SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 20-F/AAMENDMENT No. 2

|o                                |  | Registration statement pursuant to Section 12 (b) or (g) of the Securities Exchange Act of 1934                                   
|-------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------
|                                 |  | or                                                                                                                                
|ý                                |  | Annual report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the fiscal year ended September 30, 2003
|                                 |  | or                                                                                                                                
|o                                |  | Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934                                         
|Commission file number 333-12634

WARNER CHILCOTT PUBLIC LIMITED COMPANY(formerly GALEN HOLDINGS PUBLIC LIMITED COMPANY)

(Exact name of Registrant as specified in its charter)

NORTHERN IRELAND(Jurisdiction of incorporation or organization)

MILLBROOK, OLD BELFAST ROAD, LARNE, NORTHERN IRELAND BT40 2SH(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12 (b) of the Act:
None

Securities registered or to be registered pursuant to Section 12 (g) of the Act:

|Title of each class                                                                                           | Name of each exchange on which registered
|------------------------------------------------------------------------------------------------------------- | -----------------------------------------
|                                                                                                              |                                          
|AMERICAN DEPOSITARY SHARES, EACH
REPRESENTING 4 ORDINARY SHARES, PAR VALUE
10.0 U.K. PENCE PER ORDINARY SHARE | NASDAQ® NATIONAL MARKET                  

Securities for which there is a reporting obligation pursuant to Section 15 (d) of the Act:
None

Indicate
the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:

Ordinary Shares, Nominal Value 10.0 U.K. Pence Per Ordinary Share 188,209,895

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:    ý

No:    o


Indicate
by check mark which financial statement item the Registrant has elected to follow:

Item 17    o

Item 18    ý




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Explanatory Note:

This
Form 20-F/A is being filed by Warner Chilcott PLC (formerly Galen Holdings PLC which is collectively referred to as "Galen", "the Company", "we", "us" or "our")
as Amendment No. 2 (this "Amendment No. 2) to its 2003 Annual Report on Form 20-F filed with the Securities and Exchange Commission on December 31, 2003, as
amended on January 5, 2004 ("Amendment No. 1"). The purpose of this Amendment No. 2 is to reflect restatements of the Company's Consolidated Financial Statements as of
September 30, 2003, 2002 and 2001 and for each of the years in the two-year period ending September 30, 2003.

The
Company had acquired various product rights and other intellectual property in a series of transactions during the last three years. These product rights were purchased through the
Company's subsidiary in the Republic of Ireland where the amortization is not deductible for tax purposes. As a result of the inability to deduct the amortization for tax purposes, the Company
originally recorded a deferred tax liability at acquisition and increased the value of the various product rights and other intellectual property by an equal amount. The Company has now determined
that the cost of the various product rights and other intellectual property is deductible for tax purposes upon sale and accordingly, the deferred tax liability should not have been recorded and the
value of the various product rights and other intellectual property should not have been increased.

As
a result of the matters described above, the Company has restated its fiscal years 2003 and 2002 financial statements to (in thousands of U.S. dollars):



The
restatement had no impact on the Company's net assets at September 30, 2003, 2002 and 2001 since the reduction of the intangible asset balance was equal to the reduction in
the deferred tax liability as described above. Additionally, the restatement had no impact on net income for the fiscal years ended 2003 and 2002, since the increase in the provision for income taxes
was equal to the reduction in amortization of intangible assets.

There
was no effect whatsoever on the income statement for the year ended September 30, 2001 because the various product rights and other intellectual property were purchased at
the end of the year. See further disclosure in Note 2 to the Consolidated Financial Statements.

This
Amendment No. 2 amends and restates the following Items of Warner Chilcott's Amendment No. 1:





The
information contained in the remainder of Items 3 and 5 speak as of the date of the filing on January 5, 2004 of the Company's Amendment No. 1 and have not been
updated or otherwise revised since the restatement did not affect these sub-items.

All
other Items, which have been omitted from this Amendment No. 2, are unchanged and reflect the disclosures made at the date of the filing on January 5, 2004 of the
Company's Amendment No. 1.

This
Amendment No. 2 does not reflect events occurring after the original filing.

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Item 3.    Key Information.



Set forth below is selected consolidated financial data of Galen Holdings PLC and its subsidiaries, in this Amendment No. 2, at the dates and for the years
indicated. The selected consolidated operations data for the three years ended September 30, 2003 and the selected balance sheet data as of September 30, 2003 and 2002 were derived from
our audited U.S. GAAP financial statements for those periods and as of those dates, which are included in "Item 18Financial Statements" of this Amendment No. 2. The selected
consolidated operations data for the two years ended September 30, 2000 and the selected balance sheet data as of September 30, 2001, 2000 and 1999 were derived from our audited U.S.
GAAP historical financial statements, which are not included in this Amendment No. 2. The consolidated financial statements as of and for the years ended September 30, 2003 and 2002 have
been restated as discussed in note 2 to the consolidated financial statements. The consolidated balance sheet as of September 30, 2001 has also been restated. The selected consolidated
financial data set forth below should be read in conjunction with "Item 5Operating and Financial Review and Prospects" in this Amendment No. 2 and our audited consolidated
financial statements included in "Item 18Financial Statements" of this Amendment No. 2.

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|                                              |                                                    | Years ended September 30, |       
|--------------------------------------------- | -------------------------------------------------- | ------------------------- | ------
|
|
|
|Statement of Operations Data:                 |                                                    |                           |       
|                                              | Product revenue(1)                                 |                           | $     
|                                              | Cost of sales (excluding depreciation shown below) |                           |       
|                                              | Selling, general and administrative                |                           |       
|                                              | Research and development                           |                           |       
|                                              | Depreciation                                       |                           |       
|                                              | Amortization                                       |                           |       
|                                              | Acquired in-process research and development(2)    |                           |       
|                                              |                                                    |                           |       
|Total operating expenses                      |                                                    |                           | 47,823
|                                              |                                                    |                           |       
|Operating income (loss)                       |                                                    |                           | 15,102
|                                              |                                                    |                           |       
|                                              | Net interest income (expense)                      |                           |       
|                                              |                                                    |                           |       
|Income (loss) before taxes                    |                                                    |                           | 15,275
|                                              |                                                    |                           |       
|                                              | Provision for income taxes                         |                           |       
|                                              |                                                    |                           |       
|Income (loss) from continuing operations      |                                                    |                           | 10,692
|                                              |                                                    |                           |       
|                                              | Discontinued operations, net of tax(3)             |                           |       
|                                              |                                                    |                           |       
|Net income (loss)                             |                                                    | $                         | 19,037
|                                              |                                                    |                           |       
|Net income (loss) per ADS:                    |                                                    |                           |       
|Continuing operations                         |                                                    |                           |       
|                                              | Basic(4)(5)(6)                                     |                           | $     
|                                              |                                                    |                           |       
|                                              | Diluted(4)(5)(6)                                   |                           | $     
|                                              |                                                    |                           |       
|Net income (loss) per ADS:                    |                                                    |                           |       
|                                              | Basic(4)(5)(6)                                     |                           | $     
|                                              |                                                    |                           |       
|                                              | Diluted(4)(5)(6)                                   |                           | $     
|                                              |                                                    |                           |       
|Weighted average ADS equivalents outstanding: |                                                    |                           |       
|                                              | Basic(4)(5)(6)                                     |                           |       
|                                              |                                                    |                           |       
|                                              | Diluted(4)(5)(6)                                   |                           |       
|                                              |                                                    |                           |       
|Cash dividend per ADS                         |                                                    | $                         | 0.09  
|                                              |                                                    |                           |       
|Cash dividend per ADS                         |                                                    | £                         | 0.06  
|                                              |                                                    |                           |       

|                                   |  | As of September 30,
|---------------------------------- |  | -------------------
|
|
|
|Balance Sheet Data:                |  |                    
|Cash and cash equivalents(4)(6)(7) |  | $                  
|Total assets(4)(6)(7)              |  |                    
|Long-term debt(4)(6)(8)            |  |                    
|Shareholders' equity(4)(6)         |  |                    
|Share capital(4)(6)                |  |                    
|Additional paid-in capital(4)(6)   |  | $                  
|                                   |  |                    

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Not applicable.



Not applicable.



You should carefully consider the risk factors described below, as well as the other information included in this annual report. Our business, financial condition
or results of operations could be materially adversely affected by any or all of these risks, or by other risks that we presently cannot identify.

If any products are approved that compete with any of our branded pharmaceutical products, sales of our products may be adversely affected.

Our branded pharmaceutical products are or may become subject to competition from generic equivalents because there is no proprietary protection for some of the
branded pharmaceutical products we sell. Generic substitutes for some of our branded pharmaceutical products are sold by other pharmaceutical companies which claim that their products provide
equivalent therapeutic benefits at a lower cost. For instance, Estrace® tablets and Loestrin® currently face generic competition and, although Estrace® tablets
accounts for about 13.5% of oral estrogen therapy products prescribed in the United States according to IMS Health, a market data provider. Estrace® tablets currently experiences a
substitution rate in excess of 90%. Typically, upon the introduction of a generic version of a branded product, 90% or more of the prescriptions written by authorized prescribers for the branded
product may be filled with a generic at the pharmacy, resulting in a commensurate loss in sales of the branded product (substitution rates are lower for products which enjoy greater brand loyalty,
such as oral

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contraceptives).
In addition, we have entered into a letter of intent with Barr Laboratories ("Barr") that would permit Barr to launch generic versions of femhrt® and
Estrostep® six months prior to patent expiry in 2010 and 2008, respectively. Under a separate letter of intent, Barr would grant Galen an option to acquire an exclusive license for Barr's
generic version of our currently marketed Ovcon® 35 oral contraceptive, which is not protected by a patent or other exclusivity rights. These transactions are subject to negotiation of
definitive agreements, completion of due diligence and other conditions including antitrust review by the U.S. Federal Trade Commission. We cannot assure you what effect, if any, these activities will
have on our results of operations. In addition, we are engaged in litigation to enforce the patent for Sarafem®. An adverse outcome in this litigation would permit the marketing of generic
competitors to Sarafem® which would likely have a material adverse effect on our results of operations because the introduction of a generic competitor to Sarafem® would likely
drastically reduce sales of Sarafem®. In addition, legislation enacted in the United States allows, or, in a few instances, in the absence of specific instructions from the prescribing
physician, mandates the use of generic products rather than brand name products. This legislation and other pressure to reduce pharmaceutical costs may result in pharmacists filling prescriptions for
our branded products with generic substitutes. Increased competition from the sale of competing generic pharmaceutical products may cause a material decrease in revenue from our branded pharmaceutical
products.

Because we rely on independent manufacturers for many of our products, any production or regulatory problems could affect our supply of products and results of operations.

Nearly all of our pharmaceutical products are manufactured for us under contracts with third parties. Accordingly, we are dependent upon our contract
manufacturers for the manufacture of our products. Any breach of their contractual obligations could adversely affect us. We cannot assure you that our
contract manufacturers will be able to manufacture our products without interruption, that they will comply with their obligations under our various supply arrangements, or that we will have adequate
remedies for any breach. In addition, their failure to comply with regulatory requirements and to keep their facilities in good working order could adversely affect the supply of products to us.

The
FDA and the MHRA must approve suppliers of certain active and inactive pharmaceutical ingredients and certain packaging materials used in our products as well as suppliers of
finished products. The development and regulatory approval of our products are dependent upon our ability to procure these ingredients, packaging materials and finished products from FDA and MHRA
approved sources. FDA and MHRA approval of a new supplier would be required if, for example, the supplier breached its obligations to us, active ingredients, packaging materials or finished products
were no longer available from the initially approved supplier or if that supplier had its approval from the FDA and MHRA withdrawn. The qualification of a new supplier could potentially delay the
manufacture of the drug involved. Furthermore, we may not be able to obtain active ingredients, packaging materials or finished products from a new supplier on terms that are at least as favorable to
us as those agreed with the initially approved supplier or at reasonable prices.

Our trademarks, patents and other intellectual property are valuable assets and if we are unable to protect them from infringement our business prospects may be harmed.

Due to our branded product focus, we consider our trademarks to be valuable assets. Therefore, we actively manage our trademark portfolio, maintain
long-standing trademarks and obtain trademark registrations for new brands. We also police our trademark portfolio against infringement. However, our efforts may be unsuccessful against
competitors or other violating entities and we may not have adequate remedies for any breach because, for example, a violating company may be insolvent.

We
also rely on patents, trade secrets and proprietary knowledge to protect our products. We generally seek to protect our proprietary rights by filing applications for patents on
certain inventions, enforcing our legal rights against third parties that we believe may infringe our intellectual property rights, and entering into confidentiality, non-disclosure and
assignment of invention agreements with

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our
employees, consultants, licensees and other companies. We do not ultimately control whether our patent applications will result in issued patents, whether we will be successful in enforcing our
legal rights against third party infringers, whether our confidentiality, non-disclosure and assignment of invention agreements will not be breached and whether we will have adequate
remedies for any such breach, or that our trade secrets will not otherwise become known by competitors.

Eli
Lilly and Company ("Lilly") initiated legal proceedings in 2002 against Teva Pharmaceuticals ("Teva") for patent infringement. These proceedings were initiated in response to an
abbreviated new drug application filed by Teva to market a generic version of Sarafem®. Galen acquired the U.S. sales and marketing rights to Sarafem® in January 2003.
Galen has continued to pursue these claims vigorously. The bench trial in this case took place in November 2003. After the exchange of post-trial briefs and responses in
January 2004, the case will be decided. We cannot assure you when the case will be decided or whether the patent will ultimately be held valid, enforceable or infringed. In the event the patent
is found valid and infringed, an injunction would be available until at least November 2007. An adverse outcome in this proceeding would likely have a material adverse effect on our results of
operations because the introduction of a generic competitor to Sarafem® would likely drastically reduce sales of Sarafem®.

There
has been substantial litigation in the pharmaceutical industry with respect to the manufacture, use and sale of new products that are the subject of conflicting patent rights.
These lawsuits relate to the validity and infringement of patents. The expense of defending lawsuits brought against us could cause us not to defend these suits and abandon the affected products. The
ultimate outcome of this type of litigation, if brought, may not be favorable and could adversely impact our operations.

If we are not successful in managing the growth of our business or the integration of new product acquisitions, our business prospects could be harmed and our financial
performance adversely affected.

Over the past few years we have acquired a number of products. Growth by acquisition involves risks, including the failure or inability to effectively integrate
acquired products into our portfolio. If we cannot successfully integrate these acquired products, or should we incur greater than anticipated costs, or expend unplanned managerial and other resources
on their integration, we may not achieve the anticipated revenue and cost benefits, our growth could be slower than we anticipate, we may incur an impairment charge for our intangible assets and our
financial performance could be adversely affected.

Our
future growth will depend to some extent upon our ability to acquire new products. We have and will continue to pursue product acquisitions that could complement or expand our
operations. Many of our present and potential competitors have research and development capabilities which may allow them to develop new or improved products that compete with our products. The
failure to acquire new products or to develop, on a commercially viable basis, new products will lead to slower growth than we anticipate and limit our ability to meet our strategic objectives.

We
cannot be sure that we will be able to identify appropriate opportunities in the future. If an acquisition candidate is identified, we do not know if we will be able to negotiate
successfully the terms of the acquisition, finance the acquisition or integrate an acquired product into our existing operations. The negotiation and completion of potential acquisitions could cause
significant diversion of management's time and resources.

An increase in product liability claims, or product recalls, could harm our business.

The development, manufacture, testing, marketing and sale of pharmaceutical products entail significant risk of product liability claims or recalls. Our products
are, in the substantial majority of cases, designed to affect important bodily functions and processes. Unforeseen side-effects caused by or manufacturing defects inherent in the products
sold by us could result in exacerbation of a patient's condition, further deterioration of the patient's condition or even death. The occurrence of such an

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event
could result in product liability claims and/or recall of one or more of our products. Claims may be brought by individuals seeking relief for themselves or, in certain jurisdictions, by groups
seeking to represent a class.

Product
liability insurance coverage is expensive, can be difficult to obtain and may not be available in the future on acceptable terms, if at all. Our product liability insurance may
not cover all the future liabilities we might incur in connection with the development, manufacture or sale of our current and potential products. In addition, we may not continue to be able to obtain
insurance on satisfactory terms or in adequate amounts. A successful claim or claims brought against us in excess of available insurance coverage or product recalls in the future could, regardless of
their outcome, have a material adverse effect on our business, results of operations and reputation and on our ability to obtain and retain customers for our products. Furthermore, we could be
rendered insolvent if we do not have sufficient financial resources to satisfy any liability resulting from such a claim or to fund the legal defense of such a claim.

Product
recalls may be issued at our discretion or at the discretion of certain of our suppliers, the FDA, MHRA, other government agencies or other entities having regulatory authority
for pharmaceutical sales. We cannot assure you that product recalls will not occur in the future. Any recall of a significant product could materially adversely affect our business by rendering us
unable to sell that product for some time.

Delays and uncertainties in the government approval process for new products could result in lost market opportunities and hamper our ability to recoup costs associated with
product development.

The clinical development, manufacture, marketing and sale of pharmaceutical products are subject to extensive supranational, national, state and local
regulations. We cannot predict the extent to which we may be affected by legislative and other regulatory actions and developments in the countries and jurisdictions in which we operate concerning
various aspects of our operations, products and the
healthcare field generally. New governmental regulation may adversely affect our operations or competitive position. We are required to obtain, as are other drug companies manufacturing or marketing
drugs, approval from the U.S. Food and Drug Administration (the "FDA"), the U.K. Medicines and Healthcare products Regulatory Agency (the "MHRA"), and other regulatory bodies based upon
pre-clinical testing, manufacturing chemistry and control data, bioavailability and other clinical data which we are required to generate prior to gaining regulatory approval necessary to
begin marketing most new drug products. The generation of this required data is regulated by the FDA, the MHRA and other regulatory bodies. This process can be time-consuming and expensive
without assurance that the data will be adequate to justify approval of our proposed new products. If we are not able to obtain governmental approval for our products, we will not be able to recoup
the costs associated with the generation of this data. These costs may be substantial and may have an adverse effect on our results of operations if not recaptured.

Even
if we are successful in obtaining all required premarketing approvals and postmarketing requirements, our inability or failure to comply with other regulations could result in
suspension or limitation of approvals. Furthermore, even if we obtain regulatory approvals, the terms of any product approval, including labeling, may be more restrictive than desired and could affect
the marketability of our products.

The loss of the services of members of our senior management team or scientific staff or the inability to attract and retain other highly qualified employees could impede our
ability to meet our strategic objectives and adversely affect our business.

Our success is dependent on attracting and retaining highly qualified scientific, sales and management staff. We face intense competition for personnel from other
companies, academic institutions, government entities and other organizations. The loss of key personnel, or our failure to

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attract
and retain other highly qualified employees, may impede our ability to meet our strategic objectives.

Pursuant
to our business strategy, we intend to expand and develop new technologies and products. This strategy will require us to hire additional employees with expertise in areas that
relate to the new technologies and products. We cannot fully anticipate or predict the time and extent to which we will need to hire this type of specialized personnel. As a result, there can be no
assurance that we will be successful in attracting and retaining the personnel necessary to pursue fully our business strategy. We offer what we believe to be competitive compensation packages and
benefits. However, if competitive conditions continue to intensify, then our cost of attracting and retaining employees may escalate.

