##### 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 September 30, 2002

Commission File Number 1-09623

IVAX CORPORATION

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

|                                         |  |           
|---------------------------------------- |  | ----------
|4400 Biscayne Boulevard, Miami, Florida  |  | 33137     
|                                         |  |           
|(Address of principal executive offices) |  | (Zip Code)

(305) 575-6000

---

(Registrants telephone number, including area code)


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

Yes   x   No   o

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

194,604,074 shares of Common Stock, $.10 par value, outstanding as of October 25, 2002





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TABLE OF CONTENTS



|                                                                                 |                                                                                                |  |  |  |  |  |  | 
|-------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|                                                                                 | PART I  FINANCIAL INFORMATION                                                                
|                                                                                 | Item 1  Financial Statements                                                                 
|IVAX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS                   
|IVAX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS         
|IVAX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
|IVAX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS         
|IVAX CORPORATION AND SUBSIDIARIES 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 6  Exhibits and Reports on Form 8-K                                                     
|Certification of CEO                                                            
|Certification of CFO                                                            



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##### Table of Contents



IVAX CORPORATION

INDEX

|                               |  |                                                                                               |                                                                                                       |  |          |   | 
|------------------------------ |  | --------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------- |  | -------- | - | 
|                               |  |                                                                                               |                                                                                                       |  | PAGE NO.
|                               |  |                                                                                               |                                                                                                       |  |         
|PART I  FINANCIAL INFORMATION |  |                                                                                               |                                                                                                       | 
|                              
|                               |  | Item 1. Financial Statements                                                                  |                                                                                                       |  |          |  
|                              
|                               |  |                                                                                               | Consolidated Balance Sheets as of September 30, 2002
and December 31, 2001                            |  |          | 2 | 
|                              
|                               |  |                                                                                               | Consolidated Statements of Operations
for the three and nine months ended September 30, 2002 and 2001 |  |          | 3 | 
|                              
|                               |  |                                                                                               | Consolidated Statement of Shareholders Equity
for the nine months ended September 30, 2002           |  |          | 5 | 
|                              
|                               |  |                                                                                               | Consolidated Statements of Cash Flows
for the nine months ended September 30, 2002 and 2001           |  |          | 6 | 
|                              
|                               |  |                                                                                               | Notes to Consolidated Financial Statements                                                            |  |          | 8 | 
|                              
|                               |  | Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations |                                                                                                       |  | 18       |  
|                              
|                               |  | Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |                                                                                                       |  | 30       |  
|                              
|                               |  | Item 4. Controls and Procedures                                                               |                                                                                                       |  | 31       |  
|                              
|                              
|PART II  OTHER INFORMATION    |  |                                                                                               |                                                                                                       | 
|                              
|                               |  | Item 1. Legal Proceedings                                                                     |                                                                                                       |  | 32       |  
|                              
|                               |  | Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                       |  | 32       |  





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##### Table of Contents






PART I  FINANCIAL INFORMATION




Item 1  Financial Statements




IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(In thousands)


|                                       |                                                                                                                                   |                                            |                                      |          |           |               |         |              |           |  |  | 
|-------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | -------- | --------- | ------------- | ------- | ------------ | --------- |  |  | 
|                                       |                                                                                                                                   |                                            |                                      |          |           | September 30, |         | December 31,
|                                       |                                                                                                                                   |                                            |                                      |          |           | 2002          |         | 2001        
|                                       |                                                                                                                                   |                                            |                                      |          |           |               |         |             
|                                       |                                                                                                                                   |                                            |                                      |          |           | (Unaudited)   |         |              |           | 
|                                       |                                                                                                                                   |                                            |                                      | ASSETS   |           |               |         |              |           |  |  | 
|Current assets:                        |                                                                                                                                   |                                            |                                      |          |           |               |         |             
|                                       | Cash and cash equivalents                                                                                                         |                                            | $                                    | 140,225  |           |               | $       | 178,264      |          
|                                       | Marketable securities                                                                                                             |                                            |                                      | 25,701   |           |               |         | 154,842      |          
|                                       | Accounts receivable, net of allowances for doubtful
accounts of $22,604 in 2002 and $21,670 in 2001                               |                                            |                                      | 208,233  |           |               |         | 247,670      |          
|                                       | Inventories                                                                                                                       |                                            |                                      | 291,918  |           |               |         | 253,471      |          
|                                       | Other current assets                                                                                                              |                                            |                                      | 154,415  |           |               |         | 164,692      |          
|                                       |                                                                                                                                   |                                            |                                      |          |           |               |         |             
|                                       |                                                                                                                                   | Total current assets                       |                                      |          | 820,492   |               |         |              | 998,939   | 
|Property, plant and equipment, net     |                                                                                                                                   |                                            | 387,081                              |          |           |               | 356,304 |             
|Goodwill, net                          |                                                                                                                                   |                                            | 396,612                              |          |           |               | 502,077 |             
|Intangible assets, net                 |                                                                                                                                   |                                            | 288,650                              |          |           |               | 187,479 |             
|Other assets                           |                                                                                                                                   |                                            | 52,521                               |          |           |               | 60,650  |             
|                                       |                                                                                                                                   |                                            |                                      |          |           |               |         |             
|                                       |                                                                                                                                   | Total assets                               |                                      | $        | 1,945,356 |               |         | $            | 2,105,449 | 
|                                       |                                                                                                                                   |                                            |                                      |          |           |               |         |             
|                                       |                                                                                                                                   |                                            | LIABILITIES AND SHAREHOLDERS EQUITY |          |           |               |         |              |           |  | 
|Current liabilities:                   |                                                                                                                                   |                                            |                                      |          |           |               |         |             
|                                       | Accounts payable                                                                                                                  |                                            | $                                    | 88,906   |           |               | $       | 97,465       |          
|                                       | Current portion of long-term debt                                                                                                 |                                            |                                      | 28,472   |           |               |         | 52,199       |          
|                                       | Loans payable                                                                                                                     |                                            |                                      | 14,646   |           |               |         | 13,249       |          
|                                       | Accrued income taxes payable                                                                                                      |                                            |                                      | 24,806   |           |               |         | 41,861       |          
|                                       | Accrued expenses and other current liabilities                                                                                    |                                            |                                      | 209,086  |           |               |         | 196,587      |          
|                                       |                                                                                                                                   |                                            |                                      |          |           |               |         |             
|                                       |                                                                                                                                   | Total current liabilities                  |                                      |          | 365,916   |               |         |              | 401,361   | 
|Long-term debt, net of current portion |                                                                                                                                   |                                            | 893,660                              |          |           |               | 913,486 |             
|Other long-term liabilities            |                                                                                                                                   |                                            | 53,266                               |          |           |               | 57,536  |             
|Minority interest                      |                                                                                                                                   |                                            | 14,986                               |          |           |               | 14,712  |             
|Shareholders equity:                  |                                                                                                                                   |                                            |                                      |          |           |               |         |             
|                                       | Common stock, $.10 par value, authorized 437,500 shares,
issued and outstanding 194,604 shares in 2002 and 196,523 shares in 2001 |                                            |                                      | 19,460   |           |               |         | 19,652       |          
|                                       | Capital in excess of par value                                                                                                    |                                            |                                      | 314,479  |           |               |         | 328,095      |          
|                                       | Put options                                                                                                                       |                                            |                                      |         |           |               |         | 34,650       |          
|                                       | Retained earnings                                                                                                                 |                                            |                                      | 532,454  |           |               |         | 446,469      |          
|                                       | Accumulated other comprehensive loss                                                                                              |                                            |                                      | (248,865 | )         |               |         | (110,512     | )        
|                                       |                                                                                                                                   |                                            |                                      |          |           |               |         |             
|                                       |                                                                                                                                   | Total shareholders equity                 |                                      |          | 617,528   |               |         |              | 718,354   | 
|                                       |                                                                                                                                   |                                            |                                      |          |           |               |         |             
|                                       |                                                                                                                                   | Total liabilities and shareholders equity |                                      | $        | 1,945,356 |               |         | $            | 2,105,449 | 
|                                       |                                                                                                                                   |                                            |                                      |          |           |               |         |             

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

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IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


|                                                      |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |         |  
|----------------------------------------------------- | --------------------------------------------------------------------------- | ------------ | ------- | ----------- | - | ---- | ------- | ------- | - | - | ------- | ------- | - | - | ------- | ------- | -
|                                                      |                                                                             | Three Months |         | Nine Months
|Period Ended September 30,                            |                                                                             |              |         |            
|(In thousands, except per share data)                 |                                                                             | 2002         |         | 2001        |   | 2002 |         | 2001   
|                                                      |                                                                             |              |         |             |   |      |         |        
|Net revenues                                          |                                                                             | $            | 319,394 |             |   | $    | 321,990 |         |   | $ | 872,021 |         |   | $ | 883,704 |        
|Cost of sales                                         |                                                                             |              | 176,592 |             |   |      | 150,128 |         |   |   | 476,682 |         |   |   | 417,191 |        
|                                                      |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |        
|                                                      | Gross profit                                                                |              |         | 142,802     |   |      |         | 171,862 |   |   |         | 395,339 |   |   |         | 466,513 |  
|                                                      |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |        
|Operating expenses:                                   |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |        
|                                                      | Selling                                                                     |              |         | 40,593      |   |      |         | 41,036  |   |   |         | 126,516 |   |   |         | 98,641  |  
|                                                      | General and administrative                                                  |              |         | 30,952      |   |      |         | 32,042  |   |   |         | 85,511  |   |   |         | 84,669  |  
|                                                      | Research and development                                                    |              |         | 18,220      |   |      |         | 26,307  |   |   |         | 55,603  |   |   |         | 65,210  |  
|                                                      | Amortization of intangible assets                                           |              |         | 3,855       |   |      |         | 5,404   |   |   |         | 10,787  |   |   |         | 13,226  |  
|                                                      | Restructuring costs                                                         |              |         | 879         |   |      |         | 1,317   |   |   |         | 3,161   |   |   |         | 1,097   |  
|                                                      |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |        
|                                                      | Total operating expenses                                                    |              |         | 94,499      |   |      |         | 106,106 |   |   |         | 281,578 |   |   |         | 262,843 |  
|                                                      |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |        
|                                                      | Income from operations                                                      |              |         | 48,303      |   |      |         | 65,756  |   |   |         | 113,761 |   |   |         | 203,670 |  
|Other income (expense):                               |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |        
|                                                      | Interest income                                                             |              |         | 1,934       |   |      |         | 5,892   |   |   |         | 7,359   |   |   |         | 19,633  |  
|                                                      | Interest expense                                                            |              |         | (13,032     | ) |      |         | (13,913 | ) |   |         | (37,752 | ) |   |         | (28,731 | )
|                                                      | Other income, net                                                           |              |         | 7,651       |   |      |         | 17,618  |   |   |         | 32,025  |   |   |         | 28,549  |  
|                                                      | Gain on partial sale of IVAX Diagnostics, Inc.                              |              |         |            |   |      |         |        |   |   |         |        |   |   |         | 10,278  |  
|                                                      |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |        
|                                                      | Total other income (expense), net                                           |              |         | (3,447      | ) |      |         | 9,597   |   |   |         | 1,632   |   |   |         | 29,729  |  
|                                                      |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |        
|                                                      | Income from continuing operations before
income taxes and minority interest |              |         | 44,856      |   |      |         | 75,353  |   |   |         | 115,393 |   |   |         | 233,339 |  
|Provision for income taxes                            |                                                                             |              | 14,503  |             |   |      | 14,120  |         |   |   | 34,081  |         |   |   | 44,086  |        
|                                                      |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |        
|                                                      | Income from continuing operations before
minority interest                  |              |         | 30,353      |   |      |         | 61,233  |   |   |         | 81,312  |   |   |         | 189,313 |  
|Minority interest                                     |                                                                             |              | 450     |             |   |      | 228     |         |   |   | 512     |         |   |   | 143     |        
|                                                      |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |        
|                                                      | Income from continuing operations                                           |              |         | 30,803      |   |      |         | 61,461  |   |   |         | 81,824  |   |   |         | 189,456 |  
|Cumulative effect of a change in accounting
principle |                                                                             |              |        |             |   |      |        |         |   |   | 4,161   |         |   |   |        |        
|                                                      |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |        
|Net income                                            |                                                                             | $            | 30,803  |             |   | $    | 61,461  |         |   | $ | 85,985  |         |   | $ | 189,456 |        
|                                                      |                                                                             |              |         |             |   |      |         |         |   |   |         |         |   |   |         |        

