UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 205494

                            ------------------------
                                    FORM 10-K
               (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the fiscal year ended: December 31, 1999
                                       OR
            ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                         COMMISSION FILE NUMBER 1-10173
                            ------------------------
                       HUNTINGDON LIFE SCIENCES GROUP plc
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                                ENGLAND AND WALES
                 (JURISDICTION OF INCORPORATION OR ORGANIZATION)
     WOOLLEY ROAD, ALCONBURY, HUNTINGDON, PE17 5HS, CAMBRIDGESHIRE, ENGLAND
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: +44 1480 892000
           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      None
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                              NAME OF EACH EXCHANGE
                     TITLE OF EACH CLASS ON WHICH REGISTERED
               -------------------- ------------------------------
   Ordinary Shares, par value 5 pence per share, New York Stock Exchange, Inc.
                    in the form of American Depositary Shares
                   represented by American Depositary Receipts

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or Section  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 report),  and (2) has been subject to such
filing requirements for the past 90 days.

                    Yes X                     No __

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment of this Form 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates of the
Registrant at February 29, 2000 was approximately (pound)15,345,267.

Indicate the number of outstanding shares of each of the Registrant's classes of
common stock as of the latest practicable date

Ordinary Shares of 5 pence each as at February 29, 2000       291,010,294


<PAGE>


                               TABLE OF CONTENTS

ITEM                                                                    PAGE

                                     PART I

 1.      Business ...........................................................2

 2.      Properties .........................................................9

 3.      Legal Proceedings .................................................10

 4.      Submission of Matters to a Vote of Security Holders................10

                                     PART II

 5.      Market For Registrant's Common Equity and Related
         Stockholder Matters................................................11

 6.      Selected Financial Data ...........................................12

 7.      Management's Discussion and Analysis of Financial Condition
         and Results of Operations .........................................13

 7A.     Quantative and Qualitative Disclosures About Market Risk...........18

 8.      Financial Statements and Supplementary Data .......................20

 9.      Changes in and disagreements with Accountants on Accounting
         and Financial  Disclosure......................................... 45

                                    PART III

10.      Directors and Executive Officers of the Registrant.................46

11.      Executive Compensation ............................................47

12.      Security Ownership of Certain Beneficial Owners and Management.....53

13.      Certain Relationships and Related Transactions ....................54

                                     PART IV

14.      Exhibits, Financial Statements, Schedules and Reports
         on Form 8-K........................................................55

<PAGE>


PART I

ITEM 1.  BUSINESS

INTRODUCTION

Huntingdon Life Sciences Group plc (the "Company" or "Huntingdon") is one of the
world's  leading  Contract  Research  Organisations  (CROs).  The Company is the
second largest  independent  worldwide provider of pre-clinical and non-clinical
biological  safety  evaluation  research services to most of the world's leading
pharmaceutical,  biotechnology,  agrochemical and industrial chemical companies.
65% of the  Company's  orders  are in  support  of early  stage  development  of
promising new pharmaceutical  and biotech compounds.  The purpose of this safety
evaluation is to identify risks to humans, animals or the environment, resulting
from the use or  manufacture  of a wide range of  chemicals  that are  essential
components of these industries products.  Huntingdon's  services are designed to
meet the regulatory requirements of governments around the world.
The  Company is based in the  United  Kingdom,  with  facilities  in  Huntingdon
(Cambridgeshire)  and Eye (Suffolk),  England, and the Princeton Research Centre
in New Jersey (USA).


GENERAL DEVELOPMENT OF THE BUSINESS

Huntingdon was originally  incorporated in the UK in 1951 as a limited liability
company  to  provide  contract  research  services  to  the  UK  pharmaceutical,
agrochemical  and food  industries.  In 1964 it was  acquired by the US company,
Becton Dickinson. Over the next 20 years it successfully established itself as a
leading  CRO with  business  across a number  of  sectors  and with a number  of
leading  pharmaceutical and agrochemical  companies.  In April 1983, the Company
was re-registered as a public limited company with the name "Huntingdon Research
Centre  plc".  In June 1985,  the  Company's  name was changed  from  Huntingdon
Research Centre plc to Huntingdon International Holdings plc.

In 1988 the Company was floated on the London  Stock  Exchange and in early 1989
it obtained a listing on the New York Stock Exchange.

In order to diversify its  activities,  Huntingdon  entered the  engineering and
environmental  services business in the 1980s through acquisition,  primarily in
the US.  Through  HIH USA Inc and  its  subsidiary  Huntingdon  Engineering  and
Environmental   Services   Inc.   the  Company   provided   construction-related
engineering  services,  environmental  services,  consultancy and testing in the
USA. This business grew so that by 1990 it was contributing 70% of total Company
revenues of (pound)104 million, but only half the operating profit.

In 1991 the Company began operating a subsidiary,  Leicester  Clinical  Research
Centre Ltd. to conduct  Phase I clinical  trials,  so  providing a wide range of
biological  and  psychological  assessment  procedures  involving  healthy human
volunteers.  A further  diversification  was the  acquisition in 1991 of Travers
Morgan  Limited.  After  acquisition  the Company  began to provide  engineering
consultancy  services  outside  the USA in the  areas  of civil  and  structural
engineering,  consultation  on the planning and  development  of  transportation
systems,  project  management and  environmental  consultancy.  This  investment
proved to be  unsuccessful  and,  in December  1994,  the High Court of Justice,
Chancery  Division,  Companies  Court granted  Travers Morgan an  administrative
order under the UK Insolvency Act 1986. Joint  administrators  were appointed to
Travers  Morgan,  as a result of which  control  passed  from the  Company,  the
trading of Travers  Morgan was isolated from the Company and the Group wrote off
its investment,  providing  (pound)11.6  million against the amounts  receivable
from Travers Morgan Limited.

In 1995, the engineering and environmental services business,  which by then was
operating  at a loss,  was  also  sold  and the  Company  refocused  on its life
sciences business.  That year it acquired the toxicology business of APBI, which
comprised  laboratories near Newcastle and Eye, Suffolk in the UK and Princeton,
USA for a total consideration of $43 million,  including an agreed value of $4.5
million for the sale of the Leicester  Clinical Research Unit.  Immediately upon
acquisition  the  toxicology  business of APBI in the UK was merged with that of
Huntingdon  Research  Centre  Ltd  and  the  name of  that  company  changed  to
Huntingdon  Life Sciences Ltd. The US business  acquired  operates as Huntingdon
Life Sciences Inc.

The Company's  name was  subsequently  changed in April 1997 to Huntingdon  Life
Sciences  Group  plc.  At this time the  Company  purchased  a small  specialist
research centre in Wilmslow, Cheshire which included a marmoset breeding colony.
Huntingdon  subsequently  decided  to  close  that  facility,  with all the work
shifting to its Huntingdon and Eye facilities. The site was sold on September 1,
1999.

In the first half of 1997 allegations were made relating to animal care and Good
Laboratory Practice (GLP) against the Company's operating subsidiaries in the UK
and US. Those  allegations and the UK Government's  subsequent  statement in the
House of  Commons in July 1997 about its  investigation  into those  allegations
caused  the  cancellation  of  booked  orders  and  a  decline  in  new  orders.
Significant trading losses and cash outflows resulted during the period from mid
1997 onwards For further details of these allegations see Government Supervision
of Regulations - 1997 Allegations relating to animal care and GLP, below.

During 1998 poor trading results put a heavy strain on cash resources, utilising
Huntingdon's available facilities. Given the medium to long term element of many
of Huntingdon's activities and the reluctance of clients to place new work until
Huntingdon's  finances  were  stabilised,   Huntingdon  required  a  substantial
injection  of  finance to both  initially  restore  confidence  and then to fund
operations during the period until Huntingdon returned to profitability.

On September 2, 1998 a group of new investors  subscribed  (pound)15 million for
120 million  ordinary  shares whilst  existing  shareholders  and  institutional
investors took up a further 57 million shares,  contributing (pound)7.1 million.
After  expenses of (pound)1.7  million,  the issue of shares raised  (pound)20.4
million.  On the same  date  Huntingdon's  bankers  agreed  to  confirm  and fix
Huntingdon's  facilities at  (pound)24.5  million until August 31, 2000 and this
amount was fully drawn down.

Since the involvement of FHP, a new management  team has been appointed,  led by
Brian Cass,  previously of Covance,  which the Company believes has successfully
addressed many of the Company's past difficulties.  Relationships with customers
have been restored,  a substantial cost and headcount reduction program has been
effected and sales have started to grow again at an encouraging rate.

As  Huntingdon  continues  to build on these  fundamentals,  the Company has the
following strategy and goals:

o    To be appreciated as the listening,  understanding  and reliable partner in
     creative compound development and safety assessment; to be the first choice
     for the industries we serve.
o    To provide our employees with the opportunity for individual development in
     a caring, rewarding and safe working environment.
o    To be recognised positively in the local communities in which we operate.
o    To grow to  significant  profitability  and improved  return on investment
     for our shareholders.


DESCRIPTION OF BUSINESS

Huntingdon provides  pre-clinical and non-clinical  biological safety evaluation
research services to most of the world's leading pharmaceutical,  biotechnology,
agrochemical  and  industrial  chemical  companies.  The  purpose of this safety
evaluation is to identify risks to humans,  animals or the environment resulting
from the use or  manufacture  of a wide range of chemicals  which are  essential
components of our clients' products. The Company's services are designed to meet
the regulatory requirements of governments around the world.

It is the  Company's  goal to become the number one  service  provider  in these
markets,  achieving  this through a mixture of organic growth and a small number
of strategic  acquisitions.  In doing so the Company will be well  positioned to
benefit from strong drug pipelines in the pharmaceutical  industry,  the growing
amount  of  legislation  concerning  the  safety  and  environmental  impact  of
agrochemicals and industrial  chemicals and a growing trend towards  outsourcing
as clients  focus more  internal  resources  on  research  in the search for new
compounds.

Huntingdon's sales and marketing functions are specifically focussed on two main
groups, pharmaceutical and non-pharmaceutical customers. As much of the research
activity  conducted  for  these two  customer  groups is  similar,  the  company
believes it is appropriate, operationally, to view this as one business.

Pharmaceuticals and Biopharmaceuticals

The Pharmaceutical research and development pathway is shown below:

  DRUG DISCOVERY               DRUG DEVELOPMENT                    MARKETING
                              ---------------------
                 NON-CLINICAL                             CLINICAL

Chemical Synthesis   Pre-Clinical    Phase I    Phase II   Phase III   Phase IV

                       Toxicology    Safety   Efficacy  Long Term   Post
                                                         efficacy   marketing
                       Pharmacology                                surveillance

                       Drug Metabolism

                       Pharmacokinetics

                                      LONG TERM SAFETY STUDIES


Huntingdon  performs  non-clinical  testing in  support of the drug  development
process.   This  primarily   consists  of  pre-clinical   outsourcing  from  the
pharmaceutical  industry,  as well as further  longer term  non-clinical  safety
testing  that is  performed  in  parallel  to human  clinical  testing  (such as
carcinogenicity   studies   and  safety   studies   relating   to   reproductive
implications). Approximately two thirds of the Company's orders are derived from
this source.  Huntingdon views its non-clinical market as extending to "proof of
concept" in man (Phase 2A) and to  analytical  chemistry  support  for  clinical
trials.  During  1999 the Company  entered  collaborative  relationships  with a
number  of Phase I  clinical  trial  units  and has  recently  started  offering
centralised clinical laboratory services in support of clinical trials.

The  outsourced  market for the large  clinical  trials  (Phase 3 and beyond) is
expanding rapidly, but the Company believes that the margins are less attractive
and it is  subject  to a  greater  degree  of  volatility  driven by the size of
individual contracts.  While the Company does not preclude entering this market,
it is a very different business and one in which a number of major companies are
already firmly established.

Within the Company's  definition of  "non-clinical"  there are  opportunities to
reverse into late research services in lead optimisation for the  pharmaceutical
industry  as well as to provide  additional  support  services  for the  rapidly
growing Biotechnology sector.

o        Market growth

It is estimated that the pharmaceutical industry annual research and development
(R & D) spend is between  $35  billion  and $40 billion and is growing at around
10% per annum. Around $20 billion is focused on development and, of this, 15% is
expenditure  in  Huntingdon's  core business area of  pre-clinical  development.
Huntingdon  believes that  approximately  30% of this is outsourced  which means
that the Company is today competing in approximately a $1 billion market.

The  market  for these  services  is  growing  as a result  of  strong  new drug
pipelines:

         The Company estimates that new drug discovery is growing at 8 - 10% per
         annum,  fueled by new technologies  and strong profits.  New techniques
         like  combinatorial   chemistry  and  high  throughput   screening  are
         dramatically   increasing  the  efficiency  and  effectiveness  of  the
         discovery process for new molecules.

         The need to replace  earnings  from drugs  coming off patent is driving
         increases in the number of drugs being put into development.

         It is  estimated  there  has  been a 50%  increase  in the  numbers  of
         projects in the R & D pipeline versus five years ago.

There is also a growing trend towards the  outsourcing  of  development  work as
clients  focus more  internal  resource  on  research in the search for new lead
compounds.

         The biotechnology  industry has become a significant source of business
         for  companies  like  Huntingdon.  The number of drugs  produced by the
         biotechnology  industry  which require US Food and Drug  Administration
         (FDA)  approval  has grown  substantially  over the past  decade.  Many
         biotechnology  companies have  strategically  chosen to outsource major
         areas of R & D and utilise contract  research  organisations to perform
         these services.

         In addition  the  process of  consolidation  within the  pharmaceutical
         industry is also accelerating the move towards outsourcing. While there
         is a short term negative impact from mergers with development pipelines
         being  rationalised and a focus on integration rather than development,
         longer term resources are increasingly  invested in in-house facilities
         for  discovery  and  lead  optimisation  rather  than  development  and
         regulatory safety evaluation. The outsourcing of development and safety
         evaluation is Huntingdon's core business.

Therefore the overall market for outsourced  services is estimated to be growing
at an annual rate of around 8 to 10%.

Non-Pharmaceuticals

Huntingdon has  historically  generated one third to one half of its orders from
safety  and  efficacy  testing of  compounds  for the  agrochemical,  industrial
chemical,   veterinary  and  food  industries.  The  work  involved  bears  many
similarities  and  often  uses  many  of the  same  facilities,  equipment,  and
scientific   disciplines   to  those   employed  in   pre-clinical   testing  of
pharmaceutical compounds.

Huntingdon's business in these areas is again driven by governmental  regulatory
requirements.  The Company's  services  address  safety  concerns  surrounding a
diverse range of products,  spanning such areas as  agricultural  herbicides and
pesticides,  medical devices,  veterinary  medicines,  and chemicals used in the
manufacture  of  pharmaceutical  intermediates,   manufactured  foodstuffs,  and
household products.  Huntingdon believes it is a clear market leader in programs
designed  to  assess  the  safety,   environmental   impact  and  efficiency  of
agricultural  chemicals as well as in programs to take new industrial  chemicals
to market.

o        Market Growth

It is estimated that the world-wide market for outsourced contract research from
these industries is around $300m. The growth in the non-pharmaceutical  business
is driven  both by the  introduction  of novel  compounds  and  increasingly  by
legislation concerning the safety and environmental impact of existing products.

The Company  believes that many market  segments  included in this broad area of
business have the potential for substantial  growth in coming years, as a result
of:

       Recent  introduction  of new testing  requirements  for `high  production
       volume' (HPV) chemical products in the US, and similar programs in Europe
       and Japan.

       Increasing  scrutiny of any compound which is used in the  manufacture of
       products  to  which  members  of the  public,  especially  children,  are
       exposed,  either  infrequently or on a day-to-day basis (e.g.  phthalates
       used in the plastic of children's toys).

       More stringent  regulations  affecting compounds which have the potential
       to  adversely  effect  the  environment,   e.g.  biocides  and  endocrine
       disrupters.

       Growth in concerns over food safety,  e.g.  additives and  genetically
       modified  foods,  and the introduction of `nutraceuticals'.

       The requirement to register or re-register pesticides on lists 2 and 3 to
       meet  the  European  Directive  91/414/EEC.   Huntingdon  has  unrivalled
       experience  with  the  chemicals  which  were  included  on list 1 of the
       Directive.

Safety  testing in these  industries  is also more likely to be  outsourced  as,
unlike the pharmaceutical  industry, fewer companies have comprehensive internal
testing  facilities.  While  overall R & D is  growing at  approximately  5%, we
believe  that  outsourcing  could  increase by up to 10% per annum over the next
five years.

COMPETITION

Competition in both the pharmaceutical  and non  pharmaceutical  market segments
ranges  from  the  in-house   research  and   development   divisions  of  large
pharmaceutical, agrochemical and industrial chemical companies who perform their
own  safety  assessments,  to  "full  service"  providers  -  contract  research
organisations  like  Huntingdon  who  provide a full  range of  services  to the
industries - and "niche" suppliers focussing on specific services or industries.

Huntingdon   is  the  second   largest   independent   worldwide   provider   of
pre/non-clinical  safety  testing  services,   behind  Covance  Inc.  which  has
estimated  sales for 1998 of  approximately  $200 million in this area and total
revenues for all their business of $732 million.

ORDERS AND BACKLOG

The gradual return of client  confidence  following the refinancing in September
1998 gained  momentum in 1999.  This was reflected in the growth of orders which
increased by 17% from the previous year. The Company's  pharmaceutical  business
showed a particularly  strong recovery,  with orders  increasing by 36% from the
1998 levels. However, 1999 was a relatively weak year for the non-pharmaceutical
businesses.  The Company  expects  that there will be an increase in orders from
the non-pharmaceutical business in 2000, as the impact of new legislation starts
to feed through into orders.

