CAMBREX CORP, 10-K405, 2000-03-20

CAMBREX CORP
10-K405, 2000-03-20
INDUSTRIAL ORGANIC CHEMICALS

Previous: READ RITE CORP /DE/, 424B5, 2000-03-20

Next: RUSSELL INSURANCE FUNDS, 40-17F2, 2000-03-20

<PAGE> 1

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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-10638

CAMBREX CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
DELAWARE 22-2476135
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
ONE MEADOWLANDS PLAZA,
EAST RUTHERFORD, NEW JERSEY 07073
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 804-3000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
<S> <C>
COMMON STOCK, $.10 PAR VALUE NEW YORK STOCK EXCHANGE
</TABLE>

(SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the 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. [X]

The aggregate market value of the voting stock held by non-affiliates of
the registrant was approximately $924,163,453 as of February 29, 2000.

APPLICABLE ONLY TO CORPORATE REGISTRANTS

As of February 29, 2000, there were 24,759,844 shares outstanding of the
registrant's Common Stock, $.10 par value.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement for the 2000 Annual
Meeting are incorporated by reference into Part III of this report.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

PART I

ITEM 1 BUSINESS.

GENERAL

Cambrex Corporation (the "Company" or "Cambrex"), a Delaware corporation,
began business in December 1981. The Company primarily provides products and
services worldwide to the life sciences industry. Cambrex operates in four
segments, Human Health, Biosciences, Animal Health/Agriculture, and Specialty
and Fine Chemicals. Each of these segments include various product categories.
The Human Health, Biosciences, and Animal Health/Agriculture segments facilitate
all the ongoing analysis of the business in the area of life sciences.
Currently, the Company's overall strategy for these segments is to focus on
niche markets that have global opportunities, build on strong customer relations
to enhance our new products pipeline, and support state-of-the-art technology,
while being a leader in environmental, health and safety performance.

Within each of the segments, the Company uses a consistent business
approach:

1. Focus on niche products requiring significant technical expertise.

2. Be a leading supplier of core products, for which price competition
is not the primary market determinant.

3. Review products on a continuing basis and eliminate those not
meeting operating profit goals and replace those products with ones
generating higher returns.

Important objectives of the Company are to expand its operations through
internal growth and to make strategic acquisitions of product lines, technology
and companies that increase its position in niche markets.

On October 3, 1997, the Company completed the acquisition of all of the
outstanding common stock of BioWhittaker, Inc. ("BioWhittaker") for
approximately $133,500. BioWhittaker, which is located on 116 acres in
Walkersville, Maryland, develops, produces and sells cell culture and endotoxin
detection products to the biotechnology and pharmaceutical industries for
research and for the commercial manufacture of biopharmaceutical products. On
May 12, 1998, Cambrex purchased the assets of the biopharmaceutical
manufacturing and distribution business of Boehringer Ingelheim Bioproduct
Partnership for $3,871, including acquisition costs of $621. The assets acquired
include a state-of-the-art cell culture and media manufacturing facility in
Verviers, Belgium, and inventory for certain cell culture, endotoxin detection
and molecular biology products.

On January 9, 1998, the Company completed the acquisition of the chiral
intermediates business of Celgene Corporation for approximately $11,328 plus
future royalties of up to $7,500 based upon sales. The product line, which has
been re-named Chiragene, produces optically active, complex, organic compounds
that are critical to the production of modern active pharmaceutical ingredients.

On January 4, 1999, the Company acquired Poietic Technologies, Inc., the
leading supplier of normal human cells of hematopoietic origin. Terms of the
transaction are $2,500 in cash and future consideration based on the performance
of the business.

On March 12, 1999, the Company completed the purchase of Irotec
Laboratories, Ltd., a manufacturer of active pharmaceutical ingredients located
in Cork, Ireland. Cambrex paid approximately $37,560 for the business, which
included a new $15,000 cGMP pharmaceutical manufacturing plant that came on line
in the third quarter of 1999. In connection with the purchase, the Company
signed a long-term agreement with Hexal AG, Germany's second largest generic
pharmaceutical producer. The agreement covers the supply of an expected $50,000
to $75,000 of Active Pharmaceutical Ingredients (API) over the next five years.

- ---------------
(dollars in thousands, except share data)
1
<PAGE> 3

On July 12, 1999, the Company acquired BioWhittaker Molecular Applications,
Inc. (formerly the BioProducts division of the FMC Corporation) for
approximately $38,000. The business, which serves the life sciences industry, is
the world's largest manufacturer of electrophoresis media based on the natural
polymer agarose. Electrophoresis media products are used to separate and analyze
proteins and sequence DNA, work critical to the development and manufacture of
new biopharmaceuticals. High purity agarose is also used to make chromatography
media for large-scale separation and purification of biologicals, important in
pharmaceutical applications. The transaction, structured as a purchase of
assets, includes two operating facilities located in Rockland, Maine and
Copenhagen, Denmark, and a number of U.S. and foreign patents associated with
the business.

PRODUCTS

The Company uses its technical expertise in a wide range of chemical and
biological processes to meet the needs of its customers for high quality
products for specialized applications. The following table sets forth for the
periods indicated information concerning gross sales from the Company's four
segments:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1999(2) 1998 1997(1)
-------- -------- --------
<S> <C> <C> <C>
Human Health....................................... $225,660 $194,766 $182,818
Biosciences........................................ 83,887 65,968 13,577
Animal Health/Agriculture.......................... 55,695 56,285 59,804
Specialty and Fine Chemicals....................... 119,318 124,664 123,884
-------- -------- --------
Gross Sales...................................... $484,560 $441,683 $380,083
======== ======== ========
</TABLE>

- ---------------
(1) Sales from BioWhittaker, acquired in October 1997, are included from the
date of acquisition.

(2) Sales from Irotec Laboratories, acquired in March 1999, and BioWhittaker
Molecular Applications, acquired in July 1999, are included from the dates
of acquisition.

Human Health: The Human Health Segment is classified into eight principal
product groups: (1) Active Pharmaceutical Ingredients, (2) Pharmaceutical
Intermediates, (3) Imaging Chemicals, (4) Personal Care Ingredients, (5)
Biomedical Urethanes, (6) Catalysts, (7) Chiral Technology and (8)
Nutraceuticals. These products are sold to a diverse group of more than 1,100
customers, with two customers accounting for 13.4% and 10.3% of 1999 sales in
this segment. Many of these products are also sold through agents.

This table summarizes the gross sales for this product segment.

<TABLE>
<CAPTION>
1999 1998 CHANGE CHANGE
-------- -------- ------- ------
$ %
<S> <C> <C> <C> <C>
Active Pharmaceutical Ingredients.......... $155,250 $120,459 $34,791 29%
Pharmaceutical Intermediates............... 25,995 24,844 1,151 5
Personal Care Ingredients.................. 14,706 16,777 (2,071) (12)
Imaging Chemicals.......................... 13,568 14,179 (611) (4)
Biomedical Urethanes....................... 3,050 3,977 (927) (23)
Catalysts.................................. 6,950 8,281 (1,331) (16)
Chiral Technology.......................... 6,032 5,548 484 9
Nutraceuticals............................. 109 701 (592) (85)
-------- -------- ------- ---
Total Human Health............... $225,660 $194,766 $30,894 16%
======== ======== ======= ===
</TABLE>

- ---------------
(dollars in thousands, except share data)
2
<PAGE> 4

Active Pharmaceutical Ingredients are manufactured under FDA regulation
(cGMP -- current Good Manufacturing Practices) for use as the active ingredients
in prescription and over-the-counter drugs. Active Pharmaceutical Ingredient
sales of $155,250 were $34,791 (29%) above the prior year due to strong demand
for our gastro-intestinal products used for treating ulcerative colitis,
increased shipments of central nervous system and cardiovascular preparations,
new products, and sales from the acquisition of Irotec in March, 1999 of
$14,587. Active Pharmaceutical Ingredients include active ingredients used in
products for gastro-intestinal, cardiovascular, endocrine, central nervous
system, respiratory, diuretics, anti-infective, anti-inflammatory, immunology
and various other uses.

Pharmaceutical Intermediate sales of $25,995 were $1,151 (5%) above 1998
due to new products used for a cholesterol reducing drug and central nervous
system applications, as well as additional products from the acquisition of
Irotec. These increases were partially offset by no sales of aminodioxepin
(AOA), ($7,600 in 1998), a drug intermediate used in the production of a
protease inhibitor for the treatment of AIDS, due to the customer changing their
production method.

Personal Care Ingredient sales of $14,706 were $2,071 (12%) below 1998 due
to reduced Pyridine sales for the pharmaceutical market, both in the U.S. and
for the export market.

Catalyst sales used in the pharmaceutical market of $6,950 were $1,331
(16%) below 1998 levels due to lower sales of Vitride.

Other product category changes from prior year were not significant.

Biosciences: This segment consists of cell culture products, including
living cell cultures, cell culture media and cell culture media supplements,
endotoxin detection products, and electrophoresis and chromatography products
supplied to the biotechnology and pharmaceutical industries. The Company
manufactures more than 1,800 products which are sold to more than 14,000
customers worldwide with no one customer accounting for more than 10% of sales
in this category.

This table summarizes the gross sales for this product segment:

<TABLE>
<CAPTION>
1999 1998 CHANGE CHANGE
------- ------- ------- ------
$ %
<S> <C> <C> <C> <C>
Cells and Media.............................. $47,434 $43,795 $ 3,639 8%
Endotoxin Detection.......................... 21,864 18,852 3,012 16
Electrophoresis and Chromatography........... 11,652 -- 11,652 --
Other........................................ 2,937 3,321 (384) (12)
------- ------- ------- ---
Total Biosciences.................. $83,887 $65,968 $17,919 27%
======= ======= ======= ===
</TABLE>

Gross sales of $83,887 were $17,919 (27%) above 1998 due to increased
shipments of cell culture and endotoxin detection products. The acquisition of
BioWhittaker Molecular Applications, Inc. (formerly the BioProducts Business of
FMC Corporation) in July 1999 added $11,652 in sales to this segment, and
includes products for fragment analysis, sequencing, gel bond film and
chromatography. This segment consists principally of cell culture products,
including living cell cultures, cell culture media and cell culture media
supplements, as well as endotoxin detection products.

Animal Health/Agriculture: This segment consists of three product groups:
(1) Vitamin B-3 used in feed additives and for veterinary products, (2) Animal
Health products used in disease prevention and (3) Agricultural Intermediates
used in crop protection. These products are sold to approximately 200 customers.
Three customers accounted for 26.9%, 22.2% and 22.0% of 1999 sales in this
segment.

- ---------------
(dollars in thousands, except share data)
3
<PAGE> 5

This table summarizes the gross sales for this product segment:

<TABLE>
<CAPTION>
1999 1998 CHANGE CHANGE
------- ------- ------- ------
$ %
<S> <C> <C> <C> <C>
Vitamin B-3.................................. $ 9,155 $12,814 $(3,659) (29)%
Animal Health................................ 15,013 17,614 (2,601) (15)
Agricultural Intermediates................... 31,527 25,857 5,670 22
------- ------- ------- ---
Total Animal Health/Agriculture.... $55,695 $56,285 $ (590) (1)%
======= ======= ======= ===
</TABLE>

Vitamin B-3 sales of $9,155 were $3,659 (29%) below 1998 due to reduced
shipments to the animal feed markets and lower prices compared to 1998.

Animal Health sales of $15,013 were $2,601 (15%) below 1998, due to slower
exports made by a major customer caused by the continued economic slowdown in
Pacific Rim countries.

Agricultural Intermediate sales of $31,527 were up $5,670 (22%) due to new
applications by a customer for use in crop protection.

Specialty and Fine Chemicals: This segment consists of two product groups:
(1) Performance Enhancing Chemicals and (2) Polymer Systems. Performance
Enhancing Chemicals are complex chemicals designed to impart special properties
when small quantities are included in the formulation of specific products.
These chemicals, which include over 100 products, are used in photography,
pigments, polymers, fuel/oil additives, catalysts and other specialty additives.
Polymer Systems are monomers or two component polymer systems for use in small
volume, high performance applications. These polymers include applications used
in coatings, telecommunications, electronics and engineering plastics. These
products are sold to approximately 1,100 customers with no one customer
accounting for over 10% of 1999 sales.

This table summarizes the gross sales for this product category:

<TABLE>
<CAPTION>
1999 1998 CHANGE CHANGE
-------- -------- ------- ------
$ %
<S> <C> <C> <C> <C>
Performance Enhancing Chemicals............ $ 76,441 $ 81,853 $(5,412) (7)%
Polymer Systems............................ 42,877 42,811 66 --
-------- -------- ------- --
Total Specialty and Fine
Chemicals...................... $119,318 $124,664 $(5,346) (4)%
======== ======== ======= ==
</TABLE>

Polymer System sales of $42,877 were up $66 due to additional customers for
encapsulants used in telecommunications. These increases were offset by reduced
demand for castor based polymer and telecommunication products, and the
Company's decision not to sell into low margin resale markets.

MARKETING AND DISTRIBUTION

The Company's Human Health segment generally includes high value, low
volume products requiring significant technical expertise for their development
and manufacture. Marketing generally requires significant cooperative effort
among a small highly trained marketing staff, a technical staff who can assess
the technical fit and estimate manufacturing economics, and the business
management to determine the strategic and business fit. Such a process may take
from two to five years before a commercial product is fully established. Because
of this long lead time and the complexity of the technical efforts, there are
usually long-term relationships with major corporations who become significant
customers. Sales of established products may be handled by agents in those areas
where direct sales efforts are uneconomic.

- ---------------
(dollars in thousands, except share data)
4
<PAGE> 6

For the Biosciences segment, the Company markets and sells its products in
the United States and Europe principally through its own direct sales force. The
Company directly serves the European markets through its wholly owned
subsidiaries, BioWhittaker UK LTD, located outside London, and BioWhittaker
Europe located in Belgium, and BioWhittaker Molecular Applications located in
Denmark. The remaining international markets are served principally through an
extensive network of independent distributors. The Company is presently
reviewing the steps necessary to use e-commerce to market these products.

For the Specialty and Fine Chemicals segment and some Animal
Health/Agriculture segment products, marketing and distribution is more typical
of specialty chemical companies, with products being sold to customers from
inventory in volumes ranging from rail cars to five gallon containers. Sales may
be handled by Company sales people, distributors or agents as appropriate.

RAW MATERIALS

The Company uses a wide array of raw materials in the conduct of its
businesses. The Company uses significant amounts of castor oil and compounds
derived from petroleum feedstocks in manufacturing a limited number of its
products. The Company believes it is one of the largest purchasers of castor oil
in the United States, and has the ability to take delivery and store a large
quantity of castor oil on site. Castor oil is used primarily in the manufacture
of the Company's polymer systems for coatings, telecommunication, and electronic
applications. Under advantageous market conditions, the Company sells this
commodity in bulk quantities as simple castor oil derivatives. Castor oil, which
is not produced in the United States, is an agricultural product, the market
price of which is affected by natural factors relating to the castor bean crop
from which the oil is produced. Castor oil is produced commercially in a few
foreign countries, with India currently being the largest exporter. The Company
has been able to obtain adequate supplies of castor oil generally at acceptable
prices in the past and expects to be able to continue to do so in the future.

Pyridine, which accounted for 6%, 6% and 7% of gross revenues in 1999, 1998
and 1997, respectively, is produced by the Company by a process involving the
high temperature reaction of acetaldehyde, formalin and ammonia. Acetaldehyde is
available from one supplier in North America. The average price of acetaldehyde
decreased approximately 9% during 1999 after decreasing 12% in 1998. Formalin's
feedstock is methanol, which experienced decreased prices in 1999 compared to
1998 due to higher natural gas inventories caused by warmer weather (methanol is
made from natural gas).

The Company obtains acetaldehyde and formalin pursuant to long-term supply
contracts under which the price for the raw material adjusts to market
conditions.

For its biosciences products, the Company buys materials from many
suppliers and is generally not dependent on any one supplier or group of
suppliers. Nonetheless, although there is a well-established market for raw
fetal bovine serum, its price and supply are cyclical and fluctuate. The Company
also is dependent on one company for the raw materials used to make Agarose
products (used by BioWhittaker Molecular Applications in electrophoeresis media
products). A long term contract is in effect for this supply.

The other key raw materials used by the Company are advanced organic
intermediates and generally have been in adequate supply from multiple
suppliers.

RESEARCH AND DEVELOPMENT

The Company's research and development program is designed to increase the
Company's competitiveness through improving its technology and developing
processes for the manufacture of new products to meet customer requirements. The
goals are to improve the Company's manufacturing processes so as to reduce
costs, improve quality and increase capacity; and to identify market
opportunities which warrant a significant technical effort, and offer the
prospects of a long-term, profitable business relationship. Research and
development activities are performed at most of the Company's manufacturing
facilities in both the United

- ---------------
(dollars in thousands, except share data)
5
<PAGE> 7

States and Europe. Approximately 150 employees are involved directly in research
and development activities worldwide.

In November, 1999, the Company approved a plan to proceed with an
investment in the Cambrex Center of Technical Excellence, a new research and
development organization. The 42,000 square foot site is located in The
Technology Center of New Jersey in North Brunswick. The new facility will help
to place the Company in a unique position to be a full-service resource for
pharmaceutical and biotechnology companies throughout the drug development
cycle.

The Company is ending its contractual agreement with Fine Tech Ltd. and
Albany Molecular Research, Inc. in March 2000. It will continue to fund
individual programs with these companies during 2000 at a expected expenditure
of up to $200.

The Company spent approximately $14,300, $14,000 and $10,600 in 1999, 1998
and 1997, respectively, on research and development efforts. The Company also
incurred a one-time non-cash expense of $14,000 in 1997 related to the value of
in-process research and development efforts underway at the time of the
acquisition of BioWhittaker.

PATENTS AND TRADEMARKS

The Company has patent protection in some of its product areas. However,
the Company relies primarily on know-how in many of its manufacturing processes
and techniques not generally known to other chemical companies, for developing
and maintaining its market position.

The Company currently owns approximately 160 United States patents which
have various expiration dates beginning in 2000 through 2018 and which cover
selected items in each of the Company's major product areas. The Company also
owns the foreign equivalent of many of its United States patents. In addition,
the Company has applied for patents for various concepts and is in the process
of preparing patent applications for other concepts. In conjunction with the
acquisition of BioWhittaker, the Company acquired patent and other proprietary
rights, which are material to the endotoxin detection products, allergy tests
kits and the ELVIS(R) cell culture products.

The Company has trademarks registered in the United States and a number of
foreign countries for use in connection with the Company's products and
business. The Company believes that many of its trademarks are generally
recognized in its industry. Such trademarks include Naturechem(R), Bufferite(R),
Vitride(R), Clonetics(R), Auto-LAL(TM) and ELVIS(R) .

The Company requires employees to sign confidentiality and non-compete
agreements where appropriate.

COMPETITION

Because of the nature of the Company's products in its Human Health and
Animal Health/Agriculture segments and its strategic approach, it is not
possible to identify a group of direct competitors. Where competition exists, it
is typically specific to a certain product, or is focused early in the process,
when an initial market position is being established. If the Company perceives
significant competitive risk and a need for large technical or financial
commitment, it generally negotiates long-term contracts or capital guarantees
from its targeted customer before proceeding.

In the Biosciences segment, no one company is known to compete with the
Company in all of its product groups, but in each group competition is offered
by a number of companies, including, in some cases, firms substantially larger
and with greater financial resources than the Company. The markets in which the
Company competes are generally concentrated and are highly competitive, with
competition centering on product specifications, quality, depth of product line,
price, technical support, timely product development and speed of delivery.

- ---------------
(dollars in thousands, except share data)
6
<PAGE> 8

Competition for the Company's Specialty and Fine Chemicals segment is more
typical of chemical markets. Competition exists from other producers of the
Company's products and from other products that may offer equivalent properties.
Competition in these areas are generally based on customer service, product
quality and pricing.

ENVIRONMENTAL AND SAFETY REGULATIONS AND PROCEEDINGS

General: Production of certain of the Company's products involves the use,
storage and transportation of toxic and hazardous materials. The Company's
operations are subject to extensive international and domestic federal, state
and local laws and regulations relating to the storage, handling, emission,
transportation and discharge of materials into the environment and the
maintenance of safe conditions in the work place. The Company maintains
environmental and industrial safety and health compliance programs at its
plants, and believes that its manufacturing operations are in general compliance
with all applicable safety, health and environmental laws.

The Company's acquisitions were made subject to known environmental
conditions. Also, as with other companies engaged in the chemical business,
risks of substantial costs and liabilities are inherent in certain plant
operations and certain products produced at the Company's plants. Additionally,
prevailing legislation tends to hold chemical companies primarily responsible
for the proper disposal of their chemical wastes even after transferal to third
party waste disposal facilities. Moreover, other future developments, such as
increasingly strict environmental, safety and health laws and regulations, and
enforcement policies thereunder, could result in substantial costs and
liabilities to the Company and could subject the Company's handling,
manufacture, use, reuse, or disposal of substances or pollutants at its plants
to more rigorous scrutiny than at present. Although the Company has no direct
operations and conducts its business through subsidiaries, certain legal
principles that provide the basis for the assertion against a parent company of
liability for the actions of its subsidiaries may support the direct assertion
against the Company of environmental liabilities of its subsidiaries.

Known environmental matters which may result in liabilities to the Company
and the related estimates and accruals are summarized in Note #22 to the Cambrex
Corporation and Subsidiaries Consolidated Financial Statements.

Present and Future Environmental Expenditures: The Company's policy is to
comply with all legal requirements of applicable environmental, health and
safety laws and regulations. The Company believes it is in general compliance
with such requirements and has adequate professional staff and systems in place
to remain in compliance. In some cases, compliance can only be achieved by
capital expenditures, and the Company made capital expenditures of approximately
$5,600 in 1999, $2,900 in 1998, and $2,800 in 1997 for environmental projects.
The Company anticipates that capital requirements will increase in subsequent
years as a result of the Clean Air Act Amendments and other pending
environmental laws. Additionally, as the environmental proceedings in which the
Company is involved progress from the remedial investigation and feasibility
study stage to implementation of remedial measures, related expenditures will
most likely increase. The Company considers costs for environmental compliance
to be a normal cost of doing business, and includes such costs in pricing
decisions.

