|                                  
|----------------------------------
|UNITED STATES                     
|SECURITIES AND EXCHANGE COMMISSION
|WASHINGTON, D.C. 20549            
|                                  
|FORM 10-Q                         

|                                                                                        
|----------------------------------------------------------------------------------------
|QUARTERLY
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: January 31, 2009

or

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

For the transition period
from ______________________ to _______________________

Commission File Number:0-22011

|                                                   
|---------------------------------------------------
|SYNOVICS PHARMACEUTICALS, INC.                     
|(EXACT NAME OF COMPANY AS SPECIFIED IN ITS CHARTER)

|                                                |        |                       |           
|----------------------------------------------- | ------ | --------------------- | ----------
|                                                | NEVADA |                       | 86-0760991
|                                                |        |                       |           
|(STATE OR
 OTHER JURISDICTION OF                |        | I.R.S. EMPLOYER      
|INCORPORATION
 OR ORGANIZATION)                 |        | IDENTIFICATION NUMBER
|                                                |        |                       |           
|5360
 NORTHWEST 35TH AVENUE, FT. LAUDERDALE, FL |        | 33309                
|(ADDRESS
 OF PRINCIPAL EXECUTIVE OFFICES)       |        | (ZIP CODE)           

|                                                 
|-------------------------------------------------
|(954) 486-4590                                   
|                                                 
|(COMPANYS TELEPHONE NUMBER, INCLUDING AREA CODE)

Indicate by check mark
whether the Company (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 Company was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes x   No o

Indicate by
check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of large accelerated filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act.

Large accelerated filer o
Accelerated filer o
Non-accelerated filer x
Smaller reporting company o

Indicate by check mark
whether the Company is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o   No x

Indicate the number of
shares outstanding of each of the issuers classes of common stock, as of the
latest practicable date:

As of March 13, 2009, there
were 29,827,357 shares of common stock outstanding (not including 4,000,000
shares of common stock that the Company is obligated to issue).

---



SYNOVICS PHARMACEUTICALS, INC.
INDEX TO QUARTERLY REPORT
ON FORM 10-Q

|                                |    |                                                                                         |      | 
|------------------------------- | -- | --------------------------------------------------------------------------------------- | ---- | 
|                                |    |                                                                                         | PAGE
|PART I -
 FINANCIAL INFORMATION |    |                                                                                        
|                                |    |                                                                                         |      | 
|ITEM I.                         |    | Financial Statements.                                                                   |      | 
|                                |    |                                                                                         |      | 
|                                |    | (UNAUDITED)                                                                             |      | 
|                                |    | Condensed
 Consolidated Balance Sheets                                                  | 3    | 
|                                |    | Condensed
 Consolidated Statements of Operations                                        | 4    | 
|                                |    | Condensed
 Consolidated Statements of Cash Flows                                        | 5    | 
|                                |    | Notes to
 Condensed Consolidated Financial Statements                                   | 6    | 
|                                |    |                                                                                         |      | 
|ITEM 2.                         |    | Managements
 Discussion and Analysis of Financial Condition and Results of Operations. | 14   | 
|                                |    |                                                                                         |      | 
|ITEM 3.                         |    | Quantitative
 and Qualitative Disclosures About Market Risk.                            | 18   | 
|                                |    |                                                                                         |      | 
|ITEM 4T.                        |    | Controls and Procedures.                                                                | 18   | 
|                                |    |                                                                                         |      | 
|PART II - OTHER INFORMATION     |    |                                                                                        
|                                |    |                                                                                         |      | 
|ITEM 1.                         |    | Legal
 Proceedings.                                                                     | 19   | 
|                                |    |                                                                                         |      | 
|ITEM 1A.                        |    | Risk
 Factors.                                                                          | 20   | 
|                                |    |                                                                                         |      | 
|ITEM 2.                         |    | Unregistered
 Sales of Equity Securities and Use of Proceeds.                           | 20   | 
|                                |    |                                                                                         |      | 
|ITEM 3.                         |    | Defaults upon Senior Securities.                                                        | 20   | 
|                                |    |                                                                                         |      | 
|ITEM 4.                         |    | Submission
 of Matters to a Vote of Security Holders.                                   | 20   | 
|                                |    |                                                                                         |      | 
|ITEM 5.                         |    | Other
 Information.                                                                     | 21   | 
|                                |    |                                                                                         |      | 
|ITEM 6.                         |    | Exhibits.                                                                               | 22   | 
|                                |    |                                                                                         |      | 
|SIGNATURES                      | 23 |                                                                                        

2

---



SYNOVICS PHARMACEUTICALS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | ----------- | ----------------- | - | ----------- | -
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  | January 31,
 2009 |             | October 31,
 2008 |  
|                                                                                                                                                                         |  |                   |             |                   |  
|ASSETS                                                                                                                                                                   |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|CURRENT ASSETS:                                                                                                                                                          |  |                   |             |                   |   |             |  
|Cash and cash equivalents                                                                                                                                                |  | $                 | 19,618      |                   | $ | 65,986      |  
|Trade receivables, net                                                                                                                                                   |  |                   | 3,763,558   |                   |   | 3,820,465   |  
|Inventory                                                                                                                                                                |  |                   | 2,635,466   |                   |   | 2,901,664   |  
|Prepaid expenses and other current assets                                                                                                                                |  |                   | 625,785     |                   |   | 377,269     |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|Total Current Assets                                                                                                                                                     |  |                   | 7,044,427   |                   |   | 7,165,384   |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|PROPERTY - Net of accumulated depreciation of $1,035,039 and $911,452,
 respectively                                                                                     |  |                   | 2,409,396   |                   |   | 2,483,577   |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|OTHER ASSETS:                                                                                                                                                            |  |                   |             |                   |   |             |  
|Security deposits                                                                                                                                                        |  |                   | 87,548      |                   |   | 87,548      |  
|Deferred financing fees                                                                                                                                                  |  |                   | 357,645     |                   |   | 698,449     |  
|Intangible assets - net of accumulated amortization of $1,495,656 and
$1,463,877, respectively                                                                           |  |                   | 431,674     |                   |   | 463,454     |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|Goodwill                                                                                                                                                                 |  |                   | 11,447,698  |                   |   | 11,447,698  |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|Total Other Assets                                                                                                                                                       |  |                   | 12,324,565  |                   |   | 12,697,149  |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|TOTAL ASSETS                                                                                                                                                             |  | $                 | 21,778,388  |                   | $ | 22,346,110  |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                                                                                                           |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|CURRENT LIABILITIES:                                                                                                                                                     |  |                   |             |                   |   |             |  
|Accounts payable                                                                                                                                                         |  | $                 | 6,965,131   |                   | $ | 5,978,001   |  
|Accrued interest                                                                                                                                                         |  |                   | 335,599     |                   |   | 374,864     |  
|Accrued liabilities                                                                                                                                                      |  |                   | 3,682,888   |                   |   | 4,054,738   |  
|Dividend payable                                                                                                                                                         |  |                   | 614,633     |                   |   | 382,650     |  
|Notes payable - shareholders and others                                                                                                                                  |  |                   | 450,000     |                   |   | 500,000     |  
|Notes payable                                                                                                                                                            |  |                   | 40,000      |                   |   | 40,000      |  
|Current portion of capital leases                                                                                                                                        |  |                   | 101,569     |                   |   | 70,291      |  
|Current portion of note payable - bank                                                                                                                                   |  |                   | 2,200,000   |                   |   | 2,100,000   |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|Total current liabilities                                                                                                                                                |  |                   | 14,389,821  |                   |   | 13,500,545  |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|LONG-TERM LIABILITIES:                                                                                                                                                   |  |                   |             |                   |   |             |  
|Note payable bank, net of current portion                                                                                                                                |  |                   | 3,000,000   |                   |   | 3,550,000   |  
|Capital lease obligation, net of current portion                                                                                                                         |  |                   | 350,809     |                   |   | 294,071     |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|Total Liabilities                                                                                                                                                        |  |                   | 17,740,630  |                   |   | 17,344,615  |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|STOCKHOLDERS EQUITY:                                                                                                                                                    |  |                   |             |                   |   |             |  
|Series A preferred stock - $.001 par value - authorized, 600,000
 shares; 591,850 and 591,850 issued and outstanding, respectively (liquidation
 preference of $798,998) |  |                   | 798,998     |                   |   | 798,998     |  
|Series C preferred stock - $.001 par value - authorized, 100,000
 shares; 28,955 and 0 issued and outstanding, respectively                                              |  |                   | 28,955      |                   |   | 28,955      |  
|Common stock - $.001 par value - authorized, 45,000,000 shares;
 28,494,014 and 27,619,015 issued and outstanding, respectively                                          |  |                   | 39,154      |                   |   | 38,279      |  
|Additional paid-in capital                                                                                                                                               |  |                   | 94,255,696  |                   |   | 93,887,270  |  
|Accumulated deficit                                                                                                                                                      |  |                   | (79,982,635 | )                 |   | (78,649,598 | )
|Common Stock in Treasury                                                                                                                                                 |  |                   | (10,952,410 | )                 |   | (10,952,410 | )
|Subscription receivable                                                                                                                                                  |  |                   | (150,000    | )                 |   | (150,000    | )
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|Total stockholders equity                                                                                                                                               |  |                   | 4,037,758   |                   |   | 5,001,495   |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                               |  | $                 | 21,778,388  |                   | $ | 22,346,110  |  
|                                                                                                                                                                         |  |                   |             |                   |   |             |  

See notes to the condensed
consolidated financial statements.

