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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended September 30, 2003



Commission File Number 1-09623



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IVAX CORPORATION



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



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



(305) 575-6000

(Registrants telephone number, including area code)



---



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ̈



Indicate by check mark whether the registrant is an
accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes x No ̈



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



196,431,233 shares of Common Stock, $.10 par value, outstanding as of October 31, 2003.



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IVAX CORPORATION



INDEX



|                               |  | PAGE NO.
|------------------------------ |  | --------
|PART I - FINANCIAL INFORMATION |  |         
|                               |  |         
|                               |  | Item 1 -
|                               |  |         
|                               |  |         
|                               |  |         
|                               |  |         
|                               |  |         
|                               |  |         
|                               |  |         
|                               |  |         
|                               |  |         
|                               |  |         
|                               |  |         
|                               |  | Item 2 -
|                               |  |         
|                               |  | Item 3 -
|                               |  |         
|                               |  | Item 4 -
|                               | 
|PART II - OTHER INFORMATION    |  |         
|                               |  |         
|                               |  | Item 1 -
|                               |  |         
|                               |  | Item 6 -





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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 30,2003 |           |   | December 31,2002 |  
|--------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | --------- | - | ---------------- | -
|                                                                                                                                  |  | (Unaudited)       |           |   |                  |  
|ASSETS                                                                                                                            |  |                   |           |   |                  |  
|Current assets:                                                                                                                   |  |                   |           |   |                  |  
|Cash and cash equivalents                                                                                                         |  | $                 | 187,546   |   |                  | $
|Marketable securities, short-term                                                                                                 |  |                   | 9,874     |   |                  |  
|Accounts receivable, net of allowances for doubtful accounts of $23,400 in 2003 and $21,719 in 2002                               |  |                   | 225,455   |   |                  |  
|Inventories                                                                                                                       |  |                   | 373,036   |   |                  |  
|Other current assets                                                                                                              |  |                   | 140,566   |   |                  |  
|                                                                                                                                  |  |                   |           |   |                  |  
|Total current assets                                                                                                              |  |                   | 936,477   |   |                  |  
|Property, plant and equipment, net                                                                                                |  |                   | 463,387   |   |                  |  
|Goodwill, net                                                                                                                     |  |                   | 426,775   |   |                  |  
|Intangible assets, net                                                                                                            |  |                   | 279,213   |   |                  |  
|Other assets                                                                                                                      |  |                   | 86,249    |   |                  |  
|                                                                                                                                  |  |                   |           |   |                  |  
|Total assets                                                                                                                      |  | $                 | 2,192,101 |   |                  | $
|                                                                                                                                  |  |                   |           |   |                  |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                              |  |                   |           |   |                  |  
|Current liabilities:                                                                                                              |  |                   |           |   |                  |  
|Accounts payable                                                                                                                  |  | $                 | 118,396   |   |                  | $
|Current portion of long-term debt                                                                                                 |  |                   | 35,723    |   |                  |  
|Loans payable                                                                                                                     |  |                   | 15,453    |   |                  |  
|Accrued income taxes payable                                                                                                      |  |                   | 36,062    |   |                  |  
|Accrued expenses and other current liabilities                                                                                    |  |                   | 236,199   |   |                  |  
|                                                                                                                                  |  |                   |           |   |                  |  
|Total current liabilities                                                                                                         |  |                   | 441,833   |   |                  |  
|Long-term debt, net of current portion                                                                                            |  |                   | 829,830   |   |                  |  
|Other long-term liabilities                                                                                                       |  |                   | 59,123    |   |                  |  
|Minority interest                                                                                                                 |  |                   | 12,259    |   |                  |  
|Shareholders equity:                                                                                                             |  |                   |           |   |                  |  
|Common stock, $.10 par value, authorized 437,500 shares, issued and outstanding 196,348 shares in 2003 and 194,372 shares in
2002 |  |                   | 19,635    |   |                  |  
|Capital in excess of par value                                                                                                    |  |                   | 336,374   |   |                  |  
|Retained earnings                                                                                                                 |  |                   | 661,131   |   |                  |  
|Accumulated other comprehensive loss                                                                                              |  |                   | (168,084  | ) |                  |  
|                                                                                                                                  |  |                   |           |   |                  |  
|Total shareholders equity                                                                                                        |  |                   | 849,056   |   |                  |  
|                                                                                                                                  |  |                   |           |   |                  |  
|Total liabilities and shareholders equity                                                                                        |  | $                 | 2,192,101 |   |                  | $
|                                                                                                                                  |  |                   |           |   |                  |  



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



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IVAX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|Period Ended September 30, (In thousands, except per share data) |      | Three Months |         |      | Nine Months |  
|---------------------------------------------------------------- | ---- | ------------ | ------- | ---- | ----------- | -
|                                                                 | 2003 |              |         | 2002 |             |  
|Net revenues                                                     |      | $            | 360,638 |      |             | $
|Cost of sales                                                    |      |              | 200,102 |      |             |  
|                                                                 |      |              |         |      |             |  
|Gross profit                                                     |      |              | 160,536 |      |             |  
|                                                                 |      |              |         |      |             |  
|Operating expenses:                                              |      |              |         |      |             |  
|Selling                                                          |      |              | 51,128  |      |             |  
|General and administrative                                       |      |              | 34,902  |      |             |  
|Research and development                                         |      |              | 29,973  |      |             |  
|Amortization of intangible assets                                |      |              | 4,611   |      |             |  
|Restructuring costs                                              |      |              | 18      |      |             |  
|                                                                 |      |              |         |      |             |  
|Total operating expenses                                         |      |              | 120,632 |      |             |  
|                                                                 |      |              |         |      |             |  
|Income from operations                                           |      |              | 39,904  |      |             |  
|Other income (expense):                                          |      |              |         |      |             |  
|Interest income                                                  |      |              | 898     |      |             |  
|Interest expense                                                 |      |              | (10,404 | )    |             |  
|Other income, net                                                |      |              | 3,938   |      |             |  
|                                                                 |      |              |         |      |             |  
|Total other income (expense)                                     |      |              | (5,568  | )    |             |  
|                                                                 |      |              |         |      |             |  
|Income before income taxes and minority interest                 |      |              | 34,336  |      |             |  
|Provision for income taxes                                       |      |              | 12,756  |      |             |  
|                                                                 |      |              |         |      |             |  
|Income before minority interest                                  |      |              | 21,580  |      |             |  
|Minority interest                                                |      |              | 51      |      |             |  
|                                                                 |      |              |         |      |             |  
|Income from continuing operations                                |      |              | 21,631  |      |             |  
|Income from discontinued operations, net of tax of $12,763       |      |              |        |      |             |  
|Cumulative effect of accounting change                           |      |              |        |      |             |  
|                                                                 |      |              |         |      |             |  
|Net income                                                       |      | $            | 21,631  |      |             | $
|                                                                 |      |              |         |      |             |  
|Basic earnings per common share:                                 |      |              |         |      |             |  
|Continuing operations                                            |      | $            | 0.11    |      |             | $
|Discontinued operations                                          |      |              |        |      |             |  
|Cumulative effect of accounting change                           |      |              |        |      |             |  
|                                                                 |      |              |         |      |             |  
|Net income                                                       |      | $            | 0.11    |      |             | $
|                                                                 |      |              |         |      |             |  
|Diluted earnings per common share:                               |      |              |         |      |             |  
|Continuing operations                                            |      | $            | 0.11    |      |             | $
|Discontinued operations                                          |      |              |        |      |             |  
|Cumulative effect of accounting change                           |      |              |        |      |             |  
|                                                                 |      |              |         |      |             |  
|Net income                                                       |      | $            | 0.11    |      |             | $
|                                                                 |      |              |         |      |             |  
|Weighted average number of common shares outstanding:            |      |              |         |      |             |  
|Basic                                                            |      |              | 195,851 |      |             |  
|                                                                 |      |              |         |      |             |  
|Diluted                                                          |      |              | 199,654 |      |             |  
|                                                                 |      |              |         |      |             |  



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



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IVAX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY

(Unaudited)

