<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934
                For The Quarterly Period Ended September 30, 1999
                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
              For the transition period from          to
                                             --------    --------

                           Commission File No. 0-24425


                           KING PHARMACEUTICALS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

          TENNESSEE                                    54-1684963
(State or other jurisdiction of             (I.R.S. EMPLOYER IDENTIFICATION NO.)
 Incorporation or organization)

       501 FIFTH STREET                                  37620
         Bristol, TN
   (Address of principal                               (Zip Code)
     executive offices)

       Registrant's telephone number, including area code: (423) 989-8000

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 [ ]

               Class                  Outstanding Shares at November 12, 1999
               -----                  ---------------------------------------
              Common                                 48,234,233
                                                     ----------



                                       1
<PAGE>   2

                           KING PHARMACEUTICALS, INC.

                                      INDEX

<TABLE>
<S>                                                                                      <C>
PART 1- FINANCIAL INFORMATION

Item 1:  Financial Statements (unaudited)

Condensed Consolidated Balance Sheets as of September 30, 1999 and December 31, 1998      3

Condensed Consolidated Statements of Operations for the Three and Nine Months ended
September 30, 1999 and 1998 ........................................................      4

Condensed Consolidated Statements of Cash Flows for the Nine Months ended
September 30, 1999 and  1998 .......................................................      5

Notes to the Condensed Consolidated Financial Statements ...........................      6

Item 2:  Management's Discussion and Analysis of Financial Condition and
         Results of Operations .....................................................     13

PART II - OTHER INFORMATION

Item 1:  Legal Proceedings .........................................................     19
Item 6:  Exhibits and Reports on Form 8-K ..........................................     20

SIGNATURES .........................................................................     21
</TABLE>




                                       2
<PAGE>   3

                         Part I - FINANCIAL INFORMATION

                         Item 1.  Financial Statements

                           KING PHARMACEUTICALS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                   September 30,  December 31,
                                                                       1999           1998
                                                                   -------------  ------------
                                                                   (Unaudited)
<S>                                                                 <C>            <C>
ASSETS

Current assets:
   Cash and cash equivalents ..................................     $  10,917      $   1,159
   Accounts receivable, net ...................................        76,178         39,666
   Inventory ..................................................        42,474         26,556
   Deferred income taxes ......................................         5,717          6,675
   Prepaid expenses and other assets ..........................         1,758          1,554
                                                                    ------------------------
         Total current assets .................................       137,044         75,610
                                                                    ------------------------
Property, plant and equipment, net ............................        94,968         93,981
Intangible assets, net ........................................       557,002        480,583
Other assets ..................................................        20,182         17,997
                                                                    ------------------------
         Total assets .........................................     $ 809,196      $ 668,171
                                                                    ========================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Current  portion of long-term debt:
   Term Loans .................................................     $  11,682      $  10,250
   Other ......................................................         1,394          3,060
Accounts payable ..............................................        21,905         12,594
Accrued expenses ..............................................        37,174         15,095
Income taxes payable ..........................................         4,917          3,524
                                                                    ------------------------
         Total current liabilities ............................        77,072         44,523
                                                                    ------------------------
Long-term debt:
   Revolving Credit Facility ..................................        80,000         19,000
   Term loans .................................................       357,435        414,750
   Senior Subordinated Notes ..................................       150,000         75,000
   Other ......................................................         5,356          5,736
Deferred income taxes .........................................         6,768          7,726
                                                                    ------------------------
         Total liabilities ....................................       676,631        566,735
                                                                    ------------------------
Shareholders' equity:
    Common shares no par value, 150,000,000 shares authorized,
      48,171,906 and 48,157,095 shares issued and outstanding,
      respectively ............................................        66,739         66,572
    Retained earnings .........................................        66,422         35,460
    Due from related party ....................................          (596)          (596)
                                                                    ------------------------
         Total shareholders' equity ...........................       132,565        101,436
                                                                    ------------------------
         Total liabilities and shareholders' equity ...........     $ 809,196      $ 668,171
                                                                    ========================
</TABLE>

                             See accompanying notes



                                       3
<PAGE>   4


                           KING PHARMACEUTICALS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                      Three Months Ended          Nine Months Ended
                                                         September 30,               September 30,
                                                      1999          1998         1999           1998
                                                  ------------------------      ------------------------
                                                          (Unaudited)                 (Unaudited)
<S>                                                <C>            <C>           <C>            <C>
REVENUES:
   Net sales .................................     $ 104,909      $ 48,089      $ 240,914      $ 108,047
   Development revenues ......................            --            --             --          5,283
                                                  ------------------------------------------------------
            Total revenues ...................       104,909        48,089        240,914        113,330
                                                  ------------------------------------------------------
OPERATING COSTS AND EXPENSES:
   Cost of sales .............................        36,112        20,521         75,055         41,933
   Selling, general and administrative .......        23,219         9,627         55,270         25,040
   Depreciation and amortization .............         6,770         2,592         19,348          6,506
                                                   ------------------------------------------------------
            Total operating costs and expenses        66,101        32,740        149,673         73,479
                                                  ------------------------------------------------------
OPERATING INCOME .............................        38,808        15,349         91,241         39,851
OTHER (EXPENSES) INCOME:
   Interest expense ..........................       (14,536)       (3,579)       (40,598)       (10,729)
   Interest income ...........................           104            35            169             89
   Other income (expense) ....................           (47)            5            (83)            31
                                                  ------------------------------------------------------
            Total other (expenses) ...........       (14,479)       (3,539)       (40,512)       (10,609)
                                                  ------------------------------------------------------
INCOME BEFORE INCOME TAXES AND
   EXTRAORDINARY ITEM ........................        24,329        11,810         50,729         29,242
   Income tax expense ........................         9,250         4,500         19,062         11,183
                                                  ------------------------------------------------------
INCOME BEFORE EXTRAORDINARY ITEM .............        15,079         7,310         31,667         18,059
Extraordinary item net of income taxes .......            --            --           (705)          (286)
                                                  ------------------------------------------------------
Net Income ...................................     $  15,079      $  7,310      $  30,962      $  17,773
                                                  ======================================================
Basic and diluted income per common share
Income before extraordinary item .............     $    0.31      $   0.15           0.65      $    0.41
Extraordinary item ...........................            --            --          (0.01)         (0.01)
                                                  ------------------------------------------------------
Net Income ...................................     $    0.31      $   0.15      $    0.64      $    0.40
                                                  ======================================================
</TABLE>


