##### 



FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2002

Commission File Number 1-09623

IVAX CORPORATION

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 16-1003559                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

4400 Biscayne Boulevard, Miami, Florida 33137

---

(Address of principal executive offices) (Zip Code)


(305) 575-6000

---

(Registrants telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

YES [X]                 NO [   ]

Indicate the number of shares outstanding of each of the issuers
classes of common stock, as of the latest practicable date.

194,779,736 shares of Common Stock, $.10 par value, outstanding as of April 30, 2002.



---



##### 



IVAX CORPORATION

INDEX

|                               |                                                                                                |                                                                                          |  |          |   | 
|------------------------------ | ---------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- |  | -------- | - | 
|                               |                                                                                                |                                                                                          |  | Page No.
|                               |                                                                                                |                                                                                          |  |         
|PART I  FINANCIAL INFORMATION |                                                                                                |                                                                                          |  |         
|                              
|                              
|                              
|                              
|                              
|                               | Item 1 - Financial Statements                                                                  |                                                                                          |  |          |  
|                              
|                              
|                              
|                              
|                              
|                               |                                                                                                | Consolidated Balance Sheets as of March 31, 2002
and December 31, 2001                   |  |          | 3 | 
|                              
|                              
|                              
|                              
|                              
|                               |                                                                                                | Consolidated Statements of Operations
for the three months ended March 31, 2002 and 2001 |  |          | 4 | 
|                              
|                              
|                              
|                              
|                              
|                               |                                                                                                | Consolidated Statements of Cash Flows
for the three months ended March 31, 2002 and 2001 |  |          | 6 | 
|                              
|                              
|                              
|                              
|                              
|                               |                                                                                                | Notes to Consolidated Financial Statements                                               |  |          | 8 | 
|                              
|                              
|                              
|                              
|                              
|                               | Item 2 - Managements Discussion and Analysis of Financial Condition and
Results of Operations |                                                                                          |  | 15       |  
|                              
|                              
|                              
|                              
|                              
|                               | Item 3 - Quantitative and Qualitative Disclosures About Market Risk                            |                                                                                          |  | 21       |  
|                              
|                              
|                              
|                              
|                              
|PART II  OTHER INFORMATION    |                                                                                                |                                                                                          |  |         
|                              
|                              
|                              
|                              
|                              
|                               | Item 1 - Legal Proceedings                                                                     |                                                                                          |  | 23       |  
|                              
|                              
|                              
|                              
|                              
|                               | Item 6 - Exhibits and Reports on Form 8-K                                                      |                                                                                          |  | 23       |  

2



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##### 



PART I  FINANCIAL INFORMATION

Item 1  Financial Statements

IVAX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


(In thousands, except per share data)


|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |              |           |  |  | 
|-------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | -------- | --------- | ----------- | ------- | ------------ | --------- |  |  | 
|                                       |                                                                                                                                   |                                            |                                      |          |           | March 31,   |         | December 31,
|                                       |                                                                                                                                   |                                            |                                      |          |           | 2002        |         | 2001        
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   |                                            |                                      |          |           | (Unaudited) |         |              |           | 
|                                       |                                                                                                                                   |                                            |                                      | ASSETS   |           |             |         |              |           |  |  | 
|                                      
|                                      
|                                      
|                                      
|Current assets:                        |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                      
|                                      
|                                      
|                                      
|                                       | Cash and cash equivalents                                                                                                         |                                            | $                                    | 113,357  |           |             | $       | 178,264      |          
|                                      
|                                      
|                                      
|                                      
|                                       | Marketable securities                                                                                                             |                                            |                                      | 148,001  |           |             |         | 154,842      |          
|                                      
|                                      
|                                      
|                                      
|                                       | Accounts receivable, net of allowances for doubtful
accounts of $20,823 in 2002 and $21,670 in 2001                               |                                            |                                      | 208,251  |           |             |         | 247,670      |          
|                                      
|                                      
|                                      
|                                      
|                                       | Inventories                                                                                                                       |                                            |                                      | 271,835  |           |             |         | 253,471      |          
|                                      
|                                      
|                                      
|                                      
|                                       | Other current assets                                                                                                              |                                            |                                      | 141,196  |           |             |         | 164,692      |          
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   | Total current assets                       |                                      |          | 882,640   |             |         |              | 998,939   | 
|                                      
|                                      
|                                      
|                                      
|Property, plant and equipment, net     |                                                                                                                                   |                                            | 350,919                              |          |           |             | 356,304 |             
|                                      
|                                      
|                                      
|                                      
|Goodwill, net                          |                                                                                                                                   |                                            | 458,912                              |          |           |             | 502,077 |             
|                                      
|                                      
|                                      
|                                      
|Intangible assets, net                 |                                                                                                                                   |                                            | 189,032                              |          |           |             | 187,479 |             
|                                      
|                                      
|                                      
|                                      
|Other assets                           |                                                                                                                                   |                                            | 52,476                               |          |           |             | 60,650  |             
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   | Total assets                               |                                      | $        | 1,933,979 |             |         | $            | 2,105,449 | 
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   |                                            | LIABILITIES AND SHAREHOLDERS EQUITY |          |           |             |         |              |           |  | 
|                                      
|                                      
|                                      
|                                      
|Current liabilities:                   |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                      
|                                      
|                                      
|                                      
|                                       | Accounts payable                                                                                                                  |                                            | $                                    | 94,609   |           |             | $       | 97,465       |          
|                                      
|                                      
|                                      
|                                      
|                                       | Current portion of long-term debt                                                                                                 |                                            |                                      | 4,138    |           |             |         | 52,199       |          
|                                      
|                                      
|                                      
|                                      
|                                       | Loans payable                                                                                                                     |                                            |                                      | 18,422   |           |             |         | 13,249       |          
|                                      
|                                      
|                                      
|                                      
|                                       | Accrued income taxes payable                                                                                                      |                                            |                                      | 16,617   |           |             |         | 41,861       |          
|                                      
|                                      
|                                      
|                                      
|                                       | Accrued expenses and other current liabilities                                                                                    |                                            |                                      | 201,660  |           |             |         | 196,587      |          
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   | Total current liabilities                  |                                      |          | 335,446   |             |         |              | 401,361   | 
|                                      
|                                      
|                                      
|                                      
|Long-term debt, net of current portion |                                                                                                                                   |                                            | 877,920                              |          |           |             | 913,486 |             
|                                      
|                                      
|                                      
|                                      
|Other long-term liabilities            |                                                                                                                                   |                                            | 62,308                               |          |           |             | 57,536  |             
|                                      
|                                      
|                                      
|                                      
|Minority interest                      |                                                                                                                                   |                                            | 15,790                               |          |           |             | 14,712  |             
|                                      
|                                      
|                                      
|                                      
|Shareholders equity:                  |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                      
|                                      
|                                      
|                                      
|                                       | Common stock, $.10 par value, authorized 437,500 shares,
issued and outstanding 196,076 shares in 2002 and 196,523 shares in 2001 |                                            |                                      | 19,608   |           |             |         | 19,652       |          
|                                      
|                                      
|                                      
|                                      
|                                       | Capital in excess of par value                                                                                                    |                                            |                                      | 319,882  |           |             |         | 328,095      |          
|                                      
|                                      
|                                      
|                                      
|                                       | Put options                                                                                                                       |                                            |                                      | 28,770   |           |             |         | 34,650       |          
|                                      
|                                      
|                                      
|                                      
|                                       | Retained earnings                                                                                                                 |                                            |                                      | 469,930  |           |             |         | 446,469      |          
|                                      
|                                      
|                                      
|                                      
|                                       | Accumulated other comprehensive loss                                                                                              |                                            |                                      | (195,675 | )         |             |         | (110,512     | )        
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   | Total shareholders equity                 |                                      |          | 642,515   |             |         |              | 718,354   | 
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   | Total liabilities and shareholders equity |                                      | $        | 1,933,979 |             |         | $            | 2,105,449 | 
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             

The accompanying Notes to Consolidated Financial Statements are an
integral part of these balance sheets.

