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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the fiscal year ended June 30, 1997

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from ___________to ___________

Commission file number 0-27058

PAREXEL INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its Charter)

MASSACHUSETTS 04-2776269
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

195 WEST STREET
WALTHAM, MASSACHUSETTS 02154
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (617) 487-9900

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK, $.01 PAR VALUE PER SHARE
(Title of class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

State the aggregate market value of the voting stock held by nonaffiliates of
the registrant:

The aggregate market value of Common Stock held by nonaffiliates was
$558,509,902 as of September 19, 1997.

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

As of September 19, 1997, there were 20,099,320 shares of the
registrant's Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Specified portions of the Registrant's 1997 Annual Report to Stockholders for
the fiscal year ended June 30, 1997 are incorporated by reference into Parts II
and IV of this report.

Specified portions of the Registrant's Proxy Statement dated September 19, 1997
for the Annual Meeting of Stockholders to be held on November 13, 1997 are
incorporated by reference into Part III of this report.

(End of cover page)

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PAREXEL INTERNATIONAL CORPORATION

FORM 10-K ANNUAL REPORT

INDEX

PAGE
PART I.
Item 1. Business 4
Item 2. Properties 20
Item 3. Legal Proceedings 20
Item 4. Submission of Matters to a Vote of Security 20
Holders
PART II
Item 5. Market for Registrant's Common Equity and 21
Related Stockholder Matters
Item 6. Selected Financial Data 21
Item 7. Management's Discussion and Analysis of 21
Financial Condition and Results of Operations
Item 8. Financial Statements and Supplementary Data 21
Item 9. Changes in and Disagreements with Accountants 21
on Accounting and Financial Disclosure
PART III
Item 10. Directors and Executive Officers of the 21
Registrant
Item 11. Executive Compensation 21
Item 12. Security Ownership of Certain Beneficial Owners 21
and Management
Item 13. Certain Relationships and Related Transactions 21
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 22

SIGNATURES 27

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PART I

ITEM 1. BUSINESS

GENERAL

PAREXEL International Corporation ("PAREXEL" or "the Company") is a
leading contract research organization ("CRO") providing a broad range of
knowledge-based product development and product launch services to the worldwide
pharmaceutical, biotechnology and medical device industries. The Company's
primary objective is to help clients quickly obtain the necessary regulatory
approvals of their products and, ultimately, optimize the market penetration of
those products. Over the past fifteen years, PAREXEL has developed significant
expertise in disciplines supporting this strategy. The Company's service
offerings include: clinical trials management, data management, biostatistical
analysis, medical marketing, clinical pharmacology, regulatory and medical
consulting, performance improvement, industry training and publishing, and other
drug development consulting services. PAREXEL's integrated services, therapeutic
area depth, and sophisticated information technology, along with its experience
in global drug development and product launch services, represent key
competitive strengths.

The Company believes it is the fourth largest CRO in the world, based
on annual net revenue, and one of a select few providers capable of delivering a
full range of clinical development and medical marketing services on a global
basis. The Company complements the research and development ("R&D") functions,
as well as the marketing functions, of pharmaceutical and biotechnology
companies. Through its high quality clinical research and product launch
services, PAREXEL helps clients maximize the return on their significant
investments in research and development by reducing the time and cost of
clinically testing their products and launching those products into the
commercial marketplace. By outsourcing these types of services, clients are
provided with a variable cost alternative to the fixed costs associated with
internal drug development and product marketing. Clients no longer need to staff
to peak periods, and can benefit from PAREXEL's technical resource pool, broad
therapeutic area expertise, global infrastructures designed to expedite
parallel, multi-country clinical trials, and other advisory services focused on
accelerating time-to-market.

Headquartered near Boston, Massachusetts, the Company has 20 offices in
10 countries, and employs over 2,400 individuals. The Company has established
footholds in the major health care markets around the world, including the
United States, Japan, Germany, the United Kingdom ("U.K."), France, Italy,
Spain, Sweden, Australia, and Israel. The Company believes it is the second
largest clinical CRO in both Europe and Japan. During fiscal 1997, PAREXEL
derived 36% of its revenues from its international operations, distinguishing
the Company from many of its competitors.

The Company, a Massachusetts corporation, was co-founded in 1983 as a
regulatory consulting firm by Josef H. von Rickenbach, Chairman of the Board,
President and Chief Executive Officer of PAREXEL. Since that time, the Company
has executed a focused growth strategy embracing aggressive internal expansion,
as well as strategic acquisitions to expand or enhance the Company's portfolio
of services, geographic presence, therapeutic area knowledge, information
technology, and client relationships.

Since June 1996, the Company has completed six acquisitions. In June
1996, the Company acquired, in separate transactions, Caspard Consultants, a
Paris-based CRO, and Sitebase Clinical Systems, Inc., a provider of remote data
entry ("RDE") technology designed to enhance the quality and timeliness of
clinical trial data. In August 1996, PAREXEL acquired Lansal Clinical
Pharmaceutics Limited, a CRO in Tel Aviv, Israel, as well as State and Federal
Associates, Inc. ("S&FA"), a Washington, D.C.-based provider of medical
marketing and related consulting services to the health care and pharmaceutical
industries. In February 1997, the Company purchased RESCON, Inc. (RESCON),
another medical marketing firm near Washington, D.C., and Sheffield Statistical
Services, Ltd. ("S-Cubed"), a data management and biostatistical consulting
business in Sheffield, U.K. All of these acquisitions involved exchanges of
PAREXEL common stock and were treated as poolings of interests for financial
reporting purposes.

S&FA and RESCON not only represent the Company's largest acquisitions
during fiscal 1997, but they also mark an important strategic move for PAREXEL.
That is, the Company has extended its strategic vision beyond product regulatory
approval to the rapid market penetration of clients' products. It is
management's belief that there

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are significant efficiencies to be gained by tightening the integration between
the R&D functions and the marketing and sales functions within client
organizations. Drawing upon PAREXEL's core competencies in clinical research,
the Company is well-positioned to capitalize on peri-approval outsourcing
opportunities within the pharmaceutical and biotechnology industries as clients
look for ways to expedite the commercial launch of their products.

In order to best serve clients, capitalize on market opportunities, and
leverage the Company's knowledge base and synergistic services, PAREXEL has
internally organized its operations into three interactive business units,
namely: Drug Development (which comprises approximately 70% of the Company's net
revenue), Medical Marketing Services, and Consulting Services.

In 1997, PAREXEL also entered into a clinical pharmacology research
collaboration with Georgetown University Medical Center ("Georgetown"), one of
the leading academic medical centers in the United States. This alliance enables
the Company to access Georgetown's scientific thought leadership, and offer
clients Phase I services in the United States, in addition to the Company's
facilities in Berlin, employing an alternative and more flexible business model.
This collaboration also signifies stronger ties with clinical investigator
sites; in this case, an academic medical center. It is the Company's belief that
the Company can have a positive impact on expediting clinical research at the
site level. In conjunction with the Company's acquisition of Sheffield
Statistical Services Limited in 1997, the Company also acquired a small European
site management organization named ClinNet(R).

INDUSTRY OVERVIEW

The CRO industry provides independent product development and related
services on an outsourced basis to the pharmaceutical, biotechnology, and
medical device industries. Although outsourcing by client companies is occurring
throughout the product life cycles of pharmaceutical and biological products,
CROs today still derive the majority of their revenue from the research and
development expenditures of pharmaceutical and biotechnology companies. The CRO
industry has evolved from providing limited clinical services in the 1970s to an
industry which currently offers a full range of services that encompass the
research and development process, including discovery, pre-clinical evaluations,
study design, clinical trial management, data collection and management,
biostatistical analysis, product registrations, and other services. Certain CROs
also offer various peri- and post-approval outsourcing services in support of
the manufacturing, marketing and sale of pharmaceutics and biologics. CROs are
required to conduct services in accordance with strict regulations which govern
clinical trials and the drug approval process.

The CRO industry is fragmented, with participants ranging from several
hundred small, limited-service providers to several large full-service CROs with
global operations. Although there are few barriers to entry for small,
limited-service providers, the Company believes there are significant barriers
to becoming a full-service CRO with global capabilities. Some of these barriers
include the development of broad therapeutic area knowledge and expertise in
other technical areas, the infrastructure and experience necessary to serve the
global demands of clients, the ability to simultaneously manage complex clinical
trials in numerous countries, the expertise to prepare regulatory submissions in
multiple countries, the development and maintenance of complex information
technology systems required to integrate these capabilities, the establishment
of solid working relationships with repeat clients, a strong history of
financial performance, and capital funding to finance growth. In recent years,
the CRO industry has experienced consolidation due, in part, to the acquisition
of smaller firms by larger full-service CROs.

The CRO industry derives substantially all of its revenue from the
pharmaceutical and biotechnology industries. The global pharmaceutical and
biotechnology industries spent an estimated $35 billion in 1996 on research and
development, with approximately 45% spent on clinical development. Of this
amount, approximately $2.5 to $3.0 billion is estimated to have been outsourced
to CROs. The Company believes that there are a number of positive macro trends
driving the CRO industry's growth.

