<PAGE>


                         SECURITIES AND EXCHANGE COMMISSION

                               Washington, D.C. 20549

                                    FORM 10-QSB


[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the quarterly period ended      March 31, 1997    
                                    -----------------------
                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
    For the transition period from -------------- to -----------------




Commission file number       1-7335     
                       -----------------

                              LEE PHARMACEUTICALS
-------------------------------------------------------------------------------
      (Exact name of small business issuer as specified in its charter)

             California                             95-2680312
 -------------------------------                ------------------
 (State or other jurisdiction of                 (I.R.S. Employer 
  incorporation or organization)                Identification No.)

             1444 Santa Anita Avenue, South El Monte, California 91733
-------------------------------------------------------------------------------
                     (Address of principal executive offices)
                                    (Zip Code)

                                  (818) 442-3141
-------------------------------------------------------------------------------
                 (Registrant's telephone number, including area code)

-------------------------------------------------------------------------------
                                       N / A                                   
-------------------------------------------------------------------------------
                (Former name, former address and former fiscal year, 
                          if changed since last report)

    Check whether the registrant (1) filed all reports required to be filed 
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 
preceding 12 months (or for such shorter period that the registrant was 
required to file such reports), and (2) has been subject to such filing 
requirements for the past 90 days. Yes   X     No
                                       -----      -----
    As of March 31, 1997, there were outstanding 4,135,162 shares of common 
stock of the registrant.

    Transitional Small Business Disclosure Format (check one):
     Yes       No   X  
         -----    -----


<PAGE>
                                                                     Form 10-QSB
                                  LEE PHARMACEUTICALS 
                                     BALANCE SHEET
                                     MARCH 31, 1997
                                 (DOLLARS IN THOUSANDS)
                                      (UNAUDITED)

                                        ASSETS

Cash                                                                     $   14
Accounts and notes receivable (net of allowances: $340)                   1,106

Due from related party                                                       94

Inventories:
    Raw materials                                        $1,589
    Work in process                                         277
    Finished goods                                          657
                                                         ------
    Total inventories                                                     2,523

Other current assets                                                      1,126
                                                                         ------
    Total current assets                                                  4,863

    Property, plant and equipment (less accumulated 
     depreciation and amortization: $6,036)                                 503

    Goodwill and other assets (net of
     accumulated amortization: $4,061)                                    3,297
                                                                         ------
    TOTAL                                                                $8,663
                                                                         ------
                                                                         ------

                          See notes to financial statements.

                                       2

<PAGE>
                                                                     Form 10-QSB


                                 LEE PHARMACEUTICALS 
                                    BALANCE SHEET
                                    MARCH 31, 1997
                                (DOLLARS IN THOUSANDS)
                                     (UNAUDITED)

                                     LIABILITIES

Bank overdraft                                                           $   74
Note payable to bank                                                          8
Notes payable, other                                                        982
Current portion - royalty agreements                                        660
Accounts payable                                                          1,391
Other accrued liabilities                                                 1,020
Due to related parties                                                      361
Deferred income                                                              65
                                                                         ------
    Total current liabilities                                             4,561

Long-term notes payable to related parties                                3,320

Long-term notes payable, other                                            1,003

Long-term notes payable to bank                                             316

Long-term payable-royalty agreements, less current portion $660             451

Deferred income                                                             174
                                                                         ------
    Total liabilities                                                     9,825
                                                                         ------
    COMMITMENTS AND CONTINGENCIES

    STOCKHOLDERS' DEFICIENCY
    
Common stock, $.10 par value; authorized, 7,500,000 shares;
    issued and outstanding, 4,135,162 shares                                413

Additional paid-in capital                                                4,222

Accumulated deficit                                                      (5,797)
                                                                         ------

    Total stockholders' deficiency                                       (1,162)
                                                                         ------
    TOTAL                                                               $ 8,663
                                                                         ------
                                                                         ------
                       See notes to financial statements.

