--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                        ---------------------------------

                                    FORM 10-Q

             Quarterly Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934
                  For the quarterly period ended June 30, 2001

                          Commission File No. 000-30123

                       ---------------------------------


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


       Delaware                                        58-2004779
(State of incorporation)                 (I.R.S. Employer Identification Number)


             660 Hembree Parkway, Suite 106, Roswell, Georgia 30076 (Address of
    registrant's principal executive offices, including zip code)

                        ---------------------------------
      (Registrant's telephone number, including area code): (770) 442-9707


     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 [ ]


     As of August 9, 2001,  there  were  17,954,038  shares of the  Registrant's
Common Stock outstanding.



--------------------------------------------------------------------------------

<PAGE>



                    FIRST HORIZON PHARMACEUTICAL CORPORATION
                                    FORM 10-Q
                                      INDEX



PART I. FINANCIAL INFORMATION (UNAUDITED)                                   PAGE


        Item 1.   Balance Sheets at June 30, 2001 and December 31, 2000        1

                  Statements of Operations for the three and six               2
                      months ended June 30, 2001 and June 30, 2000

                  Statements of Cash Flows for the six months ended            3
                      June 30, 2001 and June 30, 2000

                  Notes to  Financial Statements                               4

        Item 2.   Management's Discussion and Analysis of Financial            6
                      Condition and Results of Operations

        Item 3.   Quantitative and Qualitative Disclosures about Market Risk   9

PART II.  OTHER INFORMATION

        Item 1.     Legal Proceedings                                         10

        Item 2.     Changes in Securities and Use of Proceeds                 10

        Item 3.     Defaults Upon Senior Securities                           11

        Item 4.     Submission of Matters to a Vote of Security Holders       11

        Item 5.     Other Information                                         11

        Item 6.     Exhibits and Reports on Form 8-K                          11

                    Signatures                                                12
<PAGE>


                  SECURITIES AND EXCHANGE COMMISSION FORM 10-Q
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                    First Horizon Pharmaceutical Corporation

                                 Balance Sheets
                                   (unaudited)

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


                                                                           June 30,            December 31,
                                                                            2001                   2000
ASSETS
Current Assets:
   Cash and cash equivalents.........................................   $103,201,340           $ 14,228,067
   Accounts receivable, net of allowance for doubtful
       accounts, discounts and contractual adjustments
       of $513,930 and $283,929 at June 30, 2001 and
       December 31, 2000, respectively...............................      7,251,325              6,710,237
   Inventories.......................................................      3,376,995              2,648,104
   Samples and other prepaid expenses................................      1,508,125              1,341,126
   Taxes receivable..................................................        869,579                      -
   Deferred tax assets...............................................      1,524,651              1,203,309
                                                                      --------------          -------------
              Total current assets...................................    117,732,015             26,130,843
                                                                      --------------          -------------
Property and equipment, net..........................................        838,310                802,674
Other Assets:
     Intangibles, net................................................     25,598,599             23,150,025
                                                                      ---------------         -------------
              Total other assets.....................................     25,598,599             23,150,025
                                                                      ---------------         -------------
              Total assets...........................................   $144,168,924           $ 50,083,542
                                                                      ==============          =============
LIABILITIES AND STOCKHODERS' EQUITY
Current Liabilities:
    Accounts payable.................................................   $  1,538,536           $  1,815,269
    Accrued expenses.................................................     12,947,664              8,986,168
    Current portion of long-term debt................................              -                221,482
                                                                       -------------          -------------
                   Total current liabilities.........................     14,486,200             11,022,919
Long -Term Liabilities
   Deferred tax liabilities..........................................        487,721                487,721
                                                                       -------------          -------------
              Total liabilities......................................     14,973,921             11,510,640
Stockholders' Equity:
   Preferred stock, 1,000,000 shares authorized and none
       outstanding...................................................              -                      -
   Common stock, $0.001 par value; 40,000,000 shares
       authorized; 17,948,747 and 12,972,900 issued and outstanding
       at June 30, 2001 and December 31, 2000, respectively.......            17,949                 12,973
    Additional paid-in capital.......................................    124,793,003             37,792,147
    Deferred compensation............................................       (722,106)              (842,566)
    Retained earnings................................................      5,106,157              1,610,348
                                                                       -------------           -------------
              Total stockholders' equity.............................    129,195,003             38,572,902

