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, 1996

                         Commission File Number 1-09623

                                IVAX CORPORATION

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

4400 BISCAYNE BOULEVARD, MIAMI, FLORIDA                             33137
(Address of principal executive offices)                         (Zip Code)

                                 (305) 575-6000
              (Registrant's telephone number, including area code)

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

                                YES [X]  NO [ ]

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

      121,473,962 SHARES OF COMMON STOCK, $.10 PAR VALUE, OUTSTANDING AS OF
OCTOBER 31, 1996.

<PAGE>

                               IVAX CORPORATION

                                    INDEX

PART I - FINANCIAL INFORMATION                                       PAGE NO.
                                                                     --------

 Item 1 - Financial Statements

          Condensed Consolidated Balance Sheets as of
          September 30, 1996 and December 31, 1995                     2

          Condensed Consolidated Statements of Operations
          for the three and nine months ended
          September 30, 1996 and 1995                                  3

          Condensed Consolidated Statements of Cash Flows
          for the nine months ended September 30, 1996 and 1995        4

          Notes to Condensed Consolidated Financial Statements         5

 Item 2 - Management's Discussion and Analysis of Financial
          Condition and Results of Operations                          9

PART II - OTHER INFORMATION

 Item 1 - Legal Proceedings                                           20

 Item 6 - Exhibits and Reports on Form 8-K                            20

<PAGE>

PART I -- FINANCIAL INFORMATION

ITEM 1 -- FINANCIAL STATEMENTS

                      IVAX CORPORATION AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In thousands)

                                                    SEPTEMBER 30,   DECEMBER 31,
                                                        1996            1995
                                                     (UNAUDITED)     (AUDITED)
                                                    -------------   ------------
                    ASSETS
Current assets:
   Cash and cash equivalents                         $    15,088    $    14,720
   Accounts receivable, net                              278,246        359,165
   Inventories                                           314,408        242,260
   Other current assets                                  100,457         60,673
                                                     -----------    -----------
      Total current assets                               708,199        676,818

Property, plant and equipment, net                       406,740        385,419
Cost in excess of net assets of acquired
  companies, net                                          49,978        138,423
Patents, trademarks, licenses and other
  intangibles, net                                        50,916         50,859
Other                                                    141,334         83,791
                                                     -----------    -----------
      Total assets                                   $ 1,357,167    $ 1,335,310
                                                     ===========    ===========

      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Loans payable                                     $     5,308    $     4,807
   Current portion of long-term debt                       2,120          3,521
   Accounts payable                                       77,429         92,343
   Accrued income taxes payable                           23,526          8,632
   Accrued expenses and other current
     liabilities                                         125,909         96,610
                                                     -----------    -----------
      Total current liabilities                          234,292        205,913

Long-term debt, net of current portion                   415,923        298,857
Other long-term liabilities                               20,921         26,314
Minority interest                                         14,089         15,054
                                                     -----------    -----------
      Total liabilities                                  685,225        546,138
                                                     -----------    -----------
Shareholders' equity:
   Common stock                                           12,147         11,803
   Capital in excess of par value                        502,621        461,603
   Retained earnings                                     162,936        322,117
   Cumulative translation adjustment and other            (5,762)        (6,351)
                                                     -----------    -----------
      Total shareholders' equity                         671,942        789,172
                                                     -----------    -----------
      Total liabilities and shareholders' equity     $ 1,357,167    $ 1,335,310
                                                     ===========    ===========

      The accompanying notes to condensed consolidated financial statements
                  are an integral part of these balance sheets.

                                       2
<PAGE>
                      IVAX CORPORATION AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited)

PERIOD ENDED SEPTEMBER 30,               THREE MONTHS          NINE MONTHS
(In thousands, except per              1996       1995       1996       1995
share data)                         ---------   --------  ---------   --------

NET REVENUES                        $ 222,720   $310,212   $830,648   $897,976
COST OF SALES                         191,713    183,469    572,361    521,680
                                    ---------   --------  ---------   --------
   Gross Profit                        31,007    126,743    258,287    376,296
                                    ---------   --------  ---------   --------
OPERATING EXPENSES:
   Selling                             57,566     45,241    163,064    132,886
   General and administrative          45,241     30,336    106,099     80,001
   Research and development            18,894     15,836     53,501     47,500
   Amortization of intangible assets    2,774      2,394      8,134      7,336
   Restructuring costs and asset
     write-downs                      118,315          -    118,315          -
   Merger expenses                          -          -        184          -
                                    ---------   --------  ---------   --------

   Total operating expenses           242,790     93,807    449,297    267,723
                                    ---------   --------  ---------   --------

   Income (loss) from operations     (211,783)    32,936   (191,010)   108,573

OTHER INCOME (EXPENSE):
   Interest income                        198        430        690      1,376
   Interest expense                    (6,254)    (4,402)   (18,151)   (14,993)
   Other income (expense), net           (638)       947      2,528      5,227
                                    ---------   --------  ---------   --------

                                       (6,694)    (3,025)   (14,933)    (8,390)
                                    ---------   --------  ---------   --------
   Income (loss) before income
      taxes, minority interest
      and extraordinary items        (218,477)    29,911   (205,943)   100,183

PROVISION (BENEFIT) FOR
  INCOME TAXES                        (40,553)     1,291    (53,886)    17,944
                                    ---------   --------  ---------   --------
   Income (loss) before minority
      interest and extraordinary
      items                          (177,924)    28,620   (152,057)    82,239

MINORITY INTEREST                        (745)    (1,038)    (4,647)    (3,229)
                                    ---------   --------  ---------   --------
   Income (loss) before
      extraordinary items            (178,669)    27,582   (156,704)    79,010
   Extraordinary items, net
      of taxes                              -          -     (2,073)        34
                                    ---------   --------  ---------   --------

NET INCOME (LOSS)                   $(178,669)  $ 27,582  $(158,777)  $ 79,044
                                    =========   ========  =========   ========

EARNINGS (LOSS) PER COMMON SHARE:

   Primary:
     Earnings (loss) before
       extraordinary items          $   (1.47)  $    .23   $  (1.29)  $    .67
     Extraordinary items                    -          -       (.02)        -
                                    ---------   --------   --------   --------
     Net earnings (loss)            $   (1.47)  $    .23   $  (1.31)  $    .67
                                    =========   ========   ========   ========
   Fully Diluted:
     Earnings (loss) before
       extraordinary items          $  (1.47)   $    .23   $  (1.29)  $    .66
     Extraordinary items                    -          -       (.02)         -
                                    ---------   --------   --------   --------
     Net earnings (loss)            $  (1.47)   $    .23   $  (1.31)  $    .66
                                    ========    ========   ========   ========
WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING:

   Primary                            121,467    119,312    120,774    118,842
                                    =========   ========   ========   ========
   Fully Diluted                      121,467    120,692    120,774    120,578
                                    =========   ========   ========   ========

      The accompanying notes to condensed consolidated financial statements
                    are an integral part of these statements.