                                       3

<PAGE>
                                                                     Form 10-QSB


                                 LEE PHARMACEUTICALS

                               STATEMENTS OF OPERATIONS
                   (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                        For the Three Months     For the Six Months
                                           Ended March 31,         Ended March 31,

                                          1997        1996         1997       1996
                                      ----------- -----------  ----------- -----------
                                      (UNAUDITED) (UNAUDITED)  (UNAUDITED) (UNAUDITED)
<S>                                     <C>         <C>          <C>         <C>
Gross revenues                          $2,453      $2,170       $4,445      $4,140
Less:  Sales returns                      (126)       (380)        (345)       (547)
       Cash discounts and other            (38)        (12)         (65)        (30)
                                        ------       -----       ------      ------

Net revenues                             2,289       1,778        4,035       3,563
                                        ------       -----       ------      ------

Costs and expenses:

    Cost of sales                          997         744        1,764       1,473
    Selling and advertising expense        826         927        1,539       1,701
    General and administrative expense     458         439          800         786
                                        ------       -----       ------      ------
Total costs and expenses                 2,281       2,110        4,103       3,960
                                        ------       -----       ------      ------

Income (loss) from operations                8        (332)         (68)       (397)

Other (loss) income                        (13)         22           46          38
                                        ------       -----       ------      ------

Net loss                                  $ (5)      $(310)        $(22)      $(359)
                                        ------       -----       ------      ------
                                        ------       -----       ------      ------
Per share:

  Net loss                                $.00       $(.08)        $.00       $(.09)
                                        ------       -----       ------      ------
                                        ------       -----       ------      ------

                              See notes to financial statements.

</TABLE>

                                       4

<PAGE>
                                                                     Form 10-QSB

                                 LEE PHARMACEUTICALS 
                               STATEMENTS OF CASH FLOWS
                                (DOLLARS IN THOUSANDS)

                                                         FOR THE SIX MONTHS 
                                                           ENDED MARCH 31,

                                                         1997           1996
                                                     -----------    -----------
                                                     (UNAUDITED)    (UNAUDITED)

Cash flows from operating activities:
    Net (loss)                                         $  (22)         $ (359)
    Adjustments to reconcile net loss to net
     cash provided by operating activities:
    Depreciation                                           54              93
    Amortization of intangibles                           684             465
    (Decrease) in deferred income                         (33)            (33)
    (Gain) on disposal of property, plant,
     and equipment                                        (13)             (9)
Change in operating assets and liabilities:
    Decrease (increase) in accounts receivable              6            (153)
    (Increase) in due from related party                  (21)              -
    (Increase) in inventories                            (225)            (21)
    Decrease (increase) in other current assets            24              (4)
    (Decrease) in accounts payable                       (253)           (238)
    Increase in accounts payable related party            (57)            (87)
    Increase in notes payable, other                      273             172
    Increase in other accrued liabilities                 421             312
    (Decrease) in accrued royalties                       (76)              -
                                                       ------          ------
    Total adjustments                                     784             497
                                                       ------          ------
      Net cash provided by operating activities           762             138
                                                       ------          ------

Cash flows from investing activities:
    Additions to property, plant, and equipment           (76)            (11)
    Proceeds from sale of equipment                        13               9
    Acquisition of product brands                      (1,092)           (114)
                                                       ------          ------
      Net cash (used in) investing activities          (1,155)           (116)
                                                       ------          ------

Cash flows from financing activities:
    (Payments on) bank loans                              (61)              -
    Proceeds from notes payable to related party           80              22
    Proceeds from notes payable, other                    703               8
    (Decrease) in long-term royalty agreements           (330)           (330)
    Increase in bank overdraft                              2             168
                                                       ------          ------
      Net cash provided by (used in) financing 
       activities                                         394            (132)
                                                       ------          ------

Net Increase (decrease) in cash                             1            (110)
Cash, beginning of year                                    13             123
                                                       ------          ------
Cash, end of period                                    $   14          $   13
                                                       ------          ------
                                                       ------          ------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the year for:
    Interest                                           $  258          $  112
                                                       ------          ------
                                                       ------          ------
Acquisition of product brands:
    Fair value of assets acquired                       1,497             114
    Fair value of liabilities incurred                 $  405               -
      Net cash payments                                $1,092             114
                                                       ------          ------
                                                       ------          ------
                          See notes to financial statements.

                                       5

<PAGE>
                                                                     Form 10-QSB

    NOTES TO FINANCIAL INFORMATION
    
1.  Basis of presentation:

    The accompanying balance sheet as of March 31, 1997, and the statements of
    operations and cash flows for the periods ended March 31, 1997, and 1996,
    have not been audited by independent accountants but reflect all
    adjustments, consisting of any normal recurring adjustments, which are, in
    the opinion of management, necessary to a fair statement of the results for
    such periods.  The results of operations for the six months ended March 31,
    1997, are not necessarily indicative of results to be expected for the year
    ending September 30, 1997.