              Total liabilities and stockholders' equity.............   $144,168,924           $ 50,083,542
                                                                       =============           ============

</TABLE>
                                       1
<PAGE>


                    FIRST HORIZON PHARMACEUTICAL CORPORATION

                            Statements of Operations
                                   (unaudited)


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

                                                 For the Quarter         For the Quarter       For the Six           For the Six
                                               Ended June 30, 2001     Ended June 30, 2000    Months Ended           Months Ended
                                                                                              June 30, 2001         June 30, 2000


Net Revenues.........................          $ 12,979,479             $ 7,843,547           $ 25,432,085           $ 14,963,186
Operating costs and expenses
       Cost of revenues..............             1,706,959               1,159,872              3,477,823              2,221,609
       Selling, general and administrative
           expenses, excluding non-cash
           compensation expense...........        7,498,006               5,226,907             15,317,123             10,718,561
       Non-cash compensation expense.........        83,876                  83,261                165,860                170,529
       Depreciation and amortization......          398,107                 307,261                793,946                402,733
       Research and development expense             232,607                 612,405                850,445                987,697
                                               ------------           -------------          -------------          -------------
                    Total operating costs and
                   expenses..................     9,919,555               7,389,706             20,605,197             14,501,129
                                               ------------           -------------          -------------          -------------

Operating income.........................         3,059,924                 453,841              4,826,888                462,057
                                               ------------           -------------          -------------          -------------
Other income (expense):
       Interest expense....................               -                (213,410)                (1,961)              (304,637)
       Interest income.....................         657,049                  41,940                898,509                 47,530
       Other...............................           1,690                  27,950                  2,486                 37,771
                                               ------------           -------------          --------------         -------------
               Total other income
                   (expense)...............         658,739                (143,520)               899,034               (219,336)
                                               ------------           -------------          --------------         -------------

Income before provision for
    income taxes...........................       3,718,663                 310,321              5,725,922                242,721
Provision for income taxes.................      (1,450,279)               (133,438)            (2,230,113)              (104,370)
                                               ------------           -------------          -------------          -------------

Net income.................................    $  2,268,384           $     176,883          $   3,495,809           $    138,351
                                               ============           =============          =============          =============
Net income per common share:
    Basic..................................    $       0.14           $        0.02          $        0.24           $      0.02
                                               ============           =============          =============          ============
    Diluted................................    $       0.13           $        0.02          $        0.22          $       0.01
                                               ============           =============          =============          ============
Weighted average common shares outstanding:
    Basic..................................      16,004,964               9,861,813             14,527,980             9,200,728
    Diluted................................      17,405,873              11,360,489             15,894,833            10,699,404

</TABLE>


                                       2
<PAGE>


                    First Horizon Pharmaceutical Corporation

                            Statements of Cash Flows
                                   (unaudited)
<TABLE>
<S>                                                             <C>                                 <C>




                                                                 Six Months Ended     Six Months Ended
                                                                   June 30, 2001        June 30, 2000

Cash flows from operating activities:
Net income...................................................    $  3,495,809         $    138,351
Adjustments to reconcile net income to net cash
     provided by (used in) operating activities:
          Depreciation and amortization........................       793,946              402,733
          Deferred tax benefit .................................     (321,342)            (226,000)
          Non-cash compensation expense......................         165,860              170,529
          Reduction in taxes payable - stock option exercises       2,045,166                    -
          Changes in assets and liabilities, net of acquired
              assets and liabilities:
              Accounts receivable...............................     (541,088)          (1,204,522)
         Inventories.............................................    (728,891)          (1,850,625)
         Samples and other prepaid expenses...............           (166,999)            (913,117)
         Notes receivable from related party...............             -                   (7,172)
         Accrued expenses and other........................           825,144            1,980,324
         Accounts payable.....................................       (276,733)             293,830
                                                                 ------------        -------------

              Net cash (used in) provided by operating
                  activities..................................      5,290,872           (1,215,669)
Cash flows from investing activities:
          Purchase of product licenses and other intangibles            -              (16,501,816)
          Purchase of property and equipment..................       (141,804)            (275,288)
                                                                 -------------       -------------

