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, 1998

                                       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 NUMBER 1-10352

                           COLUMBIA LABORATORIES, INC.
               (Exact name of Company as specified in its charter)

          DELAWARE                                               59-2758596
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                              Identification No.)

      2875 NORTHEAST 191 STREET
          AVENTURA, FLORIDA                                         33180
(Address of principal executive offices)                          (Zip Code)

Company's telephone number, including area code: (305) 933-6089

         Indicate by check mark whether the Company (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 Company
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X  No ___

         Number of shares of the Common Stock of Columbia Laboratories, Inc.
issued and outstanding as of October 31, 1998: 28,684,687


<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                         PART 1 - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

         The following unaudited, condensed consolidated financial statements of
the Company have been prepared in accordance with the instructions to Form 10-Q
and, therefore, omit or condense certain footnotes and other information
normally included in financial statements prepared in accordance with generally
accepted accounting principles. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary for a fair presentation
of the financial information for the interim periods reported have been made.
Results of operations for the nine months ended September 30, 1998 are not
necessarily indicative of the results for the year ending December 31, 1998.

         Except for historical information contained herein, the matters
discussed in this document are forward looking statements made pursuant to the
safe harbor provisions of the Securities Litigation Reform Act of 1995. Such
statements involve risks and uncertainties, including but not limited to
economic, competitive, governmental and technological factors affecting the
Company's operations, markets, products and prices, and other factors discussed
elsewhere in this report.


                                  Page 2 of 15
<PAGE>

<TABLE>
<CAPTION>
                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                        SEPTEMBER 30,   DECEMBER 31,
                                                             1998            1997 
                                                        ------------    ------------
                                                         (Unaudited)
<S>                                                     <C>             <C>
ASSETS:
   Current assets-
     Cash and cash equivalents                          $  1,366,072    $  2,256,590
     Accounts receivable, net                              3,162,433       6,223,842
     Inventories                                           3,342,845       2,252,675
     Prepaid expenses                                        585,279         477,857
                                                        ------------    ------------
        Total current assets                               8,456,629      11,210,964

   Property and equipment, net                             1,566,058       1,701,136
   Intangible assets, net                                  5,416,926       1,119,697
   Other assets                                              686,256         969,955
                                                        ------------    ------------
                                                        $ 16,125,869    $ 15,001,752
                                                        ============    ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
   Current liabilities-
     Accounts payable                                   $  3,214,793    $  3,709,368
     Accrued expenses                                      1,356,317       1,319,400
     Deferred revenue                                        606,907       1,042,638
                                                        ------------    ------------
            Total current liabilities                      5,178,017       6,071,406
                                                        ------------    ------------
Convertible Subordinated Note payable                     10,000,000            --
Other long-term liabilities                                  122,320         116,781

Stockholders' equity-
    Preferred stock, $.01 par value; 1,000,000 shares
      authorized;
       Series A Convertible Preferred Stock, 923
       shares issued and outstanding in 1998 and 1997              9               9
       Series B Convertible Preferred Stock, 1,630
       shares issued and outstanding in 1998 and 1997             16              16
    Common stock, $.01 par value; 40,000,000 shares
      authorized; 28,684,687 and 28,623,187 shares
      issued and outstanding in 1998 and 1997,
      respectively                                           286,847         286,231
    Capital in excess of par value                        93,149,393      92,588,038
    Accumulated deficit                                  (92,709,599)    (84,128,906)
    Cumulative translation adjustment                         98,866          68,177
                                                        ------------    ------------
       Total stockholders' equity                            825,532       8,813,565
                                                        ------------    ------------
                                                        $ 16,125,869    $ 15,001,752
                                                        ============    ============
</TABLE>

            See notes to condensed consolidated financial statements.

                                  Page 3 of 15
<PAGE>

<TABLE>
<CAPTION>
                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                  NINE MONTHS ENDED             THREE MONTHS ENDED
                                                    SEPTEMBER 30,                   SEPTEMBER 30,
                                                1998            1997            1998            1997 
                                           ------------    ------------    ------------    ------------
<S>                                        <C>             <C>             <C>             <C>
NET SALES                                  $  7,692,494    $ 10,130,324    $  3,295,782    $  6,533,878

