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

                       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 September 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 November 8, 2001,  there were 27,047,724  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 September 30, 2001 and                  1
                     December 31, 2000

                   Statements of Operations for the three and nine           2
                      months ended September 30, 2001 and
                      September 30, 2000

                   Statements of Cash Flows for the nine months ended        3
                      September 30, 2001 and September 30, 2000

                   Notes to  Financial Statements                            4

          Item 2.  Management's Discussion and Analysis of Financial         7
                      Condition and Results of Operations

          Item 3.  Quantitative and Qualitative Disclosures about           10
                      Market Risk

PART II.  OTHER INFORMATION

          Item 1.  Legal Proceedings                                        11

          Item 2.  Changes in Securities and Use of Proceeds                11

          Item 3.  Defaults Upon Senior Securities                          12

          Item 4.  Submission of Matters to a Vote of Security Holders      12

          Item 5.  Other Information                                        12

          Item 6.  Exhibits and Reports on Form 8-K                         12

                   Signatures                                               13



<PAGE>





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

ITEM 1. FINANCIAL STATEMENTS

                    First Horizon Pharmaceutical Corporation

                                 Balance Sheets
                                   (unaudited)
<TABLE>
<CAPTION>
<S>                                                                 <C>                        <C>

                                                                    September 30, 2001         December 31, 2000
ASSETS
Current Assets:
    Cash and cash equivalents                                              $59,476,256               $14,228,067
    Accounts receivable, net of allowance for doubtful
         accounts, discounts and contractual adjustments
         of $732,228 and $283,929 at September 30, 2001
         and December 31, 2000, respectively                                11,853,034                 6,710,237
    Inventories                                                              2,968,540                 2,648,104
    Samples and other prepaid expenses                                       1,603,694                 1,341,126
    Deferred tax assets                                                      1,758,278                 1,203,309
                                                                        --------------            --------------
         Total current assets                                               77,659,802                26,130,843
Property and equipment, net                                                    844,197                   802,674

Intangibles, net                                                            78,522,235                23,150,025
                                                                        --------------            --------------

         Total assets                                                     $157,026,234               $50,083,542
                                                                        ==============            ==============
LIABILITIES AND STOCKHODERS' EQUITY
Current Liabilities:
    Accounts payable                                                        $4,700,648                $1,815,269
    Accrued expenses                                                        18,095,641                 8,986,168
    Current portion of long-term debt                                                -                   221,482
                                                                        --------------            --------------
         Total current liabilities                                          22,796,289                11,022,919
Long -Term Liabilities:
    Deferred tax liabilities                                                   487,721                   487,721
                                                                        --------------            --------------
         Total liabilities                                                 $23,284,010               $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; 27,045,710 and 19,459,350 issued
and outstanding at September 30, 2001 and
December 31, 2000, respectively                                                 27,045                    19,459
    Additional paid-in capital                                             126,111,665                37,785,661
    Deferred compensation                                                     (661,665)                 (842,566)
    Retained earnings                                                        8,265,179                 1,610,348
                                                                        --------------            --------------
         Total stockholders' equity                                        133,742,224                38,572,902

Total liabilities and stockholders' equity                                $157,026,234               $50,083,542
                                                                        ==============            ==============


</TABLE>


                                       1
<PAGE>


                    First Horizon Pharmaceutical Corporation

                            Statements of Operations
                                   (unaudited)
<TABLE>
<CAPTION>
<S>                                                 <C>                <C>                 <C>                  <C>


                                                             For The Quarter Ended                     For the Nine Months Ended
                                                    September 30, 2001   September 30, 2000   September 30, 2001  September 30, 2000