(Continued)

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IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Continuation)

|                                                      |                                                       |              |   |             |  |      |   |         |  |  |   |         |  |  |   |         | 
|----------------------------------------------------- | ----------------------------------------------------- | ------------ | - | ----------- |  | ---- | - | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                                      |                                                       | Three Months |   | Nine Months
|Period Ended September 30,                            |                                                       |              |   |            
|(In thousands, except per share data)                 |                                                       | 2002         |   | 2001        |  | 2002 |   | 2001   
|                                                      |                                                       |              |   |             |  |      |   |        
|BASIC EARNINGS PER COMMON SHARE:                      |                                                       |              |   |             |  |      |   |         |  |  |   |         |  |  |   |        
|                                                      | Continuing operations                                 |              | $ | 0.16        |  |      | $ | 0.31    |  |  | $ | 0.42    |  |  | $ | 0.95    | 
|                                                      | Cumulative effect of a change in accounting
principle |              |   |            |  |      |   |        |  |  |   | 0.02    |  |  |   |        | 
|                                                      |                                                       |              |   |             |  |      |   |         |  |  |   |         |  |  |   |        
|                                                      | Net income                                            |              | $ | 0.16        |  |      | $ | 0.31    |  |  | $ | 0.44    |  |  | $ | 0.95    | 
|                                                      |                                                       |              |   |             |  |      |   |         |  |  |   |         |  |  |   |        
|DILUTED EARNINGS PER COMMON SHARE:                    |                                                       |              |   |             |  |      |   |         |  |  |   |         |  |  |   |        
|                                                      | Continuing operations                                 |              | $ | 0.16        |  |      | $ | 0.30    |  |  | $ | 0.42    |  |  | $ | 0.91    | 
|                                                      | Cumulative effect of a change in accounting
principle |              |   |            |  |      |   |        |  |  |   | 0.02    |  |  |   |        | 
|                                                      |                                                       |              |   |             |  |      |   |         |  |  |   |         |  |  |   |        
|                                                      | Net income                                            |              | $ | 0.16        |  |      | $ | 0.30    |  |  | $ | 0.44    |  |  | $ | 0.91    | 
|                                                      |                                                       |              |   |             |  |      |   |         |  |  |   |         |  |  |   |        
|WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING: |                                                       |              |   |             |  |      |   |         |  |  |   |         |  |  |   |        
|                                                      | Basic                                                 |              |   | 194,604     |  |      |   | 200,089 |  |  |   | 195,292 |  |  |   | 199,743 | 
|                                                      |                                                       |              |   |             |  |      |   |         |  |  |   |         |  |  |   |        
|                                                      | Diluted                                               |              |   | 196,452     |  |      |   | 214,497 |  |  |   | 197,501 |  |  |   | 224,144 | 
|                                                      |                                                       |              |   |             |  |      |   |         |  |  |   |         |  |  |   |        

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

4



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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 |         | Put      |   | Retained      |         | Comprehensive |   |             |  |       
|                            |                                                |                                                                                         |                    |        | Shares       |   | Amount     |      | Par Value |   | Options   |         | Earnings |   | Income (Loss) |         | Total        
|                            |                                                |                                                                                         |                    |        |              |   |            |      |           |   |           |         |          |   |               |         |              
|BALANCE, January 1, 2002    |                                                |                                                                                         | 196,523            |        |              | $ | 19,652     |      |           | $ | 328,095   |         |          | $ | 34,650        |         |               | $ | 446,469     |  |        | $ | (110,512 | ) |          | $ | 718,354 |        
|                            | Comprehensive loss:                            |                                                                                         |                    |        |              |   |            |      |           |   |           |         |          |   |               |         |               |   |             |  |        |   |          |   |          |   |         |         |         
|                            |                                                | Net income                                                                              |                    |        |              |   |            |      |           |   |           |         |          |   |               |         |               |   |             |  | 85,985 |   |          |   |          |   |         |         | 85,985   |        
|                            |                                                | Translation adjustment                                                                  |                    |        |              |   |            |      |           |   |           |         |          |   |               |         |               |   |             |  |        |   |          |   | (137,607 | ) |         |         | (137,607 | )      
|                            |                                                | Unrealized net loss on
available-for-sale equity
securities and derivatives,
net of tax |                    |        |              |   |            |      |           |   |           |         |          |   |               |         |               |   |             |  |        |   |          |   | (746     | ) |         |         | (746     | )      
|                            |                                                |                                                                                         |                    |        |              |   |            |      |           |   |           |         |          |   |               |         |               |   |             |  |        |   |          |   |          |   |         |        
|                            |                                                |                                                                                         | Comprehensive loss |        |              |   |            |      |           |   |           |         |          |   |               |         |               |   |             |  |        |   |          |   |          |   |         |         |          | (52,368 | )
|                            | Exercise of stock options                      |                                                                                         |                    | 627    |              |   |            | 63   |           |   |           | 4,937   |          |   |               |         |               |   |             |  |        |   |          |   |          |   |         | 5,000   |         
|                            | Tax benefit of option exercises                |                                                                                         |                    |        |              |   |            |      |           |   |           | 1,319   |          |   |               |         |               |   |             |  |        |   |          |   |          |   |         | 1,319   |         
|                            | Employee stock purchases                       |                                                                                         |                    | 58     |              |   |            | 6    |           |   |           | 729     |          |   |               |         |               |   |             |  |        |   |          |   |          |   |         | 735     |         
|                            | Repurchase and retirement of
common stock      |                                                                                         |                    | (3,575 | )            |   |            | (358 | )         |   |           | (42,477 | )        |   |               | (12,725 | )             |   |             |  |        |   |          |   |          |   |         | (55,560 | )       
|                            | Shares issued to settle put options            |                                                                                         |                    | 971    |              |   |            | 97   |           |   |           | 21,828  |          |   |               | (21,925 | )             |   |             |  |        |   |          |   |          |   |         |        |         
|                            | Value of stock options issued
to non-employees |                                                                                         |                    |        |              |   |            |      |           |   |           | 48      |          |   |               |         |               |   |             |  |        |   |          |   |          |   |         | 48      |         
|                            |                                                |                                                                                         |                    |        |              |   |            |      |           |   |           |         |          |   |               |         |               |   |             |  |        |   |          |   |          |   |         |        
|BALANCE, September 30, 2002 |                                                |                                                                                         | 194,604            |        |              | $ | 19,460     |      |           | $ | 314,479   |         |          | $ |              |         |               | $ | 532,454     |  |        | $ | (248,865 | ) |          | $ | 617,528 |        
|                            |                                                |                                                                                         |                    |        |              |   |            |      |           |   |           |         |          |   |               |         |               |   |             |  |        |   |          |   |          |   |         |        

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)


|                                                             |                                                                                  |                                                       |                                                                   |          |          |         |         |          |          |         |  
|------------------------------------------------------------ | -------------------------------------------------------------------------------- | ----------------------------------------------------- | ----------------------------------------------------------------- | -------- | -------- | ------- | ------- | -------- | -------- | ------- | -
|Nine Months Ended September 30,                              |                                                                                  | 2002                                                  |                                                                   | 2001    
|(In thousands)                                               |                                                                                  |                                                       |                                                                   |         
|Cash flows from operating activities:                        |                                                                                  |                                                       |                                                                   |          |          |         |         |         
|                                                             | Net income                                                                       |                                                       | $                                                                 | 85,985   |          |         | $       | 189,456  |         
|                                                             | Adjustments to reconcile net income to net cash
flows from operating activities: |                                                       |                                                                   |          |          |         |         |          |         
|                                                             |                                                                                  | Restructuring costs                                   |                                                                   |          | 988      |         |         |          | 1,097    |        
|                                                             |                                                                                  | Depreciation and amortization                         |                                                                   |          | 43,212   |         |         |          | 36,192   |        
|                                                             |                                                                                  | Deferred tax provision (benefit)                      |                                                                   |          | 2,575    |         |         |          | (13,279  | )      
|                                                             |                                                                                  | Tax effect of stock option exercises                  |                                                                   |          | 1,319    |         |         |          | 10,647   |        
|                                                             |                                                                                  | Value of stock options issued to non-employees        |                                                                   |          | 48       |         |         |          | 173      |        
|                                                             |                                                                                  | Provision for doubtful accounts                       |                                                                   |          | 3,007    |         |         |          | 2,852    |        
|                                                             |                                                                                  | Provision for inventory obsolescence                  |                                                                   |          | 6,458    |         |         |          | 7,973    |        
|                                                             |                                                                                  | Interest accretion on notes payable                   |                                                                   |          | 1,171    |         |         |          |         |        
|                                                             |                                                                                  | Minority interest in earnings                         |                                                                   |          | (512     | )       |         |          | (143     | )      
|                                                             |                                                                                  | Equity in earnings of unconsolidated affiliates       |                                                                   |          | (644     | )       |         |          | (882     | )      
|                                                             |                                                                                  | Loss on sale of marketable securities                 |                                                                   |          | 341      |         |         |          |         |        
|                                                             |                                                                                  | Gain on sale of product rights                        |                                                                   |          | (9,053   | )       |         |          | (8,312   | )      
|                                                             |                                                                                  | Losses (gains) on sale of assets, net                 |                                                                   |          | 537      |         |         |          | (12,673  | )      
|                                                             |                                                                                  | Gains on extinguishment of debt                       |                                                                   |          | (13,614  | )       |         |          | (11,302  | )      
|                                                             |                                                                                  | Cumulative effect of a change in accounting principle |                                                                   |          | (4,161   | )       |         |          |         |        
|                                                             |                                                                                  | Changes in operating assets and liabilities:          |                                                                   |          |          |         |         |          |          |        
|                                                             |                                                                                  |                                                       | Accounts receivable                                               |          |          | 27,541  |         |          |          | (65,448 | )
|                                                             |                                                                                  |                                                       | Inventories                                                       |          |          | (45,592 | )       |          |          | (26,875 | )
|                                                             |                                                                                  |                                                       | Other current assets                                              |          |          | (330    | )       |          |          | (11,300 | )
|                                                             |                                                                                  |                                                       | Other assets                                                      |          |          | 5,706   |         |          |          | 2,007   |  
|                                                             |                                                                                  |                                                       | Accounts payable, accrued expenses, and other
current liabilities |          |          | (7,276  | )       |          |          | 14,770  |  
|                                                             |                                                                                  |                                                       | Other long-term liabilities                                       |          |          | (6,222  | )       |          |          | (1,626  | )
|                                                             |                                                                                  |                                                       |                                                                   |          |          |         |         |         
|                                                             |                                                                                  |                                                       | Net cash flows from operating activities                          |          |          | 91,484  |         |          |          | 113,327 |  
|                                                             |                                                                                  |                                                       |                                                                   |          |          |         |         |         
|Cash flows from investing activities:                        |                                                                                  |                                                       |                                                                   |          |          |         |         |         
|                                                             | Proceeds from sale of product rights                                             |                                                       |                                                                   | 9,053    |          |         |         | 8,312    |         
|                                                             | Capital expenditures                                                             |                                                       |                                                                   | (64,096  | )        |         |         | (44,255  | )       
|                                                             | Proceeds from sale of assets                                                     |                                                       |                                                                   | 615      |          |         |         | 41,300   |         
|                                                             | Acquisitions of intangible assets                                                |                                                       |                                                                   | (38,393  | )        |         |         | (11,162  | )       
|                                                             | Acquisitions of businesses, net of cash acquired                                 |                                                       |                                                                   | 1,302    |          |         |         | (467,511 | )       
|                                                             | Investment in affiliates                                                         |                                                       |                                                                   | (964     | )        |         |         | (14,266  | )       
|                                                             | Purchases of marketable securities                                               |                                                       |                                                                   | (101,065 | )        |         |         | (57,457  | )       
|                                                             | Proceeds from sales of marketable securities                                     |                                                       |                                                                   | 229,684  |          |         |         |         |         
|                                                             |                                                                                  |                                                       |                                                                   |          |          |         |         |         
|                                                             |                                                                                  | Net cash flows from investing activities              |                                                                   |          | 36,136   |         |         |          | (545,039 | )      
|                                                             |                                                                                  |                                                       |                                                                   |          |          |         |         |         
|Cash flows from financing activities:                        |                                                                                  |                                                       |                                                                   |          |          |         |         |         
|                                                             | Borrowings on long-term debt and loans payable                                   |                                                       |                                                                   | 12,883   |          |         |         | 724,235  |         
|                                                             | Payments on long-term debt and loans payable                                     |                                                       |                                                                   | (118,323 | )        |         |         | (78,197  | )       
|                                                             | Exercise of stock options and employee stock purchases                           |                                                       |                                                                   | 5,735    |          |         |         | 14,151   |         
|                                                             | Repurchase of common stock                                                       |                                                       |                                                                   | (55,560  | )        |         |         | (117,030 | )       
|                                                             |                                                                                  |                                                       |                                                                   |          |          |         |         |         
|                                                             |                                                                                  | Net cash flows from financing activities              |                                                                   |          | (155,265 | )       |         |          | 543,159  |        
|                                                             |                                                                                  |                                                       |                                                                   |          |          |         |         |         
|Effect of exchange rate changes on cash and cash equivalents |                                                                                  |                                                       | (10,393                                                           | )        |          |         | (5,033  | )       
|                                                             |                                                                                  |                                                       |                                                                   |          |          |         |         |         
|Net (decrease) increase in cash and cash equivalents         |                                                                                  |                                                       | (38,039                                                           | )        |          |         | 106,414 |         
|Cash and cash equivalents at the beginning of the year       |                                                                                  |                                                       | 178,264                                                           |          |          |         | 174,794 |         
|                                                             |                                                                                  |                                                       |                                                                   |          |          |         |         |         
|Cash and cash equivalents at the end of the period           |                                                                                  | $                                                     | 140,225                                                           |          |          | $       | 281,208 |         
|                                                             |                                                                                  |                                                       |                                                                   |          |          |         |         |         