3



---



##### 



IVAX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)


|                                                          |                                                                             |      |         |         |   |   |         |         |  
|--------------------------------------------------------- | --------------------------------------------------------------------------- | ---- | ------- | ------- | - | - | ------- | ------- | -
|Three Months Ended March 31,                              |                                                                             | 2002 |         | 2001   
|(In thousands, except per share data)                     |                                                                             |      |         |        
|                                                         
|Net revenues                                              |                                                                             | $    | 272,222 |         |   | $ | 259,932 |        
|                                                         
|                                                         
|                                                         
|                                                         
|Cost of sales                                             |                                                                             |      | 150,247 |         |   |   | 123,724 |        
|                                                          |                                                                             |      |         |         |   |   |         |        
|                                                          | Gross profit                                                                |      |         | 121,975 |   |   |         | 136,208 |  
|                                                          |                                                                             |      |         |         |   |   |         |        
|Operating expenses:                                       |                                                                             |      |         |         |   |   |         |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Selling                                                                     |      |         | 42,146  |   |   |         | 27,502  |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | General and administrative                                                  |      |         | 27,266  |   |   |         | 23,721  |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Research and development                                                    |      |         | 19,054  |   |   |         | 18,883  |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Amortization of intangible assets                                           |      |         | 3,015   |   |   |         | 3,593   |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Restructuring costs                                                         |      |         | 488     |   |   |         |        |  
|                                                          |                                                                             |      |         |         |   |   |         |        
|                                                          | Total operating expenses                                                    |      |         | 91,969  |   |   |         | 73,699  |  
|                                                          |                                                                             |      |         |         |   |   |         |        
|                                                          | Income from operations                                                      |      |         | 30,006  |   |   |         | 62,509  |  
|                                                         
|                                                         
|                                                         
|                                                         
|Other income (expense):                                   |                                                                             |      |         |         |   |   |         |        
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Interest income                                                             |      |         | 2,399   |   |   |         | 3,808   |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Interest expense                                                            |      |         | (12,408 | ) |   |         | (4,359  | )
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Other income, net                                                           |      |         | (353    | ) |   |         | 1,750   |  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Gain on partial sale of IVAX Diagnostics, Inc.                              |      |         |        |   |   |         | 10,278  |  
|                                                          |                                                                             |      |         |         |   |   |         |        
|                                                          | Total other income                                                          |      |         | (10,362 | ) |   |         | 11,477  |  
|                                                          |                                                                             |      |         |         |   |   |         |        
|                                                          | Income from continuing operations before income taxes
and minority interest |      |         | 19,644  |   |   |         | 73,986  |  
|                                                         
|                                                         
|                                                         
|                                                         
|Provision for income taxes                                |                                                                             |      | 3,851   |         |   |   | 13,755  |        
|                                                          |                                                                             |      |         |         |   |   |         |        
|                                                          | Income from continuing operations before minority interest                  |      |         | 15,793  |   |   |         | 60,231  |  
|                                                         
|                                                         
|                                                         
|                                                         
|Minority interest                                         |                                                                             |      | 94      |         |   |   | (99     | )      
|                                                          |                                                                             |      |         |         |   |   |         |        
|                                                          | Income from continuing operations                                           |      |         | 15,887  |   |   |         | 60,132  |  
|                                                         
|                                                         
|                                                         
|                                                         
|Extraordinary gains on extinguishment of debt, net of tax |                                                                             |      | 3,413   |         |   |   |        |        
|                                                         
|                                                         
|                                                         
|                                                         
|Cumulative effect of a change in accounting principle     |                                                                             |      | 4,161   |         |   |   |        |        
|                                                          |                                                                             |      |         |         |   |   |         |        
|Net income                                                |                                                                             | $    | 23,461  |         |   | $ | 60,132  |        
|                                                          |                                                                             |      |         |         |   |   |         |        

(Continued)

4



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##### 



IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Continuation)

|                                         |                                                       |      |   |         |  |  |   |         | 
|---------------------------------------- | ----------------------------------------------------- | ---- | - | ------- |  |  | - | ------- | 
|Three Months Ended March 31,             |                                                       | 2002 |   | 2001   
|(In thousands, except per share data)    |                                                       |      |   |        
|                                        
|BASIC EARNINGS PER COMMON SHARE:         |                                                       |      |   |         |  |  |   |        
|                                        
|                                        
|                                        
|                                        
|                                         | Continuing operations                                 |      | $ | 0.08    |  |  | $ | 0.30    | 
|                                        
|                                        
|                                        
|                                        
|                                         | Extraordinary items                                   |      |   | 0.02    |  |  |   |        | 
|                                        
|                                        
|                                        
|                                        
|                                         | Cumulative effect of a change in accounting principle |      |   | 0.02    |  |  |   |        | 
|                                         |                                                       |      |   |         |  |  |   |        
|                                         | Net income                                            |      | $ | 0.12    |  |  | $ | 0.30    | 
|                                         |                                                       |      |   |         |  |  |   |        
|DILUTED EARNINGS PER COMMON SHARE:       |                                                       |      |   |         |  |  |   |        
|                                        
|                                        
|                                        
|                                        
|                                         | Continuing operations                                 |      | $ | 0.08    |  |  | $ | 0.29    | 
|                                        
|                                        
|                                        
|                                        
|                                         | Extraordinary items                                   |      |   | 0.02    |  |  |   |        | 
|                                        
|                                        
|                                        
|                                        
|                                         | Cumulative effect of a change in accounting principle |      |   | 0.02    |  |  |   |        | 
|                                         |                                                       |      |   |         |  |  |   |        
|                                         | Net income                                            |      | $ | 0.12    |  |  | $ | 0.29    | 
|                                         |                                                       |      |   |         |  |  |   |        
|WEIGHTED AVERAGE NUMBER OF COMMON SHARES |                                                       |      |   |         |  |  |   |        
|                                        
|                                        
|                                        
|                                        
|                                         | OUTSTANDING:                                          |      |   |         |  |  |   |         | 
|                                        
|                                        
|                                        
|                                        
|                                         | Basic                                                 |      |   | 196,227 |  |  |   | 199,255 | 
|                                         |                                                       |      |   |         |  |  |   |        
|                                         | Diluted                                               |      |   | 199,988 |  |  |   | 206,270 | 
|                                         |                                                       |      |   |         |  |  |   |        

The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.

5



---



##### 



IVAX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)


|                                                             |                                                                                  |                                                       |                                                                   |         |         |         |         |         |         |         |  
|------------------------------------------------------------ | -------------------------------------------------------------------------------- | ----------------------------------------------------- | ----------------------------------------------------------------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | -
|Three Months Ended March 31,                                 |                                                                                  | 2002                                                  |                                                                   | 2001   
|(In thousands, except per share data)                        |                                                                                  |                                                       |                                                                   |        
|                                                            
|Cash flows from operating activities:                        |                                                                                  |                                                       |                                                                   |         |         |         |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Net income                                                                       |                                                       | $                                                                 | 23,461  |         |         | $       | 60,132  |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Adjustments to reconcile net income to net cash
flows from operating activities: |                                                       |                                                                   |         |         |         |         |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | Restructuring
costs                                   |                                                                   |         | 488     |         |         |         |        |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | Depreciation and amortization                         |                                                                   |         | 11,757  |         |         |         | 10,529  |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | Deferred tax benefit                                  |                                                                   |         | (1,259  | )       |         |         | (1,115  | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | Tax effect of stock option exercises                  |                                                                   |         | 1,097   |         |         |         | 1,642   |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | Provision for doubtful accounts                       |                                                                   |         | 1,156   |         |         |         | 421     |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | Provision for inventory obsolescence                  |                                                                   |         | 12,941  |         |         |         | 5,140   |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | Minority interest in earnings                         |                                                                   |         | (94     | )       |         |         | 99      |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | Equity in earnings of unconsolidated affiliates       |                                                                   |         | (175    | )       |         |         | (388    | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | (Gain) on sale of marketable securities               |                                                                   |         | (478    | )       |         |         |        |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | (Gain) on sale of product rights                      |                                                                   |         | (1,819  | )       |         |         | (1,290  | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | (Gains) losses on sale of assets, net                 |                                                                   |         | 55      |         |         |         | (8,875  | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | (Gains) on extinguishment of debt                     |                                                                   |         | (3,413  | )       |         |         |        |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | Cumulative effect of a change in accounting principle |                                                                   |         | (4,161  | )       |         |         |        |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  | Changes in operating assets and liabilities:          |                                                                   |         |         |         |         |         |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  |                                                       | Accounts receivable                                               |         |         | 31,446  |         |         |         | (16,227 | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  |                                                       | Inventories                                                       |         |         | (36,551 | )       |         |         | (2,952  | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  |                                                       | Other current assets                                              |         |         | 15,502  |         |         |         | 3,748   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  |                                                       | Other assets                                                      |         |         | 11,049  |         |         |         | 2,318   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  |                                                       | Accounts payable, accrued expenses, and other
current liabilities |         |         | (18,486 | )       |         |         | 7,639   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  |                                                       | Other long-term liabilities                                       |         |         | (420    | )       |         |         | 3,439   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                  |                                                       | Other, net                                                        |         |         | (3,023  | )       |         |         | (291    | )
|                                                             |                                                                                  |                                                       |                                                                   |         |         |         |         |        
|                                                             |                                                                                  | Net cash flows from operating activities              |                                                                   |         | 39,073  |         |         |         | 63,969  |        
|                                                             |                                                                                  |                                                       |                                                                   |         |         |         |         |        
|Cash flows from investing activities:                        |                                                                                  |                                                       |                                                                   |         |         |         |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Proceeds from sale of product rights                                             |                                                       |                                                                   | 1,819   |         |         |         | 1,230   |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Capital expenditures                                                             |                                                       |                                                                   | (12,650 | )       |         |         | (9,171  | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Proceeds from sales of assets                                                    |                                                       |                                                                   | 318     |         |         |         | 22,307  |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Acquisitions of intangible assets                                                |                                                       |                                                                   | (7,024  | )       |         |         | (10,925 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Acquisitions of businesses, net of cash acquired                                 |                                                       |                                                                   |        |         |         |         | (59,401 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Investment in affiliates                                                         |                                                       |                                                                   | 511     |         |         |         | (5,197  | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Purchases of marketable securities                                               |                                                       |                                                                   | (59,801 | )       |         |         |        |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Proceeds from sales of marketable securities                                     |                                                       |                                                                   | 65,941  |         |         |         | 45,144  |        
|                                                             |                                                                                  |                                                       |                                                                   |         |         |         |         |        
|                                                             |                                                                                  | Net cash flows from investing activities              |                                                                   |         | (10,886 | )       |         |         | (16,013 | )      
|                                                             |                                                                                  |                                                       |                                                                   |         |         |         |         |        
|Cash flows from financing activities:                        |                                                                                  |                                                       |                                                                   |         |         |         |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Borrowings on long-term debt and loans payable                                   |                                                       |                                                                   | 5,470   |         |         |         | 1,093   |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Payments on long-term debt and loans payable                                     |                                                       |                                                                   | (77,913 | )       |         |         | (2,212  | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Exercise of stock options and employee stock purchases                           |                                                       |                                                                   | 4,759   |         |         |         | 4,120   |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Repurchase of common stock                                                       |                                                       |                                                                   | (19,993 | )       |         |         | (53,482 | )      
|                                                             |                                                                                  |                                                       |                                                                   |         |         |         |         |        
|                                                             |                                                                                  | Net cash flows from financing activities              |                                                                   |         | (87,677 | )       |         |         | (50,481 | )      
|                                                             |                                                                                  |                                                       |                                                                   |         |         |         |         |        
|Effect of exchange rate changes on cash and cash equivalents |                                                                                  |                                                       | (5,417                                                            | )       |         |         | (814    | )      
|                                                             |                                                                                  |                                                       |                                                                   |         |         |         |         |        
|Net decrease in cash and cash equivalents                    |                                                                                  |                                                       | (64,907                                                           | )       |         |         | (3,339  | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Cash and cash equivalents at the beginning of the year       |                                                                                  |                                                       | 178,264                                                           |         |         |         | 174,794 |        
|                                                             |                                                                                  |                                                       |                                                                   |         |         |         |         |        
|Cash and cash equivalents at the end of the period           |                                                                                  | $                                                     | 113,357                                                           |         |         | $       | 171,455 |        
|                                                             |                                                                                  |                                                       |                                                                   |         |         |         |         |        