(In thousands)



|                                                                                        |  | Common Stock    |   |  | Capital inExcess ofPar Value |        |   | RetainedEarnings |   | AccumulatedOtherComprehensiveIncome (Loss) |   |  | Total |        
|--------------------------------------------------------------------------------------- |  | --------------- | - |  | ---------------------------- | ------ | - | ---------------- | - | ------------------------------------------ | - |  | ----- | -------
|                                                                                        |  | Number ofShares |   |  | Amount                       |        |   |                  |   |                                           
|BALANCE, January 1, 2003                                                                |  | 194,372         |   |  | $                            | 19,437 |   |                  | $ | 311,367                                    |   |  | $     | 569,225
|Comprehensive income:                                                                   |  |                 |   |  |                              |        |   |                  |   |                                            |   |  |       |        
|Net income                                                                              |  |                |   |  |                              |       |   |                  |   |                                           |   |  |       | 91,906 
|Translation adjustment                                                                  |  |                |   |  |                              |       |   |                  |   |                                           |   |  |       |       
|Unrealized net gain on available-for-sale equity securities and derivatives, net of tax |  |                |   |  |                              |       |   |                  |   |                                           |   |  |       |       
|                                                                                        |  |                 |   |  |                              |        |   |                  |   |                                            |   |  |       |        
|Comprehensive income                                                                    |  |                 |   |  |                              |        |   |                  |   |                                            |   |  |       |        
|Exercise of stock options                                                               |  | 1,370           |   |  |                              | 137    |   |                  |   | 13,759                                     |   |  |       |       
|Tax benefit of option exercises                                                         |  |                |   |  |                              |       |   |                  |   | 3,049                                      |   |  |       |       
|Employee stock purchases                                                                |  | 69              |   |  |                              | 7      |   |                  |   | 720                                        |   |  |       |       
|Repurchase and retirement of common stock                                               |  | (700            | ) |  |                              | (70    | ) |                  |   | (8,927                                     | ) |  |       |       
|Shares issued in acquisitions                                                           |  | 1,237           |   |  |                              | 124    |   |                  |   | 16,366                                     |   |  |       |       
|Value of stock options issued to non-employees                                          |  |                |   |  |                              |       |   |                  |   | 40                                         |   |  |       |       
|                                                                                        |  |                 |   |  |                              |        |   |                  |   |                                            |   |  |       |        
|BALANCE, September 30, 2003                                                             |  | 196,348         |   |  | $                            | 19,635 |   |                  | $ | 336,374                                    |   |  | $     | 661,131
|                                                                                        |  |                 |   |  |                              |        |   |                  |   |                                            |   |  |       |        



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,                                                  |  | 2003 |         |   | 2002 |  
|-------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|(In thousands)                                                                   |  |      |         |   |      |  
|                                                                                 |  |     
|Cash flows from operating activities:                                            |  |      |         |   |      |  
|Net income                                                                       |  | $    | 91,906  |   |      | $
|Adjustments to reconcile net income to net cash flows from operating activities: |  |      |         |   |      |  
|Restructuring costs                                                              |  |      | 798     |   |      |  
|Depreciation and amortization                                                    |  |      | 54,668  |   |      |  
|Deferred tax provision                                                           |  |      | 3,692   |   |      |  
|Tax effect of stock options exercised                                            |  |      | 3,049   |   |      |  
|Value of stock options issued to non-employees                                   |  |      | 40      |   |      |  
|Provision for doubtful accounts                                                  |  |      | 2,561   |   |      |  
|Provision for inventory obsolescence                                             |  |      | 24,047  |   |      |  
|Interest accretion on notes payable                                              |  |      | 1,912   |   |      |  
|Minority interest in earnings                                                    |  |      | (162    | ) |      |  
|Equity in earnings of unconsolidated affiliates                                  |  |      | (910    | ) |      |  
|Gain on sale of marketable securities                                            |  |      |        |   |      |  
|Gains on sale of product rights                                                  |  |      | (9,003  | ) |      |  
|Losses on sale of assets, net                                                    |  |      | 131     |   |      |  
|Gains on extinguishment of debt                                                  |  |      | (2,323  | ) |      |  
|Income from discontinued operations                                              |  |      | (22,204 | ) |      |  
|Cumulative effect of accounting change                                           |  |      |        |   |      |  
|Changes in operating assets and liabilities:                                     |  |      |         |   |      |  
|Accounts receivable                                                              |  |      | 4,826   |   |      |  
|Inventories                                                                      |  |      | (75,438 | ) |      |  
|Other current assets                                                             |  |      | 8,983   |   |      |  
|Other assets                                                                     |  |      | 1,045   |   |      |  
|Accounts payable, accrued expenses and other current liabilities                 |  |      | (9,906  | ) |      |  
|Other long-term liabilities                                                      |  |      | (5,889  | ) |      |  
|                                                                                 |  |      |         |   |      |  
|Net cash flows from operating activities                                         |  |      | 71,823  |   |      |  
|                                                                                 |  |      |         |   |      |  
|Cash flows from investing activities:                                            |  |      |         |   |      |  
|Proceeds from sale of product rights                                             |  |      | 9,003   |   |      |  
|Capital expenditures                                                             |  |      | (62,771 | ) |      |  
|Proceeds from sale of assets                                                     |  |      | 1,873   |   |      |  
|Acquisitions of intangible assets                                                |  |      | (5,827  | ) |      |  
|Acquisitions of businesses, net of cash acquired                                 |  |      | 106     |   |      |  
|Investment in affiliates                                                         |  |      | 2,791   |   |      |  
|Purchases of marketable securities                                               |  |      | (15,992 | ) |      |  
|Proceeds from sales of marketable securities                                     |  |      | 38,928  |   |      |  
|Net proceeds from discontinued operations                                        |  |      | 8,824   |   |      |  
|                                                                                 |  |      |         |   |      |  
|Net cash flows from investing activities                                         |  |      | (23,065 | ) |      |  
|                                                                                 |  |      |         |   |      |  
|Cash flows from financing activities:                                            |  |      |         |   |      |  
|Borrowings on long-term debt and loans payable                                   |  |      | 23,809  |   |      |  
|Payments on long-term debt and loans payable                                     |  |      | (57,226 | ) |      |  
|Exercise of stock options and employee stock purchases                           |  |      | 14,623  |   |      |  
|Repurchase of common stock                                                       |  |      | (8,997  | ) |      |  
|                                                                                 |  |      |         |   |      |  
|Net cash flows from financing activities                                         |  |      | (27,791 | ) |      |  
|                                                                                 |  |      |         |   |      |  
|Effect of exchange rate changes on cash and cash equivalents                     |  |      | 11,171  |   |      |  
|                                                                                 |  |      |         |   |      |  
|Net increase (decrease) in cash and cash equivalents                             |  |      | 32,138  |   |      |  
|Cash and cash equivalents at the beginning of the period                         |  |      | 155,408 |   |      |  
|                                                                                 |  |      |         |   |      |  
|Cash and cash equivalents at the end of the period                               |  | $    | 187,546 |   |      | $
|                                                                                 |  |      |         |   |      |  
|Supplemental disclosures:                                                        |  |      |         |   |      |  
|Interest paid                                                                    |  | $    | 20,440  |   |      | $
|                                                                                 |  |      |         |   |      |  
|Income tax payments                                                              |  | $    | 48,276  |   |      | $
|                                                                                 |  |      |         |   |      |  



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



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IVAX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except per share data)



(1) GENERAL:



The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. However, in the opinion of management, all adjustments (consisting of
only normal recurring adjustments) considered necessary to present fairly the results of operations, financial position and cash flows have been made. The results of operations and cash flows for the nine months ended September 30, 2003, are not
necessarily indicative of the results of operations and cash flows which may be reported for the remainder of 2003 or for future periods. The interim consolidated financial statements should be read in conjunction with the consolidated financial
statements and the Notes to Consolidated Financial Statements included in IVAX Annual Report on Form 10-K for the year ended December 31, 2002. For purposes of these financial statements, North America includes the United States and Canada.
Mexico is included within Latin America.



