##### Table of Contents



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 June 30, 2003

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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). 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.

195,662,835 shares of Common Stock, $.10 par value, outstanding as of July 25, 2003.





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TABLE OF CONTENTS



|                                                |                                                                                                |                                                |  |  |  |  |  | 
|----------------------------------------------- | ---------------------------------------------------------------------------------------------- | ---------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                 
|                                                | Item 1  Financial Statements                                                                 
|                                                |                                                                                                | CONSOLIDATED BALANCE SHEETS                   
|                                                |                                                                                                | CONSOLIDATED STATEMENTS OF OPERATIONS         
|                                                |                                                                                                | CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
|                                                |                                                                                                | CONSOLIDATED STATEMENTS OF CASH FLOWS         
|                                                |                                                                                                | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|                                                | Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                | Item 3  -  Quantitative and Qualitative Disclosures About Market Risk                         
|                                                | Item 4 Controls and Procedures                                                               
|PART II  -  OTHER INFORMATION                  
|                                                | Item 1  Legal Proceedings                                                                    
|                                                | Item 4  Submission of Matters to a Vote of Security Holders                                  
|                                                | Item 6  -  Exhibits and Reports on Form 8-K                                                   
|Signature                                      
|EXHIBIT INDEX                                  
|EX-10.21 Amend to Employment Agreement - Henein
|EX-31.1 CEO Certification Section 302          
|EX-31.2 CFO Certification Section 302          
|EX-32 CEO and CFO Certification Section 906    



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IVAX CORPORATION

INDEX

|                               |          |                                                                                                 |  |         
|------------------------------ | -------- | ----------------------------------------------------------------------------------------------- |  | --------
|                               |          |                                                                                                 |  | PAGE NO.
|                               |          |                                                                                                 |  |         
|PART I - FINANCIAL INFORMATION |          |                                                                                                
|                               | Item 1 - | Financial Statements                                                                            |  |         
|                               |          | Consolidated Balance Sheets as of June 30, 2003
and December 31, 2002                           |  | 2       
|                               |          | Consolidated Statements of Operations
for the three and six months ended June 30, 2003 and 2002 |  | 3       
|                               |          | Consolidated Statement of Shareholders Equity
for the six months ended June 30, 2003           |  | 4       
|                               |          | Consolidated Statements of Cash Flows
for the six months ended June 30, 2003 and 2002           |  | 5       
|                               |          | Notes to Consolidated Financial Statements                                                      |  | 6       
|                               | Item 2 - | Managements Discussion and Analysis of Financial Condition and
Results of Operations           |  | 14      
|                               | Item 3 - | Quantitative and Qualitative Disclosures About Market Risk                                      |  | 26      
|                               | Item 4 - | Controls and Procedures                                                                         |  | 27      
|PART II - OTHER INFORMATION    |          |                                                                                                
|                               | Item 1 - | Legal Proceedings                                                                               |  | 28      
|                               | Item 4 - | Submission of Matters to a Vote of Security Holders                                             |  | 29      
|                               | Item 6 - | Exhibits and Reports on Form 8-K                                                                |  | 29      





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PART I - FINANCIAL INFORMATION




Item 1 - Financial Statements




IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)

|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |              |           |  |  | 
|-------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | -------- | --------- | ----------- | ------- | ------------ | --------- |  |  | 
|                                       |                                                                                                                                   |                                            |                                      |          |           | June 30,    |         | December 31,
|                                       |                                                                                                                                   |                                            |                                      |          |           | 2003        |         | 2002        
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   |                                            |                                      |          |           | (Unaudited) |         |              |           | 
|                                       |                                                                                                                                   |                                            |                                      | ASSETS   |           |             |         |              |           |  |  | 
|Current assets:                        |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       | Cash and cash equivalents                                                                                                         |                                            | $                                    | 185,955  |           |             | $       | 155,408      |          
|                                       | Marketable securities, short-term                                                                                                 |                                            |                                      | 2,101    |           |             |         | 28,873       |          
|                                       | Accounts receivable, net of allowances for doubtful
accounts of $22,882 in 2003 and $21,719 in 2002                               |                                            |                                      | 205,368  |           |             |         | 224,768      |          
|                                       | Inventories                                                                                                                       |                                            |                                      | 345,132  |           |             |         | 309,655      |          
|                                       | Other current assets                                                                                                              |                                            |                                      | 148,577  |           |             |         | 162,513      |          
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   | Total current assets                       |                                      |          | 887,133   |             |         |              | 881,217   | 
|Property, plant and equipment, net     |                                                                                                                                   |                                            | 453,102                              |          |           |             | 420,246 |             
|Goodwill, net                          |                                                                                                                                   |                                            | 420,790                              |          |           |             | 407,403 |             
|Intangible assets, net                 |                                                                                                                                   |                                            | 279,810                              |          |           |             | 283,298 |             
|Other assets                           |                                                                                                                                   |                                            | 85,885                               |          |           |             | 55,595  |             
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   | Total assets                               |                                      | $        | 2,126,720 |             |         | $            | 2,047,759 | 
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |              |          
|                                       |                                                                                                                                   |                                            | LIABILITIES AND SHAREHOLDERS EQUITY |          |           |             |         |              |           |  | 
|Current liabilities:                   |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       | Accounts payable                                                                                                                  |                                            | $                                    | 116,186  |           |             | $       | 111,590      |          
|                                       | Current portion of long-term debt                                                                                                 |                                            |                                      | 37,289   |           |             |         | 28,617       |          
|                                       | Loans payable                                                                                                                     |                                            |                                      | 15,668   |           |             |         | 14,935       |          
|                                       | Accrued income taxes payable                                                                                                      |                                            |                                      | 32,549   |           |             |         | 50,555       |          
|                                       | Accrued expenses and other current liabilities                                                                                    |                                            |                                      | 233,731  |           |             |         | 228,366      |          
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   | Total current liabilities                  |                                      |          | 435,423   |             |         |              | 434,063   | 
|Long-term debt, net of current portion |                                                                                                                                   |                                            | 819,510                              |          |           |             | 872,339 |             
|Other long-term liabilities            |                                                                                                                                   |                                            | 55,251                               |          |           |             | 46,115  |             
|Minority interest                      |                                                                                                                                   |                                            | 12,608                               |          |           |             | 10,379  |             
|Shareholders equity:                  |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       | Common stock, $.10 par value, authorized 437,500 shares,
issued and outstanding 195,337 shares in 2003 and
194,372 shares in 2002 |                                            |                                      | 19,534   |           |             |         | 19,437       |          
|                                       | Capital in excess of par value                                                                                                    |                                            |                                      | 323,337  |           |             |         | 311,367      |          
|                                       | Retained earnings                                                                                                                 |                                            |                                      | 639,500  |           |             |         | 569,225      |          
|                                       | Accumulated other comprehensive loss                                                                                              |                                            |                                      | (178,443 | )         |             |         | (215,166     | )        
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   | Total shareholders equity                 |                                      |          | 803,928   |             |         |              | 684,863   | 
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |             
|                                       |                                                                                                                                   | Total liabilities and shareholders equity |                                      | $        | 2,126,720 |             |         | $            | 2,047,759 | 
|                                       |                                                                                                                                   |                                            |                                      |          |           |             |         |              |          

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

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IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |         |       | 
|---------------------------------------------------------- | -------------------------------------- | ---------------------------- | ------- | ---------- | ------- | ---- | ------- | ------- | ------ | - | ------- | ------- | ------- | - | ------- | ------- | ----- | 
|Period Ended June 30,                                      |                                        | Three Months                 |         | Six Months
|(In thousands, except per share data)                      |                                        | 2003                         |         | 2002       |         | 2003 |         | 2002   
|                                                           |                                        |                              |         |            |         |      |         |        
|Net revenues                                               |                                        | $                            | 342,985 |            |         | $    | 280,406 |         |        | $ | 660,678 |         |         | $ | 552,628 |        
|Cost of sales                                              |                                        |                              | 192,033 |            |         |      | 149,843 |         |        |   | 363,583 |         |         |   | 300,090 |        
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|                                                           | Gross profit                           |                              |         | 150,952    |         |      |         | 130,563 |        |   |         | 297,095 |         |   |         | 252,538 |      
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|Operating expenses:                                        |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|                                                           | Selling                                |                              |         | 52,458     |         |      |         | 43,701  |        |   |         | 98,053  |         |   |         | 85,847  |      
|                                                           | General and administrative             |                              |         | 31,279     |         |      |         | 27,368  |        |   |         | 56,347  |         |   |         | 54,634  |      
|                                                           | Research and development               |                              |         | 25,065     |         |      |         | 18,330  |        |   |         | 45,486  |         |   |         | 37,384  |      
|                                                           | Amortization of intangible assets      |                              |         | 5,315      |         |      |         | 3,918   |        |   |         | 9,806   |         |   |         | 6,932   |      
|                                                           | Restructuring costs                    |                              |         | 317        |         |      |         | 1,794   |        |   |         | 780     |         |   |         | 2,282   |      
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|                                                           | Total operating expenses               |                              |         | 114,434    |         |      |         | 95,111  |        |   |         | 210,472 |         |   |         | 187,079 |      
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|Income from operations                                     |                                        |                              | 36,518  |            |         |      | 35,452  |         |        |   | 86,623  |         |         |   | 65,459  |        
|Other income (expense):                                    |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|                                                           | Interest income                        |                              |         | 686        |         |      |         | 3,026   |        |   |         | 1,919   |         |   |         | 5,425   |      
|                                                           | Interest expense                       |                              |         | (11,003    | )       |      |         | (12,312 | )      |   |         | (21,952 | )       |   |         | (24,720 | )    
|                                                           | Other income, net                      |                              |         | 230        |         |      |         | 19,354  |        |   |         | 5,854   |         |   |         | 24,374  |      
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|                                                           |                                        | Total other income (expense) |         |            | (10,087 | )    |         |         | 10,068 |   |         |         | (14,179 | ) |         |         | 5,079 | 
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|Income before income taxes and minority interest           |                                        |                              | 26,431  |            |         |      | 45,520  |         |        |   | 72,444  |         |         |   | 70,538  |        
|Provision for income taxes                                 |                                        |                              | 7,378   |            |         |      | 13,766  |         |        |   | 24,484  |         |         |   | 19,578  |        
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|Income before minority interest                            |                                        |                              | 19,053  |            |         |      | 31,754  |         |        |   | 47,960  |         |         |   | 50,960  |        
|Minority interest                                          |                                        |                              | 33      |            |         |      | (32     | )       |        |   | 111     |         |         |   | 62      |        
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|Income from continuing operations                          |                                        |                              | 19,086  |            |         |      | 31,722  |         |        |   | 48,071  |         |         |   | 51,022  |        
|Income from discontinued operations, net of tax
of $12,763 |                                        |                              | 22,204  |            |         |      |        |         |        |   | 22,204  |         |         |   |        |        
|Cumulative effect of accounting change                     |                                        |                              |        |            |         |      |        |         |        |   |        |         |         |   | 4,161   |        
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|Net income                                                 |                                        | $                            | 41,290  |            |         | $    | 31,722  |         |        | $ | 70,275  |         |         | $ | 55,183  |        
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|Basic earnings per common share:                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|                                                           | Continuing operations                  |                              | $       | 0.10       |         |      | $       | 0.16    |        |   | $       | 0.25    |         |   | $       | 0.26    |      
|                                                           | Discontinued operations                |                              |         | 0.11       |         |      |         |        |        |   |         | 0.11    |         |   |         |        |      
|                                                           | Cumulative effect of accounting change |                              |         |           |         |      |         |        |        |   |         |        |         |   |         | 0.02    |      
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|                                                           | Net income                             |                              | $       | 0.21       |         |      | $       | 0.16    |        |   | $       | 0.36    |         |   | $       | 0.28    |      
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|Diluted earnings per common share:                         |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|                                                           | Continuing operations                  |                              | $       | 0.10       |         |      | $       | 0.16    |        |   | $       | 0.25    |         |   | $       | 0.26    |      
|                                                           | Discontinued operations                |                              |         | 0.11       |         |      |         |        |        |   |         | 0.11    |         |   |         |        |      
|                                                           | Cumulative effect of accounting change |                              |         |           |         |      |         |        |        |   |         |        |         |   |         | 0.02    |      
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|                                                           | Net income                             |                              | $       | 0.21       |         |      | $       | 0.16    |        |   | $       | 0.36    |         |   | $       | 0.28    |      
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|Weighted average number of common
shares outstanding:      |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|                                                           | Basic                                  |                              |         | 195,163    |         |      |         | 195,083 |        |   |         | 195,066 |         |   |         | 195,642 |      
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        
|                                                           | Diluted                                |                              |         | 198,503    |         |      |         | 196,998 |        |   |         | 197,578 |         |   |         | 198,128 |      
|                                                           |                                        |                              |         |            |         |      |         |         |        |   |         |         |         |   |         |        

