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COVANCE REPORTS $0.19/SHARE FOR 1Q 2000

PRINCETON, N.J., April 25, 2000 — Covance Inc. (NYSE: CVD) today reported earnings for its first quarter ended March 30, 2000 of $0.19/diluted share.

Commenting on the quarter Chris Kuebler, Chairman and CEO said "Covance's early development services earnings continued to grow steadily in the first quarter and we saw improved financial performance in our central laboratory services. Despite some cost improvements from our restructuring last year, the Company's financial results continued to be impacted by a weak market for our Phase III clinical development services. Further impacting our first quarter results were a weather-related shutdown of our biomanufacturing facility and reduced biomanufacturing revenues due to production complications."

Net revenues for the first quarter of 2000 were $209.6 million as compared to $210.6 million in 1999. Operating income for the first quarter was $19.9 million resulting in an operating margin of 9.5% compared to $24.2 million and 11.5% for the prior year. Net income for the first quarter was $10.6 million or $0.19/diluted share compared to $13.1 million or $0.22/diluted share for the first quarter of 1999.

Segment Results
Early Development Segment

($ in millions)	1Q'00	1Q'99	change
Revenues	$72.2	$65.6	10.0%
Costs/Expenses	61.2	57.6	6.2%
OM%	15.3%	12.2%

The Company's Early Development segment includes preclinical and Phase I clinical trial services. Overall Early Development segment results for the first quarter 2000 were in line with expectations. Increased revenues were primarily realized in toxicology services. Costs and expenses increased compared to the prior year due to additional spending needed to support revenue growth. Covance continues to increase its market share in early development services reflecting its strong leadership position in this area.

Late-Stage Development Segment

($ in millions)	1Q'00	1Q'99	change
Revenues	$137.4	$145.0	(5.2)%
Costs/Expenses	128.5	128.9	NM
OM%	6.5%	11.2%

The Late-Stage Development segment includes clinical development services, clinical support services, biomanufacturing, and commercialization services. Revenues for the first quarter 2000 declined compared to the prior year primarily due to continued weakness in clinical development services. Management indicated a cautious outlook regarding its clinical development services due to continuing pricing pressures and over-capacity in the Phase III contract clinical trial market. Clinical development services revenues currently represent less than 20% of Covance's total revenues.

Unusually strong central laboratory services revenues for the first quarter of 1999 resulted in a 9% year over year decline in revenue from these services. However central laboratory revenues were up 12% sequentially from the fourth quarter 1999.

For the first quarter 2000 costs and expenses in the Late-Stage segment were flat with the prior year. Savings from the Company's 1999 clinical operations restructuring and lower central laboratory services expenses were offset by increased costs for planned growth in capacity for biomanufacturing services.

The first quarter operating margin of 6.5% in the Late-Stage segment reflects weak clinical development services and biomanufacturing revenues. The Company continues to experience strong demand for its biomanufacturing services and expects to resume operating at full production levels in the second half of the year.

Corporate Information

The Company recorded backlog at the end of the first quarter of 2000 of approximately $925 million versus $957 million at December 31,1999. The backlog reflects weak order generation in Phase III clinical development services and some first quarter contract cancellations. Backlog consists of signed contracts, signed letters of intent and verbal contracts where work has commenced.

Net Days Sales Outstanding for the Company were 60 days at March 30, 2000 versus 52 days at December 31,1999 and 60 days at March 30,1999.

During the first quarter the Company announced an important milestone achievement in its collaborative agreement with Variagenics Inc., a full-spectrum pharmacogenomics company. As a result of this collaboration, Covance is offering new genotyping services to ultimately enable more effective clinical trial design and increase the success rate of new drugs.

Covance, with headquarters in Princeton, New Jersey, is one of the world's largest and most comprehensive drug development services companies with 1999 revenues of $829 million, global operations, and approximately 7,600 employees worldwide. Information on Covance's products and services, recent press releases, and SEC filings can be obtained by browsing the Investor Relations section.

Statements contained in this press release, which are not historical facts, such as statements about prospective earnings, savings, revenue, earnings growth and other financial results are forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements including the statements contained herein regarding anticipated trends in the Company's business are based largely on management's expectations and are subject to and qualified by risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, without limitation, competitive factors, outsourcing trends in the pharmaceutical industry, the Company's ability to continue to attract and retain qualified personnel, the fixed price nature of contracts or the loss of large contracts, the success of the Company's restructuring, and other factors described in the Company's filings with the Securities and Exchange Commission. No assurance can be given that the Company will be able to realize the net revenues included in backlog. Covance believes that its aggregate backlog is not necessarily a meaningful indicator of future results.


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Financial Exhibits follow


                                 COVANCE INC.

                              INCOME STATEMENTS

              FOR THE THREE MONTHS ENDED MARCH 31, 2000 and 1999

                (Dollars in thousands, except per share data)

                                 (UNAUDITED)

                                                 Three Months Ended March 31
                                                     2000           1999

    Net revenues                                    $209,627       $210,632

    Costs and expenses:
      Cost of revenue                                145,924        141,430
      Selling, general and administrative             30,423         33,811
      Depreciation and amortization                   13,356         11,225
        Total                                        189,703        186,466

    Income from operations                            19,924         24,166

    Other expense, net:
      Interest expense, net                            2,892          1,986
      Other income                                      (381)           (80)
        Other expense, net                             2,511          1,906

    Income before taxes                               17,413         22,260

    Taxes on income                                    6,774          9,112

    Net income                                       $10,639        $13,148

    Basic earnings per share                           $0.19          $0.22

    Weighted average shares outstanding
     - basic                                      57,037,201     58,562,963

    Diluted earnings per share                         $0.19          $0.22

    Weighted average shares outstanding
     - diluted                                    57,199,742     59,827,159


                                 COVANCE INC.

                         CONDENSED BALANCE SHEET DATA

                     MARCH 31, 2000 AND DECEMBER 31, 1999

                            (Dollars in thousands)

                                                   March 31,    December 31,
                                                     2000           1999
                                                  (UNAUDITED)

    CONDENSED BALANCE SHEET DATA

    Cash and cash equivalents                        $13,461        $25,444
    Accounts and unbilled receivables               $210,354       $192,327
    Total Current Assets                            $313,864       $302,124
    Total Assets                                    $721,666       $700,314

    Total Current Liabilities                       $194,440       $199,877
    Long-term debt                                  $223,499       $208,724
    Total Liabilities                               $446,688       $437,662
    Total Stockholders' Equity                      $274,978       $262,652


                                 COVANCE INC.

                           CONDENSED CASH FLOW DATA

              FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999

                            (Dollars in thousands)

                                 (UNAUDITED)

                                                  Three Months Ended March 31
                                                      2000          1999
    CONDENSED CASH FLOW DATA

    Cash flows from net earnings adjusted
     for non-cash activity                           $23,298        $25,639
    Changes in operating assets and liabilities      (28,617)       (12,460)
    Net cash (used in) provided by operating
     activities                                       (5,319)        13,179

    Capital expenditures                             (22,141)       (20,196)

    Acquisition of businesses                              -        (15,133)

    Other, net                                             9            301

    Net proceeds from debt                            14,775         20,000

    Cash provided by stock issued under employee
     benefit plans                                     1,022          2,659

    Other                                               (329)             -

    Net change in cash and cash equivalents          (11,983)           810

    Cash and cash equivalents, beginning of period    25,444         19,263

    Cash and cash equivalents, end of period         $13,461        $20,073
     
	SOURCE  Covance Inc.