SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 COMMISSION FILE NUMBER 1-09623

IVAX CORPORATION

INCORPORATED UNDER THE LAWS OF THE I.R.S. EMPLOYER IDENTIFICATION NUMBER
STATE OF FLORIDA 16-1003559

4400 BISCAYNE BOULEVARD, MIAMI, FLORIDA 33137
305-575-6000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT

Name of each exchange on
Title of each class which registered

COMMON STOCK, PAR VALUE $.10 AMERICAN STOCK EXCHANGE

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 (ss.229.405 of this chapter) 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. [ ]

As of February 29, 1996, there were 120,049,286 shares of Common Stock
outstanding.

The aggregate market value of the voting stock held by non-affiliates of
the registrant on February 29, 1996, was approximately $2.9 billion.

DOCUMENTS INCORPORATED BY REFERENCE: None

IVAX CORPORATION

ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1995

TABLE OF CONTENTS

PAGE
----
PART I

Item 1. Business.................................................... 1
Item 2. Properties.................................................. 14
Item 3. Legal Proceedings........................................... 15
Item 4. Submission of Matters to a Vote of Security Holders......... 18

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.................................................... 19

Item 6. Selected Financial Data..................................... 20
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 21
Item 8. Financial Statements and Supplementary Data................. 32
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................. 32

PART III

Item 10. Directors and Executive Officers of the Registrant.......... 33
Item 11. Executive Compensation...................................... 36
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................ 39
Item 13. Certain Relationships and Related Transactions.............. 41

PART IV

Item 14. Exhibits, Financial Statement Schedule, and Reports on
Form 8-K.................................................. 43

PART I
ITEM 1. BUSINESS

GENERAL

IVAX Corporation is a holding company with subsidiaries involved in
generic and branded pharmaceuticals, intravenous solutions and related
products, in vitro diagnostics, personal care products, and specialty
chemicals. IVAX' principal business is the research, development, manufacture,
marketing and distribution of health care products. IVAX was incorporated in
Florida in 1993, as successor to a Delaware corporation formed in 1985, and
its principal executive offices are located at 4400 Biscayne Boulevard, Miami,
Florida 33137; its telephone number is (305) 575-6000. All references to
"IVAX" in this Form 10-K mean IVAX Corporation and its subsidiaries unless the
context otherwise requires.

PHARMACEUTICALS

IVAX' pharmaceutical operations accounted for approximately 62%, 57%,
and 55% of its consolidated net revenues during the years ended December 31,
1995, 1994 and 1993, respectively. Since its inception, IVAX' pharmaceutical
business has grown through the development and acquisition of brand name,
generic and over-the-counter pharmaceutical products, the license of
technology and products from third parties, and the acquisition of other
businesses. IVAX presently markets several brand name pharmaceutical products
and a wide variety of generic and over-the-counter pharmaceutical products
primarily in the United States and the United Kingdom. IVAX also maintains
direct operations in Argentina, Canada, the Czech Republic, Hong Kong,
Ireland, Germany, Poland, Russia, the Slovak Republic, and Uruguay, and
markets its products through distributors or joint ventures in other foreign
markets, including China. IVAX also markets a line of veterinary products
primarily in the United States.

BRAND NAME PRODUCTS

IVAX markets brand name products under the Baker Norton(TM) name,
including the following products which are marketed primarily in the United
States: Proglycem(R), used to treat hyperinsulinemia; and the urological
medications Bicitra(R), Polycitra(R), Polycitra-K Crystals(R),
Polycitra-LC(TM), Neutra-Phos(R), Neutra-Phos-K(TM), Prohim(R), and
Urotrol(R). Also under the Baker Norton(TM) name, IVAX markets the following
products primarily in the United Kingdom: the cardiovascular medications
Cordilox(TM), Triam-Co(TM), Amil-Co(TM), Spiro-Co(TM), Fru-Co(TM) and
Cardilate(TM); Diasorb(TM), an antidiarrhoeal product; Terfenor(TM), an
antihistamine; Pro-Banthine(TM), an anticholinergic useful as adjunctive
therapy in the treatment of peptic ulcers; Serenace(TM), a neuroleptic used
for psychiatric disorders; the respiratory medications Cromogen(TM),
Salamol(TM) and Beclazone(TM) metered dose inhalers and Easi-Breathe(TM)
breath activated inhalers and the Steri-Neb(TM) line of nebulization products;
and the ophthalmic medications Hay-Crom(TM) and Glaucol(TM). These products
are marketed by IVAX' direct sales force to physicians, pharmacies, hospitals,
managed health care organizations and government agencies, and are sold
primarily to wholesalers, distributors, hospitals and physicians. In addition,
IVAX has sublicensed its marketing rights for the sedative Doral(R) to
Carter-Wallace, Inc. in the United States.

Under the Baker Cummins Dermatologicals(R) name, IVAX manufactures and
markets various dermatological products, including the X-Seb(R) and P&S(R)
line of psoriasis, seborrhea and dandruff preparations, Acno(R) acne
preparation, the Aquaderm(R), Ultra Derm(R) and Ultramide-25(R) lines of dry
skin preparations, and the Baker's(R) disposable biopsy punch and dermatophyte
testing medium. These products are marketed primarily in the United States and
Canada to physicians, pharmacies, hospitals,

managed health care organizations and government agencies through IVAX'
direct sales force, and are sold primarily to wholesalers, distributors and
physicians.

GENERIC PRODUCTS

Generic drugs are therapeutically equivalent to their brand name
counterparts, but are generally sold at lower prices as alternatives to the
brand name products. Approximately 51%, 49%, and 51% of IVAX' consolidated net
revenues for the years ended December 31, 1995, 1994, and 1993, respectively,
were attributable to worldwide sales of generic prescription and
over-the-counter drugs and vitamin supplements.

DOMESTIC. IVAX manufactures and markets in the United States
approximately 100 generic prescription and over-the-counter drugs in liquid,
capsule or tablet forms in an aggregate of approximately 170 dosage strengths.
IVAX distributes in the United States (but does not manufacture) approximately
700 additional generic prescription and over-the-counter drugs and vitamin
supplements, in various dosage forms, dosage strengths and package sizes,
constituting an aggregate of approximately 1,500 products. IVAX' domestic
generic drug distribution network encompasses most classes of the
pharmaceutical market, including wholesalers, retail drug chains, retail
pharmacies, hospital groups and nursing home providers.

The more significant generic drugs manufactured and marketed by IVAX
include: verapamil HCl ER tablets, the generic equivalent of Calan(R) SR
marketed by G.D. Searle & Co. and Isoptin(R) SR marketed by Knoll
Pharmaceutical Company, a sustained release pharmaceutical product used to
treat hypertension, which accounted for $96.5 million, or 7.7%, of IVAX' 1995
consolidated net revenues; cefaclor oral suspension and capsules, the generic
equivalent of Eli Lilly and Company's Ceclor(R), an antibiotic indicated for
the treatment of various infections, which was approved and launched in April
1995 and accounted for $70.0 million, or 5.6%, of IVAX' 1995 consolidated net
revenues; and albuterol metered dose inhaler, the generic equivalent of Glaxo
Inc.'s Ventolin(R) Inhalation Aerosol, used to control bronchospasm in
patients with asthma and other diseases, which was approved and launched in
late December 1995 and accounted for $8.6 million of IVAX' 1995 consolidated
net revenues.

Of the generic drugs for which IVAX received regulatory approval during
1995, IVAX sold ten generic drugs in an aggregate of 23 dosage forms and
strengths, including cefaclor and albuterol metered dose inhaler, described
above, and triamterene/hydrochlorothiazide capsules, the generic equivalent of
SmithKline Beecham Pharmaceuticals' Dyazide(R) (Original Formulation); guanabenz
acetate tablets, the generic equivalent of Wyeth-Ayerst Laboratories'
Wytensin(R); bumetanide tablets, the generic equivalent of Hoffmann LaRoche,
Inc.'s Bumex(R); cimetidine tablets, the generic equivalent of SmithKline
Beecham Pharmaceuticals' Tagamet(R); naproxen tablets, the generic equivalent of
Syntex's Naprosyn(R); flurbiprofen tablets, the generic equivalent of The Upjohn
Company's Ansaid(R); indapamide tablets, the generic equivalent of Rhone-Poulenc
Rorer Pharmaceuticals Inc.'s Lozol(R); and glipizide tablets, the generic
equivalent of Pratt Pharmaceuticals' Glucotrol(R). These products accounted for
approximately $107.1 million in net revenues during 1995.

INTERNATIONAL. IVAX is the largest manufacturer and distributor of
generic pharmaceuticals in the United Kingdom. IVAX manufactures and markets
under the "Norton" trade name approximately 150 generic prescription and
over-the-counter drugs in various dosage forms, dosage strengths and package
sizes, constituting an aggregate of approximately 300 products, primarily in
the United Kingdom. Such products are marketed to wholesalers, retail
pharmacies, hospitals, physicians and

government agencies. In addition, IVAX manufactures and markets primarily
in the United Kingdom various "blow-fill-seal" pharmaceutical products, such
as contact lens solutions, unit dose eye drops, solutions for injection or
irrigation, and unit dose vials for nebulization to treat respiratory
disorders. IVAX also contract manufactures pharmaceutical products in the
United Kingdom and Ireland for other companies.

IVAX owns a controlling interest in Galena a.s. ("Galena"), one of the
oldest and more established pharmaceutical companies based in the Czech
Republic. Galena develops, manufactures and markets a variety of
pharmaceuticals and veterinary products, as well as raw materials used in the
manufacture of pharmaceuticals, including cyclosporin and ergot alkaloids.
Galena sells its products primarily in Eastern European countries, including
Russia. As part of the acquisition, IVAX contributed to Galena rights to
manufacture and market certain products and products under development in
certain countries.

IVAX is a 50% partner in two Chinese joint ventures, one with the
Peoples Republic of China named Beijing JiAi Pharmaceuticals Limited Liability
Company, which manufactures and markets inhalation products for respiratory
ailments, and the other with Kunming Pharmaceutical Factory named Kunming
Baker Norton Pharmaceutical Co., Ltd., which manufactures and markets
a variety of pharmaceutical products.

IVAX has sought to internationalize its business by either acquiring
pharmaceutical companies operating in important markets, forming strategic
alliances with other pharmaceutical companies in such markets, or establishing
offices in important markets.

In March 1995, IVAX and Knoll AG ("Knoll"), a wholly-owned subsidiary
of BASF Aktiengesellschaft, established a joint venture to market generic
pharmaceutical products in Europe. The joint venture company, called Knoll
Norton GmbH, is owned 50% by Knoll and 50% by IVAX. The joint venture
company's initial efforts have focused solely on marketing generic
pharmaceuticals in Germany, where its operations are conducted through a
subsidiary called BASF Generics GmbH. Knoll contributed to the joint venture
the capital stock of BASF Generics GmbH and rights to certain generic
pharmaceutical products, many of which are already licensed and marketed in
Germany. IVAX contributed to the joint venture rights to certain generic
pharmaceutical products, most of which are currently manufactured and marketed
by Norton Healthcare Limited, IVAX' principal United Kingdom subsidiary
("Norton Healthcare"), as well as rights to certain products under
development.

In September 1995, IVAX acquired Pharmatop Limited, a company engaged
in the distribution and marketing in Poland of certain pharmaceutical products
manufactured by Norton Healthcare. In February 1996, IVAX entered into a
distribution agreement with Hafslund Nycomed ASA ("Hafslund"), pursuant to
which Hafslund was appointed as IVAX' exclusive distributor for Norton
Healthcare's line of respiratory products in certain European countries. In
March 1996, IVAX acquired three affiliated pharmaceutical companies, Elvetium
S.A. (Argentina) and Alet Laboratorios S.A.E.C.I. y E., both headquartered in
Buenos Aires and engaged in the business of manufacturing and marketing
pharmaceuticals in Argentina, and Elvetium S.A. (Uruguay), headquartered in
Montevideo and engaged in the business of manufacturing and marketing
pharmaceuticals in Uruguay.

VETERINARY PRODUCTS

IVAX formulates, packages and distributes under the "DVM
Pharmaceuticals" trade name various veterinary products primarily in the
United States, including topical dermatological agents (OxyDex(R),
SulfOxyDex(R), Relief(R), SebaLyt(R), NuSal-T(R)); ectoparasiticidals
(SynerKyl(R), EctoKyl(R), DuraKyl(R)); essential fatty acid nutritional
supplements (DermCaps(R), 3V Caps(TM)); topical and premise antiseptics
(ChlorhexiDerm(TM)); wound healing dressings (BioDres(R)); otics (OtiCalm(R),
Clearx(R)); and cleansing and grooming formulations (HyLyt(R), D-Basic(TM)).
These products are marketed through IVAX' direct sales force and a national
network of ethical veterinary distributors primarily to the small animal
practitioners, and are manufactured to IVAX' specifications mostly by third
parties.

INTRAVENOUS PRODUCTS

IVAX' intravenous products group manufactures and markets a broad line
of basic and specialty intravenous solutions, irrigation solutions,
intravenous administration sets, infusion pumps and other infusion supplies
and equipment, primarily to hospitals and alternate site health care locations
in the United States and, through independent distributors, in various foreign
markets, including Australia, Canada, China, Europe, Hong Kong, Mexico, New
Zealand, Saudi Arabia, South America and Taiwan. IVAX' intravenous products
operations accounted for 27%, 30% and 31% of IVAX' consolidated net revenues
for the years ended December 31, 1995, 1994, and 1993, respectively.

BASIC INTRAVENOUS SOLUTIONS AND SETS. IVAX manufactures and sells a
broad line of basic large and small volume parenteral solutions. Basic
parenteral solutions are used to correct fluid and electrolyte imbalance,
treat dehydration, irrigate wounds and facilitate urological procedures. IVAX
packages many of its solutions in its patented EXCEL(R) flexible plastic
container, which IVAX believes offers certain advantages over competitive
containers which are made of polyvinylchloride ("PVC"), a material that has
been shown to emit toxic hydrogen chloride gas when incinerated. EXCEL(R) bags
are made with a plastic film that can be incinerated without toxic emission,
weigh from 25% to 45% less than comparable PVC containers, and have been shown
to be compatible with certain medications that cannot be administered in PVC
containers because of potentially harmful interactions that occur between the
intravenous solution and PVC.

IVAX' basic intravenous solutions are typically sold under contracts
that also provide for the sale of disposable administration sets. These sets
generally consist of tubing, filters and flow control devices that transfer
the solutions from their containers to the catheter used to access the
patient's venous system. IVAX develops, manufactures, markets and distributes
a full line of administration sets used as primary lines or secondary lines,
filtered sets and blood sets, together with accessories such as catheter
plugs, spike adapters and protected needles. Such sets can be used with a
variety of manufacturers' products.

BASIC AND SPECIALTY NUTRITION SOLUTIONS. Nutrition solutions consist of
sterilized water mixed with dextrose, amino acids, lipids, electrolytes,
vitamins and minerals in various concentrations. Parenteral nutrition therapy
is used to intravenously supply nutrition to patients who are unable to ingest
sufficient nutrients orally. IVAX manufactures and sells a full line of
products used in providing basic parenteral nutrition therapy. IVAX also
manufactures and sells a number of specialized parenteral and enteral (oral)
nutrition products that have been specially formulated to meet the unique
metabolic needs of specific groups of patients, such as those with kidney and
liver disease, infants and children and immuno-suppressed patients.

INFUSION PUMPS AND OTHER EQUIPMENT. Infusion pumps are used to
administer, measure and control the flow of solutions and drugs into a
patient's bloodstream. IVAX offers a line of infusion pumps used in both the
hospital and alternate site health care markets. The majority of IVAX'
infusion pumps are designed specifically for use, and are sold together, with
its intravenous sets. The Horizon(R) infusion pump incorporates innovations in
microprocessor and electromechanical technologies to increase functionality
while reducing instrument size and weight. IVAX believes that the Horizon(R)
pump is especially well suited for critical care use in the hospital. IVAX is
also the leading distributor of single and variable speed syringe pumps, and
distributes a single dose, disposable ambulatory infusion pump specifically
designed for home infusion pursuant to an alliance with another pump
manufacturer.

OTHER PHARMACY PRODUCTS. IVAX sells several products to hospital and
home health care pharmacies for use in the formulation and administration of
intravenous solutions. These products include systems such as the
HyperFormer(R) computerized compounding and filling system for nutrition
formulations, devices that combine drugs in vials with solutions in bags, and
pre-mixed antibiotics. In addition, IVAX manufactures, and co-markets through
a marketing agreement with DuPont Merck Pharmaceutical Company, the product
Hespan(R) in the United States. Hespan(R) is a product derived from
hydroxyethyl starch ("HES") powder that is mixed with certain solutions to
create a blood plasma expander for administration to patients suffering from
substantial blood loss and shock. HES has been shown to be clinically
equivalent to, is less expensive than, and does not have the risk of infection
inherent in, blood-derived plasma expanders.

CENTRAL ADMIXTURE PHARMACY SERVICE. Hospital pharmacies regularly use
large quantities of commercially manufactured nutrients, drugs and solutions
to "admix" a therapeutically effective final intravenous solution suitable for
the particular patient to whom they are to be administered. The admixture
process is very costly, requiring special equipment, trained personnel,
inventory maintenance, and quality assurance procedures. To address the cost
containment needs of hospital pharmacies, IVAX offers comprehensive and
cost-effective pharmacy admixture services. IVAX presently operates eight
pharmacy facilities serving more than 200 hospital and alternate site
customers which admix and deliver prescription-specific total parenteral
nutrition solutions, intravenous antibiotic therapies and other selected drug
solutions.

DIAGNOSTICS

IVAX' in vitro diagnostics group, which develops, manufactures and
markets diagnostic products, accounted for approximately 1%, 2% and 2% of
IVAX' consolidated net revenues for the years ended December 31, 1995, 1994
and 1993, respectively. IVAX manufactures and markets a line of enzyme
immunoassays under the Microassay(TM) name which are used to detect the
presence of infectious diseases, such as measles, herpes and other viral
diseases, and auto-immune diseases, such as systemic lupus erythematosus,
rheumatoid arthritis and scleroderma, and a line of auto-immune antigens,
reagents and other diagnostic products. IVAX also manufactures and markets a
line of products used to identify elements of the human complement system.
Complement is part of the natural defense of the body against infectious
disease as well as a major mediator of inflammation, and deficiencies in
complement components often lead to or are symptoms of chronic infections. The
diagnostic group's products are marketed to clinical reference laboratories,
hospital laboratories and research institutions in the United States through
IVAX' direct sales force. IVAX also markets these products, as well as
diagnostic products manufactured by others, in Italy through a direct sales
force to public hospitals and private medical laboratories. Sales of IVAX'
diagnostic products are also made

through independent distributors in various other foreign markets,
including Central and South America, the Far East, and certain Western
European countries.

PERSONAL CARE PRODUCTS

IVAX' personal care products group develops, manufactures and markets a
variety of personal care products, primarily within the United States. IVAX
markets over 250 products in three principal areas: hair care products
designed primarily for African American consumers, cosmetic products designed
primarily for dark-skinned women and corrective cosmetics. This business
segment accounted for 5%, 6% and 6% of IVAX' consolidated net revenues for the
years ended December 31, 1995, 1994 and 1993, respectively.

HAIR CARE PRODUCTS. IVAX develops, manufactures and markets hair care
products designed primarily for African American consumers. Its product lines
are primarily hair relaxers, conditioners and shampoos designed for both
retail consumers and professional hair-care customers, and are marketed under
brand names such as Ultra Sheen(R), Classy Curl(R), Gentle Treatment(TM), Afro
Sheen(R), Soft Touch(R), Sta-Sof-Fro(R), Ultra Star(R), Bantu(R) and Ultra
Sheen's Precise(R). Products for the retail consumer market are sold
principallY through national and regional drug, grocery and mass merchandising
chains. Professional products are sold mainly through distributors serving
beauty salons and barber shops.

COSMETICS. IVAX sells a line of cosmetics for African American women
under the name Flori Roberts(R), which is marketed through department stores
and major retailers; a line of cosmetics for African American women under the
name Posner(R), which is marketed in drug stores, mass merchandisers and food
stores, as well as through distributors; a line of cosmetics designed
primarily for dark-skinned women under the name Iman(TM) Cosmetics, which is
sold in major department stores; and Glamatone(R), a line of cosmetics for
women of all skin types, which is marketed through independent chain drug
stores and mass merchandising outlets. These products are manufactured to
IVAX' specifications by third parties.

CORRECTIVE COSMETICS. IVAX sells a unique line of makeup designed to
conceal skin blemishes and other imperfections under the name Dermablend(R)
Corrective Cosmetics, which is marketed to dermatologists, plastic surgeons
and other physicians, and is sold in major department stores. These products
are manufactured to IVAX' specifications by third parties.

SPECIALTY CHEMICALS

IVAX' specialty chemicals group manufactures and markets, primarily in
the United States and Canada, several hundred chemical products in three
distinct market segments: vacuum pump fluids, textile and denim products, and
cleaning products. This business segment accounted for approximately 5%, 6%
and 6% of IVAX' consolidated net revenues for the years ended December 31,
1995, 1994 and 1993, respectively.

VACUUM PUMP FLUIDS. IVAX manufactures and markets specialized fluids
for all types of vacuum pump systems and distributes high vacuum greases and
synthetic lubricants manufactured by others for use in the semiconductor,
aerospace, food processing, pharmaceutical, metallurgical and other
industries. Sales are made through a direct sales force and a network of
manufacturers' representatives.

TEXTILES AND DENIM PRODUCTS. IVAX manufactures and markets: specialty
chemicals such as scouring, wetting, sizing, anti-slip and anti-static agents,
dye bath additives and softeners to textile mills for use in the preparation,
dying and finishing of textiles; and specialty chemicals such as strippers,
agers, conditioners, brighteners and enzymes under the Blue-J(R) and
STONE-EZE(R) names to denim processors and blue jean manufacturers to
facilitate the process of imparting a worn, soft, or abraded appearance to
denim fabrics. Sales of these products are made through IVAX' direct sales
force.

CLEANING PRODUCTS. IVAX manufactures and markets a complete line of
industrial floor and carpet care products, germicidal cleaners, deodorants and
hand soaps, and a variety of industrial metal and synthetic cleaning pads. The
complete line of products is sold through a national network of over 1,300
distributors under the Franklin(R) and Brillo(R) brand names. Floor care
products and maintenance services are also sold to national and regional
account chains on a direct basis and through selected companies with national
distribution capabilities under the Masury-Columbia(TM) and Brillo(R) brand
names and under private labels.

RESEARCH AND DEVELOPMENT

For the years ended December 31, 1995, 1994 and 1993, IVAX spent $64.6
million, $48.7 million, and $43.9 million, respectively, for company-sponsored
research and development activities. Approximately 94%, 92%, and 90% of such
amounts were devoted to pharmaceutical and intravenous related research and
development for the years 1995, 1994 and 1993, respectively. From time to
time, IVAX may supplement its research and development efforts by entering
into research and development agreements, joint ventures and other
collaborative arrangements with other companies to defray the cost of product
development. IVAX engages in product development activities in three primary
areas: proprietary pharmaceuticals, generic pharmaceuticals, and specialized
drug delivery systems.

Statements in this Form 10-K concerning the timing of regulatory filings
and approvals are forward looking statements which are subject to risks and
uncertainties. The length of time necessary to complete clinical trials and
from submission of an application for market approval to a final decision by a
regulatory authority varies significantly. No assurance can be given that IVAX
will successfully complete the development of products under development, that
IVAX will be able to obtain regulatory approval for any such product, or that
any approved product may be produced in commercial quantities, at reasonable
costs, and successfully marketed.

PROPRIETARY PHARMACEUTICALS

IVAX is committed to the cost effective development of proprietary
pharmaceuticals directed primarily towards indications having relatively large
patient populations or for which limited or inadequate treatments are
available. IVAX seeks to accelerate product development and introduction by
in-licensing compounds, especially after clinical testing has begun, and by
developing new dosage forms of existing products or new therapeutic
indications for existing products. IVAX has programs for the development of a
variety of proprietary pharmaceuticals in varying stages of development.

As part of its ongoing evaluation of the optimum utilization of IVAX'
development resources, during 1995 IVAX analyzed the status of each
proprietary drug project in its portfolio, the likelihood of receiving
regulatory approval within a reasonable time, the costs associated with
completion of each project, and the potential market for the product.
Following this analysis, IVAX determined to

concentrate the majority of its proprietary drug development resources on
the completion of its Elmiron(R), Cervene(R) and paclitaxel projects,
described below.

