===============================================================================

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

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997

                         COMMISSION FILE NUMBER 0-28454
                             _____________________

                                ANDRX CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                             _____________________

           FLORIDA                                    65-0366879
  (STATE OR OTHER JURISDICTION OF                  (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)

    4001 SOUTHWEST 47TH AVENUE
       FORT LAUDERDALE, FL                               33314
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)               (ZIP CODE)

                                  954-584-0300
                         (REGISTRANT'S TELEPHONE NUMBER,
                              INCLUDING AREA CODE)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:

                                 [X] YES [ ] NO

As of October 31, 1997, 14,833,000 shares of the Registrant's only class of
common stock were issued and outstanding.

===============================================================================

<PAGE>

                                ANDRX CORPORATION

                             INDEX TO THE FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 30, 1997

                                                                   PAGE NUMBER

                  INDEX TO FORM 10-Q                                      2

PART I            FINANCIAL INFORMATION

   Item 1.        Consolidated Financial Statements

                  Consolidated Balance Sheets
                    as of September 30, 1997 and
                    December 31, 1996                                     3

                  Consolidated Statements of Operations
                    for the three and nine months ended
                    September 30, 1997 and 1996                           4

                  Consolidated Statements of Cash Flows
                    for the nine months ended
                    September 30, 1997 and 1996                           5

                  Notes to Consolidated Financial Statements              6

   Item 2.        Management's Discussion and Analysis of
                    Financial Condition and Results of Operations         9

PART II           OTHER INFORMATION

   Item 2.        Changes in Securities and Use of Proceeds              15

   Item 6.        Exhibits and Reports on Form 8-K                       15

SIGNATURES                                                               16

                                       2
<PAGE>

                                ANDRX CORPORATION
                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.         CONSOLIDATED FINANCIAL STATEMENTS

                       ANDRX CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                           Assets                                                 September 30,       December 31,
                                                                                      1997                1996
                                                                                 ----------------   -----------------
                                                                                   (UNAUDITED)
<S>                                                                              <C>                <C>
Current assets
   Cash and cash equivalents                                                     $     5,050,100    $     3,427,500
   Investments available for sale                                                     26,015,900         26,892,000
   Accounts receivable, net of allowances of $1,132,900 (unaudited) and
    $969,800 as of September 30, 1997 and December 31, 1996, respectively             21,963,800         13,501,900
   Due from joint venture, net                                                           199,100            314,100
   Inventories, net                                                                   24,288,200         12,240,400
   Prepaid and other current assets                                                      869,500            461,100
                                                                                 ----------------   -----------------
     Total current assets                                                             78,386,600         56,837,000

Property and equipment, net                                                           15,020,000          9,724,600
Other assets                                                                              61,600             74,700
                                                                                -----------------   -----------------
     Total assets                                                                $    93,468,200    $    66,636,300
                                                                                 ================   =================
                           Liabilities and Shareholders' Equity
Current liabilities
   Accounts payable                                                              $    26,942,700    $    13,839,100
   Accrued liabilities                                                                 4,586,500          3,374,000
   Bank loan                                                                             764,700          6,460,900
   Notes payable                                                                          33,000            102,300
   Commitment to joint venture, net                                                       21,900             98,400
                                                                                 ----------------   -----------------
      Total current liabilities                                                       32,348,800         23,874,700
                                                                                 ----------------   -----------------

Commitments and contingencies

 Shareholders' equity
  Convertible preferred stock; $0.001 par value,
   1,000,000 shares authorized; none issued and
   outstanding as of September 30, 1997 (unaudited) and
   December 31, 1996                                                                          --                 --
  Common stock; $0.001 par value, 25,000,000 shares authorized; 14,788,100
    (unaudited) and 13,417,500 shares issued and outstanding as of September 30,
    1997 and December 31, 1996, respectively                                              14,800             13,400
  Additional paid-in capital                                                          82,118,200         57,252,700
  Accumulated deficit                                                                (21,037,300)       (14,508,900)
  Unrealized gain on investments available for sale                                       23,700              4,400
                                                                                 ----------------   -----------------
     Total shareholders' equity                                                       61,119,400         42,761,600
                                                                                 ----------------   -----------------
     Total liabilities and shareholders' equity                                  $    93,468,200     $   66,636,300
                                                                                 ================   =================
</TABLE>

          See Accompanying Notes to Consolidated Financial Statements.