(Continued)

6



---



##### 



IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Continuation)

|                                                                      |                                               |                                                                                                                                     |   |        |  |   |         |         |  | 
|--------------------------------------------------------------------- | --------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------- | - | ------ |  | - | ------- | ------- |  | 
|Three Months Ended March 31,                                          |                                               | 2002                                                                                                                                |   | 2001  
|(In thousands, except per share data)                                 |                                               |                                                                                                                                     |   |       
|                                                                     
|Supplemental disclosures:                                             |                                               |                                                                                                                                     |   |        |  |   |         |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Interest paid                                 |                                                                                                                                     | $ | 1,085  |  |   | $       | 104     | 
|                                                                      |                                               |                                                                                                                                     |   |        |  |   |         |        
|                                                                      | Income tax payments                           |                                                                                                                                     | $ | 26,027 |  |   | $       | 863     | 
|                                                                      |                                               |                                                                                                                                     |   |        |  |   |         |        
|Supplemental schedule of non-cash investing and financing activities: |                                               |                                                                                                                                     |   |        |  |   |         |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      |                                               | Information with respect to acquisitions which were accounted for under
the purchase method of accounting is summarized as follows: |   |        |  |   |         |         |  | 
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Fair value of assets acquired                                         |                                               |                                                                                                                                     |   |        |  | $ | 84,197  |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Liabilities assumed                                                   |                                               |                                                                                                                                     |   |        |  |   | 56,536  |        
|                                                                      |                                               |                                                                                                                                     |   |        |  |   |         |        
|                                                                      |                                               |                                                                                                                                     |   |        |  |   | 27,661  |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|Reduction of minority interest                                        |                                               |                                                                                                                                     |   |        |  |   |        |        
|                                                                      |                                               |                                                                                                                                     |   |        |  |   |         |        
|Net assets acquired                                                   |                                               |                                                                                                                                     |   |        |  |   | 27,661  |        
|                                                                      |                                               |                                                                                                                                     |   |        |  |   |         |        
|Purchase price:                                                       |                                               |                                                                                                                                     |   |        |  |   |         |        
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Cash, net of cash acquired                    |                                                                                                                                     |   |        |  |   |         | 59,374  | 
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Acquisition costs                             |                                                                                                                                     |   |        |  |   |         | 27      | 
|                                                                     
|                                                                     
|                                                                     
|                                                                     
|                                                                      | Fair market value of stock and options issued |                                                                                                                                     |   |        |  |   |         | 93,365  | 
|                                                                      |                                               |                                                                                                                                     |   |        |  |   |         |        
|                                                                      | Total                                         |                                                                                                                                     |   |        |  |   |         | 152,766 | 
|                                                                      |                                               |                                                                                                                                     |   |        |  |   |         |        
|Goodwill                                                              |                                               |                                                                                                                                     |   |        |  | $ | 125,105 |        
|                                                                      |                                               |                                                                                                                                     |   |        |  |   |         |        

The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.

7



---



##### 



IVAX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)
(In thousands, except per share data)


(1) GENERAL:

The accompanying unaudited interim consolidated financial statements
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission for reporting on Form 10-Q and, therefore, do not include
all information normally included in audited financial statements. However, in
the opinion of management, all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the results of operations, financial
position and cash flows have been made. The results of operations and cash flows
for the three months ended March 31, 2002, are not necessarily indicative of the
results of operations and cash flows which may be reported for the remainder of
2002. The interim consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes to
consolidated financial statements included in IVAX Annual Report on Form 10-K
for the year ended December 31, 2001.

Certain prior period amounts presented in the consolidated financial
statements have been reclassified to conform to the current periods
presentation.

(2) INVENTORIES:

Inventories consist of the following:

|                |                   |   |           |         |              |   |         |         | 
|--------------- | ----------------- | - | --------- | ------- | ------------ | - | ------- | ------- | 
|                |                   |   | March 31, |         | December 31,
|                |                   |   | 2002      |         | 2001        
|                |                   |   |           |         |             
|Raw materials   |                   | $ | 114,199   |         |              | $ | 110,443 |        
|               
|               
|               
|               
|Work-in-process |                   |   | 39,307    |         |              |   | 34,820  |        
|               
|               
|               
|               
|Finished goods  |                   |   | 118,329   |         |              |   | 108,208 |        
|                |                   |   |           |         |              |   |         |        
|                | Total inventories |   | $         | 271,835 |              |   | $       | 253,471 | 
|                |                   |   |           |         |              |   |         |        

(3) EARNINGS PER SHARE:

A reconciliation of the denominator of the basic and diluted earnings
per share computation for income from continuing operations is as follows:

|                                                                                                    |                           |      |         |        |  |  |         |       | 
|--------------------------------------------------------------------------------------------------- | ------------------------- | ---- | ------- | ------ |  |  | ------- | ----- | 
|Three Months Ended March 31,                                                                        |                           | 2002 |         | 2001  
|                                                                                                    |                           |      |         |       
|                                                                                                   
|Basic weighted average number of shares outstanding                                                 |                           |      | 196,227 |        |  |  | 199,255 |      
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Effect of dilutive securities  stock options and warrants                                          |                           |      | 3,761   |        |  |  | 7,015   |      
|                                                                                                    |                           |      |         |        |  |  |         |      
|Diluted weighted average number of shares outstanding                                               |                           |      | 199,988 |        |  |  | 206,270 |      
|                                                                                                    |                           |      |         |        |  |  |         |      
|Not included in the calculation of diluted earnings per
share because their impact is antidilutive: |                           |      |         |        |  |  |         |      
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                    | Stock options outstanding |      |         | 9,665  |  |  |         | 2,654 | 
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                    | Convertible debt          |      |         | 24,609 |  |  |         | 8,412 | 

8



---



##### 



(4) REVENUES:

Net revenues are comprised of gross revenues less provisions for
expected customer returns, inventory credits, discounts, promotional allowances,
volume rebates, chargebacks and other allowances. The reserve balances related
to these provisions are included in Accounts receivable, net of allowances for
doubtful accounts and Accrued expenses and other current liabilities in the
accompanying consolidated balance sheets in the amounts of $126,285 and $90,961,
respectively, at March 31, 2002, and $115,752 and $88,955, respectively, at
December 31, 2001.

