<PAGE>

                       Securities and Exchange Commission
                             Washington, D.C. 20549

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (Fee required) For the Fiscal Year ended December 31, 1998

                                       or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (No Fee Required) For the transition period from _____ to__________

                           Commission File No. 0-29100
                           ---------------------------

                        PREMIER RESEARCH WORLDWIDE, LTD.
               (Exact name of issuer as specified in its charter)

         Delaware                                       22-3264604
 (State of incorporation)                  (I.R.S. Employer Identification No.)

                   30 South 17th Street Philadelphia, PA 19103
               (Address of Principal Executive Offices - Zip Code)

       Registrant's telephone number, including area code: (215) 972-0420

        Securities registered pursuant to Section 12(b) of the Act: None
           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $.01 par value

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
 Yes   X    No      
      ---  ---
The aggregate market value of the registrant's Common Stock, $.01 par value,
held by non-affiliates, computed by reference to the average of the closing bid
and asked prices of the Common Stock as reported by Nasdaq on March 29, 1999 was
$27,318,000

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

    Number of shares of Common Stock of the registrant issued and outstanding
                       as of March 25, 1999 was 7,058,720

                       DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III (items 10, 11, 12 and 13) is incorporated
by reference from the Registrant's definitive proxy statement for its Annual
Meeting of Stockholders, to be filed with the Commission pursuant to Regulation
14A, or if such proxy statement is not filed with the Commission on or before
120 days after the end of the fiscal year covered by this Report, such
information will be included in an amendment to this Report filed no later than
the end of such 120-day period.

                                       1
<PAGE>

ITEM 1. BUSINESS

General

         Premier Research Worldwide, Ltd. (the "Company") is a full-service
clinical research and consulting organization (CRO) that brings significant
added value to the clinical development process through the application and
integration of science, process and technology. The Company provides clinical
research products and services to the pharmaceutical, biotechnology and medical
device industries and creates client driven clinical R&D process solutions
through coupling the Company's in-depth understanding of clinical development
with technology and efficient workflow processes.

         The Company's products and services are provided, both in the United
States and internationally, through two business segments: Clinical Operations,
which include centralized diagnostic testing services and clinical trial and
data management services; and Technology Operations, which includes the
developing, marketing and support of clinical trial and data management
software, support and consulting services. See footnote 11 to the Consolidated
Financial Statements appearing herein for information pertaining to the amounts
of net revenue, operating profit and identifiable assets attributable to each of
the Company's industry segments for the Company's last three fiscal years.

         Within Clinical Operations, centralized diagnostic testing services
include ECG and transtelephonic monitoring, Holter monitoring, imaging and
pulmonary function testing which the Company then analyzes or interprets, and
clinical laboratory blood and urine testing. Clinical trial and data management
services include study protocol design, site and investigator recruitment,
patient enrollment, study monitoring and data medical services, report writing,
clinical data collection, analysis and reporting, biostatistical services and
regulatory affairs services.

         All of the Company's products and services are designed to help clients
reduce their product development time in a cost-effective manner. In 1977, the
Company's predecessor, Cardio Data Systems, began providing diagnostic testing
services used to evaluate the safety and efficacy of new drugs. Today, the
Company provides these services, which include electrocardiograms ("ECGs"),
Holter monitoring, transtelephonic monitoring, pulmonary function testing, blood
and urine sampling, and other tests, on a centralized basis. To take advantage
of the potential synergies and cross-selling opportunities with its centralized
diagnostic testing services, the Company added clinical trial management
capabilities in September 1995 by forming with PREMIER, Inc. (a large voluntary
hospital buying group), a limited liability company, which was owned 65% by the
Company and 35% by PREMIER, Inc. Upon the closing of the Company's initial
public offering of its Common Stock in February 1997, PREMIER, Inc.'s minority
interest in this limited liability company, held on behalf of certain member
hospitals, was converted into 330,150 shares of Common Stock of the Company.

         In October 1997, the Company acquired the assets and business of DLB
Systems, Ltd. ("DLB"), a provider of clinical trial and data management
software, support and information technology consulting services to the
pharmaceutical, biotechnology and device industry. The acquisition of DLB
provided the opportunity to extend the Company's clinical data management
expertise worldwide. The integration of the Company's rapid data acquisition and
review capacity and DLB's integrated clinical research system allows the Company
to offer technological advantages facilitating drug and medical device
development.


                                       2
<PAGE>
Company Products and Services

Clinical Operations

         Diagnostic tests are employed in clinical trials to measure the effect
of the product on certain body organs and systems, to determine the product's
safety and/or efficacy. Diagnostic testing services provided by the Company
include a variety of diagnostic tests, such as ECGs and Holter monitoring. These
services, which the Company provides on a centralized basis, are part of most
new drug studies. In most cases, the ECG and transtelephonic monitoring strips,
Holter monitoring tapes, imaging and pulmonary function computer disks samples
are delivered to the Company, which the Company then analyzes or interprets. The
Company provides a broad array of centralized diagnostic testing services,
including the following:

         12-lead Eletrocardiography. The ECG provides an electronic map of the
heart's rhythm and structure, and typically is performed in most clinical
trials. ECG strips are measured by the Company's analysts utilizing a digitizing
system, and are then interpreted by a Board-certified cardiologist.

         Modem ECG. Modem ECG will allow the investigator to telephonically
transmit 12 lead ECG data directly to the Company for interpretation and
immediate return of results back to the investigator. This technology will save
time and money and provide the investigator with immediate feedback as to the
viability of the patient for admission to the clinical trial or adverse side
effects. Modem ECG is in final testing and should be available to the Company's
clients during the first half of 1999.

         Holter Monitoring. Holter monitoring is a 24 hour continuous ECG
recording of the heart's rhythm on a cassette tape. 

         Transtelephonic Monitoring (TTM). TTM measures the electrical activity
of the heart, typically for 5 to 30 seconds. This data is transmitted over
telephone lines by patients carrying a self-activated transmitting device. This
test typically is utilized in trials seeking to identify symptomatic heart
rhythm events.

         Pulmonary Function Testing (PFT). PFT measures the lungs' capacity and
function by having the patient breathe into a spirometer.

         Diagnostic Imaging. This service is used in all clinical imaging
modalities, including standard radiography (e.g., x-rays), contrast-enhanced
radiography (e.g., angiography, studies of the gastrointestinal tract), computed
techniques (including CT scanning and MRI), nuclear medicine techniques and
ultrasonography to determine or confirm the condition of a patient.

         Clinical Laboratory Services. The Company performs centralized
reference testing of blood and urine samples for drug trials.

         The Company offers complete services for the design, performance and
management of clinical trial programs. The results of clinical trials form the
basis on which regulatory approval is granted for pharmaceutical and
biotechnology products and medical devices. The Company's multi-disciplinary
clinical research group and extensive network of consultants examine a product's
pre-clinical and clinical data to design protocols that will evaluate the
product's safety and efficacy. The Company can then manage every aspect of
clinical trials, including protocol and database design, site and investigator
recruitment, regulatory initiation, patient enrollment, study monitoring and
data collection, medical services and report writing.

         The Company's clinical trial and data management services include the
following:

         Study Protocol Design. The protocol defines the medical issues the
study seeks to examine and the statistical tests that will be conducted to
determine whether the product is safe and effective or, in some pharmacoeconomic
trials, whether it is cost-effective. Detailed in the protocol are: (i) the
number and type of clinical, laboratory and outcomes measures that are to be
tracked and analyzed, (ii) the number of patients required to produce a
statistically valid result, (iii) the period of time over which the patients
must be tracked and (iv) the dosage and frequency of drug administration or the
program of use of the relevant device.

                                       3
<PAGE>

         Site and Investigator Recruitment. The drug or device being tested is
administered to patients by physicians (investigators), at hospitals, clinics or
other locations (sites). Potential investigators are identified by a number of
means. In some cases, the sponsor has pre-selected investigators with whom it
wishes to work. The CRO generally solicits the investigator's participation in
the study. Each trial's success depends on the successful identification and
recruitment of investigators with an adequate base of patients who meet the
requirements of the study protocol. The Company has a database of several
thousand investigators, both within and outside the PREMIER, Inc. alliance of
hospitals. Access to this data allows the Company to readily identify the sites
and investigators able to provide the requisite patient population.

         Patient Enrollment. Investigators find and enroll patients suitable for
each study according to the protocol. The speed with which trials can be
completed is significantly affected by the rate at which patients are enrolled.
Inability to recruit a sufficient number of patients in a timely manner is a
recurring problem and one of the most frequent causes of clinical trial delays,
as well as a major source of cost overruns for the sponsor. The Company believes
that its contract with AmericasDoctor.com, Inc., the internet company providing
real-time physician chat, referrals and healthcare events on America Online's
health web page, could provide rapid identification and recruitment of
candidates to participate in clinical trials. During a three-week test period in
the fourth quarter of 1988, the Company received information on over 17,000
people who expressed an interest in volunteering for clinical research programs.
In addition, the Company believes that its affiliation with PREMIER, Inc. and
the resultant access to PREMIER, Inc.'s databases could additionally enhance the
Company's ability to quickly and cost-effectively recruit investigators and
patients for clinical trials. The Company believes that its access to both
AmericasDoctor.com, Inc. and PREMIER, Inc.'s patient databases can provide a
competitive advantage because it permits the Company to identify more precisely
exclusion and inclusion criteria, thereby maximizing patient recruitment without
jeopardizing patient safety.

         Regulatory Services. Each site is required to document compliance with
regulations governing the conduct of clinical trials, which must be completed
before a trial can be initiated. The use of the Company's DLB Monitor
facilitates this process by providing real-time tracking of the status of all
relevant documents to the Company and to the client.

         Study Monitoring and Data Collection. As patients are examined and
tests are conducted in accordance with the study protocol, data are recorded on
customized case report forms ("CRFs") and laboratory reports. Traditionally,
these data are reviewed at the study site by specially trained clinical research
associates, also known as CRAs or monitors. The CRAs compare the data to the
medical records at the site to reduce the possibility of fraud or error. The CRA
requires site personnel to correct errors to facilitate efficient data entry.
CRAs visit sites regularly to ensure that the CRFs are completed correctly and
that all data specified in the protocol are collected. CRFs are reviewed for
consistency and accuracy before their data are entered into an electronic
database.

         The Company also offers its clients three different mechanisms for
collecting clinical data and storing the data in one integrated database.
Through the use of its Technology Operations segment, the Company can offer (1)
traditional double entry ( where each piece of data is entered into a database
twice for consistency and accuracy checks); (2) web based remote data entry
through the use of the Company's DLB Recorder Remote; and (3) the
PremierResearch * Fax system, a fax based rapid data capture system based on a
combination of a commercially available technology (DataFax TM, Clinical DataFax
Systems Inc.) and procedures and software developed by the Company, which can
accelerate the completion, correction and review of accurate CRF data. The
PremierResearch * Fax system permits a CRF to be filled out by the investigating
site, faxed to the Company and reviewed using the Company's Navigator system
within days of a patient's visit. The data from the fax are automatically
downloaded into the Company's database by means of optical character recognition
and the results are carefully checked both by computer and by trained clinical
research personnel. Any errors are compiled and automatically faxed back to the
site for correction. This process allows a large portion of data errors to be
identified and corrected within a week of a given patient's visit, as opposed to
the traditional correction process that typically requires several weeks to
several months. The Company believes that correcting a large portion of the
errors as the trial progresses decreases the time and expense of clinical data
collections and is a significant competitive advantage.

         Medical Services and Report Writing. During the course of a clinical
trial, the Company may provide medical research services, including medical
monitoring of the clinical trials and interpretation of clinical trial results.
In addition, the statistical analysis of the data collected during a trial,
together with other clinical data, are included in a final report generated for
inclusion in a regulatory document. The Company's PremierResearch * CARD
(computer-assisted research and development) technology allows for immediate
correction of data and identification of safety and efficacy issues that may
change the course of the clinical development plan or accelerate its timeline.
The Company believes that this results in improved medical services.

                                       4
<PAGE>


         The Company has a history of technological innovation in the provision
of services in drug trials, including creating the first computer-assisted new
drug application ("CANDA") and creating over sixty-five CANDAs. The Company
believes that its technological expertise provides a competitive advantage in
the provision of clinical data management and biostatistical analysis services.

         The Company's data management professionals assist in the design of
protocols and CRFs, as well as the development of training manuals for
investigational staff to ensure that data are collected in a systematic format.
Once the study protocol has been finalized, CRFs for recording the desired
information must be developed. Different CRFs may be used at different
assessment periods during the course of a trial reflecting the variety of data
collected. The application of the Company's processes and technology increase
the accuracy and reduce the time and cost of data processing during the trial.
Databases are designed according to the analytical specifications of the project
and the particular needs of the client. The Company provides clients with data
listings, data review and coding, data entry, database verification and editing
and problem data resolution. In addition, the Company offers its clients the
ability to compile the clinical data for an electronic regulatory submission,
such as a CANDA.

         Biostatistical Analysis. The Company's biostatistics professionals
provide biostatistical consulting, database design, data analysis and
statistical reporting. These professionals develop and review protocols, design
appropriate analysis plans and design report formats to address the objectives
of the study protocol and the client's individual objectives. The Company's
programming staff and biostatisticians work together to perform appropriate
analyses and produce tables, graphs, listings and other applicable displays of
trial results. In addition, biostatisticians can assist clients in government
regulatory proceedings and in legal proceedings. 

         Regulatory Affairs Services. The Company provides comprehensive
regulatory product registration services for pharmaceutical, biotechnology and
medical device products in North America and Europe, including regulatory
strategy formulation, document preparation and intermediation with the FDA and
other regulatory agencies. The Company reviews published literature, assesses
the scientific background of a product and the competitive and regulatory
environment, identifies deficiencies and defines the steps necessary to obtain
registration in the most expeditious manner. Through this service, the Company
helps its clients determine the feasibility of developing a particular product
or product line.

Technology Operations

         The Company develops, markets and supports clinical trial and data
management software and provides software support and information technology
consulting services to pharmaceutical, biotechnology and medical device
companies. It also utilizes its technology internally to support its Clinical
Operations services to clients. To date, inter-segment sales have not been
material.

         The Company's software is designed to accelerate product development
and to improve the quality of clinical research by providing superior data
handling that facilitates analysis. The technology is developed for clinical
research personnel, rather than information technology specialists, enabling
medical reviewers to make timely and accurate decisions during the product
development process. The acquisition of DLB provided the opportunity to extend
the Company's clinical data management expertise worldwide. The integration of
the Company's rapid data acquisition and review capacity and DLB's integrated
clinical data management system allows the Company to offer technological
advantages facilitating drug and medical device development. The Company's
software is available on multiple platforms which facilitates integration with
the wide variety of systems used by its clients. The Company fully supports and
maintains its client's software installations through annual support agreements.
The annual support agreement entitle the client to ongoing telephone technical
support and improvements and application enhancement and product upgrades. The
Company also provides, for fee, complete software training and an array of
software migration and implementation consulting services. The Company's
clinical trial and data management software products include the following:

                                       5
<PAGE>


         DLB Recorder TM. The Company's DLB Recorder Clinical Data Management
System (Recorder) is a comprehensive solution for collecting, cleaning and
managing clinical trial data in any development environment, from single site to
worldwide operations. Recorder aids clinical data management by unifying and
simplifying case report design, database checking and data quality checking.
Recorder offers a three level data structure to effectively assemble new study
data for accelerated analysis and reporting according to company specifications,
therapeutic area requirements or protocol-specific standards. Recorder's unique
Object Cascade eases and simplifies managing changes to evolving standards. Data
entry can be accomplished through common processes or in a study by study manner
with verification and interactive checks from a single entry screen.

         Data integrity and quality problems can be identified by programming,
or industry-standard languages can be used to store complex checks in Recorder's
libraries for repeated use. Recorder offers a lifecycle discrepancy management
system to easily locate data discrepancies, then route them to in-house groups
or to the investigator for resolution. Recorder tracks the status of each
discrepancy either on-line or through standard reports, allowing application of
fully-audited solutions directly to the database.

         Recorder's flexibility of privileged access and control plus
hierarchical data locking allow multiple levels of security, flexibility and
blinding of data items for archiving data and/or creating interim database
"snapshots" prospectively or retrospectively. Recorder interfaces seamlessly
with SAS(R), exporting all data and definitions in SAS format directly through
SAS/ACCESS(R) pass-through views. Recorder offers standard reports or custom
reports can be built with any Oracle(R)-based reporting or query tool.