- - Drug Development Pressures. The Company believes that research and
development expenditures have increased as a result of the constant
pressure to develop product pipelines, and to respond to the demand for
products for an aging population and for the treatment of chronic
disorders and life-threatening conditions in such categories as
infectious disease, central nervous system, cardiology and oncology.
The development of therapies for chronic disorders, such as HIV/AIDS,
Alzheimer's, cancer, diabetes and arthritis, requires complex

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clinical trials to demonstrate the therapy's safety and effectiveness,
and to determine if the drug causes any long-term side effects.

- - Globalization of Clinical Development and Regulatory Strategy.
Pharmaceutical and biotechnology companies increasingly are attempting
to maximize profits from a given drug by pursuing regulatory approvals
in multiple countries in parallel rather than sequentially, as was the
practice historically. The Company believes that the globalization of
clinical research and development activities has increased the demand
for CRO services. A pharmaceutical or biotechnology company seeking
approvals in a country in which it lacks experience or internal
resources will frequently turn to a CRO for assistance in interacting
with regulators or in organizing and conducting clinical trials. In
addition, a company may turn to a CRO in the belief that regulatory
authorities who are not familiar with the company may have more
confidence in the results from tests independently conducted by a CRO
known to those authorities. An important event recently occurred in
Japan which should benefit the CRO industry. Effective April 1, 1997,
Japan officially adopted Good Clinical Practices ("GCP") and
legitimized the use of CROs in conducting clinical research in
accordance with Western standards. This should result in demand for
CROs services on behalf of local pharmaceutical companies in Japan, as
well as Western companies interested in performing clinical studies in
Japan.

- - Increasingly Complex and Stringent Regulation; Need for Technological
Capabilities. Increasingly complex and stringent regulatory
requirements throughout the world have increased the volume of data
required for regulatory filings and escalated the demands on data
collection and analysis during the drug development process. In recent
years, the FDA and corresponding regulatory agencies of Canada, Japan
and Western Europe have made progress in attempting to harmonize
standards for preclinical and clinical studies and the format and
content of applications for new drug approvals. Further, the FDA
encourages the use of computer-assisted filings in an effort to
expedite the approval process. As regulatory requirements have become
more complex, the pharmaceutical and biotechnology industries are
increasingly outsourcing to CROs to take advantage of their data
management expertise, technological capabilities and global presence.

- - Competitive Pressures to Contain Costs and Accelerate Time-to-Market.
Drug companies have been focusing on gaining market share and more
efficient ways of conducting business because of pressures stemming
from patent expirations, market acceptance of generic drugs, and
efforts of regulatory bodies and managed care to control drug prices.
The Company believes that the pharmaceutical industry is responding by
centralizing the research and development process and outsourcing to
variable cost CROs, thereby reducing the fixed costs associated with
internal drug development. The CRO industry, by specializing in
clinical trials management, is often able to perform the needed
services with a higher level of expertise or specialization, more
quickly and at a lower cost than the client could perform the services
internally. The Company believes that some large pharmaceutical
companies, rather than utilizing many CRO service providers, are
selecting a limited number of full-service, global CROs to serve as
their primary CROs, a phenomenon referred to as short-listing.

- - Consolidation in the Pharmaceutical Industry. The pharmaceutical
industry is consolidating as pharmaceutical companies seek to obtain
cost reduction synergies through business combinations. Consolidations
include some of the largest multinational pharmaceutical companies in
the world, such as Glaxo-Wellcome, American Home Products-American
Cyanamid, Hoechst-Marion Merrill Dow, Upjohn-Pharmacia, Roche-Syntex
and Sandoz-Ciba Geigy. Once consolidated, many pharmaceutical companies
aggressively manage costs by reducing headcount and outsourcing to
variable-cost CROs in an effort to reduce the fixed costs associated
with internal drug development. The Company believes that full-service
global CROs will benefit from this trend.

- - Growth of Biotechnology and Genomics Industries.. The U.S.
biotechnology industry has grown rapidly over the last ten years, and
in recent years the genomics industry has emerged with strong growth
potential. These companies are introducing significant numbers of new
drug candidates which will require regulatory approval. Oftentimes,
they do not have the necessary experience or resources to conduct
clinical trials, registrations, and product launches. Accordingly, many
of these companies have chosen to outsource to CROs rather than expend
significant time and resources to develop the necessary internal
capabilities. Moreover, the biotechnology industry is rapidly expanding
into and within Europe, providing significant growth opportunities for
CROs with a global presence.

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PAREXEL'S STRATEGY

PAREXEL's intention is to maintain and enhance its position as a
leading CRO by providing a full range of integrated clinical research and
medical marketing services on a global basis across key therapeutic areas. With
an ongoing commitment to providing excellent client service and advancing safe
and effective drug therapies, the Company draws on its specialized knowledge and
expertise to aid clients in expediting drug development time, regulatory
approval and the market introduction of new products. In so doing, PAREXEL helps
clients achieve an important objective, which is maximizing product revenues and
profits over limited patent lives.

Central to PAREXEL's success has been the Company's focused strategy on
building its platform of knowledge in the pursuit of outstanding client service.
This includes a focus on its core clinical research business which has enjoyed
significant growth; a focus on continuous process improvement, efficiency gains
and leveraging internal expertise, resources and infrastructure; a focus on
managing the Company's strong internal growth while augmenting the Company's
knowledge base through strategic acquisitions; a focus on deeply and broadly
penetrating key client accounts by offering a full spectrum of clinical
development and medical marketing services; and always, a focus on outstanding
quality and superior client service.

The Company's service philosophy involves a flexible approach which
allows its clients to use the Company's services on an individual or bundled
basis. The Company believes its expertise in conducting scientifically demanding
trials and its ability to coordinate complicated global trials are significant
competitive strengths. The Company continues to devote significant resources to
developing innovative methodologies and sophisticated information systems
designed to allow the Company to more effectively manage its business operations
and deliver services to its clients. The Company has executed a focused growth
strategy embracing aggressive internal expansion and strategic acquisitions to
expand or enhance the Company's portfolio of services, geographic presence,
therapeutic area knowledge, information technology, and client relationships.

PAREXEL has extended its strategic vision beyond product regulatory
approval, to the rapid market penetration of clients' products. It is
management's belief that there are significant efficiencies to be gained by
tightening the integration between the R&D functions and the marketing and sales
functions within client organizations, which will positively impact
time-to-market. Given PAREXEL's core competencies in clinical research, the
Company is well-positioned to capitalize on peri-approval outsourcing
opportunities within the pharmaceutical and biotechnology industries. PAREXEL
completed two acquisitions in the medical marketing area during fiscal 1997:
S&FA and RESCON. These companies focus on pricing, payment and other market
access issues by interfacing with the key players in the health care delivery
system. They have brought expertise in health economics, outcomes research,
market analysis, reimbursement, patient registrars, hotlines and other patient
assistance programs, training and communication programs, and health policy
advocacy.

Serve the Global Model of New Drug Development

The Company believes that its ability to conduct clinical trials and
other services worldwide enhances its ability to serve the increasingly global
model of drug development. The Company provides clinical research and
development services to major North American, European and Japanese
pharmaceutical companies. The Company has expanded geographically primarily
through internal growth, supplemented by strategic acquisitions, with a goal of
serving all major client markets worldwide and positioning the Company to serve
developing markets. Since January 1, 1994, the Company has established a
presence in Kobe and Tokyo, Japan; Milan, Italy; Raleigh-Durham, NC; Sydney,
Australia; Madrid, Spain; Tel Aviv, Israel; Washington, D.C.; Chicago, IL;
Sheffield, U.K.; and Stockholm, Sweden. PAREXEL is conducting a number of
multinational clinical studies designed to pursue concurrent regulatory
approvals in multiple countries. The Company believes that the expertise
developed by conducting multi-jurisdictional clinical trials is a competitive
advantage as pharmaceutical companies increasingly pursue regulatory approvals
in multiple jurisdictions in parallel.

The Company believes that the efficient delivery of high-quality
clinical services requires adherence to standardized procedures on a worldwide
basis. The Company has devoted considerable resources to developing internal
standard operating procedures, including many internal checks and balances.
These procedures, together with the Company's information technology, enable the
Company to reduce the time involved in preparing

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regulatory submissions by concurrently compiling and analyzing large volumes of
data from multinational trials and preparing regulatory submissions for filings
on a global basis.

Address All Aspects of Clinical Research and Product Launch

The Company offers a full range of services that encompass the clinical
research process, and will continue to build its medical marketing services
supporting the commercial launch phase. The Company believes that its knowledge
and experience in all stages of clinical research, as well as peri-and
post-approval services surrounding product launch, enhance its marketability and
credibility with clients. The Company's full range of services and global
experience complement the R&D and marketing and sales functions of
pharmaceutical and biotechnology companies. In order to meet the needs of
specific clients, PAREXEL offers its services on either an individual or a
bundled basis. This approach allows the Company to establish a relationship with
a new client with the need for a particular service which may in turn lead to
larger, more comprehensive projects. This flexibility allows PAREXEL to deliver
its services by operating autonomously or by working in close collaboration with
its clients. In some cases, the Company has taken advantage of the flexibility
of its information technology systems to gain direct access to client data on
client systems. In addition, the Company provides regulatory periodicals,
training materials and seminars and other complementary information products and
services designed to meet its clients' demands for increased productivity in
clinical development.