              Net cash used in investing activities...........       (141,804)         (16,777,104)

Cash flows from financing activities:
     Proceeds from revolving loan agreement......................           -             (800,000)
     Principal payments on long-term debt.......................     (221,482)          (2,250,353)
     Proceeds from issuance of common stock, net.......            84,045,687           31,199,549
                                                                --------------       -------------

             Net cash provided by financing activities.......      83,824,205           28,149,196

Net change in cash and cash equivalents......................      88,973,273           10,156,423
Cash and cash equivalents, beginning of period..............       14,228,067              219,688
                                                                -------------        -------------
Cash and cash equivalents, end of period.....................   $ 103,201,340        $  10,376,111
                                                                =============        =============
</TABLE>

                                       3
<PAGE>



                    FIRST HORIZON PHARMACEUTICAL CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (unaudited)

1.   Basis of Presentation

     The  accompanying   unaudited  interim  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 generally  accepted  accounting  principles  have been condensed or
omitted  from the 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, 2000
(File No. 000-30123).

2.   New Accounting Pronouncements

     In June 1998, the Financial  Accounting Standards Board issued SFAS No. 133
"Accounting  for Derivative  Instruments  and Hedging  Activities."  The Company
adopted  SFAS No. 133 (as amended by SFAS No. 138) on January 1, 2001.  SFAS No.
133 established methods of accounting for derivative  financial  instruments and
hedging  activities  related  to  those  instruments  as well as  other  hedging
activities.  Adoption  of SFAS No.  133 did not have a  material  impact  on the
Company's financial condition or results of operations.

     In July 2001, the Financial  Accounting Standards Board issued SFAS No. 141
"Business Combinations".  SFAS No. 141 eliminates the pooling-of-interest method
of  accounting  for business  combinations.  SFAS No. 141 is  effective  for any
business  combination  completed after June 30, 2001, and did not have an impact
on the Company's financial position or results of operations.

     In July 2001, the Financial  Accounting Standards Board issued SFAS No. 142
"Goodwill  and Other  Intangible  Assets".  Under  SFAS No.  142,  goodwill  and
indefinite lived intangible assets are no longer amortized.  Separate intangible
assets  that are not  deemed  to have an  indefinite  life will  continue  to be
amortized over their useful lives. SFAS No. 142 also establishes a new method of
testing goodwill and other  intangible  assets for impairment on an annual basis
or on an interim  basis if an event  occurs or  circumstances  change that would
reduce the fair  value of that  goodwill  or other  intangible  asset  below its
carrying value.  The  amortization  provisions of SFAS 142 apply to goodwill and
other  intangible  assets  acquired  after June 30, 2001. For goodwill and other
intangible  assets  acquired prior to July 1, 2001, SFAS No. 142 must be adopted
as of January 1, 2002. The Company is in the process of evaluating the financial
statement impact of adoption of SFAS No. 142.

3.   Inventories

     Inventories are stated at the lower of cost or market and primarily consist
of purchased  finished goods.  Cost is determined  using the first-in  first-out
method.


                                       4
<PAGE>

4.   Earnings Per Share

     Below is the calculation of basic and diluted net income per share:

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


                                    Quarter Ended    Quarter Ended     Year to Date     Year to Date
                                    June 30, 2001    June 30, 2000     June 30, 2001    June 30, 2000
                                    -------------    -------------     -------------    -------------

         Net income................ $2,268,384       $   176,883       $3,495,809       $   138,351
         Weighted average shares
           outstanding - basic..... 16,004,964         9,861,813       14,527,980         9,200,728
         Dilutive effect of stock
           options.................  1,400,909         1,498,676        1,366,853         1,498,676
                                    ----------       ------------      ----------       -----------

         Weighted average shares
           outstanding - diluted..  17,405,873        11,360,489       15,894,833        10,699,404

         Basic earnings per share   $      .14       $       .02      $      .24        $       .02

         Diluted earnings per share $      .13       $       .02      $      .22        $       .01
</TABLE>


5.   Follow on Offering

     On May 9, 2001, the Company  completed its follow-on  offering of 4,000,000
shares of common stock at $19.30 per share.  On May 15, 2001,  the  underwriters
exercised an  over-allotment  option to purchase  600,000  additional  shares of
common  stock from the  Company at $19.30 per share.  The Company  received  net
proceeds of $83,414,316  from the offering after  deducting  offering  expenses.
Proceeds from the offering will be used for general corporate purposes.