EMPLOYEES

At December 31, 1999 the Company had 1,860 employees worldwide (770 of whom
were from international operations) compared with 1,750 employees at December
31, 1998 and 1,790 at December 31, 1997.

All hourly plant employees at the Bayonne, New Jersey facility are
represented by Local 8-406 of the Oil, Chemical and Atomic Workers International
Union under a contract expiring September 17, 2001; the hourly plant employees
at the Carlstadt, New Jersey plant are represented by the Amalgamated Industrial
Union of East Orange, New Jersey under a contract expiring November 30, 2003;
and the hourly plant employees at the
- ---------------
(dollars in thousands, except share data)
7
<PAGE> 9

Harriman, New York facility are represented by Local 810 of the International
Brotherhood of Teamsters under a contract expiring June 30, 2001. Nordic and
Profarmaco production, administration, scientific and technical employees are
represented by various local and national unions. The contracts with these
unions expire at various times through December 31, 2000. The Company believes
its labor relations are satisfactory, and will begin negotiations for the
renewal of contracts expiring in 2000.

SEASONALITY

Like many other businesses in the life sciences and specialty chemicals
industry, the Company experiences some seasonality. Operating results for any
quarter, however, are not necessarily indicative of results for any future
period. In particular, as a result of various factors such as acquisitions and
plant shutdowns, the Company believes that period-to-period comparisons of its
operating results should not be relied upon as an indication of future
performance.

EXPORT AND INTERNATIONAL SALES

The Company exports numerous products to various areas, principally Western
Europe, Asia and Latin America. Export sales from the Company's domestic
operations in 1999, 1998 and 1997 amounted to $66,963, $64,174 and $48,852,
respectively. Sales from international operations were $192,038 in 1999,
$156,844 in 1998, and $152,079 in 1997. Refer to Note #20 to the Cambrex
Corporation and Subsidiaries Consolidated Financial Statements.

ITEM 2 PROPERTIES.

Set forth below is information relating to the Company's manufacturing
facilities:

<TABLE>
<CAPTION>
OPERATING
LOCATION ACREAGE SUBSIDIARY PRODUCT LINES MANUFACTURED
- -------- --------- ------------------- --------------------------------
<S> <C> <C> <C>
Bayonne, NJ 8 acres CasChem Personal Care Ingredients;
Biomedical Urethanes;
Performance Enhancing-Chemicals;
Polymer Systems
Carlstadt, NJ 3 acres Cosan Performance Enhancing Chemicals;
Polymer Systems
Harriman, NY 29 acres Nepera Active Pharmaceutical
Ingredients; Personal Care
Ingredients; Vitamin B-3;
Agricultural Intermediates;
Performance Enhancing Chemicals
Delaware Water Gap, PA 12 acres Heico Active Pharmaceutical
Ingredients; Chiral Technology;
Performance Enhancing Chemicals;
Polymer Systems
North Haven, CT 4 acres Humphrey Performance Enhancing Chemicals
Charles City, IA 57 acres Salsbury Active Pharmaceutical
Ingredients; Pharmaceutical
Intermediates; Imaging
Chemicals; Animal Health
Products; Performance Enhancing
Chemicals
Zeeland, MI 14 acres Zeeland Pharmaceutical Intermediates;
Personal Care Ingredients;
Chiral Technology; Catalysts;
Performance Enhancing Chemicals
</TABLE>

- ---------------
(dollars in thousands, except share data)
8
<PAGE> 10

<TABLE>
<CAPTION>
OPERATING
LOCATION ACREAGE SUBSIDIARY PRODUCT LINES MANUFACTURED
- -------- --------- ------------------- --------------------------------
<S> <C> <C> <C>
Middlesbrough, England 12 acres Seal Sands Pharmaceutical Intermediates;
Personal Care Ingredients;
Catalysts; Agricultural
Intermediates; Performance
Enhancing Chemicals; Polymer
Systems
Karlskoga, Sweden 42 acres Nordic Active Pharmaceutical
Ingredients; Pharmaceutical
Intermediates; Imaging
Chemicals; Personal Care
Ingredients; Catalysts;
Agricultural Intermediates;
Performance Enhancing Chemicals
Paullo (Milan), Italy 13 acres Profarmaco Active Pharmaceutical
Ingredients
Walkersville, MD 116 acres BioWhittaker Biosciences
Verviers, Belgium 9 acres BioWhittaker Europe Biosciences
Cork, Ireland 21 acres Irotec Active Pharmaceutical
Ingredients; Pharmaceutical
Intermediates
Rockland, Maine 93 acres BMA Biosciences
Copenhagen, Denmark Leased BMA Biosciences
</TABLE>

The Company owns all the above facilities and properties, with the
exception of the leased facilities in Middlesbrough, England and Copenhagen,
Denmark. The Company also leases 18,500 square feet in Warren, NJ for its
Chiragene facility, which will end on December 31, 2000, unless terminated
sooner in accordance with the provision of the lease. In addition, the Company
owns thirty-one acres of undeveloped land adjacent to the North Haven facility,
one hundred and three acres of undeveloped land adjacent to the Harriman
facility, sixty-six acres of undeveloped land adjacent to the Zeeland facility
and eighty-one acres used as grazing fields for the Company's animals in
Walkersville, Maryland. The Company believes its facilities to be in good
condition, well maintained and adequate for its current needs.

Most of the Company's products are manufactured in multi-purpose
facilities. Each product has a unique requirement for equipment, and occupies
such equipment for varying amounts of time. This, combined with the variations
in demand for individual products, makes it difficult to estimate actual overall
capacity subject to regulatory approval. It is generally possible to transfer
the manufacturing of a particular product to another facility should capacity
constraints dictate. However, the Company's pyridine and arsenical feed additive
product groups are each manufactured at a single facility, and production of
such products would not be transferable to another site.

The Company plans to continue to expand capacity to meet growing needs by
process improvements and construction of new facilities where needed.

ITEM 3 LEGAL PROCEEDINGS.

See "Environmental and Safety Regulations and Proceedings" under Item 1 and
Note #22 to the Cambrex Corporation and Subsidiaries Consolidated Financial
Statements with respect to various proceedings involving the Company in
connection with environmental matters. The Company is party to a number of other
proceedings also discussed in Note #22. Management is of the opinion that while
the ultimate liability resulting from those proceedings, as well as
environmental matters, may have a material effect upon the results of operations
in any given year, they will not have a material adverse effect upon the
Company's liquidity nor its financial position.

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

None

- ---------------
(dollars in thousands, except share data)
9
<PAGE> 11

ITEM 10 EXECUTIVE OFFICERS OF THE REGISTRANT.

The following table lists the executive officers of the Company and the
chief operating officers of the Company's operating subsidiaries:

<TABLE>
<CAPTION>
NAME AGE OFFICE(1)
- ---- --- -----------------------------------------------
<S> <C> <C>
James A. Mack................................... 62 Chairman of the Board, President and Chief
Executive Officer
Douglas H. MacMillan............................ 53 Vice President and Chief Financial Officer
Peter E. Thauer................................. 60 Vice President, Law & Environment
General Counsel & Corporate Secretary
Steven M. Klosk................................. 42 Executive Vice President, Administration
Claes Glassell.................................. 48 Vice President, Cambrex
President, Pharmaceutical Group
Salvatore J. Guccione........................... 37 Vice President, Corporate Development
Ronnie D. Carroll............................... 59 Vice President, Technology
Thomas N. Bird.................................. 55 Vice President, Cambrex
President, Biosciences Group
John V. Van Hulle............................... 42 Vice President, Cambrex
President, Specialty and Fine Chemicals Group
John A. Antonelli, Jr. ......................... 44 Vice President, Treasurer
John P. Hopkins................................. 39 Vice President, Controller
Cyril C. Baldwin, Jr. .......................... 72 Chairman Emeritus
</TABLE>

- ---------------
(1) Unless otherwise indicated, positions shown are with the Company.

The Company's executive officers are elected by the Board of Directors and
serve at the Board's discretion.

Mr. Mack was elected Chairman of the Board of Directors on October 28,
1999. He also retains his position as President and Chief Executive Officer. Mr.
Mack has been Chief Executive Officer since Mr. Baldwin's retirement on April 1,
1995. Mr. Mack was appointed President and Chief Operating Officer and a
director of the Company in February 1990. For five years prior thereto he was
Vice President in charge of the worldwide Performance Chemicals businesses of
Olin Corporation, a manufacturer of chemical products, metal products, and
ammunition and defense-related products. Mr. Mack was Executive Vice President
of Oakite Products, Inc. from 1982 to 1984. Prior to joining Oakite, he held
various positions with The Sherwin-Williams Company, most recently as President
and General Manager of the Chemicals Division from 1977 to 1981. Mr. Mack is a
past Chairman of the Board of Governors of the Synthetic Organic Chemical
Manufacturing Association and is a member of the Board of Trustees of the
Michigan Tech Alumni Fund.

Mr. MacMillan was appointed Vice President and Chief Financial Officer in
April 1997. He was most recently Vice President, Chief Financial Officer for
Morgan Products, Ltd., a manufacturer and distributor of building products
traded on the New York Stock Exchange. Prior to his work with Morgan Products,
he was Chief Financial Officer of Varlen Corporation, a manufacturer of
petroleum analysis and automotive and scientific instruments.

Mr. Thauer was appointed Vice President, Law & Environment in December
1992, and General Counsel and Corporate Secretary in August 1989. From 1987
until he joined Cambrex, he was Counsel to the business and finance group of the
firm of Crummy, Del Deo, Dolan, Griffinger and Vecchione. From 1971 to 1987, Mr.
Thauer had held various positions with Avon Products, Inc., including U. S.
Legal Department Head and Corporate Assistant Secretary.

- ---------------
(dollars in thousands, except share data)
10
<PAGE> 12

Mr. Klosk was appointed Executive Vice President, Administration in October
1996. Mr. Klosk joined the Company in October 1992 as Vice President,
Administration. From February 1988 until he joined Cambrex, he was Vice
President, Administration and Corporate Secretary for The Genlyte Group, Inc., a
lighting fixture manufacturer. From 1985 to January 1988, he was Vice President,
Administration for Lightolier, Inc., a subsidiary of The Genlyte Group, Inc.

Mr. Glassell assumed the position of President, Pharmaceutical Group in
July 1998. Mr. Glassell was appointed President, International in November 1997.
Mr. Glassell was appointed Vice President of Cambrex in November 1994. After
extensive management experience at Nordic and Profarmaco, he joined Cambrex as a
result of the 1994 acquisition of Nordic and Profarmaco. In 1989, he joined
Nordic as President and CEO for Nordic's Chemistry Business. From 1986 to 1989,
he worked for the agricultural division of Berol Europe Ltd.

Mr. Guccione joined the Company in December 1995 as Vice President,
Corporate Development. Prior to joining the Company, from 1993 to 1995, he held
the position of Vice President and General Manager of the International
Specialty Products (ISP) Personal Care Division. He also served as Director of
Corporate Development for ISP.

Dr. Carroll joined the Company in September 1997 as Vice President,
Technology. Mr. Carroll had been with Bristol-Myers Squibb for 14 years, most
recently as Vice President, Chemical Development for Bristol-Myers Squibb
Technical Operations. Prior to working for Bristol-Myers Squibb, Dr. Carroll was
with Pfizer, Inc. in Groton, CT.

Mr. Bird was appointed President, Biosciences Group in July 1998. Mr. Bird
joined the Company in June 1997, as President of Nepera, Inc. He was previously
President of the consulting firm of Bavier, Bulgar and Goodyear since 1994.
Prior to that, Mr. Bird maintained various vice presidential positions with
Commercial Intertech Corporation in their Fluid Purification Group.

Mr. Van Hulle assumed the position President, Specialty and Fine Chemicals
Group effective July 1998. Mr. Van Hulle was appointed President of the
Specialty Chemicals Group in November 1997. Mr. Van Hulle was appointed
President of CasChem, Inc. and Cosan Chemical Corporation in December 1994. He
joined CasChem in July 1994 as Executive Vice President. For more than five
years prior thereto he was General Manager of the Fine Chemicals Group for
General Chemical Corporation, and had extensive experience with Air Products &
Chemicals, Inc.

Mr. Antonelli was appointed Vice President and Treasurer in April 1999. Mr.
Antonelli was promoted to the position of Treasurer in April 1998. He joined the
Company in June 1995 as Director of Taxes. Prior to joining the Company, Mr.
Antonelli was Corporate Tax Manager at InterMetro Industries, a worldwide
manufacturer and distributor of storage and shelving systems. Mr. Antonelli is a
Certified Public Accountant who has worked for PriceWaterhouse, KPMG and Parente
Randolph.

Mr. Hopkins joined the Company in January 1999 as Vice President and
Controller. Prior to joining the Company, from 1988 to 1998, he held various
senior financial positions with ARCO Chemical Company, a manufacturer and
marketer of specialty chemicals and chemical intermediates. Mr. Hopkins is a
Certified Public Accountant and was an Audit Manager for Coopers & Lybrand prior
to joining ARCO Chemical.

Mr. Baldwin was named Chairman Emeritus on October 28, 1999. Mr. Baldwin
was Chairman of the Board from July 1991 to October 28, 1999, and a Director of
the Company since it began business in December 1981. On January 26, 1995, Mr.
Baldwin announced his retirement, effective April 1, 1995, as Chief Executive
Officer of the Company, a position he also held since December 1981. Mr. Baldwin
retired as an employee of the Company effective April 30, 1995. He is a member
of the Environmental and Governance Committees of the Company's Board of
Directors, and he is a director of Church & Dwight Co., Inc. and Congoleum
Corporation.

- ---------------
(dollars in thousands, except share data)
11
<PAGE> 13

PART II

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

Effective March 5, 1998 the Company's Common Stock, $.10 par value, was
listed on the New York Stock Exchange (NYSE), continuing under the symbol CBM.
From November 15, 1990 to March 5, 1998, the Company's Common Stock had been
traded on the American Stock Exchange (AMEX). The following table sets forth the
closing high and low sales price of the Common Stock as reported on the NYSE:

<TABLE>
<CAPTION>
1999 HIGH LOW
- ---- ---- ---
<S> <C> <C>
First Quarter............................................... $24 13/16 $20 9/16
Second Quarter.............................................. 26 1/4 22 1/16
Third Quarter............................................... 28 5/16 23 13/16
Fourth Quarter.............................................. 34 7/16 24 5/8
</TABLE>

<TABLE>
<CAPTION>
1998 HIGH LOW
- ---- ---- ---
<S> <C> <C>
First Quarter............................................... $25 1/4 $21
Second Quarter.............................................. 29 7/16 25 3/8
Third Quarter............................................... 28 3/16 22 13/16
Fourth Quarter.............................................. 29 19 5/8
</TABLE>

As of March 15, 2000, the Company estimates that there were approximately
5,990 beneficial holders of the outstanding Common Stock of the Company.

The quarterly dividend on common stock was $0.03 for 1999 and 1998.

ITEM 6 SELECTED FINANCIAL DATA.

The following selected consolidated financial data of the Company for each
of the years in the five year period ended December 31, 1999 are derived from
the audited financial statements. The consolidated financial statements of the
Company as of December 31, 1999 and December 31, 1998 and for each of the years
in the three year period ended December 31, 1999 and the accountants' reports
thereon are included elsewhere in this annual report. The data presented below
should be read in conjunction with the financial statements of the Company and
the notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere herein.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------
1999(1) 1998(2) 1997(3)(4) 1996 1995
-------- -------- ---------- -------- --------
(IN THOUSANDS, EXCEPT PER-SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME DATA:
Gross sales............................. $484,560 $441,683 $380,083 $369,479 $368,070
Net revenues............................ 481,388 457,241 374,215 359,385 357,176
Gross profit............................ 167,163 163,417 113,962 101,336 99,780
Selling, general and administrative..... 77,729 76,594 52,688 45,879 47,751
Research and development................ 14,255 13,956 10,600 9,183 7,526
Vitamin B-3 provision................... 6,000 -- -- -- --
Non-recurring in-process R&D charge..... -- -- 14,000 -- --
Operating profit........................ 69,179 72,867 36,674 46,274 44,503
Interest expense, net................... 9,723 10,227 5,330 5,799 10,508
Other (income) expense, net............. 555 945 (1,263) (194) 2,779
Income before taxes..................... 58,901 61,695 32,607 40,669 31,216
Net income.............................. 38,132 39,102 17,776 28,225 19,670
</TABLE>

- ---------------
(dollars in thousands, except share data)
12
<PAGE> 14

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------
1999(1) 1998(2) 1997(3)(4) 1996 1995
-------- -------- ---------- -------- --------
(IN THOUSANDS, EXCEPT PER-SHARE DATA)
<S> <C> <C> <C> <C> <C>
EARNINGS PER SHARE DATA:
Earnings per common share and common
share equivalents:
Basic................................. $ 1.55 $ 1.62 $ 0.75 $ 1.22 $ 1.03
Diluted............................... $ 1.49 $ 1.54 $ 0.73 $ 1.19 $ 0.98
Weighted average shares outstanding:
Basic................................. 24,572 24,194 23,627 23,214 19,078
Diluted............................... 25,613 25,412 24,419 23,792 20,106
DIVIDENDS PER COMMON SHARE.............. $ 0.12 $ 0.11 $ 0.10 $ 0.09 $ 0.07
BALANCE SHEET DATA: (at end of period)
Working capital....................... $163,165 $156,297 $116,743 $ 62,912 $ 69,865
Total assets.......................... 673,647 617,054 552,426 404,444 402,553
Long-term obligations................. 225,922 191,372 194,325 60,152 99,643
Total stockholders' equity............ 295,365 276,853 225,954 229,045 189,484
</TABLE>

- ---------------
(1) Includes the results of Irotec Laboratories, Ltd. from the date of
acquisition effective March 1999 and the results of BioWhittaker Molecular
Applications, Inc. from the date of acquisition effective July 1999.

(2) Includes royalty income of $19,298 in net revenues related to a technology
license agreement with Mylan Laboratories for the use of intellectual
property.

(3) Includes the results of BioWhittaker, Inc. from the date of acquisition
effective October 1997.

(4) Includes the non-recurring charge for in-process research and development
associated with the acquisition of BioWhittaker.

- ---------------
(dollars in thousands, except share data)
13
<PAGE> 15

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

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain items
from the selected consolidated financial information as a percentage of gross
sales.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------
1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
Gross sales....................................... 100.0% 100.0% 100.0%
Net revenues...................................... 99.3 103.5* 98.5
Gross profit...................................... 34.5 37.0 30.0
Selling, general and administrative............... 16.1 17.3 13.9
Research and development.......................... 2.9 3.2 2.8
Vitamin B-3 provision............................. 1.2 -- --
Non-recurring in-process R&D charge............... -- -- 3.6
Operating profit.................................. 14.3 16.5 9.6
Interest expense.................................. 2.0 2.3 1.4
Other (income) expense, net....................... 0.1 0.2 (0.3)
Net income........................................ 7.9 8.9 4.7
</TABLE>

- ---------------
* Includes royalty income of $19,298

The following tables show the gross sales of the Company's four segments,
in dollars and as a percentage of the Company's total gross sales for the years
ended December 31, 1999, 1998 and 1997, as well as the gross profit by product
segment for 1999 and 1998.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
GROSS SALES
Human Health..................................... $225,660 $194,766 $182,818
Biosciences...................................... 83,887 65,968 13,577
Animal Health/Agriculture........................ 55,695 56,285 59,804
Specialty and Fine Chemicals..................... 119,318 124,664 123,884
-------- -------- --------
Total Gross Sales.................................. $484,560 $441,683 $380,083
======== ======== ========
Total Net Revenues................................. $481,388 $457,241* $374,215
======== ======== ========
Total Gross Profit................................. $167,163 $163,417 $113,962
======== ======== ========
</TABLE>

- ---------------
* Includes royalty income of $19,298

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
GROSS SALES DISTRIBUTION
Human Health..................................... 46.6% 44.1% 48.1%
Biosciences...................................... 17.3% 14.9% 3.6%
Animal Health/Agriculture........................ 11.5% 12.8% 15.7%
Specialty and Fine Chemicals..................... 24.6% 28.2% 32.6%
------ ------ ------
Total Gross Sales Distribution..................... 100.0% 100.0% 100.0%
====== ====== ======
</TABLE>

- ---------------
(dollars in thousands, except share data)
14
<PAGE> 16

1999-1998 GROSS SALES & GROSS PROFIT BY PRODUCT SEGMENT

<TABLE>
<CAPTION>
1999
--------------------------------
GROSS GROSS GROSS
SALES PROFIT $ PROFIT %
-------- -------- --------
<S> <C> <C> <C>
Human Health......................................... $225,660 $ 83,603 37.0%
Biosciences.......................................... 83,887 42,088 50.2%
Animal Health/Agriculture............................ 55,695 12,045 21.6%
Specialty and Fine Chemicals......................... 119,318 29,427 24.7%
-------- --------
Total...................................... $484,560 $167,163 34.5%
======== ========
</TABLE>

<TABLE>
<CAPTION>
1998
--------------------------------
GROSS GROSS GROSS
SALES PROFIT $ PROFIT %
-------- -------- --------
<S> <C> <C> <C>
Human Health......................................... $194,766 $ 92,441* 47.5%
Biosciences.......................................... 65,968 32,321 49.0%
Animal Health/Agriculture............................ 56,285 11,557 20.5%
Specialty and Fine Chemicals......................... 124,664 27,098 21.7%
-------- --------
Total...................................... $441,683 $163,417 37.0%
======== ========
</TABLE>

- ---------------
* Includes royalty income of $19,298

1999 Compared to 1998

Gross sales in 1999 were $42,877 (10%) above 1998. Increases occurred in
Human Health and Biosciences. Specialty and Fine Chemicals decreased compared to
1998, and Animal Health/Agriculture was at the same level as the prior year.