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

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IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
(Unaudited)
(In thousands)

|                         |                                                |                                                                                         |                      |       |              |   |            |     |           |   |           |        |               |   |               |   |        |   |          |   |        |   |         |        |        |         | 
|------------------------ | ---------------------------------------------- | --------------------------------------------------------------------------------------- | -------------------- | ----- | ------------ | - | ---------- | --- | --------- | - | --------- | ------ | ------------- | - | ------------- | - | ------ | - | -------- | - | ------ | - | ------- | ------ | ------ | ------- | 
|                         |                                                |                                                                                         |                      |       | Common Stock |   |            |     |           |   |           |        |               |   | Accumulated   |   |        |   |         
|                         |                                                |                                                                                         |                      |       |              |   | Capital in |     |           |   |           |        | Other         |   |               |   |       
|                         |                                                |                                                                                         |                      |       | Number of    |   |            |     |           |   | Excess of |        | Retained      |   | Comprehensive |   |        |   |         
|                         |                                                |                                                                                         |                      |       | Shares       |   | Amount     |     | Par Value |   | Earnings  |        | Income (Loss) |   | Total        
|                         |                                                |                                                                                         |                      |       |              |   |            |     |           |   |           |        |               |   |              
|BALANCE, January 1, 2003 |                                                |                                                                                         | 194,372              |       |              | $ | 19,437     |     |           | $ | 311,367   |        |               | $ | 569,225       |   |        | $ | (215,166 | ) |        | $ | 684,863 |       
|                         | Comprehensive income:                          |                                                                                         |                      |       |              |   |            |     |           |   |           |        |               |   |               |   |        |   |          |   |        |   |         |        |       
|                         |                                                | Net income                                                                              |                      |       |             |   |            |     |          |   |           |        |              |   |               |   | 70,275 |   |          |   |       |   |         |        | 70,275 |        
|                         |                                                | Translation adjustment                                                                  |                      |       |             |   |            |     |          |   |           |        |              |   |               |   |       |   |          |   | 36,631 |   |         |        | 36,631 |        
|                         |                                                | Unrealized
net gain on
available-for-sale equity
securities and derivatives,
net of tax |                      |       |             |   |            |     |          |   |           |        |              |   |               |   |       |   |          |   | 92     |   |         |        | 92     |        
|                         |                                                |                                                                                         |                      |       |              |   |            |     |           |   |           |        |               |   |               |   |        |   |          |   |        |   |         |       
|                         |                                                |                                                                                         | Comprehensive income |       |              |   |            |     |           |   |           |        |               |   |               |   |        |   |          |   |        |   |         |        |        | 106,998 | 
|                         | Exercise of stock options                      |                                                                                         |                      | 472   |              |   |            | 48  |           |   |           | 4,523  |               |   |               |  |        |   |          |  |        |   |         | 4,571  |       
|                         | Tax benefit of option exercises                |                                                                                         |                      |      |              |   |            |    |           |   |           | 768    |               |   |               |  |        |   |          |  |        |   |         | 768    |       
|                         | Employee stock purchases                       |                                                                                         |                      | 43    |              |   |            | 4   |           |   |           | 446    |               |   |               |  |        |   |          |  |        |   |         | 450    |       
|                         | Repurchase and retirement of
common stock      |                                                                                         |                      | (550  | )            |   |            | (55 | )         |   |           | (6,100 | )             |   |               |  |        |   |          |  |        |   |         | (6,155 | )     
|                         | Shares issued in acquisitions                  |                                                                                         |                      | 1,000 |              |   |            | 100 |           |   |           | 12,293 |               |   |               |  |        |   |          |  |        |   |         | 12,393 |       
|                         | Value of stock options issued
to non-employees |                                                                                         |                      |      |              |   |            |    |           |   |           | 40     |               |   |               |  |        |   |          |  |        |   |         | 40     |       
|                         |                                                |                                                                                         |                      |       |              |   |            |     |           |   |           |        |               |   |               |   |        |   |          |   |        |   |         |       
|BALANCE, June 30, 2003   |                                                |                                                                                         | 195,337              |       |              | $ | 19,534     |     |           | $ | 323,337   |        |               | $ | 639,500       |   |        | $ | (178,443 | ) |        | $ | 803,928 |       
|                         |                                                |                                                                                         |                      |       |              |   |            |     |           |   |           |        |               |   |               |   |        |   |          |   |        |   |         |       

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

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

|                                                             |                                                                                  |                                                 |                                                                  |         |         |         |         |          |          |         |  
|------------------------------------------------------------ | -------------------------------------------------------------------------------- | ----------------------------------------------- | ---------------------------------------------------------------- | ------- | ------- | ------- | ------- | -------- | -------- | ------- | -
|Six Months Ended June 30,                                    |                                                                                  | 2003                                            |                                                                  | 2002   
|(In thousands)                                               |                                                                                  |                                                 |                                                                  |        
|Cash flows from operating activities:                        |                                                                                  |                                                 |                                                                  |         |         |         |         |         
|                                                             | Net income                                                                       |                                                 | $                                                                | 70,275  |         |         | $       | 55,183   |         
|                                                             | Adjustments to reconcile net income to net cash
flows from operating activities: |                                                 |                                                                  |         |         |         |         |          |         
|                                                             |                                                                                  | Restructuring costs                             |                                                                  |         | 780     |         |         |          | 2,282    |        
|                                                             |                                                                                  | Depreciation and amortization                   |                                                                  |         | 35,313  |         |         |          | 26,668   |        
|                                                             |                                                                                  | Deferred
tax provision (benefit)                |                                                                  |         | (282    | )       |         |          | 1,362    |        
|                                                             |                                                                                  | Tax effect of stock options exercised           |                                                                  |         | 768     |         |         |          | 1,297    |        
|                                                             |                                                                                  | Value of stock options issued to non-employees  |                                                                  |         | 40      |         |         |          |         |        
|                                                             |                                                                                  | Provision for doubtful accounts                 |                                                                  |         | 2,003   |         |         |          | 2,064    |        
|                                                             |                                                                                  | Provision for inventory obsolescence            |                                                                  |         | 16,485  |         |         |          | 5,173    |        
|                                                             |                                                                                  | Interest accretion on notes payable             |                                                                  |         | 1,362   |         |         |          | 453      |        
|                                                             |                                                                                  | Minority interest in earnings                   |                                                                  |         | (111    | )       |         |          | (62      | )      
|                                                             |                                                                                  | Equity in earnings of unconsolidated affiliates |                                                                  |         | (614    | )       |         |          | (502     | )      
|                                                             |                                                                                  | Gain on sale of marketable securities           |                                                                  |         |        |         |         |          | (797     | )      
|                                                             |                                                                                  | Gains on sale of product rights                 |                                                                  |         | (5,309  | )       |         |          | (7,489   | )      
|                                                             |                                                                                  | (Gain) loss on sale of assets, net              |                                                                  |         | (139    | )       |         |          | 370      |        
|                                                             |                                                                                  | Gains on extinguishment of debt                 |                                                                  |         | (2,274  | )       |         |          | (9,570   | )      
|                                                             |                                                                                  | Income from discontinued operations             |                                                                  |         | (22,204 | )       |         |          |         |        
|                                                             |                                                                                  | Cumulative effect of accounting change          |                                                                  |         |        |         |         |          | (4,161   | )      
|                                                             |                                                                                  | Changes in operating assets and liabilities:    |                                                                  |         |         |         |         |          |          |        
|                                                             |                                                                                  |                                                 | Accounts receivable                                              |         |         | 24,387  |         |          |          | 37,813  |  
|                                                             |                                                                                  |                                                 | Inventories                                                      |         |         | (40,613 | )       |          |          | (40,591 | )
|                                                             |                                                                                  |                                                 | Other current assets                                             |         |         | 3,304   |         |          |          | 9,396   |  
|                                                             |                                                                                  |                                                 | Other assets                                                     |         |         | 1,278   |         |          |          | 3,538   |  
|                                                             |                                                                                  |                                                 | Accounts payable, accrued expenses and other current liabilities |         |         | (17,568 | )       |          |          | (40,569 | )
|                                                             |                                                                                  |                                                 | Other long-term liabilities                                      |         |         | (1,332  | )       |          |          | 1,701   |  
|                                                             |                                                                                  |                                                 |                                                                  |         |         |         |         |         
|                                                             |                                                                                  |                                                 | Net cash flows from operating activities                         |         |         | 65,549  |         |          |          | 43,559  |  
|                                                             |                                                                                  |                                                 |                                                                  |         |         |         |         |         
|Cash flows from investing activities:                        |                                                                                  |                                                 |                                                                  |         |         |         |         |         
|                                                             | Proceeds from sale of product rights                                             |                                                 |                                                                  | 5,309   |         |         |         | 7,489    |         
|                                                             | Capital expenditures                                                             |                                                 |                                                                  | (40,569 | )       |         |         | (35,150  | )       
|                                                             | Proceeds from sale of assets                                                     |                                                 |                                                                  | 1,916   |         |         |         |         |         
|                                                             | Acquisitions of intangible assets                                                |                                                 |                                                                  | (4,386  | )       |         |         | (32,946  | )       
|                                                             | Acquisitions of businesses, net of cash acquired                                 |                                                 |                                                                  | (48     | )       |         |         | 6,417    |         
|                                                             | Investment in affiliates                                                         |                                                 |                                                                  | 2,310   |         |         |         | 58       |         
|                                                             | Purchases of marketable securities                                               |                                                 |                                                                  | (250    | )       |         |         | (100,473 | )       
|                                                             | Proceeds from sales of marketable securities                                     |                                                 |                                                                  | 28,626  |         |         |         | 226,420  |         
|                                                             | Net proceeds from discontinued operations                                        |                                                 |                                                                  | 8,824   |         |         |         |         |         
|                                                             |                                                                                  |                                                 |                                                                  |         |         |         |         |         
|                                                             |                                                                                  | Net cash flows from investing activities        |                                                                  |         | 1,732   |         |         |          | 71,815   |        
|                                                             |                                                                                  |                                                 |                                                                  |         |         |         |         |         
|Cash flows from financing activities:                        |                                                                                  |                                                 |                                                                  |         |         |         |         |         
|                                                             | Borrowings on long-term debt and loans payable                                   |                                                 |                                                                  | 2,726   |         |         |         | 9,436    |         
|                                                             | Payments on long-term debt and loans payable                                     |                                                 |                                                                  | (44,063 | )       |         |         | (94,419  | )       
|                                                             | Exercise of stock options and employee stock purchases                           |                                                 |                                                                  | 5,021   |         |         |         | 5,260    |         
|                                                             | Repurchase of common stock                                                       |                                                 |                                                                  | (6,155  | )       |         |         | (50,625  | )       
|                                                             |                                                                                  |                                                 |                                                                  |         |         |         |         |         
|                                                             |                                                                                  | Net cash flows from financing activities        |                                                                  |         | (42,471 | )       |         |          | (130,348 | )      
|                                                             |                                                                                  |                                                 |                                                                  |         |         |         |         |         
|Effect of exchange rate changes on cash and cash equivalents |                                                                                  |                                                 | 5,737                                                            |         |         |         | (13,871 | )       
|                                                             |                                                                                  |                                                 |                                                                  |         |         |         |         |         
|Net increase (decrease) in cash and cash equivalents         |                                                                                  |                                                 | 30,547                                                           |         |         |         | (28,845 | )       
|Cash
and cash equivalents at the beginning of the period     |                                                                                  |                                                 | 155,408                                                          |         |         |         | 178,264 |         
|                                                             |                                                                                  |                                                 |                                                                  |         |         |         |         |         
|Cash and cash equivalents at the end of the period           |                                                                                  | $                                               | 185,955                                                          |         |         | $       | 149,419 |         
|                                                             |                                                                                  |                                                 |                                                                  |         |         |         |         |          |         
|Supplemental disclosures:                                    |                                                                                  |                                                 |                                                                  |         |         |         |         |         
|                                                             | Interest paid                                                                    |                                                 | $                                                                | 20,050  |         |         | $       | 22,895   |         
|                                                             |                                                                                  |                                                 |                                                                  |         |         |         |         |          |         
|                                                             | Income tax payments                                                              |                                                 | $                                                                | 46,149  |         |         | $       | 38,899   |         
|                                                             |                                                                                  |                                                 |                                                                  |         |         |         |         |          |         

