##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934


For the Quarterly Period Ended September 30, 2005


Commission file number 333-123250


PHARMA SERVICES INTERMEDIATE HOLDING CORP.


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 73-1678018                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)
|                                                                  
|4709 Creekstone Dr., Suite 200
    Durham, NC                      |  | 27703-8411(Zip Code)                    
|(Address of principal executive offices)                           |  |                                         

(919) 998-2000


(Registrants telephone number, including area code)


N/A


(Former name, former address and former fiscal year, if
changed since last report)


þ o


o þ


o þ












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Index


|                                   |  |                                                                                                                                                              |    |      |    | 
|---------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------ | -- | ---- | -- | 
|                                   |  |                                                                                                                                                              |    | Page |   
|                                   |  |                                                                                                                                                              |    |      |   
|Part I.  Financial
    Information
|Item 1.                            |  | Financial Statements (unaudited)
     Condensed consolidated balance sheets 
    September 30, 2005 and December 31, 2004                                   |    |      | 2  | 
|                                   |  | Condensed consolidated statements of
    operations  Three months ended September 30,
    2005 and 2004;  Nine months ended September 30, 2005 and
    2004 |    |      | 3  | 
|                                   |  | Condensed consolidated statements of cash
    flows  Nine months ended September 30, 2005 and
    2004                                                      |    |      | 4  | 
|                                   |  | Notes to condensed consolidated financial
    statements  September 30, 2005                                                                                |    |      | 5  | 
|Item 2.                            |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                                                                    |    |      | 30 | 
|Item 3.                            |  | Quantitative and Qualitative Disclosure
    About Market Risk                                                                                                |    |      | 62 | 
|Item 4.                            |  | Controls and Procedures                                                                                                                                      |    |      | 62 | 
|                                  
|Part II.  Other
    Information   
|Item 1.                            |  | Legal Proceedings                                                                                                                                            |    |      | 62 | 
|Item 2.                            |  | Unregistered Sales of Equity Securities and
    Use of Proceeds  Not Applicable                                                                             |    |      | 64 | 
|Item 3.                            |  | Defaults Upon Senior Securities 
    Not Applicable                                                                                                         |    |      | 64 | 
|Item 4.                            |  | Submission of Matters to a Vote of Security
    Holders  Not Applicable                                                                                     |    |      | 64 | 
|Item 5.                            |  | Other Information  Not
    Applicable                                                                                                                       |    |      | 64 | 
|Item 6.                            |  | Exhibits                                                                                                                                                     |    |      | 64 | 
|Signatures                         |  |                                                                                                                                                              | 65 |     
|Exhibit Index                      |  |                                                                                                                                                              | 66 |     
|Ex-31.01                          
|Ex-31.02                          
|Ex-32.01                          
|Ex-32.02                          







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##### Table of Contents






Part I.     Financial
Information







|        |                     
|------- | --------------------
|Item 1. | Financial Statements

PHARMA SERVICES INTERMEDIATE HOLDING CORP. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED BALANCE SHEETS


|                                     |                                                                                                                                    |                                            |         |         |              |  |           |         |           | 
|------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------- | ------------ |  | --------- | ------- | --------- | 
|                                     |                                                                                                                                    | September 30,                              |         |         | December 31, | 
|                                     |                                                                                                                                    | 2005                                       |         |         | 2004         | 
|                                     |                                                                                                                                    |                                            |         |         |              | 
|                                     |                                                                                                                                    | (Unaudited)                                |         |         | (Note 1)     | 
|                                     |                                                                                                                                    | (In thousands, except                      |        
|                                     |                                                                                                                                    | share data)                                |        
|ASSETS                              
|Current assets:                      |                                                                                                                                    |                                            |         |         |              |  |           |        
|                                     | Cash and cash equivalents                                                                                                          |                                            | $       | 479,525 |              |  | $         | 535,732 |          
|                                     | Trade accounts receivable and unbilled services, net                                                                               |                                            |         | 338,254 |              |  |           | 263,072 |          
|                                     | Investments in debt securities                                                                                                     |                                            |         | 588     |              |  |           | 569     |          
|                                     | Prepaid expenses                                                                                                                   |                                            |         | 20,025  |              |  |           | 19,152  |          
|                                     | Deferred income taxes                                                                                                              |                                            |         | 28,137  |              |  |           | 28,670  |          
|                                     | Other current assets and receivables                                                                                               |                                            |         | 36,949  |              |  |           | 25,406  |          
|                                     | Assets of discontinued operations                                                                                                  |                                            |         |        |              |  |           | 223,690 |          
|                                     |                                                                                                                                    |                                            |         |         |              | 
|                                     |                                                                                                                                    | Total current assets                       |         |         | 903,478      |  |           |         | 1,096,291 | 
|Property and equipment               |                                                                                                                                    |                                            | 175,623 |         |              |  | 170,097   |        
|Less accumulated depreciation        |                                                                                                                                    |                                            | (69,981 | )       |              |  | (49,126   | )      
|                                     |                                                                                                                                    |                                            |         |         |              | 
|                                     |                                                                                                                                    |                                            | 105,642 |         |              |  | 120,971   |        
|Intangibles and other assets:        |                                                                                                                                    |                                            |         |         |              |  |           |        
|                                     | Investments in debt securities                                                                                                     |                                            |         | 12,869  |              |  |           | 11,552  |          
|                                     | Investments in marketable equity securities                                                                                        |                                            |         | 33,450  |              |  |           | 24,425  |          
|                                     | Investments in non-marketable equity securities and loans                                                                          |                                            |         | 52,985  |              |  |           | 56,441  |          
|                                     | Investments in unconsolidated affiliates                                                                                           |                                            |         | 125,692 |              |  |           | 120,984 |          
|                                     | Commercial rights and royalties                                                                                                    |                                            |         | 122,961 |              |  |           | 138,543 |          
|                                     | Accounts receivable  unbilled                                                                                                     |                                            |         | 38,734  |              |  |           | 46,669  |          
|                                     | Goodwill                                                                                                                           |                                            |         | 88,238  |              |  |           | 97,735  |          
|                                     | Other identifiable intangibles, net                                                                                                |                                            |         | 227,204 |              |  |           | 270,652 |          
|                                     | Deferred income taxes                                                                                                              |                                            |         | 66,443  |              |  |           | 2,877   |          
|                                     | Deposits and other assets                                                                                                          |                                            |         | 43,321  |              |  |           | 54,327  |          
|                                     |                                                                                                                                    |                                            |         |         |              | 
|                                     |                                                                                                                                    |                                            | 811,897 |         |              |  | 824,205   |        
|                                     |                                                                                                                                    |                                            |         |         |              | 
|                                     |                                                                                                                                    | Total assets                               |         | $       | 1,821,017    |  |           | $       | 2,041,467 | 
|                                     |                                                                                                                                    |                                            |         |         |              | 
|                                    
|LIABILITIES AND STOCKHOLDERS EQUITY
|Current liabilities:                 |                                                                                                                                    |                                            |         |         |              |  |           |        
|                                     | Accounts payable and accrued expenses                                                                                              |                                            | $       | 323,289 |              |  | $         | 334,474 |          
|                                     | Credit arrangements                                                                                                                |                                            |         | 18,758  |              |  |           | 20,319  |          
|                                     | Unearned income                                                                                                                    |                                            |         | 206,742 |              |  |           | 190,150 |          
|                                     | Other current liabilities and income taxes                                                                                         |                                            |         | 8,220   |              |  |           | 32,265  |          
|                                     | Liabilities of discontinued operations                                                                                             |                                            |         |        |              |  |           | 28,697  |          
|                                     |                                                                                                                                    |                                            |         |         |              | 
|                                     |                                                                                                                                    | Total current liabilities                  |         |         | 557,009      |  |           |         | 605,905   | 
|Long-term liabilities:               |                                                                                                                                    |                                            |         |         |              |  |           |        
|                                     | Credit arrangements, less current portion                                                                                          |                                            |         | 765,490 |              |  |           | 910,793 |          
|                                     | Deferred income taxes                                                                                                              |                                            |         |        |              |  |           | 25,581  |          
|                                     | Payable to Parent Company                                                                                                          |                                            |         | 128,470 |              |  |           | 128,470 |          
|                                     | Minority interest                                                                                                                  |                                            |         | 43,061  |              |  |           | 43,347  |          
|                                     | Unearned income                                                                                                                    |                                            |         | 37,202  |              |  |           |        |          
|                                     | Other liabilities                                                                                                                  |                                            |         | 15,825  |              |  |           | 19,901  |          
|                                     |                                                                                                                                    |                                            |         |         |              | 
|                                     |                                                                                                                                    |                                            | 990,048 |         |              |  | 1,128,092 |        
|                                     |                                                                                                                                    |                                            |         |         |              | 
|                                     |                                                                                                                                    | Total liabilities                          |         |         | 1,547,057    |  |           |         | 1,733,997 | 
|Stockholders equity:                |                                                                                                                                    |                                            |         |         |              |  |           |        
|                                     | Common stock and additional paid-in capital, 100 shares
    issued and outstanding at September 30, 2005 and
    December 31, 2004 |                                            |         | 269,812 |              |  |           | 269,812 |          
|                                     | Accumulated deficit                                                                                                                |                                            |         | (20,638 | )            |  |           | (14,419 | )        
|                                     | Accumulated other comprehensive income                                                                                             |                                            |         | 24,786  |              |  |           | 52,077  |          
|                                     |                                                                                                                                    |                                            |         |         |              | 
|                                     |                                                                                                                                    | Total stockholders equity                 |         |         | 273,960      |  |           |         | 307,470   | 
|                                     |                                                                                                                                    |                                            |         |         |              | 
|                                     |                                                                                                                                    | Total liabilities and stockholders equity |         | $       | 1,821,017    |  |           | $       | 2,041,467 | 
|                                     |                                                                                                                                    |                                            |         |         |              | 



2



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##### Table of Contents



PHARMA SERVICES INTERMEDIATE HOLDING CORP. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                                                                                                                                                                                 |                                                          |                |         |         |               |   |         |               |   |   |               |           |   |   |           |           |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | -------------- | ------- | ------- | ------------- | - | ------- | ------------- | - | - | ------------- | --------- | - | - | --------- | --------- | -
|                                                                                                                                                                                                                 |                                                          | Three Months   |         |         | Three Months  |   |         | Nine Months   |   |   | Nine Months   |          
|                                                                                                                                                                                                                 |                                                          | Ended          |         |         | Ended         |   |         | Ended         |   |   | Ended         |          
|                                                                                                                                                                                                                 |                                                          | September 30,  |         |         | September 30, |   |         | September 30, |   |   | September 30, |          
|                                                                                                                                                                                                                 |                                                          | 2005           |         |         | 2004          |   |         | 2005          |   |   | 2004          |          
|                                                                                                                                                                                                                 |                                                          |                |         |         |               |   |         |               |   |   |               |          
|                                                                                                                                                                                                                 |                                                          | (In thousands) |        
|                                                                                                                                                                                                                 |                                                          | (Unaudited)    |        
|Net revenues                                                                                                                                                                                                     |                                                          | $              | 470,290 |         |               | $ | 396,497 |               |   | $ | 1,413,721     |           |   | $ | 1,167,020 |          
|Add: reimbursed service costs                                                                                                                                                                                    |                                                          |                | 141,109 |         |               |   | 91,620  |               |   |   | 377,371       |           |   |   | 251,573   |          
|                                                                                                                                                                                                                 |                                                          |                |         |         |               |   |         |               |   |   |               |          
|Gross revenues                                                                                                                                                                                                   |                                                          |                | 611,399 |         |               |   | 488,117 |               |   |   | 1,791,092     |           |   |   | 1,418,593 |          
|Costs, expenses and other:                                                                                                                                                                                       |                                                          |                |         |         |               |   |         |               |   |   |               |           |   |   |           |          
|                                                                                                                                                                                                                 | Costs of revenues                                        |                |         | 441,497 |               |   |         | 357,888       |   |   |               | 1,285,462 |   |   |           | 1,026,055 |  
|                                                                                                                                                                                                                 | Selling, general and administrative                      |                |         | 136,884 |               |   |         | 147,067       |   |   |               | 431,653   |   |   |           | 433,608   |  
|                                                                                                                                                                                                                 | Interest expense (income), net                           |                |         | 16,274  |               |   |         | 18,569        |   |   |               | 54,029    |   |   |           | 52,037    |  
|                                                                                                                                                                                                                 | Other expense (income), net                              |                |         | (2,240  | )             |   |         | (247          | ) |   |               | 423       |   |   |           | (3,014    | )
|                                                                                                                                                                                                                 | Restructuring                                            |                |         | 3,358   |               |   |         |              |   |   |               | 22,565    |   |   |           |          |  
|                                                                                                                                                                                                                 | Impairments                                              |                |         |        |               |   |         |              |   |   |               | 6,633     |   |   |           |          |  
|                                                                                                                                                                                                                 | Transaction expense, net                                 |                |         |        |               |   |         |              |   |   |               | (2,666    | ) |   |           |          |  
|                                                                                                                                                                                                                 | Gain on sale of portion of an investment in a subsidiary |                |         |        |               |   |         |              |   |   |               |          |   |   |           | (24,688   | )
|                                                                                                                                                                                                                 | Non-operating gain on change of interest transaction     |                |         |        |               |   |         |              |   |   |               |          |   |   |           | (10,030   | )
|                                                                                                                                                                                                                 |                                                          |                |         |         |               |   |         |               |   |   |               |          
|                                                                                                                                                                                                                 |                                                          |                | 595,773 |         |               |   | 523,277 |               |   |   | 1,798,099     |           |   |   | 1,473,968 |          
|                                                                                                                                                                                                                 |                                                          |                |         |         |               |   |         |               |   |   |               |          
|Income (loss) before income taxes                                                                                                                                                                                |                                                          |                | 15,626  |         |               |   | (35,160 | )             |   |   | (7,007        | )         |   |   | (55,375   | )        
|Income tax (benefit) expense (includes $17,778 and $49,299 of
    income tax benefit related to American Jobs Creation Act of 2004
    for the three and nine months ended September 30, 2005,
    respectively) |                                                          |                | (10,878 | )       |               |   | (16,354 | )             |   |   | (42,953       | )         |   |   | (919      | )        
|                                                                                                                                                                                                                 |                                                          |                |         |         |               |   |         |               |   |   |               |          
|Income (loss) before minority interests and equity in (losses)
    earnings of unconsolidated affiliates                                                                                                         |                                                          |                | 26,504  |         |               |   | (18,806 | )             |   |   | 35,946        |           |   |   | (54,456   | )        
|Equity in (losses) earnings of unconsolidated affiliates                                                                                                                                                         |                                                          |                | (849    | )       |               |   | (366    | )             |   |   | (1,377        | )         |   |   | (389      | )        
|Minority interests                                                                                                                                                                                               |                                                          |                | (1,373  | )       |               |   | (563    | )             |   |   | (3,539        | )         |   |   | (730      | )        
|                                                                                                                                                                                                                 |                                                          |                |         |         |               |   |         |               |   |   |               |          
|Income (loss) from continuing operations                                                                                                                                                                         |                                                          |                | 24,282  |         |               |   | (19,735 | )             |   |   | 31,030        |           |   |   | (55,575   | )        
|Income (loss) from discontinued operations, net of income taxes                                                                                                                                                  |                                                          |                | 4,199   |         |               |   | (1,986  | )             |   |   | (32,677       | )         |   |   | 5,358     |          
|(Loss) gain from sale of discontinued operations, net of income
    taxes                                                                                                                                        |                                                          |                | (4,572  | )       |               |   | 53,372  |               |   |   | (4,572        | )         |   |   | 53,372    |          
|                                                                                                                                                                                                                 |                                                          |                |         |         |               |   |         |               |   |   |               |          
|Net income (loss)                                                                                                                                                                                                |                                                          | $              | 23,909  |         |               | $ | 31,651  |               |   | $ | (6,219        | )         |   | $ | 3,155     |          
|                                                                                                                                                                                                                 |                                                          |                |         |         |               |   |         |               |   |   |               |          



