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

                                    FORM 10-K

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                       OR

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

                For the transition period from                to
                                               --------------

                         COMMISSION FILE NUMBER 1-10352

                           COLUMBIA LABORATORIES, INC.
               (Exact name of Company as specified in its charter)

         DELAWARE                                              59-2758596
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

         2875 NORTHEAST 191ST STREET, SUITE 400
         AVENTURA, FLORIDA                                               33180
(Address of principal executive offices)                              (Zip Code)

Company's telephone number, including area code: (305) 933-6089

Securities registered pursuant to Section 12(b) of the Act:

COMMON STOCK, $.01 PAR VALUE                        AMERICAN STOCK EXCHANGE
  (Title of each class)                      (Name of exchange where registered)

         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

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

         The aggregate market value of Columbia Laboratories, Inc. Common Stock,
$.01 par value, held by non-affiliates, computed by reference to the price at
which the stock was sold as of February 29, 2000: $326,071,266.

         Number of shares of Common Stock of Columbia Laboratories, Inc. issued
and outstanding as of February 29, 2000: 29,314,489.


<PAGE>
                                     PART I

ITEM 1. BUSINESS

GENERAL DESCRIPTION OF BUSINESS

         Columbia Laboratories, Inc. (the "Company") was incorporated as a
Delaware corporation in December 1986. The Company's objective is to develop
unique pharmaceutical products that treat female specific diseases and
conditions including infertility, dysmenorrhea, endometriosis, hormonal
deficiencies and the prevention of sexually transmitted diseases. Columbia's
research in endocrinology has also led to the development of a product to treat
"Andropause" in men. Columbia's products primarily utilize the Company's
patented bioadhesive delivery technology, the ("Bioadhesive Delivery System").

         Formulated products utilizing the Bioadhesive Delivery System consist
principally of a polymer, polycarbophil, and an active ingredient. The
Bioadhesive Delivery System is based upon the principle of bioadhesion, a
process by which the polymer adheres to epithelial surfaces and to mucin, a
naturally occurring secretion of the mucous membranes. The polymer remains
attached to epithelial surfaces and/or the mucin and is discharged upon normal
cell turnover or upon the detachment of the mucin from the mucous membranes, a
physiological process which, depending upon the area of the body, occurs every
12 to 72 hours. This extended period of attachment permits the Bioadhesive
Delivery System to be utilized in products when extended duration of
effectiveness is desirable or required.

         The Company has focused on women's health care because of the
significant number of women whose health and hygiene needs have not been met by
available products and because the Company has found vaginal delivery to be
particularly effective. The Company intends to continue to develop products that
improve the delivery of previously approved drugs.

         The Company is currently engaged solely in one business segment -- the
development and sale of pharmaceutical products and cosmetics. See footnote 7 to
the consolidated financial statements for information on foreign operations.

         The Company's principal executive offices are located at 2875 Northeast
191st Street, Suite 400, Aventura, Florida 33180, and its telephone number is
(305) 933-6089. The Company's subsidiaries, all of which are wholly-owned, are
Columbia Laboratories (Bermuda) Ltd. ("Columbia Bermuda"), Columbia Laboratories
(France) SA ("Columbia France"), Columbia Laboratories (UK) Limited ("Columbia
UK") and Columbia Research Laboratories, Inc. ("Columbia Research").

         Except for historical information contained herein, the matters
discussed in this document are forward looking statements made pursuant to the
safe harbor provisions of the Securities Litigation Reform Act of 1995. Such
statements involve risks and uncertainties, including but not limited to
economic, competitive, governmental and technological factors affecting the
Company's operations, markets, products and prices, and other factors discussed
elsewhere in this report.

PRODUCTS

         CRINONE(R). The Company's first prescription drug is a sustained
release, vaginally delivered, natural progesterone product. Crinone utilizes the
Company's patented Bioadhesive Delivery System which enables the progesterone to
achieve a "First Uterine Pass Effect"(C). Crinone is the first product to
deliver progesterone directly to the uterus, thereby maximizing therapeutic
benefit and avoiding side effects seen with orally-delivered synthetic
progestins.

         In May 1997, the Company received U.S. marketing approval for Crinone
from the U.S. Food and Drug Administration ("FDA") for use as a progesterone
supplementation or replacement as part of an Assisted Reproductive Technology
(ART) treatment for infertile women with progesterone deficiency. In July 1997,
the

                                       2
<PAGE>

Company received U.S. marketing approval for Crinone from the FDA for the
treatment of secondary amenorrhea (loss of menstrual period).

         Outside the U.S., Crinone has been approved for marketing for one or
more medical indications in the following countries: the United Kingdom,
Ireland, Finland, Argentina, Greece, Mexico, Colombia, Belgium, Italy, Germany
and France. The medical indications include the treatment of secondary
amenorrhea, progesterone supplementation or replacement as part of an ART
treatment for infertile women, the prevention of hyperplasia and endometrial
cancer in post-menopausal women receiving hormone replacement therapy ("HRT"),
the reduction of symptoms of premenstrual syndrome ("PMS"), menstrual
irregularities, dysmenorrhea and dysfunctional uterine bleeding.

         In May 1995, the Company entered into a worldwide, except for South
Africa, license and supply agreement with American Home Products Corporation
("AHP") under which the Wyeth-Ayerst Laboratories division of AHP market
Crinone. Under the terms of the agreement, the Company earned $17 million in
milestone payments to date and will continue to receive additional milestone
payments. The Company also supplied Crinone at a price equal to 30% of AHP's net
selling price. On July 2, 1999, AHP assigned the license and supply agreement to
Ares-Serono ("Serono"), a Swiss pharmaceutical company. Serono paid $68 million
to AHP for the rights to Crinone and assumed AHP's financial obligations to the
Company.

         ADVANTAGE-S(TM). Advantage-S, the Company's female contraceptive gel
utilizes the Bioadhesive Delivery System with the active ingredient nonoxynol-9
(the"Product") and it has been marketed in the United States by the Company
since July 1998 under an existing monograph for nonoxynol-9 spermicidal
products. The Product had been marketed in the United States under the tradename
Advantage 24(R) by Lake Pharmaceuticals, Inc. ("Lake"). In July 1997, the FDA
alleged that the monograph did not permit a claim for 24-hour effectiveness.
Although, the Company believes that its claim for 24-hour effectiveness was
valid, it agreed with the FDA in February 1998 to market the Product without a
claim for 24-hour effectiveness under the tradename of Advantage-S. During the
period in which the Company was disputing the FDA allegations, the Company
terminated its license agreement with Lake. In July 1998, the Company began
marketing the Product in the United States under the tradename Advantage-S.
Among Advantage-S benefits is that it utilizes the Company's Bioadhesive
Delivery System, which enables the nonoxynol-9 to adhere to the cervix.

         In August 1998, the Company signed a distribution agreement with
Advantage Technology Development Co. Ltd. ("Advantech") for the distribution of
the Product in China under the tradename Advantage-LA(R). An introduction test
was conducted by Advantech and was satisfactorily completed. The product is now
being sold in selected larger cities within China under an agreement with the
Chinese Health Authorities for what is known as "Trial Sales". Upon successful
completion of the "Trial Sales" in 1999, the Chinese Health Authorities issued a
Family Planning Import Sales Certificate allowing distribution of Advantage-LA
throughout China. In Europe, the Company intends to register Advantage-S as an
over-the-counter drug.

         Broader claims relating to prevention of sexually transmitted diseases
(STD's) will be requested upon completion, if successful, of clinical studies
now underway. The United Nations Global Program on AIDS (formerly known as the
World Health Organization Global Program on AIDS) has completed a 600 women
safety study on Advantage-S. Analysis of the data generated indicates that
Advantage-S, as used in the study, was free of any serious side effects. In
addition, Advantage-S was shown to be safer than any other nonoxynol-9 product
studied. Studies to determine the efficacy of Advantage-S in preventing the
heterosexual transmission of HIV and other STD's have begun in a National
Institute of Health sponsored study in Kenya. Additional U.N. studies are
underway in Thailand, India and the Ivory Coast.

         REPLENS(R). Replens replenishes vaginal moisture on a sustained basis
and relieves the discomfort associated with vaginal dryness. Replens was the
first product utilizing the Bioadhesive Delivery System. Replens is marketed in
the United States by the Company who reacquired the marketing rights from the
Warner-Lambert Company on April 1, 1998. Replens is marketed by various
pharmaceutical companies throughout the rest of the world. In October 1999, the
Company engaged an investment banking firm to act as its exclusive advisor in a
planned divesture of certain of the Company's over-the-counter products which
includes Replens.

                                       3
<PAGE>

         OTHER PRODUCTS. The Company also markets Advanced Formula Legatrin
PM(R), for the relief of occasional pain and sleeplessness associated with minor
muscle aches such as night leg cramps; Legatrin(R) GCM Formula(TM), which
nutritionally supports healthy joint function; Vaporizer in a bottle(R), a
portable cough suppressant for the temporary relief of a cough due to the common
cold; and Diasorb(R), a pediatric antidiarrheal product. These products do not
utilize the Bioadhesive Delivery System. In October 1999, the Company engaged an
investment banking firm to act as its exclusive advisor in a planned divestiture
of certain of the Company's over-the-counter products which include Advanced
Formula Legatrin PM, Legatrin GCM Formula, Vaporizer in a Bottle and Diasorb.

         In March 1999, the Company entered into a license and supply agreement
with Mipharm SpA under which Mipharm SpA will be the exclusive marketer of the
Company's previously unlicensed women's healthcare products in Italy, Portugal,
Greece and Ireland with a right of first refusal for Spain. Under the terms of
the agreement, the Company received $462,500, net of expenses, and expects to
receive future milestone payments as products are made available by the Company.

RESEARCH AND DEVELOPMENT

         The Company expended $6.7 million in 1999, $7.8 million in 1998 and
$9.1 million in 1997 on research and development activities. The expenditures
are primarily the result of costs associated with contracting for, supervising
and administering the clinical studies on the Company's Crinone, Advantage-S,
Chronodyne and Testosterone Bioadhesive Tablet products. These studies are
coordinated from the Company's New York and Paris offices.

         CHRONODYNE(R). In June 1998, the Company announced that it had been
granted an Investigational New Drug Application ("IND") by the FDA for
terbutaline in Columbia's patented bioadhesive vaginal delivery system. This
product is intended to relax the uterus and prevent uterine dyskinesia (abnormal
contractions), and therefore may be useful in the treatment of disorders such as
dysmenorrhea, difficult and painful menstruation and for the treatment and
prevention of endometriosis, the growth of endometrial tissue outside the
uterus. Dysmenorrhea is a disorder that afflicts nearly 25 million women in the
U.S. which is more than 30% of all menstruating women. Endometriosis effects 5
million women in the U.S. of whom 30 to 40% are infertile.

This vaginal form of terbutaline, trademarked Chronodyne by Columbia, takes
advantage of the Company's patented "First Uterine Pass Effect" whereby the drug
is preferentially delivered to the uterus. This results in high concentrations
in the uterus, the target organ, and low concentrations in the systemic
circulation thereby minimizing the potential for side effects. Pharmacokinetic
studies have demonstrated that when Chronodyne is administered vaginally the
common side effects of tachycardia (rapid heart rate) and tremor are avoided
because the systemic serum levels of terbutaline are only a fraction of that
seen after oral administration.

Chronodyne represents a new approach in the treatment of dysmenorrhea.
Traditionally, analgesics are used by women after the pain occurs with the
result that only partial relief is obtained. Chronodyne can prevent pain from
occurring by addressing the root cause of dysmenorrhea painful uterine
contractions. Chronodyne would be used at the first sign of dysmenorrhea,
therefore preventing painful contractions.

It is a widely held theory that endometriosis is the result of retrograde
(backward-flowing) menstruation. Endometriosis occurs when endometrial tissue
flows backward through the fallopian tubes and attaches to nearby pelvic
structures, such as the ovary, and then grows. It has been shown that women who
develop endometriosis usually have a long history of dysmenorrhea. It has been
shown that women with endometriosis have an abnormality of uterine contractility
which prevents sperm from reaching the fallopian tubes, thereby causing
infertility. The Company believes that Chronodyne can normalize uterine
contractility and restore fertility.

         TESTOSTERONE BIOADHESIVE BUCCAL TABLET. In August 1998, the Company
announced that studies had been completed demonstrating that its patented
bioadhesive buccal tablet can completely replace the normal amount of
testosterone produced by men. The new bioadhesive buccal tablet which is only 9
mm in diameter and insensible after


                                       4
<PAGE>



being inserted into the mouth, has been shown to deliver physiologic levels of
testosterone. This contrasts with large transdermal patches which produce
sub-physiologic levels because they deliver only 5 mg per day.

Testosterone has traditionally been used to treat hypogonadel men. Hypogonadism
in men is characterized by a deficiency or absence of endogenous testosterone
production. However, recent data has demonstrated that men with low levels of
testosterone may be at a greater risk of having a heart attack. Like the failure
of the ovaries in menopausal women to produce estrogen, failure of the testes to
product sufficient testosterone in men results in increasing levels of Follicle
Stimulating Hormone (FSH) and Luteinizing Hormone (LH). The advent of
"Andropause" in men may have the same impact as menopause in women- increased
risk of cardiovascular disease, Alzheimer's disease and ultimately osteoporosis.

Research sponsored by the Company has shown that testosterone apparently plays
the same role in men as estradiol does in women, i.e., it acts as a potent
coronary dilator. Acute administration of testosterone improves exercise-induced
myocardial ischemia in men with coronary artery disease. Columbia's testosterone
bioadhesive buccal tablet may play an important role in the treatment of angina
and in the secondary prevention of a heart attack.

PATENTS, TRADEMARKS AND PROTECTION OF PROPRIETARY INFORMATION

         The Company purchased the patents underlying the Bioadhesive Delivery
System from Bio-Mimetics, Inc. ("Bio-Mimetics"). The basic patent that covers
the Bioadhesive Delivery System was issued in the United States in 1986 and by
the European Patent Office in 1992. The Company has the exclusive right to the
use of the Bioadhesive Delivery System subject to certain third party licenses
issued by Bio-Mimetics that have been assigned to the Company and certain
restrictions on the assignment of the patents. See "Management's Discussion and
Analysis of Financial Conditions and Results of Operations."

         During 1999, there were two United States patents granted to the
Company. The first patent was for a method of treating or reducing ischemia or
incidence of cardiovascular events by administering progesterone. The second
patent was for the composition and method of moisturizing mammalian membranous
tissue.

         During 1997, the Company was granted a United States patent covering
the technology used in its product Advantage-S, which potentiates the activity
of nonoxynol-9 against various organisms which can cause sexually transmitted
diseases, including AIDS, gonorrhea, chlamydia, trichomonal infections, syphilis
and genital herpes.

         During 1996, the Company was granted United States patents covering
vaginal moisturization and the direct transport of progesterone to the uterus.
In addition, a patent covering the treatment of ischemia through the delivery of
Crinone was filed in the United States. The Company is continuing to develop the
core Bioadhesive Delivery System and has filed additional patent applications
covering tissue moisturization, vaginal moisturization and progesterone
delivery. While patent applications do not ensure the ultimate issuance of a
patent, it is the Company's belief that patents based on these applications will
issue.

         Because the Company operates on a worldwide basis, the Company seeks
worldwide patent protection for its technology and products. While having patent
protection cannot ensure that no competitors will emerge, this is a fundamental
step in protecting the technologies of the Company.