(2) EARNINGS PER SHARE:



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



|                                                                                                    |  | Three Months |  | Nine Months
|--------------------------------------------------------------------------------------------------- |  | ------------ |  | -----------
|Period Ended September 30,                                                                          |  | 2003         |  | 2002       
|Basic weighted average number of shares outstanding                                                 |  | 195,851      |  | 194,604    
|Effect of dilutive securities  stock options and warrants                                          |  | 3,803        |  | 1,848      
|                                                                                                    |  |              |  |            
|Diluted weighted average number of shares outstanding                                               |  | 199,654      |  | 196,452    
|                                                                                                    |  |              |  |            
|Not included in the calculation of diluted earnings per share because their impact is antidilutive: |  |              |  |            
|Stock options outstanding                                                                           |  | 7,661        |  | 14,163     
|Convertible debt                                                                                    |  | 21,799       |  | 23,409     



(3) STOCK-BASED COMPENSATION
PLANS:



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



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



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



|                                                                                                                                            |  | Three Months |         |   | Nine Months |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | - | ----------- | -
|Period Ended September 30,                                                                                                                  |  | 2003         |         |   | 2002        |  
|Net income as reported                                                                                                                      |  | $            | 21,631  |   |             | $
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related
tax effects |  |              | 4,762   |   |             |  
|                                                                                                                                            |  |              |         |   |             |  
|Pro forma net income                                                                                                                        |  | $            | 16,869  |   |             | $
|Basic net income per share as reported                                                                                                      |  |              | 0.11    |   |             |  
|Pro forma basic net income per share                                                                                                        |  |              | 0.09    |   |             |  
|Diluted net income per share as reported                                                                                                    |  |              | 0.11    |   |             |  
|Pro forma diluted net income per share                                                                                                      |  |              | 0.08    |   |             |  
|Weighted average fair value                                                                                                                 |  | $            | 7.29    |   |             | $
|Expected life (years)                                                                                                                       |  |              | 5       |   |             |  
|Risk-free interest rate                                                                                                                     |  |              | 3.6-3.9 | % |             |  
|Expected volatility                                                                                                                         |  |              | 27      | % |             |  
|Dividend yield                                                                                                                              |  |              | 0       | % |             |  



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



(4) REVENUES AND COST OF SALES:



Net
revenues are comprised of gross revenues less provisions for expected customer returns, inventory credits, discounts, promotional allowances, rebates, chargebacks, reimbursements relating to Medicaid and Medicare and other allowances. The reserve
balances related to these provisions are included in Accounts receivable, net of allowances for doubtful accounts and Accrued expenses and other current liabilities in the accompanying consolidated balance sheets in the
amounts of $140,135 and $116,648, respectively, at September 30, 2003, and $147,580 and $94,937, respectively, at December 31, 2002. As a result of IVAX recent return and customer inventory experience, IVAX estimates of product returns
and other sales allowances and inventory obsolescence decreased during the third quarter of 2003 and, accordingly, IVAX recognized increased net revenues and reduced cost of sales during the quarter. During the three and nine months ended September
30, 2003, these changes increased net revenues by $10,170, reduced cost of sales by $2,457, increased net income by $7,943 and increased diluted earnings per share by $0.04.



(5) INCOME FROM DISCONTINUED OPERATIONS:



During June 2003, IVAX recorded income from discontinued operations in the amount of $22,204, net of tax of $12,763, or
$0.11 per diluted share, resulting from a number of agreements, for certain patent and product rights and the settlement of litigation related to a contingent sale price dispute from the 1997 sale of McGaw, Inc. to B. Braun Melsungen AG. Under these
agreements, IVAX received $13,896 of cash, net of related expenses incurred in 2003, and recorded a current tax payable of $5,072. In addition, the agreements provide for additional payments totaling $25,500 due in five approximately



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equal annual installments, which were recorded as a receivable discounted at 4%. IVAX also accrued $1,622 of additional fees related to the settlement and a
deferred tax liability of $7,691.



(6) INVENTORIES:



Inventories consist of the following:



|                  |  | September 30,2003 |         | December 31,2002
|----------------- |  | ----------------- | ------- | ----------------
|Raw materials     |  | $                 | 130,414 |                 
|Work-in-process   |  |                   | 59,657  |                 
|Finished goods    |  |                   | 182,965 |                 
|                  |  |                   |         |                 
|Total inventories |  | $                 | 373,036 |                 
|                  |  |                   |         |                 



As of September 30,
2003, IVAX had approximately $14,775 in inventories relating to products pending launch while IVAX awaits receipt of final FDA or foreign governmental marketing approval and/or satisfactory resolution of patent infringement litigation.



(7) INTANGIBLE ASSETS:



Intangible assets consist of the following:



|                                     |  | September 30, 2003  |         | December 31, 2002      
|------------------------------------ |  | ------------------- | ------- | -----------------------
|                                     |  | GrossCarryingAmount |         | AccumulatedAmortization
|Amortized intangible assets:         |  |                     |         |                        
|Patents and related licenses         |  | $                   | 72,465  |                        
|Trademarks                           |  |                     | 116,816 |                        
|Licenses and other intangibles       |  |                     | 138,426 |                        
|                                     |  |                     |         |                        
|Total                                |  | $                   | 327,707 |                        
|                                     |  |                     |         |                        
|Unamortized intangible assets:       |  |                     |         |                        
|Trademarks and product registrations |  | $                   | 23,017  |                        
|                                     |  |                     |         |                        



Intangible assets
amortization expense is estimated to be $5,088 for the remainder of fiscal 2003, $20,638 in fiscal 2004, $19,982 in fiscal 2005, $18,884 in fiscal 2006, and $20,695 in fiscal 2007.



(8) DEBT:



During the first nine months of 2003, IVAX repurchased $27,300 of 4.5% Convertible Senior Subordinated Notes due 2008 for $24,496, plus accrued interest
of $346, and wrote off debt issuance costs of $530. This resulted in a gain on the extinguishment of debt of $2,274.



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



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On August 22, 2003, IVAX executed a mortgage note and borrowed $15,000 from a financial institution. The
note matures on August 21, 2008, and bears interest at an annual rate of 4.3% through August 21, 2005. Thereafter, through the maturity date, the interest rate is adjusted annually based on a variable rate of twenty-five basis points over the prime
rate. The note requires monthly principal payments of $35.8 plus interest, with a balloon payment of $12,888 due August 21, 2008. The mortgage covers the land and building at IVAX corporate headquarters in Miami.



(9) INCOME TAXES:



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



|                           |  | Three Months |        | Nine Months
|-------------------------- |  | ------------ | ------ | -----------
|Period Ended September 30, |  | 2003         |        | 2002       
|Current:                   |  |              |        |            
|Domestic                   |  | $            | 5,338  |            
|Foreign                    |  |              | 3,444  |            
|Deferred                   |  |              | 3,974  |            
|                           |  |              |        |            
|Total                      |  | $            | 12,756 |            
|                           |  |              |        |            



During 2003, IVAX
recognized $2,689 of deferred tax asset in France as management now believes it is more likely than not that a portion of the deferred tax asset will be realized. Payment of the current tax provision for the year ending December 31, 2003, for
domestic and foreign operations will be reduced by $876 and $2,173, respectively, representing the incremental impact of compensation expense deductions associated with non-qualified stock options exercised during the first nine months of 2003.
These amounts were credited to Capital in excess of par value. As of September 30, 2003, a domestic net deferred tax asset of $96,745 and an aggregate foreign net deferred tax asset of $11,065 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.



(10) SHAREHOLDERS EQUITY:



During the first nine months of 2003, IVAX repurchased 700 shares of its common stock at a total cost, including commissions, of $8,997.



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(11) BUSINESS SEGMENT INFORMATION:



|Revenues by RegionPeriod Ended September 30,                |      | Three Months |         |      | Nine Months |  
|----------------------------------------------------------- | ---- | ------------ | ------- | ---- | ----------- | -
|                                                            | 2003 |              |         | 2002 |             |  
|North America                                               |      |              |         |      |             |  
|External sales                                              |      | $            | 167,418 |      |             | $
|Intersegment sales                                          |      |              | 27      |      |             |  
|Other revenues                                              |      |              | 4,858   |      |             |  
|                                                            |      |              |         |      |             |  
|Net revenues  North America                                |      |              | 172,303 |      |             |  
|                                                            |      |              |         |      |             |  
|Europe                                                      |      |              |         |      |             |  
|External sales                                              |      |              | 100,586 |      |             |  
|Intersegment sales                                          |      |              | 19,090  |      |             |  
|Other revenues                                              |      |              | 4,363   |      |             |  
|                                                            |      |              |         |      |             |  
|Net revenues  Europe                                       |      |              | 124,039 |      |             |  
|                                                            |      |              |         |      |             |  
|Latin America                                               |      |              |         |      |             |  
|External sales                                              |      |              | 68,633  |      |             |  
|Other revenues                                              |      |              | 142     |      |             |  
|                                                            |      |              |         |      |             |  
|Net revenues  Latin America                                |      |              | 68,775  |      |             |  
|                                                            |      |              |         |      |             |  
|Corporate and other                                         |      |              |         |      |             |  
|External sales                                              |      |              | 14,199  |      |             |  
|Intersegment sales                                          |      |              | (19,117 | )    |             |  
|Other revenues                                              |      |              | 439     |      |             |  
|                                                            |      |              |         |      |             |  
|Net revenues  Corporate and other                          |      |              | (4,479  | )    |             |  
|                                                            |      |              |         |      |             |  
|Consolidated net revenues                                   |      | $            | 360,638 |      |             | $
|                                                            |      |              |         |      |             |  
|Profits by RegionPeriod Ended September 30,                 |      | Three Months |         |      | Nine Months |  
|                                                            | 2003 |              |         | 2002 |             |  
|Income from continuing operations before minority interest: |      |              |         |      |             |  
|North America                                               |      | $            | 22,725  |      |             | $
|Europe                                                      |      |              | (5,787  | )    |             |  
|Latin America                                               |      |              | 11,096  |      |             |  
|Corporate and other                                         |      |              | (6,454  | )    |             |  
|                                                            |      |              |         |      |             |  
|Income from continuing operations before minority interest  |      |              | 21,580  |      |             |  
|                                                            |      |              |         |      |             |  
|                                                            |      |              |         |     
|Net Income:                                                 |      |              |         |      |             |  
|Minority interest                                           |      |              | 51      |      |             |  
|Discontinued operations                                     |      |              |        |      |             |  
|Cumulative effect of accounting change                      |      |              |        |      |             |  
|                                                            |      |              |         |      |             |  
|Net income                                                  |      | $            | 21,631  |      |             | $
|                                                            |      |              |         |      |             |  