                                       3
<PAGE>

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

NINE MONTHS ENDED SEPTEMBER 30,                              1996       1995
(In thousands)                                            ----------  ---------

Cash flows from operating activities:
   Net income (loss)                                      $(158,777)  $  79,044
   Adjustments to reconcile net income
     (loss) to net cash provided by
     (used for) operating activities:
     Non cash charges relating to restructuring
       costs and asset write-downs                          118,315           -
     Depreciation and amortization                           41,401      39,917
     Benefit for deferred taxes                             (43,872)     (1,644)
     Provision for allowances for doubtful accounts          23,669       3,720
     Losses (gains) on sale of long-term assets                 232      (2,921)
     Losses (gains) on extinguishment of debt                 1,640         (63)
     Minority interest                                        4,647       3,229
     Changes in assets and liabilities:
       Decrease (increase) in accounts receivable            66,387     (62,637)
       Increase in inventories                              (67,511)    (18,204)
       Increase in other current assets                     (32,297)     (8,791)
       Increase in other assets                             (11,970)     (2,129)
       Increase (decrease) in accounts payable,
         accrued expenses and other 
         current liabilities                                  6,169      (7,283)
       Decrease in other long-term liabilities               (7,865)     (1,322)
       Other, net                                              (746)      1,132
                                                          ---------   ---------
       Net cash provided by (used for)
         operating activities                               (60,578)     22,048
                                                          ---------   ---------
Cash flows from investing activities:
   Capital expenditures, net of proceeds from sales         (61,336)    (72,395)
   Acquisitions of patents, trademarks, licenses,
     and other intangibles, net of sales proceeds            (2,698)       (687)
   Acquisitions of businesses, net of cash acquired         (12,110)     (4,831)
   Other, net                                                     -        (397)
                                                          ---------   ---------

       Net cash used for investing activities               (76,144)    (78,310)
                                                          ---------   ---------
Cash flows from financing activities:
   Payments on long-term debt and loans payable            (456,555)    (50,759)
   Borrowings on long-term debt and loans payable           568,643      83,429
   Issuance of common stock                                  31,779      20,444
   Cash dividends paid                                       (6,057)     (4,632)
                                                          ---------   ---------

       Net cash provided by financing activities            137,810      48,482
                                                          ---------   ---------

       Effect of exchange rate changes on cash                 (720)        191
                                                          ---------   ---------
       Net increase (decrease) in cash and
         cash equivalents                                       368      (7,589)

Cash and cash equivalents at the beginning of the year       14,720      37,045
                                                          ---------   ---------

Cash and cash equivalents at the end of the period        $  15,088   $  29,456
                                                          =========   =========
Supplemental disclosures:
   Interest paid                                          $  18,186   $  11,884
                                                          =========   =========

   Income tax payments                                    $  12,123   $  11,661
                                                          =========   =========

      The accompanying notes to condensed consolidated financial statements
                    are an integral part of these statements.

                                       4

<PAGE>

                      IVAX CORPORATION AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)
 
(1) GENERAL:

      In management's opinion, the accompanying unaudited condensed consolidated
financial statements of IVAX Corporation and subsidiaries ("IVAX") contain all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the financial position of IVAX as of September 30, 1996, and the
results of its operations for the three and nine months ended September 30, 1996
and 1995. The results of operations and cash flows for the nine months ended
September 30, 1996 are not necessarily indicative of the results of operations
or cash flows which may be reported for the remainder of 1996.

      The accompanying unaudited interim condensed consolidated financial
statements have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission for reporting on Form 10-Q. Pursuant to such
rules and regulations, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The condensed 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, 1995.

      The accounting policies followed for interim financial reporting are the
same as those disclosed in Note 2 of the Notes to Consolidated Financial
Statements included in IVAX' Annual Report on Form 10-K for the year ended
December 31, 1995.

(2) EARNINGS (LOSS) PER SHARE:

      Primary earnings (loss) per share is computed by dividing net income
(loss) by the weighted average number of common and dilutive common equivalent
shares outstanding for each period. Common stock equivalents include the
dilutive effect of all outstanding stock options and warrants using the treasury
stock method. Fully diluted earnings (loss) per share assumes the maximum
dilutive effect from stock options and warrants, and if applicable, the
conversion equivalents of the 6-1/2% Convertible Subordinated Notes due 2001 
and, for the three and nine months ended September 30, 1995, the 9.00% 
Convertible Subordinated Debentures due 1995.

(3)  RESTRUCTURING COSTS AND ASSET WRITE-DOWNS:

RESTRUCTURING COSTS

      During the third quarter of 1996, IVAX approved and initiated a
restructuring program aimed at reducing costs and enhancing operating
efficiencies in the company's United States generic pharmaceutical operations.
The restructuring program primarily involves facility consolidations, work force
reductions and other cost saving measures. IVAX recorded a pre-tax restructuring
charge of $13,974,000 ($8,445,200 after-tax) in the 1996 third quarter,
comprised of

                                       5

<PAGE>

$8,650,000 for the estimated loss on sale of closed manufacturing plants;
$3,000,000 for other plant closures and related costs; and $2,324,000 for
severance and other employee termination benefits associated with the work force
reductions. As of September 30, 1996, no costs had been charged against
established reserves.

ASSET WRITE-DOWNS

      During the third quarter of 1996, management reevaluated the carrying
value of certain long-lived assets and goodwill related to those assets held and
used in IVAX' United States generic pharmaceutical and specialty chemical
operations. This reevaluation was necessitated by management's determination
that, based on recent results of operations and the restructuring program
described above, the expected future results of operations and cash flows from
these businesses would be substantially lower than previously expected by
management. As a result, and in accordance with Financial Accounting Standard
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of," IVAX recorded a charge of $55,898,878 (pre- and
after-tax) to reduce the carrying value of goodwill related to its United States
generic pharmaceutical distribution operations, and charges of $9,752,867
($6,195,941 after-tax) and $38,689,207 (pre- and after-tax) to reduce the
carrying value of certain fixed assets and goodwill, respectively, related to
certain product lines of its specialty chemical operations. Management
determined the amount of the write-downs based on various valuation techniques,
including discounted cash flow analysis and net realizable value for assets to
be held and used.

(4) INCOME TAXES:

      The provision for income taxes is based on the consolidated United States
entities' and individual foreign companies' estimated tax rates for the
applicable year. IVAX utilizes the liability method and deferred taxes are
determined based on the estimated future tax effects of differences between the
financial statement and tax basis of assets and liabilities using applicable tax
laws. Deferred income tax provisions and benefits are based on the changes in
the deferred tax asset or tax liability from period to period.

