===============================================================================
                                  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, 1996

                         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                         (Zip Code)
              Executive Offices)

                                  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:

                                    YES   [X]        NO   [ ]

As of November 1, 1996, 13,378,159 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, 1996


                                                               PAGE NUMBER
                                                               -----------

              INDEX TO FORM 10-Q                                    2

PART I        FINANCIAL INFORMATION

   Item 1.    Consolidated Financial Statements

              Consolidated Balance Sheets
                as of September 30, 1996 and
                December 31, 1995                                   3

              Consolidated Statements of Operations
                for the three and nine months ended
                September 30, 1996 and 1995                         4

              Consolidated Statements of Cash Flows
                for the nine months ended
                September 30, 1996 and 1995                         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 6.    Exhibits and Reports on Form 8-K                     15

SIGNATURES                                                         16

                                       2
<PAGE>
<TABLE>
<CAPTION>

                                ANDRX CORPORATION
                                     PART I
                              FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                       ANDRX CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                           ASSETS                                              SEPTEMBER 30,         DECEMBER 31,
                                                                                    1996                 1995
                                                                              -----------------    ------------------
                                                                                 (UNAUDITED)

<S>                                                                                <C>                   <C> 
Current assets
   Cash and cash equivalents                                                       $ 5,783,600          $ 13,841,400
   Short-term investments                                                           28,181,700                  --
   Accounts receivable, net of allowances of $893,000 (unaudited) and $574,200
    as of September 30, 1996 and December 31, 1995, respectively                    11,870,800             8,263,400
   Due from joint venture                                                              259,900               488,500
   Inventories                                                                      11,712,100             9,502,000
   Prepaid and other current assets                                                    967,600               130,500
                                                                                 --------------       ---------------

     Total current assets                                                           58,775,700            32,225,800

Property and equipment, net                                                          7,253,700             3,831,100
Other assets                                                                            45,100                91,800
                                                                                 --------------       ---------------

     Total assets                                                                 $ 66,074,500          $ 36,148,700
                                                                                 =============          ============

                           LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
   Accounts payable                                                               $ 11,388,200          $  9,860,000
   Accrued liabilities                                                               3,411,500             1,724,200
   Bank loan                                                                         7,527,000             6,077,500
   Notes payable                                                                       293,100                23,500
   Commitment to joint venture                                                          19,500               139,000
                                                                                 -------------          ------------

       Total current liabilities                                                    22,639,300            17,824,200
                                                                                 -------------          ------------
Commitments and contingencies

Shareholders' equity
  Convertible preferred stock; $0.001 par value,
   1,000,000 shares authorized; no shares issued and
    outstanding as of September 30,1996 (unaudited) and December 31, 1995,
    respectively                                                                          --                    --
  Common stock; $0.001 par value, 25,000,000 shares
    authorized; 13,349,600 (unaudited) and 10,727,100 shares issued 
    and outstanding as of September 30, 1996 and
    December 31, 1995, respectively                                                     13,300                10,700
  Additional paid-in capital                                                        56,787,200            28,795,000
  Accumulated deficit                                                              (13,384,200)          (10,481,200)
  Unrealized gain on short-term investments                                             18,900                  --
                                                                                 --------------        --------------
    Total shareholders' equity                                                      43,435,200            18,324,500
                                                                                 --------------        --------------
    Total liabilities and shareholders' equity                                    $ 66,074,500          $ 36,148,700
                                                                                 =============         ==============
</TABLE>

          See Accompanying Notes to Consolidated Financial Statements.

