<PAGE>   1
                       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, 1997 

                                                Commission File number 0 - 27698

                                   CHIREX INC.
             (Exact name of registrant as specified in its charter)

              DELAWARE                                   04-3296309
   (State or other jurisdiction of          (I.R.S. Employer Identification No.)
    incorporation or organization)

          300 Atlantic Street
              Suite 402
         Stamford, Connecticut                              06901
(Address of principle executive office)                   (Zip Code)

                                 (203) 351-2300
              (Registrant's telephone number, including area code)


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
filing requirements for the past 90 days.

Yes |X|      No |_|

Number of shares outstanding of the issuer's classes of common stock as of
October 16, 1997.



              Class                              Number of Shares Outstanding
--------------------------------------           ----------------------------
Common Stock, par value $.01 per share                    11,780,450
<PAGE>   2

                                   CHIREX INC.

                                      INDEX


                                                                     Page Number
                                                                     -----------


PART I.   FINANCIAL INFORMATION

          Item 1.    Financial Statements

                     Consolidated Balance Sheets
                     December 31, 1996 and September 30, 1997                3

                     Consolidated Statements of Operations for the
                     three-month and nine-month periods ended
                     September 30, 1996 and 1997.                            4

                     Consolidated Statements of Cash Flows for the
                     nine-month periods ended September 30, 1996 and 1997    5

                     Notes to Consolidated Interim Financial Statements      6


          Item 2.    Management's Discussion and Analysis of
                     Financial Condition and Results of Operations           8


PART II.  OTHER INFORMATION

          Item 4.    Submission of Matters to a Vote of Security Holders.   13

          Item 5.    Other Information                                      13

          Item 6.    Exhibits and Reports on Form 8-K                       13

          SIGNATURE                                                         14

      This Quarterly Report on Form 10-Q contains forward-looking statements.
For this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, the words "believes," "anticipates," "plans," "expects," and
similar expressions are intended to identify forward-looking statements. Many
important factors could cause actual results to differ materially from those
indicated by forward-looking statements made herein and presented elsewhere by
management from time to time.


                                       2
<PAGE>   3

                         PART I - FINANCIAL INFORMATION
                                     ITEM 1
                              FINANCIAL STATEMENTS

                                   CHIREX INC.
                           CONSOLIDATED BALANCE SHEETS
                 AS OF DECEMBER 31, 1996 AND SEPTEMBER 30, 1997
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                 December 31, September 30,
                                                                                    1996         1997
                                                                                  ---------    ---------
                                                                                              (unaudited)
<S>                                                                               <C>         <C>      
ASSETS
------

Current Assets:
      Cash                                                                        $     291   $   1,945
      Trade and other receivables                                                    12,764      14,007
      Inventories                                                                    23,350      24,613
      Other current assets                                                            4,448       6,291
                                                                                  ---------   ---------
         Total current assets                                                        40,853      46,856
Property, plant and equipment, net                                                   61,349      51,817
Other non-current assets                                                                 --       2,004
Intangible assets, net                                                               28,604      27,730
                                                                                  ---------   ---------
      Total Assets                                                                $ 130,806   $ 128,407
                                                                                  =========   =========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current Liabilities:
      Accounts payable                                                            $  11,421   $   7,742
      Accrued expenses                                                                9,232       7,395
      Income taxes payable                                                            2,383       4,388
      Deferred income taxes                                                           2,369       2,227
                                                                                  ---------   ---------
         Total current liabilities                                                   25,405      21,752
Long-term debt                                                                        3,933       2,916
Deferred income taxes                                                                 7,411       7,593
Deferred income                                                                       3,989       3,488
                                                                                  ---------   ---------
      Total liabilities                                                              40,738      35,749
                                                                                  ---------   ---------

Stockholders' equity:
      Common stock ($.01 par value, 30,000,000 shares authorized, 11,770,234 and
         10,933,735 shares issued and outstanding on
         September 30, 1997 and December 31, 1996, respectively)                        109         118
      Additional paid-in capital                                                     95,479     100,562
      Retained earnings                                                             (10,761)    (10,672)
      Cumulative translation adjustment                                               5,241       2,650
                                                                                  ---------   ---------
         Total stockholders' equity                                                  90,068      92,658
                                                                                  ---------   ---------
      Total liabilities and stockholders' equity                                  $ 130,806   $ 128,407
                                                                                  =========   =========
</TABLE>