                             See accompanying notes


                                       4
<PAGE>   5

                           KING PHARMACEUTICALS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                     For the Nine
                                                                     Months Ended
                                                                     September 30,
                                                              -------------------------
                                                                  1999           1998
                                                              -------------------------
                                                                     (Unaudited)
<S>                                                            <C>            <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: .....     $  35,142      $  (1,381)
                                                              -------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment ....................        (5,246)       (77,753)
  Proceeds from sale of equipment ........................            20             --
  Product acquisitions ...................................       (91,650)       (56,559)
  Other ..................................................            --             35
                                                              -------------------------
      Net cash used in investing activities ..............       (96,876)      (134,277)
                                                              -------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from revolving line of credit .................        87,000         20,139
  Payments on revolving line of credit ...................       (26,000)       (20,291)
  Due from related party .................................            --          1,075
  Payments on short-term debt ............................            --           (360)
  Proceeds from long-term debt and capital lease
    obligations ..........................................            81        175,596
  Payments on long-term debt and capital lease obligations       (58,010)       (81,213)
  Repayment of senior subordinated seller notes ..........       (75,000)            --
  Proceeds of senior subordinated notes ..................       150,000             --
  Debt issuance costs ....................................        (6,746)        (7,335)
  Proceeds from issuance of common stock, net ............            --         50,966
  Other ..................................................           167             --
                                                              -------------------------
      Net cash provided by financing activities ..........        71,492        138,577
                                                              -------------------------
Increase in cash and cash equivalents.....................         9,758          2,919
Cash and cash equivalents, beginning of the period .......         1,159             69
                                                              -------------------------
Cash and cash equivalents, end of the period .............     $  10,917      $   2,988
                                                              =========================
</TABLE>

                             See accompanying notes


                                       5


<PAGE>   6


                           KING PHARMACEUTICALS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                (in thousands, except share and per share data)

NOTE 1.  GENERAL

The accompanying unaudited interim condensed consolidated financial statements
of King Pharmaceuticals, Inc. (the "Company") have been prepared by the Company
in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X, and accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of items
of a normal recurring nature) considered necessary for a fair presentation have
been included. Operating results for the three months and nine months ended
September 30, 1999 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1999. These interim statements should
be read in conjunction with the financial statements and notes thereto included
in the Company's latest Annual Report on Form 10-K.

NOTE 2.  NEW ACCOUNTING PRONOUNCEMENT

In 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133
requires that all derivative instruments be recorded on the balance sheet at
their fair value. Changes in the fair value of derivatives are recorded each
period in current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction and, if it is, the type
of hedge transaction. The Financial Accounting Standards Board delayed the
effective date of SFAS No. 133 for one year, to fiscal years beginning after
June 15, 2000. The delay, published as SFAS No. 137, applies to quarterly and
annual financial statements. Management is evaluating the provisions of SFAS
No. 133, but has not yet determined the impact, if any, of its adoption.

NOTE 3.  EQUITY

INCOME PER SHARE

The following table sets forth a reconciliation of the numerators and
denominators in computing income per share:

<TABLE>
<CAPTION>
                                                   Three Months Ended             Nine Months Ended
                                                      September 30,                  September 30,
                                                  1999            1998            1999            1998
                                             ------------------------------------------------------------
<S>                                           <C>             <C>             <C>             <C>
Net income ..............................     $    15,079     $     7,310     $    30,962     $    17,773
                                             ============================================================
Weighted average basic shares outstanding      48,164,371      48,112,698      48,160,118      44,191,826
Effect of dilutive stock options ........         297,541              --         233,070              --
                                             ------------------------------------------------------------
Dilutive shares outstanding .............      48,461,912      48,112,698      48,393,188      44,191,826
                                             ============================================================

                                             ------------------------------------------------------------
Basic and diluted net income per share ..     $      0.31     $      0.15     $      0.64     $      0.40
                                             ============================================================
</TABLE>

STOCK SPLIT

On October 4, 1999 the Company's board of directors declared a three for two
stock split for shareholders of record as of October 28, 1999, to be distributed
November 11, 1999. The stock split has been reflected in all share data
contained in these financial statements.




                                       6
<PAGE>   7

NOTE 4.  INVENTORY

Inventory consists of the following:

<TABLE>
<CAPTION>
                                   September 30,  December 31,
                                      1999             1998
                                  ----------------------------
                                  (Unaudited)

<S>                                 <C>                <C>
         Finished goods .......     $23,830            $13,772
         Work-in-process ......      10,626              5,386
         Raw materials ........       8,018              7,398
                                  ----------------------------
                                    $42,474            $26,556
                                  ============================
</TABLE>


NOTE 5.  ACQUISITIONS/INTANGIBLE ASSETS

On August 19, 1999 the Company acquired the antibiotic Lorabid(R) (loracarbef)
in the United States and Puerto Rico from Eli Lilly and Company for a purchase
price of $91.7 million including acquisition costs plus sales performance
milestones that could bring the total value of the deal to $158 million. The
final contingent payment will be made if the Lorabid(R) annual net sales reach
$140 million.