3

---



SYNOVICS PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

|                                                      |  |                    |            |                   |   |            |  
|----------------------------------------------------- |  | ------------------ | ---------- | ----------------- | - | ---------- | -
|                                                      |  | Three Months Ended |           
|                                                      |  |                    |            |                   |  
|                                                      |  | January 31,
 2009  |            | January 31,
 2008 |  
|                                                      |  |                    |            |                   |  
|                                                      |  |                    |            |                   |   |            |  
|REVENUES, net                                         |  | $                  | 6,836,279  |                   | $ | 4,255,120  |  
|                                                      |  |                    |            |                   |   |            |  
|COST OF REVENUES                                      |  |                    | 4,495,019  |                   |   | 3,262,772  |  
|                                                      |  |                    |            |                   |   |            |  
|                                                      |  |                    |            |                   |   |            |  
|GROSS PROFIT                                          |  |                    | 2,341,260  |                   |   | 992,348    |  
|                                                      |  |                    |            |                   |   |            |  
|                                                      |  |                    |            |                   |   |            |  
|OPERATING EXPENSES                                    |  |                    |            |                   |   |            |  
|Research and development                              |  |                    | 218,035    |                   |   | 290,078    |  
|Selling, general, and administrative                  |  |                    | 2,757,039  |                   |   | 1,693,210  |  
|                                                      |  |                    |            |                   |   |            |  
|Total expenses                                        |  |                    | 2,975,075  |                   |   | 1,983,288  |  
|                                                      |  |                    |            |                   |   |            |  
|                                                      |  |                    |            |                   |   |            |  
|OPERATING LOSS                                        |  |                    | (633,815   | )                 |   | (990,940   | )
|                                                      |  |                    |            |                   |   |            |  
|OTHER INCOME (EXPENSES):                              |  |                    |            |                   |   |            |  
|Other income                                          |  |                    |           |                   |   | 1,572      |  
|Interest expense, net                                 |  |                    | (467,239   | )                 |   | (1,235,336 | )
|                                                      |  |                    |            |                   |   |            |  
|                                                      |  |                    |            |                   |   |            |  
|Total other (expenses) income                         |  |                    | (467,239   | )                 |   | (1,233,764 | )
|                                                      |  |                    |            |                   |   |            |  
|                                                      |  |                    |            |                   |   |            |  
|NET LOSS BEFORE PROVISION
 FOR INCOME TAX             |  |                    | (1,101,054 | )                 |   | (2,224,704 | )
|                                                      |  |                    |            |                   |   |            |  
|PROVISION FOR INCOME TAXES                            |  |                    |           |                   |   |           |  
|                                                      |  |                    |            |                   |   |            |  
|                                                      |  |                    |            |                   |   |            |  
|NET LOSS                                              |  | $                  | (1,101,054 | )                 | $ | (2,224,704 | )
|                                                      |  |                    |            |                   |   |            |  
|                                                      |  |                    |            |                   |   |            |  
|NET LOSS PER SHARE                                    |  | $                  | (0.04      | )                 | $ | (0.09      | )
|                                                      |  |                    |            |                   |   |            |  
|                                                      |  |                    |            |                   |   |            |  
|WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING |  |                    | 28,343,652 |                   |   | 23,547,066 |  
|                                                      |  |                    |            |                   |   |            |  

See notes to the condensed
consolidated financial statements.

4

---



SYNOVICS PHARMACEUTICALS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)

|                                                                             |  |                            |            |                   |   |            |  
|---------------------------------------------------------------------------- |  | -------------------------- | ---------- | ----------------- | - | ---------- | -
|                                                                             |  | FOR THE THREE MONTHS ENDED |           
|                                                                             |  |                            |           
|                                                                             |  | January 31,
 2009          |            | January 31,
 2008 |  
|                                                                             |  |                            |            |                   |  
|OPERATING ACTIVITIES:                                                        |  |                            |            |                   |   |            |  
|Net loss                                                                     |  | $                          | (1,101,054 | )                 | $ | (2,224,704 | )
|Adjustments to reconcile
 net loss to net cash used in operating activities: |  |                            |            |                   |   |            |  
|Depreciation and amortization                                                |  |                            | 155,367    |                   |   | 147,394    |  
|Amortization of deferred financing fees                                      |  |                            | 340,805    |                   |   | 360,697    |  
|Stock based compensation                                                     |  |                            | 369,300    |                   |   |           |  
|Expenses satisfied with issuance of common stock                             |  |                            |           |                   |   |           |  
|Changes in operating assets and liabilities:                                 |  |                            |            |                   |   |            |  
|Accounts receivable                                                          |  |                            | 56,908     |                   |   | 1,377,310  |  
|Inventory                                                                    |  |                            | 266,198    |                   |   | 599,745    |  
|Prepaids and other current assets                                            |  |                            | (248,517   | )                 |   | (145,600   | )
|Accounts payable                                                             |  |                            | 1,165,131  |                   |   | (105,220   | )
|Accrued interest                                                             |  |                            | (39,265    | )                 |   | 282,869    |  
|Accrued liabilities                                                          |  |                            | (371,850   | )                 |   | 519,749    |  
|                                                                             |  |                            |            |                   |   |            |  
|Net cash provided in
 operating activities                                   |  |                            | 593,022    |                   |   | 812,241    |  
|                                                                             |  |                            |            |                   |   |            |  
|                                                                             |  |                            |            |                   |   |            |  
|INVESTING ACTIVITIES:                                                        |  |                            |            |                   |   |            |  
|Purchase of machinery and
 equipment                                         |  |                            | (49,406    | )                 |   | (132,879   | )
|                                                                             |  |                            |            |                   |   |            |  
|                                                                             |  |                            |            |                   |   |            |  
|Net cash used in investing
 activities                                       |  |                            | (49,406    | )                 |   | (132,879   | )
|                                                                             |  |                            |            |                   |   |            |  
|                                                                             |  |                            |            |                   |   |            |  
|FINANCING ACTIVITIES:                                                        |  |                            |            |                   |   |            |  
|Repayment of debt                                                            |  |                            | (500,000   | )                 |   | (664,785   | )
|Repayment of capital leases                                                  |  |                            | (89,984    | )                 |   | (13,573    | )
|                                                                             |  |                            |            |                   |   |            |  
|                                                                             |  |                            |            |                   |   |            |  
|Net cash used in financing activities                                        |  |                            | (589,984   | )                 |   | (678,358   | )
|                                                                             |  |                            |            |                   |   |            |  
|                                                                             |  |                            |            |                   |   |            |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                         |  |                            | (46,368    | )                 |   | 1,004      |  
|                                                                             |  |                            |            |                   |   |            |  
|CASH AND CASH EQUIVALENTS,
 BEGINNING OF PERIOD                              |  |                            | 65,986     |                   |   |           |  
|                                                                             |  |                            |            |                   |   |            |  
|                                                                             |  |                            |            |                   |   |            |  
|CASH AND CASH EQUIVALENTS,
 END OF PERIOD                                    |  | $                          | 19,618     |                   | $ | 1,004      |  
|                                                                             |  |                            |            |                   |   |            |  
|                                                                             |  |                            |            |                   |   |            |  
|SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING AND INVESTING
 ACTIVITIES:     |  |                            |            |                   |   |            |  
|Purchase of equipment through capital leases                                 |  |                            | 178,000    |                   |   |           |  
|Cash paid for interest                                                       |  |                            | 143,710    |                   |   |           |  
|                                                                             |  |                            |            |                   |   |            |  
|                                                                             |  | $                          | 321,710    |                   | $ |           |  
|                                                                             |  |                            |            |                   |   |            |  

See notes to
the condensed consolidated financial statements.