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##### Table of Contents



PHARMA SERVICES INTERMEDIATE HOLDING CORP. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                                                                  |                                                                          |                |          |         |               |   |          |         |  
|--------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | -------------- | -------- | ------- | ------------- | - | -------- | ------- | -
|                                                                                                                                  |                                                                          | Nine Months    |          |         | Nine Months   |  
|                                                                                                                                  |                                                                          | Ended          |          |         | Ended         |  
|                                                                                                                                  |                                                                          | September 30,  |          |         | September 30, |  
|                                                                                                                                  |                                                                          | 2005           |          |         | 2004          |  
|                                                                                                                                  |                                                                          |                |          |         |               |  
|                                                                                                                                  |                                                                          | (In thousands) |         
|                                                                                                                                  |                                                                          | (Unaudited)    |         
|Operating activities                                                                                                              |                                                                          |                |          |         |               |   |          |        
|Net (loss) income                                                                                                                 |                                                                          | $              | (6,219   | )       |               | $ | 3,155    |        
|Loss (income) from discontinued operations, net of income taxes                                                                   |                                                                          |                | 32,677   |         |               |   | (5,358   | )      
|Loss (gain) from sale of discontinued operations, net of
    income taxes                                                         |                                                                          |                | 4,572    |         |               |   | (53,372  | )      
|                                                                                                                                  |                                                                          |                |          |         |               |  
|Income (loss) from continuing operations                                                                                          |                                                                          |                | 31,030   |         |               |   | (55,575  | )      
|Adjustments to reconcile income (loss) from continuing
    operations to net cash provided by (used in) operating
    activities: |                                                                          |                |          |         |               |   |          |        
|                                                                                                                                  | Depreciation and amortization                                            |                |          | 81,718  |               |   |          | 86,459  |  
|                                                                                                                                  | Amortization of debt issuance costs                                      |                |          | 6,346   |               |   |          | 2,957   |  
|                                                                                                                                  | Amortization of commercial rights and royalties assets                   |                |          | 16,527  |               |   |          | 8,301   |  
|                                                                                                                                  | Restructuring charge accrual                                             |                |          | 22,565  |               |   |          |        |  
|                                                                                                                                  | Restructuring charge payments                                            |                |          | (19,145 | )             |   |          | (6,061  | )
|                                                                                                                                  | Impairment of long-lived assets                                          |                |          | 6,633   |               |   |          |        |  
|                                                                                                                                  | Loss from sales and impairments of investments, net                      |                |          | 1,952   |               |   |          | 6,303   |  
|                                                                                                                                  | Loss on disposals of property and equipment, net                         |                |          | 48      |               |   |          | 262     |  
|                                                                                                                                  | Gain from sale of certain assets                                         |                |          |        |               |   |          | (5,835  | )
|                                                                                                                                  | Gain from sale of a portion of an investment in a subsidiary             |                |          |        |               |   |          | (24,688 | )
|                                                                                                                                  | Non-operating gain on change of interest transaction                     |                |          |        |               |   |          | (10,030 | )
|                                                                                                                                  | (Benefit from) provision for deferred income tax expense                 |                |          | (28,655 | )             |   |          | 15,649  |  
|                                                                                                                                  | Change in accounts receivable, unbilled services and unearned
    income |                |          | (68,334 | )             |   |          | (53,972 | )
|                                                                                                                                  | Change in other operating assets and liabilities                         |                |          | 32,913  |               |   |          | 4,630   |  
|                                                                                                                                  | Other                                                                    |                |          | 1,672   |               |   |          | (1,140  | )
|                                                                                                                                  |                                                                          |                |          |         |               |  
|Net cash provided by (used in) continuing operations                                                                              |                                                                          |                | 85,270   |         |               |   | (32,740  | )      
|Net cash provided by discontinued operations                                                                                      |                                                                          |                | 9,768    |         |               |   | 4,279    |        
|                                                                                                                                  |                                                                          |                |          |         |               |  
|Net cash from operating activities                                                                                                |                                                                          |                | 95,038   |         |               |   | (28,461  | )      
|Investing activities                                                                                                              |                                                                          |                |          |         |               |   |          |        
|Acquisition of property and equipment                                                                                             |                                                                          |                | (27,032  | )       |               |   | (31,210  | )      
|Payment of transaction costs in Transaction                                                                                       |                                                                          |                | (2,856   | )       |               |   | (17,393  | )      
|Acquisition of businesses, net of cash acquired                                                                                   |                                                                          |                | (13,901  | )       |               |   | (2,189   | )      
|Acquisition of commercial rights and royalties                                                                                    |                                                                          |                | (20,944  | )       |               |   | (13,000  | )      
|Proceeds from disposal of discontinued operations, net of
    expenses                                                            |                                                                          |                | 120,230  |         |               |   | 177,936  |        
|Proceeds from sale of certain assets                                                                                              |                                                                          |                |         |         |               |   | 9,218    |        
|Proceeds from sale of minority interest in subsidiary                                                                             |                                                                          |                |         |         |               |   | 35,963   |        
|Proceeds from disposition of property and equipment                                                                               |                                                                          |                | 5,428    |         |               |   | 5,561    |        
|Purchases of debt securities, net                                                                                                 |                                                                          |                | (977     | )       |               |   | (612     | )      
|Purchases of equity securities and other investments                                                                              |                                                                          |                | (15,835  | )       |               |   | (12,045  | )      
|Proceeds from sale of equity securities and other investments                                                                     |                                                                          |                | 9,080    |         |               |   | 30,210   |        
|Other                                                                                                                             |                                                                          |                | 59       |         |               |   | 250      |        
|                                                                                                                                  |                                                                          |                |          |         |               |  
|Net cash provided by continuing operations                                                                                        |                                                                          |                | 53,252   |         |               |   | 182,689  |        
|Net cash used in discontinued operations                                                                                          |                                                                          |                | (11,293  | )       |               |   | (6,941   | )      
|                                                                                                                                  |                                                                          |                |          |         |               |  
|Net cash from investing activities                                                                                                |                                                                          |                | 41,959   |         |               |   | 175,748  |        
|Financing activities                                                                                                              |                                                                          |                |          |         |               |   |          |        
|Proceeds from issuance of debt                                                                                                    |                                                                          |                |         |         |               |   | 124,705  |        
|Debt issuance costs paid                                                                                                          |                                                                          |                | (3,301   | )       |               |   | (5,836   | )      
|Principal payments on credit arrangements                                                                                         |                                                                          |                | (165,134 | )       |               |   | (14,293  | )      
|Intercompany with parent companies                                                                                                |                                                                          |                | (41      | )       |               |   | (237     | )      
|Proceeds from change in interest transaction                                                                                      |                                                                          |                |         |         |               |   | 41,773   |        
|Dividend payable to parent company                                                                                                |                                                                          |                |         |         |               |   | (119,269 | )      
|                                                                                                                                  |                                                                          |                |          |         |               |  
|Net cash (used in) provided by continuing operations                                                                              |                                                                          |                | (170,019 | )       |               |   | 25,701   |        
|Net cash used in discontinued operations                                                                                          |                                                                          |                | (18      | )       |               |   | (21      | )      
|                                                                                                                                  |                                                                          |                |          |         |               |  
|Net cash from financing activities                                                                                                |                                                                          |                | (168,494 | )       |               |   | 26,822   |        
|Effect of foreign currency exchange rate changes on cash                                                                          |                                                                          |                | (24,710  | )       |               |   | (537     | )      
|                                                                                                                                  |                                                                          |                |          |         |               |  
|(Decrease) increase in cash and cash equivalents                                                                                  |                                                                          |                | (56,207  | )       |               |   | 173,572  |        
|Cash and cash equivalents at beginning of period                                                                                  |                                                                          |                | 535,732  |         |               |   | 375,163  |        
|                                                                                                                                  |                                                                          |                |          |         |               |  
|Cash and cash equivalents at end of period                                                                                        |                                                                          | $              | 479,525  |         |               | $ | 548,735  |        
|                                                                                                                                  |                                                                          |                |          |         |               |  



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SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)


September 30, 2005




|   |                      
|-- | ---------------------
|1. | Basis of Presentation















|   |                            
|-- | ---------------------------
|2. | Employee Stock Compensation



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)










|   |                                
|-- | -------------------------------
|3. | Commercial Rights and Royalties



|                                |  |               |         |  |              |   |         | 
|------------------------------- |  | ------------- | ------- |  | ------------ | - | ------- | 
|                                |  | September 30, |         |  | December 31, |  
|                                |  | 2005          |         |  | 2004         |  
|                                |  |               |         |  |              |  
|Commercial rights and royalties |  | $             | 122,961 |  |              | $ | 138,543 | 
|Accounts receivable-unbilled    |  |               | 38,734  |  |              |   | 46,669  | 
|Unearned income  long-term     |  |               | 37,202  |  |              |   |        | 



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)








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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)








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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)






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SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)


tm






|                    |  |              |        |  |      |   |         |      |  |   |        |  |  |      |        |  |       |   |        |  |  |   |         | 
|------------------- |  | ------------ | ------ |  | ---- | - | ------- | ---- |  | - | ------ |  |  | ---- | ------ |  | ----- | - | ------ |  |  | - | ------- | 
|                    |  | October 1,   |        |  |      |   |         |      |  |   |        |  | 
|                    |  | 2005 through |        |  |      |   |         |      |  |   |        |  | 
|                    |  | December 31, |        |  |      |   |         |      |  |   |        |  | 
|                    |  | 2005         |        |  | 2006 |   |         | 2007 |  |   | 2008   |  |  | 2009 |        |  | Total |  
|                    |  |              |        |  |      |   |         |      |  |   |        |  |  |      |        |  |       |  
|Service commitments |  | $            | 33,368 |  |      | $ | 125,903 |      |  | $ | 99,362 |  |  | $    | 89,749 |  |       | $ | 69,738 |  |  | $ | 418,120 | 
|                    |  |              |        |  |      |   |         |      |  |   |        |  |  |      |        |  |       |  
|                    |  | $            | 33,368 |  |      | $ | 125,903 |      |  | $ | 99,362 |  |  | $    | 89,749 |  |       | $ | 69,738 |  |  | $ | 418,120 | 
|                    |  |              |        |  |      |   |         |      |  |   |        |  |  |      |        |  |       |  



|   |                                           
|-- | ------------------------------------------
|4. | Investments  Marketable Equity Securities



|                                   |  |            |        |             |       |   |        | 
|---------------------------------- |  | ---------- | ------ | ----------- | ----- | - | ------ | 
|                                   |  |            |        | Fair Market |      
|                                   |  | Cost Basis |        |             | Value |  
|                                   |  |            |        |             |       |  
|Total Marketable Equity Securities |  | $          | 33,796 |             |       | $ | 33,450 | 
|                                   |  |            |        |             |       |  





|   |                                                             
|-- | ------------------------------------------------------------
|5. | Investments  Non-marketable Equity Securities and
    Loans



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)




|                                   |                                                  |            |        |                   |            |   |        |        | 
|---------------------------------- | ------------------------------------------------ | ---------- | ------ | ----------------- | ---------- | - | ------ | ------ | 
|                                   |                                                  |            |        | Remaining Funding |           
|Company                            |                                                  | Cost Basis |        |                   | Commitment |  
|                                   |                                                  |            |        |                   |            |  
|Venture capital funds              |                                                  | $          | 31,213 |                   |            | $ | 15,405 |       
|Equity investments (ten companies) |                                                  |            | 13,303 |                   |            |   | 2,158  |       
|Loans (three companies)            |                                                  |            | 8,469  |                   |            |   |       |       
|                                   |                                                  |            |        |                   |            |  
|                                   | Total non-marketable equity securities and loans |            | $      | 52,985            |            |   | $      | 17,563 | 
|                                   |                                                  |            |        |                   |            |  



|                                    |  |              |       |  |      |   |        |      |  |   |       |  |  |      |       |  |       |   |     |  |  |   |        | 
|----------------------------------- |  | ------------ | ----- |  | ---- | - | ------ | ---- |  | - | ----- |  |  | ---- | ----- |  | ----- | - | --- |  |  | - | ------ | 
|                                    |  | October 1,   |       |  |      |   |        |      |  |   |       |  | 
|                                    |  | 2005 through |       |  |      |   |        |      |  |   |       |  | 
|                                    |  | December 31, |       |  |      |   |        |      |  |   |       |  | 
|                                    |  | 2005         |       |  | 2006 |   |        | 2007 |  |   | 2008  |  |  | 2009 |       |  | Total |  
|                                    |  |              |       |  |      |   |        |      |  |   |       |  |  |      |       |  |       |  
|Venture capital funds               |  | $            | 2,200 |  |      | $ | 9,342  |      |  | $ | 2,093 |  |  | $    | 1,200 |  |       | $ | 570 |  |  | $ | 15,405 | 
|Equity investments                  |  |              | 1,023 |  |      |   | 1,135  |      |  |   |      |  |  |      |      |  |       |   |    |  |  |   | 2,158  | 
|                                    |  |              |       |  |      |   |        |      |  |   |       |  |  |      |       |  |       |  
|Total remaining funding commitments |  | $            | 3,223 |  |      | $ | 10,477 |      |  | $ | 2,093 |  |  | $    | 1,200 |  |       | $ | 570 |  |  | $ | 17,563 | 
|                                    |  |              |       |  |      |   |        |      |  |   |       |  |  |      |       |  |       |  





|   |            
|-- | -----------
|6. | Derivatives





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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)








|   |             
|-- | ------------
|7. | Acquisitions





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PHARMA SERVICES INTERMEDIATE HOLDING CORP. AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)




