<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-Q

          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  for the quarterly period ended June 30, 2007

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

               for the transition period from ________ to _________
                         Commission file number 1-10638

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

            DELAWARE                                 22-2476135
            --------                                 ----------
   (State or other jurisdiction of                 (I.R.S. Employer
   incorporation or organization)                Identification No.)

            ONE MEADOWLANDS PLAZA, EAST RUTHERFORD, NEW JERSEY 07073
            --------------------------------------------------------
                    (Address of principal executive offices)

                                 (201) 804-3000
                                 --------------
              (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 twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                Yes [X]. No [ ].

      Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer"in Rule 12b-2 of the Exchange
Act. (Check one):

   Large accelerated filer [ ] Accelerated filer [X] Non-accelerated filer [ ]

      Indicate by check mark whether the Registrant is a shell company (as
defined in Rule 12b-2 of the Act). Yes [ ]. No [X].

      As of July 31, 2007, there were 28,889,915 shares outstanding of the
registrant's Common Stock, $.10 par value.

<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES

                                    FORM 10-Q

                       For The Quarter Ended June 30, 2007
                                Table of Contents
<TABLE>
<CAPTION>
                                                                                                                  Page No.
                                                                                                                  --------
<S>                                                                                                               <C>
Part I Financial information

        Item 1.  Financial Statements

                 Consolidated Balance Sheets as of June 30, 2007 and December 31, 2006                                   2

                 Consolidated Statements of Operations for the three and six months ended June 30, 2007 and 2006         3

                 Consolidated Statements of Cash Flows for the six months ended June 30, 2007 and 2006                   4

                 Notes to Unaudited Consolidated Financial Statements                                               5 - 22

        Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations             23 - 28

        Item 3.  Quantitative and Qualitative Disclosures about Market Risk                                             29

        Item 4.  Controls and Procedures                                                                                29

Part II Other information

        Item 1.  Legal Proceedings                                                                                      30

        Item 1A. Risk Factors                                                                                           30

        Item 6.  Exhibits                                                                                               30

Signatures                                                                                                              31
</TABLE>

<PAGE>

Part I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                      CAMBREX CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                            JUNE 30,    DECEMBER 31,
                                                                             2007          2006
                                                                          -----------   ------------
                                                                          (UNAUDITED)
<S>                                                                       <C>           <C>
ASSETS
Current assets:
   Cash and cash equivalents                                              $    41,233   $     33,746
   Trade receivables, net                                                      29,959         38,552
   Inventories, net                                                            60,125         53,893
   Assets of discontinued operations                                               --         79,383
   Prepaid expenses and other current assets                                   19,306         19,176
                                                                          -----------   ------------
        Total current assets                                                  150,623        224,750

Property, plant and equipment, net                                            145,425        141,863
Goodwill                                                                       33,219         32,573
Assets of discontinued operations                                                  --        202,292
Other non-current assets                                                        7,368          4,898
                                                                          -----------   ------------

        Total assets                                                      $   336,635   $    606,376
                                                                          ===========   ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                       $    22,048   $     28,592
   Accrued expense and other current liabilities                               70,780         45,141
   Liabilities of discontinued operations                                          --         33,401
                                                                          -----------   ------------
        Total current liabilities                                              92,828        107,134

Long-term debt                                                                 85,700        158,600
Deferred income tax                                                            21,374         14,268
Liabilities of discontinued operations                                             --         24,208
Accrued pension and postretirement benefits                                    38,863         39,911
Other non-current liabilities                                                  18,515         15,609
                                                                          -----------   ------------
        Total liabilities                                                     257,280        359,730

Stockholders' equity:
   Common stock, $.10 par value; authorized 100,000,000, issued
     31,257,445 and 30,145,319 shares at respective dates                       3,125          3,015
   Additional paid-in capital                                                  96,611        241,360
   Retained earnings                                                            2,274         28,860
   Treasury stock, at cost, 2,391,330 and 2,446,097 shares at respective
   dates                                                                      (20,365)       (20,832)
   Accumulated other comprehensive loss                                        (2,290)        (5,757)
                                                                          -----------   ------------

        Total stockholders' equity                                             79,355        246,646
                                                                          -----------   ------------
        Total liabilities and stockholders' equity                        $   336,635   $    606,376
                                                                          ===========   ============
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.


                                       2
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (unaudited)
                     (in thousands, except per-share data)

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED            SIX MONTHS ENDED
                                                                JUNE 30,                     JUNE 30,
                                                         -----------------------   --------------------------
                                                            2007         2006          2007          2006
                                                         ----------   ----------   ------------   -----------
<S>                                                      <C>          <C>          <C>            <C>
Gross sales                                              $   63,081   $   63,031   $    128,078   $   117,151
     Allowances and rebates                                     184          284            774           670
                                                         ----------   ----------   ------------   -----------
Net sales                                                    62,897       62,747        127,304       116,481

     Other revenues                                             (42)        (405)           765        (1,052)
                                                         ----------   ----------   ------------   -----------
Net revenues                                                 62,855       62,342        128,069       115,429

Cost of goods sold                                           38,917       39,902         79,736        73,904
                                                         ----------   ----------   ------------   -----------
Gross profit                                                 23,938       22,440         48,333        41,525

Operating expenses:
     Selling, general and administrative expenses            10,556       14,998         25,903        27,488
     Research and development expenses                        2,961        3,077          5,561         5,439
     Restructuring expenses                                   1,901           --          3,583            --
     Strategic alternative costs                              4,564        1,042         27,694         2,030
                                                         ----------   ----------   ------------   -----------
        Total operating expenses                             19,982       19,117         62,741        34,957

Operating profit/(loss)                                       3,956        3,323        (14,408)        6,568
Other (income)/expenses:
     Interest (income)/expense, net                            (871)         122         (2,410)        5,566
     Other expenses, net                                        401          125            382           130
                                                         ----------   ----------   ------------   -----------
Income/(loss) before income taxes                             4,426        3,076        (12,380)          872

     Provision/(benefit) for income taxes                     1,971        3,424           (392)        5,924
                                                         ----------   ----------   ------------   -----------
Income/(loss) from continuing operations                 $    2,455   $     (348)  $    (11,988)  $    (5,052)

(Loss)/income from discontinued operations, net of tax         (181)       1,324        219,478         4,851
                                                         ----------   ----------   ------------   -----------
Income/(loss) before cumulative effect of a change in
accounting principle                                          2,274          976        207,490          (201)

Cumulative effect of a change in accounting principle            --           --             --          (228)
                                                         ----------   ----------   ------------   -----------
Net income/(loss)                                        $    2,274   $      976   $    207,490   $      (429)
                                                         ==========   ==========   ============   ===========

Basic earnings per share:
     Income/(loss) from continuing operations            $     0.09   $    (0.01)  $      (0.42)  $     (0.19)
     (Loss)/income from discontinued operations, net of
     tax                                                 $    (0.01)  $     0.05   $       7.73   $      0.18
     Cumulative effect of a change in accounting
     principle                                           $       --   $       --   $         --   $     (0.01)
                                                         ----------   ----------   ------------   -----------
     Net income/(loss)                                   $     0.08   $     0.04   $       7.31   $     (0.02)

Diluted earnings per share:
     Income/(loss) from continuing operations            $     0.08   $    (0.01)  $      (0.42)  $     (0.19)
     Income from discontinued operations, net of tax     $     0.00   $     0.05   $       7.73   $      0.18
     Cumulative effect of a change in accounting
     principle                                           $       --   $       --   $         --   $     (0.01)
                                                         ----------   ----------   ------------   -----------
     Net income/(loss)                                   $     0.08   $     0.04   $       7.31   $     (0.02)

Weighted average shares outstanding:
     Basic                                                   28,711       26,741         28,393        26,701
     Effect of dilutive stock based compensation                238           --             --            --
                                                         ----------   ----------   ------------   -----------
     Diluted                                                 28,949       26,741         28,393        26,701

     Cash dividends paid per share                       $    14.00   $     0.03   $      14.03   $      0.06
                                                         ==========   ==========   ============   ===========
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.

                                        3
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                  SIX MONTHS ENDED
                                                                      JUNE 30,
                                                              ---------------------------
                                                                   2007           2006
                                                              ------------   ------------
<S>                                                           <C>            <C>
Cash flows from operating activities:
   Net income/(loss)                                          $    207,490   $       (429)
   Adjustments to reconcile net income/(loss) to cash flows:
   Cumulative effect of a change in accounting principle                --            228
   Depreciation and amortization                                     9,645          9,633
   Write-off of debt origination fees                                  841            463
   Strategic alternative and restructuring charges                  21,862             --
   Stock based compensation included in net income/(loss)            4,589            808
   Deferred income tax provision                                     6,991          (469)
   Inventory reserve                                                 2,165            942
   Other                                                               206            246
   Changes in assets and liabilities:
     Receivables                                                     9,041          2,162
     Inventories                                                    (7,807)       (10,081)
     Prepaid expenses and other current assets                         692           (800)
     Accounts payable and other current liabilities                 (9,961)         4,063
     Other non-current assets and liabilities                         (599)           171
   Discontinued operations:
     Gain on sale of businesses                                   (235,607)            --
     Rutherford settlement, net of tax                               4,007             --
     Changes in operating assets and liabilities                    (5,310)       (13,588)
     Other non-cash charges                                          1,359         10,639
                                                              ------------   ------------
   Net cash provided by operating activities                         9,604          3,988
                                                              ------------   ------------

Cash flows from investing activities:
   Capital expenditures                                            (11,774)        (9,638)
   Other investing activities                                          (15)            --
   Discontinued operations:
     Capital expenditures                                             (530)        (7,995)
     Proceeds from sale of business                                463,914             --
     Acquired in-process research and development                       --         (1,392)
     Other investing activities                                         11            (65)
                                                              ------------   ------------
   Net cash provided by/(used) in investing activities             451,606        (19,090)
                                                              ------------   ------------

Cash flows from financing activities:
   Dividends                                                      (402,200)        (1,604)
   Net (decrease)/increase in short-term debt                         (135)           246
   Long-term debt activity (including current portion):
     Borrowings                                                    127,200        176,000
     Repayments                                                   (200,222)      (177,975)
   Proceeds from stock options exercised                            20,947          1,267
   Other financing activities                                          (59)          (113)
   Discontinued operations:
     Debt borrowings                                                    --             14
     Debt repayments                                                  (254)          (748)
                                                              ------------   ------------
     Net cash used in financing activities                        (454,723)        (2,913)
                                                              ------------   ------------
Effect of exchange rate changes on cash and cash equivalents         1,000          2,320
                                                              ------------   ------------
Net increase/(decrease) in cash and cash equivalents                 7,487        (15,695)
Cash and cash equivalents at beginning of period                    33,746         45,342
                                                              ------------   ------------
Cash and cash equivalents at end of period                    $     41,233   $     29,647
                                                              ============   ============
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.