ELMIRON(R). Elmiron(R) is an oral form of pentosan polysulfate sodium
indicated for the treatment of interstitial cystitis, a chronic, progressive
and debilitating urinary bladder disease afflicting primarily women and
characterized by severe bladder and pelvic pain and urinary frequency. At
present there is no effective orally-administered treatment for the disease.
Elmiron(R) has demonstrated an ability to provide safe and effective relief
from the pain and discomfort of interstitial cystitis. The drug was approved
for marketing in Canada in 1993, and has been available in the United States on
a compassionate use basis for several years. IVAX filed a New Drug Application
("NDA") for the drug in 1991 and, in March 1996, received an approvable letter
from the United States Food and Drug Administration (the "FDA"). Although an
approvable letter does not constitute final approval to market a drug, it does
indicate that the FDA is prepared to approve the NDA upon the satisfaction of
specified conditions. In the case of the approvable letter for Elmiron(R),
IVAX has been asked to provide certain data and other information regarding
the compound and related clinical studies, to address FDA comments regarding
labeling and package inserts, and to agree to carry out Phase IV clinical
studies after the product is approved. IVAX has licensed rights to a patent
covering use of the compound for the treatment of interstitial cystitis in the
United States until the year 2010. IVAX is continuing to study Elmiron(R) for
other indications.

CERVENE(R). Cervene(R) is IVAX' trade name for an intravenous form of
the compound nalmefene indicated for the mitigation of central nervous system
damage following the occurrence of ischemic stroke. Nalmefene was originally
developed to reverse the effects of narcotic analgesia and drug overdoses, and
IVAX licensed this indication of the compound in the United States and Canada
to Ohmeda, Inc., which commenced to sell the compound in the United States
following approval of its NDA in April 1995. IVAX believes that nalmefene may
have significantly broader applications, holds or is licensed under patents in
the United States and certain other countries covering the use of nalmefene
for a variety of indications, and is investigating different uses of the
compound, with particular emphasis on nalmefene for the treatment of ischemic
stroke. A pilot clinical trial completed in 1994 indicated the clinical
effectiveness of Cervene(R) in the recovery of acute ischemic stroke patients.
IVAX is in the process of completing the first of two pivotal registration
seeking studies for Cervene(R), and is in the process of enrolling sites for
the final phase III study. Although there can be no assurance, IVAX believes
that it may be able to file an NDA for Cervene(R) during 1997.

PACLITAXEL. Paclitaxel is an off-patent compound which, in clinical
trials sponsored by the National Cancer Institute, exhibited promising results
in the treatment of ovarian, breast and other cancers. Bristol-Myers Squibb
Company currently markets a product containing paclitaxel under the brand name
Taxol(R) for the treatment of ovarian and breast cancer, and under applicable
law, the FDA will not accept an ANDA for a generic version of this product
until December 1997. IVAX has entered into an exclusive agreement with NaPro
BioTherapeutics, Inc. ("NaPro") to develop and market in certain territories
paclitaxel supplied by NaPro, and IVAX is presently engaged in phase III
clinical trials with respect to paclitaxel for breast and ovarian cancers and
for other tumors. Although there can be no assurance, IVAX believes it may be
able to submit an NDA for paclitaxel for at least one of these indications
during 1997. IVAX is also conducting research involving analogues of
paclitaxel and novel delivery systems for this class of drugs. Taxol(R) is a
registered trademark of Bristol-Myers Squibb Company.

GENERIC PHARMACEUTICALS

IVAX also focuses on the development of generic pharmaceutical products
with an emphasis on those products which are difficult to replicate or which
are used to treat large patient populations. By including development of
difficult to replicate generic products, IVAX seeks to minimize competition
and obtain higher margin sales for its generic products. In addition, in
evaluating which product development projects to undertake, IVAX considers
whether the new product, once developed, will complement other IVAX products
in the same therapeutic family, or will otherwise assist in making IVAX'
product line more complete.

During 1995, IVAX received FDA approval of 18 Abbreviated New Drug
Applications ("ANDAs") relating to 12 different chemical compounds, and
approval of 21 Abridged Product License Applications ("APLAs"), the United
Kingdom equivalent of an ANDA, from the United Kingdom Medicines Control
Agency (the "MCA") relating to 13 chemical compounds. As of March 20, 1996,
IVAX had 21 ANDAs relating to 18 chemical compounds pending at the FDA, and 21
APLAs relating to 13 chemical compounds pending at the MCA.

DRUG DELIVERY SYSTEMS

In addition to its activities relating to the development of proprietary
and generic pharmaceuticals, IVAX seeks to utilize its drug delivery system
and drug formulation expertise to develop new and more effective uses for
existing pharmaceutical products. IVAX believes that certain of its delivery
systems may increase the benefits of certain products by providing sustained
action, allowing for a more convenient or appealing mode of administration, or
decreasing toxicity. Presently, IVAX is focusing its development efforts in
this area in four categories of products.

BREATH ACTIVATED METERED DOSE INHALERS. IVAX holds patents on a breath
activated metered dose inhaler designed to overcome the difficulty many
persons experience in attempting to coordinate their inhalation with the
emission of the medication from a conventional metered dose inhaler. IVAX'
device, called Easi-Breathe(TM), emits the medication automatically upon
inhalation, minimizing coordination problems and better insuring that the
medication is delivered to the lungs. During 1995, IVAX commenced marketing
the asthma drugs albuterol and beclomethasone in the Easi-Breathe(TM) inhaler
in the United Kingdom and Ireland, and is presently developing
Easi-Breathe(TM) for use with albuterol and beclomethasone for registration in
the United States. IVAX is also developing Easi-Breathe(TM) for use with other
active ingredients.

NON-CFC AND DRY POWDER INHALERS. IVAX' existing inhalation aerosol
products, including Easi-Breathe(TM), use chlorofluorocarbons ("CFCs") as a
propellant. In light of international agreements calling for the eventual
phase out of CFCs, IVAX is developing non-CFC containing aerosol products for
inhalation. IVAX is also developing a multi-dose dry powder inhaler.

DUPLEX(TM) ADMIXTURE SYSTEM. A wide variety of drugs administered
intravenously are not stable in solution. As a result, these drugs are
typically mixed with diluent just prior to administration or are mixed at the
site of manufacture, frozen for shipment, then thawed at the site of
administration. IVAX is in the advanced stages of developing what it believes
will be a more convenient and cost effective delivery system for this class of
drugs. The system, called Duplex(TM), is a proprietary two compartment
intravenous bag using a sophisticated seal to hold the drug separate from the
diluent until just prior to administration. The nurse, physician or alternate
site administrator then breaks the seal, shakes the bag and administers the
drug. IVAX expects to utilize a form of its EXCEL(R) plastic container,

described under "Intravenous Products" above, in the manufacture of
Duplex(TM). Prior to marketing in the United States, each drug delivered in
the Duplex(TM) system will require FDA approval. Although there can be no
assurance, IVAX believes that it may be able to submit the first of its drug
approval applications for drugs to be delivered in the Duplex(TM) system
beginning in late 1997.

EXCEL(R) EXTENSIONS. IVAX is in the advanced stages of developing new
product lines, including larger volume EXCEL(R) containers, nutrition
solutions packaged in EXCEL(R) containers, and additional premixed drugs.
Prior to marketing in the United States, each of these solutions will require
FDA approval. Although there can be no assurance, IVAX believes that it may be
able to submit the first of its drug approval applications for these products
beginning in late 1996.

GOVERNMENTAL REGULATION

IVAX' pharmaceutical, intravenous and diagnostic operations are subject
to extensive regulation by governmental authorities in the United States and
other countries with respect to the testing, approval, manufacture, labeling,
marketing and sale of pharmaceutical, intravenous and diagnostic products.
IVAX devotes significant time, effort and expense addressing the extensive
government regulations applicable to its business, and in general, the trend
is towards more stringent regulation.

The FDA requires extensive testing of new pharmaceutical products to
demonstrate that such products are both safe and effective in treating the
indications for which approval is sought. Testing in humans may not be
commenced until after an Investigational New Drug exemption is granted by the
FDA. An NDA must be submitted to the FDA for new drugs that have not been
previously approved by the FDA and for new combinations of, and new
indications and new delivery methods for, previously approved drugs. Three
phases of clinical trials must be successfully completed before an NDA is
approved: phase I clinical trials, which involve the administration of the
drug to a small number of healthy subjects to determine safety, tolerance,
absorption and metabolism characteristics; phase II clinical trials, which
involve the administration of the drug to a limited number of patients for a
specific disease to determine dose response, efficacy and safety; and phase
III clinical trials, which involve the study of the drug to gain confirmatory
evidence of efficacy and safety from a wide base of investigators and
patients. In the case of a new formulation of a drug that has been previously
approved by the FDA, an abbreviated approval process is available. For such
drugs an ANDA may be submitted to the FDA for approval. For an ANDA to be
approved, the drug must be shown to be bioequivalent to the previously
approved drug. The NDA and ANDA approval process generally takes a number of
years and involves the expenditure of substantial resources. IVAX' parenteral
solutions, including its nutrition solutions and Duplex(TM) system products,
as well as the use of a different packaging material, such as EXCEL(R), for
existing approved parenteral solutions, also require FDA approval.

IVAX' diagnostic products and substantially all of IVAX' infusion
instruments, administration sets and filling and admixture accessories are
considered medical devices, which require either a 510(k) premarket
notification clearance ("510(k)") or an approved Premarket Approval
Application ("PMA") from the FDA prior to marketing. A product qualifies for a
510(k) if it is substantially equivalent to another medical device that was on
the market prior to May 28, 1976 and does not now have a PMA or has previously
received 510(k) premarket notification clearance and is lawfully on the
market. The 510(k) approval process can take several months and may involve
the submission of limited chemical data together with other supporting
information. An approved PMA application indicates that the FDA has determined
that a device has been proven to be safe and effective for its

intended use. The PMA process typically can last several years and
requires the submission of significant quantities of preclinical and clinical
data as well as manufacturing and other information.

IVAX' enteral nutrition products are currently classified as medical
foods, which are exempt from the NDA and ANDA approval process, and which are
regulated as food products under applicable federal law. Accordingly, these
products must conform to food safety and labeling requirements. IVAX' pharmacy
admixture services are, in general, regulated under the pharmacy laws and
regulations of the states in which such services are provided. Each facility
operates as a licensed pharmacy under the applicable pharmacy laws of the
state in which it is located and is also registered with the FDA.

On an ongoing basis, the FDA reviews the safety and efficacy of
marketed pharmaceutical and intravenous products and products considered
medical devices and monitors labeling, advertising and other matters related
to the promotion of such products. The FDA also regulates the facilities and
procedures of IVAX used to manufacture pharmaceutical, intravenous and
diagnostic products in the United States or for sale in the United States.
Such facilities must be registered with the FDA and all products made in such
facilities must be manufactured in accordance with "good manufacturing
practices" established by the FDA. The FDA periodically inspects IVAX'
manufacturing facilities and procedures to assure compliance. The FDA may
cause the recall or withdraw approvals of products if regulatory standards are
not maintained. FDA approval to manufacture a drug is site specific. In the
event an approved manufacturing facility for a particular drug becomes
inoperable, obtaining the required FDA approval to manufacture such drug at a
different manufacturing site could result in production delays.

In connection with its activities outside the United States, IVAX is
also subject to regulatory requirements governing the testing, approval,
manufacture, labeling, marketing and sale of pharmaceutical, intravenous and
diagnostic products, which requirements vary from country to country. Whether
or not FDA approval has been obtained for a product, approval of the product
by comparable regulatory authorities of foreign countries must be obtained
prior to marketing the product in those countries. The approval process may be
more or less rigorous from country to country, and the time required for
approval may be longer or shorter than that required in the United States. No
assurance can be given that clinical studies conducted outside of any country
will be accepted by such country, and the approval of any pharmaceutical,
intravenous or diagnostic product in one country does not assure that such
product will be approved in another country.

The federal and state governments in the United States, as well as many
foreign governments, including the United Kingdom, are exploring ways to
reduce medical care costs through health care reform. This effort has resulted
in, among other things, government policies that encourage the use of generic
drugs rather than brand name drugs to reduce drug reimbursement costs.
Virtually every state in the United States has a generic substitution law
which permits the dispensing pharmacist to substitute a generic drug for the
prescribed brand name product. The debate to reform the United States' health
care system is expected to be protracted and intense. Due to uncertainties
regarding the ultimate features of reform initiatives and their enactment and
implementation, IVAX cannot predict what impact any reform proposal ultimately
adopted may have on the pharmaceutical, intravenous or diagnostic industries
or IVAX.

RAW MATERIALS

Raw materials essential to IVAX' business segments are generally
readily available from multiple sources. However, some raw materials used in
the manufacture of IVAX' pharmaceutical and intravenous products are currently
available from only one or a limited number of suppliers. Any curtailment in
the availability of such raw materials could be accompanied by production or
other delays as well as increased raw material costs, with consequent adverse
effects on IVAX' business and results of operations. Furthermore, because the
FDA requires that raw material suppliers be specified in applications for drug
approvals, changes in raw material suppliers could result in production
delays. IVAX did not experience any significant restrictions on the raw
materials necessary to produce its products during 1995.

COMPETITION

The pharmaceutical industry is highly competitive and includes numerous
established pharmaceutical companies, many of which have considerably greater
financial, technical, clinical, marketing and other resources and experience
than IVAX. The markets in which IVAX competes are undergoing, and are expected
to continue to undergo, rapid and significant technological change, and IVAX
expects competition to intensify as technological advances are made. IVAX
intends to compete in this marketplace by developing or licensing
pharmaceutical products that are either patented or proprietary and which are
primarily for indications having relatively large patient populations or for
which limited or inadequate treatment are available, and, with respect to
generic pharmaceuticals, by developing therapeutic equivalents to previously
patented products which are difficult to duplicate or which are used to treat
large patient populations. There can be no assurance, however, that
developments by others will not render IVAX' pharmaceutical products or
technologies obsolete or uncompetitive. In addition to product development,
other competitive factors in the pharmaceutical industry include product
quality and price, reputation and dissemination of technical information.

Revenues and gross profit derived from generic pharmaceutical products
tend to follow a pattern based on regulatory and competitive factors unique to
the generic pharmaceutical industry. As patents for brand name products and
related exclusivity periods mandated by regulatory authorities expire, the
first generic manufacturer to receive regulatory approval for generic
equivalents of such products is usually able to achieve relatively high market
share, revenues and gross profit. As other generic manufacturers receive
regulatory approvals on competing products, market share and prices typically
decline. Accordingly, the level of revenues and gross profit attributable to
generic products developed and manufactured by IVAX is dependent, in part, on
IVAX' ability to develop and rapidly introduce new products, the timing of
regulatory approval of such products, and the number and timing of regulatory
approvals of competing products. In addition, competition in the United States
generic pharmaceutical market continues to intensify as the pharmaceutical
industry adjusts to increased pressures to contain health care costs. Brand
name companies are increasingly selling their products into the generic market
directly by acquiring or forming strategic alliances with generic
pharmaceutical companies. No regulatory approvals are required for a brand
name manufacturer to sell directly or through a third party to the generic
market, nor do such manufacturers face any other significant barriers to entry
into such market. In addition, brand name companies are increasingly pursuing
strategies to prevent or delay the introduction of generic competition. These
strategies include, among other things, seeking to establish regulatory
obstacles to demonstrate the bioequivalence of generic drugs to the brand name
products, and instituting legal actions based on process or other patents that
allegedly are infringed by the generic products.

Competition among suppliers of intravenous solutions and related
products to hospitals and alternate site providers has historically been
intense and, accordingly, IVAX' intravenous products group faces substantial
competition in its markets for all its products. There are three major
suppliers of intravenous solutions and related sets in the hospital and
alternate site health care markets: Baxter International, Inc. ("Baxter"),
Abbott Laboratories ("Abbott") and IVAX. According to industry sources, based
upon hospital census beds under full line contract, the 1995 market shares of
Baxter, Abbott and IVAX were approximately 44%, 37% and 19%, respectively.
Baxter and Abbott are major diversified health care companies and have greater
financial, research and development, marketing and human resources than IVAX.
Baxter and Abbott also offer a broad range of medical products in addition to
intravenous solutions, sets and related products, which can be combined into
more comprehensive bundles than IVAX is able to offer. Competition in the
intravenous products industry is primarily based on quality of products and
services, price, reputation with group purchasing organizations, hospital
administrators, materials managers, pharmacists and nurses, and technological
innovation and development.

PATENTS AND TRADEMARKS

IVAX seeks to obtain patent protection on its products and products
under development where possible. IVAX currently owns or is licensed under
various United States, United Kingdom and other foreign patents and patent
applications covering certain of its products, products under development,
product uses and manufacturing processes. Protection for individual products,
product uses or manufacturing processes extend for varying periods in
accordance with the date of grant and the legal life of the patents in the
various countries. The protection afforded, which may also vary from country
to country, depends on the type of patent and its scope of coverage. There is
no assurance that patents will be issued on pending applications or as to the
scope or degree of protection patents will afford IVAX. Although IVAX believes
that its patents and licenses are important to its business, no single patent
or license is currently material in relation to IVAX' business as a whole.
IVAX believes that the patents relating to EXCEL(R) are of material importance
to the intravenous products group.

IVAX sells certain of its products under trademarks and seeks to obtain
protection for its trademarks by registering them in the United States, United
Kingdom and other countries where the products are marketed. At present, IVAX
does not consider its trademarks, individually or in the aggregate, to be
material in relation to its business as a whole. The trademarks of the
specialty chemicals group and personal care products group, however, are well
established and recognized within their respective industries and IVAX
believes that in the aggregate such trademarks are of material importance to
the specialty chemicals group and personal care products group, respectively.

LICENSING

IVAX has obtained licenses from various inventors, universities and the
United States Government and will continue to seek new licenses from such
parties and others, including pharmaceutical companies, to promising
technology and compounds for development into new pharmaceutical products.
Generally, these licenses grant IVAX the right to complete development efforts
initiated by others and to market any resulting products. IVAX generally is
required to pay a royalty based on sales of the product. IVAX also grants
licenses to other pharmaceutical companies relating to technologies or
compounds under development and, in some cases, finished products. Generally,
these licenses grant the licensees the right to complete development work of
the technology or compound, or obtain regulatory approvals of a product, and
thereafter market the product in specified territories. These licenses often
involve the payment of an up-front fee and fees upon

completion of certain development milestones, and also provide for the
payment of royalties based on sales of the product. IVAX often retains the
right to supply the product to the licensees.

SEASONALITY

While certain of IVAX' individual products may have a degree of
seasonality, there are no significant seasonal aspects to IVAX' business
segments, except that sales of pharmaceutical products indicated for colds and
flu symptoms are higher during the fourth quarter as customers supplement
inventories in anticipation of the cold and flu season, and IVAX' personal
care products group has historically experienced significant sales increases
during the third quarter as retailers supplement inventories in anticipation
of increased consumer purchasing during the holidays.

ENVIRONMENT

IVAX believes that its operations comply in all material respects with
applicable laws and regulations concerning the environment. Compliance with
such laws is not expected to require significant capital expenditures and has
not had, and is not presently expected to have, a material adverse affect on
IVAX' earnings or competitive position.

EMPLOYEES

As of February 29, 1996, IVAX had approximately 7,893 full time
employees, of which 5,536 were engaged in research and development, production
and associated support, 1,275 were engaged in sales, marketing and
distribution, and 1,082 were engaged in finance and general administration. By
industry segment, the employees were divided as follows: 1,904 in domestic
pharmaceuticals, 2,343 in international pharmaceuticals, 2,836 in the
intravenous products group, 282 in the personal care products group, 319 in
specialty chemicals, 106 in diagnostics, and 103 in corporate. The foregoing
information includes 1,101 employees of Galena, which is owned 64% by IVAX.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS AND FOREIGN AND DOMESTIC
OPERATIONS

Specific financial information with respect to IVAX' industry segments
and foreign and domestic operations is provided in Note 10, Business Segment
and Geographic Information, in the Notes to Consolidated Financial Statements
included in this Form 10-K.

ITEM 2. PROPERTIES

IVAX owns or leases an aggregate of approximately 4.8 million square
feet of space in Argentina, Canada, the Czech Republic, Germany, Hong Kong,
Ireland, Italy, Poland, Russia, the Slovak Republic, the United Kingdom, the
United States, and Uruguay, which is used by the pharmaceutical group (58%),
the intravenous group (22%), the personal care products group (6%), the
diagnostics group (2%), and the specialty chemicals group (12%). IVAX believes
its facilities are in satisfactory condition, are suitable for their intended
use and have capacities considered appropriate to meet IVAX' present needs.

IVAX operates eighteen pharmaceutical manufacturing facilities, three
of which are located in Waterford, Ireland; two of which are located in each
of Miami, Florida and London, England; and one of which is located in each of
Buenos Aires, Argentina; Northvale, New Jersey; St. Croix, Virgin Islands;
Cidra, Puerto Rico; Opava, Czech Republic; Shreveport, Louisiana; Syosset, New
York;

Falkenhagen, Germany; Harlow, England; Runcorn, England; and Montevideo,
Uruguay. IVAX' personal care products manufacturing facility is located in
Chicago, Illinois. IVAX' intravenous manufacturing facilities are located in
Irvine, California; Sabana Grande, Puerto Rico; and Carrollton, Texas. IVAX'
specialty chemicals manufacturing facilities are located in Churchville, New
York; Rock Hill, South Carolina; Lawrence, Massachusetts; and Marion, Ohio.
IVAX' diagnostics manufacturing facilities are located in Miami, Florida and
Springdale, Arkansas. IVAX owns all of the Miami and Chicago manufacturing
facilities, and the Buenos Aires, Cidra, Shreveport, Syosset, Falkenhagen,
Opava, Churchville, Rock Hill, and Marion facilities, and leases its remaining
manufacturing facilities.

IVAX maintains sales offices and distribution centers in Argentina,
Canada, China, the Czech Republic, Hong Kong, Italy, Poland, Russia, the
Slovak Republic, Uruguay, and various parts of the United States and the
United Kingdom, most of which are held pursuant to leases. None of such leases
are material to IVAX.

ITEM 3. LEGAL PROCEEDINGS

In late April 1995, Zenith Laboratories, Inc., a wholly owned
subsidiary of IVAX ("Zenith"), received approvals from the FDA to manufacture
and market the antibiotic cefaclor in capsule and oral suspension
formulations. Cefaclor is the generic equivalent of Ceclor(R), a product of
Eli Lilly and Company ("Lilly"). On April 27, 1995, Lilly filed a lawsuit
against Zenith and others styled Eli Lilly and Company v. American Cyanamid
Company, Biocraft Laboratories, Inc., Zenith Laboratories, Inc. and Biochimica
Opos S.p.A. in the United States District Court for the Southern District of
Indiana, Indianapolis Division. In general, the lawsuit alleges that Zenith's
cefaclor raw material supplier, a third party unaffiliated with IVAX,
manufactures cefaclor raw material in a manner which infringes two process
patents owned by Lilly, and that Zenith and the other named defendants have
knowingly and willfully infringed and induced the supplier to infringe the
patents by importing the raw material into the United States. The lawsuit
seeks to enjoin Zenith and the other defendants from infringing or inducing
the infringement of the patents and from making, using or selling any product
incorporating the raw material provided by such supplier, and seeks an
unspecified amount of monetary damages and the destruction of all cefaclor raw
material manufactured by the supplier and imported into the United States. In
August 1995, the Court denied Lilly's motion for preliminary injunction which
sought to prevent Zenith from selling cefaclor until the merits of Lilly's
allegations could be determined at trial. Lilly has appealed such ruling,
which appeal has been briefed and argued and remains pending. IVAX intends to
defend this lawsuit vigorously. Although IVAX believes Lilly's allegations are
without merit, if determined adversely to IVAX, the lawsuit would likely have
a material adverse effect on IVAX' financial position and results of
operations.