6.   Subsequent Events

     On July 27,  2001,  the Company  entered  into a  definitive  agreement  to
acquire rights to the Prenate brand line of products from Sanofi-Synthelabo Inc.
The closing of the  acquisition  is subject to certain  conditions.  The Company
currently anticipates that it will complete the acquisition in the third quarter
of 2001 subject to the satisfaction of conditions to closing.

                                       5
<PAGE>

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

     The  following  should be read with the  financial  statements  and related
footnotes and Management's  Discussion and Analysis of Results of Operations and
Financial Condition included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2000 (File No.  000-30123).  The results discussed below
are not  necessarily  indicative  of the  results to be  expected  in any future
periods. The following discussion contains  forward-looking  statements that are
subject to risks and  uncertainties  which could cause actual  results to differ
from the statements made.

     Overview

     The Company is a specialty  pharmaceutical  company that currently  markets
and sells 13 brand name  prescription  drugs  through its  nationwide  sales and
marketing force of approximately 150  professionals.  The Company focuses on the
treatment  of  chronic  conditions,   including   cardiovascular   diseases  and
respiratory,  gastroenterological and gynecological disorders. The Company seeks
to acquire and obtain licenses for pharmaceutical  products that other companies
do  not   actively   market  and  have  high   sales   growth   potential,   are
promotion-sensitive and complement the Company's existing products. In addition,
the Company seeks to increase the value of existing  products by developing  new
formulations,  new  delivery  methods and seeking new  indications  for existing
products. The Company may also acquire companies with complementary products.

Results of Operations

     Net Revenues.  Net revenues increased $5,135,932,  or 65%, over the quarter
ended June 30, 2000, to  $12,979,479  for the quarter  ended June 30, 2001.  Net
revenues increased $10,468,899, or 70%, over the six month period ended June 30,
2000,  to  $25,432,085  for the six months ended June 30, 2001.  The increase in
sales  for the  quarter  and the  six-month  period  ended  June 30,  2001  were
primarily  due to  increased  unit  sales of the  Company's  four  key  products
Tanafed, Robinul, Nitrolingual Pumpspray, and Ponstel. The Company began to sell
Nitrolingual Pumpspray on February 1, 2000, Ponstel on April 14, 2000 and Cognex
on June 22, 2000.

     Cost  of  Revenues.  Cost  of  revenues  increased  $547,087,  or  47%,  to
$1,706,959  for the quarter ended June 30, 2001  compared to $1,159,872  for the
quarter ended June 30, 2000. Cost of revenues increased  $1,256,214,  or 57%, to
$3,477,823 for the six months ended June 30, 2001 compared to $2,221,609 for the
six months ended June 30, 2000.

     Gross  Margin.  Gross  margin for the  quarter  ended June 30, 2001 was 87%
compared to 85% for the quarter  ended June 30,  2000.  Gross margin for the six
months ended June 30, 2001 was 86% compared to 85% for the six months ended June
30, 2000. This increase resulted primarily from increased sales of the Company's
four key products, which have higher margins than the Company's other products.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative  expenses  increased  $2,271,099,  or 43%, to $7,498,006  for the
quarter  ended June 30,  2001.  Selling,  general  and  administrative  expenses
increased  $4,598,562,  or 43%, to $15,317,123 for the six months ended June 30,
2001.  Selling  related  expenses  increased  due the expansion of the Company's
retail sales force in the third quarter of 2000,  higher  commission and royalty
expense  due  to  increased  sales,  and  higher  training  costs.  General  and
administrative  expenses increased due to additions to the Company's  management
team  and  support  personnel  in the  Company's  corporate  office  and  higher
insurance costs due to increased insurance coverage.

     Non-Cash  Compensation.  Non-cash  compensation expense was $83,876 for the
quarter  ended June 30, 2001  compared to $83,261 for the quarter ended June 30,
2000. Non-cash  compensation  expense was $165,860 for the six months ended June
30, 2001  compared  to $170,529  for the six months  ended June 30,  2000.  This


                                       6
<PAGE>

non-cash  expense  resulted  from the Company  issuing stock options at exercise
prices that were lower than the market value of the Company's  stock at the time
the options were issued,  as determined by an  independent  valuation.  Non-cash
compensation expense will be recognized over the vesting term of the options.