Conduct Scientifically Demanding Trials

The Company provides its services in connection with scientifically and
clinically demanding trials in a wide range of therapeutic areas, such as trials
involving the testing of drugs developed by biotechnology companies and drugs
addressing complex diseases such as HIV/AIDS, cancer and Alzheimer's. The
Company's leadership in HIV/AIDS-related therapeutic areas is evidenced by the
selection of PAREXEL as the CRO for the Intercompany Collaborative for AIDS Drug
Development, a consortium including 18 global leaders in AIDS research. Other
therapeutic categories in which the Company has expertise include central
nervous system ("CNS"), neurology, oncology, gastroenterology, endocrinology,
cardiology, hematology, immunology, rheumatology and the study of pulmonary,
reproductive and infectious diseases. The Company believes that as trials
involve increasingly complex therapeutic areas, CROs with a broad range of
experience have a competitive advantage over other companies with more limited
capabilities.

Continue Investment in Information Technology

The Company believes that superior information technology is essential
to enable a CRO to provide project services concurrently in multiple countries,
expand its geographic operations to meet the global needs of the pharmaceutical
and biotechnology industries and provide innovative services designed to
expedite the clinical trials process. The Company has an extensive and effective
global information technology network and believes that its information
technology provides it with a significant competitive advantage. The Company's
information technology supports its global organizational structure by enabling
all offices to exchange information with each other so that several offices
worldwide can work simultaneously on a project. The global information
technology network also allows the Company to track the progress of ongoing
client projects and predict more accurately and quickly its future personnel
needs to meet client contract commitments. In addition, the Company's open and
flexible information technology system can be adapted to the multiple needs of
different clients and regulatory systems. For example, the system enables the
Company to reduce the time involved in preparing regulatory submissions by
concurrently compiling and analyzing large volumes of data from multinational
trials and preparing regulatory submissions for filings on a global basis. This
system also enables the Company to respond quickly to client inquires on the
progress of projects and, in some cases, to gain direct access to client data on
client systems.

SERVICES

The Company provides a full continuum of outsourced services to the
pharmaceutical and biotechnology industries ranging from first-in-human clinical
studies through a product's launch into the commercial marketplace. It is
PAREXEL's vision to orchestrate all critical activities and seamlessly manage
the clinical development process, as project managers, through the marketing
phase of new products, as product managers.

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Over the past fifteen years, PAREXEL has developed significant
expertise in disciplines which support clients' efforts to accelerate the
development and market introduction of their products. Specifically, PAREXEL
offers such services as: clinical trials management, data management,
biostatistical analysis, medical marketing, clinical pharmacology, regulatory
and medical consulting, performance improvement, industry training and
publishing, and other drug development consulting services. The Company's
integrated services, therapeutic area depth, and sophisticated information
technology, along with its experience in global drug development and product
launch services, represent key competitive strengths.

In order to best serve clients, capitalize on market opportunities, and
leverage the Company's knowledge base and synergistic services, PAREXEL has
internally organized its operations into three interactive business units,
namely: Drug Development (which comprise approximately 70% of the Company's
revenues), Medical Marketing Services, and Consulting Services.

DRUG DEVELOPMENT

Clinical Trials Management, Biostatistical and Data Management and
related medical services comprise the Company's Drug Development business unit,
which represents approximately 70% of the Company's revenue base.

Clinical Trials Management Services

PAREXEL offers complete services for the design, initiation and
management of clinical trial programs, a critical element in obtaining
regulatory approval for drugs. The Company has performed services in connection
with trials in most therapeutic areas, including, but not limited to,
cardiovascular, central nervous system, infectious disease, AIDS/HIV, neurology,
oncology, gastroenterology, endocrinology, hematology, immunology, rheumatology
and the study of pulmonary, and reproductive diseases. PAREXEL's
multi-disciplinary clinical trials group examines a product's existing
preclinical and clinical data to design clinical trials to provide evidence of
the product's safety and efficacy.

PAREXEL can manage every aspect of clinical trials, including study and
protocol design, placement, initiation, monitoring, report preparation and
strategy development. See "Government Regulation -- New Drug Development-An
Overview." Most of the Company's clinical trials management projects involve
Phase II or III clinical trials, which are generally larger and more complex
than Phase I trials.

Clinical trials are monitored for and with strict adherence to good
clinical practices ("GCP"). The design of efficient Case Report Forms ("CRF"),
detailed operations manuals and site visits by PAREXEL's clinical research
associates ensure that clinical investigators and their staffs follow the
established protocols of the studies. The Company has adopted standard operating
procedures which are intended to satisfy regulatory requirements and serve as a
tool for controlling and enhancing the quality of PAREXEL's worldwide clinical
services.

Clinical trials represent one of the most expensive and time-consuming
parts of the overall drug development process. The information generated during
these trials is critical for gaining marketing approval from the FDA or other
regulatory agencies. PAREXEL's clinical trials management group assists clients
with one or more of the following steps:

- Study Protocol Design. The protocol defines the medical issues
the study seeks to examine and the statistical tests that will
be conducted. Accordingly, the protocol defines the frequency
and type of laboratory and clinical measures that are to be
tracked and analyzed. The protocol also defines the number of
patients required to produce a statistically valid result, the
period of time over which they must be tracked and the
frequency and dosage of drug administration. The study's
success depends on the protocol's ability to predict correctly
the requirements of the regulatory authority.

- Case Report Forms Design. Once the study protocol has been
finalized, case report forms ("CRFs") must be developed. The
CRF may change at different stages of a trial. The CRFs for
one patient in a given study may consist of 100 or more pages.

- Site and Investigator Recruitment. The drug is administered to
patients by physicians, referred to as investigators, at
hospitals, clinics or other locations, referred to as sites.
Potential investigators may be

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identified by the drug sponsor or the CRO. The CRO generally
solicits the investigators' participation in the study. The
trial's success depends on the successful identification and
recruitment of experienced investigators with an adequate base
of patients who satisfy the requirements of the study
protocol. The Company has access to several thousand
investigators who have conducted clinical trials for the
Company. The Company will also provide additional services at
the clinical investigator site to assist physician and
expedite the clinical research process.

- Patient Enrollment. The investigators find and enroll patients
suitable for the study. The speed with which trials can be
completed is significantly affected by the rate at which
patients are enrolled. Prospective patients are required to
review information about the drug and its possible side
effects, and sign an informed consent form to record their
knowledge and acceptance of potential side effects. Patients
also undergo a medical examination to determine whether they
meet the requirements of the study protocol. Patients then
receive the drug and are examined by the investigator as
specified by the study protocol.

- Study Monitoring and Data Collection. As patients are examined
and tests are conducted in accordance with the study protocol,
data are recorded on CRFs and laboratory reports. The data are
collected from study sites by specially trained persons known
as monitors. Monitors visit sites regularly to ensure that the
CRFs are completed correctly and that all data specified in
the protocol are collected. The monitors take completed CRFs
to the study coordinating site, where the CRFs are reviewed
for consistency and accuracy before their data is entered into
an electronic database. The Company believes remote date entry
("RDE") technology will significantly enhance both the quality
and timeliness of clinical data collection with significant
efficiency savings. Hence, in June 1996, the Company acquired
Sitebase Clinical Systems, Inc., ("Sitebase") a provider of
RDE software to the pharmaceutical industry. The Company's
study monitoring and data collection services comply with the
FDA's adverse events reporting guidelines.

- Clinical Data Management and Biostatistical Services.
(See Below)

- Report Writing. The findings of statistical analysis of data
collected during the trial together with other clinical data
are included in a final report generated for inclusion in a
regulatory document.

- Medical Services. Throughout the course of a development
program, PAREXEL's physicians provide a wide range of medical
research and consulting services to improve the speed and
quality of clinical research, including medical supervision of
clinical trials, compliance with medical standards and safety
regulations, medical writing, medical imaging, strategy
development, and portfolio management.

Clinical Data Management and Biostatistical Services

PAREXEL's data management professionals assist in the design of CRFs,
as well as training manuals for investigators, to ensure that data are collected
in an organized and consistent format. Databases are designed according to the
analytical specifications of the project and the particular needs of the client.
Prior to data entry, PAREXEL personnel screen the data to detect errors,
omissions and other deficiencies in completed CRFs. The use of Sitebase, RDE
technology, to gather and report clinical monitoring information expedites data
exchange while minimizing data collection errors as a result of real time data
integrity verification. The Company provides clients with data abstraction, data
review and coding, data entry, database verification and editing and problem
data resolution.

The Company has extensive experience throughout the world in the
creation of scientific databases for all phases of the drug development process,
including the creation of customized databases to meet client-specific formats,
integrated databases to support New Drug Application submissions and databases
in strict accordance with FDA and European specifications. For example, the
Company completed, in support of a New Drug Application filing, an expanded
access program with over 2,000 investigators enrolling over 11,000 patients at
sites located in 26 countries, including 17 in Europe, five in South America,
two in Central America, the United States and Australia. Over 300,000 pages of
CRF data were collected from these sites and merged into one integrated
database.

PAREXEL's biostatistics professionals assist clients with all phases of
drug development, including biostatistical consulting, database design, data
analysis and statistical reporting. These professionals develop and review
protocols, design appropriate analysis plans and design report formats to
address the objectives of the study protocol

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as well as the client's individual objectives. Working with the programming
staff, biostatisticians perform appropriate analyses and produce tables, graphs,
listings and other applicable displays of results according to the analysis
plan. Frequently, biostatisticians represent clients during panel hearings at
the FDA.