As part of the agreement, the Company acquired or licensed Lilly's rights in the
United States  and Puerto Rico including Lorabid's(R) new drug applications,
investigational new drug applications, patents and associated United States
copyright and trademark material. Lilly will manufacture Lorabid(R) for the
Company. As part of the manufacturing agreement, the Company must meet certain
minimum purchase requirements each year.

On November 12, 1999 the Company purchased the Tigan product line from Roberts
Pharmaceutical Corporation.

Intangible assets are as follows:

<TABLE>
<CAPTION>
                                                              September 30,     December 31,
                                                                   1999             1998
                                                               ----------------------------
<S>                                                              <C>              <C>
         Altace(R), Silvadene(R), AVC(TM) ................       $ 362,950        $ 362,950
         Lorabid(R) ......................................          91,650               --
         Septra(R), Proloprim(R), Mantadil(R), Kemadrin(R)          15,425           15,425
         Cortisporin(R) ..................................          23,694           23,694
         Sterile Products ................................          54,509           54,509
         Neosporin(R) ....................................           5,876            5,876
         Viroptic(R) .....................................           5,229            5,229
         Nucofed(R)/Quibron(R) ...........................           7,301            7,301
         Polysporin(R) ...................................           3,783            3,783
         Menest(R) .......................................           5,000            5,000
         Other ...........................................           3,377            3,377
                                                               ----------------------------
                                                                   578,794          487,144
         Less accumulated amortization ...................         (21,792)          (6,561)
                                                               ----------------------------
                                                                 $ 557,002        $ 480,583
                                                               ============================
</TABLE>

The following unaudited pro forma summary presents the financial information as
if certain of the Company's acquisitions except the Tigan product line had
occurred on January 1, 1998. These pro forma results have been prepared for
comparative purposes and do not purport to be indicative of what would have
occurred had the acquisitions been made on January 1, 1998, nor is it indicative
of future results.




                                       7
<PAGE>   8


<TABLE>
<CAPTION>
                                               For the three                          For the nine
                                               months ended                           months ended
                                               September 30,                          September 30,
                                           1999             1998                1999               1998
                                     --------------------------------------------------------------------------
<S>                                      <C>               <C>                <C>                <C>
Total revenues ......................    $111,268          $99,727            $272,711           $268,641
                                     ==========================================================================
Net income ..........................    $ 15,445          $ 9,621            $ 33,952           $ 21,229
                                     ==========================================================================
Basic and diluted income per
  common share ......................    $   0.32          $  0.20            $   0.70           $   0.48
                                     ==========================================================================
</TABLE>

NOTE 6.  CONTINGENCIES

Except as described below, the Company has not been a party to litigation or
other legal proceedings.

Many distributors, marketers and manufacturers of anorexigenic drugs have been
subject to claims relating to the use of these drugs. The Company is a defendant
in 69 lawsuits which claim damages for personal injury arising from the
Company's production of the anorexigenic drug phentermine under contract for
SmithKline Beecham ("SKB"). Generally, the lawsuits allege that the defendants
(1) misled users of the products with respect to the dangers associated with
them, (2) failed to adequately test the products, and (3) knew or should have
known about the negative effects of the drugs, and should have informed the
public about the risks of such negative effects. The actions generally have been
brought by individuals in their own right and have been filed in various state
and federal jurisdictions throughout the United States. They seek, among other
things, compensatory and punitive damages and/or court-supervised medical
monitoring of persons who have ingested the product. The Company expects to be
named in additional lawsuits related to the Company's production of the
anorexigenic drug under contract for SKB.

While the Company cannot predict the outcome of these suits, management believes
that the claims against the Company are without merit and intends to vigorously
pursue all defenses available to the Company. The Company is being indemnified
in all of these suits by SKB for which the Company manufacture the anorexigenic
product, provided that neither the lawsuits nor the associated liabilities are
based upon the independent negligence or intentional acts of the Company. The
Company intends to submit a claim for all unreimbursed costs to its product
liability insurance carrier. However, in the event that SKB is unable to satisfy
or fulfill its obligations under the indemnity, the Company would have to defend
the lawsuit and be responsible for damages, if any, which are awarded against
the Company or for amounts in excess of the Company's product liability
coverage.

NOTE 7.  LONG-TERM DEBT

As of September 30, 1999 the Company has $20,000 of availability under the
Revolving Credit Facility.

As of September 30, 1999 the Company has entered into $285.0 million of interest
rate hedging transactions with a group of commercial banks to exchange variable
LIBOR for a fixed LIBOR rate of interest. Under these agreements the Company
pays weighted average LIBOR interest rates between 5.5% and 5.9% and receives
the equivalent of one-month LIBOR until termination. The agreements expire at
various times through September 2006.



                                       8
<PAGE>   9

NOTE 8.  SEGMENT  REPORTING

The Company primarily evaluates its segments based on gross profit. Reportable
segments were separately identified based on revenues, gross profit and total
assets.