The effect of foreign currency exchange rates on gross sales for the year
resulted in a negative impact on sales of $2,482 compared to 1998. Gross sales
for 1999 would have been $487,042 using 1998 exchange rates compared to 1998
sales of $441,683.

The foreign currency translation adjustments decreased by $19,889 to a
negative ($29,408) from December 31, 1998. This decrease is attributable
primarily to significant exchange rate fluctuations in the Italian Lire against
the U.S. dollar in 1999. The Swedish Krona, Pound Sterling and Irish Punt were
also negatively affected in 1999. The exchange rate declined from 1,649 Lira to
the dollar at December 31, 1998 to 1,915 Lira to the dollar, at December 31,
1999, a decline of 16%. The Swedish Krona declined 5%, the pound Sterling
declined 4%, and the Irish Punt declined 3% to the dollar in 1999. There were
also fluctuations in the Italian Lira, Swedish Krona, Pound Sterling, and Irish
Punt between average monthly rates and month end rates in 1999 which had an
effect on the foreign currency translation adjustment.

The Human Health Segment gross sales of $225,660 were $30,894 (16%) above
1998. This segment's increase was in Active Pharmaceutical Ingredients, which
were up $34,791 (29%). Personal Care Ingredients were down $2,071 (12%) and
Catalysts were down $1,331 (16%) from 1998.

Active Pharmaceutical Ingredient sales of $155,250 were $34,791 (29%) above
the prior year due to strong demand for our gastro-intestinal products used for
treating ulcerative colitis, increased shipments of central nervous system and
cardiovasular preparations, new products, and sales from the acquisition of
Irotec in March 1999 of $14,587. Active Pharmaceutical Ingredients include
active ingredients used in products for gastro-intestinal, cardiovascular,
endocrine, central nervous system, respiratory, diuretics, anti-infective, anti-
inflammatory, immunology and various other uses. Pharmaceutical Intermediate
sales of $25,995 were roughly at the same level as 1998 with new products used
for a cholesterol reducing drug and central nervous system applications, as well
as additional products from the Irotec acquisition, offsetting no sales of
- ---------------
(dollars in thousands, except share data)
15
<PAGE> 17

aminodioxepin (AOA) ($7,600 in 1998), a drug intermediate used in the production
of a protease inhibitor for the treatment of AIDS, due to the customer changing
their production method. Personal Care Ingredients of $14,706 were $2,071 (12%)
below 1998 due to reduced Pyridine sales for the pharmaceutical market both in
the U.S. and for the export market. Catalyst sales used in the pharmaceutical
market of $6,950 were $1,331 (16%) below 1998 levels due to lower sales of
Vitride.

The Biosciences Segment gross sales of $83,887 were $17,919 (27%) above
1998 due to increased shipments of cell culture and endotoxin detection
products. The acquisition of BioWhittaker Molecular Applications, Inc. (formerly
the BioProducts Business of FMC Corporation) in July 1999 added $11,652 in sales
to this segment, and includes products for fragment analysis, sequencing, gel
bond film and chromatography. This segment consists principally of cell culture
products, including living cell cultures, cell culture media and cell culture
media supplements, as well as endotoxin detection products.

Sales for 1999 from cell culture products of $47,434 were $3,639 (8%) above
the prior year, and sales from endotoxin detection products of $21,864 were
$3,012 (16%) above the prior year due to increased shipments to European
customers.

The Animal Health/Agriculture Segment gross sales of $55,695 were $590 (1%)
below the 1998 level. Sales of Vitamin B-3 decreased $3,659 (29%) and Animal
Health products decreased $2,601 (15%). These decreases were offset by
agricultural intermediate sales, which increased $5,670 (22%).

Vitamin B-3 sales of $9,155 were $3,659 (29%) below 1998 due to reduced
shipments to the animal feed markets and lower prices compared to 1998. Animal
Health product sales of $15,013 were $2,601 (15%) below 1998, due to slower
exports made by a major customer caused by the continued economic slowdown in
Pacific Rim countries. Agricultural Intermediate sales of $31,527 were up $5,670
(22%) due to new applications by a major customer for use in crop protection.

The Specialty and Fine Chemicals Segment gross sales of $119,318 were
$5,346 (4%) below 1998. Sales of Performance Enhancing Chemicals were $5,412
(7%) below 1998 levels and Polymer Systems remained at 1998 levels.

Performance Enhancing Chemical sales of $76,441 were $5,412 (7%) below 1998
levels. Key decreases were in sales of pyridine products used in specialty
additives, Suconox (used as an anti-oxidant in plastic resins), and ASA's
(alkenyl succinic anhydrides used in the fuel/oil industries as additives).
Polymer system sales of $42,877 were up $66 due to additional customers for
encapsulants used in telecommunications. These increases were offset by reduced
demand for castor based polymer and telecommunication products, and the
Company's decision not to sell into low margin resale markets.

Export sales from U.S. businesses were $66,963 compared with $64,174 in
1998. International sales, comprised of all sites from our operations in Europe,
totaled $192,038 compared with $156,844 in 1998.

Total gross profit of $167,163 was $3,746 above 1998 due to improved gross
margins in Biosciences, Animal Health/Agriculture and the Specialty Fine
Chemicals, The Human Health segment gross profit was lower than 1998 due to the
inclusion in 1998 of $19,298 in royalty income. This royalty income ended in
December 1998 with the termination of the exclusive portion of the License
Agreement with Mylan Laboratories. The Company's gross margin percentage in 1999
was 34.5% versus 37.0% in 1998. Excluding the royalty income, the gross margin
percentage in 1998 was 32.6%.

Selling, general and administrative expenses as a percentage of gross sales
was 16.1% in 1999, compared to 17.3% in 1998. This decrease was mainly due to
the reduction of $3.3 million in 1999 compared to 1998 for administrative costs
at the Corporate group and a reorganization at some of the Specialty Chemical
sites which was started in 1998. Increases in marketing and sales were due to
additional promotional and compensation expenses attributed to upgrading
biosciences marketing efforts in the U.S. and Europe. In 1999, the Company
incurred an additional $194 in environmental costs and reversed $1,200 from the
reserve, thereby decreasing the total reserve by $1,394. In addition, the
Company settled certain environmental claims

- ---------------
(dollars in thousands, except share data)
16
<PAGE> 18

involving the Cosan Chemical Company (a subsidiary) with insurance companies for
$1,150. The Company conducts periodic reviews of its environmental and
litigation matters, prepares estimates of the range of potential future costs of
each matter wherever possible, and adjusts the accruals for environmental
contingencies as circumstances warrant. The Company also expended $1,200 in
addition to a $6,000 provision for legal fees concerning the alleged Nepera
Vitamin B-3 anti-trust violations.

Research and Development expenses of $14,255 were 2.9% of gross sales in
1999 versus $13,956 (3.2% of gross sales) in 1998. The decreased percentage was
due to reduced contract research sponsored by the Corporate Group and reduced
R&D spending by the Zeeland, Michigan facility due to a reorganization of the
Specialty Chemical sites. Total spending increased due to the biosciences
spending at BioWhittaker Molecular Applications, Inc. (formerly the BioProducts
division of FMC Corporation).

An accrual of $6,000 was recorded as of December 31, 1999 to cover the
anticipated government settlements, related litigation, and legal expenses
associated with Cambrex's subsidiary, Nepera, alleged role in Vitamin B-3
anti-trust violations from 1992 to 1995. Vitamin B-3 sales during this period
account for approximately 2% of Cambrex volume at low gross margins.

The operating profit in 1999 was $75,179 versus $72,867 in 1998 (excluding
the effect of the Vitamin B-3 accrual of $6,000).

Net interest expense of $9,723 in 1999 reflected a decrease of $504 from
1998. This decrease was due to the reduced interest rate in 1999. The average
interest in 1999 was 6.1% versus 6.5% in 1998.

Other expense of $555 for 1999 was lower than the $945 in 1998. Included in
other expense for 1998 were asset write-offs at our Zeeland, Michigan facility
of $522.

The provision for income taxes for 1999 resulted in an effective rate of
32% (excluding the effect of the Vitamin B-3 provision of $6,000, including a
benefit of $1,493 for the Italian Substitute Tax) versus 31% in 1998 (excluding
the Italian Substitute Tax expense of $3,420).

The Company's net income for 1999 increased to $44,132 (excluding the
effect of the Vitamin B-3 accrual of $6,000) compared with a net income of
$39,102 in 1998. Net income in 1999, including the Vitamin B-3 accrual, was
$38,132.

1998 Compared to 1997

Gross sales in 1998 were $61,600 (16%) above 1997. Increases occurred in
Human Health and Biosciences, Animal Health/Agriculture products decreased
compared to 1997, and Specialty and Fine Chemicals was at the same level as the
prior year.

The effect of foreign currency exchange rates on gross sales for the year
resulted in a negative impact on sales of $2,026 compared to 1997. Gross sales
for 1998 would have been $443,709 using 1997 exchange rates compared to 1997
sales of $380,083.

The Human Health Segment gross sales of $194,766 were $11,948 (7%) above
1997. This segment's increases were in Active Pharmaceutical Ingredients, which
were up $9,998 (9%), Pharmaceutical Intermediates were up $1,414 (6%) and Chiral
Technology, up $1,815 (49%). Imaging Chemicals (X-Ray Media) were down $3,438
(20%) from 1997.

Active Pharmaceutical Ingredient sales of $120,459 were $9,998 (9%) above
the prior year due to strong demand for our gastro-intestinal products used for
treating ulcerative colitis, and due to shipments of a new anti-asthma drug made
in one of our pilot plant facilities. Active Pharmaceutical Ingredients include
active ingredients used in products for gastro-intestinal, cardiovascular,
endocrine, central nervous system, respiratory, diurectics, anti-infective,
anti-inflammatory, immunology and various other uses. Pharmaceutical
Intermediates sales of $24,844 were $1,414 (6%) above 1997 due to new products
used in migraine medicine, central nervous system applications, and another
intermediate for a new molecular compound in cooperation

- ---------------
(dollars in thousands, except share data)
17
<PAGE> 19

with a major ethical pharmaceutical company. These increases were partially
offset by lower sales of aminodioxoepin (AOA), a drug intermediate used in the
production of a protease inhibitor for the treatment of AIDS. Chiral Technology
product sales of $5,548 were $1,815 (49%) above 1997 due to the sales from the
acquisition of the assets of the chiral intermediates business (now Chiragene)
from Celgene Corporation in January 1998. Imaging Chemical (X-Ray Media) sales
of $14,179 were $3,438 (20%) below the prior year due to a customer reducing
inventories, and another customer deciding to manufacture for themselves. The
decrease was also caused by a customer who established a backup supplier as was
permitted under a 5-year supply agreement. Other product category changes from
prior years were not significant.

The Biosciences Segment gross sales of $65,968 are from our BioWhittaker
subsidiary which was acquired in the fourth quarter of 1997, and include their
first full year sales as a Cambrex subsidiary. This segment consists principally
of cell culture products, including living cell cultures, cell culture media and
cell culture media supplements, as well as endotoxin detection products.

Sales for 1998 from cell culture products were $43,795 and sales from
endotoxin detection products were $18,852.

The Animal Health/Agriculture Segment gross sales of $56,285 were $3,519
(6%) below the 1997 level with decreases in Agricultural Intermediates of $4,313
(down 14%). Vitamin B-3 was $651 (up 5%) above 1997 and Animal Health products
were at the same level as 1997.

Vitamin B-3 sales of $12,814 were $651 (5%) above 1997 due to price
increases put in place in late 1997 and volume increases to customers. Animal
Health sales of $17,614 was at the same level as 1997, with sales of
organo-arsenical feed additives, the largest product in feed additives,
remaining at 1997 levels. Agricultural Intermediate sales of $25,857 were down
$4,313 (14%) due to reduced demand for crop protection products directly related
to the economic conditions in Asia.

The Specialty and Fine Chemicals Segment gross sales of $124,664 increased
$780 (1%) above 1997. Sales of Performance Enhancing Chemicals of $81,853 were
at 1997 levels and Polymer System sales of $42,811 were $567 (1%) above 1997.

Performance Enhancing Chemical sales include over 100 products used in
photography, pigments, specialty polymers, fuel/or additives, catalysts, and
other specialty additives. Key increases were in sales of THPE, a polycarbonate
additive, with growth in export markets, and in castor oil based products.
Polymer System sales of $42,811 were $567 (1%) above 1997, due to increased
demand for a monomer used in high performance plastics offset by decreases in
coating products. Export sales from U.S. businesses of $64,174 in 1998 compared
to $48,852 in 1997.

Export sales from U.S. businesses were at $64,174 compared with $48,852 in
1997. International sales, comprised of all sites from our operations in Europe,
totaled $156,844 as compared with $152,079 in 1997.

Total gross profit of $163,417 was $49,455 above 1997 due mainly to the
inclusion of the Biosciences Segment for a full year, and the effect of royalty
income of $19,298. (The 1997 Gross Profit included $1,000 in royalty income).
The gross margin for all product segments excluding the royalty income was 32.6%
up from 29.7% in 1997. The reduced gross margin in the Specialty and Fine
Chemicals segment was due to higher sales of low margin commodity castor oil.
The gross margin for the Human Health Segment (excluding the royalty income) was
$73,143 (37.6%) in 1998 versus $66,779 (36.5%) in 1997 due to the general mix of
sales.

The royalty income discussed above relates to a technology license
agreement signed in late 1997 with Mylan Laboratories for the use of
intellectual property related to three pharmaceutical ingredients. The company
has been advised that Mylan will no longer enforce its exclusive access to the
technology. The royalty arrangements under the agreements have also concluded.
As previously reported, the company's exclusive license agreement is the subject
of various lawsuits. The Company has begun to sell these products on a
non-exclusive basis in first quarter 1999. The Company has been able to replace
a substantial portion of royalty revenues through sales with additional
customers and price increases.

- ---------------
(dollars in thousands, except share data)
18
<PAGE> 20

Selling, general and administrative expenses as a percentage of gross sales
was 17.3% in 1998, up from 13.9% in 1997. The increase is mainly due to the
inclusion for the full year 1998 of the Biotechnology Segment acquired in the
fourth quarter 1997, Chiragene acquired in January 1998 and the third quarter
1998 restructuring charge of $1,400. Excluding the effect of the Biotechnology
Segment for the first nine months of 1998, the restructuring charge taken in the
third quarter 1998, and the Chiragene expenses, SG&A expenses were $59,144
(13.4% of gross sales) versus $52,688 (13.7% of gross sales) in 1997. The
Company incurred a restructuring charge of $1,400 which includes the
non-recurring costs resulting from the consolidation of administrative and
management functions and resulted in the reduction of 44 employees. These costs
are primarily related to severance paid to terminated employees. Certain actions
were taken in the third quarter of 1998 for the acquisition reorganization plan
at our BioWhittaker facility of approximately $1,400 for the termination of 28
employees. This plan was part of the final purchase accounting adjustments made
in the third quarter 1998. In addition, BioWhittaker favorably concluded a
patent infringement dispute and has received a cash payment of approximately
$5,400 in 1999. This settlement, as well as the settlement of other acquisition
contingencies of approximately $1,600, are part of the final purchase accounting
adjustments in the third quarter 1998. As a result of finalizing the purchase
accounting, the net impact on goodwill, including the tax effect, was a
reduction of approximately $900. The Company conducts periodic reviews of its
environmental and litigation matters, prepares estimates of the range of
potential future costs of each matter wherever possible, and adjusts the
accruals for environmental contingencies as circumstances warrant. In 1998, the
Company incurred an additional $1,799 in environmental expenses and reversed
$800 from the reserve, thereby decreasing the total reserve by $2,599.

Research and Development expenses of $13,956 were 3% of gross sales in
1998, and represented a 32% increase from 1997. This increase was mainly due to
the inclusion of BioWhittaker for a full year, the acquisition of Chiragene in
January 1998, and increased corporate commitment to underwrite spending on
outside contract research.

The operating profit in 1998 was $72,867 versus $50,674 in 1997 (excluding
the effect of the non-recurring charge for in-process research and development
of $14,000 in 1997).

Net interest expense of $10,227 in 1998 reflected an increase of $4,897
from 1997. This increase was due to the financing of the acquisition of
BioWhittaker and Chiragene. The average interest rate was 6.5% in 1998 versus
6.8% in 1997.

Other expense of $945 for 1998 was $2,208 higher than the $1,263 of other
income in 1997. The year 1997 included a one-time gain of $954 on a foreign
currency denominated loan. Also included in other expense for 1998 were asset
write-offs at our Zeeland, Michigan facility of $522.

The year 1998 included a one-time charge of $3,420 in income taxes for the
Italian Substitute Tax election, which was made in the second quarter of 1998.
This election allows previously non-deductible goodwill of Cambrex's Italian
subsidiary, Profarmaco, S.r.l., to be deducted. This one-time charge will have a
total future tax benefit in the years 1999 to 2004 of approximately $8,000.

The provision for income taxes for 1998 resulted in an effective rate of
31% (excluding the Italian Substitute Tax) versus 32% in 1997 (excluding the
effect of the non-recurring charge for in-process research and development of
$14,000 in 1997).

The Company's net income for 1998 increased to $39,102 compared with a net
income of $31,776 in 1997 (excluding the effect of the non-recurring charge for
in-process research and development of $14,000 in 1997).

1997 Compared to 1996

Gross sales in 1997 were $10,604 above 1996. Increases in Human Health were
offset by lower sales in our Animal Health/Agriculture and Specialty Fine
Chemicals categories. Biosciences sales (from the acquisition of BioWhittaker in
the fourth quarter 1997) were $13,577.
- ---------------
(dollars in thousands, except share data)
19
<PAGE> 21

The effect of foreign currency exchange rates on gross sales for the year
resulted in a reduction in sales of $8,551 compared to 1996. Gross sales for
1997 would have been $388,634 using 1996 exchange rates compared to 1996 sales
of $369,479.

The Human Health Segment gross sales of $182,818 were $8,420 (5%) above
1996. Increases in Active Pharmaceutical Ingredients of $6,652, Pharmaceutical
Intermediates of $7,119, and Personal Care of $2,150, more than offset Lower
Imaging Chemicals (X-Ray Media) of $5,407.

Active Pharmaceutical Ingredient sales of $110,461 were $6,652 (6%) above
1996 due mainly to the introduction of a new generic product in the Japanese
market used as an anti-ulcerative, which resulted in new product sales of $6,264
in 1997. This increase was also attributable to sales of
Isosorbide-5-mononitrate, used as a vasodilator in cardiovascular pretreatments,
which had strong volume growth in 1997. Pharmaceutical Intermediate sales of
$23,430 were $7,119 (44%) above 1996 due to the effect of sales of an advanced
intermediate of a new protease inhibitor for AIDS treatment, and the manufacture
of Aminopyridine, used in a variety of pharmaceutical products. Personal Care
Ingredient sales of $16,453 were $2,150 (15%) above 1996, due to higher sales of
several smaller products manufactured and sold to the European market.

The Biosciences Segment gross sales of $13,577 are from BioWhittaker since
the date of acquisition. Their products include cell culture and endotoxin
detection products.

The Animal Health/Agriculture Segment gross sales of $59,804 were $1,756
(3%) below 1996. The Animal Health sales decreased $678, Agricultural
Intermediate sales decreased $1,501, but Vitamin B-3 sales increased $423.

Vitamin B-3 sales of $12,163 increased 4% as compared to 1996 with volume
increases in Europe partially offset by decreased pricing due to competitive
pressure. Animal Health Product sales were $17,471, down 4% from 1996, mainly
due to a decision to exit a low margin poultry additive. Agricultural
Intermediate sales of $30,170 decreased $1,501 (5%) from 1996. The decrease was
due to the unusual amount of a pyridine derivative used in the manufacture of
herbicides shipped in 1996 under a renegotiated contract. The shipments in 1997
returned to normal levels. Pyridine, which is the largest agriculture product,
was at 1996 levels.

The Specialty and Fine Chemicals Segment gross sales of $123,884, decreased
$9,637 (7%) from 1996. Performance Enhancing Chemical sales of $81,640 were down
7% compared to 1996 and Polymer System sales of $42,244 were down 8% from 1996.

Performance Enhancing Chemical sales decreased $5,755 (7%). Pyridine
derivatives returned to pre-1996 sales as the result of decreased demand in the
Asian market. Photographic product sales decreased due to the expected reduction
in volume by one-half of normal levels from a key customer. Polymer System sales
of $42,244 decreased $3,881 (8%) as compared to 1996. Sales of engineering
plastics decreased $2,000 (24%) from 1996 due to a major customer losing to a
competitor their largest market of a product used in producing high performance
plastics mainly used in the electronics industry. Coatings decreased $1,217 (6%)
from 1996 due to reduced sales of low margin castor based products as a result
of management's decision to focus on higher margin products, and
Telecommunications product sales decreased $665 (4%) from 1996 primarily as a
result of a major customer's decision to change their specification of an
encapsulant product, but it took some time for customers to reduce existing
inventories.

Export sales from U.S. businesses were at $48,852 compared with $50,243 in
1996. International sales, comprised of all sales from our operations in Europe,
totaled $152,079 as compared with $151,466 in 1996.

Total gross profit in 1997 increased to $113,962, resulting in a higher
gross margin percentage of 30.0% of gross sales compared with 27.4% in 1996. The
gross margin increase was due to an improved product mix of sales to include
higher active pharmaceutical ingredients and new pharmaceutical intermediates,
production efficiencies, and increased plant throughput, in line with
management's continued focus on higher performing, more profitable product
lines. Excluding the BioWhittaker acquisition, the gross margin would have been
29.3%.

