UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q/A
(Amendment No. 1)

|ý                                                             | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|For the quarterly period ended March 31, 2004                
|OR                                                           
|o                                                             | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
from                             to

Commission File No. 000-30123

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FIRST HORIZON PHARMACEUTICAL CORPORATION(Exact name of registrant as specified in its charter)

|Delaware(State of incorporation)                                              |  | 58-2004779(I.R.S. Employer Identification Number)
|----------------------------------------------------------------------------- |  | -------------------------------------------------
|                                                                              |  |                                                  
|6195 Shiloh Road, Alpharetta, Georgia(Address of principal executive offices) |  | 30005(Zip code)                                  
|(770) 442-9707(Registrant's telephone number, including area code):          

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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 ý    No o

As of April 30, 2004, there were 35,906,297 shares of the Registrant's Common Stock outstanding.



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Explanatory Note

This Amendment No. 1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, is being filed in order to make
certain modifications to Note 10 of the financials pursuant to a comment received from the Commission. Except for Note 10, these modifications do not affect the financials as originally filed.

2

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PART IFINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FIRST HORIZON PHARMACEUTICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

|                                                                                                                                                                             |                                                                                                                                                                           | (unaudited)
March 31, 2004 |                                            | December 31, 2003
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | -----------------
|ASSETS                                                                                                                                                                       |                                                                                                                                                                           |                            |                                            |                  
|Current assets:                                                                                                                                                              |                                                                                                                                                                           |                            |                                            |                  
|                                                                                                                                                                             | Cash and cash equivalents                                                                                                                                                 |                            | $                                          | 157,499          
|                                                                                                                                                                             | Marketable securities                                                                                                                                                     |                            |                                            | 47,533           
|                                                                                                                                                                             | Accounts receivable, net of allowance for doubtful accounts, discounts and contractual adjustments of $400 and $546 at March 31, 2004 and December 31, 2003, respectively |                            |                                            | 11,287           
|                                                                                                                                                                             | Inventories                                                                                                                                                               |                            |                                            | 9,038            
|                                                                                                                                                                             | Income taxes receivable                                                                                                                                                   |                            |                                            | 2,778            
|                                                                                                                                                                             | Current deferred tax assets                                                                                                                                               |                            |                                            | 2,712            
|                                                                                                                                                                             | Other current assets                                                                                                                                                      |                            |                                            | 5,448            
|                                                                                                                                                                             |                                                                                                                                                                           |                            |                                            |                  
|                                                                                                                                                                             |                                                                                                                                                                           |                            | Total current assets                       |                  
|Property and equipment, net                                                                                                                                                  |                                                                                                                                                                           |                            | 2,900                                      |                  
|Other assets:                                                                                                                                                                |                                                                                                                                                                           |                            |                                            |                  
|                                                                                                                                                                             | Intangibles, net                                                                                                                                                          |                            |                                            | 236,475          
|                                                                                                                                                                             | Other assets                                                                                                                                                              |                            |                                            | 5,079            
|                                                                                                                                                                             | Deferred tax assets                                                                                                                                                       |                            |                                            | 72               
|                                                                                                                                                                             |                                                                                                                                                                           |                            |                                            |                  
|                                                                                                                                                                             |                                                                                                                                                                           |                            | Total other assets                         |                  
|                                                                                                                                                                             |                                                                                                                                                                           |                            | Total assets                               |                  
|                                                                                                                                                                             |                                                                                                                                                                           |                            |                                            |                  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                         |                                                                                                                                                                           |                            |                                            |                  
|Current liabilities:                                                                                                                                                         |                                                                                                                                                                           |                            |                                            |                  
|                                                                                                                                                                             | Accounts payable                                                                                                                                                          |                            | $                                          | 4,571            
|                                                                                                                                                                             | Accrued expenses                                                                                                                                                          |                            |                                            | 11,457           
|                                                                                                                                                                             |                                                                                                                                                                           |                            |                                            |                  
|                                                                                                                                                                             |                                                                                                                                                                           |                            | Total current liabilities                  |                  
|Long-term liabilities:                                                                                                                                                       |                                                                                                                                                                           |                            |                                            |                  
|                                                                                                                                                                             | Convertible debt                                                                                                                                                          |                            |                                            | 150,000          
|                                                                                                                                                                             | Other long-term liabilities                                                                                                                                               |                            |                                            | 461              
|                                                                                                                                                                             |                                                                                                                                                                           |                            |                                            |                  
|                                                                                                                                                                             |                                                                                                                                                                           |                            | Total liabilities                          |                  
|Stockholders' equity:                                                                                                                                                        |                                                                                                                                                                           |                            |                                            |                  
|                                                                                                                                                                             | Preferred stock, 1,000,000 shares authorized and none outstanding                                                                                                         |                            |                                            |                 
|Common stock, $0.001 par value; 100,000,000 shares authorized; 35,883,408 and 35,595,442 shares issued and outstanding at March 31, 2004 and December 31, 2003, respectively |                                                                                                                                                                           |                            | 36                                         |                  
|Additional paid-in capital                                                                                                                                                   |                                                                                                                                                                           |                            | 292,191                                    |                  
|Retained earnings                                                                                                                                                            |                                                                                                                                                                           |                            | 21,808                                     |                  
|Accumulated other comprehensive income                                                                                                                                       |                                                                                                                                                                           |                            | 297                                        |                  
|                                                                                                                                                                             |                                                                                                                                                                           |                            |                                            |                  
|                                                                                                                                                                             |                                                                                                                                                                           |                            | Total stockholders' equity                 |                  
|                                                                                                                                                                             |                                                                                                                                                                           |                            | Total liabilities and stockholders' equity |                  
|                                                                                                                                                                             |                                                                                                                                                                           |                            |                                            |                  