         The Company has filed "Replens", "Advantage 24", "Advantage-S",
"Advantage-LA", "Crinone" and "Chronodyne"as trademarks in countries throughout
the world. Applications for the registration of trademarks do not ensure the
ultimate registration of these marks. The Company believes these marks will be
registered. In addition, there can be no assurance that such trademarks will
afford the Company adequate protection or that the Company will have the
financial resources to enforce its rights under such trademarks.

         The Company also relies on confidentiality and nondisclosure
agreements. There can be no assurance that other companies will not acquire
information which the Company considers to be proprietary. Moreover, there can
be

                                       5
<PAGE>

no assurance that other companies will not independently develop know-how
comparable to or superior to that of the Company.

MANUFACTURING

         Crinone, Advantage-S, Advantage 24, Advantage-LA and Replens are
currently being manufactured and packaged by third-party manufacturers in Europe
utilizing the "form, fill and seal" single step manufacturing process.

         Medical grade, cross-linked polycarbophil, the polymer used in the
Company's products utilizing the Bioadhesive Delivery System, is currently
available from only one supplier, B.F. Goodrich Company ("Goodrich"). The
Company believes that Goodrich will supply as much of the material as the
Company may require because the Company's products rank among the highest
value-added uses of the polymer. There can be no assurance that Goodrich will
continue to supply the product. In the event that Goodrich cannot or will not
supply enough of the product to satisfy the Company's needs, the Company will be
required to seek alternative sources of polycarbophil. There can be no assurance
that an alternative source of polycarbophil will be obtained.

         All of the other raw materials used by the Company for its products
utilizing the Bioadhesive Delivery System are available from several sources.

OVER-THE-COUNTER DRUGS

         The Company currently markets six over-the-counter drugs: Advanced
Formula Legatrin PM, for the relief of occasional pain and sleeplessness
associated with minor muscle aches such as night leg cramps; Legatrin GCM
Formula, which nutritionally supports healthy joint function; Diasorb, a
pediatric antidiarrheal product; Vaporizer in a bottle, a portable cough
suppressant, Replens and Advantage-S. These over-the-counter drugs are
manufactured by third-party manufacturers. All of the raw materials for the non
Bioadhesive Delivery System products used by the Company for its
over-the-counter drugs are available from several sources.

         The over-the-counter drugs are sold to drug wholesalers, mass
merchandisers and chain drug stores. The Company utilizes approximately 20 drug
manufacturers' representative firms to make calls on the Company's trade
customers. The manufacturers' representatives receive commissions based on sales
made within their respective territories. The Company supports the activities of
the manufacturers' representatives by advertising in consumer publications and
convention participation.

SALES

         The following table sets forth the percentage of the Company's
consolidated net sales by product, for each product accounting for 5% or more of
consolidated net sales in any of the three years ended December 31, 1999.

                                1999                1998                 1997
                             ----------          ----------          -----------
Crinone                            56%                 25%                  68%
Replens                            24                  40                   10
Advantage-S                         3                   4                    3*
Legatrin PM/Legatrin GCM           12                  26                   15
Other Products                      5                   5                    4
                             ----------          ----------          -----------
                                  100%                100%                 100%
                             ==========          ==========          ===========

          * Prior to July 1997 the tradename was Advantage 24.

The Company anticipates the percentage of sales attributable to Legatrin PM and
the other products to decrease in future years as additional products utilizing
the Bioadhesive Delivery System are introduced. AHP and Ares-Serono accounted
for approximately 56% of 1999 consolidated net sales. AHP accounted for
approximately 25% and 68% of


                                       6
<PAGE>

1998 and 1997 consolidated net sales, respectively. A retail customer accounted
for approximately 9%, 15% and 5% of 1999, 1998 and 1997 consolidated net sales,
respectively. Another customer accounted for approximately 5%, of 1999,
consolidated net sales.

COMPETITION

          While the Company has entered into the strategic alliance agreements
for the marketing of its women's health care products, there can be no assurance
that the Company and its partners will have the ability to compete successfully.
The Company's success to a great extent is dependent on the marketing efforts of
its strategic alliance partners, over which the Company has limited ability to
influence. The markets which the Company and its strategic alliance partners
operate in or intend to enter are characterized by intense competition. The
Company and its partners compete against established pharmaceutical and consumer
product companies which market products addressing similar needs. In addition,
numerous companies are developing or, in the future, may develop enhanced
delivery systems and products competitive with the Company's present and
proposed products. Some of the Company's and its partners' competitors possess
greater financial, research and technical resources than the Company or its
partners. Moreover, these companies may possess greater marketing capabilities
than the Company or its partners, including the resources to implement extensive
advertising campaigns.

          Crinone, although a natural progesterone product, competes in markets
with other progestins, both synthetic and natural, which may be delivered
orally, by injections or by suppositories. Some of the more successful orally
dosed products include Provera marketed by the Upjohn Company and Prempro and
Premphase marketed by AHP. Although the Company is not aware of any product
incorporating rate-controlled technology with respect to vaginal lubrication,
the Company believes that Replens competes in the same markets as K-Y Jelly(R)
and Gyne-Moisturin(R), vaginal lubricants marketed by Johnson & Johnson
Products, Inc. and Schering-Plough Corporation, respectively. The Company also
believes that Advantage-S, Legatrin PM and Diasorb compete against numerous
products in their respective categories and that Vaporizer in a bottle(R)
competes against Vicks Vaporsteam, a product distributed by Richardson-Vicks,
Inc.

GOVERNMENT REGULATION

          The Company is subject to both the applicable regulatory provisions of
the FDA in the United States and the applicable regulatory agencies in those
foreign countries where its products are manufactured and/or distributed.

          As in the United States, a number of foreign countries require
premarketing approval by health regulatory authorities. Requirements for
approval may differ from country to country and may involve different types of
testing. There can be substantial delays in obtaining required approvals from
regulatory authorities after applications are filed. Even after approvals are
obtained, further delays may be encountered before the products become
commercially available.

          In the United States, manufacturers of pharmaceutical products are
subject to extensive regulation by various Federal and state governmental
entities relating to nearly every aspect of the development, manufacture and
commercialization of such products. The FDA, which is the principal regulatory
authority in the United States for such products, has the power to seize
adulterated or misbranded products and unapproved new drugs, to require their
recall from the market, to enjoin further manufacture or sale and to publicize
certain facts concerning a product. As a result of FDA regulations, pursuant to
which new pharmaceuticals are required to undergo extensive and rigorous
testing, obtaining premarket regulatory approval requires extensive time and
cash expenditures. The manufacturing of the Company's products which are either
manufactured and/or sold in the United States, is subject to current Good
Manufacturing Practices prescribed by the FDA. The labeling of over-the-counter
drugs in the United States, as well as advertising relating to such products,
are subject to the review of the Federal Trade Commission ("FTC") pursuant to
the general authority of the FTC to monitor and prevent unfair or deceptive
trade practices.

                                       7
<PAGE>

PRODUCT LIABILITY

          The Company may be exposed to product liability claims by consumers.
Although the Company presently maintains product liability insurance coverage in
the amount of $15 million, there can be no assurance that such insurance will be
sufficient to cover all possible liabilities. In the event of a successful suit
against the Company, insufficiency of insurance coverage could have a materially
adverse effect on the Company.


EMPLOYEES

          As of February 29, 2000, the Company had 37 employees, 3 in
management, 14 in research and development administration, 5 in manufacturing, 2
in marketing, and 13 in support functions. None of the Company's employees are
represented by a labor union. The Company believes that its relationship with
its employees is satisfactory.

          The Company has employment agreements with certain employees, some of
whom are also stockholders of the Company. See "Executive Compensation--
Employment Agreements."


ITEM 2. PROPERTIES

          As of February 29, 2000, the Company leases the following properties:
<TABLE>
<CAPTION>
                                                                                                       ANNUAL
    LOCATION                     USE                   SQUARE FEET          EXPIRATION                  RENT
----------------           ---------------------       ------------       --------------           --------------
<S>                           <C>                           <C>                    <C>                 <C>
Aventura, FL               Corporate office              4,580             June 2003                $  119,000
Paris, France              Research admin office         9,500             August 2001                 324,000
Paris, France              Business residence            2,600             June 2001                    61,000
New York, NY               Residential office            1,000             April 2000                   50,000
Rockville Center, NY       Research admin office         2,000             October 2004                 53,000
</TABLE>

ITEM 3. LEGAL PROCEEDINGS

         The Company filed an action in the United States District Court for the
Southern District of Florida ("Florida Action") in November 1997 seeking a
declaratory judgement on certain issues related to its relationship with Lake
Consumer Products, Inc. ("Lake") as governed in the contract between the Company
and Lake. Lake filed an action against the Company in the United States District
Court, Northern District of Illinois ("Illinois Action") , for damages alleged
by Lake to have been suffered by it as a result of the FDA's allegations in July
1997 that the Company's nonoxynol-9 product, then marketed by Lake under the
tradename Advantage 24, was not permitted to be sold under the monograph. The
IllinoisAction was dismissed by the Illinois Court and transferred to the
Florida Court for consolidation as a counterclaim in the Florida Action. On
March 16, 2000, the Company and Lake settled all outstanding issues in the
consolidated Florida Action by the Company having bought out the contract for
the sum of $1,200,000 ($600,000 in cash and $600,000 in the form of Company
common stock). As a result, the Company reacquired the U.S. rights to the
Advantage product and both parties agreed to have their legal actions dismissed.

         Other claims and law suits have been filed against the Company. In the
opinion of management and counsel, none of these lawsuits are material and they
are all adequately reserved for or covered by insurance or, if not so covered,
are without any or have little merit or involve such amounts that if disposed of
unfavorably would not have a material adverse effect on the Company.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.

                                       8
<PAGE>

                                     PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

         The Company's $.01 par value Common Stock ("Common Stock") trades on
the American Stock Exchange under the symbol COB. The following table sets forth
the high and low sales prices of the Common Stock on the American Stock
Exchange, as reported on the Composite Tape.


FISCAL YEAR ENDED DECEMBER 31, 1998               HIGH              LOW
------------------------------------             ------           -------
         First Quarter                           $15.18           $11.25
         Second Quarter                           14.13             5.63
         Third Quarter                             8.94             2.50
         Fourth Quarter                            4.88             2.38


FISCAL YEAR ENDED DECEMBER 31, 1999
-----------------------------------

         First Quarter                            $6.81            $2.88
         Second Quarter                            9.06             5.88
         Third Quarter                             8.69             5.69
         Fourth Quarter                            8.31             5.50


         At February 29, 2000, there were 396 shareholders of record of the
Company's Common Stock, although the Company estimates that there are
approximately 9,500 beneficial owners, 2 shareholders of record of the Company's
Series A Convertible Preferred Stock ("Series A Preferred Stock"), 3
shareholders of record of the Company's Series B Convertible Preferred Stock
("Series B Preferred Stock") and 22 shareholders of record of the Company's
Series C Convertible Preferred Stock ("Series C Preferred Stock").

         Between January 7, 1999 and February 1, 1999 the Company sold (i) 6,660
shares of Series C Convertible Preferred Stock, convertible into shares of the
Company's Common Stock, par value $.01 (the "Series C Convertible Preferred
Stock"), and (ii) warrants to purchase up to an aggregate of 233,100 shares of
Common Stock at an exercise price of $3.50 per share (the "Series C Warrants")
for an aggregate purchase price of $6,660,000. The Series C Preferred Stock may
be converted into Common Shares at a conversion price equal to the lesser of (i)
$3.50 and (ii) 100% of the average of the closing prices of the Common Shares as
reported on the AMEX for the three Trading Days immediately preceding the date
of conversion. In accordance with Rule 501 of Regulation D under the Securities
Act of 1933 (the "Securities Act"), it was not necessary in connection with the
offer, sale and delivery of the Series C Preferred Stock to register the Series
C Preferred Stock under the Securities Act.

         On January 28, 1999 the Company granted to Shephard Lane and Anthony
Campbell, in exchange for services performed, warrants to purchase up to an
aggregate of 125,000 shares of Common Stock at an exercise price of $4.8125 per
share.

         On January 28, 1999 and September 23, 1999, the Company granted to
James Apostolakis, warrants to purchase up to an aggregate of 100,000 and 75,000
shares, respectively, of common stock at an exercise price of $4.8125 and $7.50,
respectively, per share.

         On October 25, 1999, the Company granted to Ryan Beck & Co., Inc., as
part of a services agreement, warrants to purchase up to an aggregate of 12,500
shares of common stock at an exercise price of $7.0625 per share.

                                       9
<PAGE>

         On August 31, 1998 the Company granted to Value Management & Research
AG a warrant to purchase up to an aggregate of 120,000 shares of Common Stock at
an exercise price of $5.00 per share in exchange for consulting services
performed.

         The Series A Preferred Stock pays cumulative dividends at a rate of 8%
per annum payable quarterly on the first business day of the subsequent quarter.
As of December 31, 1999, dividends of $1,860 were payable on January 3, 2000.
The Series C Preferred Stock issued in January 1999 pays cumulative dividends at
a rate of 5% per annum payable quarterly on the last day of the quarter.

         The Company has never paid a cash dividend on its Common Stock and does
not anticipate the payment of cash dividends in the foreseeable future. The
Company intends to retain any earnings for use in the development and expansion
of its business.

         Applicable provisions of the Delaware General Corporation Law may
affect the ability of the Company to declare and pay dividends on its Common
Stock as well as on its Preferred Stock. In particular, pursuant to the Delaware
General Corporation Law, a company may pay dividends out of its surplus, as
defined, or out of its net profits, for the fiscal year in which the dividend is
declared and/or the preceding year. Surplus is defined in the Delaware General
Corporation Law to be the excess of net assets of the company over capital.
Capital is defined to be the aggregate par value of shares issued.


ITEM 6. SELECTED FINANCIAL DATA

         The following consolidated selected financial data of the Company for
the five years ended December 31, 1999 (not covered by the auditors' report),
should be read in conjunction with the consolidated financial statements and
related notes thereto. See "Item 8. Financial Statements and Supplementary
Data."
<TABLE>
<CAPTION>
<S>                                                                                <C>
                                                      FOR THE YEARS ENDED DECEMBER 31,
                                            1999       1998        1997        1996        1995
                                         -----------------------------------------------------------
Statement of Operations Data: (000's)

NET SALES                                    18,921     $10,018     $16,547      $5,646      $9,905
NET INCOME ( LOSS) (1)                       (2,210)    (13,860)        763     (13,079)       (959)
INCOME (LOSS) PER COMMON SHARE                (0.09)      (0.48)       0.03       (0.47)      (0.04)
WEIGHTED AVERAGE NUMBER
  OF COMMON SHARES OUTSTANDING-DILUTED       28,853      28,679      29,982      27,615      25,487

BALANCE SHEET DATA: (000'S)

WORKING CAPITAL (DEFICIENCY)                 $3,441     ($1,401)     $5,140        $720     ($1,968)
TOTAL ASSETS                                 12,988      11,880      15,002       9,980       7,687
LONG-TERM DEBT                               10,000      10,000          --          --          --
STOCKHOLDERS' EQUITY (DEFICIENCY)              (274)     (4,333)      8,814       4,673       1,556
</TABLE>

(1) 1999, 1998, 1997, 1996 and 1995 net income (loss) includes approximately
$463,000, $73,000, $7.0 million, $2.0 million and $8.1 million, respectively, of
license fee income.