    Certain information and footnote disclosure normally included in financial
    statements prepared in accordance with generally accepted accounting
    principles have been omitted pursuant to the requirements of the Securities
    and Exchange Commission, although the Company believes that the disclosures
    included in these financial statements are adequate to make the information
    not misleading.

    The financial statements should be read in conjunction with the financial
    statements and notes thereto included in the Company's annual report on
    Form 10-KSB for the fiscal year ended September 30, 1996.

    The Company is involved in various matters involving environmental cleanup
    issues.  See "Item 2. Management's Discussion and Analysis or Plan of
    Operations" and Note 10 of Notes to Financial Statements included in the
    Company's Form 10-KSB for the fiscal year ended September 30, 1996.  The
    ultimate outcome of these matters cannot presently be determined. 
    Environmental expenditures that relate to an existing condition caused by
    past operations, and which do not contribute to current or future revenue
    generation, are expensed.  The Company's proportionate share of the
    liabilities are recorded when environmental remediation and/or cleanups are
    probable, and the costs can be reasonably estimated.

2.  Net loss per share:

    Net loss per share is based on the weighted average number of shares of
    common stock outstanding during the periods presented.  Common stock
    equivalents (common stock options) are not included in these calculations
    where their effect on net loss per share is anti-dilutive.  The weighted
    average number of shares was 4,135,162 for all periods presented.

3.  Note payable to bank:

    Effective April 26, 1996, the Company renewed its real estate loan with the
    bank.  The note payable to the bank, secured by deed on land and building,
    requires a monthly payment of $4,200, including interest at Bank of
    America's base rate plus 4%, maturing March 2001.  At March 31, 1997, the
    interest rate was 12.5%.  The note is guaranteed by the former Chairman of
    the Company and the Company's President.

4.  Line of credit:

    In May 1996, the Company obtained $1,000,000 of financing, in the form of a
    revolving credit facility.  The financing is secured by accounts
    receivable, equipment, inventories and certain other assets.  It is a two
    year agreement, maturing May 1998, and will automatically continue
    thereafter until either party terminates on a 90 day prior written notice. 
    The loan and security agreement is subject to a minimum interest of $3,000
    per month. The loan bears interest at Bank of America's prime plus 8%.

5.  Acquisitions:

    On October 16, 1996, the Company purchased certain assets from Lactona
    Corporation for $175,000 plus inventory valued at approximately $30,000. 
    The Company remitted $75,000 at closing.  Payments of $3,000, including
    interest, are due the 16th of each month starting November 1996 and ending
    September 1999 and any remaining amount on October 16, 1999.  Interest is
    to be computed at the highest prime rate during the payment period. The 
    highest prime rate was 8.25% on March 16, 1997.

                                       6

<PAGE>
                                                                     Form 10-QSB


    On October 21, 1996, the Company purchased certain assets from Roberts
    Laboratories, Inc. for $1,168,089.  The Company remitted $100,000 at
    closing.  Payments of $19,752 are due on the first of each month starting
    November 1, 1996, and ending on October 1, 2000.  Any remaining unpaid
    balance is due on November 1, 2000.  Interest shall be paid at the highest
    prime rate during the preceding month.

ITEM 2.

    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

    MATERIAL CHANGES IN RESULTS OF OPERATIONS
    THREE MONTHS ENDED MARCH 31, 1997, AND MARCH 31, 1996

    Gross revenues for the three months ended March 31, 1997, were $2,453,000, 
    an increase of approximately $283,000 or 13% from the comparable three 
    months period ended March 31, 1996. The increase in gross revenues was due 
    to the volume generated from the newly acquired brands such as; 
    Aquafilter-R-, two oral care brands, and 28 items including ointments, 
    nutritional supplements, vitamins, analgesics, and various over-the-counter 
    brands. These acquisitions are discussed in Note 5 above. The above 
    increased sales volume was partially offset by reduced sales revenues of 
    the nail category products. The Company's gross revenues from nail products
    have continued to decline, but at a lesser rate than reported in the prior 
    quarterly Form 10-QSB filings.  The decline is primarily due to customers 
    discontinuance of several of the nail extender SKU's (stock keeping units). 
    In addition, revenues from the Company's line of depilatories were lower 
    in the current quarter as compared to the quarter ended March 31, 1996. 

    Net revenues increased approximately $511,000 or 29% for the three months 
    ended March 31, 1997, as compared to the three months ended March 31, 1996. 
    The change in net revenues was due to the increase in gross revenues 
    discussed above.  In addition, the sales returns declined $254,000 or 67% 
    when comparing the three months ended March 31, 1997, and 1996.  The lower 
    sales returns during the current quarter was the result of fewer returns 
    related to the nail extender category.  As discussed earlier the nail 
    products sales volume has continued to decline, thereby resulting in lesser 
    returns of the nail extender category.  The Company's retail customers have 
    continued to change their planograms, where they are stocking fewer SKU's 
    of the Company's products.

