Edgar Filing: ICON PLC /ADR/

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
AUGUST 4, 2003 REGISTRATION NO. 333-102893

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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AMENDMENT NO. 5 TO

FORM F-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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ICON PUBLIC LIMITED COMPANY
(Exact name of Registrant as specified in its charter)

IRELAND
(State or other jurisdiction of incorporation or organization)

NOT APPLICABLE
(I.R.S. Employer Identification Number)

ICON PLC
SOUTH COUNTY BUSINESS PARK,
LEOPARDSTOWN, DUBLIN 18,
IRELAND
(353) 1-291-2000
(Address and telephone number of Registrant's
principal executive offices)

CT CORPORATION SYSTEM
111 EIGHTH AVENUE
NEW YORK, NEW YORK 10011
(212) 894-8581
(Name, address and telephone number of
agent for service)

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COPIES TO:

SEAN LEECH WILLIAM M. HARTNETT, ESQ. KATHRYN A. CAMPBELL, ESQ.
CHIEF FINANCIAL OFFICER ICON PLC CAHILL GORDON & REINDEL LLP SULLIVAN & CROMWELL LLP
SOUTH COUNTY BUSINESS PARK 80 PINE STREET 1 NEW FETTER LANE
LEOPARDSTOWN, DUBLIN 18, IRELAND NEW YORK, NEW YORK 10005 LONDON EC4A 1AN, ENGLAND
(353) 1-291-2000 (212) 701-3000 (44 20) 7959 8900

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date hereof.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: |_|

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: |_|

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: |_|

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: |_|

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: |_|

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SECTION 8(A), MAY DETERMINE

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The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated August 4, 2003.

[ICON LOGO OMITTED]

ICON PLC
3,000,000
American Depositary Shares
Representing
3,000,000 Ordinary Shares

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This is an offering of American Depositary Shares, or ADSs, of ICON plc.
We are offering 1,500,000 ADSs. The selling shareholders identified in this
prospectus are offering an additional 1,500,000 ADSs. We will not receive any of
the proceeds from the sale of the ADSs being sold by the selling shareholders.
Each ADS represents one ordinary share. In addition to the offering in the
United States, the offering includes an offering of ADSs to investors outside
the United States.

Our ADSs are quoted on The Nasdaq National Market under the symbol "ICLR."
On August 1, 2003, the last reported sale price of our ADSs on The Nasdaq
National Market was $33.94 per ADS. Our ordinary shares are listed on the
Official List of the Irish Stock Exchange.

SEE "RISK FACTORS" BEGINNING ON PAGE 7 TO READ ABOUT CERTAIN FACTORS YOU
SHOULD CONSIDER BEFORE BUYING THE ADSs.

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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

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A copy of this document, together with the consents referred to on page
51, has been delivered to the Registrar of Companies in Ireland in accordance
with Section 47 of the Companies Act, 1963.

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Per ADS Total
--------- -----
Initial price to public ................................ $ $
Underwriting discount .................................. $ $
Proceeds, before expenses, to ICON ..................... $ $
Proceeds, before expenses, to the selling shareholders . $ $

To the extent that the underwriters sell more than 3,000,000 ADSs, the
underwriters have the option to purchase up to an additional 450,000 ADSs from
the selling shareholders at the initial price to public less the underwriting
discount.

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The underwriters expect to deliver the ADSs against payment in New York,
New York on , 2003.

GOLDMAN, SACHS & CO.
WILLIAM BLAIR & COMPANY
BEAR, STEARNS & CO. INC.
DAVY STOCKBROKERS

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Prospectus dated , 2003.

SUMMARY

This summary highlights information about us and the terms of this
offering. Because it is a summary, it does not contain all of the information
that may be important to you in deciding whether to purchase ADSs. You should
read carefully the entire prospectus and the documents that we have filed with
the Securities and Exchange Commission, or SEC or Commission, that are
incorporated or deemed to be incorporated by reference prior to deciding whether
to purchase ADSs. In particular, you should read carefully the section titled
"Risk Factors" and the financial statements and the notes relating to those
statements included elsewhere in this prospectus and the documents incorporated
or deemed incorporated by reference. Unless we tell you otherwise, all
information in this prospectus assumes that the underwriters do not exercise
their option to purchase additional ADSs. In this prospectus, "ICON", the
"Company", "we", "us" and "our" refer to ICON plc, a public limited company
organized under the laws of the Republic of Ireland, and its consolidated
subsidiaries.

ICON

We are a contract research organization, or CRO, providing clinical
research and development services on a global basis to the pharmaceutical and
biotechnology industries. Our focus is on supporting the conduct of clinical
trials. We have historically done so by providing such services as Phase II-IV
clinical trials management, clinical data management, study design, laboratory
services and drug development support. Through our recent acquisition of Medeval
Group Limited, we have continued to expand our service offerings to include
Phase I clinical trials. We have approximately 2,325 employees and operations in
29 locations in 17 countries. Our main regions of operations are the United
States, Europe and the Rest of the World. For the nine months ended February 28,
2003, we derived approximately 71.0%, 26.4% and 2.6% of our net revenue in the
United States, Europe and the Rest of the World, respectively.

Headquartered in Dublin, Ireland, we began operations in 1990 and have
expanded our business through internal growth and strategic acquisitions. Since
our initial public offering, our net revenue, comprised of gross revenue less
payments to subcontractors, grew from $45.2 million in fiscal 1998 to $156.6
million in fiscal 2002, while our operating income and net income grew from $6.3
million and $4.3 million respectively, to $18.2 million and $14.2 million,
respectively over the same period. In 2002 revenue was earned from over 270
clients, including 19 of the top 20 pharmaceutical companies, as ranked by 2001
revenues.

In executing clinical trials, we utilize an operating model based on a
"dedicated team approach" in which a team of full-time clinical professionals,
operating out of centralized offices, is assigned exclusively to each project.
This contrasts with the approach of many competitors whose clinical staff
typically work on multiple projects at once, sometimes operating from non-office
bases in remote locations and some of whom may be part-time. We believe our
operating model has a number of advantages, and in particular it ensures that
each clinical project receives undivided attention and is executed efficiently
and to high quality standards, as team members do not have conflicting demands.
In addition strong relationships with our clients are developed by the team
which generally facilitates high levels of repeat business.

Since inception, we have invested significantly in developing and
maintaining a quality system that supports and reinforces our culture of
customer focus, client service and high quality output. We became ISO 9002
accredited in 1994, and we recently transitioned to the new ISO 9001:2000
standard. This quality system combined with our independent quality assurance
division provides a globally consistent approach to all projects that we
undertake and also promotes the delivery of a high quality service to all of our
clients.

RISKS RELATED TO OUR BUSINESS AND THIS OFFERING

Before you purchase our ADSs, you should be aware that there are various
risks related to, among other things: our dependence on the continued
outsourcing of research and development by the pharmaceutical and biotechnology
industries; our limited number of clients; clients discontinuing use of services
or cancellations or discontinuance of projects; competition with larger
companies and research

institutions; quarterly results fluctuations; our dependence on long-term
fixed-fee contracts; our ability to attract or retain qualified staff; failure
to comply with regulatory authorities; exchange rate fluctuations; potential
liability claims; dilution of your investment; substantial discretion for use of
proceeds; fluctuations in the stock market or general economic conditions; and
difficulty enforcing U.S. judgments against us.

Our principal executive offices are located in South County Business Park,
Leopardstown, Dublin 18, Ireland and our telephone number is (353) 1-291-2000.
Our principal offices in the United States are located at 212 Church Road, North
Wales, PA 19454.

THE OFFERING

Offering price U.S.$ per ADS

ADSs offered by us 1,500,000 ADSs

ADSs offered by the
selling shareholders 1,500,000 ADSs

Selling shareholders Dr. Ronan Lambe and Dr. John Climax through Wineberry Limited, a company
controlled by him.

Ordinary shares outstanding
after this offering (1) 13,341,757

Ordinary shares per ADS One. The ADSs are issued pursuant to the Deposit
Agreement with The Bank of New York dated as of May 20, 1998.

Option to purchase
additional ADSs If the underwriters exercise the option to purchase
additional ADSs described under the heading "Underwriting", the selling
shareholders may sell up to an additional 450,000 ADSs.

Lock-up arrangements We have agreed with the underwriters, subject to certain
exceptions, not to dispose of or hedge any of our ordinary shares, ADSs or
securities convertible into or exchangeable for ordinary shares or ADSs
during the period from the date of this prospectus continuing through the
date 90 days after the date of this prospectus, except with the prior written
consent of Goldman, Sachs & Co. The selling shareholders have agreed with the
underwriters, subject to certain exceptions, not to dispose of or hedge any
of our ordinary shares, ADSs or securities convertible into or exchangeable
for ordinary shares or ADSs during the period from the date of this
prospectus continuing through the date 180 days after the date of this
prospectus, except with the prior written consent of Goldman, Sachs & Co.

Use of proceeds We estimate that the net proceeds to us from this offering,
after deducting underwriting discounts and the estimated offering expenses
payable by us, will be approximately $ million. We will not receive any of
the proceeds from the sale of ADSs by the selling shareholders. We intend to
use the net proceeds from this offering, together with our existing cash,
cash equivalents, short-term investments and cash generated from operations,
for general corporate purposes, including, but not limited to funding the
continued growth and development of the business, opportunistic acquisitions,
and working capital requirements.

Please refer to "Use of Proceeds" for further discussion of how we intend to use
the net proceeds from this offering.

Nasdaq symbol ICLR

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(1) The calculation of the number of ordinary shares to be outstanding after
this offering is based upon the number of ordinary shares outstanding on
June 30, 2003. The number of ordinary shares to be outstanding after this
offering does not include 1,185,445 ordinary shares reserved for issuance
upon the exercise of stock options outstanding on June 30, 2003.

RECENT DEVELOPMENTS

RECENT RESULTS

On July 21, 2003, we announced our unaudited results for the fourth
quarter and year ended May 31, 2003.

THREE MONTHS ENDED MAY 31, 2003 COMPARED WITH THREE MONTHS ENDED MAY 31, 2002

Net revenues increased over the comparable period by $23.0 million, or
54%, from $43.0 million to $66.0 million. Excluding the impact of acquisitions,
revenue growth for the quarter was 34% over the same quarter last year. Net
revenues in the United States increased by $15.6 million, or 52%, from $29.7
million to $45.3 million. Net revenues in Europe/Rest of World increased by $7.4
million, or 56%, from $13.3 million to $20.7 million.

Income from operations for the quarter increased by $2.1 million, or 43%
over the comparable period, from $5.1 million to $7.2 million. Operating margin
for the quarter decreased by 0.8%, from 11.8% in the comparable period to 11.0%.
Operating margins for the quarter were 12.4% in our clinical segment and (2.1)%
in our central laboratory segment. Net income for the quarter was $5.3 million
or $0.43 cents per share, on a diluted basis, compared with $3.8 million or
$0.31 cents per share for the quarter ended May 31, 2002.

FISCAL YEAR ENDED MAY 31, 2003 COMPARED TO FISCAL YEAR ENDED MAY 31, 2002

Net revenues increased by $69.1 million, or 44% from, $156.6 million to
$225.7 million. Excluding the impact of acquisitions, revenue growth was 33% for
the twelve months ending May 31, 2003. Net revenues in the United States
increased by $51.2 million, or 48%, from $107.5 million to $158.7 million. Net
revenues for Europe/Rest of World increased by $17.9 million, or 37%, from $49.1
million to $67.0 million.

Income from operations increased by $6.7 million, or 37%, from $18.2
million to 24.9 million. Operating margin for the full year decreased by 0.6%,
from 11.6% to 11.0%. Net income was $18.3 million or $1.50 per share on a
diluted basis for fiscal 2003, compared with $14.2 million or $1.16 per share
reported for fiscal 2002.

Days sales outstanding, comprising accounts receivable and unbilled
revenue less payments on account, were 64 days at May 31, 2003 compared with 67
days at May 31, 2002. For the quarter to May 31, 2003, cash generated from
operations was $4.9 million, capital expenditure was $4.6 million and payments
of $1.2 million were made in relation to acquisitions. In the twelve months to
May 31, 2003, cash generated from operating activities was $21.5 million,
capital expenditure was $15.8 million and payments of $40.0 million were made in
relation to acquisitions. As a result the company's net cash was $11.2 million
(cash and cash equivalents of $18.3 million net of bank overdrafts of $7.1
million) at May 31, 2003, compared to $43.1 million (cash and cash equivalents
of $36.3 million and short term investments of $18.6 million net of bank
overdrafts of $11.8 million) at May 31, 2002.

We were awarded $88 million of net new business in the fourth quarter of
fiscal 2003. At May 31, 2003, we had a total backlog of $352 million, of which
we estimate $221 million will be earned in the next twelve months. See
"Business--Backlog".

NEW CREDIT FACILITY

On July 3, 2003, we entered into an agreement with Bank of Ireland and
Ulster Bank for a credit line of $60 million, $40 million of which will be
available for acquisitions, with the remaining $20 million for working capital
purposes. The working capital line will replace the majority of our existing
lines of credit.

ACQUISITION

On July 29, 2003, we entered into a purchase agreement for the acquisition
of Globomax LLC, a drug development consulting company employing approximately
80 people, based in the US. The initial consideration will be approximately $11
million, to be paid in cash.

The agreement allows for additional payments up to a maximum of $4 million to be
paid over the subsequent three years contingent upon certain earnings targets
being met.

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA

The consolidated financial data set forth below for the years ended May
31, 2000, 2001 and 2002 have been extracted from our audited consolidated
financial statements, which have been audited by KPMG, independent chartered
accountants, and which are incorporated herein by reference. The consolidated
financial data for the years ended May 31, 1998 and 1999 have been extracted
from our audited consolidated financial statements not included or incorporated
by reference in this prospectus. The consolidated financial data for the
nine-month periods ended February 28, 2002 and 2003 have been extracted from our
unaudited interim condensed consolidated financial statements, which are
incorporated herein by reference. The interim financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of our financial position and operating results for the
unaudited nine-month periods ended February 28, 2002 and 2003. We have prepared
our consolidated financial statements in accordance with U.S. generally accepted
accounting principles. The data set forth below should be read in conjunction
with, and are qualified by reference to, "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included elsewhere and our
audited and unaudited financial statements incorporated by reference in this
prospectus.

In this prospectus, references to "U.S. dollars," "U.S.$" or "$" are to
the lawful currency of the United States, references to "pounds sterling,"
"sterling," "(pound)," "pence" or "p" are to the lawful currency of the United
Kingdom, references to "Israeli Shekels" or "ILS" are to the lawful currency of
Israel, and references to "euro", "(euro)" or "cent" are to the European single
currency adopted by twelve members of the European Union (including the Republic
of Ireland, France and Germany). ICON publishes its consolidated financial
statements in U.S. dollars.

ICON prepares its consolidated financial statements on the basis of a
fiscal year beginning on June 1 and ending on May 31. References to a fiscal
year in this prospectus are references to the fiscal year ending on May 31 of
that year. In this prospectus, financial results and operating statistics are,
unless otherwise indicated, stated on the basis of such fiscal years.

NINE MONTHS
YEAR ENDED MAY 31, ENDED FEBRUARY 28,
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1998 1999 2000 2001 2002 2002 2003
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(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

STATEMENT OF OPERATIONS DATA:

Gross revenue ................ $ 67,743 $ 98,910 $ 115,087 $ 151,832 $ 218,842 $ 153,356 $ 236,270
Subcontractor costs (1) ...... (22,549) (39,003) (34,320) (35,669) (62,287) (39,798) (76,565)
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Net revenue .................. 45,194 59,907 80,767 116,163 156,555 113,558 159,705
Costs and expenses:
Direct costs ................. 23,697 31,662 42,007 63,800 83,371 60,446 87,507
Selling, general and
administrative ............... 14,037 19,200 27,348 36,312 48,951 35,550 49,481
Merger costs (2) ............. -- -- 1,617 -- -- -- --
Depreciation and amortization 1,196 2,066 3,264 4,975 6,020 4,416 5,017
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Total costs and expenses ..... 38,930 52,928 74,236 105,087 138,342 100,412 142,005
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Income from operations ....... 6,264 6,979 6,531 11,076 18,213 13,146 17,700
Net interest income .......... 189 2,631 2,659 2,519 1,116 864 379
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Income before provision for
income taxes ................. 6,453 9,610 9,190 13,595 19,329 14,010 18,079
Provision for income taxes ... (2,110) (1,557) (3,122) (2,617) (5,129) (3,625) (5,090)
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Net income (3) ............... $ 4,343 $ 8,053 $ 6,068 $ 10,978 $ 14,200 $ 10,385 $ 12,989
========= ========== ========== ========== ========== ========== ==========
NET INCOME PER ORDINARY
SHARE (4):
Basic $ 0.56 $ 0.74 $ 0.55 $ 0.97 $ 1.22 $ 0.90 $ 1.10
--------- ---------- ---------- ---------- ---------- ---------- ----------
Diluted $ 0.49 $ 0.68 $ 0.51 $ 0.92 $ 1.16 $ 0.85 $ 1.07
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WEIGHTED AVERAGE NUMBER OF
ORDINARY SHARES OUTSTANDING (4):
Basic ................... 7,788,349 10,908,409 11,050,556 11,292,610 11,656,153 11,576,692 11,804,576
--------- ---------- ---------- ---------- ---------- ---------- ----------
Diluted ................. 8,805,567 11,917,605 11,824,359 11,943,849 12,241,820 12,224,383 12,169,875
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AS OF
AS OF MAY 31, FEBRUARY 28,
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1998 1999 2000 2001 2002 2003
-------- -------- -------- -------- -------- ------------
(IN THOUSANDS)

BALANCE SHEET DATA:

Cash and cash equivalents $54,384 $12,353 $26,552 $11,179 $ 36,291 $ 21,862
Short-term investments
(available for sale) -- 35,936 21,405 35,941 18,551 --
Working capital 57,886 56,944 57,962 61,147 72,923 50,451
Total assets 89,981 95,758 100,118 128,967 165,794 215,044
Total debt 1,312 3,514 2,251 11,518 11,745 10,503
Government grants 705 624 533 476 962 1,079
Shareholders' equity $64,074 $71,633 $77,053 $86,580 $107,561 $126,350

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(1) Subcontractor costs comprise investigator payments and certain other costs
reimbursed by clients under terms specific to each of our contracts.

(2) On January 28, 2000, one of our wholly-owned subsidiaries completed a
merger with Pacific Research Associates Inc., or PRAI, a company
specializing in data management, statistical analysis and medical and
regulatory consulting based in Mountain View, California. The merger with
PRAI was accounted for as a pooling-of-interests transaction and requires
us to combine the historical results of PRAI with our historical results.

(3) On June 1, 2001, we adopted Statement of Financial Accounting Standards
("SFAS") No. 142. Under SFAS No. 142, goodwill and intangible assets with
indefinite lives are no longer amortized, but instead are tested for
impairment at least annually. The following table provides a reconciliation
of reported net income to adjusted net income and earnings per ordinary
share excluding amortization expense for all periods presented:

NINE MONTHS
YEAR ENDED MAY 31, ENDED FEBRUARY 28,
-------------------------------------------------------- --------------------
1998 1999 2000 2001 2002 2002 2003
-------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Reported net
income ........... $4,343 $8,053 $6,068 $10,978 $14,200 $10,385 $12,989
Add back goodwill
amortization ..... -- -- 38 210 -- -- --
------ ------ ------ ------- ------- ------- -------
Adjusted net
income ........... $4,343 $8,053 $6,106 $11,188 $14,200 $10,385 $12,989
------ ------ ------ ------- ------- ------- -------

Basic net income
per ordinary
share reported ... $ 0.56 $ 0.74 $ 0.55 $ 0.97 $ 1.22 $ 0.90 $ 1.10
Add back goodwill
amortization ..... -- -- -- $ 0.02 -- -- --
------ ------ ------ ------- ------- ------- -------
Adjusted basic net
income per
ordinary share ... $ 0.56 $ 0.74 $ 0.55 $ 0.99 $ 1.22 $ 0.90 $ 1.10
------ ------ ------ ------- ------- ------- -------
Diluted net income
per ordinary
share reported ... $ 0.49 $ 0.68 $ 0.51 $ 0.92 $ 1.16 $ 0.85 $ 1.07
Add back goodwill
amortization ..... -- -- -- $ 0.02 -- -- --
------ ------ ------ ------- ------- ------- -------
Adjusted diluted
net income per
ordinary share ... $ 0.49 $ 0.68 $ 0.51 $ 0.94 $ 1.16 $ 0.85 $ 1.07
------ ------ ------ ------- ------- ------- -------

(4) Net income per ordinary share is based on the weighted average number of
outstanding ordinary shares while diluted net income per share is adjusted
to include potential ordinary shares from the exercise of options.

