SECURITIES AND EXCHANGE COMMISSION
			   Washington, D.C.  20549

				 FORM 10-KSB
(Mark One)

[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
	For the fiscal year ended July 31, 2001

	OR

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
	For the transition period from              to

			Commission file No. 000-23399

		     FLEMINGTON PHARMACEUTICAL CORPORATION
	    -----------------------------------------------------
	    (Exact name of registrant as specified in its charter)

	    Delaware                              22-2407152
----------------------------------------------------------------------------
(State or other jurisdiction of         (I.R.S. Employer Identification No.)
 incorporation or organization)

    31 State Highway 12 Flemington, New Jersey               08822
----------------------------------------------------------------------------
     (Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code: (908) 782-3431
						    --------------

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

Securities registered pursuant to Section 12(g) of the Act:
 Common Stock, par value $.001 per share
 Redeemable Class A Common Stock Purchase Warrants expiring November 18, 2002.

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes   [X]    No  [ ]

     Check if there is no disclosure of delinquent filings pursuant to Item
405 of Regulation S-K contained herein, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.     [X]

     State the issuer's revenues for its most recent fiscal year:  $323,000

     The aggregate market value of the voting and non-voting common equity of
the registrant held by non-affiliates of the registrant at November 8, 2001
was approximately $3,970,994 based upon the closing sale price of $0.65 for
the Registrant's Common Stock, $.001 par value, as reported by the National
Association of Securities Dealers OTC Bulletin Board on November 8, 2001.

      As of November 8, 2001 the Registrant had 7,724,900 shares of Common
Stock, $.001 par value, outstanding.


		   FLEMINGTON PHARMACEUTICAL CORPORATION

		       Annual Report on Form 10-KSB
		  For the Fiscal Year Ended July 31, 2001

			    TABLE OF CONTENTS



							       Page

				 PART  I

Item 1.  Business                                               4
Item 2.  Properties                                            27
Item 3.  Legal Proceedings                                     27
Item 4.  Submission of Matters to a Vote of Security Holders   27
Item 4A. Non-director Executive Officers                       27

				 PART  II

Item 5.  Market for the Registrant's Common Stock and Related
	  Security Holder Matters                              28
Item 6.  Management's Discussion and Analysis of Financial
	  Condition and Results of Operations                  29
Item 7.  Financial Statements                                  32
Item 8.  Changes in and Disagreements with Accountants on
	  Accounting and Financial Disclosure                  32

				 PART  III

Item 9.  Directors and Executive Officers of the Registrant    32
Item 10. Executive Compensation                                34
Item 11. Security Ownership of Certain Beneficial Owners
	  and Management                                       39
Item 12. Certain Relationships and Related Transactions        40


				PART  IV

Item 13. Exhibit List and Reports on Form 8-K                  41

	 FINANCIAL  STATEMENTS

	 Report of Independent Auditors                       F-1
	 Balance Sheet                                        F-2
	 Statements of Operations                             F-3
	 Statements of Changes in Stockholders' Equity        F-4
	 Statements of Cash Flows                             F-5
	 Notes to Financial Statements                        F-6



				 PART I

ITEM 1. BUSINESS.

General

     Flemington Pharmaceutical Corporation, a Delaware corporation (the
"Company" or the "Registrant"), is engaged in consulting activities and the
development of novel application drug delivery systems for presently marketed
prescription and over-the-counter ("OTC") drugs.  The Company's (both patented
and patent-pending) delivery systems are lingual sprays and soft gelatin bite
capsules, enabling drug absorption through the oral mucosa and more rapid
absorption into the bloodstream than presently available oral delivery
systems.  The Company's proprietary oral dosage delivery systems enhance and
greatly accelerate the onset of the therapeutic benefits which the drugs are
intended to produce.  The Company refers to its delivery systems as Immediate
-Immediate Release (I2R TM) because its delivery systems are designed to
provide therapeutic benefits within minutes of administration.  The Company's
development efforts for its novel drug delivery systems are concentrated on
drugs which are already available and proven in the marketplace.  In addition
to increasing bioavailability by avoiding metabolism by the liver before entry
into the bloodstream, the Company believes that its proprietary delivery
systems offer the following significant advantages:  (i) improved drug safety
profile by reducing the required dosage, including possible reduction of side
-effects; (ii) improved dosage reliability; (iii) allowing medication to be
taken without water; and (iv) improved patient convenience and compliance.

     In light of the material expense and delays associated with independently
developing and obtaining approval of pharmaceutical products, the Company will
continue to seek to develop such products through collaborative arrangements
with major pharmaceutical companies, which will fund that development.  The
Company is presently a party to one such development agreement with a
pharmaceutical company.  Due to the Company's small revenue base, low level
of working capital and inability to increase the number of development
agreements with pharmaceutical companies, the Company has been unable to
aggressively pursue its product development strategy.  The Company will
require significant additional financing and/or a strategic alliance with a
well-funded development partner to undertake its business plan.  See
"Management Discussion and Analysis."

     Since its inception in 1982, the Company has been a consultant to the
pharmaceutical industry, focusing on product development activities of various
European pharmaceutical companies, and since 1992 has used its consulting
revenues to fund its own product development activities.  The Company's recent
focus on developing its own products evolved naturally out of its consulting
experience for other pharmaceutical companies.  Substantially all of the
Company's revenues have been derived from its consulting activities.  In 1998,
the Company changed the name under which it performs its consulting activities
from Pharmaconsult to FPC Consulting.  The Company's principal business
address is 31 State Highway 12, Flemington, New Jersey, 08822, and its
telephone number is (908) 782-3431.


Forward Looking Statements

     When used in this report, the words "may," "will," "expect," "anticipate,"
"continue," "estimate," "project," "intend" and similar expressions are
intended to identify forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934 regarding events, conditions and financial trends that may affect
the Company's future plans of operations, business strategy, operating results
and financial position.  Current stockholders and prospective investors are
cautioned that any forward-looking statements are not guarantees of future
performance and are subject to risks and uncertainties and that actual results
may differ materially from those included within the forward-looking statements
as a result of various factors.  Such factors are described under the headings
"Business-Certain Considerations", "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Financial Statements
and Notes thereto.


Recent Developments

Filing of two Estradiol INDs and initiation of Phase II Studies

     In mid-1999, as part of its joint development agreement with Nace
Resources, (see Development Agreements, below), the Company completed its
open label clinical pilot study of its Estradiol lingual spray product. In
the opinion of the Company, the results of the study were favorable. The
Company believes that the product would be appropriate for premenstrual
migraine, for treatment of hot flashes in post- and perimenopausal women and
as a long-term, low-dose, low side-effect treatment of post-menopausal
symptoms.   A Pre-IND meeting with FDA was held in the third quarter of 2000
and, based on the results of that meeting, a plan for  further development
was prepared.  Two INDs were subsequently filed - one for vasomotor symptoms
and a second for treatment of menstrual migraines.  Both INDs were approved
in 2000.  Under the vasomotor IND a pilot study was started to see if rapid
relief of hot flushes could be obtained with the lingual spray.  The study,
due to the small number of subjects and/or the study design, was not able
clearly to demonstrate an advantage for the rapid relief of vasomotor
symptoms.  At this time a study large enough to demonstrate this rapid relief
and/or to demonstrate the utility of the Lingual Spray for maintenance therapy
has been delayed pending identification of a partner to fund the studies.  A
pilot study under the second IND was planned to start in the fourth quarter
2000, but has been delayed until a partner has been identified to fund the
study. The Company is presently engaged in discussions with potential
partners which would fund the further development of the product and the
necessary regulatory filings.

Progesterone Lingual Spray

     This product is being developed as part of the agreement with CLL and is
intended to treat the symptoms of progesterone deficiency.  The formulation
work was completed, which was carried out by the Company and CLL, and
stability and clinical supplies were manufactured in fourth quarter 1999. The
pilot clinical study was carried out in early 2000. The results of this pilot
clinical study supported the concept of fast and efficient relief of the
symptoms associated with progesterone deficiency.  A Pre-IND meeting with FDA
was held in the third quarter of 2000 and based on the results of that meeting
a plan for further development was prepared.  CLL and the Company are seeking
development partners to finance the further work associate with filing an NDA
and bringing this product to market.

Doxylamine Succinate Lingual Spray

     The Company has developed a formulation and performed stability studies
for doxylamine succinate as a sleep-inducing agent.  The Company has conducted
a pilot clinical study.  The study did not support the use of the product as
a fast-onset OTC sleep inducer so reformulation is necessary.  The earliest
time that the Company could reasonably expect to have a commercially salable
product in this category is early 2003.

Loratadine Lingual Spray

     A loratadine lingual spray formulation has been developed and
successfully undergone stability testing. A Pre-IND meeting with FDA was held
in the third quarter of 2000 and based on the results of that meeting a plan
for further development was prepared.  An IND was filed and a pharmacokinetic
study was carried out under this IND to compare the plasma levels following
administration of a 5.0 mg and a 2.5 mg lingual spray to those after
administration of a 10 mg tablet.  Both lingual spray doses resulted in higher
plasma levels concentrations than the 10 mg tablet.  In the case of the 5.0
mg dose the peak plasma levels were greater than twice those of the tablet and
those after the 2.5 mg dose were about 50% higher.  Therapeutic plasma levels
based on the claimed start of antihistaminic effect for the Claritin(r)
tablet (1-3 hours) were achieved between 24 and thirty minutes.  The company
is presently seeking a partner to develop this product.

Clemastine Lingual Spray

     The formulation of clemastine lingual spray that was terminated by Novartis
in 1998 was revised and a Pre-IND meeting with FDA was held in the third
quarter of 2000.  Based on the results of that meeting a plan for further
development was prepared and an IND was filed.  A pilot nasal challenge
efficacy study was initiated in the second quarter of 2000. This study tested
the relative response of subjects challenged with allergy producing substances
to an OTC tablet (1.34 mg) and a lingual spray dose of 0.68 mg.  The
antihistamine was administered 15 minutes prior to the challenge.  The results
showed that the spray had the same antihistaminic effect when compared to
placebo at 45 minutes after dosing as the tablet even though the dose was only
half that of the tablet.  Eight of the parameters measured in the study showed
a clear trend that the spray was better than the tablet and the tablet was
better than placebo.  Even though the study was only a pilot study, the results
appear to support the concept that a clemastine lingual spray could be the
first OTC non-sedating antihistamine product in that there were two cases of
drowsiness when the tablet was given and one with the placebo but none when
the lingual spray was administered.  A larger confirmatory study as well as
other pilot studies are planned.  The company is seeking a partner to develop
this product.

Insulin Lingual Spray

     Pursuant to an agreement with PolyMASC, a subsidiary of Valentis (see
Agreements below), formulation development was started in the third quarter
of 2000 to formulate their proprietary modified insulin molecule into the
Company's lingual spray.  The modified insulin has a polyethylene glycol
molecule attached in a way that the insulin activity is maintained but the
product should be more slowly degraded by enzymes in the blood.  Due to
restructuring at Valentis and a lack of funding on the part of the Company
the project is presently on hold.

Replacement Lingual Spray

     Pursuant to an agreement with Innovex, a partner of Novartis (see
Agreements below), formulation development was started in the third quarter
of 2000 to formulate a replacement lingual spray for one of their products.
Formulation work has been completed and the samples for the planned
pharmacokinetic study have been manufactured and tested for stability.  The
company has been informed that Innovex is no longer a party to the agreement
but that Norvartis plans to develop this product with the Company.  Discussions
are ongoing to set up a coordination committee to manage the work being
carried by the Company and Novartis.

Lavipharm Lingual Spray

     Pursuant to an agreement with Lavipharm Laboratories a formulation
development company (see Agreements below), formulation development was
started in the second quarter of 2001 to formulate a compound of their choice
as a lingual spray.  Lavipharm had been unsuccessful in formulating the drug
in their drug delivery systems to achieve a rapid increase in blood levels and
faster onset of action.  It is contemplated that after confirmation of the
ability of the Company's lingual spray formulation to deliver a rapid increase
in plasma levels is demonstrated in a pilot pharmacokinetic study that a
program will be developed to further develop the product.  Lavipharm is
paying the costs of the formulation development and the pilot pharmacokinetic
study.  Formulation development is completed and the results of the
pharmacokinetic study are expected in the last quarter of 2001.

Loan to Chief Executive Officer

     In April 1998, the Company made a $60,000 loan to its president and CEO
in exchange for a 7% demand promissory note (the "Executive Note").  Accrued
interest (which totaled $4,200 for fiscal 2001) is to be paid quarterly.  In
October 2001, the President and CEO indicated this loan would be repaid in
full before year-end 2001.

Development Agreements

     In November 1996, the Company entered into an Agreement with Altana Inc.
("Altana"), a U.S. subsidiary of Altana GmbH, under which the Company agreed
to prepare for Altana an Abbreviated New Drug Application ("ANDA") for the
Company's patent-pending lingual spray for treatment of angina.  Under the
terms of the Agreement, Altana will, upon approval of the product by the FDA,
market the product in the U.S., and source all of its related product
requirements from the Company.  The Company was paid a consulting fee for
preparation of the ANDA. In March 1998, the FDA refused to accept the ANDA
for filing.  Subsequently, the Company and Altana met with representatives of
FDA and agreed upon a plan for the Company to file an NDA under Section
505(1)(b)(2) of the Act, together with two agreed-upon small clinical trials.
Altana has agreed to fund those trials and to pay the Company a consulting fee
in connection with its preparation of the NDA and its oversight of the trials.
The Company is about to begin the manufacturing of clinical supplies for those
trials during the fourth quarter of 2001.

     In February 1998, the Company entered into two joint development
agreements with CLL Pharmaceuticals, of Nice, France ("CLL") and Nace
Resources, Inc. (now Nace Pharma) of Highland Park, Illinois ("Nace") for the
development of various products using the Company's delivery technologies.
Under the terms of such agreements, the Company, CLL and Nace, respectively,
will conduct a series of pilot studies (at the parties' joint expense) to
validate the efficacy of the various products being tested.  If the Company
and its partners are satisfied with the results of a particular pilot study,
the parties will seek a license to fund further trials to support applications
with the FDA and foreign regulatory agencies.  Under such agreements, the
Company will conduct the clinical trials and file all approval applications,
and the Company and its partners will share equally in the expenses and
profits (if any) arising from such arrangements. The first products identified
for development studies are progesterone and estradiol for CLL and Nace,
respectively.

     During 1999 the estradiol clinical study was completed to the
satisfaction of the Company and Nace.  During 2000 two INDs were filed, one
for Vasomotor relief (hot flushes) and one for abortive treatment of migraines
associated with the menses.  A phase II study was conducted under the
Vasomotor IND to investigate the possibility of rapid relief of hot flush
symptoms on administration of the lingual spray.  Additional work is dependent
on obtaining a partner firm to finance the development.

     During 2000, laboratory development of the clinical supplies for the
progesterone product and the pilot clinical study were completed with results
satisfactory to the Company and CLL.  Further development is on hold pending
identification of a partner firm to finance the development.

     In February 2000, the Company entered into a joint development agreements
with PolyMASC, a subsidiary of Valentis, to formulate their proprietary
modified insulin molecule into the Company's lingual spray.  The modified
insulin has a polyethylene glycol molecule attached in a way that the insulin
activity is maintained but enzymes in the blood more slowly degrade the
product.  Formulation development was started in the third quarter of 2000.
This project presently is on hold.

     In 2000, the company entered into a joint development agreement with
Innovex, which is marketing certain of the Novartis products, to develop a
lingual spray formulation of one of those products. Formulation work has been
completed and the samples for the initial pilot pharmacokinetic study have
undergone stability testing.

     In 2000, the company entered into a joint development agreement with
Lavipharm Laboratories to develop a lingual spray formulation of a product of
its choice.  Formulation work has been completed and the samples for the
initial pilot pharmacokinetic study are being prepared for stability testing.
Following stability testing a pharmacokinetic study comparing plasma levels
of the drug after administration of the spray at low dose levels and the
standard tablet is planned.  Lavipharm is financing the project.