8.     Goodwill and Identifiable
Intangible Assets






|                                     |                                                                          |                          |         |         |                         |   |         |        |  |   |              |         |             |              |         |         |        |   |        |        |  |   |         |         | 
|------------------------------------ | ------------------------------------------------------------------------ | ------------------------ | ------- | ------- | ----------------------- | - | ------- | ------ |  | - | ------------ | ------- | ----------- | ------------ | ------- | ------- | ------ | - | ------ | ------ |  | - | ------- | ------- | 
|                                     |                                                                          | As of September 30, 2005 |         |         | As of December 31, 2004 |  
|                                     |                                                                          |                          |         |         |                         |  
|                                     |                                                                          | Gross                    |         |         | Accumulated             |   |         | Net    |  |   |              |         | Accumulated |              |         | Net     |       
|                                     |                                                                          | Amount                   |         |         | Amortization            |   |         | Amount |  |   | Gross Amount |         |             | Amortization |         |         | Amount |  
|                                     |                                                                          |                          |         |         |                         |   |         |        |  |   |              |         |             |              |         |         |        |  
|Identifiable intangible assets:      |                                                                          |                          |         |         |                         |   |         |        |  |   |              |         |             |              |         |         |        |   |        |        |  |   |         |        
|                                     | Commercial rights and royalties, licenses and customer
    relationships |                          | $       | 122,154 |                         |   | $       | 71,637 |  |   | $            | 50,517  |             |              | $       | 122,504 |        |   | $      | 45,512 |  |   | $       | 76,922  | 
|                                     | Trademarks, trade names and other                                        |                          |         | 176,333 |                         |   |         | 27,630 |  |   |              | 148,703 |             |              |         | 169,496 |        |   |        | 18,967 |  |   |         | 150,529 | 
|                                     | Software and related assets                                              |                          |         | 67,918  |                         |   |         | 39,934 |  |   |              | 27,984  |             |              |         | 70,143  |        |   |        | 27,012 |  |   |         | 43,131  | 
|                                     |                                                                          |                          |         |         |                         |   |         |        |  |   |              |         |             |              |         |         |        |  
|Total identifiable intangible assets |                                                                          | $                        | 366,405 |         |                         | $ | 139,201 |        |  | $ | 227,204      |         |             | $            | 362,143 |         |        | $ | 91,491 |        |  | $ | 270,652 |        
|                                     |                                                                          |                          |         |         |                         |   |         |        |  |   |              |         |             |              |         |         |        |  





|                                                              |  |                     |        |   |                     |           |        |             |  |   |              |  |  |   |        |  
|------------------------------------------------------------- |  | ------------------- | ------ | - | ------------------- | --------- | ------ | ----------- |  | - | ------------ |  |  | - | ------ | -
|                                                              |  |                     |        |   |                     | PharmaBio |        |             | 
|                                                              |  | Product Development |        |   | Commercial Services |           |        | Development |  |   | Consolidated | 
|                                                              |  |                     |        |   |                     |           |        |             |  |   |              | 
|Balance as of December 31, 2004                               |  | $                   | 52,665 |   |                     | $         | 43,657 |             |  | $ | 1,413        |  |  | $ | 97,735 |  
|Less privatization purchase price adjustment for income taxes |  |                     | (5,412 | ) |                     |           | (3,563 | )           |  |   |             |  |  |   | (8,975 | )
|Add acquisitions                                              |  |                     | 489    |   |                     |           |       |             |  |   |             |  |  |   | 489    |  
|Impact of foreign currency fluctuations                       |  |                     | (985   | ) |                     |           | (26    | )           |  |   |             |  |  |   | (1,011 | )
|                                                              |  |                     |        |   |                     |           |        |             |  |   |              | 
|Balance as of September 30, 2005                              |  | $                   | 46,757 |   |                     | $         | 40,068 |             |  | $ | 1,413        |  |  | $ | 88,238 |  
|                                                              |  |                     |        |   |                     |           |        |             |  |   |              | 

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PHARMA SERVICES INTERMEDIATE HOLDING CORP. AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)




9.     Investment Revenues




|                                             |                       |               |     |       |               |   |        |               |   |   |               |        |   |   |        |         |  
|-------------------------------------------- | --------------------- | ------------- | --- | ----- | ------------- | - | ------ | ------------- | - | - | ------------- | ------ | - | - | ------ | ------- | -
|                                             |                       | Three Months  |     |       | Three Months  |   |        | Nine Months   |   |   | Nine Months   |       
|                                             |                       | Ended         |     |       | Ended         |   |        | Ended         |   |   | Ended         |       
|                                             |                       | September 30, |     |       | September 30, |   |        | September 30, |   |   | September 30, |       
|                                             |                       | 2005          |     |       | 2004          |   |        | 2005          |   |   | 2004          |       
|                                             |                       |               |     |       |               |   |        |               |   |   |               |       
|Marketable equity and derivative securities: |                       |               |     |       |               |   |        |               |   |   |               |        |   |   |        |        
|                                             | Gross realized gains  |               | $   | 1,095 |               |   | $      |              |   |   | $             | 2,289  |   |   | $      | 7,389   |  
|                                             | Gross realized losses |               |     | (204  | )             |   |        | (2,241        | ) |   |               | (1,247 | ) |   |        | (3,063  | )
|                                             | Impairment losses     |               |     |      |               |   |        |              |   |   |               | (1,322 | ) |   |        | (10,157 | )
|Non-marketable equity securities and loans:  |                       |               |     |       |               |   |        |               |   |   |               |        |   |   |        |        
|                                             | Gross realized gains  |               |     | 49    |               |   |        |              |   |   |               | 70     |   |   |        |        |  
|                                             | Impairment losses     |               |     | (50   | )             |   |        | (268          | ) |   |               | (1,741 | ) |   |        | (473    | )
|                                             |                       |               |     |       |               |   |        |               |   |   |               |       
|Total investment revenues                    |                       | $             | 890 |       |               | $ | (2,509 | )             |   | $ | (1,951        | )      |   | $ | (6,304 | )      
|                                             |                       |               |     |       |               |   |        |               |   |   |               |       

10.     Credit Arrangements




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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)






|                                                                                                                                          |  |                                                                                                             
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------
|Facility                                                                                                                                  |  | Interest Rates                                                                                              
|                                                                                                                                          |  |                                                                                                             
|$75.0 million                                                                                                                             |  | Either at LIBOR (3.84% at September 30, 2005) plus 2.50% or
    ABR (6.75% at September 30, 2005) plus 1.50%
|£1.5 million (approximately $2.6 million) general
    banking facility with a United Kingdom bank used for the
    issuance of guarantees |  | 1% per annum for each guarantee issued                                                                      





|                                                                                                                                      |  |                    |         |  |                   |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- |  | ----------------- | - | ------- | 
|                                                                                                                                      |  | As of              |         |  | As of             |  
|                                                                                                                                      |  | September 30, 2005 |         |  | December 31, 2004 |  
|                                                                                                                                      |  |                    |         |  |                   |  
|11.5% Senior Discount Notes due 2014                                                                                                  |  | $                  | 148,090 |  |                   | $ | 136,231 | 
|10% Senior Subordinated Notes due 2013                                                                                                |  |                    | 450,000 |  |                   |   | 450,000 | 
|Senior Term B Loan (Either at LIBOR (3.84% at September 30,
    2005) plus 1.75% or ABR (6.75% at September 30, 2005) plus
    0.75%) |  |                    | 153,800 |  |                   |   | 306,125 | 
|Missouri tax incentive bonds due October 2009 (6.7% annual
    interest rate)                                                         |  |                    | 2,977   |  |                   |   | 3,256   | 
|Other notes payable                                                                                                                   |  |                    | 2,524   |  |                   |   | 4,160   | 
|                                                                                                                                      |  |                    |         |  |                   |  
|                                                                                                                                      |  |                    | 757,391 |  |                   |   | 899,772 | 
|Capital leases                                                                                                                        |  |                    | 26,857  |  |                   |   | 31,340  | 
|                                                                                                                                      |  |                    |         |  |                   |  
|Total credit arrangements                                                                                                             |  | $                  | 784,248 |  |                   | $ | 931,112 | 
|                                                                                                                                      |  |                    |         |  |                   |  



|                                          |  |   |         | 
|----------------------------------------- |  | - | ------- | 
|October 1, 2005 through December 31, 2005 |  | $ | 1,416   | 
|2006                                      |  |   | 4,974   | 
|2007                                      |  |   | 4,169   | 
|2008                                      |  |   | 3,902   | 
|2009                                      |  |   | 144,576 | 
|2010                                      |  |   | 117     | 
|Thereafter                                |  |   | 598,237 | 
|                                          |  |   |        
|                                          |  | $ | 757,391 | 
|                                          |  |   |        



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)




sm




11.     Commitments




12.     Restructuring




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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)
















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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)










|           |  |              |       |                             |         |   |            |          |  |   |             |          |  |         |               |   |          |   |        |             |  |   |        |   |  |   |      |   |  |   |        | 
|---------- |  | ------------ | ----- | --------------------------- | ------- | - | ---------- | -------- |  | - | ----------- | -------- |  | ------- | ------------- | - | -------- | - | ------ | ----------- |  | - | ------ | - |  | - | ---- | - |  | - | ------ | 
|           |  |              |       | Severance and related costs |         |   | Exit costs |          |  |  
|           |  |              |       |                             |         |   |            |          |  |  
|           |  | Balance at   |       |                             |         |   | Foreign    |          |  |   |             | Foreign  |  |         | Balance at    |  
|           |  | December 31, |       |                             |         |   | Currency   |          |  |   |             | Currency |  |         | September 30, |  
|           |  | 2004         |       |                             | Accrual |   |            | Payments |  |   | Translation |          |  | Accrual |               |   | Payments |   |        | Translation |  |   | 2005   |  
|           |  |              |       |                             |         |   |            |          |  |   |             |          |  |         |               |   |          |   |        |             |  |   |        |  
|2005 Plans |  | $            |      |                             |         | $ | 10,886     |          |  | $ | (9,094      | )        |  | $       | (73           | ) |          | $ | 10,046 |             |  | $ | (3,281 | ) |  | $ | (160 | ) |  | $ | 8,324  | 
|2004 Plans |  |              | 4,303 |                             |         |   | 1,379      |          |  |   | (4,980      | )        |  |         | (83           | ) |          |   | 254    |             |  |   | (147   | ) |  |   | (15  | ) |  |   | 711    | 
|2003 Plans |  |              | 826   |                             |         |   |           |          |  |   | (724        | )        |  |         |              |   |          |   |       |             |  |   |       |   |  |   |     |   |  |   | 102    | 
|2002 Plans |  |              | 7     |                             |         |   |           |          |  |   |            |          |  |         |              |   |          |   |       |             |  |   | (4     | ) |  |   |     |   |  |   | 3      | 
|2001 Plans |  |              | 4,556 |                             |         |   |           |          |  |   |            |          |  |         |              |   |          |   |       |             |  |   | (883   | ) |  |   |     |   |  |   | 3,673  | 
|2000 Plans |  |              | 32    |                             |         |   |           |          |  |   |            |          |  |         |              |   |          |   |       |             |  |   | (23    | ) |  |   |     |   |  |   | 9      | 
|           |  |              |       |                             |         |   |            |          |  |   |             |          |  |         |               |   |          |   |        |             |  |   |        |  
|           |  | $            | 9,724 |                             |         | $ | 12,265     |          |  | $ | (14,798     | )        |  | $       | (156          | ) |          | $ | 10,300 |             |  | $ | (4,338 | ) |  | $ | (175 | ) |  | $ | 12,822 | 
|           |  |              |       |                             |         |   |            |          |  |   |             |          |  |         |               |   |          |   |        |             |  |   |        |  



|    |            
|--- | -----------
|13. | Impairments





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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)










|    |                        
|--- | -----------------------
|14. | Discontinued Operations





|                                              |  |   |          |  
|--------------------------------------------- |  | - | -------- | -
|Cash received                                 |  | $ | 124,000  |  
|Purchase price adjustments                    |  |   | 5,090    |  
|Pension curtailment gain                      |  |   | 2,713    |  
|Disposal costs                                |  |   | (6,204   | )
|Net assets                                    |  |   | (125,784 | )
|Goodwill allocated to discontinued operations |  |   | (6,296   | )
|                                              |  |   |         
|Loss on disposal of discontinued operations   |  |   | (6,481   | )
|Income tax benefit                            |  |   | (1,872   | )
|                                              |  |   |         
|Loss on sale of discontinued operations       |  |   | (4,609   | )
|Loss to non-controlling interest              |  |   | 37       |  
|                                              |  |   |         
|Loss on sale of discontinued operations       |  | $ | (4,572   | )
|                                              |  |   |         