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


                                       3
<PAGE>   4

                                   CHIREX INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED
                           SEPTEMBER 30, 1996 AND 1997
                                   (unaudited)
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                    Three Months Ended     Nine Months Ended
                                                                       September 30           September 30
                                                                    -------------------   -------------------
                                                                      1996       1997       1996       1997
                                                                    --------   --------   --------   --------
<S>                                                                 <C>        <C>        <C>        <C>     
Revenues:
     Product sales                                                  $ 20,337   $ 21,411   $ 49,307   $ 67,691
     License fee and royalty income                                      225        194        830        577
                                                                    --------   --------   --------   --------
            Total revenues                                            20,562     21,605     50,137     68,268
                                                                    --------   --------   --------   --------

Costs and expenses:
     Cost of goods sold                                               15,632     15,874     38,277     50,276
     Selling, general and administrative                               2,033      1,885      5,241      6,451
     Research and development                                            829      1,357      2,096      3,814
     Write-off of in-process research and development                     --         --      5,790         --
     Stock compensation charge                                            --         --      5,611         --
     Proceeds from disposition of acetaminophen business  (note 3)        --         --         --     (6,308)
     Restructuring and other costs (note 3)                               --         --         --     12,901
                                                                    --------   --------   --------   --------
            Total costs and expenses                                  18,494     19,116     57,015     67,134
                                                                    --------   --------   --------   --------

Operating profit (loss)                                                2,068      2,489     (6,878)     1,134

Interest income (expense) - net                                         (167)        11       (587)       (64)
Amortization of goodwill                                                (288)      (291)      (636)      (873)
                                                                    --------   --------   --------   --------
Income (loss) before income taxes                                      1,613      2,209     (8,101)       197
Provision for income taxes                                               633        609      1,392         93
                                                                    --------   --------   --------   --------
Net income (loss)                                                   $    980   $  1,600   $ (9,493)  $    104
                                                                    ========   ========   ========   ========

Weighted average number of common
     and common equivalent shares outstanding                         11,341     11,803      7,992     11,548
                                                                    ========   ========   ========   ========

Net income (loss) per share:                                        $   0.09   $   0.14   $  (1.19)  $   0.01
                                                                    ========   ========   ========   ========
</TABLE>



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


                                       4
<PAGE>   5

                                   CHIREX INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
          FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1996 AND 1997
                                   (unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                               Nine Months Ended
                                                                 September 30
                                                              ------------------
                                                                1996       1997
                                                              --------   -------
<S>                                                           <C>        <C>    
Cash flows from operating activities:
     Net income (loss)                                        $ (9,493)  $   104
     Add back: Depreciation & amortization                       5,288     7,054
         Inventory uplift release                                1,792        --
         Write-off of in-process research and development        5,790        --
         Executive stock option charge                           5,611        --
         Proceeds from diposition of acetaminophen business         --    (6,308)
         Restructuring and other costs                              --     8,391
     Changes in assets and liabilities:
         Receivables                                              (848)   (1,812)
         Inventories                                              (245)   (2,564)
         Other current assets                                   (1,985)     (936)
         Accounts payable and accrued expenses                  (1,364)   (5,973)
         Income taxes payable                                    1,017     1,893
         Other non-current assets and liabilities                 (377)      (37)
                                                              --------   -------
         Net cash provided from operating activities             5,186      (188)
                                                              --------   -------

Cash flows from investing activities:
     Capital expenditures                                       (2,472)   (6,767)
     Proceeds from disposition of acetaminophen business            --     4,100
                                                              --------   -------
         Net cash used in investing activities                  (2,472)   (2,667)
                                                              --------   -------