The geographical split of orders is as follows:

                           % of Orders from each Geographic area

                                   1999                        1998
Europe                               39                          38
Far East                             23                          28
United States                        38                          34
                             -----------                 -----------
Total                               100                         100
                             -----------                 -----------

1999 saw a 30% increase in the Company's US business,  mainly due to orders from
the pharmaceutical  industry. The Princeton laboratory,  in particular,  is well
placed to pick up work from the US pharmaceutical  industry situated on the East
Coast of the United States.

Total orders from the Far East declined both in percentage and real terms. There
were a number of reasons for this;  the general  economic  weakness in the area,
particularly Japan; the uncertainties of the Japanese pharmaceutical market; and
the  completion  of a number  of large  development  programs  for  agrochemical
clients.  Notwithstanding  this the  Company's  orders  from the  pharmaceutical
industry in Japan  increased by 60%,  another sign that we have regained  client
confidence.


GOVERNMENT SUPERVISION OF OPERATIONS

Supervisory regimes

Since the services  provided by Huntingdon  are used to support  pharmaceutical,
biotechnological,  chemical or agrochemical product approval  applications,  its
laboratories are subject to both formal and informal  inspections by appropriate
regulatory  and  supervisory  authorities,  as well as by  representatives  from
client  companies.  Huntingdon  is  regularly  inspected  by  US,  Japan  and UK
governmental  agencies  because of the number and complexities of the studies it
undertakes.  In 1979, the US Food and Drug Administration  (FDA) promulgated the
GLP  regulations,   defining  the  standards  under  which   biological   safety
evaluations  are  to be  conducted.  Other  governmental  agencies  such  as the
Environmental  Protection  Agency  (EPA),  the  Japanese  Ministry Of Health and
Welfare, the Japanese Ministry of Agriculture,  Forestry and Fisheries,  and the
UK Department of Health,  have introduced  compliance  monitoring  programs with
similar GLP  standards.  Huntingdon has had over 30 such  inspection  visits and
audits since 1985.

Huntingdon's  operations  in the UK are  regulated  by the  Animals  (Scientific
Procedures)  Act 1986.  This  legislation,  administered  by the UK Home Office,
provides  for  the  control  of  scientific  procedures  carried  out on  living
vertebrate animals and regulation of the animals' environment. Personal licences
(Huntingdon has approximately 300 licensees) are issued by the UK Home Office to
personnel who are competent to perform regulated  procedures and each program of
work must be  authorised  in  advance  by a  Project  Licensee.  Premises  where
procedures  are  carried  out must also be  formally  designated  by the UK Home
Office.  Consultations  and  inspections  are  regularly  undertaken in order to
ensure  continued  compliance  with  regulatory  and  legislative  requirements.
Typically, Huntingdon has 18 such inspections annually.

Huntingdon's laboratory in the USA is subject to the United States Department of
Agriculture  (USDA)  Animal  Welfare  Regulations  (Title  9,  Code  of  Federal
Regulations,  Subchapter  A). The  laboratory  is  regularly  inspected  by USDA
officials for compliance with these  regulations.  Compliance is assured through
an  Institutional  Animal Care and Use Committee,  comprising staff from a broad
range of disciplines  within Huntingdon and including  external  representation.
Furthermore, laboratories in the USA are expected by the USDA to be certified by
an independent and internationally recognised organisation,  the Association for
Assessment and Accreditation of Laboratory Animal Care (AAALAC).

At each of its research centres, Huntingdon ensures the availability of suitably
experienced and qualified veterinary staff backed by a 24 hour call out system.

1997 Allegations relating to animal care and GLP

In the Spring of 1997 allegations of malpractice  related to animal care and GLP
were made at both  Huntingdon's  UK and US operations.  The UK allegations  were
received by the regulatory  authorities following the television broadcast of an
animal rights  "undercover"  film showing  breaches of animal care procedures by
employees of the Company.  Those in the US were  submitted to the USDA and based
on reports received by PeTA, an animal rights activist group.

In July 1997 the UK Home Office Inspectors  confirmed to their satisfaction that
whilst  there was an incident  of  maltreatment,  it was  isolated.  However,  a
statement made by the Government caused many clients to conclude that there were
separate  further  allegations.  The Home  Office then  established  a number of
conditions,  which  Huntingdon  had to comply  with by the end of  November.  On
September  29, 1997,  the Home Office  stated that the Company had  demonstrated
full compliance with the conditions and that they were fully satisfied.

In the US the USDA undertook two  inspections  during the summer of 1997 and one
in  February  1998,  these  followed  their  annual  inspection  in April and an
intensive  FDA  inspection  in  February - both of which were  satisfactory.  In
December 1997  Huntingdon  announced the receipt of a settlement  agreement as a
Court  Order  in  which  PeTA  agreed  to  give up all of its  campaign  against
Huntingdon..  The  AAALAC  inspected  the  site  and  unanimously  endorsed  its
continued  accreditation.  In 1998 the USDA  investigation was concluded and did
not include any  concessions of violations by  Huntingdon.  In December 1998 the
USDA conducted its annual routine  inspection of the  laboratories and concluded
that  they  were  in  full  compliance  with  all  aspects  of the  Department's
Regulations.

COMPLIANCE WITH ENVIRONMENTAL REGULATIONS

Whilst  Huntingdon  is obliged in the  conduct of its  business  to comply  with
certain  environmental  regulations,  compliance with such  regulations does not
impact  significantly  on  its  earnings  or  competitive  position.  Management
believes  that its  operations  are  currently in material  compliance  with all
applicable environmental regulations.

OTHER INFORMATION PERTAINING TO THE COMPANY

Human Resources

Huntingdon's  most  important  resource  is its  people,  they have  created the
Company's knowledge base, its expertise and its excellent scientific reputation.
Scientists  from the Company are represented at the highest levels in several UK
and  international  committees  on safety and toxicity  testing.  Several  staff
members are  considered  leaders in their  respective  fields,  they  frequently
lecture at  scientific  seminars and  regularly  publish  articles in scientific
journals. This recognition has resulted in frequent assignments from clients for
consultation  services.  Some of  Huntingdon's  staff  serve  by  invitation  or
election on a number of scientific and industrial  advisory panels and groups of
certain  organisations  and agencies such as the FDA, the EPA, the UK Department
of Health, and the World Health Organisation.

To ensure that this  experience  and  expertise is  transmitted  throughout  the
organisation, the Company maintains training programs. For example, Huntingdon's
Introductory and Advanced Graduate Training Programs train graduate staff in all
phases  of  toxicology.  Also,  in  conjunction  with the  Institute  of  Animal
Technology,  Huntingdon  maintains  what it  believes  to be one of the  largest
animal   technician   training  programs  in  the  world.   Huntingdon   employs
approximately 300 licensed personnel.

The  number of  employees  in the Group at  December  31,  1999 and 1998 were as
follows:

                        Employees at December 31
                      1999                  1998

UK ............      1,090                 1,189
USA............        199                   193
Japan..........        10                     10
                  -----------            ----------
                     1,299                 1,392
                  -----------            ----------


In December,  1998 the Company announced a cost reduction program to align staff
resources with current revenues. The program which was completed in January 1999
rationalised  service lines and capabilities across the two UK sites. See Item 8
-  Financial  Statements  and  Supplementary  Data  'Notes  to the  Consolidated
Financial Statements, Note 8'.

Animal Rights Activism

In parallel with an increase in "animal rights" activity internationally, during
November 1999 a new activist group was formed in the UK with Huntingdon as their
target. The group's broad aim is to end all animal research.  This direct action
campaign has included all forms of protest including  demonstrations outside the
Company's UK facilities and in local towns,  distribution of propaganda material
and intimidation of some members of staff and shareholders.

To counter this "animal  rights"  campaign  Huntingdon has adopted a strategy of
openness  and  direct  co-operation  with all  parts of the  media and the local
community.  The Company has taken every  opportunity to promote the value of the
work it does in helping its clients bring to market safe and effective products.
Members of the media, schools, local groups and national bodies have all visited
the company,  toured the animal  facilities  and  laboratories,  and talked with
staff. All these visitors have all been impressed with Huntingdon's standards of
animal welfare and the professionalism of its staff.

Management and Labour Relations

Huntingdon's  labour force is non-union and there has never been any  disruption
of the business through strikes or other employee action.  Huntingdon  regularly
reviews its pay and benefits  packages and believes  that its labour  relations,
policies and practices and management  structure are  appropriate to support its
competitive position.

Research and Development

In addition to  experience  gained  through  research  activities  performed for
clients,  Huntingdon  engages in  research  in order to respond to the  changing
needs of clients and to maintain  competitiveness within the industries in which
it operates.  Most of the research  undertaken,  however, is an inherent part of
the research carried out on behalf of clients in completing  studies and as such
it is not identified separately.

Know-how and Patents

Huntingdon believes that its proprietary know-how plays an important role in the
success of its business.  Where Huntingdon  considers it appropriate,  steps are
taken to protect its know-how through confidentiality  agreements and protection
through  registration  of  title  or use.  However  Huntingdon  has no  patents,
trade-marks,  licenses,  franchises or  concessions  which are material and upon
which any of the services offered is dependent.

Quality Assurance

Huntingdon  maintains extensive quality assurance  programs,  designed to ensure
that all testing  programs  meet client  requirements,  as well as all  relevant
codes,  standards  and  regulations.   Based  on  a  Master  Schedule,  periodic
inspections are conducted as testing  programs are performed to assure adherence
to  project  specifications  or  protocols  and final  reports  are  extensively
inspected  to ensure  consistency  with  data  collected.  Huntingdon's  quality
assurance  programs are  controlled by a formally  constituted  Quality Board, a
Quality Monitoring Committee and Quality Groups.

Financial information about geographic areas

See Financial Statements

Available Information

Huntingdon  files annual,  quarterly and current  reports and other  information
with the SEC  (including an Annual Report on Form 20-F for the Fiscal Year ended
December 31, 1998).  You may read and copy any of these  reports,  statements or
other information at the SEC's Internet site (http:/www.sec.gov) or at the SEC's
public reference rooms (450 Fifth Street, N.W.,  Washington,  DC 20549). You can
request copies of those documents, upon payment of a duplicating fee, by writing
to the SEC.

ITEM 2.  PROPERTIES

Huntingdon's head office is situated within the research centre at Huntingdon.

Huntingdon  believes that its facilities,  described below, are adequate for its
operations and that suitable additional space will be available when needed.

The  following  table  shows  the  location  of the  facilities  of  Huntingdon,
approximate size and the principal  activities conducted at such facilities each
of which is owned by the Company.
<TABLE>
<CAPTION>

Location                 Laboratories      Size           Principal Activities
                         and Offices
<S>                     <C>               <C>            <C>
Huntingdon, England      612,000 sq.ft.    74 acres       Laboratories, animal accommodation and
                                                          offices
Near Princeton, NJ, USA  180,000 sq.ft.    53.5 acres     Laboratories, animal accommodation and offices
Near Diss, England       250,000 sq.ft.    28 acres       Laboratories, animal accommodation and
                                                          offices
</TABLE>

The Company's  Wilmslow Research Centre,  the principal  functions of which were
laboratories, animal accommodation and offices, was sold on September 1, 1999.

ITEM 3.  LEGAL PROCEEDINGS

Huntingdon is party to certain legal actions arising out of the normal course of
its  business.  In  management's  opinion,  none of these  actions  will  have a
material effect on Huntingdon's  operations or financial  condition.  No form of
proceedings has been brought,  instigated or is known to be contemplated against
Huntingdon by any governmental agency.

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

None
<PAGE>


PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's  Ordinary Shares are listed on the London Stock Exchange Ltd under
the Stock Exchange Automated  Quotation symbol "HTD." American Depositary Shares
"ADS"s,  each of which  evidences  five  Ordinary  Shares  and which in turn are
evidenced by American  Depositary  Receipts  "ADR"s,  are listed on the New York
Stock Exchange, Inc. ("NYSE") also under the symbol "HTD".

The Bank of New York is the  depositary for the Ordinary  Shares  represented by
ADSs.  As at February 29, 2000,  there were 168 recorded  holders of ADSs. It is
believed  that, at such date,  62,336,440  of the  Company's  total issued share
capital of 291,010,294  Ordinary Shares were represented by 12,467,288 ADSs. The
remaining  Ordinary  Shares were, as at such date,  held in the form of Ordinary
Shares for which there were 2,207 recorded holders.
The high and low  quarterly  sales prices (in pounds  sterling) of the Company's
Ordinary  Shares on the London Stock  Exchange  from January 1, 1998 to December
31, 1999 were as follows:

                                                   HIGH SALES       LOW SALES
QUARTER ENDED                                         PRICE           PRICE
-------------
                                                ---------------    ------------
                                                     (pound)        (pound)

March 31, 1998...............................        0.465             0.425
June 30, 1998................................        0.43              0.175
September 30, 1998...........................        0.20              0.1275
December 31, 1998............................        0.135             0.105

March 31, 1999...............................        0.215             0.11
June 30, 1999................................        0.195             0.1875
September 30, 1999...........................        0.1925            0.175
December 31, 1999............................        0.175             0.105


The high and low quarterly  sales prices (in US dollars) of the Company's  ADSs,
as evidenced by ADRs, on the NYSE from January 1, 1998 to December 31, 1999 were
as follows:

                                                    HIGH SALES       LOW SALES
QUARTER ENDED                                       PRICE            PRICE
-------------
                                                    -------------  -----------
                                                    $                $

March 31, 1998...............................          3.9375          3.4375
June 30, 1998................................          3.75            1.6250
September 30, 1998...........................          1.6875          0.9375
December 31, 1998............................          1.4375          0.8125



March 31, 1999...............................          2.19            1.13
June 30, 1999................................          1.88            1.25
September 30, 1999...........................          1.63            0.88
December 31, 1999............................          1.38            0.81

On February 29, 2000, the mid-market closing price of  Huntingdon's Ordinary
Shares was(pound)0.08 and was $0.69 per ADR.

The Board  does not  expect to declare  or pay cash  dividends  on  Huntingdon's
Ordinary  Shares in the near future.  The Board of Directors  will determine the
extent to which legally available funds will be used to pay dividends. In making
decisions regarding dividends, the Board will exercise its business judgment and
will take into  account  such  matters as results of  operations  and  financial
condition and any then-existing or proposed commitments for the use of available
funds.

ITEM 6.  SELECTED FINANCIAL DATA

The following selected  consolidated  statement of operations and operating data
for the years ended  December  31,  1999,  1998,  1997 and 1996 the three months
ended  December 31, 1995 and the twelve months ended  September 30, 1995 and the
consolidated  balance  sheet data as of  December  31,  1995  through  1999 were
derived from  Huntingdon's  audited  consolidated  financial  statements and the
related notes included in this Annual Report on Form 10-K beginning on page 23.

The Company reports primarily in UK GAAP as it is incorporated in the UK and the
majority  of its  operations  and  assets  are  based in the UK.  The  following
financial  information has been prepared under the general  accepted  accounting
principles of the United States of America.

<TABLE>
<CAPTION>

                                                   12 Months Ended                        3 Months Ended      12 Months Ended
                                                     December 31                           December 31         September 30
                                ------------- ------------- ------------ -------------  ------------------- --------------------
                                    1999          1998          1997          1996            1995                    1995
(AMOUNTS IN STERLING THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                 <C>           <C>           <C>           <C>            <C>                 <C>

OPERATING STATEMENT DATA

Revenues                              58,215        52,616       63,689        73,564         14,285               81,877
Net (loss)/income                    (4,095)      (24,437)      (2,882)         7,871        (3,001)             (31,538)
Operating (loss)/profit              (1,821)      (28,234)      (5,065)        11,799          1,397                7,196
(Loss)/earnings per share -   (pound)(0.014)(pound)(0.142)(pound)(0.026)  (pound)0.073 (pound)(0.028)       (pound)(0.316)
basic (A)

</TABLE>
<TABLE>
<CAPTION>


                                                            As at December 31
                                   ------------- ------------- ------------- ------------- ------------
                                       1999          1998          1997          1996         1995
(AMOUNTS IN STERLING THOUSANDS)
<S>                                   <C>          <C>          <C>            <C>         <C>
BALANCE SHEET

Total Assets                           98,635      110,137       112,461       108,924      103,771
Long-term debt                         31,023       54,688        33,691        42,654       50,377
Shareholders' equity                    9,216       13,311        17,362        14,586        6,601
</TABLE>


(A)      Based  upon  an  average  of  291,010,294  (1998:   172,199,772;
         1997:   112,935,450;   1996: 108,492,218; 1995: 99,865,393)
         Ordinary Shares outstanding.

(B)      Significant changes from 1996 to 1997 are explained in Item 1

(C)      The Company's year end was changed from September to December in 1995

(D)      See Item 7 for information relating to exchange rates.



<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

GENERAL

You  should  read  the  following  together  with  the  consolidated  financial
statements  and the related  notes included in this Annual  Report on Form 10-k
beginning on page 22. Certain  statements in this  section are "forward-looking
statements." You should read the information under "Forward-Looking  Statements"
later  in this  section  for  special  information  about  our  presentation  of
forward-looking information.

Huntingdon is a leading CRO which  provides an extensive  range of  pre-clinical
and  non-clinical  services to the  pharmaceutical,  agrochemical and industrial
chemical  industries.  The Company provides those services under contracts which
may range from one day to three years. Income from these contracts is recognised
on the  basis of work done and  variable  costs are  matched  with such  income.
Contracts  are  generally  terminable  upon notice by the client with the client
being  responsible for reimbursing  Huntingdon for the value of work done to the
date of cancellation  plus the value of work required to wind down a study on an
orderly basis.

The Company's business is characterised by high fixed costs, in particular staff
and facility related costs. Such a high proportion creates favourable conditions
for the Company as excess  capacity is utilised but, during periods of declining
revenue,  careful planning is required to reduce costs without impairing revenue
generating activities.

RESULTS OF OPERATIONS

12 months ended  December 31 1999 compared with the 12 months ended  December 31
1998.