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)






|                                          |  |               |        |   |               |   |        |               |  |   |               |   |  |   |         |  
|----------------------------------------- |  | ------------- | ------ | - | ------------- | - | ------ | ------------- |  | - | ------------- | - |  | - | ------- | -
|                                          |  | Three Months  |        |   | Three Months  |   |        | Nine Months   |  |   | Nine Months   |  
|                                          |  | Ended         |        |   | Ended         |   |        | Ended         |  |   | Ended         |  
|                                          |  | September 30, |        |   | September 30, |   |        | September 30, |  |   | September 30, |  
|                                          |  | 2005          |        |   | 2004          |   |        | 2005          |  |   | 2004          |  
|                                          |  |               |        |   |               |   |        |               |  |   |               |  
|Gross revenues                            |  | $             | 53,465 |   |               | $ | 47,394 |               |  | $ | 145,557       |   |  | $ | 130,644 |  
|Income (loss) before income taxes         |  |               | 6,801  |   |               |   | (2,085 | )             |  |   | (57,016       | ) |  |   | (8,256  | )
|Income tax expense (benefit)              |  |               | 2,568  |   |               |   | (603   | )             |  |   | (24,075       | ) |  |   | (4,035  | )
|                                          |  |               |        |   |               |   |        |               |  |   |               |  
|Net (loss) income                         |  |               | 4,233  |   |               |   | (1,482 | )             |  |   | (32,941       | ) |  |   | (4,221  | )
|(Income) loss to controlling interest     |  |               | (34    | ) |               |   | 12     |               |  |   | 264           |   |  |   | 34      |  
|                                          |  |               |        |   |               |   |        |               |  |   |               |  
|Income (loss) from discontinued operation |  | $             | 4,199  |   |               | $ | (1,470 | )             |  | $ | (32,677       | ) |  | $ | (4,187  | )
|                                          |  |               |        |   |               |   |        |               |  |   |               |  



|                                       |  |                    |         | 
|-------------------------------------- |  | ------------------ | ------- | 
|                                       |  | As of December 31, |        
|                                       |  | 2004               |        
|                                       |  |                    |        
|Current assets                         |  | $                  | 42,815  | 
|Property and equipment, net            |  |                    | 172,017 | 
|Goodwill                               |  |                    | 6,296   | 
|Intangible assets                      |  |                    | 1,962   | 
|Other assets                           |  |                    | 600     | 
|                                       |  |                    |        
|Assets of discontinued operations      |  | $                  | 223,690 | 
|                                       |  |                    |        
|Current liabilities                    |  | $                  | 24,362  | 
|Long-term liabilities                  |  |                    | 4,335   | 
|                                       |  |                    |        
|Liabilities of discontinued operations |  | $                  | 28,697  | 
|                                       |  |                    |        







|    |             
|--- | ------------
|15. | Income Taxes



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)










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SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)






|    |                     
|--- | --------------------
|16. | Comprehensive Income



|                                   |                                                                                                                                                                                                                                                                                                                              |               |        |        |               |   |        |               |   |   |               |         |   |   |       |        |  
|---------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | ------ | ------ | ------------- | - | ------ | ------------- | - | - | ------------- | ------- | - | - | ----- | ------ | -
|                                   |                                                                                                                                                                                                                                                                                                                              | Three Months  |        |        | Three Months  |   |        | Nine Months   |   |   | Nine Months   |        
|                                   |                                                                                                                                                                                                                                                                                                                              | Ended         |        |        | Ended         |   |        | Ended         |   |   | Ended         |        
|                                   |                                                                                                                                                                                                                                                                                                                              | September 30, |        |        | September 30, |   |        | September 30, |   |   | September 30, |        
|                                   |                                                                                                                                                                                                                                                                                                                              | 2005          |        |        | 2004          |   |        | 2005          |   |   | 2004          |        
|                                   |                                                                                                                                                                                                                                                                                                                              |               |        |        |               |   |        |               |   |   |               |        
|Net income (loss)                  |                                                                                                                                                                                                                                                                                                                              | $             | 23,909 |        |               | $ | 31,651 |               |   | $ | (6,219        | )       |   | $ | 3,155 |       
|Other comprehensive income (loss): |                                                                                                                                                                                                                                                                                                                              |               |        |        |               |   |        |               |   |   |               |         |   |   |       |       
|                                   | Unrealized (losses) on marketable securities arising during the
    period, net of income taxes of ($260,000) and
    ($3.2) million for the three months ended
    September 30, 2005 and 2004, respectively, and ($607,000)
    and ($3.4) million for the nine months ended
    September 30, 2005 and 2004, respectively |               |        | (528   | )             |   |        | (5,925        | ) |   |               | (1,254  | ) |   |       | (6,440 | )
|                                   | Unrealized (losses) gains on derivative instruments, net of
    income taxes of ($19,000) and $188,000 for the three months
    ended September 30, 2005 and 2004, respectively, and
    ($107,000) and $566,000 for the nine months ended
    September 30, 2005 and 2004, respectively                                     |               |        | (86    | )             |   |        | 349           |   |   |               | (415    | ) |   |       | 1,052  |  
|                                   | Reclassification adjustment for gains (losses), net of income
    taxes of ($46,000) and $502,000 for the three months ended
    September 30, 2005 and 2004, and ($55,000) and
    $1.6 million for the nine months ended September 30,
    2005 and 2004, respectively, included in net income (loss)                      |               |        | (74    | )             |   |        | 932           |   |   |               | (90     | ) |   |       | 2,933  |  
|                                   | Foreign currency adjustment                                                                                                                                                                                                                                                                                                  |               |        | (2,844 | )             |   |        | (1,392        | ) |   |               | (26,861 | ) |   |       | (3,147 | )
|                                   | Other comprehensive income to non-controlling interest                                                                                                                                                                                                                                                                       |               |        | 371    |               |   |        | 363           |   |   |               | 1,338   |   |   |       | 311    |  
|                                   |                                                                                                                                                                                                                                                                                                                              |               |        |        |               |   |        |               |   |   |               |        
|                                   | Comprehensive income (loss)                                                                                                                                                                                                                                                                                                  |               | $      | 20,748 |               |   | $      | 25,978        |   |   | $             | (33,501 | ) |   | $     | (2,136 | )
|                                   |                                                                                                                                                                                                                                                                                                                              |               |        |        |               |   |        |               |   |   |               |        



|    |         
|--- | --------
|17. | Segments



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SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)




|                                |                          |                                       |         |         |            |   |        |             |  |   |              |        |  |              |   |         |   |   |         |         | 
|------------------------------- | ------------------------ | ------------------------------------- | ------- | ------- | ---------- | - | ------ | ----------- |  | - | ------------ | ------ |  | ------------ | - | ------- | - | - | ------- | ------- | 
|                                |                          | Three Months Ended September 30, 2005 |         |         |           
|                                |                          |                                       |         |         |           
|                                |                          | Product                               |         |         | Commercial |   |        | PharmaBio   |  |   |              |        | 
|                                |                          | Development                           |         |         | Services   |   |        | Development |  |   | Eliminations |        |  | Consolidated |  
|                                |                          |                                       |         |         |            |   |        |             |  |   |              |        |  |              |  
|Service revenues:               |                          |                                       |         |         |            |   |        |             |  |   |              |        |  |              |   |         |   |   |         |        
|                                | External                 |                                       | $       | 278,935 |            |   | $      | 159,372     |  |   | $            |       |  |              | $ |        |   |   | $       | 438,307 | 
|                                | Intersegment             |                                       |         | 1,011   |            |   |        | 23,308      |  |   |              |       |  |              |   | (24,319 | ) |   |         |        | 
|                                |                          |                                       |         |         |            |   |        |             |  |   |              |        |  |              |  
|                                | Total net services       |                                       |         | 279,946 |            |   |        | 182,680     |  |   |              |       |  |              |   | (24,319 | ) |   |         | 438,307 | 
|Commercial rights and royalties |                          |                                       |        |         |            |   |       |             |  |   | 31,093       |        |  |              |  |         |   |   | 31,093  |        
|Investment                      |                          |                                       |        |         |            |   |       |             |  |   | 890          |        |  |              |  |         |   |   | 890     |        
|                                |                          |                                       |         |         |            |   |        |             |  |   |              |        |  |              |  
|                                | Total net revenues       |                                       |         | 279,946 |            |   |        | 182,680     |  |   |              | 31,983 |  |              |   | (24,319 | ) |   |         | 470,290 | 
|                                | Reimbursed service costs |                                       |         | 122,541 |            |   |        | 21,154      |  |   |              |       |  |              |   | (2,586  | ) |   |         | 141,109 | 
|                                |                          |                                       |         |         |            |   |        |             |  |   |              |        |  |              |  
|                                | Gross revenues           |                                       | $       | 402,487 |            |   | $      | 203,834     |  |   | $            | 31,983 |  |              | $ | (26,905 | ) |   | $       | 611,399 | 
|                                |                          |                                       |         |         |            |   |        |             |  |   |              |        |  |              |  
|Contribution                    |                          | $                                     | 141,971 |         |            | $ | 68,527 |             |  | $ | (13,440      | )      |  | $            |  |         |   | $ | 197,058 |        
|                                |                          |                                       |         |         |            |   |        |             |  |   |              |        |  |              |  

|                                |                          |                                       |         |         |            |   |        |             |  |   |              |       |  |              |   |         |   |   |         |         | 
|------------------------------- | ------------------------ | ------------------------------------- | ------- | ------- | ---------- | - | ------ | ----------- |  | - | ------------ | ----- |  | ------------ | - | ------- | - | - | ------- | ------- | 
|                                |                          | Three Months Ended September 30, 2004 |         |         |           
|                                |                          |                                       |         |         |           
|                                |                          | Product                               |         |         | Commercial |   |        | PharmaBio   |  |   |              |       | 
|                                |                          | Development                           |         |         | Services   |   |        | Development |  |   | Eliminations |       |  | Consolidated |  
|                                |                          |                                       |         |         |            |   |        |             |  |   |              |       |  |              |  
|Service revenues:               |                          |                                       |         |         |            |   |        |             |  |   |              |       |  |              |   |         |   |   |         |        
|                                | External                 |                                       | $       | 238,923 |            |   | $      | 152,423     |  |   | $            |      |  |              | $ |        |   |   | $       | 391,346 | 
|                                | Intersegment             |                                       |         |        |            |   |        | 26,703      |  |   |              |      |  |              |   | (26,703 | ) |   |         |        | 
|                                |                          |                                       |         |         |            |   |        |             |  |   |              |       |  |              |  
|                                | Total net services       |                                       |         | 238,923 |            |   |        | 179,126     |  |   |              |      |  |              |   | (26,703 | ) |   |         | 391,346 | 
|Commercial rights and royalties |                          |                                       |        |         |            |   |       |             |  |   | 7,660        |       |  |              |  |         |   |   | 7,660   |        
|Investment                      |                          |                                       |        |         |            |   |       |             |  |   | (2,509       | )     |  |              |  |         |   |   | (2,509  | )      
|                                |                          |                                       |         |         |            |   |        |             |  |   |              |       |  |              |  
|                                | Total net revenues       |                                       |         | 238,923 |            |   |        | 179,126     |  |   |              | 5,151 |  |              |   | (26,703 | ) |   |         | 396,497 | 
|                                | Reimbursed service costs |                                       |         | 78,492  |            |   |        | 15,732      |  |   |              |      |  |              |   | (2,604  | ) |   |         | 91,620  | 
|                                |                          |                                       |         |         |            |   |        |             |  |   |              |       |  |              |  
|                                | Gross revenues           |                                       | $       | 317,415 |            |   | $      | 194,858     |  |   | $            | 5,151 |  |              | $ | (29,307 | ) |   | $       | 488,117 | 
|                                |                          |                                       |         |         |            |   |        |             |  |   |              |       |  |              |  
|Contribution                    |                          | $                                     | 121,165 |         |            | $ | 71,917 |             |  | $ | (35,099      | )     |  | $            |  |         |   | $ | 157,983 |        
|                                |                          |                                       |         |         |            |   |        |             |  |   |              |       |  |              |  

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PHARMA SERVICES INTERMEDIATE HOLDING CORP. AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)


|                                |                          |                                      |         |           |            |   |         |             |  |   |              |        |  |              |   |         |   |   |         |           | 
|------------------------------- | ------------------------ | ------------------------------------ | ------- | --------- | ---------- | - | ------- | ----------- |  | - | ------------ | ------ |  | ------------ | - | ------- | - | - | ------- | --------- | 
|                                |                          | Nine Months Ended September 30, 2005 |         |           |           
|                                |                          |                                      |         |           |           
|                                |                          | Product                              |         |           | Commercial |   |         | PharmaBio   |  |   |              |        | 
|                                |                          | Development                          |         |           | Services   |   |         | Development |  |   | Eliminations |        |  | Consolidated |  
|                                |                          |                                      |         |           |            |   |         |             |  |   |              |        |  |              |  
|Service revenues:               |                          |                                      |         |           |            |   |         |             |  |   |              |        |  |              |   |         |   |   |         |          
|                                | External                 |                                      | $       | 831,628   |            |   | $       | 488,249     |  |   | $            |       |  |              | $ |        |   |   | $       | 1,319,877 | 
|                                | Intersegment             |                                      |         | 4,149     |            |   |         | 71,814      |  |   |              |       |  |              |   | (75,963 | ) |   |         |          | 
|                                |                          |                                      |         |           |            |   |         |             |  |   |              |        |  |              |  
|                                | Total net services       |                                      |         | 835,777   |            |   |         | 560,063     |  |   |              |       |  |              |   | (75,963 | ) |   |         | 1,319,877 | 
|Commercial rights and royalties |                          |                                      |        |           |            |   |        |             |  |   | 95,795       |        |  |              |  |         |   |   | 95,795  |          
|Investment                      |                          |                                      |        |           |            |   |        |             |  |   | (1,951       | )      |  |              |  |         |   |   | (1,951  | )        
|                                |                          |                                      |         |           |            |   |         |             |  |   |              |        |  |              |  
|                                | Total net revenues       |                                      |         | 835,777   |            |   |         | 560,063     |  |   |              | 93,844 |  |              |   | (75,963 | ) |   |         | 1,413,721 | 
|                                | Reimbursed service costs |                                      |         | 327,524   |            |   |         | 53,592      |  |   |              |       |  |              |   | (3,745  | ) |   |         | 377,371   | 
|                                |                          |                                      |         |           |            |   |         |             |  |   |              |        |  |              |  
|                                | Gross revenues           |                                      | $       | 1,163,301 |            |   | $       | 613,655     |  |   | $            | 93,844 |  |              | $ | (79,708 | ) |   | $       | 1,791,092 | 
|                                |                          |                                      |         |           |            |   |         |             |  |   |              |        |  |              |  
|Contribution                    |                          | $                                    | 417,937 |           |            | $ | 214,285 |             |  | $ | (49,483      | )      |  | $            |  |         |   | $ | 582,739 |          
|                                |                          |                                      |         |           |            |   |         |             |  |   |              |        |  |              |  