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

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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 in accordance with accounting principles generally accepted in
the United States and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all information and footnotes
required by accounting principles generally accepted in the United States for
complete financial statements. However, in the opinion of management, all
adjustments (consisting of only normal recurring adjustments) considered
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
six months ended June 30, 2003, are not necessarily indicative of the results
of operations and cash flows which may be reported for the remainder of 2003.
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, 2002. For purposes of these financial statements, North
America includes the United States and Canada. Mexico is included within Latin
America.

(2) 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 |         | Six Months
|                                                                                                    |                           |              | 2003    |            | 2002 |  | 2003    |        | 2002
|Period Ended June 30,                                                                               |                           |              |         |            |      |  |         |        |     
|Basic weighted average number of shares outstanding                                                 |                           |              | 195,163 |            |      |  | 195,083 |        |      |  | 195,066 |        |  |  | 195,642 |       
|Effect of dilutive securities  stock options and warrants                                          |                           |              | 3,340   |            |      |  | 1,915   |        |      |  | 2,512   |        |  |  | 2,486   |       
|                                                                                                    |                           |              |         |            |      |  |         |        |      |  |         |        |  |  |         |       
|Diluted weighted average number of shares
outstanding                                               |                           |              | 198,503 |            |      |  | 196,998 |        |      |  | 197,578 |        |  |  | 198,128 |       
|                                                                                                    |                           |              |         |            |      |  |         |        |      |  |         |        |  |  |         |       
|Not included in the calculation of diluted earnings
per share because their impact is antidilutive: |                           |              |         |            |      |  |         |        |      |  |         |        |  |  |         |       
|                                                                                                    | Stock options outstanding |              |         | 9,419      |      |  |         | 14,264 |      |  |         | 12,483 |  |  |         | 9,960  | 
|                                                                                                    | Convertible debt          |              |         | 21,885     |      |  |         | 23,518 |      |  |         | 22,039 |  |  |         | 24,299 | 

(3) STOCK-BASED COMPENSATION PLANS:

As permissible under Statement of Financial Accounting Standards (SFAS)
No. 123, Accounting for Stock-Based Compensation, IVAX accounts for all
stock-based compensation arrangements using the intrinsic value method
prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees, as interpreted by FASB Interpretation No. 44, Accounting
for Certain Transactions Involving Stock Compensation, and discloses pro forma
net earnings and earnings per share amounts as if the fair value method had
been adopted. Accordingly, no compensation cost is recognized for stock option
awards granted to employees at or above market value.

IVAX pro forma net income, pro forma net income per common share and pro
forma weighted average fair value of options granted, with related assumptions,
assuming IVAX had adopted the fair

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value method of accounting for all
stock-based compensation arrangements consistent with the provisions
of SFAS No. 123, using the Black-Scholes option pricing model for all
options granted after January 1, 1995, are indicated below:

|                                                                                                                                            |  |              |         |            |  |      |         |      |  |   |         |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | ---------- |  | ---- | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                                                                                            |  | Three Months |         | Six Months
|                                                                                                                                            |  | 2003         |         | 2002       |  | 2003 |         | 2002
|Period Ended June 30,                                                                                                                       |  |              |         |            |  |      |         |     
|Net income as reported                                                                                                                      |  | $            | 41,290  |            |  | $    | 31,722  |      |  | $ | 70,275  |   |  | $ | 55,183  |  
|Deduct: Total stock-based employee compensation
expense determined under fair value based
method for all awards, net of related
tax effects |  |              | 671     |            |  |      | 298     |      |  |   | 3,087   |   |  |   | 4,246   |  
|                                                                                                                                            |  |              |         |            |  |      |         |      |  |   |         |   |  |   |         |  
|Pro forma net income                                                                                                                        |  | $            | 40,619  |            |  | $    | 31,424  |      |  | $ | 67,188  |   |  | $ | 50,937  |  
|Basic net income per share as reported                                                                                                      |  |              | 0.21    |            |  |      | 0.16    |      |  |   | 0.36    |   |  |   | 0.28    |  
|Pro forma basic net income per share                                                                                                        |  |              | 0.21    |            |  |      | 0.16    |      |  |   | 0.34    |   |  |   | 0.26    |  
|Diluted net income per share as reported                                                                                                    |  |              | 0.21    |            |  |      | 0.16    |      |  |   | 0.36    |   |  |   | 0.28    |  
|Pro forma diluted net income per share                                                                                                      |  |              | 0.20    |            |  |      | 0.16    |      |  |   | 0.34    |   |  |   | 0.26    |  
|Weighted average fair value                                                                                                                 |  | $            | 8.02    |            |  | $    | 4.97    |      |  | $ | 4.61    |   |  | $ | 8.38    |  
|Expected life (years)                                                                                                                       |  |              | 5.2     |            |  |      | 5.2     |      |  |   | 5.2     |   |  |   | 5.2     |  
|Risk-free interest rate                                                                                                                     |  |              | 2.7-3.4 | %          |  |      | 4.4-4.8 | %    |  |   | 2.7-4.0 | % |  |   | 4.4-4.9 | %
|Expected volatility                                                                                                                         |  |              | 27      | %          |  |      | 27      | %    |  |   | 27      | % |  |   | 27      | %
|Dividend yield                                                                                                                              |  |              | 0       | %          |  |      | 0       | %    |  |   | 0       | % |  |   | 0       | %

As the SFAS No. 123 method of accounting has not been applied to options
granted prior to January 1, 1995, the resulting pro forma compensation cost may
not be representative of that to be expected in future years. In addition,
valuations are based on highly subjective assumptions about the future,
including stock price volatility and exercise patterns.

(4) REVENUES:

Net revenues are comprised of gross revenues less provisions for expected
customer returns, inventory credits, discounts, promotional allowances,
rebates, chargebacks, reimbursements relating to Medicaid and Medicare 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 $164,536 and $119,330,
respectively, at June 30, 2003, and $147,580 and $94,937, respectively, at
December 31, 2002.

(5) INCOME FROM DISCONTINUED OPERATIONS:

During June 2003, IVAX recorded income from discontinued operations in the
amount of $22,204, net of tax of $12,763, or $0.11 per diluted share, resulting
from a number of agreements, for certain patent and product rights and the
settlement of litigation related to a contingent sale price dispute from the
1997 sale of McGaw, Inc. to B. Braun Melsungen AG. Under these agreements,
IVAX received $13,896 of cash, net of related expenses incurred in 2003, and
recorded a current tax payable of $5,072. In addition, the agreements provide
for additional payments totaling $25,500 due in five approximately equal annual
installments, which were recorded as a receivable discounted at 4%. IVAX also
accrued $1,622 of additional fees related to the settlement and a deferred tax
liability of $7,691.

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(6)  INVENTORIES:

Inventories consist of the following:

|                |                   |   |          |         |              |   |         |         | 
|--------------- | ----------------- | - | -------- | ------- | ------------ | - | ------- | ------- | 
|                |                   |   | June 30, |         | December 31,
|                |                   |   | 2003     |         | 2002        
|                |                   |   |          |         |             
|Raw materials   |                   | $ | 132,863  |         |              | $ | 117,485 |        
|Work-in-process |                   |   | 58,166   |         |              |   | 50,678  |        
|Finished goods  |                   |   | 154,103  |         |              |   | 141,492 |        
|                |                   |   |          |         |              |   |         |        
|                | Total inventories |   | $        | 345,132 |              |   | $       | 309,655 | 
|                |                   |   |          |         |              |   |         |        

As of June 30, 2003, IVAX had approximately $12,872 in inventories
relating to products pending launch while IVAX awaits receipt of final FDA or
foreign governmental marketing approval and/or satisfactory resolution of
patent infringement litigation.