         Recorder's integrated randomization subsystem easily implements
treatment codes and other randomized aspects of clinical studies, whether
generated for an individual study design, a standardized study design, or
designs imported from other systems. Recorder allows for distribution of data
management operations across sites by operation as well as by individual study
for the greatest flexibility in replication, and to centralize maintenance of
standards or distribute them to other sites.

         Recorder's optional Global Dictionary and Codelist Manager subsystem
database structures and maintenance facilities are provided for all standard
medical dictionaries, including dictionary structures for company products,
institutes and investigators.

         DLB Recorder Remote TM. The Company's DLB Recorder Remote (Recorder
Remote) is a web based remote data entry system which enables the Company's
pharmaceutical, biotechnology and medical device clients to use standard web
browser tools to input data in real-time online or offline, which saves time and
reduces costs while maintaining a valid, clean central database. Recorder Remote
is currently in beta test and it is anticipated that it will be released to the
market in the first half of 1999.

         Users of Recorder can speed collection and integration of data via the
World Wide Web, using standard browser tools such as Netscape Navegator(R) or
Microsoft Internet Explorer(R). With Web-based distribution of information,
investigators, CRAs and medical directors can all be simultaneously aware of a
study's progress, enabling decisions to be made more quickly, and directives to
be transmitted at megabyte speed. Recorder Remote Data Capture System maintains
a full audit trail, and improves accuracy by performing data validation at the
point of entry.

         DLB Monitor TM. The Company's DLB Monitor and Field Monitor (Monitor)
create a comprehensive system and methodology for clinical trial management,
which supports the planning and management of a development program and
associated studies from Phase I through Phase IV.

                                       6
<PAGE>


         Monitor Clinical Trial Management Software is an effective tool for
ongoing coordination and management of clinical trials. Designed for maximum
flexibility and functionality, Monitor provides fast, accurate answers to
operational issues whenever they are needed. The tool enables managers to track
recruitment (by patient, center, region, protocol and program), contacts, site
visits, CRF milestones, grant and investigator payments, supplies and finances.
Monitor is a comprehensive project management system, supporting planning and
scheduling from the overall program to the individual patient, and provides
up-to-date reviews of the study's progress, either by desired completion date or
projected start date. Monitor integrates with popular desktop management tools
such as Microsoft Project(R), and can automatically transfer data between global
locations so all users can base decisions on the same current and consistent
information.

         Alert. Alert is a comprehensive clinical safety reporting system
providing a complete solution for multi-national regulatory compliance for
manufacturers of pharmaceuticals, biologics, consumer health care products and
medical devices. Alert Adverse Event Management Software, is an integrated tool
(integrated with Recorder and Monitor) for collecting and reporting safety data
analysis information providing complete, validated adverse event management
capabilities that meet the global needs of pharmaceutical, biotechnology,
medical device and healthcare companies. Alert allows reporting of adverse
events from multiple sources, including clinical trials, spontaneous events,
published articles and journals, and regulatory authority reports. Alert data
can be stored in company and/or product-specific databases, and is the only
system that provides the convenience of both single and double data entry, with
interactive batch verification of the second entry. Data may be validated at
entry or post-entry, and both high-volume and occasional data entry are
supported for managing and tracking cases and case workflow, supports
checklists, action items and reporting history. Ad hoc case reviews may be made
by Alert's fast Query-by-Example facility, or its more generalized Query
Builder, which allows selection of virtually any set of criteria for exploration
of any set of data fields in the database. Alert generates single- and
multi-case reports including FDA 3500A, Clinical Trial 10-Day Report, FDA
Periodic Report, Increased Frequency Report, CIOMS I/II, BfArM (Germany), EMEA
Spontaneous Report, EMEA Clinical Report, and AFM Report (France). It also
allows creation and storage of custom, company or site-specific templates for
tracking checklists which implement company-specific Standard Operating
Procedures (SOPs). Alert supports reconciliation of adverse event cases
submitted on CRFs with commercial or company-developed clinical data management
systems, and it cooperates efficiently with Recorder by utilizing
consistently-defined data items in both systems to reconcile adverse events in
either system that may not be found in the other, or that exist in both, with
any differences highlighted.

         The Company believes that its technology is attractive to its clients'
clinical groups, since it includes "user-friendly" tools specifically designed
for clinical research personnel. The Company believes that this provides a
competitive advantage, since this group is influential in CRO selection.

Technology Utilization and Development

         The Company has a history of technological innovation in the support of
clinical trials, including:

         The first electronic transfer of centralized diagnostic data, 
         eliminating manual key punching (1979), the

         First multi-site remote data entry system used by the FDA, partially
         replacing site monitoring (1984), the

         First computer-assisted new drug application, shortening regulatory
         review process (1985). The Company has since filed over 65 full data
         review CANDAs, and the

         First NDA Day, a one day intensive session between the FDA and the
         product's sponsor utilizing the interactive features and real-time data
         query capabilities of the CANDA (1988).First interactive CANDA,
         providing for the interactive review of clinical data by the FDA,
         further accelerating the regulatory review process (1993).

                                       7
<PAGE>


         The Company's technology, designed primarily for the internal use of
the Company to support Clinical Operations includes:

         PremierResearch * Navigator is the Company's proprietary, highly
interactive software system designed specifically for the review, analysis and
submission of clinical data in the new drug or device application process.
Navigator is a user friendly software designed to allow medical and regulatory
personnel to interactively review and analyze research data. The Company
believes that use of its Navigator system speeds both the product development
and regulatory review process, which allows the client to prioritize, change or
potentially terminate development of the product. The Company markets the
Navigator system for single clinical studies or single laboratory datasets under
the name PremierResearch * CARD (computer assisted research and development) and
for electronic regulatory submissions for pharmaceutical clients under the name
PremierResearch * CANDA.

         PremierResearch * Enterprise. Enterprise is a proprietary information
management system that permits efficient and timely delivery of diagnostic and
clinical trial data to the user. Enterprise integrates an entire set of data
from an individual patient in a clinical trial which is then available for
on-line review by project management, diagnostic services and clinical research
personnel. The Company believes that Enterprise facilitates and speeds product
development by making it easier for the Company, on behalf of the client, to
collect, store, retrieve and utilize the massive amounts of data traditionally
collected in clinical trials.



                                       8
<PAGE>


         PremierResearch * Fax. The Company has developed an overall
data-handling process based on the use of a commercial technology (DataFax TM,
Clinical DataFax Systems Inc.) supplemented by validation procedures and export
software and procedures allowing integration into the Company's proprietary
Navigator system in an overall system referred to as the PremierResearch * Fax
process. This system receives CRFs, electronically enters the information into
data bases, queries the site to correct data errors and inconsistencies, and
compiles the resultant database for rapid export into the Navigator system for
clinical review. The Company believes that the PremierResearch * Fax system can
accelerate the collection and correction of the CRF, which is filled out by
investigators at a site and faxed to the Company within days of the patient
visit. The data from the fax is downloaded into the Company's database by means
of optical character recognition and the results are carefully checked by both
the computer and trained clinical research personnel. Any errors are compiled
and automatically faxed back to the site for correction. This process allows a
large portion of data errors to be resolved within a week of a given patient's
visit, as opposed to the traditional correction process that typically requires
several weeks to several months. The Company believes that correcting a large
portion of errors as the trial progresses decreases the time and expense of
clinical data collection.

Strategic Investments and Relationships

         The company has sought and continues to seek strategic investments and
relationships to leverage its position in the market place by attracting new
technologies and/ or services to increase its capabilities and ability to
provide value added products and services.

         AmericasDoctor.com, Inc. In July, 1998, the Company made a $1 million
equity investment in AmericasDoctor.com, Inc. (formerly kmown as America's
Doctor), an internet company, which provides real-time physician chat, referrals
and healthcare events on America Online's Health web page. AmericasDoctor.com,
Inc. became fully operational in September 1998 and is providing one-on-one
doctor chat service using a state-of-the-art, 24 hour physician staffed call
center. The Company has an exclusive contract with AmericasDoctor.com, Inc. to
provide the Company with information on individuals who have expressed an
interest in participating in future clinical trials. During a three week test
period in the fourth quarter of 1998, the Company received information on over
17,000 people who expressed an interest in volunteering for clinical research
programs. Since patient recruitment remains the single largest cause of delayed
clinical trials, such a large source of referrals may be advantageous in the
future to the Company as well as other clinical research organizations and the
patient recruitment efforts of clinical trial sponsor organizations.


                                       9
<PAGE>
         RX2OTC Joint Venture. During the third quarter of 1998, PRWW entered
into a strategic relationship with Nelson Communications Inc., one of the
leading independent providers of marketing and communication services to the
healthcare industry. The Company formed a joint venture with Nelson, named
RX2OTC, which will focus on the expanding business segment of bringing
prescription products to the over-the-counter market. The combination of the
Company's clinical science, process and technology expertise and Nelson's market
research, strategy and communications expertise might result in a creative
resource for those healthcare companies looking to take products to the OTC
market in a more timely manner.

         PREMIER, Inc. In September 1995, the Company with PREMIER, Inc. formed
a limited liability company, owned 65% by the Company, for the provision of
clinical research services. Upon the Company's initial public offering of its
Common Stock in February 1997, PREMIER, Inc.'s interest in the limited liability
company converted into 330,150 shares of the Company's Common Stock which is
held by PREMIER, Inc. on behalf of certain of its affiliated hospitals.

         PREMIER, Inc. is a voluntary hospital buying group of more than 230
independent, not-for-profit health systems in fifty states which operate or are
affiliated with approximately 1,700 hospitals. Healthcare organizations purchase
goods and services worth approximately $8.5 billion a year through PREMIER, Inc.
group contracts. PREMIER, Inc. is considered the largest committed healthcare
group purchasing organization in the world.

         The agreement between PREMIER, Inc. and the Company gives the Company
access to information about PREMIER, Inc.'s pharmaceutical contacts as well as
access to PREMIER, Inc.'s databases of patients and physicians for use in
connection with the Company's clinical research studies. The Company, in turn,
has agreed that PREMIER, Inc.'s affiliated hospitals will be utilized as
investigator sites for these studies; however, the Company is not restricted
from using investigator sites outside the PREMIER, Inc. alliance.

Sales and Marketing

         The Company's marketing strategy is to focus on prospective clients
whose product development projects are complex. The Company's sales staff
maintains direct contacts and relationships with clients and prospective
clients. The Company believes that a large percentage of its clients have been
referred by others in the industry, and its salespeople seek to foster such
referrals.

         During 1998, the Company successfully integrated the Clinical
Operations and Technology Operations sales forces into a cohesive multi
product/service focused organization. The sales force has extensive
pharmaceutical, biotechnology, medical device, software and consulting
experience which, under the team selling concept, presents the client with a
full picture, integrated solution to the clinical trial process.

         The Company believes that its technology is attractive to the clinical
staff of its clients because of its "user-friendly" tools specifically designed
for clinical research personnel. The Company believes that this provides it with
a competitive marketing advantage, since such personnel are influential in CRO
selection.

         While the Company seeks new clients, it also attempts to increase
repeat business with existing clients by meeting high quality and timely
performance standards and through proactive project management. Approximately
72% of net revenues in 1998 were derived from clients for which the Company
previously has performed services. When the Company increases the amount of
business with an existing client, both benefit from the efficiencies of using
proven systems already in place for study conduct and data delivery.

         The Company uses direct mailings of brochures and marketing materials
to existing and prospective clients and advertises in trade journals and similar
publications. The Company also attends and exhibits at selected trade shows in
the United States and Europe.

Clients

         Over the last three years, the Company has provided services to 22 of
the top 25 pharmaceutical companies in the world as ranked by 1997 research and
development expenditures as reported by Med Ad News. During 1998, pharmaceutical
companies accounted for approximately 63% of the Company's net revenues. In the
future, as the Company expands its clinical research services, it expects that
biotechnology and medical device companies will account for a more significant
percentage of its net revenues. During 1998, the Company provided services under
289 contracts for 91 clients, including some of the largest pharmaceutical
companies in the United States, Europe and Japan. During 1996, Sandoz
Pharmaceuticals Corporation and Zeneca Pharmaceuticals accounted for
approximately 15.3% and 10.1% of the Company's net revenues, respectively.
During 1998 and 1997, no single client accounted for more than 10% of the
Company's net revenues. The loss of any significant client could have a material
adverse effect on the Company's net revenues.

                                       10
<PAGE>

Forward Load Backlog

         The company's forward load backlog (also commonly referred to as
backlog) consists of anticipated net revenues from work under letters of intent
and contracts that have been signed but not yet completed. Once work under a
contract or letter of intent commences, revenues are generally recognized over
the life of the contract, which generally lasts from one month to two years.

         Forward load backlog excludes anticipated net revenues from projects
for which the Company has commenced work but for which a definitive contract or
letter agreement has not been executed. Forward load backlog at December 31,
1998 for Clinical Operations was approximately $33 million as compared to a
backlog of $30 million at the end of 1997. The Company experienced growth in
both centralized diagnostic testing services and in clinical data management
services. The growth was somewhat offset by a decline in the backlog for the
clinical laboratory portion of centralized diagnostic testing as the Company,
during 1998, chose not to actively promote this smaller, less profitable portion
of the business. The Company believes that backlog for Technical Operations is
not meaningful and has not been included in the backlog figures as delivery
times for software products and consulting services are relatively short and
therefore the backlog from year-to-year can change dramatically.

         The Company believes that its Clinical Operations forward load backlog
as of any date is not necessarily a meaningful predictor of future results.
Clinical studies under contracts included in the forward load backlog are
subject to termination or delay. Clients terminate or delay contracts for a
variety of reasons including, among others, the failure of products being tested
to satisfy safety requirements, unexpected or undesirable clinical results of
the product, the client's decision to forego a particular study, insufficient
patient enrollment or investigator recruitment or production problems resulting
in shortages of the drug. Most of the Company's contracts are terminable without
cause upon 30 to 90 days notice by the client. The Company frequently is
entitled to keep any portion of any advance payment and receive certain fees for
winding down a study that is terminated or delayed.

Competition

         The decision of whether to outsource can place the Company in
competition with a client's in-house development group. However, once the
decision is made to outsource, the Company primarily competes against other full
service CROs and, to a lesser extent, universities and teaching hospitals. Some
of these competitors have substantially greater capital, technical and other
resources than the Company. Large CROs with which the Company competes include
Quintiles Transnational Corporation, ClinTrials Research, Inc., Covance, Inc.,
Kendle, Pharmaceutical Product Development, Inc. and PAREXEL International
Corporation. CROs generally compete on the basis of experience, medical and
scientific expertise in specific therapeutic areas, the quality of clinical
research, the ability to organize and manage large-scale trials on a global
basis, the ability to manage large and complex medical databases, the ability to
provide statistical and regulatory services, the ability to recruit
investigators and patients, the ability to integrate information technology with
systems to improve the efficiency of clinical research, an international
presence, financial viability and price. The Company believes that it competes
favorably in all of these areas.

         The CRO industry is highly fragmented, with participants ranging from
several hundred small, limited-service providers to a few large, full-service
CROs with global operations. The trend toward CRO industry consolidation has
resulted in heightened competition among the CROs for clients. In addition,
consolidation within the pharmaceutical industry, as well as a trend by
pharmaceutical companies to outsource to fewer CROS, has heightened competition
among CROs for contracts from that industry. The Company believes major
pharmaceutical, biotechnology and medical device companies tend to develop
preferred provider relationships with full-service CROs, effectively excluding
smaller CROs from the bidding process. The Company may find reduced access to
certain potential clients due to these arrangements.

                                       11
<PAGE>


         The Company's Technology Operations segment, DLB, competes primarily
with Fraser Williams and Clinarium in the trial management area. Its data
management competitors include Domain, Oracle Clinical and DZS. In addition the
Company vies for business primarily with Domain and Clinarium in the safety
arena. In all areas, the primary competitive differentiator for DLB is
implementation certainty, which includes a fixed cost and time frame and assured
accuracy and completeness.

Government Regulation

         Human pharmaceutical products, biological products and medical devices
are subject to rigorous regulations by the federal government, principally the
Food and Drug Administration (FDA), and foreign governments if products are
tested or marketed abroad. In the United States, the Federal Food, Drug and
Cosmetic Act (FFDCA) governs clinical trials and approval procedures as well as
the development, manufacturing, safety, labeling, storage, record keeping and
marketing of pharmaceutical products and medical devices. Biological products
are subject to similar regulation under both the FFDCA and the Public Health
Service Act. Because the Company offers services relating to the conduct of
clinical trials and the preparation of the marketing applications, the Company
is obligated to comply with applicable regulatory requirements governing these
activities, both in the United States and in foreign countries. Requirements
governing these activities vary from country to country.