In September 1994, individuals purporting to be shareholders of IVAX
filed a class action complaint against IVAX and all but one of its directors
as of that date and certain of its officers in the United States District
Court for the Southern District of Florida which consolidates, amends and
supplements a number of similar complaints filed earlier in 1994. The
consolidated lawsuit is styled Harvey M. Jasper Retirement Trust and Harvey M.
Jasper Individual Retirement Account et al. vs. IVAX Corporation and Phillip
Frost et al. Plaintiffs seek to act as representatives of a class consisting
of all purchasers of IVAX' common stock between January 14 and May 2, 1994,
including as a subclass parties who exchanged their shares of common stock of
McGaw, Inc. ("McGaw") for IVAX' common stock in connection with IVAX'
acquisition of McGaw in March 1994. In general, the complaints allege
violations of Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act
of 1934, as amended, and the rules promulgated thereunder, and Sections 11,
12(2) and 15 of the Securities Act

of 1933, as amended (the "Securities Act"), as well as a claim for
negligent misrepresentation. The complaint alleges that IVAX made untrue
statements of material fact and/or omitted to state material facts necessary
to make statements made not misleading in its public disclosure documents, in
communications to securities analysts and the public, and in IVAX'
registration statement and proxy statement-prospectus distributed in
connection with the acquisition of McGaw, relating primarily to net revenues
and earnings, verapamil sales, and the effects of competition in the verapamil
market on IVAX' net revenues and earnings. The complaint seeks an unspecified
amount of compensatory and recessionary damages, equitable and/or injunctive
relief, interest, litigation costs and attorneys' fees. The outside directors
of IVAX initially named as defendants in the suit were dismissed without
prejudice from the consolidated actions pursuant to a stipulation filed in
January 1995. In November 1995, the defendants' motion to dismiss the
consolidated amended complaint was denied. IVAX intends to defend this lawsuit
vigorously. Although IVAX believes that this lawsuit is without merit, its
outcome cannot be predicted. If determined adversely to IVAX, the lawsuit
would likely have a material adverse effect on IVAX' financial position and
results of operations.

In June 1994, the former chairman and chief executive officer of McGaw
filed, in his individual capacity, an action styled James M. Sweeney vs. IVAX
Corporation and Phillip Frost, M.D. against IVAX and Dr. Frost, the Chairman
of the Board and Chief Executive Officer of IVAX, in the United States
District Court for the Central District of California. The complaint alleges
essentially the same securities laws violations and negligent
misrepresentation claim as alleged in the consolidated class action suit
described above, as well as certain additional state law claims. The complaint
seeks up to $21 million in compensatory damages (and up to $48 million in
rescissionary damages upon tender of IVAX shares held by plaintiff), as well
as punitive damages, litigation costs and attorneys' fees. This action has
been transferred to the United States District Court for the Southern District
of Florida. Although the lawsuit was initially consolidated for all purposes
with the class action suit described above, in August 1995, the Court entered
an order allowing the former McGaw chairman to opt out of the class action and
to proceed under his separate complaint.

In April 1995, an action styled Ventana Partnership III, L.P. and
Ventana Equity Expansion Partnership IV, L.P. vs. IVAX Corporation, Phillip
Frost, M.D., Isaac Kaye and Andrew Zinzi was filed against IVAX and certain of
its officers in the United States District Court for the Southern District of
California. The complaint alleges essentially the same securities laws
violations as well as negligent misrepresentation claim as alleged in the
consolidated class action suit described above. The complaint seeks in excess
of $21 million in compensatory, consequential, rescissionary and punitive
damages, as well as litigation costs. This action has been transferred to the
United States District Court for the Southern District of Florida and is
expected to be consolidated with the class action suit described above.

In July 1994, an action styled ABS MB Investment Limited Partnership and
ABS MB Ltd. vs. IVAX Corporation was filed against IVAX in the United States
District Court for the District of Maryland. Plaintiffs, shareholders of McGaw
at the time of its acquisition by IVAX, alleged that IVAX violated Sections 11
and 12(2) of the Securities Act, as well as certain state securities laws, and
that it breached certain provisions of the merger agreement and IVAX' bylaws,
by issuing to plaintiffs shares of IVAX' common stock subject to the
restrictions imposed by Rule 145 promulgated under the Securities Act and
Accounting Series Release 135. The plaintiffs claim that, as a result of the
restrictions imposed on the certificates issued to them, they suffered damages
from the loss of value of their shares, and seek damages of $11 million, plus
expenses and attorneys' fees. In June 1995, the Court entered an order denying
plaintiffs' motion for summary judgment with respect to the claims alleging
that IVAX breached certain provisions of the merger agreement and IVAX' bylaws
and

granted IVAX' motion to dismiss such counts. The Court denied IVAX' motion
to dismiss the counts relating to alleged violation of Sections 11 and 12(2)
of the Securities Act and alleged violations of certain state securities laws,
as well as its motion to transfer venue. In October 1995, the Court entered an
order granting the plaintiffs' motion to amend their complaint to assert new
causes of action under the Uniform Commercial Code and granting the
plaintiffs' motion for reconsideration of the dismissal of the claims alleging
breach of IVAX' bylaws, and ordered that such counts be reinstated.

IVAX intends to continue to vigorously defend each of the Sweeney,
Ventana and ABS MB Investment lawsuits described above. Although IVAX believes
such lawsuits are without merit, their respective outcomes cannot be
predicted. Any of such lawsuits, if determined adversely to IVAX, could have a
material adverse effect on IVAX' results of operations.

In October 1995, five class action complaints were filed by individuals
purporting to be shareholders of IVAX, in the Circuit Court of the Eleventh
Judicial Circuit in Dade County, Florida, against IVAX, its Board of Directors
and Hafslund Nycomed AS, in connection with IVAX' proposed merger with
Hafslund Nycomed. The complaints were voluntarily dismissed without prejudice
in February 1996.

Goldline Laboratories, Inc. ("Goldline"), a wholly-owned subsidiary of
IVAX, has been either a named defendant, or has assumed the defense of a
customer which was a named defendant, in approximately 110 lawsuits filed
since March 1990 in both state and federal courts relating to injuries
allegedly suffered as a result of the ingestion of L-Tryptophan, an
over-the-counter food supplement previously distributed by Goldline in the
United States. Generally, the lawsuits allege personal injury, wrongful death
and loss of support and consortium, under a variety of liability theories,
including strict products liability, breach of warranty and negligence. A
majority of the lawsuits also seek punitive damages. As of March 20, 1996, 105
of the L-Tryptophan lawsuits filed against Goldline have been settled, and 5
remain pending. Goldline did not formulate or manufacture any L-Tryptophan
products; it purchased only finished products in bulk and then bottled,
labeled and distributed the products in the United States. Goldline and IVAX
entered into certain agreements with the manufacturer of bulk L-Tryptophan and
its United States subsidiary pursuant to which such companies agreed to pay
Goldline's defense costs relating to the L-Tryptophan litigation and to
indemnify Goldline for settlements or judgments (other than punitive damages),
in exchange for Goldline agreeing not to assert claims against the
manufacturer or its United States subsidiary. The agreements may be terminated
at any time by either party. As a result of the agreements, to date, Goldline
has not paid any settlement amounts or appreciable legal fees with respect to
any of the lawsuits. In addition, when IVAX acquired Goldline in 1991, 165,000
shares of IVAX' common stock issued in the acquisition were pledged until
December 1996 by the former owner of Goldline as collateral against future
claims regarding this product. Goldline also has available to it limited
insurance coverage with respect to the currently pending L-Tryptophan
lawsuits. IVAX' ultimate liability with respect to the L-Tryptophan
litigation, if any, is not presently determinable. In the event that the
manufacturer of the product and its United States subsidiary do not continue
to provide the indemnity described above, the aggregate liability of Goldline
to plaintiffs in these lawsuits is likely to exceed available insurance
coverage and the indemnity provided by the former owner of Goldline, and could
have a material adverse impact upon the financial position and results of
operations of IVAX.

any losses resulting from such legal proceedings will not have a material
adverse impact on the financial position or results of operations of IVAX.

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

No matters were submitted to a vote of security holders during the
quarter ended December 31, 1995.

PART II

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

IVAX' common stock is listed on the American Stock Exchange and is
traded under the symbol IVX. The following table sets forth the high and low
closing prices of IVAX' common stock as reported on the composite tape of the
American Stock Exchange and the cash dividends paid by IVAX for each of the
quarters indicated:

1994
-----------------------------------
Quarter High Low Dividend
---------- ---------- ----------
First $ 37.50 $ 24.25 $ --
Second 26.88 15.00 .03
Third 21.88 15.25 --
Fourth 21.00 17.75 .03

1995
-----------------------------------
Quarter High Low Dividend
---------- ---------- ----------
First $ 26.00 $ 19.50 $ --
Second 27.50 23.25 .04
Third 31.13 23.88 --
Fourth 31.38 22.75 .04

As of the close of business on February 29, 1996, there were
approximately 6,719 record holders of IVAX' common stock.

The declaration and payment of dividends is made at the discretion of
IVAX' Board of Directors. IVAX paid its first cash dividend in the second
quarter of 1993, and it presently intends to continue paying a semi-annual
cash dividend.

ITEM 6. SELECTED FINANCIAL DATA

SELECTED FINANCIAL DATA

YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- --------- ---------
(in thousands, except per share data) (1)
OPERATING DATA
Net Revenues $ 1,259,766 $1,134,806 $1,062,945 $ 853,497 $600,766
Income before
extraordinary items 114,801 89,872 107,982 37,410 15,647
Net income 114,835 89,049 99,354 29,820 17,850
Earnings per common
share:
Primary:
Earnings before
extraordinary items .96 .77 .94 .37 .17
Net earnings .96 .76 .87 .29 .19
Fully Diluted:
Earnings before
extraordinary items .95 .77 .93 .37 .17
Net earnings .95 .76 .86 .29 .19
Weighted average number
of common shares
outstanding:
Primary 119,253 116,339 114,722 99,642 91,714
Fully diluted 120,365 116,792 115,504 99,928 92,927
Cash dividends per
common share $ .08 $ .06 $ .04 $ - $ -

BALANCE SHEET DATA
Working capital $ 470,905 $ 332,818 $ 295,413 $ 214,479 $199,910
Total assets 1,335,310 1,106,704 1,001,279 848,075 812,484
Total long-term debt,
net of current portion 298,857 253,839 278,708 334,722 313,951
Shareholders' equity 789,172 634,456 527,772 339,657 295,969
Book value per common
share (2) 6.69 5.56 4.65 3.05 2.71

- ---------

(1) Figures have been restated to reflect the acquisition of the
following companies, each of which was accounted for under the pooling of
interests method of accounting: Zenith Laboratories, Inc. ("Zenith") and
McGaw, Inc. in 1994; Johnson Products Co., Inc. in 1993; Willen Drug Company,
DVM Pharmaceuticals, Inc., Waverley Pharmaceutical Limited, and H N Norton Co
in 1992. Figures include the results of the following businesses acquired by
purchase since the respective acquisition dates: ImmunoVision, Inc. on July
17, 1995; 60% of the shares of Galena a.s., on July 25, 1994 (subsequently
increased to 62% effective June 14, 1995); certain assets and the assumption
of certain liabilities of Elf Atochem North America, Inc. on June 7, 1993;
Flori Roberts, Inc. on July 28, 1992; and Goldline Laboratories, Inc. and
Bioline Laboratories, Inc. effective December 1, 1991.

(2) Assumes conversion of Zenith's cumulative convertible preferred
stock.

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

The following discussion and analysis should be read in conjunction
with the Consolidated Financial Statements and the related Notes to
Consolidated Financial Statements. Except for historical information contained
herein, the matters discussed below are forward looking statements that
involve risks and uncertainties, including but not limited to economic,
competitive, governmental and technological factors affecting IVAX'
operations, markets, products and prices, and other factors discussed
elsewhere in this report and the documents filed by IVAX with the Securities
and Exchange Commission.

RESULTS OF OPERATIONS
OVERVIEW

IVAX' operations are conducted through subsidiaries involved in
pharmaceuticals, intravenous products, in vitro diagnostics, personal care
products and specialty chemicals. Information regarding the results of
operations and financial position of IVAX' principal business segments is set
forth in Note 10, Business Segment and Geographic Information, in the Notes to
Consolidated Financial Statements.

Historically, IVAX' revenues and profits have increased primarily as a
result of the acquisition of other businesses and the successful development
and marketing of generic pharmaceutical products. IVAX' future success is
largely dependent upon its ability to develop, manufacture and market, in the
short-term, commercially viable generic pharmaceutical products, and in the
long term, commercially viable generic and proprietary pharmaceutical
products. In the short term, IVAX' revenues and profits from its
pharmaceutical operations may vary significantly from period to period, as
well as in comparison to corresponding prior periods, as a result of
regulatory and competitive factors unique to the generic pharmaceutical
industry. Such factors include the timing of new generic drug approvals
received by IVAX, the number and timing of generic drug approvals for
competing products, the timing of IVAX' initial shipments of newly-approved
generic drugs, strategies adopted by brand name companies to maintain market
share, and the effects of sales promotion programs.

The first company to receive regulatory approval for and to introduce a
generic drug is usually able to capture significant market share from the
branded drug and to achieve relatively high revenues and gross profits from
sales of the drug. As other generic versions of the same drug enter the
market, however, market share, prices, revenues and gross profits decline,
sometimes significantly. In addition, the initial shipments by the first
company to introduce a generic drug are often significant as customers fill
their initial inventory requirements.

Competition in the United States generic pharmaceutical market has
continued to intensify as the pharmaceutical industry adjusts to increased
pressures to contain health care costs. As a result, brand name companies are
increasingly selling their products into the generic market directly by
acquiring or forming strategic alliances with generic pharmaceutical
companies. No regulatory approvals are required for a brand name manufacturer
to sell directly or through a third party to the generic market, nor do such
manufacturers face any other significant barriers to entry into such market.
In addition, brand name companies are increasingly pursuing strategies to
prevent or delay the introduction of generic competition. These strategies
include, among other things, seeking to establish regulatory obstacles to
demonstrate the bioequivalence of generic drugs to the brand name products,

and instituting legal actions based on process or other patents that allegedly
are infringed by the generic products.

IVAX' pharmaceutical revenues and profits may also be affected by other
factors. Certain raw materials and components used in the manufacture of IVAX'
products are available from limited sources, and in some cases, a single
source. Furthermore, because raw material sources for pharmaceutical products
must generally be approved by regulatory authorities, changes in raw materials
suppliers could result in production delays and higher raw material costs. In
addition, FDA approval to manufacture a drug is site specific. In the event an
approved manufacturing facility for a particular drug becomes inoperable,
obtaining the required FDA approval to manufacture such drug at a different
manufacturing site could also result in production delays.

Political, economic and regulatory influences are resulting in
fundamental changes in the health care industry in the United States. Numerous
legislative proposals have been introduced or proposed in Congress and in some
state legislatures that would effect major changes in the United States health
care system nationally and at the state level. Proposals have included
fundamental changes to the health care delivery and payment systems designed
to, among other things, increase access to, and decrease the cost of, health
care. IVAX anticipates that Congress and state legislatures will continue to
review and assess alternative health care delivery systems and payment methods
and that public debate of these issues will likely continue in the future. Due
to uncertainties regarding the ultimate features of reform initiatives and
their enactment and implementation, IVAX cannot predict which, if any, reform
proposals will be adopted, when they may be adopted or what impact they may
have on IVAX. There can be no assurance that such reforms, if enacted, will
not have a material adverse effect on IVAX.

IVAX regularly reviews potential acquisitions and business alliances,
some of which could result in material changes to IVAX' financial condition
and results of operations. Historically, IVAX has generally acquired other
businesses through the issuance of common stock. As consideration for any
future acquisition, IVAX may, among other things, pay cash, contribute assets,
incur indebtedness or issue debt or equity securities.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO THE YEAR ENDED DECEMBER 31, 1994

IVAX reported net income of $114.8 million for the year ended December
31, 1995, an increase of $25.8 million from the $89.0 million of net income in
1994. Primary and fully diluted earnings per common share were $.96 and $.95,
respectively, for the year ended December 31, 1995, as compared to $.76 per
common share on both a primary and fully diluted basis reported for 1994.

NET REVENUES AND GROSS PROFIT BY BUSINESS SEGMENT:
(In thousands)
1995 1994
------------------------- -------------------------
Net Gross Net Gross
Revenues Profit Revenues Profit
----------- ----------- ------------ -----------
Pharmaceuticals $ 774,240 $ 326,625 $ 643,496 $ 273,260
Intravenous products 339,978 133,067 337,884 139,931
Other operations 147,045 64,038 153,641 68,254
Intersegment
eliminations (1,497) - (215) -
----------- ----------- ------------ -----------
Total $ 1,259,766 $ 523,730 $ 1,134,806 $ 481,445
=========== =========== ============ ===========

Net revenues totalled $1,259.8 million for 1995, an increase of $125.0
million, or 11%, from the $1,134.8 million reported in the prior year.
Consolidated gross profit increased $42.3 million, or 9%, as compared to 1994.
Gross profit totalled $523.7 million (41.6% of net revenues) for the year
ended December 31, 1995, compared to $481.4 million (42.4% of net revenues)
for the prior year.

Net revenues of IVAX' pharmaceutical operations, which represented
approximately 62% of 1995 consolidated net revenues, increased $130.7 million
from 1994. Net revenues of IVAX' domestic and international pharmaceutical
operations increased $65.8 million and $64.9 million, respectively. The 1995
market introduction of and related promotional programs for new generic
products manufactured by IVAX was the principal factor leading to the rise in
the net revenues of IVAX' domestic pharmaceutical operations from $440.4
million in 1994 to a total of $506.2 million in 1995.

During April 1995, IVAX received FDA approval to market cefaclor, the
generic equivalent of Eli Lilly and Company's Ceclor(R), an antibiotic
indicated for the treatment of a variety of infections. Net revenues
attributable to sales of cefaclor totalled $70.0 million in 1995. Competition
in the generic cefaclor market is likely to result in lower cefaclor net
revenues and gross profit for IVAX in 1996. In addition, the principal raw
material used in the manufacture of cefaclor is presently available to IVAX
from only one source. Changes in the availability of or the price charged for
the raw material may affect IVAX' future net revenues or gross profit
attributable to cefaclor. Furthermore, IVAX' sale of cefaclor is the subject
of a patent infringement action brought by Eli Lilly and Company, as discussed
in Note 11, Commitments and Contingencies, in the Notes to Consolidated
Financial Statements.

During the latter part of the third quarter and throughout the fourth
quarter of 1995, IVAX commenced domestic sales of nine other recently approved
generic products, contributing an additional $37.1 million in net revenues to
its domestic pharmaceutical operations. These new products included the
December introduction of IVAX' albuterol metered dose inhaler, the generic
equivalent of Glaxo Inc.'s Ventolin(R) Inhalation Aerosol, used in the
treatment of asthma, which contributed $8.6 million to 1995 net revenues.
Although sales of these new products were a significant factor contributing to
the overall increase in net revenues of the domestic pharmaceutical operations
compared to 1994, the levels of revenues generated during the introduction
period of a new generic drug are often higher than the levels experienced for
routine inventory replenishment by customers in the months following the
drug's introduction.

Net revenues attributable to sales of verapamil HCl ER tablets
manufactured by IVAX totalled $96.5 million in 1995 compared to $119.1 million
in 1994. The decline in net revenues was due primarily to a reduction in the
net selling price of verapamil caused by competition, offset in part by
increased unit volume caused by an increase in the substitution rate of
generic verapamil for brand name verapamil. IVAX had been the sole United
States supplier of generic verapamil until March 1994, when Zenith
Laboratories, Inc. ("Zenith") began distribution of generic verapamil supplied
by a company marketing brand name verapamil. Notwithstanding IVAX' pooling of
interests acquisition of Zenith in December 1994, competition in the generic
verapamil market has continued because Zenith's former verapamil supplier
commenced distribution of generic verapamil through another generic
pharmaceutical company. In addition, in March 1996, another generic
manufacturer received regulatory approval for one of the dosage strengths of
verapamil sold by IVAX. Competition in the generic verapamil market is likely
to result in lower verapamil net revenues and gross profit for IVAX in 1996.

As noted in the "Overview," other manufacturers may obtain regulatory
approvals or otherwise determine to market generic products equivalent to
IVAX' manufactured generic products, such as cefaclor, albuterol and
verapamil, in 1996 and thereafter. As additional competitors enter the generic
pharmaceutical market with products similar to those manufactured by IVAX, the
resulting competition is likely to reduce IVAX' net revenues and gross profit
generated from those products.

IVAX' international pharmaceutical operations generated net revenues of
$268.0 million in 1995 compared to $203.1 million in 1994. The $64.9 million
increase in international pharmaceutical net revenues included an increase of
$40.4 million attributable to the operations of Galena a.s. ("Galena"). The
July 1994 acquisition of a majority interest in Galena was accounted for as a
purchase, and accordingly, Galena's results of operations are included in
IVAX' consolidated financial statements only since the acquisition date. The
remaining $24.5 million increase in net revenues of IVAX' international
pharmaceutical operations was primarily due to higher sales of branded
respiratory products in the United Kingdom accompanied by the favorable impact
of exchange rate differences in comparison to the prior year. Net revenues
attributable to sales of branded respiratory products represented
approximately 27% of the total net revenues of the international
pharmaceutical operations in 1995 as compared to approximately 19% of the
total during the prior year.

The gross profit percentage of IVAX' pharmaceutical operations was 42.2%
in 1995 as compared to 42.5% in 1994. The gross profit percentage remained
relatively constant in comparison to the prior year due primarily to domestic
sales of the recently approved generic products manufactured by IVAX, which
are sold at a higher margin, in combination with a shift in sales mix to
higher margin branded products manufactured by IVAX' international
pharmaceutical operations. The margin contribution of these products almost
entirely offset the decrease in the gross profit margin resulting from the
competition in the domestic generic pharmaceutical distribution business
experienced during 1995.

Net revenues of the intravenous products division totalled approximately
$340.0 million in 1995, an increase of $2.1 million from the $337.9 million
reported for 1994. The increase in net revenues resulted primarily from higher
sales of infusion pumps and needlefree intravenous sets and increased revenues
from admixture services, partially offset by lower net revenues attributable
to both Hespan(R), McGaw's brand name blood plasma expansion product, and
specialty nutrition solutions. Net revenues for 1994 also included a $2.0
million one-time settlement of a contractual obligation. Gross profit was
$133.1 million in 1995 compared to $139.9 million in 1994. The gross profit
percentage of the intravenous products division decreased from 41.4% in 1994
to 39.1% in 1995. The reduction in gross profit and the decrease in the gross
profit percentage were primarily due to the reduction in the net selling price
of Hespan(R) caused by new competition and the decrease in selling prices of
the specialty nutrition solutions. In February 1995, another pharmaceutical
company introduced a generic version of Hespan(R) in the United States
resulting in both lower prices and a reduction in the intravenous products
division's share of the market. Net revenues and gross profit derived from
Hespan(R) are expected to continue to decrease in 1996 as compared to 1995 due
in part to additional competition from other companies expected to begin
marketing a generic version of the product.

Net revenues and gross profit of IVAX' personal care products,
diagnostics and specialty chemicals operations, excluding intersegment
eliminations, represented approximately 12% of consolidated net revenues and
consolidated gross profit in 1995. Combined net revenues of these other
operations decreased $6.6 million from 1994 primarily as a result of lower net
revenues attributable to textile and denim product sales of IVAX' specialty
chemicals group. Declines in gross profit were

experienced by each of IVAX' other operations during 1995, resulting in a
decrease in combined gross profit of $4.2 million compared to 1994.

OPERATING EXPENSES BY BUSINESS SEGMENT:
(In thousands)

RESEARCH AMORTIZATION
GENERAL AND AND OF MERGER
SELLING ADMINISTRATIVE DEVELOPMENT INTANGIBLES EXPENSES TOTAL
-------- ------------- ----------- ------------ -------- --------

1995
- ----
Pharmaceuticals $ 85,107 $ 58,520 $ 44,492 $ 2,411 $ -- $190,530
Intravenous products 55,050 29,846 16,005 4,657 -- 105,558
Other operations 41,270 13,596 4,105 2,430 -- 61,401
Corporate and other -- 15,422 -- -- 3,392 18,814
-------- -------- -------- -------- -------- --------
Total $181,427 $117,384 $ 64,602 $ 9,498 $ 3,392 $376,303
======== ======== ======== ======== ======== ========
1994
- ----
Pharmaceuticals $ 71,148 $ 48,893 $ 31,838 $ 3,536 $ 10,191 $165,606
Intravenous products 56,697 22,493 12,779 5,835 -- 97,804
Other operations 39,937 15,618 4,044 2,514 -- 62,113
Corporate and other -- 12,238 -- -- 2,858 15,096
-------- -------- -------- -------- -------- --------
Total $167,782 $ 99,242 $ 48,661 $ 11,885 $ 13,049 $340,619
======== ======== ======== ======== ======== ========

Selling expenses totalled $181.4 million (14.4% of net revenues) in 1995
compared to $167.8 million (14.8% of net revenues) in 1994, an increase of
$13.6 million. An increase in selling expenses of IVAX' international
pharmaceutical operations, due primarily to the rise in its net revenues,
accounted for approximately 87% of this increase, or $11.9 million.