                                       10
<PAGE>

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


FORWARD-LOOKING INFORMATION

         The Company and its representatives from time to time make written or
verbal forward looking statements, including statements contained in this and
other filings with the Securities and Exchange Commission and in the Company's
reports to stockholders, which are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Such statements
include, without limitation, the Company's expectations regarding sales,
earnings or other future financial performance and liquidity, product
introductions, entry into new geographic regions and general optimism about
future operations or operating results. Although the Company believes that its
expectations are based on reasonable assumptions within the bounds of its
knowledge of its business and operations, there can be no assurance that actual
results will not differ materially from its expectations. Factors that could
cause actual results to differ from expectations include, without limitation:
(i) increased competitive activity from companies in the pharmaceutical
industry, some of which have greater resources than the Company; (ii) social,
political and economic risks to the Company's foreign operations, including
changes in foreign investment and trade policies and regulations of the host
countries and of the United States; (iii) changes in the laws, regulations and
policies, including changes in accounting standards, that affect, or will
affect, the Company in the United States and abroad; (iv) foreign currency
fluctuations affecting the relative prices at which the Company and foreign
competitors sell their products in the same market; and (v) the timely
completion of studies and approvals by the FDA and other regulatory
agencies. Additional information on factors that may affect the business and
financial results of the Company can be found in filings of the Company with the
Securities and Exchange Commission. All forward-looking statements should be
considered in light of these risks and uncertainties. The Company assumes no
responsibility to update forward-looking statements made herein or otherwise.

LIQUIDITY AND CAPITAL RESOURCES

          Cash and cash equivalents increased from approximately $315,000 at
December 31, 1998 to approximately $1,982,000 at December 31, 1999. The Company
received approximately $6.4 million, net of expenses from the issuance and sale
of Series C Convertible Preferred Stock. Offsetting this was the approximately
$4.1 million of cash used in operating activities.

         In May 1995, the Company entered into a worldwide, except for South
Africa, license and supply agreement with American Home Products Corporation
("AHP") under which the Wyeth-Ayerst Laboratories division of AHP market
Crinone. On July 2, 1999 AHP assigned this license and supply agreement to
Ares-Serono ("Serono"), a swiss pharmaceutical company. Under the terms of the
agreement, as of February 28, 2000, the Company has earned $17 million in
milestone payments and will continue to receive additional milestone payments.
The Company also supplied Crinone at a price equal to 30% of AHP's net selling
price. Serono paid $68 million to AHP for the rights to Crinone and assumed
AHP's financial obligations to the Company.


                                       11
<PAGE>

          In connection with the 1989 purchase of the assets of Bio-Mimetics,
Inc., which assets consisted of the patents underlying the Company's Bioadhesive
Delivery System, other patent applications and related technology, the Company
pays Bio-Mimetics, Inc. a royalty equal to two percent of the net sales of
products based on the Bioadhesive Delivery System, to an aggregate of $7.5
million. The Company is required to prepay a portion of the remaining royalty
obligation, in cash or stock at the option of the Company, if certain conditions
are met. Through December 31, 1999, the Company has paid approximately $1.6
million in royalty payments.

          As of December 31, 1999, the Company has outstanding exercisable
options and warrants that, if exercised, would result in approximately $50.9
million of additional capital. However, there can be no assurance that such
options or warrants will be exercised.

          Significant expenditures anticipated by the Company in the near future
are concentrated on research and development related to new products. The
Company anticipates it will spend approximately $8.2 million on research and
development in 2000 and an additional $200,000 on property and equipment.

          As of December 31, 1999, the Company had available net operating loss
carryforwards of approximately $45 million to offset its future U.S. taxable
income.

          In accordance with Statement of Financial Accounting Standards No.
109, as of December 31, 1999 and 1998, other assets in the accompanying
consolidated balance sheet include deferred tax assets of approximately $17
million and $18 million, respectively, (comprised primarily of a net operating
loss carryforward) for which a valuation allowance has been recorded since the
realizability of the deferred tax assets are not determinable.

         In January 1999, the Company raised approximately $6.4 million, net of
expenses, from the issuance and sale of Series C Convertible Preferred Stock.
("Preferred Stock"). The Preferred Stock, sold to twenty-four accredited
investors, has a stated value of $1,000 per share. The Preferred Stock is
convertible into common stock at the lower of: (i) $3.50 per common share and
(ii) 100% of the average of the closing prices during the three trading days
immediately preceding the conversion notice. If conversion is based on the
$3.50 conversion price, conversion may take place after the underlying common
stock is registered. If conversion is based on the alternative calculation,
conversion cannot take place for fifteen months. The Preferred Stock pays a 5%
dividend, payable quarterly in arrears on the last day of the quarter.

         Subsequent to year-end, the Company has received approximately $4.7
million from the exercise of outstanding options and warrants. The Company
anticipates that cash generated from operations, together with the proceeds
from the exercise of options and warrants will be sufficient to meet its working
capital requirements for 2000.

         In October 1999, the Company engaged an investment banking firm to act
as its exclusive advisor in a planned divestiture of certain of the Company's
over-the-counter products. Subsequent to year-end, the Company has received a
letter of intent from a prospective party who is in the process of completing
due diligence procedures. The terms of the agreement are being negotiated.


                                       12
<PAGE>

RESULTS OF OPERATIONS - YEARS ENDED DECEMBER 31, 1999 VERSUS DECEMBER 31, 1998
VERSUS DECEMBER 31, 1997

          Net sales increased by approximately 89% in 1999 to approximately
$18.9 million as compared to $10.0 million in 1998 and $16.5 million in 1997.
Sales of Crinone accounted for approximately $10.6 million of net sales in 1999
as compared to approximately $2.5 million and $11.2 million in 1998 and 1997,
respectively. AHP, the Company's former licensee for Crinone, had purchased
large initial quantities of Crinone from the Company in 1997 and used this
inventory to fulfill most of their 1998 Crinone requirements. The approximately
$8.9 million increase in 1999 over 1998 was attributable to the replenishment of
inventory utilized in 1998 and increased usage by consumers. Sales of Replens
were approximately $4.5 million, $4.2 million and $1.6 million in 1999, 1998 and
1997, respectively. The increase in 1998 reflects the reacquisition of the
product by the Company from the Warner-Lambert Company in April 1998. As a
result of the reacquisition, the Company sells Replens directly to chain
drugstores, food stores and mass merchandisers at wholesale prices instead of to
Warner-Lambert at contract manufacturing prices which are much lower than
wholesale prices.

          Gross profit as a percentage of sales increased in 1999 to
approximately 70% as compared to approximately 43% in 1998 and approximately 60%
in 1997. The increase in Crinone sales, with its approximately 80% gross profit,
accounts for almost all of the increase in 1999

          Selling and distribution expenses were approximately $3.9 million,
$4.1 million and $2.9 million in 1999, 1998 and 1997, respectively. Selling and
distribution expenses increased by approximately 41% in 1998 compared to 1997.
Contributing to the approximately $1.2 million increase were additional expenses
related to the reacquisition of Replens and the marketing of the product such
as: amortization of the Replens trademark $230,000; media advertising $464,000;
advertising billbacks $209,000; and broker commissions $133,000.

          General and administrative expenses decreased approximately $1.2
million or 21% to approximately $4.6 million in 1999 from approximately $5.8
million in 1998. The decrease was principally the result of an approximately
$249,000 reduction in salaries, an approximately $490,000 reduction in
professional services, including investor relations, and an approximately
$227,000 reduction in legal expenses related to dissident shareholder
activities. General and administrative expenses increased by 46% to $5.8 million
in 1998 from $4.0 million in 1997. The principal reasons for the $1.8 million
increase were an increase in legal expense from $707,000 in 1997 to $1,793,000
in 1998 and an increase in investor/public relations expenses from $543,000 in
1997 to $966,000 in 1998. The increase in legal fees reflected additional
attorney charges related to litigation and dissident shareholder activities. The
increase in investor/public relation expenses reflected work done in 1998 on
Crinone media promotion and investor relations work performed in Europe. The
European investor relations expense included $264,000 which represented the
value of warrants granted to non-employees. Other increases in 1998 general and
administrative expenses included $135,000 for salaries and benefits and $84,000
for insurance

          Research and development decreased in 1999 to approximately $6.7
million as compared to approximately $7.8 million in 1998. The $1.1 million
decrease was primarily the result of a $125,000 reimbursement of expenses
incurred in 1998 negotiated and received in 1999 and an approximately $742,000
reduction in Crinone studies and other research and development costs. Research
and development expenditures decreased in 1998 to $7.8 million as compared to
$9.1 million in 1997 as the number of Crinone studies continued to decline.

          License fees in 1999 of $462,500, net of expenses totaling $137,500,
represent payments received in connection with the licensing agreement with
Mipharm SpA entered into in March 1999. License fees in 1998 were $73,088.
License fees in 1997 were $7.0 million representing milestone payments received
in connection with the licensing agreement with AHP.

          Interest income in 1999 was $134,795. Interest income in 1998 was
$141,564 as compared to $70,664 in 1997. The increase resulted from interest
earned on the money received from the issuance of a $10 million note issued to
SBC Warburg Dillon Read in March 1998, after paying $4.6 million to reacquire
the rights to the product Replens in April 1998.

                                       13
<PAGE>

          Interest expense amounted to $755,352, $599,773 and $24,186 in 1999,
1998 and 1997, respectively. Interest expense is primarily from interest on the
$10 million note issued in March 1998 which bears an interest rate of 7.125%.

          As a result, the net loss for 1999 was $2,210,208 or $.09 per share as
compared to a net loss of $13,859,734 or $0.48 per share in 1998 and net income
of $762,906 or $0.03 per share in 1997.


IMPACT OF THE YEAR 2000

          Since January 1, 2000, the Company has not had any Year 2000-related
problems associated with its internal systems or software, and is not aware of
any Year 2000-related problems associated with the systems or software of its
vendors, distributors or suppliers. Although the Company expects most material
Year 2000 compliance problems to have arisen or occurred on or after January 1,
2000, there can be no assurance, however, that the Year 2000 problem will not
adversely affect the Company's business, financial condition, results of
operations or cash flows. It is possible that future Year 2000-related problems
will arise after January 1, 2000.


EURO

          On January 1, 1999, eleven of the fifteen member countries of the
European Union established fixed conversion rates between their existing
currencies ("legacy currencies") and one common currency (the "Euro"). The Euro
trades on currency exchanges and may be used in business transactions. Under the
regulations governing the transition to a single currency, there is a "no
compulsion, no prohibition" rule which states that no one is obliged to use the
Euro until the notes and coinage have been introduced on January 1, 2002.
Beginning in January 2002, new euro-denominated bills and coins will be issued
and legacy currencies will be withdrawn from circulation. The Company's
operating subsidiaries affected by the Euro conversion have established plans to
address the systems and business issues raised by the Euro currency conversion.
These issues include: (1) the need to adapt computer and other business systems
and equipment to accommodate Euro-denominated transactions, and (2) the
competitive impact of cross-border price transparency, which may make it more
difficult for business to charge different prices for the same products on a
country-by-country basis particularly once the Euro currency is issued in 2002.
Based upon current plans and assumptions, the Company does not expect that the
Euro conversion will have a material adverse impact on its financial condition
or results of operations.

IMPACT OF INFLATION

          Sales revenues, manufacturing costs, selling and distribution
expenses, general and administrative expenses and research and development costs
tend to reflect the general inflationary trends.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          The financial statements of the Company are annexed to this report on
pages F-1 through F-21. An index to the financial statements appears on page
F-1. The financial statement schedules are also annexed to this report on pages
S-1 through S-4. An index to the financial statement schedules appears on page
S-1.


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

          On January 7, 1999, the Board of Directors of Columbia Laboratories,
Inc. (the "Registrant") approved the engagement of Goldstein Golub Kessler LLP
as the Registrant's independent certified public accountants to audit the
Registrant's consolidated financial statements. During the last two fiscal years
and each subsequent interim period, the Registrant has not consulted with
Goldstein Golub Kessler LLP regarding the application of accounting principles
to a


                                       14
<PAGE>

specified transaction, either completed or proposed; or the type of audit
opinion that might be rendered on the Registrant's financial statements or on
any matter that was the subject of a disagreement or a reportable event.

          Simultaneously with the approval of the Registrant's new accountants,
the Board of Directors dismissed Arthur Andersen LLP as the Registraint's
independent certified public accountants. During the two most recent fiscal
years or any subsequent interim period, there have been no adverse opinions,
disclaimers of opinion or qualifications or modifications as to uncertainty,
audit scope or accounting principles regarding the reports of Arthur Andersen
LLP, on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure of a nature which if not resolved to
the satisfaction of Arthur Andersen LLP would have caused it to make reference
to the subject matter of such disagreement in connection with its report.

                                       15
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The executive officers and directors of the Company as of February 29, 2000 are
as follows:
<TABLE>
<CAPTION>
         NAME                      AGE                          POSITION
<S>                                <C>
William J. Bologna                 57                      Chairman of the Board and Chief Executive Officer

James J. Apostolakis               57                      Vice Chairman of the Board and President

David L. Weinberg                  54                      Vice   President--Finance   and  Administration,   Chief
                                                           Financial Officer, Secretary and Treasurer

Dominique de Ziegler, M.D.         52                      Vice President--Pharmaceutical Development and
                                                           Director

Howard L. Levine, Pharm. D.        45                      Vice President--Research and Development

Annick Blondeau, Ph.D.             54                      Vice President--Regulatory Affairs

Jean Carvais, M.D.                 72                      Director

Norman M. Meier                    60                      Director

Denis M. O'Donnell, M.D.           46                      Director

Selwyn P. Oskowitz, M.D.           53                      Director

Robert C.  Strauss                 58                      Director
</TABLE>

                                       16
<PAGE>

         WILLIAM J. BOLOGNA has been a director of the Company since inception,
Chairman of the Company's Board of Directors since January 1992 and Chief
Executive Officer since January 2000. From December 1988 to January 1992, Mr.
Bologna served as Vice Chairman of the Company's Board of Directors. In
addition, from 1980 to 1991, he was Chairman of Bologna & Hackett ("B&H"), an
advertising agency specializing in pharmaceutical products which has in the past
performed services for various international pharmaceutical companies. B&H
ceased operations in May 1991. Prior to 1980, Mr. Bologna was employed by
William Douglas McAdams, Inc., a company engaged in the marketing of
pharmaceuticals, in a variety of positions, including Senior Vice President. In
1965, Mr. Bologna received his B.S. in Pharmacy from Fordham University. He
received an MBA in Finance from Fordham University in 1971.

         JAMES J. APOSTOLAKIS has been a director and Vice Chairman of the
Company's Board of Directors since January 1999 and President since January
2000. Mr. Apostolakis has been a Managing Director at Poseidon Capital
Corporation, an investment banking firm, since February of 1998. Mr. Apostolakis
has also served as President of Lexington Shipping & Trading Corporation, a
company engaged in shipping operations, since 1973. From 1989 until 1992, Mr.
Apostolakis served as a director on the Board of Directors of Grow Group, a
paint and specialty chemicals company. From 1982 to 1988, he served as a
director for Macmillan, Inc., a publishing and information services company. Mr.
Apostolakis received an A.B. in Economics from the University of Pennsylvania in
1962 and an LL.B from Harvard University Law School in 1965.