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

3

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FIRST HORIZON PHARMACEUTICAL CORPORATION  CONSOLIDATED STATEMENTS OF OPERATIONS  (unaudited, in thousands, except per share data)

|                                                |                                                            | For The Quarter Ended March 31, |                                   
|----------------------------------------------- | ---------------------------------------------------------- | ------------------------------- | ----------------------------------
|
|Net Revenues                                    |                                                            | $                               | 32,018                            
|Operating costs and expenses:                   |                                                            |                                 |                                   
|                                                | Cost of revenues (excluding amortization and depreciation) |                                 |                                   
|                                                | Selling, general and administrative expense                |                                 |                                   
|                                                | Depreciation and amortization                              |                                 |                                   
|                                                | Research and development expense                           |                                 |                                   
|                                                |                                                            |                                 |                                   
|                                                |                                                            |                                 | Total operating costs and expenses
|                                                |                                                            |                                 |                                   
|Operating income (loss)                         |                                                            |                                 | 8,280                             
|                                                |                                                            |                                 |                                   
|Other (expense) income:                         |                                                            |                                 |                                   
|                                                | Interest expense                                           |                                 |                                   
|                                                | Interest income                                            |                                 |                                   
|                                                | Other                                                      |                                 |                                   
|                                                |                                                            |                                 |                                   
|                                                |                                                            |                                 | Total other (expense) income      
|                                                |                                                            |                                 |                                   
|Income (loss) before provision for income taxes |                                                            |                                 | 8,373                             
|Benefit (provision) for income taxes            |                                                            |                                 | (3,326                            
|                                                |                                                            |                                 |                                   
|Net income (loss)                               |                                                            | $                               | 5,047                             
|Other comprehensive income (loss)               |                                                            | $                               | (17                               
|                                                |                                                            |                                 |                                   
|Comprehensive income (loss)                     |                                                            | $                               | 5,030                             
|                                                |                                                            |                                 |                                   
|Net income (loss) per common share:             |                                                            |                                 |                                   
|                                                | Basic earnings (loss) per common share                     |                                 | $                                 
|                                                |                                                            |                                 |                                   
|                                                | Diluted earnings (loss) per common share                   |                                 | $                                 
|                                                |                                                            |                                 |                                   
|Weighted average common shares outstanding:     |                                                            |                                 |                                   
|                                                | Basic                                                      |                                 |                                   
|                                                |                                                            |                                 |                                   
|                                                | Diluted                                                    |                                 |                                   
|                                                |                                                            |                                 |                                   