(Continued)

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

|Nine Months Ended September 30,                                       |                                               | 2002                                                                                                                                |   | 2001  
|--------------------------------------------------------------------- | --------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------- | - | ------
|(In thousands)                                                        |                                               |                                                                                                                                     |   |       
|Supplemental disclosures:                                             |                                               |                                                                                                                                     |   |       
|                                                                      | Interest paid                                 |                                                                                                                                     | $ | 23,637
|                                                                      |                                               |                                                                                                                                     |   |       
|                                                                      | Income tax payments                           |                                                                                                                                     | $ | 45,493
|                                                                      |                                               |                                                                                                                                     |   |       
|Supplemental schedule of non-cash investing and financing
activities: |                                               |                                                                                                                                     |   |       
|                                                                      |                                               | Information with respect to acquisitions which were
accounted for under the purchase method of
accounting is summarized as follows: |   |       
|Fair value of assets acquired                                         |                                               |                                                                                                                                     |   |       
|Liabilities assumed                                                   |                                               |                                                                                                                                     |   |       
|                                                                      |                                               |                                                                                                                                     |   |       
|Net assets acquired                                                   |                                               |                                                                                                                                     |   |       
|                                                                      |                                               |                                                                                                                                     |   |       
|Purchase price:                                                       |                                               |                                                                                                                                     |   |       
|                                                                      | Cash, net of cash acquired                    |                                                                                                                                     |   |       
|                                                                      | Acquisition costs                             |                                                                                                                                     |   |       
|                                                                      | Fair market value of stock and options issued |                                                                                                                                     |   |       
|                                                                      |                                               |                                                                                                                                     |   |       
|                                                                      | Total                                         |                                                                                                                                     |   |       
|                                                                      |                                               |                                                                                                                                     |   |       
|Goodwill                                                              |                                               |                                                                                                                                     |   |       
|                                                                      |                                               |                                                                                                                                     |   |       

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
generally accepted accounting principles 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 three and nine months ended
September 30, 2002, are not necessarily indicative of the results of operations
and cash flows which may be reported for the remainder of 2002. The interim
consolidated financial statements should be read in conjunction with the
consolidated financial statements and the notes to consolidated financial
statements included in IVAX Annual Report on Form 10-K for the year ended
December 31, 2001. For purposes of these financial statements, North America
includes the United States and Canada. Mexico is included within Latin
America. Certain prior period amounts presented in the consolidated financial
statements have been reclassified to conform to the current periods
presentation.

(2) EARNINGS PER SHARE:

A reconciliation of the denominator of the basic and diluted earnings per
share computation is as follows:

|                                                                                                    |                           |              |         |             |      |   |         |        |      |   |         |        |  |   |         |     | 
|--------------------------------------------------------------------------------------------------- | ------------------------- | ------------ | ------- | ----------- | ---- | - | ------- | ------ | ---- | - | ------- | ------ |  | - | ------- | --- | 
|Period Ended September 30,                                                                          |                           | Three Months |         | Nine Months
|                                                                                                    |                           |              |         |            
|                                                                                                    |                           |              | 2002    |             | 2001 |   | 2002    |        | 2001
|                                                                                                    |                           |              |         |             |      |   |         |        |     
|Numerator:                                                                                          |                           |              |         |             |      |   |         |        |      |   |         |        |  |   |         |    
|Income from continuing operations, basic                                                            |                           | $            | 30,803  |             |      | $ | 61,461  |        |      | $ | 81,824  |        |  | $ | 189,456 |    
|Interest reduction on conversion of convertible debt                                                |                           |              |        |             |      |   | 2,183   |        |      |   |        |        |  |   | 15,070  |    
|                                                                                                    |                           |              |         |             |      |   |         |        |      |   |         |        |  |   |         |    
|Income from continuing operations, diluted                                                          |                           | $            | 30,803  |             |      | $ | 63,644  |        |      | $ | 81,824  |        |  | $ | 204,526 |    
|                                                                                                    |                           |              |         |             |      |   |         |        |      |   |         |        |  |   |         |    
|Denominator:                                                                                        |                           |              |         |             |      |   |         |        |      |   |         |        |  |   |         |    
|Basic weighted average number of shares outstanding                                                 |                           |              | 194,604 |             |      |   | 200,089 |        |      |   | 195,292 |        |  |   | 199,743 |    
|Effect of dilutive securities  stock options and warrants                                          |                           |              | 1,848   |             |      |   | 14,408  |        |      |   | 2,209   |        |  |   | 24,401  |    
|                                                                                                    |                           |              |         |             |      |   |         |        |      |   |         |        |  |   |         |    
|Diluted weighted average number of shares
outstanding                                               |                           |              | 196,452 |             |      |   | 214,497 |        |      |   | 197,501 |        |  |   | 224,144 |    
|                                                                                                    |                           |              |         |             |      |   |         |        |      |   |         |        |  |   |         |    
|Not included in the calculation of diluted earnings
per share because their impact is antidilutive: |                           |              |         |             |      |   |         |        |      |   |         |        |  |   |         |    
|                                                                                                    | Stock options outstanding |              |         | 14,163      |      |   |         | 413    |      |   |         | 13,245 |  |   |         | 326 | 
|                                                                                                    | Convertible debt          |              |         | 23,409      |      |   |         | 18,017 |      |   |         | 23,993 |  |   |         |    | 
|                                                                                                    | Put options               |              |         |            |      |   |         | 1,850  |      |   |         |       |  |   |         | 450 | 

(3) REVENUES:

Net revenues are comprised of gross revenues less provisions for expected
customer returns, inventory credits, discounts, promotional allowances, volume
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

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consolidated balance sheets in the amounts of $131,124 and $98,447,
respectively, at September 30, 2002, and $115,752 and $88,955, respectively, at
December 31, 2001.

(4) INVENTORIES:

Inventories consist of the following:

|                |                   |   |               |         |              |   |         |         | 
|--------------- | ----------------- | - | ------------- | ------- | ------------ | - | ------- | ------- | 
|                |                   |   | September 30, |         | December 31,
|                |                   |   | 2002          |         | 2001        
|                |                   |   |               |         |             
|Raw materials   |                   | $ | 107,342       |         |              | $ | 110,443 |        
|Work-in-process |                   |   | 47,356        |         |              |   | 34,820  |        
|Finished goods  |                   |   | 137,220       |         |              |   | 108,208 |        
|                |                   |   |               |         |              |   |         |        
|                | Total inventories |   | $             | 291,918 |              |   | $       | 253,471 | 
|                |                   |   |               |         |              |   |         |        

(5) INTANGIBLE ASSETS:

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

|                               |                                    |  |                    |         |                   |  |          |        |              |  |   |         |  |  |   |        | 
|------------------------------ | ---------------------------------- |  | ------------------ | ------- | ----------------- |  | -------- | ------ | ------------ |  | - | ------- |  |  | - | ------ | 
|                               |                                    |  | September 30, 2002 |         | December 31, 2001
|                               |                                    |  |                    |         |                  
|                               |                                    |  | Gross              |         |                   |  |          |        | Gross        |  |   |         | 
|                               |                                    |  | Carrying           |         | Accumulated       |  | Carrying |        | Accumulated 
|                               |                                    |  | Amount             |         | Amortization      |  | Amount   |        | Amortization
|                               |                                    |  |                    |         |                   |  |          |        |             
|Amortized intangible assets:   |                                    |  |                    |         |                   |  |          |        |              |  |   |         |  |  |   |       
|                               | Patents and related licenses       |  | $                  | 75,556  |                   |  | $        | 45,035 |              |  | $ | 73,031  |  |  | $ | 40,766 | 
|                               | Trademarks                         |  |                    | 123,477 |                   |  |          | 6,051  |              |  |   | 112,958 |  |  |   | 2,114  | 
|                               | Licenses and other intangibles     |  |                    | 124,871 |                   |  |          | 7,236  |              |  |   | 22,768  |  |  |   | 4,352  | 
|                               |                                    |  |                    |         |                   |  |          |        |              |  |   |         |  |  |   |       
|                               | Total                              |  | $                  | 323,904 |                   |  | $        | 58,322 |              |  | $ | 208,757 |  |  | $ | 47,232 | 
|                               |                                    |  |                    |         |                   |  |          |        |              |  |   |         |  |  |   |       
|Unamortized intangible assets: |                                    |  |                    |         |                   |  |          |        |              |  |   |         |  |  |   |       
|                               | Trademarks & product registrations |  | $                  | 23,068  |                   |  |          |        |              |  | $ | 25,954  |  |  |   |        | 
|                               |                                    |  |                    |         |                   |  |          |        |              |  |   |         |  |  |   |       

Intangible assets amortization expense is estimated to be $6,332 for the
remainder of fiscal 2002, $25,329 in fiscal 2003, $25,328 in fiscal 2004,
$25,319 in fiscal 2005, and $24,873 in fiscal 2006.

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

On April 2, 2002, IVAX entered into an agreement to acquire the technical
files and French marketing authorizations to substantially all of the products
comprising the generic pharmaceutical business of Merck & Co., Inc.s
subsidiary in France. The total consideration due is 5,641 Euros ($4,917 at
the March 31, 2002, currency exchange rate) one-half of which was paid upon
signing and the remainder in four months. On July 19, 2002, the agreement was
amended reducing the second payment to 2,565 Euros ($2,531 as of the August 2,
2002, payment date).

On April 22, 2002, IVAX acquired an exclusive U.S. license to the patent
rights to market QVAR (beclomethasone dipropionate HFA), an aerosol inhaler
prescribed to treat asthma. In addition, IVAX has an option to obtain
ownership of the U.S. QVAR trademark, as well as related patents and the

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New Drug Application in five years. 3M Drug Delivery Systems will
manufacture the QVAR product for IVAX under a long-term contract. The purchase
price was allocated to the fair values of the assets acquired pursuant to an
independent appraisal resulting in a value of $27,140 for the license
agreement, which is being amortized over its 5 year life, and $67,116 for the
option, which is not being amortized. If the option is exercised, the value of
the option will be allocated to the underlying assets acquired by the exercise
and appropriate lives determined. The total consideration due under the
contract, including options and extensions, is $105,000, $21,000 of which was
paid on the effective date, $22,000 is due on the first anniversary, $31,000 is
due on the second anniversary, $26,000 is due on the third anniversary and
$5,000 is due on the fifth anniversary upon exercise of the option. IVAX also
acquired a non-exclusive worldwide license to certain 3M patents covering HFA
formulations of various asthma drugs.