- ---------------
(dollars in thousands, except share data)
20
<PAGE> 22

Selling, general and administrative expenses as a percentage of gross sales
were 13.8% in 1997, up from 12.4% in 1996. The 1997 expense of $52,688 was
$6,809 (15%) above 1996 primarily due to addition of BioWhittaker in the fourth
quarter 1997 and incremental expenses associated with tax planning strategies.
Expenses were reduced by a $2,400 recovery of previously incurred environmental
costs as a result of a settlement with a prior owner of one of the Company's
operating facilities. The Company conducts periodic reviews of its environmental
and litigation matters, prepares estimates of the range of potential future
costs of each matter wherever possible, and adjusts the accruals for
environmental contingencies as circumstances warrant. No adjustments were made
to this reserve in 1997.

Research and development expenses of $10,600 were 2.8% of gross sales in
1997, and represented a 15% increase from 1996. A portion of this increase was
due to costs associated with the Albany Molecular contract and the addition of
BioWhittaker. As previously announced in November 1997, Cambrex recorded a
charge of $14,000 in the fourth quarter 1997 for the value of in-process
research and development at the time of the acquisition of BioWhittaker, Inc.
which was completed on October 3, 1997. This charge, which is consistent with
pharmaceutical industry practice, reflects the recognition of the value of the
continuing efforts to develop new products in the biotechnology marketplace.
These research and development projects were not commercially viable and had no
alternative future use at the date of acquisition. Management intends to
continue funding these projects, which will permit BioWhittaker to maintain its
market leadership position.

The operating profit in 1997 was $36,674, including the non-recurring
charge for in-process research and development of $14,000, versus $46,274 in
1996. Excluding the charge, operating profit would have been $50,674.

Net interest expense of $5,330 in 1997 reflected a decrease of $469 (8%)
from 1996. The decrease was due to an average interest rate in 1997 of 6.8%
compared to 7.4% in 1996 offset by the additional borrowings used to finance the
BioWhittaker acquisition combined with an increase in the average outstanding
debt.

Other income in 1997 was $1,263 compared with $194 in 1996. Other income
included a gain of $954 on the settlement of a foreign denominated loan.
Additionally, 1997 other income included the final resolution and receipt of the
settlement proceeds due from the 1996 premature termination of a contract by the
customer of $766, offset by a charge of $507 for the settlement of a legal
matter reached during the year.

The provision for income taxes for 1997 resulted in an effective rate of
45.5%, which includes the $14,000 non-recurring charge for in-process research
and development, versus 30.6% in 1996. The effective tax rate in 1997 would have
been 31.8% excluding the $14,000 charge, which is not deductible for tax
purposes. The 1997 effective tax rate is the result of continued tax planning
efforts to minimize the impact of foreign taxes. In 1996, the Company recorded a
$1,500 reversal of tax reserves as a result of a settlement with the Internal
Revenue Service related to audits for the years 1988 through 1991.

The Company's net income in 1997 was $17,776, including $14,000 for the
non-recurring charge for in-process research and development, compared to
$28,225 in 1996. Excluding this charge, net income in 1997 would have been
$31,776.

LIQUIDITY AND CAPITAL RESOURCES

Net cash flow from operations was $88,011 for the year ended December 31,
1999 compared with $80,686 in 1998. The increase in cash flow is primarily due
to a reduction in inventory as well as an increase in net income (excluding the
Vitamin B-3 provision), which was offset by increased accounts receivable and a
decrease in accounts payable and accrued liabilities. Cash flows used in
investing activities of $106,706 increased $50,448 over the prior year due to
the acquisitions of BioWhittaker Molecular Applications, Irotec Laboratories and
Poietics, which was partially offset by lower capital expenditures of $30,529.
Cash flows from financing activities of $29,834 included additional borrowings
of $52,500 to finance the aforementioned acquisitions offset by repayments of
$24,291.

- ---------------
(dollars in thousands, except share data)
21
<PAGE> 23

Capital expenditures were $30,529 in 1999, $43,007 in 1998 and $35,935 in
1997. The largest expenditures in 1999 were for an additional cGMP capacity
increase at Nordic Synthesis in Sweden, a high containment manufacturing
facility at Salsbury Chemicals in Iowa, a new sebacic acid facility at CasChem
in New Jersey (in the process of commissioning), and continued construction of a
new niacinamide (Vitamin B-3) plant at Nepera, Inc. in New York. In addition,
capital was spent on a waste water treatment plant at Nordic Synthesis, an
effluent plant at Seal Sands Chemicals in England, and a ambient cooling system
at Irotec in Ireland.

On September 16, 1997, the Company entered into a new five year Credit
Agreement (the "Agreement") with a bank group headed by The Chase Manhattan Bank
as Administrative Agent and The First National Bank of Chicago as Documentation
Agent. The bank group has a total of 13 domestic banks and 8 international
banks. The Agreement provides the Company with a $400,000 borrowing facility.
The new Agreement replaces the previously existing Revolving Credit Agreement
with NBD Bank, N.A.

Under this agreement, the Company has pledged 66% of the common stock of
the Company's foreign subsidiaries as collateral. The Agreement permits the
Company to choose between various interest rate options. Under the Agreement,
the interest rate options available to the Company are: (a) U.S. Prime rate or
(b) LIBOR plus the applicable margin (ranging from .225% to .5% or (c)
Competitive Bid at a LIBOR Rate Borrowing or a Fixed Rate Borrowing to be
determined by auction. The applicable margin is adjusted based upon the Funded
Indebtedness to Cash Flow Ratio of the Company. Additionally, the Company pays a
commitment fee of between .15% to .25% on the entire portion of the Agreement.

On September 18, 1997, the Company utilized $60,000 of the Agreement in
order to repay the then outstanding balance under the previously existing
Revolving Credit Agreement. On September 30, 1997, the Company borrowed $126,000
to finance the acquisition of the outstanding common stock of BioWhittaker. Of
this amount, $116,000 was utilized on September 30, 1997 to acquire the 93% of
BioWhittaker shares which had been tendered at that date. The Company
subsequently utilized the remaining portion to finance the acquisition of the
remaining 7% of BioWhittaker on October 3, 1997.

The undrawn borrowing availability under the Agreement as of December 31,
1999 and 1998 was $181,500 and $210,400 respectively. There is $218,500
outstanding as of December 31, 1999. Management is of the opinion that these
amounts, together with cash flows from operations, are adequate for meeting the
company's operating, financing and capital requirements.

Management believes that existing sources of capital, together with cash
flows from operations, will be sufficient to meet foreseeable cash flow
requirements.

FINANCIAL INSTRUMENTS

The Company is exposed to market risks arising from adverse changes in
interest rates and foreign currency exchange rates. In the normal course of
business, the Company uses a variety of techniques and instruments, including
derivatives, as part of its overall risk management strategy.

Currency Risk Management

The Company's primary market risk relates to exposure to foreign currency
exchange rate fluctuations on transactions entered into by our international
operations which are primarily denominated in the U.S. dollar, Euro currency,
and British pound sterling. The Company currently uses foreign currency exchange
forward contracts to mitigate the effect of short-term foreign exchange rate
movements on the Company's operating results. The net notional amount of these
contracts is $39,448, which the Company estimates to be approximately 62% of the
non-local currency exposure during the period. These unrealized foreign exchange
contract losses do not subject the Company's actual results to risk. Gains or
losses on these contracts generally offset gains or losses on the transactions
that are hedged.

- ---------------
(dollars in thousands, except share data)
22
<PAGE> 24

Given the unlikely scenario that the operating companies' non-local
currency collections match their forecast, and that all collections move 10%
against their local currencies, no more than $2,600 of pre-tax profits for a
twelve-month period would be at risk. This is based on an non-hedged risk of
$26,000. This residual risk allows for an over-forecasting margin of error and
prevents over hedging of actual operating risk. As of December 31, 1999, the
combined non-local currency forecasted net collections amounted to $95,000.
Offsetting this exposure are the expected $18,000 U.S. dollar inter-company
payments from the combined European sites. The remaining $77,000 forecasted
exposure was partially hedged ($51,000) with major banks to reduce the
non-hedged risk to $26,000.

Interest Rate Management

The Company's debt outstanding and the interest paid to support the debt
increased over the past year due primarily to acquisitions. Each of the interest
rate options in the Revolving Credit Agreement includes floating rates. This
arrangement has the advantage of making lower interest rates available in a
declining market. However, it also exposes the company to any upward swings in
interest rates. For example, based on the company's current net debt
outstanding, an annual interest rate increase of 100 basis points would increase
interest expense and thus decrease the company's after-tax profitability by
$1,230 after tax. Fortunately, movement in interest rates is a risk that can be
controlled.

The Company has employed a plan to control interest rate risk. To limit the
risk of interest rates rising above a tolerable level, the Company would pay a
premium now in order to obtain a fixed interest rate at predetermined cost in
the future. That premium, or Swap, stabilizes interest costs by converting
floating or variable rates to fixed rates through a contract with a financial
institution. We monitor the Company's debt position and market trends to protect
it from any unforeseen shifts in interest rates.

As of December 31, 1999, the Company had seven interest rate Swaps in place
that total $80,000, at an average rate of 5.79%, and with varying maturity dates
through the year 2003. The Company's strategy has been to cover approximately
40% of outstanding bank debt with interest rate protection.

ENVIRONMENTAL

In connection with laws and regulations pertaining to the protection of the
environment, the Company is a party to several environmental remediation
investigations and cleanups and, along with other companies, has been named a
"potentially responsible party" for certain waste disposal sites (Superfund
sites). Each of these matters is subject to various uncertainties, and it is
possible that some of these matters will be decided unfavorably against the
Company. The Company had accruals, included in current accrued liabilities and
other noncurrent liabilities, of $3,400 and $4,800 at December 31, 1999 and
1998, respectively, for costs associated with the study and remediation of
Superfund sites and the Company's current and former operating sites for matters
that are probable and reasonably estimable. Based on currently available
information and analysis, the Company's accrual represents 72% of what it
believes are the reasonably possible environmental cleanup related costs of a
non-capital nature. During the past three-year period, cash payments for
environmental cleanup related matters were $200, $1,800 and $400 for 1999, 1998
and 1997, respectively. There were no provisions for environmental contingencies
during the past three-year period. The Company reduced reserves of approximately
$1,200 and $800 during the third quarter of 1999 and 1998, respectively, as a
result of revised estimates. In addition, the Company settled certain
environmental claims involving the Cosan Chemical Company (a subsidiary) with
insurance companies for $1,150. After reviewing information currently available,
management believes any amounts paid in excess of the accrued liabilities will
not have a material effect on its financial position or results of operations.
However, these matters, if resolved in a manner different from the estimates
could have a material adverse effect on financial condition, operating results
and cash flows when resolved in a future reporting period.

- ---------------
(dollars in thousands, except share data)
23
<PAGE> 25

LITIGATION

The Company and its subsidiary, Profarmaco S.r.l. ("Profarmaco"), were
named as defendants in a proceeding instituted by the Federal Trade Commission
("FTC") on December 21, 1998, in the United States District Court for the
District of Columbia. The complaint alleges that exclusive license agreements
which Profarmaco entered into with Mylan Laboratories, Inc. ("Mylan") covering
the drug master files for (and therefore the right to buy and use) two active
pharmaceutical ingredients ("APIs"), lorazepam and clorazepate, were part of an
effort on Mylan's part to restrict competition in the supply of lorazepam and
clorazepate and to increase the price charged for these products when Mylan sold
them as generic pharmaceuticals. The complaint further alleges that these
agreements violate the Federal Trade Commission Act, and that Mylan, Cambrex,
Profarmaco, and Gyma Laboratories of America, Inc., Profarmaco's distributor in
the United States, engaged in an unlawful restraint of trade and conspired to
monopolize and attempted to monopolize the markets for the generic
pharmaceuticals incorporating the APIs. The FTC seeks a permanent injunction and
other relief, including disgorgement of the profits generated through the
licensing arrangements, which the FTC alleges to be in excess of $120,000 for
all defendants. In accordance with the license agreement, the Company received
royalties of approximately $19,300 and $1,000 for the years ended December 31,
1998 and 1997, respectively.

A lawsuit making similar allegations against the Company and Profarmaco,
and seeking injunctive relief and treble damages, has been filed by the
Attorneys General of 31 states in the United States District Court for the
District of Columbia on behalf of those states and persons in those states who
were purchasers of the generic pharmaceuticals. The Company and Profarmaco have
also been named in purported class action complaints brought by private
plaintiffs in various state courts on behalf of purchasers of lorazepam and
clorazepate in generic form, making allegations essentially similar to those
raised in the FTC's complaint and seeking various forms of relief including
treble damages.

The Company strongly believes that its licensing arrangements with Mylan
are in accordance with regulatory requirements and will vigorously defend the
FTC's actions and various other lawsuits and class actions. However, the Company
and Mylan have terminated the exclusive license to the drug master files as of
December 31, 1998. In entering these licensing arrangements, the Company elected
not to raise the price of its products and had no control or influence over the
pricing of its final generic product. Under the terms of the agreement, Mylan
has agreed to indemnify the Company and Profarmaco against damages, losses,
costs and expenses arising from any claim, lawsuit or other action.

On May 14, 1998, the Company's Nepera subsidiary, a manufacturer and seller
of niacinamide (Vitamin B-3), received a Federal Grand Jury subpoena for the
production of documents relating to the pricing and possible customer allocation
with regard to that product. The Company understands that the subpoena was
issued as part of the Federal Government's ongoing anti-trust investigation into
various business practices in the vitamin industry generally. The Company has
reached a settlement with the Government concerning Nepera's alleged role in
Vitamin B-3 violations from 1992 to 1995. In addition, Nepera has been named as
a defendant, along with several other companies, in five private civil actions
brought on behalf of alleged purchasers of Vitamin B-3. An accrual of $6,000 was
recorded in the fourth quarter 1999 to cover the anticipated government
settlements, related litigation, and legal expenses. This accrual has been
recorded in Accounts Payable and Accrued Liabilities.

While it not possible to predict with certainty the outcome of the above
litigation matters and various other lawsuits, it is the opinion of management
that the ultimate resolution of these proceedings should not have a material
adverse effect on the Company's results of operations, cash flows and financial
position. These matters, if resolved in an unfavorable manner, could have a
material effect on the operating results and cash flows when resolved in a
future reporting period.

- ---------------
(dollars in thousands, except share data)
24
<PAGE> 26

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 "Accounting for Derivative Instruments
and Hedging Activities" (SFAS 133). SFAS 133 was originally effective for all
fiscal quarters of all fiscal years beginning after June 15, 1999. In June 1999,
the Financial Accounting Standards Board issued Statements of Financial
Accounting Standard No. 137 "Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of FASB Statement No. 133" (SFAS
137). SFAS 137 defers the effective date of FASB 133 for all fiscal quarters of
all fiscal years beginning after June 15, 2000 (January 1, 2001 for the
Company). SFAS 133 requires that all derivative instruments be recorded on the
balance sheet at their fair value. Changes in the fair value of derivatives are
recorded each period in current earnings or other comprehensive income,
depending on whether a derivative is designated as part of a hedge transaction
and, if it is, the type of hedge transaction. The fair value hedge transactions
in which the Company is hedging changes in an asset's, liability's or firm
commitment's fair value; changes in the fair value of the derivative instrument
that are reported in other comprehensive income will be reclassified as earnings
in the period in which earnings are impacted by the variability of the cash
flows of the hedged item. The ineffective portion of all hedges will be
recognized in current-period earnings. The Company is evaluating the impact that
the adoption of SFAS 133 will have on its earnings, comprehensive income and
financial position.

YEAR 2000 UPDATE

The ability of computers, software or any equipment utilizing
micro-processors to properly recognize and process data information at the turn
of the century is commonly referred to as a Year 2000 ("Y2K") compliance issue.

The Company approached its Y2K compliance issue by categorizing its
dependencies into two sections: Internal systems (Information Technology ("IT")
systems and Non-IT systems), and External systems of suppliers and customers.
Generally, internal systems identified as non-Y2K compliant were replaced or
modified (reprogrammed, upgraded, etc.). Many of the internal non-compliant
systems were targeted for replacement for reasons other than Y2K issues as the
benefits of newer technology had already created an economic business case for
action. Replacement solution costs were capitalized as permitted by applicable
accounting standards whereas the cost of modification solutions were generally
expensed as repairs. External systems were monitored with the cooperation of our
suppliers and customers.

Internal Systems

(a) Internal IT systems -- These systems included internal applications
software such as finance, manufacturing (purchasing, product costing, production
reporting, maintenance, and planning and scheduling) and logistics (distribution
planning and customer order entry), human resources, and communications. All
internal IT systems were inventoried, assessed, remediated where necessary for
Y2K compliance, and have been tested. The Company's internal IT system was
certified Y2K compliant at end of 1999.

b) Non-IT systems -- These included systems for process monitoring and
control, laboratory measurement and analysis, waste treatment control, and in
other plant operations. These systems included embedded chip technology such as
programmable logic controllers and related hardware/software, and personal
computers and related software. All internal non-IT systems were inventoried and
assessed for Y2K compliance and critical systems which require modification were
remediated at the end of 1999.

External systems

External systems included systems of customers and suppliers. The Company
identified and contacted third parties whose systems would have a significant
negative impact on operations if not Y2K compliant. The Company completed its
assessment and has developed requisite action plans with respect to these
findings.

- ---------------
(dollars in thousands, except share data)
25
<PAGE> 27

The Company successfully transitioned into the year 2000 with no
disruptions.

Costs directly associated with the Company's efforts approximately $8,500.
The costs do not include additional costs that may be incurred as a result of
the failure of third parties to become Y2K compliant or costs to implement any
contingency plans.

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements. Investors should be
aware of factors that could cause Cambrex actual results to vary materially from
those projected in the forward-looking statements. These factors include, but
are not limited to, global economic trends; competitive pricing or product
development activities; markets, alliances, and geographic expansions developing
differently than anticipated; government legislation and/or regulation
(particularly on environmental issues); and technology, manufacturing and legal
issues; and the factors disclosed in the Year 2000 Update.

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The following consolidated financial statements and selected quarterly
financial data of the Company are filed under this item:

<TABLE>
<CAPTION>
PAGE NUMBER
(IN THIS REPORT)
----------------
<S> <C>
Report of Independent Accountants........................... 27
Consolidated Balance Sheets as of December 31, 1999 and
1998...................................................... 28
Consolidated Income Statements for the Years Ended December
31, 1999, 1998 and 1997................................... 29
Consolidated Statements of Stockholders' Equity for the
Years Ended December 31, 1999, 1998 and 1997.............. 30
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1999, 1998 and 1997.......................... 31
Notes to Consolidated Financial Statements.................. 32
Consolidated Quarterly Financial Data (unaudited) for the
Years Ended December 31, 1999 and 1998.................... 56
</TABLE>

The consolidated financial statements and financial statement schedule are
filed pursuant to Item 14 of this report.

- ---------------
(dollars in thousands, except share data)
26
<PAGE> 28

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of Cambrex Corporation:

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, stockholders' equity and cash flows
present fairly, in all material respects, the financial position of Cambrex
Corporation and its subsidiaries at December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States, which 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP

Florham Park, New Jersey
January 21, 2000, except for the first
paragraph of Note 23, as to which the
date is February 25, 2000 and the second
paragraph of Note 23, as to which the
date is March 2, 2000

27
<PAGE> 29

CAMBREX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 39,796 $ 48,527
Trade receivables, less allowances of $799 and $1,550 at
respective dates....................................... 72,227 56,964
Inventories, net.......................................... 92,439 100,245
Deferred tax assets....................................... 16,422 11,759
Prepaid expenses and other current assets................. 14,403 14,031
-------- --------
Total current assets.............................. 235,287 231,526
Property, plant and equipment, net.......................... 280,163 255,016
Intangible assets, net...................................... 149,307 126,995
Other assets................................................ 8,890 3,517
-------- --------
Total assets...................................... $673,647 $617,054
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities.................. $ 57,567 $ 63,467
Income taxes payable...................................... 11,276 8,733
Short-term debt and current portion of long-term debt..... 3,279 3,029
-------- --------
Total current liabilities................................... 72,122 75,229
Long-term debt.............................................. 225,922 191,372
Deferred tax liabilities.................................... 55,172 52,183
Other noncurrent liabilities................................ 25,066 21,010
-------- --------
Total liabilities................................. 378,282 339,794
Commitments and contingencies
Stockholders' equity:
Common Stock, $.10 par value; issued 26,719,924 and
26,573,324 shares at respective dates.................. 2,667 2,655
Additional paid-in capital................................ 166,288 163,525
Retained earnings......................................... 167,655 132,471
Treasury stock, at cost; 2,100,690 and 2,081,099 shares at
respective dates....................................... (10,172) (9,841)
Accumulated other comprehensive income/(loss)............. (31,073) (11,550)
-------- --------
Total stockholders' equity........................ 295,365 277,260
-------- --------
Total liabilities and stockholders' equity........ $673,647 $617,054
======== ========
</TABLE>

See accompanying notes to consolidated financial statements.
28
<PAGE> 30

CAMBREX CORPORATION AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER-SHARE DATA)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Gross sales................................................ $484,560 $441,683 $380,083
-------- -------- --------
Net revenues............................................... 481,388 457,241 374,215
Cost of goods sold....................................... 314,225 293,824 260,253
-------- -------- --------
Gross profit............................................... 167,163 163,417 113,962
Selling, general and administrative...................... 77,729 76,594 52,688
Research and development................................. 14,255 13,956 10,600
Vitamin B-3 provision.................................... 6,000 -- --
Non-recurring in-process R&D charge...................... -- -- 14,000
-------- -------- --------
Operating profit........................................... 69,179 72,867 36,674
Other (income) expenses
Interest income.......................................... (41) (249) (238)
Interest expense......................................... 9,764 10,476 5,568
Other -- net............................................. 555 945 (1,263)
-------- -------- --------
Income before income taxes................................. 58,901 61,695 32,607
Provision for income taxes................................. 20,769 22,593 14,831
-------- -------- --------
Net income................................................. $ 38,132 $ 39,102 $ 17,776
======== ======== ========
Earnings per share of common stock and common stock
equivalents:
Basic.................................................... $ 1.55 $ 1.62 $ 0.75
Diluted.................................................. $ 1.49 $ 1.54 $ 0.73
Weighted average shares outstanding:
Basic.................................................... 24,572 24,194 23,627
Diluted.................................................. 25,613 25,412 24,419
</TABLE>