Business Strategy

     The Company's strategy is to concentrate its product development
activities primarily on those pharmaceuticals for which there already are
significant prescription and OTC sales, where the use of the Company's
innovative delivery systems will greatly enhance speed of onset of therapeutic
effect, reduce side effects through a reduction of the amount of active drug
substance required to produce a given therapeutic effect, and improve patient
convenience or compliance.

      In light of the material expense and delays associated with independently
developing and obtaining approval of pharmaceutical products, the Company will
continue to seek to develop such products through collaborative arrangements
with major pharmaceutical companies, which will fund that development.  The
Company is presently a party to such a development agreement with Altana.  The
Company's lack of working capital has impaired its ability to pursue its
strategy.  See "Management Discussion and Analysis."

Patented and Patent Pending Delivery Systems

     The Company has patent applications pending for two oral dosage delivery
systems, the Lingual (Oral) Spray and the Soft Gelatin Bite Capsule, for which
FDA approval is not a prerequisite for patent approval (See "Patents and
Protection of Proprietary Information" below).  The expected year of
marketability will vary depending upon the specific drug product with which
the delivery system will be utilized.  Each individual use of the delivery
system will require registration and/or approval with the FDA prior to
marketability, and the amount of regulatory oversight required by the FDA
will also depend on the specific type of drug product for which the delivery
system is implemented.  The following are descriptions of the two oral dosage
delivery systems for which patent applications are either granted or pending:

	 Lingual (Oral) Spray.  The Company's aerosol and pump spray
formulations release the drug in the form of a fine mist into the mouth for
immediate absorption into the bloodstream via the mucosal membranes.  The
Company believes that this delivery system offers certain advantages,
including improving the safety profile of certain drugs by lowering the
required dosage, improving dose reliability, and allowing medication to be
taken without water.  Drug absorption through the mucosal membranes of the m
outh is rapid and minimizes the first-pass metabolism effect (i.e., total or
partial inactivation of a drug as it passes through the gastrointestinal
tract and liver).

	 Soft Gelatin Bite Capsule.  The Company's soft gelatin bite capsule
formulation consists of a seamless gelatin shell surrounding a core substance
(usually a liquid solution).  When crushed or chewed, the soft gelatin bite
capsule releases medication into the mouth, thereby allowing absorption
through the oral mucosa.  The portion of the dose that is eventually swallowed
is introduced to the stomach in a solution ready for immediate absorption,
thereby maximizing absorption from the gastrointestinal tract into the
bloodstream.  The result is rapid onset of the desired therapeutic effect.

Proposed Products

     The Company's proposed products described below are subjected to
laboratory testing and stability studies and tested for therapeutic comparison
to the originators' products by qualified laboratories and clinics.  To the
extent that two drug products with the same active ingredients are
substantially identical in terms of their rate and extent of absorption in
the human body (bioavailability), they are considered bioequivalent.  If the
accumulated data demonstrates bioequivalency, submission is then made to the
FDA (through the filing of an ANDA) for its review and approval to manufacture
and market.  If the accumulated data demonstrates that there are differences
in the two drugs' rate and extent of absorption into the human body, or if it
is intended to make additional or different claims regarding therapeutic
effect for the newly developed product, submission is made to the FDA via a
NDA for its review and approval under Section 505(1)(b)(2) or Section
505(b)(2) of the FDC Act.  An NDA submitted under these sections of the FDC
Act are generally less complex than an ordinary NDA and are usually acted upon
by FDA in a shorter period of time.  It is the Company's expectation that the
majority of its products in development will require the filing of these
shorter versions of an NDA because the products are known chemical entities,
but the Company or its licensees will be making new claims as to therapeutic
effects or lessened side effects, or both.

     The Company estimates that development of new formulations of
pharmaceutical products, including formulation, testing and obtaining FDA
approval, generally takes three to five years for the ANDA process.
Development of products requiring additional clinical studies under Section
505(b)(2) NDAs, may take four to seven years.  There can be no assurance that
the Company's determinations will prove to be accurate or that pre-marketing
approval relating to its proposed products will be obtained on a timely basis,
or at all.  See "Government Regulation."

     The Company's initial proposed products fall into the following
therapeutic classes:

* Estradiol Lingual Spray

     Several new "non-estrogen" products have recently been introduced to
treat osteoporosis without the associated side effects of estrogens.  Due to
the non-estrogen nature of these products, the Company believes that patients
often experience "hot-flashes" and find it difficult to maintain the required
dosage regimen.  The lingual spray is intended to relieve the "hot-flashes"
within minutes, which, the Company believes, will allow such patients to
maintain the required dosage regimen more easily.  The Company has completed
preformulation development of this product, and has manufactured and packaged
supplies for stability and clinical studies.  The pilot clinical study was
completed in mid-1999 and the Company considers the results of that study to
be favorable. A Pre-IND meeting with FDA was held in the third quarter of 2000
and based on the results of that meeting a plan for further development was
prepared.  Two INDs were subsequently filed - one for vasomotor symptoms and
a second for treatment of menstrual migraines.  Both INDs were approved in
2000.  Under the vasomotor IND a pilot study was started to see if rapid
relief of hot flushes could be obtained with the lingual spray.  The study
results have been received.  A pilot study under the second IND is planned
for fiscal 2001.

* Progesterone Lingual Spray

     This product is being developed as part of the agreement with CLL and is
intended to treat the symptoms of progesterone deficiency.  The formulation
work was completed, which was carried out by the Company and CLL, and
stability and clinical supplies were manufactured in second quarter 1999. The
pilot clinical study was carried out in early 2000. The results of this pilot
clinical study supported the concept of fast relief of the symptoms associated
with progesterone deficiency.  A Pre-IND meeting with FDA was held in the
third quarter of 2000 and based on the results of that meeting a plan for
further development was prepared.  CLL and the Company are seeking development
partners to finance the further work associated with filing an NDA and
bringing this product to market.

* Doxylamine Succinate Lingual Spray

     The Company has developed a formulation and performed stability studies
for doxylamine succinate as a sleep-inducing agent.  The Company has conducted
a pilot pharmacokinetic study comparing two doses of the lingual spray to
those obtained after administration of the tablet.  The results did not show
any advantage for the lingual spray except possible ease of administration
for those such as phagic patients, the elderly or children who cannot take or
do not like to take tablets.  It is believed that the very water soluble
nature of the succinate salt was the cause of these results.  Re-formulation
was started to make the product less water soluble and more suitable for fast
onset. These efforts are on hold pending identification of a partner to
finance the further development.

* Cardiovascular (Nitroglycerin)

     The Company's Nitroglycerin product has been formulated and stability
testing has been completed. A United States patent was issued in 1999. This
product is subject to a license agreement with Altana.  See " -- Recent
Developments."  A pre-IND meeting has been held with the FDA and a program
for clinical trials has been tentatively agreed upon with the FDA.  The
company is presently manufacturing clinical samples to be used in the two
studies required.  After stability studies an IND is planned for the fourth
quarter of 2001 and an NDA  the second quarter of 2002.

* Loratadine Lingual Spray

     A loratadine lingual spray formulation has been developed and
successfully undergone stability testing. A Pre-IND meeting with FDA was held
in the third quarter of 2000 and based on the results of that meeting a plan
for further development was prepared.  An IND was filed in the fourth quarter
of 2000 and a pharmacokinetic study was completed in the second quarter of
2001.

* Clemastine Lingual Spray

     The formulation of clemastine lingual spray that was terminated by
Novartis in 1998 was revised and a Pre-IND meeting with FDA was held in the
third quarter of 2000.  Based on the results of that meeting a plan for
further development was prepared and an IND was filed.  A pilot nasal
challenge efficacy study was initiated in the second quarter of 2000. and was
completed in the fourth quarter of 2000.  This study tested the relative
response of subjects challenged with allergy producing substances to an OTC
tablet (1.34 mg) and a lingual spray dose of 0.68 mg.  The antihistamine was
administered 15 minutes prior to the challenge. The results showed that the
spray had the same antihistaminic effect when compared to placebo at 45
minutes after dosing as the tablet even though the dose was only half that of
the tablet.  Eight of the parameters measured in the study showed a clear
trend that the spray was better than the tablet and the tablet was better
than placebo.  Even though the study was only a pilot study, the results
support the concept that a clemastine lingual spray could be the first OTC
non-sedating antihistamine product in that there were two cases of drowsiness
when the tablet was given and one with the placebo but none when the lingual
spray was administered.  A larger confirmatory study, as well as other pilot
studies, is planned.  The Company is seeking a partner to develop this product.

* Insulin Lingual Spray

     Subsequent to an agreement with PolyMASC, a subsidiary of Valentis,
formulation development was started in the third quarter of 2000 to formulate
their proprietary modified insulin molecule into the Companies lingual spray.
The modified insulin has a polyethylene glycol molecule attached in a way that
the insulin activity is maintained but the product is more slowly degraded by
enzymes in the blood.   Due to restructuring at Valentis and a lack of funding
on the part of the Company the project is presently on hold.

Marketing and Distribution

     The Company intends, generally, to license products developed with its
technology to drug companies already selling such drug substances under their
own brand names, or to market its products to pharmaceutical wholesalers,
drug distributors, drugstore chains, hospitals, United States governmental
agencies, health maintenance organizations and other drug companies.  It is
anticipated that promotion of the Company's proposed products will be
characterized by an emphasis on their distinguishing characteristics, such as
dosage form and packaging, as well as possible therapeutic advantages of such
products.  The Company will seek to position its proposed products as
alternatives or as line extensions to brand-name products.  The Company
believes that to the extent that the Company's formulated products are patent-
protected, such formulations may offer brand-name manufacturers the
opportunity to expand their product lines. Alternatively, products which are
not patented may be offered to brand-name manufacturers as substitute products
after patent protection on existing products expire.

     Inasmuch as the Company does not have the financial or other resources to
undertake extensive marketing activities, the Company generally intends to
seek to enter into marketing arrangements, including possible joint ventures
or license or distribution arrangements, with third parties.  The Company
believes that such third-party arrangements will permit the Company to
maximize the promotion and distribution of its products while minimizing the
Company's direct marketing and distribution costs.  Other than the Company's
aforementioned agreements for the Company's proposed lingual spray products
for angina, the Company has not entered into any agreements or arrangements
with respect to the marketing of its proposed products and there can be no
assurance that it will do so in the future.  There can be no assurance that
the Company's proposed products can be successfully marketed.

     Strategies relating to marketing of the Company's other proposed
formulated products have not yet been determined; these will be formulated in
advance of anticipated completion of development activities relating to the
particular formulated product. The Company has no experience in marketing or
distribution of its proposed proprietary products, and the Company's ability
to fund such marketing activities will require the Company to raise additional
funds and/or consummate a strategic alliance or combination with a well-funded
business partner.

Manufacturing

     The Company had entered into agreements with various European
pharmaceutical manufacturers, regarding the manufacture of certain of the
Company's products in spray and gelatin bite capsule dosage forms.  These
contracts have been canceled by the European manufacturers to the Company's
detriment. New arrangements have been established for the manufacture of
aerosol products for clinical supplies with a contract manufacturer in
Pennsylvania.  The Company will manufacture all of its pump spray products for
clinical studies at its facility.  Within the next year the company will have
to locate contract manufacturers who can manufacture commercial requirements
for its proposed products, at a price to be negotiated by the parties.

     It is anticipated that the Company will arrange with third-party suppliers
for supplies of active and inactive pharmaceutical ingredients and packaging
materials used in the manufacture of the Company's proposed products.  It is
the Company's present intent to seek to enter into similar manufacturing
arrangements for other products to be developed by it in the future.

     The manufacture of the Company's pharmaceutical products will be subject
to current Good Manufacturing Processes ("cGMP") prescribed by the FDA, and
pre-approval inspections by the FDA and foreign authorities prior to the
commercial manufacture of any such products.  See "Government Regulation" and
"Raw Materials and Suppliers."

     In addition, the raw materials necessary for the manufacture of the
Company's products will, in all likelihood, be purchased by the Company from
suppliers in the United States, Europe and Japan and delivered to its
manufacturers' facilities by such suppliers.  Accordingly, the Company and its
manufacturers may be subject to various import duties applicable to both
finished products and raw materials and may be affected by various other
import and export restrictions as well as other developments impacting upon
international trade.  These international trade factors will, under certain
circumstances, have an impact both on the manufacturing cost (which will, in
turn, have an impact on the cost to the Company of the manufactured product)
and the wholesale and retail prices of the products to be manufactured abroad.
To the extent that transactions relating to the foreign manufacture of the
Company's proposed products and purchase of raw materials involve currencies
other than United States dollars (e.g., Swiss francs and German marks), the
operating results of the Company will be affected by fluctuations in foreign
currency exchange rates.

Raw Materials and Suppliers

     The Company believes that the active ingredients used in the manufacture
of its proposed pharmaceutical products are presently available from numerous
suppliers located in the United States, Europe and Japan.  Generally, certain
raw materials, including inactive ingredients, are available from a limited
number of suppliers and certain packaging materials intended for use in
connection with the Company's lingual spray products that may only be available
from sole source suppliers.  Although the Company believes that it will not
encounter difficulties in obtaining the inactive ingredients or packaging
materials necessary for the manufacture of its products, there can be no
assurance that the Company or its manufacturers will be able to enter into
satisfactory agreements or arrangements for the purchase of commercial
quantities of such materials.  The failure to enter into agreements or
otherwise arrange for adequate or timely supplies of principal raw materials
and the possible inability to secure alternative sources of raw material
supplies could have a material adverse effect on the ability to manufacture
formulated products.

     Development and regulatory approval of the Company's pharmaceutical
products are dependent upon the Company's ability to procure active ingredients
and certain packaging materials from FDA-approved sources.  Since the FDA
approval process requires manufacturers to specify their proposed suppliers
of active ingredients and certain packaging materials in their applications,
FDA approval of a supplemental application to use a new supplier would be
required if active ingredients or such packaging materials were no longer
available from the specified supplier, which could result in manufacturing
delays.  Accordingly, the Company will seek to locate alternative FDA approved
suppliers.

Government Regulation

     The development, manufacture and commercialization of pharmaceutical
products are generally subject to extensive regulation by various federal and
state governmental entities.  The FDA, which is the principal United States
regulatory authority, has the power to seize adulterated or misbranded products
and unapproved new drugs, to request their recall from the market, to enjoin
further manufacture or sale, to publicize certain facts concerning a product
and to initiate criminal proceedings.  As a result of federal statutes and
FDA regulations, pursuant to which new pharmaceuticals are required to undergo
extensive and rigorous testing, obtaining pre-market regulatory approval
requires extensive time and expenditures.

     Under the FDC Act, a new drug may not be commercialized or otherwise
distributed in the United States without the prior approval of the FDA.  The
FDA approval process relating to a new drug differs, depending on the nature
of the particular drug for which approval is sought.  With respect to any drug
product with active ingredients not previously approved by the FDA, a
prospective drug manufacturer is required to submit a NDA, including complete
reports of pre-clinical, clinical and laboratory studies to prove such
product's safety and efficacy.  The NDA process generally requires, before the
submission of the NDA, submission of an IND pursuant to which permission is
sought to begin preliminary clinical testing of the new drug.  An NDA based
on published safety and efficacy studies conducted by others may also be
required to be submitted for a drug product with a previously approved active
ingredient, if the method of delivery, strength or dosage is changed.
Alternatively, a drug having the same active ingredients as a drug previously
approved by the FDA may be eligible to be submitted under an ANDA, which is
significantly less stringent than the NDA approval process.

     While the ANDA process requires a manufacturer to establish bioequivalence
to the previously approved drug, it permits the manufacturer to rely on the
safety and efficacy studies contained in the NDA for the previously approved
drug.