The perceived health effects of estrogen and combined estrogen-progestogen hormone therapy products may affect the acceptability and commercial success of our products.

Three of our products, Estrace® tablets, Estrace® cream and Menoring®/Femring® are estrogen therapy ("ET")
products, and one of our products, femhrt®, is a combined estrogen-progestogen therapy ("EPT") product. These hormone therapy products are used by women to alleviate symptoms associated
with menopause. Recent studies have analyzed the health effects of ET and EPT products. The outcome of these studies and any resulting changes in labeling for our products may affect the acceptability
of our products by patients, the willingness of physicians to prescribe our products for their patients or the duration of their therapy. In any such event, we may not achieve our anticipated sales
levels for these products and we may not be able to recoup our investment in the development of our products and our overall rate of growth may be lower.

Changes in market conditions including lower than expected cash flows or revenues for our branded pharmaceutical products may result in our inability to realize the value of
these products in which case we may have to record an impairment charge.

The pharmaceutical industry is characterized by rapid product development and technological change, and, as a result, our pharmaceutical products could be
rendered obsolete or made uneconomical by the development of new technology or new pharmaceutical products to treat the conditions currently addressed by our products, technological advances that
reduce the cost of production or marketing or pricing actions by one or more of our competitors.

We
acquired a significant amount of goodwill in connection with our acquisition of Warner Chilcott, which is subject to annual or more frequent impairment testing. We currently do not
anticipate any impairment charges.

Pricing pressures by managed care organizations or government sponsored health systems and regulations relating to Medicare and Medicaid, healthcare reform, pharmaceutical
reimbursement and pricing in general could decrease our revenues.

Our
commercial success in producing, marketing and selling products depends, in part, on the availability of adequate reimbursement from third party healthcare payers, such as government
bodies and agencies, including the U.K. National Health Service (the "NHS"), private health insurers and managed care organizations for the cost of the products and related treatment. The market for
our products may be limited by actions of third party payers. Third party payers are increasingly challenging the pricing of pharmaceutical products and services and reviewing their reimbursement
practices and many managed healthcare organizations are now limiting the number of pharmaceutical products that are on their formulary lists in an effort to control and reduce costs associated with
patient drug therapies. The resulting competition among pharmaceutical companies to place their products on these formulary lists has created a trend of downward pricing pressure in the industry. Our
products may not be included on the formulary lists of managed care organizations and downward pricing pressures in the industry generally may negatively impact our operations. Further, a number of
U.S. legislative and

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regulatory
proposals aimed at changing the healthcare system have been proposed. While we cannot predict whether any such proposals will be adopted or the effect such proposals may have on our
business, the existence of such proposals, as well as the adoption of any proposal, may increase industry-wide pricing pressures.

Prescription drug importation from Canada could increase pricing pressure on certain of our products and could decrease our revenues and profit margins.

Under pre-existing U.S. law, U.S. individuals may import prescription drugs from Canada for their personal use under specified circumstances. Other
imports although illegal under U.S. law also enter the country as a result of the resource constraints and enforcement priorities of the FDA and the U.S. Customs Service. In addition, in
December 2003, the United States enacted the Medicare Prescription Drug, Improvement, and Modernization Act, which would permit pharmacists and wholesalers to import prescription drugs into the
United States from Canada under specified circumstances. These additional import provisions will not take effect until the Secretary of Health and Human Services makes a required certification
regarding the safety and cost savings of imported drugs and the FDA has promulgated regulations setting forth parameters for importation. If these provisions take effect, the volume of prescription
drug imports from Canada could increase significantly. Even if these provisions do not take effect, the volume of prescription drug imports from Canada could increase due to a variety of factors,
including proposals by certain state and local governments to facilitate Canadian imports. We currently sell Loestrin® and femhrt® in Canada. In addition, Estrace®
tablets, Dovonex® and Dovobet® are sold in Canada by third parties. For the year ended September 30, 2003, Loestrin®, femhrt® and
Estrace® products accounted for 28.9% of our sales. Due to government price regulation in Canada, these products are generally sold in Canada for lower prices than in the United States. As
a result, if these drugs are imported into the United States from Canada, we may experience reduced sales or profit margins.

We cannot assure you that our products using the vaginal ring drug delivery technology will be successful.

The successful launch of products using our proprietary vaginal ring technology is a part of our growth strategy. Our vaginal ring technology consists of a
silicone ring, containing an active ingredient, which is inserted into the vagina where the active ingredient is absorbed. To date, vaginal ring technology has not been widely used as a drug delivery
technology and it may not be readily accepted by either prescribing physicians or their patients. We have recently launched Femring®, our first product using our proprietary vaginal ring
technology in the United States. We cannot assure you that sales of Femring® will achieve anticipated results. Other alternative estrogen therapies, including orally administered tablets,
transdermal patches and subcutaneous implants have each been used for some time and are familiar to many prescribing physicians and their patients. If our vaginal ring products are not accepted as an
alternative method of administration of estrogen therapy, we may not achieve our anticipated sales levels for these products. In such an event, we may not be able to recoup our investment in the
development of vaginal ring products.

Item 5.    Operating and Financial Review and Prospects.



The following discussion and analysis of financial condition and results of operations of Galen should be read in conjunction with the selected financial
information of Galen, the consolidated financial statements for the fiscal years 2001, 2002 and 2003 together with the notes to the consolidated financial statements, as well as the business
description included in this annual report. The financial data analyzed in this discussion has been prepared in accordance with U.S. GAAP. In addition, the

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following
discussion does not include the results from our discontinued operations, unless otherwise indicated.

Overview

For the period under review, our consolidated results of operations should be considered in light of the following specific factors.

Effect of the Acquisition of Warner Chilcott.On September 29, 2000, we acquired Warner Chilcott, a U.S. based
developer and marketer of branded prescription pharmaceutical products for $325.5 million. The acquisition, accounted for as a purchase, has and will continue to affect our results of
operations. We recognized goodwill in the amount of $212.1 million. Pursuant to SFAS 142, the Company's goodwill is no longer amortized effective October 1, 2001. We recognized
intangible assets in the amount of $199.9 million related to the Ovcon® 35, Ovcon® 50 and Estrace® cream products of Warner Chilcott together with
$20.9 million attributed to the value of core developed technology, and we amortize these amounts over a period of 20 years.

In
February 2000, Warner Chilcott, Inc. issued $200 million principal amount of 12.625% senior notes due 2008 ("Notes"). After certain noteholders exercised their
repurchase rights in connection with our acquisition of Warner Chilcott, $159.7 million of senior notes remained outstanding. During the year ended September 30, 2002, we repurchased
$111.3 million of principal amount of senior notes in privately negotiated transactions, and an additional $2.9 million of principal amount in the year ended September 30, 2003.
As of September 30, 2003, the principal amount of senior notes outstanding amounted to $45.5 million. Under the terms of the indenture, Warner Chilcott is permitted to redeem the senior
notes on or after February 15, 2004. On December 18, 2003, Warner Chilcott gave notice to the trustee under the indenture of its intention to redeem all of the outstanding senior notes
on February 15, 2004.

Effect of Acquisitions and Disposals.We have expanded our portfolio of branded pharmaceutical products since we acquired
Warner Chilcott in 2000. As a result of these product acquisitions, we have recognized intangible assets totaling approximately $796 million. We are amortizing this amount over 20 years,
which has the effect of reducing our net income accordingly. We may acquire additional products in the future. We also disposed of our CSS business in December 2001, CTS business in
May 2002, ICTI business in August 2002 and therefore no longer have any pharmaceutical services businesses. The following discussion does not include the results from these discontinued
businesses unless otherwise indicated. A description of these acquisitions and disposals may be found under "Item 4Information on the
Company." A consequence of our recent acquisitions is that our results of operations may not be comparable to prior year periods.

Critical Accounting Policies

The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation
of our consolidated financial statements. Our significant policies are described in Note 1 to the consolidated financial statements included in Item 18 of this annual report.



We periodically evaluate acquired businesses for potential impairment indicators. Our judgments regarding the existence of impairment indicators are based on
legal factors, market conditions and operational performance of our business. We carry out an annual impairment review of goodwill unless events occur which trigger the need for an earlier impairment
review. We have completed our annual impairment test as of June 30, 2003 and have determined that goodwill has not been impaired. Future

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events
could cause us to conclude that impairment indicators exist and that goodwill associated with our business is impaired. Any resulting impairment could affect our financial condition and results
of operations.



We assess the impairment of definite lived intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Factors which we consider could trigger an impairment review include, but are not limited to, the following: (i) significant negative industry or economic trends; and (ii) current,
historical or projected losses that demonstrate continuing losses. When we determine that there is an indicator that the carrying value of definite lived intangible assets may not be recoverable, we
measure impairment based on estimates of future cashflow. These estimates include assumptions about future conditions within the Company and the industry. If actual cashflows differ from those
projected by management, additional write-offs may be required.



We record an allowance for estimated bad debts included in our accounts receivable. This allowance is determined based on our historical collection and
write-off experience. An allowance is also made for customer accounts for which we believe that collectibility is doubtful. Management's judgment is a key factor in determining this
allowance and, as such, additional allowances may be required.



Our inventory is stated at the lower of cost or net realizable value. Cost is determined on a first in, first out basis and includes transportation and handling
costs. In the case of manufactured products, cost includes material, labor and applicable manufacturing overheads. Provisions are made for obsolete, slow moving or defective items where appropriate.
The provisioning process requires the use of management's judgment.

Results of Operations



Revenue.Revenue from continuing operations of $432.3 million for the year ended September 30, 2003 (fiscal
2003) increased $197.0 million, or 84%, from $235.2 million for the year ended September 30, 2002 (fiscal 2002). Our continuing operations represent our pharmaceutical products
business, which includes the development, promotion and sale of branded prescription products in the United States, United Kingdom and the Republic of Ireland. Approximately 83% of our fiscal 2003
revenue from continuing operations was generated in the United States. A significant part of the increase in our revenue from continuing operations was the result of our newly acquired products. The

11

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following
table summarizes our product revenue for our newly acquired products and for our other important products (in millions):

Year Ended
September 30, 2003Doryx®

$
54.1Estrace® cream


44.8Estrostep®


26.5femhrt®


22.6Femring®


2.3Loestrin®


34.9Ovcon®


58.6Sarafem®


59.9All other


128.6$
432.3


Although
revenue from our newly acquired products significantly contributed to our increased revenue in fiscal 2003, revenues for our existing products promoted by our sales force
increased as well. Revenues for Ovcon®, Estrace® cream and Doryx® increased by 27% compared to fiscal 2002. In January 2003, we acquired the U.S. sales and
marketing rights to Sarafem® from Lilly for cash consideration of approximately $295 million. Sarafem® is a treatment for premenstrual dysphoric disorder, a severe form
of premenstrual syndrome. In March 2003, we acquired two oral contraceptives, Estrostep® and Loestrin®, from Pfizer, Inc. for an initial cash consideration of
approximately $197 million. We acquired femhrt® in April 2003 for an initial cash consideration of approximately $162 million. femhrt® is a continuous
estrogen-progestogen therapy. No revenue for these newly acquired products was recorded in fiscal 2002. In June 2003, we launched Femring®, our vaginal ring for estrogen therapy.

Gross profit and gross margin.Gross profit of $359.6 million for fiscal 2003 increased $175.9 million, or 96%,
from $183.7 million in fiscal 2002. Our gross margin was 83% in fiscal 2003 compared to 78% in fiscal 2002. These improved results correspond with the increase in revenues from our branded
pharmaceutical products in the United States.

Selling, general and administrative expenses.Selling, general and administrative expenses of $135.9 million increased
$71.3 million, or 111%, from $64.5 million in fiscal 2002 primarily due to increased selling, advertising and promotion costs incurred as we expanded our sales force and increased
spending on promoting our broadened product portfolio. Included in the increase in our promotion and advertising costs is $21.4 million associated with our June 2003 U.S. launch of
Femring®. The average number of representatives on our sales force in fiscal 2003 was 328, an increase of 26% as compared to the fiscal 2002 average of 261. As of September 30, 2003
we had approximately 390 sales representatives.

Research and development.Research and development expenses of $28.7 million increased $8.9 million, or 45%,
from $19.8 million in fiscal 2002 reflecting our ongoing investment in our pipeline of products. During fiscal 2003, we received final approval from the FDA for Femring®, and we
completed work on the NDA for our oral estradiol acetate product, Femtrace, for the treatment of the symptoms of menopause. The NDA for Femtrace was accepted for filing by
the FDA on December 19, 2003. In November 2003, we received final FDA approval for our new Ovcon® 35 chewable tablet product. We expect to submit an NDA for our
Doryx® line extension in early calendar 2004 and an NDA for MetroRing in the second half of calendar 2004. Also in fiscal 2003, we received final approval by the FDA for
Femring®, our first vaginal ring product to be approved in the United States. We received final FDA approval for our new Ovcon® 35 chewable tablet product in
November 2003.

12

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Depreciation and amortization.Depreciation expense of $6.8 million increased $1.5 million, or 29%, from
$5.3 million in fiscal 2002 resulting from investments in property, plant and equipment in the ordinary course. Amortization expense of $38.4 million increased $19.9 million, or
107%, from $18.5 million in fiscal 2002. This increase was primarily due to the amortization of Estrostep® and Loestrin® acquired in March 2003,
femhrt® acquired in April 2003, the U.S. sales and marketing rights to Sarafem® acquired in January 2003, and Duricef® and Moisturel®
acquired in March 2002.

Interest income and interest expense.Interest income of $3.2 million decreased $7.6 million, or 71%, from
$10.8 million in fiscal 2002 as funds on hand were significantly less during fiscal 2003. During the second and third quarters of fiscal 2003, we acquired femhrt®,
Estrostep®, Loestrin® and the U.S. sales and marketing rights for Sarafem® for a total of approximately $654 million. These transactions were financed from
cash on hand and the drawdown of approximately $350 million in long-term debt, under our $450 million credit facility put in place during the second quarter of fiscal 2003.
Interest expense of $11.3 million decreased $18.4 million, or 62%, from $29.7 million in fiscal 2002. This decrease was primarily due to net costs of $13.2 million,
associated with our early retirement of debt, which are included in our results for fiscal 2002. These costs were the result of our fiscal 2002 purchase of $111.3 million principal amount of
the Notes acquired as part of the Warner Chilcott transaction. In fiscal 2003, we purchased an additional $2.9 million principal amount of Notes, and recorded net costs of $0.2 million.
We purchased the Notes in privately negotiated transactions. The average principal amount outstanding during fiscal 2002 was $111.4 million, compared to a balance of $48.2 million during
fiscal 2003. The reduction in interest charges related to our purchase of the Notes more than offset the interest expense associated with our fiscal 2003 drawdown of approximately $350 million
in debt under our credit facility, having the effect of further lowering our interest charges in fiscal 2003 as compared to fiscal 2002.

Provision for income taxes.Taxes of $45.6 million increased $26 million from $19.6 million in fiscal
2002. We operate primarily in three tax jurisdictions, the United Kingdom, the United States and the Republic of Ireland. In the United Kingdom the statutory rate was 30% in both fiscal 2003 and 2002.
The federal statutory rate in the United States was 35% in both fiscal 2003 and 2002. In the Republic
of Ireland, the statutory rate was 13% in fiscal 2003 and 17% in fiscal 2002. Our effective tax rate was 32% in fiscal 2003, compared to 35% in fiscal 2002, the decrease reflecting the lower tax rates
in the Republic of Ireland.

Discontinued Operations.Our discontinued operations represented our pharmaceutical services businesses, which were ICTI
(sold as of August 23, 2002), CTS (sold as of May 31, 2002) and CSS (sold as of December 31, 2001). In fiscal 2002, we reported a gain of $101.1 million, net of taxes of
$3.9 million, representing the sale of these businesses. Also included in our results was income from discontinued operations of $7.0 million, net of taxes of $2.2 million,
representing results for ICTI, CTS and CSS through their respective dates of sale. No results for discontinued operations were recorded for fiscal 2003 as our discontinued operations were disposed of
in entirety by the end of our fiscal year 2002.

Net income.Due to the factors set forth above, we reported net income of $96.2 million as compared to
$145.2 million in fiscal 2002. Our discontinued operations, including the gain on disposal, accounted for $108.1 million of our net income for fiscal 2002. Net income per ADS was $2.10
(basic) and $2.08 (diluted), compared to $3.13 (basic) and $3.12 (diluted) in fiscal 2002. The weighted average number of ADS equivalent shares outstanding decreased by 0.4 million due to our
repurchase of 0.5 million ADS equivalents in the last quarter of fiscal 2002. Our Board of Directors recommended the payment of a final dividend of 2.4 pence per ordinary share, a 20% increase
over fiscal 2002, making the total dividend for fiscal 2003 3.6 pence per ordinary share compared to 3.0 pence per ordinary share in fiscal 2002.

13

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Years Ended September 30, 2002 and 2001

Revenue.Revenue from continuing operations of $235.2 million for the year ended September 30, 2002 (fiscal
2002) increased 28%, or $51.4 million, from $183.8 million for the year ended September 30, 2001 (fiscal 2001). Our continuing operations represent our pharmaceutical products
business, which includes the development, promotion and sale of branded prescription products in the United States, United Kingdom and Ireland. 74% of our fiscal 2002 revenue from continuing
operations was generated in the United States, compared to 64% in fiscal 2001.

Our
top three performing products, Ovcon®, our oral contraceptive, Estrace® cream, for local treatment of urogenital symptoms associated with menopause, and
Doryx®, our pelletized oral formulation of doxycycline for the treatment of acne,
continued to grow during fiscal 2002. Contributing to the growth was our launch in January 2002 of our new 75 mg. dosage strength for Doryx® to complement our successful
Doryx® 100 mg. product. During fiscal 2002, we further expanded our portfolio of products marketed to the dermatologist in the United States with our acquisition of Duricef®
and Moisturel® in March 2002. Sales for Estrace® tablets, acquired in June 2001, were recorded for a full year in fiscal 2002 and for our final quarter in fiscal
2001.

Gross profit and gross margin.Gross profit of $183.7 million for fiscal 2002 increased 32%, or $44.1 million
from $139.6 million in fiscal 2001. These improved results reflect the significant increase in our revenues from our high margin pharmaceutical products in the United States. Our gross margin
increased from 76% in fiscal 2001 to 78% in fiscal 2002.

Selling, general and administrative.Selling, general and administrative expenses of $64.5 million were consistent
with fiscal 2001. Increased selling and promotion costs of $11.4 million in support of our product portfolio and newly launched products, were offset primarily by foreign currency gains.