Cash flows from financing activities:
     Borrowings (repayment) on long-term line of credit, net    14,595      (839)
     Repayment of subordinate note                             (58,746)       --
     Redemption of common stock                                (35,168)       --
     Proceeds from the issuance of common stock                 80,024     5,094
                                                              --------   -------
         Net cash provided from financing activities               705     4,255
                                                              --------   -------

Effect of exchange rate changes on cash                             91       254
                                                              --------   -------
Net increase in cash                                             3,510     1,654
Cash at beginning of period                                          1       291
                                                              --------   -------
Cash at end of period                                         $  3,511   $ 1,945
                                                              ========   =======
</TABLE>


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


                                       5
<PAGE>   6

                                   CHIREX INC.
               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1.  Nature of Operations and Principles of Consolidation

Nature of Operations

    ChiRex Inc. (the "Company" or "ChiRex") is a Contract Manufacturing
Organization ("CMO") serving the out-sourcing needs of the pharmaceutical
industry through its extensive pharmaceutical fine chemical manufacturing and
process development capabilities and proprietary chiral technologies. The
Company supports and supplements the in-house development and manufacturing
capabilities of its pharmaceutical and biotechnology customers with a broad
range of fully-integrated services, accelerating the time from drug discovery to
commercialization. The Company currently manufactures over 50 products in its
world-class, FDA, cGMP manufacturing facilities located in Dudley,
Northumberland, England and has entered into a definitive Asset Purchase
Agreement and Supply Agreement to acquire a second manufacturing facility from
Glaxo Wellcome plc located in Annan, Scotland. ChiRex holds 54 patents and
patent applications in the field of chiral chemistry.

Principles of Consolidation

    The financial statements of the Company include the historical results of
its subsidiaries for the entire period presented or from the date of
acquisition.

    The interim financial statements, in the opinion of management, reflect all
adjustments (including normal recurring adjustments) necessary for a fair
presentation of the results for the interim period ended September 30, 1997. The
results of operations for the interim period are not necessarily indicative of
the results of operations expected for the fiscal year.

    See Form 10-K filed as of December 31, 1996 for additional information.

2.  Recent Accounting Developments

    In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings per Share (SFAS 128). This
Statement establishes standards for computing and presenting earnings per share
and applies to entities with publicly traded common stock or potential common
stock. SFAS 128 is effective for financial statements for both the interim and
annual periods ending after December 15, 1997 and early adoption is not
permitted. When adopted, the statement will require restatement of prior years'
earnings per share. The Company will adopt this statement for its quarter ended
December 31, 1997. Assuming that SFAS No. 128 had been implemented, basic
earnings per share would not have differed significantly from those disclosed in
the accompanying statements of operations.

Reclassification:

    Certain amounts in the prior period's financial statements have been
reclassified to be consistent with the current period presentation.

3.  Disposition of Acetaminophen Business

    On April 9, 1997, the Company announced the sale of its acetaminophen
business, including related intellectual property, to Rhone-Poulenc Chimie S.A.
("RPC"). Under the terms of the asset purchase agreement, the Company continued
to manufacture acetaminophen for RPC pursuant to a Supply Agreement until early
September 1997 and will continue to supply RPC from inventory into the fourth
quarter.


                                       6
<PAGE>   7

    Under the asset purchase agreement, RPC is required to make specified
payments to the Company, subject to certain conditions, over a three year
period. The Company anticipates it will recognize net sales proceeds of
approximately $6.3 million, after considering the likelihood of receipt of each
required payment and the effect of discounting future cash receipts. The sale of
the acetaminophen business creates a permanent impairment of assets consisting
of related buildings and equipment, which has resulted in a provision for
impairment of approximately $8.3 million. Additionally, the Company has
implemented a plan to terminate certain employees associated with the production
of acetaminophen and otherwise restructure its operations, which has resulted in
charges of approximately $4.6 million.

4.  Business Acquisition

    On July 7, 1997, the Company announced the signing of a letter of intent
with Glaxo Wellcome plc to acquire Glaxo Wellcome's FDA cGMP pharmaceutical
production facility at Annan, Scotland. As part of the proposed agreement, Glaxo
Wellcome would award the Company a five year contract to supply certain
pharmaceutical intermediates and active ingredients worth approximately $450
million.

