancer and its
potential for use with brachytherapy, a technique involving the direct implant
of a radioactive source into or adjacent to large tumors.

      DIRAME(R).  In 1992, the Company obtained exclusive worldwide rights from
Bayer AG ("Bayer") to develop and market DIRAME (propiram), a potent, centrally
acting analgesic with low addiction potential intended for use in the control of
moderate to severe acute or chronic pain.  See "Government Regulation."

                                      -9-
<PAGE>
 
     DIRAME is in Phase III clinical trials which indicate that the compound
appears to be safe and effective in patients with various kinds of acute and
chronic pain.

     A joint venture from which Bayer obtained the rights to DIRAME had
initially filed an NDA for DIRAME.  Subsequent to such filing, the FDA required
additional studies regarding the drug.  The Company is now addressing the issues
raised by the FDA and, in 1993, commenced long-term carcinogenicity studies on
two species of laboratory animals and other clinical studies.  In order to
complete its NDA filing, the Company believes it must complete these studies and
a Phase III clinical trial involving approximately 300 patients.

      SOMAGARD.  In addition to the treatment of central precocious puberty and
endometriosis, SOMAGARD has been studied as adjunctive treatment for prostate
cancer.  Other treatments for prostate cancer such as surgery and/or
radiotherapy are often precluded because the cancer has spread to the bones.  As
a result, castration, hormonal therapy or chemotherapy are often the only
available treatments.  SOMAGARD is being evaluated by the Company as an
alternative to these procedures.  The Company has filed a Product License
Application (NDA equivalent) for SOMAGARD for treatment of prostate cancer in
the United Kingdom and has obtained approval from the Irish regulatory
authorities to market the product for this indication.  Use of SOMAGARD for the
treatment of prostate cancer in the United States is in Phase III clinical
trials.

 LICENSE AGREEMENTS

     The Company has obtained rights to the late-stage drugs currently being
developed by it through license agreements with pharmaceutical companies,
government agencies and research based institutions and has sublicensed certain
of these rights to pharmaceutical companies through license and/or marketing
agreements.  A discussion of these agreements is provided below.

     PROAMATINE Agreements.  In 1985, the Company entered into a license
     ----------------------                                             
agreement with Hafslund Nycomed Pharma pursuant to which the Company obtained
exclusive rights to develop and market the product PROAMATINE in the United
States, Canada, the United Kingdom, Ireland and certain other countries.  The
agreement was amended in January 1994 to, among other things, provide for a
reduction in the delivery price of midodrine to the Company in any territory
covered by the agreement for a five year period commencing upon the Company's
launch of the product in any such territory and the addition of minimum sales
requirements which must be achieved by the Company in the territories covered by
the agreement in order to maintain exclusivity.  The Company's agreement with
Hafslund Nycomed Pharma, as amended, obligates it to develop PROAMATINE and
obtain governmental approval to market the product in the licensed territories.
The Company is obliged to pay a royalty to Hafslund Nycomed Pharma on sales of
PROAMATINE by the Company and its distributors and must purchase its
requirements of PROAMATINE from Hafslund Nycomed Pharma.

     In 1991, the Company entered into a marketing agreement with Knoll which
granted Knoll the exclusive right to market and sell PROAMATINE in Canada (under
the name AMATINE) for use in the treatment of orthostatic hypotension.

                                      -10-
<PAGE>
 
     AGRELIN License Agreement.  In 1991, the Company entered into a license
     --------------------------                                             
agreement with Bristol-Myers Squibb pursuant to which the Company obtained
exclusive worldwide rights to develop and market AGRELIN.  The Company is
obliged to fund the continued development and registration of AGRELIN, make an
additional payment upon FDA approval and pay royalties on sales of the drug.

     In 1994, the Company entered into a distribution agreement with Swedish
Orphan AB ("Swedish Orphan") for the distribution and sale of AGRELIN in the
Nordic countries of Norway, Sweden, Finland, Denmark and Iceland.  AGRELIN is
not yet approved in the Nordic countries and, as part of the distribution
agreement, Swedish Orphan is responsible for obtaining regulatory approval.  If
regulatory approval is obtained, the Company will supply finished goods to
Swedish Orphan which will provide physical distribution along with marketing and
sales support.

     MAXIVENT Agreements.  In 1984, the Company obtained an exclusive license
     --------------------                                                    
from ABC to develop and market MAXIVENT in the United States, Canada and Japan
and, in 1989, obtained a nonexclusive license to develop and market the drug in
the United Kingdom and Ireland.  The exclusive license agreement requires the
Company to develop the product and obtain the requisite FDA and other approvals.
Each of the exclusive and nonexclusive license agreements requires the Company
to purchase its requirements of the bulk drug substance from ABC.  If the
Company does not meet certain sales levels to be agreed upon, ABC may terminate
the exclusive license agreement, appoint additional licensees in the United
States, Canada and Japan or market the product directly or through third parties
in the United Kingdom and Ireland.

     In 1993, the Company entered into an agreement with two Japanese
pharmaceutical companies, Sawai Pharmaceutical Co., Ltd. and Grelan
Pharmaceutical Co., Ltd., pursuant to which the Company granted such companies
exclusive rights to co-develop doxofylline in Japan.  The agreement was entered
into after the two Japanese pharmaceutical companies exercised an option to
acquire such rights previously granted to them by the Company.

     SOMAGARD License Agreement.  In 1988, the Company and the Salk Institute
     ---------------------------                                             
entered into a license agreement pursuant to which the Company obtained certain
rights to develop and market the product SOMAGARD in the United States and
certain foreign markets, including the United Kingdom and Canada.  Under the
terms of the license agreement, the Company is required to pay royalties on
sales of SOMAGARD in countries in which the Salk Institute has obtained patents.

     DIRAME License Agreement.  In 1992, the Company entered into a license
     -------------------------                                             
agreement with Bayer with respect to the product DIRAME.  Pursuant to this
agreement, the Company acquired exclusive worldwide rights from Bayer to
develop, manufacture and market the product DIRAME.  The Company paid an up-
front royalty to Bayer for rights to develop and market DIRAME.  The Company
must also pay Bayer licensing fees and royalties on sales.

     RADINYL Agreements.  In 1985, the United States government and the Company
     -------------------                                                       
entered into a license agreement pursuant to which the Company obtained certain
rights to develop and market the product RADINYL.  The license granted to the
Company is

                                      -11-
<PAGE>
 
exclusive for seven years from the date of the first commercial sale of the
product and nonexclusive thereafter.  The agreement pursuant to which the
license has been granted requires the Company to pay certain patent maintenance
fees and royalties to the United States government.

     In 1985, the Company and Hafslund Nycomed Pharma formed a joint venture
company known as Linz-Roberts, Inc. ("Linz-Roberts") to develop RADINYL.  The
Company and Hafslund Nycomed Pharma each own 50% of the common stock of Linz-
Roberts.  The Company contributed its license to RADINYL to Linz-Roberts and the
Company has been granted an exclusive license by the joint venture to
manufacture and distribute RADINYL dosage forms in the United States, Canada,
the United Kingdom and Ireland.  Hafslund Nycomed Pharma has been licensed on an
exclusive basis to manufacture and distribute RADINYL dosage forms in Europe
(except the United Kingdom and Ireland), the Middle East and Africa.  Both
parties have the right to grant sublicenses.  Hafslund Nycomed Pharma has been
designated the supplier of bulk RADINYL substance, and the joint venture has
contracted to purchase its entire requirements of bulk RADINYL substance from
Hafslund Nycomed Pharma, provided that Hafslund Nycomed Pharma can meet certain
price requirements and supply all required quantities.  Linz-Roberts has
retained the right to distribute RADINYL in the territories not licensed to the
Company or Hafslund Nycomed Pharma.

     STANATE License Agreement.  In 1994, the Company and The Rockefeller
     --------------------------                                          
University entered into a license agreement pursuant to which the Company
acquired the exclusive worldwide rights to develop, manufacture, market and sell
STANATE.  The Company paid an up-front license fee to Rockefeller University for
the rights to develop, manufacture, market and sell STANATE.  The Company must
also pay Rockefeller University annual licensing fees and royalties on sales.

 MARKETING

     The Company markets and sells its products primarily through its own sales
force and through a network of brokers and distributors.  During 1995, the
Company's marketing and sales force increased by more than 50% in order to
promote actively the Company's products, mainly in connection with the
commencement of the sale of TIGAN, EMINASE and NOROXIN.  Pursuant to the
Company's exclusive marketing, sales and distribution agreement with Merck with
respect to NOROXIN, the Company agreed to increase its domestic professional
sales force significantly and to make a fixed number of medical presentations to
medical specialists in order to promote NOROXIN actively.  See "Prescription
Pharmaceutical Products."

     The Company is currently positioning its sales operation to impact selected
physician specialties and major buying and decision making entities, such as
managed care organizations and large retail and mass merchandise operations.
With the growing trend in the United States of providing health care through
some form of managed care program, the Company has stepped up its selling
efforts of prescription products to such managed healthcare organizations.  In
an effort to increase its sales to managed healthcare organizations, the Company
has employed national account managers to focus efforts on this growing market.
Various marketing, promotion, sales and training programs have been

                                      -12-
<PAGE>
 
initiated to improve the Company's penetration of the managed healthcare market
and increase product sales to managed healthcare organizations.

     In October 1995, the Company hired a contract sales organization, Syncom
Pharmaceuticals, Inc. ("Syncom"), to assist with a pediatric promotional program
involving TIGAN, NUCOFED and FUROXONE, and a cardiovascular promotional program
involving NITRODISC.  Pursuant to the terms of the agreement between Syncom and
the Company, Syncom will hire and train approximately seventy-five sales
representatives who will call upon a select physician audience to promote TIGAN,
NUCOFED, FUROXONE and NITRODISC.  Syncom shall receive a fixed fee for each
physician call made and a service fee for establishing a series of pediatric
product line territories.  Initially, Syncom shall promote the pediatric program
for a period of ten (10) months, and the cardiovascular program for a period of
twelve (12) months.  The Company can extend the agreement for a period of four
months.

 MANUFACTURING

     The Company engages contractors, primarily large pharmaceutical companies,
to convert active ingredients into finished drug products.  In most instances
where the Company has acquired the rights to approved products from other
pharmaceutical companies, the seller or licensor has agreed to manufacture the
Company's requirements of the products for a specified period of time.  The
manufacturing activities conducted by third parties for the Company consist of
the receipt and storage of materials, purification, production, packaging and
labeling.  The Company has established a manufacturing department which is
responsible for (i) monitoring the manufacturing operations of its contractors,
(ii) inventory control, and (iii) quality control.  The Company's manufacturing
department has established a quality control and quality assurance program,
including a set of standard operating procedures, designed to assure that the
Company's products are manufactured in accordance with good manufacturing
practices standards ("GMP") and other applicable domestic and foreign
regulations.

 HOMECARE AND MEDICAL PRODUCTS

     In 1994, the Company reorganized Homecare under the name "Pronetics Health
Care Group."  Through four subsidiary entities of the Company, located in South
Carolina, North Carolina, New York and New Jersey, Homecare distributes high
value prescription injectable and biotechnology pharmaceutical products for
physician office use and provides medical and other health oriented therapies in
home and outpatient settings.  The products distributed by Homecare include
specialty endocrinology, oncology and biotechnology products for nationwide
distribution to physicians and a series of products for use in the treatment of
AIDS patients, such as recombinant erythropoietin.  Homecare operates a
licensed, certified and isolated clean room laboratory at its South Carolina
location where it prepares many of the drugs that it distributes.  The home and
outpatient therapeutic services offered by Homecare include enteral and
parenteral nutritional support, IV antibiotic therapy, investigational drug
therapies, chemotherapy, pain management, HIV/AIDS therapies, human growth
hormone therapy and home infusion therapy.  Through a division of the Company,
Roberts Medical Products, Homecare markets medical products to industrial
companies

                                      -13-
<PAGE>
 
through catalogs, advertising flyers, telemarketing, direct physician office
visits and at local, regional and national medical conventions.

     In August 1995, the Company announced its decision to discontinue and
divest certain non-core, nonpharmaceutical business activities, including the
operations of Homecare, which are no longer compatible with the Company's
objective of growing and developing a pharmaceutical company with a primary
focus on the sale of prescription drugs.  While Homecare's businesses had a role
in the initial stages of the Company's growth and development, these businesses
never represented a significant portion of the Company's consolidated revenue or
earnings.  The Company believes that by narrowing its business mix through
divestment of these non-core businesses,  the Company can realize certain
significant benefits such as (i) a more efficient and focused deployment of the
Company's resources towards the sale of prescription pharmaceuticals; (ii) the
opportunity to allocate more of the Company's resources towards moving the
Company's late-stage development drugs through the Company's research and
development pipeline; and (iii) the ability to provide greater management
control over the Company's core business operations.

     The Company is continuing the process of reviewing divestment opportunities
for Homecare and is actively soliciting offers for the assets of these
businesses.  The Company already has sold many of the assets of the medical
products division.  The Company expects to complete the sale of the Homecare
businesses in 1996.  For financial reporting purposes, the operations of
Homecare have been accounted for as discontinued operations and reported
separately from the results of the Company's continuing business operations.
See "Item 7 Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Notes to Consolidated Financial Statements - Note
16."

