EXECUTIVE OVERVIEW

The following significant events occurred during the third quarter of 2008:

- Sales increased 3.2% (-1.7% excluding foreign currency impact) compared to third quarter 2007.

RESULTS OF OPERATIONS

COMPARISON OF THIRD QUARTER 2008 VERSUS THIRD QUARTER 2007

Gross sales in the third quarter 2008 of $56,508 were $1,766 or 3.2% above the third quarter 2007. Gross sales were favorably impacted 4.9% due to exchange rates reflecting a weaker U.S. dollar. Excluding the currency impact, sales decreased 1.7%. The decrease is primarily due to fewer custom development projects, lower volumes of certain products based on the Company's proprietary technologies and lower volumes of feed additives as a result of the Company's late 2007 decision to exit this business partially offset by higher sales of generic active pharmaceutical ingredients ("APIs"), particularly certain controlled substances. Lower pricing on a key gastrointestinal API and certain generic APIs also contributed to the lower sales.

The following table reflects sales by geographic area for the three months ended September 30, 2008 and 2007:

                         2008      2007
                       -------   -------
North America          $19,465   $17,951
Europe                  33,029    33,220
Asia                     1,041     1,575
Other                    2,973     1,996
                       -------   -------
   Total Gross Sales   $56,508   $54,742
                       =======   =======

Gross margins decreased to 28.7% in the third quarter 2008 from 33.8% in the third quarter 2007. This decrease is primarily due to lower pricing on a key gastrointestinal API, higher costs, mainly associated with the start-up of the finishing facility at the Milan facility, and unfavorable product mix. Gross margins were favorably impacted 2.9% due to foreign currency exchange.

Selling, general and administrative expenses of $8,767 or 15.5% of gross sales in the third quarter 2008 decreased from $10,669, or 19.5% in the third quarter 2007. The decrease in expense is due mainly to lower costs as a result of the restructuring of the corporate office and cost savings at the operating sites, partially offset by a negative impact from foreign currency.

In November 2007 the Company announced that it would consolidate its United States research and development ("R&D") activities and small scale active API production into its facility in Charles City, Iowa. This consolidation was substantially completed at December 31, 2007. All costs, net of expected sublease income, related to the existing operating lease at the New Jersey R&D facility will be recorded as restructuring expenses in the income statement. During the third quarter of 2008, the Company recorded $321 in restructuring expenses, the majority of which relates to rent at the New Jersey R&D facility. During the third quarter 2007 the Company recorded $451 in restructuring expenses primarily consisting of severance and retention bonuses related to the restructuring of the corporate office.

RESULTS OF OPERATIONS (CONTINUED)

COMPARISON OF THIRD QUARTER 2008 VERSUS THIRD QUARTER 2007 (CONTINUED)

Strategic alternative costs for the third quarter 2008 were $833, primarily consisting of costs associated with a project to streamline the Company's legal structure. Strategic alternative costs for the third quarter 2007 were $866, consisting of change-in-control benefits, retention bonuses, costs associated with the modification of employee stock options due to the payment of the special dividend in connection with the divestiture and external advisor costs.

Research and development expenses of $1,772 were 3.1% of gross sales in the third quarter 2008, compared to $3,062 or 5.6% of gross sales in the third quarter 2007. The decrease is primarily due to the Company's decision in 2007 to consolidate its New Jersey technical center with its R&D operations in Iowa to create increased operating efficiencies. The Company also utilized certain R&D personnel on custom development projects resulting in these costs being classified as cost of goods sold.

Operating profit in the third quarter of 2008 was $4,542 compared to $3,473 in the third quarter 2007. The results reflect lower operating expenses at the corporate office partially offset by lower gross margins as discussed above.

Net interest expense was $956 in the third quarter 2008 compared to $1,069 in the third quarter 2007. Third quarter 2008 results reflect lower interest rates partially offset by higher average debt compared to the third quarter 2007. The average interest rate on debt was 4.7% in the third quarter 2008 versus 7.3% in the third quarter 2007.