On July 1, 2002, in connection with the termination of a license granted
by IVAX to specified products in IVAX proprietary dry powder inhaler device
(MDPI), IVAX entered into an agreement to acquire the technical files,
trademark and related rights invented or produced by the licensee in connection
with the commercialization of products under the license. The total
consideration due is 5,000 Pounds Sterling ($7,665 at the July 1, 2002,
currency exchange rate). An additional payment of between 250 to 1,100 Pounds
Sterling will also be paid to the licensee upon the receipt of marketing
approval and launch of a specified product using the acquired rights and data.

(6) DEBT:

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

See Note 10, Recently Issued Accounting Standards, for a discussion of the
classification of gains on extinguishment of debt. During the first quarter of
2002, IVAX repurchased $35,000 of 4.5% Convertible Senior Subordinated Notes
due 2008 for $28,797, plus accrued interest of $484, and wrote off debt
issuance costs of $828, resulting in a gain on extinguishment of debt of
$5,375. During the second quarter of 2002, IVAX repurchased $20,000 of 4.5%
Convertible Senior Subordinated Notes due 2008 for $15,363, plus accrued
interest of $111, and wrote off debt issuance costs of $442, resulting in a
gain on extinguishment of debt of $4,195. During the third quarter of 2002,
IVAX repurchased $22,000 of 4.5% Convertible Senior Subordinated Notes due 2008
for $17,486, plus accrued interest of $337, and wrote off debt issuance costs
of $470, resulting in a gain on extinguishment of debt of $4,044.

As described in Note 5, payments for the acquisition of QVAR are due
through the third anniversary of the effective date. The payments carried no
stated interest rate and were discounted at a 3.7% rate
resulting in $74,394 of additional long-term debt as of September 30, 2002,
including accretion of interest, of which $22,000 is current. In addition,
payments for the technical files, trademark and related rights to the MDPI are
due through June 30, 2005. The payments carried no stated interest rate and
were discounted at a 4.1% rate resulting in $7,404 of
additional long-term debt as of September 30, 2002, including accretion of
interest, of which $2,196 is current.

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(7) INCOME TAXES:

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

|                           |          |              |        |             |      |   |        |       |      |   |        |        |  |   |         |        | 
|-------------------------- | -------- | ------------ | ------ | ----------- | ---- | - | ------ | ----- | ---- | - | ------ | ------ |  | - | ------- | ------ | 
|Period Ended September 30, |          | Three Months |        | Nine Months
|                           |          |              |        |            
|                           |          |              | 2002   |             | 2001 |   | 2002   |       | 2001
|                           |          |              |        |             |      |   |        |       |     
|Current:                   |          |              |        |             |      |   |        |       |      |   |        |        |  |   |         |       
|                           | Domestic |              | $      | 8,249       |      |   | $      | 5,166 |      |   | $      | 15,492 |  |   | $       | 45,872 | 
|                           | Foreign  |              |        | 5,040       |      |   |        | 8,732 |      |   |        | 16,014 |  |   |         | 15,675 | 
|Deferred                   |          |              | 1,214  |             |      |   | 222    |       |      |   | 2,575  |        |  |   | (17,461 | )     
|                           |          |              |        |             |      |   |        |       |      |   |        |        |  |   |         |       
|Total                      |          | $            | 14,503 |             |      | $ | 14,120 |       |      | $ | 34,081 |        |  | $ | 44,086  |       
|                           |          |              |        |             |      |   |        |       |      |   |        |        |  |   |         |       

The effective tax rate during the first nine months of 2002 is less than
the statutory rate due primarily to low tax rates applicable to IVAX Puerto
Rican and Irish manufacturing operations and the Swiss and Chilean operations.
Payment of the current tax provision for the year ended December 31, 2002, for
domestic and foreign operations will be reduced by $945 and $374, respectively,
representing the incremental impact of compensation expense deductions
associated with non-qualified stock option exercises during the current year.
These amounts were credited to Capital in excess of par value. As of
September 30, 2002, a domestic net deferred tax asset of $102,391 and an
aggregate foreign net deferred tax asset of $4,320 are included in Other
current assets and Other assets in the accompanying consolidated balance
sheet. Realization of the net deferred tax assets is dependent upon generating
sufficient future domestic and foreign taxable income. Although realization is
not assured, management believes it is more likely than not that the net
deferred tax assets will be realized.

(8) SHAREHOLDERS EQUITY:

On March 5, 2002, IVAX elected the net share settlement method and issued
160 shares of IVAX common stock to settle one put option for 200 shares,
bearing a strike price of $31.00, that expired on March 1, 2002. On April 4,
2002, IVAX elected the physical settlement method for one put option, and paid
$4,750 to purchase 250 shares of IVAX common stock at a strike price of
$19.00. On April 30, 2002, IVAX elected the physical settlement method for one
put option, and paid $7,975 to purchase 250 shares of IVAX common stock at a
strike price of $31.90. On May 15, 2002, IVAX elected the net share settlement
method and issued 444 shares of IVAX common stock to settle one put option for
250 shares, bearing a strike price of $32.28, that expired on May 14, 2002. On
May 22, 2002, IVAX elected the net share settlement method and issued 367
shares of IVAX common stock to settle one put option for 250 shares, bearing a
strike price of $32.15, that expired on May 21, 2002.

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

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(9) BUSINESS SEGMENT INFORMATION:

|                           |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |         |  
|-------------------------- | -------------------------------- | ------------ | ------- | ----------- | ---- | - | ------- | ------- | ---- | - | ------- | ------- | - | - | ------- | ------- | -
|Revenues by Region         |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|Period Ended September 30, |                                  | Three Months |         | Nine Months
|                           |                                  |              |         |            
|                           |                                  |              | 2002    |             | 2001 |   | 2002    |         | 2001
|                           |                                  |              |         |             |      |   |         |         |     
|North America              |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|                           | External sales                   |              | $       | 131,369     |      |   | $       | 139,804 |      |   | $       | 345,876 |   |   | $       | 440,793 |  
|                           | Intersegment sales               |              |         | 153         |      |   |         | 758     |      |   |         | 705     |   |   |         | 1,221   |  
|                           | Other revenues                   |              |         | 6,801       |      |   |         | 1,152   |      |   |         | 21,661  |   |   |         | 1,420   |  
|                           |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|                           | Net revenues  North America     |              |         | 138,323     |      |   |         | 141,714 |      |   |         | 368,242 |   |   |         | 443,434 |  
|                           |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|Europe                     |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|                           | External sales                   |              |         | 98,188      |      |   |         | 75,646  |      |   |         | 264,377 |   |   |         | 221,844 |  
|                           | Intersegment sales               |              |         | 6,646       |      |   |         | 13,923  |      |   |         | 36,551  |   |   |         | 35,123  |  
|                           | Other revenues                   |              |         | 18,163      |      |   |         | 14,562  |      |   |         | 35,354  |   |   |         | 43,451  |  
|                           |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|                           | Net revenues  Europe            |              |         | 122,997     |      |   |         | 104,131 |      |   |         | 336,282 |   |   |         | 300,418 |  
|                           |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|Latin America              |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|                           | External sales                   |              |         | 52,859      |      |   |         | 78,375  |      |   |         | 169,362 |   |   |         | 143,545 |  
|                           | Other revenues                   |              |         | 274         |      |   |         | 1,021   |      |   |         | 1,104   |   |   |         | 1,556   |  
|                           |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|                           | Net revenues  Latin America     |              |         | 53,133      |      |   |         | 79,396  |      |   |         | 170,466 |   |   |         | 145,101 |  
|                           |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|Corporate & Other          |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|                           | External sales                   |              |         | 12,085      |      |   |         | 9,615   |      |   |         | 32,292  |   |   |         | 27,346  |  
|                           | Intersegment sales               |              |         | (6,799      | )    |   |         | (14,681 | )    |   |         | (37,256 | ) |   |         | (36,344 | )
|                           | Other revenues                   |              |         | (345        | )    |   |         | 1,815   |      |   |         | 1,995   |   |   |         | 3,749   |  
|                           |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|                           | Net revenues  Corporate & Other |              |         | 4,941       |      |   |         | (3,251  | )    |   |         | (2,969  | ) |   |         | (5,249  | )
|                           |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        
|Consolidated net revenues  |                                  | $            | 319,394 |             |      | $ | 321,990 |         |      | $ | 872,021 |         |   | $ | 883,704 |        
|                           |                                  |              |         |             |      |   |         |         |      |   |         |         |   |   |         |        

|                                                            |                                                       |              |        |             |      |   |        |        |      |   |        |         |   |   |         |         | 
|----------------------------------------------------------- | ----------------------------------------------------- | ------------ | ------ | ----------- | ---- | - | ------ | ------ | ---- | - | ------ | ------- | - | - | ------- | ------- | 
|Profits by Region                                           |                                                       |              |        |             |      |   |        |        |      |   |        |         |   |   |         |        
|Period Ended September 30,                                  |                                                       | Three Months |        | Nine Months
|                                                            |                                                       |              |        |            
|                                                            |                                                       |              | 2002   |             | 2001 |   | 2002   |        | 2001
|                                                            |                                                       |              |        |             |      |   |        |        |     
|Income from continuing operations
before minority interest: |                                                       |              |        |             |      |   |        |        |      |   |        |         |   |   |         |        
|                                                            | North America                                         |              | $      | 24,134      |      |   | $      | 25,742 |      |   | $      | 54,126  |   |   | $       | 123,371 | 
|                                                            | Europe                                                |              |        | 6,329       |      |   |        | 16,420 |      |   |        | 21,217  |   |   |         | 6,114   | 
|                                                            | Latin America                                         |              |        | 8,334       |      |   |        | 11,307 |      |   |        | 25,800  |   |   |         | 14,395  | 
|                                                            | Corporate & Other                                     |              |        | (8,444      | )    |   |        | 7,764  |      |   |        | (19,831 | ) |   |         | 45,433  | 
|                                                            |                                                       |              |        |             |      |   |        |        |      |   |        |         |   |   |         |        
|Income from continuing operations
before minority interest  |                                                       |              | 30,353 |             |      |   | 61,233 |        |      |   | 81,312 |         |   |   | 189,313 |        
|                                                            |                                                       |              |        |             |      |   |        |        |      |   |        |         |   |   |         |        
|Net Income:                                                 |                                                       |              |        |             |      |   |        |        |      |   |        |         |   |   |         |        
|                                                            | Minority interest                                     |              |        | 450         |      |   |        | 228    |      |   |        | 512     |   |   |         | 143     | 
|                                                            | Cumulative effect of a change in accounting principle |              |        |            |      |   |        |       |      |   |        | 4,161   |   |   |         |        | 
|                                                            |                                                       |              |        |             |      |   |        |        |      |   |        |         |   |   |         |        
|Net income                                                  |                                                       | $            | 30,803 |             |      | $ | 61,461 |        |      | $ | 85,985 |         |   | $ | 189,456 |        
|                                                            |                                                       |              |        |             |      |   |        |        |      |   |        |         |   |   |         |        

|                   |                   |   |               |         |      |   |           |         | 
|------------------ | ----------------- | - | ------------- | ------- | ---- | - | --------- | ------- | 
|                   |                   |   | September 30,
|                   |                   |   |              
|                   |                   |   | 2002          |         | 2001
|                   |                   |   |               |         |     
|Long-Lived Assets: |                   |   |               |         |      |   |           |        
|                   | North America     |   | $             | 306,699 |      |   | $         | 77,663  | 
|                   | Europe            |   |               | 280,060 |      |   |           | 224,454 | 
|                   | Latin America     |   |               | 412,695 |      |   |           | 593,197 | 
|                   | Corporate & Other |   |               | 109,390 |      |   |           | 109,050 | 
|                   |                   |   |               |         |      |   |           |        
|Total              |                   | $ | 1,108,844     |         |      | $ | 1,004,364 |        
|                   |                   |   |               |         |      |   |           |        

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(10) RECENTLY ISSUED ACCOUNTING STANDARDS:

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

SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
Activities, requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred rather than when
a commitment to an exit plan is made. It is effective for exit or disposal
activities that are initiated after December 31, 2002. Management believes the
impact of adoption of this statement will not be significant.