RISK FACTORS

IF YOU PURCHASE OUR ADSs, YOU WILL TAKE ON A FINANCIAL RISK. IN DECIDING
WHETHER TO INVEST, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS, THE
OTHER INFORMATION CONTAINED IN THIS PROSPECTUS AND THE ADDITIONAL INFORMATION IN
OUR REPORTS AND OTHER DOCUMENTS ON FILE WITH THE SEC THAT ARE INCORPORATED
HEREIN BY REFERENCE.

RISKS RELATED TO OUR BUSINESS

WE ARE DEPENDENT ON THE CONTINUED OUTSOURCING OF RESEARCH AND DEVELOPMENT BY THE
PHARMACEUTICAL AND BIOTECHNOLOGY INDUSTRIES.

We are dependent upon the ability and willingness of the pharmaceutical
and biotechnology companies to continue to spend on research and development and
to outsource the services that we provide. We are therefore subject to risks,
uncertainties and trends that affect companies in these industries. We have
benefited to date from the tendency of pharmaceutical and biotechnology
companies to outsource clinical research projects. Any downturn in these
industries or reduction in spending or outsourcing could adversely affect our
business. For example, if these companies expanded upon their in-house clinical
or development capabilities, they would be less likely to utilize our services.
In addition, if governmental regulations were changed, they could affect the
ability of our clients to operate profitably, which may lead to a decrease in
research spending and therefore this could have a material adverse effect on our
business.

WE DEPEND ON A LIMITED NUMBER OF CLIENTS AND A LOSS OF OR SIGNIFICANT DECREASE
IN BUSINESS FROM THEM COULD AFFECT OUR BUSINESS.

We have in the past and may in the future derive a significant portion of
our net revenue from a relatively limited number of clients. During the fiscal
year ended May 31, 2002, 60% of our net revenue was derived from our top five
clients. In fiscal 2002, 16% of our net revenue was from Astra Zeneca, 14% from
Pfizer and 12% from Bristol Myers Squibb. During the fiscal year ended May 31,
2001, we derived 58% of our net revenue from our top five clients. In fiscal
2001, 19% of our net revenue was from Pfizer and 15% from GlaxoSmithKline.
During the fiscal year ended May 31, 2000, we derived 68% of our net revenue
from our top five clients. In fiscal 2000, 24% of our net revenue came from
Pfizer, 18% from GlaxoSmithKline and 16% from Novartis. The loss of, or a
significant decrease in business from, one or more of these clients could have a
material adverse effect on our business.

IF OUR CLIENTS DISCONTINUE USING OUR SERVICES, OR CANCEL OR DISCONTINUE
PROJECTS, OUR REVENUE WILL BE ADVERSELY AFFECTED AND WE MAY NOT RECEIVE THEIR
BUSINESS IN THE FUTURE OR MAY NOT BE ABLE TO ATTRACT NEW CLIENTS.

Our clients may discontinue using our services completely or cancel some
projects either without notice or upon short notice. The termination or delay of
a large contract or of multiple contracts could have a material adverse effect
on our revenue and profitability. Historically, clients have canceled or
discontinued projects and may in the future cancel their contracts with us for
reasons including:

o the failure of products being tested to satisfy safety or efficacy
requirements;

o unexpected or undesired clinical results of the product;

o a decision that a particular study is no longer necessary;

o insufficient patient enrollment or investigator recruitment; or

o production problems resulting in shortages of the drug.

If we lose clients, we may not be able to attract new ones, and if we lose
individual projects, we may not be able to replace them.

WE COMPETE AGAINST MANY COMPANIES AND RESEARCH INSTITUTIONS THAT MAY BE LARGER
OR MORE EFFICIENT THAN WE ARE. THIS MAY PRECLUDE US FROM BEING GIVEN THE
OPPORTUNITY TO BID, OR MAY PREVENT US FROM BEING ABLE TO COMPETITIVELY BID ON
AND WIN NEW CONTRACTS.

The market for CROs is highly competitive. We primarily compete against
in-house departments of pharmaceutical companies and other CROs including
Covance, Inc., Ingenix Inc. (United Health), Inveresk Research Group, Inc.,
Kendle International Inc., MDS Inc., Omnicare, Inc., PAREXEL International
Corp., Pharmaceutical Product Development, Inc., PRA Inc., and Quintiles
Transnational Corporation. Some of these competitors have substantially greater
capital, research and development capabilities and human resources than we do.
As a result, they may be selected as preferred vendors of our clients or
potential clients for all projects or for significant projects, or they may be
able to price projects more competitively than us.

Any of these factors may prevent us from getting the opportunity to bid on
new projects or prevent us from being competitive in bidding on new contracts.

OUR QUARTERLY RESULTS ARE DEPENDENT UPON A NUMBER OF FACTORS AND CAN FLUCTUATE
FROM QUARTER TO QUARTER.

Our results of operations in any quarter can fluctuate depending upon,
among other things, the number and scope of ongoing client projects, the
commencement, postponement, variation and termination of projects in the
quarter, the mix of revenue, cost overruns, employee hiring and other factors.
Our net revenue in any period is directly related to the number of employees and
the percentage of these employees who were working on projects and billed to the
client during that period. We may be unable to compensate for periods of
underutilization during one part of a fiscal period by augmenting revenues
during another part of that period. We believe that operating results for any
particular quarter are not necessarily a meaningful indication of future
results.

APPROXIMATELY 80% OF OUR NET REVENUE IS EARNED FROM LONG-TERM FIXED-FEE
CONTRACTS. WE WOULD LOSE MONEY IN PERFORMING THESE CONTRACTS IF THE COSTS OF
PERFORMANCE EXCEED THE FIXED FEES FOR THESE PROJECTS.

Approximately 80% of our net revenue is earned from long-term fixed-fee
contracts. We have in the past and therefore will continue to bear the risk of
cost overruns under these contracts. If the costs of performing these projects
exceed the fixed fees for these projects, for example if we underprice these
contracts, if there are significant cost overruns or if there are unanticipated
delays under these contracts, our business, financial condition and operating
results could be adversely affected.

IF WE FAIL TO ATTRACT OR RETAIN QUALIFIED STAFF, OUR PERFORMANCE MAY SUFFER.

Our business, future success and ability to expand operations depends upon
our ability to attract, hire, train and retain qualified professional,
scientific and technical operating staff. We compete for qualified professionals
with other CROs, temporary staffing agencies and the in-house departments of
pharmaceutical and biotechnology companies. Although we have not had any
difficulty attracting or retaining qualified staff in the past, there is no
guarantee that we will be able to continue to attract a sufficient number of
clinical research professionals at an acceptable cost.

FAILURE TO COMPLY WITH THE REGULATIONS OF THE U.S. FOOD AND DRUG ADMINISTRATION
AND OTHER REGULATORY AUTHORITIES COULD RESULT IN SUBSTANTIAL PENALTIES AND/OR
LOSS OF BUSINESS.

The U.S. Food and Drug Administration, or FDA, and other regulatory
authorities inspect us from time to time to ensure that we comply with their
regulations and guidelines, including environmental and health and safety
matters. In addition, we must comply with the applicable regulatory requirements
governing the conduct of clinical trials in all countries in which we operate.
If we fail to comply with any of these requirements we could suffer:

o the termination of any research;

o the disqualification of data;

o the denial of the right to conduct business;

o criminal penalties; and

o other enforcement actions.

OUR EXPOSURE TO EXCHANGE RATE FLUCTUATIONS COULD ADVERSELY AFFECT OUR RESULTS OF
OPERATIONS.

We derived approximately 31.3% of our consolidated net revenue in 2002
from our operations outside of the United States. Our financial statements are
presented in U.S. dollars. Accordingly, changes in exchange rates between the
U.S. dollar and other currencies in which we report local results, including the
pound sterling and the euro, will affect the translation of a subsidiary's
financial results into U.S. dollars for purposes of reporting our consolidated
financial results.

In addition, our contracts with our clients are sometimes denominated in
currencies other than the currency in which we incur expenses related to such
contracts. Where expenses are incurred in currencies other than those in which
contracts are priced, fluctuations in the relative value of those currencies
could have a material adverse effect on our results of operations. We regularly
review our currency exchange exposure and hedge a portion of this exposure using
forward exchange contracts. In fiscal 2002, we purchased $21.5 million of
foreign exchange contracts to hedge against U.S. dollar net revenue arising in
non-U.S. operations.

LIABILITY CLAIMS BROUGHT AGAINST US COULD RESULT IN PAYMENT OF SUBSTANTIAL
DAMAGES TO PLAINTIFFS AND DECREASE OUR PROFITABILITY.

We contract with physicians who serve as investigators in conducting
clinical trials to test new drugs on their patients. This testing creates the
risk of liability for personal injury to or death of the patients. Although
investigators are generally required by law to maintain their own liability
insurance, we could be named in lawsuits and incur expenses arising from any
professional malpractice actions against the investigators with whom we
contract. To date, we have not been subject to any liability claims that are
expected to have a material effect on us.

Indemnifications provided by our clients against the risk of liability for
personal injury to or death of the patients vary from client to client and from
trial to trial and may not be sufficient in scope or amount or the providers may
not have the financial ability to fulfill their indemnification obligations.
Furthermore, we would be liable for our own negligence.

In addition, we maintain approximately $10-15 million of worldwide
Professional Liability/Error and Omissions Insurance. The amount of coverage we
maintain depends upon the nature of the trial. We may in the future be unable to
maintain or continue our current insurance coverage on the same or similar
terms. If we are liable for a claim that is beyond the level of insurance
coverage, we may be responsible for paying all or part of any award.

RISKS RELATED TO THIS OFFERING

IF YOU PURCHASE ADSS IN THIS OFFERING, YOU WILL SUFFER IMMEDIATE AND SUBSTANTIAL
DILUTION OF YOUR INVESTMENT.

After giving effect to the sale of ADSs in this offering, the number of
our ordinary shares outstanding will be 13,341,757 and purchasers of ADSs in
this offering will experience an immediate and substantial dilution in the net
tangible book value per ordinary share of $ (based on the sale of the ADSs
at the public offering price set forth on the cover page of this prospectus).

WE HAVE SUBSTANTIAL DISCRETION AS TO HOW TO USE THE PROCEEDS FROM THIS OFFERING.

Our management has broad discretion as to how to spend the proceeds from
this offering and may spend these proceeds in ways with which our shareholders
may not agree. Investment of the proceeds may not yield a favorable or any
return. See "Use of Proceeds".

FLUCTUATIONS IN THE STOCK MARKET OR GENERAL ECONOMIC CONDITIONS COULD NEGATIVELY
AFFECT THE MARKET PRICE OF OUR ADSS.

The market price of our ADSs, which are quoted on the Nasdaq National
Market, and our ordinary shares, which are listed on the Official List of the
Irish Stock Exchange, may be subject to significant fluctuations in response to
variations in operating results from quarter to quarter, changes in earnings
estimates by analysts, market conditions of the industry, prospects of
healthcare reform, changes in government regulation, general economic conditions
and ongoing geopolitical tensions. Furthermore, the stock market has
experienced, and may further experience in the future, significant price and
volume fluctuations unrelated to the operating performance of particular
companies. These market fluctuations may have a material adverse effect on the
market price of our ADSs and ordinary shares.

IT MAY BE DIFFICULT FOR INVESTORS TO ENFORCE U.S. JUDGMENTS AGAINST US.

We are incorporated in the Republic of Ireland and many of our
subsidiaries are organized outside of the United States. As a result, the
principles of law that govern our shareholder rights, the validity of corporate
procedures and other matters may be different from those that would apply if we
were a U.S. company. For example, it is not certain whether an Irish court (i)
would enforce judgments of U.S. courts based upon the civil liability provisions
of applicable U.S. federal and state securities laws or (ii) would enforce, in
original actions, liabilities against us or our subsidiaries based upon these
laws.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that are not historical facts but
rather are based on current expectations, estimates and projections about our
business and industry, our beliefs and assumptions. Words such as "anticipates",
"expects", "intends", "plans", "believes", "seeks", "estimates" and variations
of these words and similar expressions including references to our budgeted
capital expenditures, expected earn-out payments, and possible future
acquisitions, are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and other factors, some of which are beyond our control,
are difficult to predict and could cause actual results to differ materially
from those expressed or forecasted in the forward-looking statements. These
risks and uncertainties include those described in "Risk Factors" and elsewhere
in this prospectus, as well as in our Annual Report on Form 20-F and other
reports and documents that we file from time to time with the Securities and
Exchange Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect our management's view only as of the
date of this prospectus. We undertake no obligation to update these statements
or publicly release the results of any revisions to the forward-looking
statements that we may make to reflect events or circumstances after the date of
this prospectus or to reflect the occurrence of unanticipated events.

USE OF PROCEEDS

We estimate that the net proceeds to us from this offering, after
deducting underwriting discounts and commissions and the estimated offering
expenses payable by us, will be approximately $ million. We intend to use
the net proceeds from this offering received by us, together with our existing
cash, cash equivalents, short-term investments and cash generated from
operations, for general corporate purposes, which may include the funding of
opportunistic acquisitions.

Our management will have broad discretion to allocate the net proceeds
from this offering. While we have, in the normal course of business, several
potential acquisition candidates that we are considering, none have developed
beyond preliminary discussions. Pending application of the net proceeds, as
described above, we intend to invest the proceeds in investment-grade,
short-term, interest-bearing investments with the objective of preserving
capital pending its use in the manner described above.

We will not receive any of the proceeds from the sale of ADSs by the
selling shareholders.

PRICE RANGE OF ADSs AND DIVIDEND POLICY

Our ADSs are traded on The Nasdaq National Market under the symbol "ICLR." A
total of 11,841,757 ordinary shares were issued and outstanding as of June 30,
2003, of which no ordinary shares were held by individual holders of record in
the United States, excluding ordinary shares held in the form of ADRs,
approximately 99% of which are held by holders of record in the United States.
Because some of these ordinary shares were held by brokers or nominees, the
number of holders of record or registered holders of ordinary shares in the
United States is not representative of the number or residence of beneficial
holders. The following table sets forth the high and low per share sale prices
for our ADSs on The Nasdaq National Market for the periods indicated, as
reported in published financial sources.

ADSs
---------------------------
NASDAQ
---------------------------
HIGH LOW
------- --------
LAST SIX MONTHS:

July, 2003 ................................ $36.51 $29.88
June, 2003 ................................ $31.82 $25.87
May, 2003 ................................. $30.85 $24.10
April, 2003 ............................... $25.90 $21.36
March, 2003 ............................... $26.50 $23.50
February, 2003 ............................ $27.82 $22.86

LAST ELEVEN QUARTERS:

FISCAL 2003
Fourth Quarter ............................ $30.85 $21.36
Third Quarter ............................. $32.87 $22.35
Second Quarter ............................ $26.00 $18.99
First Quarter ............................. $30.50 $14.88
FISCAL 2002
Fourth Quarter ............................ $34.49 $23.87
Third Quarter ............................. $32.79 $25.13
Second Quarter ............................ $35.69 $22.93
First Quarter ............................. $39.58 $26.74
FISCAL 2001
Fourth Quarter ............................ $27.55 $18.38
Third Quarter ............................. $29.75 $15.38
Second Quarter ............................ $20.13 $15.00
LAST FIVE FISCAL YEARS:
2003 ...................................... $32.87 $14.88
2002 ...................................... $39.58 $22.93
2001 ...................................... $29.75 $15.00
2000 ...................................... $29.00 $11.87
1999 ...................................... $36.75 $10.00

Our ordinary shares are also traded on the Official List of the Irish
Stock Exchange; however, to date there has been limited trading activity on this
exchange.

We currently anticipate that after this offering all of our earnings will
be retained for the development of our business and do not anticipate paying any
cash dividends in the foreseeable future. Under Irish law, we may only pay
dividends out of profits legally available for that purpose. In addition, we are
restricted from distributing by way of dividend any sum we receive as grants in
connection with agreements we have with the Irish government agency, Enterprise
Ireland. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations." We paid no dividends in fiscal year 1996 through the
present.

CAPITALIZATION

The following table sets forth, as of May 31, 2003, our cash and cash
equivalents, short-term investments, short-term debt and capitalization:

o on an actual basis; and

o as adjusted to give effect to the issuance and sale of 1,500,000
ADSs by us in this offering at an assumed offering price of $33.94 (based on the
last reported sale price of our ADSs on August 1, 2003 on the Nasdaq National
Market):

AS OF
MAY 31, 2003
----------------------------
ACTUAL AS ADJUSTED
------ -----------
(IN THOUSANDS)
Cash and cash equivalents ...................... $ 18,311 $ 18,311
--------- ---------

Short-term investments (available for sale) .... $ -- $ 46,900
========= =========

Total short-term debt (1) ...................... $ 7,126 $ 7,126
--------- ---------
Shareholders' equity:
Ordinary shares, par value (euro)0.06
per share: 20,000,000 shares authorized;
11,841,557 fully-paid shares issued and
outstanding (actual); 13,341,557
fully-paid shares issued and
outstanding (as adjusted) ................. 841 947

Additional paid-in capital ..................... 61,164 107,958

Accumulated other comprehensive income ......... 7,787 7,787
Merger reserve ................................. 47 47
Retained earnings .............................. 67,071 67,071
--------- ---------

Total shareholders' equity ..................... 136,910 183,810
--------- ---------
Total capitalization ........................... $ 144,036 $ 190,936
========= =========

----------
(1) For a discussion of our indebtedness, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources" and "Recent Developments--Credit facility."

DILUTION

As of May 31, 2003, our net tangible book value was $91.9 million, or
$7.76 per ordinary share. Net tangible book value per ordinary share represents
total consolidated tangible assets less total consolidated liabilities, divided
by the aggregate number of ordinary shares outstanding. After giving effect to
our sale of the ADSs in this offering, at an assumed public offering price of
$33.94 per ADS, and after deducting estimated underwriting discounts and
estimated offering expenses payable by us, our pro forma net tangible book value
as of May 31, 2003, would have been approximately $138.4 million, or $10.40 per
ordinary share. This represents an immediate increase in pro forma net tangible
book value to existing stockholders of $2.64 per ordinary share and an immediate
dilution to new investors of $23.54 per ordinary share.

The following table illustrates this per ordinary share dilution:

Public offering price per ADS $ 33.94
Net tangible book value per ordinary share as of May 31, 2003 (1) $ 7.76
Increase in net tangible book value per ordinary share attributable
to this offering $ 2.64
---------
Pro forma net tangible book value per ordinary share after giving effect to this offering $ 10.40
---------
Dilution in net tangible book value per ordinary share to new investors (2) $ 23.54
=========

As of May 31, 2003, there were options outstanding to purchase a
total of 1,185,645 ordinary shares. To the extent that any of these options are
exercised or shares are issued, there will be further dilution to new public
investors

----------
(1) Intangible assets as of May 31, 2003 were $45.0 million, or $3.80 per
ordinary share.

(2) Dilution is determined by subtracting pro forma net tangible book value per
ordinary share after giving effect to this offering from the public
offering price per ADS paid by a new investor.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

EXCEPT FOR HISTORICAL INFORMATION, THE DISCUSSION IN THIS PROSPECTUS
CONTAINS FORWARD-LOOKING STATEMENTS, AS DEFINED IN SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED, THAT INVOLVE RISKS AND UNCERTAINTIES. THESE FORWARD-LOOKING
STATEMENTS INCLUDE, AMONG OTHERS, THOSE STATEMENTS INCLUDING THE WORDS
"EXPECTS", "ANTICIPATES", "INTENDS", "BELIEVES" AND SIMILAR LANGUAGE. OUR ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THIS PROSPECTUS. FACTORS
THAT COULD CAUSE OR CONTRIBUTE TO THESE DIFFERENCES INCLUDE, BUT ARE NOT LIMITED
TO, THE RISKS DISCUSSED IN THE SECTION ENTITLED "RISK FACTORS" IN THIS
PROSPECTUS.

