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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, EFFECTIVE
OCTOBER 7, 1996) FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

[ ] 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
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COMMISSION FILE NUMBER 33-69586

CLINTRIALS RESEARCH INC.
(Exact name of registrant as specified in its charter)

DELAWARE 62-1406017
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)

20 BURTON HILLS BOULEVARD, SUITE 500 37215
NASHVILLE, TENNESSEE (Zip Code)
(Address of principal executive offices)

(615) 665-9665
(Company's telephone number, including area code)

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

NONE

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

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common Stock, $.01 par value Nasdaq Stock Market

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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 requirement 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. [ ]

The aggregate market value of voting stock held by nonaffiliates of the
registrant was $112,686,000 as of March 14, 1997. The number of Shares of Common
Stock outstanding as of March 14, 1997 was 17,871,017.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated by reference into Part II, Items
6, 7 and 8 of this Form 10-K: Portions of the Registrant's Annual Report to its
stockholders for fiscal year ended December 31, 1996.

The following documents are incorporated by reference into Part III, Items
10, 11 and 12 of this Form 10-K: Portions of the Registrant's definitive proxy
materials for its 1997 Annual Meeting of stockholders.
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PART I

ITEM 1. BUSINESS

ClinTrials Research Inc. (the "Company" or "ClinTrials") is a full service
contract research organization ("CRO") serving the pharmaceutical, biotechnology
and medical device industries. The Company designs, monitors and manages
preclinical and clinical trials, provides clinical data management and
biostatistical services, and offers product registration services throughout the
United States, Canada and Europe. The Company generates substantially all of its
revenue from the clinical testing of new pharmaceutical and biotechnology
products. At December 31, 1996, the Company had contracts in backlog to perform
clinical research services in over 30 countries worldwide. To date, the Company
has performed services for approximately 300 clients including the ten largest
pharmaceutical companies in the world. Net service revenue increased 61.6% to
$93.5 million in 1996 from $57.8 million in 1995.

New pharmaceutical and biotechnology products must undergo extensive
testing and regulatory review to determine their relative safety and
effectiveness. Companies seeking approval for these products are responsible for
performing and analyzing the results of preclinical and multi-phase clinical
trials. Preclinical trials typically last for up to three years and involve
animal testing. Clinical trials are conducted over a period typically lasting
eight to twelve years and involve hundreds or thousands of human subjects. These
trials were historically performed almost exclusively by inhouse personnel at
the major pharmaceutical companies. In recent years, pharmaceutical companies
have begun to outsource clinical trials management to CROs, which has resulted
in significant growth in the CRO industry. The Company believes worldwide
research and development expenditures by the pharmaceutical and biotechnology
industries reached an estimated $33 billion in 1995, approximately $11 billion
of which was spent on clinical trials, with approximately $2.5 billion being
outsourced to CROs. Research and development expenditures in 1995 for the top 50
pharmaceutical companies in the world increased approximately 10% from the
previous year. The Company believes that certain industry trends have led
pharmaceutical and biotechnology companies to increase research and development
for proprietary new drugs, conduct increasingly complex clinical trials, and
develop multinational clinical trial capability, while seeking to control
internal fixed costs. These trends include the increased emphasis on finding
treatments for chronic disorders and infectious diseases, the desire by
manufacturers to market pharmaceutical and biotechnology products simultaneously
in several countries, and cost containment pressures from certain governments,
managed care organizations and other payors. By providing experienced clinical
and database management personnel to conduct complex trials on a contract basis,
CROs have enabled pharmaceutical and biotechnology companies to respond to cost
containment pressures by turning the fixed costs of internal clinical research
into variable costs.

ClinTrials Research Inc. is an international research services organization
headquartered in Nashville, Tennessee, with offices in Research Triangle Park,
North Carolina; Lexington, Kentucky; Maidenhead, U.K.; Brussels, Belgium; Paris,
France; Melbourne, Australia; Jerusalem, Israel; Santiago, Chile; and Montreal,
Canada.

BACKGROUND

New Drug Development -- An Overview. Before a new drug may be marketed, it
must generally undergo extensive testing and regulatory review to determine that
it is safe and effective. This development process consists of two stages,
preclinical and clinical. In the preclinical stage, the sponsor of the new drug
conducts laboratory analyses and animal tests, generally over a one to three
year period, to determine the basic biological activity and safety of the drug.
Upon successful completion of the preclinical phase, the drug undergoes a series
of clinical tests in humans, including healthy volunteers as well as patients
with the targeted disease, generally over an eight to twelve year period. In the
United States, preclinical and clinical testing must comply with the
requirements of Good Clinical Practice ("GCP") and other standards promulgated
by the Food and Drug Administration (the "FDA") and other federal and state
governmental authorities. GCP 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. The FDA pioneered the use of clinical
trials in the regulation of new drug development, and the agency's approval
process has shaped much drug regulation worldwide. In

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recent years, the FDA and corresponding regulatory agencies of the major
industrial countries (Canada, Japan and the European Community ("EC")) commenced
discussions for the purpose of developing common standards for both the conduct
of preclinical and clinical studies and the format and content of applications
for new drug approvals. Data from multi-national studies adhering to GCP are now
generally acceptable to the FDA and the governments within the EC.

In the United States, a drug sponsor must file an Investigational New Drug
Application ("IND") with the FDA before the commencement of human testing of a
drug. The IND includes preclinical testing results and sets forth the sponsor's
plans for conducting human clinical trials. The design of these plans, also
referred to as the study protocol, is critical to the success of the drug
development effort because the protocol must correctly anticipate the data and
results that the FDA will require before approving the drug. In the absence of
any comments from the FDA, human clinical trials may begin 30 days after the IND
is filed.

Clinical trials usually start on a small scale to assess safety and then
expand to larger trials to test efficacy. Trials are usually grouped into four
phases, with multiple trials generally conducted within each phase.

Phase I. Phase I trials are conducted on healthy volunteers,
typically 20 to 80 persons, to develop basic safety data relating to
toxicity, metabolism, absorption and other pharmacological actions. These
trials last an average of six months to one year.