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

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

Effective January 1, 2002, IVAX adopted SFAS No. 142, Goodwill and Other
Intangible Assets. Intangible assets that have indefinite lives and goodwill
are no longer amortized. This will increase net income by approximately $2,000
per quarter, or $8,000 per year. The life of one product intangible asset with
a net book value of $6,519 as of January 1, 2002, was extended based on a
review of the expected remaining estimated useful life. Intangible assets with
indefinite lives were tested for impairment resulting in the write-down of one
intangible asset by $177. The initial test for impairment of goodwill as of
January 1, 2002, was completed during the second quarter and no impairments
were indicated. An independent valuation firm was used to perform the test.

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

|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |      | 
|----------------------------------------------------------- | ------------------------------- | ------------ | ------ | ----------- | ---- | - | ------ | ---- | ---- | - | ------ | ---- |  | - | ------- | ---- | 
|Period Ended September 30,                                  |                                 | Three Months |        | Nine Months
|                                                            |                                 |              |        |            
|                                                            |                                 |              | 2002   |             | 2001 |   | 2002   |      | 2001
|                                                            |                                 |              |        |             |      |   |        |      |     
|Reported net income                                         |                                 | $            | 30,803 |             |      | $ | 61,461 |      |      | $ | 85,985 |      |  | $ | 189,456 |     
|Addback: Interest savings on conversion of convertible
debt |                                 |              |        |             |      |   | 2,183  |      |      |   |        |      |  |   | 15,070  |     
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|Reported net income, diluted                                |                                 |              |        |             |      |   | 63,644 |      |      |   |        |      |  |   | 204,526 |     
|Addback: Goodwill amortization                              |                                 |              |        |             |      |   | 1,477  |      |      |   |        |      |  |   | 3,838   |     
|Addback: Workforce in place amortization                    |                                 |              |        |             |      |   | 54     |      |      |   |        |      |  |   | 163     |     
|Adjust: Product intangible amortization                     |                                 |              |        |             |      |   | 903    |      |      |   |        |      |  |   | 2,709   |     
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|Adjusted net income                                         |                                 | $            | 30,803 |             |      | $ | 66,078 |      |      | $ | 85,985 |      |  | $ | 211,236 |     
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|Basic earnings per common share:                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|                                                            | Reported net income             |              | $      | 0.16        |      |   | $      | 0.31 |      |   | $      | 0.44 |  |   | $       | 0.95 | 
|                                                            | Goodwill amortization           |              |        |             |      |   |        | 0.01 |      |   |        |      |  |   |         | 0.02 | 
|                                                            | Product intangible amortization |              |        |             |      |   |        |     |      |   |        |      |  |   |         | 0.01 | 
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|                                                            | Adjusted net income             |              | $      | 0.16        |      |   | $      | 0.32 |      |   | $      | 0.44 |  |   | $       | 0.98 | 
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|Diluted earnings per common share:                          |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|                                                            | Reported net income, diluted    |              | $      | 0.16        |      |   | $      | 0.30 |      |   | $      | 0.44 |  |   | $       | 0.91 | 
|                                                            | Goodwill amortization           |              |        |             |      |   |        | 0.01 |      |   |        |      |  |   |         | 0.02 | 
|                                                            | Product intangible amortization |              |        |             |      |   |        |     |      |   |        |      |  |   |         | 0.01 | 
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|                                                            | Adjusted net income, diluted    |              | $      | 0.16        |      |   | $      | 0.31 |      |   | $      | 0.44 |  |   | $       | 0.94 | 
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     

The following table displays the changes in the carrying amounts of
goodwill by operating segment for the nine months ended September 30, 2002:

|                  |                       |   |              |         |              |   |               |          |   |   |         |         | 
|----------------- | --------------------- | - | ------------ | ------- | ------------ | - | ------------- | -------- | - | - | ------- | ------- | 
|                  |                       |   | Balance      |         | Foreign      |   | Balance      
|                  |                       |   | December 31, |         | Exchange and |   | September 30,
|                  |                       |   | 2001         |         | Other        |   | 2002         
|                  |                       |   |              |         |              |   |              
|North America     |                       | $ | 3,972        |         |              | $ |              |          |   | $ | 3,972   |        
|Europe            |                       |   | 24,200       |         |              |   | 7,168         |          |   |   | 31,368  |        
|Latin America     |                       |   | 427,157      |         |              |   | (113,373      | )        |   |   | 313,784 |        
|Corporate & Other |                       |   | 46,748       |         |              |   | 740           |          |   |   | 47,488  |        
|                  |                       |   |              |         |              |   |               |          |   |   |         |        
|                  | Consolidated goodwill |   | $            | 502,077 |              |   | $             | (105,465 | ) |   | $       | 396,612 | 
|                  |                       |   |              |         |              |   |               |          |   |   |         |        

During the second quarter of 2002, IVAX elected to early adopt SFAS No.
145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections.The impact of adoption was the
reclassification into income from continuing operations of extraordinary losses
from the early retirement of subordinated notes of $8,725 in 2000, an
extraordinary gain of $7,120, net of taxes of $4,182, during the third quarter
of 2001, an extraordinary gain of $3,413, net of taxes of $1,962, during the
first quarter of 2002 and an extraordinary gain of $2,664, net of taxes of
$1,531, during the second quarter of 2002.

(11) ACQUISITIONS:

On February 9, 2001, IVAX indirectly acquired IVAX Pharmaceuticals Mexico,
S.A. de C.V. (IVAX Mexico, formerly known as Laboratorios Fustery, S.A. de
C.V.), a Mexican pharmaceutical company, by purchasing the outstanding
securities of IVAX Mexicos parent, Maancirkel Holding B.V.,

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a corporation organized under the laws of The Netherlands, from Morcob
CVA, an entity organized under the laws of Belgium, pursuant to a stock
purchase agreement entered into among the parties on October 11, 2000. The
operating results of IVAX Mexico are included in the consolidated financial
statements subsequent to the February 9, 2001, acquisition date. During the
second quarter of 2002, IVAX received a refund of $6,417 on the purchase price
of IVAX Mexico, which reduced goodwill.

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

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

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

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

Proforma information for the above acquisitions as if the purchases
occurred on January 1, 2001, is presented below.

|                                |  |              |         |             |  |   |         | 
|------------------------------- |  | ------------ | ------- | ----------- |  | - | ------- | 
|                                |  | Three Months |         | Nine Months
|Period Ended September 30,      |  | 2001         |         | 2001       
|                                |  |              |         |            
|Revenues                        |  | $            | 320,423 |             |  | $ | 998,425 | 
|Net income                      |  |              | 57,141  |             |  |   | 201,301 | 
|Diluted weighted average shares |  |              | 206,085 |             |  |   | 224,678 | 
|Diluted earnings per share      |  | $            | 0.28    |             |  | $ | 0.96    | 

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

On August 30, 2002, IVAX acquired Glaxo Wellcome S.A. (subsequently
renamed IVAX Manufacturing Argentina S.A.), an Argentine manufacturing
pharmaceutical company, consisting primarily of a manufacturing facility, for
$6,000 in cash. The operating results of this company are included in the
consolidated financial statements subsequent to its acquisition date.

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

On March 14, 2001, IVAX wholly-owned subsidiary, IVAX Diagnostics, Inc.,
was merged with b2bstores.com, a non-operating company with approximately
$22,285 of cash, resulting in IVAX owning approximately 70% of the newly merged
public company. IVAX received 20,000 shares of b2bstores.com common stock in
exchange for all of the outstanding shares of IVAX Diagnostics, Inc. and
b2bstores.coms name was changed to IVAX Diagnostics, Inc. For accounting
purposes, this transaction

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was treated as a partial sale of IVAX Diagnostics, Inc. in exchange for
cash of b2bstores.com. IVAX elected income statement recognition as its
accounting policy for sales of subsidiary stock and recorded a gain of $10,278.
Deferred taxes were not recorded related to the gain as it represents an
outside basis difference and IVAX expects it can recover its investment in IVAX
Diagnostics, Inc. tax-free. Also recorded was $1,041 of nondeductible
compensation expense from outstanding options under the IVAX Diagnostics, Inc.
1999 Stock Option Plan converting to a fair value plan as a result of the
merger. IVAX Diagnostics, Inc. is engaged in the development, manufacture and
marketing of diagnostic test kits, reagents and instruments.

(13) LEGAL PROCEEDINGS:

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

In April 2002, we received notice of an investigation by United Kingdom
National Health Service officials concerning prices charged by generic drug
companies, including IVAX UK Limited, for penicillin-based antibiotics and
warfarin sold in the United Kingdom from 1996 to 2000. This is an
investigation by the Serious Fraud Office of the United Kingdom involving all
pharmaceutical companies that sold these products in the United Kingdom during
this period. According to statements by investigating agencies, this is a
complex investigation expected to continue for some time and there is no
indication from the agencies when or if charges will be made against any of
these companies. The company is cooperating fully with this investigation and
believes its sales of these products have been in compliance with all
applicable laws and regulations.

On June 13, 2002, the Louisiana Wholesale Drug Co. v. Abbott Laboratories
and Valley Drug Co. v. Abbott Laboratories et al. cases, previously reported in
IVAX Annual Report on Form 10-K for the year ended December 31, 2001, were
also settled.

On July 12, 2002, an action purporting to be a class action styled John
Rice v. Abbott Laboratories, Inc., et al.was filed against IVAX
Pharmaceuticals, Inc. and others in the Superior Court of the State of
California, alleging violations of Californias Business & Professional Code
§17200 et seq. with respect to the way pharmaceutical companies report their
average wholesale price (AWP). Plaintiffs allege that each defendant
reported an AWP to Medicare and Medicaid which materially misrepresented the
actual prices paid to defendants by physicians and pharmacies for prescription
drugs. The complaint seeks unspecified damages, including punitive damages,
and injunctive relief. Two other class actions, Thompson v. Abbott
Laboratories, Inc., et al.and Turner v. Abbott Laboratories, Inc., et al.,
containing similar allegations against IVAX Pharmaceuticals, Inc. and others
were filed in California courts in August and September 2002, respectively, as
well. IVAX believes that it has substantial defenses to these claims and will
defend itself vigorously. However, as with any litigation, there can be no
assurance that IVAX will prevail.

On September 13, 2002, a lawsuit containing allegations similar to those
in the Louisiana Wholesale Drug Co. v. Abbott Laboratories, Geneva
Pharmaceuticals, Inc. and Zenith Goldline, Inc.filed by the Attorneys General
of Florida, Kansas and Colorado, previously reported in IVAX Annual Report on
Form 10-K for the year ended December 31, 2001, was also settled.

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(14) SUBSEQUENT EVENTS:

From October 1, 2002, through October 25, 2002, IVAX repurchased $11,000
of 4.5% Convertible Senior Subordinated Notes due 2008 for $8,652, plus accrued
interest of $212, and wrote off debt issuance costs of $235, resulting in a
gain on extinguishment of debt of $2,113.

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

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

Results of Operations

Nine months ended September 30, 2002 compared to the nine months ended September 30, 2001

Net income for the nine months ended September 30, 2002, was $86.0
million, or $.44 per diluted share, compared to $189.5 million, or $.91 per
diluted share, for the same period of the prior year. Income from continuing
operations for the nine months ended September 30, 2002, was $81.8 million, or
$.42 per diluted share, compared to $189.5 million, or $.91 per diluted share,
for the same period of the prior year. As of January 1, 2002, we recorded a
cumulative change in accounting principle credit in the amount of $4.2 million,
or $.02 per diluted share, in accordance with Statement of Financial Accounting
Standards (SFAS) No. 141, Business Combinations.