OVERVIEW

We are a contract research organization, or CRO, providing clinical
research and development services on a global basis to the pharmaceutical and
biotechnology industries. Our focus is on supporting the conduct of clinical
trials. We have historically done so by providing such services as Phase II - IV
clinical trials management, study design, laboratory services and drug
development support. Through our recent acquisition, we have continued to expand
our service offerings to include Phase I clinical trials. We have approximately
2,325 employees and operations in 29 locations in 17 countries. Our main regions
of operations are the United States, Europe and the Rest of the World. For the
nine months ended February 28, 2003, we derived approximately 71.0%, 26.4% and
2.6% of our net revenue in the United States, Europe and the Rest of the World,
respectively.

Since January 2000, we have also expanded our operations through the
acquisition of:

o PRAI, a San Francisco based company that specializes in data
management, statistical analysis and medical and regulatory consulting, was
acquired on January 28, 2000 for approximately $14.4 million;

o YRCR Limited, or YRCR, a regulatory consulting company based in the
United Kingdom, was acquired on January 27, 2000 for approximately sterling 2.1
million;

o Protocole SAS, or Protocole, a clinical research organization
specializing in the execution of veterinary trials based in Paris, France, was
acquired on March 14, 2000 for approximately $586,000;

o UCT (U.S.), Inc., or UCT, a central laboratory organization based in
New York, New York, was acquired on June 8, 2000 for approximately $7.0 million;

o Barton & Polansky Associates, Inc., or BPA, and Managed Clinical
Solutions, Inc., or MCS, a clinical research organization and contract staffing
business based in New York, New York, were acquired on October 9, 2002 for
approximately $15.7 million of initial consideration (excluding costs of
acquisition) and a further $3.7 million in an earn-out payment on December 20,
2002, as well as potential earn-out payments. See "--Contractual Obligations
Table"; and

o Medeval Group Limited, or Medeval, a clinical pharmacology group
provider of Phase I clinical trials and bioanalytical services based in
Manchester, United Kingdom, was acquired on January 24, 2003 for approximately
sterling 9.5 million (U.S. $15.5 million) of initial consideration (excluding
costs of acquisition), as well as potential earn-out payments. See
"--Contractual Obligations Table".

Revenue consists primarily of fees earned under contracts with third-party
clients. In most cases, a portion of the contract fee is paid at the time the
study or trial is started, often upon the signing of a letter of intent, and the
balance of the contract fee is generally payable in installments over the study
or trial duration, based on the achievement of certain performance targets or
"milestones." Revenue for contracts is recognized on a percentage of completion
basis as work is performed. As is customary in the CRO industry, we subcontract
with third party investigators in connection with clinical trials. All
subcontractor costs, and certain other costs where reimbursed by clients, are,
in accordance with industry practice,

deducted from gross revenue to arrive at net revenue. As no profit is earned on
these costs, which vary from contract to contract, we view net revenue as our
primary measure of revenue growth.

Direct costs consist primarily of compensation and associated fringe
benefits for project-related employees and other direct project driven costs.
Selling, general and administrative expenses consist of compensation and related
fringe benefits for selling and administrative employees, professional services,
advertising costs and all costs related to facilities and information systems.

As the nature of our business involves the management of projects having a
typical duration of one to three years, the commencement, completion,
curtailment or early termination of projects in a fiscal year can have a
material impact on revenues earned with the relevant clients in such years. In
addition, as we typically work with some, but not all, divisions of a client,
fluctuations in the number and status of available projects within such
divisions can also have a material impact on revenues earned from such clients
from year to year.

Although domiciled in Ireland, we report our results in U.S. dollars. As a
consequence, the results of our non-United States based operations, when
translated into U.S. dollars, could be materially affected by fluctuations in
exchange rates between the U.S. dollar and the currency of those operations.

In addition to translation exposures, we are also subject to transaction
exposures because the currency in which contracts are priced can be different
from the currencies in which costs relating to those contracts are incurred. We
have eleven operations trading in U.S. dollars, four trading in euro, three in
pounds sterling, and one each in Australian dollars, Singapore dollars, Japanese
Yen, Israeli Shekels, Latvian Lats, Swedish Krona, South African Rands,
Argentine Pesos, Indian Rupees, Russian Rubles and Canadian dollars. Our
operations in the United States are not materially exposed to such currency
differences as the majority of our revenues and costs are in U.S. dollars.
However, outside the United States the multinational nature of our activities
means that contracts are usually priced in a single currency, most often pounds
sterling, U.S. dollars or euro, while costs arise in a number of currencies,
depending, among other things, on which of our offices provide staff for the
contract, and the location of investigator sites. Although many such contracts
benefit from some degree of natural hedging due to the matching of contract
revenues and costs in the same currency, where costs are incurred in currencies
other than those in which contracts are priced, fluctuations in the relative
value of those currencies could have a material effect on our results of
operations. We regularly review our currency exposures and hedge a portion of
these, using forward exchange contracts, where natural hedges do not cover them.
The introduction of the euro on January 1, 1999 also reduced our exposures as
four of our offices, and many of the countries where we are carrying out
projects, are within the euro zone.

We have received capital and revenue grants from Enterprise Ireland. We
record capital grants as deferred income, which are credited to income on a
basis consistent with the depreciation of the relevant asset. Grants relating to
operating expenditures are credited to income in the period in which the related
expenditure is charged. The capital grant agreements provide that in certain
circumstances the grants received may be refundable in full. These circumstances
include sale of the related asset, liquidation of the Company or failing to
comply in other respects with the grant agreements. The operating expenditure
grant agreements provide for repayment in the event of downsizing of the Company
calculated by reference to any reduction in employee numbers. We have not
recognized any loss contingency, having assessed as remote the likelihood of
these events arising. Up to February 28, 2003, we have received $1,244,195 and
$1,551,433 under the capital grants and operating grants, respectively. Pursuant
to the terms of the grant agreements we are restricted from distributing some of
these amounts by way of dividend or otherwise.

As we conduct operations on a global basis, our effective tax rate has
depended and will depend on the geographic distribution of our revenue and
earnings among locations with varying tax rates. Our results of operations
therefore may be affected by changes in the tax rates of the various
jurisdictions. In particular, as the geographic mix of our results of operations
among various tax jurisdictions changes, our effective tax rate may vary
significantly from period to period.

RESULTS OF OPERATIONS

THREE MONTHS ENDED FEBRUARY 28, 2003 COMPARED WITH THREE MONTHS ENDED FEBRUARY
28, 2002

The following table sets forth for the periods indicated certain financial
data as a percentage of net revenue and the percentage change in these items
compared to the prior comparable period. The trends illustrated in the following
table may not be indicative of future results.

THREE MONTHS ENDED
FEBRUARY 28, FEBRUARY 28, 2003
2003 2002 TO 2002
------------ ------------ ------------------
PERCENTAGE OF NET REVENUE PERCENTAGE INCREASE

Net revenue ............................... 100.0% 100.0% 49.9%
Costs and expenses:
Direct costs .............................. 56.3% 52.9% 59.4%
Selling, general and administrative ....... 30.2% 31.5% 43.6%
Depreciation and amortization ............. 3.1% 3.9% 21.5%
Income from operations .................... 10.4% 11.7% 33.4%

Net revenue increased by $19.7 million, or 49.9%, from $39.6 million to
$59.3 million. This improvement arose through a combination of increased
business from existing clients, business won from new clients and revenues from
acquisitions not included in the comparative period. The additional revenues
from these acquisitions (BPA, MCS and Medeval) amounted to $6.0 million for the
three months ended February 28, 2003. Including the impact of acquisitions,
revenues in the United States, Europe/Rest of World grew 54.4% and 39.3%,
respectively. For the three months ended February 28, 2003, net revenue for our
central laboratory business fell by 20.6% from $7.8 million to $6.2 million
while our clinical research segment grew by 67.2% from $31.8 million to $53.1
million over the comparable period. The growth in net revenue in our clinical
research segment is due to the expansion of our services to both existing and
new clients, increased use of outsourcing by the pharmaceutical and
biotechnology industries, an underlying increase in research and development
spending and consolidation in the CRO industry. The decrease in the central
laboratory revenues was due principally to a higher than normal level of project
cancellations in the first quarter of fiscal 2003.

Direct costs increased by $12.5 million, or 59.4%, from $20.9 million to
$33.4 million, primarily due to increased staff numbers needed to support
increased project related activity and increased costs arising from the
acquisitions amounting to $4.3 million. Direct costs, as a percentage of net
revenue increased from 52.9% in the three months to February 28, 2002 to 56.3%
for the quarter ended February 28, 2003 or 54.6% when the effects of
acquisitions have been excluded.

Selling, general and administrative expenses increased by $5.4 million, or
43.6%, from $12.5 million to $17.9 million. The increase in costs is due to the
continued expansion of our operations and additional selling, general and
administrative costs from acquisitions of $1.6 million not included in the
comparative period. As a percentage of net revenue, selling, general and
administrative expenses, decreased from 31.5% in the three months to February
28, 2002 to 30.2% for the quarter ended February 28, 2003, or 30.6% when the
effects of acquisitions have been excluded.

Depreciation and amortization expense increased by $0.3 million, or 21.5%,
over the same quarter last year. This increase is due to the continued
investment in facilities and information technology to support the growth in
activity and in providing for future capacity. As a percentage of net revenue,
depreciation and amortisation decreased from 3.9% of net revenues in the three
months to February 28, 2002 to 3.1% for the quarter ended February 28, 2003 or
3.4% when the effects of acquisitions have been excluded.

Income from operations increased by $1.6 million, or 33.4%, from $4.6
million to $6.2 million, including acquisitions. This improvement is due to
increased levels of activity carried out across the Company together with the
acquisition of BPA, MCS and Medeval. As a percentage of net revenue, including
the

effect of acquisitions, income from operations decreased from 11.7% for the
three months ended February 28, 2002 to 10.4% of net revenues for the three
months ended February 28, 2003. For the quarter, income from operations, as a
percentage of net revenue for the central laboratory fell to (7.3%) from 22.5%
in the same quarter in fiscal 2002, due principally to a higher than normal
level of project cancellations in the first quarter of the current fiscal year.
Operating margins for our clinical research segment increased from 9.1% in the
three months ended February 28, 2002 to 12.5% for the three months ended
February 28, 2003 due principally to improved staff utilization.

Net interest income for the three months ended February 28, 2003 was $0.1
million compared to $0.3 million for the equivalent period last year. Net cash
invested decreased from $43.1 million at May 31, 2002 to $11.4 million at
February 28, 2003. Lower average interest rates for the third quarter of fiscal
2003, when compared to the same period last year, together with lower amounts of
cash invested contributed to the lower returns on our investments.

Our effective tax rate for the nine months ended February 28, 2003 was
27.1% compared to 26.9% for the comparable period last year. The increase in the
effective rate was due to a change in the geographic distribution of pre-tax
earnings and the impact of acquisitions.

NINE MONTHS ENDED FEBRUARY 28, 2003 COMPARED WITH NINE MONTHS ENDED FEBRUARY 28,
2002

NINE MONTHS ENDED
FEBRUARY 28, FEBRUARY 28, 2003
2003 2002 TO 2002
------------ ------------ ------------------
PERCENTAGE OF NET REVENUE PERCENTAGE INCREASE

Net revenue .............................. 100.0% 100.0% 40.6%
Costs and expenses:
Direct costs ............................. 54.8% 53.2% 44.8%
Selling, general and administrative ...... 31.0% 31.3% 39.2%
Depreciation and amortization ............ 3.1% 3.9% 13.6%
Income from operations ................... 11.1% 11.6% 34.6%

Net revenue increased by $46.1 million, or 40.6%, from $113.6 million to
$159.7 million. This improvement arose through a combination of increased
business from existing clients, business won from new clients and revenues from
acquisitions not included in the comparative period. The additional revenues
from these acquisitions (BPA, MCS & Medeval) were $9.6 million for the nine
months ended February 28, 2003. Of the total increase, revenues in the United
States, Europe/Rest of World grew by 45.8% and 29.4%, respectively. For the nine
months ended February 28, 2003 net revenue for our central laboratory segment
grew from $19.2 million to $19.4 million, or 1.1% over the comparable period
last year, while our clinical research segment grew from $94.4 million to $140.3
million, or 48.7% in the same period. The growth in net revenue in both our
clinical research and central laboratory segments is due to the expansion of our
services to both existing and new clients, increased use of outsourcing by the
pharmaceutical and biotechnology industries, an underlying increase in research
and development spending and consolidation in the CRO industry.

Direct costs increased by $27.0 million, or 44.8%, from $60.5 million to
$87.5 million, primarily due to increased staff numbers needed to support
increased project related activity and increased costs arising from the
acquisitions amounting to $6.4 million. Direct costs, as a percentage of net
revenue increased from 53.2% in the nine months to February 28, 2002, to 54.8%
for the nine months ended February 28, 2003 or 54.0% when the effect of
acquisitions has been excluded.

Selling, general and administrative expenses increased by $13.9 million,
or 39.2%, from $35.6 million to $49.5 million. The increase in costs is due to
the continued expansion of our operations and additional selling, general and
administrative costs from acquisitions of $2.6 million not included in the
comparative period. As a percentage of net revenue, selling, general and
administrative expenses, decreased from 31.3% in the nine months to February 28,
2002, to 31.0% for the nine months ended February 28, 2003 or 31.2% when the
effect of acquisitions has been excluded.

Depreciation and amortization expense increased by $0.6 million, or 13.6%,
over the same period last year. This increase is due to the continued investment
in facilities and information technology to support the growth in activity and
in providing for future capacity costs from acquisitions of $0.1 million not
included in the comparative period. As a percentage of net revenue, depreciation
and amortization decreased from 3.9% of net revenues in the nine months to
February 28, 2002 to 3.1% for the nine months ended February 28, 2003 or 3.3%
when the effect of acquisitions has been excluded.

Income from operations increased by $4.6 million, or 34.6%, from $13.1
million to $17.7 million, including acquisitions. This increase is due to
increased levels of activity carried out across the Company together with the
acquisition of BPA, MCS & Medeval. As a percentage of net revenue, including the
effect of acquisitions, income from operations decreased from 11.6% for the nine
months ended February 28, 2002, to 11.1% for the nine months to February 28,
2003. For the first nine months of fiscal 2003, income from operations, as a
percentage of net revenue for our central laboratory segment fell to 1.3% from
14.4% in the same period in fiscal 2002 due principally to a higher than normal
level of project cancellations in the first quarter of the current fiscal year.
Cancellations of this nature are typical in our business and generally arise due
to safety or efficacy issues relating to the trial drug, which are outside of
our control. Operating margins for our clinical research segment increased from
11.0% in the nine months ended February 28, 2002 to 12.4% for the nine months
ended February 28, 2003 primarily due to improved staff utilization.

Net interest income for the nine months ended February 28, 2003 was $0.4
million compared to $0.9 million for the equivalent period last year. Net cash
invested decreased from $43.1 million at May 31, 2002 to $11.4 million at
February 28, 2003, primarily due to the acquisition of BPA and MCS in October
2002 and Medeval in January 2003. Lower average interest rates for the first
nine months of fiscal 2003 compared to the same period last year, combined with
lower levels of net cash invested, contributed to the lower returns on our
investments.

Our effective tax rate for the nine months ended February 28, 2003 was
28.2% compared to 25.9% for the comparable period last year. The increase in the
effective rate was due to a change in the geographic distribution of pre-tax
earnings and the impact of acquisitions.

FISCAL YEAR ENDED MAY 31, 2002 COMPARED TO FISCAL YEAR ENDED MAY 31, 2001

2000 2001
2000 2001 2002 TO 2001 TO 2002
-------- -------- -------- --------- ---------
PERCENTAGE INCREASE/
PERCENTAGE OF NET REVENUE (DECREASE)
-------------------------------- --------------------

Net revenue 100.0% 100.0% 100.0% 43.8% 34.8%
Costs and expenses:
Direct costs 52.0% 54.9% 53.3% 51.9% 30.7%
Selling, general and administrative 33.9% 31.3% 31.3% 32.8% 34.8%
Depreciation and amortization 4.0% 4.3% 3.8% 52.4% 21.0%
Income from operations 8.1% 9.5% 11.6% 69.6% 64.4%

Net revenue increased by $40.4 million, or 34.8%, from $116.2 million to
$156.6 million. This increase arose through growth in both of our existing
segments. Our central laboratory segment grew from $13.6 million to $25.9
million, or by 90.9%, while our clinical research segment grew from $102.6
million to $130.7

million, or 27.4% in fiscal 2002 compared to fiscal 2001. Of the total increase,
revenues in the United States and Europe/Rest of the World grew by 31.3% and
43.2%, respectively.

Direct costs increased by $19.6 million, or 30.7%, from $63.8 million to
$83.4 million, primarily due to a 33.0% increase in staff numbers which were
needed to support increased project-related activity. Direct costs as a
percentage of net revenue decreased from 54.9% in the twelve months to May 31,
2001 to 53.3% in the equivalent period in fiscal 2002 due to increased
utilization of our staff on project-related activity.

Selling, general and administrative expenses increased by $12.6 million,
or 34.8%, from $36.3 million to $48.9 million. The increase in costs is due to
the continued expansion of our operations. As a percentage of net revenue,
selling, general and administrative expenses remained at 31.3% in fiscal 2002,
the same level as fiscal 2001.

Depreciation and amortization expense increased by $1.0 million, or 21.0%,
from $5.0 million to $6.0 million. Excluding goodwill amortization of $0.2
million in fiscal 2001 (in order to be comparable to fiscal 2002, which reflects
the adoption of SFAS No. 142), the increase in fiscal 2002 over fiscal 2001 was
$1.2 million or 26.5%. This increase is due to the continued investment in
facilities and information technology to support the growth in activity and in
providing for future capacity. As a percentage of net revenue, depreciation and
amortization expenses decreased from 4.3% in the twelve months to May 31, 2001
to 3.8% in the equivalent period in fiscal 2002. Excluding goodwill amortization
in 2001, depreciation and amortization represented 4.1% of net revenues.

Income from operations increased by $7.1 million, or 64.4%, from $11.1
million to $18.2 million, due principally to improved operational performance in
our central laboratory segment and increased levels of activity overall. As a
percentage of net revenue, income from operations increased from 9.5% for the
year ended May 31, 2001 to 11.6% of net revenues for fiscal 2002. In the same
period, income from operations as a percentage of net revenue in our central
laboratory segment grew from -2.3% to 14.1%, while our clinical research segment
income remained at 11.1% for fiscal 2002, the same level as fiscal 2001.

Net interest income for the year ended May 31, 2002 was $1.1 million, a
decrease of $1.4 million on the equivalent period last year due primarily to
reduced cash on deposit and lower interest rates during the current fiscal year.
Net cash invested decreased from $35.9 million at May 31, 2001 to $18.6 million
at the end of May 2002.

Our effective tax rate for the year ended May 31, 2002 was 26.5% compared
with 19.2% for the comparable period last year. The increase in the effective
rate was primarily due to a change in the geographic distribution of pre-tax
earnings.

FISCAL YEAR ENDED MAY 31, 2001 COMPARED TO FISCAL YEAR ENDED MAY 31, 2000

Net revenue increased by $35.4 million, or 43.8%, from $80.8 million to
$116.2 million. This increase arose through a combination of growth in our
existing business and revenues from acquisitions not included in the comparative
period. Revenues from acquisitions increased from $0.9 million for the year
ended May 31, 2000 (comprising YRCR and Protocole) to $16.6 million for the year
ended May 31, 2001 (comprising YRCR, Protocole and UCT). Excluding acquisitions,
net revenue increased by 24.7% over the comparable period. Of the total
increase, revenues in the United States and Europe/Rest of the World grew by
51.4% and 28.0%, respectively.

Direct costs increased by $21.8 million, or 51.9%, from $42.0 million to
$63.8 million, primarily due to a 42.0% increase in staff numbers which were
needed to support increased project-related activity. Direct costs arising from
the acquisitions amounted to $10.7 million. Excluding acquisitions, direct costs
increased by 28.1%. Direct costs including acquisitions as a percentage of net
revenue increased from 52.0% in the

twelve months to May 31, 2000, to 54.9% in the equivalent period in fiscal 2001.
Excluding acquisitions, direct costs were 53.3% of net revenues in the twelve
months to May 31, 2001.