Revenues in the twelve months ended December 31, 1999 were (pound)58.2  million,
an  increase of 11% on revenues  of  (pound)52.6  million for the twelve  months
ended  December 31, 1998.  The recovery in the volume and value of orders placed
following the refinancing in September 1998, noted in the final quarter of 1998,
continued throughout 1999.

Cost of sales fell by 9% to  (pound)51.5  million  for the twelve  months  ended
December 31, 1999 from (pound)56.7  million for the twelve months ended December
31, 1998 despite the increase in revenues.  Huntingdon's  operating capacity was
reduced  throughout  1998  through  natural  attrition  and the  closure  of the
Wilmslow  Research Centre. In addition a cost reduction program was announced by
new  management in December  1998.  This was designed to align  operations  with
current sales levels and has produced  targeted  savings of (pound)6 million per
year.

Selling and  administrative  expenses fell by 2% to  (pound)9.0  million for the
twelve  months  ended  December 31, 1999 from  (pound)9.2  million in the twelve
months ended December 31, 1998, due to lower commission expenses.

Other operating  income in the twelve months ended December 31, 1999 comprised a
profit of (pound)1.8 million on the sale of the Wilmslow Research Centre, offset
by a loss of  (pound)1.3  million  to write  off  assets  that are not Year 2000
compliant. In the twelve months ended December 31, 1998 other operating expenses
were (pound)14.9 million. For further detail see - "12 months ended December 31,
1998 compared with the 12 months ended 31 December 1997".

Net interest  expense fell by 29% to  (pound)3.9  million for the twelve  months
ended  December  31, 1999 from  (pound)5.5  million in the twelve  months  ended
December 31, 1998. Interest expense in 1998 included (pound)1.2 million relating
to the review and renewal of borrowing facilities.

The unrealised  loss on exchange of (pound)0.7  million arose on net liabilities
denominated  in US  dollars  (primarily  the  Convertible  Capital  Bonds of $50
million) with the weakening of sterling against the dollar. In the twelve months
to December 31, 1998  sterling  strengthened  against the dollar  resulting in a
(pound)0.2 million gain on exchange.

Taxation  relief on losses for the twelve  months  ended  December  31, 1999 was
(pound)2.3  million  representing  relief at 36% compared to (pound)9.0  million
representing  relief at 27% for the twelve months ended  December 31, 1998.  The
difference in effective tax rates is due to a combination of exchange losses not
taxable,  changes in tax rates and the effect of non-taxation of other operating
income/expense.

The  overall  net  loss  for the  twelve  months  ended  December  31,  1999 was
(pound)4.1  million  compared  to a loss of  (pound)24.4  million  in the twelve
months  ended  December  31,  1998.  The 1999 loss per  share was  (pound)0.014,
compared  to a loss per  share of  (pound)0.142  last year on shares in issue of
291,010,294 (1998, 172,199,772).

12 months ended December 31, 1998 compared with the 12 months ended December 31,
1997.

Beginning  mid  1997,   orders  and  backlog  declined  sharply   following  the
allegations of malpractice and  mistreatment of animals.  This continued to have
an impact  in 1998,  but by the end of the year,  after  the  refinancing  noted
below,  client  confidence began to return and a modest increase in order volume
was being  experienced.  Although  full year 1998 new orders  were 3% lower than
1997, the year-end  backlog was up 7% from 1997 and 12% ahead of the August 1998
level.

The revenue decline in 1998 was more dramatic than the fall in orders due to the
long term nature of many of the contracts under which  Huntingdon does business,
and reflected  the steep  reduction in orders in 1997.  Revenues at  (pound)52.6
million in 1998 were 17% down from 1997  revenue  of  (pound)63.7  million.  The
Company's  operating  capacity,  which had increased modestly in 1997 before the
full impact of the order rate decline was felt, was reduced  throughout the year
through  natural  attrition  and the closure of the  Wilmslow  Research  Centre.
However,  new management  believed that further  reductions were  appropriate to
align staffing with the reduction in revenues which the Company had experienced,
and in December 1998 a cost reduction  program was announced.  This included the
elimination  of  approximately   150  positions  and  the   rationalisation   of
capabilities  within the UK.  This  program is intended to reduce the total cost
base by approximately (pound)6 million per annum.

Overall  operating  costs  (before  other  operating  expenses) in 1998 were up
(pound)0.7m to (pound)65.9m (1% up on 1997).

Other operating expenses during the year were(pound)14.9 million
(1997:(pound)3.5 million).  These arose from:

(i) Closure  of the  Company  's UK site at  Wilmslow  and write down of related
    assets.  Redundancy and related costs amount to (pound)0.4 million and asset
    write down (pound)2.9 million.

(ii)The  December  1998  cost   reduction   program   designed  to   rationalise
    capabilities  in the UK.  The cost of this  program  is  (pound)3.4  million
    including asset write offs of (pound)0.5 million.

(iii) The write off of the  unamortised  balance of the goodwill  arising on the
    acquisition  of  businesses  in 1995 of  (pound)7.3  million.  Following the
    decline in revenues and the successful  integration of the businesses,  this
    no longer has any intrinsic value.

(iv) A review of asset values in the UK resulting in accelerated depreciation
     of(pound)0.9million.

Net interest expense rose by (pound)1.9  million (51%) to (pound)5.5  million in
1998.  In part this arose from the  increase  in net bank debt during 1997 and a
further  increase in debt in the first eight months of 1998.  (At March 31, 1997
net bank debt was (pound)13.5 million and peaked in August 1998 at approximately
(pound)25  million).  In  addition,  the need to review the facility in February
1998 and August 1998, coupled with the complete renegotiation of the facility in
September 1998, led to charges of (pound)1.2  million in respect of the facility
during 1998 (1997: (pound)0.1 million).

Taxation relief on losses at (pound)9.0  million  represent relief at 27% versus
the UK statutory rate of 31%. This reduction  arises  primarily from the lack of
relief on the write off of goodwill.

Overall the net loss at (pound)24.4  million is (pound)21.5  million higher than
the net loss of  (pound)2.9  million  reported  in 1997.  Net loss per share has
risen from (pound)0.026 for 1997 to (pound)0.142 for 1998.

LIQUIDITY & CAPITAL RESOURCES

During the twelve months ended December 31, 1999 funds absorbed were  (pound)8.8
million,  which  includes the  repayment of short term  borrowings of (pound)0.8
million,  reducing  cash in hand  and on short  term  deposit  from  (pound)14.1
million at December  31,  1998 to  (pound)5.3  million at December 1, 1999.  The
funds were utilised as follows:


                                                   1999
                                                 (pound)m
Operating loss (1)                                (2.3)
Depreciation                                       5.9
Cost reduction program                            (2.1)
Working capital movements                         (1.6)
Interest                                          (3.8)
Proceeds from sale of Wilmslow                     4.2
Capital expenditure                               (3.0)
Loan repayments                                   (6.1)
                                              ---------------
                                                   8.8
                                              ---------------
(1)  Before other operating income of(pound)0.5 million

During 1998 poor trading results put a heavy strain on cash resources, utilising
Huntingdon's available facilities. Given the medium to long term element of many
of Huntingdon's activities and the reluctance of clients to place new work until
Huntingdon's  finances  were  stabilised,   Huntingdon  required  a  substantial
injection  of  finance to both  initially  restore  confidence  and then to fund
operations during the period until Huntingdon returned to profitability.

On September 2, 1998 a group of new investors  subscribed  (pound)15 million for
120 million  ordinary  shares whilst  existing  shareholders  and  institutional
investors took up a further 57 million shares,  contributing (pound)7.1 million.
After  expenses of (pound)1.7  million,  the issue of shares raised  (pound)20.4
million.  On the same  date  Huntingdon's  bankers  agreed  to  confirm  and fix
Huntingdon's  facilities at  (pound)24.5  million until August 31, 2000 and this
amount was fully drawn down.

On  September 1, 1999 the sale of the Wilmslow  Research  Centre was  completed.
Part of the proceeds from this site ((pound)1.9 million) were used to repay bank
debt and the facility was reduced accordingly.  Interest is payable in quarterly
breaks  at  "LIBOR"   plus  1.75%  per  annum  in  respect  of  drawings  up  to
(pound)19,500,000   and   LIBOR   plus   2%  in   respect   of   drawings   over
(pound)19,500,000.  The interest  rate  payable at December  31,1999 is 7.83% on
(pound)19,500,000 and 8.08% on (pound)3,086,000.

As this  facility is  confirmed to August 31, 2000 the bank debt is now shown in
current  liabilities.  The  Company is  currently  involved in  negotiations  to
provide adequate financing following the expiry of these loans. This finance can
be asset backed or supported by projected cash flows. The negotiations are at an
early  stage  and  there is  substantial  doubt as to the  outcome  as there are
uncertainties  involved  in  either  approach.  In the  light of the  above  the
directors  have formed a  judgement  that it is  appropriate  to adopt the going
concern basis in preparing the accounts. The financial statements do not include
any  adjustments  that  would  result  from  an  inability  to  secure  adequate
financing.

The remainder of  Huntingdon's  long term  financing is provided by  Convertible
Capital Bonds repayable in 2006. These Bonds, totalling $50 million, were issued
in 1991 and remain  outstanding as at December 31, 1999.  They carry interest at
7.5% per  annum,  payable  at  six-monthly  breaks in March and  September.  The
conversion rate, which is based upon a fixed rate of exchange of  (pound)1.00=US
$1.6825  is 242.3  pence per  Ordinary  Share and is subject  to  adjustment  in
certain circumstances.

The  balance of the  consideration  payable  for the  purchase  of the  Wilmslow
Research Centre (acquired in 1997) which remained outstanding as at December 31,
1998 ((pound)3.3 million) was repaid during the year.

EXCHANGE RATE FLUCTUATIONS AND EXCHANGE CONTROLS

In the twelve  months to December 31, 1999  following  the weakening of sterling
against the US dollar, net liabilities  denominated in US dollars (primarily the
Convertible   Capital  Bonds  of  $50  million)  have   increased  in  value  on
consolidation to sterling.  This does not affect the cash flow of Huntingdon but
has  increased  the  reported  loss  before  tax,  accounting  largely  for  the
unrealised  loss on exchange of (pound)0.7  million  reported in these  results.
This compares with an exchange gain in the twelve months to December 31, 1998 of
(pound)0.2 million.

Interest on the Convertible  Capital Bonds is payable  half-yearly (in March and
September)  in US dollars and the impact of  fluctuations  in the exchange  rate
between  sterling  and US  dollars is offset by US dollar  denominated  revenues
receivable by Huntingdon. Although reported results have been affected partially
by conversion  into sterling of the Bonds on  consolidation  and there may be an
impact in the future, Management has decided not to hedge against this exposure.
Such a hedge might impact upon Huntingdon's cash flow compared with movements on
the Bonds which do not affect cash flow in the medium term. Huntingdon's current
treasury policy does not include any hedging or derivative activity.

Huntingdon  operates on a world-wide basis and generally invoices its clients in
the  currency  of the  country in which it  operates.  Thus,  for the most part,
exposure to exchange rate  fluctuations  is limited as sales are  denominated in
the same currency as costs. Trading exposures to currency  fluctuations do occur
as a result of certain  sales  contracts,  performed  in the UK for US  clients,
which are  denominated in US dollars and contribute  approximately  14% of total
revenues,  and exchange rate  fluctuations  have an impact on the relative price
competitiveness  of  Huntingdon  vis a vis  competitors  who trade in currencies
other than sterling or dollars.

Exchange rates for translating sterling into US dollars were as follows:
<TABLE>
<CAPTION>

          YEAR ENDED                   AT SEPTEMBER 30           AVERAGE RATE (1)         HIGH (2)        LOW (2)
         SEPTEMBER 30
-------------------------------    ------------------------    ---------------------     -----------    ------------
<S>     <C>                           <C>                       <C>                      <C>             <C>
             1995                           1.58                       1.59                 1.61           1.56
          YEAR ENDED                   AT DECEMBER 31            AVERAGE RATE (1)         HIGH (2)        LOW (2)
         DECEMBER 31
-------------------------------    ------------------------    ---------------------     -----------    ------------
             1996                           1.71                       1.57                 1.66           1.52
             1997                           1.64                       1.64                 1.69           1.60
             1998                           1.66                       1.66                 1.70           1.64
             1999                           1.61                       1.62                 1.66           1.57
THREE MONTHS ENDED DECEMBER 31         AT DECEMBER 31            AVERAGE RATE (1)         HIGH (2)        LOW (2)
-------------------------------    ------------------------    ---------------------     -----------    ------------
             1995                           1.55                       1.55                 1.58           1.54

</TABLE>

(1) Based on the  average  of the  exchange  rates on the last day of each month
during the period.

(2) Based on the monthly average of the daily average rate.

On March 24,  2000 the noon buying rate for sterling was $1.5887   =(pound)1.00

Huntingdon has not experienced difficulty in transferring funds to and receiving
funds  remitted from those  countries  outside the US or UK in which it operates
and Management expects this situation to continue.

Whilst  the UK has  not at  this  time  entered  the  European  Monetary  Union,
Huntingdon  has  ascertained  that its financial  systems are capable of dealing
with Euro  denominated  transactions.  In addition,  these  systems  ensure that
Huntingdon, if ever required to do so, will be able to report in Euros.

COMPETITION

Competition in both the  pharmaceutical and  non-pharmaceutical  market segments
ranges from in-house research and development divisions of large pharmaceutical,
agrochemical  and industrial  chemical  companies,  who perform their own safety
assessments to contract research  organisations  like Huntingdon,  who provide a
full range of  services  to the  industries  and niche  suppliers  focussing  on
specific services or industries.

This  competition  could  have a material  adverse  effect on  Huntingdon's  net
revenues  and net income,  either  through  in-house  research  and  development
divisions doing more work internally to utilise  capacity or through the loss of
studies  to  other  competitors  on  pricing.   As  Huntingdon  operates  on  an
international basis, movements in exchange rates, particularly against sterling,
can have a significant impact on its price competitiveness.

INDUSTRY CONSOLIDATION

The  process  of  consolidation   within  the  pharmaceutical   industry  should
accelerate the move towards outsourcing work to contract research  organisations
such as Huntingdon in the longer term as resources are increasingly  invested in
in-house facilities for discovery and lead optimisation, rather than development
and  regulatory  safety  evaluation.  However,  in the  short  term,  there is a
negative impact with  development  pipelines being  rationalised  and a focus on
integration rather than development.  This can have a material adverse impact on
Huntingdon's net revenues and net income.

INFLATION

While most of Huntingdon's  net revenues are earned under fixed price contracts,
the effects of inflation do not generally have a material  adverse effect on its
operations  or financial  condition as only a minority of the  contracts  have a
duration in excess of one year.

YEAR 2000

The Company  completed its Year 2000 compliance  program in December 1999. Where
necessary,  items of computer hardware,  software and other equipment relying on
computer  related  technologies  were  upgraded or replaced  and the Company has
experienced no disruption to its operations as a result of equipment or computer
failures.  Equally  there  has been no  disruption  caused  by  problems  at the
Company's clients or suppliers.

The Company currently estimates that the amounts that have, or will be, expensed
as incurred  over the three year period to December 31, 2000 will total  between
(pound)1,900,000   and   (pound)2,000,000.   Of   this   amount   a   total   of
(pound)1,818,000 has been incurred and expensed in the two years to December 31,
1999 ((pound)1,808,000 in 1999 and (pound)10,000 in 1998). The amounts that will
be  capitalised  have  primarily  been incurred in the two years to December 31,
1999  and are  estimated  at  (pound)1,500,000  ((pound)1,203,000  in  1999  and
(pound)275,000 in 1998).

The Company is  continuing  to monitor for potential  issues  through 2000,  but
believes that Year 2000 compliance  will have no material  adverse effect on the
results of its operations.

NEW ACCOUNTING STANDARDS

In June 1998, the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
133,  "Accounting  for  Derivative  Instruments  and Hedging  Activities".  This
statement   establishes   accounting  and  reporting  standards  for  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts (collectively referred to as derivatives), and for hedging activities.
It  requires  that an entity  recognise  all  derivatives  as  either  assets or
liabilities in the statement of financial position and measure those instruments
at  fair  value.  As  amended  by  SFAS  No.  137,  "Accounting  for  Derivative
Instruments  and  Hedging  Activities  - Deferral of the  Effective  Date of FAB
Statement  No. 133",  this  statement is  effective  for all fiscal  quarters of
fiscal  years  beginning  after  June  15,  2000,  although  early  adoption  is
encouraged.  The  Company  is in the  process  of  analysing  the  impact of the
adoption of this statement on its consolidated financial statements.

FORWARD LOOKING STATEMENTS

Statements in this management's  discussion and analysis of financial  condition
and  results of  operations,  as well as in certain  other  parts of this Annual
Report on Form 10-K (as well as information included in oral statements or other
written  statements made or to be made by Huntingdon) that look forward in time,
are forward looking  statements  made pursuant to the safe harbor  provisions of
the Private  Litigation Reform Act of 1995.  Forward looking  statements include
statements concerning plans,  objectives,  goals,  strategies,  future events or
performance,  expectations,  predictions,  and assumptions and other  statements
which are  other  than  statements  of  historical  facts.  Although  Huntingdon
believes  such  forward-looking  statements  are  reasonable,  it  can  give  no
assurance that any  forward-looking  statements  will prove to be correct.  Such
forward-looking  statements  are subject  to, and are  qualified  by,  known and
unknown risks,  uncertainties and other factors that could cause actual results,
performance or achievements to differ materially from those expressed or implied
by those statements.  These risks,  uncertainties and other factors include, but
are not limited to  Huntingdon's  ability to estimate the impact of  competition
and of industry  consolidation  and risks,  uncertainties  and other factors set
forth in  Huntingdon's  filings with the  Securities  and  Exchange  Commission,
including without limitation this annual report on Form 10-K.