The following represents selected information for the Company's operating
segments for the periods indicated:


<TABLE>
<CAPTION>
                               For the Three Months Ended     For the Nine Months Ended
                                      September, 30                 September, 30
                               -------------------------------------------------------
                                   1999           1998           1999           1998
                               -------------------------------------------------------
                                       (Unaudited)                   (Unaudited)
<S>                             <C>            <C>            <C>            <C>
REVENUE:
Branded pharmaceuticals ...     $  93,394      $  39,359      $ 205,506      $  85,132
Contract manufacturing ....        25,839         20,458         51,463         36,976
All other .................         2,390            297          8,887          5,994
Eliminations ..............       (16,714)       (12,024)       (24,942)       (14,772)
                               -------------------------------------------------------
    Consolidated total
      revenues ............     $ 104,909      $  48,090      $ 240,914      $ 113,330
                               =======================================================
GROSS PROFIT (LOSS):
Branded pharmaceuticals ...     $  68,427      $  26,914      $ 162,153      $  65,829
Contract manufacturing ....          (824)           558         (1,777)           100
All other .................         1,193             96          5,482          5,468
                               -------------------------------------------------------
    Consolidated gross
      profit ..............     $  68,796      $  27,568      $ 165,858      $  71,397
                               =======================================================
</TABLE>

<TABLE>
<CAPTION>
                                   As of          As of
                              September 30,    December 31,
                                   1999           1998
                               -------------------------
                                      (Unaudited)
<S>                             <C>            <C>
TOTAL ASSETS:
Branded pharmaceuticals ...     $ 647,294      $ 522,218
Contract manufacturing ....       161,094        144,614
All other .................         1,328          1,735
Eliminations ..............          (520)          (396)
                               -------------------------
    Consolidated total
      assets ..............     $ 809,196      $ 668,171
                               =========================
</TABLE>





                                       9
<PAGE>   10

NOTE 9.  GUARANTOR FINANCIAL STATEMENTS

The Company's wholly-owned subsidiaries Monarch Pharmaceuticals, Inc., Parkedale
Pharmaceuticals, Inc. and King Pharmaceuticals of Nevada, Inc. (the "Guarantor
Subsidiaries") have guaranteed the Company's performance under the $150,000 of
10 3/4% Senior Subordinated Notes due 2009 on a joint and several basis. There
are no restrictions under the Company's financing arrangements on the ability of
the Guarantor Subsidiaries to distribute funds to the Company in the form of
cash dividends, loans or advances. The following combined financial data
provides information regarding the financial position, results of operations and
cash flows of the Guarantor Subsidiaries (condensed combined financial data).
Separate financial statements and other disclosures concerning the Guarantor
Subsidiaries are not presented because management has determined that such
information would not be material to the holders of the notes.


GUARANTOR SUBSIDIARIES
CONDENSED COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
                                             September 30, December 31,
                                                  1999        1998
                                             -----------------------
                                              (Unaudited)
<S>                                            <C>          <C>
Current assets:
  Cash ...................................     $     --     $     --
  Accounts Receivable ....................       67,453       30,475
  Inventory ..............................       36,706       20,089
  Prepaid expense ........................        1,133           27
                                             -----------------------
      Total current assets ...............      105,292       50,591
                                             -----------------------

Property, plant, and equipment, net ......       73,440       72,965
Intangible assets, net ...................      113,766      117,518
                                             -----------------------
      Total assets .......................     $292,498     $241,074
                                             =======================
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable .......................     $ 19,692     $  8,157
  Current portion of long-term debt ......           27           --
  Accrued expenses .......................       27,463       10,645
                                             -----------------------
      Total current liabilities ..........       47,182       18,802
                                             -----------------------

Long-term debt ...........................           48           --
Intercompany payable .....................      134,129      175,613
                                             -----------------------
      Total liabilities ..................      181,359      194,415
                                             -----------------------

Shareholders' equity .....................      111,139       46,659
                                             -----------------------
      Total liabilities and shareholders'
        equity ...........................     $292,498     $241,074
                                             =======================
</TABLE>


                                       10
<PAGE>   11

GUARANTOR SUBSIDIARIES
COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                           For the Three Months         For the Nine Months
                                           Ended September 30,          Ended September 30,
                                           1999          1998           1999           1998
                                        ------------------------------------------------------
                                              (Unaudited)                   (Unaudited)
<S>                                      <C>            <C>           <C>            <C>
REVENUES:
  Net sales ........................     $ 116,562      $ 58,247      $ 249,034      $ 116,093
  Development revenue ..............            --            --             --          5,283
                                        ------------------------------------------------------
      Total revenues ...............       116,562        58,247        249,034        121,376
                                        ------------------------------------------------------
OPERATING COSTS AND EXPENSES:
  Cost of sales ....................        48,568        30,476         86,990         50,710
  Selling, general, and
    administrative .................        18,072         5,854         43,251         15,198
  Depreciation and Amortization ....         2,287         2,288         11,649          5,654
  Royalty expense ..................           888           448          1,822            850
                                        ------------------------------------------------------
      Total operating costs and
        expenses ...................        69,815        39,066        143,712         72,412
                                        ------------------------------------------------------
OPERATING INCOME ...................        46,747        19,181        105,322         48,964

OTHER (EXPENSES) INCOME
  Interest expense .................            --         8,417             --          8,419
  Gain/loss ........................            62            (5)           131             (5)
  Interest income ..................            (2)         (494)            (3)          (495)
  Other income expense .............             4            (1)             5            (15)
                                        ------------------------------------------------------
      Income before income taxes ...        46,683        11,264        105,189         41,060
                                        ------------------------------------------------------
Income tax expense .................        18,066         4,359         40,708         15,891
                                        ------------------------------------------------------
NET INCOME .........................     $  28,617      $  6,905      $  64,481      $  25,169
                                        ======================================================
</TABLE>



                                       11
<PAGE>   12

GUARANTOR SUBSIDIARIES
COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                  For the Nine Months
                                                                  Ended September 30,
                                                                  1999           1998
                                                              --------------------------
                                                                      (Unaudited)