      The provision (benefit) for income taxes consists of the following (in
thousands):

                                       THREE MONTHS            NINE MONTHS
Period Ended September 30,          1996        1995        1996       1995
                                 ----------  ---------   ----------  ---------
Current:
  United States                  $ (19,081)  $    (859)  $ (27,157)  $  10,473
  Foreign, including Puerto Rico
  and U.S. Virgin Islands            1,899       4,571      17,143       9,115
Deferred                           (23,371)     (2,421)    (43,872)     (1,644)
                                 ---------   ---------   ---------   ---------
Provision (benefit) for
  income taxes                   $ (40,553)  $   1,291   $ (53,886)  $  17,944
                                 =========   =========   =========   =========

      As of September 30, 1996, other current and non-current assets and
liabilities include a $95,472,241 net deferred tax asset. A portion of the net
deferred tax asset in the amount of $20,532,954 will be realized by a refund of
federal income taxes paid in prior years and available in the carryback period.
Realization of the remaining $74,939,287 ($51,491,526 and $23,447,761

                                       6

<PAGE>

domestic and foreign, respectively) is dependent upon generating sufficient
future taxable income. Although realization is not assured, management believes
it is more likely than not that the remaining deferred tax asset will be
realized based upon estimated future taxable income. Management's estimates of
future taxable income are subject to revision due to, among other things,
regulatory and competitive factors affecting the generic pharmaceutical
industry. Such factors are discussed in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included in IVAX' Annual Report
on Form 10-K for the year ended December 31, 1995 and Item 2 of this Quarterly
Report on Form 10-Q.

(5) BUSINESS COMBINATIONS:

      On March 1, 1996, IVAX acquired Elvetium S.A. (Argentina), Alet
Laboratorios S.A.E.C.I. y E. and Elvetium S.A. (Uruguay), three affiliated
companies engaged in the manufacture and marketing of pharmaceuticals in
Argentina and Uruguay, in exchange for 1,490,909 shares of IVAX' common stock.
Although the acquisition was accounted for using the pooling of interests method
of accounting, the acquisition was recorded as of January 1, 1996 and the
accompanying historical condensed consolidated financial statements have not
been restated to give retroactive effect to the acquisition due to the
immateriality of the related amounts.

      During the first half of 1996, IVAX purchased additional shares of Galena
a.s. increasing its ownership interest to approximately 74%.

(6) DEBT:

      On May 14, 1996, IVAX entered into a revolving line of credit with a bank
syndicate permitting borrowings of up to $425,000,000. On November 14, 1996,
IVAX entered into an amendment to the revolving line of credit, which, among
other things, reduces permitted borrowings to $375,000,000 and shortens the
maturity of the line of credit from May 2001 to November 1999. Borrowings under
the amended credit facility generally accrue interest at the London Interbank
Offer Rate (LIBOR) plus 2% through December 31, 1996, and thereafter at LIBOR
plus between .88% and 2%, depending on certain financial ratios. Pursuant to the
terms of the amended credit facility, IVAX has agreed to pledge to the lenders
stock of certain subsidiaries and certain accounts receivable, inventory,
intangible assets, and property, plant and equipment; not dispose of any of its
assets without lender approval other than in the ordinary course of business;
not consummate any acquisitions without lender approval; not pay cash dividends;
and limit capital expenditures and indebtedness. The amended credit facility
contains various financial covenants, including required minimum levels of
earnings before income taxes, depreciation and amortization, and tangible net
worth. Proceeds from the credit facility were used to refinance previously
existing credit facilities and, as discussed below, to make an investment in and
advances to McGaw, Inc. ("McGaw"), and will be used for working capital and
general corporate purposes.

      On June 17, 1996, IVAX made an investment in and advances to McGaw in the
aggregate amount of $91,150,000 using proceeds from the credit facility. McGaw
used the proceeds to redeem the remaining outstanding face value of its 10-3/8%
Senior Notes due April 1, 1999 at a purchase price of approximately 102% of
their outstanding principal of $87,420,000, plus accrued interest. The
redemption resulted in a pre-tax extraordinary loss of $3,455,000.

                                       7

<PAGE>

(7) DIVIDENDS ON COMMON STOCK:

      On June 3, 1996, IVAX paid a $.05 per share cash dividend to holders of
record of IVAX' common stock as of May 10, 1996. On November 8, 1996, IVAX'
Board of Directors did not declare a dividend for the second half of 1996. Under
the terms of the amended credit facility, as discussed in Note 6, Debt, above,
IVAX is prohibited from paying cash dividends.

(8) SUBSEQUENT EVENT:

      On November 10, 1996, IVAX entered into a definitive merger agreement with
Bergen Brunswig Corporation. Bergen Brunswig Corporation, headquartered in
Orange, California, provides nationwide distribution of pharmaceuticals and
medical-surgical supplies to chain and independent pharmacies, hospitals, health
maintenance organizations, nursing homes, clinics and physician groups. The
merger is intended to be accounted for as a pooling-of-interests. Completion of
the transaction is subject to, among other things, regulatory approvals and the
approval of the transaction by the shareholders of Bergen Brunswig Corporation
and IVAX. For additional information regarding the proposed business
combination, reference is made to IVAX' Current Report on Form 8-K dated
November 12, 1996.

                                       8

<PAGE>

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 IVAX' Annual Report on Form 10-K
for the year ended December 31, 1995 and the Condensed Consolidated Financial
Statements and the related Notes to Condensed Consolidated Financial Statements
included in Item 1 of this Quarterly Report on Form 10-Q. Except for historical
information contained herein, the matters discussed below are forward looking
statements made pursuant to the safe harbor provisions of the Securities
Litigation Reform Act of 1995. Such statements involve risks and uncertainties,
including but not limited to economic, competitive, governmental and
technological factors affecting IVAX' operations, markets, products and prices,
and other factors discussed elsewhere in this report and the documents filed by
IVAX with the Securities and Exchange Commission ("SEC").

RESULTS OF OPERATIONS

   NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1995

      IVAX reported a net loss of $158.8 million for the nine months ended
September 30, 1996, compared to net income of $79.0 million for the nine months
ended September 30, 1995. Loss before extraordinary items was $156.7 million for
the nine months ended September 30, 1996, compared to income of $79.0 million
for the same period of the prior year. Results for the first nine months of 1996
included $2.1 million in net extraordinary losses from the early extinguishment
of debt.

      Primary loss before extraordinary items per common share was $1.29 for the
nine months ended September 30, 1996, compared to earnings of $.67 for the nine
months ended September 30, 1995. Net loss per primary common share was $1.31 for
the nine months ended September 30, 1996, compared to net earnings of $.67 for
the same period of the prior year. The net extraordinary loss of $.02 per common
share recorded in the first nine months of 1996 related to the early
extinguishment of debt.