Net Revenues and Gross Profit

Net revenues for the nine months ended September 30, 2002, totaled $872.0
million, a decrease of $11.7 million, or 1%, from the $883.7 million reported
in the same period of the prior year. This decrease was comprised of decreases
in net revenues of $75.2 million from North American subsidiaries partially
offset by increases of $35.8 million from European subsidiaries, $25.4
million from Latin American subsidiaries and $2.3 million from other
operations.

North American subsidiaries generated net revenues of $368.2 million for
the nine months ended September 30, 2002, compared to $443.4 million for the
same period of the prior year. The 17% decrease in net revenues was primarily
attributable to decreased volume and lower prices of our paclitaxel product and
higher sales returns and allowances, partially offset by increased volume and
prices of certain brand equivalent pharmaceutical products, increased sales of
proprietary respiratory products and increased product development fees. North
American subsidiaries recorded provisions for sales returns and allowances that
reduced gross sales by $420.9 million during the nine months ended September
30, 2002, and $275.0 million for the same period of the prior year. The
increase of $145.9 million, or 53%, was primarily due to reduced net prices on
certain brand equivalent pharmaceutical products and increased sales volume.

European subsidiaries generated net revenues of $336.2 million for the
nine months ended September 30, 2002, compared to $300.4 million for the same
period of the prior year. The 12% increase in net revenues was primarily due
to higher sales volumes and favorable effects of currency exchange rates and
$5.8 million of other revenues from a previously deferred up-front payment
received under a license agreement that was terminated during the third quarter
of 2002, partially offset by reduced product development fees and lower prices
for certain brand equivalent products. European subsidiaries recorded
provisions for sales returns and allowances that reduced gross sales by $35.7
million during the nine months ended September 30, 2002, and $24.8 million for
the same period of the prior year. The increase of $10.9 million, or 44%, was
primarily due to pricing pressures on brand equivalent products and an increase
in financial discounts.

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Latin American subsidiaries generated net revenues of $170.5 million for
the nine months ended September 30, 2002, compared to $145.1 million for the
same period of the prior year. The 17% increase was primarily due to the
revenue generated by Laboratorio Chile S.A. (Lab Chile), which was acquired
July 5, 2001, partially offset by unfavorable effects of currency exchange
rates. Latin American subsidiaries recorded provisions for sales returns and
allowances that reduced gross sales by $25.4 million during the nine months
ended September 30, 2002, and $14.9 million for the same period of the prior
year. The increase of $10.5 million, or 70%, was primarily due to the
inclusion of the operations of Lab Chile for the full nine-month
period in 2002 as compared to only a partial period in 2001.

Gross profit was $395.3 million (45% of net revenues) for the nine months
ended September 30, 2002, compared to $466.5 million (53% of net revenues) for
the same period of the prior year. The decrease in gross profit percentage was
primarily attributable to reduced volume and pricing of our paclitaxel product.
We are continuing to experience increased competition for paclitaxel as well
as our brand equivalent albuterol products and the resulting pricing and volume
pressures have negatively impacted and may continue to negatively impact our
revenues and gross profits. Our results for the first nine months of 2002 were
also adversely impacted by significant currency devaluations in Argentina and
Venezuela, reductions in government purchases of our products in Mexico and
continued pricing pressures in the United States and the United Kingdom.
Revenues from the sale of our paclitaxel product did not contribute
significantly to our revenues and gross profits during the first nine months of
2002 and, because of the continuing price erosion and competition, are not
likely to contribute significantly in the near future to our North American
results.

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, including, but not limited to, payments under the
Product Collaboration and Development Services Agreement with
Bristol-Myers Squibb (BMS), which will expire in
November 2002. In October 2002, we entered into a new agreement with
BMS that supersedes, effective November 2002, the prior product
collaboration agreement. The new agreement, which in part relates to
some of the subject matter of the earlier agreement, also encompasses
additional arrangements between the parties and has a term of ten
months, although the parties may enter into additional collaboration
agreements if certain option rights contained therein are exercised.
Notwithstanding the expiration of the prior product collaboration
agreement with BMS, we expect that
milestone, developmental, royalty and other payments under existing
and new collaboration and license agreements with other parties, including expected
payments under the new agreement with BMS and the recently announced
development agreement with Serono S.A. for our cladribine product
for the treatment of multiple sclerosis, as well as other agreements
which we expect to enter into, will continue to be a significant
portion of our net revenues and profits. 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 develop and rapidly introduce new products;                                
|
| |  |  | the timing of regulatory approval of such products;                                       
|
| |  |  | our ability to manufacture
such products efficiently; and                                 
|
| |  |  | the number and timing of
regulatory approvals of competing products.                      

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Operating Expenses

Selling expenses increased $27.9 million, or 28%, to $126.5 million (15%
of net revenues) for the nine months ended September 30, 2002, compared to
$98.6 million (11% of net revenues) for the same period of the prior year. The
increase was due to higher expenses associated with the operations of Lab Chile
and IVAX Pharmaceuticals Mexico, S.A. de C.V. (IVAX Mexico, formerly known as
Laboratorios Fustery, S.A. de C.V.) and increased sales and promotional
expenses at IVAX Laboratories, our U.S. proprietary respiratory subsidiary, and
our European subsidiaries, partially offset by reduced sales and promotional
expenses at Elvetium Argentina and favorable effects of foreign currency rates.

General and administrative expenses increased $.9 million, or 1%, to $85.5
million (10% of net revenues) for the nine months ended September 30, 2002,
compared to $84.6 million (10% of net revenues) for the same period of the
prior year. The increase is primarily attributable to additional general and
administrative expenses from the operations of Lab Chile and IVAX Mexico and
increased expenses at IVAX Laboratories and our European subsidiaries,
partially offset by reduced expenses at Elvetium Argentina, favorable effects
of foreign currency rates and lower professional fees at Corporate. In June
2002, we received $2.2 million in partial settlement of a vitamin price-fixing
class action lawsuit. In addition, we paid $2.1 million to settle the
Louisiana Wholesale Drug Co. v. Abbott Laboratories and Valley Drug Co. v.
Abbott Laboratories et al. cases, previously reported in our Annual Report on
Form 10-K for the year ended December 31, 2001.

Research and development expenses for the nine months ended September 30,
2002, decreased $9.6 million, or 15%, to a total of $55.6 million (6% of net
revenues), compared to $65.2 million (7% of net revenues) for the same period
of the prior year. 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 nine months of 2002, we incurred $3.2 million of
restructuring costs, which were substantially paid out during the second
quarter, at two subsidiaries, consisting primarily of employee termination
benefits.

Other Income (Expense)

Interest income decreased $12.3 million and interest expense increased
$9.0 million for the nine months ended September 30, 2002, as compared to the
same period of the prior year primarily due to the cash purchases of Lab Chile
on July 5, 2001, and Nasarel and Nasalide on October 16, 2001, and the issuance
of $725 million of 4.5% Convertible Senior Subordinated Notes in 2001.

Other income, net increased $3.5 million for the nine months ended
September 30, 2002, compared to the same period of the prior year. During
January 2002, we repaid $48 million of U.S. denominated loans held by an
Argentine subsidiary resulting in a pretax foreign exchange loss of
approximately $2.8 million, which was partially offset by foreign currency
gains at other subsidiaries. During the second quarter, we reclassified $5.3
million of first quarter extraordinary gains on the repurchase of subordinated
notes into other income in accordance with the early adoption of SFAS No. 145,
Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections.Also during the second quarter of 2002, we
realized a gain of $4.2 million on the repurchase of subordinated notes, earned
a $4.3 million milestone as additional consideration for the sale of Elmiron to
ALZA Corporation during 1997, which is to be received in the first quarter of
2003, and recorded a gain of $6.3 million on the sale of certain intangible
assets in the Czech Republic, which proceeds under the contract were received
in the third quarter of 2002. During the third quarter of 2002,

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we realized $4.0 million of gains on the repurchase of subordinated notes
and $3.3 million of foreign currency gains at various subsidiaries. These
gains were partially offset by net foreign currency losses at various
subsidiaries during the previous quarters.

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

Three months ended September 30, 2002 compared to the three months ended September 30, 2001

Net income for the three months ended September 30, 2002, was $30.8
million, or $.16 per diluted share, compared to $61.5 million, or $.30 per
diluted share, for the same period of the prior year.

Net Revenues and Gross Profit

Net revenues for the three months ended September 30, 2002, totaled $319.4
million, a decrease of $2.6 million, or 1%, from the $322.0 million reported in
the same period of the prior year. This decrease was comprised of reductions
in net revenues of $3.4 million from North American subsidiaries and $26.3
million from Latin American subsidiaries, partially offset by increases in net
revenues of $18.9 million from European subsidiaries and $8.2 million from
other operations.

North American subsidiaries generated net revenues of $138.3 million for
the three months ended September 30, 2002, compared to $141.7 million for the
same period of the prior year. The 2% decrease was primarily attributable to
decreased volume and lower prices of our paclitaxel product and higher sales
returns and allowances, partially offset by increased volume and prices of
certain brand equivalent pharmaceutical products, increased sales of
proprietary respiratory products and increased product development fees. North
American subsidiaries recorded provisions for sales returns and allowances that
reduced gross sales by $142.5 million during the three months ended September
30, 2002, and $135.8 million for the same period of the prior year. The
increase of $6.7 million, or 5%, was primarily due to reduced net prices on
certain brand equivalent pharmaceutical products and increased sales volume.

European subsidiaries generated net revenues of $123.0 million for the
three months ended September 30, 2002, compared to $104.1 million for the same
period of the prior year. The 18% increase was primarily due to higher sales
volumes and favorable effects of currency exchange rates and $5.8 million of
other revenues from a previously deferred up-front payment received under a
license agreement that was terminated during the third quarter of 2002,
partially offset by reduced product development fees and lower prices for
certain brand equivalent products. European subsidiaries recorded provisions
for sales returns and allowances that reduced gross sales by $12.8 million
during the three months ended September 30, 2002, and $8.4 million for the same
period of the prior year.

Latin American subsidiaries generated net revenues of $53.1 million for
the three months ended September 30, 2002, compared to $79.4 million for the
same period of the prior year. The 33% decrease was primarily due to reduced
sales volume in Mexico and unfavorable effects of currency exchange rates.
Latin American subsidiaries recorded provisions for sales returns and
allowances that reduced gross sales by $7.8 million during the three months
ended September 30, 2002, and $11.6 million for the same period of the prior
year. The $3.8 million, or 33%, decrease was primarily due to the favorable
effects of currency exchange in Argentina.

Gross profit was $142.8 million (45% of net revenues) for the three months
ended September 30, 2002, compared to $171.9 million (53% of net revenues) for
the same period of the prior year. The decrease in gross profit percentage was
primarily attributable to reduced volume and pricing of our paclitaxel product.

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We are continuing to experience increased competition for paclitaxel as
well as our brand equivalent albuterol products and the resulting pricing and
volume pressures have negatively impacted and may continue to negatively impact
our revenues and gross profits. Our results this quarter were also adversely
impacted by significant currency devaluations in Argentina and Venezuela and by
reductions in government purchases of our products in Mexico.

Operating Expenses

Selling expenses decreased $.4 million, or 1%, to $40.6 million (13% of
net revenues) for the three months ended September 30, 2002, compared to $41.0
million (13% of net revenues) for the same period of the prior year. The
decrease was primarily due to reduced sales and promotional expenses at Elvetium
Argentina and favorable effects of foreign currency rates, partially offset by
higher expenses associated with the operations of Lab Chile and IVAX Mexico and
increased sales and promotional expenses at IVAX Laboratories and our European
subsidiaries.

General and administrative expenses decreased $1 million, or 3%, to $31.0
million (10% of net revenues) for the three months ended September 30, 2002,
compared to $32.0 million (10% of net revenues) for the same period of the
prior year. The decrease is primarily attributable to reduced general and
administrative expenses at Elvetium Argentina, favorable effects of foreign
currency rates and lower professional fees at Corporate, partially offset by
increased expenses at North American pharmaceutical subsidiaries and the
operations of Lab Chile.

Research and development expenses for the three months ended September 30,
2002, decreased $8.1 million, or 31%, to $18.2 million (6% of net revenues),
compared to the same period of the prior year. 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 third quarter of 2002, we incurred $.9 million of restructuring
costs consisting primarily of employee termination benefits.