                                        4
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                    (dollars in thousands, except share data)

(1) BASIS OF PRESENTATION

      Unless otherwise indicated by the context, "Cambrex" or the "Company"
means Cambrex Corporation and subsidiaries.

      The accompanying unaudited consolidated financial statements have been
prepared from the records of the Company. In the opinion of management, the
financial statements include all adjustments, which are of a normal and
recurring nature, except as otherwise described herein, and are necessary for a
fair statement of financial position and results of operations in conformity
with generally accepted accounting principles. These interim financial
statements should be read in conjunction with the financial statements for the
year ended December 31, 2006.

      The results of operations for the three and six months ended June 30, 2007
are not necessarily indicative of the results to be expected for the full year.

      Certain reclassifications have been made to prior year amounts to conform
to the current year presentation.

      In October 2006, the Company sold two businesses within the Human Health
segment for nominal consideration. As a result of this transaction, the Company
reported a non-cash charge of $23,244 in the fourth quarter of 2006, and all
periods presented reflect the results of these businesses as discontinued
operations.

      In February 2007, the Company completed the sale of the businesses that
comprised the Bioproducts and Biopharma segments (excluding certain liabilities)
to Lonza Group AG for total cash consideration of $463,914, including working
capital adjustments. As a result of this transaction, the Company reported a
gain of $235,607, including working capital adjustments, and all periods
presented reflect the results of these businesses as discontinued operations.
Refer to Note 14 for a complete discussion on discontinued operations.

(2) IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      Accounting for Uncertainty in Income Taxes

      The Company adopted Financial Accounting Standards Board ("FASB")
Interpretation No. 48, Accounting for Uncertainty in Income Taxes -- an
interpretation of FASB Statement No. 109 ("FIN 48") effective January 1, 2007.
This interpretation clarified the accounting for uncertainty in income tax
positions and required the Company to recognize in the consolidated financial
statements the impact of a tax position that is more likely than not to be
sustained upon examination based on the technical merits of the position. The
effect of adopting this interpretation was not material. Refer to Note 5 for
further discussion.

      Accounting for Planned Major Maintenance Activities

      The Company adopted FASB Staff Position ("FSP") No. AUG AIR-1 "Accounting
for Planned Major Maintenance Activities" effective January 1, 2007. This FSP
amended certain provisions of APB Opinion No. 28 "Interim Financial Reporting".
This FSP prohibited the use of the accrue-in-advance method of accounting for
planned major maintenance activities in annual and interim reporting periods.
The adoption of this FSP had an immaterial impact on the Company's financial
position and results of operations.

                                        5
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(3) STOCK BASED COMPENSATION

      Beginning January 1, 2006, the Company began recognizing compensation
costs for stock option awards to employees based on their grant-date fair value.
The value of each stock option is estimated on the date of grant using the
Black-Scholes option-pricing model. The weighted-average fair value per share
for the stock options granted to employees during the three and six months ended
June 30, 2007 was $8.30. The weighted-average fair value per share for the stock
options granted to employees during the three and six months ended June 30, 2006
was $7.73 and $8.02, respectively.

      For the three months ended June 30, 2007 and 2006, the Company recorded
$23 and $157, respectively, in selling, general and administrative expenses for
stock options. In addition, the Company recorded $20 in restructuring expenses
related to the reduction in workforce in the second quarter of 2007. For the six
months ended June 30, 2007 and 2006, the Company recorded $96 and $158,
respectively, in selling, general and administrative expenses for stock options.
In addition, the Company recorded $198 and $37 in strategic alternative costs
and restructuring expenses, respectively, for stock options related to the
change in control agreements and the reduction in workforce in the first six
months of 2007.

      As of June 30, 2007, the total compensation cost related to unvested stock
option awards granted to employees but not yet recognized was $685. The cost
will be amortized on a straight-line basis over the remaining weighted-average
vesting period of 2.4 years.

      In addition, for the three and six months ended June 30, 2007, the Company
recorded $2,417 in strategic alternative costs for expense associated with a
stock option modification due to the special dividend paid on May 3, 2007. The
modification reduced the exercise price of all stock options outstanding as of
the dividend payment date by $14.00 per share, the amount of the special
dividend. As of June 30, 2007, the total compensation cost related to unvested
stock option awards that were modified but not yet recognized was $430. The cost
will be amortized on a straight-line basis over the remaining weighted-average
vesting period of 2.4 years.

      Cambrex senior executives and certain employees participate in two
long-term incentive plans which rewards achievement of long-term strategic goals
with restricted stock units. For the three months ended June 30, 2007 and 2006,
the Company recorded $92 and $227, respectively, in selling, general and
administrative expenses for restricted stock. In addition, the Company recorded
$140 and $65 in strategic alternative costs and restructuring expenses,
respectively, in the second quarter of 2007. For the six months ended June 30,
2007 and 2006, the Company recorded $263 and $386, respectively, in selling,
general and administrative expenses for restricted stock. In addition, the
Company recorded $1,443 and $135 in strategic alternative costs and
restructuring expenses, respectively, in the first six months of 2007, primarily
for the acceleration of vesting related to restricted stock per the terms of the
executive change in control agreements. As of June 30, 2007 the total
compensation cost related to unvested restricted stock granted but not yet
recognized was $1,221. The cost will be amortized on a straight-line basis over
the remaining weighted-average vesting period of 1.6 years.

      At June 30, 2006, the Company had outstanding 150,000 fully-vested
cash-settled incentive SARs at a price of $19.30. These SARs were classified as
liability awards and, as such, were recorded at fair value until the rights were
exercised during the fourth quarter of 2006. As of June 30, 2007 the Company did
not have any SARs outstanding. For the three and six months ended June 30, 2006
the Company recorded $46 and $264, respectively, in compensation expense. Under
FAS 123(R), the Company is required to measure the SARs at fair market value.
Prior to adopting FAS 123(R), the SARs were measured at the intrinsic value. In
addition, during the first quarter of 2006, the Company recorded $228 in
compensation expense as a cumulative effect of a change in accounting principle
in accordance with FAS 123(R).

                                        6
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(3) STOCK BASED COMPENSATION (CONTINUED)

      The following table is a summary of the Company's stock option activity
issued to employees and related information:

<TABLE>
<CAPTION>
                                              WEIGHTED
                                              AVERAGE
                                 NUMBER OF    EXERCISE
          OPTIONS                 SHARES       PRICE
------------------------------  ----------   ---------
<S>                             <C>          <C>
Outstanding at January 1, 2007   2,754,893   $   28.48
Granted                                 --          --
Exercised                         (792,221)  $   21.34
Forfeited or expired              (182,085)  $   23.55
                                 ---------
Outstanding at March 31, 2007    1,780,587   $   32.16
                                 ---------
Granted                             18,000   $   24.58
Exercised                         (324,305)  $   13.28
Forfeited or expired                (3,900)  $   12.90
                                 ---------
Outstanding at June 30, 2007     1,470,382   $   20.00
                                 =========
Exercisable at June 30, 2007     1,341,290   $   21.17
</TABLE>

      On May 3, 2007, the Company paid a special dividend of $14.00 per share.
As a result, the market price of the stock declined by approximately $14.00 per
share from the prior days close and therefore all outstanding options were
modified to reduce the exercise price by $14.00 per share.

      The aggregate intrinsic value for all stock options exercised during the
three months ended June 30, 2007 and 2006 were $956 and $129, respectively. The
aggregate intrinsic value for all stock options exercised during the first six
months of 2007 and 2006 were $2,552 and $564, respectively. The aggregate
intrinsic value for all stock options outstanding as of June 30, 2007 was
$1,828. The aggregate intrinsic value for all stock options exercisable as of
June 30, 2007 was $1,127.