<S>                                                              <C>           <C>
Net cash provided by operating activities ..................     $ 44,800      $  17,698
                                                              --------------------------
Cash flows from investing activities:
  Purchases of intangible assets ...........................       (4,883)       (59,855)
  Purchases of property and equipment ......................       (3,619)       (74,571)
                                                              --------------------------
      Net cash used in investing activities ................       (8,502)      (134,426)
                                                              --------------------------
Cash flows from financing activities:
  Increase (decrease) in inter-company payable .............      (36,373)       118,490
  Increase (decrease) in long-term debt ....................           75         (1,762)
                                                              --------------------------
      Net cash (used in) provided by financing activities ..      (36,298)       116,728
                                                              --------------------------
Change in cash and cash equivalents ........................           --             --
Cash and cash equivalents at beginning of period ...........           --             --
                                                              --------------------------
Cash and cash equivalents at end of period .................     $     --      $      --
                                                              ==========================
</TABLE>







                                       12
<PAGE>   13
                          PART I- FINANCIAL INFORMATION
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion contains certain forward-looking statements that
reflect management's current views of future events and operations. These
forward-looking statements involve certain significant risks and uncertainties,
and actual results may differ materially from the forward-looking statements.
Some important factors which may cause results to differ include: our
significant leverage and debt service requirements, dependence on our ability to
continue to acquire branded products, dependence on sales of our products,
management of our growth and integration of our acquisitions. Other important
factors that may cause actual results to differ materially from the
forward-looking statements are discussed in various sections of our Annual
Report on Form 10-K for the year ended December 31, 1998, which is on file with
the Securities and Exchange Commission. We do not undertake to publicly update
or revise any of our forward-looking statements even if experience or future
changes show that the indicated results or events will not be realized. The
following presentation of management's discussion and analysis of financial
condition and results of operations should be read in conjunction with our
unaudited consolidated financial statements and related notes thereto.

OVERVIEW

         We are a vertically integrated pharmaceutical company that
manufactures, markets and sells primarily branded prescription pharmaceutical
products. Through a national sales force of over 200 representatives and
copromotion arrangements, we market our branded pharmaceutical products to
general/family practitioners, internal medicine physicians and hospitals across
the country. Our business strategy is to acquire established branded
pharmaceutical products and to increase their sales by focused marketing and
promotion and through product life cycle management. In pursuing acquisitions,
we seek to capitalize on opportunities in the pharmaceutical industry created by
cost containment initiatives and consolidation among large, global
pharmaceutical companies. We also create value by developing product line
extensions for our branded pharmaceutical products such as new formulations,
dosages or new indications. These product line extensions are attractive to us
because they may have market exclusivity or sales levels that do not attract
significant competition. In addition to branded pharmaceuticals, we also provide
contract manufacturing for a number of the world's leading pharmaceutical and
biotechnology companies, including Amgen, Inc., Warner-Lambert, Mallinckrodt
Chemical, Inc. ("Mallinckrodt"), Genetics Institute, Inc. and Hoffman-La Roche
Inc.

         Our branded pharmaceutical products can be divided into four
therapeutic areas: (i) cardiovascular (including Altace, Thalitone and
Procanbid), (ii) anti-infectives (including Lorabid, Cortisporin, Neosporin and
Coly-Mycin M), (iii) vaccines and biologicals (including Fluogen and Aplisol)
and (iv) women's health (including Pitocin and Menest). All of these products
are marketed to general/family practitioners and internal medicine physicians.
Unlike many of our competitors, we have a broad therapeutic focus that provides
us with opportunities to purchase a wide variety of products, as evidenced by
our acquisition of 27 products over the last 24 months, including Altace and
Lorabid. In addition, we have well known products in all of our therapeutic
categories that generate high prescription volumes. Our portfolio of
well-recognized prescription brand names includes, among others, Altace,
Lorabid, Neosporin, Cortisporin, Pitocin, Anusol-HC and Fluogen.




                                       13
<PAGE>   14

         Since December 1994 we have acquired 35 branded pharmaceutical
products, developed three products internally, divested one product and
introduced eight product line extensions. We acquired from Glaxo Wellcome the
Cortisporin product line in March 1997, the Viroptic product line in May 1997
and six additional branded products, including Septra, and exclusive licenses,
free of royalty obligations, for the prescription formulations of Neosporin and
Polysporin in November 1997 (the "Glaxo Acquisition").

         In February 1998 we acquired from Warner-Lambert 15 branded
pharmaceutical products, the Parkedale Facility located in Rochester, Michigan
and certain manufacturing contracts for third parties for $127.9 million,
including $2.9 million of assumed liabilities (the "Sterile Products
Acquisition").

         In June 1998 we acquired the Menest product line from SmithKline
Beecham Corporation for $5.0 million.

         In June 1998 we launched our new Cortisporin-TC Otic line.
Cortisporin-TC Otic is a product line extension for our Cortisporin Otic
Suspension product.

         In August 1998 we received approval by the FDA to reintroduce Fluogen
(influenza virus vaccine, Trivalent, Types A & B), which was acquired as part of
the Sterile Products Acquisition and had been off the market since 1996. Fluogen
is a seasonal product with most of its sales occurring the third and fourth
quarters.

         In December 1998 we acquired from Hoechst Marion Roussel, Inc. ("HMR")
for $362.5 million the United States rights to Altace, an ACE inhibitor, HMR's
worldwide rights to Silvadene, a burn cream, and HMR's worldwide rights to AVC,
a vaginal anti-infective cream (the "Altace Acquisition").

         In August 1999 we acquired the antibiotic Lorabid from Eli Lilly and
Company ("Lilly") for $91.7 million including acquisition costs plus sales
performance milestones that could bring the total value of the deal to $158.0
million. The final contingent payment will be made if we achieve $140.0 million
in annual net sales of Lorabid. As part of the agreement, we acquired or
licensed all of Lilly's rights in the United States and Puerto Rico to Lorabid
including Lorabid's new drug applications, investigational new drug
applications, and certain patents and associated United States copyright and
trademark material. Lilly will manufacture Lorabid for us. Lorabid has United
States patent protection through December 31, 2005. Lorabid is indicated for the
treatment of patients with mild to moderate infections caused by susceptible
strains of bacteria in the upper and lower respiratory tract, the skin, and the
urinary tract.