|                    |  | September 30,
|------------------- |  | -------------
|Long-Lived Assets:  |  | 2003         
|North America       |  | $            
|Europe              |  |              
|Latin America       |  |              
|Corporate and other |  |              
|                    |  |              
|Total               |  | $            
|                    |  |              



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



|                      |  | BalanceJanuary 1,2003 |         | Acquisitions |   | ForeignExchangeand Other |  |   | BalanceSeptember 30,2003
|--------------------- |  | --------------------- | ------- | ------------ | - | ------------------------ |  | - | ------------------------
|North America         |  | $                     | 3,972   |              | $ | 3,220                    |  | $ | (2,500                  
|Europe                |  |                       | 32,839  |              |   |                         |  |   | 2,597                   
|Latin America         |  |                       | 323,137 |              |   |                         |  |   | 16,116                  
|Corporate and other   |  |                       | 47,455  |              |   |                         |  |   | (61                     
|                      |  |                       |         |              |   |                          |  |   |                         
|Consolidated goodwill |  | $                     | 407,403 |              | $ | 3,220                    |  | $ | 16,152                  
|                      |  |                       |         |              |   |                          |  |   |                         



(12) RECENTLY ISSUED ACCOUNTING
STANDARDS:



In January 2003, the Financial Accounting
Standards Board (FASB) issued Interpretation No. 46, Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51, Consolidated Financial Statements, which addresses consolidation by
business enterprises of variable interest entities (VIEs). It is effective immediately for variable interest entities created after January 31, 2003. On October 9, 2003, the FASB issued Staff Position No. FIN 46-6 deferring the
effective date, for VIEs created before February 1, 2003, to the end of the first interim or annual period ending after December 15, 2003. As part of the acquisition of Lab Chile, IVAX acquired a note receivable secured by an option to acquire
all of the outstanding shares of common stock of a company that owns 50.1% of a Latin American pharmacy chain, which had net revenues of $36,317 during the year ended December 31, 2002. Consolidation of the pharmacy chain may be required as of
December 31, 2003. IVAX maximum exposure to loss is the recorded value of the receivable, which was $1,728 at September 30, 2003.



In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, which amends and
clarifies accounting for derivative instruments under SFAS No. 133. It is effective for contracts entered into after June 30, 2003. The impact of adoption of this statement was not significant.



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



(13) ACQUISITIONS:



On January 24, 2003, IVAX acquired ChemSource Corporation in Puerto Rico from Chemo Iberica S.A. and Quimica Sintetica S.A. for 1,000 shares of IVAX
common stock, valued at $12,393, and $100 in cash. ChemSource Corporation was subsequently renamed API Industries, Inc. (API). The total purchase price, including acquisition costs of $309 less cash acquired of $358, was $12,444. API
develops, manufactures and sells active pharmaceutical ingredients for various pharmaceutical



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products, including many products that IVAX sells or has under development. IVAX acquired API to further its objective of complementing existing businesses
and to provide new products and marketing opportunities. The operating results of API are included in the consolidated financial statements subsequent to the January 24, 2003, acquisition date.



On May 27, 2003, IVAX entered into an agreement to acquire Advanced Tobacco
Products, Inc. (ATP), for 237 shares of IVAX common stock, valued at $4,097. On September 23, 2003, the transaction to acquire ATP was approved by the shareholders of ATP and the transaction was completed. The total purchase price,
including acquisition costs of $175, less cash acquired of $332, was $3,940. ATP is an inhalation technology company that developed a patent for nicotine impermeable copolymer technology marketed for smoking cessation, that it sold to Pharmacia in
1987. ATP receives payments from Pharmacia on the sales of those products. ATP also has an exclusive license to certain dry powder inhaler technology from Duke University. IVAX entered into the agreement to acquire ATP because of the complementary
nature of ATPs technology to IVAX product line and because of the anticipated payments from sales of Pharmacias products incorporating the patented nicotine technology sold by ATP to Pharmacia.



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



|Current assets, excluding cash acquired |  | $ | 4,973  |  
|--------------------------------------- |  | - | ------ | -
|Property, plant and equipment           |  |   | 8,308  |  
|Intangible assets                       |  |   | 2,219  |  
|Other assets                            |  |   | 46     |  
|                                        |  |   |        |  
|Total assets acquired                   |  |   | 15,546 |  
|                                        |  |   |        |  
|Current liabilities                     |  |   | 2,382  |  
|Long-term debt                          |  |   |       |  
|                                        |  |   |        |  
|Total liabilities assumed               |  |   | 2,382  |  
|                                        |  |   |        |  
|Net assets acquired                     |  | $ | 13,164 |  
|                                        |  |   |        |  
|Purchase price:                         |  |   |        |  
|Cash acquired, net of cash paid         |  | $ | (590   | )
|Acquisition costs                       |  |   | 484    |  
|Fair market value of stock issued       |  |   | 16,490 |  
|                                        |  |   |        |  
|Total                                   |  | $ | 16,384 |  
|                                        |  |   |        |  
|Goodwill                                |  | $ | 3,220  |  
|                                        |  |   |        |  



The results of
operations prior to the acquisitions were not significant in relation to IVAX results of operations.



(14) LEGAL PROCEEDINGS:



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



AWP Litigation



In the John Rice v. Abbott Laboratories, Inc. et al., Thompson v.
Abbott Laboratories, Inc., et al. and Turner v. Abbott Laboratories, Inc., et al., cases previously reported in IVAX Annual Report on



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Form 10-K for the year ended December 31, 2002, the defendants, including IVAX, have been successful in removing these cases to federal court and shortly
thereafter, these cases were transferred to the multi-district litigation pending in Boston, Massachusetts.



Commonwealth of Massachusetts v. Mylan Labs., et al. On September 29, 2003, IVAX received a copy of a Summons and Complaint filed by the
Commonwealth of Massachusetts against IVAX Corporation, and various other manufacturers of generic pharmaceutical products, alleging that all defendant manufacturers inflated the prices of generic pharmaceutical products paid for by the
Massachusetts Medicaid Program through alleged fraudulent promotion, marketing and sales practices, resulting in millions of dollars in overpayments. The Complaint also alleges that the defendant manufacturers reported understated drug pricing to
the federal government, which had the effect of reducing rebate payments to the Commonwealth under rebate agreements. The complaint alleges violations of the Massachusetts Medicaid False Claims Act, the Massachusetts False Claims Act and common law
fraud, along with claims for unjust enrichment, breach of contract and breach of the duty of good faith and fair dealing. The Commonwealth seeks injunctive relief, restitution, treble damages, civil penalties, attorneys fees, and investigative
and litigation costs. IVAX intends to vigorously defend itself in this matter and against these allegations.