(7)  INTANGIBLE ASSETS:

Intangible assets consist of the following:

|                               |                                      |  |               |         |                   |  |          |        |              |  |   |         |  |  |   |        | 
|------------------------------ | ------------------------------------ |  | ------------- | ------- | ----------------- |  | -------- | ------ | ------------ |  | - | ------- |  |  | - | ------ | 
|                               |                                      |  | June 30, 2003 |         | December 31, 2002
|                               |                                      |  |               |         |                  
|                               |                                      |  | Gross         |         |                   |  |          |        | Gross        |  |   |         | 
|                               |                                      |  | Carrying      |         | Accumulated       |  | Carrying |        | Accumulated 
|                               |                                      |  | Amount        |         | Amortization      |  | Amount   |        | Amortization
|                               |                                      |  |               |         |                   |  |          |        |             
|Amortized intangible assets:   |                                      |  |               |         |                   |  |          |        |              |  |   |         |  |  |   |       
|                               | Patents and related licenses         |  | $             | 72,299  |                   |  | $        | 43,306 |              |  | $ | 71,716  |  |  | $ | 40,989 | 
|                               | Trademarks                           |  |               | 116,909 |                   |  |          | 11,098 |              |  |   | 113,160 |  |  |   | 7,518  | 
|                               | Licenses and other intangibles       |  |               | 134,961 |                   |  |          | 12,083 |              |  |   | 132,457 |  |  |   | 7,205  | 
|                               |                                      |  |               |         |                   |  |          |        |              |  |   |         |  |  |   |       
|                               | Total                                |  | $             | 324,169 |                   |  | $        | 66,487 |              |  | $ | 317,333 |  |  | $ | 55,712 | 
|                               |                                      |  |               |         |                   |  |          |        |              |  |   |         |  |  |   |        | 
|Unamortized intangible assets: |                                      |  |               |         |                   |  |          |        |              |  |   |         |  |  |   |       
|                               | Trademarks and product registrations |  | $             | 22,128  |                   |  |          |        |              |  | $ | 21,677  |  |  |   |        | 
|                               |                                      |  |               |         |                   |  |          |        |              |  |   |         |  |  |   |       

Intangible assets amortization expense is estimated to be $10,589 for the
remainder of fiscal 2003, $20,433 in fiscal 2004, $20,197 in fiscal 2005,
$18,741 in fiscal 2006, and $20,267 in fiscal 2007.

(8) DEBT:

During the first six months of 2003, IVAX repurchased $20,300 of 4.5%
Convertible Senior Subordinated Notes due 2008 for $17,672, plus accrued
interest of $262, and wrote off debt issuance costs of $403. This resulted in
a gain on the extinguishment of debt of $2,225.

During the first six months of 2003, IVAX repurchased $1,000 of 5.5%
Convertible Senior Subordinated Notes due 2007 for $935, plus accrued interest
of $12, and wrote off debt issuance costs of $16. This resulted in a gain on
the extinguishment of debt of $49.

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(9) BUSINESS SEGMENT INFORMATION:

|                          |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |         |  
|------------------------- | ---------------------------------- | ------------ | ------- | ---------- | ---- | - | ------- | ------- | ---- | - | ------- | ------- | - | - | ------- | ------- | -
|                          |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|                          |                                    | Three Months |         | Six Months
|Revenues by Region        |                                    |              | 2003    |            | 2002 |   | 2003    |         | 2002
|Period Ended June 30,     |                                    |              |         |            |      |   |         |         |     
|North America             |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|                          | External sales                     |              | $       | 142,436    |      |   | $       | 111,546 |      |   | $       | 288,799 |   |   | $       | 214,507 |  
|                          | Intersegment sales                 |              |         | 178        |      |   |         | 276     |      |   |         | 462     |   |   |         | 552     |  
|                          | Other revenues                     |              |         | 6,954      |      |   |         | 7,124   |      |   |         | 17,080  |   |   |         | 14,860  |  
|                          |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|                          | Net revenues - North America       |              |         | 149,568    |      |   |         | 118,946 |      |   |         | 306,341 |   |   |         | 229,919 |  
|                          |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|Europe                    |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|                          | External sales                     |              |         | 105,107    |      |   |         | 80,906  |      |   |         | 198,810 |   |   |         | 166,189 |  
|                          | Intersegment sales                 |              |         | 14,546     |      |   |         | 15,516  |      |   |         | 27,941  |   |   |         | 29,905  |  
|                          | Other revenues                     |              |         | 12,513     |      |   |         | 8,651   |      |   |         | 17,642  |   |   |         | 17,191  |  
|                          |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|                          | Net revenues  Europe              |              |         | 132,166    |      |   |         | 105,073 |      |   |         | 244,393 |   |   |         | 213,285 |  
|                          |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|Latin America             |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|                          | External sales                     |              |         | 60,458     |      |   |         | 57,726  |      |   |         | 111,081 |   |   |         | 116,503 |  
|                          | Other revenues                     |              |         | 132        |      |   |         | 430     |      |   |         | 259     |   |   |         | 830     |  
|                          |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|                          | Net revenues  Latin America       |              |         | 60,590     |      |   |         | 58,156  |      |   |         | 111,340 |   |   |         | 117,333 |  
|                          |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|Corporate and other       |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|                          | External sales                     |              |         | 13,768     |      |   |         | 12,928  |      |   |         | 24,815  |   |   |         | 20,208  |  
|                          | Intersegment sales                 |              |         | (14,724    | )    |   |         | (15,792 | )    |   |         | (28,403 | ) |   |         | (30,457 | )
|                          | Other revenues                     |              |         | 1,617      |      |   |         | 1,095   |      |   |         | 2,192   |   |   |         | 2,340   |  
|                          |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|                          | Net revenues - Corporate and other |              |         | 661        |      |   |         | (1,769  | )    |   |         | (1,396  | ) |   |         | (7,909  | )
|                          |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        
|Consolidated net revenues |                                    | $            | 342,985 |            |      | $ | 280,406 |         |      | $ | 660,678 |         |   | $ | 552,628 |        
|                          |                                    |              |         |            |      |   |         |         |      |   |         |         |   |   |         |        

|                                                            |                                        |              |        |            |      |   |        |        |      |   |        |        |   |   |        |         |  
|----------------------------------------------------------- | -------------------------------------- | ------------ | ------ | ---------- | ---- | - | ------ | ------ | ---- | - | ------ | ------ | - | - | ------ | ------- | -
|                                                            |                                        |              |        |            |      |   |        |        |      |   |        |        |   |   |        |        
|                                                            |                                        | Three Months |        | Six Months
|Profits by Region                                           |                                        |              | 2003   |            | 2002 |   | 2003   |        | 2002
|Period Ended June 30,                                       |                                        |              |        |            |      |   |        |        |     
|Income from continuing operations
before minority interest: |                                        |              |        |            |      |   |        |        |      |   |        |        |   |   |        |        
|                                                            | North America                          |              | $      | 15,717     |      |   | $      | 16,419 |      |   | $      | 44,719 |   |   | $      | 29,992  |  
|                                                            | Europe                                 |              |        | 3,150      |      |   |        | 5,446  |      |   |        | 240    |   |   |        | 14,888  |  
|                                                            | Latin America                          |              |        | 4,994      |      |   |        | 13,288 |      |   |        | 11,386 |   |   |        | 17,466  |  
|                                                            | Corporate and other                    |              |        | (4,808     | )    |   |        | (3,399 | )    |   |        | (8,385 | ) |   |        | (11,386 | )
|                                                            |                                        |              |        |            |      |   |        |        |      |   |        |        |   |   |        |        
|Income from continuing operations before
minority interest  |                                        |              | 19,053 |            |      |   | 31,754 |        |      |   | 47,960 |        |   |   | 50,960 |        
|                                                            |                                        |              |        |            |      |   |        |        |      |   |        |        |   |   |        |        
|Net Income:                                                 |                                        |              |        |            |      |   |        |        |      |   |        |        |   |   |        |        
|                                                            | Minority interest                      |              |        | 33         |      |   |        | (32    | )    |   |        | 111    |   |   |        | 62      |  
|                                                            | Discontinued operations                |              |        | 22,204     |      |   |        |       |      |   |        | 22,204 |   |   |        |        |  
|                                                            | Cumulative effect of accounting change |              |        |           |      |   |        |       |      |   |        |       |   |   |        | 4,161   |  
|                                                            |                                        |              |        |            |      |   |        |        |      |   |        |        |   |   |        |        
|Net income                                                  |                                        | $            | 41,290 |            |      | $ | 31,722 |        |      | $ | 70,275 |        |   | $ | 55,183 |        
|                                                            |                                        |              |        |            |      |   |        |        |      |   |        |        |   |   |        |         |  

|                   |                     |      |           |         |  |   |           |         | 
|------------------ | ------------------- | ---- | --------- | ------- |  | - | --------- | ------- | 
|                   |                     |      | June 30, 
|Long-Lived Assets: |                     | 2003 |           | 2002   
|                   |                     |      |           |        
|                   | North America       |      | $         | 324,314 |  |   | $         | 306,290 | 
|                   | Europe              |      |           | 322,347 |  |   |           | 265,458 | 
|                   | Latin America       |      |           | 437,454 |  |   |           | 431,074 | 
|                   | Corporate and other |      |           | 131,511 |  |   |           | 110,048 | 
|                   |                     |      |           |         |  |   |           |        
|Total              |                     | $    | 1,215,626 |         |  | $ | 1,112,870 |        
|                   |                     |      |           |         |  |   |           |         | 

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The following table displays the changes in the
carrying amounts of goodwill by geographic region for the six months ended June
30, 2003:

|                      |                     |   |            |         |              |   |           |       |          |   |          |        |   |   |         |         | 
|--------------------- | ------------------- | - | ---------- | ------- | ------------ | - | --------- | ----- | -------- | - | -------- | ------ | - | - | ------- | ------- | 
|                      |                     |   | Balance    |         |              |   |           |       | Foreign  |   | Balance 
|                      |                     |   | January 1, |         |              |   |           |       | Exchange |   | June 30,
|                      |                     |   | 2003       |         | Acquisitions |   | and Other |       | 2003    
|                      |                     |   |            |         |              |   |           |       |         
|                      | North America       |   | $          | 3,972   |              |   | $         | 2,646 |          |   | $        | (2,500 | ) |   | $       | 4,118   | 
|                      | Europe              |   |            | 32,839  |              |   |           |      |          |   |          | 1,955  |   |   |         | 34,794  | 
|                      | Latin America       |   |            | 323,137 |              |   |           |      |          |   |          | 11,339 |   |   |         | 334,476 | 
|                      | Corporate and other |   |            | 47,455  |              |   |           |      |          |   |          | (53    | ) |   |         | 47,402  | 
|                      |                     |   |            |         |              |   |           |       |          |   |          |        |   |   |         |         | 
|Consolidated goodwill |                     | $ | 407,403    |         |              | $ | 2,646     |       |          | $ | 10,741   |        |   | $ | 420,790 |        
|                      |                     |   |            |         |              |   |           |       |          |   |          |        |   |   |         |         | 

(10) INCOME TAXES:

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

|                      |          |              |        |            |      |   |        |       |      |   |        |        |  |   |        |        | 
|--------------------- | -------- | ------------ | ------ | ---------- | ---- | - | ------ | ----- | ---- | - | ------ | ------ |  | - | ------ | ------ | 
|Period Ended June 30, |          | Three Months |        | Six Months
|                      |          |              | 2003   |            | 2002 |   | 2003   |       | 2002
|                      |          |              |        |            |      |   |        |       |     
|Current:              |          |              |        |            |      |   |        |       |      |   |        |        |  |   |        |       
|                      | Domestic |              | $      | 5,629      |      |   | $      | 5,062 |      |   | $      | 18,634 |  |   | $      | 7,242  | 
|                      | Foreign  |              |        | 4,794      |      |   |        | 6,083 |      |   |        | 6,132  |  |   |        | 10,974 | 
|Deferred              |          |              | (3,045 | )          |      |   | 2,621  |       |      |   | (282   | )      |  |   | 1,362  |       
|                      |          |              |        |            |      |   |        |       |      |   |        |        |  |   |        |        | 
|Total                 |          | $            | 7,378  |            |      | $ | 13,766 |       |      | $ | 24,484 |        |  | $ | 19,578 |       
|                      |          |              |        |            |      |   |        |       |      |   |        |        |  |   |        |        | 

During the second quarter of 2003, IVAX recognized $2,550 of deferred tax
asset in France as management now believes it is more likely than not that a
portion of the deferred tax asset will be realized. Payment of the current tax
provision for the year ending December 31, 2003, for domestic and foreign
operations will be reduced by $478 and $290, respectively, representing the
incremental impact of compensation expense deductions associated with
non-qualified stock options exercised during the first six months of 2003.
These amounts were credited to Capital in excess of par value. As of June
30, 2003, a domestic net deferred tax asset of $100,639 and an aggregate
foreign net deferred tax asset of $10,432 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.