ITEM 7A. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market  risk  represents  the risk of loss  that  may  impact  the  consolidated
financial  position,  results of  operations  or cash flows of the Company.  The
Company is exposed to market  risk in the areas of  interest  rates and  foreign
currency exchange rates.

INTEREST RATES

The  Company's  exposure to market risk for  changes in interest  rates  relates
primarily  to the  Company's  debt  obligations.  The  Company  has a cash  flow
exposure on its bank loans due to its variable LIBOR  pricing.  In the 12 months
ended  December  31,  1999  a 1%  change  in  LIBOR  would  have  resulted  in a
fluctuation in interest expense of approximately (pound)240,000.

FOREIGN EXCHANGE RISK

See Item 7 -  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations, Exchange Rate Fluctuations and Exchange Controls.

For disclosure of other risks see Item 7 - Management's  Discussion and Analysis
of Financial Condition and Results of Operations.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                              Page


Report of Deloitte & Touche - Independent Auditors......................  20

Report of Arthur Andersen - Independent Auditors........................  21

Consolidated Balance Sheets - December 31, 1999 and 1998................  22

Consolidated Statements of Operations  - Years ended
December 31, 1999, 1998 and 1997........................................  23

Consolidated  Statements  of  Changes in Stockholders'
Equity  - Years  ended December 31, 1999, 1998 and 1997................   24

Consolidated  Statements of Cash Flows - Years ended
December 31, 1999, 1998 and 1997.......................................   25

Notes to Consolidated Financial Statements.............................   26

<PAGE>
REPORT OF INDEPENDENT AUDITORS


To the  Board of  Directors  and  Stockholders  of  Huntingdon  Life  Sciences
Group  plc,  Huntingdon, Cambridgeshire, England

We have audited the accompanying  consolidated  balance sheet of Huntingdon Life
Sciences  Group plc and  subsidiaries  as of December 31, 1999,  and the related
consolidated  statement of operations,  stockholders'  equity and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
in the  United  Kingdom,  which do not  differ  in any  material  respects  from
generally  accepted  auditing  standards in the United States of America.  Those
standards  require  that we plan and  perform  the  audit to  obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material respects,  the financial position of Huntingdon Life Sciences Group plc
at December  31, 1999 and the results of their  operations  and their cash flows
for the year  then  ended  in  conformity  with  generally  accepted  accounting
principles in the United States.

The accompanying  financial statements for the year ended December 31, 1999 have
been prepared  assuming that the Company will  continue as a going  concern.  As
discussed  in Note 3 to the  financial  statements,  the  Company's  ability  to
refinance the bank loans due August 31, 2000 raise  substantial  doubt about its
ability to continue as a going  concern.  Management's  plans  concerning  these
matters are also  described in Note 3. The  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.

Deloitte & Touche

Chartered Accountants

Cambridge

England

March 30, 2000


<PAGE>


REPORT OF INDEPENDENT AUDITORS

To the Board of Huntingdon Life Sciences Group plc

We have audited the accompanying  consolidated balance sheet of Huntingdon Life
Sciences  Group plc and  subsidiaries  as of December  31, 1998 and the related
consolidated statements of income, changes in shareholders'
equity and cash flows for the years ended December 31, 1998 and 1997.

Respective responsibilities of directors and auditors
The  financial   statements  and  the  financial  statements  schedule  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.

Basis of opinion
We conducted our audits in accordance  with United  Kingdom  auditing  standards
which do not differ in any  significant  respect  from United  States  generally
accepted  auditing  standards.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

Going concern
The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 3 to the
financial  statements,  the  Company's  ability to refinance  the bank loans due
August 31, 2000 raise substantial doubt about its ability to continue as a going
concern.  Management's plans concerning these matters are also described in Note
3. The  financial  statements do not include any  adjustments  that might result
from the outcome of this uncertainty.

Opinion
In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial position of Huntingdon Life
Sciences  Group plc and  subsidiaries  as of December  31, 1998 and the
consolidated  results  of their  operations  and their  cash flows for the years
ended December 31, 1998 and 1997 in conformity  with  generally  accepted
accounting principles.


Arthur Andersen
Chartered Accountants
Cambridge
England
April 30, 1999  (except with  respect to the matter  discussed in Note 3, as to
which the date is March 30 2000)


<PAGE>

<TABLE>

Huntingdon Life Sciences Group plc and subsidiaries
Consolidated Balance Sheets
<CAPTION>

                                                                                            December 31,
                                                                                      1999             1998
                                                                               (pound)'000      (pound)'000
<S>                                                                            <C>              <C>
ASSETS
Current assets:
Cash and cash equivalents                                                            5,258           14,080
Accounts receivable net of allowance for
uncollectible amounts of(pound)115,000                                               9,595            7,791
(1998 pound)111,000)
Unbilled receivables                                                                 5,689            4,060
Inventories                                                                            803            1,137
Prepaid expenses and other                                                           1,233            1,441
Deferred  income taxes                                                                 825              873
                                                                               ------------     ------------
Total current assets                                                                23,403           29,382
                                                                               ------------     ------------

Property and equipment; net                                                         68,969           75,416
                                                                               ------------     ------------

Investments                                                                             79              154
Unamortised costs of raising long term debt                                            692              882
Deferred income taxes                                                                5,492            4,303
                                                                               ------------     ------------
Total assets                                                                        98,635          110,137
                                                                               ------------     ------------

                       LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable                                                                     3,982            4,034
Accrued payroll and other benefits                                                     760            1,094
Accrued expenses and other liabilities                                               4,593            4,651
Fees invoiced in advance                                                             9,317            8,340
Short term debt                                                                     22,656            4,116
                                                                               ------------     ------------
Total current liabilities                                                           41,308           22,235
                                                                               ------------     ------------
Long term debt                                                                      31,023           54,688
                                                                               ------------     ------------
Other long term liabilities                                                          2,977            4,618
                                                                               ------------     ------------
                                                                               ------------     ------------
Deferred income taxes                                                               14,111           15,285
                                                                               ------------     ------------
Shareholders' Equity: 5p Ordinary Shares;
Authorised-at December 31, 1999 400,000,000 (1998, 400,000,000);
Issued and outstanding-at December 31, 1999 291,010,294 (1998, 291,010,294)         14,550           14,550
Paid in capital                                                                     25,100           25,100
Retained deficit                                                                  (30,434)         (26,339)
                                                                               ------------     ------------
Total shareholders' equity                                                           9,216           13,311
                                                                               ------------     ------------
Total liabilities and shareholders' equity                                          98,635          110,137
                                                                               ------------     ------------

<FN>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>

<PAGE>

<TABLE>

Huntingdon Life Sciences Group plc and subsidiaries
Consolidated Statements of Operations
<CAPTION>
                                                                Year Ended December 31,
                                                           1999             1998               1997
                                                    (pound)'000      (pound)'000        (pound)'000
<S>                                                 <C>              <C>                <C>
Revenues                                                 58,215           52,616             63,689
Cost of sales                                          (51,517)         (56,739)           (56,136)
                                                    ------------     ------------       ------------
Gross profit/(loss)                                       6,698          (4,123)              7,553
Selling and administrative expenses                     (9,026)          (9,200)            (9,069)
Other operating income/(expense)                            507         (14,911)            (3,549)
                                                    ------------     ------------       ------------
Operating loss                                          (1,821)         (28,234)            (5,065)
Interest income                                             353              375                546
Interest expense                                        (4,283)          (5,882)            (4,197)
Other (expense)/income                                    (687)              321              1,001
                                                    ------------     ------------       ------------
Loss before income taxes                                (6,438)        (33,420 )           (7,715 )
Income taxes                                              2,343            8,983              4,833
                                                    ------------     ------------       ------------
Net loss                                                (4,095)        (24,437 )            (2,882)
                                                    ------------     ------------       ------------

Loss per share
 -basic                                          (pound)(0.014)   (pound)(0.142)     (pound)(0.026)
 -diluted                                        (pound)(0.014)   (pound)(0.142)     (pound)(0.026)
                                                          (000)            (000)              (000)
Weighted average shares outstanding
 -basic                                                 291,010          172,200            112,935
 -diluted                                               291,010          172,200            112,935


<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

</FN>
</TABLE>

<PAGE>

<TABLE>

Huntingdon Life Sciences Group plc and subsidiaries
Consolidated Statement of Changes in Shareholders' Equity
<CAPTION>
                                                    Ordinary      Paid in       Retained
                                                      Shares      Capital       Earnings      Total
                                                 (pound)'000  (pound)'000    (pound)'000    (pound)'000
<S>                                                 <C>          <C>            <C>           <C>
Balance, December 31, 1996                             5,429        8,393            764        14,586
Net loss for year                                          -            -        (2,882)       (2,882)
Exercise of Share Options                                  1            9              -            10
Issue of Shares                                          270        5,378              -         5,648
Transfers                                                  -        (108)            108             -
                                                     --------     ---------      ---------     --------
Balance, December 31, 1997                             5,700       13,672        (2,010)        17,362
Net loss for year                                          -            -       (24,437)       (24,437)
Issue of shares                                        8,850       11,536              -        20,386
Transfers                                                  -        (108)            108             -
                                                    ---------     --------       --------      ---------
Balance, December 31, 1998                            14,550       25,100        (26,339)        13,311
Net loss for year                                         -            -          (4,095)        (4,095)
                                                    ---------     ---------      --------      ---------
Balance, December 31, 1999                            14,550       25,100        (30,434)         9,216
                                                    ---------     ---------      ---------     ---------

<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>


<PAGE>

<TABLE>

Huntingdon Life Sciences Group plc and subsidiaries
Consolidated Statements of Cash Flows
<CAPTION>
                                                                               Year Ended December 31,
                                                                         1999           1998          1997
                                                                  (pound)'000    (pound)'000   (pound)'000
<S>                                                                  <C>           <C>           <C>
Cash flows from operating activities:
Net loss                                                              (4,095)       (24,437)       (2,882)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation and amortisation                                           5,979         17,991         6,126
Deferred income taxes                                                 (2,324)        (8,444)       (3,113)
Provision for losses on accounts receivable                                 4             36             1
Profit on sale of property, plant and equipment                       (1,757)              -          (83)
Asset write down                                                        1,250              -             -
Changes in operating assets and liabilities:
Accounts receivable, unbilled receivables and prepaid expenses        (3,045)          2,186         4,739
Inventories                                                               334            135            38
Accounts payable, accrued expenses and other liabilities and
accrued payroll and other benefits                                      (444)          (837)       (3,324)
Fees invoiced in advance                                                  977            493       (1,468)
Other liabilities                                                     (1,743)          3,264         1,150
                                                                     ------------   ------------  ---------
Net cash (used in)/provided by operating activities                   (4,864)        (9,613)         1,184
                                                                     ------------   ------------  ---------
Cash flows from investing activities:
Purchase of property, plant and equipment                             (3,024)        (2,419)      (14,501)
Proceeds from sale of property, plant and equipment                     4,214              5           205
                                                                     ------------   ------------  ---------
Net cash provided by/(used in) investing activities                     1,190        (2,414)      (14,296)
                                                                     ------------   ------------  ---------
Cash flows from financing activities:
Proceeds from issue of ordinary shares                                      -         20,386         5,658
Proceeds from long term borrowings                                          -          5,205         3,800
Repayments of long term borrowings                                      (136)          (551)          (32)
Proceeds from short term borrowings                                         -            747             -
Repayment of short term borrowings                                    (5,960)              -             -
Amortisation of loan costs                                                108            133           201
                                                                     ------------   ------------  ---------
Net cash (used in)/provided by financing activities                   (5,988)         25,920         9,627
                                                                     ------------   ------------  ---------
Effect of exchange rate changes on cash and cash equivalents              840          (256)           891
                                                                     ------------   ------------  ---------
(Decrease)/increase in cash and cash equivalents                      (8,822)         13,637       (2,594)
Cash and cash equivalents at beginning of year                         14,080            443         3,037
                                                                     ------------   ------------  ---------
Cash and cash equivalents at end of year                                5,258         14,080           443
                                                                     ------------   ------------  ---------

Supplementary disclosures:
Interest paid                                                         (4,173)        (5,717)       (4,434)
Income taxes received/( paid)                                              28            974          (98)

<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

</FN>
</TABLE>

<PAGE>


Huntingdon Life Sciences Group plc and subsidiaries
Notes to Consolidated Financial Statements December 31, 1999, 1998 and 1997

1. Business

The Company is a leading Contract  Research  Organisation,  offering  world-wide
pre-clinical  and  non-clinical  testing  for  biological  safety  and  efficacy
assessment  which  is  necessary  for the  development  of  pharmaceuticals  and
chemicals.  The Company  serves the  rapidly  evolving  requirements  to perform
safety  evaluations  on new  pharmaceutical  compounds  and  chemical  compounds
contained within the products that man uses, eats, and is otherwise  exposed to.
In addition,  it tests the effect of such compounds on the  environment and also
performs work on assessing the safety and efficacy of veterinary products.

2. Basis of Financial Statements

These financial  statements are not the Company's primary  financial  statements
and do not constitute  statutory  accounts  within the meaning of Section 227 of
the Companies Act 1985 of Great Britain.  Such statutory  accounts for the years
ended  December  31,  1997 and 1998  have been and for the year  ended  December
31,1999 will be delivered to the  Registrar of Companies  for England and Wales.
The auditors have issued unqualified audit reports on these accounts.

These  financial  statements  are  prepared in  conformity  with the  accounting
principles  generally  accepted in the United States ("US GAAP").  These US GAAP
statements  are prepared  solely for the purposes of preparing the Annual Report
on Form 10-K.  They are presented in pounds sterling since the United Kingdom is
the country in which the Company is incorporated.

3. Summary of Significant Accounting Policies

A summary of the principal accounting  policies,  all of which have been applied
consistently  throughout  the year ended  December 31, 1999,  and the  preceding
periods presented is set out below:

Basis of consolidation

The consolidated  financial  statements  incorporate the accounts of the Company
and  each of its  subsidiaries  for the year  ended  December  31,  1999 and the
preceding   periods   presented  except  as  described  below.  The  results  of
subsidiaries  acquired  or  disposed  of during any period are  included  in the
Consolidated  Statement  of  Operations  from or to,  the date on which  control
passed.

Travers Morgan Group ("TM")

Joint  administrators  were appointed to TM, on December 15, 1994. Upon granting
of the  administration  order,  control  of the  realisation  of the  assets and
settlement  of  liabilities  passed  from  the  Company  to  the  Administrator.
Accordingly , the residual  assets and  liabilities of TM have not been included
in the  Consolidated  Balance Sheet at December 31, 1997,  December 31, 1998 and
December 31, 1999. In addition,  as full provision was made for the losses of TM
at  September  30,  1994,  the  results  of TM have  not  been  included  in the
Consolidated Statements of Operations for the 12 months ended December 31, 1997,
December 31, 1998 and December 31, 1999.

Going concern

As stated in note 7, bank loans  totalling  (pound)22,586,000  are  repayable on
August 31, 2000. The directors are currently involved in negotiations to provide
adequate financing  following the expiry of these loans. This financing could be
asset backed or supported by projected cash flows.  The  negotiations  are at an
early  stage  and  there is  substantial  doubt as to the  outcome  as there are
uncertainties involved in either approach.

In the light of the above  the  directors  have  formed a  judgement  that it is
appropriate  to adopt the going concern  basis in preparing  the  accounts.  The
financial  statements do not include any  adjustments  that would result from an
inability to secure adequate financing.

Reclassifications

Certain  figures in the accounts for the year ended  December 31, 1998 have been
reclassified  so that their  presentation  mirrors  that in the accounts for the
year ended  December 31, 1999.  There are provisions for the pension costs which
are now shown as other  long term  liabilities.  In 1998 they were  included  in
trade payables, accrued expenses and accrued payroll and benefits.

Summary of Significant Accounting Policies continued

Cash and cash equivalents

Cash and cash equivalents include all highly liquid investments with an original
maturity  date of three  months  or less at the  date of  purchase  and  consist
principally of amounts temporarily invested in money market funds. Cash includes
a restricted  amount of $250,000  representing an irrevocable  standby letter of
credit issued to cover the Group's liabilities to a third party.

Financial instruments

The  fair  value of cash and cash  equivalents,  accounts  receivable,  accounts
payable  and  accrued  expenses  and  long  term  and  short  term  debt are not
materially  different  from their  carrying  amounts as reported at December 31,
1999 and 1998 except for the Convertible Capital Bonds (see note 7).



<PAGE>


Huntingdon Life Sciences Group plc and subsidiaries
Notes to Consolidated Financial Statements December 31, 1999, 1998 and 1997
continued

Inventories

Inventories  are valued at the lower of cost, on a FIFO basis, or net realisable
value  after  making  due  allowances  for any  obsolete  items.  They  comprise
materials and supplies.

Impairment of Long-Lived Assets

Long-lived  assets are  evaluated  for possible  impairment  through a review of
undiscounted expected future cash flows. If the sum of the undiscounted expected
future cash flows is less than the carrying amount of the asset or if changes in
facts and circumstances indicate, an impairment loss is recognised.

Depreciation

The cost of depreciable assets is written off in equal monthly instalments over
their expected useful lives as follows:

         Freehold buildings and facilities      15 - 50 years
         Plant and equipment                     5 - 15 years
         Vehicles                                     5 years
         Computer software                            5 years


Goodwill arising on consolidation

Goodwill,  being  the  excess  of  the  purchase  consideration  for  subsidiary
companies acquired over the fair values ascribed to their tangible net assets at
the date of acquisition,  is amortized over its expected useful life which is 40
years. In subsequent  years,  goodwill  carried forward is assessed based on its
fair  value  and any  permanent  impairment  is  written-off  at the  time it is
identified.

Investments

On January 2, 1996 the Company  entered into an agreement with Chugai Boyeki Co.
Ltd to form a company, Huntingdon Life Sciences Co. Ltd owned 50% by each party.
Huntingdon  Life Sciences Co. Ltd is  responsible  for selling and marketing all
Huntingdon  services in Japan. This investment  represents a joint venture which
is accounted for using the equity method.