(5) INTANGIBLE ASSETS:

Intangible assets with definite lives are amortized and carried at cost
less accumulated amortization. Intangible assets with indefinite lives are
carried at cost and are not amortized. Intangible assets consist of the
following:

|                               |                                    |  |                |         |                   |  |          |        |              |  |   |         |  |  |   |        | 
|------------------------------ | ---------------------------------- |  | -------------- | ------- | ----------------- |  | -------- | ------ | ------------ |  | - | ------- |  |  | - | ------ | 
|                               |                                    |  | March 31, 2002 |         | December 31, 2001
|                               |                                    |  |                |         |                  
|                               |                                    |  | Gross          |         |                   |  |          |        | Gross        |  |   |         | 
|                               |                                    |  | Carrying       |         | Accumulated       |  | Carrying |        | Accumulated 
|                               |                                    |  | Amount         |         | Amortization      |  | Amount   |        | Amortization
|                               |                                    |  |                |         |                   |  |          |        |             
|Amortized intangible assets:   |                                    |  |                |         |                   |  |          |        |              |  |   |         |  |  |   |       
|                              
|                              
|                              
|                              
|                               | Patents and related licenses       |  | $              | 78,333  |                   |  | $        | 40,441 |              |  | $ | 73,031  |  |  | $ | 40,766 | 
|                              
|                              
|                              
|                              
|                               | Trademarks                         |  |                | 111,570 |                   |  |          | 3,161  |              |  |   | 112,958 |  |  |   | 2,114  | 
|                              
|                              
|                              
|                              
|                               | Licenses and other intangibles     |  |                | 21,082  |                   |  |          | 4,265  |              |  |   | 22,768  |  |  |   | 4,352  | 
|                               |                                    |  |                |         |                   |  |          |        |              |  |   |         |  |  |   |       
|                               | Total                              |  | $              | 210,985 |                   |  | $        | 47,867 |              |  | $ | 208,757 |  |  | $ | 47,232 | 
|                               |                                    |  |                |         |                   |  |          |        |              |  |   |         |  |  |   |       
|Unamortized intangible assets: |                                    |  |                |         |                   |  |          |        |              |  |   |         |  |  |   |       
|                              
|                              
|                              
|                              
|                               | Trademarks & product registrations |  | $              | 25,914  |                   |  |          |        |              |  | $ | 25,954  |  |  |   |        | 
|                               |                                    |  |                |         |                   |  |          |        |              |  |   |         |  |  |   |       

On March 1, 2002, IVAX acquired from Syntex Pharmaceuticals
International Ltd. the non-U.S. rights to pharmaceutical products containing
flunisolide hemihydrate, sold under the tradenames Syntaris, Nasalide, Rhinalar,
Locasyn and Lokilan, for 10,156 Swiss francs ($5,986 at the February 28, 2002,
currency exchange rate).

(6) DEBT:

During January 2002, IVAX repaid $48,000 of U.S. denominated loans held
by an Argentine subsidiary resulting in a pretax foreign exchange loss of
$2,824.

During the first quarter of 2002, IVAX repurchased $35,000 of 4.5%
Convertible Senior Subordinated Notes due 2008 for $28,797, plus accrued
interest of $484, and wrote off debt issuance costs of $828, resulting in an
extraordinary gain on extinguishment of debt of $3,413, net of tax.

9



---



##### 



(7) INCOME TAXES:

The provision for income taxes from continuing operations consists of
the following:

|                             |          |      |        |       |  |   |        |        | 
|---------------------------- | -------- | ---- | ------ | ----- |  | - | ------ | ------ | 
|Three Months Ended March 31, |          | 2002 |        | 2001 
|                             |          |      |        |      
|Current:                     |          |      |        |       |  |   |        |       
|                            
|                            
|                            
|                            
|                             | Domestic |      | $      | 219   |  |   | $      | 11,144 | 
|                            
|                            
|                            
|                            
|                             | Foreign  |      |        | 4,891 |  |   |        | 3,726  | 
|                            
|                            
|                            
|                            
|Deferred                     |          |      | (1,259 | )     |  |   | (1,115 | )     
|                             |          |      |        |       |  |   |        |       
|Total                        |          | $    | 3,851  |       |  | $ | 13,755 |       
|                             |          |      |        |       |  |   |        |       

The effective tax
rate during the first quarter of 2002 is less than the statutory
rate due primarily to low tax rates applicable to IVAX Puerto Rico
and Waterford, Ireland manufacturing operations. Payment of the current tax provision for the year ended December 31,
2001, for domestic and foreign operations will be reduced by $727 and $370,
respectively, representing the incremental impact of compensation expense
deductions associated with non-qualified stock option exercises during the
current quarter. These amounts were credited to Capital in excess of par
value. As of March 31, 2002, a domestic net deferred tax asset of $100,869 and
an aggregate foreign net deferred tax asset of $5,192 are included in Other
current assets and Other assets in the accompanying consolidated balance
sheet. Realization of the net deferred tax assets is dependent upon generating
sufficient future domestic and foreign taxable income. Although realization is
not assured, management believes it is more likely than not that the net
deferred tax assets will be realized.

(8) COMPREHENSIVE INCOME:

The components of IVAX comprehensive income are as follows:

|                                                         |  |      |         |      |  |   |         |  
|-------------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|Three Months Ended March 31,                             |  | 2002 |         | 2001
|                                                         |  |      |         |     
|Net income                                               |  | $    | 23,461  |      |  | $ | 60,132  |  
|                                                        
|                                                        
|                                                        
|                                                        
|Unrealized losses on marketable securities, net of taxes |  |      | (358    | )    |  |   | (104    | )
|                                                        
|                                                        
|                                                        
|                                                        
|Foreign currency translation adjustments                 |  |      | (84,805 | )    |  |   | (14,753 | )
|                                                         |  |      |         |      |  |   |         |  
|Comprehensive income (loss)                              |  | $    | (61,702 | )    |  | $ | 45,275  |  
|                                                         |  |      |         |      |  |   |         |  

(9) SHAREHOLDERS EQUITY:

On January 15, 2002, one put option for 250 shares of IVAX common
stock was rolled forward to May 14, 2002, with a strike price of $32.28. No
additional premium was collected. IVAX elected the net share settlement method
to settle one put option for 200 shares, bearing a strike price of $31.00, that
expired on March 1, 2002. IVAX issued 160 shares of IVAX common stock in
settlement of this obligation on March 5, 2002.

On March 15, 2002, IVAX Board of Directors expanded the authorization
of our repurchase program by an additional 10,000 shares of common stock or a
like-valued amount of IVAX convertible debentures.

During the first quarter of 2002, IVAX repurchased 1,131 shares of its
common stock at a total cost, including commissions, of $19,957.

10



---



##### 



(10) BUSINESS SEGMENT INFORMATION:

|                                                            |                                        |   |                              |         |      |   |         |         |  
|----------------------------------------------------------- | -------------------------------------- | - | ---------------------------- | ------- | ---- | - | ------- | ------- | -
|                                                            |                                        |   | Three Months Ended March 31,
|                                                            |                                        |   |                             
|                                                            |                                        |   | 2002                         |         | 2001
|                                                            |                                        |   |                              |         |     
|Revenues by Region                                          |                                        |   |                              |         |      |   |         |        
|                                                           
|                                                           
|                                                           
|                                                           
|North America                                               |                                        |   |                              |         |      |   |         |        
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | External sales                         |   | $                            | 102,961 |      |   | $       | 138,743 |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Intersegment sales                     |   |                              | 276     |      |   |         | 386     |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Other revenues                         |   |                              | 7,736   |      |   |         | 121     |  
|                                                            |                                        |   |                              |         |      |   |         |        
|                                                            | Net revenues  North America           |   |                              | 110,973 |      |   |         | 139,250 |  
|                                                            |                                        |   |                              |         |      |   |         |        
|Europe                                                      |                                        |   |                              |         |      |   |         |        
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | External sales                         |   |                              | 85,283  |      |   |         | 70,288  |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Intersegment sales                     |   |                              | 14,389  |      |   |         | 7,741   |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Other revenues                         |   |                              | 8,540   |      |   |         | 15,205  |  
|                                                            |                                        |   |                              |         |      |   |         |        
|                                                            | Net revenues  Europe                  |   |                              | 108,212 |      |   |         | 93,234  |  
|                                                            |                                        |   |                              |         |      |   |         |        
|Latin America                                               |                                        |   |                              |         |      |   |         |        
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | External sales                         |   |                              | 58,777  |      |   |         | 26,509  |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Other revenues                         |   |                              | 400     |      |   |         | 229     |  
|                                                            |                                        |   |                              |         |      |   |         |        
|                                                            | Net revenues  Latin America           |   |                              | 59,177  |      |   |         | 26,738  |  
|                                                            |                                        |   |                              |         |      |   |         |        
|Corporate & Other                                           |                                        |   |                              |         |      |   |         |        
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | External sales                         |   |                              | 7,280   |      |   |         | 8,371   |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Intersegment sales                     |   |                              | (14,665 | )    |   |         | (8,127  | )
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Other revenues                         |   |                              | 1,245   |      |   |         | 466     |  
|                                                            |                                        |   |                              |         |      |   |         |        
|                                                            | Net revenues  Corporate & Other       |   |                              | (6,140  | )    |   |         | 710     |  
|                                                            |                                        |   |                              |         |      |   |         |        
|Consolidated net revenues                                   |                                        | $ | 272,222                      |         |      | $ | 259,932 |        
|                                                            |                                        |   |                              |         |      |   |         |        
|Profits by Region                                           |                                        |   |                              |         |      |   |         |        
|                                                           
|                                                           
|                                                           
|                                                           
|Income from continuing operations
before minority interest: |                                        |   |                              |         |      |   |         |        
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | North America                          |   | $                            | 13,573  |      |   | $       | 35,086  |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Europe                                 |   |                              | 9,442   |      |   |         | 75      |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Latin America                          |   |                              | 4,178   |      |   |         | 1,305   |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Corporate & Other                      |   |                              | (11,400 | )    |   |         | 23,765  |  
|                                                            |                                        |   |                              |         |      |   |         |        
|Income from continuing operations
before minority interest  |                                        |   | 15,793                       |         |      |   | 60,231  |        
|                                                           
|                                                           
|                                                           
|                                                           
|Net income:                                                 |                                        |   |                              |         |      |   |         |        
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Minority interest                      |   |                              | 94      |      |   |         | (99     | )
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Extraordinary item                     |   |                              | 3,413   |      |   |         |        |  
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Cumulative effect of accounting change |   |                              | 4,161   |      |   |         |        |  
|                                                            |                                        |   |                              |         |      |   |         |        
|Net income                                                  |                                        | $ | 23,461                       |         |      | $ | 60,132  |        
|                                                            |                                        |   |                              |         |      |   |         |        

|                   |                   |   |           |         |      |   |         |         | 
|------------------ | ----------------- | - | --------- | ------- | ---- | - | ------- | ------- | 
|                   |                   |   | March 31,
|                   |                   |   |          
|                   |                   |   | 2002      |         | 2001
|                   |                   |   |           |         |     
|Long-lived assets: |                   |   |           |         |      |   |         |        
|                  
|                  
|                  
|                  
|                   | North America     |   | $         | 210,244 |      |   | $       | 61,410  | 
|                  
|                  
|                  
|                  
|                   | Europe            |   |           | 228,986 |      |   |         | 213,595 | 
|                  
|                  
|                  
|                  
|                   | Latin America     |   |           | 489,647 |      |   |         | 177,154 | 
|                  
|                  
|                  
|                  
|                   | Corporate & Other |   |           | 106,446 |      |   |         | 96,851  | 
|                   |                   |   |           |         |      |   |         |        
|Total              |                   | $ | 1,035,323 |         |      | $ | 549,010 |        
|                   |                   |   |           |         |      |   |         |        