Other Income (Expense)

Interest income decreased $4.0 million and interest expense decreased $.9
million for the three months ended September 30, 2002, compared to the same
period of the prior year primarily due to the cash purchases of Nasarel and
Nasalide on October 16, 2001, and the repurchases of subordinated notes during
2002.

Other income, net decreased $10.0 million for the three months ended
September 30, 2002, compared to the same period of the prior year. During the
third quarter of 2002, we realized $4.0 million of gains on the repurchase of
subordinated notes and $3.3 million of foreign currency gains at various
subsidiaries. See discussion below of adoption of SFAS No. 145 regarding
reclassification of prior year extraordinary gains.

Recently Issued Accounting Standards

Statement of Financial Accounting Standards (SFAS) No. 143, Accounting
for Asset Retirement Obligations, addresses financial accounting and reporting
for obligations associated with the

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retirement of tangible long-lived assets. It is effective for fiscal
years beginning after June 15, 2002. Management believes the impact of
adoption of this statement will not be significant.

SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
Activities, requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred rather than when
a commitment to an exit plan is made. It is effective for exit or disposal
activities that are initiated after December 31, 2002. Management believes the
impact of adoption of this statement will not be significant.

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

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

Effective January 1, 2002, we adopted SFAS No. 142, Goodwill and Other
Intangible Assets. Intangible assets that have indefinite lives and goodwill
are no longer amortized. This will increase net income by approximately $2
million per quarter, or $8 million per year. The life of one product
intangible asset with a net book value of $6.5 million as of January 1, 2002,
was extended based on a review of the expected remaining estimated useful life.
Intangible assets with indefinite lives were tested for impairment resulting
in the write-down of one intangible asset by $.2 million. The initial test for
impairment of goodwill as of January 1, 2002, was completed during the second
quarter and no impairments were indicated. An independent valuation firm was
used to perform the test.

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

|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |      | 
|----------------------------------------------------------- | ------------------------------- | ------------ | ------ | ----------- | ---- | - | ------ | ---- | ---- | - | ------ | ---- |  | - | ------- | ---- | 
|Period Ended September 30,                                  |                                 | Three Months |        | Nine Months
|                                                            |                                 |              |        |            
|                                                            |                                 |              | 2002   |             | 2001 |   | 2002   |      | 2001
|                                                            |                                 |              |        |             |      |   |        |      |     
|Reported net income                                         |                                 | $            | 30,803 |             |      | $ | 61,461 |      |      | $ | 85,985 |      |  | $ | 189,456 |     
|Addback: Interest savings on conversion of convertible
debt |                                 |              |        |             |      |   | 2,183  |      |      |   |        |      |  |   | 15,070  |     
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|Reported net income, diluted                                |                                 |              |        |             |      |   | 63,644 |      |      |   |        |      |  |   | 204,526 |     
|Addback: Goodwill amortization                              |                                 |              |        |             |      |   | 1,477  |      |      |   |        |      |  |   | 3,838   |     
|Addback: Workforce in place amortization                    |                                 |              |        |             |      |   | 54     |      |      |   |        |      |  |   | 163     |     
|Adjust: Product intangible amortization                     |                                 |              |        |             |      |   | 903    |      |      |   |        |      |  |   | 2,709   |     
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|Adjusted net income                                         |                                 | $            | 30,803 |             |      | $ | 66,078 |      |      | $ | 85,985 |      |  | $ | 211,236 |     
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|Basic earnings per common share:                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|                                                            | Reported net income             |              | $      | 0.16        |      |   | $      | 0.31 |      |   | $      | 0.44 |  |   | $       | 0.95 | 
|                                                            | Goodwill amortization           |              |        |             |      |   |        | 0.01 |      |   |        |      |  |   |         | 0.02 | 
|                                                            | Product intangible amortization |              |        |             |      |   |        |     |      |   |        |      |  |   |         | 0.01 | 
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|                                                            | Adjusted net income             |              | $      | 0.16        |      |   | $      | 0.32 |      |   | $      | 0.44 |  |   | $       | 0.98 | 
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|Diluted earnings per common share:                          |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|                                                            | Reported net income, diluted    |              | $      | 0.16        |      |   | $      | 0.30 |      |   | $      | 0.44 |  |   | $       | 0.91 | 
|                                                            | Goodwill amortization           |              |        |             |      |   |        | 0.01 |      |   |        |      |  |   |         | 0.02 | 
|                                                            | Product intangible amortization |              |        |             |      |   |        |     |      |   |        |      |  |   |         | 0.01 | 
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     
|                                                            | Adjusted net income, diluted    |              | $      | 0.16        |      |   | $      | 0.31 |      |   | $      | 0.44 |  |   | $       | 0.94 | 
|                                                            |                                 |              |        |             |      |   |        |      |      |   |        |      |  |   |         |     

The following table displays the changes in the carrying amounts of
goodwill by operating segment for the nine months ended September 30, 2002 (in
thousands):

|                  |                       |   |              |         |              |   |               |          |   |   |         |         | 
|----------------- | --------------------- | - | ------------ | ------- | ------------ | - | ------------- | -------- | - | - | ------- | ------- | 
|                  |                       |   | Balance      |         | Foreign      |   | Balance      
|                  |                       |   | December 31, |         | Exchange and |   | September 30,
|                  |                       |   | 2001         |         | Other        |   | 2002         
|                  |                       |   |              |         |              |   |              
|North America     |                       | $ | 3,972        |         |              | $ |              |          |   | $ | 3,972   |        
|Europe            |                       |   | 24,200       |         |              |   | 7,168         |          |   |   | 31,368  |        
|Latin America     |                       |   | 427,157      |         |              |   | (113,373      | )        |   |   | 313,784 |        
|Corporate & Other |                       |   | 46,748       |         |              |   | 740           |          |   |   | 47,488  |        
|                  |                       |   |              |         |              |   |               |          |   |   |         |        
|                  | Consolidated goodwill |   | $            | 502,077 |              |   | $             | (105,465 | ) |   | $       | 396,612 | 
|                  |                       |   |              |         |              |   |               |          |   |   |         |        

During the second quarter of 2002, IVAX elected to early adopt SFAS No.
145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections.The impact of adoption was the
reclassification into income from continuing operations of extraordinary losses
from the early retirement of subordinated notes of $8.7 million in 2000, an
extraordinary gain of $7.1 million, net of taxes of $4.2 million, during the
third quarter of 2001, an extraordinary gain of $3.4 million, net of taxes of
$2.0 million, during the first quarter of 2002 and an extraordinary gain of
$2.7 million, net of taxes of $1.5 million, during the second quarter of 2002.

Liquidity and Capital Resources

At September 30, 2002, working capital was $454.6 million compared to
$597.6 million at December 31, 2001. Cash and cash equivalents were $140.2
million at September 30, 2002, compared to

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$178.3 million at December 31, 2001. Short-term marketable securities
were $25.7 million at September 30, 2002 compared to $154.8 million at December
31, 2001.

Net cash of $91.5 million was provided by operating activities during the
first nine months of 2002 compared to $113.3 million during the same period of
the prior year. The decrease in cash provided by operating activities was
primarily the result of reduced operating earnings and increases in inventories
and payments of accounts payable, partially offset by increased collections of
accounts receivable.

Net cash of $36.1 million was provided by investing activities during the
first nine months of 2002 compared to $545.0 million used for investing
activities during the same period of the prior year. During the first nine
months of 2002, our capital expenditures increased by approximately $19.8
million as compared to the same period of the prior year. During the first
nine months of 2001, we also received $41.3 million in proceeds from the sale
of assets. During the first nine months of 2002 we spent $38.4 million to
acquire intangible assets, compared to $11.1 million to acquire intangible
assets during the same period of the prior year, and $481.8 million was used to
acquire businesses and increase our ownership interest in affiliates during the
same period of the prior year. During the first nine months of 2002, we
received $128.6 million net proceeds from the sale of marketable securities
compared to using $57.5 million to acquire marketable securities during the
same period of the prior year.

On March 1, 2002, we acquired from Syntex Pharmaceuticals International
Ltd. the non-U.S. rights to pharmaceutical products containing flunisolide
hemihydrate, sold under the tradenames Syntaris, Nasalide, Rhinalar, Locasyn
and Lokilan, for 10.2 million Swiss francs ($6.0 million at the February 28,
2002, currency exchange rate). During April 2002, we entered into an agreement
to acquire the technical files and French marketing authorizations to
substantially all of the products comprising the generic pharmaceutical
business of Merck & Co., Inc.s subsidiary in France for total consideration of
approximately $5 million payable half on signing and half in four months. On
July 19, 2002, the agreement was amended reducing the second payment to 2.6
million Euros ($2.5 million as of the August 2, 2002, payment date). We also
acquired an exclusive U.S. license to the patent rights to market QVAR
(beclomethasone dipropionate HFA), an aerosol inhaler prescribed to treat
asthma. In addition, we have an option to obtain ownership of the U.S. QVAR
trademark, as well as related patents and the New Drug Application in five
years. 3M Drug Delivery Systems will manufacture the QVAR product for us under
a long-term contract. The total consideration due under the contract,
including options and extensions, is $105 million, $21 million of which was
paid on the effective date, $22 million is due on the first anniversary, $31
million is due on the second anniversary, $26 million is due on the third
anniversary and $5 million is due on the fifth anniversary upon exercise of the
option. The payments carry no stated interest rate and were
discounted at a 3.7% rate. On July 1, 2002, in connection with the termination of
a license granted by IVAX to specified products in IVAX proprietary dry powder
inhaler device (MDPI), IVAX entered into an agreement to acquire the
technical files, trademark and related rights invented or produced by the
licensee in connection with the commercialization of products under the
license. The total consideration due is 5 million Pounds
Sterling ($7.7 million at
the July 1, 2002, currency exchange rate). An additional payment up to 1.1
million Pounds Sterling will also be paid to the licensee upon the receipt of
marketing approval and launch of a specified product using the acquired rights
and data. On August 30, 2002, we acquired Glaxo Wellcome S.A. (subsequently
renamed IVAX Manufacturing Argentina S.A.), an Argentine manufacturing
pharmaceutical company, consisting primarily of a manufacturing facility, for
$6.0 million in cash.

Net cash of $155.3 million was used by financing activities during the
first nine months of 2002 compared to $543.2 million provided by financing
activities during the same period of the prior year primarily reflecting the
$725 million Convertible Senior Subordinated Notes sold in May of 2001. During
the first nine months of 2002, we repaid $56.9 million of bank debt, made
$12.9 million of new

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borrowings, and repurchased $77.0 million of our convertible debentures
for $61.6 million, but reduced our repurchases of common stock by $61.4 million
compared to the same period of the prior year. On March 15, 2002, our Board of
Directors expanded the authorization of our repurchase program by an additional
10 million shares of our common stock or a like-valued amount of our
convertible debentures.

We plan to spend substantial amounts of capital in 2002 to continue the
research and development of pharmaceutical products. Although research and
development expenditures are expected to be between $75 million and $80 million
during 2002, actual expenditures will depend on, among other things, the
outcome of clinical testing or products under development, delays or changes in
government required testing and approval procedures, technological and
competitive developments, strategic marketing decisions, collaborative
alliances and liquidity. In addition, we plan to spend between $80 million and
$90 million in 2002 to improve and expand our pharmaceutical and other related
facilities.

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

Income Taxes

We recognized a $34.1 million tax provision for the nine months ended
September 30, 2002, of which $18.0 million related to foreign operations. The
effective tax rate during the first nine months of 2002 is less than the
statutory rate due primarily to low tax rates applicable to our Puerto Rico and
Waterford, Ireland manufacturing operations and our Swiss and Chile operations.

As of September 30, 2002, domestic net deferred tax assets totaled $102.4
million and aggregate foreign net deferred tax assets totaled $4.3 million.
Realization of the net deferred tax assets is dependent upon generating
sufficient future domestic and foreign taxable income. Although realization 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, 2001.