Taxation

The  current  charge for  income  taxes is  calculated  in  accordance  with the
relevant tax  regulations  applicable  to each entity in the  Company.  Deferred
income taxes are  recognised  for the future tax  consequences  attributable  to
temporary  differences  between  the  financial  statement  carrying  amounts of
existing assets and liabilities  and their  respective tax basis.  The effect on
deferred tax assets and  liabilities  of a change in tax rates is  recognised in
income in the period that includes the enactment  date.  Deferred tax assets are
recognised  in full  subject to a valuation  allowance  that  reduces the amount
recognised to that which is more likely than not to be realised.

Summary of Significant Accounting Policies continued

Revenue recognition

Revenues represent the value of work done for clients, exclusive of VAT or sales
taxes.  Billings in advance of work  performed  are recorded as fees invoiced in
advance and included in current  liabilities,  while billings in arrears of work
performed are included in current assets as amounts recoverable on contracts.

Contracts

Profit on  contracts,  irrespective  of length,  is taken as the work is carried
out. The profit is calculated to reflect the  proportion of the work  performed,
by  recording  turnover  and  related  costs as  contract  activity  progresses.
Turnover is calculated as that  proportion of total  contract  value which costs
incurred to date bear to total expected costs for that contract.  Full provision
is made for losses on contracts when they are first foreseen.

Foreign currencies

Assets,  liabilities,  revenues and costs denominated in foreign  currencies are
recorded  at the rates of  exchange  ruling  at the  dates of the  transactions;
monetary  assets and  liabilities  at the balance  sheet date are  translated at
period end rates of exchange. All exchange differences thus arising are reported
as part of the net income for the period.

On  consolidation,  the assets and  liabilities  of  overseas  subsidiaries  are
translated  at the period end rates of exchange,  and the revenues and costs are
translated at monthly average rates of exchange.  Translation  adjustments where
material are included as a separate  component  of  stockholders'  equity in the
consolidated financial statements.

Leased assets

Assets held under the terms of capital  leases are  included  in tangible  fixed
assets and are depreciated in accordance with the Company's policy.  Obligations
for future lease payments,  less  attributable  finance charges are shown within
liabilities  and are analysed  between  amounts falling due within and after one
year.  Operating  lease  rentals are charged to the  Consolidated  Statement  of
Operations as incurred.

Pension costs

Contributions to defined  contribution plans are charged to income in the period
in which they accrue.  Current  service costs for defined benefit plans are also
accrued  in the  period to which  they  relate.  Prior  service  costs,  if any,
resulting  from  amendments to the plans are  recognised  and amortised over the
remaining period of service of such employees.

Costs of raising long-term debt

The costs of raising long term  financing  are  capitalised  as an asset and are
amortised,  using  the  effective  interest  method,  over the term of the loan.
Convertible debt is reported as a liability unless conversion actually occurred.

Use of estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the results of operations during the reporting periods. Although these estimates
are based upon management's best knowledge of current events and actions, actual
results could differ from those estimates.

Loss per share

Loss per share is computed in accordance  with FASB Statement No. 128,  Earnings
Per Share.  Basic loss per share is computed by dividing net income available to
common  stockholders by the weighted average number of shares outstanding during
the  period.  The  computation  of  diluted  loss per  share is  similar  to the
computation of basic loss per share, except that the denominator is increased to
include the number of additional  common shares that would have been outstanding
if the dilutive  potential common shares had been issued. The potential dilution
which could arise from  outstanding  share options and the  Convertible  Capital
Bonds is not disclosed as any adjustments would be anti-dilutive.

Summary of Significant Accounting Policies continued

Segment Analysis

In June 1997,  the FASB issued SFAS No. 131,  "Disclosures  about Segments of an
Enterprise and Related  Information".  This statement  establishes standards for
the reporting of information about operating  segments on an annual basis and is
effective  for fiscal  years  beginning  after  December  15,  1997.  Except for
geographic  information  (see Note 12),  this  statement  did not  result in any
changes to the  Company's  presentation  of financial and  nonfinancial  data in
1998.  The Company's  operating  locations  have been  aggregated  into a single
reportable  segment,  as permitted  under SFAS No. 131,  since they have similar
economic characteristics, products, production processes, types of customers and
distribution methods.

Stock-Based Compensation

SFAS No. 123 encourages,  but does not require, companies to record compensation
cost for stock-based  compensation  plans at fair value. The Company has elected
to continue to account  for  stock-based  compensation  in  accordance  with APB
Opinion  No.  25,  "Accounting  for Stock  Issued  to  Employees",  and  related
interpretations,  as permitted by SFAS No. 123.  Compensation  expense for stock
options is measured as the excess, if any, of the average quoted market price of
the Company's stock at the date of grant over the amount an employee must pay to
acquire the stock.

New accounting standards

In June 1998, the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
133,  "Accounting  for  Derivative  Instruments  and Hedging  Activities".  This
statement   establishes   accounting  and  reporting  standards  for  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts (collectively referred to as derivatives), and for hedging activities.
It  requires  that an entity  recognise  all  derivatives  as  either  assets or
liabilities in the statement of financial position and measure those instruments
at  fair  value.  As  amended  by  SFAS  No.  137,  "Accounting  for  Derivative
Instruments  and  Hedging  Activities  - Deferral of the  Effective  Date of FAB
Statement  No. 133",  this  statement is  effective  for all fiscal  quarters of
fiscal  years  beginning  after  June  15,  2000,  although  early  adoption  is
encouraged.  The  Company  is in the  process  of  analysing  the  impact of the
adoption of this statement on its consolidated financial statements.

<PAGE>

4.  Property and Equipment

Property and equipment at December 31, 1999 and 1998 consists of the following:

                                                         1999           1998
                                                  (pound)'000    (pound)'000
Property and equipment at cost:
Freehold property                                       63,228        68,355
Plant equipment and vehicles                            55,810        61,622
Assets in the course of construction                     2,032         2,575
                                                  -------------    ---------
                                                       121,070       132,552
                                                  -------------    ---------
Less: Accumulated depreciation and amortisation         52,101        57,136
                                                  -------------    ---------
Property and equipment, net                             68,969        75,416
                                                  -------------    ---------

Depreciation  and  amortisation  expenses   aggregated   (pound)5,979,000  and
(pound)10,649,000 for 1999 and 1998 respectively.

The net book value of assets held under capital leases and included above under
plant equipment and vehicles is as follows:

                                             Cost      Depreciation    Net book
                                                                         Value
                                      (pound)'000   (pound)'000    (pound)'000
At December 31, 1998                         325           134            191
At December 31, 1999                         314           82             232

5.  Goodwill
                                            1999                   1998
                                      (pound)'000            (pound)'000
Cost:                                      7,752                  7,752
                                       ---------------        -------------
Accumulated amortisation
Balance at beginning of period             7,752                    410
Charge in year                               -                    7,342
                                       ---------------        -------------
Balance at end of period                   7,752                  7,752
                                       ---------------        -------------
Net balance:                                 -                      -
                                       ---------------        -------------

The unamortised balance of the goodwill arising on the acquisition of businesses
by the Company in 1995 was  written off in 1998.  Due to the decline in revenues
and the  re-naming  and  successful  integration  of the Princeton and Eye sites
acquired in 1995,  the  unamortised  balance of goodwill  acquired at that time,
(pound)7,342,000, was written off following an impairment review.


6. Taxes on Income

The  components  of loss before taxes and the related  benefit for tax relief on
losses for 1999, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>

Loss before taxes                                                1999             1998              1997
                                                          (pound)'000      (pound)'000       (pound)'000
<S>                                                     <C>               <C>               <C>
United Kingdom                                                  6,019           30,000             5,171
United States                                                     419            3,420             2,544
                                                         -------------    -------------     -------------
                                                                6,438           33,420             7,715
                                                         -------------    -------------     -------------

Benefit for income taxes                                         1999             1998              1997
                                                          (pound)'000      (pound)'000       (pound)'000

UK tax calculated at 30% (1998 and 1997: 31%)                      28              539             1,843
Deferred taxation                                               2,315            8,444             2,990
                                                         -------------    -------------     -------------
                                                                2,343            8,983             4,833
                                                         -------------    -------------     -------------
</TABLE>

The  differences  between the benefit for income taxes and income taxes computed
using the UK corporation tax rate for 1999, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>

                                                                           % of Income before Income Taxes
                                                                          1999            1998          1997
                                                                             %               %             %
<S>                                                                     <C>             <C>             <C>
UK statutory rate                                                           30              31            31
Effect of non taxation of profit on sale of fixed assets, goodwill &         6             (7)             8
exceptional bad debt recovery
Increase in taxes arising from effect of foreign earnings                    -               1             4
Exchange loss not taxable                                                  (5)               -            (4)
Effect of reduction in UK tax rate on deferred tax                           5               -            18
Prior year adjustments                                                       -               2             7
Permanent differences                                                        -               -            (1)
                                                                       --------         -------       -------
Effective tax rate                                                          36              27            63
                                                                       --------         -------       -------
</TABLE>

<PAGE>


6. Taxes on Income continued

The tax effects of temporary  differences that give rise to significant portions
of deferred  tax assets and  liabilities  at  December  31, 1999 and 1998 are as
follows:


                                                    1999              1998
                                             (pound)'000       (pound)'000

Current deferred tax assets
Liabilities not currently deductible                 825               873
                                            -------------     -------------
                                                     825               873
                                            -------------     -------------
Non current deferred tax assets
Net operating losses                               5,492             4,303
                                            -------------     -------------
                                                   5,492             4,303
                                            -------------     -------------
Non current deferred tax liabilities
Property and equipment                            18,915            19,849
Net operating losses                             (4,804)           (4,564)
                                            -------------     -------------
                                                  14,111            15,285
                                            -------------     -------------

Net operating  losses are set off against tax  liabilities to the extent that is
allowed under UK tax legislation.  Of these tax losses  (pound)7,150,000 have no
expiry date, (pound)850,000 expire in 2011 and (pound)2,296,000 expire in 2012.

The  Company  has not  provided a valuation  allowance  on  deferred  tax assets
because those amounts are expected to be realised  through  taxable  income from
future operations.

No account is taken of the benefits of capital losses incurred in prior years as
the Company would be required to make a capital gain before such losses could be
utilised.


7.   Short and Long Term Debt

                                                  1999              1998
                                           (pound)'000       (pound)'000
Bank overdrafts and loans - short term:
Bank loans                                      22,586               747
Non bank loans                                       -             3,300
Capital leases                                      70                69
                                           ------------     -------------
                                                22,656             4,116
                                           ------------     -------------
Loans - long term:
Bank loans repayable on August 31, 2000              -            24,500
Capital leases                                       -               136
Convertible Capital Bonds                       31,023            30,052
                                           ------------     -------------
                                                31,023            54,688
                                           ------------     -------------


The bank loan is  repayable  on August  31,  2000 and hence is shown in  amounts
falling due within one year.  Interest is payable in quarterly breaks at "LIBOR"
plus 1.75% in respect of drawings up to  (pound)19,500,000  and LIBOR plus 2% in
respect  of  drawings  over  (pound)19,500,000.  The  interest  rate  payable at
December 31, 1999 is 7.83% on (pound)19,500,000 and 8.08% on (pound)3,086,000.


7.   Short and Long Term Debt continued

The bank loans are secured by guarantees from the Company, Huntingdon Life
Sciences Ltd., and Huntingdon Life Sciences Inc., together with charges over
the assets of those Companies. The non-bank loan was secured by charges over
the assets of the Wilmslow Research Centre and bore no interest.

All capital leases are repayable within one year.

On August 12, 1991, an issue of US  $50,000,000  7 1/2%  Convertible  Capital
Bonds, 2006, ("the Bonds"),  was made by a subsidiary company,  HIH Capital Ltd.
The  Bonds  are  guaranteed  on a  subordinated  basis by the  Company,  and are
convertible by the holders at any time into Redeemable  Preference Shares of HIH
Capital Ltd., which in turn are immediately  exchangeable for Ordinary Shares of
5 pence  each in the  Company.  The  conversion  rate,  which is based  upon the
paid-up value of the Redeemable  Preference  Shares and a fixed rate of exchange
of (pound)1.00=US $1.6825, is 242.3 pence per Ordinary Share (1998: 242.3 pence)
and is subject to adjustment in certain  circumstances.  At this conversion rate
the number of Ordinary  Shares to be issued on  conversion  and exchange of each
unit of US $1,000 comprised in a Bond would be 245 (1998:  245). The proceeds of
the Bonds  issue of US  $47,300,000  were  passed to the  Company by HIH Capital
Ltd.,  in  consideration  for the issue of US  $50,000,000  Debenture,  on terms
similar to those of the Bonds. The  (pound)1,590,000  costs of issuing the Bonds
are amortised over the life of the Bonds and together with the interest  payable
are charged to the Consolidated  Income  Statement using the effective  interest
method.

The Bonds are  redeemable by the holders at the maturity date and by the Company
at any time. To date no Bonds have been redeemed.

Fair value of financial instruments

Cash and cash  equivalents  are held on short term deposit at commercial  rates.
Long term loans are offered to the Company at fair rates of interest for similar
debt.  Accordingly  the  carrying  values  approximate  to the fair  value.  The
Convertible  Capital Bond is however a negotiable  instrument and the fair value
is the  quoted  market  price.  The  estimated  fair  value of the  Bonds are as
follows:

                                              1999                 1998
                                       (pound)'000          (pound)'000
           Carrying Amount                  31,023               30,052
           Fair value                       18,769               24,793


8.   Other Long Term Liabilities

                                              1999                 1998
                                       (pound)'000          (pound)'000
           Restructuring                        60                2,086
           Pension liabilities               2,403                2,047
           Other                               514                  485
                                     --------------    -----------------
                                             2,977                4,618
                                     --------------    -----------------
<PAGE>

9.  Stockholders' Equity

Ordinary shares

The authorised share capital of the Company as at December 31, 1996 and December
31, 1997 was  (pound)7,000,000,  comprising  140,000,000  ordinary  shares of 5p
each.  This was increased in 1998 to  (pound)20,000,000  comprising  400,000,000
ordinary shares of 5p each.

At an Extraordinary General Meeting on September 2, 1998 shareholders approved a
subscription of 120,000,000 and a placing and open offer of 57,003,431 shares at
12.5 pence.  The shares not taken up by existing  qualifying  shareholders  were
placed by Kleinwort Benson Securities  Limited with  institutional  investors in
the UK.  These  transactions  raised  (pound)20.4M  net of  expenses.  The issue
discount  before expenses was 36 per cent as compared with 19.5 pence per share,
being the London Stock Exchange  middle market price at the time the issue price
was agreed.  However,  the issue price net of expenses  represented a 6 per cent
discount to the price of the Company's  ADR's on the New York Stock  Exchange at
the time that the price was agreed.  Dealings  commenced  in these new  Ordinary
shares  on  September  3, 1998 and the  discount  at that time was 4 per cent as
compared  with the then  prevailing  middle  market  price on the  London  Stock
Exchange.

Paid in Capital

This is not distributable.

(Loss) / earnings per share

The computation of loss per share is as follows:

                                    1999             1998              1997
Numerator
Net loss ((pound)'000)             4,095            24,437            2,882
Denominator
Weighted average
Shares outstanding (000)          291,010           172,200          112,935
Loss per share              (pound)(0.014)   (pound)(0.142)    (pound)(0.026)


The potential dilution, which could arise from outstanding share options and the
Convertible Capital Bonds in all three years is not disclosed as any adjustments
would be anti-dilutive.

Share option plans

On April 8, 1983,  the Company  adopted the  Unapproved  Share  Option Plan (the
"Unapproved Plan") pursuant to which options to acquire Ordinary Shares could be
granted to any eligible employee or Director. Options may be exercised,  subject
to certain exceptions, in respect of 50% of the shares allocated from the second
anniversary  of the date of the grant and in respect of 100% of the shares  from
the third anniversary. Options lapse on the seventh anniversary.

On January 29,  1985,  the  Company  adopted a second  share  option  plan,  the
Approved  Management  Share Option Plan (the  "Approved  Plan"),  which has been
approved by the Board of Inland Revenue (the "Inland  Revenue")  pursuant to the
Finance Act 1984.  The rules of the Approved  Plan  broadly  follow those of the
Unapproved  Plan,  except  that an option may be  exercised,  subject to certain
exceptions, only between three and ten years after it is granted.

Both the Unapproved  Plan and the Approved Plan  terminated on December 31, 1997
with respect to the grant of new options.  Options  outstanding at that date are
not affected by such termination.

<PAGE>


9.  Stockholders' Equity continued

Under the terms of the plans, the following  Options to purchase Ordinary Shares
of 5p in the Company have been granted but not  relinquished  or exercised as at
December 31, 1999.


 Date of grant           Number of shares     Option price
                           outstanding

UNAPPROVED  PLAN
 December 18, 1995          112,500               (pound)0.77
 November 21,1996            60,000                     $1.60
 December 1, 1997           100,000               (pound)0.50
 December 31, 1997          522,920              (pound)0.465
 December 31, 1997          680,000                     $0.77

APPROVED PLAN
 February 13, 1995         202,500               (pound)0.49
 December 11, 1995         640,000               (pound)0.78
 December 11, 1995         130,000                     $1.19
 December 18, 1995          64,000               (pound)0.77
 November 21,1996          560,000               (pound)0.95
 December 31, 1997         580,000              (pound)0.465


Other share options

At the Extraordinary  General Meeting held on September 2, 1998 the Shareholders
approved a new  option  scheme  (the  rules of which were  amended at the Annual
General  Meeting held on June 3, 1999) and a separate  Option  Agreement with Mr
Baker:

a. The Huntingdon Life Sciences Group Unapproved Share Option Scheme
    ("Unapproved Scheme")

(i) 8,000,000 Founder Options had been granted but not relinquished or exercised
at December 31, 1999.  They are  exercisable  from the third  anniversary of the
date  of  the  grant   subject  to  the  share  price   reaching  the  following
pre-determined  targets for a period of seven  consecutive  dealing  days at any
time after January 1, 1999.