NET REVENUES AND GROSS PROFIT BY BUSINESS SEGMENT:

Nine Months Ended September 30,           1996                    1995
(In thousands)                   ---------------------   ---------------------
                                     NET       GROSS         NET       GROSS
                                  REVENUES     PROFIT     REVENUES     PROFIT
                                 ---------   ---------   ---------   ---------
Pharmaceuticals                  $ 458,478   $ 114,803   $ 532,043   $ 227,180
Intravenous products               249,597      84,811     253,552      99,570
Other operations                   124,039      58,673     113,253      49,546
Intersegment eliminations           (1,466)          -        (872)          -
                                 ---------   ---------   ---------   ---------
   Total                         $ 830,648   $ 258,287   $ 897,976   $ 376,296
                                 =========   =========   =========   =========

                                       9

<PAGE>

      Net revenues for the first nine months of 1996 totaled $830.6 million, a
decrease of $67.3 million, or 7%, compared to the same period of the prior year.
Gross profit for the first nine months of 1996 decreased $118.0 million, or 31%,
from the same period of the prior year. Gross profit was $258.3 million (31.1%
of net revenues) for the first nine months of 1996, compared to $376.3 million
(41.9% of net revenues) for the first nine months of 1995.

      Net revenues of IVAX' pharmaceutical operations decreased $73.6 million,
or 14%, in comparison to the first nine months of 1995 due to a reduction in net
revenues of the domestic pharmaceutical operations, partially offset by
increased net revenues from the international pharmaceutical operations.

      Domestic pharmaceutical net revenues totaled $214.4 million for the first
nine months of 1996, compared to $336.0 million for the same period of 1995. The
$121.6 million, or 36%, decrease in domestic pharmaceutical net revenues was
primarily due to the factors affecting IVAX' United States generic
pharmaceutical operations during the second and third quarters of 1996 discussed
below, partially offset by increased net revenues from the sale of certain new
generic products manufactured by IVAX and introduced during the past twelve
months.

      The decline in net revenues of the United States pharmaceutical operations
for the first nine months of 1996 compared to the first nine months of 1995 was
primarily attributable to significant price declines for generic drugs at a time
when customers had significant inventories of IVAX' generic drugs. These factors
resulted in depressed customer re-orders, increased customer inventory credits,
and increased reserves for expected returns. In addition, to avoid exacerbating
the inventory situation, IVAX decreased promotional activities during the 1996
third quarter which further reduced sales volume. Customer inventory credits are
made, consistent with industry practice, to adjust customer accounts for price
declines on their existing inventory. Customer inventory credits and reserves
for expected returns established during the first nine months of 1996 increased
approximately $103.8 million compared to the first nine months of 1995.

      In addition to the competitive factors affecting the generic
pharmaceutical industry which are described in IVAX' Annual Report on Form 10-K
for the year ended December 31, 1995 and subsequent reports filed with the SEC,
generic drug price declines during the second and third quarters of 1996 were in
part due to programs instituted by certain national wholesalers during 1996
intended to provide cost savings to independent retail pharmacies. These
programs encouraged generic drug manufacturers to aggressively bid to be the
exclusive supplier of products under the programs. The existence of these
programs also resulted in reduced prices to other customers. Other wholesalers
have commenced or are expected to implement similar programs, and such programs
may be expanded to other product lines or other customer groups.

      As noted in documents previously filed with the SEC, the United States
generic drug industry is highly price competitive, with pricing determined by
many factors, including the number and timing of regulatory approvals and
product introductions by IVAX and its competitors. Although the price of a
generic product generally declines over time as competitors introduce additional
versions of the product, the actual degree and timing of price competition
generally is not predictable. IVAX establishes reserves for customer inventory
credits in accordance with generally accepted accounting principles. Adjustments
to these reserves result from, among other things, the actual degree and

                                       10

<PAGE>

timing of additional price declines and the magnitude of customer inventories at
the time, and are recorded when identified.

      During September 1996, IVAX received FDA approval to market its patented
prescription medication Elmiron(R), used for treatment of the pain and
discomfort associated with interstitial cystitis, a debilitating urinary and
bladder disease afflicting primarily women and characterized by severe pain in
the bladder region and urinary frequency. Elmiron(R) is IVAX' first innovative
new drug approved by the FDA for marketing in the United States. Net revenues of
$4.4 million were generated from sales of this product during its third quarter
1996 launch.

      Sales of cefadroxil, the generic equivalent of Bristol-Myers Squibb's
antibiotic Duricef(R), approved in March 1996, contributed $34.6 million in net
revenues for the nine months ended September 30, 1996. IVAX experienced limited
price competition with respect to sales of cefadroxil during the 1996 second and
third quarters and, consequently, customer inventory credits had a limited
impact on net revenues of this product. Although IVAX remains the only FDA
approved generic manufacturer of cefadroxil, the company marketing the brand
name version of this drug is marketing its own generic form of this product.

      Sales of albuterol metered dose inhaler, the generic equivalent of Glaxo
Inc.'s Ventolin(R) Inhalation Aerosol, used in the treatment of asthma and
approved late in December 1995, generated $28.8 million of net revenues during
the first nine months of 1996. Net revenues attributable to sales of albuterol
metered dose inhaler were negatively impacted during the 1996 third quarter by
price competition combined with elevated customer inventory levels following the
drug's launch. The company marketing the brand name version of this drug is also
marketing, through a third party, a generic form of the drug and, in August
1996, two other generic manufacturers received regulatory approval to market an
albuterol metered dose inhaler product in the United States.

      Net revenues attributable to sales of cefaclor, approved in April 1995,
totaled $11.3 million for the first nine months of 1996 compared to $42.5
million for the first nine months of 1995, the period in which the product was
launched. The decline in net revenues of cefaclor was primarily attributable to
price and volume declines, reserves for expected returns and higher levels of
customer inventory credits as compared to the first nine months of 1995. During
the second quarter of 1996, two other generic manufacturers received regulatory
approval to market cefaclor and began marketing their products in the 1996 third
quarter.

      Net revenues attributable to sales of verapamil HCl ER tablets totaled
$16.0 million in the first nine months of 1996 compared to $66.0 million in the
same period of the prior year. The decline in verapamil net revenues was due
primarily to a reduction in the net selling price and, to a lesser extent, a
decline in unit volume and a higher level of customer inventory credits as
compared to the first nine months of 1995. During the second quarter of 1996,
another generic version of one of the dosage strengths of verapamil sold by IVAX
was introduced into the market by a competitor.

      As discussed in Note 8, Subsequent Event, in the Notes to Condensed
Consolidated Financial Statements, IVAX entered into a definitive merger
agreement with Bergen Brunswig Corporation, a national wholesaler. Although
ultimately expected to result in increased net revenues to IVAX,

                                       11

<PAGE>

pending completion of the transaction and integration of the businesses, IVAX'
net revenues may be adversely affected by a decline in sales to Bergen Brunswig
Corporation's competitors.