                                       3
<PAGE>

                       ANDRX CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                        Three Months Ended                          Nine Months Ended
                                                          September 30,                               September 30,
                                                   1997                 1996                   1997                 1996
                                             ------------------   -----------------     -------------------   ------------------
<S>                                          <C>                  <C>                   <C>                   <C>
Revenues
   Distribution, net                         $    42,573,100      $   23,320,600        $     105,793,900     $     61,097,000
   Research and development services
     to joint venture                                398,900             274,400                1,089,800            1,829,300
   Licensing revenue                                  87,500                  --                   87,500                   --
                                             ------------------   -----------------     -------------------   ------------------
    Total revenues                                43,059,500          23,595,000              106,971,200           62,926,300
                                             ------------------   -----------------     -------------------   ------------------

Cost of revenues
   Distribution                                   36,502,100          19,477,100               90,048,500           50,975,300
   Research and development services
     to joint venture                                398,900             274,400                1,089,800            1,829,300
                                             ------------------   -----------------     -------------------   ------------------
    Total cost of revenues                        36,901,000          19,751,500               91,138,300           52,804,600
                                             ------------------   -----------------     -------------------   ------------------

Gross profit                                       6,158,500           3,843,500               15,832,900           10,121,700
                                             ------------------   -----------------     -------------------   ------------------

Operating expenses
   Selling, general and administrative             5,308,000           3,493,000               14,061,900            9,333,000
   Research and development                        3,031,000           1,174,500                6,760,800            2,499,400
   Manufacturing overhead                            521,600                  --                  993,900                   --
   Equity in losses of joint venture                 497,600             352,800                1,261,000            1,384,000
                                             ------------------   -----------------     -------------------   ------------------
    Total operating expenses                       9,358,200           5,020,300               23,077,600           13,216,400
                                             ------------------   -----------------     -------------------   ------------------

Loss from operations                              (3,199,700)         (1,176,800)              (7,244,700)          (3,094,700)

Interest income                                      442,300             447,400                1,165,000              762,000
Interest expense                                    (107,400)           (288,700)                (448,700)            (570,300)
                                             ------------------   -----------------     -------------------   ------------------
Net loss                                     $    (2,864,800)     $   (1,018,100)       $      (6,528,400)    $     (2,903,000)
                                             ==================   =================     ===================   ==================

Net loss per share                           $         (0.19)     $        (0.08)       $           (0.47)    $          (0.25)
                                             ==================   =================     ===================   ==================
Weighted average shares of
    common stock outstanding                       14,736,300         13,297,000               14,006,200           11,734,000
                                             ==================   =================     ===================   ==================
</TABLE>

          See Accompanying Notes to Consolidated Financial Statements.

                                       4
<PAGE>

                       ANDRX CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                    Nine Months Ended
                                                                                      September 30,
                                                                           1997                          1996
                                                                      ---------------               ----------------
<S>                                                                   <C>                           <C>
Cash flows from operating activities
  Net loss                                                            $ (6,528,400)                  $  (2,903,000)
  Adjustments to reconcile net loss to net cash used in
        operating activities
    Depreciation and amortization                                         1,400,000                        757,000
    Provision for accounts receivable, net                                  163,100                        318,800
    Equity in losses of joint venture                                     1,261,000                      1,384,000
    Contributions to joint venture                                       (1,200,000)                    (2,005,500)
    Increase in accounts receivable                                      (8,625,000)                    (3,926,200)
    (Increase) decrease in due from joint venture, net                      (22,500)                       730,600
    Increase in inventories, net                                        (12,047,800)                    (2,210,100)
    Increase in prepaid and other current assets                           (408,400)                      (837,100)
    Decrease in other assets                                                 13,100                         46,700
    Increase in accounts payable and accrued liabilities                 14,316,100                      3,215,500
                                                                      --------------                 ---------------
      Net cash used in operating activities                             (11,678,800)                    (5,429,300)
                                                                      --------------                 ---------------

Cash flows from investing activities
   Maturity (purchase) of  investments available for sale, net              895,400                    (28,162,800)
   Purchase of property and equipment                                    (6,695,400)                    (4,179,600)
                                                                      --------------                 ---------------
    Net cash used in investing activities                                (5,800,000)                   (32,342,400)
                                                                      --------------                 ---------------