Phase II. Phase II trials are conducted on a small number of
subjects, typically 100 to 200 patients, who suffer from the drug's
targeted disease or condition. Phase II trials offer the first evidence of
clinical efficacy, as well as additional safety data. These trials last an
average of two years.

Phase III. Phase III trials are conducted on a significantly larger
population of several hundred to several thousand patients, some of whom
suffer from the targeted disease or condition and some of whom are healthy.
Phase III trials are designed to measure efficacy on a large scale as well
as long-term side effects. These trials involve numerous sites and
generally last two to three years.

Phase IV. As a condition of granting marketing approval, the FDA may
require that a sponsor continue to conduct additional clinical trials,
known as Phase IV trials, to monitor long-term risks and benefits, study
different dosage levels, or evaluate different safety and efficacy
parameters in target patient populations. With the increasing importance of
Phase IV trials has also come increased complexity in the scope of the
trials (i.e., the number of patients tested) and the manner in which they
are conducted (i.e., the number of sites at which testing is performed).
Phase IV trials generally last one to four years.

Clinical trials often represent the most expensive and time-consuming part
of the overall drug development process generally lasting from eight to twelve
years. The information generated during these trials is critical for gaining
marketing approval from the FDA or other regulatory agencies. After the
successful completion of Phase III trials, the sponsor of a new drug must submit
a New Drug Application ("NDA") to the FDA. The NDA is a comprehensive filing
that includes, among other things, the results of all preclinical and clinical
studies, information about the drug's composition and the sponsor's plans for
producing, packaging and labeling the drug. Most of the clinical data contained
in an NDA is generated during the Phase II and III trials. The FDA's review of
an NDA can last from several months to several years, with the average review
lasting two and one-half years. Drugs that successfully complete this review may
be marketed in the United States, subject to the conditions imposed by the FDA
in its approval. The FDA has been subject to increasing pressure to allow drugs
to reach the public more quickly. As a result, in some instances the FDA has
expedited the review process by granting conditional approval of lifesaving
drugs or those for conditions for which there is no current treatment so that
they can be marketed while Phase IV trials are being conducted. In recent years,
the FDA has encouraged the use of computer assisted NDAs ("CANDAs") in an effort
to expedite the approval process.

INDUSTRY TRENDS

The contract research industry derives substantially all of its revenue
from the research and development ("R&D") expenditures of pharmaceutical,
biotechnology and medical device companies. The Company

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believes that certain industry trends have led pharmaceutical and biotechnology
companies to increase the use of CROs for preclinical and clinical trials. These
trends include the following:

Increasing Cost Containment Pressures. The increasing pressure to control
rising health care costs, and the penetration of managed health care and health
care reform have caused the following changes in the pharmaceutical industry:

- Managed Care Organizations. Managed care organizations have become major
participants in the delivery of pharmaceuticals. These organizations limit
the selection of drugs from which affiliated physicians may prescribe,
thus increasing the competition among pharmaceutical companies to develop
more effective products in a shorter time frame.

- Consolidation. As pharmaceutical companies seek to create economies of
scale, there have been several large mergers within the pharmaceutical
industry, and as a result of these mergers, the pharmaceutical industry
has experienced large scale employee lay-offs and other cutbacks.

- Other Factors. Factors such as competition from generic drugs following
patent expiration, more stringent regulatory requirements and the
increasing complexity of clinical trials have resulted in increasing
market pressure on profit margins.

In response to these cost containment pressures, a number of United States
pharmaceutical companies have publicly committed to hold net effective price
increases generally in line with inflation. In the area of clinical development,
many pharmaceutical and biotechnology companies are seeking to reduce the high
fixed costs associated with peak-load staffing by reducing internal clinical
staff and relying on a combination of internal resources and external resources
such as CROs, thereby shifting fixed costs to variable costs.

Globalization of Clinical Research and Development. Due to the increasing
cost of new drug development, many projects that are not expected to achieve
sufficient annual worldwide revenue are abandoned. Pharmaceutical companies are
increasingly attempting to maximize returns from a given drug by pursuing
regulatory approvals in multiple countries simultaneously rather than
sequentially. A pharmaceutical company seeking approval 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. The Company believes that the globalization of clinical
research and development activities has increased the demand for CRO services.

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 demand for data collection and analysis during the
drug development process. In addition, over the last ten years the average
number of clinical trials per new drug application has approximately doubled,
and the average number of patients participating in those trials has increased
approximately 25%. In recent years, the FDA and corresponding regulatory
agencies of Canada, Japan and the EC have commenced discussions to develop
common 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.

Escalating Research and Development Expenditures. Research and development
expenditures in 1995 for the top 50 pharmaceutical companies in the world (as
measured by such expenditures) increased approximately 10% from the previous
year. Such expenditures have resulted from an increased emphasis on developing
effective products for the treatment of chronic disorders and life threatening
acute conditions such as infectious diseases. The cost of developing therapies
for chronic disorders, such as arthritis, Alzheimer's disease and osteoporosis
is higher because the treatments must be studied for a longer period to
demonstrate their effectiveness in curbing the chronic disorder and to determine
any possible long-term side effects.

Reducing Drug Development Time Requirements. Pharmaceutical and
biotechnology companies face increased pressure to bring new drugs to market in
the shortest possible time, thereby reducing costs,

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maintaining market share and accelerating realization of revenue. Currently,
successful development of a new drug takes approximately eight to twelve years,
a significant portion of a drug's seventeen-year period for protection under
United States patent laws. Certain clients of the Company have expressed a
desire to reduce this time to approximately five to seven years. Pharmaceutical
and biotechnology companies are attempting to increase the speed of new product
development, and thereby maximize the period of marketing exclusivity and
economic returns for their products, by outsourcing development activities to
CROs. The Company believes that CROs are often able to perform the needed
services with a higher level of expertise or specialization, and more quickly,
than a pharmaceutical or biotechnology company could perform such services
internally. In addition, some pharmaceutical and biotechnology companies are
beginning to contract with large full-service CROs to conduct preclinical and
all phases of clinical trials for new product programs lasting several years,
rather than separately contracting specific phases of drug development to
several different CROs. The Company believes this approach may result in shorter
overall development times. In anticipation of this trend, the Company has
established itself as a firm capable of taking a pharmaceutical from its initial
testing through its licensing for commercialization.