                                       3

<PAGE>
<TABLE>
<CAPTION>


                       ANDRX CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                                     THREE MONTHS ENDED                  NINE MONTHS ENDED
                                                       SEPTEMBER 30,                       SEPTEMBER 30,
                                                  1996              1995              1996            1995
                                             ---------------------------------   --------------------------------

<S>                                              <C>               <C>             <C>               <C>
REVENUES
   Distribution revenues, net                  $ 23,320,600      $ 12,512,300    $  61,097,000      $ 35,008,300
   Research and development services
     to joint venture                               274,400           631,200        1,829,300         1,722,300
   Licensing revenues                                   --            115,000             --             165,000
                                             ---------------    --------------   --------------    --------------
    Total revenues                               23,595,000        13,258,500       62,926,300        36,895,600
                                             ---------------    --------------   --------------    --------------

COST OF REVENUES
   Distribution revenues                         19,477,100        10,267,100       50,975,300        28,922,600
   Research and development services
     to joint venture                               274,400           631,200        1,829,300         1,722,300
                                             ---------------    --------------   --------------    --------------
    Total cost of revenues                       19,751,500        10,898,300       52,804,600        30,644,900
                                             ---------------    --------------   --------------    --------------

Gross profit                                      3,843,500         2,360,200       10,121,700         6,250,700
                                             ---------------    --------------   --------------    --------------

OPERATING EXPENSES
   Selling, general and administrative            3,493,000         2,057,900        9,333,000         5,944,400
   Research and development                       1,174,500           806,700        2,499,400         1,638,800
   Equity in losses of joint venture                352,800           483,800        1,384,000         1,298,000
                                             ---------------    -------------    --------------    --------------
    Total operating expenses                      5,020,300         3,348,400       13,216,400         8,881,200
                                             ---------------    --------------   --------------    --------------

LOSS FROM OPERATIONS                             (1,176,800)         (988,200)      (3,094,700)       (2,630,500)

Interest expense                                   (288,700)         (172,200)        (570,300)         (447,200)
Interest income                                     447,400            32,600          762,000           128,700
Other income, net                                      --              31,300             --              64,600
                                             ---------------    --------------   --------------    --------------

NET LOSS                                      $  (1,018,100)     $ (1,096,500)     $(2,903,000)     $ (2,884,400)
                                             ===============   ================  ==============    ==============
NET LOSS PER SHARE                            $       (0.08)     $      (0.11)     $     (0.25)     $      (0.31)
                                             ===============   ===============  ================   ==============
WEIGHTED AVERAGE SHARES OF
    COMMON STOCK OUTSTANDING                     13,297,000         9,652,400       11,734,000         9,252,100
                                             ================   ==============   ==============    ==============


</TABLE>


          See Accompanying Notes to Consolidated Financial Statements.

                                       4
<PAGE>
<TABLE>
<CAPTION>


                       ANDRX CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                                   NINE MONTHS ENDED                 NINE MONTHS ENDED
                                                                   SEPTEMBER 30, 1996               SEPTEMBER 30, 1995
                                                                  ---------------------            ----------------------

<S>                                                                        <C>                          <C>
Cash flows from operating activities
  Net loss                                                               $ (2,903,000)                $ (2,884,400)
  Adjustments to reconcile net loss to net cash used in
    operating activities
    Depreciation and amortization                                             757,000                      620,800
    Provision for (write-off of) receivables, net                             318,800                      (85,400)
    Equity in losses of joint venture                                       1,384,000                    1,298,000
    Contributions to joint venture                                         (2,005,500)                  (1,200,000)
    Increase in accounts receivable                                        (3,926,200)                  (2,152,900)
    (Increase) decrease in due from joint venture                             730,600                      (54,600)
    Increase in inventories                                                (2,210,100)                  (2,925,100)
    Increase in prepaid and other current assets                             (837,100)                     (15,700)
    Decrease in other assets                                                   46,700                       54,900
    Increase in accounts payable and accrued liabilities                    3,215,500                       61,700
    Decrease in unearned revenue                                                 --                       (115,000)
                                                                       --------------                -------------
      Net cash used in operating activities                                (5,429,300)                  (7,397,700)
                                                                       --------------                -------------

Cash flows from investing activities
    Purchase of property and equipment                                     (4,179,600)                  (1,085,500)
    Purchase of short-term investments, net                               (28,162,800)                        --  
                                                                       --------------                -------------
    Net cash used in investing activities                                 (32,342,400)                  (1,085,500)
                                                                       --------------                ------------- 