      IVAX' international pharmaceutical operations generated net revenues of
$244.0 million for the first nine months of 1996, compared to $196.0 million for
the same period of the prior year. The $48.0 million, or 24%, increase in
international pharmaceutical net revenues included an increase of $28.6 million
attributable to the combined operations of Elvetium S.A. (Argentina), Alet
Laboratorios S.A.E.C.I. y E. and Elvetium S.A. (Uruguay), (collectively,
"Elvetium"), acquired in March 1996. Although the acquisition of Elvetium was
accounted for as a pooling of interests, the acquisition was recorded as of
January 1, 1996 and IVAX' historical results of operations were not restated to
give retroactive effect to the acquisition due to the immateriality of the
related amounts. The remaining $19.4 million increase in net revenues of the
international pharmaceutical operations was primarily due to higher net revenues
of Galena a.s. as a result of increased sales of several products and higher
sales of branded products in the United Kingdom, partially offset by the
unfavorable impact of exchange rate differences in comparison to the prior year
period.

      The gross profit percentage of IVAX' pharmaceutical operations was 25.0%
in the first nine months of 1996 compared to 42.7% for the first nine months of
1995. The decline in the gross profit percentage was primarily attributable to
price declines for U.S. generic drugs and higher levels of customer inventory
credits and reserves for expected returns relating to the United States generic
pharmaceutical operations discussed above.

      Net revenues of the intravenous products division totaled $249.6 million
in the first nine months of 1996, compared to $253.6 million in the same period
of 1995. The $4.0 million decrease in net revenues was primarily due to price
and volume decreases for Hespan(R), McGaw's brand name blood plasma expansion
product, as a result of generic competition and decreased sales volume of
biomedical and pharmacy equipment, kits and accessories. The decrease was
partially offset by increased sales volume for basic nutrition, sets and
solutions and increased net revenues attributable to the continued growth in
alternate-site health care locations. The gross profit percentage of the
intravenous products division decreased from 39.3% for the first nine months of
1995 to 34.0% for the same period in 1996. The $14.8 million reduction in gross
profit and the decrease in the gross profit percentage were due primarily to the
reduction in the net selling price of Hespan(R) and a charge to cost of sales
due to a decrease in inventory carrying costs as a result of lower standard
manufacturing costs adopted as a result of manufacturing efficiencies achieved
in 1995. Gross profit generated by the intravenous products division is likely
to continue to decrease in 1996 as compared to 1995 as a result of competitive
pressures in the industry.

      Net revenues and gross profit of IVAX' personal care products, diagnostics
and specialty chemicals operations, excluding intersegment eliminations,
collectively represent 15% and 23%, respectively, of consolidated net revenues
and consolidated gross profit for the first nine months of 1996. Combined net
revenues and combined gross profit of these other operations increased $10.8
million and $9.1 million, respectively, compared with the first nine months of
1995, primarily due to the introduction by the personal care products group of
the IMAN(TM) product line, which was acquired in November 1995.

                                       12

<PAGE>

<TABLE>
<CAPTION>

OPERATING EXPENSES BY BUSINESS SEGMENT:
(In thousands)
                                                                              RESTRUCTURING
                                       GENERAL      RESEARCH   AMORTIZATION     COSTS AND
                                         AND           AND          OF            ASSET       MERGER
                         SELLING   ADMINISTRATIVE  DEVELOPMENT  INTANGIBLES    WRITE-DOWNS   EXPENSES    TOTAL
                        ---------  --------------  ----------- ------------   -------------  --------  --------- 
<S>                     <C>        <C>             <C>         <C>            <C>            <C>       <C>
1996 NINE MONTHS
----------------
Pharmaceuticals         $  85,095     $ 62,129     $  37,474     $  3,357       $ 69,873     $    71   $ 257,999
Intravenous products       41,111       15,997        12,683        2,467              -           -      72,258
Other operations           36,858       11,621         3,344        2,285         48,442           -     102,550
Corporate and other             -       16,352             -           25              -         113      16,490
                        ---------     --------     ---------     --------       --------     -------   --------- 
      Total             $ 163,064     $106,099     $  53,501     $  8,134       $118,315     $   184   $ 449,297
                        =========     ========     =========     ========       ========     =======   ========= 

1995 NINE MONTHS
----------------
Pharmaceuticals         $  60,550     $ 41,087     $  32,780     $  2,003       $      -     $     -   $ 136,420
Intravenous products       40,923       18,663        11,706        3,555              -           -      74,847
Other operations           31,413       10,190         3,014        1,778              -           -      46,395
Corporate and other             -       10,061             -            -              -           -      10,061
                        ---------     --------     ---------     --------       --------     -------   --------- 
      Total             $ 132,886     $ 80,001     $  47,500     $  7,336       $      -     $     -   $ 267,723
                        =========     ========     =========     ========       ========     =======   ========= 
</TABLE>

      Selling expenses totaled $163.1 million (19.6% of net revenues) for the
first nine months of 1996, compared to $132.9 million (14.8% of net revenues)
for the first nine months of 1995. Selling expenses of Elvetium, acquired during
the first quarter of 1996, accounted for $9.9 million of the total $30.2 million
increase. The remaining $20.3 million increase was primarily due to increased
sales and marketing expenses associated with the launch of newly approved
products of IVAX' pharmaceutical operations and the introduction by the personal
care products group of the IMAN(TM) product line.

      General and administrative expenses totaled $106.1 million (12.8% of net
revenues) for the first nine months of 1996, compared to $80.0 million (8.9% of
net revenues) for the first nine months of 1995, an increase of $26.1 million.
The increase was primarily a result of an increase in allowances for doubtful
accounts of the domestic pharmaceutical operations mainly resulting from a
wholesaler customer filing a Chapter 11 bankruptcy petition during the third
quarter of 1996, and, to a lesser extent, general and administrative expenses
associated with Elvetium, and increases in corporate health and business
insurance, personnel, travel and facilities costs.

      Research and development expenses for the first nine months of 1996
increased $6.0 million, or 13%, compared to the first nine months of 1995, to a
total of $53.5 million. Expenditures by IVAX' pharmaceutical operations
represented 70% of the total research and development expenses for the first
nine months of 1996. The 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, and strategic marketing
decisions.

      During the third quarter of 1996, IVAX approved and initiated a
restructuring program aimed at reducing costs and enhancing operating
efficiencies in the company's United States generic pharmaceutical operations.
The restructuring program primarily involves facility consolidations, work force
reductions and other cost saving measures. IVAX recorded a pre-tax restructuring
charge of $14.0 million ($8.4 million after-tax) in the 1996 third quarter,
comprised

                                       13

<PAGE>

of $8.7 million for the estimated loss on sale of closed manufacturing plants;
$3.0 million for other plant closures and related costs; and $2.3 million for
severance and other employee termination benefits associated with the work force
reductions.