|                                |                          |                                      |         |         |            |   |         |             |  |   |              |        |  |              |   |         |   |   |         |           | 
|------------------------------- | ------------------------ | ------------------------------------ | ------- | ------- | ---------- | - | ------- | ----------- |  | - | ------------ | ------ |  | ------------ | - | ------- | - | - | ------- | --------- | 
|                                |                          | Nine Months Ended September 30, 2004 |         |         |           
|                                |                          |                                      |         |         |           
|                                |                          | Product                              |         |         | Commercial |   |         | PharmaBio   |  |   |              |        | 
|                                |                          | Development                          |         |         | Services   |   |         | Development |  |   | Eliminations |        |  | Consolidated |  
|                                |                          |                                      |         |         |            |   |         |             |  |   |              |        |  |              |  
|Service revenues:               |                          |                                      |         |         |            |   |         |             |  |   |              |        |  |              |   |         |   |   |         |          
|                                | External                 |                                      | $       | 691,533 |            |   | $       | 443,390     |  |   | $            |       |  |              | $ |        |   |   | $       | 1,134,923 | 
|                                | Intersegment             |                                      |         |        |            |   |         | 41,582      |  |   |              |       |  |              |   | (41,582 | ) |   |         |          | 
|                                |                          |                                      |         |         |            |   |         |             |  |   |              |        |  |              |  
|                                | Total net services       |                                      |         | 691,533 |            |   |         | 484,972     |  |   |              |       |  |              |   | (41,582 | ) |   |         | 1,134,923 | 
|Commercial rights and royalties |                          |                                      |        |         |            |   |        |             |  |   | 38,401       |        |  |              |  |         |   |   | 38,401  |          
|Investment                      |                          |                                      |        |         |            |   |        |             |  |   | (6,304       | )      |  |              |  |         |   |   | (6,304  | )        
|                                |                          |                                      |         |         |            |   |         |             |  |   |              |        |  |              |  
|                                | Total net revenues       |                                      |         | 691,533 |            |   |         | 484,972     |  |   |              | 32,097 |  |              |   | (41,582 | ) |   |         | 1,167,020 | 
|                                | Reimbursed service costs |                                      |         | 209,404 |            |   |         | 45,148      |  |   |              |       |  |              |   | (2,979  | ) |   |         | 251,573   | 
|                                |                          |                                      |         |         |            |   |         |             |  |   |              |        |  |              |  
|                                | Gross revenues           |                                      | $       | 900,937 |            |   | $       | 530,120     |  |   | $            | 32,097 |  |              | $ | (44,561 | ) |   | $       | 1,418,593 | 
|                                |                          |                                      |         |         |            |   |         |             |  |   |              |        |  |              |  
|Contribution                    |                          | $                                    | 345,530 |         |            | $ | 187,782 |             |  | $ | (57,255      | )      |  | $            |  |         |   | $ | 476,057 |          
|                                |                          |                                      |         |         |            |   |         |             |  |   |              |        |  |              |  

|                                            |                                                  |               |        |        |               |   |        |               |  |   |               |        |  |   |        |        | 
|------------------------------------------- | ------------------------------------------------ | ------------- | ------ | ------ | ------------- | - | ------ | ------------- |  | - | ------------- | ------ |  | - | ------ | ------ | 
|                                            |                                                  | Three months  |        |        | Three months  |   |        | Nine months   |  |   | Nine months   |       
|                                            |                                                  | ended         |        |        | ended         |   |        | ended         |  |   | ended         |       
|                                            |                                                  | September 30, |        |        | September 30, |   |        | September 30, |  |   | September 30, |       
|                                            |                                                  | 2005          |        |        | 2004          |   |        | 2005          |  |   | 2004          |       
|                                            |                                                  |               |        |        |               |   |        |               |  |   |               |       
|Depreciation and amortization expense:      |                                                  |               |        |        |               |   |        |               |  |   |               |        |  |   |        |       
|                                            | Product Development                              |               | $      | 17,225 |               |   | $      | 16,709        |  |   | $             | 49,716 |  |   | $      | 50,183 | 
|                                            | Commercial Services                              |               |        | 8,743  |               |   |        | 7,857         |  |   |               | 23,887 |  |   |        | 23,864 | 
|                                            | PharmaBio Development (included in contribution) |               |        | 376    |               |   |        | 1,121         |  |   |               | 4,609  |  |   |        | 2,940  | 
|                                            | Corporate                                        |               |        | 1,188  |               |   |        | 3,188         |  |   |               | 3,506  |  |   |        | 9,472  | 
|                                            |                                                  |               |        |        |               |   |        |               |  |   |               |       
|Total depreciation and amortization expense |                                                  | $             | 27,532 |        |               | $ | 28,875 |               |  | $ | 81,718        |        |  | $ | 86,459 |       
|                                            |                                                  |               |        |        |               |   |        |               |  |   |               |       

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PHARMA SERVICES INTERMEDIATE HOLDING CORP. AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)


|              |                                   |               |           |         |              |   |           |         | 
|------------- | --------------------------------- | ------------- | --------- | ------- | ------------ | - | --------- | ------- | 
|              |                                   | As            |           |         | As of        |  
|              |                                   | September 30, |           |         | December 31, |  
|              |                                   | 2005          |           |         | 2004         |  
|              |                                   |               |           |         |              |  
|Total Assets: |                                   |               |           |         |              |   |           |        
|              | Product Development               |               | $         | 902,013 |              |   | $         | 875,245 | 
|              | Commercial Services               |               |           | 316,348 |              |   |           | 349,557 | 
|              | PharmaBio Development             |               |           | 266,888 |              |   |           | 294,378 | 
|              | Corporate                         |               |           | 335,768 |              |   |           | 298,597 | 
|              | Assets of discontinued operations |               |           |        |              |   |           | 223,690 | 
|              |                                   |               |           |         |              |  
|              |                                   | $             | 1,821,017 |         |              | $ | 2,041,467 |        
|              |                                   |               |           |         |              |  



|    |              
|--- | -------------
|18. | Contingencies





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SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)










|    |                                     
|--- | ------------------------------------
|19. | Recently Issued Accounting Standards



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SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(UNAUDITED)














|    |                 
|--- | ----------------
|20. | Subsequent Event



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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

Cautionary Statement for Forward-Looking Information








| |         
| | --------
| | Overview





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| |                      
| | ---------------------
| | Results of Operations







| |                                               
| | ----------------------------------------------
| | Three Months Ended September 30, 2005 and 2004

Gross Revenues.


|                                              |  |                    |         |   |      |   |         |  
|--------------------------------------------- |  | ------------------ | ------- | - | ---- | - | ------- | -
|                                              |  | Three Months Ended |        
|                                              |  | September 30,      |        
|                                              |  |                    |        
|                                              |  | 2005               |         |   | 2004 |  
|                                              |  |                    |         |   |      |  
|Service revenues  external                   |  | $                  | 579,416 |   |      | $ | 482,966 |  
|Less: reimbursed service costs                |  |                    | 141,109 |   |      |   | 91,620  |  
|                                              |  |                    |         |   |      |  
|Net service revenues  external               |  |                    | 438,307 |   |      |   | 391,346 |  
|Net service revenues  intersegment           |  |                    | 24,319  |   |      |   | 26,703  |  
|                                              |  |                    |         |   |      |  
|Net service revenues  combined               |  |                    | 462,626 |   |      |   | 418,049 |  
|Commercial rights and royalties               |  |                    | 31,093  |   |      |   | 7,660   |  
|Investments                                   |  |                    | 890     |   |      |   | (2,509  | )
|Eliminations: service revenues  intersegment |  |                    | (24,319 | ) |      |   | (26,703 | )
|                                              |  |                    |         |   |      |  
|Total net revenues                            |  | $                  | 470,290 |   |      | $ | 396,497 |  
|                                              |  |                    |         |   |      |  
|Reimbursed service costs                      |  |                    | 141,109 |   |      |   | 91,620  |  
|                                              |  |                    |         |   |      |  
|Gross revenues                                |  | $                  | 611,399 |   |      | $ | 488,117 |  
|                                              |  |                    |         |   |      |  

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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Service Revenues  External. Service
    revenues  external were $579.4 million for the
    third quarter of 2005 compared to $483.0 million for the
    third quarter of 2004. Service revenues  external
    less reimbursed service costs, or net service
    revenues  external, for the third quarter of 2005
    were $438.3 million, an increase of $47.0 million or
    12.0% over net service revenues  external of
    $391.3 million for the third quarter of 2004. Net service
    revenues  external for the third quarter of 2005 were
    negatively impacted by approximately $152,000 due to the effect
    of the strengthening of the United States dollar relative to the
    British pound, offset by the weakening of the United States
    dollar relative to the euro, South African rand and the Japanese
    yen. Our Commercial Services and Product Development Groups
    experienced growth in the third quarter of 2005 compared to the
    third quarter of 2004. Our Product Development Group experienced
    growth in our clinical development services, or CDS, and central
    laboratory businesses. Net service revenues  external
    increased in the Asia Pacific region $3.5 million or 4.2%
    to $87.1 million for the third quarter of 2005 from the
    third quarter of 2004 including a positive impact of
    approximately $772,000 due to the effect of foreign currency
    fluctuations. Our Commercial Services Group experienced strong
    growth in the Asia Pacific region. Net service
    revenues  external increased $30.0 million or
    18.0% to $196.3 million for the third quarter of 2005 from
    the third quarter of 2004 in the Europe region despite a
    negative impact of approximately $1.7 million due to the
    effect of foreign currency fluctuations. We experienced growth
    from CDS and central laboratory businesses, along with an
    improvement in the business conditions for our Commercial
    Services Group in Europe. Net service revenues 
    external increased in the Americas region $13.5 million or
    9.5% to $154.9 million for the third quarter of 2005 from
    the third quarter of 2004 including a positive impact of
    approximately $791,000 due to the effect of foreign currency
    fluctuations. The growth in the Americas region is from our
    Product Development Group, including growth from our CDS,
    Phase I and clinical pharmacology businesses.
| 
| | Net Service Revenues  Intersegment. Net
    service revenues  intersegment represents the
    revenues from services provided by our service segments,
    primarily commercial services, to our PharmaBio Development
    Group under risk-based arrangements in which we provide services
    to customers in exchange for royalties. Net service
    revenues  intersegment decreased to
    $24.3 million for the third quarter of 2005 versus
    $26.7 million for the third quarter of 2004 as a result of
    a decrease in the incremental services provided under our
    February 2004 contract with a large pharmaceutical customer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| 
| | Net Service Revenues  Combined. Net service
    revenues  combined for the third quarter of 2005 were
    $462.6 million versus $418.0 million for the third
    quarter of 2004 for the reasons stated above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| 
| | Commercial Rights and Royalties Revenues. Commercial
    rights and royalties revenues, which include product revenues,
    royalties and commissions, for the third quarter of 2005 were
    $31.1 million, an increase of $23.4 million as
    compared to the third quarter 2004 commercial rights and
    royalties revenues of $7.7 million. Commercial rights and
    royalties revenues were positively impacted by approximately
    $112,000 due to the effect of foreign currency fluctuations
    primarily related to the weakening of the United States dollar
    relative to the South African rand. Commercial rights and
    royalties revenues were reduced by approximately
    $5.6 million for the third quarter of 2005 for the
    amortization of the payments we made to our customers versus
    $10.3 million for the third quarter of 2004. These payments
    are considered incentives and are amortized against revenues
    over the service period of the contract. The increase in
    commercial rights and royalties revenues is due to (1) our
    contract for Cymbalta®, which contributed
    $14.1 million of revenues in the third quarter of 2005
    versus $2.4 million in the third quarter of 2004;
    (2) our February 2004 contract with a large pharmaceutical
    customer which contributed $3.2 million of revenues in the
    third quarter of 2005 compared to no revenues in the third
    quarter of 2004; (3) our contracts with Columbia Labs,
    Inc., or Columbia, which contributed $269,000 of revenues in the
    third quarter of 2005 but decreased revenues by approximately
    $5.9 million in the third quarter of 2004 due to an
    impairment of the payments made to Columbia of approximately
    $7.8 million due to a decline in fair value of the related
    commercial rights and royalties asset which we deemed to be
    other-than-temporary; (4) our contract with Cell
    Therapeutics, Inc., or Cell Therapeutics, which contributed
    $1.0 million of revenues in the third quarter of 2005
    compared to no revenues in the third quarter of 2004; and
    (5) an increase of approximately $1.5 million in the
    revenues from miscellaneous contracts and activities. Commercial
    rights and royalties revenues for the third quarter of 2005 were
    attributable to the following: (1) approximately 45.5% to
    our                                                                      

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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | Cymbalta® contract, (2) approximately 25.1% to
    our contracts with two large pharmaceutical customers in Europe,
    (3) approximately 10.4% to our February 2004 contract with
    a large pharmaceutical customer, (4) approximately 14.9%
    related to miscellaneous contracts and activities,
    (5) approximately 3.2% related to our contract with Cell
    Therapeutics and (6) approximately 0.9% to our contracts with
    Columbia.                                                                                                                                                                                                                                                                                                                                                                                                   
| 
| | Investment Revenues. Investment revenues related to our
    PharmaBio Development Groups financing arrangements, which
    include gains and losses from the sale of equity securities and
    impairments from other-than-temporary declines in the fair
    values of our direct and indirect investments, for the third
    quarter of 2005 were $890,000 versus a loss of $2.5 million
    for the third quarter of 2004. Investment revenues for the third
    quarter of 2005 included $891,000 of net gains on marketable
    securities versus net losses of $2.2 million for the third
    quarter of 2004. In addition, during the third quarter of 2005
    and 2004, we recognized $50,000 and $268,000, respectively, of
    impairment losses on investments whose decline in fair value was
    considered to be other than temporary.