Cash flows from financing activities

  Proceeds from issuance of shares of common stock, net                    27,430,200                    2,006,300
  Proceeds from exercise of stock options and warrants                        564,600                      814,100
  Net borrowings under bank loan                                            1,449,500                    3,175,800
  Proceeds from notes payable                                                 501,900                      110,600
  Payment on notes payable                                                   (232,300)                    (157,000)
                                                                       --------------                ------------- 
    Net cash provided by financing activities                              29,713,900                    5,949,800
                                                                       --------------                ------------- 

Net decrease in cash and cash equivalents                                  (8,057,800)                  (2,533,400)
Cash and cash equivalents, beginning of period                             13,841,400                    3,845,800
                                                                       --------------                ------------- 
Cash and cash equivalents, end of period                                 $  5,783,600                $   1,312,400
                                                                       ==============                ============= 

Supplemental disclosure of cash paid during the period for
    Interest                                                             $    570,300                $     447,200
                                                                       ==============                =============

</TABLE>


           See Accompanying Notes to Consolidated Financial Statements

                                       5
<PAGE>


                       ANDRX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1996
                                   (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 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, 1996
and cash flows for the nine months ended September 30, 1996, are not necessarily
indicative of the results of operations or cash flows which may be expected for
the remainder of 1996. The unaudited consolidated financial statements should be
read in conjunction with the consolidated financial statements and related notes
for the year ended December 31, 1995, included in the Company's Prospectus dated
June 14, 1996.

2.    BANK LOAN

     In October 1996, the Company amended its line of credit agreement whereby,
amongst other things, the interest rate was decreased from the prime rate (8.25%
as of September 30, 1996) plus 1.5% to the prime rate plus 1.0%, and the unused
commitment fee was reduced from .5% to .25%. Additionally, the amendment
provides for, under certain circumstances, the payment of dividends, repayments
and advances from the Company's distribution subsidiary to Andrx and its other
subsidiaries. As of September 30, 1996, approximately $1.0 million was available
for such distributions.

3.    INCOME TAXES

     For the three and nine months ended September 30, 1996 and 1995 the Company
was not required to provide for federal or state income taxes due to its net
losses. Under the provisions of SFAS No. 109, "Accounting for Income Taxes", the
Company has provided a valuation allowance to reserve against 100% of its net
operating loss carryforwards given the Company's history of net losses. As of
September 30, 1996, for financial reporting purposes and federal income tax
purposes, the Company has net operating loss carryforwards of approximately
$12.6 million and approximately $10.3 million, respectively, which if not
utilized, will expire beginning in 2008. Net operating loss carryforwards are
subject to review and possible adjustment by the Internal Revenue Service and
may be limited in the event of certain cumulative changes in the ownership
interest of significant shareholders over a three-year period in excess of 50%.

                                       6
<PAGE>



4.     JOINT VENTURE

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

                                       SEPTEMBER 30, 1996             DECEMBER 31, 1995
                                       ------------------             ------------------

<S>                                     <C>                             <C>          
Cash                                    $   517,600                     $      84,900
Equipment, net                               26,700                              --
                                        -----------                     -------------
      Total assets                      $   544,300                     $      84,900
                                        ===========                     =============

Current liabilities                     $   612,200                     $   1,285,200
Partners' deficit                           (67,900)                       (1,200,300)
                                        -----------                     -------------
        Total liabilities and
        partner's deficit               $   544,300                     $      84,900
                                        ===========                     =============

                                   THREE MONTHS ENDED                      NINE MONTHS ENDED
                                     SEPTEMBER 30,                           SEPTEMBER 30,
                                 1996             1995                   1996              1995
                               ------------     ------------           -------------     ------------

Research and development
           expenses            $    710,700      $   811,600           $   2,776,400     $  2,171,800
                               ============      ===========           =============     ============

Net loss                       $   (705,500)     $  (806,400)          $  (2,767,900)    $ (2,163,300)
                               ============      ===========           =============     ============
</TABLE>


         As of September 30, 1996 and December 31, 1995, the Company was due
$274,400 and $1,005,000, respectively, from ANCIRC for research and development
services rendered. In the September 30, 1996 and December 31, 1995 consolidated
balance sheets, such amounts due from the joint venture were offset by $14,500
and $516,500, respectively, representing the amount that Andrx is required to
fund to ANCIRC in order to receive the full amount due from the joint venture.