New Drug Development Pressures. The Company believes that R&D expenditures
have increased as a result of the constant pressure to develop and patent
products, and to respond to the demand for products for an aging population and
for the treatment of chronic disorders and life-threatening conditions. In
response to this pressure, pharmaceutical and biotechnology companies are
outsourcing preclinical and clinical trials in order to use their own resources
to develop additional drugs.

Growth of Biotechnology Industry. The biotechnology industry and the
number of drugs produced by it which require FDA approval have grown
substantially over the past decade. Many biotechnology companies have chosen not
to expend resources to develop sufficient staff or expertise to conduct clinical
trials in-house, but rather have utilized providers such as CROs to perform
these services.

As the use of CROs increases, so do the demands placed upon CROs like
ClinTrials that provide a broad range of services in multiple countries for
larger clients. For example, larger CROs generally remain competitive by
sustaining internal growth and by opening offices in additional countries in
order to have a presence near either a client or a large test site.
Increasingly, large clients require CROS to meet certain credit-worthiness
standards. As a result of these factors, CROs such as ClinTrials have
experienced an increasing demand for working capital and strong balance sheets
in order to maintain their competitive standing within the industry.

BUSINESS STRATEGY

The trend toward outsourcing the clinical testing process for
pharmaceutical, biotechnology and medical device products is accelerating. The
CRO industry is highly fragmented with many small, limited-service providers as
well as in-house research departments, universities and teaching hospitals, and
other CROs, many of which have substantially greater resources than the Company.
However, the Company believes it is well positioned to take advantage of the
trend toward outsourcing as a result of its demonstrated ability to provide a
broad range of professional, cost-effective clinical research and development
services worldwide. The Company's strategy is comprised of the following
elements:

Provide Comprehensive Preclinical and Clinical Research Services. The
Company offers a broad range of clinical research services and believes that its
knowledge and experience in all stages of clinical research enhance its
credibility with prospective clients. The Company has the capability to provide
a full range of preclinical and clinical services on a turnkey basis, which the
Company believes can be especially important to clients without significant
relevant regulatory expertise, such as biotechnology companies and international
pharmaceutical companies seeking to enter new geographic markets. To meet the
needs of specific clients, the Company offers its services separately or as an
integrated package. This allows a client to use the Company to design a
protocol, conduct a trial, analyze the results of one or more trials, prepare
and submit a new drug application or computer-assisted filing to the FDA, or for
any combination of these services. This approach enables the Company to respond
to clients' requirements with flexibility and also allows it to establish a
relationship with a new client with a particular service that may in turn lead
to larger, more comprehensive

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projects. In addition, the Company believes its preclinical capabilities will
increase the prospect of being awarded contracts for later stage testing after
satisfactory completion of the preclinical tests.

Pursue Strategic Alliances. In these arrangements, the client agrees to
provide the Company with a minimum level of revenue and is guaranteed adequate
staffing over a multi-year period. The Company believes this type of arrangement
results in more predictable pricing to the client and more efficient management
of the Company's resources, and potentially increases the amount of work
outsourced to the Company by the strategic partner. In the past three years, the
Company has entered into strategic alliances with Baxter Healthcare Corporation,
Novartis Pharmaceuticals Corporation, SmithKline Beecham Corporation and Glaxo
Wellcome. In addition, the Company's preclinical subsidiary has "preferred
provider" relationships, which, in contrast to strategic alliances, are
noncontractual, informal relationships in which the client makes the Company
among its first choices of testing service providers.

Expand International Presence. The Company provides clinical research and
development services to major United States and European pharmaceutical and
biotechnology companies. The Company conducts multi-national clinical trials
designed to pursue concurrent regulatory approvals in multiple countries. The
Company believes that this experience is a competitive advantage, as
pharmaceutical and biotechnology companies increasingly are pursuing regulatory
approvals simultaneously in multiple countries. The Company has recently
increased and strengthened its European management team and increased its office
space in Maidenhead, England and Brussels, Belgium to provide more comprehensive
services to its United States clients doing business abroad and to better market
its services to existing and potential European clients. During 1996, the
Company expanded its geographic reach by opening trials management offices in
Australia, France, Israel and Chile, and now delivers services in over 30
countries.

Develop Capabilities in Emerging Areas. The Company attempts to establish
study protocols and expertise in a therapeutic area prior to the formal
announcement of a new product by a pharmaceutical or biotechnology company.
Manufacturers prefer to outsource to CROs that already have knowledge and have
developed testing models in the relevant area and that can therefore more
quickly begin the new drug application process. The Company learns of promising
research and potential new products by attending conferences, reading scientific
literature and by networking with industry experts, academics, manufacturers'
representatives and others.

Invest in Information Systems Technology. The Company maintains a
commitment to investment in technology with a focus on management information
systems. The Company has invested heavily in improving its standard operating
procedures, in continuous reengineering of the workflow processes and in the
infrastructure required to support the creation, maintenance and statistical
analysis of highly sophisticated databases. In particular, the Company has: (i)
extended its wide area communications network to include all Company locations,
enabling multi-national project teams to coordinate their activities on global,
multi-site programs; (ii) supplemented its existing suite of clinical database
tools with the implementation of industry-standard data management software;
(iii) implemented new project tracking systems internationally as well as
reengineered processes to reduce project set-up time; (iv) completed major
investments in computer hardware, including processors and disk storage systems,
which tripled its capacity to process study data; and (v) increased its
management, biostatistics and information systems team to more than 300
employees, one of the largest such groups in the industry. The Company intends
to continue to improve its management information systems with significant
capital expenditures anticipated in 1997.