     The NDA approval process generally requires between four to seven years
from NDA submission to pre-marketing approval, although in the case of an NDA
submitted pursuant to Section 505(1)(b)(2) of the Act this time frame may be
significantly shorter.  By contrast, the ANDA process permits an expedited
FDA review pursuant to which pre-marketing regulatory approval can generally
be obtained in three to five years.  The ANDA process is available for drugs
with the same active ingredients, dosage form, strength and method of delivery
as a product which has previously received FDA approval pursuant to the NDA
process.  Manufacturing information, including a review of chemical and
physical data, stability data, facilities and processes, must also be
evaluated by FDA before approval.

     The Company believes that products developed in lingual spray and soft
gelatin bite capsule delivery systems (dosage forms) usually will require
submission of an NDA.

     The Company estimates that the development of new formulations of
pharmaceutical products, including formulation, testing and obtaining FDA
approval, generally takes three to five years for the ANDA process and four
to seven years for the NDA process, although NDAs submitted under Section
505(1)(b)(2) or Section 505(b)(2) are generally less complex than an ordinary
NDA and are usually acted upon by the FDA in a shorter period of time.  There
can be no assurance that the Company's determinations will prove to be
accurate or that pre-marketing approval relating to its proposed products will
be obtained on a timely basis, or at all.  The FDA application procedure has
become more rigorous and costly and the FDA currently performs pre-approval
and periodic inspections of each finished dosage form and each active
ingredient.

     The manufacture of the Company's pharmaceutical products will be subject
to cGMP prescribed by the FDA, pre-approval inspection by the FDA and foreign
authorities prior to the commercial manufacture of such products and periodic
cGMP compliance inspection by the FDA.  The Company's European manufacturers
will be required to be in compliance with cGMP with respect to the manufacture
of the Company's products.  There can be no assurance that the Company's
manufacturers will be deemed to be in compliance with cGMP with respect to any
particular product.  To the extent that the Company's manufacturers are deemed
not to be in compliance with cGMP, there can be no assurance that the Company
will be able to enter into other suitable manufacturing arrangements with
third parties which are in compliance with cGMP.

Competition

     The markets which the Company intends to enter are characterized by
intense competition.  The Company will be competing against established
pharmaceutical companies which currently market products which are equivalent
or functionally similar to those the Company intends to market.  Prices of
drug products are significantly affected by competitive factors and tend to
decline as competition increases.  In addition, numerous companies are
developing or may, in the future, engage in the development of products
competitive with the Company's proposed products.  The Company expects that
technological developments will occur at a rapid rate and that competition is
likely to intensify as enhanced delivery system technologies gain greater
acceptance.  Additionally, the markets for formulated products which the
Company has targeted for development are intensely competitive, involving
numerous competitors and products.  The Company will seek to enhance its
competitive position by focusing its efforts on its novel dosage forms.

Patents and Protection of Proprietary Information

      The Company has applied for United States and foreign patent protection
for the delivery systems which are the primary focus of its development
activities as well as the delayed contact allergy topical formulations.
Three United States patents have been issued and other applications are
pending.  There can be no assurance, however, that any additional patent
applications will be granted, or, if granted, will provide any adequate
protection to the Company. The Company also intends to rely on whatever
protection the law affords to trade secrets, including unpatented know-how.
Other companies, however, may independently develop equivalent or superior
technologies or processes and may obtain patent or similar rights with
respect thereto.

     Although the Company believes that its technology has been developed
independently and does not infringe on the patents of others, there can be no
assurance that the technology does not and will not infringe on the patents of
others.  In the event of infringement, the Company or its manufacturers could,
under certain circumstances, be required to modify the infringing process or
obtain a license. There can be no assurance that the Company or its
manufacturers would be able to do either of those things in a timely manner
or at all, and failure to do so could have a material adverse effect on the
Company and its business.  In addition, there can be no assurance that the
Company will have the financial or other resources necessary to enforce or
defend a patent infringement or proprietary rights violation action.  If any
of the products developed by the Company infringe upon the patent or
proprietary rights of others, the Company could, under certain circumstances,
be enjoined or become liable for damages, which would have a material adverse
effect on the Company.

     The Company also relies on confidentiality and nondisclosure arrangements
with its licensees and potential development candidates.  There can be no
assurance that other companies will not acquire information which the Company
considers to be proprietary.  Moreover, there can be no assurance that other
companies will not independently develop know-how comparable to or superior
to that of the Company.

     Buccal Nonpolar Spray or Capsule.  On April 12, 1996 the Company filed
an application with the United States Patent and Trademark Office ("PTO") for
protection of this subject matter.  On September 1, 1998 the PTO allowed the
claims directed to sprays, but rejected the claims directed to the capsules.
In October 1998 the Company dropped the capsule claims from this application,
to pursue allowance and issuance of a patent directed to the spray claims.
On October 21, 1999 the PTO issued a patent (5955098) to the Company on the
spray claims.

     On February 21, 1997, the Company filed an application under the Patent
Cooperation Treaty ("PCT") for the above-subject matter.  The International
Preliminary Examination Authority has issued an opinion in which the PCT
examiner determined that the subject matter of the invention while novel is
not inventive for obviousness.  This opinion, with which the Company disagrees,
is not dispositive, however, it may be highly persuasive in subsequent
proceedings in the European and individual national patent offices should the
Company decide to proceed in these jurisdictions.

     In October 1998, the Company filed a patent application in the European
Patent Office and in Canada for the buccal nonpolar spray claims. The former
has not yet been acted on, the latter is not yet due for examination.

     Buccal Polar Spray or Capsule. On April 12, 1996 the Company filed an
application with the United States Patent and Trademark Office ("PTO") for
protection of this subject matter, no claims were allowed. On November 25,
1998, the Company filed the application in the PTO directed to the method of
use of the spray and subsequently the PTO issued a patent (6110486) to the
Company on these claims.

     On February 21, 1997, the Company filed an application under the Patent
Cooperation Treaty ("PCT") for the above-subject matter.  The International
Preliminary Examination Authority has issued an opinion in which the PCT
examiner determined that the subject matter of the invention while novel is
not inventive for obviousness.  This opinion, with which the Company disagrees,
is not dispositive, however, it may be highly persuasive in subsequent
proceedings in the European and individual national patent offices should the
Company decide to proceed in these jurisdictions.

     In October and November 1998, the Company filed patent applications in
Europe and Canada for the buccal polar spray claims.   In the former case an
Official action has been received and responded to. The latter is not ripe
for examination yet.

     Buccal Nonpolar Spray for Nitroglycerin. On April 12, 1996, the Company
filed an application in the PTO directed to the above subject matter.  On
August 5, 1998 the PTO allowed claims to the above subject matter, and a
patent  (5869082) was issued in February 1999.  On February 21, 1997 the
Company filed a PCT application directed to the above subject matter. The
application was rejected for lack of  inventive step on the ground that the
manner in which the claims differed from the prior art  was required by
legislation. European and Canadian counterpart applications have been filed.
The Canadian application is not yet ripe for examination.

     Buccal/Polar/Nonpolar Sprays or Capsule (Different Medicaments as Above).
An application was filed with the PCT on October 1, 1997 designating a large
number of possible countries including the United States.  This application
differs from the first two applications above in that it utilizes different
ingredients.   The PCT Examiner allowed two rather limited (but not
commercially insignificant) claims, and rejected the remaining claims for lack
of inventive step and lack of unity.

     The Company has made individual filings for patent protection in USA,
Japan, Canada, and Europe.

     In the United States, the original application has been refiled as a CIP
(008) directed only to pump spray compositions. An initial Official Action has
been received and responded to. No examination is yet due in Japan and Canada.

     Upon advice of our European Associate, the original application was filed
as three separate divisional applications. While some new references have been
cited no Official Action has been received in any of these cases.

     Antihistamine Syrup and Ointment.  On November 10, 1997 the Company filed
an application with the U.S. PTO for protection of its antihistamine syrup and
ointments, a technology to be utilized in the company's proposed poison ivy
product.  In October 1998, the PTO initially rejected the application for this
product. The application was refiled in May 2000 with claims directed solely
to method of protection claims.  An Official Action has been received and a
response has been filed to the patent examiner's comments.  The Company is
awaiting a reply.

     General Comment with Respect to the Foregoing PCT Applications.  The
Company is interested in obtaining patent protection in Europe and Canada.  It
is to be expected that the same examiner who examined these applications in
Europe as a PCT examiner will be the examiner who will handle applications in
the European "National" Phase.  Hence, the Company anticipates it may be
necessary to appeal to the Board of Appeals in Munich.  At the present time,
it is not possible to accurately predict the expenses involved in pursuing the
foregoing applications.  However, expenses may exceed $100,000 (in the
aggregate for all three applications) before a final disposition is obtained.
The Company expects this process to take between two and four years.

Product Liability

	The Company may be exposed to potential product liability claims by
consumers. The Company does not presently maintain product liability insurance
coverage.  Although the Company will seek to obtain product liability insurance
prior to the commercialization of any products, there can be no assurance that
the Company will obtain such insurance or, if obtained, that any such insurance
will be sufficient to cover all possible liabilities.  In the event of a
successful suit against the Company, insufficiency of insurance coverage could
have a material adverse effect on the Company.  In addition, certain food and
drug retailers require minimum product liability insurance coverage as a
condition precedent to purchasing or accepting products for retail
distribution.  Failure to satisfy such insurance requirements could impede
the ability of the Company or its distributors to achieve broad retail
distribution of its proposed products, which would have a material adverse
effect upon the business and financial condition of the Company.

Customer Dependence

     Since inception, substantially all of the Company's revenues have been
derived from consulting activities primarily in connection with product
development for various pharmaceutical companies.  Among other things, the
Company works with its European clients to obtain regulatory approvals for
new drug formulations in the United States.  For the year ended July 31, 2001,
consulting activities relating to the Company's two (2) largest clients
accounted for approximately 40% and 18% respectively, of the Company's revenue.
For the year ended July 31, 2000, consulting activities relating to the
Company's two largest clients accounted for approximately 27% and 18%
respectively, of the Company's revenue. For the year ended July 31, 1999
consulting activities relating to the Company's three largest clients
accounted for approximately 19%, 14% and 10% respectively, of the Company's
revenue.

Employees

     The Company currently has eight (8) full-time employees, three (3) of
whom are executive officers of the Company, and two (2) of whom are engaged
in administrative functions. The success of the Company will be dependent in
part, upon its ability to hire and retain additional qualified sales and
distribution personnel, however, there can be no assurance that the Company
will be able to hire or retain such necessary personnel.

CERTAIN CONSIDERATIONS

     This Form 10-KSB, the Company's Proxy Statement, other documents of the
Company and statements made by members of management of the Company, in each
case, may contain forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in such forward-looking statements.  Factors that might
cause such a difference include the following:


     Accumulated Deficit and Operating Losses; Anticipated Continuing Losses;
Limited Working Capital.  The Company had an accumulated deficit at July 31,
2001 of approximately $5,523,000.  The Company incurred operating losses in
six of the last seven fiscal, years ended July 31 including a net loss of
approximately $1,109,000 for the year ended July 31, 2001.  Because the
Company increased its product development activities, the Company anticipates
that it will incur substantial operating expenses in connection with continued
development, testing and approval of its proposed products, and expects these
expenses will result in continuing and, perhaps, significant operating losses
until such time, if ever, that the Company is able to achieve adequate product
sales levels.

     Dependence on Principal Clients. [RFS3] To date, substantially all of the
Company's revenues have been derived from consulting services rendered to a
limited number of clients, the loss of certain of which would have an adverse
effect on the Company.  For the year ended July 31, 2001, consulting activities
relating to the Company's two (2) largest clients, with which the Company has
written agreements, accounted for approximately 40%, and 18% respectively, of
the Company's revenues.  There can be no assurance that the Company's clients
will continue to seek consulting services from the Company or that the Company
will continue to provide consulting services to the industry. See "---Customer
Dependence."

     Evolving Nature of Business; Entry into Product-Based Business.  Although
the Company has received revenue from its own product development activities,
these revenues are insignificant as compared to the Company's revenues from
product development consultation work done for its clients.  The nature of the
Company's revenue received from its own product development consists of
payments by pharmaceutical companies for research and bioavailability studies,
pilot clinical trials, and similar milestone-related payments.  Subject to
additional funding, the Company expects to continue its consulting activities
despite increasing its product development activities.  The future growth and
profitability of the Company will be dependent upon the Company's ability to
successfully raise additional funds to complete the development of, obtain
regulatory approvals for, and license out or market, its own proposed products.
Accordingly, the Company's prospects must be considered in light of the risks,
expenses and difficulties frequently encountered in connection with the
establishment of a new business in a highly competitive industry, characterized
by frequent new product introductions. The Company anticipates that it will
incur substantial operating expenses in connection with the development,
testing and approval of its proposed products and expects these expenses to
result in continuing and, perhaps, significant operating losses until such
time, if ever, that the Company is able to achieve adequate levels of sales
or license revenues. There can be no assurance that the Company will be able
to raise additional financing, increase revenues significantly, or achieve
profitable operations.

     Significant Capital Requirements for Product Development and
Commercialization. The Company has a significant capital requirement necessary
to fund planned expenditures in connection with the research, development,
testing and approval of its proposed products.  The Company anticipates, based
on its current proposed plans and assumptions relating to its operations
(including the timetable of, and costs associated with, new product
development), that the proceeds of the November 1997 public offering ("Public
Offering"), its 2000 Private Placement,  its 2001 Private Placement and
projected cash flow from operations will be sufficient to satisfy its
contemplated cash requirements for approximately four months from the date
hereof.  Due to the Company's small revenue base, low level of working capital
and inability to increase the number of development agreements with
pharmaceutical companies, the Company has been unable to pursue its product
development strategy.  The Company will require significant additional
financing and/or a strategic alliance with a well-funded development partner
to undertake its business plan.  The Company has no current arrangements with
respect to, or sources of, additional financing, and there can be no assurance
that additional financing will be available to the Company on acceptable terms,
if at all.  In view of the Company's very limited resources, its anticipated
expenses and the competitive environment in which the Company operates, any
inability to obtain additional financing could severely limit the Company's
ability to complete development and commercialization of its proposed products.
See "Management's Discussion and Analysis Of Financial Condition And Results
Of Operations."

     No Commercially Available Products. The Company's principal efforts are
the development of, and obtaining regulatory approvals for, its proposed
products.  The Company anticipates that marketing activities for its
proprietary products, whether by the Company or one or more licensees will
not begin until 2003 at the earliest.  Accordingly, it is not anticipated
that the Company will generate any revenues from royalties or sales of
proprietary products until regulatory approvals are obtained and marketing
activities begin.  There can be no assurance that any of the Company's
proposed proprietary products will prove to be commercially viable, or if
viable, that they will reach the marketplace on the timetables desired by the
Company.  The failure or the delay of these products to achieve commercial
viability would have a material adverse effect on the Company.  See
"- - Proposed Products" and " - Government Regulation."

     Product Development and Acceptance Risks.  The development of the
Company's proposed products has not been completed and the Company will be
required to devote considerable effort and expenditures to complete such
development.  In addition to obtaining adequate financing, satisfactory
completion of development, testing, government approval and sufficient
production levels of such products must be obtained before the proposed
products will become available for commercial sale.  The Company does not
anticipate generating material revenue from product sales until perhaps 2003
or thereafter.  Other potential products remain in the conceptual or very
early development stage and remain subject to all the risks inherent in the
development of pharmaceutical products, including unanticipated development
problems, and possible lack of funds to undertake or continue development.
These factors could result in abandonment or substantial change in the
development of a specific formulated product.  There can be no assurance that
any of the Company's proposed products will be successfully developed, be
developed on a timely basis or be commercially accepted once developed.  The
inability to successfully complete development, or a determination by the
Company, for financial or other reasons, not to undertake to complete
development of any product, particularly in instances in which the Company
has made significant capital expenditures, could have a material adverse
effect on the Company. See "- - Proposed Products."