Cash flows from financing activities
  Proceeds from issuance of shares of common stock, net                  21,342,500                     27,430,200
  Proceeds from exercise of stock options and warrants                    3,524,400                        564,600
  Net borrowings (repayments) under bank loan                            (5,696,200)                     1,449,500
  Proceeds from notes payables                                                   --                        501,900
  Payment on notes payable                                                  (69,300)                      (232,300)
                                                                      --------------                 ---------------
    Net cash provided by financing activities                            19,101,400                     29,713,900
                                                                      --------------                 ---------------

Net increase (decrease) in cash and cash equivalents                      1,622,600                     (8,057,800)
Cash and cash equivalents, beginning of period                            3,427,500                     13,841,400
                                                                      --------------                 ---------------
Cash and cash equivalents, end of period                              $   5,050,100                  $   5,783,600
                                                                      ==============                 ===============

Supplemental disclosure of cash paid during the period for:

    Interest                                                          $     448,700                  $     570,300
                                                                      ==============                 ===============
</TABLE>
           See Accompanying Notes to Consolidated Financial Statements

                                       5

<PAGE>

                       ANDRX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1997
                                   (UNAUDITED)

1.       GENERAL

         In the opinion of management, the accompanying unaudited consolidated
financial statements have been prepared by Andrx Corporation ("Andrx" or the
"Company") pursuant to the rules and regulations of the U.S. Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in annual financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to those
rules and regulations. However, management believes that the disclosures
contained herein are adequate to make the information presented not misleading.
The unaudited consolidated financial statements reflect, in the opinion of
management, all material adjustments (which include only normal recurring
adjustments) necessary to present fairly the Company's financial position and
results of operations. The results of operations for the three and nine months
ended September 30, 1997 and cash flows for the nine months ended September 30,
1997, are not necessarily indicative of the results of operations or cash flows
which may be expected for the remainder of 1997. The unaudited consolidated
financial statements should be read in conjunction with the consolidated
financial statements and related notes for the year ended December 31, 1996,
which are included in the Company's December 31, 1996 Form 10-K.

2.        JOINT VENTURE

         Condensed balance sheets and statements of operations for ANCIRC
Pharmaceuticals, the Company's 50/50 joint venture with Watson Pharmaceuticals,
Inc. ("Watson"), are as follows:
<TABLE>
<CAPTION>

                                                    September 30, 1997         December 31, 1996
                                                    ------------------         -----------------
<S>                                               <C>                         <C>               
     Cash                                         $              2,400        $          700,900
     Equipment, net                                            250,900                    25,100
                                                  --------------------        ------------------
              Total assets                        $            253,300        $          726,000
                                                  ====================        ==================

     Current liabilities                          $            697,200        $        1,047,800
     Partners' deficit                                        (443,900)                 (321,800)
                                                  --------------------        ------------------
               Total liabilities and 
                partners' deficit                 $            253,300        $          726,000
                                                  ====================        ==================
</TABLE>

                                       6
<PAGE>
<TABLE>
<CAPTION>

                                                    Three Months Ended                          Nine Months Ended
                                                       September 30,                              September 30,
                                              1997                   1996                   1997                   1996
                                         ----------------      ------------------    -------------------     ------------------
<S>                                      <C>                   <C>                   <C>                     <C>
Research and development
  expenses                               $      998,500        $        710,700      $       2,545,000       $     2,776,400
                                         ==================    ===================   ==================      ==================

Net loss                                 $     (995,200)       $       (705,500)     $      (2,522,100)      $    (2,767,900)
                                         ==================    ===================   ==================      ==================
</TABLE>

         As of September 30, 1997 and December 31, 1996, the Company was due
$399,100 and $376,600, respectively, from ANCIRC Pharmaceuticals for research
and development services rendered. In the September 30, 1997 and December 31,
1996 consolidated balance sheets, such amounts due from the joint venture were
offset by $200,000 and $62,500 respectively, representing the amounts that Andrx
is required to fund to ANCIRC Pharmaceuticals in order to receive the full
amount due from the joint venture.

3.       NET LOSS PER SHARE

         For the three and nine month periods ended September 30, 1997 and 1996,
net loss per share is based on the weighted average number of common shares
outstanding. Since the effect of common stock equivalents was antidilutive, all
such equivalents were excluded in the calculation of net loss per share.