         In November 1996, the joint venturers were required to make capital
contributions to ANCIRC to fund their respective capital accounts. The proceeds
of these contributions were utilized by ANCIRC to pay each joint venturers'
outstanding balance for services rendered through September 30, 1996. Andrx's
capital contribution to ANCIRC was $500,000 and ANCIRC paid $274,400 to the
Company.

5.       NET LOSS PER SHARE

         For the three and nine months ended September 30, 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 loss per share.

         Pursuant to Securities and Exchange Commission Staff Accounting
Bulletins, common stock and common stock equivalents issued at prices below the
public offering price during the 12-month period prior to the Company's IPO on
June 14, 1996, are required to be included in the

                                       7
<PAGE>


calculation of earnings or loss per share, as if they were outstanding for all
periods presented, using the treasury stock method. Accordingly, the weighted
average number of shares of common stock outstanding for three and nine months
ended September 30, 1995 have been adjusted to reflect the impact of such
additional common stock and common stock equivalents issued below the initial
public offering price.

6.       CONTINGENCIES

         The Company is involved in a dispute and two litigation matters, all of
which arose in the ordinary course of business. The litigation process is
inherently uncertain and it is possible that the resolution of the lawsuits may
adversely effect the Company. There have been no material developments in any
legal matters since the Company's Prospectus dated June 14, 1996.

         For the three and nine months ended September 30, 1996, the Company has
recorded provisions for $150,000 and $450,000, respectively, for anticipated
additional litigation costs related to the Company's Abbreviated New Drug
Application for its generic version of Cardizem CD/registered trademark/.

                                       8
<PAGE>



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", "ESTIMATE", OR "CONTINUE" OR THE NEGATIVE OTHER VARIATIONS
THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. FACTORS WHICH MAY EFFECT THE COMPANY'S RESULTS INCLUDE, BUT ARE NOT
LIMITED TO, THE RISKS AND UNCERTAINTIES ASSOCIATED WITH A DRUG DELIVERY COMPANY
WHICH HAS NOT COMMERCIALIZED ITS FIRST PRODUCT, INCLUDING 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 controlled-release oral pharmaceuticals utilizing its proprietary drug
delivery technologies. To date, the distribution operations have generated
substantially all of the Company's revenues and the Company expects that
revenues from the distribution of generic pharmaceuticals will continue to
comprise substantially all of its revenues until the Company receives approvals
from the U.S. Food and Drug Administration ("FDA") for the marketing of its
products and meaningful revenues are achieved from a product developed by the
Company. The Company expects to generate negative cash flow and net losses at
least through 1997.

         To expedite product development and reduce the Company's development
costs, the Company has entered into collaborative agreements with major
pharmaceutical companies. The Company is a 50% partner in the ANCIRC joint
venture with Watson Pharmaceuticals, Inc. ("Watson") for the development of up
to eight controlled-release drugs and has entered into development and licensing
agreements with Mylan Laboratories, Inc., Zenith Laboratories, Inc. (a
subsidiary of IVAX Corporation) and Watson for four additional
controlled-release drugs. Capital contributions to, and net income or losses
from, 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.

                                       9
<PAGE>


RESULTS OF OPERATIONS

         THREE MONTHS ENDED SEPTEMBER 30, 1996 AS COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1995

         Total revenues for the three months ended September 30, 1996 ("1996
Quarter") were approximately $23.6 million, an increase of approximately $10.3
million or 77.9%, as compared to total revenues of approximately $13.3 million
for the three months ended September 30, 1995 ("1995 Quarter"). The distribution
of generic pharmaceutical products generated revenues of approximately $23.3
million in the 1996 Quarter, an increase of approximately $10.8 million or
86.4%, from approximately $12.5 million in the 1995 Quarter. The increase in
distribution revenues reflects the Company's increased penetration of the
generic market. Revenues generated by research and development services to
ANCIRC decreased to approximately $274,000 in the 1996 Quarter from
approximately $631,000 in the 1995 Quarter. This reflects a decrease in the
amount of research and development services provided by Andrx to ANCIRC.