    A definitive Asset Purchase Agreement and Supply Agreement were signed by
the Company and Glaxo Welcome on September 22, 1997 on essentially the same
terms contained in the letter of intent with the closing occurring no latter
then November 15, 1997. The purchase price of the Annan facility is 40.0 million
Pounds Sterling ("GBP") (approximately $65.0 million) plus an additional payment
for certain working capital not to exceed 1.0 million GBP (approximately $1.6
million).

    To finance the acquisition and provide for the general cash requirements of
the business, the Company has signed a commitment letter subject to definitive
documentation with an internationally recognized bank to provide a
senior-secured term-loan and revolving-credit facility for one of its
subsidiaries allowing it to borrow up to 62.0 million GBP (approximately $100.0
million) for a five-year period. The credit facility will be comprised of a 40.0
million GBP (approximately $65.0 million) term loan and a 22.0 million GBP
(approximately $35.0 million) revolving credit facility each bearing interest at
LIBOR plus 1%. The term loan facility will be repayable in nine equal
semi-annual installments beginning in late 1998 and will also provide for annual
mandatory pre-payments from excess cashflow as defined in the credit agreement.
Borrowings under the credit facility will be secured by the real and personal
property of and guaranteed by the Company and its subsidiaries. The credit
agreement will contain normal and customary financial covenants and limitations
on indebtedness, dividends, capital expenditures and certain other transactions.
The Company's existing bank revolving credit facility will be repaid and
terminated upon signing of the new credit facility.


                                       7
<PAGE>   8

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

    The following discussion and analysis should be read in conjunction with the
historical consolidated financial statements and the notes thereto included
elsewhere herein.

Introduction

    ChiRex Inc. is a CMO serving the out-sourcing needs of the pharmaceutical
industry through its extensive pharmaceutical fine chemical manufacturing and
process development capabilities and proprietary chiral technologies. The
Company supports and supplements the in-house development and manufacturing
capabilities of its pharmaceutical and biotechnology customers with a broad
range of fully-integrated services, accelerating the time from drug discovery to
commercialization. The Company currently manufactures over 50 products in its
world-class, FDA, cGMP manufacturing facilities located in Dudley,
Northumberland, England and has entered into a definitive Asset Purchase
Agreement and Supply Agreement to acquire a second manufacturing facility from
Glaxo Wellcome plc located in Annan, Scotland. ChiRex holds 54 patents and
patent applications in the field of chiral chemistry. Management has reviewed
the Company's product portfolio and identified "core products" which the Company
believes offer superior long-term growth potential, higher margins or strategic
customer relationship benefits.

    The Company, incorporated in December 1995, is a combination of Sterling
Organics Limited, a U.K.-based pharmaceutical fine chemicals manufacturer, and
SepraChem Inc., a U.S.-based chiral chemistry business. On March 11, 1996, the
Company consummated its initial public offering.

    Substantially all of the Company's revenues and expenses are denominated in
Pounds Sterling, and to prepare the Company's financial statements such amounts
are translated into U.S. Dollars at average exchange rates in accordance with
generally accepted accounting principles.

Results of Operations

    In order to make the comparison of financial information for the three- and
nine-month periods ended September 30, 1997 with that of the same period for
1996 more meaningful, the following tables sets forth (i) the historical results
of the Company for the three- and nine-month periods ended September 30, 1997,
(ii) the historical results of the Company for the three-month period ended
September 30, 1996 and (iii) the pro forma results of the Company for the
nine-month period ended September 30, 1996, adjusted to exclude various
non-recurring charges resulting from the contribution of Crossco (157) Limited
(subsequently renamed ChiRex (Holdings) Limited) on March 11, 1996 (the
"Contribution"), and the merger of SepraChem Inc. with a wholly owned subsidiary
of the Company on March 11, 1996 (the "Merger"), consisting of an adjustment to
restate inventory at fair value, the write-off of acquired in-process research
and development and a non-recurring expense relating to certain executive stock
compensation. There were no intercompany transactions requiring elimination in
any of the periods presented. The pro forma adjustments and pro
forma-as-adjusted data set forth in the following tables are not necessarily
indicative of future operations or what the Company's results of operations
would actually have been had the various transactions set forth below occurred
as described. The period-to-period comparisons that follow the tables compare
the historical and pro forma-as-adjusted results of operations for the three-
and nine-month period ended September 30, 1996, and the historical results of
operations for the three- and nine-month period ended September 30, 1997, set
forth in the following table.