Net Revenues                                        $     18,510,396   $       9,632,716   $      43,942,481    $        24,595,902
Operating costs and expenses
   Cost of revenues                                        2,829,697           1,401,940           6,307,520              3,623,549
   Selling, general and administrative expenses,
excluding the non-cash expense presented below             9,630,946           5,805,848          24,948,069             16,524,409
   Non-cash selling, general and administrative              102,099              81,257             267,959                251,786
expense
   Depreciation and amortization                             930,132             338,637           1,724,078                741,371
   Research and development expense                          538,514             525,564           1,388,959              1,513,261
                                                    -----------------  ------------------  ------------------   --------------------
     Total operating costs and expenses                   14,031,388           8,153,246          34,636,585             22,654,376
                                                    -----------------  ------------------  ------------------   --------------------

Operating income                                           4,479,008           1,479,470           9,305,896              1,941,526

Other income (expense)
   Interest expense                                                -             (11,476)             (1,961)              (316,114)
   Interest income                                           689,058             137,209           1,587,567                184,740
   Other                                                         753             (15,786)              3,239                 21,985
                                                    -----------------  ------------------  ------------------   --------------------
     Total other income (expense)                            689,811             109,947           1,588,845               (109,389)
                                                    -----------------  ------------------  ------------------   --------------------

Income before provision for income taxes                   5,168,819           1,589,417          10,894,741              1,832,137
Provision for income taxes                                (2,009,797)           (634,284)         (4,239,910)              (738,653)
                                                    -----------------  ------------------  ------------------   --------------------

Net income                                          $      3,159,022   $         955,133   $       6,654,831    $         1,093,484
                                                    =================  ==================  ==================   ====================
Net income per common share:
   Basic                                            $           0.12   $            0.05   $            0.28    $              0.07

                                                    =================  ==================  ==================   ====================
   Diluted                                          $           0.11   $            0.04   $            0.26    $              0.06

                                                    =================  ==================  ==================   ====================
Weighted average common shares outstanding:
   Basic                                                  26,968,850          19,378,715          23,536,631             15,673,871
                                                    =================  ==================  ==================   ====================
   Diluted                                                29,212,261          21,831,812          25,589,566             18,079,095
                                                    =================  ==================  ==================   ====================
</TABLE>


                                       2
<PAGE>



                    First Horizon Pharmaceutical Corporation

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

                                                                       Nine Months Ended          Nine Months Ended
                                                                       September 30, 2001        September 30, 2000

Cash flows from operating activities:
Net income                                                                  $6,654,831                 $1,093,484
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
    Depreciation and amortization                                            1,724,078                    741,371
    Deferred tax benefit                                                      (554,969)                  (373,000)
    Non-cash selling, general and administrative expense                       267,959                    251,786
    Reduction in taxes payable - stock option exercises                      3,921,601
Changes in assets and liabilities, net of acquired
    assets and liabilities:
    Accounts receivable                                                     (5,142,797)                (2,906,942)
    Inventories                                                               (320,436)                (2,441,784)
    Samples and other prepaid expenses                                        (262,568)                (1,140,456)
    Accounts payable                                                         2,885,379                    669,645
    Accrued expenses                                                         4,053,935                  3,634,654
                                                                             ---------                  ---------

         Net cash provided by (used in) operating activities                13,227,013                   (471,242)

Cash flows from investing activities:
    Purchase of product licenses and other intangibles                     (51,876,769)               (16,508,990)
    Purchase of property and equipment                                        (205,504)                  (335,273)
                                                                             ---------                  ---------

         Net cash used in investing activities                             (52,082,273)               (16,844,263)

Cash flows from financing activities:
    Payment on revolving loan agreement                                              -                   (800,000)
    Principal payments on long-term debt                                      (221,482)                (2,461,700)
    Proceeds from issuance of common stock, net                             84,324,931                 31,168,345
                                                                            ----------                 ----------

         Net cash provided by financing activities                          84,103,449                 27,906,645

Net change in cash and cash equivalents                                     45,248,189                 10,591,140
Cash and cash equivalents, beginning of period                              14,228,067                    219,688
                                                                            ----------                 ----------
Cash and cash equivalents, end of period                                   $59,476,256                $10,810,828
                                                                         =============              =============
</TABLE>



                                       3
<PAGE>



                    FIRST HORIZON PHARMACEUTICAL CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                               September 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 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. Management believes that the adoption of SFAS No. 141 will not have a
     material  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 No. 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.  Management  believes  that the  adoption of SFAS No. 142 will not
     have a material impact on the Company's  financial  condition or results of
     operations.