COST OF GOODS SOLD                            3,840,395       4,082,500       1,468,113       1,863,110
                                           ------------    ------------    ------------    ------------
         Gross profit                         3,852,099       6,047,824       1,827,669       4,670,768
                                           ------------    ------------    ------------    ------------
OPERATING EXPENSES:
    Selling and distribution                  2,750,010       2,289,591         992,922         793,000
    General and administrative                4,030,787       2,456,781       1,183,626         997,821
    Research and development                  5,307,584       6,587,510       1,585,091       2,128,735
                                           ------------    ------------    ------------    ------------
        Total operating expenses             12,088,381      11,333,882       3,761,639       3,919,556
                                           ------------    ------------    ------------    ------------
        Income (loss) from operations        (8,236,282)     (5,286,058)     (1,933,970)        751,212
                                           ------------    ------------    ------------    ------------
OTHER INCOME (EXPENSE):
    License fees                                 73,088       5,750,000          73,088       5,250,000
    Interest income                             134,673          49,150          26,790          16,096
    Interest expense                           (410,935)        (19,420)       (188,838)        (16,361)
    Other, net                                 (141,235)        (79,577)        (71,178)         12,586
                                           ------------    ------------    ------------    ------------
                                               (344,409)      5,700,153        (160,138)      5,262,321
                                           ------------    ------------    ------------    ------------
        Net income (loss)                  $ (8,580,691)   $    414,095    $ (2,094,108)   $  6,013,533
                                           ============    ============    ============    ============
NET INCOME (LOSS)
PER COMMON SHARE:
 BASIC                                     $       (.30)   $        .01    $       (.07)   $        .21
                                           ============    ============    ============    ============
 DILUTED                                   $       (.30)   $        .01    $       (.07)   $        .20
                                           ============    ============    ============    ============
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING:
  BASIC                                      28,677,000      28,290,000      28,685,000      28,398,000
                                           ============    ============    ============    ============
  DILUTED                                    28,677,000      29,969,000      28,685,000      30,231,000
                                           ============    ============    ============    ============
</TABLE>

            See notes to condensed consolidated financial statements.

                                  Page 4 of 15
<PAGE>

<TABLE>
<CAPTION>
                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

          CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
                                   (Unaudited)

                                                   NINE MONTHS ENDED            THREE MONTHS ENDED
                                                      SEPTEMBER 30,                SEPTEMBER 30,
                                                  1998           1997           1998           1997
                                              -----------    -----------    -----------    -----------
<S>                                           <C>            <C>            <C>            <C>
Net income (loss)                             $(8,580,691)   $   414,095    $(2,094,108)   $ 6,013,533

Other comprehensive loss:

  Foreign currency translations, net of tax       (30,689)       (35,197)       (33,024)       (29,448)
                                              -----------    -----------    -----------    -----------
Comprehensive income (loss)                   $(8,611,380)   $   378,898    $(2,127,132)   $ 5,984,085
                                              ===========    ===========    ===========    ===========
</TABLE>

            See notes to condensed consolidated financial statements.

                                  Page 5 of 15
<PAGE>

<TABLE>
<CAPTION>
                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                     NINE MONTHS ENDED SEPTEMBER 30,
                                                           1998            1997
                                                           ----            ----
<S>                                                   <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                                   $ (8,580,691)   $    414,095
  Adjustments to reconcile net loss to net
   cash used in operating activities-
    Depreciation and amortization                          738,431         661,242
    Issuance of warrants and options for
       consulting services                                 435,709            --

    Changes in assets and liabilities-
      (Increase) decrease in:
        Accounts receivable                              3,061,409        (761,795)
        Inventories                                     (1,090,170)     (1,527,304)
        Prepaid expenses                                  (331,809)        (68,055)
        Other assets                                       266,589          71,074

      Increase (decrease) in:
        Accounts payable                                  (494,575)        351,564
        Accrued expenses                                    36,917         (32,060)
        Deferred revenue                                  (435,731)        (15,336)
                                                      ------------    ------------
Net cash used in operating activities                   (6,393,921)       (906,575)
                                                      ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of product rights                          (4,600,000)           --
    Purchase of property and equipment                    (283,474)       (891,593)
                                                      ------------    ------------
      Net cash used in investing activities             (4,883,474)       (891,593)
                                                      ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of note payable                              10,000,000            --
  Proceeds from exercise of options and warrants           356,188       2,166,616
                                                      ------------    ------------
    Net cash provided by financing activities           10,356,188       2,166,616
                                                      ------------    ------------
</TABLE>

                                   (Continued)

                                  Page 6 of 15
<PAGE>

<TABLE>
<CAPTION>
                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                   (Continued)