On September 15, 2003, IVAX Pharmaceuticals, Inc. (IPI) and IVAX were served with an Amended Complaint filed in the U.S. District Court for
the District of Massachusetts in the case styled County of Suffolk vs. Abbott Laboratories, Inc., et al. and on August 25, 2003, IPI and IVAX were served with a similar complaint filed in the U.S. District Court for the Southern District of
New York in the case styled County of Westchester vs. Abbott Laboratories, Inc. et al. In each of these cases, the plaintiffs allege that the defendants violated the Racketeering Influenced and Corrupt Organizations Act (RICO),
the Federal Medicaid Statute, New York Social Services Law, New York Department of Health Regulations, and New York General Business Law. The plaintiffs also seek the recovery of damages for unfair trade practices, fraud, breach of contract and
under the theory of unjust enrichment. The plaintiffs also seek unspecified damages, including treble and punitive damages, civil penalties, declaratory and injunctive relief and restitution, allegedly suffered by the plaintiffs as a result of the
defendants alleged unlawful scheme to overcharge for prescription medications paid for by Medicaid. The plaintiffs allege that through promotional, discounting, and pricing practices, the defendants reported false and inflated average
wholesale prices or wholesale acquisition costs and failed to report their best prices as required by federal and state rebate statutes resulting in the plaintiffs overpaying for certain medications. IPI and IVAX intend to vigorously defend
themselves in these cases and against these allegations.



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



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Contract Litigation



On April 22, 2003, GenPharm, Inc. filed a complaint in the United States
District Court for the District of Puerto Rico against API for damages and equitable relief, including declaratory relief and specific performance, arising out of APIs alleged breach of agreements and failure to supply GenPharm with an active
pharmaceutical ingredient. The complaint also seeks the recovery of damages for APIs alleged negligence in failing to maintain production facilities in accordance with FDA standards. The plaintiff seeks to recover millions of dollars in
damages, along with interest, costs and expenses, including attorneys fees and other fees and costs. The plaintiff has filed a motion for preliminary relief seeking the attachment of approximately 165 kg. of the active pharmaceutical
ingredient, which motion IVAX has vigorously opposed. The complaint has been tendered to the sellers of API for defense and indemnity based on the terms of the agreement by which API was acquired by IVAX but the sellers have thus far refused to
accept responsibility.



Fen-Phen
Litigation



With respect to the individual and class
action lawsuits in both state and federal courts involving the diet drug combination of fenfluramine and phentermine, commonly known as fen-phen, previously reported in IVAX Annual Report on Form 10-K for the year ended December
31, 2002, to date, IVAX Pharmaceuticals has been named in approximately 5,297 cases and has been dismissed from approximately 4,961 of these cases.



United Kingdom Serious Fraud Office Investigation and Related Litigation



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



Environmental Related
Proceedings



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



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



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(15) SUBSEQUENT EVENTS:



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



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



Except for the historical information contained herein, the following discussion contains forward-looking statements that are subject to known and unknown
risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. We discuss such risks, uncertainties and other factors throughout this report and
specifically under the caption Risk Factors in Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2002. The following discussion and analysis should be read in conjunction with the consolidated financial statements,
the related Notes to Consolidated Financial Statements and Managements Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2002, and the unaudited
interim consolidated financial statements and the related notes to unaudited interim consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.



Results of Operations



Nine Months Ended September 30, 2003 Compared to the Nine Months Ended September 30, 2002



Net income for the nine months ended September 30, 2003, was $91.9 million, or $0.46 per diluted share, compared to $86.0
million, or $0.44 per diluted share, for the same period of the prior year. Income from continuing operations for the nine months ended September 30, 2003, was $69.7 million, or $0.35 per diluted share, compared to $81.8 million, or $0.42 per
diluted share, for the same period of the prior year. During the second quarter of 2003, we recorded income from discontinued operations in the amount of $22.2 million, net of tax of $12.8 million, or $0.11 per diluted share, resulting from a number
of agreements, for certain patent and product rights and the settlement of litigation related to a contingent sale price dispute from the 1997 sale of McGaw, Inc. to B. Braun Melsungen AG. Under these agreements, we received $13.9 million of cash,
net of related expenses incurred in 2003, and recorded a current tax payable of $5.1 million. In addition, the agreements provide for additional payments totaling $25.5 million due in five approximately equal annual installments, which were recorded
as a receivable discounted at 4%. We also accrued $1.6 million of additional fees related to the settlement and a deferred tax liability of $7.7 million. As of January 1, 2002, we recorded a cumulative change in accounting principle credit in the
amount of $4.2 million, or $0.02 per diluted share, in accordance with Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations.



Net Revenues and Gross Profit



Net revenues for the nine months ended September 30, 2003, totaled $1.0 billion, an increase of $149.3 million, or 17%, from
the $872.0 million reported in the same period of the prior year. This increase was comprised of increases of $110.4 million from North American subsidiaries, $32.2 million from European subsidiaries and $9.6 million from Latin American
subsidiaries, partially offset by a decrease in net revenues of $2.9 million from other operations. As a result of our recent return and customer inventory experience, our estimates of product returns and other sales allowances and inventory
obsolescence decreased during the third quarter of 2003 and, accordingly, we recognized increased net revenues and reduced cost of sales during the quarter. During the nine months ended September 30, 2003, these changes increased net revenues by
$10.2 million, reduced cost of sales by $2.5 million, increased net income by $7.9 million and increased diluted earnings per share by $0.04.



North American subsidiaries net revenues totaled $478.6 million for the nine months ended September 30, 2003, compared to $368.2 million for the same
period of the prior year. North American subsidiaries recorded provisions for sales returns and allowances that reduced gross sales by $436.0



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million during the nine months ended September 30, 2003, and $420.9 million for the same period of the prior year. The 30% increase in net revenues was due
to the impacts of price increases of $26.9 million (including the impact of the change in estimates discussed above), volume increases of $83.2 million and an increase in other revenues of $0.3 million.



European subsidiaries generated net revenues of $368.4 million for the nine
months ended September 30, 2003, compared to $336.3 million for the same period of the prior year. European subsidiaries recorded provisions for sales returns and allowances that reduced gross sales by $29.9 million during the nine months ended
September 30, 2003, and $35.7 million for the same period of the prior year. The 10% increase in net revenues was primarily due to favorable effects of currency exchange rates of $41.3 million, the impacts of price increases of $5.1 million, volume
increases of $4.5 million and a decrease, net of currency effects, in other revenues of $18.7 million. The decrease in other revenues was primarily due to reduced product collaboration and development fees of $18.7 million and a decrease in various
other revenues of $6.0 million, partially offset by a $6.0 million milestone payment received in the second quarter under a license and development agreement.



Latin American subsidiaries generated net revenues of $180.1 million for the nine months ended September 30, 2003, compared to $170.5 million for the
same period of the prior year. Latin American subsidiaries recorded provisions for sales returns and allowances that reduced gross sales by $26.0 million during the nine months ended September 30, 2003, and $25.4 million for the same period of the
prior year. The 6% increase in net revenues was primarily due to the impacts of price increases of $24.3 million, volume increases of $7.7 million, unfavorable effects of currency devaluations of $21.7 million and a decrease, net of currency
effects, in other revenues of $0.7 million.



Gross profit was
$457.6 million (45% of net revenues) for the nine months ended September 30, 2003, compared to $395.3 million (45% of net revenues) for the same period of the prior year.



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



| |  | our ability to obtain and maintain FDA approval of our manufacturing facilities;
| | - | --------------------------------------------------------------------------------



| |  | our ability to maintain a pipeline of products in development;
| | - | --------------------------------------------------------------



| |  | our ability to achieve the milestones specified in our license and development agreements;
| | - | ------------------------------------------------------------------------------------------



| |  | our ability to manufacture, obtain and maintain a sufficient supply of products to meet market demand, retain our customers and meet contractual deadlines and terms;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | our ability to develop and rapidly introduce new products and to introduce existing products into new territories;
| | - | ------------------------------------------------------------------------------------------------------------------



| |  | the timing of regulatory approval of such products;
| | - | ---------------------------------------------------



| |  | the availability and cost of raw materials required to manufacture such products;
| | - | ---------------------------------------------------------------------------------



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| |  | our ability to manufacture such products efficiently;
| | - | -----------------------------------------------------



| |  | the number and timing of regulatory approvals of competing products;
| | - | --------------------------------------------------------------------



| |  | the outcome and timing of legal proceedings, particularly those related to Hatch-Waxman exclusivity and patent infringement cases;
| | - | ----------------------------------------------------------------------------------------------------------------------------------



| |  | our ability to forecast inventory levels and trends at our customers and their end-customers; and
| | - | -------------------------------------------------------------------------------------------------



| |  | our and our competitors pricing and chargeback policies.
| | - | ---------------------------------------------------------



Operating Expenses



Selling expenses increased $22.7 million, or 18%, to $149.2 million (15% of net revenues) for the nine months ended September 30, 2003, compared to $126.5
million (15% of net revenues) for the same period of the prior year. The increase was due primarily to higher expenses associated with our U.S. proprietary sales force.