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

4

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FIRST HORIZON PHARMACEUTICAL CORPORATION  CONSOLIDATED STATEMENTS OF CASH FLOWS  (unaudited, in thousands)

|                                                                                                   |                                            | For The Three Months Ended March 31,                                       |                                                    
|-------------------------------------------------------------------------------------------------- | ------------------------------------------ | -------------------------------------------------------------------------- | ---------------------------------------------------
|
|Cash flows from operating activities:                                                              |                                            |                                                                            |                                                    
|Net income (loss)                                                                                  |                                            | $                                                                          | 5,047                                              
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |                                            |                                                                            |                                                    
|                                                                                                   |                                            | Depreciation and amortization                                              |                                                    
|                                                                                                   |                                            | Non-cash interest expense                                                  |                                                    
|                                                                                                   |                                            | Deferred income tax benefit                                                |                                                    
|                                                                                                   |                                            | Non-cash compensation expense                                              |                                                    
|                                                                                                   |                                            | Reduction in taxes payable  stock option exercises                        |                                                    
|                                                                                                   |                                            | Changes in assets and liabilities, net of acquired assets and liabilities: |                                                    
|                                                                                                   |                                            |                                                                            |                                                    
|                                                                                                   |                                            |                                                                            |                                                    
|                                                                                                   |                                            |                                                                            |                                                    
|                                                                                                   |                                            |                                                                            |                                                    
|                                                                                                   |                                            |                                                                            |                                                    
|                                                                                                   |                                            |                                                                            |                                                    
|                                                                                                   |                                            |                                                                            |                                                    
|                                                                                                   |                                            |                                                                            | Net cash provided by (used in) operating activities
|Cash flows from investing activities:                                                              |                                            |                                                                            |                                                    
|                                                                                                   | Purchase of marketable securities          |                                                                            |                                                    
|                                                                                                   | Purchase of property and equipment         |                                                                            |                                                    
|                                                                                                   |                                            |                                                                            |                                                    
|                                                                                                   |                                            |                                                                            | Net cash used in investing activities              
|Cash flows from financing activities:                                                              |                                            |                                                                            |                                                    
|                                                                                                   | Capitalized financing costs incurred       |                                                                            |                                                    
|                                                                                                   | Repurchase of common stock                 |                                                                            |                                                    
|                                                                                                   | Proceeds from long-term debt               |                                                                            |                                                    
|                                                                                                   | Net proceeds from issuance of common stock |                                                                            |                                                    
|                                                                                                   |                                            |                                                                            |                                                    
|                                                                                                   |                                            |                                                                            | Net cash provided by (used in) financing activities
|Effect of foreign exchange rates on cash                                                           |                                            |                                                                            | (10                                                
|Net change in cash and cash equivalents                                                            |                                            |                                                                            | 123,777                                            
|Cash and cash equivalents, beginning of period                                                     |                                            |                                                                            | 33,722                                             
|                                                                                                   |                                            |                                                                            |                                                    
|Cash and cash equivalents, end of period                                                           |                                            | $                                                                          | 157,499                                            
|                                                                                                   |                                            |                                                                            |                                                    
|Supplemental Cash Flow Information:                                                                |                                            |                                                                            |                                                    
|Cash paid for taxes                                                                                |                                            | $                                                                          | 333                                                
|                                                                                                   |                                            |                                                                            |                                                    
|Cash paid for interest                                                                             |                                            | $                                                                          | 13                                                 
|                                                                                                   |                                            |                                                                            |                                                    

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

5

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FIRST HORIZON PHARMACEUTICAL CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)

1.     Basis of Presentation

The accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting solely of normal recurring adjustments) which management
considers necessary for fair presentation of the financial position, results of operations and cash flows of the Company for the interim periods. Certain footnote disclosures normally included in
financial statements prepared according to accounting principles generally accepted in the United States of America have been condensed or omitted from these interim financial statements as permitted
by the rules and regulations of the Securities and Exchange Commission. Interim results are not necessarily indicative of results for the full year. The interim results should be read in conjunction
with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2003 (File
No. 000-30123).