MEDICAL MARKETING SERVICES

With the acquisitions of S&FA and RESCON in fiscal 1997, PAREXEL has
extended the endpoint of its service offerings beyond product regulatory
approval to the commercial launch and market acceptance of clients' products.
Various pressures on the pharmaceutical industry have resulted in a greater
focus on quickly moving more compounds from clinical development into the
marketplace in order to maximize revenues and profits over limited patent lives.
The move into medical marketing services in response to client demand has been a
natural progression for PAREXEL, and one that draws upon the Company's core
competencies in clinical research. It is PAREXEL's vision to orchestrate all
critical activities and seamlessly manage the clinical development process, as
project managers, through the marketing phase of new products, as product
managers. An emphasis on tightening the integration between the R&D and
marketing functions should have a positive impact on time-to-market and market
penetration.

The Company's experience indicates that clients need assistance in
addressing the technical aspects of launching their products, especially
managing the simultaneous launch of numerous products. PAREXEL assists clients
in: developing launch strategies; defining product attributes; product
positioning and promotion; interpreting clinical results; pricing and
reimbursement issues; justifying the cost-effectiveness and outcomes of proposed
treatments; post-approval studies; training physicians, sales forces, patients,
payors; managing patient registries, hotlines and other assistance programs; and
advocating appropriate public policy.

CONSULTING SERVICES

The Company offers a number of consulting, or advisory, services in
support of the product development and product marketing processes. This group
brings together experts from relevant disciplines focused on shaping meaningful
solutions and helping clients make the best business decisions with respect to
their product development and marketing strategies. This group also serves as a
valuable resource for the Company's internal operations, as technical experts
leverage their knowledge and experience to benefit Drug Development and Medical
Marketing Services.

PAREXEL's Consulting Services which are synergistically related,
included Regulatory Affairs, Clincial Pharmacology, Information Technology
Consulting, Information Products, and Performance Improvement.

Regulatory Affairs

PAREXEL provides comprehensive regulatory product registration services
for pharmaceutical and biotechnology products in major jurisdictions in Europe
and North America, including regulatory strategy formulation, document
preparation and liaison with the FDA and other regulatory agencies. In addition,
the Company provides the services of qualified experts to assist with good
manufacturing practices ("GMP") compliance in existing manufacturing plants and
to assure that new facilities are built to conform to GMP. PAREXEL's staff
provides on-site GMP training sessions and conducts internal and external
quality control and quality assurance audits.

PAREXEL works closely with clients to devise regulatory strategies and
comprehensive product development programs. The Company's regulatory affairs
experts review existing published literature, assess the scientific background
of a product, assess the competitive and regulatory environment, identify
deficiencies and define the steps necessary to obtain registration in the most
expeditious manner. Through this service, the Company helps its clients
determine the feasibility of developing a particular product or product line.

Clinical Pharmacology

PAREXEL's clinical pharmacology services primarily include Phase I
investigations and trial facilities, both for volunteers and patients. The
Company's Clinical Pharmacology Unit in Berlin is one of the world's leading
units

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for combined kinetic and dynamic studies. It provides state-of-the-art in- and
out-patient facilities, and is staffed with a team of clinical pharmacology
experts with extensive experience in both pharmakinetics and pharmadynamics.
During fiscal 1997, PAREXEL also entered into a clinical pharmacology research
collaboration with Georgetown University Medical Center, thereby creating the
Georgetown/PAREXEL Clinical Pharmacology Research Unit ("CPRU"). This
relationship provides PAREXEL exclusive access to the CPRU for purposes of
conducting clinical pharmacology research employing a more flexible,
variable-cost business model.

Information Technology Consulting

Information technology is integral to the clinical research process.
PAREXEL has technical experts which consult externally with clients, as well as
internally with Drug Development, on ways to best utilize technology to expedite
the development process. The Company has developed expertise is such areas as:
Sitebase (RDE technology), interactive voice recognition, optical imaging,
medical imaging, clinical information systems, and Computer Assisted New Drug
Application (CANDA) technologies, amongst others.

Information Products Division

The Company's Information Products Division ("IPD") offers a wide range
of specialized clinical consulting, training, and publication services to the
health care industry. PAREXEL/Barnett is a leader in providing conferences,
educational materials, and management consulting services tot the clinical
research community, with extensive experience in organizational structure,
curriculum design, and human resource management. The publications group
produces several publications covering regulatory issues, including the monthly
U.S. Regulatory Reporter, and books such as International Pharmaceutical Product
Registration; Drug Formularies and the Pharmaceutical Industry; A Practical
Guide to the EMEA; New Drug Development: A Regulatory Overview; and Biologies
Development: A Regulatory Overview. Other publications include the Worldwide
Pharmaceutical Regulation Series and PAREXEL's Pharmaceutical R&D Statistical
Source Book, published annually.

Performance Improvement

PAREXEL/Barnett is also a leader in management consulting in the
clinical research area, offering a wide range of solutions that help
pharmaceutical and biotechnology companies improve their own in-house clinical
performance. These services include performance benchmarking, process
improvement, clinical research capacity analysis, and operational support
services.

INFORMATION SYSTEMS

The Company is committed to investing in information technology
designed to help the Company provide high quality services in a cost effective
manner and to manage its internal resources. The Company believes it is one of a
few CROs that has an extensive and effective global information technology
network. The Company has built on its network by developing a number of
proprietary information systems that address critical aspects of its business,
such as project proposals/budget generations, time information management,
revenue and resource forecasting, clinical data entry and management, and
project management.

In June 1996, the Company augmented its information technology
capabilities with the acquisition of Sitebase Clinical Systems, Inc., a provider
of RDE technology which involves entry of data onto electronic case report forms
at the investigational site. RDE technology has important implications for CROs,
including enhancing the accuracy and timeliness of clinical data, thereby
shortening customers' time-to-market. The Company has also developed expertise
in each area as interactive voice recognition, optical imaging, and Computer
Assisted New Drug Applications (CANDA) technologies.

The Company's information systems group has hundreds of employees
responsible for technology procurement, applications development and management
of the Company's worldwide computer network. The wide area network links
numerous local area networks, interconnecting over 2,400 computers worldwide.
The Company's information systems are designed to work in support of and
reinforce the Company's standard operating procedures. The Company's information
technology system is open and flexible, allowing it to be adapted to the
multiple needs of

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different clients and regulatory systems. This system also enables the Company
to respond quickly to client inquiries on the progress of projects and, in some
cases, to gain direct access to client data on client systems.

SALES AND MARKETING

PAREXEL's marketing strategy is maintain excellent service-oriented
relationship with its large and loyal client base, while expanding its base
through strong global development initiatives. The Company's client relations
professionals, senior executives and project team leaders all share
responsibility for the maintenance of key client relationships and business
development activities. The Company believes that its emphasis on developing
close relationships with its clients leaves it well positioned to benefit from
the trend among pharmaceutical companies to concentrate their outsourcing among
fewer CROs. The Company's core marketing activities are complemented by the
industry conferences and publications offered by the Company's IPD. Although the
IPD activities are conducted as independent business activities, the Company
believes that the IPD offerings enhance the Company's market position in the
drug development community.

The Company's marketing activities are coordinated by PAREXEL's client
service executives in each of the Company's U.S. locations as well as the
Company's locations in Australia, France, Germany, Israel, Italy, Japan, Spain,
Sweden, and the United Kingdom. Most of the Company's business development
personnel have technical or scientific backgrounds and many are physicians,
pharmacologists, statisticians and regulatory affairs professionals. The Company
coordinates its worldwide marketing efforts through a computerized system that
is integrated into each of the Company's locations.

CLIENTS

During fiscal 1997, the Company provided services to most of the top 20
pharmaceutical and top 10 biotechnology companies, as ranked by estimated 1995
worldwide R&D spending. The Company performed services for hundreds of clients
on over 2,000 projects during the year.

The Company has in the past derived, and may in the future derive, a
significant portion of its net revenue from a core group of major projects or
clients. Concentrations of business in the CRO industry are not uncommon and the
Company is likely to experience such concentration in future years. In fiscal
1997, one client accounted for 11% of net revenue; in fiscal 1996 and 1995, no
single customer accounted for more than 10% of net revenue. In fiscal 1997, 1996
and 1995, the Company's top five customers accounted for 41%, 32% and 25%,
respectively, of the Company's net revenue. The loss of business from a
significant client could materially and adversely affect the Company's net
revenue and results of operations.

BACKLOG

Backlog consists of anticipated net revenue from letter agreements or
contracts that have been signed but not yet completed. Once work under a
contract or letter agreement commences, revenue is generally recognized over the
life of the contract, which usually lasts for 12 months or more. Backlog
excludes anticipated net revenues for projects for which the Company has
commenced work but for which a definitive contract or letter agreement has not
been executed. Backlog at June 30, 1997 was approximately $200 million, as
compared to approximately $110 million at June 30, 1996.

The Company believes that its backlog as of any date is not necessarily
a meaningful predictor of future results. Clinical studies under contracts
included in backlog are subject to termination or delay. Clients terminate or
delay contracts for a variety of reasons including, among others, the failure of
products being tested to satisfy safety requirements, unexpected or undesirable
clinical results of the product, the clients' decision to forego a particular
study, insufficient patient enrollment or investigator recruitment or production
problems resulting in shortages of the drug. Most of the Company's contracts are
terminable upon 60 to 90 days' notice by the client. The Company typically is
entitled to receive certain fees for winding down a study which is terminated or
delayed and, in some cases, a termination fee.