 PATENTS AND PROPRIETARY RIGHTS

     The Company considers the protection of discoveries in connection with its
development activities important to its business.  To date, the Company  has
acquired certain foreign patents acquired in connection with the acquisition of
certain products and has filed applications for patents covering new processes
for manufacturing anagrelide, the active ingredient in AGRELIN.  Additionally,
rights to patented technology have been licensed to the Company.  The late-stage
products being developed by the Company which are afforded patent protection
are: AGRELIN - patents issued 1976, 1980 and 1982 and applications filed in
1996; MAXIVENT - patent issued 1980; SOMAGARD - patent issued 1980; DIRAME -
patent issued 1978; RADINYL - patent issued 1983; and STANATE - patents issued
1987, 1988, 1992 and 1993.  The SOMAGARD patent applies to the use of the
product for the treatment of precocious puberty and prostate cancer in males.
Certain of the Company's products may be afforded protection under laws which
provide market exclusivity for orphan drugs and drugs which include a new active
ingredient.  See "Government Regulation."

CONTRACT CLINICAL RESEARCH SEGMENT

     Since its inception, the Company, through its subsidiary VRG, has derived a
portion of its revenues from contract clinical research.  Under these
arrangements, the Company is paid a fee to conduct clinical research for
pharmaceutical companies that wish to test the safety and efficacy of their
products.  The Company has primarily conducted studies of

                                      -14-
<PAGE>
 
investigational new drugs for major multinational pharmaceutical company clients
and to a lesser degree performed safety and efficacy tests on a variety of over-
the-counter products.

     The Company has also provided clinical investigation services to
pharmaceutical companies to assist them in reducing the time required to
introduce new drugs to the market.

     The Company's integrated clinical research operations have been conducted
through fifteen research-dedicated outpatient clinics located in 10 states; an
in-house patient recruiting system; a custom designed multi-purpose computerized
study tracking system; on-site study coordinators; qualified contract
investigators; sophisticated data management and multi-level quality control.

     In 1992 and 1993, VRG entered into a series of agreements with Yamanouchi,
U.K. Limited, a subsidiary of Yamanouchi Pharmaceutical Co., Ltd.
("Yamanouchi"), pursuant to which VRG conducted clinical trials on YM617.  These
agreements were subsequently assigned to Yamanouchi U.S.A. Inc. ("Yamanouchi
U.S.A."), also a subsidiary of Yamanouchi.  In 1995, Yamanouchi U.S.A. merged
with and into Yamanouchi Group Holding Inc. ("Yamanouchi Group"), also a
subsidiary of Yamanouchi, as part of a corporate restructuring, and all assets
of Yamanouchi U.S.A.were transferred to the Yamanouchi Group. Yamanouchi Group
is a major shareholder of the Company. As required by the terms of the
agreements, as amended, VRG completed all work under the agreements by December
31, 1995 and Yamanouchi has paid to VRG the balance of the $30 million contract
fee (approximately $28.2 million had been paid to VRG before 1995).

     The work performed under the Yamanouchi agreements decreased in 1995 and
was not replaced by other contracts.  This resulted in substantially lower
revenue from contract clinical research operations during the fiscal year ended
December 31, 1995.  See "Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations."  In 1995, VRG's operations
produced a loss, net of tax benefit, of $3.5 million.   Consistent with the
Company's decision in 1995 to discontinue and divest certain of its non-core,
nonpharmaceutical businesses, the Company announced, in March 1996, the adoption
of a plan pursuant to which it will discontinue and seek to divest the business
operations of VRG. Contract clinical research generally has proven to have lower
profit margins than the sale of prescription pharmaceuticals, and the Company
believes that, in the future, contract clinical research has lower growth
prospects for it than the sale of prescription pharmaceuticals. If the Company
continued the operations of VRG, the Company projects that, in the foreseeable
future, the operation of its contract research business would continue to
produce a net loss. The Company is also faced with the dilemma that contract
clinical research operations are now more highly dependent for customers on
other pharmaceutical companies which, as the Company continues to grow and
develop as a pharmaceutical company with a focus on the sale of prescription
drugs, have been hesitant to contract with the Company since such firms view the
Company as a rival and competitor. The Company expects that the sale of its
contract clinical research operations will be completed before the end of
December 1996. See "Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Notes to Consolidated Financial
Statements - Note 16."

                                      -15-
<PAGE>
 
GENERAL
 
 COMPETITION

     Many companies, including large pharmaceutical, chemical and biotechnology
firms with financial and marketing resources and research and development staffs
and facilities substantially greater than those of the Company, are engaged in
researching, developing, marketing and selling products intended to treat the
same conditions and diseases as the products currently sold and under
development by the Company.  Further, other products now in use or under
development by others may be intended to treat the same conditions as the
Company's products.  The pharmaceutical industry is characterized by rapid
technological advances, and competitors may develop products more rapidly than
the Company.  In addition, competitors may be able to complete the regulatory
approval process sooner than the Company, and therefore market their products
earlier than the Company can market certain of its products.

 GOVERNMENT REGULATION

     The marketing of pharmaceutical products requires the approval of the FDA
and comparable agencies in foreign countries.  The FDA has established
guidelines and safety standards which apply to the preclinical evaluation,
clinical testing, manufacture and marketing of pharmaceutical products.  The
process of obtaining FDA approval for a new drug can take many years and often
involves the expenditure of substantial resources.  The steps required before
such a product can be produced and marketed for human use include preclinical
studies, the filing of an IND, human clinical trials and the approval of an NDA.

     Drug marketing exclusivity protection is granted through the Orphan Drug
Act of 1983 (the "Orphan Drug Act") and the Drug Price Competition and Patent
Term Restoration Act of 1984 (commonly referred to as the "Waxman Hatch Act").
The Orphan Drug Act entitles a company to market exclusivity in the United
States for a period of seven years from the date of FDA approval for drugs
which, among other criteria, are intended to treat a patient population of less
than 200,000.  Three of the Company's late-stage drugs, PROAMATINE for
idiopathic orthostatic hypotension, SOMAGARD for central precocious puberty and
AGRELIN for thrombocythemia, have been granted "orphan drug status" in the
United States.  Certain provisions of the Waxman-Hatch Act grant market
exclusivity in the United States for a period of five years from the date of FDA
approval for drugs containing a new active ingredient.  Based upon its review of
industry and government data, the Company believes that DIRAME may qualify for
this protection.

     The manufacturing processes of the Company's contractors and licensees are
subject to regulation, including the need to comply with GMP.  The Company's
business is also subject to regulation under the Occupational Safety and Health
Act, the Environmental Protection Act, the Toxic Substances Control Act, the
Drug Enforcement Act, the Resource Conservation and Recovery Act, the
Pharmaceutical Marketing Act of 1988 and other present and potential future
federal, state or local regulations.

     The Company's subsidiaries operating as part of Homecare are subject to
federal laws and regulations which govern reimbursement procedures and practices
under the

                                      -16-
<PAGE>
 
Medicare program and impose certain restrictions on both the manner in which the
services are provided as well as on the manner in which certain administrative
activities are handled.  In addition, these subsidiaries are subject to federal
environmental laws and regulations regarding the disposal of toxic and
infectious waste.  However, with the adoption of the plan to discontinue the
operations of Homecare, the Company anticipates that these laws and regulations
will not have a significant effect on its business operations in the future.

     The Company markets various products containing controlled substances that
are subject to the Department of Justice, Drug Enforcement Administration
regulations.  Distribution of prescription drugs classified as controlled
substances or, in some cases, other pharmaceutical products, is subject to
licensing or regulation in certain states.  Generally, the entity engaged in the
actual distribution is subject to such regulation.  In addition, state licensing
is generally required in the state in which such entity's principal place of
business is located.

     United States Federal and state governments continue to seek means to
reduce costs of Medicare and Medicaid programs, including placement of
restrictions on reimbursement for, or access to, certain drug products.  Major
changes were made in the Medicaid program under the Omnibus Budget
Reconciliation Act of 1990 (the "Act").  As a result, the Company entered into a
Medicaid Rebate Agreement ("Rebate Agreement") with the United States
Government, under Section 4401 of the Act.  Pursuant to the Rebate Agreement, in
order for federal reimbursement to be available for prescription drugs under
state Medicaid plans, the Company must pay certain statutorily prescribed
rebates on Medicaid purchases.  Effective July 1, 1991, the law also denies
federal Medicaid reimbursement for drug products of the original NDA-holder if a
less expensive generic version of such drug is available from another
manufacturer, unless the prescriber indicates on the prescription that the
branded product is medically necessary.

     In most other markets, governments exert controls over pharmaceutical
prices either directly or by controlling admission to, or levels for,
reimbursement by government health programs.  The nature of such controls and
their effect on the pharmaceutical industry vary greatly from country to
country.

 EMPLOYEES

     As of March 22, 1996, the Company had 483 employees, including 4 officers,
40 persons engaged in research and development activities and 257 persons
engaged in marketing and sales activities.  In addition to its full-time staff,
the Company engages medical doctors and other professional personnel on a
consultancy basis and, from time to time, consultants and others on a per diem
or hourly basis.

     The Company believes its relations with its employees are satisfactory.

                                      -17-
<PAGE>
 
 FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS

     Financial Information about Foreign and Domestic Operations is presented in
Note 14 to the Company's financial statements.  See "Notes to Consolidated
Financial Statements -Note 14."

ITEM 2.  PROPERTIES

     The Company's worldwide headquarters is located at Meridian Center II, 4
Industrial Way West, Eatontown, New Jersey.  The building housing the Company's
worldwide headquarters, which was purchased by the Company in 1992 and occupied
in 1993, consists of an aggregate of 80,000 square feet.

     The Company owns an office and warehouse building consisting of 30,300
square feet, which is located across the street from the Company's worldwide
headquarters.  The Company uses this building for the warehousing of Company
records, archives, certain offices and facilities.

     The Company's United Kingdom subsidiary, Monmouth Pharmaceuticals, Ltd.,
occupies 3,800 square feet of leased office space in the Surrey Research Park in
Guildford, Surrey, England, 30 miles south of London.  The monthly rental for
these offices is approximately 6,500 British pounds.

     The Company's Canadian subsidiary, Roberts Pharmaceutical Canada, Inc.,
occupies 4,122 square feet of leased office space in Ontario, Canada.  The lease
provides for a monthly rental of $4,122, Canadian currency.

     The Company also leases office space in several other locations in the
United States and certain foreign countries.

ITEM 3.  LEGAL PROCEEDINGS

     On April 10, 1995, a shareholders' class action suit was instituted in the
United States District Court for the District of New Jersey against the Company
and certain of its officers and a former officer by Grace Cowitt on behalf of
all persons who purchased shares of the Company's Common stock between November
7, 1994 and March 22, 1995.  On June 26, 1995, a similar shareholders' class
action suit was instituted in the United States District Court for the District
of New Jersey against the Company and certain of its officers and a former
officer by Dieter Zander on behalf of all persons who purchased shares of the
Company's Common Stock between November 7, 1994 and May 31, 1995.  Each
complaint asserts claims against the Company and certain of its officers and a
former officer for violations of Section 10(b) and 20(a) of the Securities and
Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder with
respect to press releases and filings with the Securities and Exchange
Commission and certain public statements allegedly made by the Company and
certain of its officers and a former officer relating to the Company's business.
The plaintiffs seek to recover damages in an unspecified amount.  The Company
believes that it has complied with all of its obligations under the federal
securities laws and considers the plaintiffs' allegations to be without merit.
In October 1995, the suit filed by

                                      -18-
<PAGE>
 
Dieter Zander was voluntarily dismissed by the plaintiff.  The Company is
vigorously defending against the allegations in the remaining suit and discovery
proceedings have commenced.  The District Court has not yet certified the
lawsuit as a class action.  The Company is not able to predict the outcome of
this proceeding at this time, and management is not able to determine the amount
of the potential liability, if any.

     There are no additional material legal, governmental, administrative or
other proceedings pending against the Company, any of its subsidiaries or any of
their properties, or to which the Company or any such subsidiary is a party, and
to the knowledge of management, no such material proceedings are threatened or
contemplated.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     During the fourth quarter ended December 31, 1995, no matter was submitted
to a vote of the Company's security holders through the solicitation of proxies
or otherwise.

ITEM 4A.  EXECUTIVE OFFICERS OF THE REGISTRANT

     The executive officers of the Company as of March 22, 1996 are listed below
and brief summaries of their business experience and certain other information
with respect to each of them is set forth in the following table and in the
information which follows the table.

     The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
 
NAME                         AGE            POSITION
---------------------------  ---  -----------------------------
<S>                          <C>  <C>
 
ROBERT A. VUKOVICH, Ph.D.     52  President and Chief Executive
                                  Officer
 
ROBERT W. LOY                 58  Executive Vice President
 
PETER M. ROGALIN              53  Vice President, Treasurer and
                                  Chief Financial Officer
 
ANTHONY A. RASCIO, ESQ.       53  Vice President, Secretary and
                                  General Counsel

</TABLE>

______________________

     Robert A. Vukovich, Ph.D., has served as Chairman of the Board and
President of the Company since its inception in 1983.  From 1979 to 1983, he
served as Director of the Division of Developmental Therapeutics for Revlon
Health Care Group.  From 1970 to 1974, Dr. Vukovich was employed in various
capacities by the Squibb Institute and served as Director of Clinical
Pharmacology for that organization from 1974 to 1979.  Prior to 1970, Dr.
Vukovich was a clinical research scientist for The Warner Lambert Research
Institute.

                                      -19-
<PAGE>
 
Dr. Vukovich is a graduate of Jefferson Medical College, Philadelphia,
Pennsylvania, with training in pharmacology and pathology.

