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COVANCE REPORTS $0.15/SHARE FOR 3Q 2001 AND IS ON TRACK TO ACHIEVE $0.58/SHARE FOR THE FULL YEAR
Margins and Earnings Increase for the Fourth Consecutive Quarter, Backlog Grows 19% Over Prior Year, Cash Balances Build and Company Further Deleveraged

Princeton, New Jersey, October 22, 2001 — Covance Inc. (NYSE: CVD) today reported earnings for its third quarter ended September 30, 2001 of $0.15/diluted share. The Company's earnings increased sequentially and more than doubled compared to the prior year. In the third quarter, Covance also experienced strong order flow and backlog growth, and generated positive cash flows reflecting its improved business conditions.

"Covance achieved higher margins and delivered sequential earnings growth for the fourth consecutive quarter. Our results reflect particularly strong performance in early development, as demand for our toxicology services continues to be very robust, and in Phase IV services. We are especially pleased that we achieved these strong results despite lower revenues in our late-stage segment due to the tragic events of September 11 and normal revenue softness during the summer vacation season. Business activity levels have returned to normal and we do not see any continuing impact on our business," said Chris Kuebler, Covance Chairman and CEO. "As a stronger and deleveraged company with a backlog now approaching $1 billion, we are confident in our ability to achieve earnings growth of approximately 30% or more this year and next. We anticipate full year earnings per share of $0.58 for 2001, the high end of our target range, and are comfortable with current consensus estimates of $0.77 for 2002."

Consolidated Results
Results for the quarters 1Q '00 through 2Q '01 included in this press release are shown on a pro forma basis, excluding packaging and biomanufacturing, which were divested this year, and special charges.

($ in millions except EPS)	3Q'01	2Q'01	1Q'01	4Q'00	3Q'00	2Q'00	1Q'00
Revenues	$196.4	$203.9	$195.6	$188.4	$179.7	$184.4	$184.7
Operating Income
Early Development	$12.5	$11.7	$11.3	$10.0	$11.4	$12.5	$13.1
Late-Stage Development	$9.0	$10.3	$8.6	$5.3	$2.8	$5.4	$14.1
Corporate Administration	$ (6.4)	$ (7.0)	$ (5.8)	$ (6.3)	$ (7.1)	$ (7.3)	$ (5.5)
Consolidated Operating Income	$15.1	$15.0	$14.1	$9.0	$7.1	$10.6	$21.7
Net Income	$ 9.1	$ 8.4	$ 7.9	$3.7	$3.2	$6.1	$13.0
Diluted EPS	$0.15	$0.14	$0.13	$0.06	$0.06	$0.11	$0.23

Net revenues for the third quarter of 2001 were $196.4 million, compared to $203.9 million last quarter and $179.7 million in the third quarter of 2000, a year-over-year increase of 9.3% (10.1% excluding the impact of foreign exchange). Year-to-date net revenues increased 8.6% (10.2% excluding the impact of foreign exchange) to $595.9 million compared to $548.9 million for 2000.

Operating income for the third quarter was $15.1 million, or 7.7% of net revenues, compared to $15.0 million, or 7.3% of net revenues last quarter, and $7.1 million or 3.9% of net revenues in the third quarter of 2000. Year-to-date operating income was $44.2 million or 7.4% of net revenues compared to $39.4 million or 7.2% of net revenues for the same period in 2000.

Consolidated operating income includes corporate administrative expenses (primarily information technology, communications, human resources, finance and legal) of approximately $6.4 million for the quarter ended September 30, 2001, $7.0 million for the quarter ended June 30, 2001 and $7.1 million for the quarter ended September 30, 2000.

Net income for the third quarter was $9.1 million or $0.15/diluted share, compared to $0.14/diluted share last quarter and $0.06/diluted share in the third quarter of 2000. Year-to-date net income was $25.4 million or $0.42/diluted share compared to $22.3 million or $0.39/diluted share for the same period in 2000.

Segment Results
Early Development Segment

($ in millions)	3Q'01	2Q'01	1Q'01	4Q'00	3Q'00	2Q'00	1Q'00
Revenues	$79.7	$78.7	$74.0	$72.4	$71.4	$71.2	$72.2
Operating Income	$12.5	$11.7	$11.3	$10.0	$11.4	$12.5	$13.1
OM%	15.7%	14.9%	15.3%	13.8%	16.0%	17.6%	18.2%

The Company's Early Development segment includes preclinical and Phase I clinical trial services. Early Development revenues were $79.7 million for the third quarter of 2001, compared to $78.7 million last quarter and $71.4 million in the third quarter of 2000, a year-over-year increase of 11.6% (12.8% excluding the impact of foreign exchange). Covance toxicology services, which continue to experience historically high levels of new study starts, continued to drive solid revenue growth in the segment.