See accompanying notes to consolidated financial statements.
29
<PAGE> 31

CAMBREX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
COMMON STOCK ACCUMULATED
---------------------- ADDITIONAL OTHER
SHARES PAR VALUE PAID-IN RETAINED TREASURY COMPREHENSIVE COMPREHENSIVE
ISSUED ($.10) CAPITAL EARNINGS STOCK INCOME/(LOSS) INCOME/(LOSS)
---------- --------- ---------- -------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1996......... 12,769,175 $1,275 $149,191 $ 80,608 $ (9,449) $ 8,138
Comprehensive income/(loss)
Net Income....................... 17,776 $ 17,776
--------
Other comprehensive income/(loss)
Foreign currency translation
adjustments.................. (23,732)
Minimum pension liability
adjustment................... 553
--------
Other comprehensive
income/(loss).................. (23,179) (23,179)
--------
Comprehensive income............... $ (5,403)
========
Cash dividends at $0.10 per
share.......................... (2,357)
Exercise of stock options........ 198,112 20 3,555 (201)
Tax benefit of stock options
exercised...................... 718
Shares issued to Board of
Directors...................... 134 54
Shares issued under savings
plan........................... 808 138
---------- ------ -------- -------- -------- --------
BALANCE AT DECEMBER 31, 1997......... 12,967,287 $1,295 $154,406 $ 96,027 $ (9,458) $(15,041)
Comprehensive income/(loss)
Net Income....................... 39,102 $ 39,102
--------
Other comprehensive income/(loss)
Foreign currency translation
adjustments.................. 5,522
Minimum pension liability
adjustment................... (2,031)
--------
Other comprehensive
income/(loss).................. 3,491 3,491
--------
Comprehensive income............... $ 42,593
========
Cash dividends at $0.11 per
share............................ (2,658)
Exercise of stock options.......... 472,575 47 7,148 (462)
Tax benefit of stock options
exercised........................ 2,977
Shares issued to Board of
Directors........................ 104
Shares issued under savings plan... 203 79
Two-for-one split.................. 13,133,462 1,313 (1,313)
---------- ------ -------- -------- -------- --------
BALANCE AT DECEMBER 31, 1998......... 26,573,324 $2,655 $163,525 $132,471 $ (9,841) $(11,550)
Comprehensive income/(loss)
Net Income....................... 38,132 $ 38,132
--------
Other comprehensive income/(loss)
Foreign currency translation
adjustments.................. (19,889)
Minimum pension liability
adjustment................... 366
--------
Other comprehensive
income/(loss).................. (19,523) (19,523)
--------
Comprehensive income/(loss)........ $ 18,609
========
Cash dividends at $0.12 per
share.......................... (2,948)
Exercise of stock options........ 146,600 12 2,134 (447)
Tax benefit of stock options
exercised...................... 548
Shares issued to Board of
Directors...................... 81 116
---------- ------ -------- -------- -------- --------
BALANCE AT DECEMBER 31, 1999......... 26,719,924 $2,667 $166,288 $167,655 $(10,172) $(31,073)
========== ====== ======== ======== ======== ========

TOTAL
STOCKHOLDERS'
EQUITY
-------------
<S> <C>
BALANCE AT DECEMBER 31, 1996......... $229,763
Comprehensive income/(loss)
Net Income....................... 17,776
Other comprehensive income/(loss)
Foreign currency translation
adjustments..................
Minimum pension liability
adjustment...................
Other comprehensive
income/(loss).................. (23,179)
Comprehensive income...............
Cash dividends at $0.10 per
share.......................... (2,357)
Exercise of stock options........ 3,374
Tax benefit of stock options
exercised...................... 718
Shares issued to Board of
Directors...................... 188
Shares issued under savings
plan........................... 946
--------
BALANCE AT DECEMBER 31, 1997......... $227,229
Comprehensive income/(loss)
Net Income....................... 39,102
Other comprehensive income/(loss)
Foreign currency translation
adjustments..................
Minimum pension liability
adjustment...................
Other comprehensive
income/(loss).................. 3,491
Comprehensive income...............
Cash dividends at $0.11 per
share............................ (2,658)
Exercise of stock options.......... 6,733
Tax benefit of stock options
exercised........................ 2,977
Shares issued to Board of
Directors........................ 104
Shares issued under savings plan... 282
Two-for-one split.................. --
--------
BALANCE AT DECEMBER 31, 1998......... $277,260
Comprehensive income/(loss)
Net Income....................... 38,132
Other comprehensive income/(loss)
Foreign currency translation
adjustments..................
Minimum pension liability
adjustment...................
Other comprehensive
income/(loss).................. (19,523)
Comprehensive income/(loss)........
Cash dividends at $0.12 per
share.......................... (2,948)
Exercise of stock options........ 1,699
Tax benefit of stock options
exercised...................... 548
Shares issued to Board of
Directors...................... 197
--------
BALANCE AT DECEMBER 31, 1999......... $295,365
========
</TABLE>

See accompanying notes to consolidated financial statements.
30
<PAGE> 32

CAMBREX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1999 1998 1997
--------- -------- ---------
<S> <C> <C> <C>
Cash flows from operations:
Net income............................................. $ 38,132 $ 39,102 $ 17,776
Depreciation and amortization.......................... 42,328 40,132 31,122
Vitamin B-3 provision.................................. 6,000 -- --
Non-recurring in-process R&D charge.................... -- -- 14,000
Reimbursement/reversal of environmental
contingencies....................................... (2,350) (800) (2,400)
Gain realized on settlement of foreign denominated
loan................................................ -- -- (954)
Provision for inventories.............................. 4,486 6,046 2,489
Deferred income tax provision.......................... (181) 2,189 4,236
Changes in assets and liabilities (net of assets and
liabilities acquired):
Receivables......................................... (8,881) (2,274) 2,321
Inventories......................................... 8,893 (10,867) (8,815)
Prepaid expenses and other current assets........... (149) (2,711) 323
Accounts payable and accrued liabilities............ (6,036) 3,383 (5,418)
Income taxes payable................................ 2,366 4,407 (2,792)
Other noncurrent assets and liabilities............. 3,403 2,079 691
--------- -------- ---------
Net cash provided from operations................... 88,011 80,686 52,579
--------- -------- ---------
Cash flows from investing activities:
Capital expenditures................................... (30,529) (43,007) (35,935)
Acquisition of businesses (net of cash acquired)....... (75,336) (15,199) (128,916)
Other investing activities............................. (841) 1,948 --
--------- -------- ---------
Net cash (used in) investing activities............. (106,706) (56,258) (164,851)
--------- -------- ---------
Cash flows from financing activities:
Dividends.............................................. (2,946) (2,658) (2,357)
Net increase (decrease) in short-term debt............. 1,761 (1,406) 370
Long-term debt activity (including current portion):
Borrowings.......................................... 52,500 37,000 235,900
Repayments.......................................... (24,291) (40,430) (109,649)
Proceeds from the issuance of common stock............. 2,775 10,325 3,575
(Purchase) Proceeds from the sale of treasury stock.... (331) (229) 933
Other.................................................. 366 (2,031) --
--------- -------- ---------
Net cash provided from financing activities......... 29,834 571 128,772
--------- -------- ---------
Effect of exchange rate changes on cash.................. (19,870) 2,059 (2,384)
--------- -------- ---------
Net increase (decrease) in cash and cash equivalents..... (8,731) 27,058 14,116
Cash and cash equivalents at beginning of year........... 48,527 21,469 7,353
--------- -------- ---------
Cash and cash equivalents at end of year................. $ 39,796 $ 48,527 $ 21,469
========= ======== =========
Supplemental disclosure:
Interest paid (net of capitalized interest)............ $ 11,105 $ 13,660 $ 5,275
Income taxes paid...................................... $ 20,277 $ 16,767 $ 13,344
Noncash transactions:
Additional minimum pension liability (eliminated from)
charged to stockholders' equity..................... $ (366) $ 2,031 $ (553)
Liabilities established under deferred compensation
plan................................................ $ (467) $ (868) $ 557
Tax benefit on stock options exercised................. $ 548 $ 2,977 $ 718
Liabilities assumed in connection with acquisition..... $ 5,436 $ -- $ 1,253
</TABLE>

See accompanying notes to consolidated financial statements.
31
<PAGE> 33

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(1) THE COMPANY

Cambrex Corporation and Subsidiaries ( the "Company" or "Cambrex")
primarily provides products and services worldwide to the life sciences
industry. The Company operates in four segments, Human Health, Biosciences,
Animal Health/Agriculture, and Specialty and Fine Chemicals.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.

Cash Equivalents

Temporary cash investments with an original maturity of less than three
months and virtually no risk of loss in value are considered cash equivalents.

Derivative Instruments

Derivative financial instruments are used by the Company primarily for
hedging purposes to mitigate a variety of working capital, investment and
borrowing risks. The use and mix of hedging instruments can vary depending on
business and economic conditions and management's risk assessments. The Company
uses a variety of strategies, including foreign currency forward contracts and
transaction hedging, to minimize or eliminate foreign currency exchange rate
risk associated with substantially all of its foreign currency transactions.
Gains and losses on these hedging transactions are generally recorded in
earnings in the same period as they are realized, which is usually the same
period as the settlement of the underlying transactions. The Company uses
interest rate derivative instruments only as hedges or as an integral part of
borrowings. As such, the differential to be paid or received in connection with
these instruments is accrued and recognized in income as an adjustment to
interest expense.

Inventories

Inventories are stated at the lower of cost, determined on a first-in,
first-out basis, or market.

Property, Plant and Equipment

Property, plant and equipment is stated at cost, net of accumulated
depreciation. Plant and equipment are depreciated on a straight-line basis over
the estimated useful lives for each applicable asset group as follows:

<TABLE>
<S> <C>
Buildings and improvements............................ 15 to 20 years
Machinery and equipment............................... 5 to 10 years
Furniture and fixtures................................ 3 to 5 years
</TABLE>

When assets are retired or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts, and any resulting gain
or loss is reflected in other (income) expense, net. Interest is capitalized in
connection with the construction and acquisition of assets. The capitalized
interest is recorded as part of the cost of the asset to which it relates and is
amortized over the asset's estimated useful life. Total interest capitalized in
connection with ongoing construction activities in 1999, 1998 and 1997 amounted
to $1,670, $533 and $1,045, respectively.

32
<PAGE> 34
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Intangible Assets

Intangible assets are recorded at cost and amortized on a straight-line
basis as follows:

<TABLE>
<S> <C>
Patents................................. Amortized over the remaining
life of individual patents
(average 5 years)
Goodwill................................ 4 to 20 years
Product technology...................... 5 to 17 years
Non-compete agreements.................. 5 years
Trademarks and other.................... 1 to 40 years
</TABLE>

The Company continually evaluates the reasonableness of its amortization of
intangibles. If it becomes probable that expected future undiscounted cash flows
associated with intangible assets are less than their carrying value, the assets
are written down to their fair value.

Revenue Recognition

Revenues are generally recognized when products are shipped or title has
passed to customer. Royalties are recognized as earned in accordance with
royalty agreements.

Income Taxes

Deferred income taxes reflect the differences between assets and
liabilities recognized for financial reporting purposes and amounts recognized
for tax purposes. Deferred taxes are based on tax laws currently enacted.

The Company and its eligible subsidiaries file a consolidated U.S. income
tax return. Certain subsidiaries which are consolidated for financial reporting
are not eligible to be included in the consolidated U.S. income tax return. U.S.
income taxes are provided on a planned repatriation of a portion of foreign
earnings and consider applicable foreign tax credits. Cambrex also intends to
indefinitely reinvest the unremitted earnings of certain non-U.S. subsidiaries,
and as such, separate provisions for income taxes have been determined for these
entities and U.S. taxes have not been provided. At December 31, 1999, 1998 and
1997, the cumulative amount of unremitted earnings of non-U.S. subsidiaries was
$49,427, $28,850, and $16,140, respectively.

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 assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Environmental Costs

In the ordinary course of business, like most other industrial companies,
the Company is subject to extensive and changing federal, state, local and
foreign environmental laws and regulations, and has made provisions for the
estimated financial impact of environmental cleanup related costs. The Company's
policy is to accrue environmental cleanup related costs of a noncapital nature
when those costs are believed to be

33
<PAGE> 35
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
probable and can be reasonably estimated. The quantification of environmental
exposures requires an assessment of many factors, including changing laws and
regulations, advancements in environmental technologies, the quality of
information available related to specific sites, the assessment stage of each
site investigation, preliminary findings and the length of time involved in
remediation or settlement. Such accruals are adjusted as further information
develops or circumstances change. For certain matters, the Company expects to
share costs with other parties. Costs of future expenditures for environmental
remediation obligations are not discounted to their present value. Recoveries of
environmental remediation costs from other parties are recorded as assets when
their receipt is deemed probable.

Foreign Currency

The functional currency of the Company's foreign subsidiaries is the
applicable local currency. The translation of the applicable foreign currencies
into U.S. dollars is performed for balance sheet accounts using current exchange
rates in effect at the balance sheet date and for revenue and expense accounts
and cash flows using average rates of exchange prevailing during the year.
Adjustments resulting from the translation of foreign currency financial
statements are accumulated in a separate component of stockholders' equity until
the entity is sold or substantially liquidated. Gains or losses relating to
transactions of a long-term investment nature are accumulated in stockholders'
equity. Gains or losses resulting from foreign currency transactions are
included in the results of operations as a component of other revenues in 1999,
1998 and 1997. Foreign currency net transaction gains were $83, $2,019, and
$2,668 in 1999, 1998 and 1997, respectively.

Earnings Per Common Share

All diluted earnings per share are computed on the basis of the weighted
average shares of common stock outstanding plus common equivalent shares arising
from the effect of dilutive stock options, using the treasury stock method.

Earnings per share calculations are as follows:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED,
-----------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
NUMERATOR:
Income available to common stockholders............... $38,132 $39,102 $17,776
DENOMINATOR:
Basic weighted average shares outstanding............. 24,572 24,194 23,627
Effect of dilutive stock options...................... 1,041 1,218 792
------- ------- -------
Diluted weighted average shares outstanding........... 25,613 25,412 24,419
Basic earnings per share.............................. $ 1.55 $ 1.62 $ 0.75
Diluted earnings per share............................ $ 1.49 $ 1.54 $ 0.73
</TABLE>

(3) ACQUISITIONS

On July 12, 1999, Cambrex completed the acquisition of FMC Corporation's
BioProducts business, which has been renamed BioWhittaker Molecular Applications
("BMA"). The business, which serves the life sciences industry, is the world's
largest manufacturer of electrophoresis media based on the polymer, agarose. The
transaction includes two operating facilities in Rockland, Maine and Copenhagen,
Denmark. Cambrex paid approximately $38,000 for the business, of which $31,000
was financed through the Company's revolving credit agreement and $7,000 through
the Company's cash reserves. The excess of the purchase price over the

34
<PAGE> 36
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(3) ACQUISITIONS -- (CONTINUED)
fair value of the net assets acquired was approximately $25,420 and was recorded
as goodwill and will be amortized over 20 years using the straight-line method.

On March 12, 1999, Cambrex completed the acquisition of Irotec Laboratories
Ltd. ("Irotec"), a supplier of active pharmaceutical ingredients (APIs) located
in Cork, Ireland. Cambrex paid approximately $37,560 for the business, net of
cash acquired, which was financed through the Company's cash reserves. The
excess of the purchase price over the fair value of the net assets acquired was
approximately $9,330 and was recorded as goodwill and will be amortized over 20
years using the straight-line method.

On January 4, 1999, the Company acquired Poietic Technologies, Inc.
("Poietics"), the leading supplier of normal human cells of hematopoietic
origin. The Company paid $2,500 cash and will pay future consideration based on
the performance of the business.

On January 9, 1998, Chiragene, a newly formed subsidiary of Cambrex
Corporation, acquired substantially all of the assets of the chiral intermediate
business of Celgene Corporation for approximately $11,328. The purchase
agreement included an upfront payment of $7,500 paid at closing plus future
royalties based upon sales. While the present value of the potential future
royalties was $7,500 based upon a formula disclosed in the purchase agreement,
the amount included in the purchase allocation was $3,750 which represents the
minimum guaranteed royalty payouts. Purchase price in excess of the fair value
of the net assets was approximately $5,000 and was recorded as goodwill and will
be amortized over 15 years. On January 9, 1998, the Company borrowed $8,200 from
the existing Credit Agreement, of which $7,500 was used to finance the
acquisition of Chiragene.

On May 12, 1998, Cambrex completed the acquisition of certain assets of the
biopharmaceutical manufacturing and distribution business of Boehringer
Ingelheim Bioproduct Partnership (BIBP) for $3,871, including acquisition costs
of $621. The assets acquired include a state-of-the-art cell culture and media
manufacturing facility in Verviers, Belgium, and inventory for certain cell
culture, endotoxin detection and molecular biology products. The majority of the
acquisition was funded through cash reserves.

On September 30, 1997, the Company acquired approximately 93% of the
outstanding common stock of BioWhittaker, Inc. for approximately $116,000. The
remaining 7% of the outstanding common stock was subsequently acquired on
October 3, 1997 for an additional $10,000. The acquisition price was
approximately $133,500 and was financed by the Company's Credit Agreement. The
excess of the purchase price over the fair value of the net assets acquired was
approximately $48,000 and was recorded as goodwill and will be amortized over 20
years using the straight-line method. The allocation to in-process research and
development of $14,000 represents the value of BioWhittaker's research and
development efforts which had not reached commercial viability with no
alternative future use and were, therefore, immediately expensed.

Certain actions were taken in the third quarter of 1998 for the acquisition
reorganization plan at our BioWhittaker facility of approximately $1,400 for the
termination of 28 employees. This plan was part of the final purchase accounting
adjustments made in the third quarter 1998. In addition, Biowhittaker favorably
concluded a patent infringement dispute and has received a cash payment of
approximately $5,400 in 1998. This settlement, as well as the settlement of
other acquisition contingencies of approximately $1,600, are part of the final
purchase accounting adjustments in the third quarter 1998. As a result of
finalizing the purchase accounting, the net impact on goodwill, including the
tax effect, was a reduction of approximately $900.

The above acquisitions have been accounted for under the purchase method of
accounting and accordingly the results of operations of the acquisitions are
included in accompanying consolidated financial statements from the date of
acquisition. Assets acquired and liabilities assumed have been recorded at their

35
<PAGE> 37
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(3) ACQUISITIONS -- (CONTINUED)
fair values, except for BMA, which is subject to adjustment when additional
information concerning asset and liability valuations is finalized.

(4) FUTURE IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

(5) INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1999 1998
------- --------
<S> <C> <C>
Finished goods.......................................... $34,509 $ 54,264
Work in process......................................... 27,214 20,177
Raw materials........................................... 26,322 20,105
Supplies................................................ 4,394 5,699
------- --------
Total......................................... $92,439 $100,245
======= ========
</TABLE>

(6) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1999 1998
--------- ---------
<S> <C> <C>
Land................................................. $ 12,908 $ 11,009
Buildings and improvements........................... 87,914 76,949
Machinery and equipment.............................. 328,492 289,577
Furniture and fixtures............................... 9,499 9,033
Construction in progress............................. 31,721 30,657
--------- ---------
Total...................................... 470,534 417,225
Accumulated depreciation............................. (190,371) (162,209)
--------- ---------
Net................................................ $ 280,163 $ 255,016
========= =========
</TABLE>

Depreciation expense amounted to $33,118, $30,547, and $24,666 for the
years ended December 31, 1999, 1998 and 1997, respectively.

36
<PAGE> 38
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(7) INTANGIBLE ASSETS

Intangible assets consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
Goodwill............................................... $135,301 $110,117
Other.................................................. 60,457 56,330
-------- --------
Total........................................ 195,758 166,447
Accumulated amortization............................... (46,451) (39,452)
-------- --------
Net.................................................. $149,307 $126,995
======== ========
</TABLE>

Amortization expense amounted to $9,210, $9,585 and $6,456 for the years
ended December 31, 1999, 1998 and 1997, respectively.