5

---



SYNOVICS
PHARMACEUTICALS, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION AND
SIGNIFICANT ACCOUNTING POLICIES

The
accompanying unaudited Condensed Consolidated Financial Statements of Synovics
Pharmaceuticals, Inc. (Synovics)
have been prepared in accordance with accounting principles generally accepted
in the United States of America and with the instructions to Form 10-Q for
interim financial information. Accordingly, they do not include all the information
and footnotes required by accounting principles generally accepted in the
United States of America for complete financial statements. In the opinion of
management, all adjustments (which include normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
cash flows for all periods presented have been made. The results of operations
for the three-month period ended January 31, 2009 are not necessarily
indicative of the operating results that may be achieved for the entire fiscal
year ending October 31, 2009. These unaudited condensed consolidated financial
statements should be read in conjunction with Synovics financial statements
and accompanying notes thereto as of and for the fiscal year ended October 31,
2008. The accompanying condensed consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. Synovics
has incurred accumulated operating losses of $79,982,635 through January 31,
2009 which have been funded through the issuance of stock and debt. The losses
incurred to date, the uncertainty regarding the ability to raise additional
capital and Synovics inability to generate operating profits and positive cash
flows from operations indicate that Synovics may not be able to continue as a
going concern for a reasonable period of time.

Principles of Consolidation

The condensed
consolidated financial statements include the accounts of Synovics
Pharmaceuticals, Inc. and its wholly owned subsidiaries, (collectively the Company). All significant inter-company
accounts and transactions have been eliminated in consolidation.

Concentrations of Credit Risk

Accounts
receivable are reported net of an allowance for doubtful accounts. The
allowance is based on managements estimate of the amount of receivables that
will be actually collected. Management performs on-going credit evaluations of
its customers and provides an allowance based on credit history and worthiness
of its customers. Receivables are written off when deemed uncollectible.

Revenue Recognition

The Company
recognizes revenue upon shipment of product.

Inventory

Inventories
are stated at the lower of cost (first-in, first-out method) or market.

Share-Based Compensation

The Company accounts for share-based compensation using the fair value based method of accounting.

Income Taxes

The Company accounts for income taxes using the liability method. The liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the
tax bases of assets and liabilities and their reported amounts in the financial statements. Any resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur.

Effective November 1, 2007, the Company adopted the
provisions of FASB’s Interpretation (“FIN”)
No. 48, “Accounting for Uncertainty
in Income Taxes – an interpretation of FASB No. 109”.
FIN 48 prescribes a recognition threshold and measurement attribute for how a
company should  recognize, measure, present, and disclose uncertain tax positions
that the company has taken or expects to take on a tax return in its financial
statements. FIN 48 requires that the financial statements reflect expected future
tax consequences of  such positions presuming the taxing authorities’ full
knowledge of the position and all relevant facts, but without considering time
values. No such amounts were accrued for at November 1, 2008. Additionally, no
adjustments related to  uncertain tax positions were recognized during the three
months ended January 31, 2009.

The Company recognizes interest and penalties related to uncertain tax positions as a reduction of the income tax benefit. No interest and penalties related to uncertain tax positions were accrued as of January 31, 2009.

The Company operates in multiple tax jurisdictions within the United States of America. Although we do not believe that we are currently under examination in any of our major tax jurisdictions, we remain subject to
examination in all of our tax jurisdictions until the applicable statutes of limitation expire. As of January 31, 2009, the tax returns for years ended 2005 onwards remain subject to examination for our federal and major state tax jurisdictions. The
Company does not expect to have a material change to unrecognized tax positions within the next twelve months.

6

---



SYNOVICS PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 2 PER SHARE (LOSS) INFORMATION

In accordance
with SFAS No. 128, Earnings Per Share,
basic earnings per share of common stock (Basic
EPS) is computed by dividing the net income by the weighted-average
number of shares of common stock outstanding. Diluted earnings per share of
common stock (Diluted EPS) is
computed by dividing the net income by the weighted-average number of shares of
common stock, and dilutive common stock equivalents and convertible securities
then outstanding. SFAS No. 128 requires the presentation of both Basic EPS and
Diluted EPS on the face of the Companys Condensed Consolidated Statements of
Operations. Common stock equivalents totaling 58,567,765 and 9,438,765 were
excluded from the computation of Diluted EPS for the three months ended January
31, 2009 and 2008, respectively as their effect on the computation of Diluted
EPS would have been anti-dilutive.

The following
table sets forth the computation of basic and diluted per share information:

|                                                     |  |                                         |            |      |   |            |  
|---------------------------------------------------- |  | --------------------------------------- | ---------- | ---- | - | ---------- | -
|                                                     |  | For the Three Months
 Ended January 31, |           
|                                                     |  |                                         |           
|                                                     |  | 2009                                    |            | 2008 |  
|                                                     |  |                                         |            |      |  
|Numerator:                                           |  |                                         |            |      |   |            |  
|Net income (loss) (in thousands):                    |  | $                                       | (1,101,054 | )    | $ | (2,224,704 | )
|                                                     |  |                                         |            |      |   |            |  
|Denominator:                                         |  |                                         |            |      |   |            |  
|Weighted-average shares of common stock
 outstanding |  |                                         | 28,343,652 |      |   | 23,547,066 |  
|                                                     |  |                                         |            |      |   |            |  
|Net loss per share:                                  |  |                                         |            |      |   |            |  
|Basic and diluted                                    |  | $                                       | (0.04      | )    | $ | (0.09      | )
|                                                     |  |                                         |            |      |   |            |  

NOTE 3  NOSTRUM SETTLEMENT AND RELEASE OF
NOSTRUM GUARANTEE

Synovics and
its subsidiary Synovics Laboratories, Inc. (Synovics
Labs), were involved in a legal dispute with Nostrum
Pharmaceuticals, Inc. (Nostrum)
and Nirmal Mulye, Ph.D. (Mulye).
As disclosed in the Companys previous periodic reports, these parties were
among the parties to pending actions and proceedings before the Federal
District Court of the Southern District of New York and the District of New
Jersey as well as arbitration before the American Arbitration Association. As
part of the legal dispute, the Company alleged, among other things, that (i)
Mulye breached fiduciary duties and usurped corporate opportunities as a member
of the board and Chief Scientific Officer and that Anil Anand (a confessed
felon in a $700 million bank fraud) and Nostrum aided and abetted Mulye in such
actions, (ii) Mulye, Anand and Nostrum tortiously interfered with prospective
contractual relationships of the Company, (iii) Mulye fraudulently induced the
Company to enter into certain financial transactions, and (iv) Mulye, Anand and
Nostrum conspired to breach fiduciary duties and steal valuable corporate
opportunities.

7

---



SYNOVICS PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 3  NOSTRUM SETTLEMENT AND RELEASE OF
NOSTRUM GUARANTEE (CONTINUED)

On July 31,
2007, the Company together with Synovics Labs entered into a settlement
agreement with all parties to the various actions. Under the terms of the
settlement agreement, all pending actions and proceedings between the parties
were dismissed with prejudice, the parties mutually released one another and
all pre-settlement agreements were terminated, including the Technology License
Agreement between the Company and Nostrum and the ANDA Ownership Transfer and Product
License Agreement (ANDA Agreement)
between Synovics Labs and Nostrum. In connection with the termination of the
ANDA Agreement, Synovics and Synovics Labs assigned to Nostrum the Abbreviated
New Drug Application for Metformin Extended Release 500mg. As part of the
settlement, 10,661,000 shares of common stock of the Company that were owned by
Nostrum were placed in escrow pursuant to a separate escrow agreement (the Escrow Shares). The escrow agreement
provided, among other things, that if the guarantees of Mulye and Nostrum to
the Bank of India and the related undertakings in connection with the BOI
Credit Facility were extinguished in full or in part by May 1, 2008, the Escrow
Shares were to be released to Synovics in an amount proportionate to the amount
by which the guarantees have been extinguished. Further, if the Escrow Shares
were released to Nostrum and during the escrow period the Company issued
additional shares of common stock or common stock equivalents to cause the
Escrow Shares to represent less than 32% of the outstanding shares of the
Company on a fully diluted basis, then the Company was required to issue to
Nostrum additional shares of common stock so that the Escrow Shares together
with the additional shares constitute 32% of the outstanding shares of the
Company on a fully diluted basis.