Operating income for the 2001 third quarter was $12.5 million, or 15.7% of net revenues, compared to $11.7 million or 14.9% of net revenues last quarter, and $11.4 million or 16.0% of net revenues in the third quarter of 2000. Operating income increased sequentially and year-over-year primarily due to stronger margins in toxicology and Phase I clinical services particularly in Europe. In the third quarter, operating income was reduced by approximately $1.5 million due to the impact of BioLink™, Covance's bioanalytical service offering launched in November 2000. While BioLink™ revenues have not yet reached planned levels, we continued to build backlog for these services in the third quarter.

Late-Stage Development Segment

($ in millions)	3Q'01	2Q'01	1Q'01	4Q'00	3Q'00	2Q'00	1Q'00
Revenues	$116.7	$125.1	$121.6	$115.9	$108.3	$113.2	$112.6
Operating Income	$9.0	$10.3	$8.6	$5.3	$2.8	$5.4	$14.1
OM%	7.7%	8.2%	7.0%	4.5%	2.6%	4.8%	12.5%

The Late-Stage Development segment includes central laboratory, clinical development, commercialization and other support services. Revenues were $116.7 million for the third quarter of 2001, compared to $125.1 million last quarter, and $108.3 million in the third quarter of 2000, a year-over-year increase of 7.7% (8.4% excluding the impact of foreign exchange). On a sequential basis, revenues declined due to seasonal softness and the impact of the events of September 11. The suspension of air services prevented some sample deliveries to our central labs in the United States and Europe and delayed site visits by some clinical monitors. Year-over-year revenue growth was primarily attributable to central laboratory, and Phase III and IV clinical services.

Operating income for the 2001 third quarter was $9.0 million, or 7.7% of net revenues, compared to $10.3 million or 8.2% of net revenues last quarter, and $2.8 million or 2.6% of net revenues in the third quarter of 2000. On a sequential basis, operating margins reflect lower revenues in central laboratory and clinical services, for the reasons previously discussed. Compared to the prior year, operating income for the third quarter of 2001 grew significantly reflecting improved profitability in Phase III clinical services, margin growth in Phase IV services and in central laboratory services in Europe, and the benefits realized from the reorganization of technology initiatives in the third quarter of this year.

Corporate Information

The company reported cash and equivalents of approximately $40 million on September 30, 2001. Debt for the same period was $10.0 million, versus $25.0 million on June 30, 2001 and $252.7 million on December 31, 2000.

The Company's backlog was approximately $996 million on September 30, 2001, up 9% sequentially and 19% from the same period last year. Backlog was $915 million on June 30, 2001, $895 million on December 31, 2000 and $840 million at September 30, 2000. Sequential and year-over-year backlog growth is attributable to all service areas.

Net Days Sales Outstanding for the Company were 45 days on September 30, 2001 versus 41 days on June 30, 2001 and on a pro forma basis 58 days on September 30, 2000.

Covance, with headquarters in Princeton, New Jersey, is one of the world's largest and most comprehensive drug development services companies with 2000 pro forma revenues of $737 million, operations currently in 17 countries, and approximately 7,200 employees worldwide. Much more informtaion about Covance can be found throughout the site, including our products and services, other recent press releases, and SEC filings.

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 our internet initiatives reorganization and the realization of savings therefrom, the Company's ability to increase order volume in central laboratory services, and continued growth in demand for bioanalytical sevices and Covance's ability to provide these services on a large scale basis, and other factors described in the Company's filings with the Securities and Exchange Commission.


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Financial Exhibits follow

                              COVANCE INC.

           PROFORMA INCOME STATEMENTS - EXCLUDING SPECIAL ITEMS
           								
            FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
            								
               (Dollars in thousands, except per share data)
                               (UNAUDITED)


                             Three Months Ended September 30   Nine Months Ended September 30
                                           2001      2000(*)        2001(*)      2000(*)

Net revenues                          $ 196,394    $ 179,737      $ 595,861    $ 548,904

Costs and expenses:
  Cost of revenue                       141,664      132,717        429,627      391,284
  Selling, general and administrative    29,241       29,358         90,231       86,588
  Depreciation and amortization          10,419       10,578         31,847       31,668
        Total                           181,324      172,653        551,705      509,540

Income from operations                   15,070        7,084         44,156       39,364

Other (income) expense, net:
  Interest expense, net                     334        1,298          2,143        1,798
  Other expense (income)                  (201)          238           (66)           74
        Other expense, net                  133        1,536          2,077        1,872