Costs of Revenues.


|                                      |  |                    |         |   |      |   |         |  
|------------------------------------- |  | ------------------ | ------- | - | ---- | - | ------- | -
|                                      |  | Three Months Ended |        
|                                      |  | September 30,      |        
|                                      |  |                    |        
|                                      |  | 2005               |         |   | 2004 |  
|                                      |  |                    |         |   |      |  
|Reimbursed service costs              |  | $                  | 141,109 |   |      | $ | 91,620  |  
|Service costs                         |  |                    | 252,128 |   |      |   | 224,967 |  
|Commercial rights and royalties costs |  |                    | 45,423  |   |      |   | 40,250  |  
|Depreciation and amortization         |  |                    | 27,156  |   |      |   | 27,754  |  
|Eliminations  intersegment costs     |  |                    | (24,319 | ) |      |   | (26,703 | )
|                                      |  |                    |         |   |      |  
|                                      |  | $                  | 441,497 |   |      | $ | 357,888 |  
|                                      |  |                    |         |   |      |  



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Reimbursed Service Costs. Reimbursed service costs were
    $141.1 million and $91.6 million for the third quarter
    of 2005 and 2004, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| 
| | Service Costs. Service costs, which include compensation
    and benefits for billable employees, and certain other expenses
    directly related to service contracts, were $252.1 million
    or 54.5% of net service revenues  combined for the
    third quarter of 2005 versus $225.0 million or 53.8% of net
    service revenues  combined for the third quarter of
    2004. Compensation and related expenses increased approximately
    $14.9 million primarily as a result of salary and wage
    increases including an increase in our number of billable
    employees. Other expenses directly related to our service
    contracts increased approximately $12.3 million.                                                                                                                                                                                                                                                                                                                                                                     
| 
| | Commercial Rights and Royalties Costs. Commercial rights
    and royalties costs, which include compensation and related
    benefits for employees, amortization of commercial rights,
    infrastructure costs of the PharmaBio Development Group and
    other expenses directly related to commercial rights and
    royalties, were $45.4 million for the third quarter of 2005
    versus $40.3 million for the third quarter of 2004. The
    increase in commercial rights and royalties costs is primarily
    due to (1) an increase of approximately $1.9 million
    in costs to $19.3 million in the third quarter of 2005
    related to our Cymbalta® contract, (2) an increase of
    approximately $1.6 million in costs to $8.7 million in
    the third quarter of 2005 related to our February 2004 contract
    with a large pharmaceutical customer, and (3) costs of
    approximately $1.3 million incurred during the third
    quarter of 2005 related to our co-promotion agreement with
    Yamanouchi Pharma Limited, or Yamanouchi.
| 
| | Depreciation and Amortization. Depreciation and
    amortization, which include depreciation of our property and
    equipment and amortization of our definite-lived intangible
    assets except commercial rights, decreased to $27.2 million
    for the third quarter of 2005 versus $27.8 million for the
    third quarter of 2004. Amortization expense decreased
    approximately $653,000 as a result of a decrease in the
    unamortized balance of intangible assets which are being
    amortized over their finite lives. We have approximately
    $109.7 million of intangible assets which have an
    indefinite life and therefore are not being amortized.
    Depreciation expense was basically flat quarter over quarter.                                                                                                                                                                                                                                                                                                               

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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Eliminations  Intersegment Costs. Eliminations
    represent the services provided by our service segments,
    primarily commercial services, to our PharmaBio Development
    Group under risk-based arrangements in which we provide services
    to customers in exchange for royalties. Eliminations decreased
    to $24.3 million for the third quarter of 2005 versus
    $26.7 million for the third quarter of 2004 primarily as a
    result of a decrease in the incremental services provided under
    our February 2004 contract with a large pharmaceutical customer.

Selling, general and administrative expenses.














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|                      |  |                    |       |   |              |          |       |          |  |  |          |   |  |          |       |   |      |  |       |          |  |   |       |   |  |  |        |  
|--------------------- |  | ------------------ | ----- | - | ------------ | -------- | ----- | -------- |  |  | -------- | - |  | -------- | ----- | - | ---- |  | ----- | -------- |  | - | ----- | - |  |  | ------ | -
|                      |  | Total Net Revenues |       |   | Contribution |         
|                      |  |                    |       |   |              |         
|                      |  |                    |       |   |              | % of Net |       |          |  |  | % of Net |  
|                      |  | 2005               |       |   | 2004         |          |       | Growth % |  |  | 2005     |   |  | Revenues |       |   | 2004 |  |       | Revenues | 
|                      |  |                    |       |   |              |          |       |          |  |  |          |   |  |          |       |   |      |  |       |          | 
|Product Development   |  | $                  | 279.9 |   |              | $        | 238.9 |          |  |  | 17.2     | % |  | $        | 142.0 |   |      |  | 50.7  | %        |  | $ | 121.2 |   |  |  | 50.7   | %
|Commercial Services   |  |                    | 182.7 |   |              |          | 179.1 |          |  |  | 2.0      |   |  |          | 68.5  |   |      |  | 37.5  |          |  |   | 71.9  |   |  |  | 40.1   |  
|PharmaBio Development |  |                    | 32.0  |   |              |          | 5.2   |          |  |  | 520.9    |   |  |          | (13.4 | ) |      |  | (42.0 | )        |  |   | (35.1 | ) |  |  | (681.4 | )
|Eliminations          |  |                    | (24.3 | ) |              |          | (26.7 | )        |  |  | (8.9     | ) |  |          |      |   |      |  |      |          |  |   |      |   |  |  |       |  
|                      |  |                    |       |   |              |          |       |          |  |  |          |   |  |          |       |   |      |  |       |          | 
|                      |  | $                  | 470.3 |   |              | $        | 396.5 |          |  |  | 18.6     | % |  | $        | 197.1 |   |      |  | 41.9  | %        |  | $ | 158.0 |   |  |  | 39.8   | %

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Product Development Group.




Commercial Services Group.




PharmaBio Development Group.




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| |                                               
| | ----------------------------------------------
| | Nine months ended September 30, 2005 and 2004?

Gross Revenues.


|                                              |  |                   |           |   |      |   |           |  
|--------------------------------------------- |  | ----------------- | --------- | - | ---- | - | --------- | -
|                                              |  | Nine Months Ended |          
|                                              |  | September 30,     |          
|                                              |  |                   |          
|                                              |  | 2005              |           |   | 2004 |  
|                                              |  |                   |           |   |      |  
|Service revenues  external                   |  | $                 | 1,697,248 |   |      | $ | 1,386,496 |  
|Less: reimbursed service costs                |  |                   | 377,371   |   |      |   | 251,573   |  
|                                              |  |                   |           |   |      |  
|Net service revenues  external               |  |                   | 1,319,877 |   |      |   | 1,134,923 |  
|Net service revenues  intersegment           |  |                   | 75,963    |   |      |   | 41,582    |  
|                                              |  |                   |           |   |      |  
|Net service revenues  combined               |  |                   | 1,395,840 |   |      |   | 1,176,505 |  
|Commercial rights and royalties               |  |                   | 95,795    |   |      |   | 38,401    |  
|Investments                                   |  |                   | (1,951    | ) |      |   | (6,304    | )
|Eliminations: service revenues  intersegment |  |                   | (75,963   | ) |      |   | (41,582   | )
|                                              |  |                   |           |   |      |  
|Total net revenues                            |  | $                 | 1,413,721 |   |      | $ | 1,167,020 |  
|                                              |  |                   |           |   |      |  
|Reimbursed service costs                      |  |                   | 377,371   |   |      |   | 251,573   |  
|                                              |  |                   |           |   |      |  
|Gross revenues                                |  | $                 | 1,791,092 |   |      | $ | 1,418,593 |  
|                                              |  |                   |           |   |      |  



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Service Revenues  External. Service
    revenues  external were $1.70 billion for the
    first nine months of 2005 compared to $1.39 billion for the
    first nine months of 2004. Net service revenues 
    external for the first nine months of 2005 were
    $1.32 billion, an increase of $185.0 million or 16.3%
    over net service revenues  external of
    $1.13 billion for the first nine months of 2004. Net
    service revenues  external for the first nine months
    of 2005 were positively impacted by approximately
    $22.7 million due to the effect of the weakening of the
    United States dollar relative to the euro, the British pound,
    the South African rand and the Japanese yen. Our Commercial
    Services and Product Development Groups experienced growth. Our
    Product Development Group experienced growth in CDS,
    Phase I and central laboratory businesses. Net service
    revenues  external increased in the Asia Pacific
    region $30.7 million or 12.9% to $268.4 million for
    the first nine months of 2005 from the first nine months of 2004
    including a positive impact of approximately $7.3 million
    due to the effect of foreign currency fluctuations. Our
    Commercial Services Group experienced strong growth in the Asia
    Pacific region. Net service revenues  external
    increased $106.1 million or 21.9% to $591.8 million
    for the first nine months of 2005 from the first nine months of
    2004 in the Europe region including a positive impact of
    approximately $13.8 million due to the effect of foreign
    currency fluctuations. We experienced growth from our CDS,
    Phase I and central laboratory businesses, along with an
    improvement in the business conditions for our Commercial
    Services Group in Europe. Net service revenues 
    external increased in the Americas region $48.1 million or
    11.7% to $459.7 million for the first nine months of 2005
    from the first nine months of 2004 including a positive impact
    of approximately $1.7 million due to the effect of foreign
    currency fluctuations. The increase in the Americas region is
    primarily from our Product Development Group, including growth
    from our CDS, Phase I and central laboratory businesses.
| 
| | Net Service Revenues  Intersegment. Net
    service revenues  intersegment increased to
    $76.0 million for the first nine months of 2005 versus
    $41.6 million for the first nine months of 2004 as a result
    of the incremental services provided under our Cymbalta®
    contract and our February 2004 contract with a large
    pharmaceutical customer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| 
| | Net Service Revenues  Combined. Net service
    revenues  combined for the first nine months of 2005
    were $1.40 billion versus $1.18 billion for the first
    nine months of 2004 for the reasons stated above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| 
| | Commercial Rights and Royalties Revenues. Commercial
    rights and royalties revenues for the first nine months of 2005
    were $95.8 million, an increase of $57.4 million as
    compared to the first nine months of 2004 commercial rights and
    royalties revenues of $38.4 million. Commercial rights and
    royalties revenues                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | were positively impacted by approximately $1.3 million due
    to the effect of foreign currency fluctuations related to the
    weakening of the United States dollar relative to the euro.
    Commercial rights and royalties revenues were reduced by
    approximately $16.5 million for the first nine months of
    2005 for the amortization of the payments we made to our
    customers versus $14.6 million for the first nine months of
    2004. These payments are considered incentives and are amortized
    against revenues over the service period of the contract. The
    increase in commercial rights and royalties revenues is due to
    (1) our contract for Cymbalta®, which contributed
    $36.9 million of revenues in the first nine months of 2005
    compared to $2.4 million of revenues in the first nine
    months of 2004; (2) our February 2004 contract with a large
    pharmaceutical customer, which contributed $14.7 million of
    revenues in the first nine months of 2005 compared to no
    revenues in the first nine months of 2004; (3) a slight
    increase in the revenues under our contracts in Europe with two
    large pharmaceutical customers to $28.6 million in the
    first nine months of 2005 as compared to $28.4 million in
    the first nine months of 2004; (4) our contract with Cell
    Therapeutics, which contributed $3.2 million in the first
    nine months of 2005 compared to no revenues in the first nine
    months of 2004; (5) our contracts with Columbia, which
    contributed $1.1 million of revenues in the first nine
    months of 2005 but decreased revenues by approximately
    $1.2 million in the first nine months of 2004 due to an
    impairment of the payments made to Columbia of approximately
    $10.7 million due to a decline in fair value of the related
    commercial rights and royalties asset which we deemed to be
    other-than-temporary; and (6) an increase of approximately
    $2.4 million in the revenues from miscellaneous contracts
    and activities. Commercial rights and royalties revenues for the
    first nine months of 2005 were attributable to the following:
    (1) approximately 38.5% to our Cymbalta® contract,
    (2) approximately 29.9% to our contracts with two large
    pharmaceutical customers in Europe, (3) approximately 15.4%
    to our February 2004 contract with a large pharmaceutical
    customer, (4) approximately 11.6% related to miscellaneous
    contracts and activities, (5) approximately 3.4% related to
    our contract with Cell Therapeutics and (6) approximately
    1.2% to our contracts with Columbia.
| 
| | Investment Revenues. Investment revenues related to our
    PharmaBio Development Groups financing arrangements for
    the first nine months of 2005 were a loss of $2.0 million
    versus a loss of $6.3 million for the first nine months of
    2004. Investment revenues for the first nine months of 2005
    included net gains on marketable securities of $1.0 million
    versus $4.3 million for the first nine months of 2004. In
    addition, during the first nine months of 2005 and 2004, we
    recognized $3.1 million and $10.6 million,
    respectively, of impairment losses on investments whose decline
    in fair value was considered to be other than temporary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

Costs of Revenues.


|                                      |  |                   |           |   |      |   |           |  
|------------------------------------- |  | ----------------- | --------- | - | ---- | - | --------- | -
|                                      |  | Nine Months Ended |          
|                                      |  | September 30,     |          
|                                      |  |                   |          
|                                      |  | 2005              |           |   | 2004 |  
|                                      |  |                   |           |   |      |  
|Reimbursed service costs              |  | $                 | 377,371   |   |      | $ | 251,573   |  
|Service costs                         |  |                   | 763,618   |   |      |   | 643,193   |  
|Commercial rights and royalties costs |  |                   | 143,327   |   |      |   | 89,352    |  
|Depreciation and amortization         |  |                   | 77,109    |   |      |   | 83,519    |  
|Eliminations  intersegment costs     |  |                   | (75,963   | ) |      |   | (41,582   | )
|                                      |  |                   |           |   |      |  
|                                      |  | $                 | 1,285,462 |   |      | $ | 1,026,055 |  
|                                      |  |                   |           |   |      |  



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Reimbursed Service Costs. Reimbursed service costs were
    $377.4 million and $251.6 million for the first nine
    months of 2005 and 2004, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| 
| | Service Costs. Service costs were $763.6 million or
    54.7% of net service revenues  combined for the first
    nine months of 2005 versus $643.2 million or 54.7% of net
    service revenues  combined for the first nine months
    of 2004. Compensation and related expenses increased
    approximately $91.5 million primarily as a result of salary
    and wage increases, including an increase in our number of
    billable employees. Other expenses directly related to our
    service contracts increased approximately $28.9 million.
    Service costs were negatively impacted by approximately
    $12.0 million from the effect of foreign currency
    fluctuations.