                                                       NINE MONTHS ENDED SEPTEMBER 30,
                                                             1998           1997 
                                                             ----           ---- 
<S>                                                      <C>            <C>
EFFECT OF EXCHANGE RATE CHANGES ON CASH                       30,689          6,130
                                                         -----------    -----------
NET (DECREASE) INCREASE IN CASH
  AND CASH EQUIVALENTS                                      (890,518)       374,578

CASH AND CASH EQUIVALENTS,
  beginning of period                                      2,256,590      3,561,794
                                                         -----------    -----------
CASH AND CASH EQUIVALENTS,
  end of period                                          $ 1,366,072    $ 3,936,372
                                                         ===========    ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

   Interest paid during the period                       $   367,307    $    11,254
                                                         ===========    ===========
</TABLE>

SUPPLEMENTAL SCHEDULE OF NONCASH OPERATING AND FINANCING ACTIVITIES:

         As of September 30, 1998, dividends on the Series A Preferred Stock of
$122,320 ($5,539 relating to the nine months ended September 30, 1998) have been
earned but have not been declared and are included in other long-term
liabilities in the accompanying September 30, 1998 condensed consolidated
balance sheet.

            See notes to condensed consolidated financial statements.

                                  Page 7 of 15
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

(1) SIGNIFICANT ACCOUNTING POLICIES:

         The accounting policies followed for quarterly financial reporting are
the same as those disclosed in Note (1) of the Notes to Consolidated Financial
Statements included in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997.

(2) NET INCOME (LOSS) PER COMMON SHARE:

         Basic net income per common share is computed by dividing net income
less preferred dividends by the weighted average number of common shares
outstanding during the period. Diluted net income (loss) per common share is
computed by dividing net income (loss) by the weighted average number of shares
of common stock outstanding during the period assuming the exercise or
conversion of all securities that are exercisable or convertible into common
stock. Basic net loss per common share is computed by dividing the net loss plus
preferred dividends by the weighted average number of shares of common stock
outstanding during the period. Shares to be issued upon the exercise of the
outstanding options and warrants or the conversion of the preferred stock are
not included in the computation of loss per share as their effect is
antidilutive.

         For the three and nine month periods ending September 30, 1998, there
was no difference between basic and diluted loss per common share as all
potential common stock was antidilutive.

         Total potential common stock at September 30, 1998, includes Series A
and Series B Convertible Preferred stock convertible into 11,408 and 33,529
shares of common stock, respectively; outstanding options and warrants to
purchase 5,467,691 shares of common stock and a convertible subordinated note
due March 15, 2005 which is convertible at the option of the holder into 662,032
shares of common stock at a conversion rate of $15.105 per share.

(3) CONVERTIBLE SUBORDINATED NOTE PAYABLE:

         On March 16, 1998, the Company issued to an institutional investor a
$10 million convertible subordinated note due March 15, 2005. The note bears
interest at 7 1/8% which is payable semi-annually on March 15 and September 15.
The note is convertible into 662,032 shares of common stock at a price equal to
$15.105 per share. The Company also granted certain registration rights to the
investor, under which the earliest the shares underlying the note could be
registered would be March 16, 1999.

(4) REACQUISITION OF PRODUCT RIGHTS:

         On April 1, 1998, the Company and the Warner-Lambert Company signed an
agreement terminating their December 1991 license and supply agreement under
which the Warner-Lambert Company had distributed Replens, a vaginal moisturizer
which had been developed by the Company. Under the terms of the termination
agreement, the Company agreed to pay $4.6 million for the right to reacquire the
product Replens, effective on April 9, 1998. The $4.6 million cost has been
capitalized and is being amortized over a 15 year period, which represents the
remaining years on the terminated December 1991 license and the patent
underlying the product.

                                  Page 8 of 15
<PAGE>

(5) RECENT ACCOUNTING PRONOUNCEMENTS:

         In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income". The Company adopted SFAS 130 on January 1, 1998. The SFAS
130 establishes standards for reporting and display of comprehensive income and
its components in a full set of financial statements. Comprehensive income is
defined as the change in equity during the financial reporting period of a
business enterprise resulting from non-owned sources. Accordingly, the Company
has included "Condensed Consolidated Statements of Comprehensive Operations" as
part of its financial statements.

         SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information", was also issued by the FASB in June 1997. This statement
establishes standards for reporting information about operating segments in
annual financial statements and requires reporting of selected information about
operating segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. The Company will adopt SFAS 131 effective
December 31, 1998.

         SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities", is effective for fiscal years ending after June 15, 1999. This
statement established accounting and reporting standards that require that every
derivative instrument be recorded in the balance sheet as either an asset or a
liability at its fair value. The Company has adopted SFAS 133 for the three
months ended September 30, 1998. The adoption of this statement did not have a
material impact on the Company's consolidated financials position since the
Company does not presently have any derivative or hedging type instruments, as
defined by SFAS 133.

                                  Page 9 of 15
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITIONS AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

          Management's Discussion and Analysis of Financial Conditions and
Results of Operations contains forward-looking statements which are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements. Additional information on factors that may affect
the business and financial results of the Company can be found in filings of the
Company with the Securities and Exchange Commission. All forward-looking
statements should be considered in light of these risks and uncertainties.

         Cash and cash equivalents decreased from approximately $2.3 million at
December 31, 1997 to approximately $1.4 million at September 30, 1998 . The
Company received $9.7 million, net of expenses, in March 1998 from the issuance
of a note to an institutional investor (see note 3 to unaudited condensed
consolidated financial statements), and approximately $356,000 from the exercise
of options and warrants. The Company paid $4.6 million in April 1998 to the
Warner-Lambert Company to reacquire the rights to the product Replens (see note
4 to unaudited condensed consolidated financial statements) and used $6.4
million for operating activities.

         In May 1995, the Company entered into a worldwide, except for South
Africa, license and supply agreement with American Home Products Corporation
("AHP") under which the Wyeth-Ayerst Laboratories division of AHP
("Wyeth-Ayerst")markets Crinone. Under the terms of the agreement, as of
September 30, 1998, the Company has earned $17 million in milestone payments and
will continue to receive additional milestone payments when achieved. The
Company also supplies Crinone to AHP at a price equal to 30% of AHP's net
selling price.

          In December 1993, the Company entered into an Option and License
Agreement with a French research group based in Marseille, France, pursuant to
which it was granted an option to obtain an exclusive license to the North and
South American rights to a potential AIDS treatment ("SPC3"). In May 1996, this
agreement was amended such that the Company now has the right to obtain an
exclusive license to the worldwide rights. A phase I/II clinical trial in humans
is now underway in the U.S. The purpose of this trial is to determine the
optimal dosage of SPC3 in late stage seropositive patients. The options, which
must be exercised upon the occurrence of certain events, expire in December
1998. Upon exercise of the options, the Company will be required to pay an
additional $7 million. Based on current information, the Company does not plan
to exercise its options.

          In connection with the 1989 purchase of the assets of Bio-Mimetics,
Inc., which assets consisted of the patents underlying the Company's Bioadhesive
Delivery System, other patent applications and related technology, the Company
pays Bio-Mimetics, Inc. a royalty equal to two percent of the net sales of
products based on the Bioadhesive Delivery System, to an aggregate of $7.5
million. The Company is required to prepay a portion of the remaining royalty
obligation, in cash or stock at the option of the Company, if certain conditions
are met. Through September 30, 1998, the Company has paid approximately $1.3
million in royalty payments.

                                 Page 10 of 15
<PAGE>

          As of September 30, 1998, the Company has outstanding exercisable
options and warrants that, if exercised, would result in approximately $52
million of additional capital. However, there can be no assurance that such
options or warrants will be exercised.

          Significant expenditures anticipated by the Company in the near future
are concentrated on research and development related to new products. The
Company anticipates it will spend approximately $8.5 million on research and
development in 1998 and an additional $300,000 on production equipment at its
suppliers.

          As of September 30, 1998, the Company had available net operating loss
carryforwards of approximately $47 million to offset its future U.S. taxable
income.

          In accordance with Statement of Financial Accounting Standards No.
109, as of September 30, 1998 and December 31, 1997, other assets in the
accompanying consolidated balance sheets include deferred tax assets of
approximately $17 million and $16 million, respectively, (comprised primarily of
a net operating loss carryforward) which have been fully reserved as their
ultimate realizability is not assured.

         The Company believes that sales and positive cash flow will increase as
Crinone is fully marketed by Wyeth-Ayerst; however, in the short term the
Company may require additional capital. The Company is presently exploring
various alternatives, including the sale of equity securities, a line of credit
and the licensing of products currently under development as possible sources of
additional capital.

RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS NINE MONTHS
ENDED SEPTEMBER 30, 1997

         Net sales decreased in 1998 to $7,692,494 or 24% as compared
$10,130,324 in the prior year. In 1997, the Company shipped approximately
$6,300,000 of Crinone as part of its large initial stocking order to
Wyeth-Ayerst for sale in the United States. In 1998, approximately $864,000 of
Crinone was shipped for U.S. sales in addition to foreign Crinone sales which
amounted to approximately $1,166,000. Sales of Replens amounted to approximately
$2,725,000 in 1998 versus $987,000 in 1997. Gross profit as a percentage of net
sales declined to 50% in 1998 from 60% in 1997, reflecting the effect of fixed
overhead on the lower sales volume.

          Selling and distribution expenses increased by $460,419 or 20% in 1998
compared to 1997. This increase was due principally to the Company's marketing
of Replens.

          General and administrative expenses increased by $1,574,006 or 64% in
1998 compared to 1997. The principal reasons were a $498,000 increase in
investor / public relations expenses including $141,000 for Crinone media
promotion and $357,000 for investor relations, of which $272,000 represented the
value of stock options and warrants granted to non-employees; a $501,000
increase in legal expense, of which $260,000 was related to FDA affairs; a
$182,000 increase in salary expense; and a $98,000 increase in insurance
expense.

          Research and development expenditures decreased by $1,279,926 or 19%
in 1998 compared to 1997 as the result of the wind down of Crinone studies.
Crinone approvals were received in the United States in May 1997 and July 1997.

         License fees in 1997 represented milestone payments received in
connection with the licensing agreement with AHP.

                                 Page 11 of 15
<PAGE>

         Interest income was $134,673 in 1998 compared to $49,150 in 1997 and
resulted from interest earned on the money received from the issuance of the $10
million note in March 1998, after paying $4.6 million to reacquire the rights
to the product Replens in April 1998.

         Interest expense increased in 1998 to $410,935 from $19,420 in 1997 as
the result of the $10 million note bearing interest at 7 1/8% issued by the
Company in March 1998 to an institutional investor.

         As a result, the net loss for the nine months ended September 30, 1998
was $8,580,691 or $.30 per share compared to a net profit of $414,095 or $.01
per share for the nine months ended September 30, 1997.

RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS THREE
MONTHS ENDED SEPTEMBER 30, 1997

         Net sales decreased in 1998 from 1997 by $3,238,096 or 50%. In the
three months ended September 30, 1997, the Company shipped approximately
$5,400,000 of Crinone as part of its large initial stocking order to
Wyeth-Ayerst for sale in the United States. In 1998, approximately $770,000 of
Crinone was shipped for U.S. sales, in addition to foreign Crinone sales in 1998
which amounted to approximately $348,000. Sales of Replens were approximately
$1,329,000 in 1998 versus $243,000 in 1997. Gross profit as a percentage of net
sales declined to 55% in 1998 from 71% in 1997, reflecting the effect of fixed
overhead on the lower sales volume.

          Selling and distribution expenses increased by $199,922 or 25% in 1998
compared to 1997. This increase was due almost entirely to the Company's
marketing of Replens.

          General and administrative expenses increased by $185,805 or 19% in
1998 compared to 1997. The principal reasons for the increase were a $81,000
increase in legal expenses and a $65,000 increase in bad debts expense.

          Research and development expenses decreased by $543,644 or 26% in 1998
compared to 1997 as the result of the wind down of Crinone studies. Crinone
approvals were received in the United States in May 1997 and July 1997.

          License fees in 1997 represented milestone payments received in
connection with the licensing agreement with AHP.

          Interest income was $26,790 in 1998 compared to $16,096 in 1997 and
resulted from interest earned on the money received from the issuance of the $10
million note in March 1998, after paying $4.6 million to reacquire the rights
to the product Replens in April 1998.

          Interest expense increased in 1998 to $188,838 from $16,361 in 1997 as
the result of the issuance in March 1998 of the $10 million note which bears
interest at the rate of 7 1/8%.

         As a result, the net loss for the three months ended September 30, 1998
was $2,094,108 or $.07 per share compared to net income of $6,013,533 or $.20
per share for the three months ended September 30, 1997.

                                 Page 12 of 15
<PAGE>

IMPACT OF THE YEAR 2000

         The Year 2000 ("Y2K") problem has arisen because many existing computer
programs only use the last two digits to refer to a year and so these programs
do not properly recognize a year that begins with a "20" instead of the familiar
"19". If not corrected, many computer applications could fail or create
erroneous results.