General and administrative expenses totalled $117.4 million (9.3% of net
revenues) in 1995 compared to $99.2 million (8.7% of net revenues) for the
prior year. The $9.6 million increase in general and administrative expenses
of IVAX' pharmaceutical operations, in comparison to the prior year, was
principally the result of increased general and administrative expenses of the
international pharmaceutical operations primarily due to higher facilities and
personnel related expenditures, the impact of a full twelve months of general
and administrative expenses of Galena during 1995, and the unfavorable effect
of exchange rate differences. The intravenous products division reported an
increase of $7.4 million in this expense category compared to 1994 principally
as a result of a $4.9 million adverse arbitration award during the 1995 fourth
quarter related to a contract dispute, in combination with increased legal
expenses incurred throughout the year. Corporate general and administrative
expenses increased $3.2 million from the prior year primarily due to increases
in personnel, travel and facilities costs.

Research and development expenses for 1995 rose $15.9 million, or 33%,
in comparison to the prior year, to a total of $64.6 million. Over 75% of the
growth in this expense category was concentrated in IVAX' pharmaceutical
operations. The increase in research and development expenses in comparison to
the prior year reflects IVAX' continuing focus on the development of new and
improved products. Management intends to continue to increase the level of its
research and development efforts. Actual expenditures will depend on, among
other things, the outcome of clinical testing of products under development,
delays or changes in government required testing and approval procedures,
technological and competitive developments, and strategic marketing decisions.

Amortization expense decreased $2.4 million compared to 1994 as a result
of the write-off of deferred financing costs associated with the March 1994
retirement of debt by the intravenous products division, in combination with
the effect of the amortization of the excess of the fair value of assets
acquired from Galena over the purchase price paid.

The $3.4 million of merger expenses reported for 1995 were primarily
related to a proposed merger with Hafslund Nycomed which was abandoned in
November 1995. The $13.0 million of merger expenses incurred during the prior
year were principally attributable to the December 1994 acquisition of Zenith.

Other income, net, increased $17.4 million compared to 1994 primarily
due to the sale of IVAX' investment in preferred stock of North American
Vaccine, Inc. which resulted in a pre-tax gain of $12.8 million. Higher
licensing and grant revenues of IVAX' international pharmaceutical operations
and a gain on the sale of certain trademarks by IVAX' personal care products
group, contributed to the remaining $4.6 million increase in other income,
net, as compared to 1994.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO THE YEAR ENDED DECEMBER 31, 1993

IVAX reported net income of $89.0 million for the year ended December
31, 1994, a decrease of $10.3 million from the $99.4 million of net income in
1993. Income before extraordinary items was $89.9 million for 1994 compared to
$108.0 million for 1993, a decline of $18.1 million. Results for both 1994 and
1993 included net extraordinary losses from the early extinguishment of debt
of $823,000 in 1994 and $8.6 million in 1993.

Both primary and fully diluted earnings per common share in 1994 were
$.76 compared to primary and fully diluted earnings per common share for 1993
of $.87 and $.86, respectively. Earnings before extraordinary items, on both a
primary and fully diluted basis, were $.77 in 1994, compared to primary and
fully diluted earnings before extraordinary items for 1993 of $.94 and $.93,
respectively.

NET REVENUES AND GROSS PROFIT BY BUSINESS SEGMENT:
(In thousands)

1994 1993
------------------------- -------------------------
Net Gross Net Gross
Revenues Profit Revenues Profit
----------- ----------- ------------ -----------
Pharmaceuticals $ 643,496 $ 273,260 $ 587,412 $ 288,132
Intravenous products 337,884 139,931 330,792 131,865
Other operations 153,641 68,254 147,003 72,535
Intersegment
eliminations (215) - (2,262) (71)
----------- ----------- ------------ -----------
Total $ 1,134,806 $ 481,445 $ 1,062,945 $ 492,461
=========== =========== ============ ===========

Net revenues totalled $1,134.8 million for 1994, an increase of $71.9
million, or 7%, from 1993. Consolidated gross profit totalled $481.4 million
(42.4% of net revenues) for 1994, a decrease of $11.0 million, or 2%, from the
$492.5 million (46.3% of net revenues) in 1993.

Net revenues of IVAX' pharmaceutical operations, which represented
approximately 57% of 1994 consolidated net revenues, increased $56.1 million,
or 10%, from 1993. Increases of $59.0

million in net revenues of IVAX' international pharmaceutical operations
and $6.0 million in domestic net sales of verapamil were partially offset by a
decline of $8.9 million in domestic net sales of other pharmaceutical
products.

IVAX' international pharmaceutical operations generated net revenues of
$203.1 million in 1994. Approximately $27.5 million of the total $59.0 million
increase in international pharmaceutical net revenues resulted from the July
1994 acquisition of a majority interest in Galena. The remaining $31.5 million
increase in net revenues of IVAX' international pharmaceutical operations was
primarily due to higher sales of both branded and generic products in the
United Kingdom.

Excluding the impact of IVAX' acquisition of Zenith, 1994 net revenues
attributable to sales of verapamil manufactured by IVAX were $119.1 million, a
decline of $26.8 million from 1993. The December 1994 acquisition of Zenith
contributed an additional $32.9 million to IVAX' 1994 consolidated verapamil
net revenues.

Domestic pharmaceutical net revenues, exclusive of verapamil, were
approximately $288.5 million in 1994 compared to $297.4 million in 1993.
During the first quarter and part of the second quarter of 1994, the domestic
pharmaceutical operations were adversely impacted by delays in processing and
shipment of customer orders and the loss of customer orders as a result of the
conversion to a new computer software system designed to integrate sales order
entry, inventory control and product delivery functions. Prior to the close of
the second quarter of 1994, IVAX had resolved most of the system conversion
problems and had significantly increased its promotional efforts as a means to
restore customer relationships affected by the system conversion problems.

The gross profit percentage of IVAX' pharmaceutical operations declined
from 49.1% in 1993 to 42.5% in 1994. The decline was primarily attributable to
the reduction of verapamil unit sales prices, in combination with competition
in the domestic generic pharmaceutical distribution business, partially offset
by a shift in sales mix to higher margin branded products by IVAX'
international pharmaceutical operations.

Net revenues of the intravenous products division totalled $337.9
million in 1994, an increase of $7.1 million from the $330.8 million reported
in 1993. Higher net revenues from specialty intravenous solutions and sets, in
combination with an increase in the admixture services business, primarily
accounted for the rise in net revenues. The increase from 1993 also included a
$2.0 million one-time payment received in 1994 by McGaw from a customer in
settlement of a contractual obligation. Gross profit of the intravenous
products division rose $8.1 million from 1993, to a total of $139.9 million.
The increase in gross profit was principally the result of increased revenues,
a more favorable product mix, the revenues associated with the settlement of
the contractual obligation referenced above and improved product pricing
combined with stable product costs.

Net revenues of IVAX' personal care products, diagnostics and specialty
chemicals operations, excluding intersegment eliminations, represented
approximately 14% of consolidated net revenues in both 1994 and 1993. Net
revenues of these other operations increased $6.6 million, while gross profit
of these operations decreased $4.3 million as compared to 1993. The specialty
chemicals group reported both higher net revenues and gross profit in
comparison to 1993, or increases of $10.9 million and $1.5 million,
respectively. These increases were principally attributable to sales generated
by the businesses acquired from Elf Atochem North America, Inc. ("Elf
Atochem") in June 1993. The acquisition of the businesses was accounted for
using the purchase method of accounting and, accordingly, the results of
operations of the acquired businesses were included in IVAX' consolidated
financial statements only since the date of acquisition.

OPERATING EXPENSES BY BUSINESS SEGMENT:
(In thousands)

RESEARCH AMORTIZATION
GENERAL AND AND OF MERGER
SELLING ADMINISTRATIVE DEVELOPMENT INTANGIBLES EXPENSES TOTAL
-------- ------------- ----------- ------------ -------- --------

1994
- ----
Pharmaceuticals $ 71,148 $ 48,893 $ 31,838 $ 3,536 $ 10,191 $165,606
Intravenous products 56,697 22,493 12,779 5,835 -- 97,804
Other operations 39,937 15,618 4,044 2,514 -- 62,113
Corporate and other -- 12,238 -- -- 2,858 15,096
--------- ---------- --------- ------- --------- --------
Total $ 167,782 $ 99,242 $ 48,661 $11,885 $ 13,049 $340,619
========= ========== ========= ======= ========= ========
1993
- ----
Pharmaceuticals $ 63,064 $ 42,078 $ 27,786 $ 2,671 $ -- $135,599
Intravenous products 56,646 23,671 11,878 7,611 7,450 107,256
Other operations 39,511 11,949 4,192 2,129 884 58,665
Corporate and other -- 5,752 -- -- 816 6,568
--------- ---------- --------- ------- --------- --------
Total $ 159,221 $ 83,450 $ 43,856 $12,411 $ 9,150 $308,088
========= ========== ========= ======= ========= ========

Selling expenses totalled $167.8 million (14.8% of net revenues) in 1994
compared to $159.2 million (15.0% of net revenues) in 1993. An increase in
selling expenses of IVAX' pharmaceutical operations accounted for
approximately 94% of the $8.6 million increase in total selling expenses as
compared to 1993. Increased personnel costs, primarily within IVAX' domestic
pharmaceutical operations, in combination with higher advertising and
promotional costs in both the domestic and international operations, were the
primary factors contributing to the $8.1 million increase in selling expenses
of the pharmaceuticals group.

General and administrative expenses totalled $99.2 million (8.7% of net
revenues) in 1994, an increase of $15.8 million in comparison to the $83.5
million (7.9% of net revenues) reported for 1993. The $6.8 million increase in
general and administrative expenses of IVAX' pharmaceuticals operations
resulted primarily from increased facilities and personnel expenditures, and
the inclusion of $1.7 million of general and administrative expenses of
Galena. Higher corporate expense levels required as a result of IVAX' growth
contributed $6.5 million to the total rise in general and administrative
expenses as compared to 1993. General and administrative expenses of IVAX'
other operations increased $2.5 million in comparison to 1993, primarily
due to $2.0 million in costs related to charges of the specialty chemicals
group in connection with, primarily, the closing of certain facilities.

Merger expenses were $13.0 million in 1994 compared to $9.2 million in
1993. Approximately $12.5 million of the merger expenses incurred in 1994 were
attributable to the acquisition of Zenith, including $5.0 million paid by
Zenith in connection with the termination of its distribution agreement with
its former generic verapamil supplier.

Interest expense declined $3.5 million in comparison to 1993, primarily
due to the March 1993 redemption of McGaw's $46.1 million of 15% subordinated
notes and the March 1994 repayment of McGaw's $52.5 million of term (floating
rate) debt, partially offset by increased interest expense associated with
borrowings under IVAX' revolving credit facility. Other income, net, decreased
$2.6 million compared to 1993 principally due to lower licensing and grant
revenues of IVAX' international

pharmaceutical operations, in combination with increased losses on the
disposal of plant and equipment.

CURRENCY FLUCTUATIONS

For 1995, 1994 and 1993, approximately 22%, 19% and 15%, respectively,
of IVAX' net revenues were attributable to operations which principally
generated revenues in currencies other than the United States dollar.
Fluctuations in the value of foreign currencies relative to the United States
dollar impact the reported results of operations for IVAX. If the United
States dollar weakens relative to the foreign currency, the earnings generated
in the foreign currency will, in effect, increase when converted into United
States dollars and vice versa. As a result of exchange rate differences, net
revenues increased by $6.4 million in 1995 as compared to 1994, and increased
by $2.7 million in 1994 as compared to 1993.

As of December 31, 1995, IVAX Corporation (the "Parent Company") had a net
\British pound sterling\47.6 million (approximately $74.0 million) short-term
intercompany receivable. IVAX seeks to reduce the effects of foreign exchange
fluctuations in short-term intercompany balances, and on December 4, 1995 the
Parent Company entered into foreign currency forward contracts totalling
\British pound sterling\30.0 million. Costs associated with these contracts are
being amortized over the contracts' lives. The contracts expire on March 29,
1996.

Norton Healthcare uses forward exchange contracts to hedge its exposure
to currency fluctuations on certain of its raw material inventory purchases.
As the commitments made by the contracts represent offsetting exposure to
commitments to purchase inventory at specified amounts payable in other
currencies, exposure to foreign currency losses is eliminated. The contract
amounts of these instruments at year-end 1995 and 1994 were approximately $5.2
million and $4.4 million, respectively.

INCOME TAXES

IVAX' effective tax rate was 19%, 25% and 35% in 1995, 1994 and 1993,
respectively. For the three years ended December 31, 1995, the effective tax
rate for IVAX' foreign subsidiaries was 22%, 19% and 14%, respectively. IVAX'
consolidated effective tax rate in 1995 and 1994 was substantially lower than
the effective tax rate in 1993 primarily as a result of a higher proportion of
income generated by IVAX' operations in Ireland, Puerto Rico and the U.S.
Virgin Islands, which are taxed at lower statutory rates. Additionally, during
1995, IVAX' consolidated tax provision was reduced by $6.5 million as a result
of the release of valuation allowances associated with the realization of the
benefits of available net operating loss carryforwards and other temporary
differences. During 1994, IVAX' consolidated tax provision was reduced by $6.6
million as a result of the release of valuation allowances associated with the
realization of the benefits of available net operating loss carryforwards.
Certain subsidiaries of IVAX, including McGaw and Zenith, have net operating
loss carryforwards which are subject to certain limitations. For further
information see Note 7, Income Taxes, in the Notes to Consolidated Financial
Statements. IVAX' future consolidated effective tax rate will, to a large
extent, depend on the mix between foreign and domestic taxable income and the
statutory tax rates of the related tax jurisdictions. The mix between IVAX'
foreign and domestic taxable income may be significantly affected by the
jurisdictions in which new products are manufactured.

IVAX receives a U.S. tax credit under Section 936 of the Internal
Revenue Code for certain income generated by its Puerto Rican and Virgin
Island operations. For 1995, this credit was $17.3 million and completely
offset the entire U.S. tax liability of such operations. No assurance can be
given that Congress will not eliminate the Section 936 tax credit in the
future.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1995, IVAX' working capital totalled $470.9 million,
compared to $332.8 million and $295.4 million at year-end 1994 and 1993,
respectively. Cash and cash equivalents were $14.7 million at December 31,
1995 compared to $37.0 million at year-end 1994 and $91.5 million on the same
date in 1993.

IVAX generated $16.4 million in cash from operating activities during
1995, representing declines of $77.7 million from 1994 and $89.2 million from
1993. The decline in cash generated from operating activities as compared to
both 1994 and 1993 was primarily due to a higher rate of growth in accounts
receivable, partially offset by increased net income. The increase in accounts
receivable during 1995 was primarily due to the launch of new manufactured
generic products by the domestic pharmaceutical operations during the 1995
third and fourth quarters and the extension of credit terms in connection with
the launch of those products. The comparison of cash generated by operations
in 1995 versus 1994 was also affected by lower growth in inventories and
significant gains from the disposal of assets.

Net cash of $97.3 million was used for investing activities in 1995, a
decrease of $13.8 million from 1994 and an increase of $36.1 million from
1993. Cash utilized for capital expenditures increased from $93.9 million and
$49.7 million in 1994 and 1993, respectively, to a total of $103.4 million in
1995. Approximately 89% of the total capital expenditures made in 1995 were
devoted to IVAX' pharmaceuticals and intravenous products operations. During
1995, IVAX sold its investment in preferred stock of North American Vaccine,
Inc. for approximately $16.3 million in cash. IVAX used $4.8 million in cash
to acquire businesses in 1995, representing a decline from both 1994 and 1993.
IVAX used $11.8 million in cash, including the payment of acquisition related
expenses and net of cash acquired, to obtain a majority ownership interest in
Galena during 1994. During 1993, IVAX used $16.0 million of cash to acquire
businesses, including approximately $13.0 million of cash to acquire certain
businesses from Elf Atochem. Prior to the close of 1993, two of the businesses
acquired from Elf Atochem were sold for a business valued at $4.2 million and
$10.0 million in cash.

On March 25, 1994, IVAX established a revolving credit facility
permitting borrowings of up to $100 million, secured by a pledge of the stock
of McGaw and an agreement not to pledge or dispose of certain of IVAX'
significant subsidiaries. In November 1995, the credit facility was amended,
increasing permitted borrowings to $130 million. As of December 31, 1995,
$99.0 million in borrowings were outstanding under this facility, an increase
of $54.0 million from the prior year-end. The credit facility contains various
financial covenants, including a restriction on the payment of dividends by
IVAX during any fiscal year in excess of 35% of IVAX' consolidated net income.
IVAX is in compliance with all such covenants. During 1995, amounts borrowed
under the revolving credit facility were primarily used to fund working
capital requirements and to fund capital expenditure programs within IVAX'
pharmaceuticals and intravenous products operations. During 1994, borrowings
under the revolving credit facility were used, in part to finance IVAX'
acquisition of a controlling interest in Galena and to repay McGaw's $52.5
million of term (floating rate) notes and the amounts borrowed under McGaw's
revolving facility which totalled $11.1 million as of December 31, 1993.
McGaw's credit facility was terminated in June 1994. In November 1995, IVAX
obtained an

unsecured floating rate overdraft facility which provides for advances of
up to $10 million. As of December 31, 1995, $528,000 was outstanding under the
overdraft facility. The revolving credit facility providing for borrowings of
up to $10.0 million previously maintained by Zenith expired in June 1995.

During 1995 and 1994, IVAX redeemed a total of $1.0 million and $18.5
million, respectively, face value of its 6-1/2% Convertible Subordinated Notes
Due 2001. Additionally, during 1995 and 1994, McGaw repurchased $3.4 million
and $2.0 million, respectively, face value of its 10-3/8% Senior Notes due 1999
("Senior Notes") at a purchase price of 101% of the outstanding principal
amount plus accrued and unpaid interest. On January 16, 1996, McGaw
repurchased $200,000 face value of its Senior Notes at a purchase price of
101% of the outstanding principal amount plus accrued and unpaid interest. The
indenture governing the Senior Notes contains certain covenants applicable to
McGaw, including limitations on restricted payments, dividends and additional
borrowings. As of December 31, 1995, McGaw was either in compliance with these
covenants or had received a waiver from the Trustee.

On March 15, 1996, IVAX' revolving line of credit was amended to provide
for an additional $45 million in borrowings for a period of ninety days. The
amendment also changed the expiration date of the revolving line of credit
from March 24, 1997 to May 24, 1997. IVAX is seeking to enter into a new
revolving line of credit in the amount of $350 million with a bank syndicate.
Proceeds from the new line of credit will be used to refinance the existing
line of credit and the Senior Notes, and for general corporate purposes,
including to fund working capital requirements and to finance acquisitions.

Proceeds from the exercise of stock options and warrants totalled $24.6
million in 1995, increases of $18.5 million from 1994 and $22.0 million from
1993. In March 1993, McGaw completed a public offering of its common stock
resulting in net proceeds of $41.7 million. McGaw used the net proceeds from
its stock offering, plus an additional $10.3 million borrowed under its $30
million revolving credit facility, to redeem $46.1 million of McGaw's 15%
Subordinated Notes due 1999 at a contractually required premium of $3.5
million. A portion of the proceeds were also used by McGaw to pay a
cancellation fee and accrued interest related to an interest rate swap
agreement totalling $2.4 million.

During 1995, IVAX paid total cash dividends of $9.3 million, or $.08 per
share on its common stock. This represented increases from the $5.2 million,
or $.06 per share, and the $2.8 million, or $.04 per share, in dividends paid
on IVAX' common stock during 1994 and 1993, respectively. Immediately prior to
its acquisition by IVAX in December 1994, Zenith paid all outstanding
cumulative dividends on its preferred stock or a total of $2.1 million.

IVAX issued 350,000 shares of its common stock valued at approximately
$11 million as of the acquisition date and paid approximately $4.9 million in
cash during 1995 in connection with three acquisitions. See Note 3,
Acquisitions, in the Notes to Consolidated Financial Statements for further
information concerning these acquisitions. During 1994, IVAX issued an
aggregate of approximately 41 million shares of common stock having a value of
$923 million at the respective issuance dates to consummate the acquisition of
McGaw and Zenith. In addition, during 1994, IVAX acquired a majority ownership
interest in Galena for approximately $15.5 million in cash. During 1993, IVAX
issued an aggregate of 4.3 million shares of common stock having a value of
approximately $106.2 million at the respective issuance dates, and paid an
aggregate of approximately $16.0 million in cash, to consummate four
acquisitions. IVAX intends to continue to expand through the acquisition of
other

businesses, as well as internal growth. Certain acquisitions could result
in material changes in IVAX' financial condition and results of operations.

IVAX believes it has adequate capital and sources of financing to
support its ongoing operational requirements. These funds will be derived from
IVAX' existing working capital, the increased revolving credit facility
currently under negotiation and cash flow from operations. For the long term,
IVAX presently believes it will be able to obtain long-term capital to the
extent necessary to support its growth objectives.

IVAX plans to spend substantial amounts of capital in 1996 to continue
the research and development of its pharmaceutical and intravenous products.
Although combined research and development expenditures of the pharmaceutical
and intravenous operations are planned to increase by approximately 40% to 50%
in comparison to 1995, actual expenditures will depend on, among other things,
the outcome of clinical testing of products under development, delays or
changes in government required testing and approval procedures, technological
and competitive developments and strategic marketing decisions. In addition,
IVAX plans to spend substantial amounts of capital in 1996 to improve and
expand its pharmaceutical and intravenous related facilities, with higher
levels of capital expenditures devoted to these operations in comparison to
1995.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and supplementary data required by Regulation
S-X are included in this Form 10-K commencing on page F-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

Set forth below is a list of the names, ages, positions held, and
business experience during the past five years of the persons serving as
directors and executive officers of IVAX as of March 29, 1996. Each director
holds office until the next annual meeting of shareholders or until his
successor is elected and qualified. Officers serve at the discretion of the
Board of Directors.

DIRECTORS

Mark Andrews. Mr. Andrews, age 45, has served as a director of IVAX since
1987. He has served as the Chairman of the Board of Directors and Chief
Executive Officer of American Exploration Company (oil and gas exploration and
production) since 1980, and was its President from 1980 to 1988.

Lloyd Bentsen. Mr. Bentsen, age 75, has served as a director of IVAX
since February 1995. He served as the 69th Secretary of the Treasury of the
United States from January 1993 until December 1994. From 1971 until his
appointment as Secretary of the Treasury, he served as a United States Senator
from the State of Texas. He is a director of Panhandle Eastern, Inc. (natural
gas) and American International Group, Inc. (insurance).

Ernst Biekert, Ph.D. Dr. Biekert, age 71, has served as a director of
IVAX since 1991. He is a professor at the University of Heidelberg in Germany.
He was the Chairman of the Board and Chief Executive Officer of Knoll A.G.
(pharmaceuticals) from 1968 to 1985. Dr. Biekert was a consultant to BASF A.G.
(chemicals and pharmaceuticals) from 1985 to 1987 and was Chairman of its
pharmaceutical division from 1975 to 1985.

Dante B. Fascell. Mr. Fascell, age 79, has served as a director of IVAX
since 1993. He has been a partner of Holland & Knight, a Florida law firm,
since May 1994. He was of counsel to Fine Jacobson Schwartz Nash & Block,
P.A., a Florida law firm, from 1993 to 1994. From 1955 to 1993, he served as a
member of the United States House of Representatives, and was Chairman of the
House Foreign Affairs Committee from 1984 to January 1993.

Jack Fishman, Ph.D. Dr. Fishman, age 65, has served as a director of
IVAX since 1987 and as a Vice Chairman of the Board of Directors of IVAX since
1991. From 1991 to February 1995, he served as IVAX' Chief Scientific Officer.
He is an Adjunct Professor at The Rockefeller University and Director of
Research of Strang Cornell Cancer Research Laboratory, a non-profit entity
associated with Cornell University Medical College. Dr. Fishman was President
of IVAX from 1988 to 1991, and served as a Research Professor of Biochemistry
and Molecular Biology at the University of Miami from 1988 to 1992.

Phillip Frost, M.D. Dr. Frost, age 59, has served as Chairman of the
Board of Directors and Chief Executive Officer of IVAX since 1987. He served
as IVAX' President from July 1991 until January 1995. He was the Chairman of
the Department of Dermatology at Mt. Sinai Medical Center of Greater Miami,
Miami Beach, Florida from 1972 to 1990. Dr. Frost was Chairman of the Board of
Directors of Key Pharmaceuticals, Inc. from 1972 to 1986. He is Chairman of
the Board of Directors of Whitman Education Group, Inc. (proprietary
education), Vice Chairman of the Board of Directors of North American Vaccine,
Inc., and a director of Northrop Grumman Corp. (aerospace), American

Exploration Company (oil and gas exploration and production), and NaPro
BioTherapeutics, Inc. (biopharmaceutical research and development). He is a
trustee of the University of Miami and a member of the Board of Governors of
the American Stock Exchange.