                                       8
<PAGE>   9
                                   CHIREX INC.
                          COMPARATIVE OPERATING RESULTS
   FOR THE THREE-MONTH AND NINE-MONTH PERIOD ENDED SEPTEMBER 30,1997 AND 1996
                                   (unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997                  CHIREX INC.
----------------------------------------------             1996           1997
                                                          -------        -------
<S>                                                       <C>            <C>    
Revenues .........................................        $20,562        $21,605
Cost of goods sold ...............................         15,632         15,874
                                                          -------        -------
Gross profit .....................................          4,930          5,731
Selling, general and administrative ..............          2,033          1,885
Research and development .........................            829          1,357
Interest income (expense) ........................           (167)            11
Amortization of goodwill .........................            288            291
                                                          -------        -------
Income before income taxes .......................          1,613          2,209
Provision for income taxes .......................            633            609
                                                          =======        =======
Net income .......................................        $   980        $ 1,600      
                                                          =======        =======

                                                                        CHIREX
NINE MONTHS ENDED SEPTEMBER 30, 1997                                     INC.
------------------------------------                                   --------
<S>                                                                    <C>     
Revenues ........................................................      $ 68,268
Cost of goods sold ..............................................        50,276
                                                                       --------
Gross profit ....................................................        17,992
Selling, general and administrative .............................         6,451
Research and development ........................................         3,814
Proceeds from disposition of acetaminophen business .............        (6,308)
Restructuring and other costs ...................................        12,901
Interest income (expense) .......................................           (64)
Amortization of goodwill ........................................           873
                                                                       --------
Income before income taxes ......................................           197
Provision for income taxes ......................................            93
                                                                       ========
Net income ......................................................      $    104
                                                                       ========
</TABLE>

NINE MONTHS ENDED SEPTEMBER 30, 1996
------------------------------------

<TABLE>
<CAPTION>
                                                CHIREX
                                               (HOLDINGS)
                                                LIMITED
                                               JANUARY 1,                                          PRO
                                               1996 THRU      PRO                                 FORMA
                                      CHIREX    MARCH 11,    FORMA        PRO                       AS
                                       INC.       1996     ADJUSTMENTS   FORMA    ADJUSTMENTS    ADJUSTED
                                     --------   --------   -----------  --------  -----------    --------
<S>                                  <C>        <C>          <C>        <C>        <C>           <C>     
Revenues ..........................  $ 50,137   $ 15,212     $  --      $ 65,349   $     --      $ 65,349
Cost of goods sold ................    38,277     12,564       112(3)     50,953     (1,372)(1)    49,581
                                     --------   --------     -----      --------   --------      --------
Gross profit ......................    11,860      2,648      (112)       14,396      1,372        15,768
Research and development ..........     7,886        558        --         8,444     (5,790)(7)     2,654
Selling, general and administrative    10,852      1,300        --        12,152     (5,611)(8)     6,451
Interest income (expense) .........      (587)      (690)      440(5)       (837)        --          (837)
Amortization of goodwill ..........       636         --       225(4)        861         --           861
                                     --------   --------     -----      --------   --------      --------
Income (loss) before income taxes .    (8,101)       100       103        (7,898)    12,773         4,875
Provision for income taxes ........     1,392         33       108(6)      1,583        453(2)      1,986
                                     --------   --------     -----      --------   --------      --------
Net income (loss) .................  $ (9,493)   $    67     $  (5)     $ (9,431)  $ 12,320      $  2,889
                                     ========   ========     =====      ========   ========      ========
</TABLE>

----------
Notes to the pro forma and other adjustments for the three-month and nine-month
periods ended September 30, 1996 and 1997.