2.     New Accounting Pronouncements

During December 2003, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin ("SAB") No. 104, Revenue
Recognition, which supercedes SAB No. 101, Revenue Recognition in Financial Statements.
This Bulletin's primary purpose is to rescind accounting guidance contained in SAB No. 101 related to multiple element revenue arrangements, superceded as a result of the issuance of EITF
00-21,Accounting for Revenue Arrangements with Multiple Deliverables. While the wording of SAB No. 104 has changed to reflect the
issuance of EITF 00-21, the revenue recognition principles of SAB No. 101 remain largely unchanged by the issuance of SAB No. 104. The issuance of this Bulletin did not
impact the Company's accounting policy for revenue recognition.

During
December 2003, the Financial Accounting Standards Board ("FASB") issued SFAS No. 132 (revised 2003),Employers' Disclosures about Pensions
and Other Postretirement
Benefitsan amendment of FASB Statements No. 87, 88, and 106. This Statement revises disclosure requirements about pension plans and other postretirement
benefit plans. It does not change the measurement or recognition of those plans required by SFAS No. 87,Employers' Accounting for Pensions,SFAS
No. 88,Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits,and SFAS
No. 106,Employers' Accounting for Postretirement Benefits Other Than Pensions.This Statement requires additional disclosures about the assets,
obligations, cash flows and net periodic benefit cost of defined benefit pension plans and other postretirement benefit plans. In addition, the various elements of pension and other postretirement
benefit costs must be disclosed on a quarterly basis. The annual disclosure provisions of SFAS No. 132 (revised 2003) generally are effective for fiscal years ending after December 15,
2003, while the interim disclosure provisions are effective for interim periods beginning after December 15, 2003. The adoption of SFAS No. 132 (revised 2003) did not have a material
impact on the Company's financial condition or results of operations.

3.     Stock Options

The Company applies APB No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for all stock options issued to
employees. Accordingly, the Company records compensation expense for any stock option grants with exercise prices lower than fair value, recognized ratably over the vesting period.

Had
compensation costs for the Company's options been determined using the Black Scholes option-pricing models prescribed by SFAS No. 123, "Accounting for Stock Based
Compensation," the

6

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Company's
pro forma net income (loss) per common share would have been reported as follows (in thousands except per share data):

For The Quarter Ended
March 31,2004

2003Net income (loss) as reported

$
5,047

$
(8,679
)Deduct:Total stock-based employee compensation expense determined under fair value basis for all awards, net of related tax effects


(641
)

(153
)Pro forma

$
4,406

$
(8,832
)Net income (loss) per common share-basic:As reported

$
0.14

$
(0.25
)Pro forma

$
0.12

$
(0.25
)Net income (loss) per common share-diluted:As reported

$
0.14

$
(0.25
)Pro-forma

$
0.12

$
(0.25
)


The
weighted average fair value per share of options granted during the three months ended March 31, 2004 and 2003 is estimated at $12.78 and $4.66, respectively. The value of
options is estimated on the date of the grant using the following weighted average assumptions:

2004

2003Risk-free interest rate

3.02
%
2.10
%Expected dividend yield



Expected lives

5 years

5 yearsExpected volatility

129.27
%
165.4
%


The
Black-Scholes option valuation model was not developed for use in valuing employee stock options. Instead, this model was developed for use in estimating the fair value of traded
options, which have no vesting restrictions, and are fully transferable, which differ significantly from the Company's stock option awards. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility and expected survival rates of the options.