On April 29,
2008, the guarantees given by Nostrum and Mulye were replaced with a letter of
credit issued by an affiliate of Maneesh Pharmaceuticals Ltd. (Maneesh)
in favor of BOI securing the BOI Loan. Maneesh is an affiliate of the Company
and three of its designees presently serve on the Companys board of directors.
Consequently, the Company delivered a notice to the escrow agent, pursuant to
the terms of the escrow agreement demanding release to the Company of the Escrow
Shares. Nostrum is currently contesting the release of the Escrow Shares and
the Company commenced an action in the Federal District Court of the Southern
District of New York (the Court) (see Note 8).

The Escrow
Shares are being treated as treasury stock. The cost of the shares included in
treasury stock at January 31, 2009 was $10,767,610. In the event that the Court
orders the release of any Escrow Shares to Nostrum from escrow, the
Company may recognize an additional charge at that time.

As an
inducement for replacing the guarantees, the Company issued 4,000,000 shares
    of its common stock to Maneesh and provided anti-dilution protection in the
    event that all or part of the Escrow Shares are ultimately released to Nostrum.
These shares were valued at $1,040,000 and were expensed during the fiscal year
    ended 2008.

NOTE 4 - NOTE PAYABLE - BANK

In May 2006,
the Company entered into a bank financing with the Bank of India (BOI) as senior secured debt in the
principal amount $10,500,000 (the BOI
Credit Facility). Of the principal, $5,250,000 could only be
utilized for working capital purposes, the amount borrowed to equal 70% of the
value of fully paid inventory and the accounts receivable and 100% of the cash
in the accounts maintained by the borrower at the bank. The interest rate is 1%
above the banks prime rate (8% at January 31, 2009). Interest is payable
monthly. In September, 2007, the amount of the loan was reduced by $5,250,000
held back for working capital purposes. As of January 31, 2009, the outstanding
principal balance due under the BOI Credit Facility was $5,200,000.

8

---



SYNOVICS PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 4 - NOTE PAYABLE  BANK (CONTINUED)

Future
maturities of notes payable - bank are as follows:

|                        |  |   |           | 
|----------------------- |  | - | --------- | 
|Year ended
 January 31, |  |   |           | 
|                        |  |   |           | 
|2010                    |  | $ | 3,000,000 | 
|                        |  |   |           | 
|2011                    |  | $ | 2,200,000 | 
|                        |  |   |           | 
|                       
|                        |  | $ | 5,200,000 | 
|                        |  |   |           | 

Interest
expense under the note payable was $143,710 and $163,894 for the three months
ended January 31, 2009 and 2008, respectively.

NOTE 5 - NOTES PAYABLE - SHAREHOLDERS AND
OTHER RELATED PARTIES

The Company
entered into a promissory note (the Copanos
Note) in the principal amount of $3,000,000 with the seller, John
Copanos, as partial consideration for the acquisition of Kirk and ANDAPharm.

During the
year ended October 31, 2007, $1,000,000 was paid to the seller. During
    the year ended October 31, 2008, the Company paid an additional $1,500,000
    to the seller with a principal balance of $500,000 remaining outstanding.
    Commencing January 1, 2009, the Company began paying down the principal due
    on the Copanos Note and during the three months ended January 31, 2009, paid
    $50,000 of principal. The Copanos Note bore interest of 12% per annum from
    October 3, 2007 to January 14, 2008 and 15% per annum from January 15, 2008
    to May 1, 2008. From May 2, 2008 to August 31, 2008, the note bore an interest
    rate of 18% per annum and from September 1, 2008 onwards it bears an interest
    rate of 24% per annum with interest payments payable monthly. As of January
    31, 2009, there was unpaid interest of $35,067, which has been included in
    these financial statements. Interest expense under the Copanos Note was $30,400
    and $64,167 for the three months ended January 31, 2009 and 2008, respectively.
    In connection with renegotiation of the repayment terms of the Copanos Note,
    the Company consented, in the case of default, to the seller obtaining a
final judgment without necessity of a further hearing.

In addition,
in connection with the renegotiation of the repayment terms of the Copanos
Note, on March 19, 2008, the Company issued to the seller a seven year warrant
to acquire 2,100,000 shares of the Companys common stock exercisable at
$1.00 per share (the Seller Warrant).
Of the shares issuable upon exercise of the warrant, 1,400,000 are immediately
exercisable and the remaining 700,000 are exercisable if the seller is employed
by the Company or its subsidiary on March 19, 2009 except that if Ronald Lane
is removed or resigns from the Companys board of directors, then such 700,000
shares shall become immediately exercisable. As a result of the Companys
Series C Preferred Stock offering that initially closed on May 9, 2008 (the Series
C Preferred Stock Offering),
the exercise price of the Seller Warrant automatically reduced to $0.75. The
Company also agreed to include the shares issuable upon exercise of the Seller
Warrant in the Companys next registration statement subject to reasonable
adjustments as may be required by the investor or investor group whose shares
are also being registered.

9

---



SYNOVICS PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 5 - NOTES PAYABLE - SHAREHOLDERS AND
OTHER RELATED PARTIES (CONTINUED)

The per share
weighted value of the warrants to purchase 2,100,000 shares of common stock at
$0.75 per share is $0.35. The warrants were valued using the Black-Scholes
option pricing model with the following weighted average assumptions: no
dividend yield; expected volatility of 80%; risk free interest rate of 2.25%;
and expected life of seven years.

NOTE 6 - 2007 PRIVATE PLACEMENT

During January
and February 2007, the Company completed closings of a private placement (2007 Private Placement), whereby the
Company sold an aggregate of 1,575,000 units (Units)
to accredited investors. Of the 1,575,000 Units sold, 450,000 Units were
exchanged in lieu of repayment of notes issued in the 2006 Bridge Note
Financing in the principal amount of $450,000.

The price per
Unit was $1.00 and each Unit consisted of (i) one share of common stock of the
Company; and (ii) a warrant to purchase, at any time prior to the third
anniversary following the final closing of the Private Placement, one share of
common stock at an exercise price of $3.00 per share, subject to adjustment in
certain instances; except that with respect to 290,000 Units, the warrant is
exercisable for half a share of common stock at an exercise price of $1.50. The
warrants are also redeemable by the Company where the exercise price exceeds a
certain amount.

The per share
weighted value of the warrants to purchase 1,575,000 shares of common stock at
$3.00 per share was between $0.98 and $1.32. The warrants were valued using the
Black-Scholes option pricing model with the following weighted average
assumptions: no dividend yield; expected volatility between 153% and 155%; risk
free interest rate of between 4.63% and 4.9%; and expected life of three years.

The subscription
agreement requires the Company to file a registration statement, covering the
securities sold in the 2007 Private Placement within 30 days of final closing
of the 2007 Private Placement and use its best efforts to cause the
registration statement to become effective within 90 days of final closing. If
the registration statement has not been declared effective within 150 days
following final closing, the Company has agreed to pay to the investors
liquidated damages, payable in cash or common stock, of 1.5% of the purchase
price paid by the investor in the 2007 Private Placement and 1% of the purchase
price paid by the investor in the 2007 Private Placement for each subsequent 30
day period, with the total of the foregoing capped at 9%. The Company
recognized $103,000 of penalties as of January 31, 2009, which is reflected as
interest expense.

NOTE 7 - RELATED PARTY TRANSACTIONS

Singh Strategic Alliance

On April 20,
2007, the Company entered into a strategic alliance with Harcharan Singh. In
connection with this strategic alliance, the Company and Kirk, entered into a
Consulting Agreement with Mr. Singh (the Consulting
Agreement) and Kirk issued to an affiliate of Mr. Singh, a note in
the principal amount of $1,250,000 (the Singh
Note). Mr. Singh was appointed to the Corporations board on May
23, 2008.

10

---



SYNOVICS PHARMACEUTICALS, INC. 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

NOTE 7 - RELATED PARTY TRANSACTIONS
(CONTINUED)

During the
term of the Consulting Agreement, Mr. Singh is being retained to provide
strategic consulting services to the Company. In consideration for these
services, Mr. Singh receives a $10,000 monthly retainer and was issued
2,000,000 shares of the Companys common stock and warrants to purchase
a further 1,000,000 shares of the Companys common stock. In addition, if
the Company achieves annual earnings before interest, taxes, depreciation and
amortization (EBITA) of at least $20,000,000, then Mr. Singh will be entitled
to a further grant of 1,000,000 shares of Companys common stock and warrants
to purchase 500,000 shares of the Companys common stock. The warrants are
exercisable for a period of seven years from the date of grant at an initial
exercise price of $2.00, subject to adjustment in certain circumstances, and
contain a cashless or net issuance component. In connection with the Series C
Preferred Stock Offering, the Company reduced the exercise price of the
warrants to acquire 1,000,000 shares of the Companys common stock to $0.75
and eliminated the cashless or net issuance component. The per share weighted
value of the warrants to purchase 1,000,000 shares of common stock at $0.75 is
$0.36. The warrants were valued using the Black-Scholes option pricing model
with the following weighted average assumptions: no dividend yield; expected
volatility of 84%; risk free interest rate of 2% and expected life of seven years.
The Company recorded a charge of $1,192,153 for the fiscal year ended October
31, 2007 to recognize the agreement.