      During the third quarter of 1996, management reevaluated the carrying
value of certain long-lived assets and goodwill related to those assets held and
used in IVAX' United States generic pharmaceutical and specialty chemical
operations. This reevaluation was necessitated by management's determination
that, based on recent results of operations and the restructuring program
described above, the expected future results of operations and cash flows from
these businesses would be substantially lower than previously expected by
management. As a result, and in accordance with Financial Accounting Standard
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of," IVAX recorded a charge of $55.9 million (pre- and
after-tax) to reduce the carrying value of goodwill related to its United States
generic pharmaceutical distribution operations, and charges of $9.8 million
($6.2 million after-tax) and $38.7 million (pre- and after-tax) to reduce the
carrying value of certain fixed assets and goodwill, respectively, related to
certain product lines of its specialty chemical operations. Management
determined the amount of the write-downs based on various valuation techniques,
including discounted cash flow analysis and net realizable value for assets to
be held and used. The write-downs will reduce depreciation and amortization
expenses by approximately $1.1 million in the 1996 fourth quarter and by
approximately $4.3 million annually, and will increase annual net income by
approximately $3.7 million.

      Other expense, net, increased $6.5 million in the first nine months of
1996, as compared to the first nine months of the prior year, primarily due to
an increase in interest expense associated with additional borrowings to fund
working capital, as well as additional income in the first nine months of 1995
resulting from gains recorded on the sale of an investment in equity securities
of an affiliated company and the sale of certain trademarks by the personal care
products group.

   THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1995

      IVAX reported a net loss of $178.7 million for the three months ended
September 30, 1996, compared to net income of $27.6 million for the three months
ended September 30, 1995. Net loss per primary common share was $1.47 for the
third quarter of 1996, compared to $.23 in net earnings per primary common share
reported for the third quarter of 1995.

NET REVENUES AND GROSS PROFIT BY BUSINESS SEGMENT:

Three Months Ended September 30,          1996                    1995
(In thousands)                   ----------------------  ---------------------
                                     NET       GROSS        NET        GROSS
                                  REVENUES     PROFIT    REVENUES      PROFIT
                                 ----------  ----------  ---------   ---------
Pharmaceuticals                  $  98,351   $ (18,186)  $ 191,547   $  79,934
Intravenous products                81,554      28,414      82,713      30,581
Other operations                    43,376      20,779      36,382      16,228
Intersegment eliminations             (561)          -        (430)          -
                                 ---------   ---------   ---------   ---------
   Total                         $ 222,720   $  31,007   $ 310,212   $ 126,743
                                 =========   =========   =========   =========

                                       14

<PAGE>

      Net revenues for the third quarter of 1996 totaled $222.7 million, a
decrease of $87.5 million, or 28%, compared to the same period of the prior
year. Gross profit in the third quarter of 1996 decreased $95.7 million, or 76%,
from the same period of the prior year. Gross profit was $31.0 million (13.9% of
net revenues) for the 1996 third quarter, compared to $126.7 million (40.9% of
net revenues) for the 1995 third quarter.

      Net revenues of IVAX' pharmaceuticals operations decreased $93.2 million,
or 49%, in comparison to the third quarter of 1995. A decrease of $107.4 million
in net revenues of IVAX' domestic pharmaceutical operations was partially offset
by an increase of $14.2 million in net revenues of IVAX' international
pharmaceutical operations.

      Domestic pharmaceutical net revenues totaled $16.5 million for the third
quarter of 1996, compared to $123.9 million for the same period of the prior
year. The $107.4 million decrease in net revenues of the domestic pharmaceutical
operations was primarily due to significant price declines for generic drugs,
lower sales volumes as a result of high customer inventory levels and reduced
promotional activities, and approximately $54.0 million of higher levels of
customer inventory credits and reserves for expected returns as compared to the
third quarter of 1995, mainly as a result of significant price declines at a
time of significant customer inventory levels as discussed in "Results of
Operations - Nine months ended September 30, 1996 compared to nine months ended
September 30, 1995."

      Sales of IVAX' new drug Elmiron(R), approved and launched in September
1996, generated $4.4 million in net revenues during the third quarter of 1996.

      Net revenues attributable to sales of cefadroxil, approved in March 1996,
were $7.0 million in the 1996 third quarter. IVAX experienced limited price
competition with respect to sales of cefadroxil during the 1996 third quarter
and, consequently, customer inventory credits had a limited impact on net
revenues of this product. Net revenues attributable to sales of cefadroxil were
lower during the 1996 third quarter than the 1996 second quarter primarily due
to lower sales volume subsequent to the product's launch.

      Net revenues attributable to sales of cefaclor decreased by $28.3 million
during the third quarter of 1996, as compared to the third quarter of the prior
year, primarily due to a reduction in the net selling price and a decline in
sales volume, and, to a lesser extent, a higher level of customer inventory
credits and reserves for expected returns as compared to the same period of the
prior year.

      Net revenues attributable to sales of verapamil HCl ER tablets decreased
by $25.1 million during the third quarter of 1996, as compared to the third
quarter of the prior year. The decline in net revenues was due primarily to a
reduction in the net selling price and a decline in sales volume, and, to a
lesser extent, a higher level of customer inventory credits as compared to the
prior year third quarter.

      Sales in the 1996 third quarter of IVAX' albuterol metered dose inhaler
were substantially offset by customer inventory credits due to price declines at
a time of elevated customer inventory levels.

                                       15

<PAGE>

      IVAX' international pharmaceutical operations generated net revenues of
$81.8 million in the third quarter of 1996, compared to $67.6 million for the
same period of the prior year. The $14.2 million, or 21%, increase in
international pharmaceutical net revenues was primarily due to $8.4 million in
net revenues attributable to the operations of Elvetium, acquired in March 1996.
The remaining $5.8 million increase in net revenues of the international
pharmaceutical operations was primarily due to an increase in sales of branded
products in the United Kingdom, and, to a lesser extent, an increase in sales of
several products by Galena a.s., partially offset by the unfavorable impact of
exchange rate differences in comparison to the prior year period.

      The decline in gross profit of $98.1 million in IVAX' pharmaceutical
operations is primarily due to price declines for U.S. generic drugs and the
higher levels of customer inventory credits and reserves for expected returns
relating to the United States generic pharmaceutical operations discussed in
"Results of Operations - Nine months ended September 30, 1996 compared to nine
months ended September 30, 1995."