     Lack of Direct Consumer Marketing Experience; Dependence on Joint
Marketing Arrangements.  The Company has no experience in marketing or
distribution at the consumer level of its proposed proprietary products.
Moreover, the Company does not have the financial or other resources to
undertake extensive marketing and advertising activities.  Accordingly, the
Company intends generally to rely on marketing arrangements, including
possible joint ventures or license or distribution arrangements with third
parties.  The Company has not entered into any significant agreements or
arrangements with respect to the marketing of its proposed products, and
there can be no assurance that it will do so in the future or that any such
products can be successfully marketed. The Company's strategy to rely on third
party marketing arrangements could adversely affect its profit margins. See
" - Marketing and Distribution."

     Dependence on Contract Manufacturing.  The Company's agreements with
respect to the manufacture of its initially proposed products with its
European contract manufacturers have been canceled Alternative arrangements
will have to be made. The Company's dependence upon third parties for the
manufacture of its products could have an adverse effect on the Company's
profit margins and its ability to deliver its products on a timely and
competitive basis.

     Compliance with Good Manufacturing Practices.  The Company currently
intends to rely on third-party arrangements for the manufacture of its
proposed products.  The manufacture of the Company's pharmaceutical products
will be subject to current Good Manufacturing Practices ("cGMP") prescribed
by the FDA, pre-approval inspections by the FDA or foreign authorities, or
both, before commercial manufacture of any such products and periodic cGMP
compliance inspections thereafter by the FDA. There can be no assurance that
the Company's European manufacturers will be able to comply with cGMP or
satisfy pre- or post-approval inspections in connection with the manufacture
of the Company's proposed products. Failure or delay by any such manufacturer
to comply with cGMP or satisfy pre- or post-approval inspections would have a
material adverse effect on the Company.  See "-- Manufacturing."

     Supplier Dependence.  The Company believes that the active ingredients
used in the manufacture of its proposed pharmaceutical products are presently
available from numerous suppliers located in the United States, Europe India
and Japan.  The Company believes that certain raw materials, including
inactive ingredients, are available from a limited number of suppliers and
that certain packaging materials intended for use in connection with its
spray products currently are available only from sole source suppliers.
Although the Company does not believe it will encounter difficulties in
obtaining the inactive ingredients or packaging materials necessary for the
manufacture of its products, there can be no assurance that the Company will
be able to enter into satisfactory agreements or arrangements for the
purchase of commercial quantities of such materials.  The Company has a
written supply agreement with Dynamit Nobel for certain raw materials for the
nitroglycerin lingual spray product.  With respect to other suppliers, the
Company operates primarily on a purchase order basis beyond which there is no
contract memorializing the Company's purchasing arrangements.  The failure to
enter into agreements or otherwise arrange for adequate or timely supplies of
principal raw materials and the possible inability to secure alternative
sources of raw material supplies could have a material adverse effect on the
Company's ability to arrange for the manufacture of formulated products. In
addition, development and regulatory approval of the Company's products are
dependent upon the Company's ability to procure active ingredients and certain
packaging materials from FDA-approved sources. Since the FDA approval process
requires manufacturers to specify their proposed suppliers of active
ingredients and certain packaging materials in their applications, FDA
approval of a supplemental application to use a new supplier would be required
if active ingredients or such packaging materials were no longer available
from the originally specified supplier, which could result in manufacturing
delays. See "- - Raw Materials and Suppliers."

     Competition.  The markets which the Company intends to enter are
characterized by intense competition.  The Company or its licensees may be
competing against established pharmaceutical companies which currently market
products which are equivalent or functionally similar to those the Company
intends to market.  Prices of drug products are significantly affected by
competitive factors and tend to decline as competition increases.  In addition,
numerous companies are developing or may, in the future, engage in the
development of products competitive with the Company's proposed products.  The
Company expects that technological developments will occur at a rapid rate and
that competition is likely to intensify as enhanced dosage from technologies
gain greater acceptance. Additionally, the markets for formulated products
which the Company has targeted for development are intensely competitive,
involving numerous competitors and products.  Most of the Company's
prospective competitors possess substantially greater financial, technical and
other resources than the Company.  Moreover, many of these companies possess
greater marketing capabilities than the Company, including the resources
necessary to enable them to implement extensive advertising campaigns.  There
can be no assurance that the Company will have the ability to compete
successfully.  See "- - Competition."

     Absence of Product Liability Insurance Coverage.  The Company may be
exposed to potential product liability claims by consumers.  The Company
presently maintains no product liability insurance coverage.  Although the
Company will seek to obtain product liability insurance before the
commercialization of any proprietary products, there can be no assurance that
the Company will be able to obtain such insurance or, if obtained, that any
such insurance will be sufficient to cover all possible liabilities to which
the Company may be exposed.  In the event of a successful suit against the
Company, insufficiency of insurance coverage could have a material adverse
effect on the Company.  In addition, certain food and drug retailers require
minimum product liability insurance coverage as a condition precedent to
purchasing or accepting products for retail distribution.  Failure to satisfy
such insurance requirements could impede the ability of the Company or its
distributors to achieve broad retail distribution of its proposed products,
which could have a material adverse effect on the Company.  None of the
Company's European manufacturers have made any representations as to the
safety or efficacy of the products covered by their agreements or as to any
products which may be marketed or used under rights granted under any such
agreements, other than compliance with cGMP and product specifications.
See "- - Product Liability."

     Extensive Government Regulation. The development, manufacture and
commercialization of pharmaceutical products is generally subject to extensive
regulation by various federal and state governmental entities.  The FDA, which
is the principal United States regulatory authority, has the power to seize
adulterated or misbranded products and unapproved new drugs, to request their
recall from the market, to enjoin further manufacture or sale, to publicize
certain facts concerning a product and to initiate criminal proceedings.  As
a result of federal statutes and FDA regulations, pursuant to which new
pharmaceuticals are required to undergo extensive and rigorous testing,
obtaining pre-market regulatory approval requires extensive time and
expenditures.  Under the Federal Food, Drug and Cosmetic Act (the "FDC Act"),
a new drug may not be commercialized or otherwise distributed in the United
States without the prior approval of the FDA.  The FDA approval processes
relating to new drugs differ, depending on the nature of the particular
drug for which approval is sought.  With respect to any drug product with
active ingredients not previously approved by the FDA, a prospective drug
manufacturer is required to submit a new drug application ("NDA"), including
complete reports of pre-clinical, clinical and laboratory studies to prove
such product's safety and efficacy. The NDA process generally requires, before
the submission of the NDA, submission of an IND pursuant to which permission
is sought to begin preliminary clinical testing of the new drug.  An NDA, based
on published safety and efficacy studies conducted by others, may also be
required to be submitted for a drug product with a previously approved active
ingredient if the method of delivery, strength or dosage form is changed.
Alternatively, a drug having the same active ingredient as a drug previously
approved by the FDA may be eligible to be submitted under an ANDA, which is
significantly less stringent than the NDA approval process.  While the ANDA
process requires a manufacturer to establish bioequivalence to the previously
approved drug, it permits the manufacturer to rely on the safety and efficacy
studies contained in the DNA for the previously approved drug. The Company
believes that some of its drug products developed in capsule form will be
substantially similar to products which have previously obtained FDA approval
and, accordingly, that approvals for such products can be obtained by
submitting an ANDA.  The Company, however, may be required, before submitting
an ANDA, to submit a suitability petition, the purpose of which is to permit
the FDA to evaluate whether a change in strength, dosage form or method of
delivery is significant enough to require clinical trials and, therefore, an
NDA filing.  There can be no assurance that the FDA will not require the
Company to conduct clinical trials for such products and otherwise comply with
the NDA approval process. The Company believes that products developed in
spray dosage form will require submission of an NDA. The Company estimates
that the development of new formulations of pharmaceutical products, including
formulation, testing and obtaining FDA approval, generally takes three to five
years for the ANDA process and four to seven years for the NDA process. There
can be no assurance that the Company's determinations will prove to be
accurate or that pre-marketing approval relating to its proposed products will
be obtained on a timely basis, or at all. The failure by the Company to obtain
necessary regulatory approvals, whether on a timely basis, or at all, would
have a material adverse effect on the Company.

     Dependence on Existing Management.  The success of the Company is
substantially dependent on the efforts and abilities of its founder, President
and Chief Executive Officer, Harry A. Dugger, III, Ph.D., the Company's
Chairman, John J. Moroney, and the Company's Chief Financial Officer, Donald
Deitman.  Mr. Moroney is not required to devote full time to the Company.
Decisions concerning the Company's business and its management are and will
continue to be made or significantly influenced by these individuals.  The
loss or interruption of their continued services would have a materially
adverse effect on the Company's business operations and prospects. See
"- Marketing and Distribution" and "DIRECTORS AND OFFICERS."

     Control by Current Stockholders, Officers and Directors.  Management and
affiliates of the Company currently beneficially own (including shares they
have the right to acquire) approximately 36.23[RFS4]% of the outstanding
Common Stock.  These persons are and will continue to be able to exercise
control over the election of the Company's directors and the appointment of
officers, increase the authorized capital, dissolve, merge or engage the
Company in other fundamental corporate transactions.

     Dividend Policy.  The Company has never declared or paid a dividend on
its Common Stock, and management expects that a substantial portion of the
Company's future earnings will be retained for expansion or development of
the Company's business.  The decision to pay dividends, if any, in the future
is within the discretion of the Board of Directors and will depend upon the
Company's earnings, capital requirements, financial condition and other
relevant factors such as contractual obligations.  Management, therefore,
does not contemplate that the Company will pay dividends on the Common Stock
in the foreseeable future.

     Limited Public Market.  There has been a very limited public market for
the Units, the Common Stock and Warrants.  Although the Units, Common Stock
and Warrants have been approved for inclusion on the OTC Bulletin Board, the
securities have been thinly traded, and there can be no assurance that a more
fluid trading market for the securities will develop or that, if developed,
it will be sustained.  The OTC Bulletin Board is an unorganized, inter-dealer,
over-the-counter market which provides significantly less liquidity than the
Nasdaq Stock market, and quotes for stocks included on the OTC Bulletin Board
are not listed in the financial sections of newspapers as are those for the
Nasdaq Stock Market.  Therefore, prices for securities traded solely on the
OTC Bulletin Board may be difficult to obtain and purchasers of the Units may
be unable to resell the securities offered hereby at or near their original
offering price or at any price.  See "Possible Adverse Effect of "Penny Stock"
Rules in Liquidity for the Company's Securities."

     Outstanding Options and Warrants.  The Company has reserved up to
3,405,472 shares of its Common Stock for issuance upon exercise of stock
options and warrants.  Of the reserved shares, a total of 1,500,000 shares
have been reserved and evenly divided among each of the Company's 1992, 1997
and 1998 Stock Option Plans, of which options to purchase an aggregate of
500,000, 500,000 and 500,000 shares have been issued under the respective
Plans. Another 800,000 shares are reserved for issuance and available for the
options granted pursuant to the terms of the employment agreements of Mr.
Moroney, and Drs. Dugger, Cox and Cleaver.(The Cox and Cleaver Employment
Agreement options expired in August 2001).  Further, shares of Common Stock
are reserved for issuance to cover warrants to purchase an aggregate of
100,000 shares of Common Stock issued to Creative Technologies, Inc. in
December 1996.  In connection with the Public Offering, the Company issued
680,000 Class A common stock purchase warrants (the "Class A Warrants"). Also
in connection with the Public Offering, the Company issued to the Underwriters
an option to purchase 68,000 Units exercisable at $9.74 (165% of the respective
public offering price of the Units) which expire in November, 2001 (the
"Underwriters' Options"). In early 2000, the Company, in connection with the
renewal of its financial consulting services contract with Saggi Capital
granted it Warrants to purchase up to 200,000 shares of the Company's common
stock at an exercise price of $1.00 per share. In May 2001, in connection
with the 2001 Private Placement, the Company issued to the companies handling
such placement Warrants to purchase an aggregate of 257,472 shares of the
Company's common stock at an exercise price of $0.75 per share.

     In connection with the 2001 Private Placement, the Company agreed, under
certain circumstances, to register the Shares for distribution to the public.
Exercise of these registration rights could involve a substantial expense to
the Company and could prove a hindrance to future financings.

     Exercise of the Underwriters' Options, the Class A Warrants, the
outstanding warrants and stock options, and those which may be granted under
the Stock Option Plans (collectively, the "Convertible Securities"), will
reduce the percentage of Common Stock held by the public stockholders.
Further, the terms on which the Company could obtain additional capital during
the life of the Convertible Securities may be adversely affected, and it should
be expected that the holders of the Convertible Securities would exercise them
at a time when the Company would be able to obtain equity capital on terms
more favorable than those provided for by such Convertible Securities.

     Potential Adverse Effect of Redemption of Warrants.  The Warrants issued
in connection with the Company's Public Offering may be redeemed by the
Company commencing May 1999 (eighteen months from the date of the Public
Offering), or earlier with the consent of the Representative, at a redemption
price of $.10 per Warrant upon not less then thirty days prior written notice
provided the last sale price of the Common Stock on the NASD OTC Bulletin
Board, Nasdaq (or another national securities exchange) for twenty consecutive
trading days ending within three days of the notice of redemption, equals or
exceeds 200% of the current Warrant exercise price, subject to adjustment.
Redemption of the Warrants could force the holders thereof to exercise the
Warrants and pay the exercise price at a time when it may be disadvantageous
for the holders to do so, to sell the Warrants at the then current market
price when they might otherwise wish to hold the Warrants, or to accept the
redemption price, which is likely to be substantially less than the market
value of the Warrants at the time of redemption.

     Possible Resales Under Rule 144.  Of the 7,724,900 shares of Common Stock
held by the Company's present stockholders, 7,144,900 shares of Common Stock
have not been registered under the Securities Act of 1933, as amended (the
"Act"). Under certain circumstances, the unregistered shares may be available
for public sale by means of ordinary brokerage transactions in the open market
pursuant to Rule 144, promulgated under the Act, subject to certain
limitations.  In general, under Rule 144, a person (or persons whose shares
are aggregated) who has satisfied a one-year holding period may, under certain
circumstances, sell within any three-month period a number of securities which
does not exceed the greater of 1% of the then outstanding shares of Common
Stock or the average weekly trading volume of the class during the four
calendar weeks prior to such sale.  Rule 144 also permits, under certain
circumstances, the sale of securities, without any limitation, by a person
who is not an affiliate of the Company and who has satisfied a two-year holding
period. Of the unregistered shares, 3,197,003 shares have been held by present
stockholders for more than two years.

     The Company has reserved up to 3,405,472 shares of its Common Stock for
issuance upon exercise of various stock options and warrants, of which
1,600,000 shares were registered under a Registration Statement on Form S-8
under the Act.  Although all of  the Company's officers and directors have
executed lock-up agreements in which they agreed not to publicly offer, sell
or otherwise dispose of directly or indirectly, any of the Company's
securities owned by them, until July, 2002, any substantial sale of Common
Stock pursuant to Rule 144 may have an adverse effect on the market price of
the Shares or the component securities.

     Future Unspecified Acquisitions.  Although there are no such transactions
contemplated at this time, the Company may, in the future, expand its business,
in part, through the acquisition of compatible products or businesses.  In
attempting to locate and consummate such acquisitions, the Company may compete
with other prospective purchasers of the acquisition candidate, some of which
may have greater resources than the Company.  There can be no assurance that
suitable acquisition candidates could be identified and acquired on terms
favorable to the Company, or that the acquired product lines or operations
could be profitably operated or integrated into the Company's operations.  In
addition, any internally generated growth experienced by the Company could
place significant demands on the Company's management, thereby restricting or
limiting its available time and opportunity to identify and evaluate potential
acquisition candidates.  The target entity of any such acquisition will not be
subject to shareholder review and the Company's decision to pursue such
transactions is not subject to shareholder approval.