11



---



##### 



(11) RECENTLY ISSUED ACCOUNTING STANDARDS:

In accordance with Statement of Financial Accounting Standards (SFAS)
No. 141, Business Combinations, on January 1, 2002, $4,161 of negative goodwill
recorded in the balance sheet as of December 31, 2001, was reversed through a
cumulative effect of a change in accounting principle. In addition, a workforce
in place intangible asset in the amount of $722 was reclassified to goodwill.

Effective
January 1, 2002, IVAX adopted SFAS No. 142, Goodwill and
Other Intangible Assets. Intangible assets that have indefinite lives and
goodwill are no longer amortized. This will increase net income by approximately
$2,000 per quarter, or $8,000 per year. The life of one product intangible asset
with a net book value of $6,519 as of January 1, 2002, was extended based on a
review of the expected remaining estimated useful life. Intangible assets with
indefinite lives were tested for impairment resulting in the write-down of one
intangible asset by $177. Management is currently evaluating the allocation of
goodwill to reporting units and the extent of impairment, if any, of goodwill as
of January 1, 2002, that may need to be recorded. The initial impairment test is
expected to be completed by June 30, 2002. The final impairment test, if any, is
expected to be completed by December 31, 2002.

Goodwill and Other Intangible Assets  Adoption of SFAS No. 142:

|                                         |                                 |      |        |      |  |   |        |      | 
|---------------------------------------- | ------------------------------- | ---- | ------ | ---- |  | - | ------ | ---- | 
|Three Months Ended March 31,             |                                 | 2002 |        | 2001
|                                         |                                 |      |        |     
|                                        
|Reported net income                      |                                 | $    | 23,461 |      |  | $ | 60,132 |     
|                                        
|                                        
|                                        
|                                        
|Addback: Goodwill amortization           |                                 |      |        |      |  |   | 1,349  |     
|                                        
|                                        
|                                        
|                                        
|Addback: Workforce in place amortization |                                 |      |        |      |  |   | 83     |     
|                                        
|                                        
|                                        
|                                        
|Adjust: Product intangible amortization  |                                 |      |        |      |  |   | 1,389  |     
|                                         |                                 |      |        |      |  |   |        |     
|Adjusted net income                      |                                 | $    | 23,461 |      |  | $ | 62,953 |     
|                                         |                                 |      |        |      |  |   |        |     
|Basic earnings per common share:         |                                 |      |        |      |  |   |        |     
|                                        
|                                        
|                                        
|                                        
|                                         | Reported net income             |      | $      | 0.12 |  |   | $      | 0.30 | 
|                                        
|                                        
|                                        
|                                        
|                                         | Goodwill amortization           |      |        |      |  |   |        | 0.01 | 
|                                        
|                                        
|                                        
|                                        
|                                         | Product intangible amortization |      |        |      |  |   |        | 0.01 | 
|                                         |                                 |      |        |      |  |   |        |     
|                                         | Adjusted net income             |      | $      | 0.12 |  |   | $      | 0.32 | 
|                                         |                                 |      |        |      |  |   |        |     
|Diluted earnings per common share:       |                                 |      |        |      |  |   |        |     
|                                        
|                                        
|                                        
|                                        
|                                         | Reported net income             |      | $      | 0.12 |  |   | $      | 0.29 | 
|                                        
|                                        
|                                        
|                                        
|                                         | Goodwill amortization           |      |        |      |  |   |        | 0.01 | 
|                                        
|                                        
|                                        
|                                        
|                                         | Product intangible amortization |      |        |      |  |   |        | 0.01 | 
|                                         |                                 |      |        |      |  |   |        |     
|                                         | Adjusted net income             |      | $      | 0.12 |  |   | $      | 0.31 | 
|                                         |                                 |      |        |      |  |   |        |     

SFAS No. 143,
Accounting for Asset Retirement Obligations, addresses
financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement
costs. It is effective for fiscal years beginning after June 15, 2002.
Management believes the impact of adoption of this statement will not be
significant.

Effective
January 1, 2002, IVAX adopted SFAS No. 144, Accounting for
the Impairment or Disposal of Long-Lived Assets, EITF Issue
No. 00-25, Vendor
Income Statement Characterization of Consideration Paid to a Reseller of the
Vendors Products, and EITF Issue No. 01-09, Accounting for Consideration Given
to a Customer or a Reseller of Vendors Products. The impact of adoption was not
significant.

12



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##### 



(12) ACQUISITIONS:

On February 9, 2001, IVAX indirectly acquired IVAX Pharmaceuticals
Mexico, S.A. de C.V. (IVAX Mexico, formerly known as
Laboratorios Fustery,
S.A. de C.V.), a Mexican pharmaceutical company, by purchasing the outstanding
securities of IVAX Mexicos parent, Maancirkel Holding B.V., a corporation
organized under the laws of The Netherlands, from Morcob CVA, an entity
organized under the laws of Belgium, pursuant to a stock purchase agreement
entered into among the parties on October 11, 2000. The operating results of
IVAX Mexico are included in the consolidated financial statements subsequent to
the February 9, 2001, acquisition date.

On February 26, 2001, IVAX acquired the assets of a research
organization located in the United States. The operating results of this company
are included in the consolidated financial statements subsequent to the February
26, 2001, acquisition date.

On March 13, 2001, IVAX acquired Netpharma Scandinavia AB
(Netpharma), a Swedish pharmaceutical company. The operating results of
Netpharma are included in the consolidated financial statements subsequent to
the March 13, 2001, acquisition date.

On April 3,
2001, IVAX acquired the remaining 70% of Indiana Protein
Technologies, Inc. (Indiana Protein) that it did not
already own. Indiana Protein was previously accounted for as an
investment under the equity method of accounting. The operating
results of Indiana Protein are included in the consolidated financial
statements subsequent to the April 3, 2001, acquisition date.

During the third
quarter of 2001, IVAX acquired 99.9% of the outstanding shares and
American Depositary Shares (ADS) of Laboratorio Chile
S.A. (Lab Chile), a Chilean pharmaceutical company, in
two tender offers for cash. The operating results of Lab Chile are
included in the consolidated financial statements subsequent to the
July 5, 2001, acquisition date.

Pro-forma information for the above acquisitions as if the purchases
occurred on January 1 of 2001 is presented below.

|                                |  |      |         | 
|------------------------------- |  | ---- | ------- | 
|Three Months Ended March 31,    |  | 2001
|                                |  |     
|                               
|Revenues                        |  | $    | 329,022 | 
|                               
|                               
|                               
|                               
|Net income                      |  | $    | 64,242  | 
|                               
|                               
|                               
|                               
|                               
|Diluted weighted average shares |  |      | 207,892 | 
|                               
|                               
|                               
|                               
|Diluted earnings per share      |  | $    | 0.31    | 

These pro-forma results of operations are not necessarily indicative of
results that might have been achieved if the acquisitions had actually occurred
on January 1, 2001.

(13) PARTIAL SALE OF IVAX DIAGNOSTICS, INC.:

On March 14, 2001, IVAX wholly-owned subsidiary, IVAX Diagnostics,
Inc., was merged with b2bstores.com, a non-operating company with approximately
$22,285 of cash, resulting in IVAX owning approximately 70% of the newly merged
public company. IVAX received 20,000 shares of b2bstores.com common stock in
exchange for all of the outstanding shares of IVAX Diagnostics, Inc. and
b2bstores.coms name was changed to IVAX Diagnostics, Inc. For accounting
purposes, this transaction was treated as a partial sale of IVAX Diagnostics,
Inc. in exchange for cash of b2bstores.com. IVAX elected income statement
recognition as its accounting policy for sales of subsidiary stock and recorded
a gain of $10,278. Deferred taxes were not recorded related to the gain as it
represents an outside basis difference and IVAX expects it can recover its
investment in IVAX Diagnostics, Inc. tax-free. Also recorded was $1,041 of
nondeductible compensation expense from outstanding options under the IVAX
Diagnostics, Inc. 1999 Stock Option Plan converting to a fair value plan as a
result of the merger. IVAX Diagnostics, Inc. is engaged in the development,
manufacture and marketing of diagnostic test kits, reagents and instruments.