         Our strategy is to continue to acquire branded pharmaceutical products
and to create value by leveraging our marketing, manufacturing and product
development capabilities. We expect that our strategy of acquiring branded
pharmaceutical products will increase our revenues as a result of sales of such
products and will increase gross margins. In general, margins are higher on our
branded pharmaceutical products than on our other products, making branded
products attractive to us. As soon as practicable after regulatory requirements
are satisfied and when advantageous, we expect that manufacturing these acquired
pharmaceutical products ourselves will increase our margins because the cost of
producing pharmaceutical products on our own is lower than the cost of having
these products manufactured by third parties. We may also be required to raise
funds through additional borrowings or the issuance of debt or equity securities
in order to finance additional branded product acquisitions and to expand or
remodel our manufacturing facilities.

         We manufacture pharmaceutical products for a variety of pharmaceutical
and biotechnology companies under contracts expiring at various times within the
next five years. We intend to enter into additional manufacturing contracts in
cases where we identify contracts that offer significant volumes and attractive
margins. We have not accepted or renewed manufacturing contracts for third
parties where we perceived insignificant volumes or revenues. In accordance with
our focus on branded pharmaceutical products, we expect that, over time, our
contract manufacturing and generic pharmaceutical, and companion animal health
product lines will become a smaller percentage of revenues.




                                       14
<PAGE>   15

        The following summarizes approximate net revenues by product categories
(in thousands).

<TABLE>
<CAPTION>
                             Three Months Ended             Nine Months Ended
                                September 30,                  September 30,
                              1999        1998              1999         1998
                            --------     -------          --------     --------
<S>                         <C>          <C>              <C>          <C>
Branded pharmaceuticals     $ 93,394     $39,359          $205,506     $ 85,130
Contract manufacturing         9,126       8,434            26,522       22,205
Other                          2,389         296             8,886        5,995
                            --------     -------          --------     --------
     Total                  $104,909     $48,089          $240,914     $113,330
                            --------     -------          --------     --------
</TABLE>

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

Revenues

         Net revenues increased $56.8 million, or 118.1%, to $104.9 million in
1999 from $48.1 million in 1998, due primarily to the acquisition and growth of
branded pharmaceutical products. The increase in revenues is primarily from the
Altace Acquisition, the acquisition of Lorabid, and revenue growth of certain
branded pharmaceutical products.

         Net sales from branded pharmaceutical products increased $54.0 million,
or 137.1%, to $93.4 million in 1999 from $39.4 million in 1998. The Altace
Acquisition, the acquisition of Lorabid and revenue gains by Fluogen and the
Cortisporin and Neosporin product lines accounted for most of the sales
increase.

         Revenues from contract manufacturing increased $692,000, or 8.0%, to
$9.1 million in 1999 from $8.4 million in 1998.

         Net sales from generic and other increased $2.1 million, or 709.5%, to
$2.4 million in 1999 from $296,000 in 1998 primarily due to increased sales of a
generic product line.

Operating Costs and Expenses

         Total operating costs and expenses increased $17.8 million, or 145.9%,
to $30.0 million in 1999 from $12.2 million in 1998. The increase was due to
increases in the costs associated with our growth, particularly the Altace
Acquisition.

         Cost of sales increased $15.6 million, or 76.1%, to $36.1 million in
1999 from $20.5 million in 1998. The increase was due primarily to the costs
associated with the newly acquired branded product lines and increases in the
production of Fluogen.

         Selling, general and administrative expenses increased $13.6 million,
or 141.7%, to $23.2 million in 1999 from $9.6 million in 1998. As a percentage
of net sales, selling, general and administrative expenses increased from 20.0%
to 22.1%. This increase was primarily attributable to the hiring of additional
sales representatives during the second half of 1998 and first part of 1999; as
well as other personnel costs, marketing, and sampling costs associated with the
new branded product lines.

         Depreciation and amortization expense increased $4.2 million, or
161.5%, to $6.8 million in 1999 from $2.6 million in 1998. This increase was
primarily attributable to having a full period of the amortization from the
intangible assets acquired in the Altace Acquisition and the acquisition of
Lorabid.




                                       15
<PAGE>   16

Operating Income

         Operating income increased $23.5 million, or 153.6%, to $38.8 million
in 1999 from $15.3 million in 1998. This increase was primarily due to increased
revenues from the acquisition of branded products offset by increased expenses
described above. As a percentage of net revenues, operating income increased to
37.0% in 1999 from 31.9% in 1998.

Interest Expense

         Interest expense increased $10.9 million, or 302.8%, to $14.5 million
in 1999 from $3.6 million in 1998, as a result of additional term loans used to
finance, primarily, the Altace Acquisition.

Income Tax Expense

         The effective tax rate in 1999 of 38.0% and 1998 of 38.1% was higher
than the federal statutory rate of 35% primarily due to state income taxes.


Net Income

         Due to the factors set forth above, net income increased $7.8 million,
or 106.8%, to $15.1 million in 1999 from $7.3 million in 1998.

NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

Revenues

         Net revenues increased $127.6 million, or 112.6%, to $240.9 million in
1999 from $113.3 million in 1998, due primarily to the acquisition and growth of
branded products. The increase in revenues is primarily attributable to the
Altace Acquisition, the acquisition of Lorabid, and sales growth of certain
branded pharmaceutical products.