    Target price per share       Proportion of options exercisable
              25p                               25%
              50p                               50%
              75p                               75%
             100p                              100%

(ii)  2,000,000  options,  other  than  Founder  Options,  which  are  generally
exercisable between the third and tenth anniversary of the date of grant subject
to the attainment of performance  related  conditions  were granted on March 29,
1999 at a  Subscription  Price of 19.25 pence each and remained  outstanding  on
December 31, 1999.

All options lapse on the tenth anniversary.

b.       Option Agreement

Mr  Baker was granted Options over 5,000,000 Ordinary Shares of 5p in the
Company,  the principal terms of which are the same as those applicable to the
Founder Options referred to above.

9.  Stockholders' Equity continued

Huntingdon Life Sciences Group Incentive Option Plan

Details of the Huntingdon Life Sciences Group Incentive  Option Plan ("Incentive
Plan"),  which was adopted on June 3, 1999,  were  included  in the  circular to
shareholders  dated April 30, 1999.  As stated  therein the  Incentive  Plan was
introduced to run alongside the Scheme described above and is designed to reward
short term improvement in financial performance. Options are available for grant
to management  and senior  staff,  subject to the  achievement  of a performance
measure and personal performance  conditions.  Options have been granted to such
employees subject to a performance measure designed to reward the recipients for
returning the Company to profit before  interest and tax in the final quarter of
1999 with continual improvement forecast thereafter. It is intended that further
grants will be made in respect of each financial year.  Options may generally be
exercised from the third anniversary of the date of grant.  Options lapse on the
tenth anniversary.



Date of grant          Number of shares outstanding    Option Price

June 28, 1999                  2,550,000              (pound)0.1925

September 6, 1999                100,000              (pound)0.175


Huntingdon Life Sciences Sharesave Scheme

The Huntingdon  Life Sciences  Sharesave  Scheme  ("Sharesave  Scheme") was also
adopted at the Annual  General  Meeting  held on June 3, 1999 and the main terms
thereof  were  summarised  in the  circular to  shareholders  referred to above.
Approximately  55% of eligible  employees,  who will fund the  exercise of their
options with the proceeds of a related Save As You Earn (SAYE) savings contract,
accepted the invitation to join the Sharesave  Scheme.  Options may generally be
exercised from the third  anniversary of the Bonus Date, which falls on November
1, 2002. Options generally lapse six months after the Bonus Date.



Date of grant            Number of shares outstanding      Option Price

September 9, 1999                 7,102,238               (pound)0.14



The following  table sets forth certain  information  relative to the changes to
options outstanding in the periods presented:
<TABLE>
<CAPTION>


                                                                                                       Option Price
                                                                                                ----------------------------
                                              Unapproved           Approved       Unapproved        Dollars(pound) Sterling
                                                    Plan               Plan          Scheme*      per Share       per Share
<S>                                         <C>                <C>               <C>             <C>           <C>
Outstanding at January 1, 1997                 2,248,300          4,398,775                -      1.15 -1.60    0.49 - 0.95
Granted                                        3,050,020            650,000                -            0.77    0.465- 0.49
Options exercised                               (12,500)                  -                -              -            0.77
Rescinded                                    (1,808,750)        (1,407,075)                -      1.19 -1.60    0.49-  0.95
                                         ----------------   ----------------   --------------   ------------    ------------
Outstanding at December 31, 1997               3,477,070          3,641,700                -      0.77 -1.60     0.465- 0.95
Granted                                                -                  -       13,500,000              -             0.125
Rescinded                                    (1,204,950)        (1,057,750)                -      0.77-1.60      0.465- 0.95

                                         ----------------   ----------------   --------------   ------------    ------------
Outstanding at December 31, 1998               2,272,120          2,583,950       13,500,000      0.77-1.60      0.125-0.95
Granted                                                -                  -        2,000,000              -           0.125
Rescinded                                      (796,700)          (407,450)        (500,000)           0.77      0.125-0.95
                                         ----------------   ----------------   --------------   ------------    ------------
Outstanding at December 31, 1999               1,475,420          2,176,500       15,000,000      0.77-1.60      0.125-0.95
                                         ----------------   ----------------   --------------   ------------    ------------
</TABLE>

9.  Stockholders' Equity continued

*and Option Agreement
<TABLE>
<CAPTION>

                                                                                        Option Price
                                                                               --------------------------------
                                               Incentive          Sharesave        Dollars            Sterling
                                                    Plan             Scheme      per Share           per Share
<S>                                      <C>                <C>                <C>             <C>
Outstanding at January 1, 1997                         -                  -              -                   -

7
Granted                                                -                  -              -                   -
Options exercised                                      -                  -              -                   -
Rescinded                                              -                  -              -                   -
                                                      --
                                         ----------------   ----------------   ------------    ----------------
Outstanding at December 31, 1997                       -                  -              -                   -
Granted                                                -                  -              -                   -
Rescinded                                              -                  -              -                   -

                                         ----------------   ----------------   ------------    ----------------
Outstanding at December 31, 1998                       -                  -              -                   -
Granted                                        2,650,000          7,193,520              -         0.14-0.1925
Rescinded                                              -           (91,282)              -                0.14

                                         ----------------   ----------------   ------------    ----------------
Outstanding at December 31, 1999               2,650,000          7,102,238              -         0.14-0.1925
                                         ----------------   ----------------   ------------    ----------------

</TABLE>

A summary of the status of the Company's  option plans,  schemes and  agreements
for the years ended  December 31, 1997,  December 31, 1998 and December 31, 1999
and changes  during the years then ended is presented in the table and narrative
below:
<TABLE>
<CAPTION>


                                                             Years ended
                                       December 31, 1999        December 31, 1998     December 31, 1997
                                       -----------------        -----------------     ----------------
                                       Shares    Wtd Avg.      Shares    Wtd Avg.        Shares       Wtd
                                                 Ex Price                 Ex Price                  Avg. Ex
                                       (000)                    (000)                     (000)      Price
<S>                                 <C>                     <C>                      <C>              <C>

Outstanding at start of period           18,356(pound)0.26        7,119 (pound)0.60       6,647(pound)  0.80
Granted                                  11,843(pound)0.16       13,500 (pound)0.13       3,700(pound)  0.47
Exercised                                     -          -            -           -        (12)(pound)  0.77
Forfeited                                     -          -            -           -           -            -
Expired                                       -          -            -           -           -            -
Cancelled                               (1,795)(pound)0.46      (2,263) (pound)0.53     (3,216)(pound)  0.86
                                     ----------- ----------   ---------- -----------  ---------- ------------
Outstanding at end of period             28,404(pound)0.21       18,356 (pound)0.26       7,119(pound)  0.60

                                     ----------- ----------   ---------- -----------  ---------- ------------

Exercisable at end of year                    -                        -                         -
Weighted average fair value of      (pound)0.08              (pound)0.08             (pound)  0.30
options granted
</TABLE>


The 28,404,158  options  outstanding at December 31, 1999 have an exercise price
between (pound)0.125 and (pound)0.95,  with a weighted average exercise price of
(pound)0.21  and a  weighted  average  remaining  contractual  life of 7  years.
2,420,460 of these options are  exercisable.  The 11,843,520  options granted in
1999 have an  exercise  price of between  (pound)0.14  and  (pound)0.1925  and a
weighted average remaining contractual life of 5.4 years.



<PAGE>


9.  Stockholders' Equity continued

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option   pricing  model  with  the  following   weighted-average
assumptions  used for the  option  grants in 1997,  1998 and 1999  respectively:
risk-free  interest  rates of 6.27  percent,  4.94  percent  and  5.68  percent;
expected  dividend  yields of 0.00  percent;  expected life of 7.0 years for the
Option Plan,  10.0 years for the Management  Plan, and 5.0 years for the options
granted during the year except for the Sharesave  Scheme where the expected life
is 3.0  years;  expected  volatility  of 54.7  percent,  57.4  percent  and 57.0
percent.

The Company  accounts for share options under APB Opinion No. 25, under which no
compensation  cost has been recognised.  Had compensation cost for stock options
awarded under the plans been determined  consistent with FASB Statement No. 123,
the  Company's  net income and  earnings  per share would have been  restated as
follows:

<TABLE>
<CAPTION>

                                                     Year Ended            Year Ended December          Year Ended
                                                  December 31, 1999             31, 1998             December 31, 1997
                                              -------------------------- ------------------------ ------------------------
<S>                          <C>                <C>                       <C>                      <C>
Net loss:                     As Reported              (4,095)                  (24,437)                   (2,882)
                              Proforma                 (4,268)                  (23,930)                   (4,046)
Basic and Diluted EPS:        As Reported       (pound)(0.014)            (pound)(0.142)            (pound)(0.026)
                              Proforma          ((pound)(0.015)           (pound)(0.139)            (pound)(0.036)

</TABLE>

As  at  December  31,  1999,  the  Company  may  grant  options  in  respect  of
15,246,871shares in aggregate under the plans and scheme.



10. Commitments and Contingent Liabilities

Operating leases

Operating lease expenses were as follows

                                       1999         1998        1997
                                 (pound)'000  (pound)'000 (pound)'000
Hire of plant and equipment             172          142         124
Other operating leases                  20           354         354


The Company has commitments payable under operating leases as follows:

                                            Plant and machinery
       Year ended December 31                (pound)'000
       2000                                          346
       2001                                          325
       2002                                          146
       2003                                           24
       Thereafter                                     11
                                        -----------------
                                                     852
                                        -----------------




<PAGE>


11.  Pensions

The Company  operates the  Huntingdon  Life Sciences  Pension and Life Assurance
Scheme a funded pension scheme providing  benefits,  based on final  pensionable
salary,  for Group  employees  in the UK. This Scheme was closed to new entrants
from April 5, 1997.

On April 6, 1997 the Company  established a defined  contribution Group Personal
Pension Plan for Company employees in the UK. A defined  contribution  scheme is
available for  employees in the US. The net pension  expense for these plans for
the  twelve  months  ended   December  31,  1999  were   (pound)423,000   (1998,
(pound)278,000; 1997, (pound)229,000)

The net pension  expense for the twelve months ended December 31, 1999, 1998 and
1997 were as follows:
<TABLE>
<CAPTION>
                                                         1999                1998              1997
                                                  (pound)'000         (pound)'000       (pound)'000
<S>                                                  <C>                 <C>               <C>
Service cost (excluding employee contributions)         2,155               3,135             2,469
Interest cost on projected benefit obligation           3,687               4,151             3,229
Actual return on plan assets                          (9,465)             (5,432)           (6,929)
Asset gain                                              5,012                 729             3,187
Amortisation of prior service cost                         60                  60                60
Amortisation of transition asset                        (158)               (158)             (158)
                                                  -------------       ------------      ------------
Net periodic pension expense                             1,291              2,485             1,858
                                                  -------------       ------------      ------------
The major assumptions used in calculating the
pension expense were:

                                                         1999                1998              1997
Discount rate                                           6.25%               6.25%             7.00%
Rate of increase of future compensation                 4.00%               4.75%             6.00%
Long-term rate of return on plan assets                 7.50%               7.50%             8.50%
</TABLE>

The Net  Asset  at  Transition,  Prior  Service  Cost and Net  Gain  subject  to
amortisation  have been  amortised  on a straight  line basis over periods of 15
years, 10 years and 10 years respectively.

A reconciliation  of the projected  benefit  obligation for the pension plans to
the accrued pension  expense  recorded at December 31, 1999, 1998 and 1997 is as
follows:
<TABLE>
<CAPTION>

                                                                      1999            1998           1997
                                                               (pound)'000     (pound)'000    (pound)'000
<S>                                                              <C>            <C>             <C>
Projected benefit obligation ("PBO")                              (63,135)        (59,747)       (59,303)
Plan assets at market value                                         68,710          59,500         55,085

                                                               ------------    ------------  -------------
Plan assets in excess/(less than) of PBO                             5,575           (247)        (4,218)

Unrecognised net (loss)/gain from past experience                  (7,357)         (1,081)          5,176
Unrecognised prior service cost                                         90             150            210
Unrecognised net asset at transition                                 (711)           (869)        (1,027)
Adjustment to recognise minimum liability                                -               -          (461)
                                                               ------------    ------------  -------------
Accrued pension expense                                            (2,403)         (2,047)          (320)
                                                               ------------    ------------  -------------
Change in plan assets
Fair value of assets at beginning of year                           59,500          55,085         43,147
Actual return on plan assets                                         9,465           5,432          6,929
Employer contributions                                                 935             297          1,609
Member contributions                                                   330             106            400
Benefit payments                                                   (1,520)         (1,420)          3,000
                                                               ------------    ------------  -------------
Fair value of assets at end of year                                 68,710          59,500         55,085
                                                               ------------    ------------  -------------
Change in benefits obligation
Projected benefit obligation at beginning of year                   59,747          59,303         40,362
Service cost                                                         2,155           3,135          2,469
Interest cost                                                        3,687           4,151          3,229
Actuarial (losses)/gains                                           (1,264)         (5,528)          9,843
Member contributions                                                   330             106            400
Benefit payments                                                   (1,520)         (1,420)          3,000
                                                               ------------    ------------  -------------
Projected benefit obligation at end of year                         63,135          59,747         59,303
                                                              ------------     ------------  ------------

</TABLE>

12. Geographical analysis

During the 12 months ended  December 31,  1997,  December  1998 and December 31,
1999 the Company  operated  from  within two  geographical  markets,  the United
Kingdom and the United  States.  The Company  has had one  continuing  activity,
Contact  Research,  throughout this period.  All disclosure  therefore refers to
continuing activities.
<TABLE>

Geographical segment information is as follows:
<CAPTION>

                                                US               UK           Total
                                       (pound)'000      (pound)'000     (pound)'000
<S>                                       <C>              <C>             <C>

    1999 Revenues                           10,719           47,496          58,215
         Operating loss                      (466)          (1,355)         (1,821)
         Identifiable assets (A)            12,939           79,667          92,606
         Depreciation & amortisation           972            5,007           5,979
         Capital expenditure                 1,284            1,740           3,024

    1998 Revenues                            8,019           44,597          52,616
         Operating loss                    (2,636)         (25,598)        (28,234)
         Identifiable assets (A)            11,325           83,696          95,021
         Depreciation & amortization           865           17,126          17,991
         Capital expenditure                   705            1,714           2,419

    1997 Revenues                            9,189           54,500          63,689
         Operating loss                    (1,100)          (3,965)         (5,065)
         Identifiable assets (A)             8,335          102,514         110,849
         Depreciation & amortization           688            5,438           6,126
         Capital expenditure                 1,850           12,651          14,501
</TABLE>

(A)  Identifiable  assets  exclude cash and cash  equivalents,  investments  and
unamortised costs of raising long term debt as follows.


                                    1999            1998            1997
                             (pound)'000     (pound)'000     (pound)'000

Identifiable assets               92,606          95,021         110,849
Cash and cash equivalents          5,258          14,080             443
Investments                           79             154             154
Unamortised costs of debt            692             882           1,015
                             ------------   -------------   -------------
Total assets                      98,635         110,137         112,461
                             ------------   -------------   -------------


                                    1999               1998               1997
                             (pound)'000        (pound)'000        (pound)'000
Revenues from customers
Europe                            23,208             20,843             29,603
United States                     20,445             15,236             16,546
Far East                          14,562             16,537             17,540
                             ------------      -------------      -------------
                                  58,215             52,616             63,689
                             ------------      -------------      -------------


13. Other operating income / (expense)

                                                1999          1998        1997
                                         (pound)'000   (pound)'000 (pound)'000

Restructuring costs                                -       (4,682)           -
Asset write downs                            (1,250)             -           -
Costs of responding to allegations                 -             -     (3,549)
Goodwill written off                               -       (7,342)           -
Write down of carrying value of Wilmslow           -       (2,887)
Profit on sale of Wilmslow                     1,757             -           -
                                         ------------  -------------  ----------
                                                 507      (14,911)     (3,549)
                                         ------------  -------------  ----------


In 1999 as a result of the Company's  Year 2000  compliance  program a number of
assets that were not Year 2000 compliant were identified,  principally  computer
hardware and software. A charge of (pound)1,250,000 was made to write these off.

The Company also disposed of its Wilmslow  research  site in 1999.  The site was
sold for (pound)4,214,000  net of expenses, a gain of (pound)1,757,000  over its
written down value.

In 1998 the  Company's UK site at Wilmslow was closed and the carrying  value of
the site written down by  (pound)2,887,000  to net realisable value.  Redundancy
and related costs of (pound)361,000 have been classified as restructuring costs.

In addition,  in December 1998 the Company  announced a cost reduction  program.
The  program  which  was  completed  in  1999  rationalised  service  lines  and
capabilities  across the two UK sites and aligned  overall staff  resources with
present revenue levels.  It resulted in the loss of 151 positions, 7 in 1998
and 144 in 1999.  Associated  costs of  (pound)3,430,000  are included in
restructuring costs in 1998.  This comprised severance pay of (pound)2,656,000,
fixed asset write offs of (pound)452,000 and stock write downs of
(pound)322,000.

A review of asset values led to the  accelerated  depreciation of certain assets
in the UK. These costs, (pound)891,000,  were included in restructuring costs in
1998.

Of total restructuring costs of  (pound)4,682,000,  (pound)2,086,000 was accrued
at the end of 1998 and (pound)60,000 at the end of 1999.

Finally,  following  the decline in revenues  and the  renaming  and  successful
integration of the businesses  acquired in 1995 into the Huntingdon  group,  the
unamortised balance of the goodwill acquired at that time, (pound)7,342,000, has
no longer any intrinsic value and was therefore written off in 1998.