13



---



##### 



(14) LEGAL PROCEEDINGS:

On January 11,
2002, two of the class action lawsuits containing
allegations similar to those in the Louisiana Wholesale Drug Co. v. Abbott
Laboratories, Geneva Pharmaceuticals, Inc. and Zenith Goldline Pharmaceuticals,
Inc. case, previously reported in IVAX Annual Report on Form 10-K for the year
ended December 31, 2001, were also settled.

(15) SUBSEQUENT EVENTS:

On April 2, 2002, IVAX entered into an agreement to acquire the
technical files and French marketing authorizations to substantially all of the
products comprising the generic pharmaceutical business of Merck & Co., Inc.s
subsidiary in France. The total consideration due is 5,641 Euros ($4,917 at the
March 31, 2002, currency exchange rate) one-half of which was
paid upon signing and the
remainder in four months. The purchase price is refundable on a pro-rata basis
if the conditions precedent to the transfer of each product file are not met.

On April 4, 2002, IVAX elected the physical settlement method for one
put option, and paid $4,750 to purchase 250 shares of IVAX common stock at a
strike price of $19.00. On April 11, 2002, one put option for 250 shares of
IVAX common stock was rolled forward to May 21, 2002, with a strike price of
$32.15. No additional premium was collected. On April 30, 2002, IVAX elected the
physical settlement method for one put option, and paid $7,975 to purchase 250
shares of IVAX common stock at a strike price of $31.90.

On April 22, 2002, IVAX acquired an exclusive U.S. license to the
patent rights to market the QVAR brand (beclomethasone dipropionate HFA)
inhalation aerosol, an inhaler prescribed to treat asthma. In
addition, IVAX has an option to obtain ownership of the U.S. QVAR trademark, as well as
related patents and the New Drug Application in five years. 3M Drug Delivery Systems will
manufacture the QVAR product for IVAX under a long-term contract. The total
consideration due under the contract, including options and extensions, is
$105,000, $21,000 of which was paid on the effective date, $22,000 is
due on the first
anniversary, $31,000 is due on the second anniversary, $26,000 is due on the third anniversary
and $5,000 is due on the fifth anniversary upon exercise of the option. IVAX also acquired a non-exclusive
worldwide license to certain 3M patents covering HFA formulations of various
asthma drugs.

During April 2002, IVAX repurchased 1,349 shares of its common stock at
a total cost, including commissions, of $23,164.

14



---



##### 



Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction
with the consolidated financial statements, the related notes to consolidated
financial statements and managements discussion and analysis of financial
condition and results of operations included in our Annual Report on Form 10-K
for the year ended December 31, 2001, and the unaudited interim consolidated
financial statements and the related notes to unaudited interim consolidated
financial statements included in Item 1 of this Quarterly Report on Form 10-Q.
Certain prior period amounts have been reclassified to conform to the current
periods presentation.

Results of Operations

Three Months Ended March 31, 2002 Compared to the Three Months Ended March 31, 2001

Net income for the three months ended March 31, 2002, was $23.5
million, or $.12 per diluted share, compared to $60.1 million, or $.29 per
diluted share, for the same period in 2001. Income from continuing operations
for the three months ended March 31, 2002, was $15.9 million, or $.08 per
diluted share, compared to $60.1 million, or $.29 per diluted share, for the
same period of the prior year. Net income for the three months ended March 31,
2002, was positively impacted by $3.4 million, or $.02 per diluted share, of net
extraordinary gains relating to the early extinguishment of debt. As of January
1, 2002, we recorded a cumulative change in accounting principle credit in the
amount of $4.2 million, or $.02 per diluted share, in accordance with Statement
of Financial Accounting Standards (SFAS) No. 141,
Business Combinations.

Net Revenues and Gross Profit

Net revenues for the three months ended March 31, 2002, totaled $272
million, an increase of $12 million, or 5%, from the $260 million reported in
the same period of the prior year. This increase was comprised of increases of
$15 million from European subsidiaries and $32 million from Latin American
subsidiaries, partially offset by decreases in net revenues of $28 million from
North American subsidiaries and a decrease of $7 million from other operations.

North American subsidiaries net revenues totaled $111 million for the
three months ended March 31, 2002, compared to $139 million for the same period
in 2001. The 20% decrease was primarily attributable to lower prices of our
paclitaxel product and higher sales returns and allowances. North American
subsidiaries recorded provisions for sales returns and allowances that reduced
gross sales by $132 million during the three months ended March 31, 2002, and
$58 million for the same period in 2001. The increase of $74 million, or 127%,
was primarily due to reduced prices on certain generic pharmaceutical products.

European subsidiaries generated net revenues of $108 million for the
three months ended March 31, 2002, compared to $93 million for the same period
in 2001. The 16% increase was primarily due to higher sales volumes partially
offset by unfavorable effects of currency exchange rates and lower prices for
certain generic products. European subsidiaries recorded provisions for sales
returns and allowances that reduced gross sales by $12 million during the three
months ended March 31, 2002, and $10 million for the same period in 2001.

15



---



##### 



Latin American subsidiaries generated net revenues of $59 million for
the three months ended March 31, 2002, which was down from $79 million for the
quarter ended December 31, 2001, primarily due to reductions in Mexican government purchases and a
significant currency devaluation in Argentina. Latin American subsidiaries
generated net revenues of $27 million for the three months ended March 31, 2001.
The 121% increase over the comparative quarter in 2001 was primarily due to the revenue generated by Laboratorio
Chile S.A. (Lab Chile) which was acquired July 5, 2001, partially offset by
currency devaluations in Argentina. Latin American subsidiaries recorded
provisions for sales returns and allowances that reduced gross sales by $10
million during the three months ended March 31, 2002, and $2 million for the
same period in 2001.

Gross profit was $122 million (45% of net revenues) for the three
months ended March 31, 2002, compared to $136 million (52% of net revenues) for
the same period in 2001. The decrease in gross profit percentage was primarily
attributable to reduced pricing on our paclitaxel product. We are continuing to
experience increased competition for paclitaxel as well as our brand equivalent
albuterol products and the resulting pricing and volume pressures have
negatively impacted and may continue to negatively impact our revenues and gross
profits. Our results this quarter were also adversely impacted by a significant
currency devaluation in Argentina, reductions in government purchases of our
products in Mexico and continued pricing pressures in the United Kingdom. Our
future net revenues and gross profits will depend upon:



| |  |  | our ability to maintain our pricing and volume levels and
obtain a consistent supply of raw materials for paclitaxel;                   
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | our ability to maintain a pipeline of products in development;                                                                          
|
| |  |  | our ability to develop and rapidly introduce new products;                                                                              
|
| |  |  | the timing of regulatory approval of such products;                                                                                     
|
| |  |  | our ability to manufacture such products efficiently;                                                                                   
|
| |  |  | the number and timing of
regulatory approvals of competing
products; and                                                                
|
| |  |  | our ability to replace or renew license fees, royalties and
development service fees as the related agreements expire or
are terminated.

Operating Expenses

Selling expenses increased $15 million, or 53%, to $42 million (15% of
net revenues) for the three months ended March 31, 2002, compared to $28 million
(11% of net revenues) for the same period in 2001. The increase was due to
higher expenses associated with the operations of Lab Chile and IVAX
Pharmaceuticals Mexico, S.A. de C.V. (formerly known as Laboratorios Fustery,
S.A. de C.V.), and increased sales and promotional expenses at the European
subsidiaries.

General and administrative expenses increased $3 million, or 15% to $27
million (10% of net revenues) for the three months ended March 31, 2002,
compared to $24 million (9% of net revenues) for the same period in 2001. The
increase is primarily attributable to additional general and administrative
expenses from the operations of Lab Chile and IVAX Mexico.

Research and development expenses for the three months ended March 31,
2002, increased $0.2 million, or 1%, to $19 million (7% of net revenues),
compared to the same period in 2001. Our future level of research and
development expenditures will depend on, among other things, the outcome of
clinical testing of products under development, delays or changes in government
required testing and approval procedures, technological and competitive
developments, strategic marketing decisions and liquidity.

16



---



##### 



Other Income (Expense)

Interest income decreased $1.4 million and interest expense increased
$8 million for the three months ended March 31, 2002, compared to the same
period in 2001 primarily due to the issuance of $725 million of 4.5% Convertible
Senior Subordinated Notes in 2001.

Other income, net decreased $2 million for the three months ended March
31, 2002, compared to the same period in 2001. During January 2002, we repaid
$48 million of U.S. denominated loans held by an Argentine subsidiary resulting
in a pretax foreign exchange loss of approximately $2.8 million, which was
partially offset by foreign currency gains at other subsidiaries.

On March 14, 2001, we sold a partial interest in IVAX Diagnostics, Inc.
through a merger with b2bstores.com, Inc. resulting in a gain of $10.3 million.

Recently Issued Accounting Standards

In accordance with
SFAS No. 141, Business Combinations, on January 1,
2002, $4.2 million of negative goodwill recorded in the balance sheet as of
December 31, 2001, was reversed through a cumulative effect of a change in
accounting principle. In addition, a workforce in place intangible asset in the
amount of $.7 million was reclassified to goodwill.