Broaden Therapeutic Expertise. Prior working knowledge in specific
therapeutic areas is a highly valued criterion by which many decisions to work
with a CRO are made. ClinTrials has experience in a broad range of therapeutic
areas and is continuing to expand its ability and experience in more therapeutic
areas. ClinTrials has demonstrated depth and high quality performance in the
following areas: anti-viral infectious diseases, cardiology, central nervous
system, gastroenterology, endocrinology, respiratory and urology, osteoporosis
evaluation, cardiovascular pharmacology, biomaterials testing, bio-marker assays
and infusion delivery. The Company is a leader in the investigation of blood
substitutes and protease inhibitors and in the conducting of megatrials (trials
involving more than 1,000 participants).

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Increase Client Base and Number of Contracts. ClinTrials' strategy is to
seek contracts with new clients and new contracts with existing clients in
different therapeutic areas and cross-sell other services to existing clients.

Pursue Selected Acquisitions. The Company plans to pursue strategic
acquisitions of selected CROs or related businesses that provide one or more of
the following: complementary services, expanded geographic presence, new
therapeutic expertise or complementary client bases.

SERVICES

The Company's services and related products include preclinical and
clinical trials management services, clinical data management and biostatistical
services, and product registration services. The Company's services can be
provided separately or as an integrated package. Services from each of these
categories can be utilized for the development and execution of a turnkey NDA.

Preclinical Trials. The Company designs and conducts preclinical research
programs, based principally upon animal models, that generate the data required
to establish safe starting dosages and the potential efficacy of a product in
humans, and to determine organ toxicity and other potential risks of human
usage. Preclinical trial reports are submitted to regulatory authorities in
support of an application to initiate clinical testing in humans. The Company
also offers analytical laboratory services including assessment of product
concentration in suspensions, solutions, animal feed and plasma radiometric
determination in metabolite profiling of biological tissues, and radiopurity
assessment of dose solution.

Clinical Trials Management Services. The Company offers complete services
for the design, placement, performance and management of clinical trial
programs, a critical element in obtaining regulatory approval for drugs and
medical devices. The Company has performed services in connection with trials in
many therapeutic areas. The Company's multi-disciplinary clinical trials group
has the ability to examine a product's existing preclinical and clinical data
for the purposes of designing protocols for clinical trials in order to
ascertain evidence of the product's safety and efficacy.

The Company manages every aspect of trials in Phases I through IV,
including design of operations manuals, identification and recruitment of trial
investigators, initiation of sites, monitoring for strict adherence to GCP, site
visits to ensure compliance with protocol procedures and proper collection of
data, interpretation of trial results and report preparation. Substantially all
of the Company's current clinical projects involve Phase II, III or IV clinical
trials, which, in most cases, are significantly larger and more complex than
Phase I trials.

In the CRO industry trials involving tests on over 1,000 patients over a
period of several years at multiple sites are becoming more routine. These
trials have resulted from the drug companies' emphasis on treating and curing
chronic disorders and the resulting need to thoroughly test large numbers of
patients for long-term side effects of new drugs. The Company is experienced in
managing such trials and actively markets its abilities in this area.

Clinical trials are monitored for strict adherence to GCP. Efficient data
collection, form design, detailed operations manuals and site visits by the
Company's clinical research associates ("CRA") are employed to determine whether
clinical investigators and their staffs follow established protocols and
accurately record the findings of the trials.

The Company assists clients with one or more of the following steps of
clinical trials:

- Study Protocol. The protocol defines the medical issues the study seeks
to examine and the statistical tests that will be conducted. Accordingly,
the protocol defines: (i) the frequency and type of laboratory and
clinical measures that are to be tracked and analyzed; (ii) the number of
patients required to produce a statistically valid result; (iii) the
period of time over which they must be tracked; and (iv) the frequency and
dosage of drug administration.

- Case Report Forms. Once the study protocol has been finalized, special
forms for recording the desired information must be developed. These forms
are called Case Report Forms ("CRFs"). The

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CRF may change at different stages of a trial. The CRF for one patient in
a given study may consist of as many as 100 pages or more.

- Site and Investigator Recruitment. The drug is administered to patients
by investigators, at hospitals, clinics or other locations, referred to as
sites. Potential investigators may be identified by the drug sponsor or
the CRO, which then solicits the investigators' participation in the
study. Generally, the investigators contract directly with the Company.
The trial's success depends on the successful identification and
recruitment of investigators with proper expertise and an adequate base of
patients who satisfy the requirements of the study protocol.

- Patient Enrollment. The investigators find and enroll patients suitable
for the study according to the study protocol. Prospective patients are
required to review information about the drug and its possible side
effects and sign an informed consent 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 CRAs. CRAs visit sites regularly to ensure that the CRFs
are completed correctly and that all data specified in the protocol are
collected. CRFs are reviewed for consistency and accuracy before their
data are entered into an electronic database.

- Medical Affairs. Throughout the course of a clinical trial, the Company
may provide various medical research and services including medical
monitoring of clinical trials, interpretation of clinical trial results
and preparation of clinical study reports.

- Report Writing. The results 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.

Clinical Data Management and Biostatistical Services. The Company's data
management professionals assist in the design of protocols and CRFs, as well as
training manuals and training sessions for investigational staff, 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, the Company's personnel screen the
data to detect errors, omissions and other deficiencies in completed CRFs. The
Company provides clients with data abstraction, data review and coding, data
entry, database verification and editing, and problem data resolution.

The Company's biostatistics professionals provide biostatistical
consulting, database design, data analysis and statistical reporting. The
Company's biostatisticians provide clients with assistance in all phases of drug
development. These professionals develop and review protocols, design
appropriate analysis plans and design report formats to address the objectives
of the study protocol 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 assist clients
before panel hearings at the FDA.

The Company believes that its data management and biostatistical services
capabilities can be utilized by a client more effectively when packaged as part
of its total clinical trials management services and used to monitor Phases I
through IV rather than just one phase. This packaging permits a faster and less
costly clinical trial process, as the data are collected and analyzed more
rapidly and the decision to move to the next phase can be made more quickly.
Although the Company believes that many pharmaceutical companies treat each
phase as a distinct trial, the Company is emphasizing its "entire process"
approach in its marketing efforts. Currently, a significant portion of these
services are utilized by clients to process data that have previously been
collected either by the client itself or by another CRO as part of a distinct
phase in the drug development process.