Research and Development.Our research and development expenses of $19.8 million increased 45%, or
$6.1 million, from $13.7 million in fiscal 2001 as we continued to increase our investment in our pharmaceutical product portfolio. Our activities were focused on the development of
proprietary products for marketing in the United States, based on the vaginal ring. We also pursued new products and line extensions of our branded products that would complement and strengthen our
existing product line. During fiscal year 2002, we submitted NDAs with the FDA for our vaginal ring estrogen therapy (Femring®) and our new Ovcon® 35 chewable tablet product.
In fiscal 2002, we worked on our proprietary line extension for Estrace® tablets (Femtrace) and the NDA for this product was accepted for filing by the FDA on
December 19, 2003. Our activities also included the development of other vaginal ring applications for the treatment of sexual dysfunction and local infection.

Depreciation and amortization expense.Depreciation expense of $5.3 million for fiscal 2002 increased
$1.0 million from $4.3 million in fiscal 2001. This increase was the result of our continued investment in our property, plant and equipment. Amortization expense of $18.5 million
decreased 29%, or $7.7 million, from $26.2 million in fiscal 2001. Effective October 1, 2001, we ceased amortizing our goodwill due to our adoption of Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets. The resulting reduction in amortization expense of $13.6 million was significantly offset by the increase in
amortization expense associated with our acquisition of Duricef® and Moisturel® in March 2002 and Estrace® tablets in June 2001.

Interest income and interest expense.Interest income of $10.8 million for fiscal 2002 increased 71%, or
$4.5 million, from $6.3 million in fiscal year 2001 as average funds held for investment were higher during fiscal 2002 than in fiscal 2001. Funds held for investment were most
significantly increased as a result of our July 2001 equity offering from which we raised approximately $268 million in net proceeds and, more recently, as a result of our sale of our
services businesses for which we received approximately $229 million (net of costs). Interest expense of $29.7 million increased 33%, or $7.3 million, from $22.4 million in
fiscal 2001 due to our purchase of a portion of the Notes acquired as part of the Warner Chilcott transaction. During fiscal 2002, we purchased in privately negotiated

14

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transactions
a total of $111.3 million principal amount of Notes, and recorded $13.2 in net costs related to this transaction. These costs were significantly offset by the reduction in interest
charges for the principal amount outstanding. The average principal amount outstanding during fiscal 2002 was $111.4 million, compared to $168 million during fiscal 2001.

Provision for income taxes.Taxes increased 227%, or $13.6 million to $19.6 million for fiscal 2002 compared to
$6.0 million for fiscal 2001. We operate primarily in three tax jurisdictions, the United Kingdom, the United States and the Republic of Ireland. In the United Kingdom the statutory rate was
30% in both fiscal 2002 and 2001. The federal statutory rate in the United States was 35% in both years. In the Republic of Ireland, the statutory rate was 17% in fiscal 2002 and 21% in fiscal 2001.
Our effective tax rate was 35% in fiscal 2002 and 41% in fiscal 2001. The lower effective tax rate in fiscal 2002 is primarily attributable to the cessation of goodwill amortization effective
October 1, 2001 described above.

Discontinued Operations.Our discontinued operations comprised our pharmaceutical services businesses, which were ICTI (sold
as of August 23, 2002), CTS (sold as of May 31, 2002) and CSS (sold as of December 31, 2001). In fiscal 2002, we reported a gain of $101.1 million, net of taxes of
$3.9 million, representing the sale of these businesses. Also included in our results was income from discontinued operations of $7.0 million, net of taxes of $2.2 million,
representing results for ICTI, CTS and CSS through their respective dates of sale.

Net income.The result of the items discussed above was that we reported $145.2 million of net income for fiscal 2002
as compared to net income of $16.4 million in fiscal 2001. Net income per ADS was $3.13 (basic) and $3.12 (diluted), compared to $0.41 (basic) and $0.40 (diluted) in fiscal 2001. The weighted
average number of ADS equivalent shares outstanding increased by 6.0 million due primarily to the issuance of 6.6 million ADS equivalents in relation to our July 2001 equity
offering, offset by the 0.5 million ADS equivalents we repurchased during fiscal 2002. Our Board of Directors recommended the payment of a final dividend of 2.00 pence per ordinary share, a 20%
increase over fiscal 2001, making the total dividend for fiscal 2002 3.00 pence per ordinary share compared to 2.49 pence per ordinary share in fiscal 2001.

New Accounting Pronouncements

Please refer to Note 1 to the consolidated financial statements included in Item 18 of this Form 20-F.



We ended fiscal 2003 with $89.1 million cash on hand as compared to $313 million at September 30, 2002. During fiscal year 2003, we acquired
femhrt®, Estrostep®, Loestrin® and the U.S. sales and marketing rights for Sarafem® for a total of approximately $654 million. These transactions
were financed from cash on hand and the drawdown of approximately $350 million in senior debt, part of a $450 million credit facility put in place during fiscal 2003.

The
following table summarizes our net (decrease)/increase in cash and cash equivalents:

|                                                     |  | For the Years Ended September 30, |         
|---------------------------------------------------- |  | --------------------------------- | --------
|
|
|Net cash provided by operating activities            |  | $                                 | 164,077 
|Net cash (used in)/provided by investing activities  |  |                                   | (670,677
|Net cash provided by/(used in) financing activities  |  |                                   | 282,570 
|                                                     |  |                                   |         
|Net (decrease)/increase in cash and cash equivalents |  | $                                 | (224,030
|                                                     |  |                                   |         

15

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Our
net cash provided by operating activities increased by $90.7 million in fiscal 2003 compared to 2002 primarily reflecting our increased operating results from continuing
operations generated from our recent product acquisitions and growth in existing promoted products. Our working capital movement decreased $11.4 million from fiscal 2002 as a result of an
increased level of payables. Our net debt as of September 30, 2003 was $253.3 million, and consisted of $295.8 million in term loans, $46.6 million in Warner Chilcott
senior notes less $89.1 million in cash.

On
March 5, 2003, we entered into the above mentioned $450 million credit facility with ABN AMRO Bank N.V., Barclays Bank PLC and Bank of Ireland. This senior debt facility
provides for a $100 million multi-currency revolving facility, a $250 million three-year term loan facility and a $100 million five-year term loan
facility. The term loan facilities were made available to us in connection with our acquisitions of Sarafem®, Estrostep®, Loestrin® and femhrt®, and
have been drawn down by us in the second and third quarters of our fiscal year 2003 as we completed these purchase transactions. We may use the $100 million multi-currency revolving facility
for all general corporate and working capital purposes other than to finance the above-mentioned acquisitions and related expenses. This credit agreement places certain restrictive covenants on Galen
and requires us to comply with certain financial covenants. As of September 30, 2003, Galen was in compliance with these financial covenants. It also contains certain events of default, which
give the lenders the right to demand repayment of the amounts drawn down under the credit agreement. Interest is payable at a rate representing a margin which is initially, and the maximum, a rate of
1.25 percent per annum (and which shall be adjusted from time to time according to compliance by Galen with certain financial covenants) above the London (or European in the case of an advance
denominated in Euro) interbank offered rate plus mandatory costs. This credit agreement also contains customary warranties and indemnities for a facility of this nature. As of September 30,
2003, we had $100 million available for use under the revolving facility.

The
Warner Chilcott senior notes outstanding are redeemable, in whole or in part, at the option of Warner Chilcott beginning in 2004 at redemption prices that decrease annually to the
maturity date and range from 106.3125% to 100%. The note indenture limits the ability of Warner Chilcott to incur or guarantee additional debt, as well as to pay dividends or to redeem or to
repurchase capital stock. On December 18, 2003, Warner Chilcott gave notice to the trustee under the note indenture of its intention to redeem all of the outstanding senior notes on
February 15, 2004. We may, from time to time, repay other outstanding borrowings.

Bank
and equivalent funding at September 30, 2003, amounted to $295.6 million, of which $295 million was at variable rates based on LIBOR. We do not make use of
derivatives to hedge interest rate risk as we believe that our exposure to changes in interest rates under the variable rate agreements will not have a significant effect on our financial condition or
results of operations.

Of
our total indebtedness of $342.4 million at September 30, 2003, $341.1 million was denominated in U.S. dollars and the balance in pounds sterling. We had no
foreign currency option contracts at September 30, 2003.

We
intend to fund our future liquidity needs, including capital expenditures and dividend payment, through a combination of cash generated from operations, cash balances on hand and
availability under bank credit facilities. There is no significant seasonality to our funding requirements, and we believe that these sources will be sufficient to fund our anticipated working capital
needs for the foreseeable future. We generally expect to fund repayments of indebtedness with other indebtedness. In the event that we pursue a significant acquisition, we may be required to raise
additional funds through additional indebtedness, or the issuance of debt or equity securities.

We
evaluate our balance sheet periodically to determine whether to refinance outstanding indebtedness with cash on hand or with other indebtedness. Accordingly, we may choose to reduce
our indebtedness from time to time.

16

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Financial Condition

|                  |                   | As of September 30,
|----------------- | ----------------- | -------------------
|
|
|
|Total assets      |                   | $                  
|                  |                   |                    
|Indebtedness      |                   | $                  
|Other liabilities |                   |                    
|                  |                   |                    
|                  | Total liabilities |                    
|                  |                   |                    

Total
assets as of September 30, 2003 increased $410.5 million compared to September 30, 2002 primarily due to our fiscal 2003 acquisition of femhrt®,
Estrostep®, Loestrin® and the U.S. sales and marketing rights for Sarafem® for which we recognized intangible assets totaling $654 million. This significant
increase in total assets was partially offset by our decrease in cash and cash equivalents of $223.9 million. The primary factor contributing to the decrease in our cash and cash equivalents
was the forementioned acquisitions which were financed with cash on hand and the drawdown of approximately $350 million in senior debt. Our indebtedness as of September 30, 2003
increased $290.4 million compared to September 30, 2002 primarily as a result of the $350 million in senior debt. Shareholders' equity increased $88.1 million principally
as a result of our fiscal 2003 net income of $96.2 million offset by $9.2 million in dividends declared.

The
ratio of indebtedness to our total capitalization (indebtedness plus shareholders' equity) increased to 26% as of September 30, 2003 from 5% as of September 30, 2002.
This increase is primarily due to our drawdown of $350 million in senior debt, described above, offset partially by the increase of $88.1 million in shareholders' equity.



For a discussion of our research and development activities, patents and licenses, please see the information set forth under the heading "Item
4Information on the Company?Business Overview?Research and Development" in this annual report.



Several trends may affect our future results of operations, liquidity and capital resources, including:

-
Acceptability of hormone replacement therapy;

-
Acceptability of vaginal ring technology; and

-
Delays in introducing new products due to governmental regulation.

Acceptability of hormone therapy.

Three of our products, Estrace® tablets, Estrace® cream and Menoring®/Femring® are estrogen therapy
("ET") products, and one of our products, femhrt®, is a combined estrogen-progestogen hormone therapy ("EPT") product. In July 2002, a clinical trial that was part of a
long-term study that focuses on strategies for preventing heart disease, breast and colorectal cancer and osteoporosis in postmenopausal women ("WHI") was terminated early when the safety
monitoring board determined that the risks of the trial exceeded the benefits. The trial compared Prempro (an EPT product containing Premarin® and the progestin
medroxyprogesterone acetate) to a placebo in non-hysterectomized patients. Despite a decrease in the incidence of hip fracture and colorectal cancer, there was an increased risk of
invasive breast cancer, coronary heart disease, stroke, and blood clots in patients randomized to Prempro. A related clinical trial comparing Premarin® (an ET product
containing conjugated equine estrogens) to a placebo in hysterectomized patients for the prevention of

17

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heart
disease and osteoporosis, and any associated risk of breast cancer, is still continuing at the recommendation of the safety monitoring board.

The
outcome of these trials and any resulting changes in labeling for HT products as a class may affect the acceptability of HT products (including ET products) by patients, the
willingness of physicians to prescribe HT for their patients or the duration of their therapy. In any such event, we may not achieve our anticipated sales levels for these products and we may not be
able to recoup our investment in the development of our products.

Acceptability of vaginal ring technology.

An important part of our strategy is to develop and commercialize pharmaceutical products based on innovative formulations and novel drug delivery technology,
particularly our vaginal ring technology. To date, vaginal ring technology has not been widely used as a drug delivery technology and it may not be readily accepted by either prescribing physicians or
their patients. Other alternative hormone replacement therapies, including orally administered tablets, transdermal patches and subcutaneous implants have each been used for some time and are more
familiar to many prescribing physicians and their patients. If our vaginal ring products are not accepted as an alternative method of administration of hormone replacement therapy, we may not achieve
our anticipated sales levels for these products. In such an event we may not be able to recoup our investment in the development of vaginal ring products.

Delays in introducing new products and supply of pharmaceutical products due to governmental regulation.

Another important part of our strategy is to develop and commercialize proprietary products and we have a number of products in various stages of development. To
begin marketing most of our new products, we must obtain approval from regulatory bodies, including the U.S. Federal Drug Administration, the U.K. Medicines and Healthcare products Regulatory Agency
and other regulatory bodies based upon pre-clinical testing, manufacturing chemistry and control data, bioavailability and other clinical data which we are required to generate prior to
gaining regulatory approval. We cannot guarantee that any of our new products will meet these clinical requirements or that we otherwise will be able to obtain the necessary regulatory approvals to
enable us to market them in the future.

E.    Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements, except for operating leases considered normal to our business.

F.    Tabular Disclosure of Contractual Obligations

The following table summarizes our financial commitments as of September 30, 2003:

Cash Payments Due by Period  (in thousands)

|                             |                               | Total |        | Less Than 1
Year |  | 1 to 3 Years |         | 3 to 5 Years |        | More
Than 5
Years
|---------------------------- | ----------------------------- | ----- | ------ | ---------------- |  | ------------ | ------- | ------------ | ------ | -----------------
|Long-term debt:              |                               |       |        |                  |  |              |         |              |        |                  
|                             | Variable rate bank debt       |       | $      | 294,991          |  | $            | 102,813 |              | $      | 163,459          
|                             | Fixed rate bank debt          |       |        | 577              |  |              | 275     |              |        | 302              
|                             | Fixed rate notes              |       |        | 46,585           |  |              |        |              |        |                 
|Supply agreement obligations |                               |       | 73,475 |                  |  | 37,175       |         |              | 24,300 |                  
|Capital lease obligations    |                               |       | 236    |                  |  | 233          |         |              | 3      |                  
|Operating lease obligations  |                               |       | 4,959  |                  |  | 1,227        |         |              | 1,699  |                  
|                             |                               |       |        |                  |  |              |         |              |        |                  
|                             | Total contractual obligations |       | $      | 420,823          |  | $            | 141,723 |              | $      | 189,763          
|                             |                               |       |        |                  |  |              |         |              |        |                  

18

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Item 18.    Financial Statements.

INDEX TO FINANCIAL STATEMENTS

|                                                                                             |                                   | Page
|-------------------------------------------------------------------------------------------- | --------------------------------- | ----
|Report of Independent Registered Public Accounting Firm                                      |                                   | 20  
|Consolidated Balance Sheets as of September 30, 2003 and 2002                                |                                   | 21  
|Consolidated Statements of Operations for the Three Years Ended September 30, 2003           |                                   | 22  
|Consolidated Statements of Shareholders' Equity for the Three Years ended September 30,
2003 |                                   | 23  
|Consolidated Statements of Comprehensive Income for the Three Years Ended September 30, 2003 |                                   | 24  
|Consolidated Statements of Cash Flows for the Three Years Ended September 30, 2003.          |                                   | 25  
|Notes to the Consolidated Financial Statements                                               |                                   | 26  
|Financial Statement Schedule:                                                                |                                   |     
|                                                                                             | Valuation and Qualifying Accounts |     

19

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    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Galen Holdings PLC.

In
our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Galen Holdings PLC and its
subsidiaries at September 30, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2003 in conformity
with accounting principles generally accepted in the United States of America. These financial statements and the financial statement schedule are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements and the financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing
standards of the Public Company Accounting Oversight Board (United States). 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, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 2 to the Consolidated Financial Statements, the financial statements as of and for the years ended September 30, 2003 and 2002 have been restated, for certain
matters related to accounting for income taxes.



Belfast
Northern Ireland
December 22, 2003 except for Note 2, as to which the date is January 5, 2005.

20

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GALEN HOLDINGS PLC    CONSOLIDATED BALANCE SHEETS  (In thousands of U.S. dollars, except per share data)

|                                                                                                                                                                                                                                    |                                                                            | September 30,                              |        
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------- | ------------------------------------------ | -------
|
|
|ASSETS                                                                                                                                                                                                                              |                                                                            |                                            |        
|Current Assets:                                                                                                                                                                                                                     |                                                                            |                                            |        
|                                                                                                                                                                                                                                    | Cash and cash equivalents                                                  |                                            | $      
|                                                                                                                                                                                                                                    | Accounts receivable, net                                                   |                                            |        
|                                                                                                                                                                                                                                    | Inventories                                                                |                                            |        
|                                                                                                                                                                                                                                    | Deferred tax asset                                                         |                                            |        
|                                                                                                                                                                                                                                    | Prepaid expense and other current assets                                   |                                            |        
|                                                                                                                                                                                                                                    |                                                                            |                                            |        
|                                                                                                                                                                                                                                    |                                                                            | Total current assets                       |        
|                                                                                                                                                                                                                                    |                                                                            |                                            |        
|Property, plant and equipment, net                                                                                                                                                                                                  |                                                                            |                                            | 64,594 
|Intangible assets, net                                                                                                                                                                                                              |                                                                            |                                            | 994,529
|Goodwill, net                                                                                                                                                                                                                       |                                                                            |                                            | 224,934
|                                                                                                                                                                                                                                    |                                                                            |                                            |        
|                                                                                                                                                                                                                                    |                                                                            | Total assets                               |        
|                                                                                                                                                                                                                                    |                                                                            |                                            |        
|LIABILITIES                                                                                                                                                                                                                         |                                                                            |                                            |        
|Current Liabilities:                                                                                                                                                                                                                |                                                                            |                                            |        
|                                                                                                                                                                                                                                    | Accounts payable                                                           |                                            | $      
|                                                                                                                                                                                                                                    | Accrued and other current liabilities                                      |                                            |        
|                                                                                                                                                                                                                                    | Current installments of long-term debt                                     |                                            |        
|                                                                                                                                                                                                                                    | Current installments of obligations under capital leases                   |                                            |        
|                                                                                                                                                                                                                                    | Income taxes                                                               |                                            |        
|                                                                                                                                                                                                                                    |                                                                            |                                            |        
|                                                                                                                                                                                                                                    |                                                                            | Total current liabilities                  |        
|                                                                                                                                                                                                                                    |                                                                            |                                            |        
|Other Liabilities:                                                                                                                                                                                                                  |                                                                            |                                            |        
|                                                                                                                                                                                                                                    | Long-term debt, excluding current installments                             |                                            |        
|                                                                                                                                                                                                                                    | Long-term obligations under capital leases, excluding current installments |                                            |        
|                                                                                                                                                                                                                                    | Deferred income taxes                                                      |                                            |        
|                                                                                                                                                                                                                                    | Other non-current liabilities                                              |                                            |        
|                                                                                                                                                                                                                                    |                                                                            |                                            |        
|                                                                                                                                                                                                                                    |                                                                            | Total liabilities                          |        
|                                                                                                                                                                                                                                    |                                                                            |                                            |        
|SHAREHOLDERS' EQUITY                                                                                                                                                                                                                |                                                                            |                                            |        
|Ordinary shares, par value £0.10 per share; 250,000,000 (2002: 250,000,000) shares authorized, 188,209,895 shares issued and outstanding at September 30, 2003, and 187,805,263 shares issued and outstanding
at September 30, 2002 |                                                                            |                                            | 30,046 
|Additional paid-in capital                                                                                                                                                                                                          |                                                                            |                                            | 676,528
|Retained earnings                                                                                                                                                                                                                   |                                                                            |                                            | 278,720
|Treasury stock                                                                                                                                                                                                                      |                                                                            |                                            | (23,638
|Accumulated other comprehensive income                                                                                                                                                                                              |                                                                            |                                            | 35,469 
|                                                                                                                                                                                                                                    |                                                                            |                                            |        
|                                                                                                                                                                                                                                    |                                                                            | Total shareholders' equity                 |        
|                                                                                                                                                                                                                                    |                                                                            |                                            |        
|                                                                                                                                                                                                                                    |                                                                            | Total liabilities and shareholders' equity |        
|                                                                                                                                                                                                                                    |                                                                            |                                            |        

See
accompanying notes to consolidated financial statements.