Harold S. Geneen. Mr. Geneen, age 86, has served as a director of IVAX
since 1992. He has served as the Chairman of the Board of Directors of Gunther
International Ltd. (automated document assembly systems) since September 1993.
He also serves on the boards of a number of privately-held companies. He was
Chairman of the Board of Directors of Finlay Enterprises, Inc. (retail
jewelry) from 1988 through 1993. Mr. Geneen was Chairman of the Board of
Directors of ITT Corporation from 1965 until 1979, remained on the Board of
Directors of ITT Corporation until 1983, and presently is Chairman Emeritus of
ITT Corporation. Mr. Geneen is also Chairman Emeritus of ITT Hartford Group,
Inc. and ITT Industries, Inc. He is a member of the Board of Trustees of New
York University, the Board of Trustees of the Salk Institute, and the Board of
Governors of the University of Miami School of Medicine.

Jane Hsiao, Ph.D. Dr. Hsiao, age 48, has served as a director of IVAX
and as IVAX' Vice Chairman-Technical Affairs since February 1995. From 1992
until February 1995, she served as IVAX' Chief Regulatory Officer and
Assistant to the Chairman, and as Vice President-Quality Assurance and
Compliance of Baker Norton Pharmaceuticals, Inc., IVAX' principal proprietary
pharmaceutical subsidiary. From 1987 to 1992, Dr. Hsiao was Vice
President-Quality Assurance, Quality Control and Regulatory Affairs of Baker
Norton Pharmaceuticals, Inc.

Lyle Kasprick. Mr. Kasprick, age 63, has served as a director of IVAX
since 1987. Mr. Kasprick is a private investor. He has served as a director of
North American Vaccine, Inc. since 1989, and served as its Chairman from June
1991 to January 1995. Mr. Kasprick is a member of the Board of Directors of
the University of North Dakota Foundation.

Isaac Kaye. Mr. Kaye, age 66, has served as Deputy Chief Executive
Officer and a director of IVAX since 1990, and as Chief Executive Officer of
Norton Healthcare Limited, IVAX' principal United Kingdom pharmaceutical
subsidiary, since 1990. Mr. Kaye is a director of Whitman Education Group,
Inc. (proprietary education).

Harvey M. Krueger. Mr. Krueger, age 66, has served as a director of IVAX
since 1991. He has served as a Senior Managing Director of Lehman Brothers
since 1991. For more than five years prior thereto, he was a Managing Director
of Lehman Brothers and its predecessor companies. He is a director of
Automatic Data Processing, Inc. (computing services), R.G. Barry Corp.
(footwear), Chaus, Inc. (women's clothing), and Electric Fuel Corp. (batteries
for electric automobiles). Mr. Krueger is also on the International Advisory
Board of Club Mediteranee, S.A. (resorts).

John H. Moxley III, M.D. Dr. Moxley, age 61, has served as a director of
IVAX since 1989. He has served as Vice President of Korn/Ferry International
(executive recruiting firm) since 1989. From 1987 to 1989, he was a
self-employed medical consultant. From 1981 to 1987, Dr. Moxley served as
Senior Vice President of Corporate Planning and Alternative Services for
American Medical International, Inc. (hospitals).

M. Lee Pearce, M.D. Dr. Pearce, age 65, has served as a director of IVAX
since 1989. Dr. Pearce is a private investor. He is a director of OrNda
Healthcorp (hospitals).

Michael Weintraub. Mr. Weintraub, age 57, has served as a director of
IVAX since 1987. Mr. Weintraub is a private investor. Since 1979, he has been
a director of Gibson Security Corp., a privately owned investment company, and
has served as its Chairman and President since 1990. Mr. Weintraub was a
director of The Continental Corporation (insurance holding company) from 1976
until May 1995 and NationsBank Corporation (bank holding company) from 1985
until August 1995.

EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

Samuel Broder, M.D. Dr. Broder, age 51, has served as IVAX' Senior Vice
President-Research and Development and Chief Scientific Officer since March
1995. He held various positions at the National Cancer Institute since 1972,
serving as its Director from 1989 until February 1995.

Michael W. Fipps. Mr. Fipps, age 53, has served as IVAX' Chief Financial
Officer since July 1994. From 1973 to June 1994, he held various positions at
Bergen Brunswig Corporation (pharmaceutical wholesaler), serving as its Vice
President and Treasurer from 1985 to June 1994.

Norwick B.H. Goodspeed. Mr. Goodspeed, age 46, has been President and
Chief Executive Officer of McGaw, Inc., IVAX' intravenous products subsidiary,
since December 1993. From May 1991 until December 1993, Mr. Goodspeed was
Senior Vice President, Sales and Marketing of McGaw, Inc. From September 1988
to May 1991, he was the President and Chief Executive Officer of Vical, Inc.
(gene therapy).

Richard C. Pfenniger, Jr. Mr. Pfenniger, age 40, has served as IVAX'
Chief Operating Officer since May 1994. He served as Senior Vice
President-Legal Affairs and General Counsel of IVAX from 1989 to May 1994, and
as Secretary from 1990 to 1994. Prior to joining IVAX, Mr. Pfenniger was
engaged in private law practice, most recently as a member of the law firm of
Greer, Homer & Bonner, P.A. in Miami, Florida. Mr. Pfenniger is a director of
NaPro BioTherapeutics, Inc. (biopharmaceutical research and development),
Whitman Education Group, Inc. (proprietary education) and North American
Vaccine, Inc.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires IVAX'
directors, executive officers and 10% shareholders to file initial reports of
ownership and reports of changes in ownership of IVAX' common stock and other
equity securities with the Securities and Exchange Commission and the American
Stock Exchange. Directors, executive officers and 10% shareholders are
required to furnish IVAX with copies of all Section 16(a) forms they file.
Based on a review of the copies of such reports furnished to IVAX and written
representations from IVAX' directors and executive officers that no other
reports were required, IVAX believes that during 1995 IVAX' directors,
executive officers and 10% shareholders complied with all Section 16(a) filing
requirements applicable to them, except that Jack Fishman, Ph.D., a director
of IVAX, filed one late report relating to the transfer of 79,207 shares of
IVAX' common stock into an exchange fund; Norwick Goodspeed, an executive
officer of IVAX, filed one late report relating to the cancellation of
employee stock options and the grant of replacement options in exchange
therefor; and Samuel Broder, M.D., an executive officer of IVAX, filed one
late report relating to the purchase of 100 shares of IVAX' common stock
through a pension plan.

ITEM 11. EXECUTIVE COMPENSATION

The following table contains certain information regarding aggregate
compensation paid or accrued by IVAX during 1995 to the Chief Executive
Officer and to each of the four highest paid executive officers other than the
Chief Executive Officer.

SUMMARY COMPENSATION TABLE
LONG-TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
---------------------------------------------------------- ------------- ------------
NAME AND OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK OPTIONS
----------------- ---- ------ ----- ------------ -------------
$ ($) ($) (#) ($)(1)

Phillip Frost, M.D. 1995 550,000 - 0 - - 0 - 75,000 4,500
Chief Executive Officer 1994 425,000 50,000 - 0 - 50,000 4,400
1993 340,000 - 0 - - 0 - 200,000 3,400

Isaac Kaye (2) 1995 500,000 - 0 - - 0 - 75,000 48,600
Deputy Chief Executive 1994 332,150 - 0 - - 0 - 50,000 49,484
Officer 1993 228,140 - 0 - - 0 - 200,000 41,390

John H. Klein (3) 1995 400,010 - 0 - - 0 - - 0 - 19,153
1994 396,170 - 0 - - 0 - - 0 - 15,811
1993 300,170 262,649 - 0 - 980,250(4) 25,812

Richard C. Pfenniger, Jr. 1995 328,333 - 0 - - 0 - 75,000 4,500
Chief Operating Officer 1994 258,720 50,000 - 0 - 100,000 4,400
1993 200,000 25,000 - 0 - 65,000 4,501

Norwick B.H. Goodspeed 1995 275,000 173,469(5) - 0 - -0- 4,500
President, McGaw, Inc. 1994 250,000 75,000 - 0 - 110,000 4,337
1993 200,000 12,000 269,535(6) 15,690(7) 8,994

- ---------
(1) Except for Messrs. Kaye, Goodspeed and Klein, the amounts included
in the "All Other Compensation" column represent matching contributions made
by IVAX under the IVAX Corporation Employee Savings Plan, an employee
retirement plan maintained under Section 401(k) of the Internal Revenue Code.
For Mr. Goodspeed, for 1993 and 1994, such amounts represent matching
contributions made by McGaw under McGaw's employee savings plan, which was
merged into the IVAX Corporation Employee Savings Plan effective January 1,
1995, and for 1995 represent matching contributions made by IVAX under the
IVAX Corporation Employee Savings Plan. For Mr. Klein, such amounts consist of
use of an automobile, reimbursement for automobile related expenses and
payment of term life insurance premiums, all of which were paid pursuant to
Mr. Klein's employment agreement, described below, and, for 1993 also include
matching contributions made by Zenith under Zenith's employee savings plan,
and for 1995 also include matching contributions made by IVAX under the IVAX
Corporation Employee Savings Plan. For Mr. Kaye, such amounts consist of the
use of an automobile and reimbursement for a chauffeur, parking and other
automobile related expenses, all of which were paid pursuant to Mr. Kaye's
employment agreement, described below.

(2) Mr. Kaye's salary and other compensation is paid in British pounds,
and the information in the table is based on the average exchange rate during
the applicable year.

(3) Mr. Klein served as the President of IVAX' North American
Multi-Source Pharmaceutical Group from January 1, 1995 until his resignation
effective January 17, 1996.

(4) These options were granted to Mr. Klein pursuant to his employment
agreement, described below, and were assumed by IVAX in connection with IVAX'
acquisition of Zenith in December 1994. The number of options are adjusted
based upon the Zenith acquisition conversion ratio.

(5) This amount includes a $125,000 retention bonus paid by IVAX to Mr.
Goodspeed on March 25, 1995 for continuing to serve as McGaw's President
during the year following the McGaw acquisition.

(6) This amount includes payment to or on behalf of Mr. Goodspeed
totalling $254,373 for relocation expenses, and payments totalling $15,162 to
cover Mr. Goodspeed's tax liability on the relocation expenses paid directly
to him.

(7) These options were assumed by IVAX in connection with IVAX'
acquisition of McGaw in March 1994. The number of options are adjusted based
upon the McGaw acquisition conversion ratio.

Mr. Kaye was a party to an employment agreement with IVAX and Norton
Healthcare which expired on December 28, 1995. Pursuant to the agreement, Mr.
Kaye was entitled to receive an annual salary of at least 150,000 British
pounds and certain benefits for serving as Deputy Chief Executive Officer of
IVAX and Chief Executive Officer of Norton Healthcare. The agreement restricts
Mr. Kaye from competing with IVAX, Norton Healthcare and certain other
affiliated entities during his employment and for a period of 12 months from
the date of expiration of the employment agreement. In connection with the
acquisition of Norton Healthcare, IVAX agreed to cause the nomination of Mr.
Kaye for successive terms as a director for so long as he is an employee of
IVAX or any of its subsidiaries pursuant to the employment agreement.

Mr. Klein was a party to an employment agreement with Zenith
Laboratories, Inc. ("Zenith") which was entered into in November 1993 prior to
IVAX' acquisition of Zenith and which was terminated by the mutual agreement
of the parties effective January 17, 1996. See "Certain Relationships and
Related Transactions." Pursuant to the employment agreement, Mr. Klein was
entitled to receive an annual salary of at least $400,000 and certain benefits
for serving as the President and Chief Executive Officer of Zenith.

The following table sets forth information concerning stock option
grants made during 1995 to the executive officers named in the "Summary
Compensation Table."

STOCK OPTION GRANTS IN FISCAL YEAR 1995

POTENTIAL REALIZABLE VALUE
PERCENT OF AT ASSUMED ANNUAL RATES OF
TOTAL STOCK PRICE APPRECIATION
OPTIONS OPTIONS FOR OPTION TERM
NAME AND GRANTED GRANTED TO EXERCISE EXPIRATION ------------------------
PRINCIPAL POSITION(1) (2) EMPLOYEES PRICE DATE 5% 10%
(#) (%) ($) ($) ($)

Phillip Frost, M.D. 75,000 4.4 20.625 2/23/2002 629,775 1,467,675
Chief Executive Officer

Isaac Kaye 75,000 4.4 20.625 2/23/2002 629,775 1,467,675
Deputy Chief Executive Officer

Richard C. Pfenniger, Jr. 75,000 4.4 20.625 2/23/2002 629,775 1,467,675
Chief Operating Officer

- --------------------
(footnotes on next page)

(1) No stock options were granted to Mr. Klein or Mr. Goodspeed during
1995.

(2) All options are nonqualified options and vest in equal portions over
four years.

The following table sets forth information concerning stock option
exercises during 1995 by each of the executive officers named in the "Summary
Compensation Table" and the year-end value of unexercised options held by such
officers.

STOCK OPTION EXERCISES IN FISCAL YEAR 1995 AND FISCAL YEAR-END OPTION VALUES

VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END(1)
NAME AND ON VALUE ---------------------------- --------------------------
PRINCIPAL POSITION EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
(#) ($) (#) (#) ($) ($)

Phillip Frost, M.D. - 0 - - 0 - 112,500 212,500 737,000 1,327,625
Chief Executive Officer

Isaac Kaye - 0 - - 0 - 112,500 212,500 737,000 1,327,625
Deputy Chief Executive Officer

John H. Klein(2) 882,225 22,395,282 392,100 588,150 4,848,317 4,697,357

Richard C. Pfenniger, Jr. - 0 - - 0 - 57,500 182,500 292,650 989,525
Chief Operating Officer

Norwick B.H. Goodspeed - 0 - - 0 - 15,713 114,250 292,587 999,217
President, McGaw, Inc.
<FN>
- -----------------
(1) The value of unexercised in-the-money options represents the number
of options held at year-end 1995 multiplied by the difference between the
exercise price and $28.50, the closing price of IVAX' common stock at year-end
1995.

(2) Former President of IVAX' North American Multi-Source Pharmaceutical
Group.
</FN>

DIRECTOR COMPENSATION

Each director who is not employed by IVAX receives $10,000 per year for
his service as a director and is reimbursed for expenses incurred in attending
board and committee meetings. Pursuant to IVAX' 1994 Stock Option Plan,
non-employee directors automatically are granted each year, on the first
business day following IVAX' annual meeting of shareholders, non-qualified
options to purchase 5,000 shares of IVAX' common stock at an exercise price
equal to the fair market value of the common stock on the date of the grant,
and having a term of ten years.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1995, the following directors served on the Compensation and Stock
Option Committee of the Board of Directors: John H. Moxley III, M.D., M. Lee
Pearce, M.D. and Michael Weintraub. None of such persons are or have been
executive officers of IVAX, and no interlocking relationships exists
between such persons and the directors or executive officers of IVAX.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL SECURITY HOLDERS

The following table sets forth certain information with respect to the
only persons known by IVAX to own beneficially in excess of five percent of
the outstanding shares of IVAX' common stock as of February 29, 1996.

NUMBER PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OF SHARES OF CLASS
------------------------------------ --------- --------

Phillip Frost, M.D. 14,226,015 (1) 11.8%
4400 Biscayne Boulevard
Miami, Florida 33137

Azure Limited 7,958,492 (2) 6.6%
c/o Charter Management, Ltd.
Town Mills
Trinity Square
St. Peter Port
Guernsey, Channel Islands
- ---------
(1) Includes 65,250 shares held directly, 547 shares held for Dr.
Frost's benefit under the IVAX Corporation Employee Savings Plan, 193,750
shares which may be acquired pursuant to stock options exercisable within 60
days of February 29, 1996, 13,950,720 shares held by Frost-Nevada Limited
Partnership ("FNLP"), and 15,748 shares which may be acquired by FNLP upon
conversion of $500,000 in principal amount of IVAX' 6-1/2% Convertible
Subordinated Notes Due 2001. Dr. Frost is the sole limited partner of FNLP and
the sole shareholder, officer and director of Frost-Nevada Corporation, the
general partner of FNLP. Dr. Frost disclaims beneficial ownership of an
additional 123,034 shares held of record by his wife. Dr. Frost is a director
and executive officer of IVAX.

(2) Azure Limited holds the shares as trustee for Charter Trust Company,
the trustee of the I. Kaye Family Trust, created by Mr. Isaac Kaye in 1988.
The beneficiaries of the I. Kaye Family Trust may include, among others, Mr.
Kaye's children. Mr. Kaye is neither a beneficiary nor a trustee of such
trust, and he disclaims beneficial ownership of all of the shares owned by
Azure Limited. Mr. Kaye is a director and executive officer of IVAX.

STOCK OWNERSHIP OF MANAGEMENT

The following table indicates, as of February 29, 1996, the number of
shares of IVAX' common stock beneficially owned by each director, each
executive officer named in the "Summary Compensation Table," and by all
directors and executive officers as a group, and the percentage such shares
represent of the total outstanding shares of IVAX' common stock. All shares
were owned directly with sole voting and investment power unless otherwise
indicated.

SHARES
NAME OR IDENTITY BENEFICIALLY PERCENT OF
OF GROUP OWNED (1) CLASS
--------------- --------- -----

Mark Andrews 25,000 (2) *
Lloyd Bentsen 29,000 (2) *
Ernst Biekert, Ph.D. 25,000 (2) *
Dante B. Fascell 20,000 (2) *
Jack Fishman, Ph.D. 2,172,753 (3) 1.8%
Phillip Frost, M.D. 14,226,015 (4) 11.8%
Harold S. Geneen 30,500 (2) *
Jane Hsiao, Ph.D. 3,076,549 (5) 2.6%
Lyle Kasprick 212,751 (2) *
Isaac Kaye 223,750 (2) *
Harvey M. Krueger 26,500 (2) *
John H. Moxley III, M.D. 34,450 (2) *
M. Lee Pearce, M.D. 306,250 (6) *
Michael Weintraub 65,000 (7) *
John H. Klein 921,747 (8) *
Norwick B.H. Goodspeed 40,640 (2) *
Richard C. Pfenniger, Jr. 239,539 (9) *

All directors and executive 21,738,115 (10) 17.8%
officers as a group
(19 persons)
- --------------------

* Represents beneficial ownership of less than 1%.

(1) For purposes of this table, beneficial ownership is computed
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934; the
inclusion of shares as beneficially owned should not be construed as an
admission that such shares are beneficially owned for purposes of Section 16
of the Securities Exchange Act of 1934.

(2) Includes shares which may be acquired pursuant to stock options
exercisable within 60 days of February 29, 1996 as follows: Mr. Andrews
(25,000), Mr. Bentsen (25,000), Dr. Biekert (25,000), Mr. Fascell (18,750),
Mr. Geneen (25,000), Mr. Kasprick (25,000), Mr. Kaye (193,750), Mr. Krueger
(25,000), Dr. Moxley (25,000), and Mr. Goodspeed (17,021).

(3) Includes 10,468 shares held by a child. Dr. Fishman disclaims
beneficial ownership of an additional 60,000 shares held as co-trustee of
certain trusts for the benefit of certain family members.

(4) Includes 65,250 shares held directly, 547 shares held on Dr.
Frost's behalf under the IVAX Corporation Employee Savings Plan, 193,750
shares which may be acquired pursuant to stock options exercisable within 60
days of February 29, 1996, 13,950,720 shares held by Frost-Nevada Limited
Partnership ("FNLP"), and 15,748 shares which may be acquired by FNLP upon
conversion of $500,000 in principal amount of IVAX' 6-1/2% Convertible
Subordinated Notes Due 2001. Dr. Frost is the sole limited partner of FNLP and
the sole shareholder, officer and director of Frost-Nevada Corporation, the
general partner of FNLP. Dr. Frost disclaims beneficial ownership of an
additional 123,034 shares held of record by his wife.

(5) Includes 984,285 shares held as trustee for the benefit of certain
family members, 81,250 shares which may be acquired pursuant to stock options
exercisable within 60 days of February 29, 1996, 1,600 shares

held by her children and 475 shares held on Dr. Hsiao's behalf under the
IVAX Corporation Employee Savings Plan.

(6) Excludes 200,000 shares donated by Dr. Pearce to a charitable
institution, of which he may be deemed to be the beneficial owner; Dr. Pearce
disclaims beneficial ownership of such shares.

(7) Includes 25,000 shares which may be acquired pursuant to currently
exercisable options. Mr. Weintraub disclaims beneficial ownership of an
additional 311,649 shares held by Gibson Security Corp., of which Mr.
Weintraub is Chairman, President, and co-trustee of a trust which owns 97.6%
of the shares of Gibson Security Corp.

(8) Includes 692,100 and 229,647 shares which may be acquired pursuant
to stock options held by Mr. Klein and Mr. Klein's wife, respectively, which
are excercisable within 60 days of February 29, 1996.

(9) Includes 117,500 shares which may be acquired pursuant to stock
options exercisable within 60 days of February 29, 1996, 574 shares held on
his behalf under the IVAX Corporation Employee Savings Plan, and 30 shares
held by Mr. Pfenniger's wife under the IVAX Corporation Employee Savings Plan.

(10) Includes shares noted in footnotes (2) through (9) as beneficially
owned and 62,500 additional shares which may be acquired pursuant to stock
options exercisable within 60 days of February 29, 1996.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Dr. Fishman, a director of IVAX, is entitled to receive $87,500 upon
the first commercial sale of a product covered by the patents relating to
nalmefene, a compound under development by IVAX. The payment was authorized in
connection with the purchase of certain patents relating to nalmefene, as
partial consideration to Dr. Fishman for the waiver of certain rights as the
inventor under such patents.

IVAX owns common stock and warrants to acquire common stock
constituting an aggregate of approximately 13% of the outstanding common stock
of NaPro BioTherapeutics, Inc. ("NaPro"), and is a party to an exclusive
agreement with NaPro to develop and market in certain territories paclitaxel
supplied by NaPro. Certain executive officers and directors of IVAX are
directors of NaPro. See "Item 10 - Directors and Executive Officers of the
Registrant."

In November 1995, IVAX sold its investment in 1,000,000 shares of North
American Vaccine, Inc. ("NAVA") Series A Convertible Preferred Stock (the
"Preferred Stock") to Frost-Nevada Limited Partnership, a limited partnership
beneficially owned by Dr. Frost, for $16,250,000 in cash. The purchase price
was determined based upon a discount from the market price of the NAVA common
stock into which the Preferred Stock is convertible. IVAX received an opinion
of an independent valuation firm that the discount was reasonable, and the
Board of Directors of IVAX, with the interested directors abstaining, approved
the sale. Certain executive officers and directors of IVAX serve as directors
of NAVA. See "Item 10 - Directors and Executive Officers of the Registrant."
In addition, Dr. Frost is a principal shareholder of NAVA.

Frost-Nevada Limited Partnership, a limited partnership beneficially
owned by Dr. Frost, held $1,000,000 in principal amount of certain convertible
subordinated debentures issued by IVAX in 1990. The debentures bore interest
at 9% and were due on October 9, 1995. The debentures were converted in
October 1995 pursuant to their terms into IVAX common stock at the conversion
price of $5.20 per share, which was a 20% premium over the market price of the
IVAX common stock on the date the debentures were issued.

Whitman Education Group, Inc. ("Whitman") is currently negotiating with
IVAX to lease approximately 5,500 square feet of office space in Miami,
Florida from IVAX. Certain executive officers and directors of IVAX serve as
directors of Whitman. See "Item 10 - Directors and Executive Officers of the
Registrant." In addition, Dr. Frost is a principal shareholder of Whitman.

IVAX is a party to a consulting agreement with Mr. Bentsen, a director
of IVAX, pursuant to which he receives each year (1) $25,000, less any fees
paid for his service as a director of IVAX, and (2) options to purchase 25,000
shares of IVAX common stock, less any options received for his service as a
director of IVAX. The agreement has a term of one year, and automatically
renews for successive one year terms unless terminated by either party.

Effective January 17, 1996, Mr. Klein and Zenith agreed to terminate the
employment agreement described under "Executive Compensation." As part of the
agreement's termination, the vesting period of certain options granted to Mr.
Klein pursuant to the agreement were accelerated, and Mr. Klein agreed to
continue to serve as a non-executive employee of Zenith until December 31, 1996
and as a consultant to Zenith from January 1, 1997 to December 31, 1998. Mr.
Klein will receive an annual salary of $400,000 through December 31, 1996 and an
annual consulting fee of $400,000 through December 31, 1998. In addition, Mr.
Klein is entitled to continue to receive certain employee benefits until January
1, 1997. Mr. Klein also agreed to refrain from competing with Zenith through
January 1, 1999.