Effective
January 1, 2002, we adopted SFAS No. 142, Goodwill and Other
Intangible Assets. Intangible assets that have indefinite lives and goodwill are
no longer amortized. This will increase net income by approximately $2 million
per quarter, or $8 million per year. The life of one product intangible asset
with a net book value of $6.5 million as of January 1, 2002, was extended based
on a review of the expected remaining estimated useful life. Intangible assets
with indefinite lives were tested for impairment resulting in the write-down of
one intangible asset by $.2 million. We are currently evaluating the allocation
of goodwill to reporting units and the extent of impairment, if any, of goodwill
as of January 1, 2002, that may need to be recorded. The initial impairment test
is expected to be completed by June 30, 2002. The final impairment test, if any,
is expected to be completed by December 31, 2002.

17



---



##### 



Goodwill and Other Intangible Assets  Adoption of SFAS No. 142 (in
thousands, except per share amounts):

|                                         |                                 |      |        |      |  |   |        |      | 
|---------------------------------------- | ------------------------------- | ---- | ------ | ---- |  | - | ------ | ---- | 
|Three Months Ended March 31,             |                                 | 2002 |        | 2001
|                                         |                                 |      |        |     
|                                        
|Reported net income                      |                                 | $    | 23,461 |      |  | $ | 60,132 |     
|                                        
|                                        
|                                        
|                                        
|Addback: Goodwill amortization           |                                 |      |        |      |  |   | 1,349  |     
|                                        
|                                        
|                                        
|                                        
|Addback: Workforce in place amortization |                                 |      |        |      |  |   | 83     |     
|                                        
|                                        
|                                        
|                                        
|Adjust: Product intangible amortization  |                                 |      |        |      |  |   | 1,389  |     
|                                         |                                 |      |        |      |  |   |        |     
|Adjusted net income                      |                                 | $    | 23,461 |      |  | $ | 62,953 |     
|                                         |                                 |      |        |      |  |   |        |     
|Basic earnings per common share:         |                                 |      |        |      |  |   |        |     
|                                        
|                                        
|                                        
|                                        
|                                         | Reported net income             |      | $      | 0.12 |  |   | $      | 0.30 | 
|                                        
|                                        
|                                        
|                                        
|                                         | Goodwill amortization           |      |        |      |  |   |        | 0.01 | 
|                                        
|                                        
|                                        
|                                        
|                                         | Product intangible amortization |      |        |      |  |   |        | 0.01 | 
|                                         |                                 |      |        |      |  |   |        |     
|                                         | Adjusted net income             |      | $      | 0.12 |  |   | $      | 0.32 | 
|                                         |                                 |      |        |      |  |   |        |     
|Diluted earnings per common share:       |                                 |      |        |      |  |   |        |     
|                                        
|                                        
|                                        
|                                        
|                                         | Reported net income             |      | $      | 0.12 |  |   | $      | 0.29 | 
|                                        
|                                        
|                                        
|                                        
|                                         | Goodwill amortization           |      |        |      |  |   |        | 0.01 | 
|                                        
|                                        
|                                        
|                                        
|                                         | Product intangible amortization |      |        |      |  |   |        | 0.01 | 
|                                         |                                 |      |        |      |  |   |        |     
|                                         | Adjusted net income             |      | $      | 0.12 |  |   | $      | 0.31 | 
|                                         |                                 |      |        |      |  |   |        |     

SFAS No. 143,
Accounting for Asset Retirement Obligations, addresses
financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement
costs. It is effective for fiscal years beginning after June 15, 2002. We
believe the impact of adoption of this statement will not be significant.

Effective
January 1, 2002, we adopted SFAS No. 144, Accounting for the
Impairment or Disposal of Long-lived Assets, EITF Issue
No. 00-25, Vendor Income
Statement Characterization of Consideration Paid to a Reseller of the Vendors
Products, and EITF Issue No. 01-09, Accounting for Consideration Given to a
Customer or a Reseller of Vendors Product. The impact of adoption was not
significant.

Liquidity and Capital Resources

At March 31, 2002, working capital was $547 million compared to $598
million at December 31, 2001. Cash and cash equivalents were $113 million at
March 31, 2002, compared to $178 million at December 31, 2001. Short-term
marketable securities were $148 million at March 31, 2002, compared to $155
million at December 31, 2001.

Net cash of $39 million was provided by operating activities during the
first quarter of 2002 compared to $64 million during the first quarter of 2001.
The decrease in cash provided by operating activities was primarily the result
of reduced operating earnings and increases in inventories and
income tax payments, partially offset by increased collections of accounts
receivable and decreases in other assets.

Net cash of $11 million was used for investing activities during the
first quarter of 2002 compared to $16 million during the same period of the
prior year. During the first quarter of 2002 we spent $7 million to acquire
intangible assets compared to $76 million to acquire intangible
assets and

18



---



##### 



businesses and increase our ownership interest in affiliates during the first
quarter of 2001. During the first quarter of 2002, our capital
expenditures increased by approximately $3 million as compared
to the first three months of 2001. During the first three months of
2001, we also received $22 million in proceeds from the sale of assets and $39
million of net proceeds from the sale of marketable securities.

During April 2002, we entered into an agreement to acquire the
technical files and French marketing authorizations to substantially all of the
products comprising the generic pharmaceutical business of Merck & Co., Inc.s
subsidiary in France for total consideration of approximately $5 million payable
half on signing and half in four months. We also acquired an exclusive U.S.
license to the patent rights to market the QVAR brand (beclomethasone
dipropionate HFA) inhalation aerosol, an inhaler prescribed to treat asthma. In
addition, we have an option to obtain ownership of the U.S. QVAR
trademark, as well as related patents and the New Drug Application in
five years. 3M Drug
Delivery Systems will manufacture the QVAR product for us under a long-term
contract. The total consideration due under the contract, including options and
extensions, is $105 million, $21 million of which was paid
on the effective date, $22 million is due on the first
anniversary, $31 million is due on the second anniversary,
$26 million is due on the third anniversary and $5 million
is due on the fifth anniversary upon exercise of the option.

Net cash of $88 million was used by financing activities during the
first quarter of 2002 compared to $50 million used during the same period of the
prior year. During January 2002, we repaid $48 million of bank debt and
repurchased $35 million of our convertible debentures for $28.8 million, but
reduced our repurchases of common stock by $33.5 million compared to the first
quarter of 2001. On March 15, 2002, our Board of Directors expanded the
authorization of our repurchase program by an additional 10 million shares of
our common stock or a like-valued amount of our convertible debentures.

We plan to spend substantial amounts of capital in 2002 to continue the
research and development of pharmaceutical products. Although research and
development expenditures are expected to be between $80 million and $90 million
during 2002, actual expenditures will depend on, among other things, the outcome
of clinical testing or products under development, delays or changes in
government required testing and approval procedures, technological and
competitive developments, strategic marketing decisions and liquidity. In
addition, we plan to spend between $80 million and $90 million in 2002 to
improve and expand our pharmaceutical and other related facilities.

Our principal sources of short-term liquidity are existing cash and
internally generated funds, which we believe will be sufficient to meet our
operating needs and anticipated capital expenditures over the short term. For
the long term, we intend to utilize principally internally generated funds,
which are anticipated to be derived primarily from the sale of existing
pharmaceutical products and pharmaceutical products currently under development.
There can be no assurance that we will successfully complete products under
development, that we will be able to obtain regulatory approval for any such
products, or that any approved product will be produced in commercial
quantities, at reasonable costs, and be successfully marketed. We may consider
issuing debt or equity securities in the future to fund potential acquisitions
and growth.

Income Taxes

We recognized a $3.9 million tax provision for the three months ended
March 31, 2002, of which $3.7 million related to foreign
operations. The effective tax rate during the first quarter of 2002
is less than the statutory rate due primarily to low tax rates
applicable to our Puerto Rico and Waterford, Ireland
manufacturing operations.

As of March 31, 2002, domestic net deferred tax assets totaled $101
million and aggregate foreign net deferred tax assets totaled $5 million.
Realization of the net deferred tax assets is dependent upon generating
sufficient future domestic and foreign taxable income. Although realization is
not

19



---



##### 



assured, we believe it is more likely than not that the net deferred tax assets
will be realized. Our estimates of future taxable income are subject to revision
due to, among other things, regulatory and competitive factors affecting the
pharmaceutical industries in the markets in which we operate. Such factors are
further discussed in managements discussion and analysis of financial condition
and results of operations included in our Annual Report on Form 10-K for the
year ended December 31, 2001.

Critical Accounting Policies

Revenue Recognition, Sales Returns and Allowances  Revenues and the
related cost of sales are recognized at the time product is shipped. Our
pharmaceutical revenues are affected by the level of provisions for estimated
returns, inventory credits, discounts, promotional allowances, volume rebates
and chargebacks, as well as other sales allowances established by us. The custom
in the pharmaceutical industry is generally to grant customers the right to
return purchased goods. In the brand equivalent pharmaceutical industry, this
custom has resulted in a practice of suppliers issuing inventory credits (also
known as shelf-stock adjustments) to customers based on the customers existing
inventory following decreases in the market price of the related brand
equivalent pharmaceutical product. The determination to grant a credit to a
customer following a price decrease is generally at our discretion, and
generally not pursuant to contractual agreements with customers. These credits
allow customers with established inventories to compete with those buying
product at the current market price, and allow us to maintain shelf space,
market share and customer loyalty.