      The intravenous products division generated net revenues of $81.6 million
during the third quarter of 1996, a decrease of $1.2 million from the same
period of the prior year. The decrease in net revenues was primarily due to
decreased sales volume of biomedical and pharmacy equipment, kits and
accessories and price and volume decreases for Hespan(R), partially offset by
increased sales volume for basic nutrition, sets and solutions. The gross profit
percentage of the intravenous products division decreased from 37.0% for the
third quarter of 1995 to 34.8% for the same period in 1996. The $2.2 million
reduction in gross profit and the decrease in the gross profit percentage were
primarily due to the reduction in the net selling price of Hespan(R) and an
increase in inventory obsolescence reserves and royalty expenses.

      Net revenues and gross profit of IVAX' personal care products, diagnostics
and specialty chemicals operations, excluding intersegment eliminations,
collectively represent 19% and 67%, respectively, of consolidated net revenues
and consolidated gross profit for the third quarter of 1996. Combined net
revenues and combined gross profit of these other operations increased $7.0
million and $4.6 million, respectively, compared with the third quarter of 1995,
primarily due to the introduction by the personal care products group of the
IMAN(TM) product line, acquired in November 1995, and other new Flori Roberts(R)
products.

<TABLE>
<CAPTION>

OPERATING EXPENSES BY BUSINESS SEGMENT:
(In thousands)
                                                                              RESTRUCTURING
                                       GENERAL      RESEARCH   AMORTIZATION     COSTS AND
                                         AND           AND          OF            ASSET       MERGER
                         SELLING   ADMINISTRATIVE  DEVELOPMENT  INTANGIBLES    WRITE-DOWNS   EXPENSES    TOTAL
                        ---------  --------------  ----------- ------------   -------------  --------  --------- 
<S>                     <C>        <C>             <C>         <C>            <C>            <C>       <C>
1996 THREE MONTHS
-----------------
Pharmaceuticals          $ 31,029     $ 30,112      $ 13,669     $ 1,305        $ 69,873      $   -    $ 145,988
Intravenous products       13,506        5,641         4,046         726               -          -       23,919
Other operations           13,031        3,883         1,179         731          48,442          -       67,266
Corporate and other             -        5,605             -          12               -          -        5,617
                         --------     --------      --------     -------        ---------     -----    ---------
      Total              $ 57,566     $ 45,241      $ 18,894     $ 2,774        $118,315      $   -    $ 242,790
                         ========     ========      ========     =======        =========     =====    =========
</TABLE>

                                       16

<PAGE>

<TABLE>
<CAPTION>
                                                                              RESTRUCTURING
                                       GENERAL      RESEARCH   AMORTIZATION     COSTS AND
                                         AND           AND          OF            ASSET       MERGER
                         SELLING   ADMINISTRATIVE  DEVELOPMENT  INTANGIBLES    WRITE-DOWNS   EXPENSES    TOTAL
                        ---------  --------------  ----------- ------------   -------------  --------  --------- 
<S>                     <C>        <C>             <C>         <C>            <C>            <C>       <C>
1995 THREE MONTHS
-----------------
Pharmaceuticals         $ 21,640      $ 17,200       $ 10,584     $  601           $   -       $  -     $ 50,025
Intravenous products      13,336         6,506          4,279      1,210               -          -       25,331
Other operations          10,265         3,555            973        583               -          -       15,376
Corporate and other            -         3,075              -          -               -          -        3,075    
                        --------      --------       --------     -------          -----       ----     --------
      Total             $ 45,241      $ 30,336       $ 15,836     $2,394           $   -       $  -     $ 93,807
                        ========      ========       ========     =======          =====       ====     ========
</TABLE>

      Selling expenses totaled $57.6 million (25.8% of net revenues) for the
third quarter of 1996, compared to $45.2 million (14.6% of net revenues) for the
third quarter of 1995. Selling expenses of Elvetium, which was acquired in the
first quarter of 1996, accounted for $4.1 million of the total $12.4 million
increase. The remaining $8.3 million increase was primarily due to increased
sales and marketing expenses associated with the launch of Elmiron(R) and the
personal care products group's IMAN(TM) product line.

      General and administrative expenses totaled $45.2 million (20.3% of net
revenues) for the third quarter of 1996, compared to $30.3 million (9.8% of net
revenues) for the third quarter of 1995, an increase of $14.9 million. The
increase was primarily due to a higher allowance for doubtful accounts of the
domestic pharmaceutical operations mainly resulting from a wholesaler customer
who filed a Chapter 11 bankruptcy petition during the third quarter of 1996.

      Research and development expenses for the third quarter of 1996 increased
$3.1 million, or 19%, compared to the 1995 third quarter, to a total of $18.9
million. Expenditures by IVAX' pharmaceutical operations represented 72% of the
total research and development expenses for the third quarter of 1996.

      Refer to the "Results of Operations -- Nine months ended September 30,
1996 compared to the nine months ended September 30, 1995" for a discussion of
the third quarter 1996 restructuring costs and asset write-downs.

      Other expense, net, increased $3.7 million from the third quarter of the
prior year primarily due to an increase in interest expense associated with
additional borrowings to fund working capital.

CURRENCY FLUCTUATIONS

      For the three and nine months ended September 30, 1996, approximately 39%
and 31%, respectively, of IVAX' net revenues were attributable to operations
which principally generated revenues in currencies other than the United States
dollar, compared to approximately 23% for both the three and nine months ended
September 30, 1995. Fluctuations in the value of foreign currencies relative to
the United States dollar impact the reported results of operations for IVAX. 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. As a result of exchange rate differences,
net revenues decreased by approximately $.7 million and

                                       17

<PAGE>

$5.4 million for the three and nine months ended September 30, 1996,
respectively, as compared to the same periods of the prior year.

INCOME TAXES

      IVAX recognized a $53.9 million tax benefit for the nine months ended
September 30, 1996. The tax benefit results from domestic losses benefited at
the prevailing federal and state statutory rates, which exceeded foreign income
taxed at the prevailing generally lower foreign rates. The tax benefit also
includes the recognition in the 1996 second quarter of a deferred tax asset of
$7.1 million by McGaw following an adjustment by the Internal Revenue Service of
the tax basis amortization of certain intangible assets; the recognition in the
1996 first quarter of a $1.1 million tax incentive provided by the state of
California; the recognition of a $5.3 million deferred tax asset in connection
with the third quarter 1996 restructuring charge; and the recognition of a $3.6
million deferred tax asset in connection with the third quarter 1996 write-down
of certain fixed assets of IVAX' specialty chemicals business.