(1) To reverse the effect of the purchase method of accounting step-up of
    inventory to fair value at the time of the Contribution.

(2) Tax effect of the adjustment described in note (1) above.

(3) Increase in depreciation reflecting the increased valuation of Holding's
    fixed assets for the period prior to the Contribution.

(4) Increase in amortization of goodwill related to the period prior to the
    Contribution.

(5) Reduction in interest expense related to debt retired in connection with the
    Contribution.

(6) Income tax effect of pro forma adjustments, excluding amortization of
    goodwill which is not deductible for tax purposes.

(7) To reverse the effect of the write-off of research and development expenses
    that were in-process at the time of the Contribution.

(8) To reverse the effect of stock compensation charge associated with granting
    of stock and options to purchase stock in connection with the Merger.


                                       9
<PAGE>   10

 Three-month period ended September 30, 1996 and 1997


<TABLE>
<CAPTION>
Revenues                             Three-month period ended               Three-month period ended
(in thousands)                              September 30,1996                      September 30,1997
--------------                              -----------------                      -----------------
<S>                                                   <C>                                    <C>    
    Core products                                     $11,901                                $15,204
    Non-core products                                   2,172                                  1,287
    Acetaminophen                                       6,264                                  4,920
    License and royalty income                            225                                    192
                                                      -------                                -------
        Total revenues                                $20,562                                $21,603
                                                      =======                                =======
</TABLE>

    Total revenues increased $1.0 million, or 5.1% to $21.6 million in the third
quarter of 1997 from $20.6 million in the comparable period last year. Revenues
from core products, which accounted for 70.4% of total revenues in the three
months ended September 30, 1997, increased by $3.3 million, or 27.8%, while
non-core products (excluding acetaminophen), which accounted for 6.0% of
revenues in the third quarter of 1997, decreased by $0.9 million, or 40.7% from
1996. Revenues attributable to the acetaminophen business, which accounted for
22.8% of revenues in three-month period ended September 30, 1997, declined by
$1.3 million, or 21.5% compared to the same period in 1996, due to lower demand
following sale of the acetaminophen supply contracts under a supply agreement
with RPC. During the third quarter the Company has its annual two-week plant
shutdown and experiences a general slowdown in activity caused by the
traditional European summer holiday season.

    Cost of goods sold increased $0.3 million, or 1.6% to $15.9 million in
three-month period ended September 30, 1997 from $15.6 million in last year's
third quarter. This increase is due to the higher volume of core product sales
partly offset by lower non-core product sales. The gross margin percentage
increased to 26.5% in the third quarter of 1997 from 24.0% in the comparable
prior year period due to the greater volume of core product sales resulting from
the selective replacement of low margin non-core products with high-margin core
products.

    Research and development expenses increased $0.6 million, or 63.3% to $1.4
million in third quarter ended September 30, 1997 from $0.8 million in the same
period in 1996. The increase was due mainly to the cost of additional research
chemists and pilot plant costs to support the new product pipeline.

    Selling, general and administrative expenses decreased $0.1 million or 7.3%,
to $1.9 million in three-month period ended September 30, 1997 from $2.0 million
last year. This decrease is due primarily to one-time legal and consulting costs
in 1996.

    Net interest income was $11 thousand in third quarter of 1997 compared to a
net interest expense of $0.2 million in last year's third quarter. This is a
result of lower borrowing requirements in the interim period due to increased
cash flow from operations, proceeds from the sale of the acetaminophen business
and proceeds from the exercise of the underwriters' option to purchase
additional shares during the secondary public offering.

    The provision for income tax was $0.6 million in the three-month period
ended September 30, 1997 which approximated the provision for income taxes
recognized in the third quarter of 1996. This represents an effective rate of
24.0% in 1997 after adjusting for non-deductible goodwill amortization compared
to an effective rate of 33.3% after adjusting for non-deductible goodwill
amortization in the same period in 1996. The lower effective tax rate in 1997 is
the result of increased profitability within the U.K. where a statutory
corporation tax rate of 31% prevails.