Selling, general and administrative expenses increased by $9.0 million, or
32.8%, from $27.3 million to $36.3 million. The increase in costs is due to the
continued expansion of our operations and additional selling, general and
administrative costs arising from the acquisitions of $4.5 million. Excluding
acquisitions, selling, general and administrative expenses increased by 16.7%.
As a percentage of net revenue, selling, general and administrative expenses
decreased from 33.9% to 31.3% in the year ended May 31, 2001 and 32.0% when
acquisitions were excluded.

Depreciation and amortization expense increased by $1.7 million, or 52.4%,
to 4.3% of net revenues in fiscal 2001 compared to 4.0% of net revenues in
fiscal 2000. This increase is due to both goodwill amortization arising on the
acquisitions of YRCR, Protocole and UCT and to the continued investment in
facilities and information technology to support the growth in activity and in
providing for future capacity. Excluding the effect of acquisitions,
depreciation and amortization was 4.4% of net revenues in the year ended May 31,
2001.

Merger costs for the year ended May 31, 2000 were $1.6 million. These
costs represented transaction-related incremental third party costs for
accounting, legal and corporate finance services and capital taxation incurred
in the pooling of interests transaction with PRAI.

Net interest income for the year ended May 31, 2001 was $2.5 million, a
decrease of $0.2 million on the equivalent period last year due primarily to
reduced cash on deposit and lower interest rates during the current fiscal year.
Net cash invested decreased from $46.1 million at May 31, 2000, to $35.9 million
at the end of May 2001.

Our effective tax rate for the year ended May 31, 2001 was 19.2% compared
with the pro forma tax rate of 27.8% for the comparable period last year after
the impact of corporate taxes arising from the merger with PRAI has been
excluded. The decline in the effective rate was due to a change in the
geographic distribution of pre-tax earnings and merger costs included in the
third quarter of last year, which were not tax deductible. A valuation allowance
was recorded against the deferred tax asset generated from operating loss carry
forwards for certain subsidiaries that are in a tax loss position.

LIQUIDITY AND CAPITAL RESOURCES

The CRO industry generally is not capital intensive. Since our inception,
we have financed our operations and growth primarily with cash flow from
operations and the $49.1 million of net proceeds received from our initial
public offering in 1998. Our principal cash needs are payment of salaries,
office rents, travel expenditures and payments to investigators. In the nine
months ended February 28, 2002 and February 28, 2003, the aggregate amount of
employee compensation, excluding stock compensation expense, paid by us and our
subsidiaries amounted to $63.6 million and $96.0 million, respectively. The
aggregate amount of employee compensation, excluding stock compensation expense,
paid by us and our subsidiaries in the three fiscal years ended May 31, 2002
amounted to $48.9 million, $68.6 million, and $88.2 million, respectively.
Investing activities primarily reflect capital expenditures for facilities,
information systems enhancements, the sale and purchase of short-term
investments and acquisitions.

Our clinical research and development contracts are generally fixed-fee
with some variable components and range in duration from a few months to several
years. Revenue from contracts is generally recognized as income on a percentage
of completion basis as the work is performed. The cash flow from contracts
typically consists of a down payment of between 10% and 20% paid at the time the
contract is entered into, with the balance paid in installments over the
contract's duration, in some cases on the achievement of certain milestones.
Accordingly, cash receipts do not necessarily correspond to costs incurred and
revenue recognized on contracts.

As of February 28, 2003, our working capital was $50.5 million, compared
to $72.9 million at May 31, 2002 and $61.1 million at May 31, 2001. The most
significant influence on our operating cash flow is revenue outstanding, which
comprises accounts receivable and unbilled revenue, less payments on account.
The dollar values of these amounts and the related days sales outstanding, or
DSOs, can vary due to the achievement of contractual milestones, including
contract signing, and the timing of cash receipts. The number of DSOs was 69
days at February 28, 2003, 67 days at May 31, 2002 and 93 days at May 31, 2001.
The decrease from May 31, 2001 to May 31, 2002 was due primarily to increased
cash collections, as a result of a more stringent application of our trading
terms with respect to our accounts receivable. The increase from May 31, 2002 to
February 28, 2003 was due primarily to the timing of pass-through sub-contractor
fees.

Net cash provided by operating activities was $16.6 million in the nine
months ended February 28, 2003, compared to $16.3 million in the nine months
ended February 28, 2002 and $17.3 million in the year ended May 31, 2002,
compared with net cash used of $1.6 million in fiscal 2001. The improvement in
operating cash flow from May 31, 2001 to May 31, 2002 was due to substantial
improvements in our DSOs from 93 days to 67 days over the period.

Net cash used in investing activities was $29.5 million in the nine months
ended February 28, 2003, compared to $4.1 million provided by investing
activities in the nine months ended February 28, 2002, due principally to
acquisition activity in the current fiscal year. Net cash provided by investing
activities was $4.8 million in the year ended May 31, 2002, compared to net cash
used in investing activities of $22.6 million in the year ended May 31, 2001,
due principally to acquisition activity in fiscal 2001 and proceeds from
short-term investments in 2002.

Net cash used in financing activities was $1.6 million in the nine months
ended February 28, 2003, compared with $0.9 million provided by financing
activities in the nine months ended February 28, 2002, due principally to the
repayment of debt. Net cash provided by financing activities was $2.7 million in
the year ended May 31, 2002, compared with $9.6 million in fiscal 2001, due
mainly to higher levels of debt in fiscal 2001.

As a result of these cash flows, cash and cash equivalents decreased by
$14.4 million in the nine months ended February 28, 2003, compared to an
increase of $21.5 million in the nine months ended February 28, 2002, and
increased by $25.1 million in the year ended May 31, 2002, compared to a
decrease of $15.4 million in the year ended May 31, 2001.

On November 17, 1998, we entered into an overdraft facility, or the A.I.B.
facility, for (euro)2,539,000 (U.S.$2,731,710) with Allied Irish Banks plc, or
A.I.B. This facility bears interest at an annual rate equal to A.I.B. Bank's
Prime Rate plus one-quarter of a percent. The full amount of the unpaid
principal and interest is due and repayable on demand. This A.I.B. facility
expires on June 30, 2003; in the event that such facility is not renewed, any
amounts outstanding will have to be repaid on the expiration date. As of
February 28, 2003, (euro)2,056,227 (U.S.$2,212,295) of this facility was
available to be drawn down.

On July 29, 2002, we entered into an additional A.I.B. facility for
sterling 50,000 (U.S.$79,006). This facility bears interest at an annual rate
equal to A.I.B. Bank's Prime Rate plus two percent. The full amount of the
unpaid principal and interest is due and repayable on demand. This A.I.B.
facility expires on June 30, 2003; in the event that such facility is not
renewed, any amounts outstanding will have to be repaid on the expiration date.
As of February 28, 2003, the full amount of this facility was available to be
drawn down.

Our U.S. subsidiary ICON Clinical Research, Inc. has a $12 million secured
line of credit with PNC Bank N.A, or the PNC Facility. Borrowings under the PNC
Facility must be the lesser of (a) $12 million and (b) the sum of (i) 80% of
ICON Clinical Research, Inc.'s gross accounts receivable less than 90 days from
the date of invoice issuance ("Qualified receivables") plus (ii) 50% of gross
unbilled receivables less than 90 days ("Qualified unbilled receivables")
provided always that drawings against Qualified unbilled receivables shall at no
time exceed 50% of drawings against Qualified receivables. The PNC Facility
bears interest at

an annual rate equal to PNC's Prime Rate less three-quarters of a percent. The
full amount of the unpaid principal and interest is due and payable on demand.
The PNC Facility is secured by a first priority security interest in certain
assets of ICON Clinical Research, Inc. This facility expires on December 31,
2003; in the event that such facility is not renewed, any amounts outstanding
will have to be repaid on the expiration date. As of February 28, 2003, $8.9
million was drawn down.

On July 3, 2003, we entered into an agreement with Bank of Ireland and
Ulster Bank for a credit line of $60 million. See "Recent Developments--New
Credit Facility."

We entered into an overdraft agreement with A.I.B., whereby we guarantee
any overdrafts of our subsidiaries ICON Clinical Research GmbH and ICON Clinical
Research Israel Ltd. up to an amount (euro)112,484 (U.S.$121,022) and
U.S.$250,000 (ILS 1,209,499), respectively. As of February 28, 2003, the full
German facility and Israeli facility were available to be drawn down.

On October 9, 2002, we completed the acquisitions of Barton & Polansky
Associates, Inc. and its sister company, Managed Clinical Solutions, Inc.,
contract research organizations in New York, for an initial cash consideration
of $15.7 million (excluding costs of acquisition) and a further $3.7 million in
an earn-out payment on December 20, 2002, as well as potential earn-out
payments. See "--Contractual Obligations Table".

On January 24, 2003, we completed the acquisition of Medeval Group
Limited, a specialist provider of Phase I clinical trials to the pharmaceutical
and biotechnology industries, for an initial cash consideration of approximately
sterling 9.5 million (U.S.$15.5 million) (excluding costs of acquisition), as
well as potential earn-out payments. See "--Contractual Obligations Table".

CONTRACTUAL OBLIGATIONS TABLE

The following table represents our contractual obligations and commercial
commitments as of February 28, 2003.

PAYMENTS DUE BY PERIOD
-----------------------------------------------------
LESS THAN 1 TO 5 AFTER 5
TOTAL 1 YEAR YEARS YEARS
--------- --------- --------- --------
(IN THOUSANDS)

Operating leases ....................................... $121,579 $ 7,359 $50,406 $63,814
Credit facilities ...................................... 10,503 10,503 -- --
Earn-out payments committed for
contingent consideration (1) ........................... 13,460 4,120 9,340 --
-------- ------- ------- -------
Total .................................................. $145,542 $21,982 $59,746 $63,814
======== ======= ======= =======

----------
(1) This cash is payable under earn-out clauses included in acquisitions.

We expect to spend approximately $15 million in the next twelve months on
further investments in information technology, the expansion of existing
facilities and the addition of new offices and expect to increase this level of
spending in subsequent years. In addition, in the twelve months ending February
28, 2004, we expect to pay approximately $4.1 million on earn-out payments
arising from acquisitions. We believe that we will be able to fund our
additional foreseeable cash needs for the next twelve months from cash flow from
operations and existing cash balances. In the future, we will consider acquiring
businesses to enhance our service offerings and global presence. Any such
acquisitions will be funded from the proceeds of this offering, and we may
require additional external financing, and we may also from time to time seek to
obtain funds from public issues of equity or debt securities. There can be no
assurance that such financing will be available on terms acceptable to us.

INFLATION

We believe that the effects of inflation generally do not have a material
impact on our operations or financial condition.

CRITICAL ACCOUNTING POLICIES

The preparation of consolidated financial statements in accordance with
generally accepted accounting principles in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reported period.

We base our estimates and judgments on historical experience and on the
other factors that we believe are reasonable under current circumstances. Actual
results may differ from these estimates if these assumptions prove to be
incorrect or if conditions develop other than as assumed for the purposes of
such estimates. The following is a brief discussion of the accounting policies
used by us, which we believe are critical in that they require estimates and
judgments by management.

REVENUE RECOGNITION

Significant management judgments and estimates must be made and used in
connection with the recognition of revenue in any accounting period. Material
differences in the amount of revenue in any given period may result if these
judgments or estimates prove to be incorrect or if management's estimates change
on the basis of development of the business or market conditions.

We apply the provisions of Statement of Position No. 81-1 "Accounting for
Performance of Construction-Type and Certain Production-Type Contracts" in
recognizing revenue, other than fee-for-service contracts. Revenues are
recognized over the period from the awarding of the customer's contract to study
completion and acceptance. The percentage to completion is measured by
monitoring of progress using records of actual cost incurred to date in the
contract compared to the total estimated contract requirements. The percentage
to completion method requires us to estimate total expected revenue, costs,
profitability, duration of the contract and outputs. These estimates are
reviewed periodically and, if any of these estimates change or actual results
differ from expected results, then an adjustment is recorded in the period in
which they become reasonably estimable.

If we do not accurately estimate the resources required or the scope of
the work to be performed, or do not manage our projects properly within the
planned cost or satisfy our obligations under the contracts, then future results
may be significantly and negatively affected.

GOODWILL

Goodwill arising on acquisition is capitalized. Where events and
circumstances are present which indicate that the carrying value may not be
recoverable, we will recognize an impairment loss. Factors we consider important
which could trigger impairment include:

o significant underperformance relative to expected historical or
projected future operating results;

o significant negative industry or economic trends;

o significant decline in our stock price for a sustained period; and

o changes in the ratio of our market capitalization to net book value.

NEW ACCOUNTING PRONOUNCEMENTS

In July 2001 the Financial Accounting Standards Board, or FASB, issued two
new statements: SFAS No. 141, "Business Combinations", and SFAS No. 142,
"Goodwill and Other Intangible Assets". Those Statements change the accounting
for business combinations and goodwill in two significant ways. First, SFAS No.
141 requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001. Use of the pooling-of-interests
method is prohibited. Second, SFAS No. 142 changes the accounting for goodwill
from an amortization method to an impairment-only approach. SFAS No. 142 also
requires that intangible assets with estimable useful lives be amortized over
their respective estimated useful lives to their estimated residual values, and
reviewed for impairment in accordance with SFAS No. 121 and subsequently SFAS
No. 144 after its adoption. We have no intangible assets with infinite lives.
Thus, amortization of goodwill, including goodwill recorded in past business
combinations, ceased upon adoption of SFAS No. 142. We adopted SFAS No. 142,
effective June 1, 2001. We completed our transitional assessment of goodwill
impairment during the year and our assessment indicates that there is no charge
for impairment.

The following table reconciles the prior periods' reported net income to
their prospective pro forma balances adjusted to exclude goodwill amortization,
which is no longer recorded under SFAS No. 142:

YEAR ENDED MAY 31,
---------------------------
2000 2001
------ -------
(IN THOUSANDS,
EXCEPT PER SHARE DATA)

Reported net income ......................................................... $6,068 $10,978
Add back goodwill amortization .............................................. 38 210
------ -------
Adjusted net income ......................................................... $6,106 $11,188
====== =======
BASIC NET INCOME PER ORDINARY SHARE
Reported .................................................................... $ 0.55 $ 0.97
Add back goodwill amortization .............................................. 0.00 0.02
------ -------
Adjusted basic net income per share ......................................... $ 0.55 $ 0.99
====== =======
DILUTED NET INCOME PER ORDINARY SHARE
Reported .................................................................... $ 0.51 $ 0.92
Add back goodwill amortization .............................................. 0.00 0.02
------ -------
Adjusted diluted net income per share ....................................... $ 0.51 $ 0.94
====== =======

In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations". SFAS No. 143, which is effective for fiscal years
beginning after June 15, 2002, requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its expected settlement amount each period,
and the capitalized cost is depreciated over the useful life of the related
asset. Upon settlement of the liability, an entity either settles the obligation
for its recorded amount or incurs a gain or loss upon settlement. We have not
yet adopted this new standard and are currently assessing the impact of the
standard but its adoption is not likely to have a material impact on our results
of operations and financial position.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". This statement supersedes both
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of", and the accounting and reporting
provisions for the disposal of a segment of a business of Accounting Principles
Board (APB) Opinion No. 30, "Reporting the Results of Operations - Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions". SFAS No. 144 retains the
fundamental provisions in SFAS No. 121 for recognizing and measuring impairment
losses on long-lived assets held for use and long-lived assets to be disposed of
by sale, while also resolving significant

implementation issues associated with SFAS No. 121. SFAS No. 144 also retains
the basic provisions of APB Opinion No. 30 on how to present discontinued
operations in the income statement but broadens that presentation to include a
component of an entity (rather than a segment of a business). We adopted SFAS
No. 144 on June 1, 2002. Adoption of SFAS No. 144 did not have a material impact
on our results of operations and financial position.

In November 2001, the Emerging Issues Task Force, or EITF, released EITF
Issue 01-14, "Income Statement Characterization of Reimbursements Received for
`Out of Pocket' Expenses Incurred", requiring companies to report reimbursed
costs as part of gross revenues. Our reimbursed costs include such items as
payments to investigators and travel costs for our clinical research staff. We
do not earn a profit on these costs. We have always included such reimbursed
costs within our measure of gross revenues and adoption of EITF Issue 01-14 had
no effect on our reported results.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". SFAS No. 145 provides for the rescission of several previously
issued accounting standards, new accounting guidance of the accounting for
certain lease modifications and various technical corrections that are not
substantive in nature to existing pronouncements. SFAS No. 145 will be adopted
beginning June 1, 2003, except for the provisions relating to the amendment of
SFAS No. 13, which have been adopted for the transactions occurring subsequent
to May 15, 2002. Adoption of SFAS No. 145 did not have a material impact on our
results of operations and financial position.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" ("SFAS No. 146"). SFAS 146
addresses financial accounting reporting for costs associated with exit or
disposal activities and nullifies EITF Issue 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit and Activity".
SFAS 146 requires that a liability for a cost associated with an exit or
disposal activity be recognized and measured initially at fair value only when
the liability is incurred. SFAS No. 146 is effective for exit or disposal
activities that are initiated after December 31, 2002 and will be effective in
our third quarter ending February 28, 2003. The adoption of SFAS No. 146 is not
expected to have a material impact on our financial position or results of
operations.

BUSINESS

THIS IS A SUMMARY OF THE MATERIAL ASPECTS OF OUR BUSINESS. FOR ADDITIONAL
INFORMATION, PLEASE REFER TO OUR FORMS 20-F AND 20-F/A FOR THE FISCAL YEAR ENDED
MAY 31, 2002, "ITEM 4. INFORMATION ON THE COMPANY."

OVERVIEW

We are a contract research organization, or CRO, providing clinical
research and development services on a global basis to the pharmaceutical and
biotechnology industries. Our focus is on supporting the conduct of clinical
trials. We have historically done so by providing such services as Phase II-IV
clinical trials management, clinical data management, study design, laboratory
services and drug development support. Through our recent acquisition of
Medeval, we have continued to expand our service offerings to include Phase I
clinical trials. We have approximately 2,325 employees and operations in 29
locations in 17 countries. Our main regions of operations are the United States,
Europe and the Rest of the World. For the nine months ended February 28, 2003,
we derived approximately 71.0%, 26.4% and 2.6% of our net revenue in the United
States, Europe and the Rest of the World, respectively.

Headquartered in Dublin, Ireland, we began operations in 1990 and have
expanded our business through internal growth and strategic acquisitions. Since
our initial public offering, our net revenue, comprised of gross revenue less
payments to subcontractors, grew from $45.2 million in fiscal 1998 to $156.6
million for fiscal 2002, while our operating income and net income grew from
$6.3 million and $4.3 million, respectively to $18.2 million and $14.2 million,
respectively over the same period. In 2002 revenue was earned from over 270
clients, including 19 of the top 20 pharmaceutical companies, as ranked by 2001
revenues.

INDUSTRY BACKGROUND

The CRO industry provides independent product development services for the
pharmaceutical and biotechnology industries. Companies in these industries
outsource product development services to CROs in order to manage the drug
development process more efficiently and cost-effectively to maximize the profit
potential of patent-protected products. The CRO industry has evolved since the
1970s from a small number of companies that provided limited clinical services
to a larger number of CROs that offer a range of services that encompass the
entire research and development process, including pre-clinical development,
clinical trials management, clinical data management, study design,
biostatistical analysis, central laboratory and regulatory affairs services.
CROs are required to provide these services in accordance with good clinical and
laboratory practices, as governed by the applicable regulatory authorities.

CRO with global capabilities. Some of these barriers include the infrastructure
and experience necessary to serve the global demands of clients, the ability to
manage simultaneously complex clinical trials in numerous countries, broad
therapeutic expertise and the development and maintenance of the complex
information technology systems required to integrate these capabilities. In
recent years, the CRO industry has experienced consolidation, resulting in the
emergence of a select group of CROs that have the capital, technical resources,
integrated global capabilities and expertise to conduct multiple phases of
clinical trials on behalf of pharmaceutical and biotechnology companies. We
believe that some large pharmaceutical companies, rather than utilizing many CRO
service providers, are selecting a limited number of CROs who are invited to bid
for projects. We believe that this trend will further concentrate the market
share among CROs with a track record of quality, speed, flexibility,
responsiveness, global capabilities and overall development experience and
expertise.