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Product Registration Services. The Company provides comprehensive product
registration services throughout Europe and the United States. The Company
provides regulatory strategy formulation, document preparation, Good
Manufacturing Practice consultation and acts as liaison with the FDA and other
regulatory agencies. Although these services have not generated material revenue
to date, the Company offers these services in order to provide the full range of
services necessary to remain competitive in the CRO industry.

The Company 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.

The Company's regulatory affairs professionals have experience in the
analysis, preparation and submission of FDA regulatory documents covering a wide
range of products, including drugs and over-the-counter products. The Company
also has experience with preparing regulatory documentation for submission to
European regulatory authorities.

CLIENTS AND MARKETING

The Company has served many of the leading pharmaceutical companies in the
United States and the EC. The Company's clients include the ten largest
pharmaceutical companies in the world. The Company's clients also include
companies in the biotechnology and medical device industries. For the year ended
December 31, 1996, the Company recognized revenue on contracts with 114 clients.
During 1996, approximately 83% of the Company's net service revenue was derived
from pharmaceutical companies, 15% from biotechnology companies and 2% from
medical device companies. In 1995, such companies contributed 88%, 10%, and 2%
of net service revenue, respectively.

The Company has had, and will continue to have, certain clients from which
at least 10% of the Company's overall revenue is generated over multiple
contracts. Such concentrations of business are not uncommon within the CRO
industry. During 1996, the Company generated approximately 23% of its net
service revenue from SmithKline Beecham Corporation. No other client represented
10% or more of the Company's net revenue in 1996. The Company's contracts are
entered into with numerous therapeutic areas or divisions within each client and
frequently involve different decision makers. Thus, there is a reduced
likelihood that the Company would simultaneously lose all contracts with any
single client.

Marketing activities are conducted by the Company's business development
personnel based in each of the Company's locations. In response to the highly
technical nature of the Company's business, most business development personnel
have scientific backgrounds. Additionally, the Company runs an extensive
advertising program in trade journals and publications and, from time to time,
employs direct mailings of information to existing and potential clients. The
Company also attends and exhibits at selected trade shows in the United States
and Europe. The Company is in the process of expanding its business development
group in order to serve additional clients.

CONTRACTUAL ARRANGEMENTS

The Company generally is awarded contracts based, among other things, upon
its response to requests for proposal ("RFP") received from pharmaceutical,
biotechnology and medical device companies. The contract may require the Company
to design a protocol, conduct the trial, analyze the results of one or more of
the trials, prepare and submit an NDA or CANDA to the FDA, or perform any
combination of these services. After negotiating a letter of intent or
definitive contract, the Company, and in many cases the client, will coordinate
the selection of clinical investigators and conduct pre-study site visits. The
clinical investigators, in conjunction with the Company, are then responsible
for enrolling participants in the trial, which may include persons with a given
disorder or disease, healthy persons and persons within defined populations.
Informed consents, in accordance with FDA and institutional regulations, are
obtained from all participants. Frequently, the Company obtains additional
revenue as a result of change orders to existing contracts. Change orders are

8
10

typically generated at the request of the client based on the results of the
trial to date and include changes in the scope of the trial and in the services
to be provided by the Company.

Most contracts are fixed priced, multi-year contracts that require a
portion of the contract amount to be paid at or near the time the trial is
initiated. The Company generally bills its clients upon the completion of
negotiated performance requirements and, to a lesser extent, on a date certain
basis. The Company's contracts generally may be terminated with or without
cause. In the event of termination, the Company is typically entitled to all
sums owed for work performed though the notice of termination and all costs
associated with termination of the study. In addition, some of the Company's
contracts provide for an early termination fee, the amount of which usually
declines as the trial progresses. Termination or delay in the performance of a
contract occurs for various reasons, including, but not limited to, unexpected
or undesired results, inadequate patient enrollment or investigator recruitment,
production problems resulting in shortages of the drug, adverse patient
reactions to the drug, or the client's decision to deemphasize a particular
trial.

The Company's strategic alliance agreements, although larger in size and
covering several projects over multiple years, are generally the same as the
contracts described above.

BACKLOG

Backlog consists of anticipated net service revenue from letters of intent
and contracts that have not been completed. Once work under a letter of intent
or contract commences, net service revenue is recognized over the life of the
contract using the percentage-of-completion method of accounting. Since it is
common for clients to authorize projects and the Company to commence providing
services before a contract is signed, the Company believes reported backlog
should consist of anticipated net revenue from uncompleted projects which have
been authorized by a client, through a written contract or otherwise. At
December 31, 1994, 1995, and 1996, the Company's backlog was $71.1 million,
$90.2 million and $140.7 million, respectively. The Company believes that
backlog is not a consistent indicator of future results because backlog can be
affected by a number of factors, including the variable size and duration of
projects, many of which are performed over several years. Additionally, projects
may be terminated by the client or delayed by regulatory authorities for many
reasons, including unexpected test results. Moreover, the scope of a project can
change during the course of a study.

COMPETITION

The Company competes primarily against pharmaceutical companies' own
in-house research departments, other CROs, universities and teaching hospitals.
The CRO industry is highly fragmented, with approximately 20 full-service CROs
and many small, limited-service providers. In recent years, several large,
full-service competitors have emerged, some of which have substantially greater
capital and other resources, are better known and have more experienced
personnel than the Company. The Company's largest competitors include Covance
(formerly a division of Corning, Inc.), PPD Pharmaco, Inc., Parexel
International Corp., and Quintiles Transnational Corp. The recent trend toward
industry consolidation is likely to result in heightened competition among the
larger CROs. Although the financial costs of entry into the industry are
relatively low, the larger CROs are increasingly required to have substantial
amounts of working capital in order to sustain internal growth and international
expansion, and to meet the credit-worthiness standards of their larger clients.
The Company believes that clients choose a CRO based on several factors, the
most important of which is the quality of the work performed for existing
clients. Other important factors include references from existing clients,
trials management experience in and scientific knowledge of specific therapeutic
areas, the price for the services performed, the ability to organize and manage
large-scale trials on a global basis, the ability to manage large and complex
medical data bases, and the ability to hire and retain qualified investigators.
The Company believes that it competes favorably in these areas.