     Limitation on Directors' Liabilities under Delaware Law.  Pursuant to the
Company's Certificate of Incorporation and under Delaware law, directors of
the Company are not liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty, except for liability in connection with
a breach of duty of loyalty, for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, for dividend
payments or stock repurchases illegal under Delaware law or any transaction
in which a director has derived an improper personal benefit.

     Indemnification of Directors under Delaware Law.  Pursuant to both the
Company's Certificate of Incorporation and Delaware law, the Company's officers
and directors are indemnified by the Company for monetary damages for breach
of fiduciary duty, except for liability which arises in connection with
(i) a breach of duty or loyalty, (ii) acts or omissions not made in good faith
or which involve intentional misconduct or a knowing violation of law,
(iii) for dividend payments or stock repurchases illegal under Delaware law,
or (iv) any transaction in which the officer or director derived an improper
personal benefit.  The Company's Certificate of Incorporation does not have
any effect on the availability of equitable remedies (such as an injunction
or rescissions) for breach of fiduciary duty.  However, as a practical matter,
equitable remedies may not be available in particular circumstances.  The
Company maintains director and officer liability coverage.

     Authorization and Discretionary Issuance of Preferred Stock.  The
Company's Certificate of Incorporation authorizes the issuance of "blank check"
preferred stock with such designations, rights and preferences as may be
determined from time to time by the Board of Directors.  Accordingly, the
Board of Directors is empowered, without stockholder approval, to issue
preferred stock with dividends, liquidation, conversion, voting or other
rights which could adversely affect the relative voting power or other rights
of the holders of the Company's Common Stock.  In the event of issuance, the
preferred stock could be used, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of the Company, which
could have the effect of discouraging bids for the Company and thereby prevent
stockholders from receiving the maximum value for their shares.  Although the
Company has no present intention to issue any shares of its preferred stock,
there can be no assurance that the Company will not do so in the future.  In
the event the Company relocates under the Laws of the State of Delaware (as it
proposes to do upon approval of the Company's shareholders) the rights,
preferences and designations of the preferred stock will be substantially
identical to those of the present.


ITEM 2. PROPERTIES

     The Company's executive offices are located at 31 State Highway 12,
Flemington, New Jersey.  The facility, constituting approximately 4,500 square
feet is occupied under a five-year lease which expires during September 2005.
Should this tenancy be terminated for any reason, there is ample comparable
space available in the area for the Company to occupy.  Since the manufacture
of the Company's products are conducted by outside vendors, the Company does
not own or lease any production or manufacturing facilities.  The Company
believes the current Flemington facilities will adequately serve its needs
for the foreseeable future.


ITEM 3. LEGAL PROCEEDINGS

     The Company is not involved in any legal proceedings.


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

     During the fourth quarter of the fiscal year covered by this report, no
matters were submitted to a vote of security holders, through the solicitation
of proxies or otherwise.

ITEM 4A.  NON-DIRECTOR EXECUTIVE OFFICERS

     The non-director executive officers of the Company and their positions
with the Company are as follows:

Donald Deitman, Chief Financial Officer.  Mr. Deitman joined the Company in
1998.  From 1988 until joining the Company, Mr. Deitman was employed as a
business consultant implementing multi-module MRP II software systems.  From
1982 to 1988, Mr. Deitman was corporate controller for FCS Industries, Inc.
of Flemington, New Jersey.  From 1975 to 1982, he was manager of materials and
systems for the Walworth Company operations located in Linden and Elizabeth,
NJ and from 1966 to 1975, he was employed by Ortho Pharmaceuticals, Inc. and
Ortho Diagnostics, Inc.  Mr. Deitman received a BS in Accounting from Rutgers
University in 1972.


				  PART II

ITEM 5. MARKET FOR COMMON STOCK AND RELATED SECURITY HOLDER MATTERS

     (a)  Private Placement.  In July 2001, the Company successfully closed a
placement of approximately 1,844,000 shares of its common stock, par value
$.001 per share, at a per share price of $.75.  The Company paid commissions,
expenses, and legal fees of approximately $226,000 and received net proceeds
of approximately $1,157,000.

     (b)  Market Information.  Since the November 1997 closing of the Public
Offering, the Company's Common Stock has traded in the over-the-counter market
on the National Association of Securities Dealers, Inc. OTC Bulletin Board
System ("OTCBB") under the symbol "FLEM".  The following table sets forth the
range of high and low closing bid quotations of the Common Stock as reported
by the OTCBB for each fiscal quarter for the past two fiscal years or such
shorter period that there has been a public trading market.  High and low bid
quotations represent prices between dealers without adjustment for retail
mark-ups, mark-downs or commissions and may not necessarily represent actual
transactions.

							      Bid  Prices
						      ------------------------
							   High           Low
FISCAL 2001

First Quarter (August 1, 2000 through October 31, 2000)    2.125         .969
Second Quarter (November 1, 2000 through January 31, 2001) 1.562         .438
Third Quarter (February 1, 2001 through April 30, 2001)    1.094         .550
Fourth Quarter (May 1, 2001 through July 31, 2001)          .950         .510


FISCAL  2000

First Quarter (August 1, 1999 through October 25, 1999)    1.687        0.875
Second Quarter (November 1, 1999 through January 31, 2000) 2.25          .875
Third Quarter (February 1, 2000 through April 30, 2000)    3.375        1.00
Fourth Quarter (May 1, 2000 through July 31, 2000)         1.406         .750

The closing bid price of the Company's Common Stock as reported by the OTCBB
was $0.650 on November 8, 2001.

     (b)  Holders. As of November 8, 2001 there were approximately 93 record
holders of the Company's Common Stock.

     (c)  Dividends.  The Company has never declared or paid a dividend on its
Common Stock, and management expects that all or a substantial portion of the
Company's future earnings will be retained for expansion or development of the
Company's business.  The decision to pay dividends, if any, in the future is
within the discretion of the Board of Directors and will depend upon the
Company's earnings, capital requirements, financial condition and other
relevant factors such as contractual obligations.  Management does not
anticipate that the Company will pay dividends on the Common Stock in the
foreseeable future.  Moreover, there can be no assurance that dividends can
or will ever be paid.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS

General

     Since its inception, substantially all of the Company's revenues have
been derived from consulting activities, primarily in connection with product
development for various pharmaceutical companies. In recent years, the Company
has shifted its focus away from consulting for other companies to the
development of its own products.  The Company has had a history of recurring
losses from operations, giving rise to an accumulated deficit at July 31, 2001
of approximately $5,523,000.  Although substantially all of the Company's
revenues to date have been derived from its consulting business, the future
growth and profitability of the Company will be principally dependent upon its
ability to successfully develop its products and to enter into license
agreements with drug companies who will market and distribute the final
products.  The Company's revenues from consulting continued to decline during
the two years ended July 31, 2001 and are likely to decline in the future as
the Company continues to shift its emphasis away from consulting for clients
and towards development of its own products.

     The Company's financial statements have been presented on the basis that
it is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business.  The Company
incurred losses during the fiscal years ended July 31, 2001 (fiscal 2001) and
2000 (fiscal 2000) and had an accumulated deficit at July 31, 2001 of
approximately $5,523,000.

     The Company's continued existence is dependent upon its ability to
achieve profitable operations or obtain additional financing.  The Company is
currently seeking collaborative arrangements with pharmaceutical companies for
joint development of delivery systems and the successful marketing of these
delivery systems.  In order to pursue this strategy, the Company will be
required to obtain financing and/or consummate a strategic alliance with a
well-funded business partner in the near future.  In view of the Company's
very limited resources, its anticipated expenses and the competitive
environment in which the Company operates, there can be no assurance that the
Company's operations will be sustained for the duration of its next fiscal
year.


Results of Operations

Fiscal Year 2001 Compared to Fiscal Year 2000

     Consulting Revenues for fiscal 2001 decreased approximately $67,000 or
65% to $36,000 from $103,000 for fiscal 2000. Product Development Revenues for
fiscal 2001 increased approximately $85,000 or 47% to $264,000 from $179,000
for fiscal 2000.  The decrease in Consulting Revenues and increase in Product
Development Revenues was due to the Company's  decision to concentrate
additional efforts in the area of product development. Interest income for
fiscal 2001 decreased approximately $21,000 or 48% to $23,000 from $44,000 for
fiscal 2000.  The interest income decrease was primarily attributable to
significantly lower average cash balances for the 2001 year.

     Total costs and expenses for fiscal 2001 decreased approximately $27,000
or 2% to approximately $1,478,000 from approximately $1,505,000 for fiscal
2000.  Consulting costs and expenses for fiscal 2001 decreased approximately
$117,000 or 70% to approximately $49,000 from approximately $166,000 for
fiscal 2000.  This decrease was primarily attributable to an approximate
$112,000 decrease in payroll related expenses associated with consulting
activities.

     Product Development costs and expenses for fiscal 2001 increased
approximately $242,000 or 61% to approximately $642,000 from approximately
$400,000 for fiscal 2000.  This increase was attributable to an approximate
$194,000 increase in product development payroll expenses, an approximate
$40,000 increase in rent expense allocated to product development due to the
Company's expanded facilities occupied during October 2000, an approximate
$18,000 increase in clinical studies expense and an approximate $12,000
increase in depreciation and amortization expense due to fixed assets
acquisitions for laboratory activities.  Expense decreases for product
development were an approximate $28,000 decrease in legal fees related to
intellectual property and an approximate $24,000 decrease in outside
laboratory testing due to the Company establishing an internal laboratory.

     Selling, General and Administrative costs and expenses for fiscal 2001
decreased approximately $152,000 or 16% to approximately $787,000 from
approximately $939,000 for fiscal 2000.  This decrease was primarily
attributable to an approximate $134,000 decrease in payroll related expenses
due to employee resignations and an approximate $47,000 decrease in legal
fees due to the satisfaction of the Company's deductible for its D & O
insurance policy. Expense increases for selling, general and administrative
were an approximate $29,000 increase in outside consultant expenses due to
the aforementioned employee resignations and an approximate $12,000 increase
in the portion of rent expense allocated to SG&A due to more costly offices
occupied during October 2000.

Liquidity and Capital Resources

     From its inception, the Company's principal sources of capital have been
provided by consulting revenues, private placements and a public offering of
its securities, as well as loans and capital contributions from the Company's
principal stockholders.  At July 31, 2001 the Company had working capital of
approximately $646,000 as compared to working capital of $667,000 at July 31,
2000 representing a net increase in working capital of approximately $18,000.
In July 2001, the Company successfully closed an offering of its securities
("Private Placement").  The Private Placement provided for the sale of
approximately 1,844,000 shares of common stock, par value $.001 per share.
The Company received proceeds, net of offering costs, of approximately
$1,157,000.

     Net cash used in operating activities was approximately $1,106,000 for
fiscal 2001 compared to net cash used in operating activities of
approximately $1,139,000 for fiscal 2000.  Net cash used in operating
activities for fiscal 2001 was primarily attributable to the net loss of
$1,109,000.  For fiscal 2001, $166,000 was used for investing activities.
Therefore, notwithstanding a $1,109,000 net loss and $1,179,000 net loss for
fiscal 2001 and 2000, respectively, total cash flow for fiscal 2001 increased
approximately $994,000 as compared to a $1,015,000 increase for fiscal 2000.

     The Company believes that its current cash levels together with revenues
from operations, will be sufficient to satisfy its cash requirements for the
next five (5) months and has substantial doubt about its ability to continue
operations beyond such period without obtaining additional financing and/or
consummating a strategic alliance with a well-funded business partner.  No
assurance can be given that future unforeseen events will not adversely
affect the Company's ability to continue operations or to successfully obtain
additional financing, which may not be available on terms acceptable to the
Company, if at all.

Inflation

     The Company does not believe that inflation has had a material effect on
its results of operations during the past three fiscal years. There can be no
assurance that the Company's business will not be affected by inflation in the
future.

New Accounting Pronouncements

     See Note 1 to the Financial Statements for a discussion of New Accounting
Pronouncements affecting the Company.


ITEM 7. FINANCIAL STATEMENTS

     The response to this item is included as a separate section of this
report commencing on page F-1.


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
	FINANCIAL DISCLOSURE

     Not Applicable.

				 PART III


ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The name and age of each of the directors, his position with the
Company, his principal occupation, and the period during which such person
has served as a Director are set out below.

				   Position with        Principal      Director
Name of Nominee              Age    the Company         Occupation      Since
-------------------------------------------------------------------------------
Harry A. Dugger, III, Ph.D.  65    President and Chief President and     1991
				   Executive Officer   Chief Executive
						       Officer of the
						       Company

John J. Moroney              47    Chairman            President,        1991
						       Landmark
						       Financial Corp.

Robert F. Schaul, Esq.       62    Secretary and       Attorney          1991
				   Director

Jack J. Kornreich            62    Director            Retired           1996

Robert C. Galler             41    Vice President,     Financial         2001
				   Corporate           Advisory
				   Development         Services
				   and Director


Harry A. Dugger, III, Ph.D., President and Director.  Dr. Dugger is a founder
of the Company and has been President and a director of the Company since its
inception in May 1982. Prior to founding the Company, from June 1980 to
November 1982, Dr. Dugger was employed as Vice President of Research and
Development by Bauers-Krey Associates, a company engaged in the development
of pharmaceutical products.  From 1964 to 1980, Dr. Dugger was Associate
Section Head for Research and Development at Sandoz Pharmaceuticals
Corporation.  Dr. Dugger received an MS in Chemistry from the University of
Michigan in 1960 and received a Ph.D. in Chemistry from the University of
Michigan in 1962.

John J. Moroney, Chairman of the Board. Mr. Moroney has been Chairman of the
Company since May 1992. From May 1992 to November 1994, Mr. Moroney was also
the Company's Chief Executive Officer. Mr. Moroney currently is President of
Landmark Financial Corp., Harrington Park, New Jersey, a private financial
consulting company. From 1985 to 1992, Mr. Moroney was a Managing Director of
Corporate Finance for the investment banking firm of Ladenburg, Thalmann &
Co., Inc., specializing in the pharmaceutical and health care industries. Mr.
Moroney received a BS in 1975 and an MBA in 1977, both from Fordham
University.

Robert F. Schaul, Esq., Secretary and Director.  Mr. Schaul has been a Director
of the Company since November 1991 and was Vice President, Secretary and
General Counsel of the Company from November 1991 to February 1995. He has
advised the Company since its formation. From 1995 to 1998, Mr. Schaul was
Vice President and General Counsel of Landmark Financial Corp.  From 1989 to
1991, Mr. Schaul was a partner with the law firm of Glynn, Byrnes and Schaul,
and for twenty years prior thereto was an attorney and partner with the law
firm Kerby, Cooper, English, Schaul & Garvin, specializing in business law
and business related litigation. Mr. Schaul received a BA from New York
University in 1961 and a JD from Harvard University in 1964.

Jack J. Kornreich, Director.  Mr. Kornreich has been a director of the Company
since 1996. He presently acts as an independent consultant.  From 1989 to
1993, Mr. Kornreich was Executive Vice President and General Counsel of Bolar
(formerly Circa Pharmaceuticals Corp. and now known as Watson Pharmaceutical
Corp.).  From 1984 to 1989, Mr. Kornreich practiced law as a partner in the
firm of Baum & Kornreich (from 1980 to 1984 the firm was named Baum, Skigen
& Kornreich).  From 1975 to 1984, Mr. Kornreich was in private practice.  Mr.
Kornreich received a JD from Brooklyn Law School in 1963 and an LLM in
Corporate Law from New York University in 1975.