      A summary of the Company's nonvested stock options as of June 30, 2007 and
changes during the three and six months ended June 30, 2007, are presented
below:

<TABLE>
<CAPTION>
                                             WEIGHTED-
                              NUMBER OF    AVERAGE GRANT-
  NONVESTED STOCK OPTIONS      SHARES     DATE FAIR VALUE
----------------------------  ---------   ---------------
<S>                           <C>         <C>
Nonvested at January 1, 2007    236,952        $21.39
Granted                              --            --
Vested during period            (59,463)       $21.39
Forfeited                       (63,497)       $21.39
                                -------
Nonvested at March 31, 2007     113,992        $21.39
                                -------
Granted                          18,000        $24.58
Vested during period                 --            --
Forfeited                        (2,900)       $ 7.39
                                -------
Nonvested at June 30, 2007      129,092        $ 7.84
                                =======
</TABLE>

                                        7
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(3) STOCK-BASED COMPENSATION (CONTINUED)

      A summary of the Company's nonvested restricted stock as of June 30, 2007
and changes during the three and six months ended June 30, 2007 are presented
below:

<TABLE>
<CAPTION>
                                            WEIGHTED-
                              NUMBER OF   AVERAGE GRANT-
 NONVESTED RESTRICTED STOCK    SHARES     DATE FAIR VALUE
----------------------------  ---------   ---------------
<S>                           <C>         <C>
Nonvested at January 1, 2007    165,868        $22.02
Granted                          53,129        $21.69
Vested during period            (51,002)       $22.74
Forfeited                       (28,922)       $21.43
                                -------
Nonvested at March 31, 2007     139,073        $21.75
                                -------
Granted                              --            --
Vested during period                 --            --
Forfeited                        (1,160)       $21.39
                                -------
Nonvested at June 30, 2007      137,913        $21.75
                                =======
</TABLE>

(4) GOODWILL

      The changes in the carrying amount of goodwill for the six months ended
June 30, 2007, are as follows:

<TABLE>
<CAPTION>
                               Human Health
                                  Segment
                               ------------
<S>                            <C>
Balance as of January 1, 2007  $     32,573
Translation effect                      646
                               ------------
Balance as of June 30, 2007    $     33,219
                               ============
</TABLE>

(5) INCOME TAXES

      The Company recorded tax expense of $1,971 and a benefit of $392 in the
three and six months ended June 30, 2007, respectively, compared to tax expense
of $3,424 and $5,924 in the three and six months ended June 30, 2006,
respectively. This change is due to the change in geographic mix of pre-tax
earnings, as well as the recognition of a tax benefit in continuing operations
as a result of the sale of the Bioproducts and Biopharma segments in the first
quarter of 2007.

      The Company maintains a full valuation allowance against its domestic, and
certain foreign, net deferred tax assets and will continue to do so until an
appropriate level of profitability is sustained or tax strategies can be
developed that would enable the Company to conclude that it is more likely than
not that a portion of these net deferred assets would be realized. As such,
improvements in domestic, and certain foreign, pre-tax income in the future may
result in these tax benefits ultimately being realized. However, there is no
assurance that such improvements will be achieved.

                                        8
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(5) INCOME TAXES (CONTINUED)

      The Company has adopted the provisions of FIN 48 effective January 1,
2007.

      As of January 1, 2007 the Company had reserves of approximately $2,024 for
uncertain tax positions that were accounted for in the Company's non-current
liabilities and includes estimated cumulative interest and penalties of $414.
The Company also had unrecognized tax benefits of $2,000 for certain tax
attributes which had full valuation allowances. The net effect of this is a
decrease to the gross deferred tax assets and a corresponding decrease to the
related valuation allowance with no effect to beginning retained earnings. There
was no interest component related to these items. Consistent with prior periods,
the company will recognize interest and penalties within its income tax
provision. The total unrecognized tax benefit of $4,024, if recognized, would
impact the effective tax rate.

      The Company has recently closed an audit of its consolidated U.S.
operations for the periods 2001- 2003. Although not currently under examination
by the IRS, the Company is subject to examination for the years 2004 through
2006. It is also subject to exams in foreign jurisdictions for periods as early
as 2002 and beyond in its significant non-U.S. jurisdictions.

      The Company is also subject to audit in various states (for various years)
in which it files income tax returns. Past audits have not resulted in material
adjustments. Audits for New Jersey and Maine have recently been concluded with
no material changes. Open years for these states are 2004 and 2005 forward,
respectively. An audit for the state of Maryland for 2001-2004 was also
concluded recently with no material changes.

      The Company anticipates a net decrease of approximately $200 to $300 for
unrecognized tax benefits, which would positively impact the provision for
income taxes, in the next 12 months mainly due to the expiration of a statute of
limitation period.

(6) NET INVENTORIES

      Inventories are stated at the lower of cost, determined on a first-in,
first-out basis, or market.

      Net inventories at June 30, 2007 and December 31, 2006 consist of the
following:

<TABLE>
<CAPTION>
                  June 30,   December 31,
                    2007         2006
                 ----------  ------------
<S>              <C>         <C>
Finished goods   $   26,685  $     23,792
Work in process      21,315        15,540
Raw materials         9,008        11,696
Supplies              3,117         2,865
                 ----------  ------------
   Total         $   60,125  $     53,893
                 ==========  ============
</TABLE>

                                        9
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(7) LONG-TERM DEBT

      In February 2007, proceeds from the sale of the Bioproducts and Biopharma
segments, as discussed in Note 14, were used to repay all outstanding debt on
the credit facility. Due to this repayment, $821 was recorded in interest
expense, in continuing operations, in the first quarter of 2007 related to the
acceleration of unamortized origination fees. In April 2007, the Company entered
into a $200,000 five-year Syndicated Senior Revolving Credit Facility which
expires in April 2012. The Company pays interest on this credit facility at
LIBOR plus 1.25% - 2.00% based upon certain measurements of the Company's
financial performance. The credit facility also includes financial covenants
regarding interest coverage and leverage ratios. The Company was in compliance
with all financial covenants at June 30, 2007. At June 30, 2007 there was
$85,700 outstanding under this credit facility.

(8) RESTRUCTURING CHARGES

      The Company announced plans to eliminate certain employee positions at the
corporate office upon completion of the sale of the Bioproducts and Biopharma
segments. This plan will include certain one-time benefits for employees
terminated and is expected to be completed before the end of 2007. During the
three months ended June 30, 2007, the Company recognized expense of $1,901,
consisting of $1,817 which will be paid in cash and $84 for stock based
compensation and other professional fees. For the six months ended June 30,
2007, the Company recognized expense of $3,583, consisting of $3,407 which will
be paid in cash and $176 for stock based compensation and other professional
fees. The Company expects the total charge for the program to be approximately
$4,000, substantially all of which will be paid in cash. The Company anticipates
annual cost savings related to the elimination of all these positions to be
approximately $5,200.

      The following table reflects the activity related to the severance reserve
through June 30, 2007:

<TABLE>
<CAPTION>
                                                   2007 Activity
                            January 1, 2007  ------------------------   June 30, 2007
                            Reserve Balance   Expense   Cash Payments  Reserve Balance
                            ---------------  ---------  -------------  ---------------
<S>                         <C>              <C>        <C>            <C>
Employee termination costs  $            --  $   3,407           (349) $         3,058
                            ===============  =========  =============  ===============
</TABLE>

(9) STOCKHOLDERS' EQUITY

      On May 3, 2007, the Company paid a special dividend of $14.00 per share to
its shareholders resulting in a reduction in stockholders' equity of $403,026.
The effect on stockholders' equity was a reduction to retained earnings of
$233,244, representing total accumulated earnings as of the date of declaration,
with the remainder representing a return of capital of $169,782. Cash
disbursements were $401,367 and $1,659 was accrued related to dividends on
unvested restricted stock. The Company also announced that it will no longer pay
a quarterly dividend.

                                       10
<PAGE>
                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(10) COMPREHENSIVE INCOME

      The following table shows the components of comprehensive income for the
three and six months ended June 30, 2007 and 2006:

<TABLE>
<CAPTION>
                                                                 Three months ended             Six months ended
                                                                       June 30,                      June 30,
                                                               ----------------------       -----------------------
                                                                 2007          2006           2007           2006
                                                               -------       --------       ---------      --------
<S>                                                            <C>           <C>            <C>            <C>
Net income/(loss)                                              $ 2,274       $    976       $ 207,490      $   (429)
Foreign currency translation                                     2,966          9,596           3,195        13,336
Reclassification adjustment for gain on disposition of
business on foreign currency translation included in
net income                                                          --             --            (483)           --
Unrealized (loss)/gain on hedging contracts, net of tax           (122)           250             (45)          374
Unrealized gain/(loss) on available-for-sale securities              5           (415)           (442)         (171)

Reclassification adjustment for net realized loss/(gain)
on available-for-sale securities included in net income             64             --            (670)          --
Pension, net of tax                                                193             --             592           --
Reclassification adjustment for loss on disposition of
business - pension, included in net income                                         --           1,320
                                                               -------       --------       ---------      --------
   Total                                                       $ 5,380       $ 10,407       $ 210,957      $ 13,110
                                                               =======       ========       =========      ========
</TABLE>

      During the six months ended June 30, 2007 the Company sold two
available-for-sale securities. For purposes of computing gains or losses, cost
is identified on a specific identification basis. As of December 31, 2006 the
amount recorded in accumulated other comprehensive income ("AOCI") was a gain of
$1,117, net of tax, which was reclassed out of AOCI upon the sale of the
securities and the Company recorded a net gain of $670 to other income at the
actual sale dates. The Company also realized a gain of $483 and a loss of $1,320
for foreign currency translation and pension, respectively, related to the sale
of the Bioproducts and Biopharma segments, both recorded as part of the gain on
sale within discontinued operations.

                                       11
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(11) RETIREMENT PLANS AND OTHER POSTRETIREMENT BENEFITS

      Domestic Pension Plans

      The components of net periodic pension cost for the Company's domestic
plans for the three and six months ended June 30, 2007 and 2006 are as follows:

<TABLE>
<CAPTION>
                                                                 Three months ended             Six months ended
                                                                       June 30,                      June 30,
                                                               ----------------------       -----------------------
                                                                 2007          2006           2007           2006
                                                               -------       --------       ---------      --------
<S>                                                            <C>           <C>            <C>            <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost                                                   $   222       $    729       $     557      $  1,458
Interest cost                                                      900            858           1,798         1,716
Expected return on plan assets                                    (937)          (746)         (1,858)       (1,492)
Amortization of prior service costs                                 68             11              73            22
Recognized actuarial loss                                           52            180             104           360
Curtailments                                                        77             --             414            --
                                                               -------       --------       ---------      --------
Net periodic benefit cost                                      $   382       $  1,032       $   1,088      $  2,064
                                                               =======       ========       =========      ========
</TABLE>

      The sale of the Bioproducts and Biopharma segments in February 2007
required the Company to recognize a curtailment charge of $337 in the three
months ended March 31, 2007, which is recorded in discontinued operations.