GOVERNMENT REGULATION

The clinical investigation of new pharmaceutical, biotechnology and medical
device products is highly regulated by governmental agencies. The purpose of
United States federal regulations is to ensure that only

9
11

those products which have been proven to be safe and effective are made
available to the public. The FDA has set forth regulations and guidelines that
pertain to applications to initiate trials of products, approval and conduct of
studies, report and record retention, informed consent, applications for the
approval of new products, and post-marketing requirements. Pursuant to FDA
regulations, CROs that assume obligations of a drug sponsor are required to
comply with applicable FDA regulations and are subject to regulatory action for
failure to comply with such regulations. In the United States, the historical
trend has been in the direction of increased regulation by the FDA. The Company
believes that many pharmaceutical, biotechnology and medical device companies do
not have the staff and/or the available expertise to comply with all of the
regulations and standards, and this has contributed and will continue to
contribute to the growth of the CRO industry.

The services provided by the Company are ultimately subject to FDA
regulation in the United States and comparable agencies in other countries,
although the level of applicable regulation in other countries is generally less
comprehensive than regulation present in the United States. The Company is
obligated to comply with FDA regulations governing such activities as selecting
qualified investigators, obtaining required forms from investigators, verifying
that patient informed consent is obtained, monitoring the validity and accuracy
of data, verifying drug/device accountability, and instructing investigators to
maintain records and reports. The Company must also maintain records for each
study for specified periods for inspection by the study sponsor and the FDA
during audits. If such audits document that the Company has failed to adequately
comply with Federal regulations and guidelines, it could have a material adverse
effect on the Company. In addition, the Company's failure to comply with
applicable regulations could possibly result in termination of ongoing research
or the disqualification of data, either of which could also have a material
adverse effect on the Company, including, without limitation, damage to the
Company's reputation.

POTENTIAL LIABILITY AND INSURANCE

The Company monitors the testing of new drugs on human volunteers pursuant
to study protocols in clinical trials. Clinical research involves a risk of
liability for personal injury or death to patients from adverse reactions to the
study drug, many of whom are seriously ill and are a great risk of further
illness or death as a result of factors other than their participation in a
trial. Additionally, although the Company's employees do not have direct contact
with the participants in a clinical trial, the Company, on behalf of its
clients, contracts with physicians who render professional services, including
the administration of the substance being tested, to such persons. As a result,
the Company could be held liable for bodily injury, death, pain and suffering,
loss of consortium, other personal injury claims and medical expenses arising
from any professional malpractice of such physicians. The Company maintains
insurance to cover malpractice liability of physicians who are employees or
consultants of the Company. To date, the Company has not received any claims
resulting from either the testing of new drugs or professional malpractice.

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 the measures designed to protect patients, such as the
requirement to obtain informed consent.

To reduce its potential liability, the Company seeks to obtain indemnity
provisions in its contracts with clients and, in some cases, with investigators
contracted by the Company on behalf of its clients. These indemnities generally
do not, however, protect the Company against certain of its own actions such as
those involving negligence or misconduct. Moreover, these indemnities are
contractual arrangements that are subject to negotiation with individual
clients, and the terms and scope of such indemnities vary from client to client
and from trial to trial. The Company also, in some circumstances, indemnifies
and holds harmless its clients and investigators against liabilities incurred by
such parties due to the actions or inactions of the Company. Finally, since the
financial performance of these indemnities is not secured, the Company bears the
risk that an indemnifying party may not have the financial ability to fulfill
its indemnification obligations. The

10
12

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 where the indemnity, although applicable, is not
performed in accordance with its terms.

The Company currently maintains an errors and omissions professional
liabilities insurance policy in amounts it believes to be sufficient. 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.

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 performance than
are any intellectual property rights developed by it. The Company has developed,
and continually develops and updates, certain computer software related
methodologies. The Company seeks to maintain its rights in the software it
develops through a combination of contract, copyright and trade secret
protection. While the Company does not consider any of this software or
methodology to be material to the Company's business, the Company believes its
software capabilities provide important benefits to its clients.

EMPLOYEES

At December 31, 1996, the Company had 1,632 employees, of which 53 held
Ph.D. or M.D. degrees, 9 held D.V.M. degrees, and 114 others held masters
degrees. Approximately 49% of the Company's employees are located in the United
States, 36% are located in Canada, and the remaining 15% are located in Europe.
The Company believes that its relations with its employees are good.

The Company's performance depends on its ability to attract and retain a
qualified management, professional, scientific and technical staff. Competition
from both the Company's clients and competitors for skilled personnel is high.
While the Company has not experienced any significant problems in attracting or
retaining qualified staff to date, there can be no assurance the Company will be
able to avoid these problems in the future.

ITEM 2. PROPERTIES

The Company both owns and leases its facilities. The Company's headquarters
are located in Nashville, Tennessee. Additionally, the Company has offices in
Research Triangle Park, North Carolina; Lexington, Kentucky; Maidenhead,
England; Brussels, Belgium; Melbourne, Australia; Santiago, Chile; Paris,
France; and Jerusalem, Israel. The Company utilizes both owned and leased
laboratory and office space in Senneville, Quebec.

The Company believes that the space leased is adequate for the Company's
operations and that the leases generally reflect market rates in their
respective geographic areas. The expiration dates of the leases range from 1998
to 2012.

In 1995, the Company agreed to lease space in a building to be constructed
in Nashville, Tennessee. In 1997, the Company will move its Nashville
operations and corporate headquarters into the new building.

In 1996, the Company agreed to lease approximately 151,000 square feet in a
building to be constructed in Cary, North Carolina. Upon its completion in 1998,
the Company will move its Research Triangle Park operations into the new
building.

ITEM 3. LEGAL PROCEEDINGS

The Company is from time to time subject to claims and suits arising in the
ordinary course of business. In the opinion of management, there are currently
no proceedings to which the Company is a party that will have a material adverse
effect upon its operations or financial condition.