         In the United States, the Company is subject to inspection by the FDA
to evaluate compliance with applicable requirements governing the conduct of
clinical trials. If the FDA discovers that the Company has violated applicable
requirements relating to the conduct of clinical trials or the preparation of
marketing applications, discussed in more detail below, the FDA may take
enforcement action such as issuance of a Warning Letter; termination of a
clinical study; refusal to approve clinical trial or marketing applications or
withdrawal of such applications; injunction; seizure of investigational
products; civil penalties; or recommending criminal prosecutions. Pursuant to
the FDA's fraud policy, the FDA generally will refuse to approve a pending
clinical trial or marketing application, or withdraw such application, if it
discovers conduct such as submission of fraudulent applications, making untrue
statements of material facts, or giving or promising bribes or illegal
gratuities. The Company also is subject to both mandatory and permissive
debarment by FDA, which would prohibit the Company from assisting in the
submission of abbreviated new, drug applications for generic drugs. Conviction
of criminal conduct relating to the development or approval of an abbreviated
drug application is a prerequisite to such debarment. Such sanctions could have
a material adverse effect on the Company. The Company believes that it is in
material compliance with all applicable governmental regulations.

         The following is a summary of the specific requirements relating to the
clinical testing and approval of drugs, biologics and devices:

Drug Development and Approval in the United States - An Overview

         Drug products marketed in the United States usually require approval by
the FDA before marketing. The steps required before a new prescription drug may
be marketed in the United States include (i) preclinical laboratory and animal
tests; (ii) the submission to the FDA of an Investigational New Drug application
("IND"), which must be evaluated and found acceptable by the FDA before human
clinical trials may commence; (iii) adequate and well-controlled human clinical
trials to establish the safety and effectiveness of the drug; (iv) the
submission of a New Drug Application ("NDA") to the FDA; and (v) FDA approval of
the NDA. The Company's services relate to steps (ii) through (iv) of this
process.


                                       12
<PAGE>

         Clinical trials to evaluate the safety and effectiveness of drugs are
generally conducted in three sequential phases that may overlap. In Phase I
(typically lasting from 6 months to one year), the drug is introduced into a
small number of human subjects, usually healthy volunteers, to determine safety
(adverse effects), dosage tolerance, metabolism, distribution, excretion and
clinical pharmacology. Phase II (typically lasting from one to two years)
involves clinical trials in a limited patient population to determine the
effectiveness of the pharmaceutical for specific targeted indications, to
determine dosage tolerance and optimal dosage and to identify possible adverse
side effects and safety risks. After a compound has been shown in Phase II
trials to have an acceptable safety profile and probable effectiveness, Phase
III trials (typically lasting from 2 to 3 years) are undertaken in an expanded
patient population at multiple clinical sites to further evaluate clinical
effectiveness and safety within an expanded patient population.

         Prior to commencing each phase of a clinical trial, a drug sponsor must
submit an IND application to the FDA. The IND application must contain, among
other things, protocols for each study; a description of the composition,
manufacture, and control of the drug substance and the drug product; information
about pre-clinical pharmacological and toxicological studies of the drug; and a
summary of previous human experience with the investigational drug. Unless the
FDA objects, the IND will become effective 30 days following its receipt by the
FDA. If the FDA has concerns about the proposed clinical trial, it may delay the
trial and require modifications to the trial protocol prior to permitting the
trial to begin. In addition, all clinical trials of new drugs must obtain
approval of the institutional review board ("IRB") at each institution at which
the trial is conducted. The IRB reviews the study to verify the method of
experimentation and safety, and to ensure that subjects give their informed
consent to participate in the clinical trial.

         When results from a Phase II or Phase III study show promise in the
treatment of a serious or immediately life-threatening disease in patients for
whom no comparable or satisfactory alternative drug or other therapy exists, the
FDA may allow the manufacturer to make the new drug available to a larger number
of patients through the regulated mechanism of a treatment IND. Although less
scientifically rigorous than a controlled clinical trial, the treatment IND
facilitates availability of promising drugs to ill patients prior to general
marketing and also allows sponsors to obtain additional data on the drug's
safety and effectiveness. In general, treatment use of an investigational drug
is conditioned upon compliance with safeguards of the IND process such as
informed consent, IRB approval, and other requirements.

         Once a clinical trial with proper IRB and IND approval is commenced,
the conduct of the clinical trial is governed by extensive FDA regulations.
Clinical trial sponsors (i.e., the persons who initiate the trials but do not
actually conduct the investigations) are responsible for the selection of
qualified investigators, providing investigators with protocols and other
necessary information, monitoring the investigation, reporting changes in study
protocol to the FDA, reporting to the FDA and investigators safety reports of
serious and unexpected adverse experiences associated with use of the drug, and
maintaining records concerning the study. To the extent that the Company
performs these functions on behalf of a drug sponsor, the Company must comply
with these requirements.

         Upon completion of clinical trials that demonstrate the safety and
efficacy of a new drug, a drug sponsor must submit an NDA and obtain FDA
approval of an NDA prior to marketing the drug. The NDA must include information
pertaining to the composition, manufacture, and specification of the drug
substance; a description of the preclinical studies; a description of the human
pharmacokinetic data and human bioavailability data; descriptions of clinical
investigations; a statistical evaluation of the clinical data; and proposed
labeling. Submission of an NDA does not assure the FDA approval for marketing.
The application review process generally takes at least two to three years to
complete, and the FDA may require additional data or other studies during the
course of its review. Notwithstanding the submission of such data, the FDA
ultimately may decide that the application does not satisfy its regulatory
criteria for approval. Finally, the FDA may require additional clinical testing
following NDA approval to confirm safety and efficacy (Phase IV clinical tests).
No assurance exists that clinical studies conducted will provide sufficient
information to support the filing of an NDA.

         Clinical trials may be conducted outside of the United States without
an IND. The FDA will accept data from such foreign clinical trials to support
clinical investigations in the United States and/or approval of an NDA only if
the agency determines that the trials are well-designed, well-conducted,
performed by qualified investigators, and conducted in accordance with
internationally recognized ethical principles.

                                       13
<PAGE>


         Less extensive approval requirements can apply to generic drugs.
Abbreviated requirements are applicable to drugs that are, for example, either
bioequivalent to brand name "pioneer" drugs, or otherwise similar to pioneer
drugs, such that all the safety and efficacy studies previously conducted on the
pioneer product need not be repeated for approval. Changes in approved drug
products, such as in the delivery system, dosage form or strength, can also be
the subject of abbreviated application requirements.

Biological Product Development and Approval in the United States - An Overview

         Like drugs and medical devices, biological products (i.e., those
derived from living materials of humans, plant, animals or microorganisms, such
as vaccines) are subject to extensive regulation by FDA. Biological products are
regulated primarily under the Public Health Service Act, but are also subject to
regulation under the FFDCA.

         While some biological products may be approved for marketing via a new
drug application ("NDA"), most manufacturers must obtain two licenses from FDA
prior to marketing a biological product: a license for the manufacturing
establishment, and a product license. In order to obtain a product license, a
manufacturer must obtain FDA approval of a product license application ("PLA").

         Similar to an NDA, a PLA must contain the following information:
nonclinical and clinical data demonstrating the product's safety, purity and
potency; a description of the manufacturing methods; data regarding the
product's stability; test results for the lots represented by the submitted
samples, and samples of the product and its labeling.

         The sponsor of a clinical trial involving a biological product must
file an IND with FDA, unless the product is exempt from such requirement. Once
the IND becomes effective, the conduct of the clinical trial is governed by the
same regulatory requirements governing drug clinical trials. Thus, to the extent
that the Company performs these functions on behalf of the biological product
sponsor, the Company must comply with these requirements.

Device Development and Approval in the United States - An Overview

         The FFDCA and regulations thereunder require that, unless exempted by
regulation, all products meeting the statutory definition of "device" receive
the FDA clearance of a premarket notification (510(k)) submission or FDA
approval of a premarket approval ("PMA") application prior to marketing in the
United States. Generally, devices are distinguished from drugs through the
characteristic of acting or achieving their effect through means other than
pharmacologic action.

         The FDA categorizes medical devices into three regulatory
classifications (Class I, II, and III) on the basis of controls deemed
reasonably necessary to ensure their safety and effectiveness. Class I devices
are subject to general controls (e.g., labeling, pre-market notification, and
adherence to good manufacturing practice regulations for medical devices), and
Class II devices are subject to general controls and special controls (e.g.,
performance standards, post-market surveillance, patient registries and FDA
guidelines). Class III devices (generally including life-sustaining,
life-supporting, or implantable devices, or new devices that have been found not
to be substantially equivalent to a legally marketed predicate device) are those
which must receive pre-market approval ("PMA") prior to marketing.

         Before a new device can be introduced into the market, the manufacturer
must generally obtain marketing clearance or approval through either a 510(k)
pre-market notification or a PMA. A 510(k) clearance will be granted if the
submitted information establishes that the proposed device is "substantially
equivalent" to a legally marketed "predicate" device (i.e., a Class I or II
medical device, or to a Class III medical device for which the FDA has not
called for a PMA). The 510(k) must include, among other information, proposed
labeling and advertisements; data demonstrating substantial equivalence to a
claimed predicate; and any additional information regarding the device requested
by the FDA that is necessary to make a finding as to substantial equivalence to
a predicate device. The FDA can require clinical studies to demonstrate that a
device is as safe and effective as the predicate device. The FDA recently has
been requiring a more rigorous demonstration of substantial equivalence than in
the past. It generally takes from four to twelve months from submission of a
510(k) to obtain 510(k) clearance, but it may take longer. The FDA may determine
that a proposed device is not substantially equivalent to a legally marketed
device, or that additional information or data are needed before a substantial
equivalence determination can be made.

                                       14
<PAGE>


         If a manufacturer cannot establish that a proposed device is
substantially equivalent to a legally marketed predicate device, the
manufacturer must seek pre-market approval of the proposed device from the FDA
through the submission of a PMA application. A PMA application must be supported
by extensive data, including non-clinical laboratory studies or animal testing;
clinical trial data; and a bibliography of all published reports reasonably
known to the manufacturer concerning safety or effectiveness. In addition, the
PMA must include a full description of the device and its components; the
principle of operation of the device; a full description of the methods,
facilities and controls used for manufacturing, processing, packing, storage
and, where appropriate, installation; and proposed labeling. Upon receipt of a
PMA application, the FDA makes a threshold determination as to whether the
application is sufficiently complete to permit a substantive review. If the FDA
determines that the PMA application is sufficiently complete to permit a
substantive review, the FDA will accept the application for filing.

         Once the submission is accepted for filing, the FDA begins an in-depth
review of the PMA. An FDA review of a PMA application generally takes one to two
years from the date the PMA application is accepted for filing, but may take
significantly longer. The review time is often significantly extended by the FDA
asking for more information or clarification of information already provided in
the submission. During the review period, an advisory committee, typically a
panel of clinicians, will likely be convened to review and evaluate the
application and provide recommendations to the FDA as to whether the device
should be approved. The FDA is not bound by the recommendations of the advisory
panel. If the FDA's evaluation of the PMA application is favorable, the FDA will
issue either an approval letter or an approvable letter, which usually contains
a number of conditions which must be met in order to secure final approval of
the PMA. When and if those conditions have been fulfilled to the satisfaction of
the FDA, the FDA will issue a PMA approval letter, authorizing marketing of the
device for certain indications. If the FDA's evaluation of the PMA application
is not favorable, the FDA will deny approval of the PMA application or issue a
"not approvable" letter. The FDA may also determine that additional clinical
trials are necessary, in which case PMA approval may be delayed for several
years while additional clinical trials are conducted and submitted in an
amendment to the PMA.

         Human clinical trials are always required to support a PMA application,
and may be required to support a 510(k) submission. If the device involved
presents a "significant risk" to the patient, the clinical trial sponsor must
obtain IRB approval for the study and must file an investigational device
exemption ("IDE") application with the FDA prior to commencing human clinical
trials. The IDE application must include reports of prior clinical and
nonclinical investigations of the device; an investigational plan; a description
of the methods, facilities, and controls used for the manufacture, processing,
packing, storage, and, where appropriate, installation of the device;
information concerning the investigators participating in the study and the
IRB's that approved the study; copies of labeling; copies of forms to be
provided to subjects to obtain informed consent; and other relevant information
requested by the FDA. As with IND applications, the IDE will become effective 30
days following its receipt by the FDA unless the FDA objects to the application.
If the FDA has concerns about the proposed clinical trial, it may delay the
trial and require modifications to the trial protocol prior to permitting the
trial to begin. Clinical trials involving a device that presents a
"nonsignificant risk" to the patient may begin after the sponsor has obtained
approval by one or more appropriate IRB'S, but not the FDA. Such investigations
are, nevertheless, subject to informed consent requirements, monitoring by the
sponsor, and record keeping requirements.

         As discussed with respect to clinical studies involving drugs, the FDA
strictly regulates the conduct of all clinical trials involving medical devices,
regardless of whether the clinical trial is conducted under an IDE. The sponsor
of a clinical study involving a device is responsible for ensuring that proper
IRB and/or FDA approval is obtained prior to commencing the study, selecting
qualified investigators and informing investigators of all necessary
information, monitoring the investigation, informing the IRB and the FDA about
significant new information pertaining to the investigation, and maintaining
accurate and current records concerning the investigation. The sponsor must
evaluate unanticipated adverse effects and terminate the study if it presents an
unreasonable risk to subjects. To the extent that the Company performs these
functions on behalf of a investigational device sponsor, the Company must comply
with these requirements.

                                       15
<PAGE>


         The FDA will accept foreign clinical studies involving devices that are
not conducted under an IDE if the data are valid and the investigator has
conducted the studies in conformance with the "Declaration of Helsinki" or the
laws and regulations of the country in which the research is conducted,
whichever accords greater protection to human subjects. Foreign clinical data
that meets these requirements may form the sole basis for PMA approval if the
foreign data are applicable to the United States population and medical
practice, studies were performed by clinical investigators of recognized
competence, and (if necessary) the FDA validates the data through an on-site
inspection or other means.

CLIA Requirements - An Overview

         The Company's clinical laboratory services are subject to the
requirements of the Clinical Laboratory Improvement Amendments of 1988 ("CLIA").
This law requires all laboratories to meet specified standards in the areas
including personnel qualification, administration, participation in proficiency
testing, patient test management, quality control, and quality assurance. In
addition, laboratories such as the Company's clinical laboratory must obtain
appropriate certification under CLIA. The Company has obtained such
certification for its clinical laboratory.

         Under CLIA, the Company's clinical laboratory is subject to inspection
by the United States Department of Health and Human Services or a designee.
Violations of the CLIA requirements may result in sanctions including
suspension, limitation, or revocation of certification; enjoinment of laboratory
activities; civil money penalties; or criminal prosecution for intentional
violations. There can be no assurance that the regulations under, and future
administrative interpretations of, CLIA will not have an adverse impact on the
Company's services in this area.

Foreign Regulatory Requirements

         The Company also is subject to foreign regulatory requirements
governing clinical trials and product approval requirements. Whether or not the
FDA approval has been obtained to conduct a clinical trial or market an
FDA-regulated product, approval by comparable regulatory authorities in foreign
countries usually must be obtained to conduct such activities in those
countries.

Potential Liability and Insurance

         The Company attempts to manage its risk of liability for personal
injury or death to patients from administration of products under study through
contractual indemnification provisions with clients and through insurance
maintained by the Company and its clients. Contractual indemnification generally
does not protect the Company against certain of its own actions, such as
negligence. The terms and scope of such indemnification vary from client to
client and from trial to trial. Although most of the Company's clients are
large, well capitalized companies, the financial viability of these
indemnification provisions cannot be assured. Therefore, the Company bears the
risk that the indemnifying party may not have the financial ability to fulfill
its indemnification obligations. The Company also maintains professional
liability insurance in the amount of $1 million per claim and in the aggregate
and an umbrella policy of $5 million. The Company could be materially and
adversely affected if it were required to pay damages or incur defense costs in
connection with a claim that is beyond the scope of an indemnity provision or
beyond the scope or level of insurance coverage maintained by it or the client
or where the indemnifying party does not fulfill its indemnification
obligations.