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COMPETITION

The Company primarily competes against in-house departments of
pharmaceutical companies, full service CROs, and, to a lesser extent,
universities, teaching hospitals and other site organizations. Some of these
competitors have greater capital, technical and other resources than the
Company. CROs generally compete on the basis of previous experience, medical and
scientific expertise in specific therapeutic areas, the quality of services, the
ability to organize and manage large-scale trials on a global basis, the ability
to manage large and complex medical databases, the ability to provide
statistical and regulatory services, the ability to recruit investigators and
patients, the ability to integrate information technology with systems to
improve the efficiency of contract research, an international presence with
strategically located facilities, financial viability and price. PAREXEL
believes that it competes favorably in these areas.

The CRO industry is fragmented, with participants ranging from several
hundred small, limited-service providers to several large, full-service CROs
with global operations. PAREXEL believes that it is the fourth largest
full-service CRO in the world, based on annual net revenue. Other large CROs
include Quintiles Transnational Corporation, Covance Inc., IBAH, Inc.,
Pharmaceutical Product Development, Inc. and ClinTrials Research, Inc.. The
trend toward CRO industry consolidation has resulted in heightened competition
among the larger CROs for clients and acquisition candidates. In addition,
consolidation within the pharmaceutical industry as well pharmaceutical
companies outsourcing to a fewer number of preferred CROs has led to heightened
competition for CRO contracts.

INTELLECTUAL PROPERTY

The Company believes that factors such as its ability to attract and
retain highly-skilled professional and technical employees and its project
management skills and experience are significantly more important to its
business than are any intellectual property rights developed by it. PAREXEL has
developed certain computer software and related methodologies that the Company
has sought to protect through a combination of contracts, copyrights and trade
secrets; however, the Company does not consider the loss of exclusive rights to
any of this software or methodology to be material to the Company's business.

EMPLOYEES

As of June 30, 1997, the Company had approximately 2,400. Approximately
65% of the employees are located in North America and 35% are located throughout
Europe and the Asia/Pacific region. The Company believes that its relations with
its employees are good.

The success of the Company's business depends on its ability to attract
and retain a qualified professional, scientific and technical staff. The level
of competition among employers for skilled personnel, particularly those with
Ph.D., M.D. or equivalent degrees, is high. The Company believes that its
multinational presence, which allows for international transfers, is an
advantage in attracting employees. In addition, the Company believes that the
wide range of clinical trials in which it participates allows the Company to
offer a broad experience to clinical researchers. While the Company has not
experienced any significant difficulties in attracting or retaining qualified
staff to date, there can be no assurance the Company will be able to avoid such
difficulties in the future.

GOVERNMENT REGULATION

New Drug Development -- An Overview

Before a new drug may be marketed in North America or Europe, the drug
must undergo extensive testing and regulatory review in order to determine that
the drug is safe and effective. The stages of this development process are as
follows:

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- Preclinical Research (1 to 3.5 years). In vitro ("test tube")
and animal studies to establish the relative toxicity of the
drug over a wide range of doses and to detect any potential to
cause birth defects or cancer. If results warrant continuing
development of the drug, the manufacturer will file for an IND
(Investigational New Drug Application), upon which the FDA may
grant permission to begin human trials.

- Clinical Trials (3.5 to 6 years)

- Phase I (6 months to 1 year). Basic safety and pharmacology
testing in 20 to 80 human subjects, usually healthy
volunteers, includes studies to determine how the drug works,
how it is affected by other drugs, where it goes in the body,
how long it remains active, and how it is broken down and
eliminated from the body.

- Phase II (1 to 2 years). Basic efficacy (effectiveness) and
dose-range testing in 100 to 200 afflicted volunteers to help
determine the best effective dose, confirm that the drug works
as expected, and provide additional safety data.

- Phase III (2 to 3 years). Efficacy and safety studies in
hundreds or thousands of patients at many investigational
sites (hospitals and clinics) can be placebo-controlled
trials, in which the new drug is compared with a "sugar pill,"
or studies comparing the new drug with one or more drugs with
established safety and efficacy profiles in the same
therapeutic category.

- TIND (May span late Phase II, Phase III, and FDA review). When
results from Phase II or Phase III show special promise in the
treatment of a serious condition for which existing
therapeutic options are limited or of minimal value, the FDA
may allow the manufacturer to make the new drug available to a
larger number of patients through the regulated mechanism of a
TIND (Treatment Investigational New Drug). Although less
scientifically rigorous than a controlled clinical trial, a
TIND may enroll and collect a substantial amount of data from
tens of thousands of patients.

- NDA Preparation and Submission. Upon completion of Phase III
trials, the manufacturer assembles the statistically analyzed
data from all phases of development into a single large
document, the New Drug Application (NDA), which today
comprises, on average, roughly 100,000 pages.

- FDA Review & Approval (1 to 1.5 years). Careful scrutiny of
data from all phases of development (including a TIND) to
confirm that the manufacturer has complied with regulations
and that the drug is safe and effective for the specific use
(or "indication") under study.

- Post-Marketing Surveillance and Phase IV Studies. Federal
regulation requires the manufacturer to collect and
periodically report to FDA additional safety and efficacy data
on the drug for as long as the manufacturer markets the drug
(post-marketing surveillance). If the drug is marketed outside
the U.S., these reports must include data from all countries
in which the drug is sold. Additional studies (Phase IV) may
be undertaken after initial approval to find new uses for the
drug, to test new dosage formulations, or to confirm selected
non-clinical benefits, e.g., increased cost-effectiveness or
improved quality of life.

The clinical investigation of new drugs is highly regulated by
government agencies. The standard for the conduct of clinical research and
development studies comprises GCP, which stipulates procedures designed to
ensure the quality and integrity of data obtained from clinical testing and to
protect the rights and safety of clinical subjects. While GCP has not been
formally adopted by the FDA nor, with certain exceptions, by similar regulatory
authorities in other countries, some provisions of GCP have been included in
regulations adopted by the FDA. Furthermore, in practice, the FDA and many other
regulatory authorities require that study results submitted to such authorities
be based on studies conducted in accordance with GCP.

The FDA's regulatory requirements have served as the model for much of
the regulation for new drug development worldwide. As a result, similar
regulatory requirements exist in the other countries in which the Company
operates. The Company's regulatory capabilities include knowledge of the
specific regulatory requirements in various countries, and the Company has
managed simultaneous regulatory submissions in more than one country for a
number of drug sponsors. Beginning in 1991, the FDA and corresponding regulatory
agencies of Canada, Japan and Western Europe commenced discussions to develop
harmonized standards for

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preclinical and clinical studies and the format and content of applications for
new drug approvals. Data from multinational studies adhering to GCP are now
generally acceptable to the FDA, Canadian and Western European regulators.
Effective April 1, 1997, Japan officially adopted GCP and legitimized the use of
CROs in conducting clinical research.

The services provided by PAREXEL are ultimately subject to FDA
regulation in the U.S. and comparable agencies in other countries. The Company
is obligated to comply with FDA requirements governing such activities as
obtaining patient informed consents, verifying qualifications of investigators,
reporting patients' adverse reactions to drugs and maintaining thorough and
accurate records. The Company must maintain source documents for each study for
specified periods, and such documents may be reviewed by the study sponsor and
the FDA during audits. Non-compliance with GCP can result in the
disqualification of data collected during a clinical trial.

POTENTIAL LIABILITY AND INSURANCE

PAREXEL's clinical research services center on the testing of new drugs
on human volunteers pursuant to a study protocol. Clinical research involves a
risk of liability for personal injury or death to patients due, among other
reasons, to possible unforeseen adverse side effects or improper administration
of the new drug. Many of these patients are already seriously ill and are at
risk of further illness or death. The Company has not experienced any claims to
date arising out of any clinical trial managed or monitored by it.

The Company believes that the risk of liability to patients in clinical
trials is mitigated by various regulatory requirements, including the role of
institutional review boards ("IRBs") and the need to obtain each patient's
informed consent. The FDA requires each human clinical trial to be reviewed and
approved by the IRB at each study site. An IRB is an independent committee that
includes both medical and non-medical personnel and is obligated to protect the
interests of patients enrolled in the trial. After the trial begins, the IRB
monitors the protocol and measures designed to protect patients, such as the
requirement to obtain informed consent.

To reduce its potential liability, PAREXEL seeks to obtain indemnity
provisions in its contracts with clients and with investigators hired by the
Company on behalf of its clients. These indemnities generally do not, however,
protect PAREXEL against certain of its own actions such as those involving
negligence. Moreover, these indemnities are contractual arrangements that are
subject to negotiation with individual clients, and the terms and scope of such
indemnities can vary from client to client and from study to study. Finally, the
financial performance of these indemnities is not secured, so that the Company
bears the risk that an indemnifying party may not have the financial ability to
fulfill its indemnification obligations. PAREXEL could be materially and
adversely affected if it were required to pay damages or incur defense costs in
connection with a claim that is outside the scope of an indemnity or where the
indemnity, although applicable, is not performed in accordance with its terms.