TRENDS AFFECTING THE CRO INDUSTRY

CROs derive substantially all of their revenue from the research and
development expenditures of pharmaceutical and biotechnology companies. Based on
industry surveys and investment analyst research, we estimate that clinical
development expenditures outsourced by pharmaceutical and biotechnology
companies worldwide in 2001 was in excess of $10 billion. We believe that the
following trends create further growth opportunities for global CROs, although
there is no assurance that growth will materialize.

INCREASING DRUG DEVELOPMENT ACTIVITY. Recent improvements in drug
discovery and screening technology, biotechnology and disease pathology have
reduced the time to develop new drug candidates. These improvements, combined
with the threat of patent expirations on existing drugs, have led drug
developers to increase the rate at which they are creating new drug candidates
for clinical trials. As the number of trials that need to be performed
increases, we believe that drug developers will increasingly rely on CROs to
manage these trials in order to continue to focus on drug discovery. In
addition, as many biotechnology companies do not have a clinical development
infrastructure, we believe that the services offered by CROs will continue to be
in demand from such companies.

PRESSURE TO ACCELERATE TIME TO MARKETS; GLOBALIZATION OF THE MARKETPLACE.
Reducing product development time maximizes the client's potential period of
patent exclusivity, which in turn maximizes potential economic returns. We
believe that clients are increasingly using CROs that have the appropriate
expertise to improve the speed of product development to assist them in
improving economic returns. In addition, applying for regulatory approval in
multiple markets and for multiple indications simultaneously, rather than
sequentially, reduces product development time and thereby maximizes economic
returns. We believe that CROs with global operations and experience in a broad
range of therapeutic areas are a key resource to support a global regulatory
approval strategy.

COST CONTAINMENT PRESSURES. Over the last several years, drug companies
have sought more efficient ways of conducting business due to margin pressures
stemming from patent expirations, greater acceptance of generic drugs, pricing
pressures caused by the impact of managed care, purchasing alliances and
regulatory consideration of the economic benefit of new drugs. Consequently,
drug companies are centralizing research and development, streamlining their
internal structures and outsourcing certain functions to CROs, thereby
converting previously fixed costs to variable costs. The CRO industry, by
specializing in clinical trials management, is often able to perform the needed
services with greater focus and at a lower cost than the client could perform
internally.

INCREASING NUMBER OF LARGE LONG-TERM POST-MARKETING STUDIES. We believe
that to establish competitive claims and to encourage drug prescription by
physicians in some large and competitive categories, more clients need to
conduct outcome studies to demonstrate, for example, that mortality rates are
reduced by certain drugs. To verify such outcomes, very large patient numbers
are required and they must be monitored over long time periods. We believe that
as these types of studies increase there will be a commensurate increase in
demand for the services of CROs who have the ability to quickly assemble large
patient populations, globally if necessary, and manage this complex process
throughout its duration.

INCREASING REGULATORY DEMANDS. We believe that regulatory agencies are
becoming more demanding with regard to the data required to support new drug
approvals and are seeking more evidence that new drugs are safer and more
effective than existing products. As a result, the complexity of clinical trials
and the size of regulatory submissions are driving the demand for services
provided by CROs.

STRATEGY

We believe that our operating model based on dedicated teams
differentiates us from our competition in the CRO industry and enables us to
deliver high quality services to our clients. Our strategy is to continue to
grow by applying this model to penetrate further our existing client base and
add new clients. We intend to implement our strategy by continuing to deliver
high quality services, by increasing our geographic presence and by expanding
the scale and range of our services. We intend to supplement our internal growth
with strategic acquisitions.

CONTINUE TO DELIVER HIGH QUALITY SERVICES AND CUSTOMER SATISFACTION. We
believe that our dedicated team approach allows us to provide high quality,
timely and cost effective services that are designed to be highly responsive to
our clients' needs. We believe that the resulting customer satisfaction and
enhanced reputation in the industry will continue to enable us to penetrate our
existing client base and add new clients. In the nine months ended February 28,
2003, approximately 95% of our net revenue was derived from second or subsequent
projects with clients. The remaining 5% of the net revenue was derived from 73
initial projects with new clients.

EXPAND GEOGRAPHIC PRESENCE. We believe that the capability to provide our
services on a global basis in most major and developing pharmaceutical markets
enhances our ability to compete for new business from large multinational
pharmaceutical and biotechnology companies. We have expanded geographically
through the establishment of 29 offices in 17 countries and intend to continue
expanding into regions that have the potential to increase our client base or
increase our investigator and patient populations.

INCREASE SCALE AND RANGE OF SERVICES. We seek to enhance our competitive
position by increasing the scale and range of our services. We intend to expand
our clinical trials, central laboratory, IVRS (interactive voice recognition
system), data management, statistical and consulting operations in order to
capitalize further on the outsourcing opportunities currently available from our
clients.

SERVICES

We offer a broad range of clinical research and development services to
our clients on a global basis, including Phase I clinical trials, Phase II-IV
clinical trials management, clinical data management, study design,
biostatistical analysis, laboratory services, bioanalytical services, product
development support services, pharmacovigilance services, IVRS and contract
research staffing. Since inception, we have carried out multiple trials
involving most major therapeutic areas, including, among others, cardiology,
endocrinology, gastroenterology, hematology, immunology, infectious diseases,
neurology, oncology, psychiatry, respiratory, rheumatology and urology.

A large part of our continued success is due to the high quality standards
we have set and delivered to our clients. Our quality goals are attained through
the implementation and maintenance of an effective quality management system,
which not only ensures that our business and quality objectives are achieved,
but which is sufficiently dynamic to rapidly respond to changes in the clinical
research and regulatory environments. Our quality management system is based on
the requirements of the ISO 9001:2000 international standard and includes over
180 standard operating procedures, or SOPs, which are implemented on a global
basis. In addition, our independent quality assurance division has the
responsibility for assuring that the process conforms to pre-determined quality,
ethical and regulatory standards.

Consistent high quality performance is what we have come to stand for with
our clients and one of the driving forces behind this is management's commitment
to ISO 9000. In 1994, we became ISO 9002 registered and remain the only such CRO
to have this standard across all offices and operational functions. In order to
retain registration we must undergo several quality system audits per year. In
2002, we adopted the new standard ISO 9001:2000, which further developed the
system through a stronger focus on processes, metrics and continuous
improvement.

ORGANIZATIONAL STRUCTURE

The following list contains all of our principal direct and indirect
wholly owned subsidiaries:

NAME COUNTRY OF INCORPORATION
---- ------------------------
ICON Clinical Research S.A. .................... Argentina
ICON Clinical Research Pty Limited ............. Australia
ICON Clinical Research (Canada) Inc. ........... Canada
ICON Clinical Research SARL .................... France
Protocole SAS .................................. France
ICON Clinical Research GmbH .................... Germany
ICON Clinical Research Israel Limited .......... Israel
ICON Japan K.K. ................................ Japan
ICON Clinical Research Limited ................. Republic of Ireland
ICON Clinical Research Pte ..................... Singapore
ICON Clinical Research Limited ................. South Africa
ICON Clinical Research (UK) Limited ............ United Kingdom
Medeval Group Limited .......................... United Kingdom
YRCR Limited ................................... United Kingdom
Barton & Polansky Associates, Inc. ............. United States
ICON Clinical Research Inc. .................... United States
ICON Laboratories, Inc. ........................ United States
Managed Clinical Solutions, Inc. ............... United States
Pacific Research Associates Inc. ............... United States

INFORMATION SYSTEMS

Our information technology strategy is to build our systems around open
standards and leading commercial hardware and software. All critical business
systems are formally validated following a documented approach in accordance
with the latest FDA regulations.

Recognizing that each client has its own requirements and systems, we seek
to ensure an entirely flexible approach to client needs. An example of this
flexibility includes linking directly to client systems if this is required or
for a client to have access to designated ICON systems. Frequently, we have
established wide area network, or WAN, links to the client's data systems, have
trained our staff in those systems and have delivered data on-line to the
client's database. We also provide secure remote access to our systems for
clients to review their study information.

We have internally developed a suite of proprietary software applications
that assists in the management of our activities, including a clinical trials
management application that tracks all relevant data in a trial and automates
all management and reporting processes and an investigator grants management
application which utilizes this tracking data to trigger payments when they
become due to investigators. We have also developed an interactive voice
response system to increase the efficiency of clinical trials. This system
provides features such as centralized patient randomization, drug inventory
management, and patient diary collection and provides our clients with a fully
flexible data retrieval solution which can be utilized via telephone, internet
browser or WAP enabled device.

In our central laboratory, we utilize a comprehensive suite of software,
including a laboratory information management system, a kit/sample management
system and a web interface system to allow clients to review results online.

We have implemented externally developed critical business systems that
are highly integrated into our business processes. These include systems to
manage, validate and analyze clinical data, systems to record, track and report
safety issues, systems to manage regulatory submissions, systems to control
documents and to review and record training and systems to record activity and
manage resources.

Our IT systems are operated from hubs in Philadelphia and Dublin. Other
offices are linked to these hubs through dedicated lines, frame relay networks
or virtual private networks, or VPNs. Travelling staff can also access all
systems via VPN facilities. A global corporate portal provides access to all
authorized data and applications for our staff.

SALES AND MARKETING

Our sales and marketing strategy is to focus our business development
efforts on pharmaceutical and biotechnology companies whose development projects
are advancing and to develop close relationships with such companies. By
maintaining such relationships with our clients, we gain repeat business and
achieve lateral penetration into other therapeutic divisions where applicable.

While our sales and marketing activities are carried out locally by
executives in each of our major locations, the sales and marketing process is
coordinated centrally. In addition, all of our business development
professionals, senior executives and project team leaders share responsibility
for the maintenance of key client relationships and business development
activities.

CLIENTS

We provide clinical services to most of the major pharmaceutical and
biotechnology companies worldwide. The number of companies to whom we have
provided services has grown from 40 by 1998 to over 475 by 2002, including 19 of
the top 20 pharmaceutical companies in the world, as ranked by 2001 revenues.
This expansion has led to an increasing percentage of revenue coming from
biotechnology, specialty and Japanese companies. From fiscal 2000 to fiscal
2002, this percentage grew from 24% to 37% of total revenues.

We have in the past and may in the future derive a significant portion of
our net revenue from a relatively limited number of major projects or clients.
Over the years, we have managed to reduce this concentration and for the first
nine months of fiscal 2003, our top five clients comprised 51% of net revenues
compared to 68% for fiscal 2000. During these periods, some clients contributed
in excess of 10% of our revenues. This reflects our success in penetrating our
client base. In the fiscal year ended May 31, 2000, we received 24% of our net
revenue from Pfizer, 18% from GlaxoSmithKline and 16% from Novartis. During the
fiscal year ended May 31, 2001, we received 19% of our net revenue from Pfizer
and 15% from GlaxoSmithKline. During the fiscal year ended May 31, 2002, we
received 16% of our net revenue from Astra Zeneca, 14% from Pfizer and 12% from
Bristol Myers Squibb.

We have expanded geographically in order to pursue larger multi-national
clinical trials in markets worldwide and have expanded through acquisition to
offer a broader range of services. For the nine months ended February 28, 2003,
we generated 71.0% of our net revenue in the United States, 26.4% in Europe and
2.6% in the Rest of the World.

CONTRACTUAL ARRANGEMENTS

We are generally awarded contracts based upon our response to requests for
proposals received from pharmaceutical and biotechnology companies.

Most of our revenues are earned from fixed-fee contracts based on certain
activity and performance specifications. Consequently, although, with certain
exceptions, we typically bear the cost of overruns, we benefit if our costs are
lower than anticipated. Payment terms usually provide for payments based on the
achievement of certain identified milestones, activity levels or monthly
payments according to a fixed payment schedule over the life of the contract.
Where clients request changes in the scope of a trial or in the services to be
provided by us, we deal with these by a change order, often resulting in
additional revenue to us. We also contract on a "fee-for-service", "days worked"
or "time and materials" basis but this accounts for less than 10% of revenues.

Contract terms may range from one year to several years depending on the
nature of the work to be performed. In most cases, a portion of the contract
fee, typically 10% to 20%, is paid at the time the study or trial is started,
and often upon the signing of a letter of intent. The balance of the contract
fee payable is generally payable in installments over the study or trial
duration and may be based on the achievement of certain performance targets or
"milestones" or, to a lesser extent, on a fixed monthly payment schedule. For
instance, installment payments may be based on patient enrollment or delivery of
the database. Reimbursable expenses are typically estimated and budgeted within
the contract and invoiced on a monthly basis. Reimbursable expenses include
payments to investigators for patients enrolled in trials, travel and
accommodation costs for investigator meetings, the cost of laboratory tests and
the cost of drug packaging for a trial.

Most of our contracts are terminable immediately by the client for cause
and on 30-60 days' notice without cause. In the event of termination, we are
usually entitled to all sums owed for work performed through the notice of
termination and certain costs associated with termination of the study. Some of
our contracts provide for an early termination fee. Termination or delay in the
performance of a contract occurs for various reasons, including, but not limited
to, unexpected or undesired results, production problems resulting in shortages
of the drug, adverse patient reactions to the drug, the client's decision to
deemphasize a particular trial or inadequate patient enrollment or investigator
recruitment.

BACKLOG

Our backlog consists of potential net revenue yet to be earned from
projects awarded by clients. Due to their varied durations, we believe that the
most meaningful measure of backlog is the amount that we estimate will be earned
from such projects in the following twelve months.

At February 28, 2003, we estimate that we had backlog to be earned in the
following twelve months of $195 million, compared with approximately $130
million at February 28, 2002. We believe that our backlog as of any date is not
necessarily a meaningful predictor of future results, due to the potential for
cancellation or delay of the projects underlying the backlog, and we may not be
able to realize this backlog as net revenue.

COMPETITION

The CRO industry is highly fragmented, consisting of several hundred
small, limited-service providers and a limited number of medium-sized and large
CROs with global operations. We primarily compete against in-house departments
of pharmaceutical companies and other CROs with global operations. Some of these
competitors have substantially greater capital, technical and other resources
than us. CROs generally compete on the basis of previous experience, the quality
of contract research, the ability to organize and manage large-scale trials on a
global basis, the ability to manage large and complex medical databases, the
ability to provide statistical and regulatory services, the ability to recruit
suitable investigators, the ability to integrate information technology with
systems to improve the efficiency of contract research, an international
presence with strategically located facilities, financial viability, medical and
scientific expertise in specific therapeutic areas and price. We believe that we
compete favorably in these areas. Our principal CRO competitors are Covance,
Inc., Ingenix Inc. (United Health), Inveresk Research Group, Inc., Kendle
International Inc., MDS Inc., Omnicare, Inc., PARAXEL International Corp.,
Pharmaceutical Product Development, Inc., PRA Inc. and Quintiles Transnational
Corporation. The trend

toward CRO industry consolidation has resulted in heightened competition among
the larger CROs for clients and acquisition candidates.

GOVERNMENT REGULATION

REGULATION OF CLINICAL TRIALS

The clinical investigation of new drugs is highly regulated by government
agencies. The standard for the conduct of clinical research and development
studies is good clinical practice, which stipulates procedures designed to
ensure the quality and integrity of data obtained from clinical testing and to
protect the rights and safety of clinical subjects. While good clinical practice
has not been formally adopted by the FDA or, with certain exceptions, by similar
regulatory authorities in other countries, some provisions of good clinical
practice have been included in regulations adopted by the FDA. Furthermore, in
practice, the FDA and many other regulatory authorities require that study
results submitted to such authorities be based on studies conducted in
accordance with good clinical practice.

Regulatory authorities, including the FDA, have promulgated regulations
and guidelines that pertain to applications to initiate trials of products, the
approval and conduct of studies, report and record retention, informed consent,
applications for the approval of drugs and post-marketing requirements. Pursuant
to these regulations and guidelines, service providers that assume the
obligations of a drug sponsor are required to comply with applicable regulations
and are subject to regulatory action for failure to comply with such regulations
and guidelines. In the United States and Europe, the trend has been in the
direction of increased regulation by the applicable regulatory authority. We
believe that many pharmaceutical companies do not have the resources to comply
with all of these regulations and standards and that this has contributed and
will continue to contribute to the growth of third-party service providers.

In providing our services in the United States, we are obligated to comply
with FDA requirements governing such activities. These include obtaining patient
informed consents, verifying qualifications of investigators, reporting
patients' adverse reactions to drugs and maintaining thorough and accurate
records. We must maintain source documents for each study for specified periods,
and such documents may be reviewed by the study sponsor and the FDA during
audits.

The services we provide outside the United States are ultimately subject
to similar regulation by the relevant regulatory authority, including the
Medicines Control Agency in the United Kingdom and the Bundesinstitut fur
Arzneimittel und Medizinprodukte in Germany. In addition, our activities in
Europe are affected by the Committee for Proprietary Medicinal Products of the
European Union, and its successor, the European Medicines Evaluation Agency,
which is based in London, England.

We must also retain records for each study for specified periods for
inspection by the client and by the applicable regulatory authority during
audits. If such audits document that we have failed to comply adequately with
applicable regulations and guidelines, it could result in a material adverse
effect. In addition, our failure to comply with applicable regulation and
guidelines, depending on the extent of the failure, could result in fines,
debarment, termination or suspension of ongoing research or the disqualification
of data, any of which could also result in a material adverse effect.

NEW DRUG DEVELOPMENT -- AN OVERVIEW

Before a new drug may be marketed, the drug must undergo extensive testing
and regulatory review in order to determine that the drug is safe and effective.
The following discussion primarily relates to the FDA approval process. Similar
procedures must be followed for clinical trials in other countries. The stages
of this development process are as follows:

PRECLINICAL RESEARCH (1 TO 3.5 YEARS). "In vitro" (test tube) and animal
studies are conducted to establish the relative toxicity of the drug over
a wide range of doses and to detect any potential to cause birth defects
or cancer. If results warrant continuing development of the drug, the
manufacturer

will file for an Investigational New Drug Application, or IND, upon which
the FDA may grant permission to begin human trials.

CLINICAL TRIALS (3.5 TO 6 YEARS)

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

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

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

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

NDA PREPARATION AND SUBMISSION. Upon completion of Phase III trials, the
manufacturer assembles the statistically analyzed data from all phases of
development into a single large submission, the New Drug Application, or
NDA, which today comprises, on average, roughly 100,000 pages.

FDA REVIEW & APPROVAL (1 TO 1.5 YEARS). Data from all phases of
development (including a TIND) is scrutinized to confirm that the
manufacturer has complied with regulations and that the drug is safe and
effective for the specific use (or "indication") under study.

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

POTENTIAL LIABILITY AND INSURANCE

We contract with physicians who serve as investigators in conducting
clinical trials to test new drugs on their patients. Such testing creates a risk
of liability for personal injury to or death of the patients resulting from
adverse reactions to the drugs administered. In addition, although we do not
believe we are legally accountable for the medical care rendered by third party
investigators, it is possible that we could be subject to claims and expenses
arising from any professional malpractice of the investigators with whom we
contract. We also could be held liable for errors or omissions in connection
with the services we perform.

We believe that the risk of liability to patients in clinical trials is
mitigated by various regulatory requirements, including the role of
institutional review boards and the need to obtain each patient's informed
consent. The FDA requires each human clinical trial to be reviewed and approved
by the institutional review board at each study site. An institutional review
board is an independent committee that includes both

medical and non-medical personnel and is obligated to protect the interests of
patients enrolled in the trial. After the trial begins, the institutional review
board monitors the protocol and measures designed to protect patients, such as
the requirement to obtain informed consent.