21

---





GALEN HOLDINGS PLC    CONSOLIDATED STATEMENTS OF OPERATIONS  (In thousands of U.S. dollars, except per share data)

|                                                 |                                                                                 | Years Ended September 30,    |                                                
|------------------------------------------------ | ------------------------------------------------------------------------------- | ---------------------------- | -----------------------------------------------
|
|
|REVENUES                                         |                                                                                 |                              |                                                
|                                                 | Products                                                                        |                              | $                                              
|                                                 |                                                                                 |                              |                                                
|OPERATING EXPENSES                               |                                                                                 |                              |                                                
|                                                 | Cost of sales (excluding depreciation shown below)                              |                              |                                                
|                                                 | Selling, general and administrative                                             |                              |                                                
|                                                 | Research and development                                                        |                              |                                                
|                                                 | Depreciation                                                                    |                              |                                                
|                                                 | Amortization                                                                    |                              |                                                
|                                                 |                                                                                 |                              |                                                
|                                                 |                                                                                 | Total operating expenses     |                                                
|                                                 |                                                                                 |                              |                                                
|OPERATING INCOME                                 |                                                                                 |                              | 149,827                                        
|                                                 |                                                                                 |                              |                                                
|OTHER INCOME (EXPENSE)                           |                                                                                 |                              |                                                
|                                                 | Interest income                                                                 |                              |                                                
|                                                 | Interest expense                                                                |                              |                                                
|                                                 |                                                                                 |                              |                                                
|                                                 |                                                                                 | Total other income (expense) |                                                
|                                                 |                                                                                 |                              |                                                
|INCOME BEFORE TAXES                              |                                                                                 |                              | 141,763                                        
|                                                 |                                                                                 |                              |                                                
|Provision for income taxes                       |                                                                                 |                              | 45,608                                         
|                                                 |                                                                                 |                              |                                                
|INCOME FROM CONTINUING OPERATIONS                |                                                                                 |                              | 96,155                                         
|                                                 |                                                                                 |                              |                                                
|DISCONTINUED OPERATIONS                          |                                                                                 |                              |                                                
|                                                 | Income from discontinued operations (net of tax charge of $2,213; 2001: $3,666) |                              |                                                
|                                                 | Gain on disposal of discontinued operations (net of tax charge of $3,893)       |                              |                                                
|                                                 |                                                                                 |                              |                                                
|NET INCOME                                       |                                                                                 | $                            | 96,155                                         
|                                                 |                                                                                 |                              |                                                
|BASIC AND DILUTED NET INCOME PER ORDINARY SHARE: |                                                                                 |                              |                                                
|                                                 |  continuing operations                                                         |                              | $                                              
|                                                 |  earnings from discontinued operations                                         |                              |                                                
|                                                 |  gain on disposal of discontinued operations                                   |                              |                                                
|                                                 |                                                                                 |                              |                                                
|                                                 |                                                                                 |                              | Basic and diluted net income per ordinary share
|                                                 |                                                                                 |                              |                                                
|BASIC NET INCOME PER ADS:                        |                                                                                 |                              |                                                
|                                                 |  continuing operations                                                         |                              | $                                              
|                                                 |  earnings from discontinued operations                                         |                              |                                                
|                                                 |  gain on disposal of discontinued operations                                   |                              |                                                
|                                                 |                                                                                 |                              |                                                
|                                                 |                                                                                 |                              | Basic net income per ADS                       
|                                                 |                                                                                 |                              |                                                
|DILUTED NET INCOME PER ADS:                      |                                                                                 |                              |                                                
|                                                 |  continuing operations                                                         |                              | $                                              
|                                                 |  earnings from discontinued operations                                         |                              |                                                
|                                                 |  gain on disposal of discontinued operations                                   |                              |                                                
|                                                 |                                                                                 |                              |                                                
|                                                 |                                                                                 |                              | Diluted net income per ADS                     
|                                                 |                                                                                 |                              |                                                
|WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:    |                                                                                 |                              |                                                
|                                                 | Basic                                                                           |                              |                                                
|                                                 |                                                                                 |                              |                                                
|                                                 | Diluted                                                                         |                              |                                                
|                                                 |                                                                                 |                              |                                                
|WEIGHTED AVERAGE ADS EQUIVALENTS OUTSTANDING:    |                                                                                 |                              |                                                
|                                                 | Basic                                                                           |                              |                                                
|                                                 |                                                                                 |                              |                                                
|                                                 | Diluted                                                                         |                              |                                                
|                                                 |                                                                                 |                              |                                                

See accompanying notes to consolidated financial statements.

22

---





GALEN HOLDINGS PLC    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY  (In thousands of U.S. dollars, except per share data)

|                              |                                  | Number of
Ordinary
Shares |            | Number of
Equivalent
ADSs
(Representing
Four Ordinary
Shares) |           | Share
Capital |        | Additional
Paid-in
Capital |   | Retained
Earnings |         | Treasury
Stock |         | Accumu-
lated Other
Compre-
hensive
Income
(Loss) |   | Total   |        
|----------------------------- | -------------------------------- | ------------------------- | ---------- | ------------------------------------------------------------- | --------- | ------------- | ------ | -------------------------- | - | ----------------- | ------- | -------------- | ------- | ------------------------------------------------- | - | ------- | -------
|Balance at September 30, 2000 |                                  | 158,965,206               |            | 39,741,302                                                    |           | $             | 25,498 |                            | $ | 399,656           |         | $              | 42,568  |                                                   | $ | (11,950 | )      
|                              | Net income                       |                           |           |                                                               |          |               |        |                           |   |                   |        |                |         | 16,426                                            |   |         |       
|                              | Dividends declared$0.13 per ADS |                           |           |                                                               |          |               |        |                           |   |                   |        |                |         | (5,012                                            | ) |         |       
|                              | Shares issued net of costs       |                           | 30,346,092 |                                                               | 7,586,523 |               |        | 4,404                      |   |                   | 269,081 |                |         |                                                  |   |         |       
|                              | Exchange difference              |                           |           |                                                               |          |               |        |                           |   |                   |        |                |         |                                                  |   |         |       
|                              | Treasury stock disposals         |                           |           |                                                               |          |               |        |                           |   |                   | (506    | )              |         |                                                  |   |         | 506    
|                              | Stock compensation expense       |                           |           |                                                               |          |               |        |                           |   |                   | 4,913   |                |         |                                                  |   |         |       
|                              |                                  |                           |            |                                                               |           |               |        |                            |   |                   |         |                |         |                                                   |   |         |        
|Balance at September 30, 2001 |                                  | 189,311,298               |            | 47,327,825                                                    |           |               | 29,902 |                            |   | 673,144           |         |                | 53,982  |                                                   |   | (11,444 | )      
|                              | Net income                       |                           |           |                                                               |          |               |        |                           |   |                   |        |                |         | 145,176                                           |   |         |       
|                              | Dividends declared$0.16 per ADS |                           |           |                                                               |          |               |        |                           |   |                   |        |                |         | (7,352                                            | ) |         |       
|                              | Shares issued net of costs       |                           | 543,965    |                                                               | 135,991   |               |        | 79                         |   |                   | 3,973   |                |         |                                                  |   |         |       
|                              | Shares repurchased               |                           | (2,050,000 | )                                                             | (512,500  | )             |        |                           |   |                   |        |                |         |                                                  |   |         | (12,478
|                              | Exchange difference              |                           |           |                                                               |          |               |        |                           |   |                   |        |                |         |                                                  |   |         |       
|                              | Treasury stock disposals         |                           |           |                                                               |          |               |        |                           |   |                   | (29     | )              |         |                                                  |   |         | 29     
|                              | Stock compensation expense       |                           |           |                                                               |          |               |        |                           |   |                   | 329     |                |         |                                                  |   |         |       
|                              |                                  |                           |            |                                                               |           |               |        |                            |   |                   |         |                |         |                                                   |   |         |        
|Balance at September 30, 2002 |                                  | 187,805,263               |            | 46,951,316                                                    |           |               | 29,981 |                            |   | 677,417           |         |                | 191,806 |                                                   |   | (23,893 | )      
|                              | Net income                       |                           |           |                                                               |          |               |        |                           |   |                   |        |                |         | 96,155                                            |   |         |       
|                              | Dividends declared$0.21 per ADS |                           |           |                                                               |          |               |        |                           |   |                   |        |                |         | (9,241                                            | ) |         |       
|                              | Shares issued net of costs       |                           | 404,632    |                                                               | 101,158   |               |        | 65                         |   |                   | 470     |                |         |                                                  |   |         |       
|                              | Exchange difference              |                           |           |                                                               |          |               |        |                           |   |                   |        |                |         |                                                  |   |         |       
|                              | Treasury stock disposals         |                           |           |                                                               |          |               |        |                           |   |                   | (255    | )              |         |                                                  |   |         | 255    
|                              | Stock compensation expense       |                           |           |                                                               |          |               |        |                           |   |                   | (1,104  | )              |         |                                                  |   |         |       
|                              |                                  |                           |            |                                                               |           |               |        |                            |   |                   |         |                |         |                                                   |   |         |        
|Balance at September 30, 2003 |                                  | 188,209,895               |            | 47,052,474                                                    |           | $             | 30,046 |                            | $ | 676,528           |         | $              | 278,720 |                                                   | $ | (23,638 | )      
|                              |                                  |                           |            |                                                               |           |               |        |                            |   |                   |         |                |         |                                                   |   |         |        

See accompanying notes to consolidated financial statements.

23

---





GALEN HOLDINGS PLC    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  (In thousands of U.S. dollars)

|                     |                             | Years Ended September 30,              
|-------------------- | --------------------------- | ---------------------------------------
|
|NET INCOME           |                             | $                                      
|                     |                             |                                        
|                     | Other comprehensive income: |                                        
|                     |                             | Foreign currency translation adjustment
|                     |                             |                                        
|                     |                             |                                        
|                     |                             |                                        
|COMPREHENSIVE INCOME |                             | $                                      
|                     |                             |                                        

See
accompanying notes to consolidated financial statements.

24

---





GALEN HOLDINGS PLC    CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousands of U.S. dollars)

|                                            |                                                                                   | Years Ended September 30,          |                                                                        
|------------------------------------------- | --------------------------------------------------------------------------------- | ---------------------------------- | -----------------------------------------------------------------------
|
|
|CASH FLOWS FROM OPERATING ACTIVITIES:       |                                                                                   |                                    |                                                                        
|                                            | Net income                                                                        |                                    | $                                                                      
|                                            | Adjustments to reconcile net income to net cash provided by operating activities: |                                    |                                                                        
|                                            |                                                                                   | Depreciation                       |                                                                        
|                                            |                                                                                   | Amortization                       |                                                                        
|                                            |                                                                                   | Profit on sale of businesses       |                                                                        
|                                            |                                                                                   | Loss on sale of assets             |                                                                        
|                                            |                                                                                   | Amortization of government grants  |                                                                        
|                                            |                                                                                   | Loan notes premium adjustment      |                                                                        
|                                            |                                                                                   | Stock compensation expense         |                                                                        
|                                            |                                                                                   | Minority interest                  |                                                                        
|                                            |                                                                                   | Changes in assets and liabilities: |                                                                        
|                                            |                                                                                   |                                    | Increase in accounts receivable, prepaid expense and other assets      
|                                            |                                                                                   |                                    | Increase in inventories                                                
|                                            |                                                                                   |                                    | Increase in accounts payable, accrued liabilities and other liabilities
|                                            |                                                                                   | Income taxes                       |                                                                        
|                                            |                                                                                   | Foreign exchange (loss)/gain       |                                                                        
|                                            |                                                                                   |                                    |                                                                        
|                                            |                                                                                   |                                    | Net cash provided by operating activities                              
|                                            |                                                                                   |                                    |                                                                        
|CASH FLOWS FROM INVESTING ACTIVITIES:       |                                                                                   |                                    |                                                                        
|                                            | Purchase of intangible assets                                                     |                                    |                                                                        
|                                            | Purchase of fixed assets                                                          |                                    |                                                                        
|                                            | Proceeds from sale of businesses                                                  |                                    |                                                                        
|                                            | Deferred consideration and acquisition costs                                      |                                    |                                                                        
|                                            | Proceeds from sale of fixed assets                                                |                                    |                                                                        
|                                            |                                                                                   |                                    |                                                                        
|                                            |                                                                                   |                                    | Net cash (used in)/provided by investing activities                    
|                                            |                                                                                   |                                    |                                                                        
|CASH FLOWS FROM FINANCING ACTIVITIES:       |                                                                                   |                                    |                                                                        
|                                            | Loan notes repaid                                                                 |                                    |                                                                        
|                                            | Long-term debt obtained                                                           |                                    |                                                                        
|                                            | Long-term debt repaid                                                             |                                    |                                                                        
|                                            | Payments under capital leases                                                     |                                    |                                                                        
|                                            | Purchase of own shares                                                            |                                    |                                                                        
|                                            | Proceeds from share capital issue, net of expenses                                |                                    |                                                                        
|                                            | Cash dividends paid                                                               |                                    |                                                                        
|                                            | Government grants received                                                        |                                    |                                                                        
|                                            |                                                                                   |                                    |                                                                        
|                                            |                                                                                   |                                    | Net cash provided by/(used in) financing activities                    
|                                            |                                                                                   |                                    |                                                                        
|                                            | Net (decrease)/increase in cash and cash equivalents                              |                                    |                                                                        
|                                            | Cash and cash equivalents, beginning of year                                      |                                    |                                                                        
|                                            | Foreign exchange adjustment on cash and cash equivalents                          |                                    |                                                                        
|                                            |                                                                                   |                                    |                                                                        
|                                            | Cash and cash equivalents, end of year                                            |                                    | $                                                                      
|                                            |                                                                                   |                                    |                                                                        
|SUPPLEMENTAL CASH FLOW INFORMATION:         |                                                                                   |                                    |                                                                        
|Interest paid                               |                                                                                   | $                                  | 11,502                                                                 
|Income taxes paid                           |                                                                                   | $                                  | 31,243                                                                 
|Non-cash investing and financing activities |                                                                                   |                                    |                                                                        
|                                            | Acquisitions of equipment through capital leases                                  |                                    | $                                                                      
|                                            | Common stock issued for acquisitions                                              |                                    | $                                                                      
|                                            | Acquisition of fixed assets through accrued liabilities                           |                                    | $                                                                      

See accompanying notes to consolidated financial statements.

25

---





GALEN HOLDINGS PLC        NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS        Dollars in Thousands Unless Otherwise Noted (Except Per Share Data)

1    Summary of Significant Accounting Policies

Description of Operations and Principles of Consolidation

Galen Holdings PLC ("Galen" or the "Company") is a Northern Ireland public limited company based in Craigavon, Northern Ireland and Rockaway, New Jersey. The
Company was founded in 1968, listed its ordinary shares on the London and Irish stock exchanges in 1997 and listed its American Depositary Receipt form, on NASDAQ® in
September 2000. Galen is an international pharmaceutical company focused principally on the therapeutic areas of women's healthcare and dermatology. Galen's pharmaceutical products are promoted
by the Company's sales and marketing organizations in the United States, United Kingdom and Republic of Ireland.

The
consolidated financial statements include the financial statements of Galen and all of its majority owned subsidiaries. Galen does not presently hold investments in any entities that
are not majority owned, nor does it have any majority owned subsidiary in which it does not have a controlling financial interest. All intercompany transactions and account balances have been
eliminated on consolidation. During the years 2000 through 2003 the Company completed several acquisitions, which were accounted for under the purchase method of accounting. The consolidated financial
statements include the results of operations from each of these business combinations as of the date of acquisition. Additional disclosure related to the Company's acquisitions is provided in
Note 3.

Use of Estimates in Financial Statements

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

Basis of Presentation

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").

Foreign Currency

The Company has operations in the United States, United Kingdom and the Republic of Ireland. Generally, the Company generates revenues and incurs expenses as
follows: U.S. dollars in the United States and the Republic of Ireland, and pounds sterling in the United Kingdom. The Company has determined that the functional currency of each operation is the
respective local currency, with the exception of the parent Company and Galen (Chemicals), a Republic of Ireland subsidiary whose functional currency is the U.S. dollar. The results of our overseas
operations, whose functional currencies are not the U.S. dollar, are translated at the average rate of exchange during the period. Assets and liabilities are translated at the rate of exchange
prevailing on the balance sheet date. Translation adjustments are reflected in shareholders' equity and are included as a component of comprehensive income.

26

---



Revenue Recognition

Revenue from product sales is recognized upon shipment of products to the customer. The Company warrants products against defects and for specific quality
standards, permitting the return of products
under certain circumstances. Product sales are recorded net of trade discounts, sales returns, rebates, value-added tax and similar taxes, and intercompany transactions.

Research and Development

Research and development costs are expensed as incurred.

Pensions and 401(K) Plan

Retirement benefits are provided for U.K. employees through a defined contribution pension scheme whereby the assets of the scheme are held separately from those
of the Company in an independently administered scheme. Contributions are charged to the income statement as they become payable. The Company also makes contributions to a 401(k) savings plan for its
U.S. employees (see Note 22).

Stock Based Compensation

The Company accounts for stock option grants in accordance with the provisions of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations, and includes appropriate disclosures as required by Statement of Financial Accounting Standards ("SFAS") No. 123 "Accounting for Stock-Based
Compensation" and SFAS No. 148 "Accounting for Stock-Based CompensationTransition and Disclosure, an amendment of FASB Statement No. 123".

Revenue Grants

Revenue grants relating to research and development expenditures are credited in the statement of operations as a reduction of operating expenses in the period in
which the related expenditure is incurred.

Capital Grants

Capital grants are recorded as deferred revenue and are amortized to the income statement over the expected useful lives of the related assets.

Income Taxes

The Company provides for income taxes in accordance with SFAS No. 109, "Accounting for Income Taxes." Deferred tax assets and liabilities are provided for
differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts. The deferred tax assets and liabilities are measured using
the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Income tax expense is

27

---



computed
as the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

Deferred
tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be
realized.