4.       CONTINGENCIES

         In January 1996, Hoechst Marion Roussel, Inc. and Carderm Capital L.P.
(collectively, "Hoechst"), filed suit against the Company claiming patent
infringement as a result of the Company's Abbreviated New Drug Application
("ANDA") filing with the U.S. Food and Drug Administration ("FDA") in late 1995
for a bioequivalent version of Cardizem(R) CD. The Company responded to these
claims by denying infringement, raising various other defenses and by filing
certain counterclaims against Hoechst. While the Company believes its product
does not infringe upon any of the patents held in connection with the branded
product and that it has meritorious defenses against this suit, the ultimate
resolution of this matter is not currently known and as described below, will
likely delay the Company from obtaining final FDA approval of the ANDA for the
Company's bioequivalent version of Cardizem(R)CD. Although the Company believes
it has adequately provided for such matter based on the current available
information, the Company may incur additional litigation costs in future periods
which may be material to the Company's results of operations and financial
position.

         In September 1997, Andrx received tentative FDA approval of the ANDA
for its bioequivalent version of Cardizem(R)CD. Such approval is tentative
because of the pending patent infringement litigation brought by Hoechst. As a
result of the Hoechst litigation, the FDA may not grant final approval of the
ANDA for Andrx's product until after either the lawsuit is resolved in Andrx's
favor or July 3, 1998 (30 months after Hoechst received Andrx's certification
that its product does not infringe the patents listed for Cardizem(R)CD).

                                       7
<PAGE>

         In September 1997, Andrx entered into a Stipulation and Agreement (the
"Stipulation") with Hoechst related to the Hoechst litigation. In the
Stipulation, Andrx agreed that if the Hoechst litigation is not concluded by the
date the FDA grants final approval of the Company's ANDA for the bioequivalent
version of Cardizem(R)CD, Andrx will not commence the commercial sale of the
product in the United States until a final and unappealable judgment is issued.
The Stipulation provides that upon receiving final FDA approval of its ANDA,
Andrx will begin to receive interim payments from Hoechst of $10.0 million
quarterly which, absent certain defaults by Andrx, are non-refundable. These
payments will continue until the Hoechst litigation is concluded or other events
occur. The payments will increase retroactively if Andrx prevails in the Hoechst
litigation, with a lump sum payment representing an agreed amount of profits
that Andrx would have earned had it begun to sell its product upon receiving
final FDA approval of its ANDA. The Stipulation also provides Andrx with the
option of licensing Hoechst's patents at certain times.

                                       8
<PAGE>

                                ANDRX CORPORATION
                                     PART I
                              FINANCIAL INFORMATION

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

         ANDRX CORPORATION AND SUBSIDIARIES ("ANDRX" OR THE "COMPANY") CAUTIONS
READERS THAT CERTAIN IMPORTANT FACTORS MAY AFFECT THE COMPANY'S ACTUAL RESULTS
AND COULD CAUSE SUCH RESULTS TO DIFFER MATERIALLY FROM ANY FORWARD-LOOKING
STATEMENTS WHICH MAY BE DEEMED TO HAVE BEEN MADE IN THIS REPORT OR WHICH ARE
OTHERWISE MADE BY OR ON BEHALF OF THE COMPANY. FOR THIS PURPOSE, ANY STATEMENTS
CONTAINED IN THIS REPORT THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY BE
DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, WORDS SUCH AS "MAY", "WILL", "EXPECT", "BELIEVE", "ANTICIPATE",
"INTEND", "COULD", "WOULD", "ESTIMATE", OR "CONTINUE" OR THE NEGATIVE OTHER
VARIATIONS THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. FACTORS WHICH MAY AFFECT THE COMPANY'S RESULTS
INCLUDE, BUT ARE NOT LIMITED TO, THE RISKS AND UNCERTAINTIES ASSOCIATED WITH A
DRUG DELIVERY COMPANY WHICH HAS A HISTORY OF NET LOSSES, UNPROVEN TECHNOLOGY,
LACK OF MANUFACTURING EXPERIENCE, CURRENT AND POTENTIAL COMPETITORS WITH
SIGNIFICANT TECHNICAL AND MARKETING RESOURCES, NEED FOR FUTURE CAPITAL AND
DEPENDENCE ON COLLABORATIVE PARTNERS AND ON KEY PERSONNEL. ADDITIONALLY, THE
COMPANY IS SUBJECT TO THE RISKS AND UNCERTAINTIES ASSOCIATED WITH ALL DRUG
DELIVERY COMPANIES, INCLUDING COMPLIANCE WITH GOVERNMENT REGULATIONS AND THE
POSSIBILITY OF PATENT INFRINGEMENT LITIGATION. THE COMPANY IS ALSO SUBJECT TO
OTHER RISKS DETAILED HEREIN OR DETAILED FROM TIME TO TIME IN THE COMPANY'S
SECURITIES AND EXCHANGE COMMISSION FILINGS.