We further attempt to reduce our risks through contractual indemnification
provisions with clients and through insurance maintained by clients,
investigators and us. However, the contractual indemnifications generally do not
protect us against certain of our own actions such as negligence, the terms and
scope of such indemnification vary from client to client and from trial to
trial, and the financial performance of these indemnities is not secured.
Therefore, we bear the risk that the indemnity may not be sufficient or that the
indemnifying party may not have the financial ability to fulfill its
indemnification obligations. We maintain worldwide professional liability
insurance. We believe that our insurance coverage is adequate. There can be no
assurance, however, that we will be able to maintain such insurance coverage on
terms acceptable to us, if at all. We could be materially adversely affected if
it were required to pay damages or bear the costs of defending any claim outside
the scope of or in excess of a contractual indemnification provision or beyond
the level of insurance coverage or in the event that an indemnifying party does
not fulfill its indemnification obligations.

PROPERTIES

We lease all but one of our facilities under operating leases.

Our principal executive offices are located in South County Business Park,
Leopardstown, Dublin, Republic of Ireland, where we own an office facility of
approximately 42,000 square feet on approximately two acres which includes an
extension completed in August 1999. We have also entered into a lease for an
additional office facility of approximately 25,000 square feet in the same
business park.

We also maintain U.S. offices in Chicago, Illinois; Philadelphia,
Pennsylvania; Nashville, Tennessee; Irvine, San Bruno and Mountain View,
California; Houston, Texas; Wilmington, Delaware; Farmingdale and New York, New
York; and Raleigh, North Carolina. Our European subsidiaries maintain offices in
Frankfurt, Germany; Paris, France; Amsterdam, The Netherlands; Southampton,
Marlow and Manchester, United Kingdom; Tel Aviv, Israel; Stockholm, Sweden;
Moscow, Russia and Riga, Latvia. Our Rest of World offices are located in Tokyo,
Japan; Sydney, Australia; Bangalore, India; Buenos Aires, Argentina;
Johannesburg, South Africa; Montreal, Canada and Singapore.

LEGAL PROCEEDINGS

From time to time, we may be involved in litigation incidental to the
conduct of our business. To date, we have not been a party to any material legal
proceedings.

MANAGEMENT

The following table and accompanying biographies set forth certain
information concerning each of our officers, directors and other key employees.
We are currently considering candidates to nominate as an additional independent
director.

NAME AGE POSITION
-------------------------- --- ----------------------------------------------
Dr. John Climax(1)(2) .... 50 Chairman of the Board
Peter Gray(1) ............ 48 Chief Executive Officer, Director
Sean Leech(1) ............ 32 Chief Financial Officer and Secretary
Dr. Ronan Lambe .......... 62 Director
Thomas Lynch(2)(3) ....... 47 Director
Edward Roberts(2)(3) ..... 68 Director
Lee Jones(2)(3) .......... 47 Director
Dr. Allan Morgan ......... 48 Chief Medical Officer, Director ICON
Clinical Research (UK) Limited
William Taaffe ........... 54 Chief Executive Officer and President,
ICON Clinical Research - U.S.
Dr. Thomas Frey .......... 51 Chief Operating Officer, Europe
Edward Caffrey ........... 49 President of ICON Laboratories
Dr. John Hubbard ......... 47 Chief Operating Officer, ICON Clinical
Research - U.S.
Josephine Coyle .......... 46 Vice President for Corporate Quality Assurance

----------
(1) Executive Officer of the Company
(2) Member of Compensation Committee
(3) Member of Audit Committee

DR. JOHN CLIMAX, one of the Company's co-founders, has served as a
director of the Company and its subsidiaries since June 1990. Dr. Climax served
as Chief Executive Officer from June 1990 to October 2002 and was appointed
Chairman of the Board in November 2002. Dr. Climax has over 18 years of
experience in the contract research industry in both Europe and the United
States. Dr. Climax received his primary degree in pharmacy in 1977 from the
University of Singapore, his masters in applied pharmacology in 1979 from the
University of Wales and his Ph.D. in pharmacology from the National University
of Ireland in 1982.

PETER GRAY has served as the Chief Executive Officer of ICON and its
subsidiaries since November 2002. He served as the Group Chief Operating Officer
of ICON and its subsidiaries from June 2001, and was Chief Financial Officer
from June 1997 to June 2001. He has been a director of the Company since June
1997. Mr. Gray has over 12 years experience in the pharmaceutical services
industry and has also worked in the engineering and food sectors. Mr. Gray
received a degree in Law from Trinity College Dublin in 1977 and became a
chartered accountant in 1980.

SEAN LEECH has served as Chief Financial Officer of ICON and its
subsidiaries since June 2001 and previously as Group Vice President of Finance
from June 1999. Mr. Leech was Group Financial Controller of Jones Group plc, a
shipping, manufacturing and fuel distribution company based in Ireland, from
1997 to 1999. Mr. Leech is an Associate member of the Chartered Institute of
Management Accountants.

DR. RONAN LAMBE, one of the Company's co-founders, served as Chairman of
the Board of the Company from June 1990 to November 2002. Dr. Lambe has over 21
years of experience in the contract research industry in Europe. Dr. Lambe
attended the National University of Ireland where he received his bachelor of
science degree in chemistry in 1959, his masters in biochemistry in 1962 and his
Ph.D. in pharmacology in 1976. Dr. Lambe continues to serve as a director of the
Company.

THOMAS LYNCH has served as an outside director of the Company since
January 1996. Since May 1993, Mr. Lynch has held several senior positions in
Elan Corporation, plc, a specialty pharmaceutical company, including Executive
Vice President, Chief Financial Officer and Deputy Chairman. He is currently
Senior Advisor to the Chairman of the Board of Elan Corporation plc. Mr. Lynch
is a director of Nanogen, Inc. and Chairman of Amarin Corporation plc. Mr. Lynch
was a partner at KPMG from May 1990 to May 1993.

EDWARD ROBERTS has served as an outside director of the Company since
February 1998. Mr. Roberts was Managing Director of the Pharmaceutical Division
of Merck KGaA from 1990 to 1998. Prior to that, he held a number of senior
management positions with Eli Lilly International in Europe and the United
States. Mr. Roberts has over 38 years of experience in the pharmaceutical
industry. He has been a partner in Global Health Care Partners since June 1998,
and also serves as Chairman of Biopartners and Chairman of the Advisory Board of
Merz & Co. GmbH.

LEE JONES has served as an outside director of the Company since June 1,
2001. Since March 2000, he has been Chairman and Chief Executive Officer of
Americas Doctor, a pharmaceutical services company. Previously, he was
Divisional Vice-President of Information Management and Technology in the
Pharmaceutical Product Division of Abbott Laboratories. He has held various
senior positions with Abbott Laboratories and the Upjohn Company.

DR. ALLAN MORGAN has served as Chief Medical Officer of the Company since
December 1990. Dr. Morgan has 23 years of experience in the pharmaceutical
industry and received his medical degree from the Welsh National School of
Medicine in 1978.

WILLIAM TAAFFE has served as President of ICON Clinical Research - U.S.
since November 1993 and now also holds the title of Chief Executive Officer of
ICON Clinical Research - U.S. Mr. Taaffe has over 27 years of experience in the
contract research and the pharmaceutical industries in Ireland, Canada and the
United States. Mr. Taaffe received his bachelor of science degree in 1970 from
the University College Dublin.

DR. THOMAS FREY has served as Chief Operating Officer for Europe since
June 2001 and has also served as Vice President of ICON Clinical Operations
Europe from January 2000 to May 2001. Dr. Frey has 15 years of experience in
pharmaceutical research and development. He started his career in 1987 with
Hoechst Pharmaceuticals. From 1995 to the end of 1999 he was Senior Director of
Clinical Development Europe at Hoechst Marion Roussel. Dr. Frey received his
medical degree in 1980 from the University of Heidelberg.

EDWARD CAFFREY has served as President of ICON Laboratories since June
2000. Mr. Caffrey has over 21 years experience in the contract research
industry. From January 1998 until joining ICON, Mr. Caffrey was Senior Vice
President of Clinical Operations at Covance North America; he also served as a
Managing Director at Covance from January 1990 to January 1998. Mr. Caffrey is a
fellow of the Institute of Biomedical Sciences in London and holds an MSc from
Dublin City University.

DR. JOHN W. HUBBARD has served as Chief Operating Officer of ICON Clinical
Research - U.S. since October 1999. Dr. Hubbard has more than 18 years of
experience in pharmaceutical research and development. From July 1997 until
joining ICON, he held the position of Senior Vice President of Clinical Research
Operations at Clinical Studies, a division of Innovative Clinical Solutions,
Ltd. Dr. Hubbard received a Ph.D. in Cardiovascular Physiology from the
University of Tennessee and a B.S. in Psychology/Biology from the University of
Santa Clara.

JOSEPHINE COYLE has served as Vice President for Corporate Quality
Assurance since April 2000. Ms. Coyle has held positions of increasing
responsibility in ICON since August 1992 and previously held the position of
director of Quality Assurance.

EMPLOYEES

As of May 31, 2003, we had 2,280 employees worldwide. There were 2,051
employees working in our clinical research segment and 229 employees in our
central laboratory segment. Globally, there were 1,369 employees in the United
States, 823 employees in Europe (of which 291 employees are in Ireland) and 88
employees in the Rest of the World.

EMPLOYEE SHARE OPTION SCHEMES

On January 17, 2003, we adopted the Share Option Plan 2003, or the 2003
Plan, pursuant to which the Compensation Committee of the Board may grant
options to employees of the Company or its subsidiaries for the purchase of
ordinary shares. Each option will be either an incentive stock option, or ISO,
described in Section 422 of the Code or an employee stock option, or NSO, not
described in Section 422 or 423 of the Code. Each grant of an option under the
2003 Plan will be evidenced by a Stock Option Agreement between the optionee and
the Company. The exercise price will be specified in each Stock Option
Agreement, however option prices for an ISO will not be less than 100% of the
fair market value of an ordinary share on the date the option is granted.

An aggregate of 1.5 million ordinary shares have been reserved under the
2003 Plan; and, in no event will the number of ordinary shares that may be
issued pursuant to options awarded under the 2003 Plan exceed 10% of the
outstanding shares, as defined in the 2003 Plan, at the time of the grant.
Further, the maximum number of ordinary shares with respect to which options may
be granted under the 2003 Plan during any calendar year to any employee shall be
100,000 ordinary shares.

No options can be granted after January 17, 2013.

SELLING SHAREHOLDERS

The following table sets forth certain information regarding the
beneficial ownership of our ordinary shares as of June 30, 2003 by the selling
shareholders in this offering.

SHARES
BENEFICIALLY
OWNED AFTER SHARES BENEFICIALLY
THIS OFFERING(1) OWNED AFTER THIS
SHARES (ASSUMING NO OFFERING(1) (ASSUMING
BENEFICIALLY EXERCISE OF THE FULL EXERCISE OF THE
OWNED UNDERWRITERS' UNDERWRITERS' OPTION
PRIOR TO NUMBER OF OPTION TO PURCHASE TO PURCHASE
THIS OFFERING(1) SHARES BEING ADDITIONAL ADSS) ADDITIONAL ADSS)
NAME AND ADDRESS OF ------------------- SOLD IN ------------------- ----------------------
SELLING SHAREHOLDER NUMBER PERCENT THIS OFFERING NUMBER PERCENT NUMBER PERCENT
------------------ -------- ------- ------------- --------- -------- --------- --------

Dr. Ronan Lambe ............. 2,408,720 20.3% 1,000,000 1,408,720 10.6% 1,183,720 8.9%
South County Business
Park, Leopardstown,
Dublin 18, Ireland

Dr. John Climax(2) .......... 2,639,120 22.3% 500,000 2,139,120 16.0% 1,914,120 14.3%
South County Business
Park, Leopardstown,
Dublin 18, Ireland

----------
(1) As used in this table, "beneficial ownership" means to the sole or shared
power to vote or direct the voting of a security, or the sole or shared
investment power with respect to a security (i.e., the power to dispose, or
direct the disposition of a security). A person is deemed as of any date to
have "beneficial ownership" of any security if that such person has the
right to acquire within 60 days after such date.

(2) Dr. Climax is selling his shares through Wineberry Limited, a company
controlled by him. The total number of shares beneficially owned by Dr.
Climax is comprised of 1,523,080 warrants and 40 ordinary shares
beneficially held by Dr. Climax and 1,115,000 ADSs held by Wineberry
Limited.

U.S. TAXATION CONSIDERATIONS

Set forth below is the opinion of Cahill Gordon & Reindel LLP, counsel to
ICON, regarding the material U.S. federal income tax consequences of the
ownership and disposition of ordinary shares or ADSs purchased in this offering
by U.S. Holders (as defined below) who hold such ordinary shares or ADSs as
capital assets. The following opinion is based upon the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), and regulations, rulings
and judicial decisions thereunder as now in effect, and such authorities may be
repealed, revoked or modified (possibly on a retroactive basis) so as to result
in U.S. federal income tax consequences different from those described in the
opinion. The following opinion is based on the accuracy of (i) each of the
factual matters set forth in this prospectus and (ii) factual representations
contained in a certificate of ICON plc delivered to Cahill Gordon & Reindel LLP
in connection with this opinion, which facts have not been independently
reviewed or verified by Cahill Gordon & Reindel LLP. Any inaccuracy in any of
these factual matters may affect the legal conclusions reached in the opinion.

As discussed in the opinion, the U.S. federal income tax consequences of
the ownership and disposition of ordinary shares or ADSs purchased in this
offering will depend to a significant extent on ICON's actual income and assets,
the manner in which ICON manages and conducts its business and the composition
of ICON's stock ownership, both now and in the future. ICON's projections,
computations and estimates of these items have not been independently reviewed
or verified by Cahill Gordon & Reindel LLP, and Cahill Gordon & Reindel LLP
expresses no opinion regarding such projections, computations and estimates.

This opinion applies only to U.S. Holders (as defined below) and does not
apply to certain categories of U.S. Holders subject to special treatment under
the Code, such as holders that are pass-through entities or investors in
pass-through entities, dealers or traders in securities or currencies, banks,
insurance companies, traders who elect to mark-to-market their securities,
persons whose "functional currency" is not the U.S. dollar, persons who own
actually or constructively 10% or more (by voting power or value) of the shares
of ICON plc, tax-exempt entities, U.S. expatriates, persons who hold ADSs as a
position in a straddle or as part of a "hedging", "integrated", "constructive
sale" or "conversion" transaction and persons subject to the U.S. federal
alternative minimum tax. Moreover, the opinion addresses only U.S. federal
income tax consequences and does not address any other U.S. federal tax
consequences or any state, local or other tax consequences. Accordingly,
prospective investors are urged to consult their own tax advisors to determine
the specific tax consequences of the ownership and disposition of ordinary
shares or ADSs to them, including any U.S. federal, state, local or other tax
consequences of (and any tax return filing or other reporting requirements
relating to) the ownership and disposition of ordinary shares or ADSs purchased
in this offering.

For purposes of the following opinion, the term "U.S. Holder" means a
beneficial owner of ordinary shares or ADSs that is, for U.S. federal income tax
purposes, a U.S. citizen or resident, a corporation created or organized in or
under the laws of the United States or any political subdivision thereof, an
estate the income of which is includable in gross income for U.S. income tax
purposes regardless of its source, or a trust if:

o a U.S. court is able to exercise primary supervision over the
administration of the trust and one or more U.S. fiduciaries have
the authority to control all substantial decisions of the trust; or

o the trust has a valid election in effect under applicable U.S.
Treasury Regulations to be treated as a U.S. person.

For U.S. federal income tax purposes, U.S. Holders of ADSs are treated as
the owners of the underlying ordinary shares.

Subject to the foregoing, it is the opinion of Cahill Gordon Reindel LLP
that:

DIVIDENDS

Subject to the passive foreign investment company ("PFIC") rules discussed
below, the gross amount of a distribution paid on an ordinary share or on an ADS
(including the amount of any withholding tax) will be a dividend for U.S.
federal income tax purposes to the extent paid out of ICON plc's current or
accumulated earnings and profits (as determined for U.S. federal income tax
purposes). To the extent that a distribution exceeds the portion of ICON plc's
earnings and profits attributable to such distribution, it will be treated as a
nontaxable return of capital to the extent of a U.S. Holder's basis in such
share or ADS and thereafter as a capital gain. Dividends paid by ICON plc, if
any, generally will not qualify for the dividends-received deduction otherwise
generally available to corporate shareholders.

The amount of any dividend paid in euros or other non-U.S. currency (a
"foreign currency") will equal the U.S. dollar value of the foreign currency
received calculated by reference to the exchange rate in effect on the date the
dividend is distributed regardless of whether the foreign currency is converted
into U.S. dollars. If the foreign currency received as a dividend is not
converted into U.S. dollars on the date of receipt, a U.S. Holder will have a
basis in the foreign currency equal to its U.S. dollar value on the date of
receipt. Any gain or loss realized on a subsequent conversion or other
disposition of the foreign currency will be treated as ordinary income or loss.

Because more than 50% of the total combined voting power of all classes of
ICON plc's shares entitled to vote or the total value of ICON plc's shares may
be owned by U.S. persons, a portion of any dividends received by a U.S. Holder
of ordinary shares or ADSs may be treated as U.S. source dividend income for
purposes of calculating U.S. foreign tax credits. However, a U.S. Holder
entitled to benefits under the Ireland-U.S. Income Tax Treaty may elect to treat
any of ICON plc's dividends as foreign source income for foreign tax credit
limitation purposes if the dividend income is separated from other income items
for purposes of calculating the U.S. Holder's foreign tax credit. U.S. Holders
should consult their own tax advisors about the desirability of making, and the
method of making, such an election and the application of the foreign tax credit
provisions to them.

GAIN ON DISPOSITION

Subject to the PFIC rules discussed below, upon a sale, exchange or other
disposition of the ordinary shares or ADSs, a U.S. Holder generally will
recognize a gain or a loss, if any, equal to the difference between the amount
realized upon the sale, exchange or disposition and the U.S. Holder's tax basis
in the ordinary shares or ADSs. Generally, a U.S. Holder's tax basis in the
ordinary shares or ADSs will be such holder's cost. Such gain or loss will be
capital gain or loss. Such gain or loss will generally be treated as U.S. source
gain or loss. The exchange of ADSs for ordinary shares will not be a taxable
event for U.S. federal income tax purposes.

PASSIVE FOREIGN INVESTMENT COMPANY ("PFIC") STATUS

A foreign corporation generally will be a PFIC for United States federal
income tax purposes if in any tax year either 75% or more of its gross income is
"passive income" (generally including (without limitation) dividends, interest,
royalties, rents and annuities) or the average percentage of its assets that
produce passive income or are held for the production of passive income is at
least 50%. If the representations made by ICON's management regarding the
current and former nature and amount of its income and assets and the manner in
which it has managed and conducted its business are accurate (without regard to
any knowledge or belief qualifiers expressed by management), ICON plc was not a
PFIC for its taxable year ended May 31, 2002. In addition, while there can be no
assurance because the determination depends on future events, based on ICON
management's current projections of ICON's future income and assets, and the
manner in which ICON currently intends to manage and conduct its business in the
future, ICON plc will not be a PFIC in its current taxable year ending May 31,
2004 or in the future. If ICON plc were treated as a PFIC for any taxable year
in which a U.S. Holder held ordinary shares or ADSs, certain adverse
consequences could apply, including a material increase in the amount of tax
that the U.S. Holder would owe, an imposition of tax earlier than would
otherwise be imposed and additional tax form filing requirements. A U.S. Holder
owning shares in a PFIC generally may be able to avoid or mitigate these

adverse tax consequences by making a timely "qualified electing fund" or
"mark-to-market" election. U.S. Holders should consult with their tax advisors
as to the effect of these rules.

PERSONAL HOLDING COMPANY ("PHC") STATUS

A corporation that is neither a PFIC, discussed above, nor a "foreign
personal holding company," discussed below, generally is a PHC if (i) more than
50% of its stock (measured by value) is owned, directly or indirectly (applying
certain attribution rules), by five or fewer individuals or entities treated as
individuals (without regard to their citizenship or residence) (the "PHC
stockholder test") and (ii) it receives 60% or more of its gross income, as
specifically adjusted, from certain "passive" sources, such as interest,
royalties and dividends. For purposes of this gross income test, a foreign
corporation generally only includes gross income derived from U.S. sources or
gross income that is effectively connected with a U.S. trade or business. A
corporation that is a PHC is subject to U.S. federal income tax on its
"undistributed personal holding company income" - which in the case of a foreign
corporation, essentially is its after-tax, after-dividends ordinary income that
is U.S.-sourced or effectively connected with a U.S. trade or business.