                                       4
<PAGE>


3.   Earnings Per Share

     Below is the calculation of basic and diluted earnings per share:

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

                                         Quarter Ended         Quarter Ended          Year to Date        Year to Date
                                         September 30,      September 30, 2000        September 30,       September 30,

                                             2001                  2000                    2001                2000
                                             ----                  ----                    ----                ----

Net income                             $    3,159,022       $     955,133         $     6,654,831        $     1,093,484
Weighted average shares
outstanding - basic                        26,968,850          19,378,715              23,536,631             15,673,871
Dilutive effect of stock options            2,243,411           2,453,097               2,052,935              2,405,224
                                            ---------           ---------               ---------              ---------

Weighted average shares                    29,212,261          21,831,812              25,589,566             18,079,095
outstanding - diluted

Basic earnings per share               $          .12       $         .05         $           .28        $           .07

Diluted earnings per share             $          .11       $         .04         $           .26        $           .06

</TABLE>

4.   Follow-on Offering

          On May 9, 2001,  the  Company  completed  its  follow-on  offering  of
     6,000,000  shares of common stock at $12.87 per share. On May 15, 2001, the
     underwriters   exercised  an  over-allotment  option  to  purchase  900,000
     additional shares of common stock from the Company at $12.87 per share. The
     Company  received  net  proceeds of  $83,414,316  from the  offering  after
     deducting offering  expenses.  A portion of the proceeds have been used for
     the product acquisition described below. The remainder of the proceeds will
     be used for general corporate purposes.

5.   Product Agreement

          On August 20, 2001 the Company  acquired from  Sanofi-Synthelabo  Inc.
     ("Sanofi")  the  Prenate  line  of  prescription   prenatal   vitamins  for
     approximately   $51.9  million  in  cash  pursuant  to  an  asset  purchase
     agreement.  The Company also  assumed  liabilities  for certain  returns of
     products  shipped by Sanofi prior to the  acquisition  date.  The agreement
     includes the purchase of the Prenate licenses and certain  trademarks.  The
     purchase price was allocated among the fair values of the intangible assets
     acquired and the liabilities assumed which is being amortized over a period
     of  three  to  twenty  years.  In  addition,   the  Company  purchased  the
     outstanding inventory of Prenate for approximately $50,000.

          Under the terms of the  asset  purchase  agreement,  the  Company  was
     assigned a contract  between  Sanofi and Patheon  Inc. to  manufacture  the
     product.  The term of the  agreement is for five years from October 1, 1999
     subject to automatic one year renewals.

          The  Company  assumed a supply and  packaging  agreements  with Banner
     Pharmacaps  Inc.  ("Banner") and Sanofi for the supply and packaging of the
     products.  The agreement with Banner is for a term of five years subject to
     two-year renewals. Under the terms of the supply agreement with Banner, the
     Company  will pay Banner a royalty on net sales  above a certain  amount of
     net sales.  The Sanofi  packaging  agreement  is for a term of three  years
     subject to a three-year renewal.



                                       5
<PAGE>




6.   Stock Split

          On September  24, 2001,  the Company  effected a  three-for-two  stock
     split on its common stock to  stockholders of record on September 10, 2001.
     All of the  information  in this form 10-Q has been adjusted to reflect the
     stock split.

                                       6
<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  14  brand  name  prescription   products  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 and  conditions.  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 seek to acquire
     companies with complementary products.