Critical Accounting Policies

Revenue Recognition, Sales Returns and Allowances  Revenues and the
related cost of sales are recognized at the time title to our
products passes to our customers. Our
pharmaceutical revenues are affected by the level of provisions for estimated
returns, inventory credits, discounts, promotional allowances, volume
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 brand equivalent pharmaceutical industry, this custom
has resulted in a practice of suppliers issuing inventory credits (also known
as shelf-stock adjustments) to customers based on the customers existing
inventory following decreases in the market price of the related brand
equivalent pharmaceutical product. We have contractual agreements with many of
our customers which require that we grant these customers inventory credit
following a

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price decrease. In other cases, the determination to grant a credit 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.

Provisions for estimated returns, inventory credits and chargebacks, as
well as other sales allowances, are established by us concurrently with the
recognition of revenue. The provisions are established in accordance with
generally accepted accounting principles based upon consideration of a variety
of factors, including actual return and inventory credit experience for
products during the past several years by product type, the number and timing
of regulatory approvals for the product by our competitors (both historical and
projected), the market for the product, expected sell-through levels by our
wholesaler customers to customers with contractual pricing arrangements with
us, estimated customer inventory levels by product and projected economic
conditions. Actual product returns and inventory credits incurred are,
however, dependent upon future events, including 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.

Legal Costs  Legal charges are recorded for the costs anticipated to be
incurred in connection with litigation and claims against us when we can
reasonably estimate these costs. We intend to vigorously defend each of the
lawsuits described in Note 13, Commitments and Contingencies, in the notes to
consolidated financial statements included in our Annual Report on Form 10-K
for the year ended December 31, 2001, and in Part II Item 1 of 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 brand equivalent approvals prior to the expiration of patents on branded
products, and to benefit from the exclusivity allowed to Abbreviated New Drug
Application applicants that successfully challenge these patents, we frequently
become involved in patent infringement litigation brought by branded
pharmaceutical companies. Although these lawsuits involve products that are
not yet marketed and therefore pose little or no risk of liability for damages,
the legal fees and costs incurred in defending such litigation can be
substantial. While it is not feasible to predict or determine the outcome or
the total cost of these proceedings, in our opinion, based on a review with
legal counsel, any losses resulting from such legal proceedings will not have a
material adverse impact on our financial position or results of operations.

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Disclosure Regarding Forward-Looking Statements

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



| |  |  | difficulties in product development and uncertainties related to the timing or outcome of product development;                                                                                                                                                                                                       
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the availability on commercially reasonable terms of raw materials, particularly raw materials for our paclitaxel product,
and other third-party sourced products;                                                                                                                                                   
|
| |  |  | our ability to replace or renew license fees, royalties and development service fees as the related agreements expire or
are terminated;                                                                                                                                                                             
|
| |  |  | 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;                                                                                                                                                                      
|
| |  |  | difficulties in manufacturing products;                                                                                                                                                                                                                                                                              
|
| |  |  | efficacy or safety concerns with respect to marketed products, whether or not scientifically justified, leading to recalls,
withdrawals or declining sales;                                                                                                                                                          
|
| |  |  | that our proposed spending on facilities improvement and expansion may not be as projected;                                                                                                                                                                                                                          
|
| |  |  | our ability to obtain 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 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 other
Latin American countries;                                                                                                                                                                    
|
| |  |  | our successful compliance with extensive, costly, complex and evolving governmental regulations and restrictions;                                                                                                                                                                                                    
|
| |  |  | our ability to successfully compete in both the branded and brand equivalent pharmaceutical sectors; and                                                                                                                                                                                                             
|
| |  |  | other risks and uncertainties detailed herein and from time to time in our Securities and Exchange Commission filings.                                                                                                                                                                                               

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The information in this Form 10-Q is as of September 30, 2002 or, where
clearly indicated, as of the date of this filing. We undertake no obligation
to publicly update any forward-looking statements, whether as a result of new
information, future events or otherwise. We also may make additional
disclosures in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K that we may file from time to time with the
Securities and Exchange Commission. Please also note that we provide a
cautionary discussion of risks and uncertainties under the section entitled
Risk Factors in our Annual Report on Form 10-K for the year ended December
31, 2001. These are factors that we think could cause our actual results to
differ materially from expected results. Other factors besides those listed
here could also adversely affect us.

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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 nine months ended September 30, 2002, sales
outside the United States accounted for approximately 59% of worldwide sales.
Virtually all of these sales were denominated in currencies of the local
country. As such, our reported profits and cash flows are exposed to changing
exchange rates. If the United States dollar weakens relative to the foreign
currency, the earnings generated in the foreign currency will, in effect,
increase when converted into United States dollars and vice versa. Although we
do not speculate in the foreign exchange market, we do from time to time manage
exposures that arise in the normal course of business related to fluctuations
in foreign currency exchange rates by entering into offsetting positions
through the use of foreign exchange forward contracts. As a result of exchange
rate differences, net revenues decreased by $21.4 million for the nine months
ended September 30, 2002, as compared to the same period of the prior year.
The effects of inflation on consolidated net revenues and operating income were
not significant. Certain firmly committed transactions are hedged with foreign
exchange forward contracts. As exchange rates change, gains and losses on the
exposed transactions are partially offset by gains and losses related to the
hedging contracts. Both the exposed transactions and the hedging contracts are
translated at current spot rates, with gains and losses included in earnings.
Our derivative activities, which primarily consist of foreign exchange forward
contracts, are initiated primarily to hedge forecasted cash flows that are
exposed to foreign currency risk.

The foreign exchange forward contracts generally require us to exchange
local currencies for foreign currencies based on pre-established exchange rates
at the contracts maturity dates. If the counterparties to the exchange
contracts do not fulfill their obligations to deliver the contracted
currencies, we could be at risk for currency related fluctuations. We enter
into these contracts with counterparties that we believe to be creditworthy and
do not enter into any leveraged derivative transactions. As of September 30,
2002, we had $23 million in foreign exchange forward contracts outstanding.
During January 2002, we repaid $48 million of United States dollar denominated
bank loans of the Argentine operations assumed in the acquisition of Lab Chile
resulting in a pretax loss of $2.8 million.

Interest Rate Risk  Our only material debt obligations relate to the 4.5%
and 5.5% Convertible Notes, which bear fixed rates of interest, 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

IVAX evaluated the design and operation of its 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 IVAX principal executive officer and principal financial
officer within the 90-day period prior to the filing of this Quarterly Report
on Form 10-Q. The principal executive officer and principal financial officer
have concluded, based on their review, that IVAX disclosure controls and
procedures, as defined at Exchange Act Rules 13a-14(c) and 15d-14(c), are
effective to ensure that information required to be disclosed by IVAX in
reports that it files under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in Securities and Exchange
Commission rules and forms. No significant changes were made to IVAX internal
controls or other factors that could significantly affect these controls
subsequent to the date of their evaluation.

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PART II  OTHER INFORMATION




Item 1  Legal Proceedings

Item 3, Legal Proceedings,of Part I of the Companys Annual Report on
Form 10-K for the fiscal year ended December 31, 2001, as amended by Item 1,
Legal Proceedings,of Part II of the Companys Quarterly Report on Form 10-Q
for each of the quarters ended March 31, 2002 and June 30, 2002, are
incorporated by reference herein.

On July 12, 2002, an action purporting to be a class action styled John
Rice v. Abbott Laboratories, Inc., et al.was filed against IVAX
Pharmaceuticals, Inc. and others in the Superior Court of the State of
California, alleging violations of Californias Business & Professional Code
§17200 et seq. with respect to the way pharmaceutical companies report their
average wholesale price (AWP). Plaintiffs allege that each defendant
reported an AWP to Medicare and Medicaid which materially misrepresented the
actual prices paid to defendants by physicians and pharmacies for prescription
drugs. The complaint seeks unspecified damages, including punitive damages,
and injunctive relief. Two other class actions, Thompson v. Abbott
Laboratories, Inc., et al. and Turner v. Abbott Laboratories, Inc., et al.,
containing similar allegations against IVAX Pharmaceuticals, Inc. and others
were filed in California courts in August and September 2002, respectively, as
well. IVAX believes that it has substantial defenses to these claims and will
defend itself vigorously. However, as with any litigation, there can be no
assurance that IVAX will prevail.

On September 13, 2002, a lawsuit containing allegations similar to those
in the Louisiana Wholesale Drug Co. v. Abbott Laboratories, Geneva
Pharmaceuticals, Inc. and Zenith Goldline, Inc.filed by the Attorneys General
of Florida, Kansas and Colorado, previously reported in IVAX Annual Report on
Form 10-K for the year ended December 31, 2001, was also settled.




Item 6  Exhibits and Reports on Form 8-K

(a) Exhibits

|     |  |                                                                                                                                       |  |                
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------
|99.1 |  | Certificate of the Chairman and Chief Executive
Officer of IVAX Corporation pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |  | Filed herewith.
|    
|99.2 |  | Certificate of the Chief Financial Officer of IVAX
Corporation pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002              |  | Filed herewith.

(b) Reports on Form 8-K

On August 14, 2002, we filed a report under Item 9  Regulation FD
Disclosure on Form 8-K reporting that our Chairman and Chief Executive Officer
and our Chief Financial Officer each filed with the Securities and Exchange
Commission (the SEC) a statement under oath regarding facts and circumstances
relating to certain of the Companys filings under the Securities Exchange Act
of 1934, as amended, as required by the SECs order Requiring the Filing of
Sworn Statements Pursuant to Section 21(a)(1) of the Securities Exchange Act
(File No. 4-460, June 27, 2002).

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Signatures

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

|                        |  |                                                                      
|----------------------- |  | ---------------------------------------------------------------------
|                        |  | IVAX Corporation                                                     
|                       
|                       
|                       
|Date: November 13, 2002 |  | By: /s/ Thomas E. Beier                                              
|                        |  |                                                                      
|                        |  | Thomas E. Beier
Senior Vice President-Finance
Chief Financial Officer

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I, Phillip Frost, M.D., certify that:

1.     I have reviewed this quarterly report on Form 10-Q of IVAX
Corporation;

2.     Based on my knowledge, this quarterly report does not contain any
untrue
statement of a material fact or omit to state a material fact
necessary to
make the statements made, in light of the circumstances under which
such
statements were made, not misleading with respect to the period
covered by
this quarterly report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash
flows of the registrant as of, and for, the periods presented in
this
quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures to ensure
that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;



| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) evaluated the effectiveness of the registrants disclosure
controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the Evaluation Date); and



| |                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5.     The registrants other certifying officers and I have disclosed,
based on
our most recent evaluation, to the registrants auditors and the
audit
committee of registrants board of directors (or persons performing
the
equivalent function):



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of
internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and

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| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) any fraud, whether or not material, that involves management
or
other employees who have a significant role in the registrants
internal controls; and

6.     The registrants other certifying officers and I have indicated in
this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect
internal
controls subsequent to the date of our most recent evaluation,
including
any corrective actions with regard to significant deficiencies and
material
weaknesses.

|                  |  |                                                         
|----------------- |  | --------------------------------------------------------
|                  |  | /s/ Phillip Frost, M.D.                                 
|                  |  |                                                         
|November 13, 2002 |  | Phillip Frost, M.D.
Chairman and Chief Executive Officer

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I, Thomas E. Beier, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of IVAX
Corporation;

2.     Based on my knowledge, this quarterly report does not contain any
untrue
statement of a material fact or omit to state a material fact
necessary to
make the statements made, in light of the circumstances under which
such
statements were made, not misleading with respect to the period
covered by
this quarterly report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash
flows of the registrant as of, and for, the periods presented in
this
quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures to ensure
that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;



| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) evaluated the effectiveness of the registrants disclosure
controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the Evaluation Date); and



| |                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5.     The registrants other certifying officers and I have disclosed,
based on
our most recent evaluation, to the registrants auditors and the
audit
committee of registrants board of directors (or persons performing
the
equivalent function):



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of
internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and

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| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and

6.     The registrants other certifying officers and I have indicated in
this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect
internal
controls subsequent to the date of our most recent evaluation,
including
any corrective actions with regard to significant deficiencies and
material weaknesses.

|                  |  |                                                                            
|----------------- |  | ---------------------------------------------------------------------------
|                  |  | /s/ Thomas E. Beier                                                        
|                  |  |                                                                            
|November 13, 2002 |  | Thomas E. Beier
Senior Vice President  Finance and
Chief Financial Officer

37