Income before taxes                      14,937        5,548         42,079       37,492

Taxes on income                           5,878        2,369         16,685       15,197

Net income                              $ 9,059      $ 3,179       $ 25,394     $ 22,295

Basic earnings per share                 $ 0.15     $   0.06         $ 0.43       $ 0.39

Weighted average shares outstanding  59,381,407   57,582,175     58,650,730   57,303,043
   - basic
Diluted earnings per share               $ 0.15       $ 0.06         $ 0.42       $ 0.39

Weighted average shares outstanding  61,317,564   57,649,229     60,134,970   57,353,347
    - diluted

* Adjusted to exclude results of Packaging and Biomanufacturing in all periods presented,
including reduced interest expense from the application of the net sales proceeds to
outstanding debt, the gain/(loss) on the sale of these businesses in 2001, and the
restructuring charges recorded in both years. See supplemental schedule for details.




                                        COVANCE INC.

                                CONSOLIDATED BALANCE SHEETS

                            SEPTEMBER 30, 2001 AND DECEMBER 31, 2000
                            
                                   (Dollars in thousands)

                                                                     PROFORMA (*)
                                         September 30   December 31   December 31
                                                 2001          2000          2000
                                          (UNAUDITED)                 (UNAUDITED)
ASSETS						
Cash & cash equivalents                         $40,231      $7,191       $11,327 
Accounts receivable, net                        151,838     168,006       137,469 
Unbilled services                                45,602      66,135        44,102 
Inventory                                        32,674      30,963        27,522 
Deferred income taxes                            28,877      32,696        28,614 
Prepaid expenses and other current assets        31,788      48,021        46,243 
  Total Current Assets                          331,010     353,012       295,277 

Property and equipment, net                     200,251     331,689       205,033 
Goodwill, net                                    54,900      81,327        57,669 
Other assets                                      5,651       5,063         2,969 
  Total Assets                                 $591,812    $771,091      $560,948 

LIABILITIES and STOCKHOLDERS' EQUITY						
Accounts payable                                $19,792     $28,312       $22,563 
Accrued payroll and benefits                     47,134      44,167        39,067 
Accrued expenses and other current liabilities   38,509      45,720        46,691 
Unearned revenue                                 99,454      96,085        87,475 
Current portion of long-term debt                     -       1,499             -   
Short-term debt                                       -     234,000        39,000 
Income taxes payable                              7,700       1,939       (2,019)
  Total Current Liabilities                     212,589     451,722       232,777 

Long-term debt                                   10,000      17,224             -   
Deferred income taxes                            25,458      20,943        24,054 
Other liabilities                                13,392      15,451        15,304 
  Total Liabilities                             261,439     505,340       272,135 

Common stock                                        615         598           598 
Paid-in capital                                 115,598      92,572        92,572 
Retained earnings                               245,551     207,426       228,180 
Cumulative translation adjustment              (10,484)    (14,938)      (12,630)
Treasury stock                                 (20,907)    (19,907)      (19,907)
  Total Stockholders' Equity                    330,373     265,751        288,813 

  Total Liabilities and Stockholders' Equity   $591,812    $771,091      $560,948 

* December 31, 2000 proforma consolidated balance sheet gives effect to the divestitures
of Packaging and Biomanufacturing as if they occurred on December 31, 2000.



                                     COVANCE INC.
                                     
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                        
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
                  
                               (Dollars in thousands)
                                     (UNAUDITED)
                                     

                                                           Nine Months Ended September 30
                                                                             PROFORMA(*)
                                                              2001       2000       2001

Cash flows from operating activities:						
  Net income                                               $38,125     $8,010    $17,371 
  Adjustments to reconcile net income to net cash provided by
    operating activities:						
    Gain on sale of businesses                            (30,803)          -          -
    Depreciation and amortization                           36,615     40,598     31,831
    Restructuring charge, net of cash paid                   7,668      9,325      7,668
    Stock issued under employee benefit and                 10,004      3,194     10,004
      stock compensation plans
    Deferred income tax provision                            (423)    (8,505)      1,141
    Other                                                    1,173        651      1,173
    Changes in operating assets and liabilities, net of businesses sold:
      Accounts receivable                                  (9,796)   (29,387)   (14,369)
      Unbilled services                                    (3,961)    (5,349)    (1,500)
      Inventory                                            (5,085)    (3,187)    (5,152)
      Accounts payable                                     (5,362)      1,479    (2,771)
      Accrued liabilities                                 (11,011)      3,990    (1,672)
      Unearned revenue                                       8,369      7,829     11,979
      Income taxes payable                                   7,295    (3,544)      9,719
      Other assets and liabilities, net                    (1,968)    (3,187)     11,311
Net cash provided by operating activities                   40,840     21,917     76,733