    As a result of the factors described above, net income was $1.6 million in
the third quarter of 1997 compared to net income of $1.0 million for the
comparable prior-year period.


                                       10
<PAGE>   11

Nine-month period ended September 30, 1996 and 1997

<TABLE>
<CAPTION>
Revenues                               Nine-month period ended                Nine-month period ended
(in thousands)                               September 30,1996                      September 30,1997
--------------                               -----------------                      -----------------
<S>                                                    <C>                                    <C>    
     Core products                                     $33,761                                $46,124
     Non-core products                                   9,614                                  4,524
     Acetaminophen                                      21,144                                 17,043
     License and royalty income                            830                                    575
                                                       -------                                -------
         Total revenues                                $65,349                                $68,266
                                                       =======                                =======
</TABLE>

    Total revenues increased $2.9 million, or 4.5% from $65.3 million in the
nine-months ended September 30, 1996 to $68.3 million in the same period in
1997. Revenues from core products, which accounted for 67.6% of total revenues
in the first nine months of 1997, increased by $12.4 million, or 36.6%, while
non-core products (excluding acetaminophen), which accounted for 6.6% of
revenues in the nine-month period ended September 30, 1997, decreased by $5.0
million, or 52.9%. Revenues attributable to the acetaminophen business, which
accounted for 25.0% of revenues in first nine months of 1997, declined by $4.1
million, or 19.4% compared to the same period in 1996 due to lower demand
following sale of the acetaminophen supply contracts under a supply agreement
with RPC.

    Cost of goods sold increased $0.7 million to $50.3 million in first nine
months of 1997. This increase reflects the higher volume of core product sales
partly offset by lower non-core products and acetaminophen shipments. The gross
margin percentage increased to 26.3% for the nine month period ending September
30, 1997 from 24.1% for the same period in 1996 due to the greater volume of
core product sales resulting from the selective replacement of low margin
non-core products with high-margin core products.

    Research and development expenses increased $1.2 million, or 43.6%, to $3.8
million in the nine-month period ended September 30, 1997 from $2.6 million in
the same period in 1996. The increase was due mainly to the cost of additional
research chemists and pilot plant costs to support the new product pipeline.

    Selling, general and administrative expenses of $6.5 million in the first
nine months of 1997 approximated the comparable prior-year period.

    Proceeds from the disposition of the acetaminophen business includes
anticipated cash proceeds of $7.8 million, of which $4.1 million has been
received, with the balance being paid over three years subject to certain
conditions. Accordingly the Company has discounted future payments by $0.6 and
established a reserve against receipt of future payments of $0.9 million,
resulting in net proceeds recognized of $6.3 million

    Restructuring and other costs includes provision for impairment of assets
related to the production of acetaminophen of $8.3 million and provision for
severance and other restructuring costs following disposition of acetaminophen
of $4.6 million, resulting in a total charge of $12.9 million.

    Interest expense in the nine-month period ended September 30, 1997 was $0.1
million, an improvement of $0.7 million from $0.8 million in interest expense
during the equivalent period in 1996. This is a result of lower borrowing
requirements in the interim period due to increased cash flow from operations,
proceeds from the sale of the acetaminophen business and proceeds from the
exercise of the underwriters' option to purchase additional shares during the
secondary public offering.


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    The provision for income taxes was $0.1 million in the nine-month period
ended September 30, 1997. This represents an effective rate of 47.2% compared 
to a provision for income taxes of $2.0 million, or an effective rate of 40.7%, 
in the same period in 1996.

Liquidity and Capital Resources

    Cash used from operations for the first nine months of 1997 of $0.2 million
is $5.4 million lower than the $5.2 million provided in the same period in 1996
and reflects payment of severance and restructuring costs particularly in the
third quarter and increased investment in working capital to meet customer
demand.

    Net cash used in investing activities in the nine-month period ended
September 30, 1997 was $2.7 million compared to $2.5 million in the same period
of 1996, and consists of capital expenditures for plant maintenance and, in
1997, for improved capacity utilization, partly offset by $4.1 million in cash
proceeds from the disposal of the acetaminophen business in 1997.