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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Commercial Rights and Royalties Costs. Commercial rights
    and royalties costs were $143.4 million for the first nine
    months of 2005 versus $89.4 million for the first nine
    months of 2004. The increase in commercial rights and royalties
    costs is primarily due to (1) an increase of approximately
    $31.5 million in costs to $55.6 million in the first
    nine months of 2005 related to our Cymbalta® contract and
    (2) an increase of approximately $7.8 million in costs
    to $22.4 million in the first nine months of 2005 related
    to our February 2004 contract with a large pharmaceutical
    customer.
| 
| | Depreciation and Amortization. Depreciation and
    amortization decreased to $77.1 million for the first nine
    months of 2005 versus $83.5 million for the first nine
    months of 2004. Amortization expense decreased approximately
    $5.0 million as a result of a decrease in the unamortized
    balance of intangible assets which are being amortized over
    their finite lives. We have approximately $109.7 million of
    intangible assets which have an indefinite life and therefore
    are not being amortized. Depreciation expense decreased
    approximately $1.4 million.                                           
| 
| | Eliminations  Intersegment Costs. Eliminations
    increased to $76.0 million for the first nine months of
    2005 versus $41.6 million for the first nine months of 2004
    primarily as a result of the incremental services provided under
    our Cymbalta® contract and our February 2004 contract with
    a large pharmaceutical customer.                                                                                                                                                                                                                                                                                             

Selling, general and administrative expenses.








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|                      |  |                    |         |   |              |          |         |          |  |  |          |   |  |          |       |   |      |  |       |          |  |   |       |   |  |  |        |  
|--------------------- |  | ------------------ | ------- | - | ------------ | -------- | ------- | -------- |  |  | -------- | - |  | -------- | ----- | - | ---- |  | ----- | -------- |  | - | ----- | - |  |  | ------ | -
|                      |  | Total Net Revenues |         |   | Contribution |         
|                      |  |                    |         |   |              |         
|                      |  |                    |         |   |              | % of Net |         |          |  |  | % of Net |  
|                      |  | 2005               |         |   | 2004         |          |         | Growth % |  |  | 2005     |   |  | Revenues |       |   | 2004 |  |       | Revenues | 
|                      |  |                    |         |   |              |          |         |          |  |  |          |   |  |          |       |   |      |  |       |          | 
|Product Development   |  | $                  | 835.8   |   |              | $        | 691.5   |          |  |  | 20.9     | % |  | $        | 417.9 |   |      |  | 50.0  | %        |  | $ | 345.5 |   |  |  | 50.0   | %
|Commercial Services   |  |                    | 560.1   |   |              |          | 485.0   |          |  |  | 15.5     |   |  |          | 214.3 |   |      |  | 38.3  |          |  |   | 187.8 |   |  |  | 38.7   |  
|PharmaBio Development |  |                    | 93.8    |   |              |          | 32.1    |          |  |  | 192.4    |   |  |          | (49.5 | ) |      |  | (52.7 | )        |  |   | (57.3 | ) |  |  | (178.4 | )
|Eliminations          |  |                    | (76.0   | ) |              |          | (41.6   | )        |  |  | (82.7    | ) |  |          |      |   |      |  |      |          |  |   |      |   |  |  |       |  
|                      |  |                    |         |   |              |          |         |          |  |  |          |   |  |          |       |   |      |  |       |          | 
|                      |  | $                  | 1,413.7 |   |              | $        | 1,167.0 |          |  |  | 21.1     | % |  | $        | 582.7 |   |      |  | 41.2  | %        |  | $ | 476.1 |   |  |  | 40.8   | %

Product Development Group.


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Commercial Services Group.




PharmaBio Development Group.




EBITDA.


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|                                                                                                       |  |               |        |   |               |   |        |               |  |   |               |   |  |   |          |  
|------------------------------------------------------------------------------------------------------ |  | ------------- | ------ | - | ------------- | - | ------ | ------------- |  | - | ------------- | - |  | - | -------- | -
|                                                                                                       |  | Three         |        |   | Three         |   |        |               |  |  
|                                                                                                       |  | Months        |        |   | Months        |   |        | Nine Months   |  |   | Nine Months   |  
|                                                                                                       |  | Ended         |        |   | Ended         |   |        | Ended         |  |   | Ended         |  
|                                                                                                       |  | September 30, |        |   | September 30, |   |        | September 30, |  |   | September 30, |  
|                                                                                                       |  | 2005          |        |   | 2004          |   |        | 2005          |  |   | 2004          |  
|                                                                                                       |  |               |        |   |               |   |        |               |  |   |               |  
|Consolidated:                                                                                          |  |               |        |   |               |   |        |               |  |   |               |   |  |   |          |  
|Net revenues                                                                                           |  | $             | 470.3  |   |               | $ | 396.5  |               |  | $ | 1,413.7       |   |  | $ | 1,167.0  |  
|Reimbursed service costs                                                                               |  |               | 141.1  |   |               |   | 91.6   |               |  |   | 377.4         |   |  |   | 251.6    |  
|                                                                                                       |  |               |        |   |               |   |        |               |  |   |               |  
|Gross revenues                                                                                         |  |               | 611.4  |   |               |   | 488.1  |               |  |   | 1,791.1       |   |  |   | 1,418.6  |  
|Costs of revenues                                                                                      |  |               | (441.5 | ) |               |   | (357.9 | )             |  |   | (1,285.5      | ) |  |   | (1,026.1 | )
|Selling, general and administrative expenses                                                           |  |               | (136.9 | ) |               |   | (147.1 | )             |  |   | (431.7        | ) |  |   | (433.6   | )
|Other (expense) income, net                                                                            |  |               | 2.2    |   |               |   | 0.2    |               |  |   | (0.4          | ) |  |   | 3.0      |  
|Restructuring                                                                                          |  |               | (3.4   | ) |               |   |       |               |  |   | (22.6         | ) |  |   |         |  
|Impairments                                                                                            |  |               |       |   |               |   |       |               |  |   | (6.6          | ) |  |   |         |  
|Transaction expenses, net                                                                              |  |               |       |   |               |   |       |               |  |   | 2.7           |   |  |   |         |  
|Gain on sale of portion of an investment in a subsidiary                                               |  |               |       |   |               |   |       |               |  |   |              |   |  |   | 24.7     |  
|Non-operating gain on change of interest transaction                                                   |  |               |       |   |               |   |       |               |  |   |              |   |  |   | 10.0     |  
|Depreciation and amortization                                                                          |  |               | 27.5   |   |               |   | 28.9   |               |  |   | 81.7          |   |  |   | 86.5     |  
|Equity in (losses) earnings of unconsolidated affiliates                                               |  |               | (0.8   | ) |               |   | (0.4   | )             |  |   | (1.4          | ) |  |   | (0.4     | )
|Minority interests                                                                                     |  |               | (1.4   | ) |               |   | (0.6   | )             |  |   | (3.5          | ) |  |   | (0.7     | )
|Depreciation and amortization of discontinued operations                                               |  |               | 0.8    |   |               |   | 4.7    |               |  |   | 8.8           |   |  |   | 16.2     |  
|Income (loss) from discontinued operation, before taxes                                                |  |               | 6.8    |   |               |   | (2.7   | )             |  |   | (57.0         | ) |  |   | 2.8      |  
|(Loss) gain on sale of discontinued operation, before taxes                                            |  |               | (6.5   | ) |               |   | 90.0   |               |  |   | (6.5          | ) |  |   | 90.0     |  
|Discontinued operations to non-controlling interest                                                    |  |               |       |   |               |   | (0.7   | )             |  |   | 0.4           |   |  |   | (0.9     | )
|                                                                                                       |  |               |        |   |               |   |        |               |  |   |               |  
|EBITDA                                                                                                 |  | $             | 58.3   |   |               | $ | 102.6  |               |  | $ | 69.6          |   |  | $ | 190.2    |  
|                                                                                                       |  |               |        |   |               |   |        |               |  |   |               |  
|Depreciation and amortization                                                                          |  |               | (28.3  | ) |               |   | (33.5  | )             |  |   | (90.5         | ) |  |   | (102.7   | )
|Interest expense, net                                                                                  |  |               | (16.3  | ) |               |   | (18.6  | )             |  |   | (54.0         | ) |  |   | (52.0    | )
|Income tax benefit (expense) benefit                                                                   |  |               | 10.2   |   |               |   | (19.2  | )             |  |   | 68.9          |   |  |   | (32.7    | )
|Depreciation, amortization and income taxes of discontinued
    operations to non-controlling interest |  |               |       |   |               |   | 0.3    |               |  |   | (0.1          | ) |  |   | 0.4      |  
|                                                                                                       |  |               |        |   |               |   |        |               |  |   |               |  
|Net income (loss)                                                                                      |  | $             | 23.9   |   |               | $ | 31.7   |               |  | $ | (6.2          | ) |  | $ | 3.2      |  
|                                                                                                       |  |               |        |   |               |   |        |               |  |   |               |  



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| |                                
| | -------------------------------
| | Liquidity and Capital Resources





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|                                               |  |                    |          |   |                   |   |          |  
|---------------------------------------------- |  | ------------------ | -------- | - | ----------------- | - | -------- | -
|                                               |  | September 30, 2005 |          |   | December 31, 2004 |  
|                                               |  |                    |          |   |                   |  
|Trade service accounts receivable, net         |  | $                  | 168,143  |   |                   | $ | 135,272  |  
|Unbilled services                              |  |                    | 160,670  |   |                   |   | 117,720  |  
|Unearned income                                |  |                    | (207,238 | ) |                   |   | (192,848 | )
|                                               |  |                    |          |   |                   |  
|Net service receivables outstanding            |  | $                  | 121,575  |   |                   | $ | 60,144   |  
|                                               |  |                    |          |   |                   |  
|Number of days of service revenues outstanding |  |                    | 19       |   |                   |   | 10       |  

















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sm






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|                                                                                           |  |              |        |  |      |   |         |      |  |   |         |  |  |      |         |  |      |   |         |            |  |   |        |  |  |   |         |  |  |   |           | 
|------------------------------------------------------------------------------------------ |  | ------------ | ------ |  | ---- | - | ------- | ---- |  | - | ------- |  |  | ---- | ------- |  | ---- | - | ------- | ---------- |  | - | ------ |  |  | - | ------- |  |  | - | --------- | 
|                                                                                           |  | October 1,   |        |  |      |   |         |      |  |   |         |  |  |      |         |  |     
|                                                                                           |  | 2005 through |        |  |      |   |         |      |  |   |         |  |  |      |         |  |     
|                                                                                           |  | December 31, |        |  |      |   |         |      |  |   |         |  |  |      |         |  |     
|                                                                                           |  | 2005         |        |  | 2006 |   |         | 2007 |  |   | 2008    |  |  | 2009 |         |  | 2010 |   |         | Thereafter |  |   | Total  | 
|                                                                                           |  |              |        |  |      |   |         |      |  |   |         |  |  |      |         |  |      |   |         |            |  |   |        | 
|Long-term debt, including interest                                                         |  | $            | 14,979 |  |      | $ | 58,794  |      |  | $ | 57,752  |  |  | $    | 57,280  |  |      | $ | 208,278 |            |  | $ | 70,310 |  |  | $ | 884,809 |  |  | $ | 1,352,202 | 
|Obligations held under capital leases                                                      |  |              | 4,268  |  |      |   | 16,160  |      |  |   | 6,257   |  |  |      | 727     |  |      |   | 447     |            |  |   | 227    |  |  |   | 67      |  |  |   | 28,153    | 
|Operating leases                                                                           |  |              | 18,161 |  |      |   | 58,980  |      |  |   | 35,127  |  |  |      | 21,910  |  |      |   | 12,449  |            |  |   | 6,063  |  |  |   | 10,950  |  |  |   | 163,640   | 
|Service agreements                                                                         |  |              | 7,013  |  |      |   | 1,596   |      |  |   | 84      |  |  |      | 64      |  |      |   | 3       |            |  |   | 1      |  |  |   |        |  |  |   | 8,761     | 
|Management fee agreement                                                                   |  |              | 938    |  |      |   | 3,750   |      |  |   | 3,750   |  |  |      | 3,750   |  |      |   |        |            |  |   |       |  |  |   |        |  |  |   | 12,188    | 
|PharmaBio funding commitments in various commercial rights and
    royalties:              |  |              |        |  |      |   |         |      |  |   |         |  |  |      |         |  |      |   |         |            |  |   |        |  |  |   |         |  |  |   |           | 
|Service commitments                                                                        |  |              | 33,368 |  |      |   | 125,903 |      |  |   | 99,362  |  |  |      | 89,749  |  |      |   | 69,738  |            |  |   |       |  |  |   |        |  |  |   | 418,120   | 
|PharmaBio funding commitments to purchase non- marketable equity
    securities and loans: |  |              |        |  |      |   |         |      |  |   |         |  |  |      |         |  |      |   |         |            |  |   |        |  |  |   |         |  |  |   |           | 
|Venture capital funds                                                                      |  |              | 2,200  |  |      |   | 9,342   |      |  |   | 2,093   |  |  |      | 1,200   |  |      |   | 570     |            |  |   |       |  |  |   |        |  |  |   | 15,405    | 
|Equity investments                                                                         |  |              | 1,023  |  |      |   | 1,135   |      |  |   |        |  |  |      |        |  |      |   |        |            |  |   |       |  |  |   |        |  |  |   | 2,158     | 
|                                                                                           |  |              |        |  |      |   |         |      |  |   |         |  |  |      |         |  |      |   |         |            |  |   |        | 
|Total                                                                                      |  | $            | 81,950 |  |      | $ | 275,660 |      |  | $ | 204,425 |  |  | $    | 174,680 |  |      | $ | 291,485 |            |  | $ | 76,601 |  |  | $ | 895,826 |  |  | $ | 2,000,627 | 
|                                                                                           |  |              |        |  |      |   |         |      |  |   |         |  |  |      |         |  |      |   |         |            |  |   |        | 