Financial Instruments

The Company did not have derivative financial instruments at any time during the fiscal year; disclosure is therefore limited to primary financial instruments.
The Company considers all liquid interest earning investments with original maturities of ninety days or less to be cash equivalents. Investments with maturities between ninety days and one year are
considered short-term investments. Cash, cash equivalents and short-term investments are stated at cost plus accrued interest, which approximates market value.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first in, first out basis and includes transportation and handling
costs. In the case of manufactured products, cost includes material, labor and applicable manufacturing overhead. Provisions are made for obsolete, slow moving or defective items where appropriate.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of cash on deposit and money market accounts with original maturities of three months or less.

Property, Plant and Equipment

The cost of fixed assets is their purchase cost together with any incidental expenses of acquisition. Plant, property and equipment are depreciated over their
estimated useful lives. Interest incurred as part of the cost of constructing fixed assets is capitalized and amortized over the life of the asset. No depreciation is charged on land. The estimated
useful lives used by the Company to calculate depreciation are:

Life in YearsBuildings

50Plant and machinery

10Motor vehicles

4Fixtures and fittings

5 to 10


Assets
acquired under capital leases are included in the balance sheet as fixed assets and are depreciated over the shorter of the period of the lease or their useful lives. The capital
elements of future lease payments are recorded as liabilities, while the interest elements are charged to the income statement over the period of the leases to give a constant charge on the balance of
the capital repayments outstanding.

28

---



Intangible Assets and Goodwill

Intangible assets include trademarks, patents and other intellectual property acquired by the Company, and are being amortized on a straight-line
basis over 20 years. Where events or circumstances are present which indicate that the carrying amount of an intangible asset may not be recoverable, the Company estimates the future
undiscounted cash flows expected to result from the use of the asset and its eventual disposition. To the extent that this estimation indicates that undiscounted cash flows are not expected to be
adequate to recover the carrying amounts, the assets are written down to discounted cash flows. Otherwise, no loss is recognized. Goodwill represents costs in excess of the fair value of net assets of
businesses acquired by the Company.

Effective
October 1, 2001 the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets
("SFAS 142"). SFAS 142 provides that goodwill no longer be amortized and the value of identifiable intangible assets be amortized over their useful life, unless the asset is determined
to have an indefinite useful life. The Company has determined that none of its intangible assets are deemed to have an indefinite life. In accordance with SFAS 142, and upon adoption, the
Company reclassified a total of $2,914 to goodwill from intangible assets (net), representing the assembled workforce associated with the Company's acquisition of Warner Chilcott. Pursuant to
SFAS 142, the Company's goodwill is no longer amortized effective October 1, 2001 and the Company is required to perform a periodic impairment test for goodwill. Goodwill is tested for
impairment at a level of reporting referred to as a reporting unit. To identify potential impairment, the fair value of each reporting unit is compared with its carrying amount including goodwill. If
the fair value of the reporting unit is less than its carrying value, goodwill is deemed to be potentially impaired. The Company has completed this impairment test as of June 30, 2003 and has
determined that goodwill has not been impaired.

New Accounting Pronouncements

Galen adopted Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets
("SFAS 144"), effective October 1, 2001. The objectives of SFAS 144 are to address significant issues relating to the implementation of Statement of Financial Accounting Standards
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of ("SFAS 121"), and to develop a single accounting model
based on the framework established in SFAS 121, for long-lived assets to be disposed of by sale. SFAS 144 requires that long-lived assets that are to be disposed
of by sale be measured at the lower of book value or fair value less cost to sell. Additionally, SFAS 144 expands the scope of discontinued operations to include all components of an entity
with operations that can be distinguished from the rest of the entity in a disposal transaction. The results of Galen's Pharmaceutical Services operating segment, divested during the year ended
September 30, 2002, were treated as "discontinued operations."

On
April 30, 2002, the FASB issued Statement of Financial Accounting Standards No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections ("SFAS 145"). Among other amendments and rescissions, SFAS No.145 eliminates the requirement that gains and losses from the extinguishment of debt be
aggregated and, if material, classified as an extraordinary item, net of the related income tax effect, unless such gains and

29

---



losses
meet the criteria in paragraph 20 of Accounting Principles Board Opinion No. 30, Reporting the Results of Operations, Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and Transactions. Generally, SFAS 145 is effective for fiscal years beginning after May 15, 2002. Upon adoption of SFAS
No. 145, the Company reclassified the losses on extinguishments of debt that were classified as extraordinary items in the year ended September 30, 2002 since they did not meet the
criteria in Opinion 30 for classification as extraordinary items.

In
July 2002, the Financial Accounting Standards Board issued SFAS No. 146, Accounting for Exit or Disposal Activities. SFAS No. 146 addresses the recognition,
measurement, and reporting of costs that are associated with exit and disposal activities, including costs related to terminating a contract that is not a capital lease and termination benefits that
employees who are involuntarily terminated receive under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation
contract. SFAS No. 146 supersedes Emerging Issues Task Force Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring). SFAS No. 146 is effective for exit or disposal activities of the Company that are initiated after December 31, 2002. No
such activities have occurred since that date.

In
December 2002, the FASB issued Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based CompensationTransition and Disclosure, an
amendment of FASB Statement No. 123 ("SFAS 148"). SFAS 148 provides alternative methods of transition for voluntary change to the fair value method of accounting for stock-based
employee compensation. Such methods for transition can be voluntarily implemented in a fiscal year ending after December 15, 2002. In addition, SFAS 148 amends SFAS 123 to require
certain disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The
effective date for the disclosure requirement is interim periods beginning after December 15, 2002. Early adoption is encouraged. Galen has adopted the disclosure requirement effective
October 1, 2002.

In
November 2002, the FASB issued Interpretation No. 45 "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others" ("FIN 45"). FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It
also requires the guarantor to recognize, at the inception of the guarantee, a liability for the fair value of obligation undertaken in issuing the guarantee. The disclosure requirements are effective
for quarters ending after December 15, 2002 and the liability recognition is in effect for guarantees initiated after December 31, 2002. The Company adopted FIN 45 effective
October 1, 2002, and has determined that it does not have a material impact on the Company's reported results of operations, financial positions or cash flows.

In
December 2003, the FASB issued revised Interpretation No. 46, Consolidation of Variable Interest Entities ("FIN 46"). In general, a variable interest entity is an entity
with a level of invested equity that is not sufficient to fund future activities to permit it to operate on a stand-alone basis, or whose equity holders lack certain characteristics of a controlling
financial interest. FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the

30

---



risk
of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. The consolidation requirements of FIN 46 apply to variable
interest entities no later than the end of the first reporting period that ends after March 15, 2004. FIN 46 applies to those entities that are considered special purpose entities no later than
as of the end of the first reporting period that ends after December 15, 2003. The Company does not have any variable interest entities or special purpose entities.

In
May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and
Equity ("SFAS 150"). SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liability and equity. It requires
that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). SFAS 150 is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS 150 has no material impact on
the results of operations and financial position of the Company.

2    Restatement

The Company had acquired various product rights and other intellectual property in a series of transactions during the last three years. These product rights were
purchased through the Company's subsidiary in the Republic of Ireland where the amortization is not deductible for tax purposes. As a result of the inability to deduct the amortization for tax
purposes, the Company originally recorded a deferred tax liability at acquisition and increased the value of the various product rights and other intellectual property by an equal amount. The Company
has now determined that the cost of the various product rights and other intellectual property is deductible for tax purposes upon sale and accordingly, the deferred tax liability should not have been
recorded and the value of the various product rights and other intellectual property should not have been increased.

As
a result of the matters described above, the Company has restated its fiscal years 2003 and 2002 financial statements to:



The
restatement had no impact on the Company's net assets at September 30, 2003, 2002 and 2001 since the reduction of the intangible asset balance was equal to the reduction in
the deferred tax

31

---



liability
as described above. Additionally, the restatement had no impact in net income for the fiscal years ended 2003 and 2002, since the increase in the provision for income taxes was equal to the
reduction in amortization of intangible assets.

There
was no effect whatsoever on the income statement for the year ended September 30, 2001 because the various product rights and other intellectual property were purchased at
the end of the year.

The
following items in the Consolidated Statement of Operations and the Consolidated Balance Sheets have been restated as follows:

|                                           |  | Years Ended September 30, |           
|------------------------------------------ |  | ------------------------- | ----------
|
|
|Consolidated Statement of Operations       |  |                           |           
|Amortization                               |  | $                         | (42,323   
|Total operating expenses                   |  |                           | (286,383  
|Operating income                           |  |                           | 145,879   
|Income before taxes                        |  |                           | 137,815   
|Provision for income taxes                 |  |                           | (41,660   
|Income from continuing operations          |  |                           | 96,155    
|Net income                                 |  |                           | 96,155    
|Consolidated Balance Sheets                |  |                           |           
|Total current assets                       |  | $                         | 166,731   
|Total assets                               |  |                           | 1,565,365 
|Total current liabilities                  |  |                           | (211,203  
|Net deferred tax (liability)/asset         |  |                           | (112,038  
|Total liabilities                          |  |                           | (568,240  
|Total shareholders' equity                 |  |                           | (997,125  
|Total liabilities and shareholders' equity |  |                           | (1,565,365

In
relation to the Consolidated Statement of Cash Flows, the restatement had no effect on the amounts of net cash provided by operating activities. Amortization and income taxes were each adjusted by
$3,948 and $993 in 2003 and 2002 respectively. Cash flows from investing and financing activities were unaffected. The Notes have also been restated for the impact of the items discussed above as
appropriate.

3    Acquisitions



In January 2003, the Company acquired the U.S. sales and marketing rights to Sarafem® from Eli Lilly and Company ("Lilly") for cash
consideration of approximately $295,000. Sarafem® is a treatment for premenstrual dysphoric disorder ("PMDD"), a severe form of premenstrual syndrome. Galen entered into a
three-year supply agreement with Lilly in relation to this product with no option to

32

---



renew.
The acquisition of the sales and marketing rights is being accounted for as a purchase. The entire purchase price was allocated to the product, and no goodwill was recorded. No value was
assigned to the supply agreement for the acquired product as the product purchase price under the agreement approximates the price Galen would expect to pay third party contract manufacturers. The
intangible assets are being amortized over 20 years, the estimated useful life of the sales and marketing rights.

In
March 2003, the Company acquired two oral contraceptives, Estrostep® and Loestrin®, from Pfizer, Inc. ("Pfizer") for an initial cash
consideration of approximately $197,000. Further contingent cash consideration of up to a maximum of $55,400 will become payable by Galen to Pfizer in the event that Estrostep® retains
market exclusivity during the life of its patent. The products are manufactured at Pfizer's manufacturing facility in Fajardo, Puerto Rico. Galen's purchase agreement includes a right of first
negotiation for a period of 90 days following an offer by Pfizer to sell the Fajardo facility within five years of the closing of the transaction. If after such 90 day period, the
parties have not entered into definitive agreements, Pfizer may sell the Fajardo facility to a third party provided that for a period of two years thereafter, such sale may not be on terms materially
less favorable to Pfizer than those proposed by the Company. Galen also entered into a transitional supply agreement with Pfizer in relation to these products, which will terminate upon the earlier of
five years following the date of the agreement and four years from the expiration of a 90-day exclusive negotiation period following Pfizer's offer to sell the Fajardo facility to Galen.
If Pfizer completes the sale of the Fajardo facility to Galen prior to this time, the transitional supply agreement will terminate upon the completion of such sale. The Company acquired all of the
intangible assets associated with the products including the patents, trademarks, regulatory files, manufacturing know-how and other intellectual property. The acquisition of the products
is being accounted for as a purchase. The entire purchase price was allocated to the products, and no goodwill was recorded. The intangible assets are being amortized over 20 years, the
products' estimated useful lives.

In
April 2003 the Company entered into a strategic alliance in dermatology Bristol-Myers Squibb ("Bristol-Myers") and LEO Pharma A/S ("Leo Pharma"). In connection with this
alliance, the Company capitalized payments to Leo Pharma related to the option to purchase the rights to Dovonex of $5,000 in fiscal year 2003 in addition to $2,000 which had been paid in the prior
year.

In
April 2003, the Company acquired the continuous estrogen-progestogen therapy product, femhrt®, from Pfizer, Inc. ("Pfizer") for an initial cash consideration
of approximately $162,000. Further contingent cash consideration of up to a maximum of $69,600 will become payable by Galen to Pfizer in the event that femhrt® retains market exclusivity
during the life of its patent. Duramed Pharmaceutical, Inc. ("Duramed"), a wholly owned subsidiary of Barr Laboratories, manufactures and packages femhrt® under a supply agreement
with Pfizer which has been assigned to Galen. This agreement continues until September 24, 2007 and provides for two additional one-year renewal terms. femhrt® is also
packaged at Pfizer's manufacturing facility in Fajardo, Puerto Rico. Galen's purchase agreement includes a right of first negotiation for a period of 90 days following an offer by Pfizer to
sell the Fajardo facility within five years of the closing of the transaction. If after such 90 day period, the parties have not entered into definitive agreements, Pfizer may sell the Fajardo
facility to a third party provided that for a period of two years thereafter, such sale may not be on terms materially less favorable to Pfizer than those proposed by the Company. Galen acquired all
of the intangible assets

33

---



associated
with the product including the patents, trademarks, regulatory files, manufacturing know-how and other intellectual property. The acquisition of the product is being accounted
for as a purchase. The entire purchase price was allocated to the product, and no goodwill was recorded. The intangible assets are being amortized over 20 years, the product's estimated useful
life.

Year Ended September 30, 2002

In March 2002, Galen purchased Duricef®, an antibiotic, and Moisturel®, a moisturizing skin cream, from Bristol-Myers Squibb for
approximately $40,440. The acquisition of the products is being accounted for as a purchase. The entire purchase price was allocated to the product, and no goodwill was recorded. The intangible assets
are being amortized over 20 years, the products' estimated useful life.

Year Ended September 30, 2001

In June 2001, Galen purchased Estrace® tablets, a branded estrogen therapy product, from Bristol-Myers Squibb for approximately $95,000. In
connection with the purchase, Galen entered into a five-year supply agreement with Bristol-Myers Squibb Laboratories Company in relation to this product with an option to renew for two
additional years. Galen acquired rights to all of the intangible assets associated with the product including the trademark, regulatory files, manufacturing know-how and other intellectual
property. The acquisition of the product is being accounted for as a purchase. The entire purchase price was allocated to the product, and no goodwill was recorded. No value was assigned to the supply
agreement for the acquired product as the
product purchase price under the agreement approximates the price Galen would expect to pay third party contract manufacturers. The asset value has been increased to $106,000 in order to account for
certain liabilities assumed by the Company at the time of purchase. The intangible assets are being amortized over 20 years, the product's estimated useful life.

Unaudited Pro Forma Information

The following pro forma information for the years ended September 30, 2003 and 2002 presents the Company's results of operations assuming the Company's
acquisitions of Estrostep®, Loestrin®, femhrt®, and Sarafem® were completed as of October 1, 2001. Although the acquisition of the products
listed above do not qualify as acquisitions of businesses under SFAS 141, "Business Combinations," the Company has voluntarily elected to include unqualified proforma information for
comparative purposes only. The proforma information includes certain adjustments, such as additional amortization expense, increased interest expense on acquisition debt and related adjustments. They
do not purport to be

34

---



indicative
of the results of operations that actually would have resulted had the transactions occurred as of October 1, 2001, or of future results of operations of the consolidated entities.

|                                              |                            | For the Years Ended
September 30,
|--------------------------------------------- | -------------------------- | ---------------------------------
|
|
|Revenue                                       |                            | $                                
|Cost of sales                                 |                            |                                  
|Operating expenses                            |                            |                                  
|Amortization                                  |                            |                                  
|                                              |                            |                                  
|                                              | Total operating expenses   |                                  
|                                              |                            |                                  
|Operating income                              |                            |                                  
|                                              | Net interest expense       |                                  
|                                              | Provision for income taxes |                                  
|                                              |                            |                                  
|Income from Continuing Operations             |                            |                                  
|Discontinued operations, net of tax charge    |                            |                                  
|Net income                                    |                            | $                                
|Net income per ADS - Basic                    |                            | $                                
|                                              |                            |                                  
|Net income per ADS - Diluted                  |                            | $                                
|                                              |                            |                                  
|Weighted average ADS equivalents outstanding: |                            |                                  
|                                              | Basic                      |                                  
|                                              |                            |                                  
|                                              | Diluted                    |                                  
|                                              |                            |                                  

4    Divestitures

During the year ended September 30, 2002, the Company disposed of its Pharmaceutical Services business segment, which consisted of Chemical Synthesis
Services ("CSS"), Clinical Trial Services ("CTS") and Interactive Clinical Technologies, Inc. ("ICTI"). These businesses provided technology-based research and development services to the
pharmaceutical industry. Companies controlled by Dr. Allen McClay, the founder, former President, former executive director of Galen and a significant shareholder, acquired CSS, CTS and ICTI.
As part of this transaction Mr. Alan Armstrong, President of Galen's Pharmaceutical Services division, resigned from his position as an executive, as well as his
Galen directorship. The Company received net proceeds of approximately $229,000 from the sales of CSS, CTS and ICTI. The Company used the proceeds from these transactions in 2003 to pursue selected
product acquisitions and strategic opportunities, and for general corporate purposes. The Company reported a net pre-tax gain of $104,984 from the disposal of this business segment, which
is included in the Company's Statement of Operations for year ended September 30, 2002. Also included in the Company's results for the year ended September 30, 2002 are related taxes
amounting to $3,893.

35

---





4    Divestitures

Chemical Synthesis Services ("CSS")

CSS consisted of SynGal (a division of Galen) and QuChem Limited (a Galen subsidiary), and provided integrated services from basic research and development and
small-scale synthesis to kilogram-scale synthesis to customers requiring custom chemical syntheses. CSS is based in Northern Ireland and had revenue of $7,500 in the year ended September 30,
2001. In anticipation of the transaction, Galen purchased the 24% minority interest in QuChem Limited that it did not already own for consideration of approximately $960.

Clinical Trial Services ("CTS")

CTS consisted of Gaelta Research and Development Limited and Galen, Inc., both of which were Galen subsidiaries. Based in Northern Ireland, CTS provided
clinical packaging services to pharmaceutical companies that chose to outsource their manufacturing, packaging and distribution of both active drugs and placebos to targeted clinical trial patients,
and analytical services. CTS also operated facilities in Audubon, Pennsylvania, and in Durham, North Carolina, where it offered specialized clinical packaging services to pharmaceutical companies. CTS
had revenue of $58,700 in the year ended September 30, 2001.

Interactive Clinical Technologies, Inc. ("ICTI")

ICTI provided interactive voice response systems for clinical trial management from its bases in Yardley, Pennsylvania, San Francisco, California, and Maidenhead
in the U.K. ICTI had revenue of $13,521 in the year ended September 30, 2001.