(8) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The components of accounts payable and accrued liabilities are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1999 1998
------- -------
<S> <C> <C>
Accounts payable......................................... $33,650 $30,761
Salaries, wages and employee benefits payable............ 9,576 20,475
Vitamin B-3 provision.................................... 6,000 --
Other accrued liabilities................................ 8,341 12,231
------- -------
Total.......................................... $57,567 $63,467
======= =======
</TABLE>

(9) INCOME TAXES

Income before taxes consisted of the following:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Domestic.............................................. $32,912 $31,324 $13,195
International......................................... 25,989 30,371 19,412
------- ------- -------
Total....................................... $58,901 $61,695 $32,607
======= ======= =======
</TABLE>

37
<PAGE> 39
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(9) INCOME TAXES -- (CONTINUED)
The provision for income taxes consists of the following expenses
(benefits):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Current:
Federal............................................. $11,587 $14,377 $ 2,670
State............................................... 178 696 427
International....................................... 9,185 5,331 7,498
------- ------- -------
20,950 20,404 10,595
------- ------- -------
Deferred:
Federal............................................. 765 (2,481) 2,272
State............................................... 61 (167) 143
International....................................... (1,007) 4,837 1,821
------- ------- -------
(181) 2,189 4,236
------- ------- -------
Total....................................... $20,769 $22,593 $14,831
======= ======= =======
</TABLE>

The provision for income taxes differs from the statutory Federal income
tax rate of 35% for 1999, 1998 and 1997 as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Income tax at Federal statutory rate.................. $20,615 $21,594 $11,412
State and local taxes (benefits), net of Federal
income tax benefits................................. 239 522 605
Difference between Federal statutory rate and
statutory rates non-U.S. income..................... 940 (945) (1,666)
Reversal of tax contingency for IRS audit
settlement.......................................... -- -- (728)
Reversal of valuation allowance for international NOL
carryforward........................................ (2,414) -- --
Research and experimentation credits.................. (255) (150) (399)
Non-taxable international income accrual.............. (2,275) -- --
Write off of acquired in-process research and
development......................................... -- -- 4,900
Foreign Tax Credits................................... (97) (311) --
Non-deductible provision for Vitamin B-3.............. 2,014 -- --
Other................................................. 2,002 1,883 707
------- ------- -------
$20,769 $22,593 $14,831
======= ======= =======
</TABLE>

The components of deferred tax assets and liabilities as of December 31,
1999 and 1998 relate to temporary differences and carryforwards as follows:

38
<PAGE> 40
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(9) INCOME TAXES -- (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1999 1998
------- -------
<S> <C> <C>
Deferred tax assets:
Acquisition reserves................................... $ 1,284 $ 781
Environmental.......................................... 1,228 1,574
Net operating loss carryforwards....................... -- 3,643
Inventory.............................................. 4,322 2,535
Employee benefits...................................... 3,963 3,297
Receivables............................................ 27 195
Capital Assets......................................... 3,626 --
Other.................................................. 1,972 2,148
------- -------
Net current deferred tax assets........................ 16,422 14,173
Valuation allowances................................... -- (2,414)
------- -------
Total net deferred tax assets.................. $16,422 $11,759
======= =======
Deferred tax liabilities:
Depreciation........................................... $30,967 $29,591
Environmental Reserves................................. 796 --
Intangibles............................................ 14,963 14,839
Italian Intangibles.................................... 4,581 6,086
Other Benefits........................................... 2,143 --
Other.................................................... 1,722 1,667
------- -------
Total net non-current deferred tax
liabilities.................................. $55,172 $52,183
======= =======
</TABLE>

Included within the change in the cumulative translation adjustment for the
year ended December 31, 1999 is $1,490 related to the translation of deferred
tax assets and liabilities of international operations.

Under the tax laws of various international countries in which the Company
operates, net operating losses (NOLs) may be carried forward, subject to
statutory limitations, to reduce taxable income in future years. The tax effect
of such international NOL carryforwards aggregated approximately $0 and $3,643
at December 31, 1999 and 1998. Valuation allowances have been established
against these NOL carryforwards in prior years to reflect uncertainties
associated with the realizability of such future benefits. These NOL
carryforwards were utilized during 1999 against currently earned income.

During 1998, the Company made an election which allows the Italian
subsidiary to deduct for tax purposes previously non-deductible intangible
assets. The result of this election was a charge to 1998 earnings of $3,420 that
resulted in net favorable tax benefits of $1,493 for 1999. Future favorable tax
benefits related to this election are projected to be $2,907.

(10) SHORT-TERM DEBT

The Company has lines of credit in Italy with five local banks (the
"Facility"). The Facility is short-term and provides three types of financing
with the following limits: Overdraft Protection of $2,000 (Lire 4.0 billion),
Export Financing of $4,000 (Lire 8.0 billion) and Advances on Uncleared Deposits
of $1,000 (Lire 3.0 billion). The Overdraft Protection and Export Financing
facilities bear interest at varying rates when utilized, however, Advances on
Uncleared Deposits (Ricevute Bancarie) bear no interest.

39
<PAGE> 41
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(10) SHORT-TERM DEBT -- (CONTINUED)
Short-term debt at December 31, 1999 and 1998 consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1999 1998
------ ------
<S> <C> <C>
Export financing facility.................................. $2,813 $2,451
</TABLE>

The 1999 and 1998 average interest rates were 2.83% and 1.36%,
respectively.

(11) LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
Bank credit facilities(a).............................. $218,500 $190,000
Capitalized leases(b).................................. 5,320 49
Notes payable(c)....................................... 2,568 1,901
-------- --------
Subtotal............................................. 226,388 191,950
Less: current portion.................................. 466 578
-------- --------
Total........................................ $225,922 $191,372
======== ========
</TABLE>

(a) On September 16, 1997, the Company entered into a five year Credit
Agreement (the "Agreement"). The Agreement provides the Company with a $400,000
borrowing facility. Under this Agreement, the Company has pledged 66% of the
common stock of the Company's international subsidiaries as collateral. The
Agreement permits the Company to choose between various interest rate options
and to specify the portion of the borrowing to be covered by specific interest
rate options. Under the Agreement, the interest rate options available to the
Company are: (a) U.S. Prime rate or (b) LIBOR plus the applicable margin
(ranging from .225% to .5%) or (c) Competitive Bid at a LIBOR Rate Borrowing or
a Fixed Rate Borrowing to be determined by auction. The applicable margin is
adjusted based upon the Funded Indebtedess to Cash Flow Ratio of the Company.
Additionally, the Company pays a commitment fee of between .15% to .25% on the
entire portion of the Agreement. The 1999 and 1998 average interest rates were
6.1% and 6.4%, respectively.

On September 18, 1997, the Company utilized $60,000 of the Agreement in
order to repay the then outstanding balance under the previously existing
Revolving Credit Agreement. On September 30, 1997, the Company borrowed $126,000
to finance the acquisition of the outstanding common stock of BioWhittaker. Of
this amount, approximately $116,000 was utilized on September 30, 1997. On
October 3, 1997, an additional $10,000 was utilized to acquire the remaining 7%
of BioWhittaker's common stock. During 1999, $31,000 was utilized to fund the
acquisition of BioWhittaker Molecular Applications, Inc. The undrawn borrowing
availability under the Agreement as of December 31, 1999 was $181,500.

The Agreement is subject to financial covenants requiring the Company to
maintain certain levels of net worth and an interest coverage ratio, as well as
a limitation on indebtedness. The Company met all of the bank covenants during
1999.

(b) The Company assumed six capital leases as part of the acquisition of
Irotec in 1999 of $5,436. These leases are for various plant and equipment
expiring in 2006 to be repaid in 28 equal quarterly installments. There is
$5,291 outstanding at December 31, 1999.

40
<PAGE> 42
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(11) LONG-TERM DEBT -- (CONTINUED)
(c) The Company had a loan agreement with the Italian government to finance
technological innovations. The loan of $1,291 bearing interest at 9.21%, was to
be amortized over ten annual payments starting July 26, 1995 and ending July 26,
2004, but was paid in full during 1999. There is $0 and $891 outstanding as of
December 31, 1999 and 1998, respectively.

The Company assumed a note payable as part of the acquisition of
BioWhittaker in 1997 of $1,253. The note, bearing interest at 8%, is payable in
annual installments of $340 and expires in 2001. There is $574 and $845
outstanding as of December 31, 1999 and 1998 respectively.

Aggregate maturities of long-term debt are as follows:

<TABLE>
<S> <C>
2000.................. $ 466
2001.................. 1,437
2002.................. 219,472
2003.................. 965
2004.................. 965
Thereafter............ 3,083
--------
Total....... $226,388
========
</TABLE>

(12) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company uses derivative financial instruments to reduce exposures to
market risks resulting from fluctuations in interest rates and foreign exchange
rates. The Company does not enter into financial instruments for trading or
speculative purposes. The Company is exposed to credit loss in the event of non-
performance by the other parties to the interest rate swap, forward exchange or
put and call contracts. However, the Company does not anticipate non-performance
by the counterparties.

Interest Rate Swap Agreements

The Company enters into interest rate Swap agreements to reduce the impact
of changes in interest rates on its floating rate debt. The Swap agreements are
contracts to exchange floating rate for fixed interest payments periodically
over the life of the agreements without the exchange of the underlying notional
debt amounts. The notional amounts provide an indication of the extent of the
Company's involvement in such agreements but do not represent its exposure to
market risk. The following table shows the notional amounts outstanding,
maturity dates, and the weighted average receive and pay rates of interest rate
swap agreements as of December 31, 1999.

<TABLE>
<CAPTION>
WEIGHTED AVG.
RATE
NOTIONAL MATURITY ---------------
AMOUNTS DATE RECEIVE PAY
- -------- -------- ------- ----
<S> <C> <C> <C>
$10,000 2002 6.10% 5.85%
$10,000 2003 6.16% 5.77%
$10,000 2002 6.20% 5.77%
$10,000 2001 6.11% 5.81%
$10,000 2000 6.16% 6.09%
$20,000 2001 6.16% 5.93%
$10,000 2002 6.16% 5.15%
</TABLE>

41
<PAGE> 43
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(12) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS -- (CONTINUED)
Interest expense under these agreements, and the respective debt
instruments that they hedge, are recorded at the net effective interest rate of
the hedged transactions. The fair value of these agreements were based on quoted
market prices and was $81,086 at December 31, 1999.

Foreign Exchange Instruments

The Company's policy is to enter into forward exchange contracts and/or
currency options to hedge foreign currency transactions. This hedging strategy
mitigates the impact of short-term foreign exchange rate movements on the
Company's operating results primarily in the United Kingdom, Sweden and Italy.
The Company's primary market risk relates to exposure to foreign currency
exchange rate fluctuations on transactions entered into by these international
operations which are denominated primarily in U.S. dollars, Euro currency, and
British pound sterling. As a matter of policy, the Company does not hedge to
protect the translated results of foreign operations. The Company's forward
exchange contracts do not subject the Company's results of operations to risk
due to exchange rate movements because gains and losses on these contracts
generally offset gains and losses on the transactions being hedged. The forward
exchange contracts have varying maturities with none exceeding twelve months.
The Company makes net settlements for forward exchange contracts at maturity,
based upon negotiated rates at inception of the contracts.

<TABLE>
<CAPTION>
1999
-----------------------------------
UNREALIZED
NOTIONAL FAIR --------------
AMOUNTS VALUE GAINS LOSSES
-------- ------- ----- ------
<S> <C> <C> <C> <C>
Forward exchange contracts................... $39,448 $40,563 $242 $1,357
</TABLE>

<TABLE>
<CAPTION>
1998
-----------------------------------
UNREALIZED
NOTIONAL FAIR --------------
AMOUNTS VALUE GAINS LOSSES
-------- ------- ----- ------
<S> <C> <C> <C> <C>
Forward exchange contracts.................... $24,371 $24,437 $482 $548
</TABLE>

The carrying amount reported in the consolidated balance sheets for cash
and cash equivalents, accounts receivable, accounts payable and short-term debt
approximates fair value because of the immediate or short-term maturity of these
financial instruments. The carrying amount reported for long-term debt
approximates fair value because approximately 60% of the underlying debt is at
variable rates and reprices quarterly. The remaining amount of long-term debt
has fixed rates through interest swap contracts.

(13) STOCKHOLDERS' EQUITY

The Company has two classes of common shares designated Common Stock and
Nonvoting Common Stock. Authorized shares of Common Stock were 60,000,000 at
December 31, 1999 and 1998. Authorized shares of Nonvoting Common Stock were
730,746 at December 31, 1999 and 1998.

At December 31, 1999, authorized shares of Common Stock were reserved for
issuance as follows:

<TABLE>
<S> <C>
Stock option plans........................................ 3,923,850
Cambrex savings plan...................................... 169,544
---------
Total shares.................................... 4,093,394
=========
</TABLE>

On May 28, 1998, the Company's Board of Directors approved a two-for-one
stock split of the Company's Common Stock, $.10 par value, effected by the
distribution to stockholders of record as of the close of business on June 10,
1998 of one additional share of Common Stock for each share held. All share and
per share date, including stock option plan information, have been adjusted to
reflect the impact of the two-

42
<PAGE> 44
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(13) STOCKHOLDERS' EQUITY -- (CONTINUED)
for-one stock split. The effect of the split was presented within stockholders'
equity at December 31, 1998 by transferring the par value for the additional
shares issued from additional paid-in capital to common stock.

Nonvoting Common Stock with a par value of $.10, has equal rights with
Common Stock, with the exception of voting power. Nonvoting Common Stock is
convertible, share for share, into Common Stock, subject to any legal
requirements applicable to holders restricting the extent to which they may own
voting stock. As of December 31, 1999 and 1998, no shares of Nonvoting Common
Stock were outstanding.

The Company held treasury stock of 2,100,690 and 2,081,099 shares at
December 31, 1999 and 1998, respectively, and are used for issuance to the
Cambrex Savings Plan.

(14) STOCK OPTIONS

The Company has authorized 5,000,000 shares of Series Preferred Stock, par
value $.10, issuable in series and with rights, powers and preferences as may be
fixed by the Board of Directors. At December 31, 1999 and 1998, there was no
preferred stock outstanding.

The Company has eight stock-based compensation plans currently in effect.
The 1983 Incentive Stock Option Plan ("1983 Plan") provides for the grant of
options intended to qualify as incentive stock options to management and other
key employees. The 1987 Stock Option Plan ("1987 Plan") provides for the
granting to key employees both non-qualified stock options and incentive stock
options. The 1989 Senior Executive Stock Option Plan ("1989 Plan") provides for
the grant of options intended to qualify as additional incentives to the
Company's Senior Executive Officers. The 1992 Stock Option Plan ("1992 Plan")
provides for the granting to key employees both non-qualified stock options and
incentive stock options. The 1993 Senior Executive Stock Option Plan ("1993
Plan") provides for the grant of options intended to qualify as additional
incentives to the Company's Senior Executive Officers. The 1994 Stock Option
Plan ("1994 Plan") provides for the granting to key employees both non-qualified
and incentive stock options. The 1994 Plan also provides for the granting of
non-qualified stock options to non-employee directors. The 1996 Performance
Stock Option Plan ("1996" Plan) provides for the granting of options intended to
qualify as additional incentives to management and other key employees. The 1996
Plan also provides for the granting of non-qualified stock options to
non-employee directors.

On April 23, 1998, the Company's stockholders approved The 1998 Performance
Stock Option Plan (the "1998 Plan"), which provides for the granting of options
intended to qualify as additional incentives to directors and key employees.
Options granted under the 1998 Plan shall vest and become exercisable nine years
after the date of grant, subject to acceleration if the publicly traded price of
the Company's Common Stock equals or exceeds levels determined by the Committee
within certain time periods or in the event of a change in control. Options
shall have a term of no more than ten years from the date of grant.

The Company applies the provisions of APB Opinion No. 25 and related
Interpretations in accounting for its stock-based compensation plans. Statement
of Financial Accounting Standards No. 123 "Accounting for Stock-Based
Compensation" (SFAS 123) establishes financial accounting and reporting
standards for stock-based employee compensation plans. The Company has adopted
the disclosure only provisions available under SFAS 123. Accordingly, no
compensation cost has been recognized for stock option plans under SFAS 123.

Had compensation cost for the Company's 1999, 1998 and 1997 grants for
stock-based compensation plans been determined based on the fair value at the
grant dates for awards under these plans consistent with

43
<PAGE> 45
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(14) STOCK OPTIONS -- (CONTINUED)
SFAS 123, the Company's net income, and net income per common share for 1999,
1998 and 1997 would approximate the pro forma amounts below:

<TABLE>
<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Net income -- as reported............................. $38,132 $39,102 $17,776
======= ======= =======
Net income -- pro forma............................... $34,357 $35,951 $16,079
======= ======= =======
Diluted earnings per share -- as reported............. $ 1.49 $ 1.54 $ 0.73
======= ======= =======
Diluted earnings per share -- pro forma............... $ 1.34 $ 1.41 $ 0.66
======= ======= =======
</TABLE>

The pro forma compensation expense of $3,775, $3,151, and $1,697 for 1999
and 1998 and 1997, respectively, was calculated based on the fair value of each
option primarily using the Black-Scholes option-pricing model for
non-performance options and a path dependent model for performance options, with
the following assumptions for 1999, 1998 and 1997, respectively: (i) average
dividend yield of 0.56%, 0.58% and 1.33% (ii) expected volatility of 24.1%,
24.5% and 25.5%, (iii) risk-free interest rate ranging from 5.32% to 5.42%,
5.50% to 5.54%, and 6.03% to 6.85% and (iv) expected life of 4-5 years.

As of December 31, 1999, 4,202,650 options had been exercised. Shares of
Common Stock subject to outstanding options under the stock option plans were as
follows:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
----------------------------------------------------- OPTIONS EXERCISABLE
WEIGHTED AVERAGE --------------------
----------------------- WEIGHTED
OPTION REMAINING AVERAGE
AUTHORIZED PRICE PER CONTRACTUAL EXERCISE NUMBER EXERCISE
FOR ISSUANCE OUTSTANDING SHARE $ LIFE (YRS.) PRICE $ OF SHARES PRICE $
------------ ----------- ------------- ----------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1983 Plan............. 648,000 -- -- -- -- -- --
1987 Plan............. 600,000 -- -- -- -- -- --
1989 Plan............. 1,200,000 -- -- -- -- -- --
1992 Plan............. 300,000 25,500 8.063-12.375 4.9 8.06 25,500 8.06
1993 Plan............. 900,000 222,125 6.625- 8.063 3.8 6.92 222,125 6.92
1994 Plan............. 300,000 73,350 6.625-11.438 4.6 7.97 73,350 7.97
1996 Plan............. 3,000,000 1,874,225 12.375-30.938 7.7 17.22 1,430,725 17.22
1998 Plan............. 1,180,000 1,021,849 22.063-29.375 8.7 22.96 6,200 22.96
--------- --------- ---------
Total
shares..... 8,128,000 3,217,049 6.625-30.938 18.05 1,757,900
========= ========= =========
</TABLE>

44
<PAGE> 46
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(14) STOCK OPTIONS -- (CONTINUED)
Information regarding the Company's stock option plans is summarized below:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
-------------------------
NUMBER OF EXERCISE FAIR VALUE $ OPTIONS
SHARES PRICE $ AT GRANT DATE EXERCISABLE
--------- -------- ------------- -----------
<S> <C> <C> <C> <C>
Outstanding at December 31, 1996.............. 2,672,976 11.52 912,226
Granted..................................... 466,800 21.09 6.92
Exercised................................... (396,226) 10.54
Cancelled................................... (30,000) 14.39
---------
Outstanding at December 31, 1997.............. 2,713,550 13.28 2,472,050
Granted..................................... 1,237,050 23.35 9.59
Exercised................................... (638,750) 11.19
Cancelled................................... (57,000) 21.84
---------
Outstanding at December 31, 1998.............. 3,254,850 17.30 2,141,800
Granted..................................... 187,549 26.81 9.31
Exercised................................... (146,600) 9.22
Cancelled................................... (78,750) 27.11
---------
Outstanding at December 31, 1999.............. 3,217,049 18.05 1,757,900
=========
</TABLE>

(15) RETIREMENT PLANS

Pension Plans

The Company maintains two U.S. defined-benefit pension plans which cover
substantially all eligible employees: (1) the Nepera Hourly Pension Plan (the
"Nepera Plan") which covers the union employees at the Harriman, New York plant,
and (2) the Cambrex Pension Plan (the "Cambrex Plan") which covers all other
eligible employees.

Benefits for the salaried and certain hourly employees are based on salary
and years of service, while those for employees covered by a collective
bargained agreement are based on negotiated benefits and years of service. The
Company's policy is to fund pension costs currently to the extent deductible for
income tax purposes. Pension plan assets consist primarily of balanced mutual
fund investments.

The Company has a Supplemental Executive Retirement Plan for key
executives.

The net periodic pension expense for both 1999 and 1998 is based on a
twelve month period and on valuations of the plans as of January 1. However, the
reconciliation of funded status is determined as of the September 30 measurement
date.

45
<PAGE> 47
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(15) RETIREMENT PLANS -- (CONTINUED)
The funded status of these plans, incorporating these fourth quarter
contributions, as of September 30, 1999 and 1998 is as follows:

<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year..................... $33,731 $29,350
Service cost................................................ 2,378 1,587
Interest cost............................................... 2,253 2,108
Amendments.................................................. -- 81
Actuarial loss (gain)....................................... (4,855) 1,843
Acquisitions................................................ 124 --
Benefits paid............................................... (1,277) (1,238)
------- -------
Benefit obligation at end of year........................... 32,354 33,731
------- -------
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year.............. 25,820 26,321
Actual return on plan assets................................ 3,603 334
Acquisitions................................................ 525 375
Benefits paid............................................... (1,249) (1,210)
------- -------
Fair value of plan assets at end of year.................... 28,699 25,820
------- -------
Funded status............................................... (3,655) (7,911)
Unrecognized prior service cost............................. 1,194 1,115
Unrecognized net (gain)loss................................. (1,100) 4,996
Additional minimum liability................................ (1,988) (3,651)
------- -------
Prepaid (accrued) benefit at September 30,.................. (5,549) (5,451)
4th quarter contributions................................... -- 232
------- -------
Prepaid (accrued) benefit cost at December 31,.............. $(5,549) $(5,219)
======= =======
</TABLE>

The components of net periodic pension cost is as follows:

<TABLE>
<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service Cost.......................................... $ 2,378 $ 1,587 $ 1,310
Interest Cost......................................... 2,253 2,108 1,887
Expected return on plan assets........................ (2,171) (2,201) (1,827)
Amortization of prior service cost.................... 47 36 (23)
Recognized actuarial loss............................. 261 195 92
------- ------- -------
Net periodic benefit cost............................. $ 2,768 $ 1,725 $ 1,439
======= ======= =======
WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER 31,
Discount rate......................................... 7.75% 6.75% 7.25%
Expected return on plan assets........................ 8.50% 8.50% 8.50%
Rate of compensation increase......................... 5.00% 5.00% 5.00%
</TABLE>

The aggregate ABO (Accumulated Benefit Obligation) for those plans with
ABO's in excess of plan assets is $4,340 in 1999. The aggregate fair value of
assets for those plans with ABO's in excess of plan assets is $0 in 1999.