     Depreciation  and  Amortization  Expense.   Depreciation  and  amortization
expense  increased  $90,846,  or 30% to $398,107 for the quarter  ended June 30,
2001.  Depreciation  and  amortization  expense  increased  $391,213,  or 97% to
$793,946 for the six months ended June 30, 2001.  This  increase  resulted  from
higher  amortization  expense related to the acquisition of Ponstel on April 14,
2000, Cognex on June 22, 2000 and increased  depreciation expense for furniture,
computer  equipment  and  leasehold  improvements  at  the  Company's  corporate
headquarters.  Amortization  expense  could  further  increase  if  the  Company
concludes any more product acquisitions.

     Research  and  Development   Expense.   Research  and  development  expense
decreased  $379,798,  or 62%,  to $232,607  for the quarter  ended June 30, 2001
compared  to  $612,405  for the  quarter  ended  June  30,  2000.  Research  and
development expense decreased  $137,252,  or 14%, to $850,445 for the six months
ended June 30, 2001 compared to $987,697 for the six months ended June 30, 2000.
The  decrease  for the  quarter  and six months  ended June 30,  2001  primarily
resulted  from a  $200,000  fee  paid to  Inpharmakon  Corporation  in May  2000
relating to the amended terms under the Collaboration Agreement with Inpharmakon
Corporation for the development of FHPC 01, the Company's migraine product.  The
Company  continues to incur research and  development  cost  associated with the
development of the migraine product and the Robinul line extension.

     Interest  Expense.  Interest  expense was $0 for the quarter ended June 30,
2001 compared to $213,410 for the quarter ended June 30, 2000.  Interest expense
was $1,961 for the six months  ended June 30, 2001  compared to $304,637 for the
six months ended June 30,  2000.  The Company  currently  does not have any debt
outstanding.  However,  the Company could incur significant  interest expense in
the future if it continues to acquire products and finance the purchase of these
products with debt.

     Interest  Income.  Interest  income was $657,049 for the quarter ended June
30,  2001  compared to $41,940 for the  quarter  ended June 30,  2000.  Interest
income was $898,509  for the six months ended June 30, 2001  compared to $47,530
for the six months ended June 30, 2000.  The increase was the result of interest
earned on the remaining  proceeds from the Company's  initial  public  offering,
proceeds  from the  follow-on  offering  which  closed on May 15,  2001 and cash
provided by operations.

     Provision for Income Taxes. Income taxes were provided for at a rate of 39%
in 2001  compared to 43% in 2000.  The decrease is primarily due to state income
tax structuring initiatives.

Liquidity and Capital Resources

     The   Company's   liquidity   requirements   arise  from  working   capital
requirements,  product development  activities and funding of acquisitions.  The
Company has met these cash requirements  through cash from operations,  proceeds
from its line of credit, borrowings for product acquisitions and the issuance of
common stock.

     The Company's cash and cash equivalents were $103,201,340 at June 30, 2001.
Net cash provided by operating activities for the six months ended June 30, 2001
was $5,290,872.  This source of cash was primarily the result of net income plus
non-cash depreciation, amortization and compensation expense, reduction in taxes
payable due to stock  option  exercises  and an  increase  in accrued  expenses,
offset by increased  inventories,  increased  accounts  receivable and decreased
accounts payable.

     Net cash used in  investing  activities  for the six months  ended June 30,
2001 was  $141,804.  This  use of cash  was for the  purchase  of  property  and
equipment.

                                       7
<PAGE>

     Net cash  provided by  financing  activities  was  $83,824,205  for the six
months ended June 30, 2001.  This source of cash was the result of the company's
follow-on  offering and the exercise of stock options by employees that provided
net proceeds of $84,045,687 offset by payment of long-term debt of $221,482.