         Gross profit on the distribution of generic pharmaceutical products was
16.5% as a percentage of distribution revenues in the 1996 Quarter, as compared
to 17.9% in the 1995 Quarter. The decrease in gross profit as a percentage of
distribution revenues is the result of the continuing competition and pricing
pressures within the generic industry. The Company expects that such competition
and pressures could continue to decrease the Company's gross profit percentage
in future periods.

         Selling, general and administrative expenses were approximately $3.5
million in the 1996 Quarter, an increase of approximately $1.4 million or 69.7%
as compared to approximately $2.1 million in the 1995 Quarter. This increase was
primarily attributable to an increase in selling activities to support the
increase in distribution revenues. Selling, general and administrative expenses
were 14.8% of total revenues in the 1996 Quarter, as compared to 15.5% in the
1995 Quarter.

         Research and development expenses were approximately $1,175,000 in the
1996 Quarter, as compared to $807,000 in the 1995 Quarter. Research and
development expenses in the 1996 Quarter include a $150,000 provision for
anticipated additional litigation costs in connection with the Abbreviated New
Drug Application ("ANDA") submitted in late 1995 for the Company's generic
version of Cardizem CD/registered trademark/. The filing of an ANDA for a
generic version of a brand name pharmaceutical may result in litigation alleging
infringement of patents covering the brand name pharmaceutical. Even though the
Company believes that its drug delivery technologies do not infringe on any
patent rights held by others, the Company evaluates the probability of patent
infringement litigation with respect to its ANDA submissions on a case by case
basis and, accordingly, will reserve for anticipated legal expenses as it deems
appropriate. Additionally, research and development expenses for the 1996
Quarter include the Company's efforts to establish a facility for the
commercial-scale manufacture of the Company's generic versions of Cardizem
CD/registered trademark/ and Dilacor XR/registered trademark/ for which ANDAs
were submitted in late 1995. Research and development expenses exclude cost of
revenues for services rendered to ANCIRC of approximately $274,000 in the 1996
Quarter and approximately $631,000 in the 1995 Quarter.

         The Company's equity in losses of the ANCIRC joint venture was
approximately $353,000 in the 1996 Quarter as compared to approximately $484,000
in the 1995 Quarter. The Company's share of ANCIRC's losses was decreased from
60% to 50% effective October 30, 1995 in connection with an amendment to the
ANCIRC agreement. ANCIRC's losses decreased

                                       10
<PAGE>


to $706,000 in the 1996 Quarter as compared to $806,000 in the 1995 Quarter
primarily due to the decrease in the services rendered to ANCIRC by the Company,
offset by the increase in services rendered to ANCIRC by Watson.

         Interest expense was approximately $289,000 in the 1996 Quarter as
compared to approximately $172,000 in the 1995 Quarter. The increase was a
result of a higher average level of borrowings during the 1996 Quarter. Such
borrowings are utilized to fund the working capital requirements for the
Company's distribution operations.

         Interest income was approximately $447,000 in the 1996 Quarter as
compared to approximately $33,000 in the 1995 Quarter. The increase in interest
income is the result of the net increase in cash, cash equivalents and
short-term investments during 1995 and 1996, primarily from the sale of shares
of common stock to Watson in August and December 1995, for net proceeds of
approximately $13.6 million, and the sale of 2,530,000 shares of the Company's
common stock in an Initial Public Offering ("IPO") in June 1996 for gross
proceeds of approximately $30.4 million.

         For 1996 and 1995, the Company was not required to provide for federal
or state income taxes due to its net losses. As of September 30, 1996, the net
operating loss carryforward was approximately $12.6 million for financial
reporting purposes and approximately $10.3 million for federal tax purposes,
which, if not utilized, will expire in 2008.