INTRODUCTION

         Andrx was organized in August 1992 and, in November 1992, commenced
marketing and distributing generic pharmaceuticals manufactured by third
parties. In February 1993, the Company began to engage in the development of
generic versions of controlled-release oral pharmaceuticals utilizing its
proprietary drug delivery technologies. During 1996, the Company commenced its
efforts on the development of brand name controlled-released products. Through
September 30, 1997, its distribution operations have generated substantially all
of the Company's revenues. In October 1997, the U.S. Food and Drug
Administration ("FDA") granted final approval of Andrx's Abbreviated New Drug
Application ("ANDA") for all three strengths of its once-a-day Diltiazem
Hydrochloride extended-release capsules bioequivalent to Dilacor XR(TM). Andrx
immediately began marketing this product. No assurance can be given that this
product can be successfully marketed or will generate meaningful revenues. The
Company expects to generate negative cash flows and net losses at least through
1997.

         The Company is a 50% partner in the ANCIRC Pharmaceuticals ("ANCIRC")
joint venture with Watson Pharmaceuticals, Inc. ("Watson") for the development
of up to eight controlled-release pharmaceuticals. Capital contributions to,
distributions from, and net income or losses generated by ANCIRC are allocated
equally between the Company and Watson. The Company generates revenues from
research and development services provided to ANCIRC, which services are
rendered at cost, resulting in no gross profit. The Company is also party to
development and licensing agreements for additional controlled-release
formulations.

                                       9
<PAGE>

RESULTS OF OPERATIONS

   THREE MONTHS ENDED SEPTEMBER 30, 1997 AS COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1996

         REVENUES. Total revenues for the three months ended September 30, 1997
("1997 Quarter") were $43.1 million, an increase of $19.5 million or 82.5%, as
compared to total revenues of $23.6 million for the three months ended September
30, 1996 ("1996 Quarter"). The distribution of pharmaceutical products generated
revenues of $42.6 million in the 1997 Quarter, an increase of $19.3 million or
82.6%, as compared to $23.3 million in the 1996 Quarter. The increase in
distribution revenues for the 1997 Quarter reflect the Company's greater
penetration of the pharmaceutical distribution market and Andrx's participation
in the distribution of generic Zantac (ranitidine), which became available in
August of 1997. Excluding the revenue from ranitidine, distribution revenues in
the third quarter of 1997 increased at a rate consistent with the Company's
historic growth rate. Revenues generated by research and development services to
ANCIRC increased to $399,000 in the 1997 Quarter, as compared to $274,000 in the
1996 Quarter. This reflects an increase in the amount of research and
development services provided by Andrx to ANCIRC.

         GROSS PROFIT. Gross profit on the distribution of pharmaceutical
products was $6.1 million in the 1997 Quarter, an increase of 58.0%, as compared
to $3.8 million in the 1996 Quarter. Gross profit on the distribution of
pharmaceutical products as a percentage of distribution revenues decreased from
16.5% in the 1996 Quarter to 14.3% in the 1997 Quarter as a result of continuing
competition and pricing pressures within the generic pharmaceutical industry.
The Company expects that such factors will continue to reduce the Company's
gross profit percentage in future periods.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses as a percentage of total revenues decreased to 12.3% for
the 1997 Quarter, as compared to 14.8% for the 1996 Quarter. Selling, general
and administrative expenses increased to $5.3 million in the 1997 Quarter as
compared to $3.5 million in the 1996 Quarter primarily due to an increase in
selling activities necessary to support the increase in distribution revenues
and includes costs related to the establishment of an infrastructure for the
sale of the Company's first product, a bioequivalent version of Dilacor XR(TM),
which was launched on October 10, 1997, immediately following its approval by
the FDA.

         RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
increased to $3.0 million in the 1997 Quarter, as compared to $1.2 million in
the 1996 Quarter. The increase in research and development expenses of 158.1%
reflects the expansion of development activities for the Company's ANDA and New
Drug Application ("NDA") programs. Research and development expenses in the 1997
Quarter include operating expenses related to activities to scale-up the
Company's products to commercial size batches. Research and development expenses
exclude cost of revenues for services rendered to ANCIRC of $399,000 in the 1997
Quarter and $274,000 in the 1996 Quarter.