General and administrative expenses increased $5.7 million, or 7%, to $91.2 million (9% of net revenues) for the nine months
ended September 30, 2003, compared to $85.5 million (10% of net revenues) for the same period of the prior year. The increase is primarily attributable to general and administrative expenses from the operations of API Industries, Inc.
(API, formerly ChemSource Corporation), which was acquired January 24, 2003, and to a $1.5 million severance payment to an executive officer who retired during the year.



Research and development expenses for the nine months ended September 30, 2003, increased $19.9 million, or 36%, to $75.5
million (7% of net revenues), compared to $55.6 million (6% of net revenues) for the same period of the prior year due primarily to an increase in various research and development projects, bio-study costs and work force in North America and Europe.
Our future level of research and development expenditures will depend on, among other things, the outcome of clinical testing of products under development, the timing and impact of patent challenges and litigation, 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 2003, we incurred $0.8 million of restructuring costs in the United Kingdom and Chile, consisting primarily of employee
termination benefits, compared to $3.2 million of restructuring costs at two subsidiaries during the first nine months of 2002.



Other Income (Expense)



Interest income decreased $4.5 million and interest expense decreased $5.4 million for the nine months ended September 30, 2003, compared to the same
period of the prior year primarily due to the early extinguishment of debt.



Other income, net decreased $22.2 million for the nine months ended September 30, 2003, compared to the same period of the prior year. During the first nine months of 2003, we realized gains of $2.3 million on the
repurchase of subordinated notes compared to $13.5 million realized in the same period of the prior year. In addition, during the first nine months of 2003, we recorded $4.0 million of foreign currency losses compared to insignificant foreign
currency gains in the same period of the prior year. During the second quarter of 2002, we recorded a gain of $6.3 million on the sale of certain intangible assets in the Czech Republic.



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



Net income for the three months ended September 30, 2003, was $21.6 million,
or $0.11 per diluted share, compared to $30.8 million, or $0.16 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, 2003, totaled $360.6 million, an increase of $41.2 million, or 13%, from the $319.4 million reported
in the same period of the prior year. This increase was comprised of increases of $34.0 million from North American subsidiaries, $1.0 million from European subsidiaries, $15.6 million from Latin American subsidiaries, partially offset by a decrease
of $9.4 million from other operations. As a result of our recent return and customer inventory experience, our estimates of product returns and other sales allowances and inventory obsolescence decreased during the third quarter of 2003 and,
accordingly, we recognized increased net revenues and reduced cost of sales during the quarter. During the three months ended September 30, 2003, these changes increased net revenues by $10.2 million, reduced cost of sales by $2.5 million, increased
net income by $7.9 million and increased diluted earnings per share by $0.04.



North American subsidiaries net revenues totaled $172.3 million for the three months ended September 30, 2003, compared to $138.3 million for the same period of the prior year. North American subsidiaries recorded
provisions for sales returns and allowances that reduced gross sales by $129.6 million during the three months ended September 30, 2003, and $142.5 million for the same period of the prior year. The 25% increase in net revenues was primarily due to
the impacts of price increases of $7.7 million (including the impact of the change in estimates discussed above), volume increases of $28.2 million, and a decrease in other revenues of $1.9 million.



European subsidiaries generated net revenues of $124.0 million for the three
months ended September 30, 2003, compared to $123.0 million for the same period of the prior year. European subsidiaries recorded provisions for sales returns and allowances that reduced gross sales by $11.8 million during the three months ended
September 30, 2003, and $12.8 million for the same period of the prior year. The 1% increase in net revenues was primarily due to favorable effects of currency exchange rates of $7.3 million, the impacts of price decreases of $1.8 million, volume
increases of $10.8 million, and a decrease, net of currency effects, in other revenues of $15.3 million. The decrease in other revenues was primarily due to reduced product collaboration and development fees of $6.4 million, a decrease of $5.8
million of other revenue from a previously deferred up-front payment received under a license agreement that was terminated in the third quarter of 2002 and a decrease in various other revenues of $3.1 million.



Latin American subsidiaries generated net revenues of $68.8 million for the
three months ended September 30, 2003, compared to $53.1 million for the same period of the prior year. Latin American subsidiaries recorded provisions for sales returns and allowances that reduced gross sales by $10.0 million during the three
months ended September 30, 2003, and $7.8 million for the same period of the prior year. The 29% increase in net revenues was primarily due to the impacts of price increases of $11.1 million, volume increases of $5.3 million, unfavorable effects of
currency devaluations of $0.6 million and a decrease, net of currency effects, in other revenues of $0.1 million.



Gross profit was $160.5 million (45% of net revenues) for the three months ended September 30, 2003, compared to $142.8 million (45% of net revenues) for
the same period of the prior year.



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Operating Expenses



Selling expenses increased $10.5 million, or 26%, to $51.1 million (14% of net revenues) for the three months ended
September 30, 2003, compared to $40.6 million (13% of net revenues) for the same period of the prior year. The increase was due primarily to higher expenses associated with our U.S. proprietary sales force.



General and administrative expenses increased $3.9 million, or 13%, to $34.9
million (10% of net revenues) for the three months ended September 30, 2003, compared to $31.0 million (10% of net revenues) for the same period of the prior year. The increase is primarily attributable to general and administrative expenses from
the operations of API, which was acquired January 24, 2003, and higher insurance costs.



Research and development expenses for the three months ended September 30, 2003, increased $11.8 million, or 65%, to $30.0 million (8% of net revenues), compared to $18.2 million (6% of net revenues) for the same
period of the prior year due primarily to an increase in various research and development projects, bio-study costs and work force in North America and Europe.



During the third quarter of 2003, we incurred minimal restructuring costs in Chile, consisting primarily of employee termination benefits, compared to
$0.9 million of restructuring costs at two subsidiaries during the third quarter of 2002.



Other Income (Expense)



Interest income decreased $1.0 million and interest expense decreased $2.6 million for the three months ended September 30, 2003, compared to the same period of the prior year primarily due to the early extinguishment of debt.



Other income, net decreased $3.7 million for the three months ended
September 30, 2003, compared to the same period of the prior year. During the third quarter of 2003, we earned minimum royalties of $3.7 million recorded as additional consideration for the 1997 sale of Elmiron to Ortho-McNeil Pharmaceutical, Inc.
compared to $1.6 million of royalties in the same period of the prior year. During the third quarter of 2003, we recorded $1.4 million of foreign currency losses compared to $3.3 million of foreign currency gains in the same period of the prior
year. In addition, during the third quarter of 2002, we recorded a gain of $4.0 million on the repurchase of subordinated notes.



Recently Issued Accounting Standards



In January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46, Consolidation of Variable Interest
Entities, an interpretation of Accounting Research Bulletin No. 51, Consolidated Financial Statements, which addresses consolidation by business enterprises of variable interest entities (VIEs). It is effective
immediately for variable interest entities created after January 31, 2003. On October 9, 2003, the FASB issued Staff Position No. FIN 46-6 deferring the effective date, for VIEs created before February 1, 2003, to the end of the first interim
or annual period ending after December 15, 2003. As part of the acquisition of Lab Chile, we acquired a note receivable secured by an option to acquire all of the outstanding shares of common stock of a company that owns 50.1% of a Latin American
pharmacy chain, which had net revenues of $36.3 million for the year ended December 31, 2002. Consolidation of the pharmacy chain may be required as of December 31, 2003. Our maximum exposure to loss is the recorded value of the receivable, which
was $1.7 million at September 30, 2003.



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Liquidity and Capital Resources



At September 30, 2003, working capital was $494.6 million compared to $447.2 million at December 31, 2002. Cash and cash
equivalents were $187.5 million at September 30, 2003, compared to $155.4 million at December 31, 2002. Short-term marketable securities were $9.9 million at September 30, 2003, compared to $28.9 million at December 31, 2002.



Net cash of $71.8 million was provided by operating activities during the
first nine months of 2003 compared to $91.5 million during the same period of the prior year. The decrease in cash provided by operating activities was primarily the result of the timing of collections of accounts receivable and increased growth of
inventories.



Net cash of $23.1 million was used by investing
activities during the first nine months of 2003 compared to $36.1 million provided by investing activities during the same period of the prior year. During the first nine months of 2003, we spent $2.9 million to acquire intangible assets and
businesses and increase our ownership interest in affiliates compared to $38.1 million during the same period of the prior year. During the first nine months of 2003, we generated $22.9 million of net proceeds from the sale of marketable securities
compared to $128.6 million during the first nine months of 2002. In addition, during the first nine months of 2003, we generated $8.8 million of net proceeds from discontinued operations.