    Cost of sales was 41% of gross revenues for the quarter ended March 31, 
    1997, compared to 34% for the quarter ended March 31, 1996.  The percentage 
    was slightly higher due to the non-recurring start-up costs associated with 
    the internal production of the product lines associated with the recent 
    brand acquisitions previously discussed, non-recurring freight charges 
    related to the transporting of inventory and equipment related to acquired 
    brands, and an increase in manufacturing labor dollars as a result of two 
    (September 1996 and March 1997) hourly rate increases in the minimum wages.

    Selling and advertising expenses declined $101,000 or 11% when comparing
    the three months ended March 31, 1997, with the three months ended March
    31, 1996.  The reduction of expenses were mainly due to the following
    factors; (1) lower salary and wages and related fringe benefits, (2)
    reduced commission expense due to a decrease in the commission rate and a
    structural change in responsibility from actual geography (geographic
    territory) to specific accounts in that geography, and (3) a non-recurring
    "special allowance" which was awarded to a key customer in fiscal 1996. 
    The previously mentioned reduced expenses were slightly offset by an
    increase in amortization costs because of the recent acquisitions; one
    brand in late September 1996 and two brands in October 1996.

    General and administrative expenses increased when comparing the quarters
    ended March 31, 1997, and 1996.  The nominal increase was approximately
    $19,000 or 4%.

    MATERIAL CHANGES IN RESULTS OF OPERATIONS
    SIX MONTHS ENDED MARCH 31, 1997, AND MARCH 31, 1996

    Gross revenues for the six months ended March 31, 1997, were $4,445,000, an
    increase of approximately $305,000 or 7% from the comparable six months
    period ended March 31, 1996.  The increase in gross revenues was due to the
    volume generated from the newly acquired brands such 

                                       7

<PAGE>
                                                                     Form 10-QSB


    as; Aquafilter-Registered Trademark-, two oral care brands, and 28 items
    including ointments, nutritional supplements, vitamins, analgesics, and
    various over-the-counter brands.  The above increased sales volume was
    partially offset by reduced sales revenues of the nail category products. 
    This reduction of nail extender products has continued to decline over the
    past years.  Net revenues for the six months ended March 31, 1997, were
    $4,035,000, an increase of $472,000 or 13%, from the comparable six months
    period ended March 31, 1996.  The reasons for lowered sales returns during
    the six months period ended March 31, 1997, versus March 31, 1996, are the
    same as explained above regarding material changes of the three months
    period ended March 31, 1997, and 1996.

    Cost of sales as a percentage of gross revenues for the six months ended
    March 31, 1997, as compared to the six months period ended March 31, 1996,
    was 40% versus 36% respectively.  The higher cost of sales percentage for
    the six months ended March 31, 1997, compared to March 31, 1996, is due to
    the reasons explained above regarding the material changes of the three
    months period ended March 31, 1997, and 1996.

    Selling and advertising expenses decreased $162,000 or 10% when comparing
    the six months ended March 31, 1997, with the six months ended March 31,
    1996.  The lower expenses were basically due to; (1) lower salary and wages
    and related fringe benefits, (2) reduced commission expense due to a
    lowered commission rate and changes in geographic territory
    responsibilities of the sales representatives, and (3) a non-recurring
    "special allowance" which was awarded to a key customer in fiscal 1996. 
    These reduced expenditures were slightly offset by an increase in
    amortization costs as a result of recent brand acquisitions; one in late
    September 1996 and two brands in October 1996.

    General administrative expenses increased when comparing the quarters ended
    March 31, 1997, and 1996.  The nominal increase was approximately $14,000
    or 2%

    LIQUIDITY AND CAPITAL RESOURCES

    During the three months ended March 31, 1997, working capital declined to
    $302,000 from $395,000 at September 30, 1996.  The ratio of current assets
    to current liabilities was 1.07 to 1 at March 31, 1997, and 1.09 to 1 at
    September 30, 1996.  The decrease in working capital of $93,000 was
    primarily due to an increase in current liabilities of $310,000 related to
    the accrued liabilities of the unpaid product brand acquisitions.