(11) SHAREHOLDERS EQUITY:

During the first six months of 2003, IVAX repurchased 550 shares of its
common stock at a total cost, including commissions, of $6,155.

(12) RECENTLY ISSUED ACCOUNTING STANDARDS:

Financial Accounting Standards Board (FASB) Interpretation No. 46,
Consolidation of Variable Interest Entities,an interpretation of Accounting
Research Bulletin No. 51, Consolidated Financial Statements,addresses
consolidation by business enterprises of variable interest entities. It is
effective immediately for variable interest entities created after January 31, 2003.
It applies in the first fiscal year or interim period beginning after June 15,
2003, to variable interest entities acquired before February 1, 2003. As part
of the acquisition of Lab Chile, IVAX acquired a note receivable secured by

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an
option to acquire all of the outstanding shares of common stock of a company
that owns 50.1% of a Latin American pharmacy chain, which had net revenues of
$36,317 during the year ended December 31, 2002. Consolidation of the pharmacy
chain may be required as of July 1, 2003. IVAX maximum exposure to loss is the
recorded value of the receivable, which was $1,726 at June 30, 2003.

SFAS No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities,amends and
clarifies accounting for derivative instruments under SFAS No. 133. It is
effective for contracts entered into after June 30, 2003. The impact of
adoption of this statement is not expected to be significant.

SFAS No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity, establishes standards for how
an issuer classifies and measures certain financial instruments with
characteristics of both liability and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances). This statement is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15,
2003. The impact of adoption of this statement is not expected to be
significant.

(13) ACQUISITIONS:

On January 24, 2003, IVAX acquired ChemSource Corporation in Puerto Rico
from Chemo Iberica S.A. and Quimica Sintetica S.A. for 1,000 shares of
IVAX common stock, valued at $12,393, and $100 in cash. ChemSource
Corporation was subsequently renamed API Industries, Inc. (API). The total
purchase price, including acquisition costs of $306 less cash acquired of $358,
was $12,441. API develops, manufactures and sells active pharmaceutical
ingredients for various pharmaceutical products, including many products that
IVAX sells or has under development. IVAX acquired API to further its
objective of complementing existing businesses and to provide new products and
marketing opportunities. The operating results of API are included in the
consolidated financial statements subsequent to the January 24, 2003,
acquisition date.

The following table summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition, the purchase price
paid and resulting goodwill. This preliminary allocation is subject to change
based on receipt of final information concerning the fair values of assets
acquired and liabilities assumed, including information about IVAX obligations
relating to compliance with environmental law.

|                                        |                                   |   |       |        |  
|--------------------------------------- | --------------------------------- | - | ----- | ------ | -
|Current assets, excluding cash acquired |                                   | $ | 3,579 |       
|Property, plant and equipment           |                                   |   | 8,308 |       
|Other assets                            |                                   |   | 30    |       
|                                        |                                   |   |       |       
|                                        | Total assets acquired             |   |       | 11,917 |  
|                                        |                                   |   |       |       
|Current liabilities                     |                                   |   | 2,122 |       
|Long-term debt                          |                                   |   |      |       
|                                        |                                   |   |       |       
|                                        | Total liabilities assumed         |   |       | 2,122  |  
|                                        |                                   |   |       |       
|                                        | Net assets acquired               |   | $     | 9,795  |  
|                                        |                                   |   |       |       
|Purchase price:                         |                                   |   |       |       
|                                        | Cash acquired, net of cash paid   |   | $     | (258   | )
|                                        | Acquisition costs                 |   |       | 306    |  
|                                        | Fair market value of stock issued |   |       | 12,393 |  
|                                        |                                   |   |       |       
|                                        | Total                             |   | $     | 12,441 |  
|                                        |                                   |   |       |       
|Goodwill                                |                                   | $ | 2,646 |       
|                                        |                                   |   |       |       

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APIs results of operations prior to the acquisition were not significant
in relation to IVAX results of operations.

On May 27, 2003, IVAX entered into an agreement to acquire Advanced
Tobacco Products, Inc. (ATP), for approximately 248 shares of IVAX common stock, valued at
$4,302. The transaction to acquire ATP has been approved by the board of
directors of each company and is subject to the approval of the shareholders of
ATP. The total purchase price, including acquisition costs, will be allocated
based on the fair value of the assets acquired upon closing. ATP is an
inhalation technology company that developed a patent for nicotine impermeable
copolymer technology marketed for smoking cessation, that it sold to Pharmacia
in 1987. ATP receives payments from Pharmacia on the sales of those products.
ATP also has an exclusive license to certain dry powder inhaler technology from
Duke University. IVAX entered into the agreement to acquire ATP because of the
complementary nature of ATPs technology to IVAX product line and because of
the anticipated product payments from Pharmacias products incorporating the
patented nicotine technology sold by ATP to Pharmacia.

(14) LEGAL PROCEEDINGS:

The following supplements and amends the discussion set forth under Item 3
  Legal Proceedings in IVAX Annual Report on Form 10-K for the year ended
December 31, 2002.

In the John Rice v. Abbott Laboratories, Inc. et al., Thompson v. Abbott
Laboratories, Inc., et al., and Turner v. Abbott Laboratories, Inc., et al.,
cases previously reported in IVAX Annual Report on Form 10-K for the year
ended December 31, 2002, the defendants, including IVAX, have been successful
in removing these cases to federal court based on ERISA grounds and shortly
thereafter, these cases were transferred to the multi-district litigation
pending in Boston, Massachusetts.

On April 22, 2003, IVAX received notice that IVAX was named as a defendant
along with approximately 25 other pharmaceutical manufacturers in a complaint
filed in the United States District Court for the Northern District of Texas by an
individual who has filed the action purportedly in the name of the United
States government, styled United States of America, ex. rel, Paul King v. Alcon
Laboratories, Inc., et al. In this suit, the plaintiff seeks to recover
damages from the defendants, including IVAX, for allegedly defrauding and
conspiring to defraud the United States government by having made sales of
drugs to various federal governmental agencies or causing the United States
government to reimburse individuals or entities for drug products that did not
comply with Current Good Manufacturing Practices and other regulations and
laws. The suit seeks the recovery of treble damages from IVAX and the other
defendants, jointly and severally, which plaintiff alleges exceeds thirty
billion dollars, plus the recovery of attorneys fees, interest, civil
penalties, costs, and other relief. IVAX intends to vigorously defend itself
in this action and against these allegations.

On April 22, 2003, GenPharm, Inc. filed a complaint in the United States
District Court for the District of Puerto Rico against ChemSource Corporation
(currently API) for damages and equitable relief, including declaratory relief
and specific performance, arising out of APIs alleged breach of agreements and
failure to supply GenPharm with an active pharmaceutical ingredient. The
complaint also seeks the recovery of damages for APIs alleged negligence in
failing to maintain production facilities in accordance with FDA standards.
The plaintiff seeks to recover millions of dollars in damages, along with
interest,
costs and expenses, including attorneys fees and other fees and costs.
The complaint has been tendered to the sellers of API for defense and indemnity
based on the terms of the agreement by which API was sold to IVAX.

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Fen-Phen Litigation

With respect to the individual and class action lawsuits in both state and
federal courts involving the diet drug combination of fenfluramine and
phentermine, commonly known as fen-phen, previously reported in IVAX Annual
Report on Form 10-K for the year ended December 31, 2002, to date, IVAX
Pharmaceuticals has been named in approximately 5,137 cases and has been
dismissed from approximately 4,925 of these cases.

United Kingdom Serious Fraud Office Investigation and Related Litigation

With respect to the civil claim filed by the Secretary of State for Health
on behalf of itself and others against Norton Healthcare, Norton
Pharmaceuticals and others, as previously reported in IVAX Annual Report on
Form 10-K for the year ended December 31, 2002, Nortons request for a stay of
the civil action was denied.

Environmental Related Proceedings

On April 4, 2003, API received an Order on Consent from The Puerto Rico
Aqueduct and Sewer Authority (PRASA) which requires that API follow a
PRASA-approved compliance plan in order to achieve compliance with certain
pretreatment standards. This Order also establishes interim limits applicable
during the implementation of the compliance plan and attaches stipulated
penalties for each day of non-compliance with the prescribed activities and
reports schedule. On June 11, 2003, API submitted to PRASA
certifications of compliance with two pretreatment standards
identified in the Order on Consent. API negotiated with PRASA the
final terms of the Order on Consent for the two remaining
pretreatment standards, which was signed and finalized on
June 30, 2003.

On April 28, 2003, API received an EPA issued Administrative Complaint
dated April 15, 2003, which proposes that a civil penalty of approximately $19
be assessed against API for the alleged violation of certain conditions of its
NPDES Multi-Sector General Permit. The complaint alleges that API failed to
perform certain quarterly visual examinations and conduct an appropriate
analysis of parameters during monitoring periods specified in the NPDES general
permit. API is currently reviewing the allegations of the complaint. The
complaint has been tendered to the sellers of API for defense and indemnity
based on the terms of the agreement by which API was sold to IVAX.

(15) SUBSEQUENT EVENTS:

From July 1, 2003, through August 4, 2003, IVAX repurchased $2,000 of 4.5%
Convertible Senior Subordinated Notes due 2008 for $1,980, plus accrued
interest of $19, and wrote off debt issuance costs of $37, resulting in a loss
on extinguishment of debt of $17.