The effective tax rate for the third quarter 2008 was 9.8% compared to 247.4% in the third quarter 2007. The tax provision in the third quarter 2008 was $304 compared to $4,592 in the third quarter 2007. This change is due to changes in the geographic mix of pre-tax earnings, the recognition of a tax benefit in continuing operations in 2007 as a result of the sale of the businesses that comprised the Bioproducts and Biopharma segments in the first quarter of 2007, reduced tax rates in Italy, benefits due to the expiration of a statute of limitations, benefits for tax loss carrybacks, and incremental benefits of the project to streamline the Company's legal structure. The Company maintains a full valuation allowance against its domestic, and certain foreign, net deferred tax assets and will continue to do so until an appropriate level of profitability is sustained or tax strategies can be developed that would enable the Company to conclude that it is more likely than not that a portion of these net deferred assets would be realized. As such, improvements in pre-tax income in the future within these jurisdictions where the Company maintains a valuation allowance may result in these tax benefits ultimately being realized. However, there is no assurance that such improvements will be achieved.

Income from continuing operations in the third quarter 2008 was $2,797, or $0.10 per diluted share, versus a loss of $2,736, or $0.09, per diluted share in the same period a year ago.

COMPARISON OF FIRST NINE MONTHS 2008 VERSUS FIRST NINE MONTHS 2007

Gross sales for the first nine months of 2008 of $184,440 were $1,620, or 0.9% higher than the first nine months of 2007. Gross sales were favorably impacted 6.3% due to exchange rates reflecting a weaker U.S. dollar in the first nine months of 2008 versus 2007. Excluding the impact of foreign currency, the main drivers were lower revenues from custom development projects, lower volumes and pricing of generic APIs, lower volumes of certain products based on the Company's proprietary technologies and lower sales of fine chemicals and feed additives partially offset by higher sales of controlled substances.

RESULTS OF OPERATIONS (CONTINUED)

COMPARISON OF FIRST NINE MONTHS 2008 VERSUS FIRST NINE MONTHS 2007 (CONTINUED)

     The following table shows sales by geographic area for the nine months
ended September 30, 2008 and 2007:

                         2008       2007
                       --------   --------
North America          $ 65,200   $ 63,253
Europe                  104,911    107,797
Asia                      8,228      6,081
Other                     6,101      5,689
                       --------   --------
   Total Gross Sales   $184,440   $182,820
                       ========   ========

Gross margins decreased to 31.4% in the first nine months of 2008 compared to 36.6% in the first nine months of 2007. The decrease in margins is due to lower pricing, higher costs and unfavorable product mix. Gross margins were unfavorably impacted 0.4% due to foreign currency exchange.

Selling, general and administrative expenses of $31,511, or 17.1% of gross sales in the first nine months of 2008 decreased from $36,572 or 20.0% in the first nine months of 2007. The decrease in expense is due mainly to lower costs as a result of the restructuring of the corporate office and lower legal fees partially offset by the acceleration of restricted stock and stock options previously awarded to the former CEO and a negative impact from foreign currency exchange. Spending at the operating sites was also lower.

In November 2007 the Company announced that it would consolidate its United States research and development ("R&D") activities and small scale API production into its facility in Charles City, Iowa. This consolidation was substantially completed at December 31, 2007. All costs, net of expected sublease income, related to the existing operating lease at the New Jersey R&D facility will be recorded as restructuring expenses in the income statement. During the first nine months of 2008, the Company recorded $1,469 in restructuring expenses. Closure costs at the New Jersey R&D facility consists mainly of rent and related costs of $1,174. Also included in restructuring expenses is approximately $295 in severance and related costs related to the restructuring of the corporate office. During the first nine months of 2007 the Company recorded $4,034 in restructuring expenses primarily consisting of severance and retention bonuses related to the restructuring of the corporate office.