On April 3,
2008, accrued consulting fees of $120,000 converted into a 2008 Bridge Note.
Consulting fees amounting to $60,000 for the year ended October 31, 2008, are
included in the accompanying financial statements.

On November
11, 2008, the Companys board of directors authorized the grant of 125,000
shares of common stock to Mr. Singh, in consideration for his deferral in
payment of certain fees due to him under the Consulting Agreement (see also
Note 9).

Maneesh Joint Venture

On June 6,
2008, the Company entered into a Joint Venture Agreement with Maneesh. Under
the terms of the Joint Venture Agreement, Maneesh has agreed to provide
consulting services to the Company and its subsidiaries for an initial term of
one year, which term shall automatically renew for additional one year terms
absent notice of non-renewal. Pursuant to the Joint Venture Agreement, the
Company has agreed to pay Maneesh a consulting fee of $25,000 per month, plus
reimbursement of reasonable and accountable expenses. The joint venture
agreement further provides that Maneesh and Kirk may in the future agree to the
license by Maneesh to Kirk of the non-exclusive right to manufacture and
distribute pharmaceutical products proprietary to Maneesh.

On November
11, 2008, the Companys board of directors authorized the grant of 500,000
shares of its common stock to Maneesh in consideration for its deferral in
payment of certain fees due to it under the Joint Venture Agreement (see also
Note 9).

Lane Compensation

On July 3,
2008, Dr. Lane resigned as the Companys Chief Executive Officer and currently
serves as the Companys Chairman of the Board. On November 11, 2008, the
Company agreed to compensate Dr. Lanes services as Chairman of the Board
pursuant to which he is to receive a salary of $120,000 per annum. In addition,
the Company agreed to pay Dr. Lane severance of $400,000 of which $372,308 is
outstanding at January 31, 2009 as well as pay down Dr. Lanes deferred
compensation which was $188,716 at January 31, 2009 and reimburse Dr. Lane for
expenses incurred by him which were $60,846 at January 31, 2009.

11

---



SYNOVICS PHARMACEUTICALS, INC. 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

NOTE 7 - RELATED PARTY TRANSACTIONS
(CONTINUED)

Getraer Separation Agreement

On January 27,
2009, the Company entered into a separation agreement with Steven Getraer, the
    Companys former Chief Financial Officer, pursuant to which the Company agreed
    to pay Mr. Getraer severance of $175,000 less applicable withholding and
    deductions payable over ten months, unpaid salary of $8,154 less applicable
    withholdings and deductions as well as expense reimbursement of $1,658. In
    addition, the Company issued to Mr. Getraer warrants to acquire 200,000 fully
    vested shares of the Companys
    common stock at an exercise price of $0.75 per share exercisable at any time
    prior to July 31, 2012, it being acknowledged that Mr. Getraer holds no additional
    options, warrants or other rights to purchase the Companys common stock.
    The per share weighted value of the warrants was $0.31 or $62,000 which was
    charged to general and administrative expense. The warrants were valued using
    the Black-Scholes option pricing model with the following weighted average
    assumptions: no dividend yield; expected volatility of 84% risk free interest
    rate of 2%; and expected life of 5 years.

NOTE 8 - LITIGATION

DEA Administrative Proceeding

On September
15, 2008, the DEA commenced an administrative proceeding with the U.S.
Department of Justice against Kirk to revoke its DEA license to manufacture and
distribute controlled substances in schedules III-V and deny any amendment to
Kirks application to add specific List I chemical manufacturing codes to its
controlled substance registration. The DEA alleges in the administrative
proceedings that Kirk shipped ephedrine guaifenesin products to a contract
packager for repackaging and relabeling that did not have the requisite DEA
license. In addition, the DEA alleges that Kirk failed to maintain an effective
system of controls to guard against and prevent a theft of approximately 1.3
million ephedrine guiafenesin tablets, which occurred at Kirk in July 2008. The
DEA also alleges that Kirk failed to maintain appropriate recordkeeping
practices.

In addition,
in December 2007, Kirk applied to the DEA for a 2008 ephedrine and
pseudoephedrine manufacturing procurement quota. In April 2008, the DEA rejected
Kirks application and Kirk is challenging its rejection which has been
consolidated with the administrative proceeding commenced by the DEA. Kirks
application for a 2009 ephedrine and pseudoephedrine manufacturing procurement
quota also remains pending.

During
February and March 2009 hearings on the merits of the case were held before an
administrative judge and a further hearing has been scheduled for June 2009.
Based on the allegations made by the DEA, and the Companys understanding
of relevant facts and circumstances, it believes that the action commenced by
the DEA is without merit and the Company intends to vigorously defend against
this.

In a separate
but related action, the United States of America commenced an action in the
United States District Court District of New Jersey on July 3, 2008 to forfeit
and condemn ephedrine guaifenesin products shipped to Kirks contract packager
referenced above at an appraised value of approximately $680,000 and which were
seized by the DEA. On September 2, 2008, the Company filed its answer and
counterclaimed seeking an award of damages for wrongful seizure of the seized
property as well as a declaratory judgment that the United States acted
unlawfully, arbitrarily and capriciously in implementing the quota system.

There can be
no assurance that the Company will prevail in these actions or that they will
be resolved upon terms favorable to the Company. If the Companys registration
were revoked, denied or suspended, or if its quota application is rejected, the
Company could no longer lawfully possess or distribute controlled substances or
manufacture and distribute products containing the disallowed controlled
substance which would have a material adverse effect on the Companys business
prospects, financial condition and results of operation.

12

---



SYNOVICS PHARMACEUTICALS, INC. 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

NOTE 8  LITIGATION (CONTINUED)

Nostrum

On June 27,
2008, the Company commenced a lawsuit in the United States District Court for
the Southern District of New York against Mulye and Nostrum (Case No.
08-Civ-5861) seeking declaratory judgment for the immediate release to the
Company of the Escrow Shares as well as damages for breach of contract and
implied covenant of good faith and dealing. On August 13, 2008, Nostrum and
Mulye filed an answer and counterclaim to the Companys complaint and on
August 26, 2008 they amended their answer. The counterclaim is seeking declaratory
judgment for the immediate release to Nostrum of the Escrow Shares and the
issuance to Nostrum of additional shares of common stock such that, under
Nostrums theory, together with the Escrow Shares will represent 32% of
the Companys outstanding shares on a fully diluted basis. Both parties
have filed motions for summary judgment seeking a ruling from the Judge regarding
the return of the Escrow Shares and are awaiting a decision from the Court. The
Company intends to vigorously prosecute this case and believes its claims against
Nostrum and Mulye are meritorious.

Stockbridge

On June 9,
2008, an action was commenced by Stockbridge Capital Investors, Inc. (Stockbridge) against the Company in the
Superior Court of the State of Arizona in the County of Maricopa. The complaint
alleges that the Company breached a letter agreement with Stockbridge by not
paying Stockbridge a success fee to which it claims entitlement. The
complaint seeks damages to be proven at trial together with attorneys fees and
costs. On September 2, 2008 the Company filed its answer. Based on the
allegations in the amended complaint, and the Companys understanding of
relevant facts and circumstances, it believes that the claims made by the
plaintiff in this lawsuit are without merit and it intends to vigorously defend
against them.

Body Dynamics

On December
19, 2008, Kirk commenced an action against Body Dynamics, Inc. (Body Dynamics) in the Circuit Court of
the 17th Judicial District in Broward County, Florida. Body Dynamics is a
customer to whom Kirk delivered goods and for which Kirk has not been paid. The
Company is seeking judgment in the amount of $375,637 plus court costs and
pre-judgment interest. On February 6, 2009, the case was moved by Body Dynamics
to the United States District Court Southern District of Florida and on the
same day Body Dynamics filed its answer to the complaint. Mediation hearings
are being scheduled for April 2009.