The Company currently maintains an errors and omissions professional
liability insurance policy. There can be no assurance that this insurance
coverage will be adequate, or that insurance coverage will continue to be
available on terms acceptable to the Company.

RISK FACTORS

In addition to the other information in this report, the following risk
factors should be considered carefully in evaluating the company and its
business. Information provided by the Company from time to time may contain
certain "forward-looking" information, as that term is defined by (i) the
Private Securities Litigation Reform Act of 1995 (the "Act") and (ii) in
releases made by the Securities and Exchange Commission (the "SEC"). These risk
factors are being provided pursuant to the provisions of the Act and with the
intention of obtaining the benefits of the "safe harbor" provisions of the Act.

LOSS OR DELAY OF LARGE CONTRACTS

Most of the Company's contracts are terminable upon 60 to 90 days'
notice by the client. Clients terminate or delay contracts for a variety of
reasons, including, among others, the failure of products being tested to
satisfy safety requirements, unexpected or undesired clinical results of the
product, the client's decision to forego a particular study, such as for
economic reasons, insufficient patient enrollment or investigator recruitment or
production problems resulting in shortages of the drug. In addition, the Company
believes that cost-containment and

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competitive pressures have caused pharmaceutical companies to apply more
stringent criteria to the decision to proceed with clinical trials and therefore
may result in a greater willingness of these companies to cancel contracts with
CROs. The loss or delay of a large contract or the loss or delay of multiple
contracts could have a material adverse effect on the financial performance of
the Company. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" on pages 16-19 of the Company's Annual Report to
Stockholders included as Exhibit 13.1 of this Form 10-K.

VARIABILITY OF QUARTERLY OPERATING RESULTS

The Company's quarterly operating results have been subject to
variation, and will continue to be subject to variation, depending upon factors
such as the initiation, progress, or cancellation of significant projects,
exchange rate fluctuations, the mix of services offered, the opening of new
offices and other internal expansion costs, the costs associated with
integrating acquisitions and the startup costs incurred in connection with the
introduction of new products and services. In addition, during the third quarter
of fiscal 1995 and 1993, the Company's results of operations were affected by a
non-cash restructuring charge and a non-cash write-down due to the impairment of
long-lived assets, respectively. See "Risks Associated with Acquisitions."
Because a high percentage of the Company's operating costs are relatively fixed,
variations in the initiation, completion, delay or loss of contracts, or in the
progress of client projects can cause material adverse variations in quarterly
operating results. See Note entitled "Quarterly Operating Results and Common
Stock Information (Unaudited)" to the Company's Consolidated Financial
Statements on page 35 of the Company's 1997 Annual Report to Stockholders
included as Exhibit 13.1 of this Form 10-K.

DEPENDENCE ON CERTAIN INDUSTRIES AND CLIENTS

The Company's revenues are highly dependent on research and development
expenditures by the pharmaceutical and biotechnology industries. The Company's
operations could be materially and adversely affected by general economic
downturns in its clients' industries, the impact of the current trend toward
consolidation in these industries or any decrease in research and development
expenditures. Furthermore, the Company has benefited to date from the increasing
tendency of pharmaceutical companies to outsource large clinical research
projects. A reversal or slowing of this trend would have a material adverse
effect on the Company. In fiscal 1997, 1996 and 1995, the Company's top five
clients accounted for 41%, 32% and 25%, respectively, of the Company's
consolidated net revenue. In fiscal 1997, one client accounted for 11% of net
revenue; In fiscal 1996 and 1995, no single customer accounted for mote than 10%
of net revenue. The loss of business from a significant client could have a
material adverse effect on the Company. See "Business - Clients" which appears
on page 13 of this Form 10-K.

DEPENDENCE ON GOVERNMENT REGULATION

The Company's business depends on the comprehensive government
regulation of the drug development process. In the United States, the general
trend has been in the direction of continued or increased regulation, although
the FDA recently announced regulatory changes intended to streamline the
approval process for biotechnology products by applying the same standards as
are in effect for conventional drugs. In Europe, the general trend has been
toward coordination of common standards for clinical testing of new drugs,
leading to changes in the various requirements currently imposed by each
country. Japan also legislated GCP and legitimatized the use of CRO's in April
1997. Changes in regulation, including a relaxation in regulatory requirements
or the introduction of simplified drug approval procedures, as well as
anticipated regulation, could materially and adversely affect the demand for the
services offered by the Company. In addition, failure on the part of the Company
to comply with applicable regulations could result in the termination of ongoing
research or the disqualification of data, either of which could have a material
adverse effect on the Company. See "Business - Government Regulation" which
appears on page 14 of this Form 10-K.

POTENTIAL ADVERSE IMPACT OF HEALTH CARE REFORM

Numerous governments have undertaken efforts to control growing health
care costs through legislation, regulation and voluntary agreements with medical
care providers and pharmaceutical companies. In the last several years, several
comprehensive health care reform proposals were introduced in the U.S. Congress.
The intent of the proposals was, generally, to expand health care coverage for
the uninsured and reduce the growth of total health care expenditures. While
none of the proposals were adopted, health care reform may again be addressed by
the

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U.S. Congress. Implementation of government health care reform may adversely
affect research and development expenditures by pharmaceutical and biotechnology
companies, resulting in a decrease of the business opportunities available to
the Company. Management is unable to predict the likelihood of health care
reform proposals being enacted into law or the effect such law would have on the
Company. See Item "Business - Industry Overview" which appears on page 5 of this
Form 10-K.

Many European governments have also reviewed or undertaken health care
reform. For example, German health care reform legislation implemented in
January 1993 contributed to an estimated 15% decline in German pharmaceutical
industry sales in calendar 1993 and led several clients to cancel contracts with
the Company. Subsequent to these events, in the third quarter of fiscal 1993,
the Company restructured its German operations and incurred a restructuring
charge of approximately $3.3 million. In addition, in the third quarter of
fiscal 1995, the Company's results of operations were affected by a non-cash
write-down due to the impairment of long-lived assets of PAREXEL GmbH, the
Company's German subsidiary, of approximately $11.3 million. The Company cannot
predict the impact that any pending or future health care reform proposals may
have on the Company's business in Europe. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 16-19 of the
Company's Annual Report to Stockholders included as Exhibit 13.1 of this Form
10-K.

COMPETITION; CRO INDUSTRY CONSOLIDATION

The CRO industry is fragmented, with participants ranging from several
hundred small, limited-service providers to several large, full-service CROs
with global operations. PAREXEL believes that it is the fourth largest
full-service CRO in the world, based on annual net revenue. Other large CROs
include Quintiles Transnational Corporation, Covance Inc., IBAH, Inc.,
Pharmaceutical Product Development, Inc. and ClinTrials Research, Inc. The
trend toward CRO industry consolidation has resulted in heightened competition
among the larger CROs for clients and acquisition candidates. In addition,
consolidation within the pharmaceutical industry as well pharmaceutical
companies outsourcing to a fewer number of preferred CROs has led to heightened
competition for CRO contracts.

RISKS ASSOCIATED WITH ACQUISITIONS

The Company has made a number of acquisitions and will continue to
review future acquisition opportunities. No assurances can be given that
acquisition candidates will continue to be available on terms and conditions
acceptable to the Company. Acquisitions involve numerous risks, including, among
other things, difficulties and expenses incurred in connection with the
acquisitions and the subsequent assimilation of the operations and services or
products of the acquired companies, the diversion of management's attention from
other business concerns and the potential loss of key employees of the acquired
company. Acquisitions of foreign companies also may involve the additional risks
of assimilating differences in foreign business practices and overcoming
language barriers. In the event that the operations of an acquired business do
not live up to expectations, the Company may be required to restructure the
acquired business or write-off the value of some or all of the assets of the
acquired business. In fiscal 1993 and 1995, the Company's results of operations
were materially and adversely affected by write-offs associated with the
Company's acquired German operations. There can be no assurance that any
acquisition will be successfully integrated into the Company's operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 16-19 of the Company's 1997 Annual Report to Stockholders
included as Exhibit 13.1 of this Form 10-K.

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MANAGEMENT OF BUSINESS EXPANSION; NEED FOR IMPROVED SYSTEMS; ASSIMILATION OF
FOREIGN OPERATIONS

The Company's business and operations have recently experienced
substantial expansion over the past 15 years. The Company believes that such
expansion places a strain on operational, human and financial resources. In
order to manage such expansion, the Company must continue to improve its
operating, administrative and information systems, accurately predict its future
personnel and resource needs to meet client contract commitments, track the
progress of ongoing client projects and attract and retain qualified management,
professional, scientific and technical operating personnel. Expansion of foreign
operations also may involve the additional risks of assimilating differences in
foreign business practices, hiring and retaining qualified personnel, and
overcoming language barriers. In the event that the operation of an acquired
business does not live up to expectations, the Company may be required to
restructure the acquired business or write-off the value of some or all of the
assets of the acquired business. Failure by the Company to meet the demands of
and to manage expansion of its business and operations could have a material
adverse effect on the Company's business. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 16-19 of the
Company's 1997 Annual Report to Stockholders included as Exhibit 13.1 of this
Form 10-K.