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| |                                     
| | ------------------------------------
| | Recently Issued Accounting Standards











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RISK FACTORS






| |                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our substantial debt could adversely affect our financial
    condition and prevent us from fulfilling our obligations under
    our discount notes and Quintiles senior subordinated
    notes.







|  |                                                                                                                                                                                                                                                                                                                       
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | increase our vulnerability to adverse general economic and
    industry conditions;                                                                                                                                                                                                                                   
| 
| | require us to dedicate a substantial portion of our cash flows
    from operations to payments on our indebtedness, thereby
    reducing the availability of our cash flows to fund working
    capital, investments, capital expenditures, research and
    development efforts and other general corporate purposes;
| 
| | limit our ability to make required payments under our existing
    contractual commitments;                                                                                                                                                                                                                           
| 
| | limit our flexibility in planning for, or reacting to, changes
    in our business and the industry in which we operate;                                                                                                                                                                                              
| 
| | place us at a competitive disadvantage compared to our
    competitors that have less debt;                                                                                                                                                                                                                           
| 
| | increase our exposure to rising interest rates because a portion
    of our borrowings is at variable interest rates; and                                                                                                                                                                                             
| 
| | limit our ability to borrow additional funds on terms that are
    satisfactory to us or at all.                                                                                                                                                                                                                      



| |                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The indenture governing the discount notes and our
    subsidiarys other debt obligations contain covenants that
    limit our flexibility and prevent us from taking certain
    actions.





|  |                                                           
|- | ----------------------------------------------------------
| | incur additional debt;                                    
| 
| | pay dividends on, redeem or repurchase capital stock;     
| 
| | issue capital stock of restricted subsidiaries;           
| 
| | make certain investments;                                 
| 
| | enter into certain types of transactions with affiliates; 
| 
| | engage in unrelated businesses;                           
| 
| | create liens; and                                         
| 
| | sell certain assets or merge with or into other companies.

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| |                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Despite our level of indebtedness, we and our parent
    companies are able to incur more debt and undertake additional
    obligations. Incurring such debt or undertaking such obligations
    could further exacerbate the risks to our financial
    condition.







| |                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may be required to pay substantial liquidated damages
    in connection with the recent monetization transaction with
    Royalty Sub in the event Quintiles breaches certain covenants in
    the Purchase and Sale Agreement relating to its performance
    under the Co-Promotion Agreement with Lilly.





| |                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Mitsuis ownership interest in our Japanese
    subsidiary could give rise to Mitsuis right to acquire our
    entire interest in our Japanese subsidiary or to require us to
    buy out Mitsuis interest.



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| |                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Changes in aggregate spending, research and development
    budgets and outsourcing trends in the pharmaceutical and
    biotechnology industries could adversely affect our operating
    results and growth rate.





| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | If we are unable to successfully develop and market
    potential new services, our growth could be adversely
    affected.





| |                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------
| | Operation of our information systems and evolution of the
    technology platform for our services pose risks to our
    business.





|  |                                                                                                                                           
|- | ------------------------------------------------------------------------------------------------------------------------------------------
| | invasion, disruption, impairment or failure of data centers,
    telecommunications facilities, or other key infrastructure
    platforms,
| 
| | failure or malfunction of or attacks on critical application
    systems or the hardware they run on, or                                  
| 
| | excessive costs, excessive delays or other deficiencies in
    systems development and deployment.                                        



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| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | We may not be able to derive the benefits we hope to
    achieve from Verispan, our joint venture with McKesson.





|  |                                                                                                                                                                                                           
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | its ability to obtain continuous access to de-identified
    healthcare data from third parties in sufficient quantities to
    support its informatics products;                                         
| 
| | its ability to process and use the volume of data received from
    a variety of data providers;                                                                                                          
| 
| | its ability to attract customers, besides us and McKesson, to
    purchase its products and services;                                                                                                     
| 
| | the risk of changes in healthcare information privacy laws and
    regulations that could create a risk of liability, increase the
    cost of Verispans business or limit its service
    offerings; and
| 
| | the risk that industry regulation may restrict Verispans
    ability to analyze and disseminate pharmaceutical and healthcare
    data.                                                                  







| |                                                                                           
| | ------------------------------------------------------------------------------------------
| | The potential loss or delay of our large contracts could
    adversely affect our results.



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| |                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Investments in our customers business or products
    and our related commercial rights strategies could have a
    negative impact on our financial performance.





| |                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------
| | Our rights to market and sell certain pharmaceutical
    products expose us to product risks typically associated with
    pharmaceutical companies.





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| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | If we lose the services of key personnel, our business
    could be adversely affected.





| |                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------
| | Our insurance may not cover all of our indemnification
    obligations and other liabilities associated with our
    operations.











| |                                                            
| | -----------------------------------------------------------
| | We may be exposed to additional income tax
    liabilities.



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| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Changes in government regulation could decrease the need
    for the services we provide.





| |                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Actions by government regulators or customers to limit the
    scope of prescription or withdraw approved products from the
    market could result in a loss of revenue.





| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Failure to comply with existing regulations could result
    in a loss of revenue.





| |                                                                                
| | -------------------------------------------------------------------------------
| | Our product development services could result in potential
    liability to us.



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| |                                                                              
| | -----------------------------------------------------------------------------
| | Our commercialization services could result in potential
    liability to us.





| |                                                                                             
| | --------------------------------------------------------------------------------------------
| | Exchange rate fluctuations may affect our results of
    operations and financial condition.





|  |                                                                                                                                                                                
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Foreign Currency Translation Risk. The revenue and
    expenses of our foreign operations are generally denominated in
    local currencies.                                   
| 
| | Foreign Currency Transaction Risk. Our service contracts
    may be denominated in a currency other than the currency in
    which we incur expenses related to such contracts.

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| |                                                                         
| | ------------------------------------------------------------------------
| | We face other risks in connection with our international
    operations.





|  |                                                                                                                                                                                                                                                                                                      
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | foreign countries could enact legislation or impose regulations
    or other restrictions which have an adverse effect on our
    ability to conduct business in that country;                                                                                                                       
| 
| | the regulatory or judicial authorities of foreign countries may
    not enforce legal rights and recognize business procedures in a
    manner to which we are accustomed or would reasonably expect;                                                                                                
| 
| | political changes and economic crises may lead to changes in the
    business environment in which we operate; and                                                                                                                                                                                   
| 
| | natural disasters or international conflict, including terrorist
    acts, could interrupt our services, endangering our personnel,
    causing project delays or loss of study material or results,
    with a significant negative impact on our financial condition
    and results of operations.



| |                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | New and proposed laws and regulations regarding
    confidentiality of patients information could result in
    increased risks of liability or increased cost to us or could
    limit our service offerings.



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| |                                                                           
| | --------------------------------------------------------------------------
| | We may be adversely affected by customer or therapeutic
    concentration.







| |                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we are unable to submit electronic records to the FDA
    according to FDA regulations, our ability to perform services
    for our customers which meet applicable regulatory requirements
    could be adversely affected.





| |                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------
| | Compliance with changing regulation of corporate
    governance and public disclosure may result in additional risks
    and expenses.



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|        |                                                              
|------- | -------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosure about Market
    Risk








|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures






Part II.     Other
Information







|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings



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|        |                                                                                
|------- | -------------------------------------------------------------------------------
|Item 2. | Unregistered Sales of Equity Securities and Use of
    Proceeds Not Applicable






|        |                                                    
|------- | ---------------------------------------------------
|Item 3. | Defaults upon Senior Securities Not
    Applicable






|        |                                                                        
|------- | -----------------------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
    Holders Not Applicable






|        |                                  
|------- | ---------------------------------
|Item 5. | Other Information Not Applicable






|        |         
|------- | --------
|Item 6. | Exhibits

|            |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----------- | -- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |    | Description
|            |    |            
|            | 2  | .01         |  | Purchase Agreement, dated July 18, 2005, by and among
    Aptuit, Inc., Quintiles Transnational Corp., Quintiles, Inc.,
    Quintiles Limited, Quintiles East Asia Private Limited, Early
    Development and Packaging Services USA, L.L.C., Early
    Development and Packaging Services (UK) Limited, and Quintiles
    Clinical Supplies Americas, Inc. (incorporated herein by
    reference to Exhibit 2.01 to the Current Report on
    Form 8-K of Quintiles Transnational Corp. dated
    July 18, 2005, as filed with the Securities and Exchange
    Commission on July 22, 2005).                                                        
|            | 2  | .02         |  | Amendment No. 1, dated August 25, 2005, to Purchase
    Agreement, dated July 18, 2005, by and among Quintiles
    Transnational Corp., Quintiles, Inc., Quintiles Limited,
    Quintiles East Asia Private Limited, Early Development and
    Packaging Services USA, L.L.C., Early Development and Packaging
    Services (UK) Limited, Quintiles Clinical Supplies Americas,
    Inc. and Aptuit, Inc. (incorporated herein by reference to
    Exhibit 2.02 to the Current Report on Form 8-K of
    Quintiles Transnational Corp. dated September 30, 2005, as
    filed with the Securities and Exchange Commission on
    October 6, 2005).   
|            | 2  | .03         |  | Amendment No. 2, dated September 30, 2005, to Purchase
    Agreement, dated July 18, 2005, by and among Quintiles
    Transnational Corp., Quintiles, Inc., Quintiles Limited,
    Quintiles East Asia Private Limited, Early Development and
    Packaging Services USA, L.L.C., Early Development and Packaging
    Services (UK) Limited, Quintiles Clinical Supplies Americas,
    Inc. and Aptuit, Inc. (incorporated herein by reference to
    Exhibit 2.03 to the Current Report on Form 8-K of
    Quintiles Transnational Corp. dated September 30, 2005, as
    filed with the Securities and Exchange Commission on
    October 6, 2005).
|            | 10 | .01         |  | Letter Agreement, dated August 22, 2005, between Quintiles
    Transnational Corp. and John D. Ratliff (incorporated herein by
    reference to Exhibit 10.01 to the Quarterly Report on
    Form 10-Q of Quintiles Transnational Corp. for the
    quarterly period ended September 30, 2005, as filed with
    the Securities and Exchange Commission on November 14,
    2005).                                                                                                                                                                                                                                                                   
|            | 31 | .01         |  | Certification Pursuant to Rule 13a-14(a)/15d-14(a), as
    Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|            | 31 | .02         |  | Certification Pursuant to Rule 13a-14(a)/15d-14(a), as
    Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|            | 32 | .01         |  | Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|            | 32 | .02         |  | Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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##### Table of Contents






SIGNATURES






| |                                           
| | ------------------------------------------
| | Pharma Services Intermediate Holding Corp.
| | Registrant                                
|
| | /s/ Dennis B. Gillings                    
| |                                           
| | Dennis B. Gillings,                       
| | Executive Chairman and                    
| | Chief Executive Officer                   





| |                             
| | ----------------------------
| | /s/ John D. Ratliff         
| |                             
| | John D. Ratliff,            
| | Executive Vice President and
| | Chief Financial Officer     



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##### Table of Contents






EXHIBIT INDEX


|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- | -- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    | Description
|        |    |            
|        | 2  | .01         |  | Purchase Agreement, dated July 18, 2005, by and among
    Aptuit, Inc., Quintiles Transnational Corp., Quintiles, Inc.,
    Quintiles Limited, Quintiles East Asia Private Limited, Early
    Development and Packaging Services USA, L.L.C., Early
    Development and Packaging Services (UK) Limited and Quintiles
    Clinical Supplies Americas, Inc. (incorporated herein by
    reference to Exhibit 2.01 to the Current Report on
    Form 8-K of Quintiles Transnational Corp. dated
    July 18, 2005, as filed with the Securities and Exchange
    Commission on July 22, 2005).                                                         
|        | 2  | .02         |  | Amendment No. 1, dated August 25, 2005, to Purchase
    Agreement, dated July 18, 2005, by and among Quintiles
    Transnational Corp., Quintiles, Inc., Quintiles Limited,
    Quintiles East Asia Private Limited, Early Development and
    Packaging Services USA, L.L.C., Early Development and Packaging
    Services (UK) Limited, Quintiles Clinical Supplies Americas,
    Inc. and Aptuit, Inc. (incorporated herein by reference to
    Exhibit 2.02 to the Current Report on Form 8-K of
    Quintiles Transnational Corp. dated September 30, 2005, as
    filed with the Securities and Exchange Commission on
    October 6, 2005).   
|        | 2  | .03         |  | Amendment No. 2, dated September 30, 2005, to Purchase
    Agreement, dated July 18, 2005, by and among Quintiles
    Transnational Corp., Quintiles, Inc., Quintiles Limited,
    Quintiles East Asia Private Limited, Early Development and
    Packaging Services USA, L.L.C., Early Development and Packaging
    Services (UK) Limited, Quintiles Clinical Supplies Americas,
    Inc. and Aptuit, Inc. (incorporated herein by reference to
    Exhibit 2.03 to the Current Report on Form 8-K of
    Quintiles Transnational Corp. dated September 30, 2005, as
    filed with the Securities and Exchange Commission on
    October 6, 2005).
|        | 10 | .01         |  | Letter Agreement, dated August 22, 2005, between Quintiles
    Transnational Corp. and John D. Ratliff (incorporated herein by
    reference to Exhibit 10.01 to the Quarterly Report on
    Form 10-Q of Quintiles Transnational Corp. for the
    quarterly period ended September 30, 2005, as filed with
    the Securities and Exchange Commission on November 14,
    2005).                                                                                                                                                                                                                                                                   
|        | 31 | .01         |  | Certification Pursuant to Rule 13a-14(a)/15d-14(a), as
    Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 31 | .02         |  | Certification Pursuant to Rule 13a-14(a)/15d-14(a), as
    Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 32 | .01         |  | Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 32 | .02         |  | Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

66