Intellectual Property

         The Company's services have been enhanced by significant investment in
information technology. The Company's information services group is committed to
achieving operating efficiencies through technical advances. The Company has
developed certain computer software and technically derived procedures that it
seeks to protect through a combination of contract law, trademarks, and trade
secrets. Although the Company does not believe that its intellectual property
rights are as important to its results of operations as are such factors as
technical expertise, knowledge, ability and experience of the Company's
professionals, the Company believes that its technical capabilities provide
significant benefits to its clients.


                                       16
<PAGE>


Employees

At December 31, 1998, the Company had 274 employees. At its US locations, the
Company had 227 employees (217 full-time, 10 part-time). At its UK locations,
the Company had 47 employees (all full-time). On December 31, 1998, 39 employees
held M.D., Ph.D. or other masters or post-graduate degrees. The Company believes
that its relations with its employees are good.

ITEM 2.  PROPERTIES

         The Company leases all of its facilities. The Company's principal
offices are located in Philadelphia, PA. On January 3, 1999 the Company moved
into new Philadelphia facilities, comprised of approximately 58,000 square feet
under a lease expiring in 2005. The Company also maintains offices of
approximately 9,000 square feet in Peterborough, UK and 6,875 square feet in
Maidenhead, UK. The Peterborough and Maidenhead leases expire in 2009 and 2004,
respectively. The Peterborough lease contains a termination option as of June
30, 1999. The Company has notified the landlord of its intent to exercise the
termination option and has identified a smaller facility at a comparable cost
per square foot.

         The Company's DLB operations are located in Bridgewater, New Jersey,
where it leases approximately 10,600 square feet. The Bridgewater lease expires
in 1999. The Company believes that the leases generally reflect market rates in
their respective geographic areas.

ITEM 3. LEGAL PROCEEDINGS

         The Company is involved in legal proceedings from time to time in the
ordinary course of its business. Management believes that none of these legal
proceedings will have a material adverse effect on the financial condition or
results of operations of the Company.

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

         The Company did not submit any matters during the fourth quarter of the
year covered by this Report to a vote of the security holders through the
solicitation of proxies or otherwise.


                                       17
<PAGE>


SPECIAL ITEM. EXECUTIVE OFFICERS OF REGISTRANT

         Officers are elected by the Board of Directors and serve at the
pleasure of the Board. The executive officers of the Company are as follows:
<TABLE>
<CAPTION>

         Name                           Age               Position
         ----                           ---               --------
<S>                                     <C>               <C>      
Joel Morganroth, M.D                    53                Chief Executive Officer
Joseph Esposito                         45                President & Chief Operating Officer
David Dworaczyk, Ph.D.                  43                Sr. Vice President, Business Development
Barry Sachais, Ph.D.                    57                Sr. Vice President, Clinical Operations
Glenn Cousins                           41                Sr. Vice President, Diagnostic Services
David A. Evans                          41                Sr. Vice President & Chief Technical Officer
Fred M. Powell                          37                Vice President, Finance and Administration
</TABLE>

         Dr. Morganroth has served as the Chief Executive Officer of the Company
since 1993 and as a Director of the Company since 1997. In addition, Dr.
Morganroth has consulted for the Company since 1976. Dr. Morganroth was a
Professor of Medicine and Pharmacology at Hahnemann University from 1982 to
1992, and served as a Director of Cardiac Research and Development at the
Graduate Hospital of Philadelphia from 1987 until 1992. Currently, Dr.
Morganroth is an Adjunct Professor of Medicine (Pharmacology) at Jefferson
Medical College of Thomas Jefferson University and Clinical Professor of
Medicine at the University of Pennsylvania School of Medicine. Dr. Morganroth is
an internationally recognized cardiologist and clinical researcher. He served
for over ten years as a Medical Review Officer/Expert for the FDA and since 1995
has served in a similar capacity for the Health Protection Branch of Canada.

         Mr. Esposito joined the Company as President of DLB Systems in October
1997 and became President and Chief Operating Officer of Premier Research
Worldwide in April 1998. From May 1997 until joining the Company, Mr. Esposito
had served as President of DLB Systems, Inc. In addition, Mr. Esposito served as
President, Worldwide Operations for Computron (1994-1997) and held various
senior management positions at Ross Systems, Inc. (1991-1994). From 1979 to
1991, Mr. Esposito held various senior management positions with Wang, which
produced computing equipment related to peripheral devices and workflow/image
management software.

         Dr. Dworaczyk joinded the Company as Senior Vice President, Business
Development in April 5, 1998. Prior to joining the Company, he held several
senior management positions at Solvay Pharmaceuticals from 1989 to 1997
including the position of Director of Computer Aided Registration Statements.
After leaving Solvay and until joining Premier Research, he founded and operated
his own consulting company focused on drug and medical device development. He
has been actively involved in the pharmaceutical industry for over 18 years and
has worked in addition at Norwich Eaton Pharmaceuticals and DuPont
Pharmaceuticals. His professional experience encompasses domestic and
international research and development, commercial operations, business
development and strategic planning.

         Dr. Sachais joined the Company as Vice President-Clinical Research in
September 1997 and was named Senior Vice President-North American Operations in
April 1998. Prior to joining the Company, he held the position of Vice President
of Clinical Research for Quintiles CNS in San Diego from 1993 to 1997 and
Director of Clinical research at Kendle from 1991 to 1993. He has spent more
than 30 years in the pharmaceutical development area including 14 years at Ciba
Geigy and 7 years with Sandoz. The majority of his career, Dr. Sachais has
managed CNS Drug Development. In that regard, he was vice president in the CNS
therapeutic area at Ciba Geigy. Dr. Sachais received his Ph.D. degree in
pharmacology from New Jersey College of Medicine in 1968.

         Mr. Cousins has served in various capacities since joining the Company
in 1980. Mr. Cousins has served as Senior Vice President, Diagnostic Services
since 1998. He served as Vice President and Chief Operating Officer of the
Company from 1993 to 1996 and as President, Diagnostic Services from 1996 to
1998.

         Mr. Evans has served as Senior Vice President and Chief Technical
Officer since January 1994. Mr. Evans, who joined the Company in 1980, has also
served as Vice President (1989-1990) and Executive Vice President (1991-1993).
Mr. Evans led the Company's effort to provide CANDAs and was the principal
designer of the first CANDA.

                                       18
<PAGE>


         Mr. Powell has served as Vice President, Finance and Administration and
Chief Financial Officer of the Company since 1995. Since joining the Company in
1993, Mr. Powell also has served as Director of Finance and Administration
(1993-1995) and Director of Finance (1993). Prior to joining the Company, Mr.
Powell was employed as an Assistant Controller for Crown Textile Co.
(1989-1993), and as a Senior Manager of KPMG Peat Marwick LLP. While at KPMG
Peat Marwick LLP, Mr. Powell specialized in the pharmaceutical and service
industries.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's Common Stock has been traded on The Nasdaq National
Market System since February 4, 1997, under the symbol "PRWW". Before February
1997, no established public trading market existed for the Company's Common
Stock. Below is the range of high and low sales information for the Common Stock
for the following quarters as quoted on The Nasdaq National Market System:

Calendar Period                                 High                   Low
---------------                                 ----                   ---
1998
First Quarter                                 $13.000               $4.500
Second Quarter                                  6.375                4.500
Third Quarter                                   5.500                3.750
Fourth Quarter                                  6.125                2.750

1997
First Quarter (February 4 - March 31)         $26.250              $13.125
Second Quarter                                 17.000                5.375
Third Quarter                                  12.000                7.625
Fourth Quarter                                 14.250                6.250

No dividends were paid on the Common Stock in 1997 or 1998. The Company plans to
retain future earnings to fund the development and growth of its business and
therefore does not anticipate paying cash dividends in the foreseeable future.

         During 1998, the Company issued 279,120 shares of its Common Stock upon
exercise of outstanding options pursuant to its 1993 Non-Qualified Stock Option
Plan, for which it received $633,602. The issuance of such shares was exempt
from the registration requirements of the Securities Act of 1933, as amended,
pursuant to Rule 701 promulgated under said Act.

         As of March 15, 1999, there were approximately 1,200 holders of record
of the Company's Common Stock.

         In its initial public offering, the Company sold 2,206,250 shares of
Common Stock (including over-allotments), pursuant to its Registration Statement
on Form S-1, File No. 333-17001 (the "Registration Statement"), which was
declared effective by the Securities and Exchange Commission on February 3, 1997
(the "Effective Date"). The gross proceeds to the Company from the IPO were
approximately $37,506,000, and, after underwriting discounts and commissions,
expenses paid to or for the benefit of underwriters, and other costs of the IPO,
net proceeds to the Company were approximately $34,182,000.

                                       19
<PAGE>


         From the Effective Date to December 31, 1998, the Company purchased
approximately $4,861,000 of property and equipment, used approximately
$3,176,000 for working capital, $5,668,000 for short-term investments,
$8,655,000 for the purchase of DLB and $1,000,000 for an equity investment in
AmericasDoctors.com, Inc.

         None of the foregoing payments resulted in direct or indirect payments
(i) to directors or officers of the Company, nor their associates, (ii) to
persons owning 10% or more of the Common Stock of the Company, nor (iii) to
affiliates of the Company.

         The Company's use of proceeds does not represent a material change in
the use of proceeds described in the Prospectus contained within the
Registration Statement.




                                       20
<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA

         The following selected consolidated financial data of the Company is
qualified by reference to, and should be read in conjunction with, the
consolidated financial statements, including the notes thereto, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this report.
<TABLE>
<CAPTION>

Consolidated Statements of Operations Data
(in thousands, except per share data)                                         Year Ended December 31                  
                                                     -----------------------------------------------------------------
                                                            1998         1997         1996           1995      1994(1)
                                                            ----         ----         ----           ----      -------
<S>                                                  <C>           <C>             <C>         <C>          <C>       
Revenues                                             $    38,134   $   15,327      $  15,396   $   12,218   $   12,910
Less: Reimbursed costs                                    (6,327)      (1,164)          (113)        (154)          --
                                                     ------------  -----------     ---------   -----------  ----------

Net revenues                                              31,807       14,163         15,283       12,064       12,910
                                                     ------------  -----------     ---------   -----------  ----------
Costs and expenses:
     Direct costs                                         13,847        7,167          6,285        4,124        3,473
     Selling, general and administrative                  16,165        9,922          6,783        6,375        7,245
     Depreciation and amortization                         1,606          709            704        1,013        1,197
     Write-off of acquired in-process research
        and development (2)                                   --        7,883             --           --           --
                                                     -----------   -----------     ---------   ----------   ----------

Total costs and expenses                                  31,618       25,681         13,772       11,512       11,915
                                                     -----------   -----------     ---------   ----------   ----------
Income (loss) from operations                                189      (11,518)         1,511          552          995
Other income, net                                          1,012        1,250             --           --           --
                                                     -----------   ----------      ---------   ----------   ----------
Income (loss) before income taxes and
     minority interest                                     1,201      (10,268)         1,511          552          995
Minority interest in limited liability
     company                                                  --           --            332           48           --
                                                     -----------   ----------      ----------------------   ----------

Income (loss) before income taxes                          1,201      (10,268)         1,843          600          995

Income tax provision (benefit) (3)                           480       (4,037)           773          259          415
                                                     -----------   -----------     ---------   ----------   ----------

Net income (loss) (4)                                $       721   $   (6,231)     $   1,070   $      341   $      580
                                                     ===========   ===========     =========   ==========   ==========

Basic net income (loss) per share                    $      0.10   $    (0.93)(2)  $    0.24   $     0.08   $     0.13
Diluted net income (loss) per share                  $      0.10   $    (0.93)(2)  $    0.23   $     0.08   $     0.13

Consolidated Balance Sheet Data
(in thousands)                                                                    December 31               
                                                     -------------------------------------------------------
                                                           1998          1997        1996          1995         1994(1)
                                                     ------------- -----------   -----------   ----------      --------
Cash and cash equivalents and
 short-term investments                              $    16,490   $    21,763   $     1,498   $       33     $     447
Working capital                                           20,017        21,661         1,595        1,729            87
Total assets                                              40,172        36,774         5,748        4,400         5,155
Total stockholders' equity                                30,941        30,467         2,516        2,658         2,175
</TABLE>

(1)  For periods prior to June 1, 1994, the Company operated as direct or
     indirect subsidiaries or as divisions of UM Holdings, Ltd.("UM"). Effective
     June 1, 1994, the Company was capitalized through the transfer of the net
     assets and operations of the divisions by UM.

                                       21
<PAGE>


(2)  Represents a one-time charge of $7.9 million ($0.71 per share) for the
     write-off of acquired in-process research and development in connection
     with the acquisition of DLB Systems, Inc.

(3)  For periods prior to February 3, 1997, the Company was included in the
     consolidated income tax returns of UM. The financial statements reflect
     income taxes calculated on a separate company basis for all periods
     presented. See Note 7 of Notes to Consolidated Financial Statements.

(4)  Net income (loss) for all periods presented includes various transactions
     with related parties, including administrative services and a facility
     lease from UM and consulting fees paid to the Company's Chief Executive
     Officer, who is a stockholder. See Note 8 of Notes to Consolidated
     Financial Statements.




                                       22
<PAGE>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Overview

         The Company is a clinical research organization providing a broad range
of integrated product development services on a global basis to its clients in
the pharmaceutical, biotechnology and medical device industries. The Company's
products and services are provided, both in the United States and
internationally, through two business segments: Clinical Operations, which
include centralized diagnostic testing services, clinical trial management
services and clinical data management services; and Technology Operations, which
includes the development, marketing and support of clinical trial and data
management software, support and consulting services. The Company had operated a
Phase I Clinical Research Unit, which was closed in the first quarter of 1998.

         The Company's centralized diagnostic testing services are on a
fee-for-service basis and contracts generally have terms of one month to two
years. A portion of the Company's fee frequently is paid upon contract execution
as a non-refundable up-front payment, with the remaining amounts billed monthly.
Clinical trial and data management services are generally fixed priced
contracts, with certain variable components, and range in duration from a few
months to two years. A portion of the Company's fee frequently is paid upon
contract execution as a non-refundable up-front payment, with the balance billed
in accordance with the contract terms. The Company's contracts generally may be
terminated with or without cause on 30 to 90 days notice. Clients terminate or
delay contracts for a variety of reasons, including, among others, the failure
of the product(s) being tested to satisfy safety or efficacy requirements;
unexpected or undesired clinical results of the product; the client's decision
to forego a particular study; insufficient patient enrollment or investigator
recruitment, and production problems resulting in shortages of required
supplies. Revenues from clinical trial software and services are derived
primarily from software license fees, software maintenance and support and 
consulting services.

         Revenues from centralized diagnostic testing services are recognized as
the services are performed. Revenues from clinical trial and data management
services are generally recognized on a percentage of completion basis as work is
performed. The Company regularly subcontracts with third-party investigators in
connection with clinical trials and with other third-party providers for
specialized services. These and other reimbursable costs are paid by the Company
and reimbursed by clients and, in accordance with industry practice, are
included in revenues. Since reimbursed costs may vary significantly from
contract to contract and are not meaningful for analyzing trends in revenues,
they are included in gross revenues but excluded from net revenues.

         Revenues from technology software licenses are recognized upon shipment
of the software and related documentation when collectibility is deemed probable
and the license fee is deemed fixed and determinable. Revenues from software
maintenance and continuing support contracts are recognized on a straight-line
basis over the period in which the software maintenance and continuing support
is provided, generally twelve months. Revenues from consulting and training
services are recognized when the services are performed.

         The Company conducts operations on a global basis, with offices in the
United States and United Kingdom. For the years ended December 31, 1998, 1997
and 1996, the Company's international net revenues represented 14.5%, 6.9% and
14.9%, respectively, of total net revenues.

                                       23
<PAGE>

Results of Operations

Year ended December 31, 1998, compared to the year ended December 31, 1997

         Net revenues increased 124.6% or $17.6 million to $31.8 million for the
year ended December 31, 1998 compared to $14.2 million for the year ended
December 31, 1997. The Company experienced increased net revenues in all ongoing
service lines.