Following
are the assets and liabilities of the discontinued operations as of the respective disposal dates:

Disposal date

CSS
December 31,
2001

CTS
May 31,
2002

ICTI
August 23,
2002Fixed assets

$
25,685

$
53,068

$
3,056Goodwill


580


14,276


19,179Current assets


2,201


23,500


5,273Current liabilities


(2,324
)

(17,312
)

(6,124
)Deferred income


(1,290
)

(1,914
)

(1,472
)Net assets of discontinued operations

$
24,852

$
71,618

$
19,912


5    Cash and Cash Equivalents

As of September 30,2003

2002Cash at bank and in hand

$


$
1Short term deposits


89,073


313,011Cash and cash equivalents

$
89,073

$
313,012


36

---



6    Accounts Receivable

As of September 30,2003

2002Trade receivables

$
38,753

$
34,530Less allowance for doubtful accounts


711


1,661Trade receivables, net

$
38,042

$
32,869


7    Inventory

As of September 30,2003

2002Finished goods

$
20,600

$
14,457Raw materials


12,208


12,445Inventories

$
32,808

$
26,902


8    Prepaid Expense and Other Current Assets

As of September 30,2003

2002Prepaid expense

$
6,612

$
3,018Other current assets


196


1,379Prepaid expense and other current assets

$
6,808

$
4,397


9    Property, Plant and Equipment, Net

As of September 30,2003

2002Land and buildings

$
42,048

$
38,161Plant and machinery


43,640


40,872Fixtures and fittings


13,192


11,927Motor vehicles


708


58499,588


91,544Less accumulated depreciation


34,994


28,150Property, plant and equipment, net

$
64,594

$
63,394


37

---



Depreciation
expense of continuing operations for the years ended September 30, 2003, 2002 and 2001 was $6,844, $5,323, and $4,303, respectively. Included in the above table are
the following amounts in relation to capital leases:

As of September 30,2003

2002Plant and machinery

$
2,656

$
2,939Less accumulated depreciation


1,159


947$
1,497

$
1,992


10    Intangible Assets

Amortizable intangible assets were as follows:

Product
Specific
Assets

Trademarks

Total
Intangible
Assets(As Restated)



(As Restated)September 30, 2003:Net book value

$
971,473

$
23,056

$
994,529Accumulated amortization

$
66,457

$
4,068

$
70,525September 30, 2002:Net book value

$
335,611

$
24,412

$
360,023Accumulated amortization

$
29,439

$
2,712

$
32,151


These
intangible assets are being amortized on a straight-line basis over 20 years, their estimated useful lives. Intangible asset amortization expense for the years
ended September 30, 2003 and 2002 amounted to $38,375 and $18,505 respectively. Following is the estimated aggregate amortization expense for the Company's next five fiscal years:

Year Ending September 30,

(As Restated)2004

$
53,2502005

$
53,2502006

$
53,2502007

$
53,2502008

$
53,250


38

---



Following
are the changes in goodwill:

Balance as of September 30, 2001

$
253,680Plus:

Reclassification of assembled workforce


2,914Foreign currency translation adjustment


22,377Pricing on acquisition of minority interests


580Less:

Elimination of accrued consideration


(2,144
)Deferred tax adjustment on assembled workforce


(1,164
)Sale of Services businesses


(34,035
)Balance as of September 30, 2002

$
242,208Less:

Reduction of valuation allowance for net operating loss carry forwards


(17,274
)Balance as of September 30, 2003

$
224,934


The
following table reconciles reported net income to that which would have been reported had SFAS 142 been applied as of the beginning of fiscal 2001:

Year Ended September 30,2003

2002

2001Reported net income

$
96,155

$
145,176

$
16,426Add back: Goodwill amortization, net of tax








12,977Adjusted net income

$
96,155

$
145,176

$
29,403Basic earnings per ADS:Reported net income

$
2.10

$
3.13

$
0.41Goodwill amortization, net of tax








0.32Adjusted net income

$
2.10

$
3.13

$
0.73Diluted earnings per ADS:Reported net income

$
2.08

$
3.12

$
0.40Goodwill amortization, net of tax








0.32Adjusted net income

$
2.08

$
3.12

$
0.72


11    Accrued and Other Liabilities

As of September 30,2003

2002Accrued transaction costs

$


$
7,102Other accrued expenses


70,848


36,951Accrued and other current liabilities

$
70,848

$
44,053


39

---



12    Long-Term Debt and Capital Leases

As of September 30,2003

2002Long-term debt

$
342,153

$
51,345Less: current installments


103,088


616Long-term debt, excluding current installments


239,065


50,729Capital leases


236


616Less: current installments


233


392Capital leases, excluding current installments


3


224Long-term debt and capital leases, excluding current installments

$
239,068

$
50,953


Long-term
debt consists of:

As of September 30,2003

2002Term loansat variable interest rates

$
294,991

$
788 at fixed interest rate (8.00%)


577


783Warner Chilcott senior notes due 200845,475 principal amount (2002: $48,400), 12.625%


46,585


49,774$
342,153

$
51,345


The
weighted average interest rates at September 30, 2003 were 8.0% and 2.5%, respectively, for fixed and variable-rate term loans (2002: 8.0% and 4.6%). The term
loans are subject to circular and cross guarantees and indemnities.

Principal
payments in each of the next five years and thereafter on long-term debt and capital leases outstanding at September 30, 2003 amount to:

Variable
Rate Bank
Debt

Fixed Rate
Bank Debt

Fixed Rate
Notes

Capital
Leases

As of
September 30,
20032004

$
102,813

$
275

$


$
233

$
103,3212005


102,646


302





3


102,9512006


60,813











60,8132007


19,146











19,1462008


9,573





46,585





56,158Thereafter














$
294,991

$
577

$
46,585

$
236

$
342,389


40

---





Long-Term Debt and Capital Leases

Capital
lease obligations for plant and machinery as of September 30, 2003 were as follows:

2004

$
2352005


32006


2007


2008


238Less interest element


2$
236


Warner Chilcott Senior Notes Due 2008

Warner Chilcott, Inc. ("WCI") at the time of its acquisition by Galen on September 29, 2000 had $200,000 principal amount of 12?% senior notes
outstanding. The senior notes were issued by WCI in February 2000 and are unconditionally guaranteed by Warner Chilcott, plc ("Warner Chilcott"), WCI's direct parent. In March 2001,
Galen unconditionally guaranteed the notes.

Interest
payments on the notes are due semi-annually in arrears on February 15 and August 15. The senior notes are due in February 2008 and are
redeemable prior to maturity at the option of WCI, in whole or part, beginning in February 15, 2004 at redemption prices that decrease annually and range from 106.3125% to 100% of the principal
amount of the senior notes plus accrued interest. The indenture governing the senior notes limits Warner Chilcott and its subsidiaries' ability to incur or guarantee additional debt, as well as to pay
dividends or distributions on, or redeem or repurchase, capital stock.

The
indenture governing the senior notes provides that upon a change of control, each note holder has the right to require WCI to repurchase their notes at a price equal to 101% of the
principal amount plus accrued interest. Galen's acquisition of Warner Chilcott triggered the right of holders to require WCI to repurchase the senior notes. Approximately 20% of the note holders
elected to tender their notes under this provision and, on December 13, 2000, Warner Chilcott purchased $40,300 principal amount of the notes. During the two years ended September 30,
2003 and 2002, Galen and its affiliates purchased a total of $114,225 of principal amount of the senior notes in privately negotiated transactions for $131,328 plus accrued interest. On
December 18, 2003, WCI gave notice to the trustee under the indenture of its intention to redeem all of the outstanding senior notes on February 15, 2004.

As
of September 30, 2003 the notes are shown on Galen's consolidated balance sheet at $46,585, which reflects the estimated fair market value of the notes on the date that Galen
acquired Warner Chilcott, adjusted for the $40,300 principal amount redemption in December 2000, Galen's purchase of $114,225 principal amount during the two years ended September 30,
2003 and 2002 in privately negotiated transactions, and accumulated premium amortization.

41

---



13    Financial Instruments

The following methods and assumptions were used to estimate the fair value of each material class of financial instrument:



Set
out below is a comparison by category of book values and fair values of the Company's financial assets and liabilities as of September 30, 2003 and 2002:

September 30, 2003

Book Value

Fair ValueFinancial assets

$
89,073

$
89,073Short-term borrowings

$
103,321

$
103,321Long-term borrowings

$
239,068

$
240,854


September 30, 2002

Book Value

Fair ValueFinancial assets

$
313,012

$
313,012Short-term borrowings

$
1,008

$
1,008Long-term borrowings

$
50,953

$
58,391


The
fair values shown above have been assessed by calculating discounted cash flows that would arise if the commitments at September 30, 2003 and 2002 had been entered into at
market rates at that time.

14    Share Capital and Retained Earnings

The Company has 250,000,000 ordinary shares, par value 10 pence, authorized of which 188,209,895 were issued and outstanding as of September 30, 2003.
Galen shares trade in the United States in American Depositary Share ("ADS") form with each comprised of four ordinary shares. On an ADS equivalent basis, the Company would have 62,500,000 equivalent
ADSs authorized of which 47,052,473 would have been issued and outstanding as of September 30, 2003. During the year ended September 30, 2002, 2,050,000 ordinary shares were repurchased
for a total of $12,600. No shares were repurchased in the year ended September 30, 2003.

In
November 1999, Galen placed 6,000,000 ordinary shares (the equivalent of 1,500,000 ADSs) and received net proceeds of $56,800. On September 29, 2000 Galen issued
31,698,554 ordinary shares (the equivalent of 7,924,639 ADSs) in exchange for all of the outstanding shares of Warner Chilcott. In

42

---



July 2001,
Galen completed an International Offer in which 26,490,011 ordinary shares were placed (the equivalent of 6,622,503 ADSs) and received approximately $268,250, net of fees.

As
part of the Warner Chilcott acquisition, Galen also issued options and warrants to purchase Galen ordinary shares and ADSs to former holders of options and warrants to purchase Warner
Chilcott shares. In the aggregate, Galen issued options and warrants over 10,254,040 Galen ordinary shares (the equivalent of 2,563,510 ADSs). Most of the options and warrants issued in exchange for
Warner Chilcott options and warrants had been issued by Warner Chilcott to officers, employees and consultants, details of which are contained in Footnote 15 "Stock Compensation Plans." As of
September 30, 2002, all Galen warrants issued to former Warner Chilcott investors were cancelled either by exercise or expiry.

Unrestricted
retained earnings available for payment of dividends as determined under U.K. GAAP at September 30, 2003 were $164,134.

15    Stock Compensation Plans

Share Option Schemes

The following share option schemes were established in 1996:



The
Galen 2000 US Option Scheme was established in 2000. The Galen Inc Employee Stock Purchase Plan, established in 1998, was terminated upon disposal of our Clinical Trial Services
business in May 2002.

A
summary of the main terms of the schemes is set out below.

The Galen Approved Executive Share Option Scheme and the Galen Unapproved Executive Share Scheme ("the Executive Schemes")

These
are discretionary share schemes, one of which has been approved by the U.K. Inland Revenue. The terms of these schemes are similar unless indicated to the contrary. Both schemes
provide for options to be granted over unissued shares or shares held in a trust. Options are granted at the
discretion of the Remuneration Committee of the Company to any full time employee of Galen or any of its subsidiaries.

Options
may be exercised between the third and tenth anniversaries of their date of grant. The exercise price is not less than the higher of the nominal value of the share and the middle
market quotation for the last dealing day before the date of grant.

43

---



The
number of options that may be issued is subject to overall scheme limits and individual limits. No further options may be granted if, as a result:



No
further options may be granted to an individual if as a result the aggregate market value of shares which have been issued to him or for which he may subscribe under any Company share
option scheme (other than the Savings Related Scheme) pursuant to options granted to him during the previous 10 years would exceed 4 times his annual earnings, or, in the case of the Approved
Scheme, the aggregate market value of shares which he may acquire under this scheme would exceed £30,000.

The Galen Savings Related Share Option Scheme ("the SAYE Scheme")

The SAYE Scheme permits the grant of options over unissued shares or shares held in a trust. All eligible employees are invited to apply for options and it is a
condition of application that employees enter into a savings contract with an approved savings institution. The number of shares over which an option can be granted will be determined by the level of
contributions which an employee commits to under the savings contract. This scheme is made available for U.K and Republic of Ireland employees of the Company and its subsidiaries with more than
1 year continuous employment. The exercise price is not less than the higher of the nominal value of the share and 80% of the middle market quotation on the day immediately preceding the date
on which the Company issues invitations to eligible employees to participate in the SAYE Scheme. An option may be exercised 3 or 5 years after the date of grant depending on the type of savings
contract taken out.

No
further options may be granted if, as a result:



44

---





The Galen 2000 U.S. Option Scheme ("the U.S. Share Scheme")

Pursuant to the terms of the U.S. Share Scheme, both incentive stock options and non-qualified stock options may be granted to any eligible employee
of or consultant to the Company's U.S. subsidiaries.

On
any date, no option may be granted under the U.S. Share Scheme if, as a result, any of the following limits would be exceeded:



The
maximum number of Ordinary Shares that may be granted in ADS form as incentive stock options under the U.S. Share Scheme is 6,363,332 Ordinary Shares.

There
are no limits on the maximum number of ADSs which may be the subject of an option granted under the U.S. Share Scheme to an eligible employee. The exercise price of an option shall
not be less than 100% of the fair market value of an ADS on the date the option is granted. The period during which options may become exercisable shall be set by the Remuneration Committee. All
options shall cease to be exercisable on the earliest of the tenth anniversary of the date of grant or after a specified period following the participant's separation from the Company.

45

---



Schedule of Compensatory Share Options and Warrants (in terms of equivalent ADSs)

|                                  |           |           |          | Exercise Price per ADS
|--------------------------------- | --------- | --------- | -------- | ----------------------
|
|Balance at September 30, 2000     |           | 1,644,137 |          | $1.60$49.35          
|                                  | Granted   |           | 583,923  |                       
|                                  | Exercised |           | (441,497 | )                     
|                                  | Cancelled |           | (14,792  | )                     
|                                  |           |           |          |                       
|Balance at September 30, 2001     |           | 1,771,771 |          | $1.60$49.35          
|                                  | Granted   |           | 662,859  |                       
|                                  | Exercised |           | (92,494  | )                     
|                                  | Cancelled |           | (237,432 | )                     
|                                  |           |           |          |                       
|Balance at September 30, 2002     |           | 2,104,704 |          | $1.60$51.53          
|                                  | Granted   |           | 935,270  |                       
|                                  | Exercised |           | (202,007 | )                     
|                                  | Cancelled |           | (291,201 | )                     
|                                  |           |           |          |                       
|Balance at September 30, 2003     |           | 2,546,766 |          | $1.60$54.68          
|                                  |           |           |          |                       
|Exercisable at September 30, 2003 |           | 1,295,683 |          | $1.60$49.35          
|                                  |           |           |          |                       

Schedule of Compensatory Share Option and Warrants Grouped by Exercise Price Range (in terms of equivalent ADSs)

|                                                                     |  | Range of Exercise Price |  |        
|-------------------------------------------------------------------- |  | ----------------------- |  | -------
|
|Number of ADSs subject to options/warrants                           |  | 279,427                 |  | 856,043
|Weighted average exercise price                                      |  | $12.93                  |  | $27.94 
|Weighted average remaining contractual life (years)                  |  | 3.9                     |  | 8.0    
|Number of exercisable options/warrants                               |  | 279,427                 |  | 241,249
|Weighted average exercise price for exercisable options and warrants |  | $12.93                  |  | $27.33 

Options
issued over ordinary shares have been converted to an equivalent number of options over ADSs by dividing the number of ordinary shares subject to such options by four and
multiplying the option exercise price by four. Exercise prices of options denominated in pounds have been converted to a U.S. dollar equivalent in the above tables using the pound / U.S. dollar
exchange rate as of September 30, 2003.

The
Company applies APB Opinion No. 25 in accounting for option grants under its share option schemes. Accordingly, the Company recorded compensation expense related to the
performance provisions of certain share options. This expense amounted to $(1,301), $323 and $4,913 for the fiscal

46

---



years
ending September 30, 2003, 2002 and 2001, respectively. Had the Company determined compensation expense based on the fair value of options and warrants issued at the grant date under SFAS
No. 123, the Company's net income and net income per ADS would have differed from the reported amounts as indicated below.

|                                                                             |                     | For the Years Ended September 30, |       
|---------------------------------------------------------------------------- | ------------------- | --------------------------------- | ------
|
|Net Income as reported                                                       |                     | $                                 | 96,155
|Add back: Compensation expense recognized during the year, net of tax effect |                     |                                   | (671  
|Proforma compensation expense, net of tax effect                             |                     |                                   | (4,314
|                                                                             |                     |                                   |       
|                                                                             | Proforma net income |                                   | $     
|                                                                             |                     |                                   |       
|Proforma net income per ADS:                                                 |                     |                                   |       
|                                                                             | Basic               |                                   | $     
|                                                                             |                     |                                   |       
|                                                                             | Diluted             |                                   | $     
|                                                                             |                     |                                   |       
|Weighted average ADS equivalents outstanding:                                |                     |                                   |       
|                                                                             | Basic               |                                   |       
|                                                                             |                     |                                   |       
|                                                                             | Diluted             |                                   |       
|                                                                             |                     |                                   |       

SFAS 123
compensation cost was determined using the Black-Scholes option-pricing model. Following are the weighted average per share fair values for options issued during the
periods indicated and the related assumptions used in the calculation of compensation cost under SFAS 123:

For the Years Ended September 30,2003

2002

2001Per share fair value of options

$10.93

$15.65

$16.76Option life

4.65 years

4.65 years

4.35 yearsRisk free interest rate

3.1%

3.2%

3.5%Volatility

40.9%

41.0%

37.0%Dividend yield

0.46%

0.46%

0.25%


In
accordance with purchase accounting, the fair value of the Warner Chilcott compensatory options and warrants assumed by the Company was recorded as part of the purchase consideration
paid to acquire Warner Chilcott. Accordingly, these options and warrants are not considered in the above pro forma amounts.

16    Treasury Stock

Treasury stock reflects shares held by the Galen Holdings PLC Employee Benefit Trust (the "Trust"), which was established by the Company's founder,
Dr. McClay, immediately prior to flotation in 1997. This is a discretionary trust for the benefit of employees and former employees of the Company, including Directors, and may be used to meet
obligations under the Company's share schemes. Dividends have not been waived by the Trust. Dr. McClay, who cannot be a beneficiary of the Trust, gifted 5,000,262 ordinary shares (1,250,065 ADS
equivalents) to the Trust on its establishment. Treasury stock is included on the balance sheet at the value of the shares on the date of the gift, $2.43 per ordinary share ($9.72 per ADS). At
September 30, 2003 there were 4,592,720 (2002: 4,721,241) ordinary shares, or 1,148,180 (2002: 1,180,310), ADS equivalents, held by the Trust.

47

---





17    Leases

The Company leases land and buildings and motor vehicles under operating leases. The Company's commitments under the non-cancelable portion of all
operating leases for the next five years as of September 30, 2003 are:

2004

$
1,2272005


7302006


9692007


1,0572008


976$
4,959


Lease
and rental expenses included in selling, general and administrative expenses in the accompanying statements of operations totaled $1,626, $1,657, and $1,023 for the years ended
September 30, 2003, 2002 and 2001, respectively.