DEPENDENCE ON PERSONNEL; ABILITY TO ATTRACT AND RETAIN PERSONNEL

The Company relies on a number of key executives, including Josef H.
von Rickenbach, its President, Chief Executive Officer and Chairman, upon whom
the Company maintains key man life insurance. Although the Company has entered
into agreements containing non-competition restrictions with its senior
officers, the Company does not have employment agreements with certain of these
persons and the loss of the services of any of the Company's key executives
could have a material adverse effect on the Company.

The Company's performance also depends on its ability to attract and
retain qualified professional, scientific and technical operating staff. The
level of competition among employers for skilled personnel, particularly those
with M.D., Ph.D. or equivalent degrees, is high. There can be no assurance the
Company will be able to continue to attract and retain qualified staff. See
"Business - Employees" which appears on page 14 of this Form 10-K.

POTENTIAL LIABILITY; POSSIBLE INSUFFICIENCY OF INSURANCE

Clinical research services involve the testing of new drugs on
consenting human volunteers pursuant to a study protocol. Such testing involves
a risk of liability for personal injury or death to patients due to, among other
reasons, possible unforeseen adverse side effects or improper administration of
the new drug. Many of these patients are already seriously ill and are at risk
of further illness or death. The Company could be materially and adversely
affected if it were required to pay damages or incur defense costs in connection
with a claim that is outside the scope of an indemnity or insurance coverage, or
if the indemnity, although applicable, is not performed in accordance with its
terms or if the Company's liability exceeds the amount of applicable insurance.
In addition, there can be no assurance that such insurance will continue to be
available on terms acceptable to the Company. See "Business - Potential
Liability and Insurance" which appears on page 16 of this Form 10-K.

ADVERSE EFFECT OF EXCHANGE RATE FLUCTUATIONS

Approximately 36%, 38% and 40% of the Company's net revenue for fiscal
1997, 1996 and 1995, respectively, was derived from the Company's operations
outside of North America. Since the revenue and expenses of the Company's
foreign operations are generally denominated in local currencies, exchange rate
fluctuations between local currencies and the United States dollar will subject
the Company to currency translation risk with respect to the results of its
foreign operations. To the extent the Company is unable to shift to its clients
the effects of currency fluctuations, these fluctuations could have a material
adverse effect on the Company's results of operations. The Company does not
currently hedge against the risk of exchange rate fluctuations.

POTENTIAL VOLATILITY OF STOCK PRICE

The market price of the Company's Common Stock could be subject to wide
fluctuations in response to quarter-to-quarter variations in operating results,
changes in earnings estimates by analysts, market conditions in the industry,
prospects of health care reform, changes in government regulation and general
economic conditions. In

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addition, the stock market has from time to time experienced significant price
and volume fluctuations that have been unrelated to the operating performance of
particular companies. These market fluctuations may adversely affect the market
price of the Company's Common Stock. Because the Company's Common Stock
currently trades at a relatively high price-earnings multiple, due in part to
analysts' expectations of continued earnings growth, even a relatively small
shortfall in earnings from, or a change in, analysts' expectations may cause an
immediate and substantial decline in the Company's stock price. Investors in the
Company's Common Stock must be willing to bear the risk of such fluctuations in
earnings and stock price.

ANTI-TAKEOVER PROVISIONS; POSSIBLE ISSUANCE OF PREFERRED STOCK

The Company's Restated Articles of Organization and Restated By-Laws
contain provisions that may make it more difficult for a third party to acquire,
or may discourage a third party from acquiring, the Company. These provisions
could limit the price that certain investors might be willing to pay in the
future for shares of the Company's Common Stock. In addition, shares of the
Company's Preferred Stock may be issued in the future without further
stockholder approval and upon such terms and conditions, and having such rights,
privileges and preferences, as the Board of Directors may determine. The rights
of the holders of Common Stock will be subject to, and may be adversely affected
by, the rights of any holders of Preferred Stock that may be issued in the
future. The issuance of Preferred Stock, while providing desirable flexibility
in connection with possible acquisitions and other corporate purposes, could
adversely affect the market price of the Common Stock and could have the effect
of making it more difficult for a third party to acquire, or discouraging a
third party from acquiring, a majority of the outstanding voting stock of the
Company. The Company has no present plans to issue any shares of Preferred
Stock.

ITEM 2. PROPERTIES

PAREXEL leases all but one of its facilities. The Company's principal
executive offices are located in Waltham, Massachusetts. The company also leases
space in Lowell, Massachusetts, and maintains other North American offices in
Chicago, Philadelphia, Raleigh- Durham, San Diego, and Washington, D.C.. The
Company's European subsidiaries maintain offices in Berlin, Frankfurt, London,
Sheffield, Milan, Paris, Madrid, Stockholm, and Tel Aviv. The Company's Japanese
subsidiary is located in Kobe, with a branch office in Tokyo. Its Australian
subsidiary is located in Sydney. The Company considers all of its properties to
be suitable and adequate for its present needs.

ITEM 3. LEGAL PROCEEDINGS

As previously disclosed, the Company was a defendant in a proceeding
captioned Dennis J. Tallon v. Frederic Harwood, Samuel T. Barnett, Barnett
Associates, Inc., and PAREXEL International Corporation, 92-3496. The proceeding
was filed on March 3, 1992 in the Court of Common Pleas, Delaware Court,
Pennsylvania. On May 8, 1997, the trial court granted the Company's motion for
summary judgment and dismissed the Plaintiff's action in its entirety.
Subsequently, the Plaintiff filed an appeal of the Trial Court's order. In
August 1997, this matter was settled and the Company was released from liability
for all alleged claims of the Plaintiff. Pursuant to the Parties' settlement,
the Plaintiff's appeal will be withdrawn and all proceedings in this matter will
be terminated. The resolution of this matter did not have a material adverse
affect on the financial position, results of operations or business of the
Company.

No material legal proceedings are pending to which the Company, its
subsidiaries, or any of their properties are subject.

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

No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ended June 30, 1997.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

This information is incorporated by reference from page 35, "Quarterly
Operating Results and Common Stock Information (Unaudited)" of the Company's
1997 Annual Report to Stockholders included as Exhibit 13.1.

ITEM 6. SELECTED FINANCIAL DATA

This information is incorporated by reference from page 35, "Selected
Financial Data," of the Company's 1997 Annual Report to Stockholders included as
Exhibit 13.1.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

This information is incorporated by reference from pages 16-19,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," of the Company's 1997 Annual Report to Stockholders included as
Exhibit 13.1.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and supplementary financial information are
incorporated by reference from pages 20-34 of the Company's 1997 Annual Report
to Stockholders included as Exhibit 13.1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information with respect to this item may be found under the captions
"Elections of Directors" and "Executive Officers" in the Proxy Statement for the
Company's 1997 Annual Meeting of Stockholders. Such information is incorporated
herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

Information with respect to this item may be found under the captions
"Directors' Compensation" and "Executive Compensation" in the Proxy Statement
for the Company's 1997 Annual Meeting of Stockholders. Such information is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information with respect to this item may be found under the caption
"Security Ownership of Certain Beneficial Owners and Management" in the Proxy
Statement for the Company's 1997 Annual Meeting of Stockholders. Such
information is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information with respect to this item may be found under the caption
"Certain Relationships and Related Transactions" in the Proxy Statement for the
Company's 1997 Annual Meeting of Stockholders. Such information is incorporated
herein by reference.

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PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A) The following documents are filed as part of this report.

(1) Financial Statements. The following financial statements and
supplementary data included in the 1997 Annual Report to
Stockholders, filed as Exhibit 13.1 to this report, are
incorporated by reference into Item 8 of this report.

ANNUAL REPORT
FINANCIAL STATEMENTS FORM 10-K PAGE TO
STOCKHOLDERS PAGE

Report of Independent Accountants 21 34
Consolidated Balance Sheets at June 30, 1997 21 21
and 1996
Consolidated Statements of Operations for each 21 20
of the three years ended June 30, 1997
Consolidated Statements of Stockholders' 21 22
Equity for each of the three years ended June
30, 1997
Consolidated Statements of Cash Flows for each 21 23
of the three years ended June 30, 1997
Notes to Consolidated Financial Statements 21 24-33

(2) Financial Statement Schedules:

For the three years ended June 30, 1997:
Schedule II - Valuation and Qualifying Accounts

All other schedules are omitted because they are not applicable or the
required information is shown in the Consolidated Financial Statements
or the Notes thereto.

(3) Exhibits

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Exhibit Description
No.

3.1 -- Amended and Restated Articles of Organization of the Company,
as amended (filed as Exhibit 3.1 to the Registrant's Quarterly
Report on Form 10-Q for the Quarter Ended December 31, 1996
and incorporated herein by this reference).

3.2 -- Amended and Restated By-laws of the Company (filed as Exhibit
3.2 to the Registrant's Registration Statement on Form S-1
(File No. 333-1188) and incorporated herein by this
reference).

4.1 -- Specimen certificate representing the Common Stock of the
Company (filed as Exhibit 4.1 to the Registrant's Registration
Statement on Form S-1 (File No. 33- 97406) and incorporated
herein by this reference).

4.2 -- Purchase Agreement dated as of August 22, 1996 between the
Company and State and Federal Associates, Inc., S&FA of
Alexandria Partnership, Martin J. Miller, Howard Tag, Peter
Malamis and Laurie Hughes (filed as Exhibit 4.2 to the
Registrant's Registration Statement on Form S-3 (File No.
333-19751) and incorporated herein by this reference).