PART IV

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

(a)(1) FINANCIAL STATEMENTS

The following consolidated financial statements are filed as a part of
this report:

Report of Independent Certified Public Accountants
Consolidated Balance Sheets at December 31, 1995 and 1994
Consolidated Statements of Operations for the three years ended
December 31, 1995
Consolidated Statements of Shareholders' Equity for the three years ended
December 31, 1995
Consolidated Statements of Cash Flows for the three years ended
December 31, 1995
Notes to Consolidated Financial Statements

(a)(2) FINANCIAL STATEMENT SCHEDULE

The following financial statement schedule of IVAX is filed as a part
of this report:

Schedule II Valuation and Qualifying Accounts for the three
years ended December 31, 1995

All other schedules have been omitted because the required information
is not applicable or the information is included in the consolidated
financial statements or notes thereto.

(a)(3) EXHIBITS

EXHIBIT
NUMBER DESCRIPTION METHOD OF FILING
- ------ ----------- ----------------

3.1 Articles of Incorporation. Incorporated by
reference to IVAX' Form
8-B dated July 28, 1993.

3.2 Bylaws. Incorporated by
reference to IVAX' Form
8-B dated July 28, 1993.

4.1 Indenture dated November 26, 1991 between Incorporated by reference
IVAX Corporation and First Trust National to IVAX' Form 10-K for the
Association, as Trustee, with respect to IVAX year ended December 31, 1991.
Corporation's 6-1/2% Convertible
Subordinated Notes due November 15, 2001.

4.2 Form of 6-1/2% Convertible Subordinated Notes Incorporated by
due November 15, 2001 in Global Form. reference to IVAX' Form
10-K for the year ended
December 31, 1991.

10.1 IVAX Corporation 1985 Stock Option Plan, as Incorporated by
amended. reference to IVAX' Form
8-B dated July 28, 1993.

10.2 IVAX Corporation 1994 Stock Option Plan. Incorporated by
reference to IVAX' Form
10-Q for the quarterly
period ended June 30, 1994.

10.3 McGaw, Inc. 1991 Stock Option Plan. Incorporated by
reference to IVAX' Form
10-K for the year ended
December 31, 1994.

10.4 McGaw, Inc. Amended and Restated Special Incorporated by
Stock Option Incentive Program. reference to McGaw,
Inc.'s Registration
Statement on Form S-8,
Registration Statement
No. 33-67608.

10.5 Zenith Laboratories, Inc. 1992 Employee Incorporated by
Stock Option Plan, as amended. reference to IVAX' Form
10-K for the year ended
December 31, 1994.

10.6 Employment Agreement, dated November 24, Inccorporated by
1993, between Zenith Laboratories, Inc. and reference to IVAX' Form
John H. Klein. 10-K for the year ended
December 31, 1994.

10.7 Termination and Consulting Agreement, dated Filed herewith.
as of January 10, 1996, between Zenith
Laboratories, Inc. and John H. Klein.

10.8 IVAX Corporation U.S. Incentive Bonus Plan. Filed herewith.

10.9 Form of Indemnification Agreement for Incorporated by
Directors. reference to IVAX' Form
8-B dated July 28, 1993.

10.10 Form of Indemnification Agreement for Incorporated by
Officers. reference to IVAX' Form
8-B dated July 28, 1993.

10.11 Employment Agreement, dated December 28, 1990, Incorporated by
among IVAX Corporation, Norton reference to IVAX' Form
Healthcare Limited and Isaac Kaye. 10-K for the year ended
December 31, 1990.

10.12 Non-Competition Agreement, dated December Incorporated by
28, 1990, between IVAX Corporation and Isaac reference to IVAX' Form
Kaye. 10-K for the year ended
December 31, 1990.

10.13 Description of Management Retention Package Incorporated by
between McGaw, Inc. and Norwick B.H. reference to IVAX' Form
Goodspeed. 10-Q for the quarterly
period ended March 31,
1994.

10.14 Convertible Subordinated Debenture, dated Incorporated by
October 9, 1990, between IVAX Corporation reference to IVAX' Form
and Frost-Nevada Limited Partnership. 10-K for the year ended
December 31, 1990.

10.15 Agreement and Plan of Merger, dated August Incorporated by
24, 1994, among IVAX Corporation, reference to IVAX'
Pharmaceutical Products, Inc. and Zenith Registration Statement
Laboratories, Inc.* on Form S-4, File No.
33-86580.

10.16 Revolving Credit and Reimbursement Incorporated by
Agreement, dated March 25, 1994, among IVAX reference to IVAX' Form
Corporation, NationsBank of Florida, 10-K for the year ended
National Association, and Continental Bank, December 31, 1993.
N.A.*

10.17 Letter Agreement, dated April 27, 1995, Incorporated by
among IVAX Corporation, NationsBank of reference to IVAX' 10-Q
Florida, National Association and for the quarterly period
Continental Bank, N.A. ended March 31, 1995.

10.18 Amendment No. 3, dated June 30, 1995, to Incorporated by
Revolving Credit and Reimbursement Agreement reference to IVAX' 10-Q
by and among IVAX Corporation, NationsBank for the quarterly period
of Florida, National Association, and Bank ended June 30, 1995.
of America Illinois (formerly Continental
Bank, N.A.)*

10.19 Amendment No. 4, dated November 20, 1995, to Filed herewith.
Revolving Credit and Reimbursement Agreement
by and among IVAX Corporation, NationsBank
of Florida, National Association, and Bank
of America Illinois (formerly Continental
Bank, N.A.)*

10.20 Amendment No. 5, dated March 15, 1996, to Filed herewith.
Revolving Credit and Reimbursement Agreement
by and among IVAX Corporation, NationsBank
of Florida, National Association, and Bank
of America Illinois (formerly Continental
Bank, N.A.)*

10.21 Agreement Containing Consent Order, dated Incorporated by
December 6, 1994, between IVAX Corporation reference to IVAX' Form
and the United States Federal Trade 10-K for the year ended
Commission. December 31, 1994.

11.1 Computation of earnings per share. Filed herewith.

21.1 Subsidiaries of IVAX Corporation. Filed herewith.

23.1 Consent of Arthur Andersen LLP Filed herewith.

23.2 Consent of Ernst & Young LLP Filed herewith.

23.3 Consent of Coopers & Lybrand L.L.P. Filed herewith.

27 Financial Data Schedule Filed herewith.

99.1 Report of Ernst & Young LLP Filed herewith.

99.2 Report of Coopers & Lybrand L.L.P. Filed herewith.
<FN>
- ----------------------
* Certain exhibits and schedules to this document have not been filed.
The Registrant agrees to furnish a copy of any omitted schedule or exhibit to
the Securities and Exchange Commission upon request.
</FN>

(b) REPORTS ON FORM 8-K.

IVAX filed a Current Report on Form 8-K dated October 18, 1995
reporting the execution of a Transaction Agreement with Hafslund Nycomed AS
and a Current Report on Form 8-K dated November 15, 1995 reporting the
termination of such Transaction Agreement.

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.

IVAX CORPORATION

Dated: April 1, 1996 By: /s/ Phillip Frost, M.D.
-----------------------------
Phillip Frost, M.D.
Chairman of the Board
and Chief Executive Officer

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

NAME CAPACITY DATE
- ---- -------- ----
/s/ Phillip Frost, M.D. Chairman of the Board and April 1, 1996
- --------------------------- Chief Executive Officer
Phillip Frost, M.D (Principal Executive
Officer)

/s/ Michael W. Fipps Chief Financial Officer April 1, 1996
- ----------------------------- (Principal Financial
Michael W. Fipps Officer)

/s/ Salomon Sredni Vice President - Accounting April 1, 1996
- ----------------------------- and Corporate Controller
Salomon Sredni (Principal Accounting
Officer)

/s/ Mark Andrews Director April 1, 1996
- -----------------------------
Mark Andrews

/s/ Lloyd Bentsen Director April 1, 1996
- -----------------------------
Lloyd Bentsen

/s/ Ernst Biekert, Ph.D. Director April 1, 1996
- -----------------------------
Ernst Biekert, Ph.D.

/s/ Dante B. Fascell Director April 1, 1996
- -----------------------------
Dante B. Fascell

/s/ Jack Fishman, Ph.D. Director and Vice Chairman April 1, 1996
- ----------------------------- of the Board
Jack Fishman, Ph.D.

/s/ Harold S. Geneen Director April 1, 1996
- -----------------------------
Harold S. Geneen

/s/ Jane Hsiao, Ph.D. Director and Vice Chairman - April 1, 1996
- ----------------------------- Technical Affairs
Jane Hsiao, Ph.D.

/s/ Lyle Kasprick Director April 1, 1996
- -----------------------------
Lyle Kasprick

/s/ Isaac Kaye Director and Deputy Chief April 1, 1996
- ----------------------------- Executive Officer
Isaac Kaye

/s/ Harvey M. Krueger Director April 1, 1996
- -----------------------------
Harvey M. Krueger

/s/John H. Moxley III, M.D. Director April 1, 1996
- -----------------------------
John H. Moxley III, M.D.

/s/ M. Lee Pearce, M.D. Director April 1, 1996
- -----------------------------
M. Lee Pearce, M.D.

/s/ Michael Weintraub Director April 1, 1996
- -----------------------------
Michael Weintraub

IVAX CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE
----

Report of Independent Certified Public Accountants F-2

Consolidated Balance Sheets at December 31, 1995 and 1994 F-3

Consolidated Statements of Operations for the
Three Years Ended December 31, 1995 F-5

Consolidated Statements of Shareholders' Equity for the
Three Years Ended December 31, 1995 F-6

Consolidated Statements of Cash Flows for the
Three Years Ended December 31, 1995 F-7

Notes to Consolidated Financial Statements F-9

Schedule II - Valuation and Qualifying Accounts for the
Three Years Ended December 31, 1995 F-29

F-1

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders
of IVAX Corporation:

We have audited the accompanying consolidated balance sheets of IVAX
Corporation (a Florida corporation) and subsidiaries (the "Company") as of
December 31, 1995 and 1994, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the three years in
the period ended December 31, 1995. These financial statements and the
schedule referred to below are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements and
the schedule based on our audits. We did not audit the 1993 financial
statements of McGaw, Inc. or Zenith Laboratories, Inc., companies acquired
during 1994 in transactions accounted for as poolings of interests, as
discussed in Note 3. Such statements are included in the consolidated
financial statements of the Company and reflect total revenues of 42% of the
related consolidated total for the year ended December 31, 1993. These
statements were audited by other auditors whose reports have been furnished to
us and our opinion, insofar as it relates to amounts included for McGaw, Inc.
and Zenith Laboratories, Inc., is based solely upon the reports of the other
auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the reports of other
auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of IVAX Corporation and subsidiaries
as of December 31, 1995 and 1994, and the results of their operations and
their cash flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedule listed in the
index to consolidated financial statements is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part
of the basic financial statements. The schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, based on our audits and the reports of other auditors,
fairly states in all material respects the financial data required to be set
forth therein in relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Miami, Florida,
February 26, 1996 (except with respect to the matters discussed in Note 13, as
to which the date is March 15, 1996).

F-2

IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)

ASSETS

DECEMBER 31,
----------------------------
1995 1994

------------ ------------

CURRENT ASSETS:
Cash and cash equivalents, including interest
bearing deposits of $12,821 and $34,440
in 1995 and 1994, respectively................. $ 14,720 $ 37,045

Accounts receivable, net of allowances for
doubtful accounts of $14,260 and $10,940 in
1995 and 1994, respectively ................... 359,165 219,717
Inventories .................................... 242,260 221,520
Other current assets ........................... 60,673 46,060
---------- ----------

Total current assets ........................ 676,818 524,342
---------- ----------
PROPERTY, PLANT AND EQUIPMENT:
Land ............................................ 45,635 44,832
Buildings and improvements ...................... 178,575 143,670
Machinery and equipment ......................... 285,728 232,458
Furniture and fixtures .......................... 24,990 18,510
---------- ----------
534,928 439,470
Less - Accumulated depreciation and amortization 149,509 119,598
---------- ----------

Property, plant and equipment, net ........... 385,419 319,872
---------- ----------
OTHER ASSETS:
Cost in excess of net assets of acquired
companies, net .................................. 138,423 138,433
Patents, trademarks, licenses and other
intangibles, net ................................ 50,859 53,446
Investments in and advances to affiliated
companies ....................................... 13,348 8,631
Other ............................................ 70,443 61,980
---------- ----------
Total other assets ................... 273,073 262,490
---------- ----------
$1,335,310 $1,106,704
========== ==========

(Continued)

F-3

IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)

(Continued)

LIABILITIES AND SHAREHOLDERS' EQUITY

DECEMBER 31,
---------------------------
1995 1994
---------- ------------

CURRENT LIABILITIES:
Loans payable $ 4,807 $ 5,006
Current portion of long-term debt 3,521 5,454
Accounts payable 92,343 91,704
Accrued payroll costs 11,196 13,599
Accrued income taxes payable 8,632 8,308
Accrued expenses and other current liabilities 85,414 67,453
----------- -----------
Total current liabilities 205,913 191,524
----------- -----------
LONG-TERM DEBT, net of current portion 298,857 253,839
----------- -----------
OTHER LONG-TERM LIABILITIES 26,314 16,502
----------- -----------
MINORITY INTEREST 15,054 10,383
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock, $.10 par value:
Authorized Outstanding
1995 250,000 118,026
1994 250,000 114,046 11,803 11,405
Capital in excess of par value 461,603 417,734
Retained earnings 322,117 216,156
Cumulative translation adjustment and other (6,351) (10,839)
----------- -----------
Total shareholders' equity 789,172 634,456
----------- ----------
$ 1,335,310 $ 1,106,704
=========== ===========

The accompanying Notes to Consolidated Financial Statements are an integral
part of these balance sheets.
F-4

IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

YEAR ENDED DECEMBER 31,
-------------------------------------
1995 1994 1993
------ ------ -------
NET REVENUES....................... $ 1,259,766 $ 1,134,806 $ 1,062,945

COST OF SALES ..................... 736,036 653,361 570,484
------------- ----------- -----------
Gross profit...................... 523,730 481,445 492,461
------------- ----------- -----------

OPERATING EXPENSES:
Selling........................... 181,427 167,782 159,221
General and administrative ....... 117,384 99,242 83,450
Research and development.......... 64,602 48,661 43,856
Amortization of intangible
assets........................... 9,498 11,885 12,411
Merger expenses .................. 3,392 13,049 9,150
------------- ----------- -----------
Total operating expenses .. 376,303 340,619 308,088
------------- ----------- -----------
Income from operations..... 147,427 140,826 184,373

OTHER INCOME (EXPENSE):
Interest income ............... 1,909 2,056 2,297
Interest expense .............. (19,289) (21,481) (25,001)
Other income, net ............. 18,394 948 3,505
------------- ----------- -----------
1,014 (18,477) (19,199)
------------- ----------- -----------

Income before income taxes,
minority interest and
extraordinary items .......... 148,441 122,349 165,174

PROVISION FOR INCOME TAXES ........ 28,338 30,322 57,192
------------- ----------- -----------
Income before minority
interest and extraordinary
items ........................ 120,103 92,027 107,982

MINORITY INTEREST ................. (5,302) (2,155) --
------------- ------------ -----------
Income before extraordinary
items ........................ 114,801 89,872 107,982

EXTRAORDINARY ITEMS:
Gains (losses) on
extinguishment of debt, net
of a tax provision of $29
in 1995 and $114 in 1994 ..... 34 (823) (8,628)
------------- ------------ -----------

NET INCOME......................... $ 114,835 $ 89,049 $ 99,354
============= ============ ===========
EARNINGS PER COMMON SHARE:
Primary:
Earnings before extraordinary
items ....................... $ .96 $ .77 $ .94
Extraordinary items .......... -- (.01) (.07)
------------- ------------ -----------
Net earnings $ .96 $ .76 $ .87
============= ============ ===========
Fully diluted:
Earnings before
extraordinary items.......... $ .95 $ .77 $ .93
Extraordinary items .......... -- (.01) (.07)
------------- ------------ -----------
Net earnings ................ $ .95 $ .76 $ .86
============= ============ ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING:
Primary ..................... 119,253 116,339 114,722
============= ============ ===========
Fully diluted ................ 120,365 116,792 115,504
============= ============ ===========

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
F-5

IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands)

Preferred Common Stock Cumulative
Stock ---------------- Capital In Translation
of Pooled Number of Excess of Retained Adjustment
Company Shares Amount Par Value Earnings and Other Total
------------ --------- -------- ----------- ---------- ----------- -----------

BALANCE, January 1, 1993 $ 5,950 103,158 $ 10,316 $ 302,037 $ 38,644 $ (17,290) $339,657
Issuances of
common stock:
Exercise of stock
options and warrants.. -- 482 48 2,512 -- -- 2,560
Acquisitions accounted
for under the purchase
method of accounting -- 1,726 173 44,788 -- -- 44,961
Contribution to 401(k)
plan ................. -- 24 2 509 -- -- 511
Effect of tax deductions
received from the
exercise of stock
options ............ -- -- -- 4,390 -- -- 4,390

Transactions by pooled
companies:
Issuance of common stock -- -- -- 44,211 -- -- 44,211
Distributions to
shareholders ....... -- -- -- -- (367) -- (367)
Cash dividends paid ... -- -- -- -- (2,798) -- (2,798)
Translation adjustment. -- -- -- -- -- (4,707) (4,707)
Net income ............ -- -- -- -- 99,354 -- 99,354
------ ------ ------ ------ ------ ------- -------
BALANCE, December 31, 1993 5,950 105,390 10,539 398,447 134,833 (21,997) 527,772
Issuances of common stock:
Exercise of stock
options.............. -- 581 58 5,970 -- -- 6,028
Contribution to
401(k) plan ......... -- 25 3 892 -- -- 895
Effect of tax deductions
received from the
exercise of stock options -- -- -- 3,915 -- -- 3,915
Transactions by pooled
companies:
Conversion of preferred
stock................. (5,950) 8,050 805 5,145 -- -- --
Issuance of common stock -- -- -- 3,365 -- -- 3,365
Distributions to
shareholders ......... -- -- -- -- (2,082) -- (2,082)
Minimum pension liability
adjustment ............. -- -- -- -- (471) -- (471)
Cash dividends paid ..... -- -- -- -- (5,173) -- (5,173)
Translation adjustment... -- -- -- -- -- 11,158 11,158
Net income .............. -- -- -- -- 89,049 -- 89,049
------ ------ ------ ------ ------ ------- -------
BALANCE, December 31, 1994 -- 114,046 11,405 417,734 216,156 (10,839) 634,456
Issuances of common stock:
Exercise of stock
options and warrants... -- 3,313 331 24,237 -- -- 24,568
Conversion of 9.00%
Convertible Subordinated
Debentures............. -- 286 29 1,471 -- -- 1,500
Contribution to
401(k) plan ........... -- 31 3 778 -- -- 781
Acquisition accounted for
under the pooling of
interests method of
accounting............. -- 350 35 (35) 68 -- 68
Effect of tax deductions
received from the exercise
of stock options ........ -- -- -- 17,418 -- -- 17,418
Unrealized net gain on
available-for-sale
equity securities ....... -- -- -- -- -- 4,805 4,805
Distributions to
shareholders by pooled
company ................. -- -- -- -- (66) -- (66)
Minimum pension liability
adjustment .............. -- -- -- -- 471 -- 471
Sale of investment in
affiliate which held
interest in IVAX' stock . -- -- -- -- -- 272 272
Cash dividends paid ...... -- -- -- -- (9,347) -- (9,347)
Translation adjustment ... -- -- -- -- -- (589) (589)
Net income ............... -- -- -- -- 114,835 -- 114,835
------ ------ ------- -------- ------ ------- -------
BALANCE, December 31, 1995 $ -- $118,026 $11,803 $461,603 $322,117 $(6,351) $ 789,172
====== ======== ======== ======== ======== ======== =========

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

F-6

IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

YEAR ENDED DECEMBER 31,
----------------------------------------------
1995 1994 1993
------------- ------------- --------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 114,835 $ 89,049 $ 99,354
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 47,319 45,499 41,433
Deferred tax benefit (5,248) (9,098) (2,534)
Provision for allowances for doubtful accounts 5,848 4,671 3,170
Minority interest 5,302 2,155 -
(Gains) losses on disposal of assets, net (12,637) 764 535
(Gains) losses on extinguishment of debt, net (63) 709 8,628
Changes in assets and liabilities:
Increase in accounts receivable (144,452) (14,905) (40,547)
Increase in inventories (21,736) (41,828) (29,461)
(Increase) decrease in other current assets 2,158 (10,288) 5,921
(Increase) decrease in other assets (6,159) (4,750) 473
Increase in accounts payable, accrued expenses
and other current liabilities 35,267 27,727 18,398
Increase (decrease) in other long-term liabilities (4,116) 4,180 195
Other, net 71 211 59
------------- ------------- --------------
Net cash provided by operating activities 16,389 94,096 105,624
------------- ------------- --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (103,449) (93,905) (49,673)
Proceeds from sale of property, plant and equipment 559 1,262 1,085
Investments in and advances to affiliated companies (422) - (4,259)
Proceeds from sale of investments in affiliated
companies 16,553 - -
Acquisitions of patents, trademarks, licenses
and other intangibles, net of sales proceeds (5,727) (6,677) (1,916)
Acquisitions of businesses, net of cash received (4,832) (11,799) (15,964)
Proceeds from the sale of businesses - - 10,000
Payment of restructuring reserves and purchase
obligations by pooled company - - (467)
------------- ------------- --------------
Net cash used for investing activities (97,318) (111,119) (61,194)
------------- ------------- --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on long-term debt and loans payable 111,145 126,915 96,587
Payments on long-term debt and loans payable (67,800) (169,397) (148,816)
Issuance of common stock 24,568 6,028 2,560
Issuance of stock by pooled companies - 3,365 44,211
Cash dividends paid (9,347) (5,173) (2,798)
Distributions to shareholders by pooled companies (66) (2,082) (367)
Payment of premium, cancellation and financing fees by
pooled company - - (5,496)
------------- ------------- --------------
Net cash provided by (used for) financing
activities 58,500 (40,344) (14,119)
------------- ------------- --------------
Effect of exchange rate changes on cash 104 2,931 (1,799)
------------- ------------- --------------
Net increase (decrease) in cash and cash
equivalents (22,325) (54,436) 28,512
Cash and cash equivalents at the beginning of
the year 37,045 91,481 62,969
------------- ------------- --------------
Cash and cash equivalents at the end
of the year $ 14,720 $ 37,045 $ 91,481
============= ============= ==============

(Continued)

F-7

IVAX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)

YEAR ENDED DECEMBER 31,
----------------------------------------------
1995 1994 1993
------------- -------------- --------------

Supplemental disclosures (in thousands):
Interest paid $ 21,012 $ 21,884 $ 26,583
============= ============== ==============
Income tax payments $ 12,270 $ 47,037 $ 35,091
============= ============== ==============

Supplemental schedule of noncash investing and financing activities:

Information with respect to IVAX' acquisitions which were accounted for
under the purchase method of accounting, net of the businesses sold, are
summarized as follows (in thousands, except share information):

1995 1994 1993
------------- -------------- -------------

Fair value of assets acquired $ 718 $ 75,414 $ 22,329
Liabilities assumed 181 19,122 5,851
------------- -------------- -------------
537 56,292 16,478
Establishment (reduction) of minority interest (813) 8,646 -
------------- -------------- -------------
1,350 47,646 16,478
------------- -------------- -------------
Purchase price:
Cash (including related acquisition costs) 4,935 15,549 5,973
Fair market value of equipment contributed - 6,600 -
Fair market value of common stock issued - - 44,961
------------- -------------- -------------
4,935 22,149 50,934
------------- -------------- -------------

Cost in excess of net assets of acquired $ 3,585 $ (25,497) $ 34,456
companies
============= ============== =============

Number of common shares issued - - 1,725,536
============= ============== =============

The excess of the fair value of assets acquired from Galena a.s. in 1994
over the purchase price was used to first reduce long-term assets and the
remainder used to reduce cost in excess of net assets of acquired companies,
net.

During the year ended December 31, 1995, common stock was issued upon
the conversion of $1,500,000 in debentures.

Contributions to the 401(k) retirement plan resulted in the issuance of
common stock totalling $781,000, $895,000 and $511,000 in the years ended
December 31, 1995, 1994 and 1993, respectively.