18    Income Taxes

Galen Holdings operates in three primary tax jurisdictions, the United Kingdom, the United States and the Republic of Ireland. The majority of Galen's taxable
income for the periods presented are derived from the United States, the United Kingdom and the Republic of Ireland. The following table shows the principal reasons for the difference between the
effective tax rate and the U.K. statutory income tax rate.

For the Years Ended September 30,2003

2002

2001(As Restated)

(As Restated)UK statutory income tax rate


30.0
%

30.0
%

30.0
%Income before taxes

$
141,763

$
56,695

$
14,596Income tax at UK statutory rate


42,529


17,009


4,379Non-deductible expense:Amortization of UK goodwill








934Non-cash compensation expense


149


97


1,473Legal, entertainment and other


4,543


378


211Change in valuation allowance


3,286


865Effect of foreign tax rates (net)


(3,787
)

1,827


Non-taxable UK grant income


(341
)

(473
)

(459
)Other differences (net)


(771
)

(56
)

(527
)Provision for income taxes

$
45,608

$
19,647

$
6,011Effective income tax rate


32.2
%

34.7
%

41.2
%


48

---



The
U.K., the Republic of Ireland and U.S. components of income before taxes and the provisions for income taxes are presented in the table below:

|                                     |  | For the Years Ended September 30, |        
|------------------------------------ |  | --------------------------------- | -------
|
|
|Income (loss) before taxes:          |  |                                   |        
|United Kingdom                       |  | $                                 | 8,630  
|Republic of Ireland                  |  |                                   | 69,839 
|United States                        |  |                                   | 63,294 
|                                     |  |                                   |        
|Total                                |  | $                                 | 141,763
|                                     |  |                                   |        
|Provision for current income taxes:  |  |                                   |        
|United Kingdom                       |  | $                                 | 2,754  
|Republic of Ireland                  |  |                                   | 21,941 
|United States federal tax            |  |                                   | 5,866  
|United States state and local taxes  |  |                                   | 195    
|                                     |  |                                   |        
|Total                                |  | $                                 | 30,756 
|                                     |  |                                   |        
|Provision for deferred income taxes: |  |                                   |        
|United Kingdom                       |  | $                                 | 2,472  
|Republic of Ireland                  |  |                                   | (6,684 
|United States federal tax            |  |                                   | 15,468 
|United States state and local taxes  |  |                                   | 3,596  
|                                     |  |                                   |        
|Total                                |  | $                                 | 14,852 
|                                     |  |                                   |        

Deferred
income tax liabilities are taxes the Company expects to pay in future periods. Similarly, deferred tax assets are recorded to reflect expected reductions in taxes payable in
future periods. Deferred income tax items arise because of differences in the book and tax treatment of certain assets and liabilities.

49

---



The
items giving rise to deferred tax liabilities and assets are summarized in the following table:

As of September 30,2003

2002(As Restated)

(As Restated)Deferred Tax Assets:Capital loss carryforwards

$
4,251

$
865Valuation allowance for capital loss carryforwards


(4,251
)

(865
)


US federal income tax net operating loss carryforwards





23,635Valuation allowance for net operating loss carryforwards





(17,274
)


6,361Reserves and other


23,487


3,196Share compensation expense





1,357Deferred tax assets

$
23,487

$
10,914Deferred Tax Liabilities:Property, plant and equipment allowances

$
(6,849
)
$
(6,159
)Intangibles


(14,099
)

(11,291
)Deferred tax liabilities

$
(20,948
)
$
(17,450
)Net deferred tax asset/(liability)

$
2,539

$
(6,536
)


The
valuation allowance of $4,251 (2002: $865) relates to foreign deferred tax assets recorded for capital loss carryforwards that the Company currently believes are more likely than not
to remain unrealized in the future. The timing differences arising from the amortization of the intangible assets result in a deferred tax asset. However, the Company has determined that it is more
likely than not that the resulting deferred tax would not have been recognized since any tax loss on the eventual sale of the intangible asset could only be used to offset future taxable income in
very limited circumstances.

In
connection with the acquisition of Warner Chilcott, completed on September 29, 2000, the Company acquired U.S. federal income tax net operating loss carryforwards of
approximately $62,000. At September 30, 2003 all loss carryforwards had been utilized.

The
deferred tax asset amount relating to share compensation expense was based on the intrinsic value of share options, the terms of which were modified on the cessation of employment of
an executive. These options have now been exercised.

19    Concentration of Credit Risk and Reliance on Major Products

The Company distributes its pharmaceutical products through wholesalers, distributors and direct to certain retailers. The following table shows significant
customer sales as a percentage of revenue from continuing operations. Amounts receivable from Customer A as of September 30, 2003 and 2002

50

---



totaled
$7,122 and $4,363, respectively. As of September 30, 2003 and 2002, amounts receivable from Customer B totaled $3,077 and $2,932, respectively.

For the Years Ended September 30,2003

2002

2001Customer A

17
%
14
%
13
%Customer B

27
%
12
%



Net sales of the following pharmaceutical products accounted for more than 10% of revenue from continuing operations:

For the Years Ended September 30,2003

2002

2001Sarafem®(1)

14
%


Ovcon® 35 and 50

14
%
19
%
20
%Doryx®

13
%
18
%
11
%Estrace® cream

10
%
16
%
16
%


---

20    Consolidating Schedule

Following are consolidating schedules reflecting Balance Sheet and Statement of Operations data for the Company as of September 30, 2003, and for the years
ended September 30, 2003, 2002 and 2001:

|                       |                                     | Galen
Holdings PLC |   | Warner
Chilcott, plc |         | Warner
Chilcott, Inc. |         | Other
Subsidiary
Companies |   | Elimination
Entries |         | Consolidated |         
|---------------------- | ----------------------------------- | ------------------ | - | -------------------- | ------- | --------------------- | ------- | -------------------------- | - | ------------------- | ------- | ------------ | --------
|
|SEPTEMBER 30, 2003     |                                     |                    |   |                      |         |                       |         |                            |   |                     |         |              |         
|Balance Sheet Data:    |                                     |                    |   |                      |         |                       |         |                            |   |                     |         |              |         
|Assets                 |                                     |                    |   |                      |         |                       |         |                            |   |                     |         |              |         
|                       | Cash and cash equivalents           |                    | $ | 30,395               |         | $                     |        |                            | $ | 63,235              |         | $            | (4,557  
|                       | Accounts receivable, net            |                    |   |                     |         |                       |        |                            |   | 31,172              |         |              | 6,870   
|                       | Inventories                         |                    |   |                     |         |                       |        |                            |   | 72,578              |         |              | 18,946  
|                       | Inter-company receivable (payable)  |                    |   | 433,290              |         |                       | (20,713 | )                          |   | 20,574              |         |              | (433,151
|                       | Deferred tax asset                  |                    |   |                     |         |                       |        |                            |   |                    |         |              | 6,305   
|                       | Other assets                        |                    |   | 747                  |         |                       |        |                            |   | 5,047               |         |              | 2,861   
|                       |                                     |                    |   |                      |         |                       |         |                            |   |                     |         |              |         
|                       |                                     | Current assets     |   | $                    | 464,432 |                       | $       | (20,713                    | ) | $                   | 192,606 |              | $       
|                       |                                     |                    |   |                      |         |                       |         |                            |   |                     |         |              |         
|                       | Property, plant and equipment, net  |                    | $ |                     |         | $                     |        |                            | $ | 2,866               |         | $            | 61,728  
|                       | Intangible assets (net) & goodwill  |                    | $ |                     |         | $                     |        |                            | $ | 349,386             |         | $            | 870,077 
|                       | Investment in Warner Chilcott notes |                    | $ | 51,590               |         | $                     |        |                            | $ |                    |         | $            | 76,378  
|                       | Investment in subsidiaries          |                    | $ | 402,733              |         | $                     | 185,593 |                            | $ |                    |         | $            |        
|Liabilities and Equity |                                     |                    |   |                      |         |                       |         |                            |   |                     |         |              |         
|                       | Current liabilities                 |                    | $ | 12,526               |         | $                     |        |                            | $ | 48,481              |         | $            | 152,004 
|                       | Long-term liabilities               |                    | $ |                     |         | $                     |        |                            | $ | 163,641             |         | $            | 192,483 
|                       | Deferred income taxes               |                    | $ |                     |         | $                     |        |                            | $ | 3,766               |         | $            |        
|                       | Other non-current liabilities       |                    | $ |                     |         | $                     |        |                            | $ |                    |         | $            | 5,931   
|                       | Shareholders' equity                |                    | $ | 906,229              |         | $                     | 164,880 |                            | $ | 328,970             |         | $            | 255,039 
|                       |                                     |                    |   |                      |         |                       |         |                            |   |                     |         |              |         
|                       |                                     |                    |   |                      |         |                       |         |                            |   |                     |         |              |         

51

---



|YEAR ENDED SEPTEMBER 30, 2003 |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |         |         |          |          |          |         |        
|----------------------------- | ------------------------------------------------------------------ | ------------------------ | ------- | ------- | ------ | - | --- | -- | ------- | ------- | ------- | ------- | ------- | ------- | -------- | -------- | -------- | ------- | -------
|Statement of Operations Data: |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |         |         |          |          |          |         |        
|Product Revenue               |                                                                    | $                        |        |         | $      |  |     | $  | 358,730 |         | $       | 314,535 |         | $       | (241,003 | )        | $        | 432,262 |        
|Operating Expenses            |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |         |         |          |          |          |         |        
|                              | Cost of goods sold (excluding depreciation shown separately below) |                          |         |        |        |   |    |    |         | 204,573 |         |         | 109,086 |         |          | (241,003 | )        |         | 72,656 
|                              | Selling, general and administrative                                |                          |         | 18,992  |        |   |    |    |         | 71,310  |         |         | 45,573  |         |          |         |          |         | 135,875
|                              | Research and development                                           |                          |         |        |        |   |    |    |         | 1,612   |         |         | 27,073  |         |          |         |          |         | 28,685 
|                              | Depreciation                                                       |                          |         |        |        |   |    |    |         | 733     |         |         | 6,111   |         |          |         |          |         | 6,844  
|                              | Amortization                                                       |                          |         |        |        |   |    |    |         | 10,569  |         |         | 27,806  |         |          |         |          |         | 38,375 
|                              |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |        
|                              |                                                                    | Total operating expenses |         |         | 18,992 |   |     |   |         |         | 288,797 |         |         | 215,649 |          |          | (241,003 | )       |        
|                              |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |        
|Other income (expense)        |                                                                    |                          | 13,561  |         |        |  |     |    | (20,157 | )       |         | (3,213  | )       |         | 1,745    |          |          | (8,064  | )      
|Provision for income taxes    |                                                                    |                          | 1,186   |         |        |  |     |    | 19,787  |         |         | 22,768  |         |         | 1,867    |          |          | 45,608  |        
|                              |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |        
|Net Income (Loss)             |                                                                    | $                        | (6,617  | )       | $      |  |     | $  | 29,989  |         | $       | 72,905  |         | $       | (122     | )        | $        | 96,155  |        
|                              |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |        
|YEAR ENDED SEPTEMBER 30, 2002 |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |         |         |          |          |          |         |        
|Statement of Operations Data: |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |         |         |          |          |          |         |        
|Product Revenue               |                                                                    | $                        |        |         | $      |  |     | $  | 184,991 |         | $       | 50,230  |         | $       |         |          | $        | 235,221 |        
|Operating Expenses            |                                                                    |                          |         |         |        |   |     |    |        |         |         |         |         |         |          |          |          |         |        
|                              | Cost of goods sold (excluding depreciation shown separately below) |                          |         |        |        |   |    |    |         | 56,773  |         |         | (5,223  | )       |          |         |          |         | 51,550 
|                              | Selling, general and administrative                                |                          |         | (4,772  | )      |   | 78  |    |         | 53,894  |         |         | 15,330  |         |          |         |          |         | 64,530 
|                              | Research and development                                           |                          |         |        |        |   |    |    |         | 1,755   |         |         | 18,028  |         |          |         |          |         | 19,783 
|                              | Depreciation                                                       |                          |         |        |        |   |    |    |         | 695     |         |         | 4,628   |         |          |         |          |         | 5,323  
|                              | Amortization                                                       |                          |         |        |        |   |    |    |         | 10,731  |         |         | 7,773   |         |          |         |          |         | 18,504 
|                              |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |        
|                              |                                                                    | Total operating expenses |         |         | (4,772 | ) |     | 78 |         |         | 123,848 |         |         | 40,536  |          |          |         |         |        
|                              |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |        
|Other income (expense)        |                                                                    |                          | 11,981  |         |        |  |     |    | (7,262  | )       |         | 2,292   |         |         | (25,847  | )        |          | (18,836 | )      
|Provision for income taxes    |                                                                    |                          | 4,766   |         |        |  |     |    | 18,557  |         |         | 1,584   |         |         | (5,260   | )        |          | 19,647  |        
|Discontinued operations       |                                                                    |                          |        |         |        |  |     |    |        |         |         | 7,037   |         |         |         |          |          | 7,037   |        
|Gain on disposal              |                                                                    |                          | 100,028 |         |        |  |     |    |        |         |         | 1,063   |         |         |         |          |          | 101,091 |        
|                              |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |        
|                              | Net Income (Loss)                                                  |                          | $       | 112,015 |        | $ | (78 | )  | $       | 35,324  |         | $       | 18,502  |         | $        | (20,587  | )        | $       | 145,176
|                              |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |        
|YEAR ENDED SEPTEMBER 30, 2001 |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |         |         |          |          |          |         |        
|Statement of Operations Data: |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |         |         |          |          |          |         |        
|Product Revenue               |                                                                    | $                        |        |         | $      |  |     | $  | 114,268 |         | $       | 69,554  |         | $       |         |          | $        | 183,822 |        
|Operating Expenses            |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |         |         |          |          |          |         |        
|                              | Cost of goods sold (excluding depreciation shown separately below) |                          |         |        |        |   |    |    |         | 21,984  |         |         | 22,259  |         |          |         |          |         | 44,243 
|                              | Selling, general and administrative                                |                          |         | 967     |        |   | (3  | )  |         | 40,898  |         |         | 22,898  |         |          |         |          |         | 64,760 
|                              | Research and development                                           |                          |         |        |        |   |    |    |         | 685     |         |         | 13,009  |         |          |         |          |         | 13,694 
|                              | Depreciation                                                       |                          |         |        |        |   |    |    |         | 414     |         |         | 3,889   |         |          |         |          |         | 4,303  
|                              | Amortization                                                       |                          |         |        |        |   |    |    |         | 22,287  |         |         | 3,898   |         |          |         |          |         | 26,185 
|                              |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |        
|                              |                                                                    | Total operating expenses |         |         | 967    |   |     | (3 | )       |         | 86,268  |         |         | 65,953  |          |          |         |         |        
|                              |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |        
|Other income (expense)        |                                                                    |                          | 954     |         |        |  |     |    | (20,039 | )       |         | 3,044   |         |         |         |          |          | (16,041 | )      
|Provision for income taxes    |                                                                    |                          |        |         |        |  |     |    | 7,153   |         |         | (1,142  | )       |         |         |          |          | 6,011   |        
|Discontinued operations       |                                                                    |                          |        |         |        |  |     |    |        |         |         | 7,841   |         |         |         |          |          | 7,841   |        
|                              |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |        
|Net Income (Loss)             |                                                                    | $                        | (13     | )       | $      | 3 |     | $  | 808     |         | $       | 15,628  |         | $       |         |          | $        | 16,426  |        
|                              |                                                                    |                          |         |         |        |   |     |    |         |         |         |         |        

52

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21    Segment Information

The Company's business consists of one operating segment for internal financial reporting purposes. Following is selected information in relation to continuing
operations for the periods indicated:



For the Years Ended September 30,2003

2002

2001RevenuesUnited States

$
359,228

$
174,531

$
116,753United Kingdom


64,893


58,993


63,349All other


8,141


1,697


3,720$
432,262

$
235,221

$
183,822




For the Years Ended September 30,2003

2002

2001Doryx®

$
54,134

$
42,439

$
20,402Duricef® and Moisturel®


23,035


8,531


Estrace® cream


44,796


36,484


28,508Estrace® tablets


22,507


20,383


4,252Estrostep®


26,494





femhrt®


22,577





Femring®


2,294





Loestrin®


34,887





Ovcon®


58,573


45,257


36,935Sarafem®


59,907





Other:Other U.S.


8,458


23,134


30,376U.K. and international


74,600


58,993


63,349$
432,262

$
235,221

$
183,822


22    Pension and 401(K) Savings Plan Contributions

Contributions by the Company to defined contribution pension plans during the years ended September 30, 2003, 2002 and 2001 were $362, $1,055, and $513,
respectively.

The
Company also makes matching contributions to a 401(k) savings plan. This plan provides eligible employees with the option to defer amounts not in excess of 15% of his or her
compensation. The Company makes matching contributions to the plan on behalf of all participants who make elective deferrals. As of January 1, 2003, the Company contributes and allocates to
each participant's account matching contributions equal to 75% of up to 6% of the participant's contributions. Prior to January 1, 2003, the Company's matching contribution was 50% of up to 6%
of the participant's contributions.

53

---



The
Company's contributions vest at 25% per year up to 100% at the participant's completion of four years of employment. The Company's contributions for the years ended September 30, 2003,
2002, and 2001 amounted to $846, $529, and $436, respectively.

23    Net Income Per Ordinary Share and ADS

Basic net income per ordinary share and ADS is based on the income available to ordinary shareholders divided by the weighted average number of ordinary shares
and equivalent ADSs outstanding during the period. Diluted income per share is computed by adjusting the weighted average number of ordinary shares and equivalent ADSs outstanding during the period
for potentially dilutive rights to acquire ordinary shares or ADSs that were outstanding during the period. The dilution attributable to rights to acquire shares is computed using the treasury stock
method and depends upon the market price of the Company's shares during the period.

The
following table sets forth the computation for basic and diluted net income per ordinary share and ADS:

|                                                                      |  | For the Years Ended September 30,
|--------------------------------------------------------------------- |  | ---------------------------------
|
|Numerator for basic and diluted net income per ordinary share and ADS |  | $                                
|                                                                      |  |                                  
|Weighted average number of ordinary shares (basic)                    |  |                                  
|Effect of dilutive stock options                                      |  |                                  
|                                                                      |  |                                  
|Weighted average number of ordinary shares (diluted)                  |  |                                  
|                                                                      |  |                                  
|Basic and diluted net income per ordinary share                       |  | $                                
|                                                                      |  |                                  
|Weighted average number of equivalent ADSs (basic)                    |  |                                  
|Effect of dilutive stock options                                      |  |                                  
|                                                                      |  |                                  
|Weighted average number of equivalent ADSs (diluted)                  |  |                                  
|                                                                      |  |                                  
|Basic net income per ADS                                              |  | $                                
|                                                                      |  |                                  
|Diluted net income per ADS                                            |  | $                                
|                                                                      |  |                                  

54

---





24    Related Parties

As of December 2001, the Company sold its CSS business to Dr. Allen McClay, the founder, former President, former executive director of Galen and a
significant shareholder. As part of the transaction, Alan Armstrong, President of Galen's Pharmaceutical Services division, resigned from both his position as an executive and as an executive director
of Galen. In May 2002, the Company sold its CTS business to companies controlled by Dr. McClay. In August 2002, the Company sold its ICTI business to a company controlled by
Dr. McClay. The Company received a total of $235,000 in consideration for the sale of these businesses.