NINE MONTHS ENDED SEPTEMBER 30, 1996 AS COMPARED TO NINE MONTHS ENDED 
SEPTEMBER 30, 1995

         Total revenues for the nine months ended September 30, 1996 ("1996
Period") were approximately $62.9 million, an increase of approximately $26.0
million or 70.6% as compared to total revenues of approximately $36.9 million
for the nine months ended September 30, 1995 ("1995 Period"). Distribution
revenues were approximately $61.1 million in the 1996 Period, an increase of
approximately $26.1 million or 74.5% from approximately $35.0 million in the
1995 Period. The increase in distribution revenues reflects the Company's
increased penetration of the generic market. Revenues generated by research and
development services to ANCIRC increased to approximately $1.8 million in the
1996 Period from approximately $1.7 million in the 1995 Period. This increase
resulted from an increase in the Company's research and development efforts on
ANCIRC products.

         Gross profit on the distribution of generic pharmaceutical products was
16.6% as a percentage of distribution revenues in the 1996 Period, as compared
to 17.4% in the 1995 Period. The decrease in gross profit as a percentage of
distribution revenues is the result of continuing competition and pricing
pressures within the generic industry. The Company expects that such competition
and pressures could continue to decrease the Company's gross profit percentage
in future periods.

         Selling, general and administrative expenses were approximately $9.3
million the 1996 Period, an increase of approximately $3.4 million or 57.0% as
compared to approximately $5.9 million in the 1995 Period. This increase was
primarily attributable to an increase in selling activities to support the
increase in distribution revenues. Selling, general and administrative expenses
were 14.8% of total revenues in the 1996 Period, as compared to 16.1% in the
1995 Period.

                                       11
<PAGE>


         Research and development expenses were approximately $2.5 million in
the 1996 Period, as compared to $1.6 million in the 1995 Period. Research and
development expenses in the 1996 Period include a $450,000 provision for
anticipated additional litigation costs in connection with the Company's ANDA
submitted in late 1995 for the generic version of Cardizem CD/registered
trademark/. Additionally, research and development expenses in the 1996 Period
include the expenses related to the establishment of a commercial-scale
manufacturing facility. Research and development expenses exclude cost of
revenues for services rendered to ANCIRC of approximately $1.8 million in the
1996 Period and approximately $1.7 million in 1995 Period.

         The Company's equity in losses of joint venture was approximately $1.4
million in the 1996 Period as compared to approximately $1.3 million in the 1995
Period. The Company's share of ANCIRC's losses was decreased from 60% to 50%
effective October 30, 1995 in connection with an amendment to the ANCIRC
agreement. ANCIRC's losses increased to $2.8 million in the 1996 Period as
compared to $2.2 million in the 1995 Period due to the increase in the research
and development services rendered by the Company and Watson to ANCIRC during the
1996 Period.

         Interest expense was approximately $570,000 in the 1996 Period as
compared to $447,000 in the 1995 Period. Although the interest rate on the
Company's bank borrowings decreased effective January 1996, interest expense
increased in the 1996 Period as compared to the 1995 Period, due to the higher
average level of borrowings during the 1996 Period. Such higher level of
borrowings were required to finance the higher average level of working capital
supporting the growth of the distribution operations.

         Interest income was approximately $762,000 in the 1996 Period as
compared to approximately $129,000 in the 1995 Period. The increase in interest
income is the result of the net increase in cash, cash equivalents and
short-term investments during 1995 and 1996, primarily from the sale of shares
of the Company's common stock.

         For 1996 and 1995, the Company was not required to provide for federal
or state income taxes due to its net losses.

LIQUIDITY AND CAPITAL RESOURCES

         In June 1996, the Company consummated its IPO which generated gross
proceeds of $30.4 million. Prior thereto, the Company had financed its
operations primarily through private placements of equity securities which
generated proceeds of $27.9 million and, to a lesser extent, through bank
borrowings. As of September 30, 1996, Andrx had $34.0 million in cash, cash
equivalents and short-term investments and $36.1 million of working capital.