46
<PAGE> 48
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(15) RETIREMENT PLANS -- (CONTINUED)
Certain foreign subsidiaries of the Company maintain pension plans for
their employees which conform to the common practice in their respective
countries. The funded status of these plans, incorporating these fourth quarter
contributions, as of December 31, 1999 and 1998 is as follows:

<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year..................... $ 8,668 $ 8,094
Service cost................................................ 702 532
Interest cost............................................... 611 533
Plan participants' contribution............................. 13 (64)
Actuarial loss (gain)....................................... 270 (264)
Acquisitions................................................ 2,424 --
Benefits paid............................................... (128) (68)
Foreign exchange............................................ (498) (95)
------- -------
Benefit obligation at end of year........................... 12,062 8,668
------- -------
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year.............. 2,749 2,205
Actual return on plan assets................................ 1,231 249
Company contribution........................................ 318 280
Plan participant contribution............................... 175 88
Acquisitions................................................ 2,811 --
Benefits paid............................................... (128) (99)
Foreign exchange............................................ (195) 26
------- -------
Fair value of plan assets at end of year.................... 6,961 2,749
------- -------
Funded status............................................... (5,101) (5,919)
Unrecognized actuarial loss................................. 244 53
Unrecognized prior service cost............................. 49 53
Unrecognized net (gain)loss................................. (1,491) (467)
Foreign exchange............................................ 20 3
------- -------
Prepaid (accrued) benefit................................... $(6,279) $(6,277)
======= =======
</TABLE>

The components of the net periodic pension cost is as follows:

<TABLE>
<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service Cost.......................................... $ 702 $ 532 $ 472
Interest Cost......................................... 611 533 544
Expected return on plan assets........................ (459) (236) (167)
Amortization of excess plan net....................... (31) (33) (34)
Amortization of prior service cost.................... (12) 3 3
------- ------- -------
Net periodic benefit cost............................. $ 811 $ 799 $ 818
======= ======= =======
</TABLE>

47
<PAGE> 49
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(15) RETIREMENT PLANS -- (CONTINUED)

<TABLE>
<S> <C> <C> <C>
WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER
31,
Discount rate................................. 5.75%-6.50% 5.50%-6.00% 5.50%-7.00%
Expected return on plan assets................ 9.00% 9.00% 10.00%
Rate of compensation increase................. 3.00%-4.50% 2.50%-3.50% 3.50%-5.00%
</TABLE>

The aggregate ABO for those plans with ABO's in excess of plan assets is
$5,713 in 1999, which were not funded.

The Company's net pension costs included in operating results amounted to
$2,768, $1,725, and $1,439 in 1999, 1998 and 1997, respectively. The pension
expense for foreign pension plans of $811, $799, and $818 is included in the
1999, 1998 and 1997 net periodic pension expense, respectively.

BioWhittaker had a noncontributory defined contribution target plan for its
eligible employees. Under BioWhittaker's target plan, all domestic employees
over 21 years of age who have completed one year of service with the Company
participate. The target plan is 100% Company-funded, with annual contributions
by the Company based on the employee's targeted benefit, determined by such
factors as salary and expected years of service to age 65. Effective May, 1999,
BioWhittaker no longer has a separate plan and is covered by the Cambrex plan.
Total target plan expenses amounted to $171 in 1999, $546 in 1998, and from the
date of acquisition amounted to $126 in 1997.

Savings Plan

Cambrex makes available to all employees a savings plan as permitted under
Sections 401(k) and 401(a) of the Internal Revenue Code. Effective August 1998,
this plan became available to all BioWhittaker employees. Employee contributions
are matched in part by Cambrex. The cost of this plan amounted to $1,391,
$1,523, and $1,387 in 1999, 1998 and 1997, respectively.

BioWhittaker had available to all eligible employees a contributory 401(k)
plan which was terminated in August 1998. Employee contributions had been
matched in part by BioWhittaker. The cost of this plan amounted to $262 in 1998
and from the date of acquisition amounted to $115 in 1997.

Other

The Company has a non-qualified Compensation Plan for Key Executives ("the
Deferred Plan"). Under the Deferred Plan, officers and key employees may elect
to defer all or any portion of their pre-tax annual bonus and/or annual base
salary. Included within other liabilities at December 31, 1999 and 1998 there is
$2,247 and $3,005, respectively, representing the Company's obligation under the
plan. To assist in the funding of this obligation, the Company invests in
certain mutual funds and as such, included within other assets at December 31,
1999 and 1998 is $2,247 and $3,005, respectively, representing the fair value of
these funds. During 1995, the Board amended the Deferred Plan to permit officers
and key employees to elect to defer receipt of Company stock which would
otherwise have been issued upon the exercise of Company options. Total shares
held in trust as of December 31, 1999 and 1998 are 283,540 and 364,811,
respectively; and are included as a reduction of equity at cost. The value of
the shares held in trust and the corresponding liability of $1,092 at December
31, 1999 have been recorded in equity. The Deferred Plan is not funded by the
Company, but the Company has established a Deferred Compensation Trust Fund
which holds the shares issued.

48
<PAGE> 50
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(16) OTHER POSTRETIREMENT BENEFITS

Cambrex provides postretirement health and life insurance benefits
("postretirement benefits") to all eligible retired employees. Employees who
retire at or after age 55 with ten years of service are eligible to participate
in the postretirement benefit plans. The Company's responsibility for such
premiums for each plan participant is based upon years of service subject to an
annual maximum of one thousand dollars. Such plans are self-insured and are not
funded.

The Company elected to amortize the transition obligation of $1,853 over
twenty years. The net effect upon 1999, 1998 and 1997 pretax operating results,
including the amortization of the transition obligation, resulted in a cost of
$323, $321, and $285, respectively. Disclosure is presented in accordance with
Statement of Financial Accounting Standards No. 132 "Employers' Disclosures
About Pensions and Other Post Retirement Benefits" (SFAS 132).

The periodic postretirement benefit cost includes the following components:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1999 1998
------ ------
<S> <C> <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year..................... $2,539 $2,157
Service cost................................................ 63 63
Interest cost............................................... 167 165
Actuarial (gain) loss....................................... (397) 154
------ ------
Funded status............................................... $2,372 $2,539
------ ------
Unrecognized net loss (gain)................................ 203 (48)
Unrecognized translation obligation......................... (1,204) (1,298)
------ ------
Benefit obligation at end of year........................... $1,371 $1,193
====== ======
Account recognized in the Statement of Financial Position:
Accrued benefit liability................................... $1,371 $1,193
------ ------
Net amount recognized....................................... $1,371 $1,193
====== ======
</TABLE>

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost of benefits earned.......................... $ 63 $ 63 $ 51
Interest cost............................................ 167 165 150
Amortization of unrecognized prior service cost.......... -- -- (9)
Amortization of transition obligation.................... 93 93 93
------ ------ ------
Total periodic postretirement benefit cost............... $ 323 $ 321 $ 285
====== ====== ======
</TABLE>

The discount rate used to determine the accumulated postretirement benefit
obligation was 7.75% and 6.75% in 1999 and 1998, respectively. The assumed
health care cost trend rate used to determine the accumulated postretirement
benefit obligation is 9%, declining ratably to 6.5% in 2002 and thereafter. A
one-percentage-point increase in the assumed health care cost trend rate would
lower the accumulated postretirement benefit obligation by $62 and would lower
the sum of interest and service cost by $9. A one-percentage-point decrease
would raise the accumulated postretirement benefit obligation by $59 and would
raise the sum of interest and service cost by $9.

49
<PAGE> 51
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(16) OTHER POSTRETIREMENT BENEFITS -- (CONTINUED)
The cost of all health and life insurance benefits is recognized as
incurred and was approximately $3,312, $4,214 and $4,286 in 1999, 1998 and 1997,
respectively. The cost of providing these benefits for the 259, 250 and 224
retirees in 1999, 1998 and 1997, respectively, is not separable from the cost of
providing benefits for the 1,052, 1,105, and 718 active U.S. employees.

(17) RESTRUCTURING

During the third quarter of 1998, the Company incurred a restructuring
charge of $1,400 which includes the non-recurring costs resulting from the
consolidation of administrative and management functions and resulted in the
reduction of 44 employees. These costs are related to severance paid to
terminated employees. The majority of these costs were incurred and paid prior
to December 31, 1998 with the remainder paid in full during 1999.

(18) OTHER INCOME AND EXPENSE

Other expense (income) was $555, $945 and ($1,263) for 1999, 1998 and 1997,
respectively. Included in 1999 expense are various costs associated with loss on
sale of assets and other miscellaneous expenses. Included in 1998 other expense
were asset write-offs at the Zeeland facility of $522. Other income in 1997
included a gain of $954 on the settlement of a foreign denominated loan.
Additionally, 1997 other income included the final resolution and receipt of the
settlement proceeds due from the 1996 premature termination of a contract by a
customer for $766, offset by a charge of $507 for the settlement of a legal
matter reached during the year.

(19) SEGMENT INFORMATION

The Company is involved principally in the manufacturing and marketing of
products which include: Human Health, which include Active Pharmaceutical
Ingredients produced under Food and Drug Administration (FDA) regulation for use
in prescription drug products, Pharmaceutical Intermediates produced in current
Good Manufacturing Practices (cGMP) facilities for use in the production of
pharmaceuticals and over-the-counter drug products, Imaging Chemicals used in
x-ray media, Personal Care Ingredients used in cosmetics and for the
pharmaceutical actives market, and Nutraceuticals used in health products;
Biosciences, consisting of cell culture and endotoxin detection products; Animal
Health/Agriculture products including Vitamin B-3 used in feed additives,
Agricultural Intermediates used in crop protection, and Animal Health products
used as feed additives; and the Specialty and Fine Chemical segment which
includes Performance Enhancing Chemicals used in photography, pigments,
specialty polymers, fuel/oil additives, catalysts, and other specialty
additives, and Polymer Systems products used in coatings, telecommunications,
electronics and engineering plastics. Most of the Company's subsidiaries operate
in more than one of these segments. The key exceptions are BioWhittaker and BMA,
which solely comprise the biosciences segment. The Company has provided
financial information in order to show Gross Sales and Gross Profit by segment.
All other financial information is available only for the Biosciences Segment
and for all other segments combined. The Company allocates Corporate expenses
and interest to each of its subsidiaries. The interest allocation is based on
12% of subsidiary working capital and 9% of net property, plant and equipment.
No customer accounts for more than 10% of consolidated revenues.

50
<PAGE> 52
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(19) SEGMENT INFORMATION -- (CONTINUED)
The following is a summary of business segment information:

<TABLE>
<CAPTION>
GROSS SALES: 1999 1998 1997
- ------------ -------- -------- --------
<S> <C> <C> <C>
Human Health....................................... $225,660 $194,766 $182,818
Biosciences........................................ 83,887 65,968 13,577
Animal Health/Agriculture.......................... 55,695 56,285 59,804
Specialty and Fine Chemicals....................... 119,318 124,664 123,884
-------- -------- --------
$484,560 $441,683 $380,083
======== ======== ========
GROSS PRODUCT SALES DETAIL FOR EACH SEGMENT
Human Health:
Active Pharmaceutical............................ $155,250 $120,459 $110,461
Pharmaceutical Intermediates..................... 25,995 24,844 23,430
Personal Care Ingredients........................ 14,706 16,777 16,453
Imaging Chemicals................................ 13,568 14,179 17,617
Biomedical Urethanes............................. 3,050 3,977 4,286
Catalysts........................................ 6,950 8,281 6,554
Chiral Technology................................ 6,032 5,548 3,733
Neutraceuticals.................................. 109 701 284
-------- -------- --------
Total Human Health....................... $225,660 $194,766 $182,818
======== ======== ========
Biosciences:
Cells and Media.................................. $ 47,434 $ 43,795 $ 9,126
Endotoxin Detection.............................. 21,864 18,852 3,539
Electrophoresis and Chromatography............... 11,652 -- --
Other............................................ 2,937 3,321 912
-------- -------- --------
Total Biosciences........................ $ 83,887 $ 65,968 $ 13,577
======== ======== ========
Animal Health/Agriculture:
Vitamin B-3...................................... $ 9,155 $ 12,814 $ 12,163
Animal Health.................................... 15,013 17,614 17,471
Agricultural Intermediates....................... 31,527 25,857 30,170
-------- -------- --------
Total Animal Health/Agriculture.......... $ 55,695 $ 56,285 $ 59,804
======== ======== ========
Specialty and Fine Chemicals:
Performance Enhancing Chemicals.................. $ 76,441 $ 81,853 $ 81,640
Polymer Systems.................................. 42,877 42,811 42,244
-------- -------- --------
Total Specialty and Fine Chemicals....... $119,318 $124,664 $123,884
======== ======== ========
</TABLE>

51
<PAGE> 53
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(19) SEGMENT INFORMATION -- (CONTINUED)

<TABLE>
<CAPTION>
GROSS PROFIT: 1999 1998 1997
- ------------- -------- -------- --------
<S> <C> <C> <C>
Human Health....................................... $ 83,603 $ 92,441* $ 67,779
Biosciences........................................ 42,088 32,321 6,696
Animal Health/Agriculture.......................... 12,045 11,557 10,621
Specialty and Fine Chemicals....................... 29,427 27,098 28,866
-------- -------- --------
$167,163 $163,417 $113,962
======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
NET INCOME: 1999 1998 1997
- ----------- -------- -------- --------
<S> <C> <C> <C>
Biosciences........................................ $ 3,150 $ 1,953 $(13,921)**
Human Health, Animal Health/Agriculture & Specialty
and Fine Chemicals............................... 34,982 37,149 31,697
-------- -------- --------
$ 38,132 $ 39,102 $ 17,776
======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
TOTAL ASSETS 1999 1998 1997
- ------------ -------- -------- --------
<S> <C> <C> <C>
Biosciences........................................ $186,405 $154,082 $145,306
Human Health, Animal Health/Agriculture & Specialty
and Fine Chemicals............................... 487,242 462,972 407,120
-------- -------- --------
$673,647 $617,054 $552,426
======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
CAPITAL SPENDING 1999 1998 1997
- ---------------- -------- -------- --------
<S> <C> <C> <C>
Biosciences........................................ $ 1,829 $ 4,215 $ 886
Human Health, Animal Health/Agriculture & Specialty
and Fine Chemicals............................... 28,700 38,792 35,049
-------- -------- --------
$ 30,529 $ 43,007 $ 35,935
======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
DEPRECIATION 1999 1998 1997
- ------------ -------- -------- --------
<S> <C> <C> <C>
Biosciences........................................ $ 2,897 $ 1,997 $ 428
Human Health, Animal Health/Agriculture & Specialty
and Fine Chemicals............................... 30,221 28,550 24,238
-------- -------- --------
$ 33,118 $ 30,547 $ 24,666
======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
AMORTIZATION 1999 1998 1997
- ------------ -------- -------- --------
<S> <C> <C> <C>
Biosciences........................................ $ 5,017 $ 4,358 $ 1,122
Human Health, Animal Health/Agriculture & Specialty
and Fine Chemicals............................... 4,193 5,227 5,334
-------- -------- --------
$ 9,210 $ 9,585 $ 6,456
======== ======== ========
</TABLE>

- ---------------
* Includes royalty income of $19,298.

** Includes effect of non-recurring charge for $14,000 related to the value of
in-process research and development efforts underway at the time of the
acquisition of BioWhittaker, Inc., which was completed on October 3, 1997.

52
<PAGE> 54
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(20) FOREIGN OPERATIONS AND EXPORT SALES

Summarized data for the Company's operations for 1999, 1998 and 1997 are as
follows:

<TABLE>
<CAPTION>
DOMESTIC EUROPEAN TOTAL
-------- -------- --------
<S> <C> <C> <C>
1999
Gross sales........................................ $292,522 $192,038 $484,560
Long-lived identifiable assets..................... 268,669 160,801 429,470
1998
Gross sales........................................ $284,839 $156,844 $441,683
Long-lived identifiable assets..................... 241,694 140,317 382,011
1997
Gross sales........................................ $228,004 $152,079 $380,083
Long-lived identifiable assets..................... 227,368 136,977 364,345
</TABLE>

Export sales, included in domestic gross sales, in 1999, 1998 and 1997
amounted to $66,963, $64,174, and $48,852, respectively. No country, in any of
the given years, represents more than 10% of these export sales.

(21) COMMITMENTS

The Company has operating leases expiring on various dates through the year
2013. The leases are primarily for office and laboratory equipment and vehicles.
At December 31, 1999, future minimum commitments under non-cancelable operating
lease arrangements were as follows:

<TABLE>
<S> <C>
Year ended December 31:
2000..................................................... $ 1,501
2001..................................................... 1,090
2002..................................................... 993
2003..................................................... 853
2004 and thereafter...................................... 18,137
-------
Net commitments............................................ $22,573
=======
</TABLE>

Total operating lease expense was $2,433, $2,412, and $1,939 for the years
ended December 31, 1999, 1998 and 1997, respectively.

On August 11, 1999, the Company completed a marketing, development and
media supply agreement with Osiris Therapeutics, Inc. covering adult stem cells,
the progenitors of structural and connective tissues. The Company's BioWhittaker
subsidiary will manufacture and market adult stem cell products for the life
science research market through an exclusive worldwide license from Osiris.
BioWhittaker will also become the exclusive supplier of culture media to Osiris
for the production of human adult stem cells in therapeutic applications. The
two companies will share development costs and Osiris will receive royalties on
sales of research reagents. Cambrex also purchased $5,000 of Osiris Common
Stock, which represents approximately 5% ownership interest in the Company, and
has agreed to purchase an additional $2,000 of Common Stock coincident with an
Osiris initial public offering. Cambrex also received preemptive rights to
maintain its equity position in subsequent rounds of financing. The $5,000 paid
for Osiris Common Stock is included in Other Non-current Assets.

53
<PAGE> 55
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(22) CONTINGENCIES

The Company is subject to various investigations, claims and legal
proceedings covering a wide range of matters that arise in the ordinary course
of its business activities.

Environmental

In connection with laws and regulations pertaining to the protection of the
environment, the Company is a party to several environmental remediation
investigations and cleanups and, along with other companies, has been named a
"potentially responsible party" for certain waste disposal sites (Superfund
sites). Each of these matters is subject to various uncertainties, and it is
possible that some of these matters will be decided unfavorably against the
Company. The Company had accruals, included in current accrued liabilities and
other noncurrent liabilities, of $3,400 and $4,800 at December 31, 1999 and
1998, respectively, for costs associated with the study and remediation of
Superfund sites and the Company's current and former operating sites for matters
that are probable and reasonably estimable. Based on currently available
information and analysis, the Company's accrual represents 72% of what it
believes are the reasonably possible environmental cleanup related costs of a
non-capital nature. During the past three-year period, cash payments for
environmental cleanup related matters were $200, $1,800 and $400 for 1999, 1998
and 1997, respectively. There were no provisions for environmental contingencies
during the past three-year period. The Company reversed reserves of
approximately $1,200 and $800 during the third quarter of 1999 and 1998,
respectively, as a result of revised estimates. In addition, the Company settled
certain environmental claims involving the Cosan Chemical Company (a subsidiary)
with insurance companies for $1,150, After reviewing information currently
available, management believes any amounts paid in excess of the accrued
liabilities will not have a material effect on its financial position or results
of operations. However, these matters, if resolved in a manner different from
the estimates could have a material adverse effect on financial condition,
operating results and cash flows when resolved in a future reporting period.

Litigation

The Company and its subsidiary, Profarmaco S.r.l. ("Profarmaco"), were
named as defendants in a proceeding instituted by the Federal Trade Commission
("FTC") on December 21, 1998, in the United States District Court for the
District of Columbia. The complaint alleges that exclusive license agreements
which Profarmaco entered into with Mylan Laboratories, Inc. ("Mylan") covering
the drug master files for (and therefore the right to buy and use) two active
pharmaceutical ingrediations ("API's"), lorazepam and clorazepate, were part of
an effort on Mylan's part to restrict competition in the supply of lorazepam and
clorazepate and to increase the price charged for these products when Mylan sold
them as generic pharmaceuticals. The complaint further alleges that these
agreements violate the Federal Trade Commission Act, and that Mylan, Cambrex,
Profarmaco, and Gyma Laboratories of America, Inc., Profarmaco's distributor in
the United States, engaged in an unlawful restraint of trade and conspired to
monopolize and attempted to monopolize the markets for the generic
pharmaceuticals incorporating the APIs. The FTC seeks a permanent injunction and
other relief, including disgorgement of the profits generated through the
licensing arrangements, which the FTC alleges to be in excess of $120,000 for
all defendants. In accordance with the license agreement, the Company received
royalties of approximately $19,300 and $1,000 for the years ended December 31,
1998 and 1997, respectively.

54
<PAGE> 56
CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(22) CONTINGENCIES -- (CONTINUED)
clorazepate in generic form, making allegations essentially similar to those
raised in the FTC's complaint and seeking various forms of relief including
treble damages.

The Company strongly believes that its licensing arrangements with Mylan
are in accordance with regulatory requirements and will vigorously defend the
FTC's actions and various other lawsuits and class actions. However, the Company
and Mylan have terminated the exclusive licenses to the drug master files as of
December 31, 1998. In entering these licensing arrangements, the Company elected
not to raise the price of its products and had no control of influence over the
pricing of its final generic product. Under the terms of the agreement, Mylan
has agreed to indemnify the Company and Profarmaco against damages, losses,
costs and expenses arising from any claim, lawsuit or other action.

On May 14, 1998, the Company's Nepera subsidiary, a manufacturer and seller
of niacinamide (Vitamin B-3), received a Federal Grand Jury subpoena for the
production of documents relating to the pricing and possible customer allocation
with regard to that product. The Company understands that the subpoena was
issued as part of the Federal Government's ongoing anti-trust investigation into
various business practices in the vitamin industry generally. The Company has
reached a settlement with the Government concerning Nepera's alleged role in
Vitamin B-3 violations from 1992 to 1995. In addition, Nepera has been named as
a defendant, along with several other companies, in five civil actions brought
on behalf of alleged purchasers of Vitamin B-3. An accrual of $6,000 was
recorded in the fourth quarter 1999 to cover the anticipated government
settlements, related litigation, and legal expenses. This accrual has been
recorded in Accounts Payable and Accrued Liabilities.