     In May 1998, the Company  entered into a credit  facility with LaSalle Bank
National  Association,  which was  subsequently  amended to include a  revolving
credit facility, a term loan and a bridge loan. The revolving loan is subject to
borrowing  base   limitations.   The  revolving  credit  facility  provides  for
borrowings up to $2,500,000  and bears interest at the bank's prime rate, and is
due May 2, 2002. At June 30, 2001, the Company had no outstanding  balance under
the revolving credit facility.

     The Company  believes that its cash and cash  equivalents,  cash  generated
from operations plus borrowings available under its credit facility with LaSalle
Bank will be adequate to fund its current  working capital  requirements  for at
least  the  next 12  months.  However,  in the  event  that  the  Company  makes
significant  acquisitions in the future,  it may be required to raise additional
funds  through  additional   borrowings  or  the  issuance  of  debt  or  equity
securities.

     The Management's Discussion and Analysis of Financial Condition and Results
of Operations  discussion  as well as  information  contained  elsewhere in this
Report contains forward-looking  statements within the meaning of Section 21E of
the Securities  Exchange Act of 1934. These  forward-looking  statements include
statements about the following:

o    developing  new   formulations,   new  delivery  methods  and  seeking  new
     indications for existing products;

o    concluding further product acquisitions;

o    the Company's product  development efforts for FHPC 01 and the Robinul line
     extension;

o    future   development   expenses;

o    future interest expense;

o    future amortization expense; and

o    adequacy of capital resources.

     When used in this Report,  the Company intends the words "may",  "believe,"
"anticipate," "planned," "expect," "require," "intend," and "depend" to identify
"forward-looking  statements." The Company's forward-looking  statements involve
uncertainties and other factors, including those described in the "Risk Factors"
section of the Company's Registration Statement on Form S-1 (File No. 333-56954)
under the headings "We currently depend on four key products for a large portion
of our sales, and substantial  declines in any of them would result in our being
unprofitable,"  "There is no assurance of continued commercial acceptance of our
products,"  "Our growth will suffer if we do not acquire  rights to new products
and  integrate  them  successfully,"  "We depend  entirely  on third  parties to
manufacture  our  products,"  "We  may  encounter  supply  shortages  or  excess
inventory for Robinul and Robinul Forte," "We may encounter interruptions in our
supply of Ponstel," "We have no written  agreements  for the  manufacture of our
Zoto-HC and Protuss-D products," "Our existing supply agreements may prohibit us
from entering into potentially more favorable supply relationships with others,"
"We face  competition  from  generic  products  that could lower prices and unit
sales,"  "Strong  competition  exists for our  products,  and  competitors  have
introduced new products and therapies that could make our products obsolete," "A
small number of customers  account for a large portion of our sales and the loss
of one of them,  or changes in their  purchasing  patterns,  could result in our
inability to successfully sell our products," "If our products under development
fail in clinical  studies or if we fail or encounter  difficulties  in obtaining
regulatory  approval for new products or new uses of existing products,  we will
have  expended  significant  resources  for no return," "We or third parties may
violate government  regulations and we may incur significant  expenses to comply
with such  regulations,"  "If  third-party  payors do not  adequately  reimburse
patients for our products,  doctors may not prescribe them," "Product  liability
claims and product recalls could limit our ability to sell products," "We expect
to require  additional  funding and if we cannot obtain it, our sales,  profits,
acquisitions  and  development  projects  could suffer,"  "Incurring  debt could
reduce  our  growth,"  "If we do not  secure or  enforce  our  patents  or other
intellectual  property  rights,  we could encounter  increased  competition that
could adversely affect our operating  results," "Our products could infringe the
intellectual  property  rights of third  parties,  which could require us to pay
license  fees or defend  litigation  that could be  expensive or prevent us from
selling  products," "The  regulatory  status of some of our products makes these
products  subject to increased  competition and other risks," and  "Pohl-Boskamp
can  terminate  our rights to  Nitrolingual."  We do not undertake to update our
forward-looking statements to reflect future events or circumstances. These risk