NOTE 9  STOCKHOLDERS EQUITY

During the
quarter ended January 31, 2009, the Companys board of directors authorized
the grant of 500,000 shares of its common stock to Maneesh and 125,000 shares
of its common stock to Mr. Singh. The Company valued the shares for Maneesh at
$175,000 and the shares for Mr. Singh at $43,750 which was charged to general
and administrative expense.

13

---



|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS

The
following discussion and analysis should be read in conjunction with the
Condensed Consolidated Financial Statements, the related Notes to Consolidated
Financial Statements and Managements Discussion and Analysis of Financial
Condition and Results of Operations included in our Annual Report on Form 10-K
for the fiscal year ended October 31, 2008 (the 10-K) and the Unaudited Condensed Consolidated Financial
Statements and related Notes to Condensed Consolidated Financial Statements
included in Item 1 of Part I of this Quarterly Report on Form 10-Q.

We
have included in this Quarterly Report certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995
concerning our business, operations and financial condition. Forward-looking
statements consist of all non-historical information, and the analysis of
historical information, including the references in this Quarterly Report to
future revenue growth, future expense growth, future credit exposure, earnings
before interest, taxes, depreciation and amortization, future profitability,
anticipated cash resources, anticipated capital expenditures, capital
requirements, and the Companys plans for future periods. In addition, the
words could, expects, anticipates, objective, plan, may
affect,
may depend, believes, estimates, projects and similar words and phrases
are also intended to identify such forward-looking statements.

Actual
results could differ materially from those projected in our forward-looking
statements due to numerous known and unknown risks and uncertainties,
including, among other things, unanticipated technological difficulties, the
volatile and competitive environment for drug products, changes in domestic and
foreign economic, market and regulatory conditions, the results of development
agreements with pharmaceutical companies, the inherent uncertainty of financial
estimates and projections, the uncertainties involved in certain legal
proceedings, instabilities arising from terrorist actions and responses
thereto, and other considerations described as Risk Factors in other filings by
us with the SEC including our Annual Report on Form 10-K. Such factors may also
cause substantial volatility in the market price of our common stock. All such
forward-looking statements are current only as of the date on which such
statements were made. We do not undertake any obligation to publicly update any
forward-looking statement to reflect events or circumstances after the date on
which any such statement is made or to reflect the occurrence of unanticipated
events.

Our Business

We
are a specialty pharmaceutical company implementing what is referred to as a
global Front-End growth strategy - the core of our business model. This
strategy incorporates targeting a series of partnering relationships with
international pharmaceutical companies to supply us with low-cost competitive
pharmaceutical products, both active pharmaceutical ingredients (APIs) and finished dosage forms. As a
result of the acquisition of Kirk Pharmaceuticals LLC (Kirk) and ANDAPharm LLC (ANDAPharm) in
May 2006, we have a
facility in Fort Lauderdale operating under cGMP (current good manufacturing
practices) guidelines for the manufacturing and distribution of
over-the-counter (OTC) private
label drugs and prescription drugs (Rx).

We
have initiated our Front-End strategy, which sources low cost, high-quality
products developed and manufactured internationally, and packages and
distributes to our customers through our Florida operation. Our access to
low-cost raw materials and manufacturing is the cornerstone of the Front-End
strategy and key to our dual objectives of growing our OTC business and
introducing a pipeline of Rx generic drugs. A critical key to this strategy and
its implementation is our alliance with Maneesh Pharmaceuticals Ltd. (Maneesh)
and Harcharan (Harry) Singh of Glopec International. Maneesh is an international
pharmaceutical company with its headquarters located in Mumbai, India. Harry
Singh is a pharmaceutical industry veteran with a 20 year proven track record
of sourcing competitive pharmaceutical products for North America from Asia and
Europe.

14

---



| |                                       |                                                                                                           
| | ------------------------------------- | ----------------------------------------------------------------------------------------------------------
| | Our key
 assets can be summarized as:
| |                                       |                                                                                                           
| |                                      | Private
 label OTC drug manufacturer - Kirk Pharmaceuticals, Fort Lauderdale, Florida;                    
| |                                       |                                                                                                           
| |                                      | DEA license
 for controlled substances, Schedule III, IIIN, IV, V and List I Chemicals;                   
| |                                       |                                                                                                           
| |                                      | Containment
 suites for manufacture of highly regulated/toxic substances (e.g. hormones
 and anti-cancer);
| |                                       |                                                                                                           
| |                                      | Robust
 pipeline of prescription Rx and OTC generic drug products;                                        
| |                                       |                                                                                                           
| |                                      | Access to
 difficult to source price competitive APIs;                                                    
| |                                       |                                                                                                           
| |                                      | Manufacture
 in both U.S. and India - Package and Distribute in U.S;                                      

From
2005 to mid-2007, our focus for revenue growth was the development of oral
controlled-release generic drug formulations utilizing proprietary drug
formulations and delivery technologies under license from Nostrum. During 2007,
we amended our focus and business model as a result of the impact of two
factors: first, our disassociation from Nostrum following the July 2007
settlement of the Nostrum legal actions; second, our new strategic alliances
with Maneesh and Harry Singh established in May 2008 and April, 2007,
respectively. These alliances are principally designed to assist us in sourcing
low-cost APIs and generic drug applications (abbreviated new drug applications
- ANDAs), submitted by international pharmaceutical companies to the FDA and
approved for sale in the United States drug market and is the foundation of our
current business model.

We
are firstly a manufacturer, packager and distributor of private label, or store
brand, OTC products to chain drug stores, wholesalers and distributors
throughout the United States. The U.S. market for manufacturing and
distribution of OTC drugs, is approaching $4 billion in size and is dominated
by Perrigo Company, with sales approximating 50% of the total store brand or
private label market. The private label market is growing substantially with
the drug stores continuing to develop and expand their store brands to compete
with the traditional national brands. Presently, in the categories in which
we are supplying products, store brands exceed approximately 35% of our total
sales and we expect this to reach more than 50% over the next few years. We
believe that this growth provides us with a great opportunity to grow our OTC
sales and that with our focus on competitive pricing and customer service, we
believe that we can, with adequate capitalization and assuming certain DEA
actions, as described in the Legal Proceedings in Item 1 of Part II of this
Form 10-Q, are resolved in a manner favorable to us, continue to grow our OTC
business in the U.S. substantially.

Our
OTC product categories include analgesics, cough and cold, antihistamines,
asthma relief and laxatives. Executing our Front-End strategy, Kirk has
initiated the shifting of manufacturing of its high-volume commodity OTC drugs
internationally to effect cost savings and maintain competitiveness. These
products are manufactured internationally and shipped in bulk to Fort
Lauderdale for packaging and distribution to our customers. We do manufacture
certain OTC products in our Fort Lauderdale facilities for reasons of size of a
given production, cost or convenience. Our OTC products are subject to control
by the DEA and will continue to be manufactured (as well as packaged and
distributed) through our Fort Lauderdale facilities and assuming certain DEA
actions, as described in Legal Proceedings in Item 1 of Part II of this Form
10-Q are resolved in a manner favorable to us.

In
addition to the OTC business, we are a manufacturer, packager and distributor
of private label solid dosage Rx products. These products are sold through
several distribution channels under exclusive or semi-exclusive agreements.
These agreements include minimum sales requirements.

Our
Front-End strategy is the source of a developing pipeline of targeted
in-licensed generic Rx drug (FDA approved or to be filed) candidates. The
Front-End strategy is founded on the fact that a variety of first-quality small
to medium international pharmaceutical companies, well financed with state of
the art manufacturing facilities, have developed and in many cases filed ANDAs
with the FDA for the U.S. market, but have no marketing or distribution
presence in the US market, i.e. no front-end. We have entered into a joint
venture agreement with Maneesh that not only provides development and
manufacturing of both OTC and Rx drugs, but resources of personnel, operating
and IT systems as well as consulting on facilities build-out and equipment
procurement. Maneesh has a variety of drug development and manufacturing
facilities in various locations throughout the world, although we are
coordinating principally with the operations in India. Harry Singh has a long
standing business relationships with numerous other pharmaceutical companies

15

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in India (and their owners) and is directing many of
our steps in arranging agreements for ANDA in-licensing, low-cost APIs and
specialty contract manufacturing. We source finished product internationally,
then package and distribute through Florida; the customer belongs to Synovics.

As
a result of historical events as well as the costs incurred in the acquisition
of Kirk in 2006 and the disputes with Dr. Mulye and Nostrum, we have not been
able to adequately generate enough cash to support our ongoing operations and
service our debt. As a result, we have suffered from chronic working capital
deficiency and there has been a continuing need for financing activities which
have also been adversely affected by the disputes with Dr. Mulye and Nostrum.