      In April 2007, the Board of Directors of the Company approved the
suspension of the domestic pension plans and Supplemental Executive Retirement
Plan ("SERP") plan effective August 31, 2007. As a result, the Company was
required to recognize a curtailment charge of $77 in the three months ended June
30, 2007.

      The Company expects to contribute approximately $4,679 in cash to its two
U.S. defined-benefit plans in 2007.

      The components of net periodic benefit cost for the Company's SERP Plan
for the three and six months ended June 30, 2007 and 2006 is as follows:

<TABLE>
<CAPTION>
                                                                 Three months ended             Six months ended
                                                                       June 30,                      June 30,
                                                               ----------------------       -----------------------
                                                                 2007          2006           2007           2006
                                                               -------       --------       ---------      --------
<S>                                                            <C>           <C>            <C>            <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost                                                   $     5       $     55       $      43      $    110
Interest cost                                                       75             63             149           126
Amortization of prior service cost                                   1              1               1             2
Recognized actuarial loss                                            4              6               8            12
Curtailments                                                         4             --              15            --
                                                               -------       --------       ---------      --------
Net periodic benefit cost                                      $    89       $    125       $     216      $    250
                                                               =======       ========       =========      ========
</TABLE>

                                       12
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(11) RETIREMENT PLANS AND OTHER POSTRETIREMENT BENEFITS (CONTINUED)

      International Pension Plans

      The components of net periodic pension cost for the Company's
international plan for the three and six months ended June 30, 2007 and 2006 are
as follows:

<TABLE>
<CAPTION>
                                                                 Three months ended             Six months ended
                                                                       June 30,                      June 30,
                                                               ----------------------       -----------------------
                                                                 2007          2006           2007           2006
                                                               -------       --------       ---------      --------
<S>                                                            <C>           <C>            <C>            <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost                                                   $   111       $    128       $     222      $    256
Interest cost                                                      160            128             320           256
Amortization of unrecognized net obligation                         --             (8)             --           (16)
Recognized actuarial (gain)/loss                                   (17)            17             (34)           34
Amortization of prior service cost                                  (2)            (1)             (4)           (2)
                                                               -------       --------       ---------      --------
Net periodic benefit cost                                      $   252       $    264       $     504      $    528
                                                               =======       ========       =========      ========
</TABLE>

      Other Postretirement Benefits

      The components of net periodic benefit cost for the three and six months
ended June 30, 2007 and 2006 are as follows:

<TABLE>
<CAPTION>
                                                                 Three months ended             Six months ended
                                                                       June 30,                      June 30,
                                                               ----------------------       -----------------------
                                                                 2007          2006           2007           2006
                                                               -------       --------       ---------      --------
<S>                                                            <C>           <C>            <C>            <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost                                                   $     5       $     16       $      10      $     32
Interest cost                                                       27             34              54            68
Actuarial loss recognized                                           17             33              34            66
Amortization of unrecognized prior service cost                    (39)           (45)            (78)          (90)
                                                               -------       --------       ---------      --------
Net periodic benefit cost                                      $    10       $     38       $      20      $     76
                                                               =======       ========       =========      ========
</TABLE>

                                       13
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(12) SEGMENT INFORMATION

      The Company classifies its non-corporate business activities into one
reportable segment: Human Health, consisting of active pharmaceutical
ingredients and pharmaceutical intermediates produced under Food and Drug
Administration cGMP for use in the production of prescription and
over-the-counter drug products and other fine custom chemicals derived from
organic chemistry.

      Information as to the operations of the Company is set forth below.
Cambrex evaluates performance based on gross profit and operating profit. The
Company allocates certain corporate expenses to the Human Health segment.

      Two customers each account for 10% of consolidated gross sales in the
three and six months ended June 30, 2007. One customer in the three months ended
June 30, 2006 and two customers in the six months ended June 30, 2006 each
account for 10% of consolidated gross sales. One customer is a pharmaceutical
company with which a long-term sales contract is in effect that is scheduled to
expire at the end of 2008. The Company has agreed in principle to extend the
contract to 2013 which will result in lower profitability for sales under this
arrangement in 2007 and 2008. Formal negotiations are complete and the Company
is awaiting signature of the contract. The second customer is a distributor
representing multiple customers.

      The following is a summary of business segment information:

<TABLE>
<CAPTION>
                                 Three months ended            Six months ended
                                      June 30,                     June 30,
                              -----------------------      ------------------------
                                2007          2006           2007           2006
                              ---------     ---------      ---------      ---------
<S>                           <C>           <C>            <C>            <C>
Gross Sales:
Human Health                  $  63,081     $  63,031      $ 128,078      $ 117,151
                              ---------     ---------      ---------      ---------
                              $  63,081     $  63,031      $ 128,078      $ 117,151
                              =========     =========      =========      =========
Gross Profit:
Human Health                  $  23,938     $  22,440      $  48,333      $  41,525
                              ---------     ---------      ---------      ---------
                              $  23,938     $  22,440      $  48,333      $  41,525
                              =========     =========      =========      =========
Operating Profit/(Loss):
Human Health                  $  14,160     $  13,745      $  28,916      $  24,805
Corporate                       (10,204)      (10,422)       (43,324)       (18,237)
                              ---------     ---------      ---------      ---------
                              $   3,956     $   3,323      $ (14,408)     $   6,568
                              =========     =========      =========      =========
Capital Expenditures:
Human Health                  $   6,272     $   5,306      $  11,697      $   9,581
Corporate                            24            42             77             57
                              ---------     ---------      ---------      ---------
                              $   6,296     $   5,348      $  11,774      $   9,638
                              =========     =========      =========      =========
Depreciation:
Human Health                  $   4,682     $   4,614      $   9,414      $   9,111
Corporate                            66           253            167            503
                              ---------     ---------      ---------      ---------
                              $   4,748     $   4,867      $   9,581      $   9,614
                              =========     =========      =========      =========
</TABLE>

                                       14
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(12) SEGMENT INFORMATION (CONTINUED)

<TABLE>
<CAPTION>
                                             June 30,      December 31,
                                               2007            2006
                                            ----------     ------------
<S>                                         <C>            <C>
Total Assets:
Human Health                                $  294,879     $    286,437
Corporate                                       41,756           38,264
Assets of discontinued operations                   --          281,675
                                            ----------     ------------
                                            $  336,635     $    606,376
                                            ==========     ============
</TABLE>

(13) CONTINGENCIES

      The Company is subject to various investigations, claims and legal
proceedings covering a wide range of matters that arise in the ordinary course
of its business activities. The Company continually assesses all known facts and
circumstances as they pertain to all legal and environmental matters and
evaluates the need for reserves and disclosures as deemed necessary based on
these facts and circumstances and as such facts and circumstances develop. These
matters, either individually or in the aggregate, could have a material adverse
effect on the Company's financial condition, operating results and cash flows in
a future reporting period.

      Environmental

      In connection with laws and regulations pertaining to the protection of
the environment, the Company and its subsidiaries are a party to several
environmental proceedings and remediation investigations and cleanups and, along
with other companies, has been named a potentially responsible party ("PRP") for
certain waste disposal sites ("Superfund sites"). Additionally, as discussed in
the "Sale of Rutherford Chemicals" section of this Note, the Company has
retained the liability for certain environmental proceedings, associated with
the Rutherford Chemicals business.

      Each of these matters is subject to various uncertainties, and it is
possible that some of these matters will be decided unfavorably against the
Company. The resolution of such matters often spans several years and frequently
involves regulatory oversight or adjudication. Additionally, many remediation
requirements are not fixed and are likely to be affected by future
technological, site, and regulatory developments. Consequently, the ultimate
extent of liabilities with respect to such matters, as well as the timing of
cash disbursements cannot be determined with certainty.

      In matters where the Company has been able to reasonably estimate its
liability, the Company has accrued for the estimated costs associated with the
study and remediation of Superfund sites not owned by the Company and the
Company's current and former operating sites. These accruals were $5,124 and
$4,862 at June 30, 2007 and December 31, 2006, respectively. The modest increase
in the accrual includes payments of $276. The impact of currency was minimal.
Based upon currently available information and analysis, the Company's current
accrual represents management's best estimate of the probable and estimable
costs associated with environmental proceedings including amounts for legal and
investigation fees where remediation costs may not be estimable at the reporting
date.

                                       15
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(13) CONTINGENCIES (CONTINUED)

      As a result of the sale of the Bayonne, New Jersey facility (see "Sale of
Rutherford Chemicals" section of this Note), The Company became obligated to
investigate site conditions and conduct required remediation under the New
Jersey Industrial Site Recovery Act. The Company completed a preliminary
assessment of the site and submitted the preliminary assessment to the New
Jersey Department of Environmental Protection ("NJDEP"). The preliminary
assessment identified potential areas of concern based on historical operations
and sampling of such areas commenced. The Company has completed a second phase
of sampling and determined that a third phase of sampling is necessary to
determine the extent of contamination and any necessary remediation. The results
of the completed and proposed sampling, and any additional sampling deemed
necessary, will be used to develop an estimate of the Company's future liability
for remediation costs, if any. The Company submitted its plan for the third
phase of sampling to the NJDEP during the fourth quarter of 2005. The sampling
will commence upon approval of the sampling plan.