                                       8
<PAGE>

factors  along  with  the  others  may  cause  actual  results,  performance  or
achievements,   to  be  different   from  that   suggested   by  the   Company's
forward-looking   statements.   You  should   not  place   undue   reliance   on
forward-looking  statements.  The Company does not intend to update any of these
factors or to publicly  announce  the results of any  revisions  to any of these
forward-looking statements.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company's  operating results and cash flows are subject to fluctuations
from  changes  in  foreign  currency  exchange  rates and  interest  rates.  The
Company's   purchases  of  Nitrolingual   Pumpspray  under  its  agreement  with
Pohl-Boskamp  are made in German  Deutsche  marks.  The Company  expects to make
purchases  several times per year under this  agreement.  In addition,  sales of
Cognex are  recognized  in the foreign  currencies  of the  respective  European
countries in which it is sold. While the effect of foreign currency translations
has not been material to the Company's  results of operations to date,  currency
translations on export sales or import purchases could be adversely  affected in
the future by the relationship of the U.S. dollar with foreign currencies.

     To the extent  that the  Company  borrows  under its credit  facility  with
LaSalle  Bank,  it will  experience  market risk with  respect to changes in the
general level of the interest  rates and its effect upon the Company's  interest
expense.  Borrowings  under the Company's credit facility with LaSalle Bank bear
interest at variable  rates.  Because  such rates are  variable,  an increase in
interest  rates will result in  additional  interest  expense and a reduction in
interest rates will result in reduced interest expense.


                                       9
<PAGE>


                           PART II - OTHER INFORMATION


ITEM 1: LEGAL PROCEEDINGS

     None

ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS

     The  Company's   Registration  Statement  on  Form  S-1  (Registration  No.
333-56954)  relating to its follow on offering was declared  effective on May 9,
2001.The offering of 4,000,000 shares of common stock,  $0.001 par value, closed
on May 15, 2001. All 4,000,000  shares  registered were sold at $19.30 per share
for an aggregate price of $77,200,000  before deducting  underwriting  discounts
commissions and underwriting expenses. The managing underwriters of the offering
were JP Morgan,  Banc of America  Securities LLC, and Thomas Weisel Partners LLC
(the "Underwriters").  The Company deducted $4,240,000 in underwriting discounts
and  commissions  and $489,684 in offering  expenses.  The Company  received net
proceeds of  $72,470,316.  On May 15, 2001,  the  Underwriters  exercised  their
over-allotment option,  pursuant to which the Company sold an additional 600,000
shares of common stock at $19.30 per share for an aggregate price of $11,580,000
before deducting underwriting discounts and commissions of $636,000. The Company
received net  proceeds of  $10,944,000  from the exercise of the  over-allotment
option.  The total net proceeds to the Company from its offering  including  the
exercise of the over-allotment option was $83,414,316.

     Through  June 30,  2001,  the Company had not used any of the net  proceeds
from its follow on  offering.  The Company  currently  expects that the proceeds
will  be  used  primarily  for  general  corporate  purposes,  including  equity
investments  in other  companies,  the  development  of new products and for new
product acquisitions.

                                       10
<PAGE>

     None of the Company's  offering expenses or net proceeds from the follow on
offering were paid  directly or  indirectly  to any  director,  officer or their
associates,  persons  owning  10% or more of any class of the  Company's  equity
securities or to any affiliates of the Company.

     The  Company's  Registration  Statement  on form S-1 (File  No.  333-30764)
relating to its initial public offering was declared  effective on May 31, 2000.
The offering of 3,800,000 shares of common stock, $.001 par value,  commenced on
May 31, 2000 and closed on June 5, 2000. All 3,800,000 of the shares  registered
were  sold at $8.00  per  share for an  aggregate  price of  $30,400,000  before
deducting  underwriting  discounts  commissions and underwriting  expenses.  The
managing  underwriters  of the initial  public  offering were Chase  Securities,
Inc.,  Banc of America  Securities  LLC,  and Thomas  Weisel  Partners  LLC (the
"Underwriters").  The Company deducted $2,128,000 in underwriting  discounts and
commissions  and  $1,393,450  in offering  expenses.  The Company  received  net
proceeds of  $26,878,550.  On June 30, 2000, the  Underwriters  exercised  their
over-allotment option,  pursuant to which the Company sold an additional 570,000
shares of common stock at $8.00 per share for an aggregate  price of  $4,560,000
before deducting underwriting discounts and commissions of $319,200. The Company
received net  proceeds of  $4,240,800  from the  exercise of the  over-allotment
option.  The total net proceeds to the Company from its initial public  offering
including the exercise of the over-allotment option was $31,119,350.