As
of September 30, 2003, Elan Corporation plc ("Elan") and its subsidiaries held 3.8% of Galen's share capital. Mr. Thomas G. Lynch, then Executive Vice Chairman of the
Board of Directors of Elan, served on Galen's Board as a non-executive director during the period of November 27, 2000 through February 13, 2002. In March 1999, Warner
Chilcott reached a binding agreement with Elan under which Elan agreed to acquire Warner Chilcott's marketing rights to an extended-release nifedipine product. Royalty payments received from Elan
during the years ended September 30, 2002 and 2001 amounted to $1,664 and $2,486, respectively. The agreement was terminated in September 2002 by mutual agreement. Under the terms of the
termination, Elan agreed to pay $1,500 to Warner Chilcott.

Boron-LePore
Group, Inc. has provided a range of services to Warner Chilcott including providing contract sales personnel, recruitment of sales representatives and certain sample
data record keeping. Mr. Roger M. Boissonneault, Galen's Chief Executive Officer, served on the Board of Boron-LePore until June 24, 2002. During the years ended September 30,
2002 and 2001, Boron-Lepore provided meeting and planning services to Warner Chilcott for fees of $1,916 and $591, respectively.

25    Subsequent Event

In December 2003, the Company sold its Pharmaceutical Development and Manufacturing Services business ("PDMS"), which formed part of Galen's contract
manufacturing business, to a company controlled by Dr. Allen McClay, the founder, former President and Director of Galen. As part of the agreement, the acquiring company entered into a supply
agreement with Galen to manufacture, supply and distribute a number of Galen products for the U.K. and Irish markets. Galen received a cash consideration of $34 million
(£20 million) for the sale of this business.

55

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SCHEDULE II    VALUATION AND QUALIFYING ACCOUNTS  (In thousands of U.S. dollars)  (As Restated)

|                                           |  | Balance at
Beginning of
Period |       | Additional
Reserves |   | Write-Offs
Against
Reserves |   | Foreign
Currency
Adjustment |   | Balance
at End of
Period
|------------------------------------------ |  | ------------------------------ | ----- | ------------------- | - | --------------------------- | - | --------------------------- | - | ------------------------
|2003:                                      |  |                                |       |                     |   |                             |   |                             |   |                         
|Allowance for doubtful accounts            |  | $                              | 1,661 |                     | $ | (950                        | ) | $                           |  |                         
|Valuation allowance for deferred tax asset |  | $                              | 865   |                     | $ | 3,386                       |   | $                           |  |                         
|2002:                                      |  |                                |       |                     |   |                             |   |                             |   |                         
|Allowance for doubtful accounts            |  | $                              | 1,134 |                     | $ | 417                         |   | $                           |  |                         
|Valuation allowance for deferred tax asset |  | $                              |      |                     | $ | 865                         |   | $                           |  |                         
|2001:                                      |  |                                |       |                     |   |                             |   |                             |   |                         
|Allowance for doubtful accounts            |  | $                              | 294   |                     | $ | 838                         |   | $                           |  |                         

56

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Item 19.Exhibits.

|1.1 |  | Articles of Association of Galen (the "Company") as amended on February 19, 2002 (incorporated by reference to Exhibit 1.1 to the Company's Annual Report on Form 20-F filed on January 2, 2003 for the year ended September
30, 2002 (File No. 333-12634)).                                                                                                                      
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.2 |  | Memorandum of Association of the Company (incorporated by reference to Exhibit 1.2 to the Company's Annual Report on Form 20-F filed on January 25, 2001 for the year ended September 30, 2000 (File No. 333-12634)).                                                                                                                                                             
|2.1 |  | Amended and Restated Deposit Agreement dated as of September 29, 2000, by and among the Company, Warner Chilcott plc, the Bank of New York and the Owners and Holders of American Depositary Receipts (incorporated by reference to Exhibit 2.1 to the
Company's Annual Report on Form 20-F filed on January 25, 2001 for the year ended September 30, 2000 (File No. 333-12634)).
|2.2 |  | Form of Ordinary Share Certificate (incorporated by reference to Exhibit 2.2 to the Company's Annual Report on Form 20-F filed on January 25, 2001 for the year ended September 30, 2000 (File No. 333-12634)).                                                                                                                                                                   
|2.3 |  | Form of ADS Certificate (included within Exhibit 2.1).                                                                                                                                                                                                                                                                                                                            
|2.4 |  | Indenture dated as of February 15, 2000, by and among Warner Chilcott plc, Warner Chilcott, Inc. and the Bank of New York (incorporated by reference to Exhibit 10.48 to Warner Chilcott plc's Annual Report on Form 10-K filed on March 16, 200 for the
year ended December 31, 1999 (File No. 000-29364)).                                                                      
|2.5 |  | First Supplemental Indenture dated as of March 30, 2001, by and among the Company, Warner Chilcott, Inc., Warner Chilcott plc and the Bank of New York (incorporated by reference to Exhibit 99.1 to the Company's Report on Form 6-K filed on April 19,
2001 (File No. 333-12634)).                                                                                              
|2.6 |  | Form of Purchase Agreement by and among certain Selling Shareholders and Merrill Lynch International (incorporated by reference to Exhibit 1.1 to the Company's Registration Statement on Form F-1 filed on July 2, 2001 (File No. 333-64324)
).                                                                                                                                  
|2.7 |  | Form of Sponsor's and Open Offer Agreement (incorporated by reference to Exhibit 1.2 to the Company's Registration Statement on Form F-1 filed on July 2, 2001 (File No. 333-64324)).                                                                                                                                                                                             
|2.8 |  | Form of Conditional Offer to Purchase (incorporated by reference to Exhibit 99.1 to the Company's Registration Statement on Form F-1 filed on July 2, 2001 (File No. 333-64324)).                                                                                                                                                                                                 
|4.1 |  | Employment Agreement dated as of May 4, 2000, by and between Warner Chilcott, Inc. and Roger M. Boissonneault (incorporated by reference to Exhibit 4.1 to the Company's Annual Report on Form 20-F filed on January 25, 2001 for the year ended September
30, 2000 (File No. 333-64324)).                                                                                        
|4.2 |  | Amendment dated as of May 20, 2002 to Employment Agreement, by and between Warner Chilcott, Inc. and Roger M. Boissonneault (incorporated by reference to Exhibit 4.2 to the Company's Annual Report on Form 20-F filed on January 2, 2003 for the year
ended September 30, 2002 (File No. 333-12634)).                                                                           
|    |  |                                                                                                                                                                                                                                                                                                                                                                                   

57

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|4.3  |  | Executive Service Agreement dated as of July 2, 1997 by and between Galen Holdings Limited (Renamed Galen Holdings PLC) and Robert Geoffrey Elliott (incorporated by reference to Exhibit 4.3 to the Company's Annual Report on Form 20-F filed on
December 28, 2001 for the year ended September 30, 2001 (File No. 333-12634)).          
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.4  |  | Executive Service Agreement dated as of April 4, 2001 by and between Warner Chilcott (Bermuda) Limited and John Alexander King (incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form 20-F filed on December 28, 2001 for the
year ended September 30, 2001 (File No. 333-64324)).                               
|4.5  |  | Executive Service Agreement dated as of April 10, 2001 by and between Galen Holdings PLC and John Alexander King (incorporated by reference to Exhibit 4.6 to the Company's Annual Report on Form 20-F filed on December 28, 2001 for the year ended
September 30, 2001 (File No. 333-12634)).                                             
|4.6  |  | Form of Letter of Appointment to the Board of Directors (incorporated by reference to Exhibit 4.7 to the Company's Annual Report on Form 20-F filed on December 28, 2001 for the year ended September 30, 2001 (File No. 333-12634)).                                                                                                      
|4.7  |  | Option Rollover and Lock-Up Agreement dated as of May 4, 2000, by and between the Company and Roger M. Boissonneault (incorporated by reference to Exhibit 4.3 to the Company's Annual Report on Form 20-F for the year ended September 30, 2000 (File No.
333-12634)).                                                                    
|4.8  |  | Transaction Agreement dated as of May 4, 2000, by and between the Company and Warner Chilcott plc (incorporated by reference to Exhibit 2.1 to Warner Chilcott plc's Report on Form 8-K filed on May 15, 2000 (File No. 000-29364)).                                                                                                       
|4.9  |  | Supplemental Agreement No. 1 to Warner Chilcott plc Warrant Certificate as issued to Roger Boissonneault regarding certificate numbered Series C No. W03 (incorporated by reference to Exhibit 4.8 to the Company's Annual Report on Form 20-F filed on
January 25, 2001 for the year ended September 30, 2000 (File No. 333-12634)).      
|4.10 |  | Supplemental Agreement No. 1 to Warner Chilcott plc Warrant Certificate as issued to Roger Boissonneault regarding certificate numbered Series C No. W04 (incorporated by reference to Exhibit 4.9 to the Company's Annual Report on Form 20-F filed on
January 25, 2001 for the year ended September 30, 2000 (File No. 333-12634)).      
|4.11 |  | Form of the 2000 US Option Scheme of the Company adopted on September 29, 2000 and amended on February 19, 2002 (incorporated by reference to Exhibit 4.11 to the Company's Annual Report on Form 20-F filed on January 2, 2003 for the year ended
September 30, 2002 (File No. 333-12634)).                                               
|4.12 |  | Approved Executive Share Option Scheme and Unapproved Executive Share Option Scheme of the Company adopted on October 9, 1996 and amended on February 19, 2002 (incorporated by reference to Exhibit 4.12 to the Company's Annual Report on Form 20-F
filed on January 2, 2003 for the year ended September 30, 2002 (File No. 333-12634)).
|4.13 |  | Purchase Agreement dated as of February 11, 2000, by and among Warner Chilcott, Inc., Warner Chilcott plc and Credit Suisse First Boston (incorporated by reference to Exhibit 10.49 to Warner Chilcott plc's Annual Report on Form 10-K filed on March 16,
 2000 for the year ended December 31, 1999 (File No. 000-29364)).              
|     |  |                                                                                                                                                                                                                                                                                                                                            

58

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|4.14 |  | Incentive Share Option Scheme of Warner Chilcott plc, originally adopted on April 3, 1997, amended on June 3, 1999 (incorporated by reference to Exhibit 10.2 to Warner Chilcott plc's Quarterly Report on Form 10-Q filed on August 13, 1999 for the
quarter ended June 30, 1999 (File No. 000-29364)).                                                                                
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.15 |  | Asset Purchase Agreement dated as of January 26, 2000, by and between Warner Chilcott, Inc. and Bristol-Myers Squibb (incorporated by reference to Exhibit 10.1 to Warner Chilcott plc's Report on Form 8-K filed on February 29, 2000 (File No.
000-29364)).                                                                                                                           
|4.16 |  | Estrace Transitional Support and Supply Agreement dated as of January 26, 2000, by and between Westwood-Squibb Pharmaceuticals, Inc. and Warner Chilcott, Inc. (incorporated by reference to Exhibit 10.2 to Warner Chilcott plc's Report on Form 8-K
filed on February 29, 2000 (File No. 000-29364)).                                                                                 
|4.17 |  | Ovcon Transitional Support and Supply Agreement by and between Bristol-Myers Squibb Laboratories Company and Warner Chilcott, Inc. dated as of January 26, 2000 (incorporated by reference to Exhibit 10.3 to Warner Chilcott plc's Report on Form 8-K
filed on February 29, 2000 (File No. 000-29364)).                                                                                
|4.18 |  | License and Distribution Agreement dated as of December 31, 1997, by and between Warner Chilcott plc and FH Faulding & Co Ltd (incorporated by reference to Exhibit 10.20 to Warner Chilcott plc's Report on Form 10-K filed on March 30, 1999 for the
year ended December 31, 1998 (File No. 000-29364)).                                                                              
|4.19 |  | Registration Rights Agreement dated as of February 11, 2000, by and among Warner Chilcott, Inc., Credit Suisse First Boston Corporation, CIBC World Market Corp. and SG Cowen Securities Corporation (incorporated by reference to Exhibit 10.50 to Warner
Chilcott plc's Annual Report on Form 10-K filed on March 16, 2000 for the year ended December 31, 1999 (File No. 000-29364)).
|4.20 |  | First Amendment to Loan and Security Agreement dated as of February 28, 2000, by and between Warner Chilcott, Inc. and PNC Bank National Association (incorporated by reference to Exhibit 10.51 to Warner Chilcott plc's Annual Report on Form 10-K filed
on March 16, 2000 for the year ended December 31, 1999 (File No. 000-29364)).                                                
|4.21 |  | Asset Purchase Agreement dated as of June 29, 2001 by and between Bristol-Myers Squibb Company and Galen (Chemicals) Limited (incorporated by reference to Exhibit 10.8 to the Company's Form F-1 filed on July 2, 2001 (File No. 333-64324)).                                                                                                                                          
|4.22 |  | Supply Agreement dated as of June 29, 2001 by and between Bristol-Myers Squibb Laboratories Company and Galen (Chemicals) Limited (incorporated by reference to Exhibit 10.9 to the Company's Form F-1 filed on July 2, 2001 (File No. 333-64324)
).                                                                                                                                    
|4.23 |  | Business purchase agreement dated January 7, 2002 among Galen Holdings PLC and Alhow Laboratories Limited (incorporated by reference as Exhibit 4.23 to the Company's Report on Form 6-K filed on January 3, 2003 (File No. 333-12634)).                                                                                                                                                
|4.24 |  | Share purchase agreement dated January 7, 2002 among Galen Holdings PLC and Almac Sciences Limited (incorporated by reference as Exhibit 4.24 to the Company's Report on Form 6-K filed on January 3, 2003 (File No. 333-12634)).                                                                                                                                                       
|4.25 |  | Share purchase agreement dated May 8, 2002 among Galen Holdings PLC and Clinical Trial Services Inc. (incorporated by reference to Exhibit 4.25 to the Company's Annual Report on Form 20-F filed on January 2, 2003 for the year ended September 30, 2002
(File No. 333-12634)).                                                                                                       
|     |  |                                                                                                                                                                                                                                                                                                                                                                                         

59

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|4.26    |  | Share purchase agreement dated May 8, 2002 among Galen Holdings PLC, Clinical Trials Services Limited and Clinical Trial Services (US) Inc. (incorporated by reference to Exhibit 4.26 to the Company's Annual Report on Form 20-F filed on January 2,
2003 for the year ended September 30, 2002 (File No. 333-12634)).                                                                                                            
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.27    |  | Stock and asset purchase agreement dated August 22, 2002 between ICTI Acquisition Inc. ("ICTI") and Galen Holdings PLC (incorporated by reference to Exhibit 4.27 to the Company's Annual Report on Form 20-F filed on January 2, 2003 for the year ended
September 30, 2002 (File No. 333-12634)).                                                                                                                                 
|4.28    |  | Assignment, transfer and assumption agreement dated December 7, 2002 between Galen (Chemicals) Limited and Eli Lilly and Company (incorporated by reference to Exhibit 4.28 to the Company's Annual Report on Form 20-F filed on January 2, 2003 for the
year ended September 30, 2002 (File No. 333-12634)).                                                                                                                       
|4.29    |  | Saving-Related Share Option Scheme of the Company as amended by the Company on February 19, 2002 (incorporated by reference to Exhibit 4.30 to the Company's Annual Report on Form 20-F filed on January 2, 2003 for the year ended September 30, 2002
(File No. 333-12634)).                                                                                                                                                       
|4.30*** |  | Manufacturing Agreement dated December 7, 2002 between Galen (Chemicals) Limited and Eli Lilly and Company.                                                                                                                                                                                                                                                                                                                         
|4.31*** |  | Estrostep® and Loestrin® Purchase and Sale Agreement dated March 5, 2003 between Galen (Chemicals) Limited, Galen Holdings plc and Pfizer Inc.                                                                                                                                                                                                                                                                                      
|4.32*** |  | femhrt® Purchase and Sale Agreement dated March 5, 2003 between Galen (Chemicals) Limited, Galen Holdings plc and Pfizer Inc.                                                                                                                                                                                                                                                                                                       
|4.33*** |  | Transitional Supply Agreement dated March 27, 2003 between Galen (Chemicals) Limited and Pfizer Inc.                                                                                                                                                                                                                                                                                                                                
|4.34*** |  | Co-promotion Agreement dated May 1, 2003 between Galen (Chemicals) Limited and Bristol-Myers Squibb Company.                                                                                                                                                                                                                                                                                                                        
|4.35*** |  | Option Agreement dated April 1, 2003 between Galen (Chemicals) Limited and Bristol-Myers Squibb Company.                                                                                                                                                                                                                                                                                                                            
|4.36*** |  | Development Agreement dated April 2, 2003 between Galen (Chemicals) Limited and LEO Pharma A/S.                                                                                                                                                                                                                                                                                                                                     
|4.37*** |  | Manufacturing, Packaging, Labelling, Testing, QP Release, Storage & Despatch Agreement dated December 2, 2003 between Galen Limited and Pharmaceutical Development and Manufacturing Services Limited.                                                                                                                                                                                                                              
|4.38*** |  | Business Purchase Agreement dated December 2, 2003 between Galen Limited and Pharmaceutical Development and Manufacturing Services Limited.                                                                                                                                                                                                                                                                                         
|4.39*** |  | Credit Agreement dated March 5, 2003 among Galen (Chemicals) Limited, Galen Holdings PLC, the companies listed on Schedule 1 thereto as original guarantors, ABN AMRO Bank N.V., Barclays Capital and The Governor and Company of the Bank of Ireland as
mandated lead arrangers, the financial institutions listed on Schedule 1 thereto as original lenders and The Governor and Company of the Bank of Ireland as facility agent.
|4.40*** |  | Manufacturing Agreement dated September 24, 1997 between Duramed Pharmaceuticals, Inc. and Warner-Lambert Company (assigned to Galen (Chemicals) Limited pursuant to the femhrt® Purchase and Sale Agreement dated March 5, 2003 between Galen
(Chemicals) Limited, Galen Holdings plc and Pfizer Inc.).                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     

60

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|4.41** |  | Master Agreement dated April 1, 2003 between Galen (Chemicals) Limited and Leo Pharma A/S.             
|------ |  | -------------------------------------------------------------------------------------------------------
|8.1*** |  | Subsidiaries of the Registrant.                                                                        
|11***  |  | Code of Business Conduct and Ethics.                                                                   
|12.1*  |  | Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|12.2*  |  | Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|13.1*  |  | Certification by the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|13.2*  |  | Certification by the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|99***  |  | 2003 Annual Report and Accounts.                                                                       

---

61

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F/A and that it has duly caused and authorized the
undersigned to sign this annual report on its behalf.

|                |  |  | WARNER CHILCOTT PLC                                                
|--------------- |  |  | -------------------------------------------------------------------
|                |  |  | /S/  R. GEOFFREY ELLIOTTR. Geoffrey Elliott Chief Financial Officer
|January 5, 2005 |  |  |                                                                    

62

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