      The Company's Cosan subsidiary conducted manufacturing operations in
Clifton, New Jersey from 1968 until 1979. Prior to the acquisition of Cosan by
the Company, the operations were moved to another location and thereafter
Cambrex purchased the business. In 1997, Cosan entered into an Administrative
Consent Order with the NJDEP. Under the Administrative Consent Order, Cosan was
required to complete an investigation of the extent of the contamination related
to the Clifton site and conduct remediation as may be necessary. During the
third quarter of 2005, the Company completed the investigation related to the
Clifton site, which extends to adjacent properties. The results of the
investigation caused the Company to increase its related reserves by $1,300 in
2005 based on the proposed remedial action plan. The Company submitted the
results of the investigation and proposed remedial action plan to the NJDEP. In
late 2006, the NJDEP requested that an additional investigation be conducted at
the site. The Company submitted its plan for additional work to the NJDEP in
April 2007 and will commence such additional work upon approval of the plan. The
Company estimated that the additional work will cost approximately $240, and as
such, increased the related reserve by that amount.

      In March 2006, the Company received notice from the United States
Environmental Protection Agency ("USEPA") that two former operating subsidiaries
are considered PRPs at the Berry's Creek Superfund Site, Bergen County, New
Jersey. The operating companies are among many other PRPs that were listed in
the notice. Pursuant to the notice, the PRPs have been asked to perform a
remedial investigation and feasibility study of the Berry's Creek Site. The
Company has met with the other PRPs. Both operating companies joined the group
of PRPs and filed a joint response to the USEPA agreeing to jointly negotiate to
conduct or fund (along with other PRPs) an appropriate remedial investigation
and feasibility study of the Berry's Creek Site. At this time it is too early to
predict the extent of any liabilities. However, reserves have been established
to cover anticipated initial costs related to the site.

      The Company is involved in other matters where the range of liability is
not reasonably estimable at this time and it is not determinable when
information will become available to provide a basis for adjusting or recording
an accrual, should an accrual ultimately be required.

      Litigation and Other Matters

            Mylan Laboratories

      In 1998 the Company and its subsidiary Profarmaco S.r.l. (currently known
as Cambrex Profarmaco Milano S.r.l.") ("Profarmaco") were named as defendants
(along with Mylan Laboratories, Inc. ("Mylan")

                                       16
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(13) CONTINGENCIES (CONTINUED)

and Gyma Laboratories of America, Inc., Profarmaco's distributor in the United
States) in a proceeding instituted by the Federal Trade Commission ("FTC") in
the United States District Court for the District of Columbia (the "District
Court"). Suits were also commenced by several State Attorneys' General. The
suits alleged violations of the Federal Trade Commission Act arising from
exclusive license agreements between Profarmaco and Mylan covering two active
pharmaceutical ingredients ("APIs"). The FTC and Attorneys' General suits were
settled in February 2001, with Mylan (on its own behalf and on behalf of
Profarmaco and Cambrex) agreeing to pay over $140,000 and with Mylan, Profarmaco
and Cambrex agreeing to monitor certain future conduct.

      The same parties including the Company and Profarmaco have also been named
in purported class action complaints brought by private plaintiffs in various
state courts on behalf of purchasers of the APIs in generic form, making
allegations similar to those raised in the FTC's complaint and seeking various
forms of relief including treble damages.

      In April 2003, Cambrex reached an agreement with Mylan under which Cambrex
would contribute $12,415 to the settlement of litigation brought by a class of
direct purchasers. In exchange, Cambrex and Profarmaco received from Mylan a
release and full indemnity against future costs or liabilities in related
litigation brought by purchasers, as well as potential future claims related to
this matter. Cambrex recorded an $11,342 charge (discounted to the present value
due to the five year pay-out) in the first quarter of 2003 as a result of this
settlement. In accordance with the agreement $10,815 has been paid through June
30, 2007, with the remaining $1,600 to be paid next year.

            Vitamin B-3

      In May 1998, the Company's subsidiary, Nepera, which formerly operated the
Harriman facility and manufactured and sold niacinamide ("Vitamin B-3"),
received a Federal Grand Jury subpoena for the production of documents relating
to the pricing and possible customer allocation with regard to that product. In
2000, Nepera reached an agreement with the government as to its alleged role in
Vitamin B-3 violations from 1992 to 1995. The Canadian government claimed
similar violations. All government suits in the U.S. and Canada have been
concluded.

      Nepera has been named as a defendant, along with several other companies,
in a number of private civil actions brought on behalf of alleged purchasers of
Vitamin B-3. The actions seek injunctive relief and unspecified but substantial
damages. All cases have been settled within established reserve amounts.

      Settlement documents are expected to be finalized and payments are
expected to be made during the next several months. The balance of the reserves
recorded within accrued liabilities related to this matter was $1,579 as of June
30, 2007.

            Sale of Rutherford Chemicals

      The Company completed the sale of its Rutherford Chemicals business in
November 2003. Under the agreement for the sale ("Purchase Agreement"), the
Company provided standard representations and warranties and included various
covenants concerning the business, operations, liabilities and financial
condition of the Rutherford Chemicals business ("Rutherford Business"). Under
the Purchase Agreement, the Company indemnified the purchasers of the Rutherford
Business ("Buyers") for breaches of representations, warranties and covenants.
The Company also retained the liabilities associated with

                                       17
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(13) CONTINGENCIES (CONTINUED)

existing general litigation matters related to the Rutherford Business. With
respect to certain pre-closing environmental matters, the Company retained the
responsibility for: (i) certain existing matters including violations and
off-site liabilities; (ii) completing the on-going remediation at the New York
facility under a Record of Decision ("ROD"); and (iii) completing the obligation
to investigate site conditions and conduct required remediation under the
provisions of the New Jersey Industrial Site Recovery Act ("ISRA"), an
obligation that was triggered by the sale of the Rutherford Business. With
respect to all other pre-closing environmental liabilities, whether known or
unknown, costs would be allocated subject to certain limitations defined in the
Purchase Agreement. The Company accrued for exposures which are deemed probable
and estimable related to the retained matters.

      In April 2006, the Company received a summons and complaint (the
"Complaint") from the Buyers, which was filed in the Supreme Court of the State
of New York, County of New York. In the Complaint, the Buyers sought
indemnification, declaratory and injunctive relief for alleged (i) breaches of
various representations, warranties and covenants, related to structures,
buildings and equipment at each of the purchased facilities and, in addition,
was responsible for a related third party claim; and (ii) was obligated to
conduct certain environmental remediation at four of the five Rutherford
Business facilities. The Company denied the allegations, filed counterclaims and
has been vigorously defending the matter.

      On July 30, 2007 the Company entered into a Settlement Agreement and
Release (the "Settlement Agreement") and a related Environmental Escrow
Agreement (the "Escrow Agreement") settling litigation which had been commenced
by the Buyers by the filing of the Complaint in April 2006.

      Under the Settlement Agreement, the parties agreed to make the following
payments:

            -     Within 30 days from the date of the Settlement Agreement, (i)
                  the Company agreed to pay the Buyers the sum of $636 in
                  reimbursement for past remediation expenses at the Rutherford
                  Business facilities; and (ii) the Buyers agreed to pay the
                  Company 400 British pounds (approximately $813) for
                  reimbursement of certain tax refunds received from United
                  Kingdom taxing authorities.

            -     The Buyers agreed to pay to an account (the "Escrow Account")
                  created under the Escrow Agreement the sum of $3,149 plus
                  interest subsequent to September 30, 2007, representing the
                  amount owed on a Subordinated Promissory Note issued as
                  consideration under the Purchase Agreement. The sum of $3,149
                  is to be paid in full no later than February 28, 2008 ("Final
                  Note Payment").

            -     The Company agreed to pay to the Escrow Account approximately
                  $4,400 within 30 days after the Buyers' Final Note Payment.

      The Escrow Account can be used only for costs arising from the remediation
of environmental contamination at the Rutherford Business facilities. The
Company has the right to object to any use of the funds in the Escrow Account
for non-remediation purposes, pursuant to an accelerated dispute resolution
process involving the parties' appointment of a Special Master.

      Under the Settlement Agreement, the parties waive and extinguish all
rights under the Purchase Agreement to seek damages or any other remedy for any
other obligation contained in the Purchase Agreement as they relate to
environmental liabilities, including damages related to pre-closing ownership or

                                       18
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(13) CONTINGENCIES (CONTINUED)

operation of the Rutherford Business facilities, compliance with environmental
laws, and all remediation at the Rutherford Business facilities, except for
certain matters which the Company specifically retained, namely (i) the off-site
treatment, storage and disposal of hazardous materials occurring before the
November 10, 2003 closing of the Purchase Agreement, (ii) liability arising from
the pre-closing sales of products, (iii) the completion of on-going remediation
at the Nepera facility under a ROD, and (iv) completion of on-going remediation
at the Bayonne facility under ISRA. The Buyers, however, retain its contractual
obligation not to engage in any conduct that materially increases the Company's
costs of completing the remediation under the ROD at the Nepera facility and the
ISRA process at the Bayonne facility. The obligations specifically retained by
the Company are consistent with its remediation obligations under the Purchase
Agreement. The Company has previously accrued for exposures deemed probable and
reasonable related to any specifically retained matters.

      Further, under the Settlement Agreement, the Buyers and the Company
release each other from all claims and counterclaims asserted in the litigation,
with the exception of the Company's possible claim that the Buyers' activities
have increased the Company's remediation costs at the Nepera facility, which
claim the Company will dismiss without prejudice to its right to reassert the
claim in the future. The Buyers and the Company also waive all rights and
obligations under the Purchase Agreement related to any claims for additional
payments under the Purchase Agreement, including the Company's claims for the
return of tax refunds, the payment of the Subordinated Note, and any payments
under the earn-out provision.