     Robert W. Loy has served as Executive Vice President of Operations and New
Business Development since March 4, 1996.  Mr. Loy served as Chief Operating
Officer of the Company from August 1992 to March 1996 and as Vice President of
the Company from December 1992 to March 1996.  Mr. Loy has served as a Director
of the Company since October 1993.  From 1963 to 1990, he held various positions
at Squibb Corporation, including that of Vice President, Worldwide Operations
for the Squibb Derm Division.  From 1990 to 1992, Mr. Loy served as Vice
President, International Sales and Marketing, with Hollister, Inc.  Mr. Loy
received his undergraduate degree from Old Dominion University and attended
Villanova University Graduate School.

     Peter M. Rogalin has served as Vice President, Treasurer, Chief Financial
Officer and a Director of the Company since February 5, 1996.  From 1978 to
1992, Mr. Rogalin was employed in various executive capacities by Sterling
Winthrop, Inc. (formerly Sterling Drug, Inc.), including Assistant Treasurer
from 1987 through 1992.  From 1993 through July 1994, Mr. Rogalin was a
Principal in RK Associates, a consulting firm with specific expertise in
financial and business operations and systems for small and medium sized
companies.  From July 1994 through January 1996, Mr. Rogalin served as Vice
President -Finance and Chief Financial Officer of ImClone Systems, Inc., a
biopharmaceutical company engaged in research and development of therapeutic
products for the treatment of cancer and cancer related disorders.  Mr. Rogalin,
a Certified Public Accountant, received his undergraduate degree from St.
Lawrence University and an M.B.A. from the Graduate School of Business, New York
University.

     Anthony A. Rascio, Esq., has served as Vice President and General Counsel
and a Director of the Company since June 1987.  In addition, he served as
Assistant Secretary of the Company from 1987 to 1992, at which time he assumed
the position of Secretary of the Company.  From January 1987 to June 1987, Mr.
Rascio was Director, Legal Affairs for the Company.  During 1986, Mr. Rascio was
engaged in the private practice of law.  From 1984 through 1985, Mr. Rascio was
employed as Director, International Operations by Jeffrey Martin, Inc., a
marketer of cosmetics and proprietary medicines.  Mr. Rascio served as Legal
Director, International Pharmaceutical Products Division for Schering-Plough
Corporation from 1980 through 1984 and held various legal positions with that
company from 1971 to 1980.  Mr. Rascio received undergraduate and law degrees
from Fordham University.

                                      -20-
<PAGE>
 
                                    PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
         MATTERS

     The Company's Common Stock is traded in the over-the-counter market on the
NASDAQ National Market System and was held by approximately 931 shareholders of
record as of March 22, 1996.

     The following table sets forth, for the periods indicated, the high and low
last sale prices for the Company's Common Stock, as reported on the NASDAQ
National Market System.

<TABLE>
<CAPTION>
 
                                 High      Low
                                -------  -------
<S>                             <C>      <C>
 
YEAR ENDED DECEMBER 31, 1994
 
  First Quarter                 $40      $28 1/2
  Second Quarter                $33 1/2  $20 1/4
  Third Quarter                 $35      $19 3/4
  Fourth Quarter                $33 1/2  $24 3/4
 
YEAR ENDED DECEMBER 31, 1995
 
  First Quarter                 $46 1/2  $24 3/4
  Second Quarter                $28      $15 1/2
  Third Quarter                 $26 1/2  $17
  Fourth Quarter                $23 3/4  $15 3/4
</TABLE>

     The Company has not paid any cash dividends on its Common Stock in the
past, and it is unlikely that the Company will pay any dividends in the
foreseeable future.

ITEM 6.  SELECTED FINANCIAL DATA

     The selected consolidated financial data for the Company for each of the
five fiscal years in the period ended December 31, 1995 are derived from
financial statements that have been audited and reported upon by Coopers &
Lybrand L.L.P., independent accountants for the Company.  This data should be
read in conjunction with "Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations" and with the Company's
consolidated financial statements and related notes appearing elsewhere in this
report.   Further, in connection with the discontinuation of the operations of
Homecare and VRG, the Company has restated the selected financial data 
to reflect income and loss from the Company's continuing operations and
discontinued operations during these years. See "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Notes to
Consolidated Financial Statements - Note 16."

                                      -21-
<PAGE>
 
<TABLE>
<CAPTION>
OPERATING STATEMENT DATA:
                                         Years Ended December 31,
-----------------------------------------------------------------------------------------
                                    1991       1992            1993       1994       1995
                                 -------   --------        --------   --------   --------
                                                (in thousands, except
                                                    per share data)
 
<S>                              <C>       <C>             <C>        <C>        <C>
Total Revenue                    $12,792   $ 18,407        $ 57,561   $ 89,020   $113,427
 
Operating Income
 (loss) from Continuing
 Operations                       (4,938)    (9,986)          7,850     25,802      6,873
 
Income (loss) from
 Continuing Operations before
 Extraordinary Item               (5,144)    (8,473)          6,415     20,618      2,703
 
Net Income (loss) from
 Continuing Operations            (5,144)    (8,473)          6,415     20,618      2,703
 
Net (Loss) Income from
 Discontinued Operations              18       (327)            813     (1,206)   (27,045)
 
Net (Loss) Income                 (5,126)    (8,800)          7,228     19,412    (24,342)
 
Earnings (loss) Per Share
 of Common Stock from
 Continuing Operations
 before Extraordinary Item          (.58)      (.61)            .41       1.10        .15
 
Earnings (loss) Per Share
 of Common Stock from
 Continuing Operations              (.58)      (.61)            .41       1.10        .15
 
(Loss) Earnings Per Share
 of Common Stock from
 Discontinued Operations             ---       (.03)            .05       (.06)     (1.45)
 
(Loss) Earnings Per Share
 of Common Stock                    (.58)      (.64)            .46       1.04      (1.30)
 
Average Number of
 Common Shares
 Outstanding                       8,843     13,770          15,590     18,708     18,623
 
 
</TABLE>

                                      -22-
<PAGE>
 
<TABLE>
<CAPTION>
BALANCE SHEET DATA:

                                           As of December 31
-----------------------------------------------------------------------------------------
                                    1991       1992            1993       1994       1995
                                 -------   --------        --------   --------   --------
                                                      (in thousands)
<S>                              <C>       <C>             <C>        <C>        <C>
Total Assets                     $44,150   $185,424        $343,103   $336,192   $340,290
 
Long-Term Debt and
 Redeemable Preferred
 Stock                             9,237     28,999          45,668     22,411     16,183
 
Shareholders' Equity              25,106    121,594         238,999    259,129    235,467
</TABLE>

                                      -23-
<PAGE>
 
ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1994 AND 1995

          Corporate Revenues.  For the year ended December 31, 1995, total
          -------------------                                             
revenue increased $24.4 million from $89 million to $113.4 million.  This
increase was the result of a $26 million increase in product revenue offset by
a $1.55 million decrease in other revenues.  See "Product Sales" and "Other
Revenues."

          Product Sales.  For the year ended December 31, 1995, product sales
          --------------                                                     
increased $26 million from $87.4 million to $113.4 million primarily as a
result of new product acquisitions in the U.S. and the United Kingdom in 1994
and 1995.  Sales in the U.S. increased from $66.2 million to $90.2 million as a
result of 1995 product acquisitions and licensing activities.  TIGAN and
EMINASE, acquired from SmithKline Beecham, and NOROXIN licensed from Merck in
1995, added $48 million.  This increase was offset by a $24 million decline in
the sales of all other prescription and nonprescription products.  Sales of the
Company's United Kingdom subsidiary, Monmouth Pharmaceuticals, Ltd., increased
$2.4 million from $9.7 million to $12.1 million.  This increase is primarily the
result of the 1994 product acquisition of MAXOLON from SmithKline Beecham.
Sales of the Company's Canadian subsidiary, Roberts Pharmaceutical Canada, Inc.,
decreased slightly to $11.1 million from $11.4 million primarily as a result of
a decline in demand for the Company's over-the-counter nonprescription
pharmaceutical products.

          Other Revenues.  Other revenues result from licensing activities
          ---------------                                                 
undertaken by the Company and represent revenues from separate transactions in
1994 and 1995.  For the year ended December 31, 1995, other revenues decreased
$1.55 million from $1.6 million to $.05 million primarily as a result of a
decline in licensing activities.

          Cost of Sales.  For the year ended December 31, 1995, cost of sales
          --------------                                                     
amounted to 47% of product sales a 25 percentage point increase as compared to
the prior year.  As a result, gross profit as a percentage of sales decreased
from 78% to 53%.  This increase in cost of sales as a percentage of product
sales and related decrease in gross profit percentage is primarily the result of
the addition of NOROXIN to the Company's product mix as well as a decline in
sales of higher margin products in the U.S.  NOROXIN, which accounted for 31% of
the Company's product sales in 1995, has a significantly lower gross profit
margin than the other core pharmaceutical products sold by the Company.  In the
foreseeable future, the Company expects that NOROXIN will continue to provide a
substantial part of the Company's product sales and, accordingly, the Company
expects that cost of sales and gross profit as a percentage of sales will be
similarly impacted.

          Research and Development.  Research and development expenses decreased
          -------------------------                                             
by $3.4 million to $6.1 million during the year ended December 31, 1995 as
compared to the prior year.  The decrease is due to a reduced level of
expenditure required to support the Company's development programs for AGRELIN
and PROAMANTINE.

                                      -24-
<PAGE>
 
          Marketing and Administrative Expenses.  For the year ended December
          --------------------------------------                             
31, 1995, marketing and administrative expenses increased $13.3 million from
$34.3 million to $47.6 million in larger part as a function of the significant
increases in sales and development programs in connection with the acquisition
and commencement of sales of TIGAN, EMINASE and NOROXIN during 1995.  Marketing
expenses increased $7.4 million as a result of increased promotional and sales
activities for new products and the expansion and training of the Company's
sales forces in the U.S., Canada and the United Kingdom.  Included in
administrative expenses is amortization of intangibles relating to product
acquisitions.  For the year ended December 31, 1995, this expense was $6.6
million, an increase of $.9 million from $5.7 million recorded in 1994.

          Interest Income and Expense.  For the year ended December 31, 1995,
          ----------------------------                                       
interest income decreased from $2.9 million to $2.1 million as a result of a
decrease in invested marketable securities.  Interest expense decreased from
$3.9 million to $3.5 million primarily as a result of a decrease in long-term
debt from 1994.

          Income Taxes.  For the year ended December 31, 1995, income taxes on
          -------------                                                       
continuing operations decreased to $2.8 million from $4.1 million in 1994
primarily as a result of a decline in income.  The Company's 1995 effective tax
rate of 51% is higher than the normal statutory rate primarily as a result of
the Company's inability to recognize the tax benefit of foreign net operating
loss carry forwards.  The Company's 1996 effective tax rate for continuing
operations should approximate a normal statutory rate.

          Income from Continuing Operations.  For the year ended December
          ----------------------------------                             
31,1995, net income from continuing operations was $2.7 million, which
represents a decrease of $17.9 million from those same business operations
during 1994.  Certain of the Company's business operations were not discontinued
in 1995 and, accordingly, the Company's consolidated statements of operations
for 1994 and 1993 have been restated to reflect income and loss from the
Company's continuing operations and discontinued operations during those years.
See "Notes to Consolidated Financial Statements - Note 16."

          The Company believes that the decline in net income from continuing
operations from 1994 to 1995 is attributable to a number of factors, including
(i) a decline in demand for certain of the Company's existing pharmaceutical
products, particularly NORETHIN, NITRODISC, SALUTENSIN and the Company's over-
the-counter nonprescription pharmaceutical products; (ii) an unanticipated delay
in the closing of the Company's agreement with Merck to distribute NOROXIN and
the diversion of the Company's sales force from the promotion of existing
products to allow for sales training related to NOROXIN; (iii) revenues from the
sale of TIGAN and EMINASE during the first quarter of 1995 prior to their
acquisition by the Company, during which time the Company was distributing such
products subject to distribution agreements with SmithKline Beecham, were not
accounted for as revenues by the Company, but instead as a $5.4 million
reduction in the purchase price paid by the Company for these products; (iv) the
increase in cost of sales as a result of the higher costs related to the sale of
NOROXIN and the growing importance of NOROXIN in the Company's product mix; and
(v) the costs associated with increasing the Company's sales force by more than
50% in 1995 in order to promote TIGAN, EMINASE and NOROXIN and the fact that the
sale of such products did not commence until the end of the first quarter of
1995.

                                      -25-
<PAGE>
 
          Discontinued Operations.  In connection with the Company's decision to
          ------------------------                                              
divest certain non-core, nonpharmaceutical business operations, the Company
announced, in August 1995, its plan to discontinue and divest Homecare.  In
March 1996, the Company announced its plan to discontinue and divest VRG, a
contract research organization.  The Company expects the sales of Homecare and
VRG will be completed in 1996 and will result in a loss to the Company at
closing.  Accordingly, the Company has charged current operations with the
estimated loss on discontinuing Homecare and VRG of $22.5 million.  The Company
has also reclassified its consolidated financial statements to report separately
the net assets expected to be realized and operating results of its discontinued
operations.  See "Notes to Consolidated Financial Statements - Note 16."   The
Company's reported loss on discontinued operations represents the Company's best
estimates of the amounts expected to be realized on the sale of its discontinued
operations.  The amounts the Company will realize could differ materially from
those amounts assumed by the Company in estimating the loss on disposal reported
in the Company's financial statements.