         DAVID L. WEINBERG has been Vice President--Finance and Administration,
Chief Financial Officer, Treasurer and Secretary of the Company from September
1997 to the present and previously from the inception of the Company to June
1991. From October 1991 until September 1997, Mr. Weinberg was employed by
Transmedia Network Inc., a company specializing in consumer savings programs,
where he served in various capacities including Vice President and Chief
Financial Officer. From February 1981 until August 1986, Mr. Weinberg worked for
Key Pharmaceuticals, Inc., a company engaged in the development, manufacturing,
marketing and sales of pharmaceuticals until its sale to Schering-Plough
Corporation. Mr. Weinberg served in various capacities including Vice President
- Finance, Treasurer and Secretary. Mr. Weinberg received a B.B.A. in Accounting
from Hofstra University in 1968.

         DOMINIQUE DE ZIEGLER, M.D. has been Vice President--Pharmaceutical
Development of the Company since January 1996 and a director since January 1998.
Dr. de Ziegler has been employed by the Company since 1992 as Director of
Research Development. In addition, from 1988 through 1991, Dr. de Ziegler was an
Associate Professor at the Department of Obstetrics and Gynecology, Hospital A.
Beclere in Clamart, France. In 1990, Dr. de Ziegler became a Diplomat of the
American Board of Obstetrics and Gynecology, Reproductive Endocrinology and
Infertility. Dr. de Ziegler is a member of the American Fertility Society, the
American Society for Reproductive Endocrinogolists, The American Endocrine
Society, the Society of Gynecologic Investigation and the Association Francaise
pour l'Etude de la Menopause. Dr. de Zeigler has also been a journal editor and
an "ad hoc" reviewer for Fertility Sterility, Human Reproduction, The Journal of
In Vitro Fertilization and Embryo Transfer, Contraception Fertilite Sexualite
and Reproduction Humaine et Hormone.

         HOWARD L. LEVINE, Pharm.D. has been Vice President-Research and
Development since September, 1997. Dr. Levine has been employed by the Company
since 1990. Prior to joining the Company, Dr. Levine was with the Medical
Department of Pfizer Labs. Dr. Levine has held faculty and clinical practice
positions at the University of Southern California, Long Island University and
Duquesne University. He has instructed both pharmacy and medical students in
clinical pharmacology, as well as providing numerous lectures for the continuing
education of practitioners. Dr. Levine received his B.S. in Pharmacy from Oregon
State University and Doctor of Pharmacy degree from the State University of New
York at Buffalo in 1980.

         ANNICK BLONDEAU, PH. D. has been Vice President--Regulatory Affairs
since June 1996. Dr. Blondeau has been employed by the Company since 1993 as
Director of Regulatory Affairs. From 1984 through 1993, Dr. Blondeau was
responsible for all of the international filings for Debat Centre R&D Garches, a
large French pharmaceutical company. Dr. Blondeau also worked at Pfizer as Head
of the Pharmacology Department. Dr. Blondeau received her doctorate in
pharmacology and physiology from the Faculte des Sciences de Potiers France in
1971.

                                       17
<PAGE>

         JEAN CARVAIS, M.D. has been a director of the Company since October
1996. Since 1984, Dr. Carvais has been an independent consultant in the
pharmaceutical industry. Prior to that time, Dr. Carvais was President of The
Research Institute of Roger Bellon, S.A., now a division of Rhone-Poulenc Rorer.
As such, he was involved in the development of a line of anti-cancer drugs,
including Bleomycin and Adriamycin, as well as a new line of antibiotics and
quinolones. Following the acquisition of Roger Bellon, S.A., Dr. Carvais became
a member of Rhone-Poulenc's central research committee which directs the
company's worldwide research and development activities.

         NORMAN M. MEIER has been a director of the Company since inception and
served as President and Chief Executive Officer from inception until January
2000. Beginning in January 2000, Mr. Meier will serve in a non-executive
position as Chairman Emeritus. From 1971 to 1977, Mr. Meier was Vice President
of Sales and Marketing for Key Pharmaceuticals, Inc., a company which had been
engaged in the marketing and sales of pharmaceuticals until its sale to
Schering-Plough Corporation in June 1986. From 1977 until June 1986, Mr. Meier
served as a consultant to Key Pharmaceuticals, Inc. In 1960, Mr. Meier received
his B.S. in Pharmacy from Columbia University. He received his M.S. in Pharmacy
Administration from Long Island University in 1964. Mr. Meier is also a director
of Universal Heights, Inc.

         DENIS M. O'DONNELL, M.D. has been a director of the Company since
January 1999. Dr. O'Donnell has been a Managing Director at Seaside Advisors
LLC, a small cap investment fund, since 1997. From 1995 to 1997, Dr. O'Donnell
served as President of Novavax, Inc., a pharmaceutical and drug delivery
company. From 1991 to 1995, he was Vice President of IGI, Inc., a company
engaged in the marketing of human and animal pharmaceuticals. Currently, Dr.
O'Donnell served on the Board of Directors and the audit committees of both
Novavax, Inc. and ELXSI, Inc., a restaurant and water inspection services
company, and also serves on the Board of Directors of Ampersand Medical
Corporation, a medical diagnostics company.

         SELWYN P. OSKOWITZ, M.D. has been a director of the Company since
January 1999. Dr. Oskowitz has been a clinical professor of obstetrics,
gynecology and reproductive biology at Harvard Medical School since 1993. He is
a reproductive endocrinologist at, and the Director of, Boston IVF, a fertility
clinic with which he has been associated since 1986. Dr. Oskowitz is also a
former President of the Boston Fertility Society.

         ROBERT C. STRAUSS has been a director of the Company since January
1997. Since December 1997, Mr. Strauss has been the President & Chief Executive
Officer of Noven Pharmaceuticals, Inc. Prior to joining Noven, Strauss was
President, Chief Executive Officer and Chairman of the Board of Cordis
Corporation. In the past he has held senior positions at Ivax Corporation,
Touche-Ross & Company and Food Fair, Inc. Mr. Strauss received undergraduate and
graduate degrees in physics and serves on the Board of Trustees for the
University of Miami. Mr. Strauss holds a position on the Board of Directors of
several companies including Procarda Corporation and Eclipse Surgical
Corporation. Mr. Strauss also devotes his time to many civic duties, namely, the
United Way of Miami-Dade County.

         During 1999, all filings of Forms 3, 4 and 5 were made on a timely
basis.

         All directors hold office until the next annual meeting of stockholders
and the election and qualification of their successors. Directors receive no
compensation for serving on the Board, except for the receipt of stock options
and the reimbursement of reasonable expenses incurred in attending meetings.
Officers are elected annually by the Board of Directors and serve at the
discretion of the Board. The Board of Directors has four standing committees,
the Audit Committee, the Compensation/Stock Option Committee, the Finance
Committee and Scientific Advisory Committee.


                                       18
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

         The tables, graph and descriptive information set forth below are
intended to comply with the Securities and Exchange Commission compensation
disclosure requirements applicable to, among other reports and filings, annual
reports on Form 10-Ks. This information is being furnished with respect to the
Company's Chief Executive officer ("CEO") and its four other executive officers,
other than the CEO, whose salary and bonus exceeded $100,000 for the most recent
fiscal year (collectively, the "Executive Officers").

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                          ANNUAL COMPENSATION     LONG-TERM COMPENSATION
                                          -------------------     ----------------------
                                                                         SECURITIES
                                                                         UNDERLYING
NAME AND PRINCIPAL POSITION   YEAR             SALARY                    OPTIONS
---------------------------   ----             ------                    -------
<S>                            <C>            <C>                          <C>
Norman M. Meier (1)           1999           $350,000                     20,000
President and Chief           1998            400,000                    250,000
Executive Officer             1997            301,000                    250,000

William J. Bologna            1999            350,000                     20,000
Chairman of the Board         1998            400,000                    250,000
                              1997            294,000                    250,000

Dominique de Ziegler          1999            221,800                     25,000
Vice President-               1998            221,800                     25,000
 Pharmaceutical               1997            221,800                     25,000
 Development

Howard L. Levine (2)          1999            250,000                     60,000
Vice President-               1998            279,198                     50,000
Research and Development      1997             82,500                       -

David L. Weinberg             1999            189,000                     25,000
Vice President-Finance        1998            182,000                     50,000
and Administration,           1997             51,000                     25,000
Chief Financial Officer,
Secretary and Tresurer
</TABLE>

(1)  Norman M. Meier served as President and Chief Executive Officer until
     January 2000.

(2)  Howard L. Levine was elected Vice President - Research and Development on
     September 29, 1997.

(3)  David L. Weinberg was elected Vice President-Finance and Administration,
     Chief Financial Officer, Secretary and Treasurer on September 29, 1997.

                                       19
<PAGE>

                            OPTION GRANTS DURING 1999
<TABLE>
<CAPTION>
                         Number of      % of total
                         Securities     Options                                              Grant
                         Underlying     Granted to          Exercise                         Date
                         Options        Employees           Price           Expiration       Present
Name                     Granted        in 1999             ($/Share)       Date             Value (1)
----                     -------        -------             ---------       ----             ---------
<S>                      <C>              <C>                <C>          <C>  <C>           <C>
Norman M. Meier          10,000           2.4%               $5.75        3/24/09            $33,716
                         10,000           2.4%                8.25         6/2/09             48,375

William J. Bologna       10,000           2.4%                5.75        3/24/09             33,716
                         10,000           2.4%                8.25         6/2/09             48,375

Dominique de Ziegler     15,000           3.6%                5.75        3/24/09             50,574
                         10,000           2.4%                8.25         6/2/09             48,375

Howard L. Levine         50,000          12.0%                5.75        3/24/09            168,580
                         10,000           2.4%                8.25         6/2/09             48,375

David L. Weinberg        15,000           3.6%                5.75        3/24/09             50,574
                         10,000           2.4%                8.25         6/2/09             48,375
</TABLE>


(1)  The estimated grant date present value reflected in the above table is
     determined using the Black-Scholes model. The material assumptions and
     adjustments incorporated in the Black-Scholes model in estimating the value
     of the options reflected in the above table include the following: (i) an
     exercise price equal to the fair market value of the underlying stock on
     the date of grant, (ii) an option term of three years, (iii) an interest
     rate of 6% that represents the interest rate on a U.S. Treasury security
     with a maturity date corresponding to that of the expected option term,
     (iv) volatility of 86.7% calculated using daily stock prices for the
     one-year period ending on December 31, 1999 and (v) no annualized dividends
     paid with respect to a share of Common Stock at the date of grant. The
     ultimate values of the options will depend on the future price of the
     Company's Common Stock, which cannot be forecast with reasonable accuracy.
     The actual value, if any, an optionee will realize upon exercise of an
     option will depend on the excess of the market value of the Company's
     Common Stock over the exercise price on the date the option is exercised.

    AGGREGATED OPTION EXERCISES DURING 1999 AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
                                                        Number of Securities           Value of Unexercised
                                                       Underlying Unexercised              In-the-Money
                                                             Options at                     Options at
                    Shares Acquired        Value          December 31, 1999              December 31, 1999
Name                  On Exercise        Realized     Exercisable Unexercisable      Exercisable Unexercisable
----                  -----------        --------     ----------- ---------------    ----------- -------------
<S>                                         <C>         <C>             <C>           <C>          <C>
Norman M. Meier            --               $-          1,122,250       80,000        $1,527,900   $   17,500

William J. Bologna         --               --          1,118,750       80,000         1,513,900       17,500

Dominique de Ziegler       --               --            145,000       25,000           119,250       26,250

Howard L. Levine           --               --            250,000       60,000              --         87,500

David L. Weinberg          --               --             75,000       25,000              --         26,250
</TABLE>


                                       20
<PAGE>

EMPLOYMENT AGREEMENTS

         In January 1996, the Company entered into five-year employment
agreements with each of William J. Bologna and Norman M. Meier, to serve as
Chairman and President of the Company, respectively. Pursuant to their
respective employment agreements, each such employee is entitled to a base
salary of $250,000. In addition, each such employee was granted options to
purchase 150,000 shares of the Company's Common Stock at an exercise price of
$7.25. Pursuant to the terms of such agreements, each employee has agreed to
dedicate his services on a substantially full-time basis and has agreed for the
term of his agreement and for two years thereafter not to compete with the
Company. The employment agreements were amended effective September 15, 1997 to
increase the base salary to $400,000. Messrs. Bologna and Meier agreed to a
voluntary 25% reduction in base salary for the six month period ending June 30,
1999. Effective January 1, 2000, Mr. Bologna's employment agreement was amended.
Under the terms of the amendment, the term of Mr. Bologna's agreement was
extended by one year. In January 2000, Mr. Meier's employment agreement was
amended. Under the terms of the amendment, Mr. Meier will be employed by the
Company for two years beginning January 1, 2000 in a non-executive position with
the title, Chairman Emeritus, at a salary of $200,000 per year.

         In January 2000, the Company entered into a two-year employment
agreement with James J. Apostolakis to serve as Vice Chairman and President of
the Company. Pursuant to his employment agreement, Mr. Apostolakis is entitled
to a base salary of $200,000 per year.

         In July 1995, the Company entered into a three-year employment
agreement with Dominique de Ziegler, to serve as Director of Research
Development. Pursuant to this agreement, Dr. de Ziegler was paid an annual
salary of $203,500. As additional compensation, Dr. de Ziegler was granted
options to purchase 25,000 shares of the Company's Common Stock at an exercise
prices of $7.25 per share. Pursuant to the terms of such agreement, Dr. de
Ziegler agreed to dedicate his services on a substantially full-time basis and
has agreed for the term of his agreement and for two years thereafter not to
compete with the Company. Dr. de Ziegler's contract expired in July 1998. For
the calendar years

                                       21
<PAGE>

1997, 1998 and 1999, Dr. de Ziegler's salary was increased to
$221,800. On December 30, 1999, the Company entered into a one-year employment
agreement with Dr. de Ziegler to serve as Director of Research and Development.
Pursuant to this agreement, Dr. de Ziegler will receive an annual salary of
$210,000 plus a housing allowance of approximately $36,000.

         The exercise price of all of the options granted pursuant to the
aforementioned employment agreements are based on the closing price of the
Company's Common Stock on the American Stock Exchange on the day of grant.


                                       22
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         As of February 29, 2000, directors and named executive officers,
individually and as a group, beneficially owned Common Stock as follows:

             Name of                             Shares, Nature of Interest
         Beneficial Owner                 and Percentage of Equity Securities(1)
         -----------------                -------------------------------------
Norman M. Meier (2)                             1,927,850               6.3%
William J. Bologna (3)                          3,025,290               9.9%
James J. Apostolakis (4)                        1,307,078               4.4%
David L. Weinberg (5)                              94,000                *
Dominique de Ziegler (5)                          160,000                *
Annick Blondeau (5)                               135,000                * %
Howard L. Levine (5)                              300,000               1.0%
Jean Carvais (5)                                   34,000                *
Denis M. O'Donnell                                 11,000                *
Selwyn P. Oskowitz                                 10,000                *
Robert C. Strauss (5)                              38,000                *
The James J. Apostolakis Group (6)              1,524,900               5.2%
   c/o Lexington Shipping and Trading Corp.
   950 Third Avenue, 27th Floor
   New York, New York 10022
The David M. Knott Group (7)                    1,397,828               4.8%
   485 Underhill Boulevard, Ste. 205
   Syosset, New York 11791-3419
Anthony R. Campbell (8)                         1,412,600               4.8%
   c/o TC Management
   237 Park Avenue, Suite 800
   New York, New York
Officers and directors as a group (11 people)   7,042,218              21.4%

*        Represents less than 1 percent.