         Clinical Operations net revenues increased 91.7% or $10.4 million to
$21.7 million for the year ended December 31, 1998 compared to $11.3 million for
the year ended December 31, 1997. Contributing to this increase was centralized
diagnostic testing service revenues which increased 42.4% to $9.8 million for
the twelve months ended December 31, 1998 compared to $6.9 million for the same
period in 1997. The increase in centralized diagnostic testing service revenues
resulted from increased contract signings in 1998 which resulted in an increase
of more than 50% in the number of diagnostic procedures performed. In addition,
1998 net revenues include the recognition of $0.8 million for work completed
under a contract which was cancelled before completion. Clinical trial and data
management services increased 168.8% or $7.5 million to $11.9 million for the
twelve months ended December 31, 1998 compared to $4.4 million for the same
twelve months in 1997. The increase in clinical trial and data management net
revenues is attributable to recognition of part of the 1997 backlog and new
contracts signed in 1998. The increase in clinical trial and data management net
revenues includes $0.6 million generated from the Company's UK operation, which
didn't offer such services until late 1997.

          Technology Operations net revenue results for 1998 reflect the full
year effect of the acquisition of DLB Systems, which occurred in October 1997.
Technology net revenues for the year ended December 31, 1998 were $9.9 million
compared to $0.8 million for the year ended December 31, 1997.

         Other net revenues result from the Company's Phase I Clinical Research
Unit which was closed during the first quarter of 1998. Phase I net revenues for
the twelve months ended December 31, 1998 were $0.2 million compared to $2.1
million for the twelve months ended December 31, 1997.

         Direct costs increased $6.7 million or 93.2% to $13.8 million for the
year ended December 31, 1998 compared to $7.2 million for the same period in
1997. The increase in overall direct costs reflects the full-year 1998 impact of
DLB operations, acquired in October, 1997, the personnel and related expense
impact of increased staffing needed to support increased net revenues and the
full-year 1998 impact of the Company's decision to build its international
clinical trials and data management service capabilities in Europe, which began
in late 1997. Direct costs, as a percent of net revenues, declined to 43.5% in
1998 from 50.6% in 1997. The decrease in direct costs as a percentage of net
revenues was primarily due to the full year impact of DLB Systems, whose
products and services have lower direct costs as a percentage of revenues,
recognition of $0.8 million in net revenues for work completed under a contract
which was cancelled before completion, closure of the Phase I unit which had a
higher percentage of direct cost to net revenues and to the overall increase in
net revenues.

         Selling, general and administrative expenses increased 62.9% to $16.2
million in 1998 from $9.9 million in 1997. The increase in selling, general and
administrative expenses is the result of the full-year impact of DLB Systems,
acquired in October 1997, the full-year impact of increases to the company's
domestic infrastructure to promote and support future growth in operations and
the full-year impact of the Company's decision to build its international
clinical trials and data management service capabilities. As a percentage of net
revenues, selling, general and administrative expenses declined to 50.8% for the
twelve months ended December 31, 1998 compared to 70.1% for the same twelve
months of 1997. The decline in selling, general and administrative expenses as a
percentage of net revenue was primarily due to the Company's ability to spread
the fixed portion of selling, general and administrative expenses over a larger
revenue base.

                                       24
<PAGE>

         Depreciation and amortization expense for the year ended December 31,
1998 increased to $1.6 million for the year ended December 31, 1998 compared to
$0.7 million for the year ended December 31, 1997. The year-to-year increase was
due to the full-year impact of the DLB System's goodwill amortization and
increased capital expenditures in 1998.

         Other income of $1.0 million during the year ended December 31, 1998
declined from the $1.3 million reported for the year ended December 31, 1997.
Other income resulted primarily from income earned on investment of the net
proceeds of the Company's initial public offering in February 1997.

         The Company had an income tax provision of $0.5 million for the year
ended December 31, 1998 compared to a tax benefit of $4.0 million for the year
ended December 31, 1997. The Company's effective income tax rate for the year
ended December 31, 1998, was 40.0%, compared to 39.3% for the year ended
December 31, 1997.

Year ended December 31, 1997, compared to the year ended December 31, 1996

         Net revenues decreased $1.1 million or 7.3% to $14.2 million for the
year ended December 31, 1997, compared to $15.3 million for the year ended
December 31, 1996.

         Clinical Operations' net revenues decreased 19.7% or $2.8 million to
$11.3 million for the year ended December 31, 1997 compared to $14.1 million for
the year ended December 31, 1996. The decrease was primarily due to a $5.1
million decrease in central diagnostic testing service revenues for the year
ended December 31, 1997, primarily the result of several significant ECG
contracts, which were ongoing in 1996, being completed in early 1997, with a low
level of new ECG contracts initiated in 1997. Partially offsetting the decrease
in central diagnostic testing service revenues, were increased clinical trial
and data management net revenues. The clinical trial and data management net
revenue growth was attributable to the Company's increased service capabilities
developed during 1997. Revenues for the year ended December 31, 1997 were also
increased by $0.4 million in connection with a payment received in the first
quarter for a licensing agreement termination.

         Technology Operations' net revenues for the twelve months ended
December 31, 1997 were $0.8 million and reflect the October 31, 1997 acquisition
of DLB Systems, Inc. (DLB)

         Other revenues, which represent the Company's Phase I Clinical Research
Unit, increased to $2.1 million for the year ended December 31, 1997 from $1.2
million for 1996 as the result of several large contracts that were conducted in
1997.

         Direct costs increased $0.9 million or 14.0% to $7.2 million for the
year ended December 31, 1997, compared to the year ended December 31, 1996. The
increase was primarily attributable to increased direct labor costs incurred in
connection with the growth in Phase I and clinical trial and data management net
revenues and from the October 31 1997 acquisition of DLB Systems. Partially
offsetting these increases was a $1.4 million decline in direct costs of central
diagnostic testing services. Prior to 1997, the Company paid ECG reading
analysis fees to a professional corporation owned by Joel Morganroth, MD, the
Company's Chief Executive Officer. The Company and Dr. Morganroth entered into
new employment and consulting agreements, effective January 1, 1997, whereby Dr.
Morganroth no longer receives ECG reading fees. During 1996, Dr. Morganroth was
paid $1.8 million for ECG reading services compared with $0.1 million in 1997
under the terms of the consulting agreement. See Notes 8 and 10 of Notes to
Consolidated Financial Statements. As a percentage of net revenues, direct costs
increased to 50.6% in 1997, compared to 41.1% in 1996 and is primarily the
result of the decline in net revenues in 1997.


                                       25
<PAGE>

         Selling, general and administrative expenses increased $3.1 million or
46.3% to $9.9 million for the year ended December 31, 1997, compared to the year
ended December 31, 1996. During 1997, the Company initiated new sales and
marketing campaigns, doubled the size of the direct sales force, increased its
commitment to its proprietary software systems and expanded its service
capabilities through increased personnel. In addition, the acquisition of DLB
added $0.4 million to the overall growth in selling, general and administrative
expenses. As a result of the foregoing, selling, general and administrative
expenses, as a percent of net revenue, increased to 70.1% for the year ended
December 31, 1997, compared to 44.4% for the year ended December 31, 1996.

         Depreciation and amortization expense for the year ended December 31,
1997 was comparable to the year ended December 31, 1996, at $0.7 million.

         In connection with the DLB acquisition, the Company assigned $7.9
million of the total purchase price to in-process research and development and
such amount was written-off as a one-time charge ($0.71 per share) in the fourth
quarter of 1997.

         Other income of $1.3 million during the year ended December 31, 1997,
resulted primarily from income earned on investment of the net proceeds of the
Company's initial public offering in February 1997.

         The Company had an income tax benefit of $4.0 million for the year
ended December 31, 1997 compared to a tax provision of $0.8 million for the year
ended December 31, 1996. The Company's effective income tax rate for the year
ended December 31, 1997, was 39.3%, compared to 41.9% for the year ended
December 31, 1996. The rate decrease in 1997, was primarily the result of
investment interest earned in 1997 that was not taxable for state purposes. The
1997 tax benefit included the recognition of a significant deferred tax asset,
primarily due to the write-off of in-process research and development and net
operating loss carry-forwards. See Note 7 of Notes to Consolidated Financial
Statements.

Liquidity and Capital Resources

         The clinical research and technology industries generally are not very
capital intensive. The Company's principal cash needs relate to funding
receivables as client payments generally lag up to 90 days after the invoice
date. 
         In February 1997, the Company completed the initial public offering of
its common stock, which resulted in proceeds from the offering, net of expenses,
of $34.2 million. As of December 31, 1998, the Company had cash and cash
equivalents of $10.8 million and short-term investments of $5.7 million. The
Company generally places its investments in A1P1 rated commercial bonds and
paper, municipal securities and certificates of deposit with maturities of less
than one year.

         For the year ended December 31, 1998, the Company used cash in
operating activities of $0.8 million compared to cash used by operations of $3.8
million during the year ended December 31, 1997. The decrease in operating cash
usage was due primarily to the Company's 1998 net profit of $0.7 million
compared to a net loss of $6.2 million in 1997 and an increase in deferred
revenues. This was partially offset by higher accounts receivable and prepaid
expenses in 1998.

         During the year ended December 31, 1998, the Company purchased $3.4
million of property and equipment compared to $1.5 million purchased in 1997.
The increase in the purchase of property and equipment reflects the needs to
support the overall growth in the business.

         On July 2, 1998, the Company made an investment of $1.0 million for a
minority equity position in AmericasDoctors.com, Inc., an internet company which
provides real-time physician chat, referrals and health care events access on
America Online's Health web site.

                                       26
<PAGE>

              On July 20, 1998, the Company announced that its Board of
Directors had authorized the repurchase, over time, of up to 500,000 shares of
the Company's common stock at prices determined appropriate by the Company. As
of December 31, 1998, the Company had used $.8 million to repurchase 177,800
shares of its Common Stock at an average price of $4.38 per share.

         During the year ended December 31, 1998, the Company received $.6
million in cash from the exercise of 279,120 employee stock options at an
average exercise price per option of $2.27.

         The Company has a line of credit arrangement with First Union National
Bank totaling $3.0 million. At December 31, 1998, the Company had no outstanding
borrowings under the line.

         The Company expects that existing cash and cash equivalents, short-term
investments, cash flow from operations and borrowings under its line of credit
will be sufficient to meet its foreseeable cash needs for at least the next
year. However, there may be acquisition and other growth opportunities that
require additional external financing and the Company may from time to time seek
to obtain additional funds from the public or private issuances of equity or
debt securities. There can be no assurance that such financings will be
available or available on terms acceptable to the Company.

Year 2000

         The Company is aware of the issues and problems associated with the
Year 2000 date change. The Company has been addressing company-wide data
processing and infrastructure issues since 1995. Premier Research has undertaken
a Year 2000 Compliance Plan that will be completed by September 1, 1999. In
addition, the Company also plans to have all clinical systems Year 2000
compliant by June 30, 1999. The purpose of this plan is to assure that Premier
Research, as a corporate entity, has assessed and taken appropriate actions
necessary to become compliant with any issues regarding Year 2000 requirements.
The problems surrounding Year 2000 compliance are of extreme concern to the
Company, since Premier Research is a clinical research organization providing
diagnostic testing and clinical research services to the pharmaceutical
industry, as well as a developer of clinical database management software. The
Company produces and delivers information that is date sensitive, especially in
deriving date and time calculations; Premier Research currently can provide to
its clients, date formats that contain century markers or 4-digit year fields
for any of its clinical and diagnostic information.

         The Company's strategy to address Year 2000 compliance is to replace
potentially non-compliant software and hardware with new compliant systems or
updated Year 2000 compliant versions. The inventory and assessment phases of the
Year 2000 plan have primarily been completed for its hardware and software
systems. The Company has begun its remediation phase of the plan through the
replacement and updating of systems.

         As of today over 90% of the Company's information technology
infrastructure has been assessed and found to be free from any Year 2000 issues.
Those that have shown not to be in compliance are currently being evaluated and
renovated for compliance. If a system can not be made compliant to the
requirements, the system will be replaced with one that is compliant.

         The Company is also assessing its facilities worldwide that it leases
or owns, and plans to complete its deployment of applicable contingency plans by
September 1, 1999.

         The Company is also assessing and surveying its suppliers of third
party products and services. Based upon information received from such parties,
the Company believes that most of its suppliers are developing, assessing and
remediating any issues associated with their Year 2000 plans. The Company cannot
at this time fully assess the status of its suppliers until they have completed
their own efforts. It will review the readiness of the suppliers on an on-going
basis throughout the remainder of the year and will implement specific actions
to rectify potential problems in its supply chain.

                                       27
<PAGE>
         As with any other company in its industry or any business in general,
the Company is exposed to risks associated with failures in the private and
public sector to become Year 2000 compliant. These risks include the possibility
that public infrastructure systems, such as electricity, water, natural gas or
telecommunications may fail in this country and other countries in the world
that the Company does business. In addition, there are those risks that the
internal systems of the Company's suppliers, service providers and customers
will fail. The Company also relies considerably on travel and could be adversely
affected, if air and train travel is disrupted by issues related to the Year
2000.

         The Company also relies heavily on the healthcare industry. This
industry and its related clinical investigational sites may not have focused
their efforts on the Year 2000 issue to the same degree. Thus the Company has an
increased risk that its investigational sites, necessary for the conduct of
clinical trials, will be unable to provide timely answers and data that it needs
to perform services on time to its contractual clients. Also, the failure of the
Company's customers to address the Year 2000 issue could negatively impact on
their ability to use the Company's services. While contingency plans will be
developed to address these risks, the Company cannot assure that those plans
will sufficiently protect the Company from the effects of those risks. Any
disruptions from the realization of any of these risks could adversely affect
the Company's ability to perform its services.

         The Company estimates that the costs associated with its Year 2000
program will be approximately $ 0.5 million, including costs already incurred.
Total Year 2000 costs of approximately $0.3 million have been incurred by the
Company through December 31, 1998. The estimates of cost, timing and impact of
addressing the Year 2000 issue are based on numerous assumptions of future
events, including the continued availability of certain resources, the ability
of the Company to meet its deadlines and the cooperation of third parties.
However, there can be no guarantee that the assumptions will be correct and that
these estimates will be achieved. Actual results could differ significantly from
those expected by the Company.

Inflation

         The Company believes the effects of inflation and changing prices
generally do not have a material adverse effect on its results of operations or
financial condition.

Cautionary Statement for Forward-Looking Information

         Statements included in Management's Discussion and Analysis of
Financial Condition and Results of Operations set forth above may constitute
forward looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements involve a number of risks and
uncertainties such as competitive factors, technology development, market demand
and the Company's ability to obtain new contracts and accurately estimate net
revenues due to variability in size, scope and duration of projects, and
internal issues of the sponsoring client. Further, information on potential
factors that could affect the Company's financial results can be found in the
Company's Registration Statement on Form S-1 and its Reports on Forms 10-K and
10-Q filed with the Securities and Exchange Commission.

ITEM 7A  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's primary financial market risks include fluctuations in
interest rates and currency exchange rates.

Interest Rate Risk

         The Company generally places its investments in A1P1 rated commercial
bonds and paper, municipal securities and certificates of deposit with fixed
rates with maturities of less than one year. The company actively manages its
portfolio of cash equivalents and marketable securities but in order to ensure
liquidity, will only invest in instruments with high credit quality where a
secondary market exists. The company has not and does not hold any derivatives
related to its interest rate exposure. Due to the average maturity and
conservative nature of the Company's investment portfolio, a sudden change in
interest rates would not have a material effect of the value of the portfolio.
Management estimates that had the average yield of the Company's investments
decreased by 100 basis points, the Company's interest income for the year ended
December 31, 1998 would have decreased by less than $200,000. This estimate
assumes that the decrease occurred on the first day of 1998 and reduced the
yield of each investment by 100 basis points. The impact on the Company's future
interest income, of future changes in investment yields, will depend largely on
the gross amount of the Company's investments. See "Liquidity and Capital
Resources".

                                       28
<PAGE>

Foreign Currency Risk

         The Company operates on a global basis from locations in the United
States and the United Kingdom. All international net revenues are billed and
expenses incurred in either US dollars or Pounds Sterling. As such, we face
exposure to adverse movements in the exchange rate of the Pound Sterling. As the
currency rate changes, translation of the income statement of our UK entity from
the local currency to US dollars affects year-to-year comparability of operating
results. The Company does not hedge translation risks because any cash flows
from international operations are generally reinvested. To date, the effect of
foreign currency fluctuations are reflected in the company's operating results
and have not been material.

         Management estimates that a 10% change in the exchange rate of the
Pound Sterling would have impacted the reported operating loss for international
operations by less than $200,000.