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



On May 27,
2003, we entered into an agreement to acquire Advanced Tobacco Products, Inc. (ATP), for 0.2 million shares of our common stock, valued at $4.1 million. During the third quarter of 2003, the transaction to acquire ATP was approved by the
shareholders of ATP and the transaction was completed. ATP is an inhalation technology company that developed a patent for nicotine impermeable copolymer technology marketed for smoking cessation, that it sold to Pharmacia in 1987. ATP receives
payments from Pharmacia on the sales of those products. ATP also has an exclusive license to certain dry powder inhaler technology from Duke University. We entered into the agreement to acquire ATP because of the complementary nature of ATPs
technology to our product line and because of the anticipated payments from sales of Pharmacias products incorporating the patented nicotine technology sold by ATP to Pharmacia.



Net cash of $27.8 million was used by financing activities during the first nine months of 2003 compared to $155.3 million
used during the same period of the prior year. During the first nine months of 2003, we repaid $57.2 million of bank debt (which included the repurchase of $28.3 million of our senior subordinated convertible debentures for $25.4 million) and
incurred $23.8 million of new borrowings. However, our repurchases of common stock during the period were $46.6 million less than during the 2002 period. On August 22, 2003, we executed a mortgage note and borrowed $15.0 million from a financial
institution. The note matures on August 21, 2008, and bears interest at an annual rate of 4.3% through August 21, 2005. Thereafter, through the maturity date, the interest rate is adjusted annually based on a variable rate of twenty-five basis
points over the prime rate. The note requires



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monthly principal payments of $.04 million plus interest, with a balloon payment of $12.9 million due August 21, 2008. The mortgage covers the land and
building at our corporate headquarters in Miami.



We plan to
spend substantial amounts of capital in 2003 to continue the research and development of pharmaceutical products. Although research and development expenditures are expected to be between $100 million and $110 million during 2003, actual
expenditures will depend on, among other things, the outcome of clinical testing or products under development, the timing and impact of patent challenges and litigation, delays or changes in government required testing and approval procedures,
technological and competitive developments, strategic marketing decisions and liquidity. In addition, we plan to spend between $90 million and $100 million in 2003 to improve and expand our pharmaceutical and related facilities.



On July 15, 2003, we entered into an agreement with the 3M Company to acquire
their respiratory branded business including license rights to certain branded respiratory products and the related marketing and sales forces in nine European countries. The transaction was closed on October 1, 2003. The total consideration due
under the agreement, including minimum annual royalty payments, is $77.0 million, of which $26.0 million was paid on closing, $24.0 million is due on the first and second anniversaries of the closing date and $3.0 million is due on the third
anniversary. We are also required to make additional royalty payments on achieving certain annual sales levels up to a maximum of $1.3 million per year, or $6.6 million in total.



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



Income Taxes



We recognized a $37.2 million tax
provision for the nine months ended September 30, 2003, of which $9.2 million related to foreign operations. During 2003, we recognized $2.6 million of deferred tax asset in France as management now believes it is more likely than not that a portion
of the deferred tax asset will be realized.



As of September
30, 2003, domestic net deferred tax assets totaled $96.7 million and aggregate foreign net deferred tax assets totaled $11.1 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, 2002.



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Critical Accounting Policies



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



Inventory  Inventories are stated at the lower of cost (first-in, first-out) or market. Components of inventory cost include materials, labor and
manufacturing overhead. In evaluating whether inventory is stated at the lower of cost or market, we consider such factors as the amount of inventory on hand, estimated time required to sell such inventory, remaining shelf life of the inventory and
current market price of the inventory. We have made, are in the process of making and/or will scale-up and make commercial quantities of certain of our product candidates prior to the date we anticipate that such products will receive final FDA or
foreign governmental marketing approval and/or satisfactory resolution of patent infringement litigation involving them (i.e., pre-launch inventory). The scale-up and commercial production of pre-launch inventories involves the risk that such
products may not be approved for marketing by the governmental agencies on a timely basis, or ever, and/or that the outcome of related litigation may not be satisfactory. This risk notwithstanding, we plan to continue to scale-up and build
pre-launch inventories of certain products that have not yet received final governmental approval and/or satisfactory resolution of patent infringement litigation when we believe that such action is appropriate in relation to the commercial value of
the product launch opportunity. As of September 30, 2003, we had approximately $14.8 million of inventories pending final approval and/or satisfactory resolution of litigation.



Revenue Recognition, Sales Returns and Allowances  Revenues and the related cost of sales are recognized at the time
title to our products and the risks and rewards of ownership passes to our customers. Our pharmaceutical revenues are affected by the level of provisions for estimated returns, inventory credits, discounts, promotional allowances, rebates,
chargebacks, reimbursements relating to Medicaid and Medicare and other allowances. The custom in the U.S. pharmaceutical industry is generally to grant customers the right to return purchased goods. In the generic pharmaceutical industry, this
custom has resulted in a practice of suppliers issuing inventory credits (also known as shelf-stock adjustments) to customers based on the customers existing inventory following decreases in the market price of the related generic
pharmaceutical product. We have contractual agreements with many of our customers, which require that we grant these customers inventory credit following a price decrease. In other cases, the determination to grant a credit to a customer following a
price decrease is at our discretion. These credits allow customers with established inventories to compete with those buying product at the current market price, and allow us to maintain shelf space, market share and customer loyalty.



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We establish provisions for estimated returns, inventory credits and chargebacks, as well as other sales
allowances, concurrently with the recognition of revenue. The provisions are established in accordance with accounting principles generally accepted in the United States based upon consideration of a variety of factors, including actual return and
inventory credit experience for products during the past several years by product type, the number and timing of regulatory approvals for the product by our competitors (both historical and projected), the market for the product, expected
sell-through levels by our wholesaler customers to customers with contractual pricing arrangements with us, estimated customer inventory levels by product and projected economic conditions. Actual product returns and inventory credits incurred are,
however, dependent upon future events, including remaining shelf-life and price competition and the level of customer inventories at the time of any price decreases. We continually monitor the factors that influence the pricing of our products and
customer inventory levels and make adjustments to these provisions when we believe that actual product returns, inventory credits and other allowances may differ from established reserves. As a result of our recent return and customer inventory
experience, our estimates of product returns and other sales allowances and inventory obsolescence decreased during the third quarter of 2003 and, accordingly, we recognized increased net revenues and reduced cost of sales during the quarter. During
the three and nine months ended September 30, 2003, these changes increased net revenues by $10.2 million, reduced cost of sales by $2.5 million, increased net income by $7.9 million and increased diluted earnings per share by $0.04.



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



Legal Costs  Legal charges are recorded for the costs anticipated to be incurred in connection with litigation and claims against us when we can reasonably estimate these costs. We intend to vigorously defend each of the lawsuits
described in Note 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, 2002, and in Note 14, Legal Proceedings, in the Notes to Consolidated
Financial Statements included in this Form 10-Q but their respective outcomes cannot be predicted. Any of such lawsuits or investigations, if determined adversely to us, could have a material adverse effect on our financial position and results of
operations. Our ultimate liability with respect to any of these proceedings is not presently determinable.



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



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Disclosure Regarding Forward-Looking Statements



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



| |  | difficulties in product development and uncertainties related to the timing or outcome of product development;
| | - | --------------------------------------------------------------------------------------------------------------



| |  | the availability on commercially reasonable terms of raw materials, particularly raw materials for our paclitaxel product, and other third-party sourced products;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | our ability to replace or renew license fees, royalties and development service fees as the related agreements expire or are terminated;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| |  | difficulties in complying with governmental regulations;
| | - | --------------------------------------------------------



| |  | difficulties in manufacturing products;
| | - | ---------------------------------------



| |  | our ability to reduce our backlog and manufacture, obtain and maintain a sufficient supply of products to meet market demand, retain our customers and meet contractual deadlines and
terms;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | our dependence on sole or limited source suppliers and the risk associated with a production interruption or shipment delays at such suppliers;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  | efficacy or safety concerns with respect to marketed products, whether or not scientifically justified, leading to recalls, withdrawals or declining sales;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | that our proposed spending on facilities improvement and expansion may not be as projected;
| | - | -------------------------------------------------------------------------------------------



| |  | our ability to obtain and maintain FDA approval of our manufacturing facilities, the failure of which could result in production stoppage or delays;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  | our ability to obtain approval from the FDA to market new pharmaceutical products;
| | - | ----------------------------------------------------------------------------------



| |  | the acceptance of new products by the medical community as effective as alternative forms of treatment for indicated conditions;
| | - | --------------------------------------------------------------------------------------------------------------------------------



| |  | the outcome and timing of any pending or future litigation or investigation (including patent, trademark and copyright litigation and the United Kingdom National Health Service
investigation), and the cost, expenses and possible diversion of managements time and attention arising from such litigation or investigation;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the impact of new regulations or court decisions regarding the protection of patents and the exclusivity period for the marketing of branded drugs;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the impact of the adoption of certain accounting standards;
| | - | -----------------------------------------------------------



| |  | our success in acquiring or licensing proprietary technologies that are necessary for our product development activities;
| | - | -------------------------------------------------------------------------------------------------------------------------



| |  | the impact of political and economic instability in the countries in which we operate, particularly Argentina and Venezuela;
| | - | ----------------------------------------------------------------------------------------------------------------------------



| |  | our successful compliance with extensive, costly, complex and evolving governmental regulations and restrictions;
| | - | -----------------------------------------------------------------------------------------------------------------



| |  | our ability to successfully compete in both the branded and generic pharmaceutical sectors; and
| | - | -----------------------------------------------------------------------------------------------