(1)      Includes shares issuable upon exercise of both options and warrants
         which are currently exercisable or which may be acquired within 60 days
         and shares issuable upon conversion of the Series A, Series B and
         Series C Preferred Stock (12.36 for the Series A Preferred Stock, 20.57
         for the Series B Preferred Stock and 285.71 for the Series C Preferred
         Stock).

(2)      Includes 1,162,250 shares issuable upon exercise of options and
         warrants, which are currently exercisable or which may be acquired
         within 60 days.

(3)      Includes 20,570 shares issuable upon conversion of 1,000 shares of
         Series B Preferred Stock and 71,428 shares issuable upon conversion of
         250 shares of Series C Preferred Stock. Includes 1,158,750 shares
         issuable upon exercise of options and warrants, which are currently
         exercisable or which may be acquired within 60 days. Includes 198,062
         shares beneficially owned by Mr. Bologna's spouse.

(4)      Includes 71,428 shares issuable upon conversion of 250 shares of Series
         C Preferred Stock. Includes 293,750 shares issuable upon exercise of
         warrants which are currently exercisable or which may be acquired
         within 60 days.

(5)      Includes shares issuable upon exercise of options, which are currently
         exercisable or which may be acquired within 60 days, to purchase 90,000
         shares with respect to Mr. Weinberg, 160,000 shares with respect to Dr.
         de


                                       23
<PAGE>

         Ziegler, 135,000 shares with respect to Dr. Blondeau, 300,000 shares
         with respect to Dr. Levine, 34,000 shares with respect to Dr. Carvais,
         11,000 shares with respect to Dr. O'Donnell, 10,000 shares with respect
         to Dr. Oskowitz and 37,000 shares with respect to Mr. Strauss.

(6)      Based on a Schedule 13D dated July 6, 1998, as amended by an Amendment
         No. 1 to Schedule 13D dated July 16, 1998, an Amendment No. 2 dated
         October 2, 1998, an Amendment No. 3 dated November 4, 1998 and an
         Amendment No. 4 dated December 14, 1998, Messrs. James J. Apostolakis,
         David Ray and Bernard Marden and, by reference to a Schedule 13D
         separately filed by David M. Knott, Mr. Knott and certain affiliated
         entities and, by reference to a Schedule 13D dated separately filed by
         Mr. Campbell, Mr. Campbell may be deemed to have acted together as a
         group for certain purposes. The information contained in the Schedule
         13D reflects that Messrs. Apostolakis, Ray and Marden beneficially own
         935,900, 214,000 and 375,700 shares of the Company's Common Stock,
         respectively. And each has sole voting and dispositive power with
         respect to all shares beneficially owned by such person. Such persons
         have indicated that their filings do not constitute an admission that
         they are members of a "group" for any purpose.

(7)      Base on a Schedule 13D dated July 6, 1998, as amended by an Amendment
         No. 1 to Schedule 13D dated October 2, 1998, an Amendment No. 2 dated
         November 23, 1998 and an Amendment No. 3 dated December 14, 1998, an
         Amendment No. 4 dated January 19, 1999 and an Amendment No. 5 dated
         January 27, 1999, Mr. Knott, Knott Partners, L.P., Dorset Management
         Corporation and Matterhorn Offshore Fund Limited, along with Messrs.
         Apostolakis, Ray, Marden and Campbell, may be deemed to have acted
         together as a group for certain purposes. Such persons have indicated,
         however, that their filings do not constitute an admission that they
         are members of a "group" for any purpose. The information contained in
         the Schedule 13D reflects that Mr. Knott beneficially owns 1,397,828
         shares of the Company's Common Stock and (a) individually (i) has the
         sole power to vote and to dispose of (1) 52,120 shares of the Company's
         Common Stock held in his and his IRA's accounts and (2) 801,008 shares
         held in the account of Knott Partners, L.P., and (ii) shares with the
         respective account owners the power to dispose of (but not to vote) 600
         shares held by the accounts of Mrs. Knott and her IRA, and (b) as
         President of Dorset Management Corporation (i) has the sole power to
         vote and dispose of 448,100 shares of the Company's Common Stock and
         (ii) shares with the respective account owner the power to vote and
         dispose of 96,100 shares held in the account of Matterhorn Offshore
         Fund Limited.

(8)      Based on a Schedule 13D dated November 4, 1998, as amended by an
         Amendment No. 1 dated December 14, 1998, and an Amendment No. 2 dated
         December 18, 1998, Mr. Campbell, and Messrs. Apostolakis, Ray, Marden
         and Knott and certain affiliated entities may be deemed to have acted
         together as a group for certain purposes. The information contained in
         the Schedule 13D reflects that Mr. Campbell beneficially owns 1,412,600
         shares of the Company's Common Stock and has sole voting and
         dispositive power with respect to all shares beneficially owned by such
         person. Additionally, Mr. Campbell individually owns 42,500 shares of
         Common Stock and a trust estate for the benefit of Mr. Campbell's
         children owns 30,000 shares of Common Stock (as to which Mr. Campbell
         disclaims beneficial ownership). Mr. Campbell expressly disclaims
         beneficial ownership of any Common Stock beneficially owned by Messrs.
         Apostolakis, Ray, Marden or any other person. Such persons have also
         indicated that their filings do not constitute an admission that they
         are members of a "group" for any purpose. TC Management, as the general
         partner of Windsor LP and manager of the TC Managed Account, may be
         deemed to beneficially own the shares directly owned by Windsor LP and
         the TC Managed Account. TC Management, Windsor LP and TC Managed
         Account own 1,382,600, 1,238,800 and 101,300 shares of the Company's
         Common Stock, respectively.

As of February 29, 2000, the Company knows of no persons other than shown above
who beneficially own or exercise voting or dispositive control over 5% or more
of the Company's outstanding Common Stock.

                                       24
<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         During 1993, the Company loaned Messrs. Meier and Bologna, $80,000 and
$110,350, respectively. The notes, which bear interest at 10% per annum and are
unsecured but with full recourse, were due on or before December 7, 1996. The
due dates of these notes have subsequently been extended through December 7,
1999. At December 31, 1999, the balances including interest remain outstanding
and total $128,667 and $178,017, respectively. At March 29, 2000 the above
notes remain outstanding.

         In connection with the issuance of the Series C Convertible Preferred
Stock in January 1999, the Company received two notes receivable from Messrs.
Meier and Bologna for $350,000 and $250,000, respectively. The notes bear
interest at 5% per annum and were due on July 28, 1999. Mr. Meier's note was
paid in December 1999 with interest through the date of payment and Mr.
Bologna's note was paid in January 2000 with interest through the date of
payment.

         On January 28, 1999 and September 23, 1999, the Company granted to
James Apostolakis, warrants to purchase up to an aggregate of 100,000 and 75,000
shares, respectively, of common stock at an exercise price of $4.8125 and $7.50,
respectively, per share.

                                       25
<PAGE>
                                     PART IV

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

FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

         Indexes to financial statements and financial statement schedules
appear on F-1 and S-1, respectively.

EXHIBITS
3.1      --       Restated Certificate of Incorporation of the Company, as
                  amended (1/)

3.2      --       Amended and Restated By-laws of Company (10/)

4.1      --       Certificate of Designations, Preferences and Rights of Series
                  C Convertible Preferred Stock of the Company, dated as of
                  January 7, 1999 (10/)

4.2      --       Securities Purchase Agreement, dated as of January 7, 1999,
                  between the Company and each of the purchasers named on the
                  signature pages thereto (10/)

4.3      --       Securities Purchase Agreement, dated as of January 19, 1999,
                  among the Company, David M. Knott and Knott Partners, L.P.
                  (10/)

4.4      --       Securities Purchase Agreement, dated as of February 1, 1999,
                  between the Company and Windsor Partners, L.P. (10/)

4.5      --       Registration Rights Agreement, dated as of January 7, 1999,
                  between the Company and each of the purchasers named on the
                  signature pages thereto (10/)

4.6      --       Form of Warrant to Purchase Common Stock (10/)

4.7      --       Warrant to Purchase Common Stock granted to James J.
                  Apostolakis on September 23, 1999

10.1     --       Employment Agreement dated as of January 1, 1996, between the
                  Company and Norman M. Meier (6/)

10.2     --       Employment Agreement dated as of January 1, 1996, between the
                  Company and William J. Bologna (6/)

10.3     --       1988 Stock Option Plan, as amended, of the Company (4/)

10.4     --       1996 Long-term Performance Plan (7/)

10.5     --       License and Supply Agreement between Warner-Lambert Company
                  and the Company dated December 5, 1991 (3/)

10.6     --       Asset Purchase, License and Option Agreement, dated November
                  22, 1989 (1/)

10.7     --       Employment Agreement dated as of April 15, 1997, between the
                  Company and Nicholas A. Buoniconti (8/)

10.8     --       License and Supply Agreement for Crinone between Columbia
                  Laboratories, Inc. (Bermuda) Ltd. and American Home Products
                  dated as of May 21, 1995 (5/)

10.9     --       Addendum to Employment Agreement dated as of September 1,
                  1997, between the Company and Norman M. Meier (8/)

10.10    --       Addendum to Employment Agreement dated as of September 1,
                  1997, between the Company and William J. Bologna (8/)

10.11    --       Addendum to Employment Agreement dated as of September 1,
                  1997, between the Company and Nicholas A. Buoniconti (8/)

10.12    --       Convertible Note Purchase Agreement, 7 1/8% Convertible
                  Subordinated Note due March 15, 2005 and Registration Rights
                  Agreement all dated as of March 16, 1998 between the Company
                  and SBC Warburg Dillon Read Inc. (9/)

10.13    --       Termination Agreement dated as of April 1, 1998 between the
                  Company and the Warner-Lambert Company (9/)

10.14    --       Addendum to Employment Agreement dated as of October 8, 1998,
                  between the Company and Nicholas A. Buoniconti. (10/)

10.15    --       Agreement dated as of December 14, 1998, by and among Columbia
                  Laboratories, Inc., William J. Bologna, Norman M. Meier, James
                  J. Apostolakis, David Ray, Bernard Marden, Anthony R.
                  Campbell, David M. Knott and Knott Partners, L.P. (10/)

                                       26
<PAGE>

10.16    --       License and Supply Agreement for Crinone between Columbia
                  Laboratories (Bermuda) Limited and Ares Trading S.A. dated as
                  of May 20, 1999

10.17    --       Addendum to Employment Agreement dated as of January 1, 2000
                  between the Company and Norman M. Meier

10.18    --       Addendum to Employment Agreement dated as of January 1, 2000
                  between the Company and William J. Bologna

10.19    --       Employment Agreement dated as of January 1, 2000 between the
                  Company and James J. Apostolakis

10.20    --       Employment Agreement dated December 30, 1999 between the
                  Company and Dominique de Ziegler

10.21    --       Settlement Agreement and Release dated as of March 16, 2000
                  between Columbia Laboratories (Bermuda) Ltd. and Lake Consumer
                  Products, Inc.

21       --       Subsidiaries of the Company

27       --       Financial Data Schedule


1/                Incorporated by reference to the Registrant's Registration
                  Statement on Form S-1 (File No. 33-31962) declared effective
                  on May 14, 1990.

2/                Incorporated by reference to the Registrant's Annual Report on
                  Form 10-K for the year ended December 31, 1990.

3/                Incorporated by reference to the Registrant's Current Report
                  on Form 8-K, filed on January 2, 1992.

4/                Incorporated by reference to the Registrant's Annual Report on
                  Form 10-K for the year ended December 31, 1993.

5/                Incorporated by reference to the Registrant's Registration
                  Statement on Form S-1 (File No. 33-60123) declared effective
                  August 28, 1995.

6/                Incorporated by reference to the Registrant's Annual Report on
                  Form 10-K for the year ended December 31, 1995.

7/                Incorporated by reference to the Registrant's Proxy Statement
                  dated August 26, 1996.

8/                Incorporated by reference to the Registrants Annual Report on
                  Form 10-K for the year ended December 31, 1997.

9/                Incorporated by reference to the Registrant's Quarterly Report
                  on Form 10-Q for the quarter ended March 31, 1998.

10/               Incorporated by referenced to the Registrant's Annual Report
                  on Form 10-K for the year ended December 31, 1998.

REPORTS ON FORM 8-K

         On November 3, 1999, the Company filed a Form 8-K in which it exhibited
its bi-monthly stockholders newsletter.

                                       27
<PAGE>

                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) 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.



                                               COLUMBIA LABORATORIES, INC.

Date:  March 29, 2000                          By: /s/ David L. Weinberg
      ----------------------------                ------------------------------

                                               David L. Weinberg, Vice President


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S>                                         <C>                                         <C>
 /s/ William J. Bologna                     Chairman of the Board of Directors          March 29, 2000
--------------------------                  and Chief Executive Officer
William J. Bologna

 /s/ James J. Apostolakis                   Vice Chairman of the Board of Directors     March 29, 2000
--------------------------                  and President
James J. Apostolakis

 /s/ David L. Weinberg                      Vice President-Finance and                  March 29, 2000
--------------------------                  Administration, Chief Financial
David L. Weinberg                           Officer, Treasurer and Secretary
                                            (Principal Financial and Accounting
                                            Officer)

 /s/ Dominique de Ziegler                   Vice President - Pharmaceutical             March 29, 2000
--------------------------                  Development and Director
Dominique de Ziegler

 /s/ Jean Carvais                           Director                                    March 29, 2000
--------------------------
Jean Carvais

/s/ Norman M. Meier                         Director                                    March 29, 2000
--------------------------
Norman M. Meier

 /s/ Denis M. O'Donnell                     Director                                    March 29, 2000
--------------------------
Denis M. O'Donnell

 /s/ Selwyn P. Oskowitz                     Director                                    March 29, 2000
--------------------------
Selwyn P. Oskowitz

 /s/ Robert C. Strauss                      Director                                    March 29, 2000
--------------------------
Robert C. Strauss
</TABLE>

                                       28
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES


                          INDEX TO FINANCIAL STATEMENTS


                                                                            Page

Report of Independent Certified Public Accountants                          F-2


Report of Independent Certified Public Accountants                          F-3


Consolidated Balance Sheets
  As of December 31, 1999 and 1998                                          F-4


Consolidated Statements of Operations
  for the Three Years Ended December 31, 1999                               F-6


Consolidated Statements of Comprehensive Operations
  for the Three Years Ended December 31, 1999                               F-7


Consolidated Statements of Stockholders' Equity (Deficiency)
  for the Three Years Ended December 31, 1999                               F-8


Consolidated Statements of Cash Flows
  for the Three Years Ended December 31, 1999                               F-10


Notes to Consolidated Financial Statements                                  F-12

                                      F-1
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Board of Directors and Stockholders
   of Columbia Laboratories, Inc.:


We have audited the accompanying consolidated balance sheets of Columbia
Laboratories, Inc. (a Delaware corporation) and Subsidiaries as of December 31,
1999 and 1998, and the related consolidated statements of operations,
comprehensive operations, stockholders' equity (deficiency) and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Columbia Laboratories, Inc. and
Subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.