Amortisation of goodwill has no tax effect and the depreciation  included within
exceptional  items of  (pound)4,240,000  has reduced deferred tax liabilities by
(pound)1,314,000.  The other costs incurred will be available for offset against
future trading profits.

In 1997,  Company  operations in  Huntingdon,  UK and near  Princeton,  USA were
alleged to have  tolerated  malpractice  in its  conduct  of studies  and in the
welfare and care of animals for use in research. Further, in the USA the Company
settled an employment  matter.  The  exceptional  loss for 1997  included  study
costs, management time, legal and professional fees

The exceptional gain in 1997 represented the expected dividend,  net of costs to
be incurred,  from the  administration of the Travers Morgan Group of companies.
In 1994 these companies were placed in administration  and the Company wrote off
its investment,  providing  (pound)11.6  million against the amounts  receivable
from Travers Morgan Limited. Following discussions with the joint administrators
the Company  believed that the provision was excessive and accordingly  released
(pound)2.1 million.  This amount is included in other  expense/income  after the
operating loss of (pound)1,001,000.


<TABLE>

14. Allowance for uncollectable accounts
<CAPTION>

                                      Balance  at        Charged to    Accounts     Balance at
                                      Beginning of       costs and     Written      End of
                                      Period             expenses      Off          Period
                                     (pound)'000        (pound)'000    (pound)'000  (pound)'000
<S>                                     <C>             <C>           <C>             <C>
Allowance for uncollectable accounts
deducted from trade debtors
December 31, 1997                          74              1             -             75
December 31, 1998                          75             42            (6)            111
December 31, 1999                         111             60           (56)            115

</TABLE>


15. Unaudited Quarterly Financial information

The following is a summary of unaudited quarterly financial  information for the
12 months ended December 31, 1999 and December 31, 1998.


<TABLE>
<CAPTION>
=                                                                       Quarter Ended
Year ended 31 December, 1999          March 31       June 30      September 30    December 31
                                      (pound)'000    (pound)'000     (pound)'000    (pound)'000
<S>                                      <C>            <C>            <C>           <C>
Revenues                                   13,383         14,283          15,035         15,514
Cost of sales                            (12,471)       (12,858)        (13,115)       (13,073)
                                    ------------------------------------------------------------
Gross profit                                  912          1,425           1,920          2,441
Selling and administrative costs          (2,465)        (2,229)         (2,099)        (2,233)
Other operating income                          -              -             522           (15)
                                    ------------------------------------------------------------
Operating (loss)/profit                   (1,553)          (804)             343            193
Interest income                               155             83              62             53
Interest expense                          (1,099)        (1,087)         (1,070)        (1,027)
Other income/(expense)                      (600)          (468)             833          (452)
                                    ------------------------------------------------------------
Income/(loss) before taxes                (3,097)        (2,276)             168        (1,233)
Taxes                                       1,171            586             713          (127)
                                    ------------------------------------------------------------
Net (loss)/income                         (1,926)        (1,690)             881        (1,360)
                                    ------------------------------------------------------------

(Loss)/earning per share           (pound)(0.007) (pound)(0.006)    (pound)0.003 (pound)(0.004)

</TABLE>


<PAGE>

15. Unaudited Quarterly Financial information continued
<TABLE>
<CAPTION>

Year ended 31 December, 1998                                        Quarter Ended
                                              March 31          June 30          September 30       December 31
                                         (pound)'000       (pound)'000        (pound)'000        (pound)'000
<S>                                          <C>                <C>                <C>                <C>
Revenues                                        13,428             13,051             13,063             13,074
Cost of sales                                 (14,477)           (14,157)           (13,943)           (14,162)
                                      --------------------------------------------------------------------------
Gross loss                                     (1,049)            (1,106)              (880)            (1,088)
Selling and administrative expenses            (2,123)            (2,097)            (2,308)            (2,672)


Other operating expenses                             -                  -                  -           (14,911)
                                      --------------------------------------------------------------------------
Operating loss                                 (3,172)            (3,203)            (3,188)           (18,671)
Interest expense                               (1,561)            (1,108)            (1,595)            (1,243)
Other income/(expense)                             554              (248)                433              (418)
                                      --------------------------------------------------------------------------
Loss before taxes                              (4,179)            (4,559)            (4,350)           (20,332)
Taxes                                            1,674              1,421              1,972              3,916
                                      --------------------------------------------------------------------------
Net loss                                       (2,505)            (3,138)            (2,378)           (16,416)
                                      --------------------------------------------------------------------------
Loss per share                          (pound)(0.022)     (pound)(0.028)     (pound)(0.014)     (pound)(0.056)

</TABLE>


<PAGE>


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

The Company filed a report on Form 8-K/A on September 7, 1999, amending its Form
8-K filed on July 14, 1999,  announcing the  resignation  of Arthur  Andersen as
auditors and the engagement of Deloitte & Touche.


<PAGE>


PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The table  below sets forth  certain  information  with  respect to the current
directors and executive officers of the Company:

Name                 Age      Office Held
Appointed
Andrew H Baker       51       Director                         1998
                              Chairman of the Board            1998
Brian Cass           52       Director
1998
                              Managing Director/
                              Chief Operating Officer          1998
Gabor Balthazar      58       Director                         2000
Frank W Bonner       47       Director                         1998
                              Director of Science
                              and Technology                   1998
John Caldwell        53       Director                         1997
Kirby L Cramer       62       Director                         1999
Joseph Dowling III   35       Director                         1999
Julian T Griffiths   47       Director
1999
                              Finance Director                 1999
                              Secretary                        2000


(a)      Identification of Directors

Andrew Baker was appointed to the Board as Executive Chairman in September 1998.
He is a chartered  accountant and has operating experience in companies involved
in the delivery of healthcare  ancillary services.  He spent 18 years until 1992
with Corning Incorporated ("Corning") and held the posts of President and CEO of
Metpath Inc.,  Corning's clinical laboratory  subsidiary,  from 1985 to 1989. He
became President of Corning Laboratory  Services Inc. in 1989, which at the time
controlled  MetPath  Inc.  (now  trading as part of Quest  Inc.),  and  Hazleton
Corporation,  G.H.Besselaar Associates and SciCor Inc., all three now trading as
part of Covance Inc. Since leaving Corning in 1992,  Andrew Baker has focused on
investing in and developing  companies in the healthcare sector including Unilab
Corporation,  a clinical laboratory services provider in California, and Medical
Diagnostics  Management,  which is a US based provider of radiology and clinical
laboratory services to health care payers. In 1997, he formed FHP, an investment
partnership which acts as general partner for healthcare startup and development
companies.  FHP's largest  investment  was the purchase in 1998 of Unilabs Group
(UK) Limited, which is a UK clinical laboratory company, based in London.

Brian  Cass,  FCMA,  was  appointed  to the  Board  as  Managing  Director/Chief
Operating  Officer in September 1998. Prior to joining  Huntingdon he was a Vice
President  of Covance Inc. and  Managing  Director of Covance  Laboratories  Ltd
(previously  Hazleton Europe Ltd) for nearly 12 years, having joined the company
in 1979 as Controller.  Brian Cass worked at Huntingdon  Research Centre between
1972  and  1974  and  has  previous  experience  with  other  companies  in  the
electronics  and heavy plant  industries.  He has also held  directorships  with
North  Yorkshire  Training &  Enterprise  Council  Ltd and  Business  Link North
Yorkshire Ltd.

Gabor   Balthazar  was  appointed  to  the  Board  as  the  Senior   Independent
Non-Executive  Director  in March  2000.  He has been  active  in  international
marketing and management consulting for almost 30 years. He was a founding Board
member  of Unilab  Corporation,  serving  as  President  from 1989 to 1992,  and
continuing to sit on Unilab's Board until November 1999. From 1985 to 1997 Gabor
Balthazar served as a consultant to Frankfurt  Consult,  the  merger/acquisition
subsidiary of BHF-Bank,  Frankfurt,  Germany and to Unilab  Holdings SA, a Swiss
Clinical  laboratory  testing holding  company,  from 1987 to 1992. Mr Balthazar
also  serves as a director  of Decora  Industries,  Inc. He is a graduate of the
Columbia Law School in New York City.

Frank Bonner,  BSc.,  PhD.,  was appointed to the Board as Director of Science &
Technology in September  1998.  He studied  Biochemistry  and  Toxicology at the
University of Surrey, Guildford (1973-1979). After post-doctoral research in the
Institute of Industrial and Environmental Health, he joined Sterling Winthrop to
establish a Drug Safety  department.  Following the  acquisition  of Sterling by
Sanofi,  he was  appointed  Scientific  and  Administrative  Director  of the UK
Research Centre in  Northumberland,  a position he held until joining Huntingdon
in 1997. He is currently  Chairman of the British  Toxicology Society and serves
on the Research and  Development  Committee  of the  Association  of the British
Pharmaceutical Industry.

John Caldwell,  B.Pharm., PhD., D.Sc., C.Biol.,  F.I.Biol., was appointed to the
Board as an Independent Non-Executive Director in December 1997. He is Professor
of Biochemical Toxicology and Head of the Division of Biomedical Sciences of the
Imperial  College  School  of  Medicine.   His  distinguished   career  includes
membership of the UK Committee on Safety of Medicines,  Ministry of  Agriculture
Fisheries and Food Steering Group for Food Surveillance, permanent membership of
the International  Scientific Committee of the International  Symposia on Chiral
Discrimination,   Honorary  Membership  of  the  Royal  College  of  Physicians,
Representative  on the  Court  of the  University  of  Surrey  for  the  British
Pharmacological  Society and he is a Past President of the International Society
for the Study of Xenobiotics. He is also a member of the Institute of Directors.
Professor Caldwell has extensive involvement as a consultant with pharmaceutical
companies in Europe, North America and Japan.

Kirby L Cramer was appointed to the Board as an Executive  Director in September
1999. He served as Chief Executive Officer of Hazleton Laboratories  Corporation
from 1968 and led it to become the  world's  largest  provider  of  pre-clinical
testing  services  when it was  sold  to  Corning  Inc in  1987.  Following  the
acquisition  he served as Chairman of the Board of  Directors  of Hazleton  from
1987 through 1991. The Hazleton  laboratories now form the pre-clinical  segment
of Covance.  Mr Cramer  also  currently  serves as a direct of D J  Orthopedics,
Immunex Corp.,  SonoSite Inc., Regan MacKenzie Group,  Commerce  Bancorporation,
Landec  Corporation and Northwestern  Trust Company.  Previously Mr Cramer was a
director of ATL Ultrasound  Inc.,  Unilab  Corporation,  Pharmaceutical  Product
Development Inc., and International Technology.

Joseph L Dowling III was appointed to the Board as an Independent  Non-Executive
Director in September  1999.  He is the managing  general  partner and portfolio
manager of  Narragansett  Asset  Management  LLC.  Prior to forming  the fund in
October  1998,  Mr Dowling  served in various  capacities,  most  recently  as a
partner of Oracle  Partners,  LP, a hedge fund and a partner of Oracle Strategic
Partners,  LP, an investment  partnership  specializing in privately  negotiated
transactions. Prior to Oracle, Mr Dowling worked at Tudor Investment Corporation
and Leo Capital, LP.

Julian  Griffiths,  M.A.,  F.C.A.,  was  appointed  to the Board as Finance
Director  in April 1999 and Secretary  in  February  2000.  Prior to joining
Huntingdon  he was most  recently  Vice  President  of Analytical  Services in
the European  pre-clinical  division of Covance Inc.,  having spent the previous
nine  years as Vice  President  of  Finance  in the  same  organisation.  Prior
to that he held  various positions with KPMG.

The  Articles of  Association  of the  Company  provide  that,  unless and until
otherwise  determined by ordinary  resolution passed at a general meeting of the
Company,  the directors  shall be not less than two in number and there shall be
no maximum number of directors. The Company may by ordinary resolution passed at
a general meeting of the Company appoint any person to be a director,  either to
fill a casual vacancy or as an addition to the existing board of directors.  Any
director  appointed by the board of  directors  holds office only until the next
following general meeting and shall then be eligible for  re-appointment  but he
is not taken into account in determining  the directors or the number who are to
retire by rotation at such meeting. At every annual general meeting one third of
the directors  (being those who do not wish to be  re-appointed or who have been
the longest in office  since their last  appointment)  must retire from  office.
Directors  so  retiring  may  be  removed  from  office  by  resolution  of  the
shareholders.

No  director  or  executive  officer  has a family  relationship  with any other
director or executive officer.

ITEM 11.  EXECUTIVE COMPENSATION

In the 12 months  ended  December  31, 1999 the  aggregate  compensation  of the
executive   directors   and   officers  as  a  group,   paid  or  accrued,   was
(pound)1,030,030.

The services of Mr Baker are provided  through a management  services  agreement
with Focused  Healthcare  Partners  ("FHP"),  the vehicle through which Mr Baker
provides  his  services.   The  agreement  provides  for  a  minimum  notice  of
termination by the Company of twelve months.

Mr Cass has a service contract  providing for a minimum notice of termination by
the Company of two years. The contract provides for liquidated damages amounting
to two years' basic  salary and an amount  equal to twice the annual  average of
bonuses,  if  any,  received  during  the two  financial  years  of the  Company
immediately  preceding  a change of control of the  Company  (as  defined in the
service contract) or in the event of termination in certain  circumstances.  The
Board has determined  that both the period of notice required for termination of
Mr Cass' contract and the change of control provisions are warranted by Mr Cass'
value to the Company.

Dr Bonner and Mr Griffiths each have service  contracts  providing for a minimum
notice of termination by the Company of twelve months.

Professor  Caldwell,  Mr Dowling and Mr Balthazar  each have  service  contracts
providing for a minimum notice of termination by the Company of three months. Mr
Cramer does not have a written service contract.
Messrs Cramer, Dowling, Balthazar and Baker and Professor Caldwell retire at the
Annual General Meeting but will offer  themselves for  re-election.  The Company
operates a discretionary  bonus plan for executive directors and key managers of
Huntingdon  based upon  improvements  to  operating  income and  achievement  of
pre-defined targets.  Bonus awards to directors and officers are administered by
the Remuneration Committee.  The Committee believes that the discretionary bonus
payments to Mr Baker,  Mr Cass and Mr  Griffiths  in 1999 and to Mr Rice,  Prof.
Caldwell  and Mr Baker in 1998  reflect  their  respective  contribution  to the
development of Huntingdon . No bonus awards were made in respect of 1997.

The following  table shows the  remuneration of Directors in the 12 Months ended
December 31, 1999, December 31, 1998, and December 31, 1997;
<TABLE>
<CAPTION>
Name of Director                  1997          1998    Salary/Fee        Pension       Other       Other         1999
----------------                  ----          ----    ----------        -------       ------      -----         ----
                                                                                     payments
                             12 Months     12 Months                Contributions                Benefits    12 Months
                             ---------     ---------                -------------                --------    ---------
                               (pound)       (pound)       (pound)        (pound)      (pound)    (pound)      (pound)
<S>                           <C>           <C>            <C>            <C>          <C>        <C>         <C>
Mr A H Baker  (iii)                  -       129,231       150,000         49,500       50,000          -      249,500
Dr F W Bonner                        -        42,466       140,000          7,000       10,000     11,368      168,368
Prof. J Caldwell                 2,000        29,000        20,000              -        2,000          -       22,000
Mr B Cass                            -        73,467       150,000         49,500       50,000     41,467      290,967
Mr C F Cliffe                  238,877       479,900             -              -            -          -            -
Mr K L Cramer (i)                    -             -        37,085              -            -          -       37,085
Mr R Devlin (i)                      -             -         6,500              -            -          -        6,500
Mr J Dowling (i)                     -             -         6,360              -            -          -        6,360
Mr J T Griffiths (i)                 -             -        78,774         15,754       10,000     21,442      125,970
Dr C M Macdonald                 3,787       116,000         9,668          1,027            -          -       10,695
Mr R A Pinnington               86,768        67,416        13,718              -            -      9,329       23,047
Mr L O Rice                     20,000        33,467             -              -            -          -            -
Mr M Sandford                   63,679        86,700        27,545          3,250       58,743          -       89,538
Mr R E H Slater (ii)            20,000         7,500             -              -            -          -            -

<FN>

(i)       From appointment
(ii)      In addition, professional fees amounting to(pound)40,954 were paid to
          Simmons & Simmons, the firm in which Mr Slater is
          a partner, in respect of the period ended December 31, 1997.
(iii)     The other payments to Mr Baker, Mr Cass, Mr Griffiths and Dr Bonner
          are bonuses. The other payment to Mr Sandford is in respect of the
          termination of his  employment.  The other payment
          to Professor Caldwell is in respect of his attendance at the
          Scientific and Advisory  Board  Committee  Meetings of  Huntingdon
          Life  Sciences Limited.

</FN>
</TABLE>

The following table shows the pensions benefits (excluding  additional voluntary
contributions and inflation) earned by Directors in the Huntingdon Life Sciences
Pension and Life Assurance Scheme in the 12 months ended December 31, 1999:
<TABLE>
<CAPTION>
     Name of Director       Increase in accrued pension      Transfer value of     Accumulated total accrued pension
                                  during the year              increase (i)                 at year-end (ii)
                                   (pound)                      (pound)                        (pound)
<S>                                   <C>                        <C>                            <C>
Dr C M Macdonald                        869                       11,800                         6,502
Mr M Sandford                           590                        3,700                         8,565

<FN>

 (i)     Calculated in accordance with Actuarial Guidance Note GN11

(ii)     ayable annually on retirement
</FN>
</TABLE>

One other  Director is a member of the Group  Personal  Pension Plan.  The other
Directors' pension contributions are privately invested.