         The Company and each of its operating subsidiaries are in the process
of implementing a Y2K readiness program with the objective of having all
significant business systems function properly with respect to Y2K before
January 1, 2000.

         The first component of Y2K readiness is to identify all internal
business systems of the Company and its operating subsidiaries that are
susceptible to system failures or processing errors as a result of Y2K problems.
This step has been completed and all systems have been upgraded to avoid the Y2K
problem, principally through the replacement or modification of computer
software of affected systems. The cost incurred by the Company and its operating
subsidiaries approximated $5,000.

         The second component is to identify significant service providers,
vendors and customers that are believed to be critical to the Company's business
operations after January 1, 2000. Steps are being undertaken in an attempt to
reasonably ascertain their stage of Y2K readiness through questionairres,
interviews and other available means. The possible consequences of the Company's
service providers, vendors and customers not being fully Y2K compliant by
January 1, 2000 include, among other things delays in delivery of products,
delays in the receipt of supplies, invoice and collections errors, and inventory
obsolescence. There can be no assurance that systems of third parties on which
the Company relies will be converted in a timely manner, or that a failure to
properly convert by another company would not have a material adverse impact on
the Company's financial condition or results of operations. However, the Company
believes that by the end of December 1998 it will have identified all vendors
who will not be Y2K compliant by January 1, 2000 and will begin to seek new
vendors who will be Y2K compliant.

         The Company believes it has developed an effective program to address
the Y2K problem and, based upon current plans and assumptions, the Company does
not expect that the Y2K problem will have a material adverse impact on the
Company's financial condition or results of operations. Due to the general
uncertainty with respect to Y2K, however, there can be no assurance that all Y2K
issues will be foreseen and corrected on a timely basis, or that no material
disruption of the Company's business operations will occur. Further, the
Company's expectations are based on the assumption that there will be no general
failure of external local, national or international systems (including power,
communications, postal or transportation systems) necessary for the ordinary
conduct of business.  The Company will, however, continue to assess the risks 
presented by the Y2K problem and will develop contingency plans if and when such
plans become necessary.

EURO

         On January 1, 1999, eleven of the fifteen member countries of the
European Union are scheduled to establish fixed conversion rates between their
existing currencies ("legacy currencies") and one common currency - the euro.
The euro will then trade on currency exchanges and may be used in business
transactions. Beginning in January 2002, new euro-denominated bills and coins
will be issued, and legacy currencies will be withdrawn from circulation. The
Company's operating subsidiaries affected by the euro conversion have
established plans to address the systems and business issues raised by the euro
currency conversion. These issues include, among others, (1) the need to adapt
computer and other business systems and equipment to accommodate
euro-denominated transactions; and (2) the competitive impact of cross-border
price transparency, which may make it more difficult for business to charge
different prices for the same products on a country-by-country basis
particularly once the euro currency is issued in 2002. Based upon current plans
and assumption, the Company does not expect that the euro conversion will 
have a material adverse impact on its financial condition or results of
operations.

                                 Page 13 of 15
<PAGE>

                  COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         Certain claims and complaints have been filed or are pending against
         the Company with respect to various matters. In the opinion of
         management and counsel, all such matters are adequately reserved for or
         covered by insurance or, if not so covered, are without any or have
         little merit or involve such amounts that if disposed of unfavorably
         would not have a material adverse effect on the Company.

ITEM 2.  CHANGES IN SECURITIES

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         As of November 12, 1998, dividends on the Series A Preferred Stock of
         $122,320 have been earned but have not been declared.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

ITEM 5.  OTHER INFORMATION

         None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         A.       Exhibits

                  27.      Financial Data Schedule

         B.       Reports on Form 8-K

                  None.

                                 Page 14 of 15
<PAGE>

                                   SIGNATURES

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

                                             COLUMBIA LABORATORIES, INC.

                                             /s/ DAVID L. WEINBERG
                                             ---------------------
                                             DAVID L. WEINBERG, Vice President-
                                             Finance and Administration,
                                             Chief Financial Officer

DATE:      NOVEMBER 13, 1998    

                                 Page 15 of 15

<PAGE>

                                 EXHIBIT INDEX

EXHIBIT        DESCRIPTION
-------        -----------
  27           Financial Data Schedule