During
the fiscal year ended October 31, 2008, we completed a series of closings of a
Series C Preferred Stock Offering that resulted in the issuance of 28,138
shares of Series C Preferred Stock, convertible into 28,138,000 shares of our
common stock, subject to adjustment, and warrants to acquire 18,780,200 shares
of our common stock. The incremental gross proceeds to us from the Series C
Preferred Stock Offering were $7,780,000 and together with a bridge note
offering that immediately preceded the Series C Preferred Stock Offering, the
incremental gross proceeds to us were $9,335,000. We principally used this
infusion of cash to reduce our debt. Management believes that the restructuring
of our balance sheet and the reduction of our short term and long term debt
will provide management with greater flexibility to make operational decisions
for growth and focus on implementing our Front-End strategy.

Since
our inception through the current fiscal year, we have received an opinion
noting the substantial doubt about our ability to continue as a going concern
from our independent auditors due to the significant recurring operating losses.

Results of Operations

The
following table sets forth, for the periods indicated, financial information
related to operations, as well as expressed as a percentage of our net revenue:

|                                    |  |                                 |            |      |  |       |    |   |            |   |  |       |   
|----------------------------------- |  | ------------------------------- | ---------- | ---- |  | ----- | -- | - | ---------- | - |  | ----- | --
|                                    |  | THREE
 MONTHS ENDED JANUARY 31, |           
|                                    |  |                                 |           
|                                    |  | 2009                            |            | 2008 | 
|                                    |  |                                 |            |      | 
|Net Revenues                        |  | $                               | 6,836,279  |      |  | 100.0 | %  | $ | 4,255,120  |   |  | 100.0 | % 
|Cost of Revenues                    |  |                                 | 4,495,019  |      |  | 66    | %  |   | 3,262,772  |   |  | 77    | % 
|                                    |  |                                 |            |      |  |       |    |   |            |   |  |       |   
|Gross Profit                        |  |                                 | 2,341,260  |      |  | 34    | %  |   | 992,348    |   |  | 23    | % 
|Operating Expenses                  |  |                                 |            |      |  |       |    |   |            |   |  |       |   
|Research and development            |  |                                 | 218,035    |      |  | 3     | %  |   | 290,078    |   |  | 7     | % 
|Selling, general and administrative |  |                                 | 2,757,039  |      |  | 40    | %  |   | 1,693,210  |   |  | 40    | % 
|Total Operating Expenses            |  |                                 | 2,975,075  |      |  | 43    | %  |   | 1,983,288  |   |  | 47    | % 
|                                    |  |                                 |            |      |  |       |    |   |            |   |  |       |   
|Loss from Operations                |  |                                 | (633,815   | )    |  | (9    | )% |   | (990,940   | ) |  | (24   | )%
|Other Expenses                      |  |                                 | (467,239   | )    |  | (7    | )% |   | (1,233,764 | ) |  | (29   | )%
|Provision (Benefit) for
 Income Tax |  |                                 | 0          |      |  | 0     | %  |   | 0          |   |  | 0     | % 
|                                    |  |                                 |            |      |  |       |    |   |            |   |  |       |   
|Net Loss                            |  | $                               | (1,101,054 | )    |  | (16   | )% | $ | (2,224,704 | ) |  | (53   | )%
|                                    |  |                                 |            |      |  |       |    |   |            |   |  |       |   

16

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| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | Results of Operations for Three Months Ended January 31, 2009
 compared to Three Months Ended January 31, 2008

Consolidated
revenues for the three months ended January 31, 2009 were $6,836,279 compared
to $4,255,120 for the same period in 2008, an increase of approximately 61%
over the prior fiscal quarter. This increase results from increases in sales
    of the Rx product line and the introduction of a new OTC product. Our sales
    could be negatively impacted in the future as a result of the rejection of
    our application to the DEA for our 2008 and 2009 procurement quota as well
    as the related DEA administrative proceeding commenced against us to, among
    other things, revoke our DEA license to manufacture and distribute controlled
    substances. If we do not prevail in this action, this will have a material
    adverse effect on our business, prospects, financial condition and results
of operation. See Part II, Item 1 Legal Proceedings.

During
the three months ended January 31, 2009, sales of products containing ephedrine
and guaifenesin accounted for approximately 27% of sales as compared to
approximately 42% for the same period in 2008.

Our
three largest customers represented approximately 58% of the sales for the
three months ended January 31, 2009. Although we believe Kirk has good working
relationships with each of these customers, Kirk is working to further
relationships with these and other entities in order to continue to broaden its
sales base.

Cost
of revenues for the three months ended January 31, 2009 was $4,495,019 compared
to $3,262,772 for the three months ended January 31, 2008. This increase is
directly attributable to our increase in sales revenue. Our gross profit
percentage increased to 34% from 23% as a result of increases in sales of our
Rx product line and the introduction of a new OTC product that sell at a higher
margin than our current inventory of products.

Research
and development expenses for the three months ended January 31, 2009 was
$218,035 compared to $290,078 for the three months ended January 31, 2008. The
research and development expenses are in line with our historical norms.
Research and development expense consists of direct costs which include
salaries and related costs of research and development personnel, and the costs
of consultants, materials and supplies associated with research and development
projects, as well as clinical studies. Indirect research and development costs
include facilities, depreciation, and other indirect overhead costs.

Selling,
general, and administrative expenses for the three months ended January 31,
2009 was $2,757,039 as compared to $1,693,210 for the three months ended
January 31, 2008. The increase in selling, general and administrative expenses
is a result of an increase in legal expense  as well as non-cash stock based
compensation expense which was not incurred during the same period in 2008.

Interest
expense for the three months ended January 31, 2009 was $467,239 as compared to
$1,235,336 for the three months ended January 31, 2008. The reason for this
reduction is a result of the significant reduction in outstanding debt during
the previous fiscal year.

As
a result of the foregoing, the net loss for the three months ended January 31,
2009 was $1,101,054 or ($0.04) per share, as compared to a net loss of
$2,224,704 or ($0.09) per share for the three months ended January 31, 2008.

Liquidity and Capital Resources

To
date, our operations have not generated sufficient cash flow to satisfy our
capital needs. We have financed our operations primarily through the private
sale of common stock, warrants and debt securities. We had a working capital
deficit of $7,345,393 at January 31, 2009 as compared with $6,335,161 at
October 31, 2008. Cash and cash equivalents were $19,618 at January 31, 2009,
as compared with $65,986 at October 31, 2008.

Net
cash provided in operating activities during the three months ended January 31,
2009 was $593,022. This resulted from our net loss of $1,101,054 reduced by
significant amortization of loan discounts and increases in current liabilities
accounts. We have generally incurred negative cash flows from operations since
inception. We expect the negative cash flow will be reduced in the future as
our short and long term debt obligations, and financing expenses are reduced or
eliminated.

17

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Net
cash used in investing activities during the three month period ended January
31, 2009 was $49,406. These funds were used for capital expenditures funded
through leasing activities. Net cash used in financing activities during the
three month period ended January 31, 2009 was $589,984.

We
will require additional equity and/or debt financing for fiscal year 2009 to
fund our operations and to satisfy our debt service obligations. There can be
no assurance given that we will be successful in the sale of our equity or
obtaining additional capital from other sources or means.

Our
auditors have emphasized the uncertainty related to our ability to continue as
a going concern in their audit report for the year ended October 31, 2008.

We
have not entered into any material capital expenditure agreements or engaged in
any off balance sheet financing.

|        |                                                            
|------- | -----------------------------------------------------------
|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We
do not invest in or own any market risk sensitive instruments entered into for
trading purposes or for purposes other than trading purposes. All loans to us
have been made with fixed interest rates, and, accordingly, the market risk to
us prior to the maturity of those instruments is minimal.

|         |                         
|-------- | ------------------------
|ITEM 4T. | CONTROLS AND PROCEDURES.

Evaluation
of Disclosure Controls and Procedures

Our
management, with the participation of our Principal Executive Officer and
Chief Financial Officer, have evaluated the effectiveness of our disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act) as of the end of the period covered by this
report. Based on that evaluation, our Principal Executive Officer and Chief
Financial Officer have concluded that, as of the end of such period, our
disclosure controls and procedures are effective to ensure that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is (i) recorded, processed, summarized and reported, within the
time periods specified in the SECs rules and forms; and (ii) accumulated
and communicated to management, including our Principal Executive Officer and
Chief Financial Officer, as appropriate to allow timely decisions regarding required
disclosure.