On July 15, 2003, IVAX entered into an agreement with 3M Pharmaceutical
Division, 3M Innovative Properties Company and Riker Laboratories, Inc. (3M
Companys), to acquire a respiratory branded business including license rights
to certain branded respiratory products and the related marketing and sales
forces in nine European countries. The total consideration due under the
agreement, including minimum annual royalty payments, is $77,000, of which
$26,000 is due on the closing date, $24,000 is due on the first and second
anniversaries of the closing date and $3,000 is due on the third anniversary.
IVAX is also required to make additional royalty payments on achieving certain
annual sales levels up to a
maximum of $1,265 per year, or $6,575 in total. This transaction is
expected to close in September 2003, after receipt of certain requisite
regulatory approvals.

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

Except for the historical information contained herein, the following
discussion contains forward-looking statements that are subject to known and
unknown risks, uncertainties and other factors that may cause our actual
results to differ materially from those expressed or implied by such
forward-looking statements. We discuss such risks, uncertainties and other
factors throughout this report and specifically under the caption Risk
Factors in Item 1 of our Annual Report on Form 10-K for the year ended
December 31, 2002. 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, 2002, 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.

Results of Operations

Six Months Ended June 30, 2003 Compared to the Six Months Ended June 30, 2002

Net income for the six months ended June 30, 2003, was $70.3 million, or
$0.36 per diluted share, compared to $55.2 million, or $0.28 per diluted share,
for the same period of the prior year. Income from continuing operations for
the six months ended June 30, 2003, was $48.1 million, or $0.25 per diluted
share, compared to $51.0 million, or $0.26 per diluted share, for the same
period of the prior year. During June 2003, we recorded income from
discontinued operations in the amount of $22.2 million, net of tax of $12.8
million, or $0.11 per diluted share, resulting from a number of agreements, for
certain patent and product rights and the settlement of litigation related to a
contingent sale price dispute from the 1997 sale of McGaw, Inc. to B. Braun
Melsungen AG. Under these agreements, we received $13.9 million of cash, net
of related expenses incurred in 2003, and recorded a current tax payable of
$5.1 million. In addition, the agreements provide for additional payments
totaling $25.5 million due in five approximately equal annual installments,
which were recorded as a receivable discounted at 4%. We also accrued $1.6
million of additional fees related to the settlement and a deferred tax
liability of $7.7 million. As of January 1, 2002, we recorded a cumulative
change in accounting principle credit in the amount of $4.2 million, or $0.02
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 six months ended June 30, 2003, totaled $660.7
million, an increase of $108.0 million, or 20%, from the $552.6 million
reported in the same period of the prior year. This increase was comprised of
increases of $76.4 million from North American subsidiaries, $31.1 million from
European subsidiaries and $6.5 million from other operations, partially offset
by a decrease in net revenues of $6.0 million from Latin American subsidiaries.

North American subsidiaries net revenues totaled $306.3 million for the
six months ended June 30, 2003, compared to $229.9 million for the same period
of the prior year. North American subsidiaries recorded provisions for sales
returns and allowances that reduced gross sales by $306.4 million during the
six months ended June 30, 2003, and $278.4 million for the same period of the
prior year. The 33% increase in net revenues was due to the impacts of price
increases of $18.5 million and volume increases of $55.7 million and an
increase in other revenues of $2.2 million.

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European subsidiaries generated net revenues of $244.4 million for the six
months ended June 30, 2003, compared to $213.3 million for the same period of
the prior year. European subsidiaries recorded provisions for sales returns
and allowances that reduced gross sales by $18.1 million during the six months
ended June 30, 2003, and $22.8 million for the same period of the prior year.
The 15% increase in net revenues was primarily due to favorable effects of
currency exchange rates of $33.9 million and the impact of price increases of
$3.0 million, partially offset by the impact of volume decreases of $2.4
million and a decrease, net of currency effects, in other revenues of $3.4
million. The decrease in other revenues was primarily due to reduced product
collaboration and development fees of $12.3 million, partially offset by a $6.0
million milestone payment received in the second quarter under a license and
development agreement and an increase in various other revenues of
$2.9 million.

Latin American subsidiaries generated net revenues of $111.3 million for
the six months ended June 30, 2003, compared to $117.3 million for the same
period of the prior year. Latin American subsidiaries recorded provisions for
sales returns and allowances that reduced gross sales by $16.0 million during
the six months ended June 30, 2003, and $17.6 million for the same period of
the prior year. The 5% decrease in net revenues was primarily due to
unfavorable effects of currency devaluations of $21.1 million and a decrease,
net of currency effects, in other revenues of $0.6 million, partially offset by
the impacts of price increases of $6.1 million and volume increases of $9.6
million.

Gross profit was $297.1 million (45% of net revenues) for the six months
ended June 30, 2003, compared to $252.5 million (46% of net revenues) for the
same period of the prior year.

As part of our ongoing business strategy, we enter into collaborative
alliances, which allow us to exploit our drug discovery and development
capabilities or provide us with valuable intellectual property and
technologies. Many of these alliances involve licenses to other companies
relating to technologies or compounds under development and, in some cases,
finished products. These licenses permit us to reduce our development costs
and often involve the receipt of an up-front payment and fees upon completion
of certain development milestones and also provide for royalties based on sales
of the products. We have received significant payments in the past from these
arrangements. We expect that milestone, developmental, royalty and other
payments under existing and new collaboration and license agreements with other
parties will continue to be an important part of our business. Our future net
revenues and profits will depend and will fluctuate from period to period, in
part, based upon our ability to replace or renew license fees, royalties and
development service fees as the related agreements expire or are terminated.
Our future net revenues and profits will also depend upon:



| |  |  | our ability to obtain and maintain FDA approval of our manufacturing facilities;                                                                                     
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | our ability to maintain a pipeline of products in development;                                                                                                       
|
| |  |  | our ability to achieve the milestones specified in our
license and development agreements;                                                                           
|
| |  |  | our ability to manufacture, obtain and maintain a sufficient
supply of products to meet market demand, retain our customers and
meet contractual deadlines and terms;
|
| |  |  | our ability to develop and rapidly introduce new products and
to introduce existing products into new territories;                                                   
|
| |  |  | the timing of regulatory approval of such products;                                                                                                                  
|
| |  |  | the availability and cost of raw materials required to manufacture such products;                                                                                    
|
| |  |  | our ability to manufacture such products efficiently;                                                                                                                
|
| |  |  | the number and timing of regulatory approvals of competing products;                                                                                                 
|
| |  |  | the outcome and timing of legal proceedings, particularly
those related to patent infringement cases;                                                                

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| |  |  | our ability to forecast inventory levels and trends at our
customers and their end-customers; and
| | - |  | -------------------------------------------------------------------------------------------------
|
| |  |  | our and our competitors pricing and chargeback policies.                                        

Operating Expenses

Selling expenses increased $12.2 million, or 14%, to $98.1 million (15% of
net revenues) for the six months ended June 30, 2003, compared to $85.8 million
(16% of net revenues) for the same period of the prior year. The increase was
due primarily to higher expenses associated with our U.S. proprietary sales
force.

General and administrative expenses increased $1.7 million, or 3%, to
$56.3 million (9% of net revenues) for the six months ended June 30, 2003,
compared to $54.6 million (10% of net revenues) for the same period of the
prior year. The increase is primarily attributable to general and
administrative expenses from the operations of API Industries, Inc. (API,
formerly ChemSource Corporation), which was acquired January 24, 2003.

Research and development expenses for the six months ended June 30, 2003,
increased $8.1 million, or 22%, to $45.5 million (7% of net revenues), compared
to $37.4 million (7% of net revenues) for the same period of the prior year due
primarily to an increase in various research and development projects,
bio-study costs and work force in North America and Europe. 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, collaborative
alliances and liquidity.

During the first six months of 2003, we incurred $0.8 million of
restructuring costs in the United Kingdom and Chile, consisting primarily of
employee termination benefits, compared to $2.3 million of restructuring costs
at two subsidiaries during the first six months of 2002.

Other Income (Expense)

Interest income decreased $3.5 million and interest expense decreased $2.8
million for the six months ended June 30, 2003, compared to the same period of
the prior year primarily due to the early extinguishment of debt.

Other income, net decreased $18.5 million for the six months ended June
30, 2003, compared to the same period of the prior year. During the first six
months of 2003, we realized gains of $2.3 million on the repurchase of
subordinated notes compared to $9.5 million realized in the same period of the
prior year. In addition, during the first six months of 2003, we earned
minimum royalties of $5.3 million recorded as additional consideration for the
1997 sale of Elmiron to Ortho-McNeil Pharmaceutical, Inc. compared to $7.5
million of milestone and royalties earned in the same period of the prior year.
During the second quarter of 2002, we recorded a gain of $6.3 million on the
sale of certain intangible assets in the Czech Republic.

Three Months Ended June 30, 2003 Compared to the Three Months Ended June 30,
2002

Net income for the three months ended June 30, 2003, was $41.3 million, or
$0.21 per diluted share, compared to $31.7 million, or $0.16 per diluted share,
for the same period of the prior year.

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Income
from continuing operations for the three months ended June 30, 2003, was
$19.1 million, or $0.10 per diluted share, compared to $31.7 million, or $0.16
per diluted share, for the same period of the prior year. During June 2003, we
recorded income from discontinued operations in the amount of $22.2 million,
net of tax of $12.8 million, or $0.11 per diluted share, resulting from a
number of agreements, for certain patent and product rights and the settlement
of litigation related to a contingent sale price dispute from the 1997 sale of
McGaw, Inc. to B. Braun Melsungen AG.

Net Revenues and Gross Profit

Net revenues for the three months ended June 30, 2003, totaled $343.0
million, an increase of $62.6 million, or 22%, from the $280.4 million reported
in the same period of the prior year. This increase was comprised of increases
of $30.6 million from North American subsidiaries, $27.1 million from European
subsidiaries, $2.5 million from Latin American subsidiaries and $2.4 million
from other operations.

North American subsidiaries net revenues totaled $149.6 million for the
three months ended June 30, 2003, compared to $118.9 million for the same
period of the prior year. North American subsidiaries recorded provisions for
sales returns and allowances that reduced gross sales by $163.2 million during
the three months ended June 30, 2003, and $146.8 million for the same period of
the prior year. The 26% increase in net revenues was primarily due to the
impacts of price increases of $3.0 million, volume increases of $27.7 million
and a decrease in other revenues of $0.1 million.

European subsidiaries generated net revenues of $132.2 million for the
three months ended June 30, 2003, compared to $105.1 million for the same
period of the prior year. European subsidiaries recorded provisions for sales
returns and allowances that reduced gross sales by $10.7 million during the
three months ended June 30, 2003, and $11.0 million for the same period of the
prior year. The 26% increase in net revenues was primarily due to favorable
effects of currency exchange rates of $15.5 million and the impacts of price
increases of $1.2 million and volume increases of $8.4 million and an increase,
net of currency effects, in other revenues of $2.0 million. The increase in
other revenues was primarily due to a $6.0 million milestone payment received
in the second quarter under a license and development agreement and
an increase in various other revenues of $2.2 million, partially offset by
reduced product collaboration and development fees of $6.2 million.