4.     Reclassifications

Certain prior year amounts have been reclassified to conform to the current year financial statement presentation.

5.     Marketable Securities

The Company classifies its existing marketable securities as available-for-sale. All available-for-sale securities
are considered current, as the Company intends to use them for current operating and investing purposes. There were no realized gains or losses in the three months ended March 31, 2004. At
March 31, 2004, the Company had total unrealized gains from marketable securities of $0.

7

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The
carrying amount of available-for-sale securities and their approximate fair values at March 31, 2004 were as follows (in thousands):

|                                               |  | Amortized Cost |        | Gross Unrealized Gains |   | Gross Unrealized Losses |  | Fair Value
|---------------------------------------------- |  | -------------- | ------ | ---------------------- | - | ----------------------- |  | ----------
|U.S. Government and Federal agency obligations |  | $              | 22,750 |                        | $ | 64                      |  | $         
|Corporate bonds                                |  |                | 24,783 |                        |   | 17                      |  |           
|                                               |  |                |        |                        |   |                         |  |           
|Total                                          |  | $              | 47,533 |                        | $ | 81                      |  | $         
|                                               |  |                |        |                        |   |                         |  |           

6.     Inventories

Inventories consist of purchased pharmaceutical products and are stated at the lower of cost or market. Cost is determined using the first-in,
first-out method, and market is considered to be net realizable value. Inventories consist of finished product and bulk product awaiting processing and packaging into finished product. At
March 31, 2004, the Company had an allowance for excess and obsolete inventory of $2.2 million compared to $2.4 million at December 31, 2003. Inventories at
March 31, 2004 and December 31, 2003 consisted of (in thousands):

March 31, 2004

December 31, 2003Bulk product

$
4,539

$
6,050Finished product


4,499


5,138$
9,038

$
11,188


7.     Samples

Samples primarily consist of product samples used in the sales and marketing efforts of the Company's products. Samples are expensed upon distribution, as a
selling expense. Sample inventories at March 31, 2004 and December 31, 2003 were $1.0 million and $0.8 million, respectively and are included in other current assets.

8.     Accrued Expenses

Accrued expenses at March 31, 2004 and December 31, 2003 consist of the following (in thousands):

March 31,
2004

December 31, 2003Employee compensation and benefits

$
1,113

$
1,830Product returns


2,370


3,813Sales deductions


4,250


4,287Royalties


966


546Assumed liabilities  product acquisitions


236


824Other


2,522


1,910$
11,457

$
13,210


8

---



9.     Earnings Per Share

Below is the calculation of basic and diluted net income (loss) per share (in thousands except per share data):

For The Quarter Ended
March 31,2004

2003Net income (loss)

$
5,047

$
(8,679
)Other comprehensive income (loss)


(17
)

18Comprehensive income (loss)

$
5,030

$
(8,661
)Weighted average common shares outstanding-basic


35,745


35,274Diluted effect of Stock Options


1,101


Weighted average common shares outstanding-diluted


36,846


35,274Basic earnings (loss) per common share:

$
0.14

$
(0.25
)Diluted earnings (loss) per common share:

$
0.14

$
(0.25
)


For
the quarter ended March 31, 2004, there were 703,437 potential common shares outstanding that were excluded from the diluted net income per share calculation because their
effect would have been anti-dilutive. The convertible debt could also be converted into 6,772,005 shares of common stock in the future, subject to certain contingencies outlined in
footnote 15. Because such contingencies were not fulfilled, the convertible debt was not considered in the calculation of diluted income per common share.