In 1991, a customer commenced legal action against the predecessor of the
Company's preclinical subsidiary claiming damages resulting from statistical
errors in carrying out two clinical research studies. Judgment was rendered in
February 1997 by the Superior Court of Montreal against the Company's subsidiary
in the approximate amount of $586,000 plus interest to accrue from September
1991. The customer has appealed

11
13

the amount of the judgment and the subsidiary's insurance company has appealed
the portion of the judgment which obligates the insurance company to pay this
claim. The preclinical subsidiary, now responsible for this action, has reserves
adequate to cover the current judgment amount. The Company believes it is, under
certain circumstances and subject to certain limitations, entitled to
indemnification from a prior transferor for a portion of this claim.

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

None.

12
14

PART II

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

The Company's Common Stock trades on The Nasdaq Stock Market ("Nasdaq")
under the symbol "CCRO". On March 14, 1997, the last reported sale price for the
Common Stock on Nasdaq was $9.37. As of December 31, 1996, the Company had
approximately 215 holders of record of the Common Stock and the Company
estimates an additional 4,600 beneficial owners. The following table shows the
high and low sales prices for the Common Stock as reported by Nasdaq for the
periods indicated, as adjusted for a 3-for-2 stock split on November 25, 1996:

HIGH LOW
----- -----

1995
First Quarter............................................. 8.67 6.00
Second Quarter............................................ 9.00 6.92
Third Quarter............................................. 13.50 8.67
Fourth Quarter............................................ 14.08 11.33
1996
First Quarter............................................. 23.75 13.00
Second Quarter............................................ 33.67 22.67
Third Quarter............................................. 32.75 20.00
Fourth Quarter............................................ 29.17 16.88
1997
First Quarter (Through March 14).......................... 32.00 7.75

The Company has paid no dividends since inception.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

Information concerning this Item is incorporated herein by reference to
page 8 of the Company's Annual Report to its stockholders for the fiscal year
ended December 31, 1996.

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

Information concerning this Item is incorporated herein by reference to
pages 9 through 12 of the Company's Annual Report to its stockholders for the
fiscal year ended December 31, 1996.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information concerning this Item is incorporated herein by reference to
pages 13 through 23 of the Company's Annual Report to its stockholders for the
fiscal year ended December 31, 1996.

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

None.

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

Information concerning this Item is incorporated herein by reference to the
Company's definitive proxy materials for the Company's 1997 Annual Meeting of
stockholders.

ITEM 11. EXECUTIVE COMPENSATION

Information concerning this Item is incorporated herein by reference to the
Company's definitive proxy materials for the Company's 1997 Annual Meeting of
stockholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information concerning this Item is incorporated herein by reference to the
Company's definitive proxy materials for the Company's 1997 Annual Meeting of
stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

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PART IV

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

(a)(1) Financial Statements of the Company and its subsidiaries required to
be included in Part II, Item 8 are incorporated by reference to the Company's
Annual Report to stockholders for the fiscal year ended December 31, 1996.

(a)(2) and (d) Schedule VIII -- Valuation and Qualifying Accounts (filed as
Exhibit 99 hereto).

(a)(3) and (c) Exhibits.

3.1 -- Restated Certificate of Incorporation, as amended, of the
Registrant (incorporated by reference to Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1993).
3.2 -- Restated Bylaws of the Registrant (incorporated by reference
to Exhibit 3.2 to the Company's Registration Statement No.
33-69586 on Form S-1)
4.1 -- Restated Certificate of Incorporation, as amended, of the
Registrant (see Exhibit 3.1)
4.2 -- Restated Bylaws of the Registrant (see Exhibit 3.2)
4.3 -- Specimen Common Stock Certificate (incorporated by reference
to Exhibit 4.3 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1993).
10.1 -- Executive Compensation Plans and Arrangements
(a) Form of Employment Agreement between the Registrant and
certain of its officers
(b) Employment Agreement between the Company and Michael F.
Anckorn
10.2 -- Form of Indemnification Agreement between the Registrant and
each of its directors (incorporated by reference to Exhibit
10.2 to the Company's Registration Statement No. 33-69586 on
Form S-1)
10.3 -- 1989 Stock Option Plan, as amended (incorporated by
reference to Exhibit 10.5 to the Company's Registration
Statement No. 33-69586 on Form S-1)
10.4 -- Amendment No. 4 to 1989 Stock Option Plan (incorporated by
reference to Exhibit 10.5 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994)
10.5 -- Profit Sharing 401(k) Plan (incorporated by reference to
Exhibit 10.6 to the Company's Registration Statement No.
33-69586 on Form S-1)
10.6 -- Lease Agreements for the Registrant's Nashville, Tennessee
office space (incorporated by reference to Exhibit 10.10 to
the Company's Registration Statement No. 33-69586 on Form
S-1)
10.7 -- Lease Agreements for the Registrant's Research Triangle
Park, North Carolina office space (incorporated by reference
to Exhibit 10.11 to the Company's Registration Statement No.
33-69586 on Form S-1)
10.7.1 -- Sublease Agreement dated June 3, 1994 for additional space
in Research Triangle Park, North Carolina (incorporated by
reference to Exhibit 10.8.1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1994)
10.8 -- Lease Agreement for the Registrant's Lexington, Kentucky
office space (incorporated by reference to Exhibit 10.12 to
the Company's Registration Statement No. 33-69586 on Form
S-1)
10.9 -- Lease Contract for the Registrant's Brussels, Belgium office
space (incorporated by reference to Exhibit 10.13 to the
Company's Registration Statement No. 33-69586 on Form S-1)
10.10 -- Agreement for Lease for the Registrant's Maidenhead, England
office space (incorporated by reference to Exhibit 10.14 to
the Company's Registration Statement No. 33-69586 on Form
S-1)
10.11 -- Second Amended and Restated Loan and Security Agreement
dated December 8, 1993 by and between NationsBank of
Tennessee, N.A., the Registrant and its subsidiaries
(incorporated by reference to Exhibit 10.11 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1993).