OPTIONS TO PURCHASE SECURITIES FROM THE REGISTRANT

The  Unapproved  Share Option Plan.  On April 8, 1983,  the Company  adopted the
Unapproved Share Option Plan (the  "Unapproved  Plan") pursuant to which options
to acquire  Ordinary  Shares may be  granted  to any person who is  required  to
devote  substantially  the whole of his time  (being  not less than 25 hours per
week)  to  serve  as a  Director  or  employee  of  the  Company  or  one of its
subsidiaries.  The maximum  number of Ordinary  Shares which may be issued under
the  Unapproved  Plan  according to the rules thereof is 10% of the issued share
capital of the Company  from time to time,  less options  outstanding  under the
Approved Plan from time to time.

An option  granted  pursuant to the  Unapproved  Plan may be exercised two years
after the grant in respect of not more than 50% of the Ordinary  Shares  subject
to the option.  An option may be exercised in full between three and seven years
after the grant in respect of the  unexercised  balance of the  Ordinary  Shares
subject to the option.  Options may be  exercised  earlier in certain  specified
circumstances,  including a change in control of 25% or more of the  outstanding
Ordinary Shares of the Company.

The Approved  Management  Share Option  Plan.  On January 29, 1985,  the Company
adopted a second share option plan,  the Approved  Management  Share Option Plan
(the  "Approved  Plan"),  which has been approved by the Board of Inland Revenue
(the  "Inland  Revenue")  pursuant  to the  Finance  Act 1984.  The rules of the
Approved Plan broadly follow those of the Unapproved Plan, except that an option
may be  exercised,  subject to certain  exceptions,  only between  three and ten
years after it is granted.

Pursuant to the Approved Plan, options to acquire Ordinary Shares may be granted
to any Director or employee of the Company whose terms of employment require him
to work for at least  thirty-seven and one-half hours per week.  Approval of the
Approved  Plan  by  the  Inland  Revenue  means  that  important   personal  tax
concessions  are  available  to  participants  who reside in the UK. The maximum
number of Ordinary  Shares which may be issued under the Approved Plan according
to the rules thereof is 10% of the issued share capital from time to time,  less
options outstanding under the Unapproved Plan from time to time.

Both the Unapproved  Plan and the Approved Plan  terminated on December 31, 1997
with respect to the grant of new options.  Options  outstanding at that date are
not affected by such termination. The grant of options under both the Unapproved
Plan and the  Approved  Plan was a matter  for the  discretion  of the  Board of
Directors of the Company. The consideration payable to the Company for the grant
of an option to acquire  Ordinary  Shares was the sum of (pound)1.  The exercise
price per share at which an option may be  exercised  is equal to the average of
the middle market quotations on the  International  Stock Exchange of the United
Kingdom and Republic of Ireland Ltd. for the Ordinary Shares on the five dealing
days  prior to the date of grant or, if no  established  market in the  Ordinary
Shares  exists,  the fair value of an Ordinary Share as determined by the Board.
Generally,  an option may not be  exercised  unless at the date of exercise  the
participant is then, and has been continuously since the grant of the option, in
the  full-time  employ  of the  Company.  This  rule,  however,  is  subject  to
alteration in specific cases at the discretion of the Board.

At the Extraordinary  General Meeting held on September 2, 1998 the Shareholders
approved a new  option  scheme  (the  rules of which were  amended at the Annual
General  Meeting held on June 3, 1999) and a separate  Option  Agreement with Mr
Baker:

(a)  The Huntingdon Life Sciences Group Unapproved Share Option Scheme (the
     "Unapproved Share Option Scheme")

(i)  8,000,000  Founder  Options had been  granted but not  relinquished  or
     exercised  as at  December  31,  1999 at an  option  price of 12.5p per
     Ordinary Share. The Options may be exercised from the third anniversary
     of the date of the  grant  subject  to the  share  price  reaching  the
     following  pre-determined  targets  for a period  of seven  consecutive
     dealing days at any time after January 1, 1999.

          Target price per share     Proportion of options
                                          exercisable
              25p                          25%
              50p                          50%
               75p                         75%
              100p                        100%


(ii)     2,000,000  options,  other than Founder  Options,  which are  generally
         exercisable  between  the third and  tenth  anniversary  of the date of
         grant subject to the attainment of performance  related conditions were
         granted on March 29, 1999 at a  subscription  price of 19.25 pence each
         and remained outstanding on December 31, 1999.


All Options lapse on the tenth anniversary of the date of the option grant.

(b)      An Option Agreement

     Andrew Baker was granted  Options over 5,000,000  Ordinary  Shares of 5p in
     the Company,  the principal terms of which are the same as those applicable
     to the Founder Options referred to above.


The Huntingdon Life Sciences Group Incentive Option Plan (the "Incentive  Option
Plan") The  Incentive  Option  Plan was  adopted  on June 3, 1999.  The Plan was
introduced to run alongside the Unapproved  Share Option Scheme  described above
and is designed to reward short term improvement in financial performance in the
Company's  turn around phase.  Options are available for grant to management and
senior staff,  subject to the achievement of a performance  measure and personal
performance  conditions;   they  may  generally  be  exercised  from  the  third
anniversary  of the date of  grant  and they  lapse  on the  tenth  anniversary.
Options have been granted to such  employees  subject to a  performance  measure
designed to reward the  recipients  for  returning  the Company to profit before
interest  and tax in any  quarter of 1999 with  continual  improvement  forecast
thereafter. It is intended that further grants will be made.


The  Huntingdon  Life Sciences  Sharesave  Scheme (the  "Sharesave  Scheme") The
Sharesave Scheme was adopted at the Annual General Meeting held on June 3, 1999.
Approximately  55% of eligible  employees,  who will fund the  exercise of their
options with the proceeds of a related Save As You Earn (SAYE) savings contract,
accepted the  invitation to join the Scheme.  Options may generally be exercised
from the Bonus Date which falls on November 1, 2002. Options generally lapse six
months after the Bonus Date.


Any US  subsidiary  of the  Company,  which  received the services in respect of
which an option was granted,  will be entitled to a deduction in an amount equal
to the compensation taxable to the optionee,  in computing its US Federal income
tax.  Generally  this is in the calendar year in which the optionee is deemed to
have received such compensation.

Under the terms of the various share option  arrangements the following  options
to purchase  Ordinary  Shares in the Company  have been  granted (net of expired
options) but not exercised as of February 29, 2000.

<TABLE>
(i)      The Unapproved Share Option Plan
<CAPTION>
Date of Grant                 Number of shares outstanding      Option Price        Expiry Date
<S>                           <C>                              <C>                 <C>
December 18, 1995             112,500                          (pound)0.77          December 17, 2002
November 21, 1996             60,000                                 $1.60          November 20, 2003
December 1, 1997              100,000                          (pound)0.50          November 30, 2004
December 31, 1997             522,920                          (pound)0.465         December 30, 2004
December 31, 1997             680,000                                $0.77          December 30, 2004
</TABLE>
<TABLE>
(ii)     The Approved Management Share Option Plan
<CAPTION>
Date of Grant                 Number of shares outstanding     Option Price         Expiry Date
<S>                          <C>                               <C>                 <C>
February 13, 1995             175, 000                         (pound)0.49          February 12, 2005
December 11, 1995             470,000                          (pound)0.78          December 10, 2005
December 11, 1995             130,000                                $1.19          December 10, 2005
December 18, 1995             59,000                           (pound)0.77          December 17, 2005
November 21, 1996             560,000                          (pound)0.95          November 20, 2006
December 31, 1997             580,000                          (pound)0.465         December 30, 2007
</TABLE>

<TABLE>
(iii)    The Unapproved Share Option Scheme and Mr Baker's Option Agreement
<CAPTION>
Date of Grant                 Number of shares outstanding      Option Price        Expiry Date
<S>                          <C>                               <C>                 <C>
September 2, 1998             5,000,000                        (pound)0.125         September 1, 2008
December 3, 1998              7,000,000                        (pound)0.125         December 2, 2008
December 31, 1998             1,000,000                        (pound)0.125         December 30, 2008
March 29, 1999                2,000,000                        (pound)0.1925        March 28, 2009
</TABLE>
<TABLE>
(iv)     Incentive Option Plan
<CAPTION>
Date of Grant                 Number of shares outstanding           Option price   Expiry Date
<S>                           <C>                              <C>                  <C>
June 28, 1999                 2,550,000                        (pound)0.1925        June 27, 2009
September  6, 1999            100,000                          (pound)0.175         September 5, 2009
</TABLE>

<TABLE>
(v)      Sharesave Scheme
<CAPTION>
Date of Grant                 Number of shares outstanding           Option price   Expiry Date
<S>                          <C>                               <C>                 <C>
September  9, 1999            7,088,096                        (pound)0.14          May 1, 2003
</TABLE>


In the  period  since  options  to  acquire  shares  have been  capable of being
exercised to February 29, 2000 options for 3,798,856  shares have been exercised
and the  shares  issued.  The total  number of  options  held by  Directors  and
Officers as a group as at February 29, 1999 is 12,623,142.

The  following  table shows the number of share  options held by Directors as at
February 29, 2000.

<TABLE>
<CAPTION>
Date of Grant         Number Granted    Exercise Price   Date First Exercisable   Expiry Date
<S>                  <C>               <C>              <C>                      <C>
A H Baker
September 2, 1998     5,000,000        (pound)0.125      September 2, 2001        September 1, 2008

F W Bonner
December 31, 1998     500,000          (pound)0.125      December 31, 2001        December 30, 2008
December 1, 1997      100,000          (pound)0.50       December 1, 1999         November 30, 2004
June 29, 1999         250,000          (pound)0.1925     June 28, 2002            June 27, 2009

B Cass
December 3, 1998      5,000,000        (pound)0.125      December 3, 2001         December 2, 2008
September 9, 1999     23,142           (pound)0.14       November 21, 2002        April 30, 2003

K Cramer
March 29, 1999        1,000,000        (pound)0.1925     March 29, 2002           March 28, 2002

J T Griffiths
March 29, 1999        500,000          (pound)0.1925     March 29, 2002           March 28, 2009
June 28, 1999         250,000          (pound)0.1925     June 28, 2002            June 27, 2002
</TABLE>

<PAGE>


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AS AT
          FEBRUARY 29, 2000.

The following  table sets forth,  as of February 29, 2000,  certain  information
regarding the beneficial ownership of the Ordinary Shares, by (a) each person or
entity  who is  known  by the  Company  to own  beneficially  5% or  more of its
outstanding  Ordinary  Shares;  (b) each  Director of the  company;  and (c) all
Directors and Executive Officers as a group.

<TABLE>
<CAPTION>
Name                                                   No. of Shares          Percent of Outstanding Ordinary Shares
<S>                                                    <C>                                   <C>
Stephens Group Inc                                      45,572,179                            15.66%
Quilcap Corp / Quilcap International Corp               34,157,333                            11.74%
Oracle Partners LP                                      23,333,333                             8.02%
Trimark Investment Management Inc.                      20,402,500                             7.01%
Mr A Baker                                              10,200,000                             3.5%
Mr G Balthazar                                               -                                   *
Dr F W Bonner                                             17,768                                 *
Mr B Cass                                                1,000,000                               *
Prof. J Caldwell                                             -                                   -
Mr K Cramer                                              8,247,167                             2.83%
Mr J Dowling III                                             -                                   -
Mr J Griffiths                                               -                                   -
All Executive Officers and Directors as a group         19,464,935                             6.69%
------------------------------------------------- ------------------------ ----------------------------------------
BNY Nominees Ltd                                        62,336,440                            21.42%

<FN>
*        Signifies less than 1%
</FN>
</TABLE>


The shares held by BNY Nominees  Ltd. are as Depositary  for the Company's  ADRs
and may duplicate some of the shareholdings reported above.

From  time to time US  depositary  institutions  hold  shares on behalf of their
clients to enable a market to be made in the Company's shares. No holdings of 3%
or more have been reported to the Company by those  institutions at February 29,
2000.



<PAGE>


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None





<PAGE>


PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

(a)      List of documents filed as part of this report
         ----------------------------------------------
(1)      Index to Financial Statements

         Page

         Report of Deloitte & Touche - Independent Auditors.................20
         Report of Arthur Andersen - Independent Auditors...................21
         Consolidated Balance Sheets .......................................23
         Consolidated Statements of Operations..............................24
         Consolidated Statement of Changes in Shareholders' Equity..........25
         Consolidated Statement of Cash Flows...............................26
         Notes to the Consolidated Financial Statements.....................27

(2)      Financial Statement Schedules

         Schedules are omitted  because they are not  applicable or the required
         information is shown in the consolidated  financial statements or notes
         thereto.

(b)      List of Exhibits

Exhibit No.    Description of Exhibit

    1.1.      An agreement between the Company and Kleinwort Benson Limited
              dated August 10, 1998 under

    2.1       An agreement between the Company, the Directors and various
              investors dated August 10,

    3.1       Memorandum and new Articles of Association adopted by the Company
              on March 22, 2000 FILED

    4.1.      Deposit Agreement dated June 21, 1983, amended and restated as of
              June 6, 1996 between the

    4.2       Specimen Certificate for American Depositary Shares. INCORPORATED
              BY REFERENCE TO Filing No. 00110173.

    4.3       Subscription Agreement dated August 1, 1991 among HIH Capital
              Limited ("HCL"), INCORPORATED BY REFERENCE TO Filing No.
              00110173.

    4.4       Trust Deed, dated August 12, 1991 among HCL, the Company and The
              Law Debenture Trust. INCORPORATED BY REFERENCE TO Filing No.
              00110173.

    4.5       Deed Poll, dated August 12, 1991, executed by the Company
              INCORPORATED BY REFERENCE TO Filing No. 00110173.

    4.6       Custodian Agreement, dated August 1, 1991 among the Custodian,
              HCL, and the Company. INCORPORATED BY REFERENCE TO Filing No.
              00110173.

   10.1       Equipment Mortgage dated April 20, 1998 between Huntingdon Life
              Sciences Ltd and National

   10.2       Security Agreement dated April 30, 1998 between Huntingdon Life
              Sciences Inc., National

   10.3       An agreement dated August 7, 1998 between, inter alia, the
              Company, Huntingdon Life

   10.4       A bridging facility being made available by National Westminster
              Bank PLC in favour of the

   10.5       An agreement between the Company, Huntingdon Life Sciences
              Limited, Huntingdon Life

   10.6       Third Supplemental Deed dated August 7, 1998 between the Company
              and National Westminster

   10.7       Third Supplemental Deed dated August 7, 1998 between Huntingdon
              Life Sciences Ltd and

   10.8       Deed of variation dated August 7, 1998 to the Service Contract
              dated March 15, 1993

   10.9       Service Contract dated August 7, 1998 between Huntingdon Life
              Sciences Ltd and Mr M

   10.10      Service Contract dated August 7, 1998 between Huntingdon Life
              Sciences Ltd and Dr C M

   10.11      Deed of variation dated August 7, 1998 to the Contract dated
              March 20, 1995 as amended on

   10.12      A letter of appointment dated August 7, 1998 between the Company
              and Professor J Caldwell.

              INCORPORATED BY REFERENCE TO REGISTRANT'S ANNUAL REPORT ON
              FORM 20-F FOR THE FISCAL YEAR

   10.13      A Management Services Agreement dated August 7, 1998 between the
              Company and Focused

   10.14      A Deed of Undertaking between the Company and Andrew Baker
              INCORPORATED BY REFERENCE TO

   10.15      Amendment dated January 26, 2000 to the Management Services
              Agreement dated August 7, 1999

   10.16      Service Contract dated April 29, 1999 between Huntingdon Life
              Sciences Ltd and Mr B Cass

   10.17      Service Contract dated April 29, 1999 between Huntingdon Life
              Sciences Ltd and Mr J

   10.18      Service Contract dated April 29, 1999 between Huntingdon Life
              Sciences Ltd and Dr F

   10.19      A letter of appointment dated September 7, 1999 between the
              Company and Mr J L Dowling

   10.20      A letter of appointment dated March 21, 2000 between the Company
              and Mr G Balthazar.

   10.21      A Management Services Agreement dated December 24, 1999 between
              the Company and Rittle

   10.22      Executive's Undertaking dated December 24, 1999 between the
              Company and Roger Devlin.

   10.23      Option Deed dated September 2, 1998 between the Company and
              Andrew Baker INCORPORATED BY

   10.24      Rules of the Huntingdon Life Sciences Group Unapproved Share
              Option Scheme as amended

   10.25      Rules of the Huntingdon Life Sciences Group Incentive Option Plan
              FILED HEREWITH.

   10.26      Rules of the Huntingdon Life Sciences Sharesave Scheme
              FILED HEREWITH.

   10.27      The Rules of The HIH Share Option Plan.  FILED HEREWITH.

   10.28      The Rules of The HIH Approved Management Share Option Plan.
              FILED HEREWITH.

   10.29      A Deed of Variation dated August 6, 1998 between Ciba-Geigy plc,
              Huntingdon Life Sciences

   10.30      Sale Agreement dated June 23, 1999 between the Company and
              Huntingdon Life Sciences Ltd

   10.31      Sale Agreement dated July 12, 1999 between the Company and J S
              Bloor (Tamworth) Limited

   21.1       Subsidiaries  FILED HEREWITH

   27.1       Financial Data Schedule.  FILED HEREWITH.

   99.1       Consent Decision and Order dated April 8, 1998 between United
              States Department of Agriculture and Huntingdon Life Sciences Inc.

              INCORPORATED BY REFERENCE TO REGISTRANT'S ANNUAL REPORT ON
              FORM 20-F FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998.


Reports on Form 8-K

On November 17, 1999, the Company filed a report on Form 8-K announcing  that it
had filed Form 10-Q for the quarter ended September 30, 1999.



                                    SIGNATURE

Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934,  this  Annual  Report  on Form  10-K has been  signed  below by the
following  person on behalf of the  Registrant  and in the capacities and on the
dates indicated.




                                         HUNTINGDON LIFE SCIENCES GROUP plc

                                                    (Registrant)




By:  /s/ Brian Cass
Name:    Brian Cass
Title:   Managing Director/Chief Operating Officer
Date:    March 30, 2000