    Net cash provided from financing activities for the first three quarters of
1997 of $4.3 million is the result of $5.1 million from the issuance of common
stock proceeds from the exercise of the underwriters' option to purchase
additional shares during the secondary public offering, and the exercise of
stock options, offset by $0.8 million used to pay down the Company's revolving
line of credit.

    The Company expects to satisfy its cash requirements, including the
requirements of its subsidiaries, through internally generating cash and
borrowings.

Foreign Currency

    The Company currently expects that sales of its products outside the United
States will continue to be a substantial percentage of its net sales. The
Company currently intends to hedge its foreign exchange exposure to a certain
extent by entering into forward contracts with banks to the extent that the
timing of the currency flows can reasonably be anticipated and by offsetting
matching foreign currency-denominated assets with foreign currency-denominated
liabilities.

    Financial results of the Company could be adversely or beneficially affected
by fluctuations in foreign exchange rates. Fluctuations in the value of foreign
currencies will affect the U.S. dollar value of the Company's net investment in
its foreign subsidiaries, with related effects included in a separate component
of stockholders' equity titled Cumulative Translation Adjustments. Operating
results of foreign subsidiaries will be translated into U.S. dollars at average
monthly exchange rates and balance sheet amounts are translated at period-end
exchange rates. In addition, the U.S. dollar value of transactions based in
foreign currency also fluctuates with exchange rates. The Company expects that
the largest foreign currency exposure will result from activity in Pounds
Sterling, German marks and Dutch guilders.


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                           PART II - OTHER INFORMATION


ITEM 4.   Submission of Matters to a vote of Security Holders.

          -NONE-

ITEM 5.   Other Information

          On July 7, 1997, the Company announced the signing of a letter of
          intent with Glaxo Wellcome plc to acquire Glaxo Wellcome's FDA cGMP
          pharmaceutical production facility at Annan, Scotland. As part of the
          proposed agreement, Glaxo Wellcome would award the Company a five year
          contract to supply certain pharmaceutical intermediates and active
          ingredients worth approximately $450 million.

          A definitive Asset Purchase Agreement and Supply Agreement were signed
          by the Company and Glaxo Welcome on September 22, 1997 on essentially
          the same terms contained in the letter of intent with the closing
          occurring no latter then November 15, 1997. The purchase price of the
          Annan facility is 40.0 million Pounds Sterling ("GBP") (approximately
          $65.0 million) plus an additional payment for certain working capital
          not to exceed 1.0 million GBP (approximately $1.6 million).

          To finance the acquisition and provide for the general cash
          requirements of the business, the Company has signed a commitment
          letter subject to definitive documentation with an internationally
          recognized bank to provide a senior-secured term-loan and
          revolving-credit facility for one of its subsidiaries allowing it to
          borrow up to 62.0 million GBP (approximately $100.0 million) for a
          five-year period. The credit facility will be comprised of a 40.0
          million GBP (approximately $65.0 million) term loan and a 22.0 million
          GBP (approximately $35.0 million) revolving credit facility each
          bearing interest at LIBOR plus 1%. The term loan facility will be
          repayable in nine equal semi-annual installments beginning in late
          1998 and will also provide for annual mandatory pre-payments from
          excess cashflow as defined in the credit agreement. Borrowings under
          the credit facility will be secured by the real and personal property
          of and guaranteed by the Company and its subsidiaries. The credit
          agreement will contain normal and customary financial covenants and
          limitations on indebtedness, dividends, capital expenditures and
          certain other transactions. The Company's existing bank revolving
          credit facility will be repaid and terminated upon signing of the new
          credit facility.

ITEM 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits. The exhibits listed on the accompanying Exhibit Index
               are filed as part of this Quarterly Report on Form 10-Q.

          (b)  Current Reports on Form 8-K: -NONE-


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SIGNATURE


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.

                                                     CHIREX INC.




Date:    October 17, 1997                   By:      /s/ Michael A. Griffith
                                                     -----------------------
                                                     Michael A. Griffith
                                                     Chief Financial Officer


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