GOLDSTEIN GOLUB KESSLER LLP

New York, New York
February 18, 2000, except for the first
paragraph under the caption "Legal
Proceedings" in Note 6 as to which
the date is March 16, 2000

                                      F-2
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Board of Directors and Stockholders
   of Columbia Laboratories, Inc.:


We have audited the accompanying consolidated statements of operations,
comprehensive operations, stockholders' equity (deficiency) and cash flows of
Columbia Laboratories, Inc. (a Delaware corporation) and Subsidiaries for the
year ended December 31, 1997. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Columbia
Laboratories, Inc. and Subsidiaries for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.





ARTHUR ANDERSEN LLP

Miami, Florida,
  February 13, 1998.

                                      F-3
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                        AS OF DECEMBER 31, 1999 AND 1998


                                     ASSETS
<TABLE>
<CAPTION>
<S>                                                              <C>                       <C>
                                                                 1999                      1998
                                                            ----------------          ---------------
CURRENT ASSETS:
  Cash and cash equivalents, of which $135,399  is
     interest-bearing as of December 31, 1999                   $ 1,982,085                 $ 315,288
  Accounts receivable, net of allowance
    for doubtful accounts of  $119,829
    and $229,829 in 1999 and 1998, respectively                   1,835,086                 1,323,271
  Inventories                                                     1,848,816                 2,411,434
  Prepaid expenses                                                  468,948                   472,538
  Other current assets                                              568,259                  288,639
                                                            ----------------          ---------------
    Total current assets                                          6,703,194                4,811,170
                                                            ----------------          ---------------

PROPERTY AND EQUIPMENT:
  Leasehold improvements                                            164,766                   186,905
  Machinery and equipment                                         2,160,288                 2,159,970
  Furniture and fixtures                                            178,297                   193,092
                                                            ----------------          ---------------
                                                                  2,503,351                 2,539,967
  Less-accumulated depreciation and amortization                 (1,494,798)              (1,166,516)
                                                            ----------------          ---------------
                                                                  1,008,553                 1,373,451
                                                            ----------------          ---------------

INTANGIBLE ASSETS, net                                            4,860,212                 5,283,277

OTHER ASSETS                                                        415,654                   411,648
                                                            ----------------          ---------------
TOTAL ASSETS                                                   $ 12,987,613               $11,879,546
                                                            ================          ===============
</TABLE>

                                   (Continued)


                                      F-4
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                        AS OF DECEMBER 31, 1999 AND 1998

                                   (Continued)

                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
<TABLE>
<CAPTION>
<S>                                                                     <C>              <C>
                                                                        1999             1998
                                                                    -------------    -------------
CURRENT LIABILITIES:

  Accounts payable                                                  $   2,089,260    $   4,153,151
  Accrued expenses                                                      1,072,567        1,480,839
  Deferred revenue                                                        100,000          578,150
                                                                    -------------    -------------
      Total current liabilities                                         3,261,827        6,212,140
                                                                    -------------    -------------

CONVERTIBLE SUBORDINATED NOTE PAYABLE                                  10,000,000       10,000,000
                                                                    -------------    -------------
TOTAL LIABILITIES                                                      13,261,827       16,212,140
                                                                    -------------    -------------
COMMITMENTS AND CONTINGENCIES (Note 6)

STOCKHOLDERS' EQUITY (DEFICIENCY):
  Preferred stock, $.01 par value; 1,000,000 shares authorized:
     Series A Convertible Preferred Stock,
      923 shares issued and outstanding in 1999 and 1998
      (liquidation preference of $92,300 at  December 31, 1999)                 9                9
     Series B Convertible Preferred Stock,
      1,630 shares issued and outstanding in 1999 and 1998
      (liquidation preference of $163,000 at  December 31, 1999)               16               16
     Series C Convertible Preferred Stock,
      5,260 shares issued and outstanding in 1999
      (liquidation preference of $5,610,000 at December 31, 1999)              53             --
  Common stock, $.01 par value; 40,000,000
    shares authorized; 29,124,686 and 28,684,687
    shares issued and outstanding in 1999 and 1998, respectively          291,246          286,846
  Capital in excess of par value                                       99,575,803       93,221,998
  Accumulated deficit                                                (100,198,848)     (97,988,640)
  Accumulated other comprehensive income                                   57,507          147,177
                                                                    -------------    -------------
    Total stockholders' equity (deficiency)                              (274,214)      (4,332,594)
                                                                    -------------    -------------
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)           $  12,987,613    $  11,879,546
                                                                    =============    =============
</TABLE>

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

                                      F-5
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S>                                                   <C>             <C>             <C>
                                                      1999            1998            1997
                                                  ------------    ------------    ------------
NET SALES                                         $ 18,921,074    $ 10,017,644    $ 16,547,411

COST OF GOODS SOLD                                   5,655,350       5,707,814       6,630,820
                                                  ------------    ------------    ------------
    Gross profit                                    13,265,724       4,309,830       9,916,591
                                                  ------------    ------------    ------------

OPERATING EXPENSES:
  Selling and distribution                           3,938,756       4,099,446       2,908,504
  General and administrative                         4,575,702       5,785,895       3,972,077
  Research and development                           6,652,096       7,821,642       9,135,573
                                                  ------------    ------------    ------------
    Total operating expenses                        15,166,554      17,706,983      16,016,154
                                                  ------------    ------------    ------------

    Loss from operations                            (1,900,830)    (13,397,153)     (6,099,563)
                                                  ------------    ------------    ------------


OTHER INCOME (EXPENSE):
  License fees, net of expenses                        462,500          73,088       7,038,853
  Interest income                                      134,795         141,564          70,664
  Interest expense                                    (755,352)       (599,773)        (24,186)
  Other, net                                           (82,321)        (77,460)       (137,862)
                                                  ------------    ------------    ------------
                                                      (240,378)       (462,581)      6,947,469
                                                  ------------    ------------    ------------

Income (loss) before income taxes                   (2,141,208)    (13,859,734)        847,906
Provision for income taxes                              69,000            --            85,000
                                                  ------------    ------------    ------------

    Net income (loss)                             $ (2,210,208)   $(13,859,734)   $    762,906
                                                  ============    ============    ============


INCOME (LOSS) PER COMMON
 SHARE - BASIC AND DILUTED                        $      (0.09)   $      (0.48)   $       0.03
                                                  ============    ============    ============

WEIGHTED AVERAGE NUMBER OF
COMMON AND POTENTIAL COMMON SHARES OUTSTANDING:
      BASIC                                         28,853,000      28,679,000      28,350,000
                                                  ============    ============    ============
      DILUTED                                       28,853,000      28,679,000      29,982,000
                                                  ============    ============    ============
</TABLE>

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

                                      F-6
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS

                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S>                                                <C>             <C>             <C>
                                                   1999            1998            1997
                                               ------------    ------------    ------------
NET INCOME (LOSS)                              $ (2,210,208)   $(13,859,734)   $    762,906

Other comprehensive income (loss):
    Foreign currency translation, net of tax         89,670         (79,000)        (38,557)
                                               ------------    ------------    ------------

Comprehensive income (loss)                    $ (2,120,538)   $(13,938,734)   $    724,349
                                               ============    ============    ============
</TABLE>
           The accompanying notes to consolidated financial statements
                   are an integral part of these statements.

                                      F-7
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
                            Series A Convertible   Series B Convertible  Series C Convertible
                               Preferred Stock       Preferred Stock        Preferred Stock          Common Stock
                             --------------------  --------------------- ---------------------  -----------------------
                             Number of              Number of             Number of             Number of
                               Shares     Amount     Shares     Amount      Shares     Amount     Shares       Amount
                             ----------- ---------  ---------- ---------- ----------- --------- ----------- -------------
<S>                               <C>         <C>       <C>          <C>     <C>        <C>     <C>             <C>
Balance, January 1, 1997          1,323       $13       1,630        $16      -          -      28,071,596      $280,716
Options exercised                -          -           -          -          -          -         366,500         3,665
Warrants exercised               -          -           -          -          -          -         180,147         1,801
Conversion of preferred stock      (400)       (4)      -          -          -          -           4,944            49
Dividends on preferred stock     -          -           -          -          -          -          -            -
Fair market value of warrants
  granted to non-employees       -          -           -          -          -          -          -            -
Fair market value of options
  granted to non-employees       -          -           -          -          -          -          -            -
Translation adjustment           -          -           -          -          -          -          -            -
Net income                       -          -           -          -          -          -          -            -
                             ----------- ---------  ---------- ---------- ----------- --------- ----------- -------------
Balance, December 31, 1997          923         9       1,630         16      -          -      28,623,187       286,231
Options exercised                -          -           -          -          -          -          31,500           315
Warrants exercised               -          -           -          -          -          -          30,000           300
Dividends on preferred stock     -          -           -          -          -          -          -            -
Fair market value of warrants
  granted to non-employees       -          -           -          -          -          -          -            -
Fair market value of options
  granted to non-employees       -          -           -          -          -          -          -            -
Translation adjustment           -          -           -          -          -          -          -            -
Net loss                         -          -           -          -          -          -          -            -
                             ----------- ---------  ---------- ---------- ----------- --------- ----------- -------------
Balance, December 31, 1998          923         9       1,630         16      -          -      28,684,687       286,846




                               Capital in                      Accumulated Other
                               Excess of       Accumulated       Comprehensive
                               Par Value         Deficit         Income (Loss)      Total
                              ------------- ------------------ -----------------  ----------
Balance, January 1, 1997      $89,254,885    ($84,891,812)        $29,620         $4,673,438
Options exercised               2,161,804           -                -             2,165,469
Warrants exercised                860,095           -                -               861,896
Conversion of preferred stock         (45)          -                -                  -
Dividends on preferred stock       (8,088)          -                -                (8,088)
Fair market value of warrants
  granted to non-employees        269,264           -                -               269,264
Fair market value of options
  granted to non-employees         50,123           -                -                50,123
Translation adjustment               -              -              38,557             38,557
Net income                           -            762,906            -               762,906
                              ------------- ------------------ -----------      -------------
Balance, December 31, 1997     92,588,038     (84,128,906)         68,177          8,813,565
Options exercised                 209,623           -                -               209,938
Warrants exercised                145,950           -                -               146,250
Dividends on preferred stock       (6,714)          -                -                (6,714)
Fair market value of warrants
  granted to non-employees         39,696           -                -                39,696
Fair market value of options
  granted to non-employees        245,405           -                -               245,405
Translation adjustment               -              -              79,000             79,000
Net loss                             -         (13,859,734)          -           (13,859,734)
                              ------------- ------------------ -----------      --------------
Balance, December 31, 1998     93,221,998      (97,988,640)       147,177         (4,332,594)
</TABLE>



                                   (Continued)


                                      F-8
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
                           Series A Convertible   Series B Convertible   Series C Convertible
                             Preferred Stock        Preferred Stock         Preferred Stock         Common Stock
                           --------------------  ---------------------  ---------------------  ------------------------
                           Number of             Number of              Number of              Number of
                             Shares     Amount     Shares     Amount      Shares     Amount      Shares      Amount
                           ----------- --------- ----------- ---------- ----------- ---------  ----------- ------------
<S>                            <C>       <C>         <C>        <C>      <C>          <C>         <C>            <C>
Balance, December 31, 1998        923        $9       1,630        $16      -          -       28,684,687     $286,846
Issuance of preferred stock    -          -          -           -           6,660       $67       -            -
Options exercised              -          -          -           -          -          -            5,000           50
Warrants exercised             -          -          -           -          -          -           35,000          350
Dividends on preferred stock   -          -          -           -          -          -           -            -
Fair market value of warrants
  granted to non-employees     -          -          -           -          -          -           -            -
Fair market value of options
  granted to non-employees     -          -          -           -          -          -           -            -
Translation adjustment         -          -          -           -          -          -           -            -
Conversion of preferred stock  -          -          -           -          (1,400)      (14)     399,999        4,000
Net loss                       -          -          -           -          -          -           -            -
                           ----------- --------- ----------- ---------- ----------- ---------  ----------- ------------
Balance, December 31, 1999        923        $9       1,630        $16       5,260       $53   29,124,686     $291,246
                           =========== ========= =========== ========== =========== =========  =========== ============



                                 Capital in                 Accumulated Other
                                  Excess of   Accumulated    Comprehensive
                                  Par Value     Deficit      Income (Loss)      Total
                                 ------------ ------------- ---------------- ------------
Balance, December 31, 1998       $93,221,998  ($97,988,640)        $147,177  ($4,332,594)
Issuance of preferred stock        6,373,277       -               -           6,373,344
Options exercised                     26,825       -               -              26,875
Warrants exercised                   122,150       -               -             122,500
Dividends on preferred stock        (287,994)      -               -            (287,994)
Fair market value of warrants
  granted to non-employees           112,172       -               -             112,172
Fair market value of options
  granted to non-employees            11,361       -               -              11,361
Translation adjustment                -            -                (89,670)     (89,670)
Conversion of preferred stock         (3,986)      -               -              -
Net loss                              -         (2,210,208)        -          (2,210,208)
                                 ------------ ------------- ---------------- ------------
Balance, December 31, 1999       $99,575,803 ($100,198,848)        $ 57,507    ($274,214)
                                 ============ ============= ================ ============
</TABLE>

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

                                      F-9
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
                                                                    1999                    1998                    1997
                                                               ----------------       ------------------       ----------------
<S>                                                               <C>                     <C>                          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                               $(2,210,208)            $(13,859,734)                $762,906
  Adjustments to reconcile net income (loss) to net
   cash used in operating activities-
     Depreciation and amortization                                     968,845                   992,358                913,945
     Provision for (recovery of) doubtful accounts                   (110,000)                   97,553                 35,001
     Provision for (recovery of) returns and allowances                (4,335)                   61,020               -
     Write-down of inventories                                        -                       1,176,200                 -
     Issuance of warrants and options for consulting services          123,533                  285,101                 94,998
    Write-off of property and equipment                                 27,766                   52,111                  3,411

Changes in assets and liabilities-
    (Increase) decrease in:
      Accounts receivable                                            (397,480)                4,741,998            (4,818,322)
      Inventories                                                      562,618              (1,334,959)            (1,309,531)
      Prepaid expenses                                                   3,590                    5,319               (72,065)
      Other assets                                                   (283,626)                  269,668                 59,080

    Increase (decrease) in:
      Accounts payable                                             (1,942,234)                  320,288                 905,117
      Accrued expenses                                               (408,272)                  161,439                130,322
      Deferred revenue                                               (478,150)                (464,488)               (15,336)
                                                               ----------------       ------------------       ----------------
        Net cash used in operating activities                      (4,147,953)              (7,496,126)            (3,310,474)
                                                               ----------------       ------------------       ----------------
</TABLE>
                                   (Continued)

                                      F-10
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999

                                   (Continued)

<TABLE>
<CAPTION>
<S>                                                                      <C>                 <C>                 <C>
                                                                         1999                1998                1997
                                                                    ----------------     --------------     ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of product rights                                               -             $ (4,615,644)              -
  Purchase of property and equipment                                    $ (108,648)          (264,720)        $(1,011,987)
  Acquisition of licensing rights                                         (100,000)            -                  -
                                                                    ----------------     --------------     ---------------
    Net cash used in investing activities                                 (208,648)        (4,880,364)         (1,011,987)
                                                                    ----------------     --------------     ---------------



CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from issuance of preferred stock                           6,373,344            -                  -
  Issuance of note payable                                                 -                10,000,000            -
  Dividends paid                                                          (409,651)            -                  -
  Proceeds from exercise of options and warrants                            149,375            356,188            3,027,365
                                                                    ----------------     --------------     ---------------
    Net cash provided by financing activities                             6,113,068         10,356,188            3,027,365
                                                                    ----------------     --------------     ---------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                    (89,670)             79,000            (10,108)
                                                                    ----------------     --------------     ---------------

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                                        1,666,797        (1,941,302)         (1,305,204)

CASH AND CASH EQUIVALENTS,
  Beginning of year                                                         315,288           2,256,590           3,561,794
                                                                    ----------------     --------------     ---------------

CASH AND CASH EQUIVALENTS,
  End of year                                                            $ 1,982,085          $ 315,288         $ 2,256,590
                                                                    ================     ==============     ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION
  Interest paid                                                           $ 712,500           $ 367,357            $ 20,825
                                                                    ================     ==============     ===============

  Taxes paid                                                              $ 134,000          $ 110,255            $ 54,076
                                                                    ================     ==============     ===============
</TABLE>

           The accompanying notes to consolidated financial statements
                    are an integral part of these statements


                                      F-11
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
----------------------------------------------

    Organization-
    ------------

Columbia Laboratories, Inc. (the "Company") was incorporated as a Delaware
corporation in December 1986. The Company's objective is to develop unique
pharmaceutical products that treat female specific diseases and conditions
including infertility, dysmenorrhea, endometriosis, hormonal deficiencies and
the prevention of sexually transmitted diseases. Columbia's research in
endocrinology has also led to the development of a product to treat "Andropause"
in men. Columbia's products primarily utilize the Company's patented bioadhesive
delivery technology.