YEARS ENDED DECEMBER 31, 1993 AND 1994

          Product Sales.  For the year ended December 31, 1994, product sales
          --------------                                                     
increased $31.8 million from $55.6 million to $87.4 million primarily as a
result of product acquisitions in 1993.  Sales in the U.S. increased from $40.4
million to $66.2 million.  SALUTENSIN, COLACE, PERI-COLACE and other OTC
products acquired from Bristol-Myers Squibb in 1993 added $21 million in the
period.  Sales of the Company's Canadian subsidiary, Roberts Pharmaceutical
Canada, Inc., increased $3.5 million from $7.9 million to $11.4 million
primarily as a result of product acquisitions in 1993 from Glaxo Canada and
Bristol-Myers Squibb.  Sales of the Company's United Kingdom subsidiary,
Monmouth Pharmaceuticals, Ltd., amounted to $9.7 million in the current period,
a $2.5 million increase from the comparable 1993 period.  This increase is
primarily the result of the 1994 product acquisition of MAXOLON from SmithKline
Beecham.

          Other Revenues.  Other revenues result from licensing activities
          ---------------                                                 
undertaken by the Company and represent revenues from separate transactions in
1993 and 1994.  In the year ended December 31, 1994, other revenues decreased
$.3 million from $1.9 million to $1.6 million.

          Cost of Sales.  For the year ended December 31, 1994, cost of sales
          --------------                                                     
amounted to 22% of product sales, a 6 percentage point decrease as compared to
the prior year.  The decrease in cost of sales as a percentage of sales is the
result of the Company's product mix; that is, increased sales of prescription
products as well as prescription product sales comprising a greater percentage
of total product sales.  As a result, gross profit as a percentage of sales
increased from 72% to 78%.

          Research and Development.  Research and development expenses increased
          -------------------------                                             
by $1.2 million to $9.5 million during the year ended December 31, 1994 as
compared to the prior year.  The percentage is due to the Company's continued
expansion of its late-stage development programs for AGRELIN, MAXIVENT, and
DIRAME.  Increased costs related primarily to these programs include payments to
research scientists and clinical investigators, cost of drug supplies, increased
research and development staff and expenses related to monitoring clinical
research sites.

                                      -26-
<PAGE>
 
          Marketing and Administrative Expenses.  For the year ended December
          --------------------------------------                             
31, 1994, marketing and administrative expenses increased $8.7 million from the
$25.6 million incurred in the prior year period in large part as a function of
the significant increases in sales and development programs.  Marketing expenses
increased $7.9 million as a result of increased promotional and sales activities
for new products and the expansion and training of sales forces in the United
States and Canada.  Included in administration expenses is amortization of
intangible assets related to product and company acquisitions.  For the year
ended December 31, 1994, this expense was $5.7 million, a $1.7 million increase
over 1993.

          Interest Income and Expense.  Interest income increased from $1.7
          ----------------------------                                     
million to $2.9 million as a result of the investment of the proceeds of the
Company's October 1993 Common Stock offering.  Interest expense increased $.7
million from $3.3 million primarily as a result of the amortization of discounts
on non-interest bearing notes issued in connection with product acquisitions in
1993.

          Income Taxes.  For the year ended December 31, 1994, income taxes
          -------------                                                    
increased to $4.1 million.  The Company's 1994 effective tax rate of 17 percent
is lower than the normal statutory rate primarily as a result of recognizing the
tax benefit of federal, state and foreign net operating loss carryforwards and
other credits.

LIQUIDITY AND CAPITAL RESOURCES

          In the year ended December 31, 1995, operating cash inflows amounted
to $22.8 million as a result of net loss offset by non-cash charges and
increased by working capital requirements due to increased sales activity.  As
of December 31, 1995, the Company had cash, cash equivalents and marketable
securities of $30 million.  Cash outflows from operations amounted to $.7
million in 1994 and cash inflows from operations in 1993 amounted to $1.6
million, resulting primarily from the Company's development programs and working
capital requirements for sales of acquired products.

          The Company's funding requirements will depend on a number of factors,
including the Company's development programs, product acquisitions, the level of
resources required for the expansion of marketing capabilities, increased
investment in accounts receivable and inventory which may arise from increased
sales levels, competitive and technological developments, the timing and cost of
obtaining required regulatory approvals for new products, relationships with
parties to collaborative agreements and the success of its acquisition
activities.

          The Company will use its existing cash and securities balances and
cash generated from operations to fund its operating activities and its near
term and long-term debt obligations from previous product acquisitions.  In
consideration of certain information furnished by the Company to the seller of
certain product rights to the Company, the seller agreed to defer to 1996, $8
million of the Company's long-term debt obligations which was due and payable in
1995.  Based upon its present plans, the Company believes that it may require
additional funding in fiscal 1996.  If additional funds are required, the
Company believes that it has various alternative funding sources including bank
debt, private debt financing, public and private equity financing and the sale
or licensing of product rights.

                                      -27-
<PAGE>
 
Cash equivalents and marketable securities currently consist of immediately
available money market fund balances and investment grade securities.

          Capital Expenditures.  Expenditures for fixed assets relate primarily
          ---------------------                                                
to the relocation and expansion of office facilities in the United States by
means of a purchase of an office facility and a combination office and warehouse
facility.  In anticipation of future growth, the Company relocated its corporate
headquarters and principal operating facilities into these expanded facilities
in the third quarter of 1993.  Capital expenditures are not expected to be
significant in the near term.

          Foreign Currency Fluctuations.  The Company has subsidiary operations
          ------------------------------                                       
and performs certain development activities outside of the United States.  As a
result, the Company is subject to fluctuations in reported revenues and costs
reported in United States dollars as a consequence of changing currency exchange
rates, especially rates for the British pound.

          Concentration of Credit Risk.  The Company markets prescription
          -----------------------------                                  
pharmaceuticals primarily to wholesale drug distributors, retail pharmacies,
managed healthcare organizations  and physicians in the United States and
abroad.  The Company performs certain credit evaluation procedures and does not
require collateral.  The Company maintains reserves for estimated credit losses.

          Inflation.  Although at reduced levels in recent years, inflation
          ----------                                                       
continues to apply upward pressure on the cost of goods and services used by the
Company.  However, the Company believes that the net effect of inflation on its
operations has been minimal during the past three years.

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          The consolidated financial statements and supplementary data of the
Company called for by this item are submitted as a separate section of this
report.

ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
            AND FINANCIAL DISCLOSURE

                    Not applicable.

                                      -28-
<PAGE>
 
                                 PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

          The information relating to directors of the Company required to be
furnished pursuant to this item is incorporated herein by reference to the
sections titled "Election of Directors" and "Compliance with Section 16(a) of
the Securities Exchange Act" from the Company's definitive Proxy Statement for
its Annual Meeting of Shareholders to be held in May 1996.  Certain information
relating to executive officers of the Company is set forth in Item 4A of Part I
of this Form 10-K under the caption "Executive Officers of the Registrant."

ITEM 11.  EXECUTIVE COMPENSATION

          Information pertaining to executive compensation is incorporated
herein by reference to the section titled "Election of Directors - Executive
Compensation" from the Company's definitive Proxy Statement for its Annual
Meeting of Shareholders to be held in May 1996.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          Information pertaining to security ownership of certain beneficial
owners and management is incorporated herein by reference to the sections titled
"Principal Shareholders" and "Security Ownership of Management" from the
Company's definitive Proxy Statement for its Annual Meeting of Shareholders to
be held in May 1996.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          Information relating to this item is incorporated herein by reference
to the section titled "Agreements with Yamanouchi and Certain Other
Transactions" from the Company's definitive Proxy Statement for its Annual
Meeting of Shareholders to be held in May 1996.

                                      -29-
<PAGE>
 
                                    PART IV

ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  1. and 2.  FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES.

     Reference is made to the Index of Financial
     Statements and Financial Statement Schedules
     hereinafter contained...............................  F-1

     3.  EXHIBITS

     Reference is made to the Index of Exhibits
     hereinafter contained................................  E-1

(b)  REPORTS ON FORM 8-K

          During the fourth quarter ended December 31, 1995, no reports on Form
          8-K were filed by the Company with the Securities and Exchange 
          Commission.

                                      -30-
<PAGE>
 
                                   SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                             ROBERTS PHARMACEUTICAL CORPORATION
                             ----------------------------------
                             (Registrant)


Date:  March 29, 1996     By:/s/ Robert A. Vukovich
                             ----------------------------------------
                             ROBERT A. VUKOVICH, President

          Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
 
       Signature                    Title               Date
------------------------  -------------------------  --------------
<S>                       <C>                        <C>         
 
/s/ Robert A. Vukovich    President & Director       March 29, 1996
------------------------  (Principal Executive 
ROBERT A. VUKOVICH         Officer)             
                                                  
 
/s/ Peter M. Rogalin      Vice President, Treasurer  March 29, 1996
------------------------  & Director (Principal   
PETER M. ROGALIN          Financial and Accounting   
                          Officer)                   
                                                     
 
/s/ Robert W. Loy         Director                   March 29, 1996
------------------------
ROBERT W. LOY
 

/s/ Anthony A. Rascio     Director                   March 29, 1996
------------------------
ANTHONY A. RASCIO
 

/s/ Yale Brozen           Director                   March 29, 1996
------------------------
YALE BROZEN
 

/s/ Takao Miyamoto        Director                   March 29, 1996
------------------------
TAKAO MIYAMOTO

 
/s/ Akihiko Matsubara     Director                   March 29, 1996
------------------------
AKIHIKO MATSUBARA

 
/s/ W. Robert Fowler      Director                   March 29, 1996
------------------------
W. ROBERT FOWLER
 

/s/ Digby W. Barrios      Director                   March 29, 1996
------------------------
DIGBY W. BARRIOS

</TABLE>

                                      -31-
<PAGE>
 
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                       ROBERTS PHARMACEUTICAL CORPORATION
<TABLE>
<CAPTION>
 
                                                       Page
                                                       ----
<S>                                                    <C>
 
Report of Independent Accountants                      F-2
 
Consolidated Balance Sheets as of
 December 31, 1995, 1994 and 1993                      F-3
 
Consolidated Statements of Operations for the
 the years ended December 31, 1995, 1994 and 1993      F-4
 
Consolidated Statements of Cash Flows for the
 the years ended December 31, 1995, 1994 and 1993      F-5
 
Consolidated Statements of Changes in Shareholders'
 Equity for the years ended December 31, 1995, 1994
 and 1993                                              F-7
 
Notes to Consolidated Financial Statements             F-8
 
Schedules:*
 
Schedule II, Valuation and Qualifying Accounts         F-24
 
</TABLE>


 __________

*  Schedule I under Article 12 of Regulation S-X has been omitted because of the
absence of the conditions under which certain information is required and
because certain information required is presented in the financial statements
and the notes thereto.

                                      F-1
<PAGE>
 
                       REPORT OF INDEPENDENT ACCOUNTANTS


The Board of Directors and Shareholders
of Roberts Pharmaceutical Corporation

We have audited the accompanying consolidated balance sheets of Roberts 
Pharmaceutical Corporation and Subsidiaries as of December 31, 1995, 1994 and 
1993, and the related consolidated statements of operations, cash flows, changes
in shareholders' equity for each of the three years in the period ended December
31, 1995 and the financial statement schedules on pages F-24 to F-26 on this
Form 10-K. These financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement schedules based on
our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the consolidated financial position of Roberts 
Pharmaceutical Corporation and Subsidiaries as of December 31, 1995, 1994 and 
1993, and the consolidated results of their operations and their cash flows for 
each of the three years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.  In addition, in our opinion, the 
financial statement schedules referred to above, when considered in relation to 
the basic financial statements taken as a whole, present fairly, in all material
respects, the information required to be included therein.

As discussed in Note 9 to the consolidated financial statements, in 1993 the 
Company changed its method of accounting for income taxes.

                                                         /s/Coopers Lybrand, LLP




Princeton, New Jersey
March 20, 1996



                                      F-2

<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                          CONSOLIDATED BALANCE SHEETS
                                (In thousands)

<TABLE> 
<CAPTION> 
                                               December 31,    December 31,    December 31,
ASSETS                                            1993            1994          1995
------                                         ------------    ------------  ------------
 
 
Current assets:
<S>                                             <C>            <C>             <C>
 Cash and cash equivalents                      $  6,071        $  9,819       $ 16,357
 Marketable securities                            85,565          26,663         13,649
 Accounts receivable, net                         16,774          28,882         26,318
 Accounts receivable from shareholder              3,400           7,256            600
 Inventory                                        12,926          19,797         20,785
 Deferred tax assets                                 ---             ---         10,419
 Net assets held for sale                            ---             ---          4,300
 Other current assets                              3,110           3,784          1,342
                                                --------        --------       --------
   Total current assets                          127,846          96,201         93,770
Fixed assets, net                                 16,272          16,800         15,681
Intangible assets                                198,471         222,534        230,681
Other assets                                         514             657            158
                                                --------        --------       --------
   Total assets                                 $343,103        $336,192       $340,290
                                                ========        ========       ========
                                                                             
LIABILITIES AND SHAREHOLDERS' EQUITY                                         
------------------------------------
                                                                             
Current liabilities:                                                         
 Current installments of                                                     
  long-term debt                                $ 37,010        $ 34,277       $ 34,809
 Accounts payable                                 10,850           6,735         14,737
 Other current liabilities                         9,799          12,922         32,236
                                                --------        --------       --------
   Total current liabilities                      57,659          53,934         81,782
Long-term debt, excluding current installments    45,668          22,411         16,183
Deferred taxes payable                               ---             ---          6,311
Other liabilities                                    777             718            547
Shareholders' equity:                                                        
  Class B preferred stock, $.10                                              
   par value, 10,000,000 shares                                              
   authorized, none outstanding                                              
  Common stock, $.01 par value,                                              
   50,000,000 shares authorized,                                             
   18,327,936, 18,420,200 and                                                
   18,536,590 outstanding                            187             188            189
Additional paid-in capital                       254,803         255,994        256,296
Cumulative translation adjustments                  (200)           (674)          (297)
Retained earnings (deficit)                      (15,554)          3,858        (20,484)
Treasury Stock, 387,594 shares of                                            
  common stock, at cost                             (237)           (237)          (237)
                                                --------        --------       --------
   Total shareholders' equity                    238,999         259,129        235,467
                                                --------        --------       --------
   Total liabilities and                                                     
    shareholders' equity                        $343,103        $336,192       $340,290
                                                ========        ========       ========
 