      Under the Settlement Agreement, the Company indemnifies and holds harmless
the Buyers for damages related to the obligations the Company specifically
retained. The Buyers indemnify and hold harmless the Company for certain
liabilities, including without limitation those arising from the presence of
hazardous materials at any of the Rutherford Business facilities, except for the
matters specifically retained by the Company.

      The foregoing description is a summary and is qualified in its entirety by
the Settlement Agreement, which is filed as an Exhibit to this Quarterly Report
on Form 10-Q for the period ending June 30, 2007.

      Related to the Settlement Agreement, the Company's second quarter 2007
results include a charge of $4,007, net of tax, recorded in discontinued
operations related to this matter.

            Class Action Matter

      In October 2003, the Company was notified of a securities class action
lawsuit filed against Cambrex and five former and current Company officers. Five
class action suits were filed with the New Jersey Federal District Court (the
"Court"). Discovery in this matter is proceeding. In January 2004, the Court
consolidated the cases, designated the lead plaintiff and selected counsel to
represent the class. An amended complaint was filed in March 2004. The lawsuit
has been brought as a class action in the names of purchasers of the Company's
common stock from October 21, 1998 through July 25, 2003. The complaint alleges
that the Company failed to disclose in a timely fashion the January 2003
accounting restatement and subsequent SEC investigation, as well as the loss of
a significant contract at the Baltimore facility.

      The Company filed a Motion to Dismiss in May 2004. Thereafter, the
plaintiff filed a reply brief and in October 2005, the Court denied the
Company's Motion to Dismiss. The Company continues to believe that the
complaints are without merit and will vigorously defend against them. As such,
the Company has recorded no reserves related to this matter. The Company has
reached its deductible under its insurance policy and further costs, expenses
and any settlement are expected to be paid by the Company's insurers.

                                       19
<PAGE>
                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(13)  CONTINGENCIES (CONTINUED)

            Securities and Exchange Commission ("SEC")

      Since 2003, the SEC has been conducting an investigation into the
Company's inter-company accounting procedures from the period 1997 through 2001.
The investigation began in the first half of 2003 after the Company voluntarily
disclosed certain matters related to inter-company accounts for the five-year
period ending December 31, 2001 that resulted in the restatement of the
Company's financial statements for those years. In late June 2007, this matter
was concluded with the issuance by the SEC of a Cease and Desist Order
("Order"). There are no fines or penalties associated with the Order. Under the
Order, the Company agreed to undertake certain remedial actions including, for a
two year period following the effective date of the Order, having the Company's
outside auditor conduct an annual review of its accounting practices related to
intercompany transactions and compliance with the Order, with the results of
such review being reported to the SEC. The Company has implemented the remedial
measures and will continue the reporting and records retention obligations set
forth in the Order. This matter may be considered concluded.

            Baltimore Litigation

      In 2001, the Company acquired the biopharmaceutical manufacturing business
in Baltimore (the "Baltimore Business"). The sellers of the Baltimore Business
filed suit against the Company alleging that the Company made false
representations during the negotiations on which the sellers relied in deciding
to sell the business and that the Company breached its obligation to pay
additional consideration as provided in the purchase agreement which was
contingent on the performance of the Baltimore Business. Management believes the
matter to be without merit and continues its defense of this matter. A decision
on the Company's Motion for Summary Judgment filed in 2006 is pending.

              Other

      The Company has commitments incident to the ordinary course of business
including corporate guarantees of certain subsidiary obligations to the
Company's lenders related to financial assurance obligations under certain
environmental laws for remediation, closure and/or third party liability
requirements of certain of its subsidiaries and a former operating location;
contract provisions for indemnification protecting its customers and suppliers
against third party liability for manufacture and sale of Company products that
fail to meet product warranties and contract provisions for indemnification
protecting licensees against intellectual property infringement related to
licensed Company technology or processes.

      Additionally, as permitted under Delaware law, the Company indemnifies its
officers and directors for certain events or occurrences while the officer or
director is, or was, serving at the Company's request in such capacity. The term
of the indemnification period is for the officer's or director's lifetime. The
maximum potential amount of future payments the Company could be required to
make under these indemnification agreements is unlimited; however, the Company
has a Director and Officer insurance policy that covers a portion of any
potential exposure. The Company currently believes the estimated fair value of
its indemnification agreements is not significant based on currently available
information, and as such, the Company has no liabilities recorded for these
agreements as of June 30, 2007.

      In addition to the matters identified above, Cambrex's subsidiaries are
party to a number of other proceedings.

                                       20
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(14)   DISCONTINUED OPERATIONS

      On October 27, 2006, the Company sold two businesses within the Human
Health segment for nominal consideration. As a result of this transaction, the
Company reported a non-cash charge of $23,244 in the fourth quarter of 2006 and
these businesses are being reported as discontinued operations in all periods
presented.

      On February 6, 2007, the Company completed the sale of the businesses that
comprise the Bioproducts and Biopharma segments (excluding certain liabilities)
to Lonza Group AG for cash consideration of $460,000. As a result of the
transaction, the Company recorded a $232,116 gain in the first quarter of 2007
and an additional gain of $3,491 in the second quarter of 2007, which includes a
final payment of $3,914 related to a working capital adjustment partially offset
by additional deal costs. As a result of the completion of the transaction on
February 6, 2007, the Bioproducts and Biopharma segments are being reported as
discontinued operations in all periods presented.

      On July 30, 2007 the Company entered into a Settlement Agreement and a
related Escrow Agreement settling litigation which had been commenced by the
purchasers of the Rutherford Business by the filing of the Complaint in April
2006. As a result of this settlement, the Company's second quarter 2007 results
include a charge of $4,007, net of tax, recorded in discontinued operations.
Refer to Note 13 for a complete discussion on this matter.

      The following table reflects revenues and (loss)/income from the
discontinued operations:

<TABLE>
<CAPTION>
                                              Three months ended June 30,    Six months ended June 30,
                                             ----------------------------   ----------------------------
                                                 2007            2006           2007           2006
                                             ------------    ------------   ------------    ------------
<S>                                          <C>             <C>            <C>             <C>
Revenues                                     $         --    $     60,546   $     20,335    $    126,033
                                             ============    ============   ============    ============
Pre-tax income from operations of
discontinued operations                      $         --    $      2,691   $        545    $      8,259
Gain on sale of Bioproducts and Biopharma
segments                                            3,491              --        235,607              --
Rutherford litigation settlement                   (4,602)             --         (4,602)             --
                                             ------------    ------------   ------------    ------------
(Loss)/income from discontinued operations
before income taxes                          $     (1,111)   $      2,691   $    231,550    $      8,259
(Benefit)/provision for income taxes                 (930)          1,367         12,072           3,408
                                             ------------    ------------   ------------    ------------
(Loss)/income from discontinued
operations, net of tax                       $       (181)   $      1,324   $    219,478    $      4,851
                                             ============    ============   ============    ============
</TABLE>

                                       21
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    (dollars in thousands, except share data)

(14)  DISCONTINUED OPERATIONS (CONTINUED)

      The following table reflects the carrying amount of the assets and
liabilities as of December 31, 2006 for the businesses that were sold on
February 6, 2007:

<TABLE>
<CAPTION>
                                            December 31,
                                               2006
                                           -------------
<S>                                        <C>
Assets:
Cash                                       $          --
Accounts receivable, net                          35,460
Inventories, net                                  40,708
Other current assets                               3,215
Property, plant and equipment, net                85,162
Intangibles, net                                 115,562
Other assets                                       1,568
                                           -------------
Total assets held for sale                       281,675
Liabilities:
Accounts payable and accrued liabilities          31,965
Other current liabilities                          1,436
Long-term debt                                     3,627
Other liabilities                                 20,581
                                           -------------
Total liabilities held for sale            $      57,609
                                           -------------
Net assets held for sale                   $     224,066
                                           =============
</TABLE>

                                       22
<PAGE>

                      CAMBREX CORPORATION AND SUBSIDIARIES
                    (dollars in thousands, except share data)

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

EXECUTIVE OVERVIEW

      The Company's business consists of one segment - Human Health. The Human
Health segment is primarily comprised of active pharmaceutical ingredients
derived from organic chemistry and pharmaceutical intermediates.

      The following significant events occurred during the second quarter of
2007 which affected reported operating profit:

      -     A charge of $4,564 recorded within operating expenses for strategic
            alternative costs.

      -     A charge of $1,901 recorded within operating expenses for
            restructuring expenses.

RESULTS OF OPERATIONS

COMPARISON OF SECOND QUARTER 2007 VERSUS SECOND QUARTER 2006

      Gross sales in the second quarter 2007 of $63,081 were equal to sales in
the second quarter 2006. Gross sales were favorably impacted 3.5% due to
exchange rates reflecting a weaker U.S. dollar.

      Within the Human Health segment, sales of active pharmaceutical
ingredients ("APIs") of $50,143 were $5,103 or 11.3% above the second quarter
2006 primarily due to higher volumes of APIs and proprietary products partially
offset by lower pricing. Sales of pharmaceutical intermediates of $5,522 were
$3,564 or 39.2% below the second quarter 2006 primarily due to fluctuations in
customer order patterns for custom development projects, and a strong second
quarter last year for custom development sales. Sales of other Human Health
products of $7,416 were $1,489 or 16.7% below the second quarter 2006 primarily
due to weaker demand of feed additives.

      Human Health gross margins increased to 37.9% in the second quarter 2007
from 35.6% in the second quarter 2006. This increase is primarily due to
favorable product mix and foreign currency exchange partially offset by lower
pricing.