Provisions for estimated returns, inventory credits and chargebacks, as
well as other sales allowances, are established by us concurrently with the
recognition of revenue. The provisions are established in accordance with
generally accepted accounting principles based upon consideration of a variety
of factors, including actual return and inventory credit experience for products
during the past several years by product type, the number and timing of
regulatory approvals for the product by our competitors (both historical and
projected), the market for the product, expected sell-through levels by our
wholesaler customers to customers with contractual pricing arrangements with us,
estimated customer inventory levels by product and projected economic
conditions. Actual product returns and inventory credits incurred are, however,
dependent upon future events, including price competition and the level of
customer inventories at the time of any price decreases. We continually monitor
the factors that influence the pricing of our products and customer inventory
levels and make adjustments to these provisions when we believe that actual
product returns, inventory credits and other allowances may differ from
established reserves.

Legal Costs  Legal charges are recorded for the costs anticipated to
be incurred in connection with litigation and claims against us when we can
reasonably estimate these costs. We intend to vigorously defend each of the
lawsuits described in Note 13, Commitments and Contingencies, in the notes to
consolidated financial statements included in our Annual Report on Form 10-K for
the year ended December 31, 2001, but their respective outcomes cannot be
predicted. Any of such lawsuits, if determined adversely to us, could have a
material adverse effect on our financial position and results of operations. Our
ultimate liability with respect to any of these proceedings is not presently
determinable.

We are involved in various other legal proceedings arising in the
ordinary course of business, some of which involve substantial amounts. In order
to obtain brand equivalent approvals prior to the expiration of patents on
branded products, and to benefit from the exclusivity allowed to Abbreviated New
Drug Application applicants that successfully challenge these patents, we
frequently become involved in patent infringement litigation brought by branded
pharmaceutical companies. Although these lawsuits involve products that are not
yet marketed and therefore pose little or no risk of liability for damages, the
legal fees and costs incurred in defending such litigation can be substantial.
While it is not feasible to predict or determine the outcome or the total cost
of these proceedings, in our opinion, based on a review with legal counsel, any
losses resulting from such legal proceedings will not have a material adverse
impact on our financial position or results of operations.

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Item 3  Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss that may impact our
consolidated financial position, results of operations or cash flows. We, in the
normal course of doing business, are exposed to the risks associated with
foreign currency exchange rates and changes in interest rates.

Foreign Currency Exchange Rate Risk  We have subsidiaries in more than
20 countries worldwide. During the three months ended March 31, 2002, sales
outside the United States accounted for approximately 62% of worldwide sales.
Virtually all of these sales were denominated in currencies of the local
country. As such, our reported profits and cash flows are exposed to changing
exchange rates. If the United States dollar weakens relative to the foreign
currency, the earnings generated in the foreign currency will, in effect,
increase when converted into United States dollars and vice versa. Although we
do not speculate in the foreign exchange market, we do from time to time manage
exposures that arise in the normal course of business related to fluctuations in
foreign currency exchange rates by entering into offsetting positions through
the use of foreign exchange forward contracts. As a result of exchange rate
differences, net revenues decreased by $6 million for the three months ended
March 31, 2002, as compared to the same period of the prior year. The effects of
inflation on consolidated net revenues and operating income were not
significant. Certain firmly committed transactions are hedged with foreign
exchange forward contracts. As exchange rates change, gains and losses on the
exposed transactions are partially offset by gains and losses related to the
hedging contracts. Both the exposed transactions and the hedging contracts are
translated at current spot rates, with gains and losses included in earnings.
Our derivative activities, which primarily consist of foreign exchange forward
contracts, are initiated primarily to hedge forecasted cash flows that are
exposed to foreign currency risk.

The foreign exchange forward contracts generally require us to exchange
local currencies for foreign currencies based on pre-established exchange rates
at the contracts maturity dates. If the counterparties to the exchange
contracts do not fulfill their obligations to deliver the contracted currencies,
we could be at risk for currency related fluctuations. We enter into these
contracts with counterparties that we believe to be creditworthy and do not
enter into any leveraged derivative transactions. As of March 31, 2002, we had
$20.5 million in foreign exchange forward contracts outstanding. During January
2002, we repaid $48 million of United States dollar denominated bank loans of
the Argentine operations assumed in the acquisition of Lab Chile resulting in a
pretax loss of $2.8 million.

Interest Rate Risk  Our only material debt obligations relate to the
4.5% and 5.5% Convertible Notes, which bear fixed rates of interest. We believe
that our exposure to market risk relating to interest rate risk is not material.

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Disclosure Regarding Forward-looking Statements

We caution the reader that certain important factors may affect our
actual results and could cause such results to differ materially from any
forward-looking statement which may have been deemed to have been made in this
report or which are otherwise made by us or on our behalf. For this purpose any
statements contained in this report that are not statements of historical fact
may be deemed to be forward-looking statements. Without limiting the generality
of the foregoing, words such as may, will, expect, believe,
anticipate, intend, could, would, estimate, continue or pursue, or
the negative other variations thereof or comparable terminology are intended to
identify forward-looking statements. Forward-looking statements involve risks
and uncertainties that cannot be predicted or quantified and, consequently,
actual results may differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include, among other
things:



| |  | difficulties in product development and uncertainties related to the
timing or outcome of product development;                                                                                                        
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | the availability on commercially reasonable terms of raw materials,
particularly raw materials for our paclitaxel product, and other
third-party sourced products;                                                    
| 
| |  | our dependence on sole or limited source suppliers and the risk
associated with a production interruption or shipment delays at such
suppliers;                                                                       
| 
| |  | difficulties in manufacturing products;                                                                                                                                                                               
| 
| |  | efficacy or safety concerns with respect to marketed products, whether
or not scientifically justified, leading to recalls, withdrawals or
declining sales;                                                           
| 
| |  | that our proposed spending on facilities improvement and expansion may
not be as projected;                                                                                                                           
| 
| |  | our ability to obtain approval from the FDA to market new
pharmaceutical products;                                                                                                                                    
| 
| |  | the acceptance of new products by the medical community as effective as
alternative forms of treatment for indicated conditions;                                                                                      
| 
| |  | the outcome of any pending or future litigation (including patent,
trademark and copyright litigation), and the cost, expenses and
possible diversion of managements time and attention arising from such
litigation;
| 
| |  | the impact of new regulations or court decisions regarding the
protection of patents and the exclusivity period for the marketing of
branded drugs;                                                                   
| 
| |  | the impact of the adoption of certain accounting standards;                                                                                                                                                           
| 
| |  | our success in acquiring or licensing proprietary technologies that are
necessary for our product development activities;                                                                                             
| 
| |  | our ability to obtain and maintain a sufficient supply of products to
meet market demand;                                                                                                                             
| 
| |  | the impact of political and economic instability in the countries in
which we operate, particularly Argentina and other Latin American
countries;                                                                     
| 
| |  | our successful compliance with extensive, costly, complex and evolving
governmental regulations and restrictions;                                                                                                     
| 
| |  | our ability to successfully compete in both the branded and
brand-equivalent pharmaceutical sectors; and                                                                                                              
| 
| |  | other risks and uncertainties detailed herein and from time to time in
our Securities and Exchange Commission filings.                                                                                                

The information in this Form 10-Q is as of March 31, 2002 or, where
clearly indicated, as of the date of this filing. We undertake no obligation to
publicly update any forward-looking statements, whether as a result of new
information, future events or otherwise. We also may make additional disclosures
in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K that we may file from time to time with the Securities and
Exchange Commission. Please also note that we provide a cautionary discussion of
risks and uncertainties under the section entitled Risk Factors in our Annual
Report on Form 10-K for the year ended December 31, 2001. These are factors that
we think could cause our actual results to differ materially from expected
results. Other factors besides those listed here could also adversely affect us.

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PART II  OTHER INFORMATION

Item 1  Legal Proceedings

On January 11,
2002, two of the class action lawsuits containing
allegations similar to those in the Louisiana Wholesale Drug Co. V. Abbott
Laboratories, Geneva Pharmaceuticals, Inc. and Zenith Goldline Pharmaceuticals,
Inc. case, previously reported in IVAX Annual Report on Form 10-K for the year
ended December 31, 2001, were also settled.

Item 6  Exhibits and Reports On Form 8-K

(a) EXHIBITS

None

(b) REPORTS ON FORM 8-K

On February 13, 2002, we filed a report on Form 8-K to report the
issuance of a press release containing certain financial information with
respect to results of operations for the year ended December 31, 2001.

On March 5, 2002, we filed a report on Form 8-K reporting our issuance
of 159,730 shares of our common stock pursuant to our Registration Statement on
Form S-3, Registration No. 333-51372, in settlement of certain put option
obligations.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                   |  |     |  |                                                                      
|------------------ |  | --- |  | ---------------------------------------------------------------------
|                   |  |     |  | IVAX CORPORATION                                                     
|                  
|                  
|                  
|                  
|                  
|Date: May 14, 2001 |  | By: |  | /s/ Thomas E. Beier                                                  
|                   |  |     |  |                                                                      
|                   |  |     |  | Thomas E.
Beier
Senior Vice President-Finance
Chief Financial Officer

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