    Principles of Consolidation-
    ---------------------------

The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany balances and transactions have
been eliminated in consolidation.

    Accounting Estimates-
    --------------------

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

    Foreign Currency-
    ----------------

The assets and liabilities of the Company's foreign subsidiaries are translated
into U.S. dollars at current exchange rates and revenue and expense items are
translated at average rates of exchange prevailing during the period. Resulting
translation adjustments are accumulated as a separate component of stockholders'
equity.

    Inventories-
    -----------

Inventories are stated at the lower of cost (first-in, first-out) or market.
Components of inventory cost include materials, labor and manufacturing
overhead. Inventories consist of the following:

                                                   December 31,
                             -------------------------------------------
                                  1999                        1998
                             ---------------             ---------------
Finished goods                   $1,029,574                  $1,550,917
Raw materials                       819,242                     860,517
                             ---------------             ---------------
                                 $1,848,816                  $2,411,434
                             ===============             ===============


   Property and Equipment-
   ----------------------

Property and equipment are stated at cost less accumulated depreciation.
Leasehold improvements are amortized over the life of the respective leases.
Depreciation is computed on the straight-line basis over the estimated useful
lives of the respective assets, as follows:
                                                               Years
                                                              -------
                     Machinery and equipment                  5 - 10
                     Furniture and fixtures                        5

                                      F-12
<PAGE>

Costs of major additions and improvements are capitalized and expenditures for
maintenance and repairs which do not extend the life of the assets are expensed.
Upon sale or disposition of property and equipment, the cost and related
accumulated depreciation are eliminated from the accounts and any resultant gain
or loss is credited or charged to operations.

INTANGIBLE ASSETS-

Intangible assets consist of the following:
                                                        December 31,
                                            -----------------------------------
                                                 1999                1998
                                            ---------------     ---------------
        Patents                                 $2,600,000          $2,600,000
        Trademarks                               4,956,644           4,956,644
        Licensing rights                           100,000            -
                                            ---------------     ---------------
                                                 7,656,644           7,556,644
        Less accumulated amortization           (2,796,432)         (2,273,367)
                                            ---------------     ---------------
                                                $4,860,212          $5,283,277
                                            ===============     ===============

Patents are being amortized on a straight-line basis over their remaining lives
(through 2003). Trademarks are being amortized on a straight-line basis over ten
years to fifteen years. Licensing rights are being amortized over a period of
five years.

In April 1998, the Company and the Warner-Lambert Company signed an agreement
terminating their December 1991 license and supply agreement under which the
Warner-Lambert Company had distributed Replens, a vaginal moisturizer which had
been developed by the Company. Under the terms of the termination agreement, the
Company agreed to pay $4.6 million for the right to reacquire the product
Replens, effective on April 9, 1998. The $4.6 million cost has been capitalized
and is being amortized over a 15 year period, which represents the remaining
term on the terminated December 1991 license and the patent underlying the
product.

    Long-lived Assets-
    -----------------

Following the acquisition of any long-lived assets, the Company continually
evaluates whether later events and circumstances have occurred that indicate the
remaining estimated useful life of the long-lived asset may warrant revision or
that the remaining balance of the long-lived asset may not be recoverable. When
factors indicate that a long-lived asset may be impaired, the Company uses an
estimate of the underlying product's future cash flows, including amounts to be
received over the remaining life of the long-lived asset from license fees,
royalty income, and related deferred revenue, in measuring whether the
long-lived asset is recoverable. Unrecoverable amounts are charged to
operations.

    Income Taxes-
    ------------

The reconciliation of the effective income tax rate to the Federal statutory
rate is as follows:


                                      1999           1998            1997
                                   -----------    ------------    ------------
Federal income tax rate                 (34.0)%         (34.0)%         34.0%
Increase in valuation allowance          34.0            34.0             --
Utilization of net operating
   loss carryover                          --              --          (34.0)
U.S. Alternative Minimum Tax              3.2              --           10.0
                                   -----------    ------------    ------------
Effective income tax rate                 3.2%          0.0%           10.0%
                                   ===========    ============    ============

As of December 31, 1999, the Company has U.S. tax net operating loss
carryforwards of approximately $45 million which expire through 2013. The
Company also has unused tax credits of approximately $949,000 which expire at


                                      F-13
<PAGE>

various dates through 2012. Utilization of net operating loss carryforwards may
be limited in any year due to limitations in the Internal Revenue Code.
Accordingly, the Company recorded a $69,000 and an $85,000 alternative minimum
tax provision for U.S. Federal taxes in 1999 and 1997, respectively.

As of December 31, 1999 and 1998, other assets in the accompanying consolidated
balance sheets include deferred tax assets of approximately $17 million and $18
million, respectively, (comprised primarily of a net operating loss
carryforward) for which a valuation allowance has been recorded since the
realizability of the deferred tax assets are not determinable.




   Revenue Recognition-
   -------------------

Sales are recorded as products are shipped and services are rendered. Royalties
and additional monies owed to the Company based on the strategic alliance
partners sales are recorded as revenue as sales are made by the strategic
alliance partners.

    License Fees-
    ------------

License fees are recognized as other income when the Company has no further
obligations with respect to the payments and thus, the earnings process is
complete.

    Advertising Expense-
    -------------------

All costs associated with advertising and promoting products are expensed in the
year incurred. Advertising and promotion expense was approximately $858,000 in
1999, $758,000 in 1998 and $460,000 in 1997.

   Research and Development Costs-
   ------------------------------

Company sponsored research and development costs related to future products are
expensed as incurred. Costs related to research and development contracts are
charged to cost of sales upon recognition of the related revenue.

    Income/Loss Per Share-
    ---------------------

Basic income per share is computed by dividing net income less preferred
dividends by the weighted average number of common stock outstanding during the
period. Diluted income per share is computed by dividing net income by the
weighted average number of shares of common stock outstanding during the period
assuming the exercise or conversion of all securities that are exercisable or
convertible into common stock. Basic loss per share is computed by dividing the
net loss plus preferred dividends by the weighted average number of shares of
common stock outstanding during the period. Shares to be issued upon the
exercise of the outstanding options and warrants or the conversion of the
preferred stock are not included in the computation of loss per share as their
effect is antidilutive.

    Statements of Cash Flows-
    ------------------------

For purposes of the statements of cash flows, the Company considers all
investments purchased with an original maturity of three months or less to be
cash equivalents.

    Stock-Based Compensation-
    ------------------------

Under the provisions of Statement of Financial Accounting Standard ("SFAS") No.
123, "Accounting for Stock-Based Compensation", companies can either measure the
compensation cost of equity instruments issued under employee compensation plans
using a fair value based method, or can continue to recognize compensation cost
using the intrinsic value method under the provisions of Accounting Principles
Board Opinion ("APB") No. 25. However, if the provisions of APB No. 25 are
continued, pro forma disclosure of net income or loss and earnings or loss per
share must be presented in the financial statements as if the fair value method
had been applied. For the three years ended


                                      F-14
<PAGE>

December 31, 1999, the Company has recognized compensation costs under the
provisions of APB No. 25, and has provided the expanded disclosure required by
SFAS No. 123 (see Note 4).

   Recent Accounting Pronouncements:

         The Company does not believe that any recently issued, but not yet
effective accounting standards will have a material effect on the Company's
consolidated financial position, results of operations or cash flows.

(2) STRATEGIC ALLIANCE AGREEMENTS:

In May 1995, the Company entered into a worldwide, except for South Africa,
license and supply agreement with American Home Products Corporation ("AHP")
under which the Wyeth-Ayerst Laboratories division of AHP marketed Crinone.
Under the terms of the agreement, the Company earned $7 million in milestone
payments in 1997 and expects to receive additional milestone payments in the
future. The Company also supplies Crinone to AHP at a price equal to 30% of
AHP's net selling price. On July 2, 1999, AHP assigned the license and supply
agreement to Ares-Serono, a Swiss pharmaceutical company. The Company will
supply Crinone to Ares-Serono under the same terms as in the agreement with AHP.

The Company has also entered into strategic alliance agreements for the
marketing and distribution of Replens and Advantage-S with various
pharmaceutical companies. Pursuant to these agreements, the Company has received
advance payments, of which $100,000 and $578,150, respectively, are reflected as
deferred revenue in the accompanying December 31, 1999 and 1998 consolidated
balance sheets. These advance payments will be recognized as products are
shipped to the applicable strategic alliance partners or as sales are made by
the strategic alliance partners.

In March 1999, the Company entered into a license and supply agreement with
Mipharm SpA under which Mipharm SpA will be the exclusive marketer of the
Company's previously unlicensed women's healthcare products in Italy, Portugal,
Greece and Ireland with a right of first refusal for Spain. Under the terms of
the agreement, the Company has received $462,500, net of expenses, and expects
to receive future milestone payments as products are made available by the
Company.


(3) CONVERTIBLE SUBORDINATED NOTE PAYABLE:

On March 16, 1998, the Company issued to an institutional investor a $10 million
convertible subordinated note due March 15, 2005. The note is subordinate to
other senior securities of the Company and bears interest at 7 1/8% which is
payable semi-annually on March 15 and September 15. The note is convertible into
662,032 shares of common stock at a price equal to $15.105 per share. The
Company also granted certain registration rights to the investor, under which
the earliest the shares underlying the note could be registered would be March
19,1999. The carrying amount of the Company's convertible subordinated note
payable approximates fair value using the Company's estimated incremental
borrowing rate.

 (4) STOCKHOLDERS' EQUITY (DEFICIENCY):

     Preferred Stock-

In November 1989, the Company completed a private placement of 151,000 shares of
Series A Convertible Preferred Stock ("Series A Preferred Stock"). The Series A
Preferred Stock pays cumulative dividends at a rate of 8% per annum payable
quarterly and each share is convertible into 12.36 shares of Common Stock.

In August 1991, the Company completed a private placement of 150,000 shares of
Series B Convertible Preferred Stock ("Series B Preferred Stock"). Each share of
Series B Preferred Stock is convertible into 20.57 shares of Common Stock.

Upon liquidation of the Company, the holders of the Series A and Series B
Preferred Stock are entitled to $100 per share. In addition, the holders of
Series A Preferred Stock are entitled to accumulated unpaid dividends. The
Series A


                                      F-15
<PAGE>

Preferred Stock shares are redeemable for cash, at the option of the Company, at
specified redemption prices. The Series B Preferred Stock will be automatically
converted into Common Stock upon the occurrence of certain events. Holders of
the Series A and Series B Preferred Stock are entitled to one vote for each
share of Common Stock into which the preferred stock is convertible.

In January 1999, the Company raised approximately $6.4 million, net of expenses
from the issuance and sale of Series C Convertible Preferred Stock ("Series C
Preferred Stock"). The Series C Preferred Stock, sold to twenty-four accredited
investors, has a stated value of $1,000 per share. The Series C Preferred Stock
is convertible into common stock at the lower of: (i) $3.50 per common share and
(ii) 100% of the average of the closing prices during the three trading days
immediately preceding the conversion notice. If conversion is based on the $3.50
conversion price, conversion may take place after the underlying common stock is
registered. If conversion is based on the alternative calculation, conversion
cannot take place for fifteen months. The Series C Preferred Stock pays a 5%
dividend, payable quarterly in arrears on the last day of the quarter.

     Warrants-
     --------

As of December 31, 1999, the Company had warrants outstanding for the purchase
of 750,853 shares of Common Stock. Information on outstanding warrants is as
follows:

                              Exercise
                               Price
                               -----
                              $ 3.50                     198,100
                                4.81                     225,000
                                5.00                     120,000
                                7.06                      12,500
                                7.50                      75,000
                               10.78                      60,253
                               16.00                      20,000
                               18.00                      20,000
                               20.00                      20,000
                                                      ----------
                                                         750,853
                                                      ==========

All the warrants are exercisable as of December 31, 1999.


     Stock Option Plan-
     -----------------

All employees, officers, directors and consultants of the Company or any
subsidiary were eligible to participate in the Columbia Laboratories, Inc. 1988
Stock Option Plan, as amended (the "Plan"). Under the Plan, a total of 5,000,000
shares of Common Stock were authorized for issuance upon exercise of the
options. As of October 1996, no further options will be granted pursuant to this
Plan.

In October 1996, the Company adopted the 1996 Long-term Performance Plan
("Performance Plan") which provides for the grant of stock options, stock
appreciation rights and restricted stock to certain designated employees of the
Company, non-employee directors of the Company and certain other persons
performing significant services for the Company as designated by the
Compensation/Stock Option Committee of the Board of Directors. Pursuant to the
Performance Plan, an aggregate of 3,000,000 shares of Common Stock have been
reserved for issuance.