10.   Impairment Charge

In the second quarter of 2003, the Company formulated a new sales and marketing strategy upon the Company hiring Mr. Patrick Fourteau as its President and
Chief Operating Officer. This new strategy resulted in the discontinuation of the pursuit of a line extension for Cognex as well as the subsequent plans to promote the product. As part of this new
strategy, using market research, the Company updated its forecasts of Cognex sales projections to reflect a life cycle through June 2013, the period of time that the Company expects it will
continue to sell the product in the future. As a result, the estimated useful life of Cognex was decreased from a remaining life of 17 years to 10 years, and using the estimated future
undiscounted cash flows over the useful life of the product, the intangible asset related to Cognex was not projected to be recoverable.

To
determine a fair value of the intangible asset related to Cognex, the Company performed an internal analysis utilizing a number of factors, including information from an independent
valuation. The Company's analysis resulted in an impairment charge of $4.2 million being recorded as of June 30, 2003. The methodologies used to determine a fair value for Cognex
included a combination of a market approach, which used a marketable multiple methodology and a comparable transaction methodology, as well as an income approach, using a discounted cash flow
methodology.

9

---



11.   Intangible Assets

The following table reflects the components of intangible assets as of March 31, 2004 (in thousands):

|                               |  | Gross Amount |         | Accumulated Amortization |   | Impairment Charge |   | Net Amount |        | Weighted Average Life
|------------------------------ |  | ------------ | ------- | ------------------------ | - | ----------------- | - | ---------- | ------ | ---------------------
|Licensing rights               |  | $            | 244,483 |                          | $ | (29,307           | ) | $          | (4,152 | )                    
|Trade names                    |  |              | 11,060  |                          |   | (1,325            | ) |            |       |                      
|Contracts                      |  |              | 8,300   |                          |   | (3,587            | ) |            |       |                      
|Supply/Distribution agreements |  |              | 11,490  |                          |   | (3,158            | ) |            |       |                      
|Other intangibles              |  |              | 3,082   |                          |   | (411              | ) |            |       |                      
|                               |  |              |         |                          |   |                   |   |            |        |                      
|Total                          |  | $            | 278,415 |                          | $ | (37,788           | ) | $          | (4,152 | )                    
|                               |  |              |         |                          |   |                   |   |            |        |                      

For
the three months ended March 31, 2004, amortization expense related to the intangible assets was $3.9 million. Amortization is calculated on a straight-line
basis over the estimated useful life of the intangible asset. Estimated annual amortization expense for each of the five succeeding fiscal years is as follows (in thousands):

Fiscal year ended
December 31:

Amount2004

$
15,6862005

$
15,4862006

$
15,3822007

$
14,0772008

$
13,826


12.   Segment Reporting

The Company is engaged solely in the business of marketing and selling prescription pharmaceutical products. Accordingly, the Company's business is classified in
a single reportable segment, the sale and marketing of prescription products. Prescription products include a variety of branded pharmaceuticals for the treatment of cardiovascular, obstetrical and
gynecological, pediatric and gastroenterological conditions and disorders.

The
following presents revenues for prescription products by area of treatment:

For The Three Months Ended
March 31,2004

2003Cardiovascular

$
14,545

$
3,941Women's Health/Pediatrics


13,222


7,033Non Promoted


4,251


1,520Net Revenues

$
32,018

$
12,494


13.   Share Buyback Program

On July 8, 2002, the Company announced a share buyback program. This program authorized the repurchase of up to $8.0 million in common stock until
July 5, 2003. Through July 5, 2003, the Company repurchased 823,400 shares of its common stock at an aggregate cost of approximately $2.1 million. On August 25, 2003, the
Company authorized the repurchase of up to an additional $7.9 million of common stock and extended the repurchase program to August 31, 2004. In

10

---



September 2003,
the Company repurchased an additional 162,225 shares of common stock at an aggregate cost of approximately $1.0 million. Through December 31, 2003, the Company had
repurchased a total of 985,625 shares of common stock at an aggregate cost of approximately $3.1 million. These shares were retired. No shares were repurchased during the quarter ended
March 31, 2004.