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

F-8

IVAX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) ORGANIZATION:

IVAX Corporation is a holding company with subsidiaries engaged
primarily in the research, development, manufacture, marketing and
distribution of health care products, including generic and branded
pharmaceuticals, intravenous solutions and related products, and in vitro
diagnostics. These health care products are sold primarily to customers within
the United States and the United Kingdom. IVAX Corporation also has
subsidiaries which manufacture, market and distribute personal care products
and specialty chemicals. All references to "IVAX" mean IVAX Corporation and
its subsidiaries unless otherwise required by the context.

IVAX' future revenues and profitability are largely dependent upon its
ability to continue to develop, manufacture and market pharmaceutical and
intravenous products. Revenues and profits derived from generic pharmaceuticals,
which presently constitute IVAX' principal business, can be significantly
affected by a variety of factors, including the timing of new product approvals,
the timing of initial shipments of newly-approved products, and the number and
timing of approvals for competing products. Certain raw materials and components
used in the manufacture of IVAX' products are available from limited sources,
and in some cases, a single source. In addition, because raw material sources
for pharmaceutical and intravenous products must generally be approved by
regulatory authorities, changes in raw material suppliers could result in delays
in production and higher raw material costs.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation - The consolidated financial statements
include the accounts of IVAX Corporation and its subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation.
Certain amounts presented in the consolidated financial statements for prior
periods have been reclassified for comparative purposes.

Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of certain
assets, liabilities, revenues and expenses. IVAX' actual results in subsequent
periods may differ from the estimates and assumptions used in the preparation
of the accompanying consolidated financial statements.

Foreign Currencies - IVAX' operations include subsidiaries which are
located outside of the United States. Assets and liabilities as stated in the
local reporting currency are translated at the rate of exchange prevailing at
the balance sheet date. The gains or losses that result from this process are
shown in the cumulative translation adjustment and other caption in the
shareholders' equity section of the accompanying consolidated balance sheets.
Statement of operations amounts are translated at the average rates for the
period.

Cash and Cash Equivalents - IVAX considers all investments with a
maturity of three months or less as of the date of purchase to be cash
equivalents.

F-9

Inventories - Inventories are stated at the lower of cost (first-in,
first-out) or market. Components of inventory cost include materials, labor
and manufacturing overhead. Inventories consist of the following (in
thousands):

December 31,
-------------------------------
1995 1994
------------- -------------

Raw materials $ 86,155 $71,021
Work-in-process 29,660 21,167
Finished goods 126,445 129,332
------------- -------------
$242,260 $ 221,520
============= =============

Property, Plant and Equipment - Property, plant and equipment are
carried at cost less accumulated depreciation and amortization. Depreciation
is computed using the straight-line method over the estimated useful lives of
the assets as follows:

Years
-----

Buildings and improvements 5-45
Machinery and equipment 2-20
Furniture and fixtures 3-15

Leasehold improvements are amortized on a straight-line basis over the shorter
of the term of the lease or their estimated useful lives. Costs of major
additions and improvements are capitalized and expenditures for maintenance
and repairs which do not extend the life of the assets are expensed. Upon sale
or disposition of property, plant and equipment, the cost and related
accumulated depreciation or amortization are eliminated from the accounts and
any resultant gain or loss is credited or charged to income.

Other Assets - Cost in excess of net assets of acquired companies is
amortized on the straight-line method over periods not exceeding 40 years.
Following any acquisition, IVAX continually evaluates whether later events and
circumstances have occurred that indicate the remaining estimated useful life
of the intangible may warrant revision or that the remaining balance of
goodwill may not be recoverable. When factors indicate that goodwill may be
impaired, IVAX uses an estimate of the related business segment's undiscounted
net income over the remaining life of the intangible in measuring whether the
cost in excess of net assets of acquired companies is recoverable; any excess
will be charged to operations. Amortization of the cost in excess of net
assets of acquired companies during the years ended December 31, 1995, 1994,
and 1993 was $2,305,000, $3,673,000 and $3,249,000, respectively. Accumulated
amortization of cost in excess of net assets of acquired companies was
approximately $15,106,000 and $12,832,000 at December 31, 1995 and 1994,
respectively.

Patents, trademarks, licenses and other intangibles are amortized on
the straight-line method over the estimated lives of the respective patents,
trademarks, licenses and other intangibles (ranging from 1-25 years). The
related accumulated amortization was approximately $41,120,000 and $33,485,000
at December 31, 1995 and 1994, respectively.

Minority Interest - Minority interest represents the minority
shareholders' proportional share of the equity in the income and the net assets
of Galena a.s. ("Galena") (See Note 3).

F-10

Financial Instruments - The carrying amounts of cash and cash
equivalents, accounts receivable, investment in sales-type leases, accounts
payable, and loans payable approximate fair value due to the short maturity of
the instruments and the provision for what management believes to be adequate
reserves for potential losses. The fair value of other assets and long-term
debt is estimated using quoted market prices, whenever available, or an
appropriate valuation method. (See Note 6).

As of December 31, 1995, IVAX Corporation (the "Parent Company") had a
net \pound sterling\47,638,000 (approximately $73,983,000) short-term
intercompany receivable. IVAX seeks to reduce the effects of foreign exchange
fluctuations in short-term intercompany balances, and on December 4, 1995 the
Parent Company entered into foreign currency forward contracts totalling \pound
sterling\30,000,000. Costs associated with these contracts are being amortized
over the contracts' lives. The contracts expire on March 29, 1996.

Norton Healthcare Limited ("Norton Healthcare"), a wholly-owned
subsidiary of IVAX based in the United Kingdom, enters into forward exchange
contracts to reduce its exposure to fluctuations in foreign currencies. The
commitments outstanding at year-end relate to offsetting commitments on
inventory purchases, thus eliminating currency fluctuation exposure. The
contract amounts of these instruments at December 31, 1995 and 1994 were
approximately $5,232,000 and $4,400,000, respectively.

Revenue Recognition - Revenue and the related cost of sales are
recognized at the time a sale is effected or services are provided. Royalty
income is recognized when obligations associated with royalty agreements have
been satisfied and is included in net revenues in the consolidated statements
of operations.

Research and Development Costs - IVAX-sponsored research and
development costs related to future products are expensed currently.

Income Taxes - The provision for income taxes is based on the
consolidated United States entities' and individual foreign companies'
estimated tax rates for the applicable year. IVAX utilizes the liability
method, and deferred taxes are determined based on the estimated future tax
effects of differences between the financial accounting and tax bases of
assets and liabilities using the applicable tax laws. Deferred income tax
provisions and benefits are based on the changes in the deferred tax asset or
tax liability from period to period.

Earnings Per Common Share - Primary earnings per common share is
computed by dividing net income by the weighted average number of common and
dilutive common equivalent shares outstanding for each period. Common stock
equivalents include the dilutive effect of all outstanding stock options and
warrants using the treasury stock method. Fully diluted earnings per common
share assumes the maximum dilutive effect from stock options and warrants, and
if applicable, the conversion equivalents of the 6-1/2% Convertible
Subordinated Notes due 2001 and the 9.00% Convertible Subordinated Debentures
due 1995. As described in Note 3, the acquisition of Zenith Laboratories, Inc.
("Zenith") was accounted for as a pooling of interests. The conversion
equivalent of Zenith's outstanding cumulative convertible preferred stock is
included in the calculation of weighted average shares if dilutive.

Recently Issued Accounting Standards - In October 1995, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 123, Accounting for Stock-Based

F-11

Compensation ("SFAS 123"), which requires proforma disclosures of net income
and earnings per share using a fair value based method of accounting for all
employee stock options or similar equity instrument plans. IVAX will implement
the disclosure provisions of SFAS 123 effective December 31, 1996.

IVAX is required to adopt Statement of Financial Accounting Standards
No. 121, Accounting for the Impairment of Long-lived Assets and for Long-lived
Assets to be Disposed of ("SFAS 121") in 1996. SFAS 121 establishes accounting
standards for recording the impairment of long-lived assets, certain
identifiable intangibles and goodwill. Management does not believe the
adoption of SFAS 121 will have a material impact on IVAX' financial position
or the results of its operations.

(3) ACQUISITIONS:

On September 30, 1995, IVAX acquired Pharmatop Limited, a company
engaged exclusively in the distribution and marketing of Norton Healthcare's
products in Poland, in consideration for 350,000 shares of IVAX' common stock.
Although the acquisition was accounted for using the pooling of interests
method of accounting, the accompanying consolidated financial statements have
not been restated to give retroactive effect to the acquisition due to the
immateriality of the related amounts.

On July 17, 1995, IVAX paid approximately $2,783,000 in cash to
acquire ImmunoVision, Inc. ("ImmunoVision"), a company engaged in the
manufacture and sale of certain diagnostic products. The acquisition was
accounted for using the purchase method of accounting. The historical
operations of ImmunoVision, when compared to the historical operations of
IVAX, were not significant.

In December 1994, IVAX acquired Zenith in consideration for 27,173,140
shares of IVAX' common stock. The acquisition was accounted for using the
pooling of interests method of accounting. Net revenues and net income
generated by Zenith prior to the date of acquisition and included in the
accompanying consolidated statement of operations for the year ended December
31, 1994 were approximately $122.0 million and $1.1 million, respectively.
Zenith's 1994 net revenues included intercompany sales of approximately $6.0
million to another subsidiary of IVAX and were eliminated in consolidation.

In July 1994, IVAX completed the acquisition of 60% of the shares of
Galena, a pharmaceutical company based in the Czech Republic. Pursuant to the
acquisition agreement, IVAX paid $12,950,000 in cash to The National Property
Fund of the Czech Republic, and contributed approximately $2,050,000 in cash
and $6,600,000 in equipment directly to Galena. In addition, IVAX granted to
Galena licenses to manufacture and distribute in certain territories certain
of IVAX' pharmaceutical products and products under development. In June 1995,
IVAX increased its ownership interest to 62%. The 1994 acquisition was
accounted for as a purchase and the consolidated financial statements of IVAX
reflect the full consolidation of the accounts of Galena since the acquisition
date. The minority shareholders' interest in Galena's net assets and net
earnings since the acquisition date are reflected as minority interest in the
accompanying consolidated financial statements. The historical operations of
Galena, when compared to the historical operations of IVAX, were not
significant.

In March 1994, IVAX acquired McGaw, Inc. ("McGaw") in consideration
for 13,985,854 shares of IVAX' common stock. The acquisition was accounted for
using the pooling of interests method of accounting. Net revenues and net
income generated by McGaw prior to the date of merger and included in the
accompanying consolidated statement of operations for the year ended December
31, 1994 totalled approximately $82.6 million and $4.0 million, respectively.

F-12

In August 1993,IVAX acquired Johnson Products Company,Inc. in
consideration for 2,539,060 shares of IVAX' common stock. The acquisition was
accounted for using the pooling of interests method of accounting.

In June 1993, IVAX acquired certain assets and assumed certain
liabilities of the United States and Canadian janitorial, textiles, commercial
laundry and food sanitation chemicals businesses of Elf Atochem North America,
Inc. ("Elf Atochem"). The purchase price was $57.0 million, paid $13.0 million
in cash and $44.0 million in shares of IVAX' common stock. A total of
1,687,036 common shares were ultimately issued in connection with the
acquisition. The acquisition was accounted for using the purchase method of
accounting. In December 1993, IVAX sold the assets and certain liabilities of
the commercial laundry and food sanitation chemicals businesses acquired from
Elf Atochem. The total consideration consisted of $10.0 million in cash and
the acquisition of assets and the assumption of certain liabilities of a
fashion processing chemicals business with a fair value of approximately $4.2
million. The excess of the total consideration received over the net assets
sold was applied to reduce the goodwill which arose from the original
acquisition of businesses from Elf Atochem.

(4) INVESTMENTS IN AND ADVANCES TO AFFILIATED COMPANIES:

In November 1995, IVAX sold its investment in 1,000,000 shares of
North American Vaccine, Inc. ("NAVA") Series A Convertible Preferred Stock at
fair value to a limited partnership beneficially owned by the chairman and
chief executive officer of IVAX for $16,250,000 in cash. The investment had
been recorded at $3,415,000, the historical cost of the preferred shares, less
$272,000 which represented IVAX' interest in shares of IVAX' common stock held
by NAVA. The pre-tax gain of $12,835,000 resulting from the sale of the
preferred shares is included in other income, net, in the accompanying
consolidated statement of operations for the year ended December 31, 1995.

In March 1995, IVAX and Knoll AG ("Knoll"), a wholly-owned subsidiary
of BASF Aktiengesellschaft, established a joint venture for the marketing of
generic pharmaceutical products in Europe. The joint venture company, called
Knoll Norton GmbH, is owned 50% by Knoll and 50% by IVAX. The joint venture
company's initial efforts have focused solely on marketing generic
pharmaceuticals in Germany, where its operations are conducted through a
subsidiary called BASF Generics GmbH. Knoll contributed to the joint venture
the capital stock of BASF Generics GmbH and rights to generic pharmaceutical
products, many of which are already licensed and marketed in Germany. IVAX
contributed to the joint venture rights to generic pharmaceutical products,
most of which are currently manufactured and marketed by Norton Healthcare, as
well as rights to certain products under development. The results of the joint
venture to date and IVAX' equity in its earnings, have not been material to
IVAX.

IVAX has ownership interests ranging from approximately 10% to 50% in
various other unconsolidated affiliates. Undistributed earnings of these
affiliates, as well as IVAX' equity in their earnings, were not significant in
each of the periods presented in the accompanying consolidated financial
statements. Unrealized gains and losses on the securities underlying IVAX'
investment in certain of these affiliates have been excluded from earnings and
are reported as a component of shareholders' equity, net of applicable income
taxes, until realized. As of December 31, 1995, a net unrealized gain of
$4,805,000, net of income taxes of $2,703,000, was included in cumulative
translation adjustment and other in the accompanying consolidated financial
statements.

F-13

(5) INVESTMENT IN SALES-TYPE LEASES:

McGaw leases biomedical equipment under sales-type lease arrangements
with terms generally ranging from three to five years at rates of interest
ranging from 11% to 17%. McGaw generally does not require collateral, but it
retains an interest in the leased equipment. Interest income on sales-type
leases is included in net revenues in the consolidated statements of
operations and totalled $1,621,000, $1,916,000 and $2,053,000 for the years
ended December 31, 1995, 1994 and 1993, respectively. Following is a summary of
the net investment in sales-type leases (in thousands):

Total minimum lease payments to be received
during the year ending December 31,

1996 $7,351
1997 4,632
1998 3,363
1999 1,812
2000 and thereafter 1,141
-------
Total minimum lease payments receivable 18,299
Less amount representing warranties (806)
Less allowance for doubtful accounts (226)
Less unearned interest income (3,344)
Current portion of net investment in sales-type leases (4,422)
-------
Net investment in sales-type leases, included in
other assets $9,501
=======

F-14

(6) DEBT:

Long-term debt consists of the following (in thousands):

December 31,
-------------------------------
1995 1994
------------- ------------

6-1/2% Convertible Subordinated Notes due 2001.
Interest payable semi-annually. Convertible at the
option of the holders into 2,866,929 shares of
common stock at a conversion rate of $31.75 per share. $91,025 $ 92,025

10-3/8% Senior Notes due 1999 issued by McGaw. Interest
payable semi-annually. Unsecured. 87,620 90,975

Borrowings under revolving line of credit due May 24, 1997
at LIBOR plus 1/2% (6.25% - 6.48% at December 31, 1995),
secured by a pledge of the stock of McGaw. 99,000 45,000

Industrial revenue bonds due 2008. Collateralized by
mortgages on real property and equipment and a standby
letter of credit. Interest payable semi-annually at
adjustable rates (4.44% at December 31, 1995). 6,700 6,700

Industrial revenue bonds due 2006. Collateralized by a
standby letter of credit in the amount of $4,207,000.
Interest at adjustable rates (5.00% - 5.15% at
December 31, 1995). 4,105 4,530

Mortgage loans, secured by real property, payable through
1997 at adjustable rates (6.88% - 9.00% at
December 31, 1995). 4,167 4,373

9.00% Convertible Subordinated Debentures due 1995, held by
related parties. Converted into 286,371 shares of
common stock at conversion rates ranging from $5.20
to $5.31 per share. - 1,500

International subsidiaries' debt 7,555 10,873

Other 2,206 3,317
------------- ------------
302,378 259,293
Current portion of long-term debt 3,521 5,454
------------- ------------
$ 298,857 $ 253,839
============= ============

During November 1995, borrowings permitted under IVAX' revolving line
of credit which expires May 24, 1997 were increased from $100,000,000 to
$130,000,000. Amounts outstanding under the revolving line of credit are
secured by a pledge of the stock of McGaw and an agreement not to pledge or
dispose of certain of IVAX' significant subsidiaries. Borrowings under the
line of credit accrue interest at IVAX' option at LIBOR plus 1/2% or at the
greater of the lender's prime rate or the Federal funds rate plus 1/2%.
Commitment fees are charged at a rate of 1/8% of the unused portion of the
line of credit and totalled $64,000 and $36,000 for the years ended December
31, 1995 and 1994, respectively. The line of credit contains various financial
covenants, including a restriction on the payment of dividends by IVAX during
any fiscal year in excess of 35% of IVAX' consolidated net income.

McGaw may at its option prepay the 10-3/8% Senior Notes due 1999
("Senior Notes") provided that prior to April 1, 1997 such prepayment is not
made with funds borrowed at an interest rate of less than 10-3/8%. Prepayment
is subject to a penalty of 4.15% through April 1, 1996 and 2.075% thereafter
through April 1, 1997. The indenture governing the Senior Notes contains
certain covenants
F-15

applicable to McGaw, including limitations on restricted payments,
dividends and additional borrowings. During 1995 and 1994, in
accordance with the indenture, McGaw repurchased $3,355,000 and $2,025,000,
respectively, face value of its Senior Notes at a purchase price of 101% of
the outstanding principal amount plus accrued and unpaid interest.
Additionally, on January 16, 1996, in accordance with the indenture, McGaw
repurchased $200,000 face value of its Senior Notes at a purchase price of
101% of the outstanding principal amount plus accrued and unpaid interest.

During 1995 and 1994, IVAX redeemed a total of $1,000,000 and
$18,500,000, respectively, face value of its 6-1/2% Convertible Subordinated
Notes due 2001.

Certain of IVAX' international subsidiaries maintain agreements with
foreign banks providing lines of credit in the aggregate amounts of
approximately $14,000,000 and $17,800,000 at December 31, 1995 and 1994,
respectively. Outstanding borrowings under these lines of credit totalled
$4,279,000 and $5,006,000 at December 31, 1995 and 1994, respectively, and are
included as loans payable in the accompanying consolidated balance sheets.
Loans payable at December 31, 1995 also includes $528,000 of amounts advanced
under a domestic floating rate overdraft facility due on demand which provides
for advances of up to $10,000,000 to fund working capital requirements.

The estimated fair values of IVAX' long-term debt are as follows (in
thousands):

December 31,
---------------------------
1995 1994
------------ --------------

6-1/2% Convertible Subordinated Notes due 2001 $ 97,283 $ 80,062
10-3/8% Senior Notes due 1999 90,249 92,795
Other 123,733 76,293
---------- ----------
$311,265 $249,150
========== ==========

Fair value of the 6-1/2% Convertible Subordinated Notes due 2001 and the
10-3/8% Senior Notes due 1999 are based on available quoted market prices.
Management believes that the carrying amounts of other debt approximate the
fair value.

The stated maturities of all long-term debt for the years 1996 through
2000 are approximately $3.5 million, $105.0 million, $1.8 million, $88.9
million and $1.2 million, respectively.

F-16

(7) INCOME TAXES:

The provision for income taxes consists of the following (in thousands):

Year Ended December 31,
----------------------------------------
1995 1994 1993
------------ ------------- -------------

Current:
U.S. Federal $ 16,561 $ 28,248 $ 45,131
State 2,861 2,175 8,823
Puerto Rico and the U.S. Virgin Islands 4,216 3,028 4,319
Foreign 9,948 5,969 1,453
Deferred (5,248) (9,098) (2,534)
------------ ------------- -----------
$ 28,338 $ 30,322 $ 57,192
============ ============= ===========

The components of income before income taxes, minority interest and
extraordinary items are as follows (in thousands):

Year Ended December 31,
----------------------------------------
1995 1994 1993
------------ ------------- -------------

United States $ 45,130 $ 65,497 $126,507
Puerto Rico and the U.S. Virgin Islands 49,455 23,223 27,042
Foreign 53,856 33,629 11,625
------------ ------------ -------------
$148,441 $122,349 $165,174
============ ============ =============

A reconciliation of the difference between the expected provision for
income taxes using the statutory Federal tax rate and IVAX' actual provision
is as follows (in thousands):

Year Ended December 31,
----------------------------------------
1995 1994 1993
------------ ------------- -------------

Provision using statutory Federal tax rate $ 51,954 $ 42,822 $ 57,811
Effect of state income taxes 1,633 1,125 5,675
Amortization of intangibles 995 1,009 1,137
Utilization of net operating loss
carryforwards -- (1,525) (1,622)
Effect of nondeductible merger expenses 153 4,072 2,807
Reversal of valuation allowance on deferred
tax assets (6,452) (6,763) -
Foreign tax rate differential (6,772) (5,436) (2,616)
Effect of Puerto Rican taxes and tollgate 5,611 2,633 3,606
Puerto Rico and U.S. possessions tax
incentives (17,309) (8,389) (10,754)
Other, net (1,475) 774 1,148
------------- ---------- ------------
$ 28,338 $30,322 $ 57,192
============= ========== ============

During 1995 and 1994, IVAX released $6,938,000 and $11,831,000 of
valuation allowances, respectively, which had been recorded to fully reserve
the deferred tax asset related to the future benefit of McGaw's net operating
loss carryforwards. The release of the valuation allowances and realization of
the benefits of other temporary differences reduced IVAX' consolidated tax
provision for the year ended December 31, 1995 by $6,452,000 and decreased
intangible assets by $486,000. The release of the valuation allowances reduced
the consolidated tax provision for the year ended December 31, 1994 by
$6,627,000 and decreased intangible assets by $5,204,000.

F-17

Deferred taxes arise due to timing differences in reporting of certain
income and expense items for book purposes and income tax purposes. A detail
of the significant components of deferred tax balances included in other
current assets and other assets is as follows (in thousands):

December 31,
---------------------------
1995 1994
------------ ------------

Accounts receivable allowances $ 8,808 $ 5,281
Reserves and accruals 14,297 12,900
Differences in capitalization of inventory costs 2,644 1,340
Book/tax differences on the recognition of revenue 1,338 1,338
Other 1,104 (997)
Valuation allowance (944) (7,837)
----------- -----------
Amount included in other current assets $ 27,247 $ 12,025
============ ============

Book/tax basis differences on fixed assets $ 24,547 $ 24,051
Book/tax basis depreciation differences on
fixed assets (20,511) (19,321)
Book/tax differences on the recognition of
revenue 7,187 8,525
Book/tax basis differences on the carrying value
of long-term assets 10,148 18,012
Long-term liability for undistributed earnings
in D.I.S.C. (1,046) (1,024)
Research and development credit carryforward 715 856
Research and development expenditures capitalized 4,167 -
Net operating losses 43,493 44,975
Other (3,047) (2,443)
Valuation allowance (44,315) (42,681)
------------ ------------
Amount included in other assets $ 21,338 $ 30,950
============ ============

Income from McGaw's Puerto Rican manufacturing operations is subject
to certain tax exemptions under the terms of a grant from the Puerto Rican
government which expires in 2002. The grant reduced tax expense by
approximately $7,500,000, $8,500,000 and $2,800,000 for the years ended
December 31, 1995, 1994, and 1993, respectively. Under the terms of the grant,
McGaw is required to maintain certain Puerto Rican employment levels; endeavor
to purchase raw materials, machinery and equipment from local suppliers; and
notify local authorities of changes in products or manufacturing processes.

Income from Zenith's Puerto Rican manufacturing operations is subject
to certain tax exemptions under the terms of a grant from the Puerto Rican
government which expires in 1999. The grant reduced tax expense by
approximately $11,171,000, $4,300,000 and $8,600,000 for the years ended
December 31, 1995, 1994 and 1993, respectively. Under the terms of the grant,
Zenith is required to maintain certain Puerto Rican employment levels.

At December 31, 1995, McGaw had $57,800,000 of net operating loss
carryforwards which will begin to expire in 2002. The utilization of the net
operating losses is subject to limitations of $21,000,000 per year which are
cumulative to the extent not utilized by IVAX. The deferred tax asset related
to the benefit of these net operating loss carryforwards has been reduced to
zero by a valuation allowance. Approximately $35,000,000 of McGaw's net
operating loss carryforwards relate to McGaw's predecessor and are subject to
a further annual limitation of $3,000,000 which is cumulative to the extent
not utilized by IVAX. Any future benefits recognized from the reduction of the
valuation

F-18

allowances related to McGaw's predecessor's losses will first reduce
McGaw's acquired noncurrent assets and then reduce income tax expense.