      The following table reflects sales by geographic area for the three months
ended June 30, 2007 and 2006:

<TABLE>
<CAPTION>
                         2007         2006
                       ---------   ---------
<S>                    <C>         <C>
North America          $  22,829   $  26,704
Europe                    36,010      33,336
Asia                       2,499       1,679
Other                      1,743       1,312
                       ---------   ---------
   Total Gross Sales   $  63,081   $  63,031
                       =========   =========
</TABLE>

      Selling, general and administrative expenses of $10,556 or 16.7% of gross
sales in the second quarter 2007 decreased from $14,998, or 23.8% in the second
quarter 2006. The decrease in expense is due mainly to lower administration
expenses, primarily personnel and related benefit costs, insurance costs due to
the renewing of several policies and audit fees partially offset by the impact
of foreign currency exchange.


                                       23
<PAGE>
RESULTS OF OPERATIONS (CONTINUED)

COMPARISON OF SECOND QUARTER 2007 VERSUS SECOND QUARTER 2006 (CONTINUED)

      The Company announced plans to eliminate certain employee positions at the
corporate office upon completion of the sale of the Bioproducts and Biopharma
segments. This plan will include certain one-time benefits for employees
terminated and is expected to be completed before the end of 2007. Costs related
to these plans are recorded on the restructuring expenses line on the income
statement. The Company recognized expense of $1,901 during the second quarter
2007, and expects the total restructuring charge to be approximately $4,000,
substantially all of which will be in cash. The Company anticipates annual cost
savings related to the elimination of all these positions to be approximately
$5,200.

      Strategic alternative costs include costs that the Company has incurred
related to the decision to sell the Bioproducts and Biopharma segments in
February 2007. These costs are not considered part of the restructuring program
or a part of discontinued operations under current accounting guidance. The
Company has recorded approximately $984 during the second quarter of 2007 which
became payable under change of control agreements between the Company and four
of its current or former executives due to the sale of the Bioproducts and
Biopharma segments. The Company will recognize additional expense in future
quarters for the recognition of interest as well as the potential for changes in
estimates. Substantially all of this charge will be paid in cash. The exact
timing of the payments is uncertain at this time but the majority are expected
to be in 2008.

      Also included in strategic alternative costs in the current quarter is
$1,044 of retention bonuses. This includes amounts payable to certain current
employees for continued employment, generally through September 30, 2007. The
Company is recognizing this cost ratably over the applicable service period and
anticipates a total charge related to such retention bonuses of approximately
$3,200. Additional costs including those associated with the modification of
employee stock options due to the payment of the special dividend in connection
with the divestiture amounted to approximately $2,536 during the quarter.
Strategic alternative costs for the second quarter 2006 of $1,042 consist of
external advisor costs related to divestitures.

      Research and development expenses of $2,961 were 4.7% of gross sales in
the second quarter 2007, and were relatively flat compared to expenses of $3,077
or 4.9% of gross sales in the second quarter 2006. The impact of foreign
currency exchange was negligible.

      Operating profit in the second quarter 2007 was $3,956 compared to $3,323
in the second quarter 2006. The results reflect higher gross margins as
discussed above, partially offset by higher operating expenses due to strategic
alternative and restructuring costs.

      Net interest income was $871 in the second quarter 2007 compared to net
interest expense of $122 in the second quarter 2006. These results primarily
reflect lower average debt from use of the proceeds from the sale of the
Bioproducts and Biopharma segments, partially offset by higher interest rates.
Interest income was also higher in the second quarter of 2007 compared to 2006
due to interest earned on the proceeds from the sale of the Bioproducts and
Biopharma segments. The average interest rate on debt was 7.5% in the second
quarter 2007 versus 5.8% in the second quarter of 2006.

      The effective tax rate for the second quarter 2007 was 44.5% compared to
111.3% in the second quarter 2006. The tax provision in the second quarter 2007
decreased to $1,971 compared to $3,424 in the second quarter of 2006. This
change is due to the geographic mix of pre-tax earnings, as well as the
recognition of a $1,548 tax benefit in continuing operations for the second
quarter 2007 as a result of the sale of the Bioproducts and Biopharma segments
in the first quarter of 2007. The Company maintains a full valuation allowance
against its domestic, and certain foreign, net deferred tax assets and will
continue to do so until an appropriate level of profitability is sustained or
tax strategies can be developed that would enable the Company to conclude that
it is more likely than not that a portion of these net deferred assets would be

                                       24
<PAGE>
RESULTS OF OPERATIONS (CONTINUED)

COMPARISON OF SECOND QUARTER 2007 VERSUS SECOND QUARTER 2006 (CONTINUED)

realized. As such, improvements in domestic, and certain foreign, pre-tax income
in the future may result in these tax benefits ultimately being realized.
However, there is no assurance that such improvements will be achieved.

      Income from continuing operations in the second quarter 2007 was $2,455,
or $0.08, per diluted share versus a loss of $348, or $0.01 per diluted share in
the same period a year ago.

      The Company adopted Financial Accounting Standards Board ("FASB")
Interpretation No. 48, Accounting for Uncertainty in Income Taxes -- an
interpretation of FASB Statement No. 109 ("FIN 48") effective January 1, 2007.
This interpretation clarified the accounting for uncertainty in income tax
positions and required the Company to recognize in the consolidated financial
statements the impact of a tax position that is more likely than not to be
sustained upon examination based on the technical merits of the position. The
effect of adopting the interpretation was not material. Refer to Note 5 for
further discussion.

      The Company adopted FASB Staff Position ("FSP") No. AUG AIR-1 "Accounting
for Planned Major Maintenance Activities" effective January 1, 2007. This FSP
amended certain provisions of APB Opinion No. 28 "Interim Financial Reporting".
This FSP prohibited the use of the accrue-in-advance method of accounting for
planned major maintenance activities in annual and interim reporting periods.
The adoption of this FSP had an immaterial impact on the Company's financial
position and results of operations.

COMPARISON OF FIRST SIX MONTHS 2007 VERSUS FIRST SIX MONTHS 2006

      Gross sales for the first six months of 2007 increased 9.3% to $128,078
from $117,151 in the first six months of 2006. Gross sales were favorably
impacted 4.4% due to exchange rates reflecting a weaker U.S. dollar in the first
six months of 2007 versus 2006.

      The following table shows sales by geographic area for the six months
ended June 30, 2007 and 2006:

<TABLE>
<CAPTION>
                          2007         2006
                       ----------   ----------
<S>                    <C>          <C>
North America          $   45,302   $   43,825
Europe                     74,577       67,174
Asia                        4,506        3,021
Other                       3,693        3,131
                       ----------   ----------
   Total Gross Sales   $  128,078   $  117,151
                       ==========   ==========
</TABLE>

      Within the Human Health segment, sales of APIs of $98,485 were $13,048 or
15.3% above the first six months of 2006 primarily due to higher volumes of APIs
partially offset by lower pricing. Sales of pharmaceutical intermediates of
$13,580 were $2,016 or 12.9% below the first six months of 2006 primarily due to
fluctuations in customer order patterns for custom development projects, and a
strong six months last year for custom development sales. Sales of other Human
Health products, primarily fine chemicals, of $16,013 were flat when comparing
the first six months of 2007 versus 2006.

      Human Health gross margins increased to 37.7% in the first six months of
2007 compared to 35.4% in the first six months of 2006. The increase in margins
is due to higher sales volume, favorable product mix and a favorable impact due
to foreign currency translation partially offset by pricing pressures on custom
development products.


                                       25
<PAGE>
RESULTS OF OPERATIONS (CONTINUED)

COMPARISON OF FIRST SIX MONTHS 2007 VERSUS FIRST SIX MONTHS 2006 (CONTINUED)

Selling, general and administrative expenses of $25,903 or 20.2% of gross sales
in the first six months of 2007 decreased from $27,488 or 23.5% in the first six
months of 2006. The decrease in expense is due primarily to lower administration
expenses related to personnel costs and audit fees partially offset by higher
legal fees and the impact of foreign currency exchange.

      The Company announced plans to eliminate certain employee positions at the
corporate office upon completion of the sale of the Bioproducts and Biopharma
segments. This plan will include certain one-time benefits for employees
terminated and is expected to be completed before the end of 2007. Costs related
to these plans are recorded on the restructuring expenses line on the income
statement. The Company recognized expense of $3,583 during the first six months
of 2007, and expects the total charge for the program to be approximately
$4,000, substantially all of which will be in cash. The Company anticipates
annual cost savings related to the elimination of all these positions to be
approximately $5,200.

      Strategic alternative costs include costs that the Company has incurred
related to the decision to sell the Bioproducts and Biopharma segments in
February 2007. These costs are not considered part of the restructuring program
or a part of discontinued operations under current accounting guidance. The
first six months of 2007 includes charges of $19,172 related to certain benefits
which became payable under change of control agreements between the Company and
four of its current or former executives due to the sale of the Bioproducts and
Biopharma segments. The Company will recognize additional expense in future
quarters for the recognition of interest and discounting as well as the
potential for changes in estimates. Substantially all of this charge will be
paid in cash. The exact timing of the payments is uncertain at this time but is
expected to be in 2008.

      Also included in strategic alternative costs in the first six months of
2007 is $3,820 of retention bonuses paid in 2007 as a result of the completion
of the Bioproducts and Biopharma segments sales transaction on February 6, 2007.
In addition, costs of $1,713 are also included related to bonuses payable to
certain current employees for continued employment, generally through September
30, 2007. The Company is recognizing this cost ratably over the applicable
service period and anticipates a total charge of approximately $3,200.
Additional costs including those associated with the payment of the special
dividend in connection with the divestiture amounted to approximately $2,989
during the first six months of 2007, $2,417 of which related to a non-cash
charge to account for a modification of the exercise price for all outstanding
stock options. Strategic alternative costs for the first six months of 2006 of
$2,030 consist of external advisor costs related to divestitures.