</TABLE>



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

                                      F-3
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                        Years Ended December 31,
                                                -----------------------------------------
                                                    1993           1994           1995
                                                -----------    -----------    -----------
<S>                                            <C>            <C>            <C>
Sales and revenue:
 Sales                                          $    55,612    $    87,437    $   113,380
 Other revenue                                        1,949          1,583             47
                                                -----------    -----------    -----------
Total sales and revenue                              57,561         89,020        113,427
 
Operating costs and expenses:
 Cost of sales                                       15,737         19,418         52,870
 Research & development                               8,389          9,546          6,108
 Marketing & administration                          25,585         34,254         47,576
                                                -----------    -----------    -----------
Total operating costs & expenses                     49,711         63,218        106,554
                                                -----------    -----------    -----------
Operating income                                      7,850         25,802          6,873
Other income (expense):
  Interest income                                     1,710          2,891          2,050
  Interest expense                                   (3,271)        (3,960)        (3,453)
  Other income (expense), net                           126            ---             49
                                                -----------    -----------    -----------
Total other income (expense)                         (1,435)        (1,069)        (1,354)
                                                -----------    -----------    -----------
Income from continuing operations
 before income taxes                                  6,415         24,733          5,519
Provision for income taxes                              ---         (4,115)        (2,816)
                                                -----------    -----------    -----------
Income from continuing operations                     6,415         20,618          2,703
 
Discontinued operations:
 (Loss) from operations of
  discontinued divisions,
  net of tax benefits
  of $0, $238 and $2,474, respectively                  813         (1,206)        (4,547)
 Estimated (Loss) on disposal of divisions,
  net of tax benefits
  of $0, $0 and $2,555, respectively                    ---            ---        (22,498)
                                                -----------    -----------    -----------
 
(Loss) income from discontinued operations              813         (1,206)       (27,045)
                                                -----------    -----------    -----------
 
Net (loss) income                               $     7,228    $    19,412    $   (24,342)
                                                ===========    ===========    ===========
 
Per share of common stock,
 primary and fully diluted:
 Net income from continuing operations                 $.41          $1.10           $.15
 Net (loss) from discontinued operations                .05           (.06)         (1.45)
                                                -----------    -----------    -----------
 Net (loss) income                                     $.46          $1.04         $(1.30)
                                                ===========    ===========    ===========
 
Weighted average number of common shares
 outstanding, primary and fully diluted:        $15,589,998    $18,708,000    $18,622,744
                                                ===========    ===========    ===========
 
</TABLE>



The accompanying notes are an integral part of these financial statements

                                      F-4
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)

<TABLE>
<CAPTION>
                                                     Years Ended December 31,
                                                  ------------------------------ 
                                                    1993       1994       1995
                                                  --------   --------   --------
<S>                                               <C>        <C>        <C>
Cash flows from operating activities:
 Net income (loss)                                $  7,228   $ 19,412   $(24,342)
 Adjustments to reconcile net income (loss)
  to net cash flows from operating activities:
   Depreciation and amortization                     4,248      6,174      7,164
   Provision for losses on receivables                 344        622        130
   Provision for product sales returns               2,161      4,253      7,669
   Loss on discontinued operations                      --         --     22,498    
   Foreign currency (losses) gains                     106        115        (31)
   Change in accounts receivable, unbilled
    revenue and advance billings                   (12,284)    (9,823)     1,187
   Change in other assets                              725        309      1,144
   Change in inventory                              (8,637)    (6,651)    (1,819)
   Change in accounts payable and
    other liabilities                                9,848     (3,158)    12,460
   Impact of discontinued operations                (2,094)   (11,906)    (3,298)
                                                  --------   --------   --------
    Total adjustments                               (5,583)   (20,065)    47,104
                                                  --------   --------   --------
   Net cash provided by (used in)
    operating activities                             1,645       (653)    22,762
                                                  --------   --------   --------
 
Cash flows from investing activities:
 Investment in marketable securities               (46,436)       ---        ---
 Redemption of marketable securities                   ---     58,902     13,013
 Purchases of intangible assets                     (8,297)   (14,272)    (1,552)
 Purchases of fixed assets                          (6,400)      (700)      (226)
 Impact of discontinued operations                    (164)    (1,406)      (243)
                                                  --------   --------   --------
 Net cash (used in) provided by
  investing activities                             (61,297)    42,524     10,992
                                                  --------   --------   --------
 
Cash flows from financing activities:
 Payments on notes payable and long
  term debt                                        (49,195)   (38,729)   (28,061)
 Net proceeds from issuance of common stock        110,377        656        803
 Impact of discontinued operations                    (230)       (16)        (7)
                                                  --------   --------   --------
 Net cash (used in) provided by financing
  activities                                        60,952    (38,089)   (27,265)
                                                  --------   --------   --------
Effect of exchange rate changes on cash
 and cash equivalents                                   (2)       (34)        49
                                                  --------   --------   --------
 
Change in cash and cash equivalents                  1,298      3,748      6,538
Beginning cash and cash equivalents                  4,773      6,071      9,819
                                                  --------   --------   --------
 
Ending cash and cash equivalents                  $  6,071   $  9,819   $ 16,357
                                                  ========   ========   ========
 
</TABLE>



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

                                      F-5
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
               CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                                (In thousands)
<TABLE>
<CAPTION>
                                                          Years ended December 31,
                                                          ------------------------
                                                           1993     1994     1995
                                                          ------  -------  -------
<S>                                                       <C>     <C>      <C>
 Supplemental cash flow information:
  Interest and dividends received                        $ 1,710   $2,891  $ 2,050
  Interest paid                                            3,408    3,726    2,979
  Income taxes paid                                           56    1,970      268
 
Non cash activities:
Present value of notes issued in
 connection with product acquisitions                    $72,918   $7,727  $18,279
</TABLE>



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

                                      F-6
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CHANGES
                            IN SHAREHOLDERS' EQUITY
                                (In thousands)

<TABLE>
<CAPTION>
                                  Common Stock       Additional    Retained    Cumulative     Trea-   Total
                            -----------------------  Paid-In       Earnings    Translation    sury    Shareholders'
                              Shares        Amount   Capital      (Deficit)    Adjustment     Stock   Equity
                            ---------     ---------  ----------    --------    -----------    -----   ------------
<S>                         <C>           <C>        <C>           <C>         <C>            <C>     <C>

Balance,
 December 31, 1992           14,982,821        $150   $144,463     $(22,782)        ---       $(237)      $121,594

Issuance of common stock      3,732,709          37    110,340          ---         ---         ---        110,377
Cumulative translation
 adjustment                         ---         ---        ---          ---       $(200)        ---           (200)
Year ended December 31,
 1993 net income                    ---         ---        ---        7,228         ---         ---          7,228
                            -----------        ----   --------     --------       -----       -----       --------
Balance,
 December 31, 1993           18,715,530        $187   $254,803     $(15,554)      $(200)      $(237)      $238,999

Issuance of common stock         92,264           1      1,191          ---         ---         ---          1,192
Cumulative translation
 adjustment                         ---         ---        ---          ---        (474)        ---           (474)
Year ended December 31,
 1994 net income                    ---         ---        ---       19,412         ---         ---         19,412
                            -----------        ----   --------     --------       -----       -----       --------

Balance,
 December 31, 1994           18,807,794        $188   $255,994     $  3,858       $(674)      $(237)      $259,129
Issuance of common stock        116,390           1        302          ---         ---         ---            303
Cumulative translation
adjustment                          ---         ---        ---          ---         377         ---            377
Year ended December 31
1995 net loss                       ---         ---        ---      (24,342)        ---         ---        (24,342)
                            -----------        ----   --------     --------       -----       -----       --------

Balance,
December 31, 1995            18,924,184        $189   $256,296     $(20,484)      $(297)      $(237)      $235,467
                             ==========        ====   ========     =========      =====      ======      =========
</TABLE> 
The accompanying notes are an integral part of these financial statnts.

                                      F-7
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    ------------------------------------------

     Basis of Presentation
     ---------------------

Roberts Pharmaceutical Corporation is an international pharmaceutical company
which licenses, acquires, develops and commercializes post-discovery drugs in
selected therapeutic categories.  The Company currently markets approved
pharmaceutical products in the United States, Canada, the United Kingdom and
several other European countries.  The consolidated financial statements include
the accounts of Roberts Pharmaceutical Corporation and its majority-owned
subsidiaries.  All significant intercompany transactions are eliminated.  All
dollar amounts are presented in thousands, except for earnings per share.

     Revenue Recognition
     -------------------

Product sales, net of estimated future product returns, are recorded as products
are shipped against customer orders.

Licensing revenues are recorded as earned under the terms of each underlying
agreement and are included in other revenue.

     Cash Equivalents and Marketable Securities
     ------------------------------------------

Cash equivalents include all money market investments with original maturities
of three months or less.

Marketable securities consist primarily of debt instruments with maturities of
more than three months and are stated at amortized cost plus accrued interest,
which approximates market.

     Inventories
     -----------

Inventories, consisting primarily of finished goods inventories, are stated at
the lower of first-in, first-out cost or market.

     Use of 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

                                      F-8
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the period reported.  Actual results could differ
from those estimates.  Estimates are used when accounting for allowance for
doubtful accounts, inventory obsolescence, future product returns, depreciation
and amortization, employee benefit plans, taxes, discontinued operations and
contingencies.

     Fixed Assets and Depreciation
     -----------------------------

Fixed assets are stated at cost less accumulated depreciation.  Depreciation is
determined using the straight-line method over the estimated useful lives of the
related assets ranging from five to fifty years.  Gains and losses on disposals
are recognized in the year of the disposal.  Expenditures for maintenance and
repairs are expensed as incurred; significant renewals and betterments are
capitalized.

     Intangible Assets
     -----------------

Intangible assets are stated at cost less accumulated amortization.
Amortization is determined using the straight-line method over the estimated
useful lives of the related assets which are estimated to range from ten to
forty years.  It is the Company's policy to periodically review and evaluate
whether there has been a permanent impairment in the value of intangibles.
Factors considered in the valuation include current operating results, trends
and anticipated undiscounted future cash flows.

     Foreign Currency Translation
     ----------------------------

The functional currency of the Company's European subsidiary is the U.S. dollar.
Accordingly, its accounts are remeasured in dollars and translation gains and
losses are included in income currently.

The functional currency of the Company's Canadian subsidiary is the Canadian
dollar.  Translation gains and losses of the Company's Canadian subsidiary are
accumulated as a separate component of Shareholders' Equity.

Included in the balance sheet at December 31, 1993, 1994 and 1995 is debt of
$1,546, $4,673 and $1,849, respectively, denominated in British pounds.

                                      F-9
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Concentration of Credit Risk
     ----------------------------

The Company markets prescription and nonprescription pharmaceuticals primarily
to wholesale drug distributors, retail pharmacies and physicians in the United
States and abroad.  The Company performs certain credit evaluation procedures
and does not require collateral.  The Company maintains reserves for estimated
credit losses; at  December 31, 1993, 1994 and 1995, the reserve for
uncollectible accounts amounted to $2,199, $2,195 and $1,754, respectively.

At December 31, 1995, cash equivalents and marketable securities consisted of
immediately available money market fund balances and investment grade debt and
preferred stock securities with maturities of less than six months.

     Recently Issued Accounting Standards
     ------------------------------------

In March 1995, the Financial Accounting Standard Board issued Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of."  The
statement, which will be adopted in 1996, addresses the accounting for the
impairment of long-lived assets, certain identifiable intangibles, and goodwill
related to those assets to be held and used. It also addresses the accounting
for long-lived assets and certain identifiable intangibles to be disposed of. It
establishes guidance for recognizing and measuring impairment losses and
requires that the carrying amount of impaired assets be reduced to fair value.
The effects of adoption of this statement are not expected to be material.

In 1996, the Company will adopt SFAS No. 123, "Accounting For Stock-Based
Compensation."  This standard establishes a fair value method for accounting for
stock-based compensation plans either through recognition of the fair value of
the stock grant as expense or disclosure of the expense amount. The Company
intends to adopt this standard by disclosing the pro forma net income and
earnings per share amounts assuming the fair value method was adopted January 1,
1995. The adoption of the this standard will not impact the Company's results of
operations, financial position or cash flows.

                                      F-10
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.  REVENUES AND EXPENSES
    ---------------------

For the years ended December 31, 1993 and 1994, license revenues amounted to
$1.8 million and $1.5 million, respectively.

Development expenses of the Company's products, including those funded under
license agreements, are included in research and development.
 
3.  INVENTORY
    ---------
 
  Inventory consists of:
                                     December 31,  
                               ------------------------- 
                                1993     1994     1995
                               -------  -------  -------
 Raw materials                 $ 3,972  $ 3,269  $ 3,539
 Finished goods                  8,954   16,528   17,246
                               -------  -------  -------
                               $12,926  $19,797  $20,785
                               =======  =======  =======
 
 
4.   FIXED ASSETS, NET
 
 Fixed assets consist of:

                                     December 31,  
                               ------------------------- 
                                1993     1994     1995
                               -------  -------  -------
  Land and buildings           $14,431  $15,140  $14,823
  Office furniture and
  equipment                      3,634    3,786    2,588
  Leasehold improvements           139      139      109
                               -------  -------  -------
                               $18,204  $19,065  $17,520
  Less:  Accumulated
  depreciation and
  amortization                   1,932    2,265  $ 1,839
                               -------  -------  -------
                               $16,272  $16,800  $15,681
                               =======  =======  =======

 Land and buildings costs include interest of $423 for 1993.