         MANUFACTURING OVERHEAD. In the 1997 Quarter, the Company incurred
$522,000 of manufacturing overhead related to the Company's commencement of
commercial-scale manufacturing operations in preparation for the launch of the
Company's first product. In future periods, as the Company increases its
production of salable products, these costs will be absorbed as a component of
the cost of inventory.

                                       10

<PAGE>

         EQUITY IN LOSSES OF JOINT VENTURE. The Company's equity in losses of
ANCIRC was $498,000 in the 1997 Quarter as compared to $353,000 in the 1996
Quarter. ANCIRC's losses increased to $995,000 in the 1997 Quarter as compared
to $706,000 in the 1996 Quarter.

         INTEREST INCOME. Interest income was $442,000 in the 1997 Quarter as
compared to $447,000 in the 1996 Quarter. The Company invests in short-term
investment grade interest bearing securities.

         INTEREST EXPENSE. Interest expense was $107,000 in the 1997 Quarter as
compared to $289,000 in the 1996 Quarter. The decrease was the result of a lower
average level of borrowings under the Company's line of credit agreement during
the 1997 Quarter as compared to the 1996 Quarter. Such borrowings are utilized
to fund the Company's distribution operations.

         INCOME TAXES. For the 1997 Quarter and the 1996 Quarter, the Company
was not required to provide for federal or state income taxes due to its net
losses.

   NINE MONTHS ENDED SEPTEMBER 30, 1997 AS COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1996

         REVENUES. Total revenues for the nine months ended September 30, 1997
("1997 Period") were $107.0 million, an increase of $44.0 million or 70.0%, as
compared to total revenues of $62.9 million for the nine months ended September
30, 1996 ("1996 Period"). The distribution of pharmaceutical products generated
revenues of $105.8 million in the 1997 Period, an increase of $44.7 million or
73.2%, as compared to $61.1 million in the 1996 Period. The increase in
distribution revenues reflects the Company's greater penetration of the
pharmaceutical distribution market. Revenues generated by research and
development services to ANCIRC decreased to $1.1 million in the 1997 Period, as
compared to $1.8 million in the 1996 Period. This reflects a decrease in the
amount of research and development services provided by Andrx to ANCIRC in the
1997 Period as compared to the 1996 Period.

         GROSS PROFIT. Gross profit on the distribution of pharmaceutical
products was $15.7 million in the 1997 Period, an increase of 55.6%, as compared
to $10.1 million in the 1996 Period. Gross profit on the distribution of
pharmaceutical products as a percentage of distribution revenues decreased from
16.6% in the 1996 Period to 14.9% in the 1997 Period as a result of continuing
competition and pricing pressures within the generic pharmaceutical industry.
The Company expects that such factors will continue to reduce the Company's
gross profit percentage in future periods.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses as a percentage of total revenues decreased to 13.1% for
the 1997 Period from 14.8% for the 1996 Period. Selling, general and
administrative expenses increased to $14.1 million in the 1997 Period as
compared to $9.3 million in the 1996 Period primarily due to an increase in
selling activities to support the increase in distribution revenues, and
includes costs related to the establishment of an infrastructure for the sale of
the Company's first product, a bioequivalent version of Dilacor XR(TM), which
was launched on October 10, 1997.

                                       11
<PAGE>

         RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
increased to $6.8 million in the 1997 Period, as compared to $2.5 million in the
1996 Period. The increase in research and development expense of 170.5% reflects
the expansion of development activities in both the Company's ANDA and NDA
programs. Research and development expenses exclude cost of revenues for
services rendered to ANCIRC of $1.1 million in the 1997 Period and $1.8 million
in the 1996 Period.

         MANUFACTURING OVERHEAD. In the 1997 Period, the Company incurred
$994,000 of manufacturing overhead related to the Company's commencement of
commercial-scale manufacturing operations in preparation for the launch of the
Company's first product. In future periods, as the Company increases its
production of salable products, these costs will be absorbed as a component of
the cost of inventory.

         EQUITY IN LOSSES OF JOINT VENTURE. The Company's equity in losses of
ANCIRC was $1.3 million in the 1997 Period as compared to $1.4 million in the
1996 Period. ANCIRC's losses decreased to $2.5 million in the 1997 Period as
compared to $2.8 million in the 1996 Period.

         INTEREST INCOME. Interest income was $1.2 million in the 1997 Period as
compared to $762,000 in the 1996 Period. The increase in interest income is the
result of the higher level of cash, cash equivalents and investments available
for sale during the 1997 Period as compared to the 1996 Period.