      Research and development expenses of $5,561 or 4.3% of gross sales in the
first six months of 2007 were comparable to $5,439 or 4.6% of gross sales in the
first six months of 2006.

      Operating loss in the first six months of 2007 was $14,408 compared to a
profit of $6,568 in the first six months of 2006. The results reflect higher
operating expenses due to strategic alternative and restructuring costs
partially offset by higher gross margins, as discussed above.

      Net interest income was $2,410 in the first six months of 2007 compared to
net interest expense of $5,566 in the first six months of 2006 primarily
reflecting lower average debt partially offset by higher interest rates. Also
included in first six months of 2007 was the acceleration of unamortized
origination fees related to the repayment of the credit facility of $821.
Included in first six months of 2006 is approximately $5,272 related to the make
whole payment of $4,809 and the related acceleration of $463 of unamortized
origination fees. Interest income was also higher in the first six months of
2007 compared to 2006 due to interest earned on the proceeds from the sale of
the Bioproducts and Biopharma segments. The average interest rate was 6.8% in
the first six months of 2007 versus 5.5% in the first six months of 2006.


                                       26
<PAGE>
RESULTS OF OPERATIONS (CONTINUED)

COMPARISON OF FIRST SIX MONTHS 2007 VERSUS FIRST SIX MONTHS 2006 (CONTINUED)

      The effective tax rate for the first six months of 2007 was 3.2% compared
to 679.4% in the first six months of 2006. The tax provision in the first six
months of 2007 changed to a benefit of $392 compared to expense of $5,924 in the
first six months of 2006. This change is due to the geographic mix of pre-tax
earnings, as well as the recognition of an $8,306 tax benefit in continuing
operations for the first six months of 2007 as a result of the sale of the
Bioproducts and Biopharma segments in the first quarter of 2007. The Company
maintains a full valuation allowance against its domestic, and certain foreign,
net deferred tax assets and will continue to do so until an appropriate level of
profitability is sustained or tax strategies can be developed that would enable
the Company to conclude that it is more likely than not that a portion of these
net deferred assets would be realized. As such, improvements in domestic, and
certain foreign, pre-tax income in the future may result in these tax benefits
ultimately being realized. However, there is no assurance that such improvements
will be achieved.

LIQUIDITY AND CAPITAL RESOURCES

      Cash and cash equivalents increased $7,487 in the first six months of
2007. During the six months ended June 30, 2007, the Company generated cash from
operations of $9,604, an increase of $5,616 versus the same period a year ago.
The increase in cash flows from operations in the first six months of 2007
versus the first six months of 2006 is due primarily to improved collections of
accounts receivable and higher net income, net of non-cash items, partially
offset by higher inventory and lower accounts payable.

      Cash flows provided by investing activities in the first six months of
2007 of $451,606 primarily reflect proceeds from the sale of the Bioproducts and
Biopharma segments. Capital expenditures from continuing operations were $11,774
in the first six months of 2007 as compared to $9,638 in 2006. Part of the funds
in 2007 were used for new manufacturing and research and development facilities
in Milan, Italy and capital improvements to existing facilities.

      Cash flows used in financing activities in the first six months of 2007 of
$454,723 include net pay down of debt of $73,157 and dividends paid of $402,200
partially offset by proceeds from stock options exercised of $20,947. In the
first six months of 2006 financing activities include a net pay down of debt of
$1,729 and dividends paid of $1,604 partially offset by proceeds from stock
options exercised of $1,267.

      The Company used the proceeds from the sale of the Bioproducts and
Biopharma segments, which closed during the first quarter of 2007, to repay
outstanding debt and in May 2007, paid a special dividend of $14.00 per share,
totaling $401,367. Approximately $94,000 was borrowed from the Company's new
five-year, $200,000 credit facility to pay the dividend. The Company also
discontinued its quarterly dividend payment and will instead allocate these cash
outlays to support its growth initiatives. During the first six months of 2006,
the Company paid cash dividends of $0.06 per share.

FORWARD-LOOKING STATEMENTS

      This document may contain "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 and Rule 3b-6 under The
Securities Exchange Act of 1934, as amended, including, without limitation,
statements regarding expected performance, especially expectations with respect
to sales, research and development expenditures, earnings per share, capital
expenditures, acquisitions, divestitures, collaborations, or other expansion
opportunities. These statements may be identified by the fact that they use
words such as "expects," "anticipates," "intends," "estimates," "believes" or
similar expressions are used in connection with any discussion of future
financial and/or operating performance. Any forward-looking statements are
qualified in their entirety by reference to the factors discussed throughout
this Form 10-Q. Any

                                       27
<PAGE>

forward-looking statements contained herein are based on current plans and
expectations and involve risks and uncertainties that could cause actual
outcomes and results to differ materially from current expectations including,
but not limited to, global economic trends, pharmaceutical outsourcing trends,
competitive pricing or product developments, government legislation and/or
regulations (particularly environmental issues), tax rate, interest rate,
technology, manufacturing and legal issues, including the outcome of outstanding
litigation disclosed in the Company's public filings, changes in foreign
exchange rates, uncollectible receivables, loss on disposition of assets,
cancellation or delays in renewal of contracts, lack of suitable raw materials
or packaging materials, the Company's ability to receive regulatory approvals
for its products and the accuracy of the Company's current estimates with
respect to its earnings and profits for tax purposes in 2007. Any
forward-looking statement speaks only as of the date on which it is made, and
the Company undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or otherwise.
New factors emerge from time to time and it is not possible for the Company to
predict which will arise. In addition, we cannot assess the impact of each
factor on the Company's business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

      For further details and a discussion of these and other risks and
uncertainties, investors and security holders are cautioned to review the
Cambrex 2006 Annual Report on Form 10-K, including the Forward-Looking Statement
section therein, and other subsequent filings with the U.S. Securities and
Exchange Commission, included Current Reports on Form 8-K. The Company
undertakes no obligation to publicly update any forward-looking statement,
whether as a result of new information, future events or otherwise.

                                       28
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      There has been no significant change in our exposure to market risk during
the first six months of 2007. For a discussion of the Company's exposure to
market risk, refer to Part II, Item 7A, "Quantitative and Qualitative
Disclosures about Market Risk," contained in the Company's Annual Report on Form
10-K for the period ended December 31, 2006.

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

      The Company maintains a system of disclosure controls and procedures
designed to provide reasonable assurance that information required to be
disclosed by the Company in reports that it files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms. Disclosure
controls are also designed to reasonably assure that such information is
accumulated and communicated to management, including the Chief Executive
Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure. Disclosure controls include components of
internal control over financial reporting, which consists of control processes
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements in accordance with
generally accepted accounting principles in the United States.

      We have carried out an evaluation under the supervision of, and with the
participation of, our management, including the Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures as of June 30, 2007. The Company's management
has concluded that the financial statements included in this Form 10-Q are a
fair presentation in all material respects the Company's financial position,
results of operations and cash flows for the periods presented in conformity
with generally accepted accounting principles.

      There are inherent limitations to the effectiveness of any system of
disclosure controls and procedures, including the possibility of human error and
the circumvention or overriding of the controls and procedures. Accordingly,
even effective disclosure controls and procedures can only provide reasonable
assurance of achieving their control objectives.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.

      There were no significant changes in the Company's internal control over
financial reporting that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over financial reporting
during the quarter ended June 30, 2007.

                                       29
<PAGE>

PART II - OTHER INFORMATION

                      CAMBREX CORPORATION AND SUBSIDIARIES

ITEM 1. LEGAL PROCEEDINGS

      See the discussion under Part I, Item 1, Note 13 to the Consolidated
Financial Statements.

ITEM 1A. RISK FACTORS

      There have been no material changes to our risk factors and uncertainties
during the first six months of 2007. For a discussion of the Risk Factors, refer
to Part I, Item 1A, "Risk Factors," contained in the Company's Annual Report on
Form 10-K for the period ended December 31, 2006.

ITEM 6. EXHIBITS

      Exhibits

      1.    Exhibit 10.10 - Settlement Agreement and Release and Environmental
            Escrow Agreement dated July 30, 2007 between Rutherford Chemicals
            LLC, Vertellus Specialties Holdings UK Ltd. (formerly Rutherford
            Chemicals UK Ltd.), Vertellus Specialties UK Ltd. (formerly Seal
            Sands Chemicals Ltd.), and Vertellus Specialties Holdings Corp.
            (formerly Rutherford Chemicals Holdings Corp.), and Cambrex
            Corporation, Nepera, Inc., CasChem Inc., Zeeland Chemicals, Inc.,
            Nepcam, Inc., and Cambrex Ltd.

      2.    Exhibit 31.1 - CEO Certification pursuant to Section 302 of the
            Sarbanes-Oxley Act of 2002.

      3.    Exhibit 31.2 - CFO Certification pursuant to Section 302 of the
            Sarbanes-Oxley Act of 2002.

      4.    Exhibit 32.1 - CEO Certification pursuant to Section 906 of the
            Sarbanes-Oxley Act of 2002.

      5.    Exhibit 32.2 - CFO Certification pursuant to Section 906 of the
            Sarbanes-Oxley Act of 2002.

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<PAGE>

                                   SIGNATURES

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

                                    CAMBREX CORPORATION

                               By   /s/ Gregory P. Sargen
                                    ------------------------------------------
                                    Gregory P. Sargen
                                    Vice President and Chief Financial Officer
                                    (On behalf of the Registrant and as the
                                    Registrant's Principal Financial Officer)

Dated:  August 7, 2007

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