                                      F-11
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.  INTANGIBLE ASSETS
    -----------------
 
  Intangible assets consist of:
                                                December 31,  
                                        ---------------------------- 
                                         1993       1994      1995
                                        --------  --------  --------
 Product rights acquired                $190,496  $216,879  $245,287
 Goodwill                                 14,834    18,815     3,812
                                        --------  --------  --------
                                         205,330   235,694   249,099
 Less: Accumulated
   amortization                            6,859    13,160    18,418
                                        --------  --------  --------
                                        $198,471  $222,534  $230,681
                                        ========  ========  ========

6.  OTHER CURRENT LIABILITIES
    -------------------------

  Other current liabilities consist of:
                                           December 31,  
                                    --------------------------
                                     1993     1994      1995
                                    ------   -------   -------
Accrued estimated loss on
 discontinuation of VRG
 and Homecare                          ---       ---   $ 8,848
Accrued estimated future
 product returns                    $6,250   $ 7,672    15,444
Accrued estimated medicaid
 rebates                               435       294     1,734
Income taxes payable                   816     2,967     3,707
Other accrued liabilities            2,298     1,989     2,503
                                    ------   -------   -------
                                    $9,799   $12,922   $32,236
                                    ======   =======   =======
 
 Product return reserves of $990, $1,279 and $2,336 been netted against accounts
receivable for 1993, 1994 and 1995, respectively.

                                      F-12
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.  LONG-TERM DEBT
    --------------
 
    Long-term debt consists of:
 
                                                   December 31,
                                           --------------------------
                                             1993      1994     1995
                                           -------   -------  -------
 
     Notes payable on product
      acquisitions at an imputed
      weighted average interest
      rate of 6.1%, 5.2% and
      5.75%                                $82,465   $56,592  $50,846
     Other notes payable                       213        96      146
                                           -------   -------  -------
                                            82,678    56,688   50,992
Less: Current installments                  37,010    34,277   34,809
                                           -------   -------  -------
                                           $45,668   $22,411  $16,183
                                           =======   =======  =======

 Principal payments in each of the next five years on long-term debt outstanding
at December 31, 1995 amount to:

  1996...........................................$34,809
  1997...........................................  5,544
  1998...........................................  3,562
  1999...........................................  3,775
  2000...........................................  3,302
                                                  ------
                                                 $50,992
                                                 =======

 Notes payable are collateralized by acquired product rights.  In consideration
of certain information being furnished by the Company to the seller of certain
product rights to the Company, $8 million which was due in 1995 is now required
to be paid in 1996 and the principal payments in 1995 and 1996 have been reduced
and increased, respectively, by that amount.

                                      F-13
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8.    SHAREHOLDERS' EQUITY
      --------------------

 The Company maintains stock option plans under which options to purchase 
shares of Common Stock are granted.
 
Stock option information:
                                   Years Ended December 31,
                               --------------------------------
                                 1993       1994        1995
                               ---------  ---------  ----------
   Number of stock options:
 
   Outstanding at the end
    of the period                531,345    966,654   1,175,710
   Exercise price range,        $   1.67  $    1.67   $   3.875
    outstanding options        to $36.50  to $25.00   to $25.00
   Exercisable at the end
    of the period                202,690    363,654     596,110
   Exercised during the
    period                        57,979     72,511     135,493
   Exercise price range,        $   1.67   $   1.67  $     1.67
    exercised options          to $21.63  to $25.00  to $25.00

9.  INCOME TAXES
    ------------

 The Company utilizes the asset and liability method for taxes, which requires
that deferred income taxes be provided for the cumulative temporary differences
between the financial and tax bases of the Company's assets and liabilities.

The provision (benefit) for income taxes consists of:
 
                         Years Ended December 31,
                       ----------------------------
                         1993      1994      1995
                       --------  --------  --------
Current
  Federal              $   235   $ 4,645    $3,641
  State and foreign        358        82        57
                       -------   -------    ------
  Total current        $   593   $ 4,727    $3,698
                       =======   =======    ======
 
Deferred
  Federal              $(1,156)      462      (728)
  State and foreign        563    (1,312)     (154)
                       -------   -------    ------
  Total deferred       $  (593)  $  (850)   $ (882)
                       =======   =======    ======

                                      F-14
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 A comparison of the provision for income taxes as reported, to a provision
based on federal statutory rates and consolidated income before income taxes is
as follows:
 
 
                                   Years Ended December 31,
                                -------------------------------
                                    1993        1994     1995
                                ------------  --------  -------
 
Provision (benefit) at
 federal statutory
 rates                              $ 2,458   $ 8,152    $1,876
Non-deductible expense                  321       599       404
State taxes net of
 federal effect                          50       287         3
Research and development
 credits                                ---      (744)      ---
Foreign net operating
 losses-valuation
 allowance                              ---       ---       405
Other                                  56        (641)      128
Reduction in federal
 valuation allowance                 (2,885)   (2,731)      ---
Reduction in state
 valuation allowance
 net of federal effect                  ---    (1,045)      ---
                                    -------   -------   -------
Provision (benefit)
for income taxes                    $   -0-   $ 3,877   $ 2,816
                                    =======   =======   =======

                                      F-15
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 The tax effect of temporary differences that give rise to significant portions
of the deferred tax assets and liabilities at December 31, 1994 and December 31,
1995 are presented below:
<TABLE> 
<CAPTION> 
                                  December 31, 1994            December 31, 1995
                              -------------------------    --------------------------
Federal                       Debits           Credits     Debits             Credits
-------                       ------           -------     ------             -------
<S>                           <C>              <C>          <C>               <C> 
Deferred interest expense     $  700           $           $   ---            $
Inventory                        506                           767            
Allowance for bad debts          612                           572
Accrued liabilities            1,733                         5,269
Depreciation                                       327                           424
Foreign items                  1,191                         1,648
Amortizable intangibles                          4,490                         6,668
Loss on Discontinuance           ---                         3,112
Other                            ---                            16            
State taxes                    1,098               867       1,075               742
                              ------            ------     -------            ------
 Total                         5,840             5,684      12,459             7,834
  Valuation allowance -                                                       
   foreign                       ---               ---        (517)              ---
                              ------            ------     -------            ------
                              $5,840            $5,684     $11,942            $7,834
                              ======            ======     =======            ======
</TABLE> 

 At December 31, 1995, the Company has foreign net operating loss carryforwards
of approximately $4,850 and net operating loss carryforwards for state tax
purposes of approximately $11,000 which expire at various dates through 2002.

 A full valuation allowance was provided for certain foreign net operating
losses since, based upon 1995 operating losses, realization of this tax asset is
uncertain.

                                      F-16
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.  LEASES AND OTHER COMMITMENTS
     ----------------------------

 The Company leases office space and certain office equipment under operating
leases.  Minimum rental payments in each of the next five fiscal years required
under leases which have initial or remaining lease terms in excess of one year
are as follows:
 
                                               December 31, 1995
                                               -----------------
 
            1996  ......................             $1,723
            1997  ......................              1,346
            1998  ......................                913
            1999  ......................                575
            2000  ......................                383

 Rent expense for the years ended December 31, 1993, 1994, and 1995 was $1,972,
$2,184 and $1,321, respectively.

 In accordance with several product acquisitions and licensing agreements and
subject to certain cancellation rights reserved by the Company, the Company may
be required to purchase inventory or make minimum payments totalling $51.9
million through 2001 and make royalty payments totalling $2 million through
1998.

11.  EMPLOYEE BENEFITS
     -----------------

 The Company has employment agreements with certain of its employees which
provide them with continued compensation for a period of three to five years in
the event of their termination by the Company and provide them with additional
payments on termination by the Company equal to three to five times a portion of
their average bonus and incentive compensation from July 1, 1988 to their
termination date.

 The Company maintains an employee savings plan available to all employees who
meet certain age and service requirements and may make discretionary
contributions to the plan based on employee compensation or employee
contributions.  In the years ended December 31, 1993, 1994 and 1995, the Company
contributions amounted to $152, $220 and $231, respectively.

 In 1993, the Company adopted a money purchase pension plan available to all
employees who meet certain age and service requirements.  The Company may make
discretionary contributions to the plan based on employee compensation, and the
Company can choose to terminate that plan at any time.  In

                                      F-17
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1993, 1994 and 1995, the Company recorded contributions amounting to $302, $0
and $217, respectively.

12.  CONTINGENCY
     -----------

 A shareholder class action suit has been instituted in the United States
District Court for the District of New Jersey against the Company and certain of
its officers for alleged violations of certain federal securities laws.  The
Company is not able to predict the outcome of this proceeding at this time, and
management is not able to determine the amount of the potential liability, if
any.  The Company believes that it has complied with all of its obligations
under the federal securities laws.  The Company intends to defend vigorously
against the plaintiff's allegations and considers such allegations to be without
merit.

13.  ACQUISITIONS
     ------------

 In 1993, 1994 and 1995, the Company acquired inventory, trademarks and other
rights to several products from various pharmaceutical companies.  The aggregate
price of these acquisitions was $79,939, $21,996 and $22,254, respectively,
consisting of cash and notes payable.  Goodwill and other intangibles related to
acquisitions are being amortized on the straight-line basis over periods ranging
from twenty-five to forty years.

                                      F-18
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14.  SEGMENT REPORTING
     -----------------

 Selected financial information of the Company's geographic segments for the
years ended December 31, 1993, 1994 and 1995 are as follows:
 
                                  Years Ended December 31,
                              -------------------------------
Geographic segments             1993       1994       1995
                              ---------  ---------  ---------
 
Revenues - nonaffiliates
 
     Domestic                 $ 40,406   $ 67,776   $ 90,177
     Foreign                    17,155     21,244     23,250
                              --------   --------   --------
                              $ 57,561   $ 89,020   $113,427
                              ========   ========   ========
 
Revenues - affiliates
     Domestic                 $    911   $    663   $    483
                              ========   ========   ========
 
Operating income (loss)
     Domestic                 $  6,944   $ 27,261   $ 10,795
     Foreign                     2,340      2,026     (1,424)
     Adjustments and
      eliminations              (1,434)    (3,485)    (2,498)
                              --------   --------   --------
                              $  7,850   $ 25,802   $  6,873
                              ========   ========   ========
 
Identifiable assets at end
 of period
     Domestic                 $312,097   $289,395   $294,247
     Foreign                    32,378     50,282     48,541
     Adjustments and
      eliminations              (1,372)    (3,485)    (2,498)
                              --------   --------   --------
                              $343,103   $336,192   $340,290
                              ========   ========   ========

 Intercompany revenues are based on market conditions at the time of sale.
Foreign operations primarily include the results of operations in the United
Kingdom, Canada and the Organization for Economic Cooperation and Development
countries which include the Republic of Ireland, certain other Western European
countries and Japan.

                                      F-19
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15.  RELATED PARTY TRANSACTIONS
     --------------------------

 In 1992 and 1993, the Company entered into contracts with Yamanouchi U.K.
Limited, a subsidiary of Yamanouchi Pharmaceutical Co., Ltd. of Japan, for
clinical trials research.  These contracts have subsequently been assigned to
Yamanouchi U.S.A. Inc., a subsidiary of Yamanouchi. As of December 31,
1993, 1994 and 1995, Yamanouchi owned 27.5, 27.5, and 27.2 percent of the
Company's outstanding Common Stock, respectively.  At December 31, 1993, 1994
and 1995 accounts receivable and unbilled revenues from these contracts totalled
$3.4 million, $7.3 million, and $.6 million, respectively.  Related revenues in
the years 1993, 1994 and 1995 amounted to $16.9 million, $10.2 million and $.5
million, respectively.  With the Company's decision to dispose of the contract
research division, these revenues have been reclassified and reported in results
from discontinued operations.  In March 1995, the Company resolved a contract
interpretation issue with Yamanouchi concerning billings for costs incurred by
the Company under the clinical research contracts.  As a result, 1994 contract
research revenue and operating income were reduced by approximately $2.4
million.  Net income for 1994 was reduced by approximately $1.5 million.

16.  DISCONTINUED OPERATIONS
     -----------------------

 In August 1995, the Company decided to seek a buyer for the assets of its
Pronetics (Homecare) subsidiaries which are located in New York, New Jersey,
North Carolina, and South Carolina.  The Company expects the sale of Homecare to
be completed in 1996 and to result in a loss at closing.  In March 1996, the
Company announced its plan to discontinue and divest, VRG, a contract research
organization.  The Company expects the sale of VRG to be completed in 1996 and
to result in a loss at closing.  Accordingly, the Company has charged current
operations with the estimated loss on discontinuing Homecare and VRG of $22.5
million, including a provision of $6.9 million for operating losses until
disposal of which $1.3 million has been utilized in the Third and Fourth
Quarters of 1995.  Revenues from VRG and Homecare for the years ended December 
31, 1993, 1994, and 1995 were $32.1 million, $23.2 million, and $12.5 million, 
respectively.  At December 31, 1995, net assets expected to be realized, 
consisting primarily of inventory, receivables, plant and equipment, total $4.3
million. The Company has also reclassified its consolidated financial statements
to report separately the net assets expected to be realized and operating
results of discontinued operations.