Based on publicly available information and representations made by ICON's
management regarding ICON plc's stock ownership, it appears unlikely that ICON
plc or any of its subsidiaries is currently a PHC because it appears unlikely
that five or fewer individuals (or entities treated as individuals) have owned
in the aggregate (directly or indirectly) more than 47% of the ICON plc shares
at any time during the current taxable year (and because the ownership is
expected to become less concentrated as a result of this offering). There can be
no assurance that this is correct, however, because it is impossible to
determine the exact ownership of a public company (particularly in this case
because ICON plc is a foreign private issuer and not subject to the requirements
of Section 16 of the Exchange Act) and the precise extent to which the ownership
attribution rules apply to public company stockholders. Moreover, even if ICON
plc and each of its subsidiaries are not currently PHCs, there can be no
assurance that neither ICON plc nor one or more of its subsidiaries will become
a PHC in the future.

FOREIGN PERSONAL HOLDING COMPANY ("FPHC") STATUS

A foreign corporation generally will be classified as an FPHC if (i) five
or fewer individuals who are U.S. citizens or residents directly or indirectly
(applying certain attribution rules) own more than 50% of the corporation's
stock (measured either by voting power or value) (the "FPHC stockholder test")
and (ii) the corporation receives at least 60% of its gross income (regardless
of source), as specifically adjusted, from certain passive sources (the "income
test"). After a corporation becomes an FPHC, the income test percentage for each
subsequent taxable year is reduced to 50%.

In general, if ICON plc or any of its foreign subsidiaries were classified
as an FPHC, the "undistributed foreign personal holding company income" of such
entity - essentially its worldwide after-tax, after-dividends income - would be
imputed to all of the U.S. shareholders of ICON plc who were deemed to hold ICON
plc's stock on the last day of its taxable year on which the FPHC stockholder
test was met, regardless of the size of their respective stockholdings. Such
income would be taxable to such persons as a dividend, even if no cash dividend
were actually paid.

Based on publicly available information and representations made by ICON's
management regarding ICON plc's stock ownership, it appears unlikely that ICON
plc or any of its foreign subsidiaries is currently an FPHC because it appears
unlikely that ICON plc currently violates the FPHC stockholder test. There can
be no assurance that this is correct, however, because it is impossible to
determine the exact ownership of a public company (particularly in this case
because ICON plc is a foreign private issuer and not subject to the requirements
of Section 16 of the Exchange Act) and the precise extent to which the ownership
attribution rules apply to public company stockholders. Moreover, even if ICON
plc and each of its foreign subsidiaries are not currently FPHCs, there can be
no assurance that neither ICON plc nor one or more of its subsidiaries will
become an FPHC in the future.

BACKUP WITHHOLDING TAX AND INFORMATION REPORTING

A U.S. Holder of ordinary shares or ADSs may be subject to information
reporting requirements and backup withholding tax for amounts paid with respect
to dividends on the ordinary shares or ADSs, or the proceeds of sale of the
ordinary shares or ADSs, unless the holder:

o is a corporation or comes within certain other exempt categories,
and when required, demonstrates this fact; or

o provides a correct taxpayer identification number, or T.I.N.,
certifies that he, she or it is not subject to backup withholding
and otherwise complies with applicable requirements of the backup
withholding rules.

A U.S. Holder of ordinary shares or ADSs who does not provide a correct
T.I.N. may be subject to penalties imposed by the U.S. Internal Revenue Service.
Any amount withheld under backup withholding rules generally will be creditable
against the U.S. Holder's U.S. federal income tax liability.

IRISH TAXATION CONSIDERATIONS

Set forth below is the opinion of KPMG, Tax Advisors to the Company,
regarding the material aspects of Irish tax law and practice regarding the
ownership and disposition of ordinary shares and ADSs. This opinion deals with
only ordinary shares and ADSs held as capital assets and does not address
special classes of shareholders such as dealers in securities. This opinion also
does not address any potential application of Section 811 Taxes Consolidation
Act of 1997, a general anti-avoidance section, enabling Irish Revenue
Commissions to recharacterize transactions undertaken for tax avoidance motives.
This opinion is not exhaustive and all shareholders are advised to contact their
own tax advisers with respect to the taxation consequences of their ownership or
disposition of ordinary shares or ADSs. This opinion is based on the tax laws of
the Republic of Ireland, the Double Taxation Convention between the Republic of
Ireland and the United States of America and current practice of the Irish
Revenue Commissioners, changes to any of which after the date hereof could apply
on a retroactive basis and affect the tax consequences described herein.

Subject to the foregoing, it is the opinion of KPMG that:

DIVIDENDS

Unless exempted, all dividends paid by ICON, other than dividends paid
entirely out of exempt patent income, subject to conditions, will be subject to
Irish withholding tax at the standard rate of income tax in force at the time
the dividend is paid, currently 20%. An individual shareholder who is neither a
tax resident nor ordinarily resident in Ireland, but is resident in a country
with which Ireland has a double tax treaty, which includes the United States, or
in a member state of the European Union, other than Ireland (together a
"Relevant Territory"), will be exempt from withholding tax provided he or she
makes the requisite declaration. No dividend withholding tax will apply on the
payment of a dividend from an Irish resident company to its Irish resident 51%
parent company. Where the Irish company receiving the dividend does not hold at
least 51% of the shares in the paying company, the dividend will be exempt if
the Irish corporate shareholder makes the requisite declaration.

Non-Irish resident corporate shareholders that:

o are ultimately controlled by residents of a Relevant Territory;

o are resident in a Relevant Territory and are not controlled by Irish
residents;

o have the principal class of their shares, or shares of a 75% parent,
substantially and regularly traded on one or more recognized stock
exchanges in a Relevant Territory or Territories; or

o are wholly owned by two or more companies, each of whose principal
class of shares is substantially and regularly traded on one or more
recognized stock exchanges in a Relevant Territory or Territories;

will be exempt from withholding tax on the production of the appropriate
certificates and declarations.

U.S. Holders (as defined in the opinion included elsewhere in "U.S.
Taxation Considerations" provided by Cahill Gordon & Reindel LLP) of ordinary
shares (as opposed to ADSs; see below) should note, however, that these
documentation requirements may be burdensome. As described below, these
documentation requirements do not apply in the case of ADSs.

Special arrangements are available in the case of shares held in Irish
companies through American depositary banks using ADSs. The depositary bank will
be allowed to receive and pass on a dividend from the Irish company without any
deduction for withholding tax in the following circumstances:

o the depositary has been authorized by the Irish Revenue
Commissioners as a qualifying intermediary and such authorization
has not expired or been revoked; and either

o the depositary bank's ADS register shows that the beneficial owner
has a U.S. address on the register; or

o if there is a further intermediary between the depositary bank and
the beneficial owner, where the depositary bank receives
confirmation from the intermediary that the beneficial owner's
address in the intermediary's records is in the U.S.

INCOME TAX

Under certain circumstances, non-Irish resident shareholders will be
subject to Irish income tax on dividend income. This liability is limited to tax
at the standard rate and therefore, where withholding tax has been deducted,
this will satisfy the tax liability.

However, a U.S. Holder will not have an Irish income tax liability on
dividends from the company if the U.S. Holder is neither resident nor ordinarily
resident in the Republic of Ireland and the U.S. Holder is:

o an individual resident in the U.S. (or several other countries);

o a corporation that is ultimately controlled by persons resident in
the U.S. (or several other countries);

o A corporation whose principal class of shares (or its 75% or greater
parent's principal class of shares) is substantially and regularly
traded on a recognized stock exchange in an EU country or a country
with which Ireland has concluded a double taxation treaty;

o a corporation resident in another EU member state or in a country
with which Ireland has concluded a double taxation treaty, which is
not controlled directly or indirectly by Irish residents; or

o a corporation that is wholly owned by two or more corporations each
of whose principal class of shares is substantially and regularly
traded on a recognized stock exchange in an EU country or a country
with which Ireland has concluded a double taxation treaty.

U.S. Holders that do not fulfill the documentation requirements or
otherwise do not qualify for the withholding tax exemption may be able to claim
treaty benefits under the treaty. U.S. Holders that are

entitled to benefits under the treaty will be able to claim a partial refund of
the 20% withholding tax from the Irish Revenue Commissioners.

GAIN ON DISPOSITION

A person who is not resident or ordinarily resident in Ireland, has not
been an Irish resident within the past five years and who does not carry on a
trade in Ireland through a branch or agency will not be subject to Irish capital
gains tax on the disposal of ordinary shares or ADSs, so long as the ordinary
shares or ADSs, as the case may be, are either quoted on a stock exchange or do
not derive the greater part of their value from Irish land or mineral rights.
The Minister of Finance announced in his budget speech on December 4, 2002, that
the Finance Act, 2003, when enacted, will, with retrospective effect to December
4, 2002, subject a person who disposes of an interest in a company while
temporarily non-resident in the Republic of Ireland, to Irish capital gains tax.
This treatment will apply to individuals who:

o cease to be Irish resident after December 4, 2002;

o own the shares when they cease to be resident;

o resume their Irish residence within five years;

o dispose of an interest in a company during this temporary
non-residence; and

o the interest disposed of represents 5% or greater of the share
capital of the company or is worth at least (euro)500,000.

In these circumstances the person will be deemed, for Irish capital gains
tax purposes, to have sold and immediately reacquired the interest in the
company on the date of his or her departure and will be subject to tax at 20% of
the taxable gain.

STAMP DUTY-ORDINARY SHARES

Irish stamp duty, which is a tax on certain documents, including CREST
operator instructions, is payable on all transfers of the ordinary shares (other
than between spouses) whenever a document of transfer is executed. Where the
transfer is attributable to a sale, stamp duty will be charged at a rate of 1%,
rounded to the nearest Euro. The stamp duty is calculated on the amount or value
of the consideration (i.e. purchase price) or, if the transfer is by way of a
gift (subject to certain exceptions) or for consideration less than the market
value, on the market value of the shares. Where the consideration for the sale
is expressed in a currency other than Euro, the duty will be charged on the Euro
equivalent calculated at the rate of exchange prevailing on the date of the
transfer.

Transfers of ordinary shares between associated companies (broadly,
compares with a 90% group relationship, and subject to the satisfaction of
certain conditions) are exempt from stamp duty in the Republic of Ireland. In
the case of transfers of ordinary shares where no beneficial interest passes
(e.g. a transfer of shares from a beneficial owner to his nominee), no stamp
duty arises where the transfer contains the appropriate certificate and, in the
absence of such certificate, a flat rate of (euro)12.70 (the nominal rate) will
apply.

STAMP DUTY-ADSS

A transfer by a shareholder to the depositary or custodian of ordinary
shares for deposit under the deposit agreement in return for ADSs and a transfer
of ordinary shares from the depositary or the custodian upon surrender of ADSs
for the purposes of the withdrawal of the underlying ordinary shares in
accordance with the terms of the deposit agreement will be stampable at the ad
valorem rate if the transfer relates to a sale or contemplated sale or any other
change in the beneficial ownership of such ordinary shares. However, it is not
certain whether the mere withdrawal of ordinary shares in exchange for ADSs or
ADSs for

ordinary shares would be deemed to be a transfer of or change in beneficial
ownership which would be subject to stamp duty at the ad valorem rate. Where the
transfer merely relates to a transfer where no change in the beneficial
ownership in the underlying ordinary shares is effected or contemplated, no
stamp duty arises where the transfer contains the appropriate certificate and,
in the absence of such certificate, the nominal rate stamp duty of (euro)12.70
applies.

Transfers of ADSs are exempt from Irish stamp duty as long as the ADSs are
dealt in on the Nasdaq National Market or any recognized stock exchange in the
United States or Canada.

The person accountable for payment of stamp duty is the transferee or, in
the case of a transfer by way of gift, or for a consideration less than market
value, all parties to the transfer. A late or inadequate payment of stamp duty
will result in a liability to pay interest, penalties and fines.

CAPITAL ACQUISITIONS TAX

A gift or inheritance of ordinary shares or ADSs will be within the charge
to Irish capital acquisitions tax, notwithstanding that the person from whom or
by whom the gift or inheritance is received is domiciled or resident outside
Ireland. Capital acquisitions tax is charged at a rate of 20% on the value of
the transfer above a tax-free threshold. This tax-free threshold is determined
by the relationship between the donor and the successor or donee. It is also
affected by the amount of the current benefit and previous benefits taken since
December 5, 1991 from persons within the same capital acquisitions tax
relationship category insofar as the benefits were within the charge to Irish
capital acquisitions tax. Gifts and inheritances between spouses are not subject
to capital acquisitions tax.

The Estate Tax Convention between Ireland and the United States generally
provides for Irish capital acquisitions tax paid on inheritances in Ireland to
be credited against U.S. federal estate tax payable in the United States and for
tax paid in the United States to be credited against tax payable in Ireland,
based on priority rules set forth in the Estate Tax Convention. The Estate Tax
Convention does not apply to Irish capital acquisitions tax paid on gifts.

UNDERWRITING

We, the selling shareholders and the underwriters for this offering named
below have entered into an underwriting agreement with respect to the ADSs being
offered. Subject to certain conditions, each underwriter has severally agreed to
purchase the number of ADSs indicated in the following table.

Underwriters Number of ADSs
------------ --------------
Goldman, Sachs & Co. .................................
William Blair & Company, L.L.C. ......................
Bear, Stearns & Co. Inc. .............................
J&E Davy (trading as Davy Stockbrokers) ..............
---------
Total ............................................ 3,000,000
=========

The underwriters are committed to take and pay for all of the ADSs being
offered, if any are taken, other than the ADSs covered by the option described
below unless and until the option is exercised.

If the underwriters sell more ADSs than the total number set forth in the
table above, the underwriters have an option to buy up to an additional 450,000
ADSs from the selling shareholders to cover such sales. They may exercise that
option for 30 days. If any ADSs are purchased pursuant to this option, the
underwriters will severally purchase ADSs in approximately the same proportion
as set forth in the table above.

The following table shows the per ADS and total underwriting discounts and
commissions to be paid to the underwriters by us and the selling shareholders.
Such amounts are shown assuming both no exercise and full exercise of the
underwriters' option to purchase an additional 450,000 ADSs.

Paid by the Company and the Selling Shareholders No Exercise Full Exercise
------------------------------------------------ ----------- -------------

Per ADS .................................................... $ $
Total ...................................................... $ $

ADSs sold by the underwriters to the public will initially be offered at
the initial price to public set forth on the cover of this prospectus. Any ADSs
sold by the underwriters to securities dealers may be sold at a discount of $
per ADS from the initial price to public. Any such securities dealers may resell
any ADSs purchased from the underwriters to certain other brokers or dealers at
a discount of up to $ per ADS from the initial price to public. If all the ADSs
are not sold at the initial price to public, the underwriters may change this
offering price and the other selling terms.

J&E Davy (trading as Davy Stockbrokers) has advised us that it will not
offer or sell the ADSs in the United States or to U.S. persons.

We, and our officers and directors, have agreed with the underwriters,
subject to certain exceptions, not to dispose of or hedge any of our ordinary
shares, ADSs or securities convertible into or exchangeable for ordinary shares
or ADSs during the period from the date of this prospectus continuing through
the date 90 days after the date of this prospectus, except with the prior
written consent of Goldman, Sachs & Co. The selling shareholders have agreed
with the underwriters, subject to certain exceptions, not to dispose of or hedge
any of their ordinary shares, ADSs or securities convertible into or
exchangeable for ordinary shares or ADSs during the period from the date of this
prospectus continuing through a date that is 180 days from the date of this
prospectus, except with the prior consent of Goldman, Sachs & Co. This agreement
does not apply to any existing employee benefit plans.

In connection with this offering, the underwriters may purchase and sell
ADSs in the open market. These transactions may include short sales, stabilizing
transactions and purchases to cover positions created by short sales. Short
sales involve the sale by the underwriters of a greater number of ADSs than they
are required to purchase in this offering. "Covered" short sales are sales made
in an amount not

greater than the underwriters' option to purchase additional ADSs from the
selling shareholders in this offering. The underwriters may close out any
covered short position by either exercising their option to purchase additional
ADSs or purchasing ADSs in the open market. In determining the source of ADSs to
close out the covered short position, the underwriters will consider, among
other things, the price of ADSs available for purchase in the open market as
compared to the price at which they may purchase ADSs through their option to
purchase additional ADSs from the selling shareholders. "Naked" short sales are
any sales in excess of such option. The underwriters must close out any naked
short position by purchasing ADSs in the open market. A naked short position is
more likely to be created if the underwriters are concerned that there may be
downward pressure on the price of the ADSs in the open market after pricing that
could adversely affect investors who purchase in this offering. Stabilizing
transactions consist of various bids for or purchases of ADSs made by the
underwriters in the open market prior to the completion of the offering.

The underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the lead manager has repurchased ADSs sold by or
for the account of such underwriter in stabilizing or short covering
transactions.

Purchases to cover a short position and stabilizing transactions may have
the effect of preventing or retarding a decline in the market price of ADSs, and
together with the imposition of the penalty bid, may stabilize, maintain or
otherwise affect the market price of the ADSs. As a result, the price of the
ADSs may be higher than the price that otherwise might exist in the open market.
If these activities are commenced, they may be discontinued at any time. These
transactions may be effected on the Nasdaq NMS, in the over-the-counter market
or otherwise.

The underwriters have represented and agreed that:

o they will not offer or sell any ordinary shares or ADSs in Ireland
except to persons in the conduct of their trades, professions or
occupations or in other circumstances which are exempted from
application of the European Communities (Transferable Securities and
Stock Exchange) Regulations, 1992; and

o they have complied with and shall comply with all applicable
provisions of the Investment Intermediaries Act, 1995 (as amended)
with respect to anything done by them in relation to the ordinary
shares or ADSs in, from or otherwise involving Ireland.

Each underwriter has represented, warranted and agreed that: (i) it has
not offered or sold and, prior to the expiry of a period of six months from the
Closing Date, will not offer or sell any ADSs to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (ii) it has only communicated
or caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment activity
(within the meaning of section 21 of the Financial Services and Markets Act
2000, or FSMA) received by it in connection with the issue or sale of any ADSs
in circumstances in which section 21(1) of the FSMA does not apply to the
issuer; and (iii) it has complied and will comply with all applicable provisions
of the FSMA with respect to anything done by it in relation to the ADSs in, from
or otherwise involving the United Kingdom.

The ADSs may not be offered, sold, transferred or delivered in or from The
Netherlands, as part of their initial distribution or as part of any
re-offering, and neither this prospectus nor any other document in respect of
the offering may be distributed or circulated in The Netherlands, other than to
individuals or legal entities which include, but are not limited to, banks,
brokers, dealers, institutional investors and

undertakings with a treasury department, who or which trade or invest in
securities in the conduct of a business or profession.

Each underwriter offering ADSs has acknowledged and agreed that (i) it has
not offered or sold and will not offer or sell in Hong Kong, by means of any
document, any ADSs other than to persons whose ordinary business it is to buy or
sell shares or debentures, whether as principal or agent, or in circumstances
which do not constitute an offer to the public within the meaning of the
Companies Ordinance (Cap. 32) of Hong Kong and (ii) it has not issued or had in
its possession for the purpose of issue and will not issue or have in its
possession for the purpose of the issue any invitation or advertisement relating
to the ADSs in Hong Kong (except if permitted to do so by the securities laws of
Hong Kong) other than with respect to ADSs intended to be disposed of to persons
outside Hong Kong or to be disposed of only to persons whose business involves
the acquisition, disposal or holding of securities, whether as principal or as
agent.

No prospectus has been registered in Singapore in relation to the ADSs.
Accordingly, the ADSs may not be offered or sold, nor may any document or other
material in connection with the ADSs be distributed, either directly or
indirectly, (i) to persons in Singapore other than under circumstances in which
such offer or sale does not constitute an offer or sale of the ADSs to the
public in Singapore or (ii) to the public or any member of the public in
Singapore other than pursuant to, and in accordance with the conditions of, an
exemption invoked under Division 5A of Part IV of the Companies Act, Chapter 50
of Singapore and to persons to whom the ADSs may be offered or sold under such
exemption.