Latin American subsidiaries generated net revenues of $60.6 million for
the three months ended June 30, 2003, compared to $58.1 million for the same
period of the prior year. Latin American subsidiaries recorded provisions for
sales returns and allowances that reduced gross sales by $8.7 million during
the three months ended June 30, 2003, and $8.1 million for the same period of
the prior year. The 4% increase in net revenues was primarily due to the impacts
of price increases of $0.3 million and volume increases of $10.1 million,
partially offset by the unfavorable effects of currency devaluations of $7.7
million and a decrease, net of currency effects, in other revenues of $0.3
million.

Gross profit was $151.0 million (44% of net revenues) for the three months
ended June 30, 2003, compared to $130.6 million (47% of net revenues) for the
same period of the prior year. The decrease in gross profit percentage was
primarily attributable to the unfavorable effects of currency devaluations in
Latin America.

Operating Expenses

Selling expenses increased $8.8 million, or 20%, to $52.5 million (15% of
net revenues) for the three months ended June 30, 2003, compared to $43.7
million (16% of net revenues) for the same period

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of the prior year. The increase was due primarily to higher expenses
associated with our U.S. proprietary sales force.

General and administrative expenses increased $3.9 million, or 14%, to
$31.3 million (9% of net revenues) for the three months ended June 30, 2003,
compared to $27.4 million (10% of net revenues) for the same period of the
prior year. The increase is primarily attributable to general and
administrative expenses from the operations of API, which was acquired January
24, 2003, and to a $1.5 million severance payment to our Deputy Chief Executive
Officer who retired during the quarter.

Research and development expenses for the three months ended June 30,
2003, increased $6.7 million, or 37%, to $25.1 million (7% of net revenues),
compared to $18.3 million (7% of net revenues) for the same period of the prior
year due primarily to an increase in various research and development projects,
bio-study costs and work force in North America and Europe. 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, collaborative
alliances and liquidity.

During the second quarter of 2003, we incurred $0.3 million of
restructuring costs in Chile, consisting primarily of employee termination
benefits, compared to $1.8 million of restructuring costs at two subsidiaries
during the second quarter of 2002.

Other Income (Expense)

Interest income decreased $2.3 million and interest expense decreased $1.3
million for the three months ended June 30, 2003, compared to the same period
of the prior year primarily due to the early extinguishment of debt.

Other income, net decreased $19.1 million for the three months ended June
30, 2003, compared to the same period of the prior year. During the second
quarter of 2003, we realized gains of $0.1 million on the repurchase of
subordinated notes compared to $4.2 million realized in the same period of the
prior year. In addition, during the second quarter of 2003, we earned minimum
royalties of $2.7 million recorded as additional consideration for the 1997
sale of Elmiron to Ortho-McNeil Pharmaceutical, Inc. compared to $5.7 million
of milestone and royalties earned in the same period of the prior year. During
the second quarter of 2002, we recorded a gain of $6.3 million on the sale of
certain intangible assets in the Czech Republic.

Recently Issued Accounting Standards

Financial Accounting Standards Board (FASB) Interpretation No. 46,
Consolidation of Variable Interest Entities,an interpretation of Accounting
Research Bulletin No. 51, Consolidated Financial Statements,addresses
consolidation by business enterprises of variable interest entities. It is
effective immediately for variable interest entities created after January 31,
2003. It applies in the first fiscal year or interim period beginning after
June 15, 2003, to variable interest entities acquired before February 1, 2003.
As part of the acquisition of Lab Chile, we acquired a note receivable secured
by an option to acquire all of the outstanding shares of common stock of a
company that owns 50.1% of a Latin American pharmacy chain, which had net
revenues of $36.3 million for the year ended December 31, 2002. Consolidation
of the pharmacy chain may be required as of July 1, 2003. Our maximum exposure to
loss is the recorded value of the receivable, which was $1.7 million at June
30, 2003.

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Statement of Financial Accounting Standards (SFAS) No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities,amends and
clarifies accounting for derivative instruments under SFAS No. 133. It is
effective for contracts entered into after June 30, 2003. The impact of
adoption of this statement is not expected to be significant.

SFAS No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity, establishes standards for how
an issuer classifies and measures certain financial instruments with
characteristics of both liability and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances). This statement is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15,
2003. The impact of adoption of this statement is not expected to be
significant.

Liquidity and Capital Resources

At June 30, 2003, working capital was $451.7 million compared to $447.2
million at December 31, 2002. Cash and cash equivalents were $186.0 million at
June 30, 2003, compared to $155.4 million at December 31, 2002. Short-term
marketable securities were $2.1 million at June 30, 2003, compared to $28.9
million at December 31, 2002.

Net cash of $65.5 million was provided by operating activities during the
first six months of 2003 compared to $43.6 million during the same period of
the prior year. The increase in cash provided by operating activities was
primarily the result of increased net income, decreased payments of accounts
payable, accrued expenses and other current liabilities, partially offset by
increased other assets and lower collections of accounts receivable.

Net cash of $1.7 million was provided by investing activities during the
first six months of 2003 compared to $71.8 million provided by investing
activities during the same period of the prior year. During the first six
months of 2003, our capital expenditures increased by approximately $5.4
million as compared to the same period of the prior year. During the first six
months of 2003, we spent $2.1 million to acquire intangible assets and
businesses and increase our ownership interest in affiliates compared to $26.5
million during the same period of the prior year. During the first six months
of 2003, we generated $28.4 million of net proceeds from the sale of marketable
securities compared to $126.0 million during the first six months of 2002. In
addition, we generated $8.8 million of net proceeds from discontinued
operations.

On January 24, 2003, we acquired API in Puerto Rico from Chemo Iberica
S.A. and Quimica Sintetica S.A. for 1.0 million shares of our common stock,
valued at $12.4 million, and $0.1 million in cash. API develops, manufactures
and sells active pharmaceutical ingredients for various pharmaceutical
products, including many products that we sell or have under development. In
March 2003, we suspended production at this facility pending assessment and
implementation of appropriate quality assurance programs and corrective
programs to address pre-existing regulatory compliance concerns.

Net cash of $42.5 million was used by financing activities during the
first six months of 2003 compared to $130.3 million used during the same period
of the prior year. During the first six months of 2003, we repaid $44.1
million of bank debt, including repurchasing $21.3 million of our senior
subordinated convertible debentures for $18.6 million, and made $2.7 million of
new borrowings, but reduced our repurchases of common stock by $44.5 million
compared to the same period of the prior year.

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We plan to spend substantial amounts of capital in 2003 to continue the
research and development of pharmaceutical products. Although research and
development expenditures are expected to be between $90 million and $100
million during 2003, 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 $90 million and $100 million in 2003 to
improve and expand our pharmaceutical and other related facilities.

On May 27, 2003, we entered into an agreement to acquire Advanced Tobacco
Products, Inc. (ATP), for approximately 0.2 million shares of our common stock, valued at
$4.3 million. The transaction to acquire ATP has been approved by the board of
directors of each company and is subject to the approval of the shareholders of
ATP. ATP is an inhalation technology company that developed a patent for
nicotine impermeable copolymer technology marketed for smoking cessation, that
it sold to Pharmacia in 1987. ATP receives payments from Pharmacia on the
sales of those products. ATP also has an exclusive license to certain dry
powder inhaler technology from Duke University. We entered into the agreement
to acquire ATP because of the complementary nature of ATPs technology to our
product line and because of the anticipated product payments from Pharmacias
products incorporating the patented nicotine technology sold by ATP to
Pharmacia.

We also entered into an agreement with the 3M Company on July 15, 2003, to
acquire a respiratory branded business including license rights to certain
branded respiratory products and the related marketing and sales forces in nine
European countries. The total consideration due under the agreement, including
minimum annual royalty payments, is $77.0 million, of which $26.0 million is
due on the closing date, $24.0 million is due on the first and second
anniversaries of the closing date and $3.0 million is due on the third
anniversary. We are also required to make additional royalty payments on
achieving certain annual sales levels up to a maximum of $1.3 million per year,
or $6.6 million in total. This transaction is expected to close in September
2003, after receipt of certain requisite regulatory approvals.

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, pharmaceutical products currently under development
and pharmaceuticals products we license or acquire. 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 or that we will acquire any such products. We may
consider issuing debt or equity securities in the future to fund potential
acquisitions and growth.

Income Taxes

We recognized a $24.5 million tax provision for the six months ended June
30, 2003, of which $5.5 million related to foreign operations. During the
second quarter of 2003, we recognized $2.6 million of deferred tax asset in
France as management now believes it is more likely than not that a portion of
the deferred tax asset will be realized.

As of June 30, 2003, domestic net deferred tax assets totaled $100.6
million and aggregate foreign net deferred tax assets totaled $10.4 million.
Realization of the net deferred tax assets is
dependent upon generating sufficient future domestic and foreign taxable
income. Although realization

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is not 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,
2002.

Critical Accounting Policies

The consolidated financial statements include the accounts of IVAX
Corporation and all majority-owned subsidiaries. The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions in certain
circumstances that affect amounts reported in the accompanying consolidated
financial statements and related footnotes. In preparing these financial
statements, management has made its best estimates and judgments of certain
amounts included in the financial statements, giving due consideration to
materiality. We base our estimates and judgments on historical experience and
other assumptions that we believe are reasonable. However, application of
these accounting policies involves the exercise of judgment and use of
assumptions as to future uncertainties and, as a result, actual results could
differ materially from these estimates. Management periodically evaluates
estimates and assumptions used in the preparation of the financial statements
and makes changes on a prospective basis when adjustments are necessary.
Significant estimates include accounts receivable allowances, deferred tax
asset allowances, inventory reserves, environmental reserves, litigation
reserves, provisions for estimated sales returns and allowances, including
chargebacks, rebates, returns and shelf-stock adjustments, and the useful lives
of intangible assets.

Inventory  -  Inventories are stated at the lower of cost (first-in,
first-out) or market. Components of inventory cost include materials, labor
and manufacturing overhead. In evaluating whether inventory is stated at the
lower of cost or market, we consider such factors as the amount of inventory on
hand, estimated time required to sell such inventory, remaining shelf life of
the inventory and current market price of the inventory. We have made, are in
the process of making and/or will scale-up and make commercial quantities of
certain of our product candidates prior to the date we anticipate that such
products will receive final FDA or foreign governmental marketing approval
and/or satisfactory resolution of patent infringement litigation involving them
(i.e., pre-launch inventory). The scale-up and commercial production of
pre-launch inventories involves the risk that such products may not be approved
for marketing by the governmental agencies on a timely basis, or ever, and/or
that the outcome of related litigation may not be satisfactory. This risk
notwithstanding, we plan to continue to scale-up and build pre-launch
inventories of certain products that have not yet received final governmental
approval and/or satisfactory resolution of patent infringement litigation when
we believe that such action is appropriate in relation to the commercial value
of the product launch opportunity. As of June 30, 2003, we had approximately
$12.9 million of inventories pending final approval and/or satisfactory
resolution of litigation.