 The Company's loss on discontinued operations includes management's best
estimates of the amounts expected to be realized on the sale of Homecare and
VRG.  The amounts the Company will ultimately realize could differ materially in
the

                                      F-20
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

near term from the amounts assumed in calculating the loss on disposal of
Homecare and VRG.

17.  FAIR VALUE OF FINANCIAL INSTRUMENTS
     -----------------------------------

 The carrying amount of cash and cash equivalents approximates fair value due to
the short-term maturities of these instruments.  The fair value of marketable
securities was estimated based on quotes obtained from brokers.  The fair value
of long-term debt is estimated based on the discounted future cash flows using
currently available interest rates.
 
                                  December 31, 1995
                             ---------------------------
                             Carrying Amount  Fair Value
                             ---------------  ----------
 
Cash and cash equivalents            $16,357     $16,357
Marketable securities                 13,649      13,552
Long-term debt                        50,846      49,400

 The carrying amounts in the table are included in the consolidated balance
sheet under the indicated captions.

 Effective January 1, 1994, the Company adopted SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities."

 Investments subject to this standard are required to be carried at fair value,
unless they are held to maturity.  There was no effect on the Company's income
of adopting SFAS 115.

 The fair value of investment securities classified as available for sale,
totaled $13,552 at December 31, 1995.  These investment securities mature within
one year.

                                      F-21
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18.  QUARTERLY RESULTS OF OPERATIONS
     -------------------------------


 The following table presents summarized quarterly results for 1995 (in
thousands, except per share data).
 
(Unaudited)
 
                             First     Second    Third      Fourth
                             --------  -------   --------   -------
 
  Revenues(1)                 $16,174  $30,364    $34,321   $32,568   
  Gross Profit(1)              10,444   17,132     15,911    17,023    
  Net Earnings                 (1,194) (10,633)(2)    331   (12,846)(3)

  Net earnings per share      $  (.06)   $(.57)      $.02     $(.69)

  _______________

  (1) Revenues and gross profit have been adjusted to those previously reported
      on Form 10-Q to reflect the Company's decision to dispose of its Homecare
      and VRG divisions. (See Note 16)

  (2) Includes a $10.992 million charge for disposal of Homecare division.

  (3) Includes a $11.506 million charge for disposal of VRG division.

                                      F-22
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

  QUARTERLY RESULTS OF OPERATIONS
  -------------------------------

  The following table presents summarized quarterly results for
  1994 (in thousands, except per share data).
 
                                          (Unaudited)
                     
                              First    Second   Third    Fourth
                              -------  -------  -------  ----------
                     
    Revenues(1)               $18,704  $20,729  $27,832     $21,755
    Gross profit(1)            14,593   15,834   21,669      15,923
    Net earnings                4,162    4,429    4,915(2)    5,906(3)
 
  Net earnings per share         $.23     $.24     $.27        $.32
  _______________

  (1) Revenues and gross profit have been adjusted to those previously reported
      on Form 10-Q to reflect the Company's decision to dispose of its Homecare
      and VRG divisions. (See Note 16)

  (2) Includes a $2.7 million charge against revenues and a $1.0 million
      increase in general and administrative expenses resulting from an increase
      in estimated reserves for contracts with a related party. (See Note 15.)
      As a result, operating income and net income were reduced by approximately
      $3.7 million and $2.6 million, respectively.

  (3) Includes a reduction in estimated reserves for receivables and estimated
      liabilities. These adjustments increased operating income and net income
      by $2.7 million and $1.6 million, respectively.

                                      F-23
<PAGE>

                                                                     SCHEDULE II
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                       VALUATION AND QUALIFYING ACCOUNTS
                     FOR THE YEAR ENDED DECEMBER 31, 1995

 
<TABLE> 
<CAPTION> 
                                                          Additions            
                              Balance        -----------------------------------              Balance
                              Beginning of        Charged to        Charged to                End of
                              Period          Costs and Expenses  Other Accounts  Deductions  Period
                              ------------    ------------------  --------------  ----------  -------
<S>                           <C>             <C>                 <C>             <C>         <C> 
Allowance for uncollectibles     $2,195              $  130              ---       $  (571)    $ 1,754

Allowance for return goods       $8,951              $7,669           $6,154(1)    $(4,994)    $17,780

Deferred tax valuation allowance $   --              $  517                --            --    $   517
</TABLE> 


(1)  Allowance established in connection with product acquisitions.

                                      F-24
<PAGE>
 
                                                                     SCHEDULE II

                      ROBERTS PHARMACEUTICAL CORPORATION
                       VALUATION AND QUALIFYING ACCOUNTS
                     FOR THE YEAR ENDED DECEMBER 31, 1994

<TABLE> 
<CAPTION> 
                                                           Additions            
                              Balance         ----------------------------------              Balance
                              Beginning of        Charged to        Charged to                End of
                              Period          Costs and Expenses  Other Accounts  Deductions  Period
                              ------------    ------------------  --------------  ----------  -------
<S>                           <C>             <C>                 <C>             <C>         <C> 
Allowance for uncollectibles     $2,199              $  622           $  270       $  (896)   $2,195

Allowance for return goods       $7,240              $4,253           $4,485(1)    $(7,027)   $8,951
</TABLE> 


(1)  Allowance established in connection with product acquisitions.

                                      F-25
<PAGE>
 
                      ROBERTS PHARMACEUTICAL CORPORATION
                       VALUATION AND QUALIFYING ACCOUNTS
                     FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE> 
<CAPTION> 
                                                           Additions            
                              Balance         ---------------------------------               Balance
                              Beginning of        Charged to        Charged to                End of
                              Period          Costs and Expenses  Other Accounts  Deductions  Period
                              ------------    ------------------  --------------  ----------  -------
<S>                           <C>             <C>                 <C>             <C>         <C> 
Allowance for uncollectibles     $1,097              $  344              758            ---    $2,199

Allowance for return goods       $  382              $2,161           $7,212(1)     $(2,515)   $7,240
</TABLE> 


(1)  Allowance established in connection with product acquisitions.

                                      F-26
<PAGE>
 
                                 Exhibit Index

Exhibit No.
-----------

zz 2.2.03  Agreement and Plan of Merger, dated March 1992, among the Company,
           NCRC of New Jersey, Inc., a wholly owned subsidiary of the Company,
           and National Clinical Research Center, Inc. ("NCRC"). Upon the 
           request of the Securities and Exchange Commission, the Company 
           agrees to furnish a copy of schedules 3.A.1 through 3.A.30 to the 
           Agreement and Plan of Merger described as follows: 3.A.1-Good 
           Standing of NCRC; 3.A.2-List of NCRC Subsidiaries; 3.A.3-Authorized
           Capitalization of NCRC; 3.A.4-Financial Statements of NCRC; 3.A.5-
           Records and Books of Account of NCRC; 3.A.6-Organization Documents 
           with respect to NCRC; 3.A.7-Liabilities of NCRC; 3.A.8-Tax Claims 
           Against NCRC; 3.A.9-Liens and Encumbrances Against NCRC Assets; 
           3.A.10- List of NCRC Assets; 3.A.11- Intellectual Property Rights of
           NCRC; 3.A.12-List of NCRC Insurance Policies; 3.A.13-Contracts and 
           Commitments Involving NCRC; 3.A.14-Customers and Suppliers
           of NCRC; 3.A.15-Legal Proceedings Involving NCRC; 3.A.17-NCRC 
           Licenses; 3.A.21- Actions by NCRC not in the Ordinary Course; 
           3.A.23-List of Capital Projects and Expenditures by NCRC; 3.A.24-
           List of Employees of NCRC and Past and Future Compensation; 3.A.28-
           ERISA Plans of NCRC; 3.A.29-Environmental Claims Involving
           NCRC; 3.A.30-Aging Schedule of Accounts Receivable of NCRC.

zz 2.2.04  Form of Escrow Agreement to be used in connection with the Agreement
           and Plan of Merger, dated March 1992, among the Company, NCRC of 
           New Jersey, Inc., a wholly owned subsidiary of the Company, and NCRC.

o    3.1   Amended and Restated Certificate of Incorporation of Registrant filed
           with the Secretary of State of the State of New Jersey on February 
           1, 1988 and Certificates of Amendment thereto dated February 2, 1988
           and October 31, 1989, respectively.

y    3.2   By-laws of the Registrant, as amended.

+    4.3   Form of Specimen Certificate, Roberts Pharmaceutical Corporation
           Common Stock.

+   10.1   License Agreement (United States), dated November 6, 1989, between
           Roberts and Istituto Biologico Chemioterapico (ABC) S.p.A.

+   10.2   License Agreement (United Kingdom), dated November 6, 1989, between
           Roberts and Istituto Biologico Chemioterapico (ABC) S.p.A.

o   10.3   License Agreement, dated January 1, 1985, between the National
           Technical Information Service and Roberts.

                                      E-1
<PAGE>
 
o   10.4   Agreement, dated October 1, 1985, between Hafslund Nycomed Pharma AG
           (formerly CL Pharma AG) and Roberts Laboratories, Inc., a wholly 
           owned subsidiary of Roberts.

aa  10.4.1 Amendment, dated January 19, 1994, to Agreement, dated October 1,
           1985, between Hafslund Nycomed Pharma AG and Roberts Laboratories, 
           Inc., a wholly owned subsidiary of Roberts.

o   10.16  Agreements and other documents of Roberts, Hafslund Nycomed AG and
           Linz-Roberts, Inc. including the following exhibits thereto:

          (a) Subscription and Shareholders Agreement, dated December 1, 1985,
              between Roberts, Hafslund Nycomed Pharma AG and Linz-Roberts, 
              Inc., including the following exhibits thereto:

              (i)   Certificate of Incorporation of Linz-Roberts, Inc.

              (ii)  By-Laws of Linz-Roberts, Inc.

              (iii) License Agreement, dated January 1, 1985, between the 
                    National Technical Information Service and Roberts.
                    (See Exhibit 10.3)

              (iv)  Agreement of Assignment, dated December
                    1, 1985, between Roberts and Linz-Roberts, Inc.

              (v)   Research and Development Agreement, dated as of December 1,
                    1985, between Vukovich Research Group, Inc. and Roberts

        (b)   License and Distribution Agreement, dated December 1, 1985, 
              between Roberts and Hafslund Nycomed Pharma AG.

o   10.17    License Agreement, dated October 31, 1988, between the Salk
             Institute for Biological Studies and Roberts.

(*) bb 10.21 Employment Agreement, dated as of December 20, 1994, between
             Roberts and Robert A. Vukovich.

(*) bb 10.23 Employment Agreement, dated as of December 20, 1994, between
             Roberts and Robert W. Loy.

(*) bb 10.24 Employment Agreement, dated as of December 20, 1994, between
             Roberts and Anthony A. Rascio.

    o  10.25 Lease Agreement between John Donato, Jr. d/b/a Mid Atlantic 
             Industrial Co. and Vukovich Research Group, Inc. relating to 
             Eatontown, New Jersey premises.

                                      E-2
<PAGE>
 
    o  10.26 Rental Deposit Deed, dated September 28, 1988, between the 
             University of Surrey and Roberts relating to the leased office 
             space in Guildford, England.

    o  10.27 Underlease, dated September 28, 1988, between the University of
             Surrey and Roberts relating to the leased office space in 
             Guildford, England.

   xx  10.42 Distribution Agreement, dated February 15, 1991, between Roberts 
             and Flint Laboratories (Canada) Ltd.

   ++  10.43 Agreement for Products and Sale of Assets, dated March 6, 1991, 
             between Norwich Eaton Pharmaceuticals, Inc. and Roberts 
             Laboratories Inc., a wholly owned subsidiary of Roberts.

   y   10.48 License Agreement, dated as of August 1, 1991, between 
             Bristol-Myers Squibb Co. and Roberts Laboratories Inc., a wholly 
             owned subsidiary of Roberts.

   y   10.51 Agreements of Roberts Laboratories Inc., a wholly owned subsidiary
             at Roberts, Boehringer Ingelheim Limited, Windsor Healthcare 
             Limited and Altam Pharmaceuticals Limited:

          (a) Agreement, dated December 5, 1991, by and among Roberts
              Laboratories Inc., a wholly owned subsidiary of Roberts, 
              Boehringer Ingelheim Limited and Windsor Healthcare Limited.

          (b) Supplemental Agreement, dated December 5, 1991, by and among
              Roberts Laboratories Inc., a wholly owned subsidiary of Roberts,
              Boehringer Ingelheim Limited and Windsor Healthcare Limited.

   y   10.52  Dopar Agreement for Purchase and Sale of Assets, dated December 6,
              1991, between Norwich Eaton Pharmaceuticals, Inc. and Roberts 
              Laboratories Inc., a wholly owned subsidiary of Roberts.

   k   10.53  Agreements of Roberts, Roberts Laboratories Inc. and Monmouth
              Pharmaceuticals Ltd., wholly owned subsidiaries of Roberts, 
              American Home Products Corporation, John Wyeth & Brother Limited
              and Ayerst, McKenna & Harrison Inc.

          (a) Agreement, dated December 20, 1991, by and among Roberts, Roberts
              Laboratories Inc., a wholly owned subsidiary of Roberts, American
              Home Products Corporation, John Wyeth & Brother Limited and 
              Ayerst, McKenna & Harrison, Inc.

          (b) Manufacturing Agreement, dated December 24, 1991, between John
              Wyeth & Brother Limited and Monmouth Pharmaceuticals Ltd., a 
              wholly owned subsidiary of Roberts.