    The Company has an accumulated deficit of $5,797,000.  The Company's
    recurring losses from operations and inability to generate sufficient cash
    flow from normal operations to meet its obligations as they came due raise
    substantial doubt about the Company's ability to continue as a going
    concern.  The Company's ability to continue in existence is dependent upon
    future developments, including obtaining additional financing and achieving
    a level of profitable operations sufficient to enable it to meet its
    obligations as they become due.

    ENVIRONMENTAL MATTERS

    The Company owns a manufacturing facility located in South El Monte,
    California.  The California Regional Water Quality Control Board (The
    "RWQCB"), has alleged that the soil and shallow groundwater at the site are
    contaminated.  On August 12, 1991, the Board issued a "Cleanup and
    Abatement Order" directing the Company to conduct further testing and
    cleanup the site.  The Company did not complete the testing, and in June,
    1992, the RWQCB requested that the EPA evaluate the contamination and take
    appropriate action.  At the EPA's request, Ecology & Environment, Inc.
    conducted an investigation of soil and groundwater on the Company's
    property.  Ecology & Environment Inc.'s Final Site Assessment Report, which
    was submitted to the EPA in June, 1994, did not rule out the possibility
    that some of the contamination originated onsite, and resulted from either
    past or current operations on the property.  While the Company may be
    liable for all or part of the costs of remediating the contamination on its
    property, the remediation cost is not known at this time.  The EPA has not
    taken any further action in this matter, but may do so in the future.

                                       8

<PAGE>
                                                                     Form 10-QSB


    The Company and nearby property owners are in the process of engaging a
    consultant to perform a site investigation with respect to soil and shallow
    groundwater contamination.  Based upon proposals received to date, the
    Company currently estimates the cost to perform the site investigation to
    be $175,000.  Accordingly, while recognizing it may be jointly and
    severally liable for the entire cost, the financial statements as of
    September 30, 1995, recognized the proportionate amount ($87,500) which the
    Company believes is its liability for a site investigation.

    The tenants of nearby properties upgradient have sued the Company alleging
    that hazardous materials from the Company's property caused contamination
    on the properties leased by the tenants.  The case name is DEL RAY
    INDUSTRIAL ENTERPRISES, INC. v. ROBERT MALONE, ET AL., Los Angeles County
    Superior Court, Northwest District, commenced August 21, 1991.  In this
    action, the plaintiff alleges environmental contamination by defendants of
    its property, and seeks a court order preventing further contamination and
    monetary damages.  The Company does not believe there is any basis for the
    allegations and is vigorously defending the lawsuit.

    The Company's South El Monte manufacturing facility is also located over a
    large area of possibly contaminated regional groundwater which is part of
    the San Gabriel Valley Superfund site.  The Company has been notified that
    it is a potentially responsible party ("PRP") for the contamination.  The
    cost of cleanup of the groundwater is not known at this time.  In September
    1992, EPA announced that the levels of contamination in the Whittier
    Narrows area of the Superfund site were sufficiently low and that it was
    not planning a cleanup at this time, but rather would continue to monitor
    the groundwater for an indefinite period.  The Company's property is
    adjacent to the Whittier Narrows area.  Except as described above, it is
    not clear what action the EPA will take with respect to the Company's
    property.

    In August 1995, the Company was informed that the EPA entered into an
    Administrative Order on Consent with Cardinal Industrial Finishes
    ("Cardinal") for a PRP lead remedial investigation and feasibility study
    (the "Study") which, the EPA states, will both characterize the extent of
    groundwater contamination in South El Monte and analyze alternatives to
    control the spread of contamination.  The Company and others have entered
    into the South El Monte Operable Unit Site Participation Agreement with
    Cardinal pursuant to which, among other things, Cardinal will contract with
    an environmental firm to conduct the Study.  The Study is anticipated to
    take eighteen to twenty-four months.  The Company's share of the cost of
    the Study is currently $15,000 and was accrued for in the financial
    statements as of September 30, 1995.

    The City of South El Monte, the city in which the Company has it's
    manufacturing facility, is located in the San Gabriel Valley.  The San
    Gabriel Valley has been declared a Superfund site.  The 1995 Water Quality
    Control Plan issued by the California Regional Water Quality Control Board
    states that the primary  groundwater  basin  pollutants  in  the  San 
    Gabriel Valley  are volatile organic compounds from industry, nitrates from
    subsurface sewage disposal and past agricultural activities.  In addition,
    the Plan noted that hundreds of underground storage tanks leaking gasoline
    and other toxic chemicals have existed in the San Gabriel Valley.  The
    California Department of Toxic Substance Control have declared large areas
    of the San Gabriel Valley to be environmentally hazardous and subject to
    cleanup work.