         The introduction of the Euro as a common currency for members of the
European Monetary Union took place in January 1999. The Company has not
determined what impact, if any, the Euro will have on the Company's foreign
exchange exposure.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The information called for by this Item is set forth on Pages F-1
through F-20.


ITEM 9.  CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

         None.

PART III

MANAGEMENT

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information relating to Directors of the Company is incorporated by
reference from the "Election of Directors" section of the Proxy Statement for
the Company's 1999 Annual Meeting of Shareholders (the "Proxy Statement"). For
information concerning the executive officers of the Company, see "Executive
Officers of Registrant" in Part 1 of this Report.

ITEM 11. EXECUTIVE COMPENSATION

         "Executive Compensation" in the Proxy Statement is incorporated by 
reference.


ITEM 12. SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         "Security Ownership of Certain Beneficial Owners and Management" in the
Proxy Statement is incorporated herein.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         "Certain Relationships and Related Party Transactions" in the Proxy 
Statement is incorporated herein.


<PAGE>

                PREMIER RESEARCH WORLDWIDE, LTD. AND SUBSIDIARIES

             INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

Report of Independent Public Accountants                               F-2

Consolidated Balance Sheets                                            F-3

Consolidated Statements of Operations                                  F-4

Consolidated Statements of Stockholders' Equity                        F-5

Consolidated Statements of Cash Flows                                  F-6

Notes to Consolidated Financial Statements                             F-7

Consolidated Financial Statement Schedule:

  II. Valuation and Qualifying Accounts                               F-20




                                       F-1


<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 

To Premier Research Worldwide, Ltd.:

We have audited the accompanying consolidated balance sheets of Premier Research
Worldwide, Ltd. and subsidiaries as of December 31, 1998 and 1997, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1998. These
financial statements and the schedule referred to below are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Premier Research Worldwide,
Ltd. and subsidiaries, as of December 31, 1998 and 1997, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the Index to
Consolidated Financial Statements and Schedule is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, fairly states, in all material respects, the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.

                                               ARTHUR ANDERSEN LLP
Philadelphia, PA
February 3, 1999



                                       F-2


<PAGE>
                Premier Research Worldwide, Ltd. and Subsidiaries
                           Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                           December 31           
                                                                  ----------------------------
                                                                      1998            1997     
                                                                  ------------    ------------
Assets
Current Assets:
<S>                                                               <C>             <C>         
     Cash and cash equivalents                                    $ 10,822,000    $  4,679,000
     Short-term investments                                          5,668,000      17,084,000
     Accounts receivable, net                                       10,423,000       5,169,000
     Prepaid expenses and other                                      2,176,000         945,000
     Deferred income taxes                                             159,000          91,000
                                                                  ------------    ------------
        Total current assets                                        29,248,000      27,968,000

Property and equipment, net                                          4,110,000       1,986,000
Goodwill, net                                                        2,160,000       2,538,000
Other assets                                                         1,023,000          23,000
Deferred income taxes                                                3,631,000       4,259,000
                                                                  ------------    ------------
                                                                  $ 40,172,000    $ 36,774,000
                                                                  ============    ============
Liabilities and Stockholders' Equity
Current Liabilities:
    Accounts payable                                              $  2,519,000    $  1,745,000
    Accrued expenses                                                 1,156,000       1,214,000
    Deferred revenues                                                5,556,000       3,348,000
                                                                  ------------    ------------
        Total current liabilities                                    9,231,000       6,307,000
                                                                  ------------    ------------

Commitments and contingencies (Note 10)

Stockholders' equity:
    Preferred stock - $10 par value, 500,000 shares authorized,
      none issued and outstanding                                         --              --
    Common stock - $.01 par value, 15,000,000 shares
      authorized, 7,217,520 and 6,938,400 shares
      issued and outstanding                                            72,000          69,000
    Additional paid-in capital                                      37,061,000      36,430,000
    Treasury stock, 177,800 shares at cost                            (779,000)           --
    Accumulated deficit                                             (5,413,000)     (6,032,000)
                                                                  ------------    ------------
        Total stockholders' equity                                  30,941,000      30,467,000
                                                                  ------------    ------------
                                                                  $ 40,172,000    $ 36,774,000
                                                                  ============    ============
</TABLE>


        The accompanying notes are an integral part of these statements.

                                       F-3


<PAGE>

                Premier Research Worldwide, Ltd. and Subsidiaries
                      Consolidated Statements of Operations
<TABLE>
<CAPTION>
                                                                 Year Ended December 31
                                                ------------------------------------------------------
                                                     1998                 1997                 1996    
                                                ------------         ------------         ------------
<S>                                             <C>                  <C>                  <C>   
Revenues                                        $ 38,134,000         $ 15,327,000         $ 15,396,000
Less: Reimbursed costs                            (6,327,000)          (1,164,000)            (113,000)
                                                ------------         ------------         ------------

Net revenues                                      31,807,000           14,163,000           15,283,000
                                                ------------         ------------         ------------

Costs and expenses:
     Direct costs                                 13,847,000            7,167,000            6,285,000
     Selling, general and administrative          16,165,000            9,922,000            6,783,000
     Depreciation and amortization                 1,606,000              709,000              704,000
     Write-off of acquired in-process
       research and development                         --              7,883,000                 --
                                                ------------         ------------         ------------

Total costs and expenses                          31,618,000           25,681,000           13,772,000
                                                ------------         ------------         ------------

Income (loss) from operations                        189,000          (11,518,000)           1,511,000
Other income, net                                  1,012,000            1,250,000                 --   
                                                ------------         ------------         ------------
Income (loss)before income taxes
     and minority interest                         1,201,000          (10,268,000)           1,511,000
Minority interest in limited liability
     company                                            --                   --                332,000
                                                ------------         ------------         ------------

Income (loss) before income taxes                  1,201,000          (10,268,000)           1,843,000
Income tax provision (benefit)                       480,000           (4,037,000)             773,000
                                                ------------         ------------         ------------

Net income (loss)                               $    721,000         $ (6,231,000)        $  1,070,000
                                                ============         ============         ============

Basic net income (loss) per share               $       0.10         $      (0.93)        $       0.24
Diluted net income (loss) per share             $       0.10         $      (0.93)        $       0.23

</TABLE>


        The accompanying notes are an integral part of these statements.

                                       F-4


<PAGE>
                Premier Research Worldwide, Ltd. And Subsidiaries
                 Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
                                                                                                   Retained
                                           Common Stock           Additional                       Earnings
                                   ---------------------------     Paid-in         Treasury      (Accumulated
                                       Shares         Amount       Capital          Stock           Deficit)          Total  
                                       ------         ------       -------         --------        --------          -----  
<S>                                 <C>         <C>            <C>             <C>             <C>             <C>     
Balance, December 31, 1995           4,402,000   $     44,000   $  2,273,000    $       --      $    341,000    $  2,658,000
     Net income                           --             --             --              --         1,070,000       1,070,000
     Net distributions to
        UM Holdings, Ltd.                 --             --             --              --        (1,212,000)     (1,212,000)
                                  ------------   ------------   ------------    ------------    ------------    ------------

Balance, December 31,1996            4,402,000         44,000      2,273,000            --           199,000       2,516,000
     Net proceeds from
        issuance of common
        stock                        2,206,250         22,000     34,160,000            --              --        34,182,000
     Conversion of minority
        interest into
        common stock                   330,150          3,000         (3,000)           --              --              --
     Net loss                             --             --             --              --        (6,231,000)     (6,231,000)
                                  ------------   ------------   ------------    ------------    ------------    ------------

Balance, December 31, 1997           6,938,400         69,000     36,430,000            --        (6,032,000)     30,467,000
     Net income                           --             --             --              --           721,000         721,000
     Deemed distribution for
        income taxes                      --             --             --              --          (102,000)       (102,000)
     Purchase of treasury stock           --             --             --          (779,000)           --          (779,000)
     Exercise of stock options         279,120          3,000        631,000            --              --           634,000
                                  ------------   ------------   ------------    ------------    ------------    ------------

Balance, December 31, 1998           7,217,520   $     72,000   $ 37,061,000    $   (779,000)   $ (5,413,000)   $ 30,941,000
                                  ============   ============   ============    ============    ============    ============
</TABLE>





        The accompanying notes are an integral part of these statements.

                                       F-5
<PAGE>


                Premier Research Worldwide, Ltd. and Subsidiaries
                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                                             Year Ended December 31          
                                                                               ------------------------------------------------
                                                                                   1998              1997               1996    
                                                                               ------------      ------------      ------------
<S>                                                                            <C>               <C>               <C>  
Operating activities:
     Net income (loss)                                                         $    721,000      $ (6,231,000)     $  1,070,000
     Adjustments to reconcile net income (loss) to
       net cash provided by (used in) operating activities-
         Depreciation and amortization                                            1,606,000           709,000           704,000
         Write-off of acquired in-process research and development                     --           7,883,000              --
         Minority interest in limited liability company                                --                --            (332,000)
         Deferred income taxes                                                      411,000        (4,149,000)          (25,000)
         Loss (gain) on sales of property and equipment                                --              36,000            (2,000)
         Changes in operating assets and liabilities, excluding effects of
           business acquisition:
              Accounts receivable                                                (5,254,000)       (1,277,000)         (251,000)
              Prepaid expenses and other                                         (1,231,000)         (524,000)           28,000
              Accounts payable                                                      774,000          (295,000)          356,000
              Accrued expenses                                                      (11,000)           (6,000)          198,000
              Payable to UM Holdings, Ltd. for income taxes                            --            (485,000)          485,000
              Deferred revenues                                                   2,208,000           586,000           783,000
                                                                               ------------      ------------      ------------

                Net cash provided by (used in) operating activities                (776,000)       (3,753,000)        3,014,000
                                                                               ------------      ------------      ------------
Investing activities:
     Purchases of property and equipment                                         (3,352,000)       (1,509,000)         (371,000)
     Proceeds from sales of property and equipment                                     --                --              34,000
     Net (purchases) sales of short-term investments                             11,416,000       (17,084,000)             --
     Net cash paid for business acquisition                                            --          (8,655,000)             --
     Investment in AmericasDoctor.com, Inc.                                      (1,000,000)             --                --   
                                                                               ------------      ------------      ------------

                Net cash provided by (used in) investing activities               7,064,000       (27,248,000)         (337,000)
                                                                               ------------      ------------      ------------
Financing activities:
     Net distributions to UM Holdings Ltd.                                             --                --          (1,212,000)
     Net proceeds from the issuance of common stock                                    --          34,182,000              --
     Net proceeds from exercise of stock options                                    634,000              --                --
     Repurchase of common stock for treasury                                       (779,000)             --                --
                                                                               ------------      ------------      ------------
                Net cash provided by (used in)
                  financing activities                                             (145,000)       34,182,000        (1,212,000)
                                                                               ------------      ------------      ------------

Net increase in cash and cash equivalents                                         6,143,000         3,181,000         1,465,000
Cash and cash equivalents, beginning of year                                      4,679,000         1,498,000            33,000
                                                                               ------------      ------------      ------------

Cash and cash equivalents, end of year                                         $ 10,822,000      $  4,679,000      $  1,498,000
                                                                               ============      ============      ============
</TABLE>


        The accompanying notes are an integral part of these statements.

                                       F-6
<PAGE>

                PREMIER RESEARCH WORLDWIDE, LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Background

Premier Research Worldwide, Ltd. (the "Company"), a Delaware corporation, is a
clinical research organization providing a broad range of integrated product
development services on a global basis to its clients in the pharmaceutical,
biotechnology and medical device industries. The Company operates in two
business segments: Clinical Operations, which includes centralized
diagnostic testing, clinical trial management, clinical data management,
biostatistical analysis, health care economics and outcomes research and
regulatory affairs services; and Technology Operations, which includes
developing, marketing and support of software products used in the management of
clinical trials. The Company also has a wholly-owned operating subsidiary in the
United Kingdom (UK).


Initial Public Offering

The Company completed an initial public offering of its common stock effective
February 3, 1997. The Company sold 2,750,000 shares of common stock at an
initial public offering price of $17.00, of which 2,000,000 shares were issued
and sold by the Company and 750,000 shares were sold by UM Holdings, Ltd. (UM).
Additionally, 412,500 shares of common stock were purchased at $17.00 per share
by the underwriters, upon the exercise of an over-allotment option, of which
206,250 shares were purchased from the Company and 206,250 shares were purchased
from UM. The net proceeds to the Company, after deducting underwriting discounts
and expenses, were approximately $34.2 million.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Company, its subsidiaries and Premier Research LLC prior to February 1997 (see
Note 6). All significant inter-company accounts and transactions have been
eliminated.

Use of Estimates

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported assets and liabilities and contingency disclosures at the
date of the financial statements and the reported revenues and expenses during
the reporting period. Actual results could differ from those estimates.

Recapitalization

On October 24, 1996, the Company's Board of Directors approved an amendment to
the Company's Certificate of Incorporation increasing the number of authorized
shares of common stock to 15,000,000 shares and authorizing 500,000 shares of
preferred stock. In addition, on November 26, 1996, the Company effected a
2,201-for-one split of its common stock. The increase in authorized shares and
the stock split have been retroactively reflected in the accompanying
consolidated financial statements.


                                       F-7
<PAGE>

Revenues

Clinical Operations revenues are generally recorded when services are rendered.
Revenues under certain clinical research service contracts are recognized under
the percentage-of-completion method and include a proportion of the revenues
expected to be realized on the contract in the ratio of costs incurred to
estimated total costs. Such contracts are generally completed within a few
months to two years. A provision for the loss on a contract is made when current
estimates indicate a total contract loss. The Company often receives
non-refundable deposits from its customers that are recorded as deferred
revenues in the accompanying consolidated balance sheets. Clinical Operations
revenues for twelve months ended December 31, 1998 include $0.8 million for work
completed under a contract which was cancelled before completion. Technology
Operations include software license revenues which are recognized upon shipment
of the software and related documentation when collectibility is deemed probable
and the license fee is deemed fixed and determinable. Revenues from software
maintenance and support contracts are recognized on a straight-line basis over
the term of the contract, generally 12 months. Revenues from related training
and consulting services are recognized as services are performed. Technology
Operations revenues for the year ended December 31, 1997 include $0.4 million
recognized in connection with a license agreement termination.

Cash and Cash Equivalents

The Company considers cash on deposit with financial institutions and all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents. At the balance sheet dates, cash equivalents consisted
primarily of investments in money market funds, municipal securities and bonds
of government sponsored agencies.

Short-term Investments

At December 31, 1998, short-term investments consisted of commercial bonds and
paper, municipal securities, certificates of deposit and bonds of government
sponsored agencies with maturities of less than one year. Pursuant to Statement
of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities", available-for-sale securities are
carried at fair value, based on quoted market prices, with unrealized gains and
losses, net of tax, reported as a separate component of stockholders' equity.
The Company has classified all of its short-term investments at December 31,
1998 as available-for-sale and at December 31, 1998, unrealized gains and losses
were immaterial. Realized gains and losses during 1998 were also immaterial. For
the purpose of determining realized gains and losses, the costs of the
securities sold is based upon specific identification.

Investment in AmericasDoctor.com, Inc.

In July 1998, the Company paid $1 million for a minority equity position in
AmericasDoctor.com, Inc., an internet company that provides physician referrals
and healthcare events on America Online's Health web page. This investment is
being accounted for on the cost method. AmericasDoctor.com, Inc. is a privately
held company and the Company believes that the cost of their investment
approximates fair value at December 31, 1998. The $1 million investment is
included in long-term assets in the accompanying consolidated balance sheet.

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided using the
straight-line method over the estimated useful lives of the assets ranging from
three to five years. Leasehold improvements are amortized using the
straight-line method over the shorter of the estimated useful life of the asset
or the remaining lease term. Repair and maintenance costs are expensed as
incurred. Improvements and betterments are capitalized. Gains or losses on the
disposition of property and equipment are included in other income. Depreciation
expense was $1,228,000, $605,000, and $656,000 for the years ended December 31,
1998, 1997 and 1996, respectively.

                                       F-8


<PAGE>


Goodwill

Goodwill is amortized using the straight-line method over five to eight years
and is net of accumulated amortization of $704,000 and $325,000 as of December
31, 1998 and 1997, respectively. The related amortization expense was $378,000,
$104,000 and $48,000 for the years ended December 31, 1998, 1997, and 1996,
respectively.