14.   Credit Agreement

On February 11, 2003, the Company entered into a Credit Agreement for a $20.0 million senior secured revolving credit facility with various lenders
and LaSalle Bank National Association, as Administrative Agent. Borrowings may be used for working capital requirements and general corporate purposes. Borrowings are secured by substantially all of
the Company's assets. Borrowings bear interest at the Company's option at the base rate in effect from time to time plus an applicable margin or the Eurodollar rate, plus an applicable margin. The
applicable margin will vary dependent upon the Company's leverage ratio in effect from time to time. The revolving facility, as amended, matures on August 11, 2006. The revolving loan contains
various covenants, including covenants relative to maintaining financial ratios and earnings levels, limitations on acquisitions, dispositions, mergers and capital expenditures, limitations on
incurring additional indebtedness and a prohibition on payment of dividends and certain issuances of our capital stock. As of March 31, 2004, the Company was in compliance with all financial
covenants of the Credit Agreement. As of March 31, 2004 there was no outstanding balance on the Credit Agreement. For the quarter ended March 31, 2004, there were no borrowings or
repayments under the Credit Agreement.

15.   Long-term Debt

In March 2004, the Company issued a total of $150.0 million of its 1.75% senior subordinated contingent convertible notes due 2024 in transactions
that were exempt from registration in reliance upon Rule 144A and other available exemptions under the Securities Act. The notes are due March 8, 2024 and accrued interest is payable
semi-annually in arrears on March 8 and September 8 of each year, commencing on September 8, 2004. In addition to the interest on the notes, after March 8,
2007, the Company will also pay contingent interest during specified six-month periods if the average trading price of the notes per $1,000 principal amount for the five day trading period
ending on the third trading day immediately preceding the first day of the applicable six-month period equals $1,200 or more. During any period when contingent interest is
payable, it will be payable at a rate equal to 0.5% per annum. As this contingent interest feature is based on the underlying trading price of the Notes, the contingent interest qualifies as an
embedded derivative. As of March 31, 2004, management determined that the fair value of this contingent interest embedded derivative is not material. The net proceeds from this issuance, after
deducting offering expenses, were approximately $145.4 million.

Holders
of the notes may initially convert the notes into shares of the Company's common stock at a conversion rate of 45.1467 shares per $1,000 principal amount of the notes, which is
equivalent to a conversion price of $22.15 per share, subject to anti-dilution adjustments, before the close of business on March 8, 2024. Holders may convert the notes only under
the following circumstances: (1) during any calendar quarter commencing after June 30, 2004, if the closing sales price of the Company's common stock exceeds 120% of the conversion price
for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding calendar quarter; (2) if the notes have been called for redemption;
(3) during the five trading day period immediately following any nine consecutive trading day period in which the trading price of the notes per $1,000 principal amount for each day of that
period was less than 95% of the product of the closing price of the Company's common stock and the number of shares of common stock issuable upon conversion of $1,000 principal amount of the notes; or
(4) the occurrence of specified corporate transactions.

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The
Company has the option to redeem the notes beginning March 13, 2007 at a price equal to 100% of their aggregate principal amount, plus accrued and unpaid interest, including
contingent interest, if any.

The
holders of the notes have the option to require the Company to repurchase the notes on March 8 of 2009, 2014 and 2019, and upon a change in control, at a price equal to 100%
of their aggregate principal amount, plus accrued and unpaid interest, including contingent interest, if any.

In
connection with the issuance of the notes, on March 25, 2004 the Company filed a registration statement on Form S-3 with the Securities and Exchange
Commission to register for resale the 6.8 million shares of the Company's common stock issuable, subject to anti-dilution adjustments, upon conversion of the notes. The registration
statement is expected to become effective during the second quarter of 2004.

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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



31.1*

Certifications of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2*

Certifications of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2*

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to be signed on its behalf by the
undersigned thereunto duly authorized.

|                   |  | FIRST HORIZON PHARMACEUTICAL CORPORATION(Registrant)
|------------------ |  | ----------------------------------------------------
|Date: May 21, 2004 |  | By:                                                 
|Date: May 21, 2004 |  | By:                                                 

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