(23) SUBSEQUENT EVENTS

On February 25, 2000, due to a release of a small quantity of malodorous
material, Nepera, Inc. a Cambrex subsidiary, received a summary abatement order
from the New York State Department of Environmental Conservation (NYSDEC)
ordering the Company to stop manufacturing operations pending a review of its
equipment and operating procedures. On March 3, 2000, all operations were
restarted except for the pyridine plant, which was subsequently restarted on
March 10, 2000. Management believes that this short term interruption of
production will not have a material effect on Cambrex's earnings in the year
2000.

On March 2, 2000, the Company completed the acquisition of Conti BPC NV, a
manufacturer and supplier of pharmaceutical intermediates and active
pharmaceutical ingredients, located in Landen, Belgium. The Company paid
approximately $5,000 in cash and assumed debt for the business. The acquisition
has been accounted for under the purchase method of accounting. Assets acquired
and liabilities assumed have been recorded at their estimated fair values, and
are subject to adjustment when additional information concerning asset and
liability valuations is finalized.

55
<PAGE> 57

CAMBREX CORPORATION

SELECTED QUARTERLY FINANCIAL DATA
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER QUARTER(2) YEAR(3)
-------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
1999
Gross sales......................... $117,519 $123,642 $118,602 $124,797 $484,560
Net revenues........................ 117,399 122,654 117,450 123,885 481,388
Gross profit........................ 40,503 42,859 39,234 44,567 167,163
Net income.......................... 10,180 11,925 9,673 6,354 38,132
Earnings per share*:(1)
Basic............................. $ 0.41 $ 0.49 $ 0.39 $ 0.26 $ 1.55
Diluted........................... $ 0.40 $ 0.47 $ 0.38 $ 0.25 $ 1.49
Average shares*:
Basic............................. 24,533 24,564 24,583 24,607 24,572
Diluted........................... 25,384 25,498 25,654 25,896 25,613
1998
Gross sales......................... $113,770 $116,173 $104,423 $107,317 $441,683
Net revenues........................ 113,602 123,504 107,950 112,185 457,241
Gross profit........................ 38,950 47,821 38,839 37,807 163,417
Net income.......................... 9,143 10,886 8,851 10,222 39,102
Earnings per share*:(1)
Basic............................. $ 0.38 $ 0.45 $ 0.36 $ 0.42 $ 1.62
Diluted........................... $ 0.36 $ 0.43 $ 0.35 $ 0.40 $ 1.54
Average shares*:
Basic............................. 23,910 24,154 24,288 24,417 24,194
Diluted........................... 25,052 25,548 25,483 25,534 25,412
</TABLE>

- ---------------
(1) Earnings per share calculations for each of the quarters are based on the
weighted average number of shares outstanding for each period, as such, the
sum of the quarters may not necessarily equal the earnings per share amount
for the year.

(2) The fourth quarter and 1999 net income includes a $6,000 provision to cover
anticipated government settlements, related litigation and legal expenses
associated with Cambrex subsidiary Nepera's alleged role in Vitamin B-3
anti-trust violations from 1992 to 1995.

(3) Includes royalty income of $19,298 in net revenues related to a technology
license agreement with Mylan Laboratories for use of intellectual property
in 1998.

* Share and per share data reflect adjustments for a two-for-one stock split
in the form of a dividend of one new share for each share held, paid in June
25, 1998.

56
<PAGE> 58

PART III

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

None.

ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

ITEM 11 EXECUTIVE COMPENSATION.

ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information called for by Part III is hereby incorporated by reference
to the information set forth under the captions "Principal Stockholders," "Board
of Directors," "Election of Directors," and "Executive Compensation" in the
registrant's definitive proxy statement for the Annual Meeting of Stockholders,
to be held April 27, 2000, which meeting involves the election of directors,
which definitive proxy statement is being filed with the Securities and Exchange
Commission pursuant to Regulation 14A.

In addition, information concerning the registrant's executive officers has
been included in Part I above under the caption "Executive Officers of the
Registrant."

57
<PAGE> 59

PART IV

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

(a) 1. The following consolidated financial statements of the Company are
filed as part of this report:

<TABLE>
<CAPTION>
PAGE NUMBER
(IN THIS REPORT)
----------------
<S> <C>
Report of Independent Accounts.............................. 27
Consolidated Balance Sheets as of December 31, 1999 and
1998...................................................... 28
Consolidated Income Statements for the Years Ended December
31, 1999, 1998 and 1997................................... 29
Consolidated Statement of Stockholder's Equity for the Years
Ended December 31, 1999, 1998 and 1997.................... 30
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1999, 1998 and 1997.......................... 31
Notes to Consolidated Financial Statements.................. 32
Consolidated Quarterly Financial Data (unaudited) for the
Years Ended December 31, 1999 and 1998.................... 56
</TABLE>

(a) 2. (i) The following schedule to the consolidated financial statements
of the Company as filed herein and the Report of Independent
Certified Public Accountants on Schedule are filed as part of this
report.

<TABLE>
<CAPTION>
PAGE NUMBER
(IN THIS REPORT)
----------------
<S> <C>
Independent Accountants' Report............................. 59
Schedule II -- Valuation and Qualifying Accounts............ 60
</TABLE>

All other schedules are omitted because they are not applicable or not
required or because the required information is included in the consolidated
financial statements of the Company or the notes thereto.

<TABLE>
<S> <C>
(a) 3. The exhibits filed in this report are listed in the
Exhibit Index on page 62
</TABLE>

The registrant agrees, upon request of the Securities and Exchange
Commission, to file as an exhibit each instrument defining the rights of holders
of long-term debt of the registrant and its consolidated subsidiaries which has
not been field for the reason that the total amount of securities authorized
thereunder does not exceed 10% of the total assets of the registrant and its
subsidiaries on a consolidated basis.

(b) Reports on Form 8-K

The registrant filed no reports on Form 8-K during the last quarter of the
year ended December 31, 1999.

58
<PAGE> 60

REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE

To the Boards of Directors
of Cambrex Corporation:

Our audits of the consolidated financial statements referred to in our
report dated January 21, 2000 (except for the first paragraph of Note 23, as to
which the date is February 25, 2000 and the second paragraph of Note 23, as to
which the date is March 2, 2000) appearing in the 1999 Annual Report on Form
10-K of Cambrex Corporation and its subsidiaries also included an audit of the
financial statement schedule listed in Item 14(a) (2) of this Form 10-K. In our
opinion, this financial statement schedule presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements.

PRICEWATERHOUSECOOPERS LLP

Florham Park, New Jersey
January 21, 2000

59
<PAGE> 61

SCHEDULE II

CAMBREX CORPORATION

VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
--------- ---------- ---------- ---------- --------
ADDITIONS
------------------------
BALANCE CHARGED TO CHARGED TO
BEGINNING COST AND OTHER END OF
CLASSIFICATION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS YEAR
- -------------- --------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999:
Doubtful trade receivables and
returns and allowances.......... $ 1,550 $ (347) $ 26(3) $ 430 $ 799
Inventory and obsolescence
provisions...................... 17,156 4,486 1,221(2) 4,209 18,654
YEAR ENDED DECEMBER 31, 1998:
Doubtful trade receivables and
returns and allowances.......... 1,705 257 -- 412 1,550
Inventory and obsolescence
provisions.................... 15,943 6,046 -- 4,833 17,156
YEAR ENDED DECEMBER 31, 1997:
Doubtful trade receivables and
returns and allowances.......... 1,453 818 57(1) 623 1,705
Inventory and obsolescence
provisions...................... 6,467 2,489 8,225(1) 1,238 15,943
</TABLE>

- ---------------
(1) Reserve of BioWhittaker acquired during 1997.

(2) Reserve of Irotec acquired March 1999.

(3) Reserve of BMA acquired July 1999.

60
<PAGE> 62

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.

CAMBREX CORPORATION

By /s/ JAMES A. MACK
---------------------------------------
James A. Mack
Chairman of the Board of Directors

Date: March 17, 2000

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

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ JAMES A. MACK Chairman of the Board of Directors
- ---------------------------------------------------
James A. Mack

/s/ DOUGLAS MACMILLAN Vice President
- --------------------------------------------------- Chief Financial Officer
Douglas MacMillan

/s/ CYRIL C. BALDWIN, JR.* Director
- ---------------------------------------------------
Cyril C. Baldwin, Jr.

/s/ ROSINA B. DIXON, M.D.* Director
- ---------------------------------------------------
Rosina B. Dixon, M.D.

/s/ GEORGE J. W. GOODMAN* Director
- ---------------------------------------------------
George J. W. Goodman

/s/ ROY W. HALEY* Director
- ---------------------------------------------------
Roy W. Haley

/s/ KATHRYN RUDIE HARRIGAN, PHD* Director
- ---------------------------------------------------
Kathryn Rudie Harrigan, PhD

/s/ LEON J. HENDRIX, JR.* Director
- ---------------------------------------------------
Leon J. Hendrix, Jr.

/s/ ILAN KAUFTHAL* Director
- ---------------------------------------------------
Ilan Kaufthal

/s/ WILLIAM KORB* Director
- ---------------------------------------------------
William Korb

/s/ ROBERT LEBUHN* Director
- ---------------------------------------------------
Robert LeBuhn

/s/ JOHN R. MILLER* Director
- ---------------------------------------------------
John R. Miller

/s/ DEAN P. PHYPERS* Director
- ---------------------------------------------------
Dean P. Phypers

*By /s/ JAMES A. MACK
----------------------------------------------
James A. Mack
Attorney-in-Fact
</TABLE>

61
<PAGE> 63

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C> <C>
3.1 -- Restated Certificate of Incorporation of
registrant(A) -- Exhibit 3(a).
3.2 -- By Laws of registrant.(E) -- Exhibit 4.2.
4.1 -- Form of Certificate for shares of Common Stock of
registrant.(A) -- Exhibit 4(a).
4.2 -- Article Fourth of the Restated Certificate of
Incorporation.(A) -- Exhibit 4(b).
4.3 -- Loan Agreement dated September 21, 1994 by and among the
registrant, NBD Bank, N.A., United Jersey Bank, National
Westminster Bank NJ, Wachovia Bank of Georgia, N.A.,
BHF-Bank, The First National Bank of Boston, Chemical Bank
New Jersey, N.A., and National City Bank.(K).
4.4 -- Loan Agreement dated September 16, 1997 by and among the
registrant, Chase Manhattan Bank as Administrative Agent and
The First National Bank of Chicago as Documentation Agent.
The bank group includes 13 domestic banks and 7
international banks.(Q)
10.1 -- Purchase Agreement dated July 11, 1986, as amended, between
the registrant and ASAG, Inc.(A) -- Exhibit 10(r).
10.2 -- Asset Purchase Agreement dated as of June 5, 1989 between
Whittaker Corporation and the registrant.(C) -- Exhibit
10(a).
10.3 -- Asset Purchase Agreement dated as of July 1, 1991 between
Solvay Animal Health, Inc. and the registrant.(F).
10.4 -- Asset Purchase Agreement dated as of March 31, 1992 between
Hexcel Corporation and the registrant.(H).
10.5 -- Stock Purchase Agreement dated as of September 15, 1994
between Akzo Nobel AB, Akzo Nobel NV and the registrant, for
the purchase of Nobel Chemicals AB.(K).
10.6 -- Stock Purchase Agreement dated as of September 15, 1994
between Akzo Nobel AB, Akzo Nobel and the registrant, for
the purchase of Profarmaco Nobel, S.r.l.(K).
10.7 -- Stock purchase agreement dated as of October 3, 1997 between
BioWhittaker and the registrant.(Q)
10.10 -- 1983 Incentive Stock Option Plan, as amended.(B).
10.11 -- 1987 Long-term Incentive Plan.(A) -- Exhibit (g).
10.12 -- 1987 Stock Option Plan.(B).
10.13 -- 1989 Senior Executive Stock Option Plan.(J).
10.14 -- 1992 Stock Option Plan.(J).
10.15 -- 1993 Senior Executive Stock Option Plan.(J).
10.16 -- 1994 Stock Option Plan.(J).
10.17 -- 1996 Performance Stock Option Plan.(N).
10.18 -- 1998 Performance Stock Option Plan.(R)
10.20 -- Form of Employment Agreement between the registrant and its
executive officers named in the Revised Schedule of Parties
thereto.(D) -- Exhibit 10.A.
10.21 -- Revised Schedule of Parties to Employment Agreement (exhibit
10.20 hereto).(M).
10.22 -- Cambrex Corporation Savings Plan.(I).
10.23 -- Cambrex Corporation Supplemental Retirement Plan.(L).
10.24 -- Deferred Compensation Plan of Cambrex Corporation.(L).
10.25 -- Amendment to Deferred Compensation Plan of Cambrex
Corporation (Exhibit 10.24 hereto).(P).
10.26 -- Cambrex Earnings Improvement Plan.(L).
10.27 -- Consulting Agreement dated December 15, 1994 between the
registrant and Arthur I. Mendolia.(L).
10.28 -- Consulting Agreement dated December 15, 1995 between the
registrant and Cyril C. Baldwin, Jr.(L).
10.29 -- Consulting Agreement between the registrant and James A.
Mack.(L).
10.30 -- Additional Retirement Payment Agreement dated December 15,
1994 between the registrant and Arthur I. Mendolia.(L).
10.31 -- Additional Retirement Payment Agreement dated December 15,
1994 between the registrant and Cyril C. Baldwin, Jr.(L).
10.32 -- Additional Retirement Payment Agreement between the
registrant and James A. Mack.(L).
</TABLE>

62
<PAGE> 64

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C> <C>
10.40 -- Registration Rights Agreement dated as of June 6, 1985
between the registrant and the purchasers of its Class D
Convertible Preferred stock and 9% Convertible Subordinated
Notes due 1997.(A) -- Exhibit 10(m).
10.41 -- Administrative Consent Order dated September 16, 1985 of the
New Jersey Department of Environmental Protection to Cosan
Chemical Corporation.(A) -- Exhibit 10(q).
10.42 -- Registration Rights Agreement dated as of June 5, 1996
between the registrant and American Stock Transfer and Trust
Company.(O) -- Exhibit 1.
10.50 -- Manufacturing Agreement dated as of July 1, 1991 between the
registrant and A.L. Laboratories, Inc.(G).
11 -- Statement re computation of earnings per share. (M).
21 -- Subsidiaries of registrant.(M).
23 -- Consent of PricewaterhouseCoopers LLP to the incorporation
by reference of its report herein in Registration Statement
Nos. 33-22017, 33-21374, 33-37791, 33-81780 and 33-81782 on
Form S-8 of the registrant.(M).
24 -- Powers of Attorney to sign this report.(M).
27 -- Financial Data Schedule.(M).
</TABLE>

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

See legend on following page.

63
<PAGE> 65

EXHIBIT INDEX

(A) Incorporated by reference to the indicated Exhibit to registrant's
Registration Statement on Form S-1 (Registration No. 33-16419).

(B) Incorporated by reference to registrant's Registration Statement on Form
S-8 (Registration No. 33-21374) and Amendment No. 1.

(D) Incorporated by reference to the indicated Exhibit to registrant's Annual
Report on Form 10-K for 1989.

(E) Incorporated by reference to the indicated Exhibit to registrant's
Registration Statement on Form S-8 (Registration No. 33-37791).

(F) Incorporated by reference to registrant's Current Report on Form 8-K dated
July 1, 1991.

(G) Incorporated by reference to the registrant's Annual Report on Form 10-K
for 1991.

(H) Incorporated by reference to the registrant's Current Report on Form 8-K
dated April 10, 1992 and Amendment No. 1 to its Current Report.

(I) Incorporated by reference to registrant's Registration Statement on Form
S-8 (Registration No. 33-81780) dated July 20, 1994.

(J) Incorporated by reference to registrant's Registration Statement on Form
S-8 (Registration No. 33-81782) dated July 20, 1994.

(K) Incorporated by reference to registrant's Current Report on Form 8-K dated
October 26, 1994.

(L) Incorporated by reference to the registrant's Annual Report on Form 10-K
for 1994.

(M) Filed herewith.

(N) Incorporated by reference to registrant's Registration Statement on Form
S-8 (Registration No. 33-22017) dated February 19, 1997.

(O) Incorporated by reference to the registrant's Current Report on Form 8-A
dated June 12, 1996.

(P) Incorporated by reference to the registrant's Annual Report on Form 10-K
for 1995.

(Q) Incorporated by reference to the registrant's Current Report on Form 8-K
dated October 8, 1997.

<PAGE> 1

CAMBREX CORPORATION
ANNUAL REPORT ON FORM 10-K

EXHIBIT 10.21

REVISED SCHEDULE OF PARTIES

<TABLE>
<CAPTION>
NAME TITLE DATE OF AGREEMENT
- ---- ------------------------------------------ -----------------
<S> <C> <C>
James A. Mack.......................... President and Chief Executive Officer 02/01/90
Claes Glassell......................... Vice President, Cambrex and 10/12/94
President, Pharmaceutical Group
Steven M. Klosk........................ Executive Vice President, Administration 10/21/92
Peter E. Thauer........................ Vice President, Law and Environment, 08/28/89
General Counsel and Corporate Secretary
Salvatore J. Guccione.................. Vice President, Corporate Development 12/14/95
Douglas H. MacMillan................... Vice President and Chief Financial Officer 04/14/97
Thomas N. Bird......................... Vice President, Cambrex 07/23/99
President, Biosciences Group
John VanHulle.......................... Vice President, Cambrex 07/23/99
President, Specialty and
Fine Chemicals Group
</TABLE>

<PAGE> 1

CAMBREX CORPORATION

EXHIBIT 21

SUBSIDIARIES OF REGISTRANT

<TABLE>
<CAPTION>
SUBSIDIARY INCORPORATED IN:
- ---------- ----------------
<S> <C>
CasChem, Inc. .............................................. Delaware
Cosan Chemical Corp. ....................................... New Jersey
Nepera, Inc. ............................................... New York
Heico Chemicals, Inc. ...................................... Delaware
The Humphrey Chemical Co., Inc. ............................ Delaware
Chiragene, Inc. ............................................ Delaware
Salsbury Chemicals, Inc. ................................... Iowa
Zeeland Chemicals, Inc. .................................... Michigan
BioWhittaker, Inc. ......................................... Delaware
Seal Sands Chemicals Limited................................ England
Profarmaco S.r.l. .......................................... Italy
Nordic Synthesis AB......................................... Sweden
BioWhittaker Europe s.p.r.l. ............................... Belgium
BioWhittaker Molecular Applications, Inc. .................. Delaware
BioWhittaker Molecular Applications Aps..................... Denmark
Irotec Laboratories, Ltd. .................................. Ireland
</TABLE>

<PAGE> 1

CAMBREX CORPORATION

EXHIBIT 23

ACCOUNTANTS' CONSENT

Cambrex Corporation:

We consent to the incorporation by reference in the registration statements
of Cambrex Corporation on Forms S-8 (File Nos. 33-22017, 33-21374, 33-37791,
33-81780, and 33-81782) of our report dated January 21, 2000, (except for the
first paragraph of Note 23, as to which the date is February 25, 2000 and the
second paragraph of Note 23, as to which the date is March 2, 2000), on our
audits of the consolidated financial statements and financial statement schedule
of Cambrex Corporation as of December 31, 1999 and 1998, and for each of the
three years in the period ended December 31, 1999, which report is included in
this Annual Report on Form 10-K.

PRICEWATERHOUSECOOPERS LLP

Florham Park, New Jersey
March 15, 2000

<PAGE> 1

Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each officer and director of Cambrex
Corporation, a Delaware corporation, whose signature appears below constitutes
and appoints Cyril C. Baldwin, Jr., James A. Mack, and Douglas H. MacMillan, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all Annual Reports on Form 10-K which
said Cambrex Corporation may be required to file pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 and any and all amendments thereto and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or their substitutes may lawfully do or cause to be done by virtue
hereof.

IN WITNESS WHEREOF each of the undersigned has executed this instrument as
of the 28th day of January 1999.

<TABLE>
<S> <C>
/s/ JAMES A. MACK /s/ LEON J. HENDRIX
- ---------------------------------------------- ----------------------------------------------
James A. Mack Leon J. Hendrix
President, Chief Executive Officer Director
Chairman of the Board
/s/ ILAN KAUFTHAL
/s/ DOUGLAS H. MACMILLAN ----------------------------------------------
- ---------------------------------------------- Ilan Kaufthal
Douglas H. MacMillan Director
Executive Vice President -- Finance and
Chief Financial Officer /s/ WILLIAM KORB
(Principal Financial Officer and Accounting ----------------------------------------------
Officer) William Korb
Director
/s/ ROSINA B. DIXON
- ---------------------------------------------- /s/ ROBERT LEBUHN
Rosina B. Dixon, M.D. ----------------------------------------------
Director Robert LeBuhn
Director
/s/ GEORGE J.W. GOODMAN
- ---------------------------------------------- /s/ JOHN R. MILLER
George J.W. Goodman ----------------------------------------------
Director John R. Miller
Director
/s/ ROY W. HALEY
- ---------------------------------------------- /s/ DEAN P. PHYPERS
Roy W. Haley ----------------------------------------------
Director Dean P. Phypers
Director
/s/ KATHRYN RUDIE HARRIGAN, PHD
- ----------------------------------------------
Kathryn Rudie Harrigan, PhD
Director
</TABLE>

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 39,796
<SECURITIES> 0
<RECEIVABLES> 73,026
<ALLOWANCES> 799
<INVENTORY> 92,439
<CURRENT-ASSETS> 235,287
<PP&E> 470,534
<DEPRECIATION> 190,371
<TOTAL-ASSETS> 673,647
<CURRENT-LIABILITIES> 72,122
<BONDS> 306,160
0
0
<COMMON> 2,667
<OTHER-SE> 292,698
<TOTAL-LIABILITY-AND-EQUITY> 673,647
<SALES> 477,245
<TOTAL-REVENUES> 481,388
<CGS> 314,225
<TOTAL-COSTS> 97,984
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,723
<INCOME-PRETAX> 58,901
<INCOME-TAX> 20,769
<INCOME-CONTINUING> 38,132
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,132
<EPS-BASIC> 1.55
<EPS-DILUTED> 1.49

</TABLE>