         INTEREST EXPENSE. Interest expense was $449,000 in the 1997 Period as
compared to $570,000 in the 1996 Period.

         INCOME TAXES. For the 1997 Period and the 1996 Period, the Company was
not required to provide for federal or state income taxes due to its net losses.

LIQUIDITY AND CAPITAL RESOURCES

         Prior to June 1996, the Company had financed its operations primarily
through private placements of equity securities which generated net proceeds of
$27.9 million and, to a lesser extent, through bank borrowings. In June 1996,
the Company consummated its initial public offering ("IPO") which generated net
proceeds of $27.4 million. In June 1997, the Company completed two private
placements which generated net proceeds of $21.3 million. As of September 30,
1997, Andrx had $31.1 million in cash, cash equivalents and investments
available for sale and $46.0 million of working capital.

         Net cash used in operating activities was $11.7 million and $5.4
million in the 1997 Period and 1996 Period, respectively. Net cash used in
operating activities in the 1997 Period and 1996 Period was primarily
attributable to research and development expenses and increases in accounts
receivable and inventories, offset by increases in accounts payable and accrued
liabilities.

         Net cash used in investing activities was $5.8 million and $32.3
million in the 1997 Period and 1996 Period, respectively. In the 1997 Period,
the Company invested $6.7 million in capital expenditures as compared to $4.2
million in the 1996 Period. The capital expenditures in the 1997 Period and the
1996 Period were primarily for the procurement of manufacturing equipment and
construction of the Company's commercial-scale manufacturing facility. In the
1996 Period the Company invested $28.1 million in short-term investment grade
interest bearing securities.

                                       12
<PAGE>

         Net cash provided by financing activities was $19.1 million and $29.7
million for the 1997 and 1996 Period, respectively. Net cash provided by
financing activities for the 1997 Period consisted primarily of net proceeds of
$21.3 million from the private placements in June 1997 and also included the net
proceeds of $3.5 million from the exercise of stock options and warrants, offset
by $5.7 million in net repayments under the Company's line of credit. Net cash
provided by financing activities in the 1996 Period consisted primarily of the
net proceeds of $27.4 million from the IPO in June 1996, and net cash drawn of
$1.5 million under the Company's line of credit.

         The Company had an outstanding short-term borrowing balance under its
distribution subsidiary's revolving line of credit of $765,000 as of September
30, 1997 as compared to $6.5 million as of December 31, 1996. Borrowings under
the line of credit are only available for the financing of the Company's
distribution operations, are secured by all of the assets of that operation and
are subject to a borrowing base related to the value of that operation's
accounts receivable and inventories. The line of credit agreement requires
compliance by the Company with certain covenants including the maintenance of
minimum working capital and net worth levels by the distribution subsidiary. In
October 1996, the Company amended the line of credit agreement whereby, amongst
other things, the interest rate was decreased from the prime rate (8.5% as of
September 30, 1997) plus 1.5% to the prime rate plus 1.0%, and the unused
commitment fee was reduced from .5% to .25%, and under certain circumstances,
permitted the payment of dividends, repayments and advances from the Company's
distribution subsidiary to Andrx Corporation and its other subsidiaries. In
October 1997, the Company further amended its line of credit whereby the
interest rate was decreased from the prime rate plus 1.0% to the prime rate plus
0.5%. During the 1997 Quarter, the Company used a portion of the net proceeds
from the June 1997 private placements to reduce the revolving line of credit
balance by $5.3 million.

         In January 1996, Hoechst Marion Roussel, Inc. And Carderm Capital L.P.
(collectively, "Hoechst"), filed suit against the Company claiming patent
infringement as a result of the Company's ANDA filing with the FDA in late 1995
for a bioequivalent version of Cardizem(R)CD. The Company responded to these
claims by denying infringement, raising various other defenses and by filing
certain counterclaims against Hoechst. While the Company believes its product
does not infringe upon any of the patents held in connection with the branded
product and that it has meritorious defenses against this suit, the ultimate
resolution of this matter is not currently known and as described below, will
likely delay the Company from obtaining final FDA approval of the ANDA for the
Company's bioequivalent version of Cardizem(R)CD.