         Net sales from branded pharmaceutical products increased $120.4
million, or 141.5%, to $205.5 million in 1999 from $85.1 million in 1998. The
increase in revenues from branded pharmaceutical products is primarily
attributable to the Altace Acquisition, the acquisition of Lorabid, and revenue
growth of Fluogen and the Cortisporin and Neosporin product lines.

         Revenues from contract manufacturing increased $4.3 million, or 19.4 %,
to $26.5 million in 1999 from $22.2 million in 1998. Contract revenue increased
primarily because we had a full nine months of contract revenue from the
Sterile Products Acquisition that closed in late February 1998.

         Net sales from generic and other increased $2.9 million, or 48.3%, to
$8.9 million in 1999 from $6.0 million in 1998. The increase in revenues is
primarily attributable to increased sales of a generic product line, offset by a
decrease in development revenue. We have recognized no development revenues in
1999. In 1998, we recognized $5.0 million in development revenues as a result of
the Food and Drug Administration ("FDA") approval and our validation of the
process of two additional ANDA's pursuant to an agreement with Mallinckrodt.
Currently, we have no ongoing agreements that would result in future development
revenue recognition.




                                       16
<PAGE>   17

Operating Costs and Expenses

         Total operating costs and expenses increased $43.1 million, or 136.8%,
to $74.6 million in 1999 from $31.5 million in 1998. The increase was due to
increases in the costs associated with our growth, particularly the Sterile
Products Acquisition and the Altace Acquisition.

         Cost of sales increased $33.2 million, or 79.2%, to $75.1 million in
1999 from $41.9 million in 1998. The increase was due primarily to the costs
associated with the newly acquired branded product lines and increase in the
production of Fluogen.

         Selling, general and administrative expenses increased $30.3 million,
or 121.2%, to $55.3 million in 1999 from $25.0 million in 1998. This increase
was primarily attributable to the hiring of additional sales representatives
during the second half of 1998 and first part of 1999; as well as other
personnel costs, marketing, and sampling costs associated with the new branded
product lines. As a percentage of net sales, selling, general and administrative
expenses increased from 22.1% to 22.9%.

         Depreciation and amortization expense increased $12.8 million, or
196.9%, to $19.3 million in 1999 from $6.5 million in 1998. This increase was
primarily attributable to the depreciation and amortization of the fixed assets
and intangibles assets acquired in the Sterile Products Acquisition in February
1998, the Altace Acquisition in December 1998 and the acquisition of Lorabid in
August 1999.

Operating Income

         Operating income increased $51.3 million, or 128.6%, to $91.2 million
in 1999 from $39.9 million in 1998. This increase was primarily due to increased
revenues from the acquisition of branded products offset by increased expenses
described above. As a percentage of net revenues, operating income increased to
37.9% in 1999 from 35.2% in 1998.

Interest Expense

         Interest expense increased $29.9 million, or 279.4%, to $40.6 million
in 1999 from $10.7 million in 1998, as a result of additional loans used to
finance, in part, the Sterile Products Acquisition, the Altace Acquisition, and
the acquisition of Lorabid.

Income Tax Expense

         The effective tax rate in 1999 of 37.6% and 1998 of 38.2% was higher
than the federal statutory rate of 35% primarily due to state income taxes. The
effective tax rate was lower in 1999 as compared to 1998 because of an inventory
donation.

Extraordinary item

         During the first quarter of 1999, we repaid $75.0 million of senior
subordinated seller notes prior to maturity. The early repayment of the notes
resulted in an extraordinary loss of $705,000, net of related tax benefits of
$445,000, from the write-off of certain deferred financing costs.

Net Income

         Due to the factors set forth above, net income increased $13.2 million,
or 74.2%, to $31.0 million in 1999 from $17.8 million in 1998.





                                       17
<PAGE>   18
LIQUIDITY AND CAPITAL RESOURCES

General

         Our liquidity requirements arise from debt service, working capital
requirements and funding of acquisitions of branded products.

         As of September 30, 1999 we have available up to $20.0 million under a
revolving line of credit, which allows for total borrowing of up to $100.0
million.

         We generated net cash from operations of $35.1 million for the nine
months ended September 30, 1999. Our net cash provided from operations was
primarily the result of $31.0 million in net income, adjusted for non-cash
depreciation and amortization of $19.3 million, a non-cash extraordinary charge
of $1.2 million before income tax benefit, an increase in accrued expenses of
$22.1 million, and an increase in accounts payable and income taxes payable of
$9.3 million and $1.4 million, respectively. Additionally, we decreased other
assets by $1.9 million and recorded $1.3 million of non-cash amortization of
loan fees. An increase in accounts receivable of $36.5 million and an increase
in inventory of $15.9 million offset the items previously described.

         Cash flows used in investing activities was $96.9 million due to the
purchase of Lorabid and $5.2 million of capital expenditures for the nine months
ended September 30, 1999.

         Financing activities provided $71.5 million comprised principally of
$150.0 million in proceeds from senior subordinated notes, and $87.0 million in
proceeds from the revolving credit facility. These amounts were offset by
repayments of the $75.0 million senior subordinated seller notes, $58.0 million
relating to the term loans, and $26.0 million on the revolving credit facility.

         As of September 30, 1999 we have outstanding approximately $525.9
million of long-term debt (including current portion), and $80.0 million in
borrowings under our revolving credit facility. Of these amounts, approximately
$449.1 million were at variable rates based on LIBOR and the remainder at fixed
rates. We have entered into $285.0 million of interest rate hedging transactions
with a group of commercial banks to exchange our variable LIBOR for a fixed rate
of interest. We do not believe our exposure to changes in interest rates under
the remaining variable rate agreements will have a material effect on our
financial condition or results of operations. Certain financing arrangements
require us to maintain certain minimum net worth, debt to equity, cash flow and
current ratio requirements. As of September 30, 1999 we were in compliance with
these covenants.