     Results of Operations

          Net  Revenues.  Net revenues  increased  $8,877,680,  or 92%, over the
     quarter  ended  September 30, 2000,  to  $18,510,396  for the quarter ended
     September 30, 2001. Net revenues  increased  $19,346,579,  or 79%, over the
     nine month period ended  September  30, 2000, to  $43,942,481  for the nine
     months ended  September 30, 2001. The increase in sales for the quarter and
     the  nine-month  period  ended  September  30, 2001 were  primarily  due to
     increased unit sales of the Company's four key products  Tanafed,  Robinul,
     Nitrolingual  Pumpspray,  and  Ponstel.  The quarter and nine month  period
     ended  September  30, 2001 also  includes  sales of Prenate and Prenate GT,
     which the company  began  selling on August 24, 2001.  The Company began to
     sell  Nitrolingual  Pumpspray  on February 1, 2000 and Ponstel on April 14,
     2000.  According  to the seller of the Prenate  line,  the Prenate line had
     sales of approximately $16,600,000 in 2000.

          Cost of Revenues.  Cost of revenues increased $1,427,757,  or 102%, to
     $2,829,697 for the quarter ended  September 30, 2001 compared to $1,401,940
     for the quarter  ended  September  30,  2000.  Cost of  revenues  increased
     $2,683,971,  or 74%, to $6,307,520 for the nine months ended  September 30,
     2001 compared to $3,623,549 for the nine months ended September 30, 2000.

          Gross Margin.  Gross margins for the quarters ended September 30, 2001
     and 2000 were 85%.  Gross  margin for the nine months ended  September  30,
     2001 was 86% compared to 85% for the nine months ended  September 30, 2000.
     The increase for the nine-month  period  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 $3,825,098, or 66%, to $9,630,946 for the
     quarter  ended  September  30, 2001.  Selling,  general and  administrative
     expenses increased  $8,423,660,  or 51%, to $24,948,069 for the nine months
     ended September 30, 2001.  Selling related expenses increased due to higher
     commission  and  royalty  expense as a result of  increased  sales,  higher
     advertising and promotion costs associated with the launch of Prenate GT in
     September 2001,  higher training costs related to training the sales forces
     of PDI and Otsuka America Pharmaceutical,  Inc. under seperate co-promotion
     agreements for Prenate GT and  Nitrolingual  Pumpspray that we entered into
     in  September  2001,  and  higher  consulting  costs and IMS  report  costs
     associated  with the  launch of  Prenate  GT.  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.   Selling,   general  and
     administrative expenses are expected to continue to increase as the Company
     continues its launch of Prenate GT.

                                       7
<PAGE>

          Non-Cash Compensation.  Non-cash compensation expense was $102,099 for
     the quarter  ended  September  30, 2001 compared to $81,257 for the quarter
     ended September 30, 2000.  Non-cash  compensation  expense was $267,959 for
     the nine months ended  September 30, 2001 compared to $251,786 for the nine
     months ended  September 30, 2000. This 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,  and as a result of issuing options
     to non-employees. Non-cash compensation expense will be recognized over the
     vesting term of the options.

          Depreciation and Amortization  Expense.  Depreciation and amortization
     expense  increased  $591,495,  or 175%,  to $930,132 for the quarter  ended
     September  30,  2001.   Depreciation  and  amortization  expense  increased
     $982,707,  or 133%, to $1,724,078  for the nine months ended  September 30,
     2001. This increase  resulted from higher  amortization  expense related to
     the  acquisition  of the Prenate line on August 20, 2001,  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 completes any more product acquisitions.

          Research and Development  Expense.  Research and  development  expense
     increased  $12,950,  or 2%, to $538,514 for the quarter ended September 30,
     2001  compared  to $525,564  for the  quarter  ended  September  30,  2000.
     Research and development expense decreased  $124,302,  or 8%, to $1,388,959
     for the nine months ended September 30, 2001 compared to $1,513,261 for the
     nine months  ended  September  30,  2000.  The decrease for the nine months
     ended  September  30, 2001  primarily  resulted from a $200,000 fee paid to
     Inpharmakon  Corporation  in May 2000  relating to 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
     September 30, 2001 compared to $11,476 for the quarter ended  September 30,
     2000.  Interest  expense was $1,961 for the nine months ended September 30,
     2001 compared to $316,114 for the nine months ended September 30, 2000. The
     Company currently does not have any debt outstanding.  However, the Company
     could  incur  significant  interest  expense in the  future if it  acquires
     products and finances the purchase of these products with debt.