The Company continually evaluates whether later events and circumstances have
occurred that indicate the remaining estimated useful life may warrant revision
or that the remaining goodwill balance may not be recoverable. If factors
indicate that goodwill should be evaluated for possible impairment, the Company
would use an estimate of the related undiscounted cash flows in measuring
whether goodwill should be written down to the fair value, in accordance with
SFAS No. 121 "Accounting for Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of". Management believes that there has been no impairment
of long-lived assets as of December 31, 1998.

Accrued Expenses

Included in accrued expenses at December 31, 1998 and 1997 is accrued payroll of
$515,000 and $538,000, respectively.

Software Development Costs

Research and development expenditures are charged to operations as incurred. In
1998 and 1997, research and development expense was approximately $2,500,000
and $700,000 respectively. Research and development expense was not material in
1996. SFAS No. 86, "Accounting for the Costs of Computer Software to be Sold,
Leased or Otherwise Marketed," requires the capitalization of certain software
development costs subsequent to the establishment of technological feasibility.
The Company has determined that technological feasibility for its products is
generally achieved upon completion of a working model. Since software
development costs have not been significant after the completion of a working
model, all such costs have been charged to expense as incurred.

Advertising Costs

The Company expenses advertising costs as incurred. Advertising expense for the
years ended December 31, 1998, 1997 and 1996 was $473,000, $310,000, and $84,000
and respectively.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
The Company was included in the consolidated federal tax return of UM until
February 1997 and files separate state, local and foreign income tax returns.
The accompanying financial statements reflect income tax expense calculated on a
separate-company basis for all periods presented.






                                       F-9
<PAGE>


Supplemental Cash Flow Information

The Company paid approximately $128,000, $819,000, and $316,000 for income taxes
in the years ended December 31, 1998, 1997 and 1996, respectively, of which
$575,000 was paid to UM in 1997 in accordance with the tax sharing agreement.
The Company was not required to make payments to UM for income taxes in 1996
(see Note 7). The following table displays the net non-cash assets that were
consolidated as a result of the Company's business acquisition in 1997 (see Note
2):

          Non-cash asset (liabilities):
            Accounts receivable                          $1,055,000
            Prepaid expenses and other                       35,000
            Property and equipment                          386,000
            Other assets                                     23,000
            In-process research and development           7,883,000
            Goodwill                                      2,548,000
            Accounts payable                             (1,209,000)
            Accrued expenses                               (450,000)
            Deferred revenues                            (1,616,000)
                                                        -----------
          Net cash paid for acquisition                  $8,655,000
                                                        ===========  


Other Income

Other income consists primarily of earnings on short-term investments.

Concentration of Credit Risk and Significant Customers

Financial instruments that potentially subject the Company to concentration of
credit risk consist primarily of trade accounts receivable from companies
operating in the pharmaceutical industry. For the year ended December 31, 1996,
two clients accounted for 25% of the Company's net revenues. For the years ended
December 31, 1998 and 1997, no single client accounted for greater than 10% of
net revenues. Due to the contract nature of the Company's business and the
relative size of such contracts in comparison to the Company, it is not unusual
for a significant customer in one year to be insignificant in the next year. The
loss of any such client could have a material adverse effect on the Company's
operations. In addition, the Company maintains reserves for potential credit
losses and such losses, in the aggregate, have not historically exceeded
management expectations.

Translation of Foreign Financial Statements

Assets and liabilities of the Company's UK subsidiary are translated at the
exchange rate as of the end of each reporting period. The income statement is
translated at the average exchange rate for the period. Cumulative adjustments
from translating the UK financial statements are immaterial.

Net Income (Loss) Per Common Share

The Company follows SFAS No. 128 "Earnings per Share". This statement requires
the presentation of basic and diluted earnings per share. Basic net income
(loss) per share is computed by dividing net income (loss) by the weighted
average number of shares of common stock outstanding during the year. Diluted
net income (loss) per share is computed by dividing net income (loss) by the
weighted average number of shares of common stock outstanding during the year,
adjusted for the dilutive effect of common stock equivalents, which consist
primarily of stock options, using the treasury stock method.

                                      F-10

<PAGE>


The table below sets forth the reconciliation of the numerators and denominators
of the basic and diluted net income (loss) per share computations.

Year Ended December 31,
-----------------------
<TABLE>
<CAPTION>
                                           Net                                         Per Share
                                      Income (Loss)               Shares                Amount
                                      -------------               ------               ----------
1998   
<S>                                   <C>                        <C>                   <C>     
    Basic net income                  $   721,000                7,102,000             $   0.10
    Effect of dilutive shares                --                    102,000                 --
                                      -----------              -----------             --------
    Diluted net income                $   721,000                7,204,000             $   0.10
                                      ===========              ===========             ========

1997
    Basic net loss                    $(6,231,000)               6,702,000             $  (0.93)
    Effect of dilutive shares                --                       --                   --
                                      -----------              -----------             --------
    Diluted net loss                  $(6,231,000)               6,702,000             $  (0.93)
                                      ===========              ===========             ========

1996
    Basic net income                  $ 1,070,000                4,402,000             $   0.24
    Effect of dilutive shares                --                    248,000                (0.01)
                                      -----------              -----------             --------
    Diluted net income                $ 1,070,000                4,650,000             $   0.23
                                      ===========              ===========             ========
</TABLE>

         In computing diluted net income (loss) per share, 435,385, 851,620 and
8,804 options to purchase shares of common stock were excluded from the 
computation for the years ended December 31, 1998, 1997 and 1996, respectively.

         The options were excluded from the 1998 and 1996 computations because
the exercise prices of such options were greater than the average market price
of the Company's Common Stock during 1998 and 1996, respectively. The options
were excluded from the 1997 computation because their effect would be
anti-dilutive.

New Accounting Pronouncements

         In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income". This statement requires companies to classify items of other
comprehensive income by their nature in the financial statements and display the
accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in-capital in the equity section of a statement of
financial position. SFAS No. 130 was effective for financial statements issued
for fiscal years beginning after December 15, 1997. The Company's comprehensive
income includes net income and unrealized gains on short-term investments and
losses from foreign currency translation. These unrealized gains and losses and
currency translation adjustments were immaterial for all periods presented.

Reclassifications

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

2. Acquisition of DLB Systems, Inc.

Effective October 31, 1997, the Company acquired substantially all of the assets
of DLB Systems, Inc. ("DLB") for $6,500,000 in cash, its prior $1.0 million
investment and the assumption of certain liabilities. The acquisition was
accounted for under the purchase method of accounting, whereby the purchase
price was allocated to the assets acquired and the liabilities assumed, based on
their fair market values at the acquisition date. The excess of the purchase
price over the estimated fair market value of the net assets acquired was
assigned to identifiable intangibles. The Company assigned $7,883,000 to
in-process research and development and such amount was charged to operations in
the accompanying consolidated statement of operations. The Company also recorded
goodwill of $2,548,000, which is being amortized on a straight-line basis over
eight years.


                                      F-11


<PAGE>

DLB's results of operations have been included in the Company's consolidated
financial statements from the effective date of the acquisition. The following
table summarizes the unaudited pro forma results of operations of the Company as
if the acquisition of DLB had occurred on January 1, 1996. The pro forma
information does not purport to be indicative of the results that would have
been attained if the operations had actually been combined during the periods
presented.

                                                     Year Ended December 31
                                                 ----------------------------
                                                    1997              1996
                                                 -----------      -----------
       Net revenues                              $19,461,000      $21,615,000
       Operating loss                             (5,105,000)      (1,751,000)
       Net loss                                   (2,631,000)      (1,477,000)
       Basis and diluted net loss per share            (0.39)           (0.34)

The pro forma amounts do not include the one-time charge of $7,883,000 ($0.71
per share) related to the write-off of in-process research and development.

3. ACCOUNTS RECEIVABLE:
                                                           December 31         
                                                 ----------------------------
                                                      1998            1997    
                                                 ------------    ------------
       Billed                                    $10,307,000     $  4,916,000
       Unbilled                                      359,000          431,000
       Allowance for doubtful accounts              (243,000)        (178,000)
                                                 -----------     ------------
                                                 $10,423,000     $  5,169,000  
                                                 ===========     ============

4. PROPERTY AND EQUIPMENT:
                                                       December 31           
                                            ---------------------------------
                                                   1998              1997    
                                            --------------     --------------
       Computer and other equipment         $  9,466,000         $7,551,000
       Furniture and fixtures                  1,436,000            636,000
       Leasehold improvements                    808,000            171,000  
                                             ------------      --------------
                                              11,710,000          8,358,000
       Less-Accumulated depreciation          (7,600,000)         (6,372,000)
                                            -------------      --------------
                                            $  4,110,000       $  1,986,000  
                                            =============      ==============

5. LINE OF CREDIT:

The Company has a line of credit with a bank, through June 30, 1999, that
provides for borrowings up to $3 million at an interest rate of prime minus 35
basis points. The line of credit agreement includes certain covenants, the most
restrictive of which limit future indebtedness and require compliance with a
liabilities-to-tangible net worth ratio. To date, the Company has not borrowed
any amounts under its line of credit.

6. PREMIER RESEARCH LLC:

In September 1995, the Company and PREMIER, Inc. entered into the Agreement and
Plan of Organization of a limited liability company, Premier Research LLC
(Premier LLC). Under the terms of the agreement, PREMIER, Inc. contributed
$300,000 in cash, $50,000 in property, $30,000 in services and the business
operations of its Contract Research Organization Division for a 35% interest in
Premier LLC. The Company agreed to manage Premier LLC and to fund Premier LLC's
working capital needs for three years in exchange for a 65% interest in Premier
LLC. In accordance with the agreement, PREMIER, Inc.'s ownership interest in
Premier LLC automatically converted into 330,150 shares of common stock
concurrent with the Company's initial public offering.


                                      F-12


<PAGE>

7. INCOME TAXES:

The Company was included in the consolidated federal income tax returns of UM
until February 1997 under a tax-sharing agreement pursuant to which the Company
would pay to UM amounts equal to the taxes that the Company would have paid had
it filed separate federal income tax returns. The agreement did not provide for
UM to pay the Company for tax losses that UM may utilize. Upon finalizing the
Company's 1997 tax return in 1998, the Company recorded a deemed distribution of
$102,000 for tax losses attributed to the Company but included in UM's
consolidated tax return. 

The income tax provision (benefit) consists of the following:
<TABLE>
<CAPTION>
                                                                 Year Ended December 31          
                                                -------------------------------------------------
                                                      1998             1997               1996  
                                                -------------     --------------      -----------
<S>                                             <C>               <C>                 <C>      
Current provision :
                  Federal                       $         --      $         --        $  485,000
                  State and local                     69,000           112,000           218,000
                  Foreign                                 --                --            95,000 
                                                -------------     --------------      -----------
                                                      69,000           112,000           798,000 
                                                -------------     --------------      -----------
Deferred provision (benefit):
                  Federal                            146,000         (3,103,000)         (19,000)
                  State and local                     34,000           (617,000)          (6,000)
                  Foreign                            231,000           (429,000)               --
                                                ------------      --------------      -----------
                                                     411,000         (4,149,000)         (25,000)
                                                ------------      --------------      -----------
                                                $    480,000      $  (4,037,000)      $  773,000 
                                                ============      ==============      ===========
</TABLE>

Foreign income (loss) before income taxes was $676,000, $(1,300,000) and
$288,000 for the years ended December 31, 1998, 1997 and 1996, respectively.

The reconciliation between income taxes at the federal statutory rate and the
amount recorded in the accompanying financial statements is as follows:
<TABLE>
<CAPTION>
                                                                        Year Ended December 31                          
                                                           ------------------------------------------------
                                                               1998              1997               1996  
                                                           -----------       -----------        -----------
          <S>                                              <C>               <C>                <C>        
          Tax at federal statutory rate                    $   408,000       $(3,491,000)       $   627,000
          State and local taxes, net of federal                 70,000          (505,000)           140,000
          Amortization of goodwill                              16,000            16,000             16,000
          Other                                                (14,000)          (57,000)           (10,000)
                                                           -----------       -----------        -----------
                                                           $   480,000       $(4,037,000)       $   773,000
                                                           ===========       ===========        ===========
</TABLE>

The components of the Company's net deferred tax asset are as follows:
<TABLE>
<CAPTION>
                                                                  December 31            
                                                 ----------------------------------------
                                                      1998                         1997  
                                                 ------------                 -----------
<S>                                              <C>                           <C>       
          Goodwill amortization                  $ 2,986,000                   $3,129,000
          Net operating loss carry-forwards          652,000                      853,000
          Depreciation                                (7,000)                      30,000
          Reserves and accruals                      159,000                      338,000
                                                 ------------                 -----------
                                                 $ 3,790,000                   $4,350,000
                                                 ============                  ==========
</TABLE>

                                      F-13

<PAGE>

At December 31, 1998, the Company had a net operating loss carry-forward for
federal income tax purposes of approximately $1.5 million which will begin to
expire in 2012, a net operating loss carry-forward for state tax purposes of
approximately $2.5 million which will begin to expire in 2007 and a UK loss
carry-forward of approximately $27,000 which has no expiration date.

Management has determined that it is more likely than not that future taxable
income will be sufficient to realize all of the Company's deferred tax assets.
Approximately $10.5 million of future taxable income is needed for the Company
to fully realize the net deferred tax asset recorded at December 31, 1998.

8. RELATED PARTY TRANSACTIONS:

TRANSACTIONS WITH UM

The Company leased its primary operating facility from UM (see Note 10) in 1998,
1997 and 1996 and participated in UM's 401(k) profit sharing plan in 1997 and
1996. The Company was charged $349,000, $349,000 and $382,000 for rent under the
facility lease for the years ended December 31, 1998, 1997 and 1996,
respectively, and $ 47,000 and $69,000 for profit sharing plan contributions for
the years ended December 31, 1997 and 1996, respectively. The Company believes
that all amounts charged by UM were reasonable.

In 1997, the Company paid UM $485,000 for 1996 income taxes payable and $90,000
for estimated 1997 income taxes due under the tax sharing agreement (see Note
7).

TRANSACTIONS WITH THE COMPANY'S CHIEF EXECUTIVE OFFICER

The Company's Chief Executive Officer, who is a stockholder, is a cardiologist
who, in addition to his role as Chief Executive Officer of the Company, provides
medical services to the Company as an independent contractor through his
wholly-owned Professional Corporation (see Note 10). Fees incurred under this
consulting arrangement approximated $144,000, $144,000 and $1,955,000 for the
years ended December 31, 1998, 1997 and 1996, respectively. The Medical Director
fees are included in direct costs as they relate to medical interpretations for
diagnostic tests. In addition, at December 31, 1998 and 1997 amounts owed to the
Company's Chief Executive Officer in connection with the consulting agreement
were $48,000 and $24,000 , respectively, and are included in accounts payable in
the accompanying consolidated balance sheets.

The Company and the Company's Chief Executive Officer entered into new
employment and consulting agreements effective January 1, 1997 (see Note 10). In
January 1996, the Chief Executive Officer and UM entered into an agreement
whereby the Chief Executive Officer purchased 660,300 shares of the Company's
Common Stock from UM for $750,000.

9. STOCK OPTION PLANS:

In August 1993, the Company established a nonqualified stock option plan (the
"1993 Plan") authorizing the grant of options to acquire up to 1,100,500 shares
of the Company's common stock. The purpose of the 1993 Plan was to provide an
incentive for key individuals to advance the success of the Company. The options
cover the purchase of common stock of the Company at exercise prices initially
set at or above current fair value as determined by the Board of Directors.
Options granted under the 1993 Plan became fully vested 90 days after the
Company's initial public offering and expire five years from the initial public
offering date. No additional options may be granted under this plan.


                                      F-14


<PAGE>

In 1996, the Company adopted a new stock option plan (the "1996 Plan") that
authorizes the grant of both incentive and non-qualified options to acquire up
to 500,000 shares of the Company's common stock. The Company's Board of
Directors determines the exercise price of the options under the 1996 Plan. The
exercise price of incentive stock options may not be below fair value on the
grant date. Incentive stock options under the 1996 Plan expire ten years from
the grant date and are exercisable in accordance with vesting provisions set by
the Board.

During September 1998, the Company offered a stock option exchange program to
its employees for options granted under the 1996 Plan. Under the program, stock
options could be exchanged, on a one for two basis with the new exercise price
set at the greater of 50% of the original exercise price or the closing price on
September 30, 1998, the final day of the exchange program. A total of 77,350
stock options were exchanged and 38,675 were reissued in the exchange program at
an average exercise price of $6.50.