         We believe that existing credit facilities and cash expected to be
generated from operations are sufficient to finance our current operations and
working capital requirements. However, in the event we make significant future
acquisitions, we may be required to raise funds through additional borrowings or
the issuance of additional debt or equity securities. At present, we are
actively pursuing acquisitions that may require the use of substantial capital
resources. There are, however, no present agreements or commitments with respect
to any such acquisitions.

         We financed the acquisition of Lorabid with borrowings under the
revolving credit facility and cash generated from operations.


Capital Expenditures

         Capital expenditures, including capital lease obligations, were $1.9
million and $4.2 million for the three months ended September 30, 1999 and 1998,
respectively, and $5.2 million and $77.8 million for the nine months ended
September 30, 1999 and 1998, respectively. The principal capital expenditures
included property and equipment purchases and building improvements. We
anticipate total capital expenditures in 1999 to be approximately $7.1 million
primarily to fund additional equipment purchases and building improvements. In
addition, we expect to increase our capital expenditures over the next few years
as a part of our acquisition and growth strategy.


                                       18
<PAGE>   19

Year 2000 Compliance

         We have conducted an evaluation of our IT and non-IT computer systems
with respect to the "Year 2000" issue. This issue arises because many electronic
systems use two digits rather than four to determine dates. This could cause
information technology systems such as software applications, hardware, network
systems and embedded chips to misread important dates beginning in the year
2000, which could cause system failures and disruption of operations.

         We have completed a Year 2000 readiness assessment of our business
critical IT and non-IT systems. As a result of the assessment, we have developed
and are implementing corrective action plans designed to address Year 2000
issues. These plans, which include modification, upgrade and replacement of our
critical administrative, production and research and development computer
systems to make them Year 2000 ready. We expect to have our critical systems
Year 2000 ready by December 31, 1999.

         Because our operations depend on the uninterrupted flow of materials
and services from our suppliers, we have requested and have been receiving and
analyzing information from our suppliers with regard to their progress toward
Year 2000 readiness. We intend to continue to monitor the progress of our key
suppliers toward Year 2000 readiness.

         We estimate that it will spend in total between $1.0 million and $1.5
million to become Year 2000 ready. The majority of this spending will constitute
replacement costs of non-compliant IT systems and reprogramming existing
systems. It is possible that the actual cost of our Year 2000 readiness effort
could exceed these estimates.

         Although we have a process in place to assess Year 2000 readiness on
the part of our suppliers, we consider the most reasonably likely worst case
scenario is that one or more of our suppliers might encounter a Year 2000
problem and be unable to supply materials. If this occurs and we could not
obtain the same materials from another vendor, production could be interrupted,
which could result in lost sales and profits. In addition, while we are taking
action to correct deficiencies in our own systems, it is possible that one or
more of our facilities or critical business systems might not achieve Year 2000
readiness as anticipated. This could also result in disruption of operations and
lost sales and profits.

         We do not manufacture any products that are subject to Year 2000 risks.
Contingency plans have been or will be developed to avoid or mitigate the risks
that either key suppliers or we might not achieve Year 2000 readiness in time to
avoid disruption of our operations.

                           PART II - OTHER INFORMATION

                            ITEM 1. LEGAL PROCEEDINGS

         Many distributors, marketers and manufacturers of anorexigenic drugs
have been subject to claims relating to the use of these drugs. We are a
defendant in 69 lawsuits that claim damages for personal injury arising from our
production of the anorexigenic drug phentermine under contract for SKB.
Generally, the lawsuits allege that the defendants (1) misled users of the
products with respect to the dangers associated with them, (2) failed to
adequately test the products, and (3) knew or should have known about the
negative effects of the drugs, and should have informed the public about the
risks of such negative effects. The actions generally have been brought by
individuals in their own right and have been filed in various state and federal
jurisdictions throughout the United States. They seek, among other things,
compensatory and punitive damages and/or court-supervised medical monitoring of
persons who have ingested the product. We expect to be named in additional
lawsuits related to our production of the anorexigenic drug under contract for
SKB.




                                       19
<PAGE>   20
      While we cannot predict the outcome of these suits, we believe that the
claims against us are without merit and intend to vigorously pursue all defenses
available to us. We are being indemnified in all of these suits by SKB for which
we manufactured the anorexigenic product, provided that neither the lawsuits nor
the associated liabilities are based upon our independent negligence or
intentional acts. We intend to submit a claim for all unreimbursed costs to its
product liability insurance carrier. However, in the event that SKB is unable to
satisfy or fulfill its obligations under the indemnity, we would have to defend
the lawsuit and be responsible for damages, if any, which are awarded against us
or for amounts in excess of our product liability coverage.


                    ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits

                Exhibit No.           Description

                (27.1)   Financial Data Schedule (For SEC Use Only)

         (b) Reports on From 8-K

                During the quarter ended September 30, 1999, we filed a
         Current Report on Form 8-K, in response to Item 5 of that Form, dated
         September 28, 1999, related to the August 19, 1999 acquisition of all
         rights, titles, and interests of Eli Lilly and Company in all
         formulations of pharmaceutical products sold under the registered
         trademark Lorabid(R) (loracarbef) in the United States and Puerto Rico.





                                       20
<PAGE>   21

                                   SIGNATURES

         Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                           King Pharmaceuticals, Inc.



Date:   November 12, 1999                  By: /s/ John M. Gregory
        -----------------------                ---------------------------------
                                                   John M. Gregory
                                                   Chairman and Chief
                                                   Executive Officer



Date:   November 12, 1999                  By: /s/  Brian G. Shrader
        -----------------------                ---------------------------------
                                                    Brian G. Shrader
                                                    Chief Financial Officer







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