A summary of the status of the Company's two stock option plans as of December
31, 1999, 1998 and 1997 and changes during the years ending on those dates is
presented below:

                                      F-16
<PAGE>
<TABLE>
<CAPTION>

                                               1999                         1998                        1997
                                    ---------------------------  ---------------------------  -------------------------
                                                    Weighted                     Weighted                   Weighted
                                                     Average                      Average                    Average
                                                    Exercise                     Exercise                   Exercise
                                        Shares        Price          Shares        Price         Shares       Price
                                    ---------------------------  ---------------------------  -------------------------
<S>                                      <C>             <C>          <C>             <C>        <C>             <C>
Outstanding at beginning of year         5,184,938       $9.13        4,557,274       $8.92      3,591,272       $6.25
Granted                                    512,500        5.97          904,000       11.52      1,332,500       14.72
Exercised                                   (5,000)       5.38          (31,500)       6.66       (366,498)       5.92
Forfeited                                  (21,000)      15.59         (244,836)      11.29        -            -
                                    ---------------              ---------------              -------------
Outstanding at end of year               5,671,438        8.83        5,184,938        9.13      4,557,274        8.92
                                    ===============              ===============              =============

Options exercisable at year end          5,038,938                    4,210,938                  2,984,774
                                    ===============              ===============              =============
</TABLE>

The following table summarizes information about stock options outstanding at
December 31, 1999:
<TABLE>
<CAPTION>
                                                     Options Outstanding                                 Options Exercisable
                                ---------------------------------------------------------    -------------------------------------
                                                            Weighted
                                                             Average       Weighted                                      Weighted
         Range of                        Number             Remaining       Average                Number                Average
         Exercise                     Outstanding          Contractual     Exercise             Exercisable              Exercise
          Prices                  at December 31, 1999    Life (Years)       Price           at December 31, 1999          Price
----------------------------    ---------------------------------------------------------    -------------------------------------
<S>                                   <C>               <C>            <C>                            <C>           <C>
       $3.19 - $4.00                       110,000           8.99           $3.26                          10,000        $4.00
       $4.38 - $7.75                     2,645,250           5.26           4.95                        2,338,750         4.81
      $8.00 - $12.13                     1,697,000           7.17           10.76                       1,471,000        11.04
     $12.25 - $18.63                     1,219,188           6.97           15.04                       1,219,188        15.04
                                -------------------                                          ---------------------
      $3.19 - $18.63                     5,671,438           6.27           8.83                        5,038,938         9.10
                                ===================                                          =====================
</TABLE>

The Company applies APB Opinion 25 and related Interpretations in accounting for
its plans. Accordingly, no compensation cost has been recognized for the stock
option plans. Had compensation cost been determined based on the fair value at
the grant dates for those awards consistent with the method of FASB Statement
123, the Company's net income or loss per share would have been decreased or
increased to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
<S>                                                          <C>            <C>                   <C>
Net income (loss)               As reported                  ($2,210,208)   ($13,859,734)         $762,906
                                                       ====================================================
                                Proforma                     ($4,311,608)   ($17,479,167)      ($7,013,855)
                                                       ====================================================

Income (loss) per share         As reported                       ($0.09)         ($0.48)            $0.03
                                                       ====================================================
                                Proforma                          ($0.15)         ($0.61)           ($0.25)
                                                       ====================================================
</TABLE>

The estimated grant date present value reflected in the above table is
determined using the Black-Scholes model. The material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the value of
the options reflected in the above table include the following: (i) an exercise
price equal to the fair market value of the underlying stock on the dates of
grant, (ii) an option term of three years, (iii) a risk free rate of 6% that
represents the interest rate on a U.S. Treasury security with a maturity date
corresponding to that of the option term, (iv) volatility of 86.7% for 1999 and
55% for 1998 and 1997 and (v) no annualized dividends paid with respect to a
share of Common Stock at the date of grant. The ultimate values of the options
will depend on the future price of the Company's Common Stock, which cannot be
forecast with reasonable accuracy. The actual value, if any, an


                                      F-17
<PAGE>

optionee will realize upon exercise of an option will depend on the excess of
the market value of the Company's Common Stock over the exercise price on the
date the option is exercised.

(5) INCOME (LOSS) PER COMMON AND POTENTIAL COMMON SHARE:

The calculation of basic and diluted income (loss) per common and potential
common share is as follows:
<TABLE>
<CAPTION>
<S>                                            <C>             <C>             <C>
                                               1999            1998            1997
                                          ------------    ------------    ------------

Net income (loss)                         $ (2,210,208)   $(13,859,734)   $    762,906
Less: Preferred stock dividends               (287,994)         (6,714)         (8,088)
         Deduction related to Series C
            Convertible Preferred Stock       (133,320)           --              --
                                          ------------    ------------    ------------


Net income (loss) applicable to
   common stock                           $ (2,631,522)   $(13,866,448)   $    754,818
                                          ============    ============    ============

Basic:
     Weighted average number of
          common shares outstanding         28,853,000      28,679,000      28,350,000
                                          ============    ============    ============

     Basic net income (loss) per common
          and potential common share      $      (0.09)   $      (0.48)   $       0.03
                                          ============    ============    ============

Diluted:
     Weighted average number of
          common shares outstanding         28,853,000      28,679,000      28,350,000
     Weighted average number of
          potential common shares                 --              --         1,632,000
                                          ------------    ------------    ------------

     Weighted average number of
          common and potential
          common shares outstanding         28,853,000      28,679,000      29,982,000
                                          ============    ============    ============

     Diluted net income (loss) per
          common and potential
          common share                    $      (0.09)   $      (0.48)   $       0.03
                                          ============    ============    ============
</TABLE>

 (6) COMMITMENTS AND CONTINGENCIES:

Cash and cash equivalents-

The Company maintains its cash in bank deposit accounts which at times may
exceed federally insured limits. The Company believes that there is no credit
risk with respect to these accounts.

                                      F-18
<PAGE>

 Leases-
 ------

The Company leases office space, apartments and office equipment under
noncancelable operating leases. Lease expense for each of the three years ended
December 31, 1999, 1998 and 1997 totaled $641,569, $813,167 and $679,791
respectively. Future minimum lease payments as of December 31, 1999 are as
follows:

      2000           $  612,774
      2001              423,409
      2002              209,158
      2003              132,131
      2004               60,684
      Thereafter          9,425
                     ----------
                     $1,447,581

     Royalties-
     ---------

In 1989, the Company purchased the assets of Bio-Mimetics, Inc. which consisted
of the patents underlying the Company's Bioadhesive Delivery System, other
patent applications and related technology, for $2,600,000, in the form of 9%
convertible debentures which were converted into 500,000 shares of Common Stock
during 1991, and $100,000 in cash. In addition, Bio-Mimetics, Inc. receives a
royalty equal to two percent of the net sales of products based on the
Bioadhesive Delivery System up to an aggregate amount of $7,500,000. In
addition, beginning in March 1995, the Company agreed to prepay a portion of the
remaining royalty obligation if certain conditions are met. The Company may not
assign the patents underlying the Bioadhesive Delivery System without the prior
written consent of Bio-Mimetics, Inc. until the aggregate royalties have been
paid.

In May 1989, the Company signed an exclusive agreement to license the U.S. and
Canadian marketing rights for Diasorb(R), a unique pediatric antidiarrheal
product formerly marketed by Schering-Plough Corporation. Under the terms of the
agreement, the Company is obligated to pay a royalty equal to 5% of the net
sales of Diasorb.

     Employment Agreements-
     ---------------------

The Company has employment agreements with certain employees, some of whom are
also stockholders of the Company. The remaining terms of the employment
agreements range from one to two years. Future base compensation to be paid
under these agreements as of December 31, 1999 are as follows:

                               2000   $1,016,000
                               2001      801,750
                                      ----------
                                      $1,817,750

During 1993, the Company's stockholders approved an Incentive Compensation Plan
covering all employees pursuant to which an aggregate of 5% of pretax earnings
of the Company for any year will be awarded to designated employees of the
Company. As a result of the Company's income in 1997, a provision for 5% of
pretax income was included in general and administrative expenses. No provision
was required in 1999 and 1998.


    Legal Proceedings-
    -----------------

         The Company filed an action in the United States District Court for the
Southern District of Florida ("Florida Action") in November 1997 seeking a
declaratory judgement on certain issues related to its relationship with Lake
Consumer Products, Inc. ("Lake") as governed in the contract between the Company
and Lake. Lake filed an action against the Company in the United States District
Court, Northern District of Illinois ("Illinois Action") , for damages alleged
by Lake to have been suffered by it as a result of the FDA's allegations in July
1997 that the Company's nonoxynol-9 product, then marketed by Lake under the
tradename Advantage 24, was not permitted to be sold under the monograph. The
Illinois Action was dismissed by the Illinois Court and transferred to the
Florida Court for consolidation as a counterclaim in the Florida Action. On
March 16, 2000, the Company and Lake settled all outstanding issues in the
consolidated Florida Action by the Company having bought out the contract for
the sum of


                                      F-19
<PAGE>

$1,200,000 ($600,000 in cash and $600,000 in the form of Company common stock).
As a result, the Company reacquired the U.S. rights to the Advantage product and
both parties agreed to have their legal actions dismissed.

         Other claims and law suits have been filed against the Company. In the
opinion of management and counsel, none of these lawsuits are material and they
are all adequately reserved for or covered by insurance or, if not so covered,
are without any or have little merit or involve such amounts that if disposed of
unfavorably would not have a material adverse effect on the Company.



(7) OTHER RELATED-PARTY TRANSACTION:

During 1993, the Company loaned two individuals who are officers, directors and
stockholders of the Company an aggregate of $190,350. These notes, which bear
interest at 10% per annum and which were due on or before December 7, 1997 were
subsequently extended through December 7, 1999. At December 31, 1999, the
aggregate balance of $306,684 remains outstanding and is included in other
current assets in the accompanying 1999 consolidated balance sheet.

In connection with the issuance of the Series C Convertible Preferred Stock in
January 1999, the Company received two notes receivable from Norman M. Meier,
the President and Chief Executive Officer, and from William J. Bologna, the
Chairman of the Board, for $350,000 and $250,000, respectively. The notes bear
interest at 5% per annum and were due on July 28, 1999. Mr. Meier's note was
paid in December 1999 with interest through the date of payment and Mr.
Bologna's note was paid in January 2000 with interest through the date of
payment.

The above notes are reflected in the accompanying balance sheets at their face
value plus interest which approximates fair value.




(8) SEGMENT INFORMATION:
-----------------------

The Company and its subsidiaries are engaged in one line of business, the
development and sale of pharmaceutical products. Two customers (under the same
contract) accounted for approximately 56% of 1999 consolidated net sales. One
customer accounted for approximately 25% and 68% of 1998 and 1997 consolidated
net sales, respectively. Another customer accounted for approximately 9%, 15%
and 5% of 1999, 1998 and 1997 consolidated net sales, respectively. A third
customer accounted for approximately 5%, of 1999, consolidated net sales. The
following table shows selected information by geographic area:

                                      F-20
<PAGE>
<TABLE>
<CAPTION>
                                                       Income
                                  Net                (loss) from            Identifiable
                                 Sales               Operations                Assets
                            -----------------     ------------------      -----------------
As of and for  the year
ended  December 31, 1999-
<S>                              <C>                     <C>                    <C>
       United States             $16,376,205             $3,860,850             $9,047,230
       Europe                      2,544,869             (5,761,680)             3,940,383
                            -----------------     ------------------      -----------------
                                 $18,921,074            ($1,900,830)           $12,987,613
                            =================     ==================      =================

As of and for the year
ended December 31, 1998-

       United States              $7,515,436            ($4,114,779)            $7,965,715
       Europe                      2,502,208             (9,282,374)             3,913,831
                            -----------------     ------------------      -----------------
                                 $10,017,644           ($13,397,153)           $11,879,546
                            =================     ==================      =================

As of and for the year
ended December 31, 1997-

       United States             $15,623,341             $4,984,325             $7,804,944
       Europe                        924,070            (11,083,888)             7,196,808
                            -----------------     ------------------      -----------------
                                 $16,547,411            ($6,099,563)           $15,001,752
                            =================     ==================      =================
</TABLE>

(9) SUBSEQUENT EVENT:

In October 1999, the Company engaged an investment banking firm to act as its
exclusive advisor in a planned divestiture of certain of the Company's
over-the-counter products. Subsequent to year-end, the Company has received a
letter of intent from a prospective party who is in the process of completing
due diligence procedures. The terms of the agreement are being negotiated.

                                      F-21
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES


                      INDEX TO FINANCIAL STATEMENT SCHEDULE


                                                                           Page
                                                                           ----


Report of Independent Certified Public Accountants                          S-2

Report of Independent Certified Public Accountants                          S-3

Schedule II - Valuation and Qualifying Accounts and Reserves                S-4



                                      S-1
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Board of Directors and Stockholders
of Columbia Laboratories, Inc.:


We have audited in accordance with generally accepted auditing standards, the
1999 and 1998 financial statements of Columbia Laboratories, Inc. and
Subsidiaries included in this Form 10-K and have issued our report thereon dated
February 18, 2000, except for the first paragraph under the caption "Legal
Proceedings" in Note 6 as to which the date is March 16, 2000. Our audits were
made for the purpose of forming an opinion on the basic financial statements
taken as a whole. Schedule II is the responsibility of the Company's management
and is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. The years
ended December 31, 1999 and 1998 portions of this schedule have been subjected
to the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, fairly state in all material respects the
financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.





GOLDSTEIN GOLUB KESSLER LLP

New York, New York
February 18, 2000, except for the first
paragraph under the caption "Legal
Proceedings" in Note 6 as to which
the date is March 16, 2000

                                      S-2
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Board of Directors and Stockholders
of Columbia Laboratories, Inc.:


We have audited in accordance with generally accepted auditing standards, the
1997 financial statements of Columbia Laboratories, Inc. and Subsidiaries
included in this Form 10-K and have issued our report thereon dated February 13,
1998. Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedule II is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. The year ended December 31, 1997 portion of this schedule
have been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, fairly states in all material respects
the financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.





ARTHUR ANDERSEN LLP

Miami, Florida,
  February 13, 1998.


                                      S-3
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                   FOR THE THREE YEARS ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                                                            Charged to
                                                      Balance at           (credited to)                                Balance
                                                       beginning             costs and                                   at end
                 Description                           of period             expenses             Deductions           of period
----------------------------------------------       --------------       ----------------       --------------       -------------
<S>                                                      <C>                     <C>                 <C>                 <C>
        YEAR ENDED DECEMBER 31, 1999:
        Allowance for doubtful accounts                    $229,829                $10,000             $120,000            $119,829
                                                     ==============       ================       ==============       =============

        YEAR ENDED DECEMBER 31, 1998:
        Allowance for doubtful accounts                    $132,276               $105,000               $7,447            $229,829
                                                     ==============       ================       ==============       =============

        YEAR ENDED DECEMBER 31, 1997:
        Allowance for doubtful accounts                     $97,275                $35,001       $        -                $132,276
                                                     ==============       ================       ==============       =============
</TABLE>

                                      S-4
<PAGE>

                                INDEX TO EXHIBITS


EXHIBIT
NUMBERS

4.7      --       Warrant to Purchase Common Stock granted to James J.
                  Apostolakis on September 23, 1999

10.16    --       License and Supply Agreement for Crinone between Columbia
                  Laboratories (Bermuda) Limited and Ares Trading S.A. dated as
                  of May 20, 1999

10.17    --       Addendum to Employment Agreement dated as of January 1, 2000
                  between the Company and Norman M. Meier

10.18    --       Addendum to Employment Agreement dated as of January 1, 2000
                  between the Company and William J. Bologna

10.19    --       Employment Agreement dated as of January 1, 2000, between the
                  Company and James J. Apostolakis

10.20    --       Employment Agreement dated December 30, 1999 between the
                  Company and Dominique de Ziegler

10.21    --       Settlement Agreement and Release dated as of March 16, 2000
                  between Columbia Laboratories (Bermuda) Ltd. and Lake Consumer
                  Products, Inc.

  21     --       Subsidiaries of the Company

  27     --       Financial Data Schedule