North Carolina		56-1640186
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

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Part I.    FINANCIAL INFORMATION
Item 1.		Financial Statements
		Consolidated Condensed Statements of Operations (unaudited) for the Three and Nine Months Ended September 30, 2001 and 2002		3
		Consolidated Condensed Balance Sheets as of December 31, 2001 and September 30, 2002 (unaudited)		4
		Consolidated Condensed Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2001 and 2002		5
		Notes to Consolidated Condensed Financial Statements		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3.		Quantitative and Qualitative Disclosures about Market Risk		22
Item 4.		Controls and Procedures		23
Part II.    OTHER INFORMATION
Item 5.		Other Information		24
Item 6.		Exhibits and Reports on Form 8-K		24
Signatures				25
Certifications				26

		Three Months Ended September 30,						Nine Months Ended September 30,
		2001			2002			2001			2002
Development revenues		$	103,995		$	142,261		$	295,813		$	394,046
Discovery sciences revenues			4,315			3,742			21,488			14,243
Reimbursed out-of-pockets			7,452			11,281			20,719			31,144
Net revenue			115,762			157,284			338,020			439,433
Direct costs—Development			50,280			68,273			143,810			189,505
Direct costs—Discovery sciences			2,105			1,936			9,388			6,197
Reimbursable out-of-pocket expenses			7,452			11,281			20,719			31,144
Research and development			1,372			2,959			3,191			7,282
Selling, general and administrative expenses			32,800			38,925			93,355			112,215
Depreciation			4,881			5,968			14,032			17,064
Amortization			260			194			797			630
			99,150			129,536			285,292			364,037
Operating income			16,612			27,748			52,728			75,396
Interest income, net			1,193			352			4,093			1,842
Impairment of investment			—			—			—			(32,006	)
Other income, net			316			466			944			1,677
Income before provision for income taxes			18,121			28,566			57,765			46,909
Provision for income taxes			6,614			10,284			21,258			26,879
Income before equity in net loss of investee			11,507			18,282			36,507			20,030
Equity in net loss of investee, net of income taxes			—			—			—			105
Net income		$	11,507		$	18,282		$	36,507		$	19,925
Net income per share:
Basic		$	0.22		$	0.33		$	0.71		$	0.37
Diluted		$	0.22		$	0.33		$	0.70		$	0.36
Weighted average number of common shares outstanding:
Basic			51,891			55,233			51,556			54,510
Dilutive effect of stock options			817			488			827			644
Diluted			52,708			55,721			52,383			55,154

		December 31, 2001				September 30, 2002
						(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	143,173			$	146,990
Accounts receivable and unbilled services, net			140,744				188,304
Investigator advances			6,008				6,282
Prepaid expenses and other current assets			10,507				11,891
Current maturities of notes receivable			500				500
Deferred tax asset			9,273				9,815
Total current assets			310,205				363,782
Property, plant and equipment, net			85,690				105,745
Goodwill, net			7,590				143,592
Notes receivable, long-term portion			17,000				—
Investments			43,758				18,088
Intangible assets			573				2,052
Other assets, net			584				2,248
Total assets		$	465,400			$	635,507
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	8,210			$	9,350
Payables to investigators			7,988				17,060
Other accrued expenses			48,951				61,000
Unearned income			82,336				103,985
Accrued income taxes			8,688				12,313
Current maturities of long-term debt			1,203				1,734
Total current liabilities			157,376				205,442
Long-term debt, less current maturities			1,871				6,953
Deferred rent and other			3,518				3,192
Total liabilities			162,765				215,587
Shareholders’ equity
Common stock			5,193				5,529
Paid-in capital			164,162				261,045
Retained earnings			140,174				160,100
Deferred compensation			(966	)			(458	)
Accumulated other comprehensive loss			(5,928	)			(6,296	)
Total shareholders’ equity			302,635				419,920
Total liabilities and shareholders’ equity		$	465,400			$	635,507

		Nine Months Ended September 30,
		2001				2002
Cash flows from operating activities:
Net income		$	36,507			$	19,925
Adjustments to reconcile net income to net cash provided by operating activities:
Impairment of investment			—				32,006
Depreciation and amortization			14,828				17,694
Stock compensation amortization			362				158
Loss on disposition of property and equipment, net			66				75
Provision for doubtful accounts			266				(361	)
Gain on sale of investment			—