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| |  | other risks and uncertainties detailed herein and from time to time in our Securities and Exchange Commission filings.
| | - | ----------------------------------------------------------------------------------------------------------------------



The information in this Form 10-Q is as of September 30, 2003, or, where
clearly indicated, as of the date of this filing. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. We also may make additional disclosures in our Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we may file from time to time with the Securities and Exchange Commission. Please also note that we provide a cautionary discussion of risks and uncertainties
under the section entitled Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2002. These are factors that we think could cause our actual results to differ materially from expected results. Other factors
besides those listed here could also adversely affect us.



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Item 3 - Quantitative and Qualitative Disclosures About Market Risk



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



Foreign Currency Exchange Rate Risk  We have subsidiaries in more than 20 countries worldwide. During the nine months ended September 30, 2003,
sales by subsidiaries located outside the United States accounted for approximately 54% of worldwide sales. The majority of these sales were denominated in currencies of the local country. As such, our reported profits and cash flows are exposed to
changing exchange rates. If the United States dollar weakens relative to the foreign currency, the earnings generated in the foreign currency will, in effect, increase when converted into United States dollars and vice versa. Although we do not
speculate in the foreign exchange market, we do from time to time manage exposures that arise in the normal course of business related to fluctuations in foreign currency exchange rates by entering into offsetting positions through the use of
foreign exchange forward contracts. As a result of exchange rate differences, net revenues increased by $20.4 million for the nine months ended September 30, 2003, compared to the same period of the prior year. The effects of inflation on
consolidated net revenues and operating income were not significant. Certain firmly committed transactions are hedged with foreign exchange forward contracts. As exchange rates change, gains and losses on the exposed transactions are partially
offset by gains and losses related to the hedging contracts. Both the exposed transactions and the hedging contracts are translated at current spot rates, with gains and losses included in earnings. Our derivative activities, which primarily consist
of foreign exchange forward contracts, are initiated primarily to hedge forecasted cash flows that are exposed to foreign currency risk.



The foreign exchange forward contracts generally require us to exchange local currencies for foreign currencies based on pre-established exchange rates at
the contracts maturity dates. If the counterparties to the exchange contracts do not fulfill their obligations to deliver the contracted currencies, we could be at risk for currency related fluctuations. We enter into these contracts with
counterparties that we believe to be creditworthy and do not enter into any leveraged derivative transactions. As of September 30, 2003, we had $13.0 million in foreign exchange forward contracts outstanding, primarily to hedge Euro-based operating
cash flows against Pounds Sterling.



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



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Item 4 - Controls and Procedures



Evaluation of Disclosure Controls and Procedures



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



Changes in
Internal Controls



No significant changes were made to our
internal controls or other factors that could significantly affect these controls during the quarterly period to which this quarterly report on Form 10-Q relates.



Limitations on the Effectiveness of Controls



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



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



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PART II - OTHER INFORMATION



Item 1 - Legal Proceedings



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



AWP Litigation



Commonwealth of Massachusetts v. Mylan Labs., et al. On September 29,
2003, we received a copy of a Summons and Complaint filed by the Commonwealth of Massachusetts against IVAX Corporation, and various other manufacturers of generic pharmaceutical products, alleging that all defendant manufacturers inflated the
prices of generic pharmaceutical products paid for by the Massachusetts Medicaid Program through alleged fraudulent promotion, marketing and sales practices, resulting in millions of dollars in overpayments. The Complaint also alleges that the
defendant manufacturers reported understated drug pricing to the federal government, which had the effect of reducing rebate payments to the Commonwealth under rebate agreements. The complaint alleges violations of the Massachusetts Medicaid False
Claims Act, the Massachusetts False Claims Act and common law fraud, along with claims for unjust enrichment, breach of contract and breach of the duty of good faith and fair dealing. The Commonwealth seeks injunctive relief, restitution, treble
damages, civil penalties, attorneys fees, and investigative and litigation costs. We intend to vigorously defend ourself in this matter and against these allegations.



On September 15, 2003, IVAX Pharmaceuticals, Inc. (IPI) and we were served with an Amended Complaint filed in
the U.S. District Court for the District of Massachusetts in the case styled County of Suffolk vs. Abbott Laboratories, Inc., et al. and on August 25, 2003, we were served with a similar complaint filed in the U.S. District Court for the
Southern District of New York in the case styled County of Westchester vs. Abbott Laboratories, Inc. et al. In each of these cases, the plaintiffs allege that the defendants violated the Racketeering Influenced and Corrupt Organizations Act
(RICO), the Federal Medicaid Statute, New York Social Services Law, New York Department of Health Regulations, and New York General Business Law. The plaintiffs also seek the recovery of damages for unfair trade practices, fraud, breach
of contract and under the theory of unjust enrichment. The plaintiffs also seek unspecified damages, including treble and punitive damages, civil penalties, declaratory and injunctive relief and restitution, allegedly suffered by the plaintiffs as a
result of the defendants alleged unlawful scheme to overcharge for prescription medications paid for by Medicaid. The plaintiffs allege that through promotional, discounting, and pricing practices, the defendants reported false and inflated
average wholesale prices or wholesale acquisition costs and failed to report their best prices as required by federal and state rebate statutes resulting in the plaintiffs overpaying for certain medications. We intend to vigorously defend ourselves
in these cases and against these allegations.



Contract Litigation



With respect to the
complaint filed by GenPharm on April 22, 2003, previously reported in our Quarterly Report on Form 10-Q for the period ended March 31, 2003, the plaintiff has filed a motion for preliminary relief seeking the attachment of approximately 165,000 kg.
of the active pharmaceutical ingredient, which motion we have vigorously opposed. The complaint has been tendered to the sellers of API for defense and indemnity based on the terms of the agreement by which API was acquired by us but the sellers
have thus far refused to accept responsibility.



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Fen-Phen Litigation



With respect to the individual and class action lawsuits in both state and
federal courts involving the diet drug combination of fenfluramine and phentermine, commonly known as fen-phen, previously reported in our Annual Report on Form 10-K for the year ended December 31, 2002, to date, IPI has been named in
approximately 5,297 cases and has been dismissed from approximately 4,961 of these cases.



Item 6 - Exhibits and Reports on Form 8-K



|(a) | Exhibits
|--- | --------



|31.1 |  | Certificate of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as
amended                                                                                |  | Filed herewith.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------
|     |  |                                                                                                                                                                                                        
|31.2 |  | Certificate of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as
amended                                                                                |  | Filed herewith.
|     |  |                                                                                                                                                                                                        
|32   |  | Certificate of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange
Act of 1934, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002 |  | Filed herewith.



|(b) | Reports on Form 8-K
|--- | -------------------



On July 30, 2003, we filed a report on Form 8-K to furnish our earnings release for the second quarter of 2003.



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Signature



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



|                        |  |  |  |     |  | IVAX CORPORATION      
|----------------------- |  |  |  | --- |  | ----------------------
|                        |  |  | 
|Date: November 13, 2003 |  |  |  | By: |  | /s/    THOMAS E.
BEIER
|                        |  |  |  |     |  |                       



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EXHIBIT INDEX



|EXHIBITNUMBER |  | DESCRIPTION OF DOCUMENT                                                                                                                                                                                
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              | 
|31.1          |  | Certificate of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended                                                                               
|              | 
|31.2          |  | Certificate of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended                                                                               
|              | 
|32            |  | Certificate of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and Section 906 of the
Sarbanes-Oxley Act of 2002