         Net cash used in operating activities was $5.4 million and $7.4 million
in the 1996 Period and the 1995 Period, respectively. The net cash used in
operating activities in both these periods was primarily attributed to research
and development and increases in accounts receivable and inventories, which were
offset by the increases in accounts payable and accrued liabilities. The
decrease in net cash used in operating activities in the 1996 Period as compared
to the 1995 Period was attributed to a larger increase in accounts payable and
accrued liabilities which was offset to a lesser extent by the increases in
accounts receivable and inventories. Research and development spending includes
the Company's contributions to ANCIRC. In 1996 the Company expects to contribute
approximately $2.5 million to ANCIRC.

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<PAGE>


         Net cash used in investing activities was $32.3 million and $1.1
million in the 1996 Period and 1995 Period, respectively. In June 1996, the
Company invested $28.2 million of the proceeds from the IPO in short-term
investment grade interest bearing securities. Additionally, in the 1996 Period
the Company invested $4.2 million in capital expenditures as compared to $1.1
million in the 1995 Period. The capital expenditures in the 1996 Period were
primarily for the procurement of manufacturing equipment and construction of the
Company's commercial-scale manufacturing facility and in the 1995 Period were
primarily for the purchase of laboratory equipment for the Company's research
and development programs.

         Net cash provided by financing activities was $29.7 million and $5.9
million in the 1996 Period and the 1995 Period, respectively. Net cash provided
by financing activities in the 1996 Period consisted primarily of $27.4 million
in net proceeds from the Company's IPO, $600,000 from the issuance of shares in
connection with the exercise of stock options and warrants, and net cash drawn
under the Company's revolving line of credit of $1.4 million. Net cash provided
by financing activities in the 1995 Period consisted primarily of proceeds from
the issuance of common stock of $2.8 million and net cash drawn under the
Company's revolving line of credit of $3.2 million.

         The Company had an outstanding short-term borrowing balance under its
distribution subsidiary's revolving line of credit of $7.5 million as of
September 30, 1996 as compared to $6.1 million as of December 31, 1995.
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 agreement requires
compliance by the Company with certain covenants including the maintenance of
minimum working capital and net worth levels, and prior to the October 1996
amendment described below, restricted the payment of dividends to the Company
by, repayment of loans or advances by the Company to, and certain asset
transfers from, the Company's distribution subsidiary. In January 1996, the
maximum amount available under the revolving line of credit was increased from
$8.0 million to $10.0 million and the interest rate was decreased from the prime
rate (8.25% as of September 30, 1996) plus 2.0% to the prime rate plus 1.5%. In
October, 1996, the Company further amended the line of credit agreement whereby,
amongst other things, the interest rate was decreased from the prime rate plus
1.5% to the prime rate plus 1.0%, and the unused commitment fee was reduced from
 .5% to .25%. Additionally, the amendment provides for, under certain
circumstances, the payment of dividends, repayments and advances from the
Company's distribution subsidiary to Andrx and its subsidiaries. As of September
30, 1996, approximately $1.0 million was available for such distributions.

         The Company anticipates that its existing capital resources will be
sufficient to enable it to maintain its current and planned operations through
the end of 1997. The Company expects negative cash flows and net losses to
continue at least through 1997 because it will use substantial funds for its
product development efforts, including the formulation of and bioequivalence
studies for its generic controlled-release product candidates, and for the
establishment of commercial-scale manufacturing operations. The Company
anticipates that during 1996 and 1997, approximately $15.0 million will be used
for research and product development activities (including the Company's share
of the funding of the ANCIRC joint venture) and approximately $10.0 million will
be used for capital expenditures relating to product development, primarily the
establishment of commercial-scale manufacturing operations for the
commercialization of the Company's generic versions of Cardizem CD/registered
trademark/ and Dilacor XR/registered trademark/. The Company may need additional
funding in order to complete research and development

                                       13
<PAGE>


for its product candidates and to commercialize these 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 needed 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 6.  EXHIBITS AND REPORTS ON FORM 8-K

              (a)  Exhibits:

                   10.28    Sixth Amendment to the Loan and Security Agreement 
                            by and between Congress Financial Corporation
                            (Florida) and Registrant

                   11       Computation of Net Loss Per Share
 
                   27       Financial Data Schedule

              (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 8, 1996

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