      As of September 30, 1996, other current and non-current assets and
liabilities include a $95.5 million net deferred tax asset. A portion of the net
deferred tax asset in the amount of $20.5 million will be realized by a refund
of federal income taxes paid in prior years and available in the carryback
period. Realization of the remaining $74.9 million ($51.5 million and $23.4
million domestic and foreign, respectively) is dependent upon generating
sufficient future taxable income. Although realization is not assured,
management believes it is more likely than not that the remaining deferred tax
asset will be realized based upon estimated future taxable income. Management's
estimates of future taxable income are subject to revision due to, among other
things, regulatory and competitive factors affecting the generic pharmaceutical
industry. Such factors are discussed in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included in IVAX' Annual Report
on Form 10-K for the year ended December 31, 1995, as well as elsewhere in this
report.

LIQUIDITY AND CAPITAL RESOURCES

      IVAX used $60.6 million in cash for operating activities during the first
nine months of 1996, compared to $22.0 million in cash generated from operating
activities during the first nine months of 1995. The increase in cash used for
operating activities, as compared to the first nine months of 1995, was
primarily the result of a higher rate of growth in inventories due to lower
sales during the second and third quarter of 1996 as discussed under "Results of
Operations - Nine months ended September 30, 1996 compared to the nine months
ended September 30, 1995." The decrease in accounts receivable and increase in
other current assets did not generate or use cash, respectively, because they
relate to non-cash items such as customer inventory credits and reserves for
expected returns, and the recognition of a tax receivable for a future tax
refund, respectively.

      Net cash of $76.1 million was utilized for investing activities during the
first nine months of 1996 as compared to $78.3 million for the same period of
the prior year. An $11.1 million decline in capital expenditures was partially
offset by IVAX' purchase of additional shares of Galena a.s. increasing its
ownership interest to approximately 74%.

                                       18

<PAGE>

      Net cash of $137.8 million was provided by financing activities during the
first nine months of 1996, compared to $48.5 million in the same period of the
prior year, primarily reflecting additional borrowings to finance capital
expenditures and the growth in working capital, as well as the receipt of higher
levels of cash on the exercise of stock options as compared to the first nine
months of 1995.

      As discussed in Note 6, Debt, in the Notes to Condensed Consolidated
Financial Statements, on November 14, 1996, IVAX entered into an amendment to
its revolving line of credit. Proceeds from the credit facility were used to
refinance previously existing credit facilities and to make an investment in and
advances to McGaw to permit it to redeem its 10-3/8% Senior Notes due 1999, and
will be used for working capital and general corporate purposes. The amended
facility permits borrowings up to $375.0 million, and at September 30, 1996, the
outstanding balance of the facility was $305.0 million. At September 30, 1996,
IVAX' working capital was approximately $473.9 million, compared to $470.9
million at December 31, 1995. Cash and cash equivalents totaled $15.1 million at
September 30, 1996, as compared to $14.7 million at year-end 1995 and $29.5
million as of September 30, 1995.

      IVAX' principal sources of short-term liquidity are borrowings under the
credit facility and internally generated funds. IVAX believes that its
short-term financing needs will be satisfied by these sources. For the
long-term, IVAX believes it will be able to obtain long-term capital and
financing to the extent necessary.

      On June 3, 1996, IVAX paid a $.05 per share cash dividend to holders of
record of IVAX' common stock as of May 10, 1996. In each of June and December
1995, IVAX paid cash dividends of $.04 per share. On November 8, 1996, IVAX'
Board of Directors did not declare a dividend for the second half of 1996. Under
the terms of the amended credit facility, as discussed in Note 6, Debt, in the
Notes to Condensed Consolidated Financial Statements, IVAX is prohibited from
paying cash dividends.

                                       19

<PAGE>

PART II -- OTHER INFORMATION

ITEM 1 -- LEGAL PROCEEDINGS

      During July through September 1996, individuals purporting to be
shareholders of IVAX filed actions styled MARGOLIN, ET AL. VS. IVAX CORPORATION
AND PHILLIP FROST, ET AL.; TOROK, ET AL. VS. IVAX CORPORATION AND PHILLIP FROST,
ET AL.; STERN, ET AL. VS. IVAX CORPORATION AND PHILLIP FROST, ET AL.; BELL, ET
AL., VS. IVAX CORPORATION AND PHILLIP FROST, ET AL.; KREPS, ET AL. VS. IVAX
CORPORATION AND PHILLIP FROST, ET AL.; and SCHOTT, ET AL. VS. IVAX CORPORATION
AND PHILLIP FROST, ET AL. against IVAX and certain of its officers and directors
in the United States District Court for the Southern District of Florida. The
plaintiffs in the MARGOLIN, STERN, KREPS and SCHOTT actions seek to act as
representatives of a class consisting of all purchasers of IVAX' common stock
between February 26, 1996 and June 27, 1996. The plaintiffs in the TOROK and
BELL actions seek to act as representatives of a class consisting of all
purchasers of IVAX' common stock between July 31, 1995 and June 27, 1996. The
complaints allege essentially the same securities laws violations as alleged in
the shareholder actions previously reported in IVAX' Quarterly Report on Form
10-Q for the quarter ended June 30, 1996. In general, the complaints seek an
unspecified amount of compensatory damages, pre-judgment interest, litigation
costs and attorney's fees. On October 25, 1996, the Court entered an order
consolidating all of the above-described actions as well as the shareholder
actions previously reported in IVAX' Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996 with the MALIN action reported in such Quarterly
Report. IVAX intends to defend the lawsuit vigorously. Although IVAX believes
that this lawsuit is without merit, its outcome cannot be predicted. If
determined adversely to IVAX, the lawsuit would likely have a material adverse
effect on IVAX' financial position and results and operations.

ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      10    Amendment No. 1 to Revolving  Credit and  Reimbursement  Agreement
            by and among IVAX  Corporation,  Norton  Healthcare,  Limited  and
            IVAX International  B.V., as Borrowers;  the Lenders party thereto
            or  referenced  therein;  NationsBank,  National  Association,  as
            Administrative  and  Documentation   Agent  and  Lender;   and  BA
            Securities,  Inc., as Syndication  Agent, dated as of November 14,
            1996. *

      11    Computation of Earnings (Loss) Per Share

      27    Financial Data Schedule

----------

*Certain exhibits and schedules to this document have not been filed. The
Registrant agrees to furnish a copy of any omitted schedule or exhibit to the
Securities and Exchange Commission upon request.

                                       20

<PAGE>

(b)   Current Reports on Form 8-K

      On October 2, 1996, IVAX filed a Current Report on Form 8-K relating to
its September 30, 1996 press release announcing IVAX' restructuring plans and
offering its outlook for the 1996 third quarter results.

      On November 12, 1996, IVAX filed a Current Report on Form 8-K reporting
the execution of a definitive merger agreement with Bergen Brunswig Corporation.

                                       21

<PAGE>

                                   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 14, 1996          By: /s/ MICHAEL W. FIPPS
                                           -------------------------------
                                           Michael W. Fipps
                                           Senior Vice President-Finance
                                           Chief Financial Officer