Robert C. Galler, Vice President, Corporate Development and Director. Mr.
Galler has been an employee and Director of the Company since September,
2001.  From 1992 to the present, Mr. Galler has been the President and
Chairman of the Lois Joy Galler Foundation for Hemolytic Uremic Syndrome, a
non-profit charity. From 1999 to 2001, Mr. Galler was Vice President,
Corporate Development and Director of  Select Therapeutics, Inc. From 1994 to
1998 Mr. Galler was a Director and advisor of Synsorb Biotech, Inc. From 1992
to 1994 Mr. Galler was an equity coordinator at Gallers Financial Group, Inc.,
and from 1984 to 1992 he was Vice President of Investments with Gruntal & Co.
Mr. Galler attended Hofstra University, Hempstead, N. Y.

Board members are elected annually by the shareholders and the officers are
appointed annually by the Board of Directors.


ITEM 10.        EXECUTIVE COMPENSATION

     EXECUTIVE COMPENSATION

     The following table sets forth a summary for the fiscal years ended July
31, 2001, 2000 and 1999, respectively, of the cash and non-cash compensation
awarded, paid or accrued by the Company to the Company's Chief Executive
Officer ("CEO") and its two most highly compensated officers other than the
CEO, who served in such capacities at the end of fiscal 2001 (collectively,
the "Named Executive Officers").  No other executive officer of the Company
earned in excess of $100,000 in total annual salary and bonus for, 2001, 2000
and 1999 in all capacities in which such person served the Company.  There
were no restricted stock awards, long-term incentive plan payouts or other
compensation paid during fiscal  2001, 2000 and 1999 to the Named Executive
Officers, except as set forth below:


			  SUMMARY COMPENSATION TABLE


<TABLE>
						       Long-Term Compensation
							      Awards               Payouts
					      Other    --------------------------  -------
					      Annual   Restricted Securities                   All
					      Compen-  Stock      Underlying        LTIP      Other
Name and            Fiscal   Salary    Bonus  sation   Awards     Options/SAR (1)  Payouts  Compensation
Principal Position   Year     ($)       ($)    ($)      ($)          (#)            ($)        ($)
========================================================================================================
<S>                  <C>      <C>       <C>     <C>      <C>         <C>             <C>       <C>
Harry A. Dugger,
 III, Ph.D.         2001    232,000(2)   0      0         0               0         0          0
 President and CEO  2000    226,000      0      0         0          95,000         0          0
		    1999    210,000      0      0         0               0         0          0

John J. Moroney     2001     57,781      0      0         0               0         0          0
 Chairman           2000    169,000      0      0         0          95,000         0          0
		    1999    157,500      0      0         0               0         0          0

Donald Deitman      2001     70,800      0      0         0               0         0          0
 Chief Financial    2000     68,000      0      0         0               0         0          0
 Officer            1999     67,500      0      0         0               0         0          0



(1) No Stock Appreciation Rights have been issued.
(2) Includes $49,000 accrued, but unpaid, salary.

</TABLE>

		     OPTION GRANTS IN LAST FISCAL YEAR
			   (individual grants)

     There were no option grants during fiscal 2001.


	      AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
		     AND FISCAL YEAR-END OPTION VALUES

     The following table sets forth information with respect to the Named
Executive Officers concerning the exercises of options during fiscal 2001 and
the number and value of unexercised options held as of the end of fiscal 2001.

					    Number of
					    Securities       Value of
					    Underlying       Unexercised
		     Number of              Unexercised      In-the-Money
		     Shares                 Options at       Options at Fiscal
		     Acquired  Value        (Exercisable/    Year End ($)
Name of              on        Realized     Unexercisable)   Exercisable/
Executive Officer    Exercise    ($)                         Unexercisable)
==============================================================================
Harry A. Dugger,
 III, Ph.D.          0            -           645,000 / 0        0 / 0
John J. Moroney      0            -           645,000 / 0        0 / 0
Donald Deitman       0            -                 -                -


Compensation of Directors

     The Directors of the Company are elected annually and serve until the
next annual meeting of stockholders and until a successor shall have been duly
elected and qualified.  Effective January 1999, Directors of the Company, who
are not employees or consultants receive for each meeting attended directors
fees of $500 for their services as members of the Board of Directors. Such
Directors are also reimbursed for expenses incurred in connection with their
attendance at meetings of the Board of Directors.  Directors may be removed
with or without cause by a vote of the majority of the stockholders then
entitled to vote.  There were no other arrangements pursuant to which any
Director was compensated during fiscal 2001 for any services provided as a
Director.

Stock Option Plans

     The Company has three stock option plans, adopted in 1992, 1997 and 1998,
respectively (collectively referred to as the "Plans").  Each Plan provides
for the issuance of options to purchase 500,000 shares of Common Stock, for a
total of 1,500,000 shares.  The 1997 Stock Option Plan is administered by
Harry A. Dugger, III, Ph.D. and John J. Moroney, who constitute the
Compensation Committee of the Board of Directors ("Committee"), and the 1992
Stock Option Plan and 1998 Stock Option Plan are administered by the entire
Board of Directors.  For purposes of the following discussion, the term
"Committee" will be used to reference the Committee with respect to the 1997
Stock Option Plan and the entire Board of Directors with respect to the 1992
Stock Option Plan and 1998 Stock Option Plan, as applicable.  The Committee
has sole discretion and authority, consistent with the provisions of the
Plans, to select the Eligible Participants to whom options will be granted
under the Plans, the number of shares which will be covered by each option
and the form and terms of the agreement to be used.  All employees and officers
of the Company are eligible to participate in the Plans.

     At September 30, 2001, eleven (11) persons were eligible to receive
Incentive Stock Options ("ISOs") under the 1992, 1997 and 1998 Plans.

     Options.  The Committee is empowered to determine the exercise price of
options granted under the Plans, but the exercise price of  ISOs must be equal
to or greater than the fair market value of a share of Common Stock on the
date the option is granted (110% with respect to optionees who own at least
10% of the outstanding Common Stock).  The Committee has the authority to
determine the time or times at which options granted under the Plans become
exercisable, but options expire no later than ten years from the date of grant
(five years with respect to Optionees who own at least 10% of the outstanding
Common Stock of the Company).  Options are nontransferable, other than by will
and the laws of descent, and generally may be exercised only by an employee
while employed by the Company or within 90 days after termination of employment
(one year from termination resulting from death or disability).

     No ISO may be granted to an employee if, as the result of such grant, the
aggregate fair market value (determined at the time each option was granted)
of the shares with respect to which ISOs are exercisable for the first time
by such Employee during any calendar year (under all such plans of the Company
and any parent and subsidiary) exceeds $100,000.  The Plans do not confer upon
any employee any right with respect to the continuation of employment by the
Company, nor do the Plans interfere in any way with the employee's right or
the Company's right to terminate the employee's employment at any time.

Compensation Committee Interlocks and Insider Participation

     Harry A. Dugger, III and John J. Moroney serve as the members of the
Company's Compensation Committee, which reviews and makes recommendations with
respect to compensation of officers, employees and consultants, including the
granting of options under the Company's 1997 Stock Option Plan.  The 1992 and
1998 Stock Option Plans are administered by the entire Board.

     Mr. Moroney is also a Director and President of Landmark Financial Corp.
("Landmark"), serving as a member of Landmark's compensation committee.
Robert F. Schaul, a Director and Secretary of the Company, earned legal fees
from the Company during fiscal 2001 in the approximate amount of $85,000.
See "Certain Transactions--Legal Fees," below.

Compensation Committee Report on Executive Compensation

     Compensation of the Company's executives is intended to attract, retain
and award persons who are essential to the enterprise.  The fundamental policy
of the Company's executive compensation program is to offer competitive
compensation to executives that appropriately rewards the individual
executive's contribution to corporate performance.  The Board of Directors
utilizes subjective criteria for evaluation of individual performance.  The
Board focuses on two primary components of the Company's executive
compensation program, each of which is intended to reflect individual and
corporate performance: base salary compensation and long-term incentive
compensation.  The Company has not paid cash incentive bonuses during fiscal
2001.

     Except as set forth herein, the Company does not have any annuity,
retirement, pension, deferred or incentive compensation plan or arrangement
under which any executive officer is entitled to benefits, nor does the
Company have any long-term incentive plan pursuant to which performance units
or other forms of compensation are paid.  Executive officers who qualify will
be permitted to participate in the Company's 1992, 1997 and 1998 Stock Option
Plans which were adopted in May 1992, February 1997 and June 1998,
respectively.  In September 1998 the Board of Directors adopted an investment
retirement account plan in which all employees of the Company are eligible to
participate.  Executive officers may participate in group life, health and
hospitalization plans, if and when such plans are available generally to all
employees.  The Compensation Committee is satisfied that the compensation and
stock option plans provided to the officers of the Company are structured and
operated to create strong alignment with the long-term best interests of the
Company and its stockholders.

     The compensation of the Company's Chief Executive Officer, Dr. Dugger,
for fiscal 2001 consisted of base salary of approximately $232,000.
Because of an inadequacy of cash flow during the second and third quarters of
fiscal 2001, Dr. Dugger and Mr. Moroney agreed to accrue all of their salaries
until the cash flow situation resolved itself.  In May 2001, Dr. Dugger's
salary was resumed and one-half of his accrued salary was paid out.  The
remaining half ($49,000) continues as an accrual at this time.  Also, in May
2001, Mr. Moroney resigned effective April 30, 2001, as an employee, although
he continues as Chairman of the Board of Directors.  At that time he forgave
all of his accrued salary, approximately $72,000.  At that same time, Mr.
Moroney entered into a four month consulting arrangement with the Company for
a one-time cash payment of $25,000 and a $6,500 per month fee.  See Note 6 to
the financial statements below.  No bonuses or stock grants were awarded to Dr.
Dugger during fiscal 2001.  The determination by the Compensation Committee of
Dr. Dugger's remuneration is based upon methods consistent with those used for
other senior executives.  The committee considers certain quantitative factors,
including the Company's financial, strategic and operating performance for the
year.  The qualitative criteria include Dr. Dugger's leadership qualities and
management skills, as exhibited by his innovations, time and effort devoted
to the Company, and other general considerations.  The Compensation Committee
also takes note of comparable remuneration of other CEOs at similar companies.
Based on the performance of the Company, the Compensation Committee believes
that Mr. Dugger's compensation was appropriate.

			 Compensation Committee:

			Harry A. Dugger, III, Ph.D
			      John J. Moroney


Stockholder Loans

     In fiscal 1998, the Company lent the principal amount of $60,000 to Dr.
Dugger in exchange for a 7% promissory note.  The note is due on demand, with
interest due quarterly.  Interest approximated $4,200 for fiscal 2001. In
October 2001, Dr. Dugger indicated this loan would be repaid in full before
year-end 2001.


	      STOCKHOLDER RETURN PERFORMANCE PRESENTATION

     The comparative stock performance graph below compares the cumulative
stockholder return on the Common Stock of the Company for the period from
November 20, 1997 through the fiscal year ended July 31, 2001, with the
cumulative total return on (i) the Total Return Index for the Nasdaq Stock
market (U.S. Companies) (the "Nasdaq Composite Index"), and (ii) the American
Stock Exchange, Inc. ("AMEX") Pharmaceutical Index (assuming the investment
of $100 in the Company's Common Stock, the Nasdaq Composite Index and the
AMEX Pharmaceutical Index on November 20, 1997 and reinvestment of all
dividends).  Measurement points are on the first full trading day after the
Company's registration statement was declared effective by the SEC and the
last trading day of the Company's fiscal year ended July 31.  The Company
cautions that the stock price performance shown in the graph below should not
be considered indicative of potential future stock performance.  Companies
included in the Nasdaq Composite Index and AMEX Pharmaceutical Index are
generally larger and have greater capitalization than the Company.


    [The following table represents a graphic chart which has been omitted]


			       11/20/97  7/31/98  7/31/99  7/31/00  7/31/01
---------------------------------------------------------------------------
AMEX Pharmaceutical Index (DRG) $100.00  $135.00  $136.58  $153.78  $124.63
Flemington Pharmaceutical
  Corporation (FLEM)            $100.00  $ 24.00  $ 15.57  $ 13.25  $  5.64
Nasdaq Composite Index          $100.00  $118.75  $162.25  $231.59  $156.82



ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

     As of November 8, 2001, there were 7,724,900 shares of Common Stock
outstanding and entitled to vote at the Annual Meeting.  Each share is
entitled to one vote on each of the matters to be voted on at the Annual
Meeting.  The following table sets forth, as of October 18, 2001, certain
information regarding the ownership of the Common Stock by (i) each person
known by the Company to be the beneficial owner of more than 5% of the Common
Stock, (ii) each of the Company's Directors and Named Executive Officers, as
such term is defined under Item 402(a)(3) of Securities and Exchange
Commission ("SEC") Regulation S-K, and (iii) all of the Company's Executive
Officers and Directors as a group.  Beneficial ownership has been determined
in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Under Rule 13d-3 certain shares may be deemed
to be beneficially owned by more than one person (such as where persons share
voting power or investment power).  In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire the
shares (for example, upon the exercise of an option) within sixty (60) days
of the date as of which the information is provided.  In computing the
ownership percentage of any person, the amount of shares outstanding is deemed
to include the amount of shares beneficially owned by such person (and only
such person) by reason of these acquisition rights.  As a result, the
percentage of outstanding shares of any person as shown in the following table
does not necessarily reflect the person's actual ownership or voting power
at any particular date.


		    Name and                    Amount and Nature   Percentage
Title of            address or Number           of Beneficial       of
 Class              in Group (1)                Ownership (2)       Class
==============================================================================
Common Stock        Harry A. Dugger, III, Ph.D.   1,829,003(3)        21.9
Common Stock        John J. Moroney               1,018,080(4)        12.2
Common Stock        Donald Deitman                        0              0
Common Stock        Robert F. Schaul, Esq.          189,286(5)         2.4
Common Stock        Robert C. Galler                      0              0
Common Stock        Jack J. Kornreich               169,310(5)         2.1
Common Stock        All Executive Officers and    3,205,679(3)(4)(5)  36.23
		     Directors as a group
		      (6 persons)



(1)  The address of all holders listed herein is c/o Flemington Pharmaceutical
Corporation, 31 State Highway 12, Flemington, New Jersey 08822.

(2)  Except as otherwise indicated, each named holder has, to the Company's
knowledge, sole voting and investment power with respect to the shares
indicated.

(3)  Includes options to purchase 200,000 shares of Common Stock issued under
the 1992 Stock Option Plan; options to purchase 50,000 shares of Common Stock
under the 1997 Stock Option Plan; options to purchase 95,000 shares of Common
Stock issued under the 1998 Stock Option Plan, options to purchase 300,000
shares of Common Stock issued outside of the Plans; 108,000 shares owned by
his daughter Christina Dugger Sommers; and 108,000 shares owned by his son
Andrew Dugger.  Dr. Dugger may be deemed to be a "parent" of the Company as
such term is defined under the Federal securities laws.

(4)  Includes options to purchase 200,000 shares of Common Stock issued under
the 1992 Stock Option Plan; options to purchase 50,000 shares of Common Stock
under the 1997 Stock Option Plan; options to purchase 95,000 shares of Common
Stock issued under the 1998 Stock Option Plan, options to purchase 300,000
shares of Common Stock issued outside of the Plans; 208,080 shares owned
jointly with his wife, and 60,000 shares owned by each of his three sons,
Matthew, Timothy and Sean Moroney.

(5)  Includes options to purchase 20,000 shares of Common Stock issued under
the 1992 Stock Option Plan and options to purchase 25,000 shares of Commons
Stock issued under the 1997 Stock Option Plan, options to purchase 105,000
shares of Common Stock issued under the 1998 Stock Option Plan.