4.3 -- Registration Rights Agreement dated as of August 22, 1996
between the Company and S&FA of Alexandria Partnership, Martin
J. Miller, Howard Tag, Peter Malamis and Laurie Hughes (filed
as Exhibit 4.3 the Registrant's Registration Statement on Form
S-3 (File No. 333-19751) and incorporated herein by this
reference).

4.4 -- Agreement and Plan of Reorganization and Merger dated as of
February 28, 1997 among the Company, Rescon, Inc., Rescon
Acquisition Corporation, Walter Leroy Hill, as Trustee of the
Walter L. Hill Revocable Trust and Walter Leroy Hill (filed as
Exhibit 4.2 the Registrant's Registration Statement on Form
S-3 (File No. 333-27487) and incorporated herein by this
reference).

4.5 -- Registration Rights Agreement dated as of February 28, 1997
among the Company, Walter Leroy Hill, and Walter Leroy Hill as
Trustee of the Walter L. Hill Revocable Trust (filed as
Exhibit 4.3 the Registrant's Registration Statement on Form
S-3 (File No. 333-27487) and incorporated herein by this
reference).

4.6 -- Share Purchase Agreement dated as of February 28, 1997 among
the Company, Dr. Richard Kay and Janet Kay (filed as Exhibit
4.4 the Registrant's Registration Statement on Form S-3 (File
No. 333-27487) and incorporated herein by this reference).

4.7 -- Registration Rights Agreement dated as of February 28, 1997
among the Company, Dr. Richard Kay and Janet Kay (filed as
Exhibit 4.5 the Registrant's Registration Statement on Form
S-3 (File No. 333-27487) and incorporated herein by this
reference).

4.8 -- Share Purchase Agreement dated as of February 28, 1997 among
the Company, Dr. Afron Lloyd Jones and Dr. Diana Smith (filed
as Exhibit 4.6 the Registrant's Registration Statement on Form
S-3 (File No. 333-27487) and incorporated herein by this
reference).

4.9 -- Registration Right Agreement dated as of February 28, 1997
among the Company, Dr. . Afron Lloyd Jones and Dr. Diana Smith
(filed as Exhibit 4.7 the Registrant's Registration Statement
on Form S-3 (File No. 333-27487) and incorporated herein by
this reference).

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10.1 -- Employment Agreement dated December 30, 1996 between James M.
Karis and the Company (filed as Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended December 31, 1996 and incorporated herein by this
reference).

10.2 -- Agreement dated June 30, 1993 between Prof. Dr. med. Werner M.
Herrmann and PAREXEL GmbH Independent Pharmaceutical Research
Organization, as amended (filed as Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended March 31, 1997 and incorporated herein by this
reference).

10.3 -- Letter Agreement date May 12, 1997 between Prof. Dr. med.
Werner M. Herrmann and the Company (filed as Exhibit 10.2 to
the Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended March 31, 1997 and incorporated herein by this
reference).

10.4 -- Form of Stock Option Agreement of the Company (filed as
Exhibit 10.9 to the Registrant's Registration Statement on
Form S-1 (File No. 333-1188) and incorporated herein by this
reference).

10.5 -- 1986 Incentive Stock Option Plan of the Company (filed as
Exhibit 10.10 to the Registrant's Registration Statement on
Form S-1 (File No. 33-97406) and incorporated herein by this
reference).

10.6 -- 1987 Stock Plan of the Company (filed as Exhibit 10.11 to the
Registrant's Registration Statement on Form S-1 (File No.
33-97406) and incorporated herein by this reference).

10.7 -- 1989 Stock Plan of the Company (filed as Exhibit 10.12 to the
Registrant's Registration Statement on Form S-1 (File No.
33-97406) and incorporated herein by this reference).

10.8 -- 1995 Stock Plan of the Company (filed as Exhibit 10.13 to the
Registrant's Registration Statement on Form S-1 (File No.
33-97406) and incorporated herein by this reference).

10.9 -- 1995 Non-Employee Director Stock Option Plan of the Company
(filed as Exhibit 10.14 to the Registrant's Registration
Statement on Form S-1 (File No. 33-97406) and incorporated
herein by this reference).

10.10 -- 1995 Employee Stock Purchase Plan of the Company (filed as
Exhibit 10.15 to the Registrant's Registration Statement on
Form S-1 (File No. 33-97406) and incorporated herein by this
reference).

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10.11 -- Corporate Plan for Retirement of the Company (filed as Exhibit
10.16 to the Registrant's Registration Statement on Form S-1
(File No. 33-97406) and incorporated herein by this
reference).

10.12 -- Loan and Security Agreement dated as of July 31, 1992 between
the Company, Barnett International Corporation and The First
National Bank of Boston, as amended (filed as Exhibit 10.17 to
the Registrant's Registration Statement on Form S-1(File No.
333-06953) and incorporated herein by this reference).

10.13 -- Line of Credit Agreement between PAREXEL GmbH and Deutsche
Bank Berlin, dated January 23, 1995 (filed as Exhibit 10.24 to
the Registrant's Registration Statement on Form S-1 (File No.
33-97406) and incorporated herein by this reference).

10.14 -- First Amendment dated as of January 3, 1992 to the Lease dated
June 14, 1991 between 200 West Street Limited Partnership and
the Company (filed as Exhibit 10.25 to the Registrant's
Registration Statement on Form S-1 (File No. 33-97406) and
incorporated herein by this reference).

10.15 -- Second Amendment dated as of June 28, 1993 to the lease dated
June 14, 1991 between 200 West Street Limited Partnership and
the Company (filed as Exhibit 10.28 to the Registrant's
Registration Statement on Form S-1 (File No. 33-97406) and
incorporated herein by this reference).

10.16 -- Letter of employment dated July 6, 1993 between Barry R.
Philpott and the Company (filed as Exhibit 10.29 to the
Registrant's Registration Statement on Form S-1 (File No.
33-97406) and incorporated herein by this reference).

10.17 -- Credit Agreement dated December 30, 1994 between PAREXEL GmbH
and The First National Bank of Boston (filed as Exhibit 10.30
to the Registrant's Registration Statement on Form S-1(File
No. 33-97406) and incorporated herein by this reference).

10.18 -- Collateral Agreement dated December 30, 1994 between PAREXEL
GmbH and The First National Bank of Boston (filed as Exhibit
10.31 to the Registrant's Registration Statement on Form S-1
(File No. 33-97406) and incorporated herein by this
reference).

10.19 -- Proposed Amended and Restated 1995 Stock Plan of the Company
to become effective upon the approval of the stockholders at
the 1997 Annual Meeting.

11.1 -- Statement re computation of per share earnings.

13.1 -- Specified portions of the Registrant's 1997 Annual Report to
Stockholders.

21.1 -- List of subsidiaries of the Company.

23.1 -- Consent of Price Waterhouse L.L.P.

27.1 -- Financial Data Schedule.

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26
(B) Reports on Form 8-K:

The Company filed a Current Report on Form 8-K dated April 23, 1997,
reporting financial results for the three months ended March 31, 1997.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 in the city of Waltham,
Massachusetts, on the 26th day of September, 1997.

PAREXEL INTERNATIONAL CORPORATION

By:/s/ JOSEF H. VON RICKENBACH
----------------------------------
JOSEF H. VON RICKENBACH
President, Chief Executive Officer
and Chairman

Signatures Title(s) Date
---------- -------- ----

/s/ JOSEF H. VON RICKENBACH President, Chief September 26, 1997
--------------------------- Executive Officer and
Josef H. von Rickenbach Chairman (principal
executive officer)

/s/ WILLIAM T. SOBO, JR. Senior Vice President, September 26, 1997
------------------------ Chief Financial Officer,
William T. Sobo, Jr. Treasurer and Clerk
(principal financial and
accounting officer)

/s/ A. DANA CALLOW, JR. Director September 26, 1997
-----------------------
A. Dana Callow, Jr.

/s/ PATRICK J. FORTUNE Director September 26, 1997
----------------------
Patrick J. Fortune

/s/ WERNER M. HERRMANN Director September 26, 1997
----------------------
Werner M. Herrmann

/s/ PETER BARTON HUTT Director September 26, 1997
---------------------
Peter Barton Hutt

/s/ JAMES A. SAALFIELD Director September 26, 1997
----------------------
James A. Saalfield

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SCHEDULE II

PAREXEL INTERNATIONAL CORPORATION

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

Balance at Charged to Balance at
beginning of costs and Charged to Deductions end of
Description period expenses other accounts and write-offs period
- ------------------------- ------------ ----------- -------------- -------------- -----------

ALLOWANCE FOR DOUBTFUL
ACCOUNTS
Year ended June 30, 1995 $ 580,000 $ 1,021,000 -- $ (327,000) $ 1,274,000
Year ended June 30, 1996 1,274,000 515,000 -- (290,000) 1,499,000
Year ended June 30, 1997 1,499,000 1,452,000 $ 384,000(1) (624,000) 2,711,000

DEFERRED TAX ASSET
VALUATION ALLOWANCE
Year ended June 30, 1995 6,071,000 -- 1,620,000 (200,000) 7,491,000
Year ended June 30, 1996 7,491,000 -- -- (1,565,000) 5,926,000
Year ended June 30, 1997 5,926,000 -- -- (2,554,000) 3,372,000

(1) Amounts acquired through business combinations.