          Interest  Income.  Interest  income was $689,058 for the quarter ended
     September 30, 2001 compared to $137,209 for the quarter ended September 30,
     2000.  Interest  income was $1,587,567 for the nine months ended  September
     30, 2001 compared to $184,740 for the nine months ended September 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 40% 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 $59,476,256 at September
     30, 2001.  Net cash  provided by operating  activities  for the nine months
     ended September 30, 2001 was $13,227,013. 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 accounts payable and accrued expenses,  offset
     by increased accounts receivable, inventories and prepaid expenses.

          Net  cash  used in  investing  activities  for the nine  months  ended
     September 30, 2001 was $52,082,273.  The Company purchased the Prenate line
     from  Sanofi-Synthelabo  Inc.  on  August  20,  2001 for  $51,876,769,  and
     purchased  $205,504  worth of  property  and  equipment  for the  corporate
     office.

          Net cash provided by financing activities was $84,103,449 for the nine
     months ended  September 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  together  provided net proceeds of  $84,324,931  offset by payment of
     long-term debt of $221,482.


                                       8
<PAGE>

          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
     credit  facility 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 September  30, 2001,
     the Company had no outstanding balance under the revolving credit facility,
     term loan or bridge loan.

          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    the use of proceeds from the Company's follow-on offering;
          o    developing new formulations, new delivery methods and seeking new
               indications for existing products;
          o    increased selling, general and administrative expenses related to
               the launch of Prenate GT;
          o    completing further product acquisitions;
          o    the  Company's  product  development  efforts for FHPC 01 and the
               Robinul line extension;
          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


                                       9
<PAGE>

     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 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.

                                       10
<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  6,000,000  shares of common  stock,  $0.001 par
     value,  closed on May15, 2001. All 6,000,000 shares registered were sold at
     $12.87 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  Securities,  Inc.,  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
     900,000  shares of common stock at $12.87 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  September 30, 2001,  the Company used  $41,097,419 of the net
     proceeds from its  follow-on  offering for the  acquisition  of the Prenate
     line.  The  Company  currently  expects  that  the  remaining  proceeds  of
     $42,316,897  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
     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 5,700,000  shares of common stock,  $.001 par value,
     commenced on May 31, 2000 and closed on June 5, 2000.  All 5,700,000 of the
     shares  registered  were sold at $5.33 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  855,000  shares of common
     stock at $5.33  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.

                                       11
<PAGE>

          Through  September  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. On August 20, 2001, the Company
     used the  remaining  $10,779,350  for the purchase of the Prenate line from
     Sanofi-Synthelabo Inc.

          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 September 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

          None

ITEM 5. OTHER INFORMATION

              None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

                  3.1*   -  Restated Certificate of Incorporation
                  3.2*   -  Amended and Restated By-Laws
                  4.1*   -  Form of Stock Certificate
                  10.1** -  Asset Purchase Agreement dated July 27, 2001 between
                            the Company and Sanofi-Synthelabo Inc.
                  10.2** -  Supply   Agreement  dated   May  3,   2001   between
                            Sanofi-Synthelabo Inc. and Banner Pharmacaps Inc.
                  10.3** -  Manufacturing  and  Supply  Agreement  dated  as  of
                            October 1, 1999 between  Sanofi-Synthelabo Inc.  and
                            Patheon Inc.

                                       12
<PAGE>

---------------------
*    Incorporated by Reference from the Company's Registration Statement on Form
     S-1 (File No. 333-30764).
**   The  Company  has  requested  confidential  treatment  of  portions of this
     exhibit pursuant to Rule 24b-2 of the Securities Act of 1934.


                                   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 November 14, 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)



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