15
17
10.12 -- Lease Agreement dated December 19, 1995 for future
headquarters space in Nashville, Tennessee (incorporated by
reference to Exhibit 10.12 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995).
10.13 -- Asset Purchase Agreement among Bio-Research Laboratories
Ltd., certain shareholders thereof, and the Company
(incorporated by reference to the Company's Current Report
on Form 8-K filed on June 19, 1996)
10.14 -- Lease dated September 30, 1996 for new offices (commencing
in 1998) in Cary, North Carolina
11 -- Statement re computation of per share earnings
13 -- Pages 8 through 23 of Annual Report to Stockholders for fiscal
year ended December 31, 1996
21 -- List of Subsidiaries of the Registrant
23 -- Consent of Ernst & Young LLP
27 -- Financial Data Schedule (for SEC use only)
99 -- Schedule VIII -- Valuation and Qualifying Accounts.

(b) No reports on Form 8-K were filed during the quarter ended December 31,
1996.

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18

SIGNATURES

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

CLINTRIALS RESEARCH INC.

By: /s/ William C. O'Neil, Jr.
--------------------------------------
William C. O'Neil, Jr.
Chairman of the Board, President and
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934 this
Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

SIGNATURE TITLE DATE
--------- ----- ----

/s/ William C. O'Neil, Jr. Chairman of the Board March 31, 1997
- ----------------------------------------------------- President and Chief
William C. O'Neil, Jr. Executive Officer
(Principal
Executive Officer)

/s/ Mary A. Chaput Chief Financial Officer and March 31, 1997
- ----------------------------------------------------- Secretary (Principal
Mary A. Chaput Financial
and Accounting Officer)

/s/ Edward G. Nelson Director March 31, 1997
- -----------------------------------------------------
Edward G. Nelson

/s/ Thomas G. Cigarran Director March 31, 1997
- -----------------------------------------------------
Thomas G. Cigarran

/s/ Richard J. Eskind Director March 31, 1997
- -----------------------------------------------------
Richard J. Eskind

/s/ Irwin B. Eskind, M.D. Director March 31, 1997
- -----------------------------------------------------
Irwin B. Eskind, M.D.

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19

INDEX TO EXHIBITS

EXHIBIT
NUMBER EXHIBITS
- ------- --------

3.1 -- Restated Certificate of Incorporation, as amended, of the
Registrant (incorporated by reference to Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1993)
3.2 -- Restated Bylaws of the Registrant (incorporated by reference
to Exhibit 3.2 to the Company's Registration Statement No.
33-69586 on Form S-1)
4.1 -- Restated Certificate of Incorporation, as amended, of the
Registrant (see Exhibit 3.1)
4.2 -- Restated Bylaws of the Registrant (see Exhibit 3.2)
4.3 -- Specimen Common Stock Certificate (incorporated by reference
to Exhibit 4.3 to the Company's annual Report on Form 10-K
for the year ended December 31, 1993)
10.1 -- Executive Compensation Plans and Arrangements
(a) Form of Employment Agreement between the Registrant and
certain of its officers
(b) Employment Agreement between the Company and Michael F.
Anckorn
10.2 -- Form of Indemnification Agreement between the Registrant and
each of its directors (incorporated by reference to Exhibit
10.2 to the Company's Registration Statement No. 33-69586 on
Form S-1)
10.3 -- 1989 Stock Option Plan, as amended (incorporated by
reference to Exhibit 10.5 to the Company's Registration
Statement No. 33-69586 on Form S-1)
10.4 -- Amendment No. 4 to 1989 Stock Option Plan (incorporated by
reference to Exhibit 10.5 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994)
10.5 -- Profit Sharing 401(k) Plan (incorporated by reference to
Exhibit 10.6 to the Company's Registration Statement No.
33-69586 on Form S-1)
10.6 -- Lease Agreements for the Registrant's Nashville, Tennessee
office space (incorporated by reference to Exhibit 10.10 to
the Company's Registration Statement No. 33-69586 on Form
S-1)
10.7 -- Lease Agreements for the Registrant's Research Triangle
Park, North Carolina office space (incorporated by reference
to Exhibit 10.11 to the Company's Registration Statement No.
33-69586 on Form S-1)
10.7.1 -- Sublease Agreement dated June 3, 1994 for additional space
in Research Triangle Park, North Carolina (incorporated by
reference to Exhibit 10.8.1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1994)
10.8 -- Lease Agreement for the Registrant's Lexington, Kentucky
office space (incorporated by reference to Exhibit 10.12 to
the Company's Registration Statement No. 33-69586 on Form
S-1)
10.9 -- Lease Contract for the Registrant's Brussels, Belgium office
space (incorporated by reference to Exhibit 10.13 to the
Company's Registration Statement No. 33-69586 on Form S-1)
10.10 -- Agreement for Lease for the Registrant's Maidenhead, England
office space (incorporated by reference to Exhibit 10.14 to
the Company's Registration Statement No. 33-69586 on Form
S-1)

E-1
20

EXHIBIT
NUMBER EXHIBITS
- ------- --------

10.11 -- Second Amended and Restated Loan and Security Agreement
dated December 8, 1993 by and between NationsBank of
Tennessee, N.A., the Registrant and its subsidiaries
(incorporated by reference to Exhibit 10.11 to the Company's
Annual Report on Form 10-K for year ended December 31, 1994)
10.12 -- Lease Agreement dated December 19, 1995 for future
headquarters space in Nashville, Tennessee (incorporated by
reference to Exhibit 10.12 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995)
10.13 -- Asset Purchase Agreement among Bio-Research Laboratories
Ltd., certain shareholders thereof, and the Company
(incorporated by reference to the Company's Current Report
on Form 8-K filed on June 19, 1996)
10.14 -- Lease dated September 30, 1996 for new offices (commencing
in 1998) in Cary, North Carolina
11 -- Statement re: computation of per share earnings
13 -- Pages 8 through 23 of Annual Report to stockholders for
fiscal year ended December 31, 1996
21 -- List of Subsidiaries of the Registrant
23 -- Consent of Ernst & Young LLP
27 -- Financial Data Schedule (for SEC use only)
99 -- Schedule VIII -- Valuation and Qualifying Accounts

E-2