Each underwriter has acknowledged and agreed that the ADSs have not been
registered under the Securities and Exchange Law of Japan and are not being
offered or sold and may not be offered or sold, directly or indirectly, in Japan
or to or for the account of any resident of Japan, except (i) pursuant to an
exemption from the registration requirements of the Securities and Exchange Law
of Japan and (ii) in compliance with any other applicable requirements of
Japanese law. As part of the offering, the underwriters may offer ADSs in Japan
to a list of 49 offerees in accordance with the above provisions.

No action has been or will be taken in any jurisdiction other than the
United States or the Republic of Ireland that would permit a public offering of
the ADSs or ordinary shares or the possession, circulation or distribution of
this prospectus in any jurisdiction where action for that purpose is required.
Accordingly, the ADSs and ordinary shares may not be offered or sold, directly
or indirectly, and neither this prospectus nor any other offering material or
advertisements in connection with the ADSs or ordinary shares may be distributed
or published in or from any country or jurisdiction except under circumstances
that will result in compliance with any applicable rules and regulations of any
such country or jurisdiction.

A prospectus in electronic format will be made available on the website
maintained by the lead manager of this offering and may also be made available
on websites maintained by other underwriters. The underwriters may agree to
allocate a number of ADSs to underwriters for sale to their online brokerage
account holders. Internet distributions will be allocated by the lead manager to
underwriters that may make Internet distributions on the same basis as other
allocations.

We estimate that our share of the total expenses of this offering,
excluding underwriting discounts and commissions, will be approximately $1.2
million.

We and the selling shareholders have agreed to indemnify the several
underwriters against certain liabilities, including liabilities under the
Securities Act of 1933.

Certain of the underwriters and their affiliates have provided from time
to time, and expect to provide in the future, investment and commercial banking
and financial advisory services to us and our affiliates in the ordinary course
of business, for which they have received and may continue to receive customary
fees and commissions.

A copy of the underwriting agreement will be available for inspection at
the offices of A&L Goodbody, IFSC, North Wall Quay, Dublin 1 during normal
business hours on any weekday (Saturdays, Sundays, public holidays exempted) for
a period of 14 days following the date of issue of this prospectus.

The addresses of the underwriters are as follows: Goldman, Sachs & Co., 85
Broad Street, New York, New York 10004; William Blair & Company, L.L.C., 222
West Adams Street, Chicago, Illinois 60606; Bear, Stearns & Co. Inc., 383
Madison Avenue, New York, New York 10179 and J&E Davy (trading as Davy
Stockbrokers), Davy House, 49 Dawson Street, Dublin 2, Ireland.

EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

Irish exchange control regulations ceased to apply from and after December
31, 1992. Except as indicated below, there are no restrictions on non-residents
of Ireland dealing in domestic securities, which includes shares or depository
receipts of Irish companies. Except as indicated below, dividends and redemption
proceeds also continue to be freely transferable to non-resident holders of such
securities.

The Financial Transfers Act, 1992 gives power to the Minister for Finance
of Ireland to make provision for the restriction of financial transfers between
Ireland and other countries and persons. Financial transfers are broadly
defined, and include all transfers which would be movements of capital or
payments within the meaning of the treaties governing the European Communities.
The acquisition or disposal of ADSs or ADRs representing shares issued by an
Irish incorporated company and associated payments may fall within this
definition. In addition, dividends or payments on redemption or purchase of
shares and payments on a liquidation of an Irish incorporated company would fall
within this definition. At present, the Financial Transfers Act, 1992 prohibits
financial transfers involving Iraq, the Federal Republic of Yugoslavia, Serbia,
Zimbabwe, the Taliban of Afghanistan, Osama bin Laden and Al-Qaeda, and
countries that harbour certain terrorist groups, without the prior permission of
the Central Bank of Ireland.

Any transfer of, or payment in respect of an ADS involving the government
of any country or any person which is currently the subject of United Nations
sanctions, any person or body controlled by any of the foregoing, or by any
person acting on behalf of the foregoing, may be subject to restrictions
pursuant to such sanctions as implemented into Irish law. The following
countries and persons are currently the subject of such sanctions: Angola, the
Federal Republic of Yugoslavia, Serbia, Iraq, Liberia, Burma/Myanmar, Zimbabwe,
the Taliban of Afghanistan, Osama bin Laden and Al-Qaeda. There are no
restrictions under the Company's Articles of Association, or under Irish Law,
that limit the right of non-residents or foreign owners to hold or vote the
Company's ordinary shares or ADSs.

VALIDITY OF THE ADSS AND ORDINARY SHARES

The validity of the ADSs offered hereby and certain matters of U.S. and
New York law with respect to this offering will be passed upon for us by Cahill
Gordon & Reindel LLP, 80 Pine Street, New York, New York. The validity of the
ordinary shares will be passed upon by A&L Goodbody, solicitors, IFSC, Dublin 1,
Ireland. The validity of the ADSs offered hereby will be passed upon for the
underwriters by Sullivan & Cromwell LLP, counsel for the underwriters. Cahill
Gordon & Reindel LLP and Sullivan & Cromwell LLP may rely upon A&L Goodbody with
respect to certain matters governed by Irish law.

EXPERTS

The consolidated financial statements of ICON plc as of May 31, 2002 and
2001 and for each of the years in the three-year period ended May 31, 2002, have
been incorporated by reference herein in reliance upon the report of KPMG,
independent chartered accountants, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.

KPMG and A&L Goodbody have given and have not withdrawn their written
consent to the references in this prospectus to their names in the form and
context in which they appear.

EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses in connection with
the issuance and distribution of the shares, which will be borne by the Company
and the selling shareholders proportionately to the ADSs being offered unless
otherwise indicated:

Securities and Exchange Commission registration fee ............. $ 9,055
National Association of Securities Dealers, Inc. filing fee ..... $ 30,500
Nasdaq National Market fees ..................................... $ 17,500
Legal fees and expenses ......................................... $ 475,000
Accounting fees and expenses .................................... $ 175,000
Printing expenses ............................................... $ 400,000
Transfer and Registrar fee ...................................... $ 100,000
Miscellaneous ................................................... $ 350,000
Subtotal ............................................... $1,557,055
Capital duty (Company only) ............................ $ 431,550
Total .................................................. $1,988,605

ENFORCEABILITY OF CIVIL LIABILITIES PROVISIONS OF FEDERAL
SECURITIES LAWS AGAINST FOREIGN PERSONS; SHAREHOLDER RIGHTS UNDER IRISH LAW

Some of the directors and officers of ICON, as well as the selling
shareholders and some of the experts named in this prospectus, reside outside of
the United States and all or a substantial portion of their assets and the
assets of ICON are located outside of the United States. As a result, it may be
difficult for investors to serve process in the United States upon such persons,
other than ICON, or to enforce against them judgments of U.S. courts or to
enforce in U.S. courts judgments obtained against such persons in courts in
jurisdictions outside the United States in each case based upon civil
liabilities under the U.S. federal securities laws. In addition, it may be
difficult for investors to enforce in original actions brought in courts in
jurisdictions outside the United States, liabilities predicated upon the U.S.
Securities laws. A&L Goodbody Solicitors, ICON's Irish counsel, advises that
there may be an issue as to the enforceability against those persons in Ireland,
whether in original actions or in actions for enforcement of judgments of U.S.
courts, of liabilities based solely upon the U.S. federal securities laws. To
enforce a judgment in Ireland given by a United States court or State court in
the State of New York or County of New York, it would be necessary to obtain an
order of the Irish Court. Such order would be granted upon proper proof of such
judgment and that such United States or State court had jurisdiction, and the
merits of the case would not be considered unless it were contended that the
judgment of the United States or State court had been obtained by fraud or was
contrary to natural justice as understood in Irish law or was repugnant to
public policy of Irish law.

Except for decisions to be made by the shareholders, all matters relating
to the management and control of an Irish company are generally delegated to its
board of directors pursuant to the company's constitutional documents. ICON's
constitutional documents contain standard provisions delegating control to the
Board of Directors. In certain situations, specific authority is delegated to
officers, auditors and examiners.

Directors may be held liable for breaches of their fiduciary duties to the
Company, and may be required to account to the Company for benefits which they
have received as a result of their positions as directors. Directors may also be
liable to the Company for negligence. Officers may also be liable for breach of
duty and negligence, and may be held liable to the Company under various
provisions of Irish company law.

ICON has appointed CT Corporation System, 111 Eighth Avenue, New York, New
York 10011, as its agent to receive service of process in actions against it
arising out of the U.S. federal securities laws or out of violations of those
laws in any federal or state court in New York, New York, relating to this
offering.

SHAREHOLDER RIGHTS UNDER IRISH LAW

Under Irish law, shareholders are entitled to inspect the register of
shareholders, registers relating to interests of directors and certain other
registers relating to debentures granted by the company. Shareholders are also
entitled to receive a copy of the Company's annual reports, and will be provided
with the Company's constitutional documents on request. Shareholders are
entitled to review minutes of shareholder meetings, but are not entitled to
review board or other corporate minutes.

Under Irish law and the Company's by-laws, shareholders are permitted to
approve corporate matters by written consent. As is normal for Irish public
companies, the Company does not have such enabling provisions in its
constitutional documents.

Under Irish law, shareholders holding 10% or more of the Company's
outstanding voting shares may call a shareholder meeting.

Irish law does not contain any absolute prohibitions on the issuance of
preferred stock or the adoption of poison pill devices or other measures that
could prevent or delay a takeover. However, the ability of Irish companies to
take any such defensive measures are constrained by the fiduciary duty of
directors to act in the best interests of the company and its shareholders.
Further Irish law provisions prohibit a company from taking any frustrating
action where an offer has been made for the shares of the company.

In general, Irish law recognizes the company as the proper plaintiff in
cases involving the company and precludes shareholders from instituting actions
on behalf of the company. In certain circumstances, Irish law permits
shareholders to sue the company where it is alleged that the affairs of the
company are being conducted in a manner oppressive to its shareholders.

All matters relating to the management and control of an Irish company are
generally delegated to its board of directors under the company's constitutional
documents, except for those actions which require a vote of the shareholders.
ICON's constitutional documents contain standard provisions delegating
management and control to its board of directors.

ADDITIONAL INFORMATION

We file annual and special reports and other information with the
Securities and Exchange Commission (the "Commission"). You may read and copy any
of our reports, statements or other information at the Commission's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the Commission at 1-800-SEC-0330 for further information on the Public Reference
Room. Our Commission filings are also available to the public from commercial
document retrieval services and over the internet on the Commission's website at
http://www.sec.gov.

In addition, we furnish to registered holders of ordinary shares and to
The Bank of New York, as Depositary under our deposit agreement, for mailing to
the record holders of ICON ADRs, all notices of stockholders' meetings and other
reports and communications we generally make available to stockholders. The
Depositary arranges for the mailing of such notices, reports and communications
to holders of record of ADSs. As a foreign private issuer, we are exempt from
the rules under the Exchange Act requiring the furnishing and content of proxy
statements.

We have filed with the Commission a registration statement on Form F-3
under the Securities Act of 1933, as amended, with respect to the ADSs offered
by this prospectus. This prospectus, which is a part of the registration
statement, does not contain all of the information set forth in the registration
statement. For further information about us and our ADSs, you should refer to
the registration statement.

INCORPORATION OF DOCUMENTS BY REFERENCE

We "incorporate by reference" information we file with the Commission,
which means that we can disclose important information to you by referring you
to those documents. This information is an important part of this prospectus.
Information that we file with the Commission in the future will automatically
update and supersede information in this prospectus. Those future filings
include annual reports on Form 20-F, reports on Form 6-K that we designate to be
incorporated by reference into this prospectus and other reports we may file
with the Commission.

This prospectus incorporates by reference the following documents that we
previously filed with the Commission and any future filings made with the
Commission under Sections 13(a), 13(c) or 15(d) of the Exchange Act until we
sell all the ADSs offered by this prospectus. These documents contain important
information about our finances and us.

o Our Annual Report on Form 20-F for the fiscal year ended May 31,
2002.

o Our Annual Report on Form 20-F/A for the fiscal year ended May 31,
2002.

o Our current report on Form 6-K filed with the Commission on August
1, 2003.

o Our current report on Form 6-K filed with the Commission on July 21,
2003.

o Our current reports on Form 6-K for the periods ended February 28,
2003 and August 31, 2002.

o Our Form 6-K/A for the period ended November 30, 2002, filed with
the Commission on March 11, 2003.

o Description of our ordinary shares contained on Form 6-K, filed with
the Commission on January 31, 2003.

o Description of our American Depositary Shares contained on Form 6-K,
filed with the Commission on January 31, 2003

o Description of our American Depositary Shares contained on Form
6-K/A filed with the Commission on March 7, 2003.

o Description of our Memorandum and Articles of Association contained
on Form 6-K, filed with the Commission on January 31, 2003.

o Description of our Registration Rights Agreement, dated as of
December 12, 1997, contained on Form 6-K, filed with the Commission
on January 31, 2003.

You may request a copy of these filings, at no cost, by writing or
telephoning us at our principal executive offices at this address: ICON plc,
Attention: Sean Leech, Chief Financial Officer, South County Business Park,
Leopardstown, Dublin 18, Ireland, (353) 1-291-2000.

================================================================================

No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the ADSs offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.

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

TABLE OF CONTENTS

PAGE
----
Summary ................................................................... 1
The Offering .............................................................. 3
Recent Developments ....................................................... 4
Summary Historical Consolidated
Financial Data .......................................................... 5
Risk Factors .............................................................. 7
Disclosure Regarding Forward-Looking
Statements .............................................................. 11
Use of Proceeds ........................................................... 12
Price Range of ADSs and Dividend
Policy .................................................................. 13
Capitalization ............................................................ 14
Dilution .................................................................. 15
Management's Discussion and Analysis
of Financial Condition and Results of
Operations .............................................................. 16
Business .................................................................. 28
Management ................................................................ 37
Selling Shareholders ...................................................... 40
U.S. Taxation Considerations .............................................. 41
Irish Taxation Considerations ............................................. 44
Underwriting .............................................................. 48
Exchange Controls and Other Limitations
Affecting Security Holders .............................................. 51
Validity of the ADSs and Ordinary Shares .................................. 51
Experts ................................................................... 51
Expenses of Issuance and Distribution ..................................... 52
Enforceability of Civil Liabilities
Provisions of Federal Securities Laws
Against Foreign Persons; Shareholder
Rights Under Irish Law .................................................. 52
Additional Information .................................................... 53
Incorporation of Documents by Reference ................................... 54

================================================================================

ICON PLC

3,000,000
American Depositary Shares
Representing
3,000,000 Ordinary Shares

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

[LOGO] ICON

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

GOLDMAN, SACHS & CO.
WILLIAM BLAIR & COMPANY
BEAR, STEARNS & CO. INC.
DAVY STOCKBROKERS

================================================================================

PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 8.INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Except as indicated below, there is no statute, charter provision, by-law,
contract or arrangement under which any director or officer of ICON is insured
or indemnified in any manner against any liability which he or she may incur in
his or her capacity as such.

Paragraph 139 of the Articles of Association of ICON provides as follows:

Subject to the provisions of and so far as may be
permitted by the Acts, every Director, Managing Director,
Secretary or other officer of the Company shall be entitled to
be indemnified by the Company against all costs, charges,
losses, expenses, and liabilities incurred by him in the
execution and discharge of his duties or in relation thereto
including any liability incurred by him in defending any
proceedings, civil or criminal, which relate to anything done
or omitted or alleged to have been done or omitted by him as
an officer or employee of the Company and in which judgment is
given in his favor (or the proceedings are otherwise disposed
of without any finding or admission of any material breach of
duty on his part) or in which he is acquitted or in connection
with any application under any statute for relief from
liability in respect of any such act or omission in which
relief is granted to him by the Court.

To the extent permitted by law, the Directors may
arrange insurance cover at the cost of the Company in respect
of any liability, loss or expenditure incurred by any Director
or officer in relation to anything done or alleged to have
been done or omitted to be done by him as Director or officer.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described above, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

ITEM 9.EXHIBITS.

(a) The following exhibits are filed herewith, or incorporated by reference
herein:

EXHIBIT
NUMBER EXHIBIT
------- -------
1** Form of Underwriting Agreement

4.1* Deposit Agreement, dated as of May 20, 1998, between the Company,
The Bank of New York and the holders from time to time of the
Company's ADRs

4.2* Form of Ordinary Share certificate.

4.3* Form of ADR certificate (included in Exhibit 4.1).

4.4* Registration Rights Agreement, dated as of December 12, 1997.

II-1

EXHIBIT
NUMBER EXHIBIT
------- -------

5.1** Opinion of A&L Goodbody Solicitors as to certain Company related
matters and the validity of the ordinary shares.

5.2** Opinion of Cahill Gordon & Reindel LLP as to the validity of the
deposit agreement.

8.1** Opinion of Cahill Gordon & Reindel LLP as to certain matters of
U.S. taxation.

8.2** Opinion of KPMG, Tax Advisors, as to certain matters of Irish
taxation.

23.1 Consent of KPMG, Chartered Accountants for the Company.

23.2** Consent of A&L Goodbody Solicitors (included in Exhibit 5.1).

23.3** Consent of Cahill Gordon & Reindel LLP (included in Exhibit 8.1).

23.4** Consent of KPMG, Tax Advisors (included in Exhibit 8.2).

23.5** Consent of Cahill Gordon & Reindel LLP (included in Exhibit 5.2).

24.1** Power of Attorney (included on a signature page).

* Incorporated by reference from exhibits to the Company's
Registration Statement on Form F-1 (File No. 333-8672) filed with
the Commission on April 23, 1998.

** Filed previously.

ITEM 10. UNDERTAKINGS.

A. The undersigned registrant hereby undertakes:

1. That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Securities Act"), each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and this
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;

2. That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934, as amended (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934), that is incorporated by reference
in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and this offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof;

3. To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual
report to security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the requirements of
Rule 14a-3 or Rule 14e-3 under the Securities Exchange Act of 1934;
and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide
such interim financial information; and

II-2

4. That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the
time it was declared effective.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form F-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 4th day of August, 2003.

ICON PLC

By: /s/ Sean Leech
---------------------------
Sean Leech
Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in their
respective capacities on the 4th day of August, 2003.

NAME CAPACITY
---- --------

* Chairman of the Board, Director
--------------------------
Dr. John Climax

* Chief Executive Officer, Director
--------------------------
Peter Gray

/s/ Sean Leech Chief Financial Officer, Chief Accounting Officer
--------------------------
Sean Leech

* Director
--------------------------
Dr. Ronan Lambe

* Director
--------------------------
Thomas Lynch

* Director
--------------------------
Edward Roberts

* Director
--------------------------
Lee Jones

/s/ William Taaffe Authorized Representative in the United States
--------------------------
William Taaffe

* Signed by Sean Leech as Attorney-in-Fact.

II-4

EXHIBIT INDEX

EXHIBIT
NUMBER EXHIBIT
------- -------

1** Form of Underwriting Agreement

4.1* Deposit Agreement, dated as of May 20, 1998, between the Company,
The Bank of New York and the holders from time to time of the
Company's ADRs

4.2* Form of Ordinary Share certificate.

4.3* Form of ADR certificate (included in Exhibit 4.1).

4.4* Registration Rights Agreement, dated as of December 12, 1997.

5.1** Opinion of A&L Goodbody Solicitors as to certain Company related
matters.

5.2** Opinion of Cahill Gordon & Reindel LLP as to the validity of the
Deposit Agreement.

8.1** Opinion of Cahill Gordon &Reindel LLP as to certain matters of
U.S. taxation.

8.2** Opinion of KPMG, Tax Advisors, as to certain matters of Irish
taxation.

23.1 Consent of KPMG, Chartered Accountants for the Company.

23.2** Consent of A&L Goodbody Solicitors (included in Exhibit 5.1).

23.3** Consent of Cahill Gordon &Reindel LLP (included in Exhibit 8.1).

23.4** Consent of KPMG, Tax Advisors (included in Exhibit 8.2).

23.5** Consent of Cahill Gordon & Reindel LLP (included in Exhibit 5.2).

24.1** Power of Attorney (included on a signature page).

* Incorporated by reference from exhibits to the Company's
Registration Statement on Form F-1 (File No. 333-8672) filed with
the Commission on April 23, 1998.

** Filed previously.