Revenue Recognition, Sales Returns and Allowances  Revenues and the
related cost of sales are recognized at the time title to our products and the
risks and rewards of ownership passes to our customers. Our pharmaceutical
revenues are affected by the level of provisions for estimated returns,
inventory credits, discounts, promotional allowances, rebates, chargebacks,
reimbursements relating to Medicaid and Medicare and other allowances. The
custom in the U.S. pharmaceutical industry is generally to grant customers the
right to return purchased goods. In the generic 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

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price of the related generic pharmaceutical
product. We have contractual agreements with many of our customers, which
require that we grant these customers inventory credit following a price
decrease. In other cases, the determination to grant a credit to a customer
following a price decrease is at our discretion. 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.

We establish provisions for estimated returns, inventory credits and
chargebacks, as well as other sales allowances, concurrently with the
recognition of revenue. The provisions are established in accordance with
accounting principles generally accepted in the United States 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 remaining shelf-life and 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.

Royalty and license fee income are recognized when obligations associated
with earning the royalty or licensing fee have been satisfied and are included
in Net revenues in the accompanying consolidated statements of operations.
In accordance with EITF Issue No. 00-21, Revenue Arrangements
with Multiple Deliverables, our accounting policy is to review
each contract to determine if there are multiple revenue-generating activities
that constitute more than one unit of accounting. If appropriate, we defer
up-front payments, whether or not they are refundable, and recognize them in
income over the obligation period. Where we expend resources to achieve
milestones, we recognize the milestone payments in income currently. The total
amortization of up-front payments and current recognition of milestones is
limited to nonrefundable provisions of the contract.

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 14, 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, 2002, and in Note 14, Legal Proceedings, in the
Notes to Consolidated Financial Statements included in this Form 10-Q but their
respective outcomes cannot be predicted. Any of such lawsuits or
investigations, 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 generic 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

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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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Disclosure Regarding Forward-Looking Statements

We wish to caution readers that certain important factors may have
affected and could in the future affect our actual results and could cause
actual results to differ significantly 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 ability to replace or renew license fees, royalties and development service fees as the related agreements expire or
are terminated;                                                                                                                                                                                        
| 
| |  | difficulties in complying with governmental regulations;                                                                                                                                                                                                                                                                        
| 
| |  | difficulties in manufacturing products;                                                                                                                                                                                                                                                                                         
| 
| |  | our ability to reduce our backlog and manufacture, obtain and maintain a sufficient supply of products to meet market
demand, retain our customers and meet contractual deadlines and terms;                                                                                                                                    
| 
| |  | our dependence on sole or limited source suppliers and the risk associated with a production interruption or shipment
delays at such suppliers;                                                                                                                                                                                 
| 
| |  | 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 and maintain FDA approval of our manufacturing facilities, the failure of which could result in
production stoppage or delays;                                                                                                                                                                            
| 
| |  | 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 and timing of any pending or future litigation or investigation (including patent, trademark and copyright
litigation and the United Kingdom National Health Service investigation), and the cost, expenses and possible diversion of
managements time and attention arising from such litigation or investigation;
| 
| |  | 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;                                                                                                                                                                                                       
| 
| |  | the impact of political and economic instability in the countries in which we operate, particularly Argentina and Venezuela;                                                                                                                                                                                                    
| 
| |  | our successful compliance with extensive, costly, complex and evolving governmental regulations and restrictions;                                                                                                                                                                                                               
| 
| |  | our ability to successfully compete in both the branded and generic pharmaceutical sectors; and                                                                                                                                                                                                                                 

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| |  | 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 June 30, 2003, 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, 2002. 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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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 six months ended June 30, 2003, sales by
subsidiaries located outside the United States accounted for approximately 55%
of worldwide sales. The majority 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 increased by $13.4 million for the
six months ended June 30, 2003, 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 June 30, 2003,
we had $14.0 million in foreign exchange forward contracts outstanding,
primarily to hedge Euro-based operating cash flows against Pounds Sterling.

Interest Rate Risk  Our only material debt obligations relate to the 4.5%
and 5.5% Convertible Notes, which bear fixed rates of interest, and the amounts
we owe for the purchase of QVAR®, which carry no stated interest rate. We
believe that our exposure to market risk relating to interest rate risk is not
material.

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Item 4 Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have evaluated the design and operation of our disclosure controls and
procedures to determine whether they are effective in ensuring that the
disclosure of required information is timely made in accordance with the
Exchange Act and the rules and forms of the Securities and Exchange Commission.
This evaluation was made under the supervision and with the participation of
management, including our principal executive officer and principal financial
officer as of the end of the quarterly period to which this Quarterly Report
on Form 10-Q relates. The principal executive officer and principal financial officer
have concluded, based on their review and subject to the limitations noted
below, that our disclosure controls and procedures, as defined at Exchange Act
Rules 13a-15(e), are effective to ensure that information
required to be disclosed by us in reports that we file under the Exchange Act
is recorded, processed, summarized and reported within the time periods
specified in Securities and Exchange Commission rules and forms.

Changes in Internal Controls

No significant changes were made to our internal controls or other factors
that could significantly affect these controls subsequent to the date of their
evaluation.

Limitations on the Effectiveness of Controls

Our management, including our principal executive officer and principal
financial officer, does not expect that our disclosure controls and internal
controls will prevent all error and fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the
design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the control.

The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions; over time, control may become inadequate because
of changes in conditions, or the degree of compliance with the policies or
procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur
and not be detected.

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PART II  -  OTHER INFORMATION




Item 1  Legal Proceedings

The following supplements and amends our discussion set forth under Item 3
 Legal Proceedings in IVAX Annual Report on Form 10-K for the year ended
December 31, 2002, and Part II, Item 1 in IVAX Quarterly Report on Form 10-Q
for the period ended March 31, 2003.

Fen-Phen Litigation

With respect to the individual and class action lawsuits in both state and
federal courts involving the diet drug combination of fenfluramine and
phentermine, commonly known as fen-phen, previously reported in IVAX Annual
Report on Form 10-K for the year ended December 31, 2002, to date, IVAX
Pharmaceuticals has been named in approximately 5,137 cases and has been
dismissed from approximately 4,925 of these cases.

United Kingdom Serious Fraud Office Investigation and Related Litigation

With respect to the civil claim filed by the Secretary of State for Health
on behalf of itself and others against Norton Healthcare, Norton
Pharmaceuticals and others, as previously reported in IVAX Annual Report on
Form 10-K for the year ended December 31, 2002, Nortons request for a stay of
the civil action was denied.

Environmental Related
Proceedings

With respect to the Order on Consent
received by API on April 4, 2003, from The Puerto Rico Aqueduct
and Sewer Authority (PRASA) previously reported in
IVAX Quarterly Report on Form 10-Q for the period ended
March 31, 2003, on June 11, 2003, API submitted to PRASA
certifications of compliance with two pretreatment standards
identified in the Order on Consent. API negotiated with PRASA the
final terms of the Order on Consent for the two remaining
pretreatment standards, which was signed and finalized on
June 30, 2003.

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Item 4  Submission of Matters to a Vote of Security Holders

Our annual meeting of shareholders was held on June 19, 2003. The
following is a summary of the matters voted on at that meeting:

The shareholders elected eleven Directors, constituting the entire Board
of Directors, to serve until the next annual meeting of shareholders and until
their respective successors are duly elected and qualified. The persons
elected to our Board of Directors and the number of votes cast for and
withheld/against each nominee for director were as follows:

|                           |  |     |             |                  |  |  |            | 
|-------------------------- |  | --- | ----------- | ---------------- |  |  | ---------- | 
|Director                   |  | For |             | Withheld/Against
|                           |  |     |             |                 
|Betty G. Amos              |  |     | 166,447,663 |                  |  |  | 3,193,191  | 
|Mark Andrews               |  |     | 143,278,484 |                  |  |  | 26,362,370 | 
|Ernst Biekert, Ph.D.       |  |     | 143,326,031 |                  |  |  | 26,314,823 | 
|Jack Fishman, Ph.D.        |  |     | 145,331,181 |                  |  |  | 24,309,673 | 
|Neil Flanzraich            |  |     | 143,111,393 |                  |  |  | 26,529,461 | 
|Phillip Frost, M.D.        |  |     | 143,090,205 |                  |  |  | 26,550,649 | 
|Jane Hsiao, Ph.D.          |  |     | 141,577,462 |                  |  |  | 28,063,392 | 
|David A. Lieberman         |  |     | 145,680,766 |                  |  |  | 23,960,088 | 
|Modesto A. Maidique, Ph.D. |  |     | 166,457,478 |                  |  |  | 3,183,376  | 
|Richard C. Pfenniger, Jr.  |  |     | 138,086,603 |                  |  |  | 31,554,251 | 
|Bertram Pitt, M.D.         |  |     | 166,359,084 |                  |  |  | 3,281,770  | 




Item 6  -  Exhibits and Reports on Form 8-K

(a)      Exhibits

|      |  |                                                                                                                                                                                                         |  |                
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------
|10.21 |  | Amendment dated June 12, 2003, to Employment
Agreement between IVAX Corporation and Rafick G. Henein,
Ph.D.                                                                                             |  | Filed herewith.
|      |  |                                                                                                                                                                                                         |  |                
|31.1  |  | Certificate of the Chief Executive Officer pursuant
to Rule 13a-14(a) of the Securities Exchange Act of 1934,
as amended                                                                                |  | Filed herewith.
|      |  |                                                                                                                                                                                                         |  |                
|31.2  |  | Certificate of the Chief Financial Officer pursuant
to Rule 13a-14(a) of the Securities Exchange Act of 1934,
as amended                                                                                |  | Filed herewith.
|      |  |                                                                                                                                                                                                         |  |                
|32    |  | Certificate of the Chief Executive Officer and
Chief Financial Officer pursuant to Rule 13a-14(b) of the
Securities Exchange Act of 1934, as amended, and Section
906 of the Sarbanes-Oxley Act of 2002 |  | Filed herewith.

(b)       Reports on Form 8-K

On April 24, 2003, we filed a report under Item 9  Regulation FD
Disclosure on Form 8-K reporting our results of operations for the first
quarter of 2003.

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Signature

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: August 12, 2003 |  | By:              |  | /s/ Thomas E. Beier                                                  
|                      |  |                  |  |                                                                      
|                      |  |                  |  | Thomas E. Beier
Senior Vice President-Finance
Chief Financial Officer

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EXHIBIT INDEX

|               |  |                                                                                                                                                                                                        
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NUMBER |  | DESCRIPTION OF DOCUMENT                                                                                                                                                                                
|10.21          |  | Amendment dated June 12, 2003, to Employment Agreement between IVAX
Corporation and Rafick G. Henein, Ph.D.                                                                                            
|               |  |                                                                                                                                                                                                        
|31.1           |  | Certificate of the Chief Executive Officer pursuant to Rule 13a-14(a) of
the Securities Exchange Act of 1934, as amended                                                                               
|               |  |                                                                                                                                                                                                        
|31.2           |  | Certificate of the Chief Financial Officer pursuant to Rule 13a-14(a) of
the Securities Exchange Act of 1934, as amended                                                                               
|               |  |                                                                                                                                                                                                        
|32             |  | Certificate of the Chief Executive Officer and Chief Financial Officer
pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as
amended, and Section 906 of the Sarbanes-Oxley Act of 2002

31