Changes
in Internal Control Over Financial Reporting

There
were no changes in our internal controls over financial reporting which
occurred during the most recent fiscal quarter covered by this report that has
materially affected, or is reasonably likely to materially affect, our internal
controls over financial reporting.

18

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PART II - OTHER INFORMATION

|        |                   
|------- | ------------------
|ITEM 1. | LEGAL PROCEEDINGS.

DEA Administrative Proceeding

On
September 15, 2008, the DEA commenced an administrative proceeding with the
U.S. Department of Justice against Kirk to revoke its DEA license to
manufacture and distribute controlled substances in schedules III-V and deny
any amendment to Kirks application to add specific List I chemical
manufacturing codes to its controlled substance registration. The DEA alleges
in the administrative proceedings that Kirk shipped ephedrine guaifenesin products
to a contract packager for repackaging and relabeling that did not have the
requisite DEA license. In addition, the DEA alleges that Kirk failed to
maintain an effective system of controls to guard against and prevent a theft
of approximately 1.3 million ephedrine guiafenesin tablets, which occurred at
Kirk in July 2008. The DEA also alleges that Kirk failed to maintain
appropriate recordkeeping practices.

In
addition, in December 2007, Kirk applied to the DEA for a 2008 ephedrine and
pseudoephedrine manufacturing procurement quota. In April 2008, the DEA
rejected Kirks application and Kirk is challenging its rejection which has
been consolidated with the administrative proceeding commenced by the DEA.
Kirks application for a 2009 ephedrine and pseudoephedrine manufacturing
procurement quota also remains pending.

During
February and March 2009 hearings on the merits of the case were held before an
administrative judge and a further hearing has been scheduled for June 2009.
Based on the allegations made by the DEA, and our understanding of relevant
facts and circumstances, we believe that the action commenced by the DEA is
without merit and we intend to vigorously defend against this.

In
a separate but related action, the United States of America commenced an action
in the United States District Court District of New Jersey on July 3, 2008 to
forfeit and condemn ephedrine guaifenesin products shipped to Kirks contract
packager referenced above at an appraised value of approximately $680,000 and
which were seized by the DEA. On September 2, 2008, Kirk filed its answer and
counterclaimed seeking an award of damages for wrongful seizure of the seized
property as well as a declaratory judgment that the United States acted unlawfully,
arbitrarily and capriciously in implementing the quota system.

There
can be no assurance that we will prevail in these actions or that they will be
resolved upon terms favorable to us. If our registration were revoked, denied
or suspended, or if our quota application is rejected, we could no longer
lawfully possess or distribute controlled substances or manufacture and
distribute products containing the disallowed controlled substance which would
have a material adverse effect on our business, prospects, financial condition
and results of operation.

Nostrum

As
previously reported, on June 27, 2008, we commenced a lawsuit in the United
States District Court for the Southern District of New York against Nirmal
Mulye (Mulye) and Nostrum
Pharmaceuticals, Inc. (Nostrum)
(Case No. 08-Civ-5861). On July 31, 2007, the Company, Mulye and Nostrum
entered into a global settlement of disputes which were the subject of four
prior contested legal proceedings between the parties. Previously, Nostrum was
our largest shareholder and Mulye served as our Chief Scientific Officer and
was a member of our Board of Directors.

Pursuant
to the terms of the settlement agreement and a related escrow agreement,
certain contested intellectual property, products and corporate opportunities
allegedly stolen by Mulye and Nostrum were assigned to Mulye and Nostrum, while
10,661,000 shares of our common stock (the Escrow
Shares), then owned by Nostrum, were placed in escrow to be
returned to us subject to the release and discharge of guarantees and a related
undertaking given by Mulye and Nostrum securing our credit facility with the
Bank of India (the BOI Loan) by
April 30, 2008.

19

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On
April 28, 2008, the guarantees and undertaking given by Nostrum and Mulye were
released and discharged and replaced with a letter of credit issued by Maneesh
in favor of the Bank of India securing the BOI Loan. Maneesh is an affiliate of
the Company and three of its designees presently serve on our Board of
Directors. In response to our demand to the escrow agent to release the Escrow
Shares to us pursuant to the terms of the escrow agreement, Nostrum objected to
the release of the Escrow Shares for reasons we believe lack merit, and
consequently we commenced a lawsuit against Nostrum and Mulye seeking
declaratory judgment for the immediate release to us of the Escrow Shares as
well as damages for breach of contract and implied covenant of good faith and
dealing.

On
August 13, 2008, Nostrum and Mulye filed an answer and counterclaim to our
complaint and on August 26, 2008 they amended their answer. The counterclaim
    is seeking declaratory judgment for the immediate release to Nostrum of the
    Escrow Shares and the issuance to Nostrum of additional shares of common
    stock such that, under Nostrums theory, together with the Escrow Shares
    will represent 32% of our outstanding shares on a fully diluted basis. Both
    parties have filed motions for summary judgment seeking a ruling from the
Judge regarding the return of the Escrow Shares and are awaiting a decision from
    the Court. We intend to vigorously prosecute this case and believe our
    claims against Nostrum and Mulye are meritorious.

Stockbridge

On
June 9, 2008, an action was commenced by Stockbridge Capital Investors, Inc.
(Stockbridge) against us in the Superior Court of the State of Arizona
in the County of Maricopa. The complaint alleges that we breached a letter agreement
with Stockbridge by not paying Stockbridge a success fee to which
it claims entitlement. The complaint seeks damages to be proven at trial together
with attorneys fees and costs. On September 2, 2008 we filed our answer.
Based on the allegations in the amended complaint, and our understanding of relevant
facts and circumstances, we believe that the claims made by the plaintiff in
this lawsuit are without merit and we intend to vigorously defend against
them.

Body Dynamics

On
December 19, 2008, Kirk commenced an action against Body Dynamics, Inc. (Body Dynamics) in the Circuit Court of
the 17th Judicial District in Broward County, Florida. Body Dynamics is a
customer to whom we delivered goods and for which we have not been paid. We are
seeking judgment in the amount of $375,637 plus court costs and pre-judgment
interest. On February 6, 2009, the case was moved by Body Dynamics to the
United States District Court Southern District of Florida and on the same day
Body Dynamics filed its answer to our complaint. Mediation hearings are being
scheduled for April 2009.

|         |              
|-------- | -------------
|ITEM 1A. | RISK FACTORS.

We
had no material changes to our risk factors as previously disclosed in its Form
10-K for the year ended October 31, 2008 filed with the Securities and Exchange
Commission on February 5, 2009.

|        |                                                             
|------- | ------------------------------------------------------------
|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On
    November 11, 2008, our board of directors authorized the grant of 500,000
    shares of our common stock to Maneesh and 125,000 shares of our common stock
    to Harry Singh,
    both affiliates of ours, in consideration for their deferral in
    payment of certain fees due to them under a joint venture agreement in the
    case of Maneesh and a consulting agreement in the case of Harry Singh. We
    have not issued these shares although we are treating them, for the purposes
    of this Quarterly Report on Form 10-Q, as if they were issued and outstanding.

The securities were offered and sold in reliance upon exemptions
from registration pursuant to Section 4(2) under the Securities Act of 1933,
as amended.

|        |                                 
|------- | --------------------------------
|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

20

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|        |                   
|------- | ------------------
|ITEM 5. | OTHER INFORMATION.

None





21

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|        |          
|------- | ---------
|ITEM 6. | EXHIBITS.

| |          |                                                                                                                                                    
| | -------- | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | Exhibits
| |          |                                                                                                                                                    
| | 31.1     | Certification of Chief
 Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities
 Exchange Act                                
| |          |                                                                                                                                                    
| | 31.2     | Certification of Chief
 Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities
 Exchange Act                                
| |          |                                                                                                                                                    
| | 32.1     | Certification of Chief
 Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
 Section 906 of the Sarbanes-Oxley Act of 2002
| |          |                                                                                                                                                    
| | 32.2     | Certification of Chief
 Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
 Section 906 of the Sarbanes-Oxley Act of 2002

22

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SYNOVICS PHARMACEUTICALS, INC.

SIGNATURE

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

|                     |     |                              | 
|-------------------- | --- | ---------------------------- | 
|Date: March 17, 2009 |     |                              | 
|                     |     |                              | 
|                     | By: | /s/ Jyotindra Gange          | 
|                     |     |                              | 
|                     |     | Jyotindra Gange              | 
|                     |     | Principal Executive
 Officer | 

23

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