Strategic alternative costs for the first nine months of 2008 were $1,408, primarily consisting of costs associated with a project to streamline the Company's legal structure, stock option modification expense related to the payment of the special dividend and change-in-control benefits. Strategic alternative costs for the first nine months of 2007 were $28,560, consisting of change-in-control benefits, retention bonuses, costs associated with the modification of employee stock options due to the payment of the special dividend in connection with the divestiture and external advisor costs.

Research and development expenses of $5,945 or 3.2% of gross sales in the first nine months of 2008 compared to $8,623 or 4.7% of gross sales in the first nine months of 2007. The decrease is primarily due to the Company's decision in 2007 to consolidate its New Jersey technical center with its R&D operations in Iowa to create increased operating efficiencies. The Company also utilized certain R&D personnel on custom development projects resulting in these costs being classified as cost of goods sold.

Operating profit in the first nine months of 2008 was $17,642 compared to a loss of $10,935 in the first nine months of 2007. The results reflect lower operating expenses, mainly from lower strategic alternative and restructuring costs partially offset by lower gross margins, as discussed above.

RESULTS OF OPERATIONS (CONTINUED)

COMPARISON OF FIRST NINE MONTHS 2008 VERSUS FIRST NINE MONTHS 2007 (CONTINUED)

Net interest expense was $2,302 in the first nine months of 2008 compared to net interest income of $1,341 in the first nine months of 2007 primarily reflecting higher average debt partially offset by lower interest rates. The first nine months of 2007 also includes the acceleration of unamortized origination fees related to the repayment of the credit facility of $841. Interest income was also considerably lower in the first nine months of 2008 compared to 2007 due to interest earned on the proceeds from the sale of the businesses that comprised the Bioproducts and Biopharma segments in 2007. The average interest rate was 4.9% in the first nine months of 2008 versus 7.0% in the first nine months of 2007.

The effective tax rate for the first nine months of 2008 was 40.3% compared to -39.9% in the first nine months of 2007. The tax provision in the first nine months of 2008 was $6,002 compared to $4,200 in the first nine months of 2007. This change is due to changes in the geographic mix of pre-tax earnings, the recognition of a tax benefit in continuing operations in 2007 as a result of the sale of the businesses that comprised the Bioproducts and Biopharma segments in the first quarter of 2007, the reduction of tax rates in Italy, benefits due to the expiration of a statute of limitations, benefits for tax loss carrybacks, and incremental benefits of the project to streamline the Company's legal structure. The Company maintains a full valuation allowance against its domestic, and certain foreign, net deferred tax assets and will continue to do so until an appropriate level of profitability is sustained or tax strategies can be developed that would enable the Company to conclude that it is more likely than not that a portion of these net deferred assets would be realized. As such, improvements in pre-tax income in the future within these jurisdictions where the Company maintains a valuation allowance may result in these tax benefits ultimately being realized. However, there is no assurance that such improvements will be achieved.

Income from continuing operations for the first nine months of 2008 was $8,879, or $0.31 per diluted share, versus a loss of $14,724, or $0.52 per diluted share, in the same period a year ago.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents decreased $9,315 in the first nine months of 2008. During the first nine months of 2008, cash used in operations was $2,902 versus $509 in the same period a year ago. The decrease in cash flows from operations in the first nine months of 2008 versus the first nine months of 2007 is due primarily to the pay down of several year end accruals, including change in control payments and the Rutherford settlement, and an increase in inventories based on expected timing of shipments.

Cash flows used in investing activities in the first nine months of 2008 of $24,192 primarily reflects capital expenditures of $22,908 compared to $15,007 in 2007. Part of the funds in 2008 were used for a new mid-scale Pharma manufacturing facility in Karlskoga, Sweden, an API purification facility in Milan, Italy and capital improvements to existing facilities.