         In September 1997, Andrx received tentative FDA approval of the ANDA
for its bioequivalent version of Cardizem(R)CD. Such approval is tentative
because of the pending patent infringement litigation brought by Hoechst. As a
result of the Hoechst litigation, the FDA may not grant final approval of the
ANDA for Andrx's product until after either the lawsuit is resolved in Andrx's
favor or July 3, 1998 (30 months after Hoechst received Andrx's certification
that its product does not infringe the patents listed for Cardizem(R)CD).

In September 1997, Andrx entered into a Stipulation and Agreement (the
"Stipulation") with Hoechst related to the Hoechst litigation. In the
Stipulation, Andrx agreed that if the Hoechst litigation is not concluded by the
date the FDA grants final approval of the Company's ANDA for the bioequivalent
version of Cardizem(R)CD, Andrx will not commence the commercial sale of the
product in the United States until a final and unappealable judgment is issued.
The Stipulation provides that upon receiving final FDA approval of its ANDA,
Andrx will begin to receive interim

                                       13

<PAGE>

payments from Hoechst of $10.0 million quarterly which, absent certain defaults
by Andrx, are non-refundable. These payments will continue until the Hoechst
litigation is concluded or other events occur. The payments will increase
retroactively if Andrx prevails in the Hoechst litigation, with a lump sum
payment representing an agreed amount of profits that Andrx would have earned
had it begun to sell its product upon receiving final FDA approval of its ANDA.
The Stipulation also provides Andrx with the option of licensing Hoechst's
patents at certain times.

         The Company anticipates that its existing capital resources will be
sufficient to enable it to maintain its operations through 1998. The Company
expects negative cash flows and net losses to continue at least through 1997 and
into 1998 because it will use substantial funds for its product development
efforts, including bioequivalence studies for its generic controlled-release
product candidates in the Company's ANDA program and the expansion of the
Company's NDA program to develop brand name controlled-release products. The
Company anticipates that during 1997 approximately $12 million will be used for
research and product development activities (including the Company's share of
the funding of the ANCIRC joint venture). After 1998, the Company may need
additional funding in order to continue research and development for its product
candidates and to commercialize products after receipt of FDA approvals.
Additional funding, whether obtained through public or private debt or equity
financing, or from collaborative arrangements, may not be available when
required or may not be available on terms favorable to the Company, if at all.
If additional financing is not available, the Company may be required to delay,
scale back or eliminate some or all of its research and development programs or
to license to third parties products or technologies that the Company would
otherwise seek to develop itself.

                                       14
<PAGE>

                                ANDRX CORPORATION
                                     PART II
                                OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         On June 14, 1996, the U.S. Securities and Exchange Commission declared
effective the Company's registration statement on Form S-1 (Registration
Statement Number 333-03614). The offering of the securities registered pursuant
to the registration statement commenced on June 14, 1996. The offering
terminated after the sale of 2,530,000 shares of the Company's common stock,
$.001 par value per share for $12.00 per share. The managing underwriters for
the public offering of the Company's securities were Oppenheimer & Co., Inc. and
Gruntal & Co., Incorporated.

In connection with the offering, the Company incurred expenses of approximately
$2.9 million. These expenses were in the form of direct or indirect payments to
others and not direct or indirect payments to directors or officers of the
Company or to persons owning more than 10% of any class of securities of the
Company. From the net proceeds of approximately $27.4 million, through September
30, 1997 the Company has used approximately $8.5 million for research and
development costs, $4.4 million for the construction of plant, building and
facilities, $4.8 million for the purchase and installation of machinery and
equipment and $2.4 million for contributions to ANCIRC. With the exception of
the contributions to ANCIRC, a joint venture between the Company and Watson
Pharmaceuticals, Inc., none of the payments from the use of proceeds were made
to officers, directors or persons beneficially owning more than 10% of any class
of securities of the Company.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

              (a)  Exhibits:

                   27        Financial Data Schedule (EDGAR version only)

              (b)  Reports on Form 8-K:

                    None

                                    15
<PAGE>

                                ANDRX CORPORATION
                                   SIGNATURES

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

                             By        /s/ ALAN P. COHEN
                               ------------------------------------------------
                                  Alan P. Cohen
                                  Chairman and Chief Executive Officer
                                  (Principal Executive Officer)

                             By       /s/ ANGELO C. MALAHIAS
                               ------------------------------------------------
                                  Angelo C. Malahias
                                  Vice President and Chief Financial Officer
                                  (Principal Financial and Accounting Officer)

November 12, 1997

                                       16
<PAGE>

                                 EXHIBIT INDEX

EXHIBIT         DESCRIPTION
-------         -----------

27              Financial Data Schedule