                                      E-3
<PAGE>
 
          (c) AHPC License Agreement, dated December 24, 1991, between American
              Home Products Corporation and Roberts Laboratories Inc., a wholly
              owned subsidiary of Roberts.

          (d) The Ayerst License Agreement, dated December 24, 1991, between
              Ayerst, McKenna & Harrison Inc. and Roberts Laboratories Inc., a
              wholly owned subsidiary of Roberts.

          (e) The Wyeth License Agreement, dated December 24, 1991, between John
              Wyeth & Brother Limited and Roberts Laboratories Inc., a wholly
              owned subsidiary of Roberts.

          (f) Distribution Agreement, dated December 24, 1991, between John
              Wyeth & Brother Limited and Monmouth Pharmaceuticals Ltd., a
              wholly owned subsidiary of Roberts.

          (g) Assignments, each dated December 24, 1991, between American Home
              Products Corporation and Roberts Laboratories Inc., a wholly owned
              subsidiary of Roberts.

          (h) Assignment, dated December 24, 1991, between John Wyeth & Brother
              Limited and Roberts Laboratories Inc., a wholly owned subsidiary
              of Roberts.

k  10.55  Stock Purchase Agreement, dated as of January 22, 1992, between
          Roberts and Yamanouchi Pharmaceutical Co., Ltd., including Shareholder
          Agreement dated as of January 22, 1992 between Dr. Robert A. Vukovich
          and Yamanouchi Pharmaceutical Co., Ltd. which comprises Annex A to
          such agreement.

j  10.56  Distribution Agreement, dated March 31, 1992, between Research
          Industries Corporation and Roberts Pharmaceutical of Canada Inc., a
          wholly owned subsidiary of Roberts.

j  10.57  License Agreement, dated April 2, 1992, between Bayer AG and Roberts
          Laboratories Inc., a wholly owned subsidiary of Roberts.

j  10.58  License Agreement, dated April 10, 1992, between Ortho Pharmaceutical
          Corporation and Roberts Laboratories Inc., a wholly owned subsidiary
          of Roberts.

j  10.59  Purchase Agreement, dated July 6, 1992, between Galen Limited and
          Roberts Laboratories Inc., a wholly owned subsidiary of Roberts.

kk 10.60  Asset Purchase Agreement, dated September 29, 1992, between Smith-
          Kline Beecham Pharmaceuticals, an unincorporated division of Smith-
          Kline Beecham Corporation, and Roberts Laboratories Inc, a wholly
          owned subsidiary of Roberts.

                                      E-4
<PAGE>
 
j  10.61  Agreement for Purchase and Sale of COMHIST Assets, dated November 24,
          1992, between Procter & Gamble Pharmaceuticals, Inc. and Roberts
          Laboratories Inc., a wholly owned subsidiary of Roberts. Upon the
          request of the Securities and Exchange Commission, Roberts agrees to
          furnish a copy of Schedules 1.1(a) through 6.11 and Exhibits A through
          C to the Agreement for Purchase and Sale of COMHIST Assets as follows:
          1.1(a) - Schedule of Trademarks; 1.1(b) - Schedule of Know-How; 
          1.1(d) -Tooling Schedule; 1.4 -Allocation of Purchase Price Schedule;
          6.6(4) -Intellectual Property Claims Schedule; 6.10 - Schedule of
          Customers; 6.11 - Financial Information Schedule; A - Form of
          Trademark Assignment; B - Form of Bill of Sale; C -Contract
          Manufacturing Agreement.

j  10.62  Agreements between Roberts Laboratories Inc., a wholly owned
          subsidiary of Roberts, and Bristol-Myers Squibb Company:

     (a) QUIBRON Sale Agreement, dated as of December 15, 1992.
     (b) QUIBRON Supply Agreement, dated as of December 15, 1992.
     (c) Security Agreement, dated as of December 15, 1992.

j  10.63  Purchase and Sale Agreement, dated December 21, 1992, between The Du
          Pont Merck Pharmaceutical Company and Roberts Laboratories Inc., a
          wholly owned subsidiary of Roberts.

j  10.64  Asset Purchase Agreement, dated December 28, 1992, between G.D. Searle
          & Co. and Roberts Laboratories Inc., a wholly owned subsidiary of
          Roberts. Upon the request of the Securities and Exchange Commission,
          Roberts agrees to furnish a copy of Exhibits A and B, Schedules 1.12
          through 4.2(d), and various miscellaneous assignments of copyrights
          and trademarks to the Asset Purchase Agreement as follows: A -
          Security Agreement; B - Supply Agreement; 1.12 -Product Registrations,
          2.3 - Purchase Price Allocations; 4.1(c) - Contracts Requiring
          Consents; 4.1(f) - Pending Suits and Claims; 4.1(g) - Compliance;
          4.1(h) - Material Contracts; 4.1(i) - Exceptions to Ownership of
          Intellectual Property; 4.1(j) - Financial Information; 4.1(l) -
          Customer List; 4.1(m) -Material Adverse Changes; 4.2(d) - Buyer's
          Financial Statements; assignments of copyrights; assignments of
          trademarks.

j  10.65  Asset Purchase Agreement, dated March 23, 1993, by and between Searle
          Canada, Inc. and Roberts Laboratories Inc., a wholly owned subsidiary
          of the Company. Upon the request of the Securities and Exchange
          Commission, Roberts agrees to furnish a copy of Exhibit A and
          Schedules 1.5(a) through 5.19 to the Asset Purchase Agreement as
          follows: A - Supply Agreement; 1.5(a) - Sales Retained by Seller;
          1.5(b) - Pricing Prior to Closing; 1.10 -Product Registrations; 
          4.1(c) -Contracts Requiring Consents; 4.1(f) - Pending Suits and
          Claims; 4.1(g) - Compliance; 4.1(h) - Material Contracts; 4.1(i) -
          Exceptions to Ownership of Intellectual Property; 4.1(j) - Financial
          Information; 4.1(l) -Customer List; 4.1(m) - Material Adverse Changes;
          5.19 -Packaging Charges.

                                      E-5
<PAGE>
 
#  10.67    Copy of form of Option Agreement used in connection with options
            granted under the Roberts Pharmaceutical Corporation Restricted
            Stock Option Plan.

#  10.68    Copy of form of Option Agreement used in connection with options
            granted under the Roberts Pharmaceutical Corporation Incentive Stock
            Option Plan.

j  10.69    Rebate Agreement, dated November 11, 1992, between the Secretary of
            Health and Human Services and Roberts Laboratories, Inc., a wholly
            owned subsidiary of Roberts.

(**)b10.70  Roberts Pharmaceutical Corporation Incentive Stock Option Plan.
        
(**)b10.71  Roberts Pharmaceutical Corporation Restricted Stock Option Plan.

a 10.72     License Agreement, dated as of March 27, 1993, by and among Roberts
            Laboratories Inc., a wholly owned subsidiary of Roberts, Sawai
            Pharmaceutical Co., Ltd. and Grelan Pharmaceutical Co., Ltd.

a 10.73     Agreements, dated as of May 5, 1993, between Roberts Laboratories
            Inc., a wholly owned subsidiary of Roberts, and Glaxo Canada Inc.,
            dated as of May 5, 1993.

            (a) First Asset Purchase Agreement.
            (b) Promotion Agreement.
            (c) Supply Agreement.
            (d) Distribution Agreement.
            (e) License Agreement.
            (f) Registered User Agreement.
            (g) Assignment of Trademarks.
            (h) Second Asset Purchase Agreement.

a  10.74    Stock Purchase Agreement, dated August 30, 1993, by and among
            Roberts, Yamanouchi Pharmaceutical Co., Ltd. and Yamanouchi U.S.A.
            Inc.

aa 10.75    Amendment to Stock Purchase Agreement, dated August 30, 1993, by and
            among Roberts, Yamanouchi Pharmaceutical Co., Ltd. and Yamanouchi
            U.S.A. Inc.

aa 10.76    Agreements, dated as of September 14, 1993, among Bristol-Myers
            Squibb Company, Bristol-Myers Squibb Company Canada Inc. and Roberts
            Laboratories Inc., a wholly owned subsidiary of Roberts.

            (a)    COLACE Et Al. Sale Agreement.
            (b)    COLACE Et Al. Supply Agreement.
            (c)    Security Agreement.
            (d)    Notice of Security Interest in Trademark.
            (e)    Assignment of Collateral.
            (f)    Guaranty.

                                      E-6
<PAGE>
 
aa 10.77 Underwriting Agreement, dated September 27, 1993, by and among Roberts,
         Morgan Stanley & Co., Incorporated, Merrill Lynch, Pierce, Fenner &
         Smith Incorporated and the several underwriters.

bb 10.78 License Agreement, dated as of July 6, 1994, between The Rockefeller
         University and Roberts Laboratories Inc., a wholly owned subsidiary of
         Roberts.

bb 10.79 Agreements between Roberts Laboratories Inc., a wholly owned subsidiary
         of Roberts, and SmithKline Beecham Pharmaceuticals, an unincorporated
         division of SmithKline Beecham Corporation:

         (a) TIGAN Asset Purchase Agreement dated as of March 27, 1995. Upon the
             request of the Securities and Exchange Commission, Roberts agrees
             to furnish a copy of Exhibits A through D and Schedules 5.4 through
             5.11 and Appendix I as follows: A - List of Products; B -
             Assignment and Assumption Agreement; C -Promissory Note; D -
             Transitional Services Agreement; 5-4 - Financial Information; 5.5 -
             Litigation; 5.6 -Inventory; 5.7 - Product Formulas; 5.8 -Regulatory
             Issues; 5.9 - FDA and Other Administrative Approvals, Registrations
             and Permits; 5.11 -Intellectual Property Rights; I - Purchase Price
             Adjustments.
         (b) EMINASE Asset Purchase Agreement dated as of March 27, 1995. Upon
             the request of the Securities and Exchange Commission, Roberts
             agrees to furnish a copy of Exhibits A through D, Schedules
             2.1(a)(1) through 5.11 and Appendices I and II as follows: A - List
             of Products; B - Manufacturing Agreement; C - Promissory Note; D -
             Transitional Services Agreement; 2.1(a)(1) -Transferable Product
             Rights; 2.1(a)(2) - Non-Transferable Product Rights; 2.1(b)-
             Transferred Contracts; 5.4 - Financial Information; 5.5 -
             Litigation; 5.6 -Inventory; 5.7 - Product Formulas; 5.8 -
             Regulatory Issues; 5.9 - FDA and Other Administrative Approvals,
             Registrations and Permits; 5.11 - Intellectual Property Rights; I -
             Territories; II - Purchase Price Adjustments.

   10.80 Distribution Agreement, dated February 23, 1995, between Roberts
         Laboratories, Inc., a wholly owned subsidiary of the Company, and Merck
         and Co., Inc. with respect to NOROXIN.

   21.   Subsidiaries of the Registrant.

   23.   Consent of Coopers & Lybrand L.L.P.

cc 27.   Financial Data Schedules.

(*) Constitutes a management contract required to be filed as an exhibit
    pursuant to Item 14(c) of Form 10-K.

(**)Constitutes a compensatory plan required to be filed as an exhibit pursuant
    to Item 14(c) of Form 10-K.



                                      E-7
<PAGE>
 
y    Incorporated by reference to the identically numbered exhibit to the
     Registrant's Registration Statement on Form S-4 (Registration No. 33-
     44441).

o    Incorporated by reference to the identically numbered exhibit to
     Registrant's Registration Statement on Form S-1 (Registration No. 33-
     31876).

+    Incorporated by reference to the identically numbered exhibit to Amendment
     No. 1 to Registrant's Registration Statement on Form S-1 (Registration No.
     33-31876).

x    Incorporated by reference to the identically numbered exhibit to Amendment
     No. 2 to Registrant's Registration Statement on Form S-1 (Registration No.
     33-31876).

z    Incorporated by reference pursuant to the identically numbered exhibit to
     Amendment No. 1 to Registrant's Registration Statement on Form S-1
     (Registration No. 33-40636).

k    Incorporated by reference to the identically numbered exhibit to
     Registrant's Registration Statement on Form S-1 (Registration No. 33-
     45069).

#    Incorporated by reference to the identically numbered exhibit to
     Registrant's Registration Statement on Form S-8 (Registration No. 33-
     34767).

a    Incorporated by reference to the identically numbered exhibit to
     Registrant's Registration Statement on Form S-3 (Registration No. 33-
     68080).

b    Incorporated by reference to Registrant's Registration Statement on Form S-
     8 (Registration No. 33-51198).

@    Incorporated by reference to Registrant's Annual Report on Form 10-K for
     the fiscal year ended June 30, 1990.

zz   Incorporated by reference to Registrant's Annual Report on Form 10-K for
     the fiscal year ended December 31, 1991.

j    Incorporated by reference to Registrant's Annual Report on Form 10-K for
     the fiscal year ended December 31, 1992.

aa   Incorporated by reference to Registrant's Annual Report on Form 10-K for
     the fiscal year ended December 31, 1993.

bb   Incorporated by reference to Registrant's Annual Report on Form 10-K for
     the fiscal year ended December 31, 1994.

cc   Financial Data Schedules are submitted in electronic format only.

xx   Incorporated by reference to Registrant's Current Report on Form 8-K, dated
     February 15, 1991.

++   Incorporated by reference to Registrant's Current Report on Form 8-K, dated
     March 6, 1991.

                                      E-8
<PAGE>
 
vv   Incorporated by reference to Registrant's Current Report on Form 8-K, dated
     November 5, 1991.

kk   Incorporated by reference to Registrant's Current Report on Form 8-K, dated
     September 29, 1992.

                                      E-9