Compliance with Section 16(a) of the Securities Exchange Act of 1934

     Section 16(a) of the Exchange Act requires officers, directors and
persons who own more than ten (10) percent of a class of equity securities
registered pursuant to Section 12 of the Exchange Act to file reports of
ownership and changes in ownership with both the SEC and the principal
exchange upon which such securities are traded or quoted.  Officers, directors
and persons holding greater than ten (10) percent of the outstanding shares
of a class of Section 12-registered equity securities ("Reporting Persons")
are also required to furnish copies of any such reports filed pursuant to
Section 16(a) of the Exchange Act with the Company.  Based solely on a review
of the copies of such forms furnished to the Company, the Company believes
that from August 1, 2000 to September 30, 2001 all Section 16(a) filing
requirements applicable to its Reporting Persons were complied with.


ITEM 12.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

			      CERTAIN TRANSACTIONS


Legal Fees

     During fiscal 2001 the Company paid Mr. Schaul approximately $85,000 for
legal services rendered to the Company.


				 PART IV

ITEM 13.  EXHIBITS, LIST AND REPORTS ON FORM 8-K

     List of Exhibits

     The exhibits that are filed with this report or that are incorporated
herein by reference are set forth in the Exhibit Index appearing on page
E-1 hereof.

     (b)  Reports on Form 8-K

	  No reports on Form 8-K were filed during the last quarter of fiscal
	  2001.



INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
  Flemington Pharmaceutical Corporation


We have audited the balance sheet of Flemington Pharmaceutical Corporation as
of July 31, 2001 and the related statements of operations, changes in
stockholders' equity and cash flows for each of the two years in the period
then ended.  These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Flemington Pharmaceutical
Corporation at July 31, 2001, and the results of its operations and its cash
flows for each of the two years in the period then ended in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note 2 to the
financial statements, the Company has had a history of recurring losses from
operations, giving rise to a stockholders' deficiency through July 31, 2001
and is currently developing pharmaceutical products which will require
substantial financing to fund anticipated product development costs.
Resulting operating losses and negative cash flows from operations are likely
to occur until, if ever, profitability can be achieved through successful
marketing of newly developed products.  These factors raise substantial doubt
about the Company's ability to continue as a going concern.  Management's
plans in regard to these matters are described in Note 2.  The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.


						WISS & COMPANY, LLP

Livingston, New Jersey
August 31, 2001



		    FLEMINGTON PHARMACEUTICAL CORPORATION

			      BALANCE SHEET
			      JULY 31, 2001

	      ASSETS

CURRENT ASSETS:
 Cash ...................................  $585,000
 Accounts receivable - trade, less
 allowance for doubtful accounts
  of $9,000..............................    92,000
 Prepaid expenses and other current assets   57,000
					    -------
  Total Current Assets...................                 $734,000

FURNITURE, FIXTURES, AND EQUIPMENT, LESS
 ACCUMULATED DEPRECIATION OF $95,000.....                  167,000

DEMAND NOTE RECEIVABLE, SHAREHOLDER......                   60,000

DUE FROM JOINT VENTURE PARTNER FOR
 REIMBURSABLE EXPENSES...................                    6,000

OTHER ASSETS.............................                   17,000
							   -------
							  $984,000
							  ========
	      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Accounts payable-trade..................  $ 11,000
 Accrued expenses and other current
  liabilities............................    77,000
					    -------
  Total Current Liabilities..............                 $ 88,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY :
 Preferred stock, $.01 per value:
  Authorized 1,000,000 shares, none issued                       -
 Common stock $.001 par value:
  Authorized - 50,000,000 shares..........
  Issued and outstanding -
  7,724,900 shares .......................    8,000
 Additional paid-in capital...............6,411,000
 Accumulated Deficit.....................(5,523,000)
					  ---------
  Total Stockholders' Equity ............                  896,000
							  --------
							  $984,000
							  ========


See accompanying notes to financial statements.


		 FLEMINGTON PHARMACEUTICAL CORPORATION

		       STATEMENTS OF OPERATIONS


						Year Ended
						 July 31,
					  ------------------------
					      2001           2000
					   ----------     ----------
REVENUES:
 Consulting............................   $     36,000    $   103,000
 Product Development...................        264,000        179,000
					     ----------     ----------
					       300,000        282,000
					    ----------     ----------
COST AND EXPENSES:
 Consulting............................         49,000        166,000
 Product development...................        642,000        400,000
 Selling, general and
  administrative expenses..............        787,000        939,000
					     ---------      ---------
					     1,478,000      1,505,000
					     ---------      ---------
LOSS FROM OPERATIONS...................     (1,178,000)    (1,223,000)
					     ---------      ---------
INTEREST INCOME........................         23,000         44,000

NET LOSS BEFORE TAXES..................     (1,155,000)    (1,179,000)
					     ---------      ---------
 Deferred Income Tax Benefit...........         46,000              -
					     ---------      ---------
NET LOSS...............................    $(1,109,000)   $(1,179,000)
					     =========      =========
WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING....................      6,326,000      4,447,000
					     =========      =========
BASIC AND DILUTED LOSS
 PER COMMON SHARE:
 Net Loss..............................   $       (.18)  $       (.27)
					     =========      =========


See accompanying notes to financial statements.

		  FLEMINGTON PHARMACEUTICAL CORPORATION

	      STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY


		  Common Stock
		-----------------   Additional
			   Par       Paid-in      Accumulated   Stockholders'
		  Shares   Value     Capital      Deficit       Equity
==============================================================================
BALANCE,
 JULY 31, 1999  3,877,300  $4,000   $4,268,000    $(3,235,000)  $  1,037,000

YEAR ENDED
 JULY 31, 2000
 In connection
 with private
 placement, net
 of costs       2,000,000   2,000      982,000              -        984,000
 Net Loss               -       -            -     (1,179,000)    (1,179,000)
		------------------------------------------------------------
BALANCE,
 JULY 31, 2000  5,877,300  $6,000   $5,250,000    $(4,414,000)  $    842,000
		------------------------------------------------------------

YEAR ENDED
 JULY 31, 2001
 Common Shares
 Issued for
 Services           3,937        -       6,000              -          6,000
 In connection
 with private
 placement, net
 of costs       1,843,663    2,000   1,155,000              -      1,157,000
 Net Loss               -        -           -     (1,109,000)    (1,109,000)
		------------------------------------------------------------
BALANCE,
 JULY 31, 2001  7,724,900   $8,000  $6,411,000    $(5,523,000)   $   896,000
		============================================================


See accompanying notes to financial statements.


		      FLEMINGTON PHARMACEUTICAL CORPORATION

			   STATEMENTS OF CASH FLOWS

						    Year Ended
						     July 31,
					     ------------------------
						2001          2000
					     ---------      ---------

CASH FLOW FROM OPERATING ACTIVITIES:
 Net loss                                    $(1,109,000)   $(1,179,000)
 Adjustments to reconcile net loss to
  net cash flows from operating activities:
  Shares issued for services                       6,000              -
  Options issued for services                          -         10,000
  Depreciation and amortization                   24,000         14,000

  Changes in operating assets and liabilities:
   Accounts receivable                           (46,000)        76,000
   Due from D&O Insurance Carrier                 86,000        (86,000)
   Prepaid expenses and other current assets      (5,000)         6,000
   Due from Joint Venture partner for
    reimbursable expenses                         74,000        (80,000)
   Other Assets                                   (7,000)         9,000
   Accounts payable - trade                      (57,000)        20,000
   Billings in excess of costs and estimated
    earnings on uncompleted contracts            (49,000)        49,000
   Accrued expenses and other current
    liabilities                                  (23,000)        22,000
					       ---------      ---------
   Net cash flows from operating activities   (1,106,000)    (1,139,000)
					       ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES -
 Purchase of property and equipment             (166,000)        (9,000)
					       ---------      ---------
  Net cash flows from investing activities      (166,000)        (9,000)
					       ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES -
 Private placement                             1,157,000        984,000
					       ---------      ---------
  Net cash flows from financing activities     1,157,000        984,000
					       ---------      ---------
NET CHANGE IN CASH                              (115,000)      (164,000)
CASH, BEGINNING OF YEAR                          700,000        864,000
					       ---------      ---------
CASH, END OF YEAR                            $   585,000    $   700,000
					       =========      =========

SUPPLEMENTAL CASH FLOW INFORMATION:
 Interest paid                               $         -    $         -
					       =========      =========
 Income taxes paid                           $         -    $         -
					       =========      =========



See accompanying notes to financial statements.



		   FLEMINGTON PHARMACEUTICAL CORPORATION

		       NOTES TO FINANCIAL STATEMENTS



Note 1 - Nature of the Business and Summary of Significant Accounting
	 Policies:

     Nature of the Business - Flemington Pharmaceutical Corporation (the
     "Company") , which was formerly incorporated under the laws of New Jersey
     was reincorporated in the State of Delaware in November 1998.  The Company
     is engaged in domestic and international consulting activities and the
     development of novel pharmaceutical products combining presently marketed
     drugs with innovative patent-pending oral dosage delivery systems of the
     Company, designed to enhance and accelerate the onset of the therapeutic
     benefits which the drugs are intended to produce.  Management intends to
     develop the products in collaboration with pharmaceutical companies having
     significant existing sales of the pharmaceutical compounds being
     incorporated into the Company's dosage delivery systems, thereby creating
     a more effective, and more attractive product.

     Revenues and Costs - Revenues from contract clinical research are
     recognized as earned.

     Contract costs normally consist of fees paid to outside clinics for
     studies and an allocable portion of the  Company's operating expenses.
     General and administrative costs pertaining to contracts are charged to
     expense as incurred.

     Financial Instruments - Financial instruments include cash, accounts
     receivable, amounts due from joint venture partner, loans to stockholders
     and employees, accounts payable, and accrued expenses.  The amounts
     reported for financial instruments are considered to be reasonable
     approximations of their fair values, based on market information available
     to management.

     Furniture, Fixtures and Equipment - Furniture, fixtures and equipment are
     stated at cost.  The Company provides for depreciation using accelerated
     methods, based upon estimated useful lives of 5 to 7 years for furniture,
     fixtures and equipment.

     Income Taxes -  Temporary differences between financial statement and
     income tax reporting result primarily from net operating losses and
     reporting on the cash basis of accounting for tax reporting purposes.
     As a result of these temporary differences, the Company has recorded a
     deferred tax asset with an offsetting valuation allowance for the same
     amount.

     Defined Contribution Retirement Plans - The Company has a Simple IRA
     retirement plan providing for contributions at management's discretion.
     During the years ended July 2000 and July 2001, the Company made
     contributions to the new retirement plan of approximately $5,000 and
     approximately $15,000, respectively.

     Risk Concentrations:

     (a) Credit Risk - The Company maintains its cash balances in financial
	 institutions that are insured by the Federal Deposit Insurance
	 Corporation (FDIC) up to $100,000 each.  Such balances, at times,
	 may exceed the FDIC limits.

     (b) Major Customers - During fiscal 2001, the Company had revenue from
	 two customers located in the United States approximating 40% and 18%,
	 respectively, of the Company's total revenue.

	 During fiscal 2000, the Company had  revenue from two customers
	 located in the United States approximating 27% and 18%, respectively,
	 of the Company's total revenue.

     (c) Accounts Receivable - At July 31, 2001, the Company had unsecured
	 accounts receivable from one customer located in the United States of
	 America and one customer located in France, approximating 55% and 30%,
	 respectively, of the Company's total accounts receivable.  At July 31,
	 2000, the Company had unsecured accounts receivable from one customer
	 located in the United States, one customer located in France and one
	 customer located in the United Arab Emirates, approximating 33%, 20%
	 and 15%, respectively, of the Company's total accounts receivable. The
	 Company has long-standing relationships with its principal customers
	 and feels that credit risk associated with these customers is limited.
	 With regard to new customers, the Company receives customer referrals
	 through long-standing relationships.

     (d) Supplier Dependence - The Company believes that certain raw materials,
	 including inactive ingredients, are available only from a limited
	 number of suppliers internationally and that certain packaging
	 materials intended for use in connection with its spray products
	 currently are available from limited supply sources.  The Company does
	 not believe it will encounter difficulties in obtaining inactive
	 ingredients or packaging materials necessary for the manufacture of
	 its products.  However, there can be no assurance that the Company
	 will be able to enter into satisfactory purchasing agreements or
	 arrangements, thereby, causing a potential significant adverse effect
	 on the Company's ability to arrange for the manufacture of formulated
	 products.


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

     Earnings (Loss) per Share - Statement of Financial Accounting Standards
     (SFAS) No. 128, "Earnings Per Share" requires the disclosure of both
     diluted and basic earnings per share.  Basic earnings per share is based
     on the weighted average of all common shares outstanding.  The computation
     of diluted earnings per share does not assume the conversion, exercise or
     contingent issuance of securities that would have an antidilutive effect
     on earnings per share.

     Recent Accounting Pronouncements -  In July 2001, the FASB issued SFAS
     N. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other
     Intangible Assets."  SFAS No. 141 provides new guidance on the accounting
     for a business combination at the date a business combination is
     completed.  Specifically, it requires use of the purchase method of
     accounting for all business combinations initiated after June 30, 2001,
     thereby eliminating use of the pooling-of-interests method.  SFAS No. 142
     establishes new guidance on how to account for goodwill and intangible
     assets after a business combination is completed.  Among other things, it
     requires that goodwill and certain other intangible assets will no longer
     be amortized and will be tested for  impairment at least annually and
     written down only when impaired.  This statement will apply to existing
     goodwill and intangible assets, beginning with fiscal years starting
     after December 15, 2001.  The Company is currently evaluating these
     statements but does not expect that they will have a material impact as
     the results of operations of financial position of the Company.

     In December 1999, the Securities and Exchange Commission (SEC) issued
     Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in
     Financial Statements."  The Company adopted SAB 101 as of August 1,
     2000.  The adoption of SAB 101 did not have an effect on the results of
     operations or financial portion of the Company.

     In June 1998, the Financial Accounting Standards Board issued SFAS No.
     133 Accounting for Derivative Instruments and Hedging Activities which,
     as amended, will be effective for its fiscal year ending July 31, 2001.
     The Company does not expect any significant impact to its financial
     statements from SFAS No. 133.

Note 2 - Management's Plans to Overcome Operating and Liquidity Difficulties

     The Company's financial statements have been presented on the basis that
     it is a going concern, which contemplates the realization of assets and
     the satisfaction of liabilities in the normal course of business.

     The Company's continued existence is dependent upon its ability to
     achieve profitable operations or obtain additional financing.  The
     Company is currently seeking collaborative arrangements with
     pharmaceutical companies for the joint development of delivery systems
     and the successful marketing of these delivery systems.  The Company is
     exploring merger opportunities or other strategic alternatives to fund
     future operations.

     In view of the Company's very limited resources, its anticipated expenses
     and the competitive environment in which the Company operates, there can
     be no assurance that its operations will be sustained for the duration of
     its next fiscal year.

Note 3 - Prepaid and Accrued expenses:

     Prepaid expenses and other current assets - Approximately $38,000 of
     prepaid supplies and an approximate $5,000 employee loan (see note 6)
     are included in the $57,000 total.  The remainder is prepaid expenses
     and other current assets.

     Accrued expenses and other current liabilities - Approximately $49,000
     of accrued salary and related payroll taxes due to the Company's
     president and CEO are included in the $77,000 total.   The remainder is
     accrued expenses and other current liabilities.

Note 4 - Furniture, Fixtures and Equipment

     Furniture, fixtures and equipment is summarized as follows:

						 July 31, 2001
						 -------------
     Equipment                                   $ 198,000
     Furniture and fixtures                         64,000
						  --------
						   262,000
     Less:  Accumulated depreciation                95,000
						  --------
						 $ 167,000
						  ========

Note 5 - Stockholders' equity:

     Preferred Stock -  The Company's Certificate of Incorporation authorizes
     the issuance of up to 1,000,000 shares of Preferred Stock.  None of such
     Preferred Stock has been designated or issued to date.  The Board is
     authorized to issue shares of Preferred Stock from time to time in one
     or more series and to establish and designate any such series and to fix
     the number of shares and the relative conversion rights, voting, terms
     of redemption and liquidation.