Cash flows from investing activities:						
  Proceeds from sale of businesses                         251,059          -          -
  Capital expenditures                                    (38,770)    (75,004)  (31,463)
  Contingent purchase price paid in connection                   -       (909)         -
    with prior acquisitions
  Other, net                                                    75         539        75 
Net cash provided by (used in) investing activities        212,364    (75,374)  (31,388)

Cash flows from financing activities:						
  Net (repayments) borrowings under                      (214,000)      45,000  (29,000)
    revolving credit facilities
  Repayments of long-term debt                            (18,723)       (920)         -
  Stock issued under employee stock purchase                12,705       3,097    12,705
    and option plans		 
  Purchase of treasury stock                                 (146)       (329)     (146)
Net cash (used in) provided by financing activities      (220,164)      46,848  (16,441)
Net change in cash and cash equivalents                     33,040     (6,609)    28,904 

Cash and cash equivalents, beginning of period               7,191      25,444    11,327 

Cash and cash equivalents, end of period                   $40,231     $18,835   $40,231 

* Proforma cash flow for the nine months ended September 30, 2001 was computed as if the
divestitures of Packaging and Biomanufacturing had occurred in 2000 (i.e., it is intended
to reflect the cash flow of Covance's continuing operations for the first nine months of 2001).



                                 COVANCE INC.
                             Supplemental Schedule
                          PRO FORMA INCOME STATEMENTS
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
              AND THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000

                 (Dollars in thousands, except per share data)
                                 (UNAUDITED)
                                          
                                                   Pro Forma Adjustments

                                 As     Remove     Remove     Remove Loss         Remove  Pro Forma
                           Reported  Packaging        Bio  (Gain) on Sale  Restructuring    Results

Nine Months Ended September 30, 2001

  Net revenues             $651,473  $(11,439)  $(44,173)             $ -            $ -   $595,861

  Income from operations     38,295    (3,806)      1,489               -          8,178     44,156

  Net income                 38,125    (1,817)      3,016        (18,915)          4,985     25,394

  Diluted earnings per share  $0.63    $(0.03)      $0.05         $(0.31)          $0.08      $0.42


Three Months Ended September 30, 2000

  Net revenues             $214,946  $(17,926)  $(17,283)             n/a            $ -   $179,737

  Income from operations      8,737    (5,202)      4,425             n/a          (876)      7,084

  Net income                  1,783    (2,259)      4,189             n/a          (534)      3,179

  Diluted earnings per share  $0.03    $(0.04)      $0.07             n/a        $(0.01)      $0.06


Nine Months Ended September 30, 2000

  Net revenues             $636,691  $(46,627)  $(41,160)             n/a            $ -   $548,904

  Income from operations     26,207   (11,631)     10,999             n/a         13,789     39,364

  Net income                  8,010    (4,677)     10,551             n/a          8,411     22,295

  Diluted earnings per share  $0.14    $(0.08)      $0.18             n/a          $0.15      $0.39




                                   COVANCE INC.
                                   
                    INCOME STATEMENTS - INCLUDING SPECIAL ITEMS
                    
            FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
            
                    (Dollars in thousands, except per share data)
                                   (UNAUDITED)
                                   
                                           Three Months Ended         Nine Months Ended
                                                 September 30              September 30
                                            2001         2000         2001         2000

Net revenues                            $196,394     $214,946     $651,473     $636,691

Costs and expenses:								
  Cost of revenue                        141,664      160,149      473,676      458,607
  Selling, general and administrative     29,241       33,192       94,709       97,490
  Depreciation and amortization           10,419       13,744       36,615       40,598
  Restructuring charge                         -        (876)        8,178       13,789
    Total                                181,324      206,209      613,178      610,484

Income from operations                    15,070        8,737       38,295       26,207

Other (income) expense, net:
  Interest expense, net                      334        5,645        6,833       13,112
  Other expense (income)                   (201)          174         (48)           38
  Gain on sale of businesses                   -            -     (30,803)            -
    Other (income) expense, net              133        5,819     (24,018)       13,150

Income before taxes                       14,937        2,918       62,313       13,057

Taxes on income                            5,878        1,135       24,188        5,047

Net income                                $9,059       $1,783      $38,125       $8,010

Basic earnings per share                   $0.15        $0.03        $0.65        $0.14

Weighted average shares outstanding   59,381,407   57,582,175   58,650,730   57,303,043
    - basic
Diluted earnings per share                 $0.15        $0.03        $0.63        $0.14

Weighted average shares outstanding   61,317,564   57,649,229   60,134,970   57,353,347
    - diluted