     Through  June 30,  2001,  the Company  used the  proceeds  from the initial
public offering to repay  $9,500,000 due under the bridge loan with LaSalle Bank
which it  borrowed  to  purchase  Ponstel,  $1,640,000  due  under the term loan
facility with LaSalle Bank and $2,000,000 under the revolving loan facility with
LaSalle Bank. The Company also repaid  $3,500,000 due under the promissory  note
issued  to  Warner-Lambert  for  the  purchase  of  Ponstel  and  $3,500,000  to
Warner-Lambert  Company  for the  purchase of Cognex.  The  Company  also paid a
$200,000 fee to Inpharmakon  Corporation under the terms of the Amendment to the
Collaboration Agreement with Inpharmakon Corporation dated May 3, 2000.

     The Company  currently  expects that the  remaining  proceeds  will be used
primarily for general corporate purposes,  including equity investments in other
companies, the development of new products and for new product acquisitions.

     None of the  Company's  offering  expenses or net proceeds from the initial
public  offering were paid  directly or  indirectly to any director,  officer or
their  associates,  persons  owning  10% or more of any  class of the  Company's
equity  securities or to any  affiliates of the Company  except for the $200,000
fee paid under the  Amendment  to the  Collaboration  Agreement  to  Inpharmakon
Corporation  and the  $16,848  fee paid to the Kapoor  Children's  1992 Trust in
consideration  of its  pledge of  securities  and  investments  in the amount of
$10,000,000 under a bridge loan with LaSalle Bank.

     The John N. Kapoor Trust,  dated  September 30, 1989 (the "Trust") owns 50%
of the  common  stock of  Inpharmakon  Corporation.  The Trust is a  partner  of
Kapoor-Pharma Investments,  L.P., which owned approximately 36% of the Company's
common stock as of June 30, 2001. John Kapoor,  Ph.D., the Trustee of the Trust,
is one of the Company's  Directors and is the President and sole  stockholder of
the managing  general partner of  Kapoor-Pharma  Investments,  L.P. In addition,
Mahendra Shah, Ph.D., the Company's Chairman and Chief Executive  Officer,  owns
options to purchase  25,000  shares of the  managing  general  partner's  common
stock.

     Dr.  Kapoor is the  husband  of Editha  Kapoor,  the  Trustee of the Kapoor
Children's 1992 Trust and their children are the beneficiaries.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

           None

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

     At the Annual Meeting of Stockholders held May 25, 2001,  Mahendra G. Shah,
Ph,D.  and Jon S. Saxe were  re-elected to the  Company's  Board of Directors as
Class B Directors.  There were 9,806,633  votes for and 1,328,192 votes withheld
for Dr. Shah.  There were 11,045,482 votes for and 89,343 votes withheld for Mr.
Saxe. The Company's Class A Directors,  John N. Kapoor,  Ph.D.,  and Jerry Ellis
and Class C Directors,  R. Brent Dixon and Pierre Lapalme,  continue to serve on
the  board.  The terms of the Class A, B and C  Directors  expire at the  Annual
Meeting of Stockholders in fiscal years 2003, 2004 and 2002 respectively.

ITEM 5. OTHER INFORMATION

     None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

         3.1* - Restated  Certificate of  Incorporation
         3.2* - Amended and Restated By-Laws
         4.1* - Form of Stock Certificate


---------------------

*    Incorporated by Reference from the Company's Registration Statement on Form
     S-1 (File No. 333-30764)

     (b)  The  Registrant  has not filed any reports on Form 8-K for the quarter
          ended June 30, 2001.

                                       11
<PAGE>

                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized on August 13, 2001.


                                    FIRST HORIZON PHARMACEUTICAL CORPORATION


                                    By:   /s/ Mahendra G. Shah, Ph.D.
                                          --------------------------------------
                                          Mahendra G. Shah, Ph.D.
                                          Chairman and Chief Executive Officer





                                    By:   /s/ Balaji Venkataraman
                                          --------------------------------------
                                          Balaji Venkataraman

                                          Executive Vice President of  Corporate
                                          Development,  Chief Financial  Officer
                                          and  Secretary (Principal   Accounting
                                          and Financial Officer)


                                       12
<PAGE>