At December 31, 1995, Zenith had net operating loss carryforwards of
$20,500,000 which will begin to expire in 2004. The deferred tax asset related
to the future benefit of these net operating loss carryforwards has been
reduced to zero through a valuation allowance. Approximately $8,000,000 of the
net operating loss carryforwards relate to Zenith's predecessor and are
subject to an annual limitation of $1,700,000 which is cumulative to the
extent not utilized by IVAX. Approximately $13,100,000 of the net operating
loss carryforwards relate to the exercise of certain stock options. Any future
benefits recognized from the reduction of the valuation allowances related to
these net operating loss carryforwards will increase paid in capital by
approximately $4,500,000.

Minority interest included in the accompanying consolidated statements
of operations is net of a provision for income taxes of $1,692,000 and
$1,132,000 for the years ended December 31, 1995 and 1994, respectively.

(8) BENEFIT PLANS:

401(k) Plans - IVAX' employees within the United States and the U.S.
Virgin Islands and certain of its employees in Puerto Rico are eligible to
participate in 401(k) retirement plans, which permit pre-tax employee payroll
contributions (subject to certain limitations) and discretionary employer
matching contributions. Total matching contributions for the years ended
December 31, 1995, 1994 and 1993 were $3,125,000, $2,771,000 and $2,578,000,
respectively, a portion of which was made in IVAX' common stock.

Defined Benefit Plans - McGaw maintains a noncontributory defined
benefit pension plan covering substantially all employees of its Puerto Rican
subsidiary, and a frozen defined benefit pension plan covering its United
States employees in which benefits no longer accrue. Under the Puerto Rican
plan, a participating employee's annual post-retirement pension benefit is
determined based on years of credited service and compensation, averaged
either over the participant's employment or the final years before retirement.
McGaw's funding policy under both plans is to make the minimum annual
contributions required by applicable regulations.

In accordance with the provisions of Statement of Financial Accounting
Standards No. 87, Employers' Accounting for Pensions, McGaw recognized a
minimum liability totalling $1,040,000 in 1992 which represented the excess of
the unfunded accumulated benefit obligation over previously accrued pension
cost related to the frozen defined benefit pension plan. This additional
minimum liability was offset by an intangible asset. During 1994, IVAX
recorded an additional minimum liability in excess of previously unrecognized
prior service cost which was recorded as a $471,000 reduction of shareholders'
equity, net of income tax benefits of $312,000. During 1995, the fair market
value of the plan's assets exceeded the accumulated benefit obligation
resulting in the write-off of the intangible asset and the reversal of the
minimum liability.

F-19

The following table sets forth the funded status and amount recognized
for these plans (in thousands):

December 31,
-------------------------
1995 1994
----------- -----------

Actuarial present value of accumulated benefit
obligation, including vested benefits of $8,193
in 1995 and $9,049 in 1994 $ (8,457) $ (9,254)
=========== ===========
Actuarial present value of projected benefit
obligation for services rendered to date $ (9,685) $(10,619)

Plan assets at fair value, primarily listed stocks
and U.S. bonds 9,529 8,320
----------- -----------
Projected benefit obligation in excess of
plan assets (156) (2,299)
Unrecognized prior service cost and other
obligation 1,234 1,848
Unrecognized net loss (gain) (476) 1,053
----------- -----------
Prepaid pension cost $ 602 $ 602
=========== ===========

Net pension cost included the following components (in thousands):

Year Ended December 31,
------------------------------
1995 1994 1993
---- ----- -----

Service cost during the period $ 298 $ 298 $ 189
Interest cost on projected benefit
obligation 793 770 702
Actual return on plan assets (1,317) (191) (825)
Net amortization and deferral 695 (377) 320
-------- ------- -------
Net pension cost $ 469 $ 500 $ 386
======== ======= =======

Significant actuarial assumptions used during each plan year for the
discount rate, rate of increase in compensation levels, and expected long-term
rate of return on assets were 8.5%, 6.0% and 8.5%, respectively.

(9) SHAREHOLDERS' EQUITY:

Stock Option Plans - IVAX administers and has stock options outstanding
under IVAX' 1994 Stock Option Plan ("1994 Plan"), IVAX' 1985 Stock Option Plan
("1985 Plan"), and certain stock option plans assumed in the acquisitions of
Zenith and McGaw. The options outstanding under the plans assumed in the Zenith
and McGaw acquisitions were converted into options to acquire IVAX' common stock
using the applicable acquisition conversion ratios. The 1994 Plan permits the
issuance of options to purchase up to 3,000,000 shares of IVAX' common stock,
with an exercise price no less than the fair market value of the common stock on
the date of grant and an option term not to exceed ten years. IVAX' Board of
Directors has approved an amendment to the 1994 Plan increasing the shares
available under the Plan by 4,000,000, subject to shareholder approval. No
additional stock options may be issued under the 1985 Plan or the plans assumed
in the Zenith and McGaw acquisitions.

F-20

The following table presents additional information concerning the
activity in the stock option plans:

Number of Option Price
Shares Per Share
---------------- --------------
Options outstanding,
January 1, 1994 11,031,570 $ .48-36.38
Granted 4,763,776 11.85-34.88
Exercised (1,413,182) .48-26.75
Terminated (2,075,348) .48-36.38
----------------
Options outstanding,
December 31, 1994 12,306,816 .48-36.38
Granted 2,247,050 20.00-30.13
Exercised (2,974,788) .48-25.50
Terminated (1,381,163) .48-36.38
----------------
Options outstanding,
December 31, 1995 10,197,915 $ .48-36.38
================
Options exercisable at:
December 31, 1994 4,759,362 $ .48-36.38
December 31, 1995 4,012,149 $ .48-36.38

Warrants - At December 31, 1994, IVAX had warrants outstanding for the
purchase of up to 337,500 shares of common stock at an exercise price of $5.00
per share. These warrants were exercised in January 1995 resulting in proceeds
of $1,687,500. No warrants were issued or exercised during the year ended
December 31, 1994. A total of 54,681 warrants were exercised during 1993
resulting in proceeds of approximately $133,000 to IVAX. At December 31, 1993,
McGaw had warrants outstanding to purchase 171,457 shares of its common stock,
all of which were exercised prior to the March 1994 merger.

Convertible Debt - At December 31, 1995, IVAX had outstanding
$91,025,000 of 6-1/2% Convertible Subordinated Notes due 2001 (See Note 6).
The notes are convertible at the option of the holders into 2,866,929 shares
of IVAX' common stock at a conversion rate of $31.75 per share. During 1995,
the $1,500,000 of 9.00% Convertible Subordinated Debentures due 1995 were
converted by the debenture holders into a total of 286,371 shares of IVAX
common stock at conversion rates ranging from $5.20 to $5.31.

Preferred Stock - Immediately prior to the December 1994 acquisition
of Zenith, all outstanding shares of Zenith's 10.00% cumulative convertible
preferred stock were converted into Zenith's common stock, which were
exchanged in the merger into 8,049,749 shares of IVAX common stock. Prior to
the conversion, Zenith's Board of Directors declared and paid a dividend on
its preferred stock equal to the amount of all accrued and unpaid dividends,
which totalled $2,082,000.

Dividends - During the years ended December 31, 1995, 1994 and 1993,
IVAX paid cash dividends of $.08, $.06 and $.04 per share with respect to its
common stock, totalling approximately $9,347,000, $5,173,000 and $2,798,000,
respectively.

F-21

(10) BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION:

IVAX has two principal business segments, pharmaceuticals and
intravenous products. IVAX also operates in three other business segments, in
vitro diagnostics, personal care products and specialty chemicals, which are
included below under "Other operations." No single customer accounted for 10% or
more of IVAX' consolidated net revenues for any of the three years ended
December 31, 1995. Identifiable assets by segment include assets directly
identified with those operations. Corporate assets consist primarily of cash and
cash equivalents, property, equipment and investments in affiliated companies.
Information about each of IVAX' principal business segments and domestic and
foreign operations as of and for the three years ended December 31, 1995 follows
(in thousands):

1995 1994 1993
----------- ----------- -----------

NET REVENUES:
Pharmaceuticals $ 774,240 $ 643,496 $ 587,412
Intravenous products 339,978 337,884 330,792
Other operations 147,045 153,641 147,003
Intersegment eliminations (1,497) (215) (2,262)
----------- ----------- -----------
$ 1,259,766 $ 1,134,806 $ 1,062,945
=========== =========== ============
INCOME (LOSS) FROM OPERATIONS:
Pharmaceuticals $ 136,095 $ 107,654 $ 152,533
Intravenous products 27,509 42,127 24,609
Other operations 2,637 6,141 13,870
Corporate expenses (18,814) (15,096) (6,568)
Intersegment eliminations - - (71)
----------- ----------- -----------
Income from operations 147,427 140,826 184,373
Other income (expense), net 1,014 (18,477) (19,199)
----------- ----------- -----------
Income before income
taxes, minority interest and
extraordinary items $ 148,441 $ 122,349 $ 165,174
=========== =========== ===========
IDENTIFIABLE ASSETS:
Pharmaceuticals $ 793,540 $ 594,143 $ 466,667
Intravenous products 318,475 292,821 280,046
Other operations 172,436 164,032 162,916
Corporate assets 51,034 55,900 91,910
Intersegment eliminations (175) (192) (260)
----------- ----------- -----------
$ 1,335,310 $ 1,106,704 $1,001,279
=========== =========== ===========

(continued)

F-22

(continued)

1995 1994 1993
----------- ----------- -----------

DEPRECIATION AND AMORTIZATION:
Pharmaceuticals $ 19,359 $ 19,981 $ 15,164
Intravenous products 21,035 18,263 20,011
Other operations 6,172 6,728 5,679
Corporate 753 527 579
----------- ------------ ------------
$ 47,319 $ 45,499 $ 41,433
=========== ============ ============

CAPITAL EXPENDITURES:
Pharmaceuticals $ 62,460 $ 60,695 $ 31,143
Intravenous products 29,298 20,901 15,435
Other operations 2,820 7,561 2,945
Corporate 8,871 4,748 150
----------- ------------ ------------
$ 103,449 $ 93,905 $ 49,673
=========== ============ ============

GEOGRAPHICAL AREAS:
NET REVENUES:
United States $ 976,356 $ 916,884 $ 901,000
Foreign (a) 283,410 217,922 161,945
----------- ------------ ------------
$ 1,259,766 $ 1,134,806 $ 1,062,945
=========== ============ ============

INCOME FROM OPERATIONS:
United States $ 91,368 $ 102,816 $ 171,346
Foreign (a) 56,059 38,010 13,027
----------- ------------ ------------
$ 147,427 $ 140,826 $ 184,373
=========== ============ ============

IDENTIFIABLE ASSETS:
United States $ 1,020,178 $ 828,713 $ 822,440
Foreign (a) 315,132 277,991 178,839
----------- ------------ ------------
$ 1,335,310 $ 1,106,704 $ 1,001,279
=========== ============ ============

(a) substantially all in Europe.

(11) COMMITMENTS AND CONTINGENCIES:

Leases - IVAX leases office, plant and warehouse facilities and
automobiles under noncancellable operating leases. Motor vehicles, production
equipment and certain manufacturing facilities are also leased under capital
leases. Rent expense for the three years ended December 31, 1995 totalled
approximately $11,991,000, $10,028,000 and $8,547,000, respectively. The
future minimum lease payments under noncancellable leases with initial or
remaining terms of one year or more at December 31, 1995, were as follows (in
thousands):

F-23

Operating Capital
Leases Leases
------------ -----------

1996 $ 8,636 $ 958
1997 6,927 789
1998 4,938 687
1999 3,002 111
2000 2,078 29
Thereafter 3,950 18
------------- -----------
Total minimum lease payments $ 29,531 2,592
============
Less amount representing interest 406
-----------
Present value of net minimum lease payments $ 2,186
===========

Assets recorded under capital leases consists of (in thousands):

December 31,
--------------------------
1995 1994
------------ -----------

Buildings and improvements $ 1,800 $ 1,800
Machinery and equipment 2,993 3,933
Less accumulated amortization (2,877) (3,178)
------------- -----------
$ 1,916 $ 2,555
============= ===========

Legal Proceedings - In late April 1995, Zenith received approvals from
the FDA to manufacture and market the antibiotic cefaclor in capsule and oral
suspension formulations, the generic equivalent of Eli Lilly and Company's
("Lilly") Ceclor(R). On April 27, 1995, Lilly filed a lawsuit against Zenith and
others in Federal Court alleging that Zenith's cefaclor raw material supplier, a
third party unaffiliated with IVAX, manufactures cefaclor raw material in a
manner which infringes two process patents owned by Lilly, and that Zenith and
the other named defendants have knowingly and willfully infringed and induced
the supplier to infringe the patents by importing the raw material into the
United States. The lawsuit seeks to enjoin Zenith and the other defendants from
infringing or inducing the infringement of the patents and from making, using or
selling any product incorporating the raw material provided by such supplier,
and seeks an unspecified amount of monetary damages and the destruction of all
cefaclor raw material manufactured by the supplier and imported into the United
States. In August 1995, the Court denied Lilly's motion for preliminary
injunction which sought to prevent Zenith from selling cefaclor until the merits
of Lilly's allegations could be determined at trial. Lilly has appealed such
ruling, which appeal has been briefed and argued and remains pending. IVAX
intends to defend this lawsuit vigorously. Although IVAX believes Lilly's
allegations are without merit, if determined adversely to IVAX, the lawsuit
would likely have a material adverse effect on IVAX' financial position and
results of operations.

In September 1994, individuals purporting to be shareholders of IVAX
filed a class action complaint against IVAX and all but one of its directors as
of that date and certain of its officers in Federal Court which consolidates,
amends and supplements a number of similar complaints filed earlier in 1994.
Plaintiffs seek to act as representatives of a class consisting of all
purchasers of IVAX' common stock between January 14 and May 2, 1994, including
as a subclass parties who exchanged their shares of McGaw common stock for IVAX'
common stock in connection with IVAX' acquisition of McGaw in March 1994. In
general, the complaints allege that IVAX violated applicable securities laws by
making untrue statements of material fact and/or omitting to state material
facts necessary to make statements made not misleading in its public disclosure
documents, in communications to

F-24

securities analysts and the public, and in IVAX' registration statement and
proxy statement-prospectus distributed in connection with the acquisition of
McGaw, relating primarily to net revenues and earnings, verapamil sales, and the
effects of competition in the verapamil market on IVAX' net revenues and
earnings. The complaint seeks an unspecified amount of compensatory and
recessionary damages, equitable and/or injunctive relief, interest, litigation
costs and attorneys' fees. The outside directors of IVAX initially named as
defendants in the suit were dismissed without prejudice from the consolidated
actions in January 1995. In November 1995, the defendants' motion to dismiss the
consolidated amended complaint was denied. IVAX intends to defend this lawsuit
vigorously. Although IVAX believes that this lawsuit is without merit, its
outcome cannot be predicted. If determined adversely to IVAX, the lawsuit would
likely have a material adverse effect on IVAX' financial position and results of
operations.

In June 1994, the former chairman and chief executive officer of McGaw
individually filed a similar complaint against IVAX and Dr. Frost alleging
essentially the same securities laws violations as alleged in the consolidated
class action suit described above, as well as certain additional state law
claims. The complaint seeks up to $21 million in compensatory damages (and up to
$48 million in rescissionary damages upon tender of IVAX shares held by
plaintiff), as well as punitive damages, litigation costs and attorneys' fees.

In April 1995, a complaint alleging essentially the same securities laws
violations as alleged in the consolidated class action suit described above was
filed in Federal Court against IVAX, and certain of its officers. The complaint
seeks in excess of $21 million in compensatory, consequential, rescissionary and
punitive damages, as well as litigation costs. This action is expected to be
consolidated with the class action suit described above.

In July 1994, an action was filed in Federal Court against IVAX, in
which plaintiffs, shareholders of McGaw at the time of its acquisition by IVAX,
alleged that IVAX violated Sections 11 and 12(2) of the Securities Act of 1993,
as well as certain state securities laws, and that it breached
certain provisions of the merger agreement and IVAX' bylaws, by issuing to
plaintiffs shares of IVAX' common stock subject to the restrictions imposed by
Rule 145 promulgated under the Securities Act and Accounting Series Release
135. The plaintiffs claim that, as a result of the restrictions imposed on the
certificates issued to them, they suffered damages from the loss of value of
their shares, and seek damages of $11 million, plus expenses and attorneys'
fees. In June 1995, the Court entered an order denying plaintiffs' motion for
summary judgment with respect to the claims alleging that IVAX breached
certain provisions of the merger agreement and IVAX' bylaws and granted IVAX'
motion to dismiss such counts. The Court denied IVAX'
motion to dismiss the counts relating to alleged securities laws violations,
as well as its motion to transfer venue. In October 1995, the Court granted
the plaintiffs' motion to amend their complaint to assert new causes of action
under the Uniform Commercial Code and granted the plaintiffs' motion for
reconsideration of the dismissal of the claims alleging breach of IVAX'
bylaws, and ordered that such counts be reinstated.

IVAX intends to continue to vigorously defend each of the three
foregoing lawsuits. Although IVAX believes such lawsuits are without merit,
their respective outcomes cannot be predicted. Any of such lawsuits, if
determined adversely to IVAX, could have a material adverse effect on IVAX'
results of operations.

Goldline Laboratories, Inc. ("Goldline"), a wholly-owned subsidiary of
IVAX, has been either a named defendant, or has assumed the defense of a
customer which was a named defendant, in approximately 110 lawsuits regarding
a product previously distributed by Goldline in the United States and it may
be named in additional lawsuits relating to the product in the future. As of
February 26,

F-25

1996, 105 of such lawsuits have been settled, and 5 remain pending. Goldline did
not formulate or manufacture the product; it purchased only finished product in
bulk and then bottled, labeled and distributed the product. Goldline and IVAX
entered into certain agreements with the manufacturer of the product and its
United States subsidiary pursuant to which such companies agreed to pay
Goldline's defense costs relating to the lawsuits and to indemnify Goldline for
settlements or judgments (other than punitive damages), in exchange for Goldline
agreeing not to assert claims against the manufacturer or its United States
subsidiary. The agreements may be terminated at any time by either party. As a
result of the agreements, to date, Goldline has not paid any settlement amounts
or appreciable legal fees with respect to any of the lawsuits. In addition, when
IVAX acquired Goldline in 1991, 165,000 shares of IVAX' common stock issued in
the acquisition were pledged until December 1996 by the former owner of Goldline
as collateral against any future claims regarding this product. Goldline also
has available to it limited insurance coverage with respect to the currently
pending claims. IVAX' ultimate liability with respect to this matter if any, is
not presently determinable. In the event that the manufacturer and its United
States subsidiary do not continue to provide the indemnity described above, the
aggregate liability of Goldline to plaintiffs in these lawsuits is likely to
exceed available insurance coverage and the indemnity provided by the former
owner of Goldline, and could have a material adverse impact upon the financial
position and results of operations of IVAX.

IVAX is involved in various other legal proceedings arising in the
ordinary course of business, some of which involve substantial amounts. While
it is not feasible to predict or determine the outcome of these proceedings,
in the opinion of management, based on a review with legal counsel, any losses
resulting from such legal proceedings will not have a material adverse impact
on IVAX' financial position or results of operations.

F-26

(12) QUARTERLY FINANCIAL INFORMATION (UNAUDITED):

The following tables summarize selected quarterly data of IVAX for the
years ended December 31, 1995 and 1994 (in thousands, except per share data):

First Second Third Fourth Full
Quarter Quarter Quarter Quarter Year
--------- -------- -------- -------- --------

1995
- ----

Net revenues $ 281,080 $ 306,684 $ 310,212 $ 361,790 $ 1,259,766
Gross profit 119,718 129,835 126,743 147,434 523,730
Income before extraordinary items 23,303 28,125 27,582 35,791 114,801
Net income 23,357 28,105 27,582 35,791 114,835
Earnings per common share
Primary:
Earnings before extraordinary
items .20 .24 .23 .30 .96
Net earnings .20 .24 .23 .30 .96
Fully Diluted:
Earnings before extraordinary
items .20 .24 .23 .30 .95
Net earnings .20 .24 .23 .30 .95

Cash dividends per share declared - .04 - .04 .08

1994
- ----

Net revenues $ 259,474 $ 282,687 $ 296,552 $ 296,093 $ 1,134,806
Gross profit 117,836 118,992 124,024 120,593 481,445
Income before extraordinary items 24,968 26,635 26,313 11,956 89,872
Net income 23,320 26,931 26,405 12,393 89,049
Earnings per common share
Primary:
Earnings before extraordinary
items .21 .23 .23 .10 .77
Net earnings .20 .23 .23 .11 .76
Fully Diluted:
Earnings before extraordinary
items .21 .23 .23 .10 .77
Net earnings .20 .23 .23 .11 .76

Cash dividends per share declared - .03 - .03 .06

(13) SUBSEQUENT EVENTS:
- -----------------------

On March 1, 1996, IVAX acquired Elvetium S.A. (Argentina), Alet
Laboratorios S.A.E.C.I. y E. and Elvetium S.A. (Uruguay), three affiliated
companies engaged in the manufacture and marketing of pharmaceuticals in
Argentina and Uruguay, in exchange for 1,490,909 shares of IVAX' common stock.
Although the acquisition will be accounted for as a pooling of interests,
IVAX' consolidated financial statements will not be restated to reflect this
acquisition due to its immateriality.

F-27

On March 15, 1996, IVAX' revolving line of credit was amended to
provide for an additional $45,000,000 in borrowings for a period of ninety
days. The amendment also changed the expiration date of the revolving line of
credit from March 24, 1997 to May 24, 1997. IVAX is seeking to enter into a
new revolving line of credit in the amount of $350,000,000 with a bank
syndicate. Proceeds from the new line of credit will be used to refinance the
existing line of credit and the Senior Notes, and for general corporate
purposes, including to fund working capital requirements and to finance
acquisitions.

F-28

SCHEDULE II

IVAX CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
THREE YEARS ENDED DECEMBER 31, 1995
(In thousands)

BALANCE AT CHARGED TO
BEGINNING COST & BALANCE AT
DESCRIPTION OF YEAR EXPENSES OTHER DEDUCTIONS END OF YEAR
- ------------------------------ ---------- ----------- ---------- ----------- -----------

Allowances for Doubtful Accounts
- --------------------------------

Year ended December 31, 1995 $ 10,940 $ 5,848 $ 28 (A) $ 2,556 $ 14,260
========== =========== ========== =========== ========

Year ended December 31, 1994 $ 7,803 $ 4,671 $ 4,681 (B) $ 6,215 $ 10,940
========== =========== =========== =========== ========

Year ended December 31, 1993 $ 5,604 $ 3,170 $ 437 (C) $ 1,408 $ 7,803
========== =========== =========== =========== ========

(A) Represents additions to the accounts receivable allowances as a result of
the acquisition of ImmunoVision, Inc.
(B) Represents additions to the accounts receivable allowances as a result of
the acquisition of Galena a.s.
(C) Represents additions to the accounts receivable allowances as a result of
various acquisitions, including the acquisition of certain assets and the
assumption of certain liabilities of Elf Atochem North America, Inc.'s
janitorial and textile chemicals businesses in the United States and Canada.

F-29

EXHIBIT INDEX

Exhibit
Number Description
- ------- -----------

10.7 -- Termination and Consulting Agreement,dated as of January 10, 1996,
between Zenith Laboratories, Inc. and John H. Klein.
10.8 -- IVAX Corporation U.S. Incentive Bonus Plan.
10.19 -- Amendment No. 4, dated November 20, 1995,to Revolving Credit and
Reimbursement Agreement by and among IVAX Corporation, NationsBank
of Florida, National Association, and Bank of America Illinois
(formerly Continental Bank, N.A.)*
10.20 -- Amendment No. 5, dated March 15, 1996, to Revolving Credit and
Reimbursement Agreement by and among IVAX Corporation, NationsBank
of Florida, National Association, and Bank of America Illinois
(formerly Continental Bank, N.A.)*
11.1 -- Computation of earnings per share.
21.1 -- Subsidiaries of IVAX Corporation.
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Ernst & Young LLP
23.3 -- Consent of Coopers & Lybrand L.L.P.
27 -- Financial Data Schedule
99.1 -- Report of Ernst & Young LLP
99.2 -- Report of Coopers & Lybrand L.L.P.

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* Certain exhibits and schedules to this document have not been filed. The
Registrant agrees to furnish a copy of any omitted schedule or exhibit to
the Securities and Exchange Commission upon request.