    The EPA announced it is studying the possibility that, although the vadose 
    soil and groundwater, while presenting cleanup problems, there may be a 
    contamination by DNAPs (dense non-aqueous phase liquids), i.e., "sinkers", 
    usually chlorinated organic cleaning solvents.  The EPA has proposed to 
    drill six "deep wells" throughout the City of South El Monte at an 
    estimated cost of $1,400,000.  The EPA is conferring with SEMPOA (South El 
    Monte Property Owners Association) as to cost sharing on this project. 
    SEMPOA has obtained much lower preliminary cost estimates.  The outcome 
    cost and exact scope of this are unclear at this time.

    The Securities and Exchange Commission has issued a formal order of
    investigation concerning certain matters, including the Company's
    environmental liabilities.  The Company is cooperating with the
    investigation.

                                       9

<PAGE>
                                                                     Form 10-QSB


    The Company has been seeking reimbursement of cleanup costs from its
    insurance carriers.  One carrier has paid certain amounts towards cleanup
    costs that may be incurred and legal fees actually incurred.  The Company
    continues to seek reimbursement from other carriers, although no such
    payments have been received or agreed to, and there can be no assurances
    that any such payments will be received.  Some carriers have denied
    liability for costs, based on their review and analysis of the insurance
    policies, the history of the site, the nature of the claims, and current
    court decisions in such cases.

    Currently, the Company does not have any reliable information on the likely
    cleanup costs of its property.  Thus, it cannot determine the extent, if
    any, of its share of liability for any such cleanup costs.

                                       10

<PAGE>
                                                                     Form 10-QSB


                             PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The information set forth under Part I, Item 2, "Management's Discussion and
Analysis or Plan of Operations - Environmental Matters" is incorporated herein
by reference.  See also "Legal Proceedings" in the Company's Form 10-KSB for the
fiscal year ended September 30, 1996.

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

The Annual Meeting of Stockholders of the registrant occurred on March 11, 
1997. At that meeting, the following directors were elected:

                                          VOTES
                                 ----------------------
    DIRECTOR                      FOR         WITHHELD
    --------                     ------    ------------
    Dr. Henry L. Lee            3,019,883     267,222
    Ronald G. Lee               3,017,103     270,002
    William M. Caldwell IV      3,019,503     267,602


                                                       VOTES
                                          ----------------------------------
                                             FOR        AGAINST    ABSTAIN
                                           ---------    --------    --------
The appointment of George Brenner, CPA
  as independent auditor                   3,083,573     145,587     57,945

To approve the 1997 Employee Incentive
  Stock Option Plan                        1,107,122     332,204      43,305

To approve the 1997 Stock Option Plan
  for Outside Directors                    1,280,072     361,925      56,233

ITEM 6.  EXHIBITS

The following exhibits have previously been filed by the Company:

         3.1  -    Articles of Incorporation, as amended  (1)

         3.4  -    By-laws, as amended December 20, 1977  (2)

         3.5  -    Amendment of By-laws effective March 14, 1978  (2)

         3.6  -    Amendment to By-laws effective November 1, 1980  (3)

         27   -    Financial Data Schedule

         (1)  Filed as an Exhibit of the same number with the Company's Form
              S-1 Registration Statement filed with the Securities
              and Exchange Commission on February 5, 1973, (Registrant No. 
              2-47005), and incorporated herein by reference.

         (2)  Filed as Exhibits 3.4 and 3.5 with the Company's Form 10-K
              Annual Report for the fiscal year ended September 30, 1978, 
              filed with the Securities and Exchange Commission and 
              incorporated herein by reference.

         (3)  Filed as an Exhibit of the same number with the Company's Form
              10-K Annual Report for the fiscal year ended September 30, 1979,
              filed with the Securities and Exchange Commission and 
              incorporated herein by reference.

                                       11


<PAGE>
                                                                     Form 10-QSB

                                     SIGNATURES

In accordance with the requirements of the Securities Exchange Acts of 1934,
the registrant has caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                                  LEE PHARMACEUTICALS
                                                  -------------------
                                                      (Registrant)


Date:    May 14, 1997                                 RONALD G. LEE
         ------------                            ----------------------
                                                      Ronald G. Lee
                                                        President



Date:    May 14, 1997                               MICHAEL L. AGRESTI
         ------------                             ---------------------
                                                    Michael L. Agresti
                                                 Vice President - Finance

                                       12