Information with respect to outstanding options under the plans is as follows:

                                               Outstanding        Option Price
                                                  Shares            Per Share  
                                              ------------      ---------------
           Balance, December 31, 1995            473,215        $          2.27
           Granted                                57,226             1.14-17.00
                                              -----------       ---------------

           Balance, December 31, 1996            530,441             1.14-17.00

           Granted                               330,679            8.25-22.125
           Cancelled                              (9,500)          13.00-13.125
                                              -----------       ---------------

           Balance, December 31, 1997            851,620            1.14-22.125

           Granted                               252,675              3.75-9.00
           Exercised                            (279,120)                  2.27
           Cancelled                            (151,675)            8.25-13.13
                                              -----------       ---------------

           Balance, December 31, 1998            673,500        $  1.14-$22.125
                                              ===========       ===============

As of December 31, 1998, 296,478 options with a weighted average exercise price
of $4.19 per share were exercisable and 82,223 options were available for future
grants under the 1996 Plan.







                                      F-15


<PAGE>

The Company accounts for its option grants under Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees", and the related
interpretations. In 1995, the FASB issued SFAS No. 123, " Accounting for
Stock-based Compensation". SFAS No. 123 established a fair value based method of
accounting for stock-based compensation plans. Had compensation cost for the
Company's stock option plans been determined based upon the fair value of the
options at the date of grant, as prescribed under SFAS No. 123, the Company's
net income (loss) and basic and diluted net income (loss) per share would have
been adjusted to the following pro forma amounts:
<TABLE>
<CAPTION>
                                                           Year Ended December 31        
                                                 1998            1997             1996   
                                              -----------    -----------      -----------
<S>                                            <C>          <C>                <C>       
Net income (loss):
          As reported                          $721,000     $(6,231,000)       $1,070,000
          Pro forma                             571,000      (6,342,000)        1,043,000
Basic net income (loss) per share:
          As reported                             0.10            (0.93)             0.24
          Pro forma                               0.08            (0.95)             0.24

Diluted net income (loss) per share:
          As reported                             0.10            (0.93)             0.23
          Pro forma                               0.08            (0.95)             0.22
</TABLE>

         The weighted average fair value per share of the options granted during
1998, 1997 and 1996 was estimated as $2.12, $5.40 and $0.80 , respectively. The
fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted average
assumptions:
<TABLE>
<CAPTION>
                                                      1998           1997           1996
                                                    --------       --------        -------
<S>                                                     <C>            <C>            <C> 
         Risk-free interest rate                        5.3%           6.1%           5.4%
         Expected dividend yield                        0.0%           0.0%           0.0%
         Expected life                               3 years        3 years        3 years
         Expected volatility                           55.0%          55.0%           0.0%
</TABLE>

The effects of applying SFAS No. 123 in the pro forma disclosure are not
indicative of future amounts. SFAS No. 123 does not apply to options granted
prior to 1995, and additional option grants are anticipated.

10. COMMITMENTS AND CONTINGENCIES:

LEASES

The Company leases office space and equipment under operating leases, including
its primary operating facility. During the years ended December 31, 1998, 1997
and 1996, the Company leased its primary operating facility from UM under a
lease agreement executed in June 1996 that expires in September 2003 (see Note
8). The Company terminated the facility lease with UM, without penalty, on
January 3, 1999 and moved into a new facility under a lease agreement executed
in June 1998 that expires in August 2005. Rent expense for all operating leases
for the years ended December 31, 1998, 1997 and 1996 was $1,203,000, $708,000,
and $830,000, respectively.

                                      F-16


<PAGE>

Future minimum lease payments as of December 31, 1998 are as follows:

                                                                   Total  
                                                                   -----  
                                1999                            $1,391,000
                                2000                             1,306,000
                                2001                             1,393,000
                                2002                             1,394,000
                                2003                             1,394,000
                                2004 and thereafter              1,777,000
                                                              ------------

                                                                $8,655,000
                                                              ============
AGREEMENTS WITH THE COMPANY'S CHIEF EXECUTIVE OFFICER

The Company has entered into employment and consulting agreements with its Chief
Executive Officer that continue through December 31, 2001. Either the Company or
the Chief Executive Officer may terminate the agreement at any time, with or
without cause. However, if the Company terminates the agreement without cause,
the Company must continue to pay the President's salary for a one-year period
subsequent to the termination. The consulting agreement relates to the Chief
Executive Officer's capacity as a medical doctor and cardiologist and, among
other things, requires the Chief Executive Officer to serve as Medical Director
and/or principal investigator for the Company in addition to providing medical
interpretations of diagnostic tests from time to time, as required. Compensation
under the consulting agreement is $144,000 per year. The consulting agreement
commenced on January 1, 1997 and it continues on a year to year basis unless
terminated. The consulting agreement replaced a prior agreement whereby the
Chief Executive Officer received additional compensation for medical
interpretations of diagnostic tests (see Note 8).

CONTINGENCIES

The Company is involved in legal proceedings from time to time in the ordinary
course of its business. Management believes that none of these legal proceedings
will have a material adverse effect on the financial condition or results of
operations of the Company.

The Company believes it has adequate insurance coverage against possible
liabilities that may be incurred in connection with the conduct of its business
primarily as it relates to the testing of new drugs or medical devices. While
the Company believes it operates safely and prudently, in addition to managing
liability risks through contractual indemnification, the Company could be
materially and adversely affected if it were required to pay damages or incur
defense costs in connection with a claim that is beyond the scope of an
indemnity provision or insurance coverage, or if an indemnity is not upheld or
if the claim exceeds the insurance policy limits.

11. OPERATING SEGMENTS:

In June 1997, SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information," was issued, effective for fiscal years ending after
December 15, 1998. The Company has adopted this statement for the year ended
December 31, 1998. The Company's reportable segments are strategic business
units that offer different products and services to a common client base. The
segments are managed separately because each business requires different
technology.

The Company's products and services are provided through two business segments,
both in the United States and internationally: Clinical Operations, which
includes centralized diagnostic testing services, clinical trial management
services and clinical data management services; and Technology Operations, which
includes clinical trial and data management software, support and consulting
services. The Company's discontinued Phase I Clinical Research Unit and income
and expense not allocated to reportable segments is reported as Other.

During 1998 and 1997, no single client accounted for more than 10% of a
segment's net revenues. During 1996, Sandoz Pharmaceuticals Corporation and
Zeneca Pharmaceuticals accounted for approximately 15.3% and 10.1% of the
Company's Clinical Operations net revenues, respectively.

                                      F-17


<PAGE>

The accounting policies of the segments are the same as those described in the
summary of significant accounting policies (see Note 1). The Company evaluates
performance based on the net revenues and operating earnings performance of the
respective business segments.

Segment information is as follows:
<TABLE>
<CAPTION>
                                                                               Year Ended December 31,1998
                                                        -------------------------------------------------------------------
                                                          Clinical
                                                        Operations         Technology             Other             Total
                                                        ----------         ----------             -----             -----
<S>                                                      <C>                 <C>                  <C>           <C>       
Net revenues from external customers                    $21,688,000        $ 9,930,000        $   189,000      $31,807,000
Income (loss) from operations                            (1,565,000)         1,689,000             65,000          189,000
Identifiable assets                                      14,189,000          4,588,000         21,395,000       40,172,000
Depreciation and amortization                             1,097,000            509,000                  -        1,606,000
Capital expenditures                                      2,864,000            488,000                  -        3,352,000

                                                                              Year Ended December 31, 1997
                                                        -------------------------------------------------------------------
                                                          Clinical
                                                        Operations         Technology             Other             Total
                                                        ----------         ----------             -----             -----
Net revenues from external customers                    $11,315,000        $   795,000        $ 2,053,000      $14,163,000
Loss from operations                                     (2,525,000)        (8,311,000)          (682,000)     (11,518,000)
Identifiable assets                                       6,263,000          3,573,000         26,938,000       36,744,000
Depreciation and amortization                               547,000             75,000             87,000          709,000
Capital expenditures                                      1,437,000             30,000             42,000        1,509,000

                                                                              Year Ended December 31, 1996
                                                        -------------------------------------------------------------------
                                                          Clinical
                                                        Operations         Technology            Other              Total
                                                        ----------         ----------            -----              -----
Net revenues from external customers                    $14,088,000        $         -        $ 1,195,000      $15,283,000
Income (loss) from operations                             2,395,000                  -           (884,000)       1,511,000
Identifiable assets                                       3,768,000                  -          1,980,000        5,748,000
Depreciation and amortization                               610,000                  -             94,000          704,000
Capital expenditures                                        371,000                  -                  -          371,000
</TABLE>

The Company operates on a worldwide basis with two locations in the United
States and two locations in the United Kingdom. Geographic information is as
follows:
<TABLE>
<CAPTION>
                                                                  Year Ended December 31, 1998 
                                                       --------------------------------------------------
                                                            North
                                                           America            Europe            Total   
                                                           -------            ------            -----   
<S>                                                    <C>                <C>               <C>          
Net revenues from external customers                    $27,187,000         $4,620,000        $31,807,000
Income (loss) from operations                             2,037,000         (1,848,000)           189,000
Identifiable assets                                      38,033,000          2,139,000         40,172,000

                                                                   Year Ended December 31, 1997   
                                                       --------------------------------------------------
                                                            North
                                                           America            Europe            Total   
                                                           -------            ------            -----   
Net revenues from external customers                   $ 13,188,000       $    975,000      $  14,163,000
Loss from operations                                    (10,218,000)        (1,300,000)       (11,518,000)
Identifiable assets                                      36,226,000            548,000         36,774,000

</TABLE>

                                      F-18


<PAGE>
<TABLE>
<CAPTION>
                                                                    Year Ended December 31, 1996       
                                                       ----------------------------------------------------
                                                            North
                                                           America               Europe            Total    
                                                           -------               ------            -----    
<S>                                                    <C>                  <C>              <C>          
Net revenues from external customers                   $   13,000,000       $  2,283,000     $  15,283,000
Income from operations                                      1,223,000            288,000         1,511,000
Identifiable assets                                         4,604,000          1,144,000         5,748,000
</TABLE>












                                      F-19


<PAGE>


                                   SCHEDULE II

                PREMIER RESEARCH WORLDWIDE, LTD. AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS
                         ALLOWANCE FOR DOUBTFUL ACCOUNTS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                 Balance                                                           Balance
                                              Beginning of     Charges to      Deductions                            End
                                                 Period          Expense      from Reserve          Other         of Period
                                              ------------     ----------     ------------          -----         ----------
<S>                                                   <C>           <C>              <C>            <C>              <C> 
December 31, 1998                                     $178              -               --            $65              $243
December 31, 1997                                     $140              -               $3            $41              $178
December 31, 1996                                     $140              -               --             --              $140
</TABLE>
                                      F-20
<PAGE>

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      1.       The financial statements of the Company filed as a part of
                  this Report are listed on the attached Index to Consolidated
                  Financial Statements and Financial Schedule at [F-1]

         2.       The Schedules to the financial statements of the Company filed
                  as a part of this Report are listed in the attached Index to
                  Consolidated Financial Statements and Financial Statement
                  Schedule at [F-1]

         3        Exhibits.

<PAGE>

     The following exhibits are filed herewith, unless otherwise marked:
<TABLE>
<CAPTION>

<S>      <C>                                                                                     <C>
         2.1      Asset Purchase Agreement among Premier Research, DLB Systems, Inc. and Recalmon(1)
         3.1      Amended and Restated Certificate of Incorporation(2)
         3.2      Bylaws(2)
         3.3      Amendment to Bylaws (filed herewith)
         4.1      Form of Stock Certificate(2)
         4.2      Preferred Stock Purchase Agreement between Premier Research and DLB Systems, Inc.(3)
         10.1     Employment Agreement with Joel Morganroth, M.D.(2)(4)
         10.2     Management Consulting Agreement with Joel Morganroth, M.D., P.C.(2)(4)
         10.3     Stock Option Agreement - Jerry Lee(2)(4)
         10.4     Stock Option Agreement - Arthur Hayes(2)(4)
         10.5     Stock Option Agreement - Connie Woodburn(4) (5)
         10.6     Amended and Restated 1993 Stock Option Plan(2)(4)
         10.7     1996 Stock Option Plan(2)(4)
         10.8     Lease of Philadelphia Facilities with amendment thereto(2)
         10.9     Agreement and Plan of Organization entered into with Premier Health Alliance, Inc.(2)
         10.10    Tax Sharing Agreement with UM Holdings, Inc.(2)
         10.12    Revolving Credit Agreement with First Union National Bank(2)
         10.13    Promissory Note to First Union National Bank(2)
         10.14    Restated Stock Option Agreement to PREMIER, Inc.(2)(4)
         10.15    Restated Stock Option Agreement to Jerry Lee(2)(4)
         10.16    Restated Option Agreement to Arthur Hays(2)(4)
         10.17    Tax Indemnity Agreement with UM Holdings, Ltd.(2)
         10.18    Amended Restated Stock Option Agreement to PREMIER, Inc.(4)
         10.19    Strategic Alliance Agreement by and between Premier Research Worlwide and en Vision Sciences, Inc.(5)
         10.20    Employment Agreement with Joseph Esposito(4)(5)
         10.21    Common Stock Purchase Agreement among AmericasDoctor.com, Inc., Medical Advisory Systems, Inc. and Premier 
                  Research Worldwide (filed herewith)

         10.22    Support and Service Agreement between AmericasDoctor.com, Inc. and Premier Research Worldwide (filed herewith) 
         10.23    Sublease Agreement between Premier Research Worldwide and Raytheon Engineers & Constructors, Inc.
                  (filed herewith) 21.1 Subsidiaries of the Registrant (filed herewith)
         21.1     Subsidiaries of the Registrant (filed herewith)
         23.1     Consent of Arthur Andersen, LLP (filed herewith) 
         24.1     Powers of Attorneys of certain signatories (included on the signature page) 
         27.0     Financial Data Schedule (filed herewith)
</TABLE>


<PAGE>


         (1)      Incorporated by reference to the exhibit with the same number,
                  filed in connection with the Company's Current Report on Form
                  8-K filed with the Securities and Exchange Commission on
                  November 12, 1997.

         (2)      Incorporated by reference to the exhibit with the same number,
                  filed in connection with the Company's Registration Statement
                  on Form S-1, File No. 333-17001, declared effective by the
                  Securities and Exchange Commission on February 3, 1997.

         (3)      Incorporated by reference to Exhibit 4.1, filed in connection
                  with the Company's Form 10-Q on August 14, 1997, and as
                  amended by the Company's Form 10-Q/A filed on October 7, 1997.

         (4)      Management contract or compensatory plan or arrangement.

         (5)      Incorporated by reference to the exhibit with the same number,
                  files in connection with the Company's Form 10K on March 30,
                  1998.

(b)      Reports on Form 8-K

         None

<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on this 30th day of March,
1999.

PREMIER RESEARCH WORLDWIDE, LTD.

By:  /s/  Joel Morganroth
----------------------------------------
Joel Morganroth,
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>

Signature                               Title                                                Date
<S>                                     <C>                                                 <C> 
/s/  Joel Morganroth                    Chief Executive Officer, Director                    March 30, 1999
----------------------------
Joel Morganroth, M.D.                   (Principal executive officer)


/s/  Joseph Esposito                    President and Chief Operating Officer                March 30, 1999
----------------------------
Joseph Esposito                                                      


/s/  Fred M. Powell                     Senior Vice President, Finance/Administration        March 30, 1999
----------------------------
Fred M. Powell                          (Principal financial and accounting officer)


/s/  Joan Carter                        Chairman, Director                                   March 30, 1999
----------------------------
Joan Carter


/s/  John Aglialoro                     Director                                             March 30, 1999
----------------------------
John Aglialoro


/s/  Arthur Hull Hayes                  Director                                             March 30, 1999
----------------------------
Arthur Hull Hayes, Jr., M.D.


/s/  Arthur W. Hicks                    Director                                             March 30, 1999
----------------------------
Arthur W. Hicks, Jr.


/s/  Charles L. Jacobson                Director                                             March 30, 1999
----------------------------
Charles L. Jacobson, M.D.


/s/  Jerry D. Lee                       Director                                             March 30, 1999
----------------------------
Jerry D. Lee


/s/   Philip J. Whitcome                Director                                             March 30, 1999
----------------------------
Philip J. Whitcome, Ph.D.


/s/  Connie Woodburn                    Director                                             March 30, 1999
----------------------------
Connie Woodburn
</TABLE>


                                       52