Note 6 - Related Party Transactions:

     Employee Note Receivable - During June 2001, the company granted a six
     (6) months loan of approximately $5,000 to an employee.  This loan
     provides for seven percent (7%) annual interest.

     Forgiven Salary - During April 2001, the Company's chairman resigned as
     an employee and forgave approximately $72,000 of accrued and unpaid
     salary.  The Company agreed to a four (4) months consulting contract
     with the chairman's consulting company for an immediate cash payment of
     $25,000 and a $6,500 per month fee.

     Legal Fees - The Company has incurred legal fees with an officer and
     director of the Company.  These fees approximated $85,000 and $66,000
     for the years ended July 31, 2001 and 2000, respectively.

     Stockholder's Note Receivable - In April 1998, the Company lent $60,000
     to its President.  The note is due on demand with interest at 7% due
     quarterly.  Interest approximated $4,200 for each of the two years ended
     July 31, 2001.

Note 7 - Commitments and Contingencies:

     Joint Venture - In December 1997, the Company entered into a joint
     venture agreement with a business development corporation (Nace) for the
     purposes of developing products.  For the year ended July 31, 2001,
     approximately $46,000 total costs had been recorded for this venture and
     approximately $23,000 had been invoiced to the joint venture partner.
     At July 31, 2001, approximately $6,000 was due from the joint venture
     partner.

     Leases - In August 2000, the Company entered into a 5-year lease
     agreement, effective October 2000, for approximately 4,500 square feet
     of office, laboratory and manufacturing space.  Annual rent is
     approximately $63,000, for each year,  plus  real estate taxes, currently
     estimated to be approximately $11,000 annually.  Previously, the Company
     rented office space on a month to month basis.  Rent expense for the
     Company totaled approximately $69,000 and $26,000 for the years ended July
     31, 2001 and 2000, respectively.

     Government Regulation - The development, manufacture and commercialization
     of pharmaceuticals are subject to extensive regulation by various federal
     and state government entities.  The Company cannot determine the impact of
     government regulations on the development of its delivery systems.

Note 8 - Income Taxes:

     No provision for current and deferred income taxes is required for the
     years ended July 31, 2001 and 2000.

     The significant components of the Company's net deferred tax asset are
     summarized as follows:

						      July 31
					       ---------------------
					       2001             2000
					       ----             ----
Differences between the cash basis of
 accounting for income tax reporting and
 the accrual basis for financial reporting
 purposes                                     $  (27,000)     $  (19,000)
 Net operating loss carryforwards.........     2,003,000       1,610,000
					       ---------       ---------
					       1,976,000       1,591,000
 Valuation allowance                           1,976,000       1,591,000
					       ---------       ---------
Net deferred tax asset....................    $        -      $        -
					       =========       =========

     The following is a reconciliation of income tax benefit computed at the
     34% statutory rate to the provision for income taxes:

					       ---------------------
					       2001             2000
					       ----             ----
Tax at statutory rate......................   $ 377,000       $ 401,000
State Income Tax...........................      48,000          47,000
Valuation allowance........................    (425,000)       (448,000)
						-------         -------
					      $       -       $       -
						=======         =======

     A valuation allowance is provided when it is more likely than not that
     some portion of the deferred tax asset will not be realized.  The Company
     has determined, based on the Company's prior history of recurring losses,
     that a full valuation allowance is appropriate at July 31, 2001 and 2000.

     At July 31, 2001, the Company has federal and state net operating loss
     carryforwards for financial reporting and income tax purposes of
     approximately $5,516,000 and $2,381,000, respectively, which can be used
     to offset current and future taxable income through the year 2021.  During
     fiscal 2001 the Company sold a portion of its state net operating loss
     carryforwards realizing approximately $46,000.  The Company has been
     informed that it is eligible to sell another portion of its state NOL
     during fiscal 2002.

Note 9 - Stock Options:

     At July 31, 2001,  the Company had three plans to allow for the issuance
     of stock options and other awards, the 1992 Stock Option Plan, the 1997
     Stock Option Plan and the 1998 Stock Option Plan (the "Plans").  The
     total number of shares of common stock reserved for issuance, either as
     incentive stock options ("ISO's") under the Internal Revenue Code or as
     non-qualified options,  under each of the Plans is 500,000 shares.  ISOs
     may be granted to employees and officers of the Company and non-qualified
     may be granted to consultants, directors, employees and officers of the
     Company.  Options to purchase Company's  common stock could not be granted
     at a price less than the fair market value of the common stock at the date
     of grant and will expire not more than ten years from the date of grant.
     ISOs granted to a 10% or more stockholder could not be for less than 110%
     of fair market value or for a term of more than 5 years.

     The Company uses the intrinsic value method prescribed by APB Opinion No.
     25 to measure compensation expense.  If the fair value method had been
     used to measure compensation expense as prescribed by SFAS No. 123, net
     loss would have increased by $361,000 or $.08 per share to $1,540,000 or
     $.35 per share for fiscal 2000.  There were no options granted in fiscal
     2001.

     The fair value of options granted in fiscal 2000 were estimated at the
     date of grant using a Black-Sholes option model with the following
     weighted-average assumptions, respectively: risk-free interest rates of
     5.5% yield of 0.0% volatility factors of the expected market price of the
     Company's Common Stock of 10% to 174% and a weighted-average expected life
     of the options of five (5) to ten (10) years.

     The Black-Scholes option valuation model was developed for use in
     estimating the fair value of traded options, which have no vesting
     restrictions and are fully transferable.  In addition, option valuation
     models require input of highly subjective assumptions including the
     expected stock price volatility.  When the Company shares were not traded
     publicly, the employee stock options had characteristics significantly
     different from those of publicly traded options.  Because changes in the
     subjective input assumptions can materially affect fair value estimate,
     in management's opinion, the existing models do not necessarily provide a
     reliable single estimate of the fair value of its employee stock options.

     Information with respect to stock option activity is as follows (in
     thousands, except exercise price amounts):

						       Outstanding Options
						-----------------------------
			    Options Available   Number of    Weighted Average
			       for Grant         Options      Exercise Price
-----------------------------------------------------------------------------
Balance at August 1, 1999...    400               1,900          $1.66
Grants......................   (400)                400            .93
Exercises...................      -                   -              -
Cancellations...............      -                   -              -
			       ---------------------------------------
Balance at July 31, 2000....      -               2,300           1.53
Grants......................      -                   -              -
Exercises...................      -                   -              -
Cancellations...............      -                   -              -
			       ---------------------------------------
Balance at July 31, 2001....      -               2,300          $1.53
			       =======================================

Option price per share:  $.88 - $2.00
Options exercisable:  2,300,000

     The following table summarizes significant ranges of outstanding and
     exercisable options at July 31, 2001 (in thousands, except exercise
     price amounts):

			  Outstanding Options            Options Exercisable
		     --------------------------------  -----------------------
			       Weighted      Weighted
			       Average       Average            Weighted
Range of                       Remaining     Exercise           Average
Exercise Prices       Options  Life in Years Price     Options  Exercise Price
==============================================================================
$0.51 - $1.00.....      680       4.5        $  .95       680    $   .95
$1.01 - $1.50.....      120       2.5          1.11       120       1.11
$1.51 - $2.00.....    1,500       4.9          1.83     1,500       1.83
		      --------------------------------------------------
		      2,300       4.7        $ 1.53     2,300     $ 1.53
		      ==================================================

     In addition to stock options issued by the Company under the Plans, the
     Company has reserved 2,105,472 shares of common stock for non-plan
     options and warrants as detailed below.

     Non-plan Options and Warrants - At July 31, 2001 there were outstanding
     the following classes and numbers of instruments exercisable for Common
     Stock:

     A.  680,000 Class A Warrants, issued in connection with the Public
     Offering, exercisable until November 2002, to purchase a like number of
     shares of Common Stock at an exercise price of $5.80 per share.

     B.  68,000 warrants, issued to the Underwriter in connection with the
     Public Offering, exercisable until November 2002, to purchase 68,000
     units, each consisting of one share of Common Stock and one Class A
     Warrant at an exercise price of $9.74 per unit.  Each Class A Warrant
     included in the units is exercisable on the same terms as is described
     above in paragraph A.

     C.  800,000 stock options, not issued under any of the plans, as follows:

	 * 300,000 options each issued to the Company's President and Chairman
	   of the Board of Directors, for a total of 600,000, having an
	   exercise price of $1.84 per share, issued in connection with their
	   respective employment agreements in June 1997, exercisable until
	   November 2007.

	 * 100,000 options each issued to the Company's Vice President for
	   Research and Development and Vice President for Product Development
	   in May 1998, for a total of 200,000, in connection with their
	   respective employment agreements, having an exercise price of $1.75
	   per share, exercisable until May 2008.  These options expired in
	   August 2001.

     D.  100,000 warrants issued to a consulting company exercisable until
     March 2003 at a price of $2.50.

     E.  200,000 warrants issued to a consulting company exercisable until
     November 2010 at a price of $.75.

     F.  257,472 warrants at $.75 per share issued to broker/dealers in
     connection with the fiscal year 2001 private placement.  50,000 warrants
     expire in October 2010, and remaining warrants of 207,472 shares expire
     in May 2011.





				     SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.

			      FLEMINGTON PHARMACEUTICAL CORPORATION


Date: November 13, 2001       By: /s/ Harry A. Dugger, III
			      -------------------------------
			      Harry A. Dugger, III, President

     Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report is signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated.

 Signatures               Title                             Date
------------------------------------------------------------------------

/s/ Harry A. Dugger, III   President and Chief Executive    November 13, 2001
------------------------   Officer (Principal Executive
Harry A. Dugger, III       Officer)


/s/ Donald Deitman
------------------------   Chief Financial Officer          November 13, 2001
Donald Deitman             (Principal Financial Officer)


/s/ John J. Moroney
------------------------   Chairman of the Board and
John J. Moroney            Director                         November 13, 2001


/s/ Robert F. Schaul
------------------------    Secretary and Director          November 13, 2001
Robert F. Schaul


/s/ Jack J. Kornreich
------------------------    Director                        November 13, 2001
Jack J. Kornreich


/s/ Robert C. Galler
------------------------    Director                        November 13, 2001
Robert C. Galler



     Incorporated Documents           SEC Exhibit Reference

2.1  Agreement of Merger dated as of  As filed with the Registrant's
     October 29, 1998                 Preliminary  Proxy Statement on
				      October 20, 1998, File No. 000-23399

3.1  Certificate of Incorporation of  As filed with the Registrant's Form
     the Registrant, as amended       SB-2, on August 8, 1997,
				      File No. 333-33201

3.2  Bylaws of the Registrant, as     As filed with the Registrant's Form
     amended                          SB-2, on August 8, 1997,
				      File No. 333-33201

4.1  Form of Warrant Agreement        As filed with the Registrant's Form
				      SB-2, on October 31, 1997,
				      File No. 333-33201

4.3  Form of Class A Warrant          As filed with the Registrant's Form
     Certificate                      SB-2, on October 31, 1997,
				      File No. 333-33201

4.4  Form of Underwriters' Option     As filed with the Registrant's Form
     Agreement                        SB-2, on October 31, 1997,
				      File No. 333-33201

10.1 Employment Agreement with Harry  As filed with the Registrant's Form
     A. Dugger III, Ph.D.             SB-2, on August 8, 1997,
				      File No. 333-33201

10.2 Employment Agreement with John   As filed with the Registrant's Form
     J. Moroney                       SB-2, on October 3, 1997,
				      File No. 333-33201

10.3 Agreement dated December 7, 1996 As filed with the Registrant's Form
     between the Registrant and       SB-2, on August 8, 1997,
     Altana, Inc.                     File No. 333-33201

10.4 Registrant's 1992 Stock Option   As filed with the Registrant's Form
     Plan                             SB-2, on August 8, 1997,
				      File No. 333-33201

10.5 Form of Option Agreement under   As filed with the Registrant's Form
     the 1992 Stock Option Plan       SB-2, on October 3, 1997,
				      File No. 333-33201

10.6 Registrant's 1997 Stock Option   As filed with the Registrant's Form
     Plan                             SB-2, on August 8, 1997,
				      File No. 333-33201

10.7 Form of Option Agreement under   As filed with the Registrant's Form
     the 1997 Stock Option Plan       SB-2, on October 3, 1997,
				      File No. 333-33201

10.8 Agreement with Rapid Spray       As filed with the Registrant's Form
     (Clemastine) dated June 2, 1992  SB-2, on August 8, 1997,
				      File No. 333-33201

10.9 Agreement with Rapid Spray       As filed with the Registrant's Form
     (Nitroglycerin) dated            SB-2, on August 8, 1997,
     June 2, 1992                     File No. 333-33201

10.10 Agreement with Creative         As filed with the Registrant's Form
      Technologies, Inc. dated        SB-2, on October 3, 1997,
      December 26, 1996               File No. 333-33201

10.11 Registrant's 1998 Stock Option  As filed with the Registrant's
      Plan                            Preliminary Proxy Statement on
				      October 20, 1998, File No. 000-23399

10.12 Employment Agreement with       As filed with the Registrant's Form
      Donald P. Cox, Ph.D.            10-KSB on October 28, 1999,
				      File No. 000-23399

10.13 Employment Agreement with       As filed with the Registrant's Form
      Kenneth Cleaver, Ph.D.          10-KSB on October 28, 1999,
				      File No. 000-23399

10.14 Amendment to Consulting         As filed with the Registrant's Form
      Agreement with Saggi Capital    10-KSB on October 28, 1999,
      Corp., dated March 25, 1998     File No. 000-23399

10.15 Agreement with Altana, Inc.,    As filed with the Registrant's Form
      dated December 7, 1996          10-KSB/A on September 26, 2001,
				      File No. 000-23399

10.16 Agreement with CLL Pharma dated As filed with the Registrant's Form
      February 12, 1998               10-KSB/A on September 26, 2001,
				      File No. 000-23399

10.17 Agreement with Nace Resources,  As filed with the Registrant's Form
      Inc., dated December 29, 1997,  10-KSB/A on September 26, 2001,
      together with Amendment Number  File No. 000-23399
      1 dated February 9, 1998;
      Amendment Number 2 dated
      November 29, 1999; and
      Amendment 3, dated May 5, 2000

10.18 Agreement with PolyMASC         As filed with the Registrant's Form
      Pharmaceuticals plc, dated      10-KSB/A on September 26, 2001,
      July 25, 2000                   File No. 000-23399

10.19 Authorization to proceed with   As filed with the Registrant's Form
      Innovex, Inc. and Novartis      10-KSB/A on September 26, 2001,
      Pharmaceuticals Corp., dated    File No. 000-23399
      June 15, 2000

      Filed herewith

11.1  Computation of earnings per share




				 EXHIBIT 11

		  FLEMINGTON PHARMACEUTICAL CORPORATION

		       EARNINGS PER SHARE COMPUTATION


						 YEAR ENDED
						JULY 31, 2001
					       --------------
						   BASIC
					       --------------
Weighted average shares outstanding               6,326,000
Dilutive effect of stock performance plans (1)            -
					       ------------
     Total                                        6,326,000

Net Income (loss)                                (1,109,000)
					       ------------
Earnings per share                                     (.18)
					       ------------


						 YEAR ENDED
						JULY 31, 2000
					       ---------------
						   BASIC
					       ---------------
Weighted average shares outstanding               4,447,000
Dilutive effect of stock performance plans (1)            -
					       ------------
     Total                                        4,447,000
					       ------------
Net Income (loss)                               (1,179,000)
					       -----------
Earnings per share                                    (.27)
					       -----------

     (1) Since the company has reported a loss for each period, no
	 potential shares from stock performance plans have been
	 presented, as their effect would be anti-dilutive.