Cash flows provided by financing activities in the first nine months of 2008 of $19,428 primarily represent net borrowings of $19,461. In the first nine months of 2007 financing activities include a net pay down of debt of $61,665 and dividends paid of $402,333 partially offset by proceeds from stock options exercised of $21,811.

During the first nine months of 2007, the Company paid cash dividends of $14.03 per share, of which $14.00 was a special dividend.

The Company believes that cash flows from operations along with funds available from a revolving line of credit will be adequate to meet the operational and debt servicing needs of the Company, but no assurances can be given that this will continue to be the case, especially in light of the recent unprecedented volatility in worldwide credit markets.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board ("FASB") issued FASB Statement No. 157 "Fair Value Measurements" ("FAS 157"). This statement defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. This statement will apply whenever another standard requires (or permits) assets or liabilities to be measured at fair value. The standard does not expand the use of fair value to any new circumstances. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Relative to FAS 157, the FASB issued FASB Staff Position 157-2, which defers the effective date of FAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis, until fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The effect of adopting this pronouncement (related to financial assets and financial liabilities) did not have a material impact on the Company's financial position or results of operations. The Company is currently evaluating the potential impact of this statement (related to nonfinancial assets and nonfinancial liabilities).

Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans

The Company adopted FASB Statement No. 158 "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)" ("FAS 158") for the year ended December 31, 2006. FAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in the balance sheet and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. This statement does not impact the amounts recognized in the income statement.

FAS 158 also requires an employer to measure the funded status of a plan as of the date of the fiscal year end balance sheet. The Company's pension plans and postretirement benefits plan previously had a September 30 measurement date. The Company will adopt this measurement requirement effective December 31, 2008. The effect of adopting this pronouncement will not have a material impact on the Company's financial position or results of operations.

The Company adopted FASB Statement No. 159 "The Fair Value Option for Financial Assets and Financial Liabilities--Including an amendment of FASB Statement No. 115" ("FAS 159") effective January 1, 2008. This statement permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected should be reported in earnings at each subsequent reporting date. The effect of adopting this pronouncement did not have a material impact on the Company's financial position or results of operations.

In December 2007, the FASB issued FASB Statement No. 141 (Revised 2007), "Business Combinations" ("FAS 141R"). Under FAS 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition date fair value with limited exceptions. FAS 141R will change the accounting treatment for certain specific items, including:

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

- acquisition costs will generally be expensed as incurred;

- noncontrolling interests will be valued at fair value at the acquisition date;

- acquired contingent liabilities will be recorded at fair value at the acquisition date and subsequently measured at either the higher of such amount or the amount determined under existing guidance for non-acquired contingencies;

- in-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date until the completion or abandonment of the associated research and development efforts;

- restructuring costs associated with a business combination will be generally expensed subsequent to the acquisition date; and

- changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense.

FAS 141R also includes a substantial number of new disclosure requirements. FAS 141R applies prospectively to business combinations (except for income taxes which applies to prior as well as future acquisitions) for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Earlier adoption is prohibited. Accordingly, the Company will adopt this statement on January 1, 2009.

In March 2008, the FASB issued FASB Statement No. 161 "Disclosures about Derivative Instruments and Hedging Activities--an amendment of FASB Statement No. 133" ("FAS 161"). This statement requires enhanced disclosures about derivative and hedging activities and thereby improves the transparency of financial reporting. FAS 161 encourages, but does not require, comparative disclosures for earlier periods at initial adoption. This statement is effective for fiscal years beginning after November 15, 2008. The effect of adopting this pronouncement will not have an impact on the Company's financial position or results of operations.

FORWARD-LOOKING STATEMENTS

This document may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Rule 3b-6 under The Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding expected performance, especially expectations with respect to sales, research and development expenditures, earnings per share, capital expenditures, acquisitions, divestitures, collaborations, or other expansion opportunities. These statements may be identified by the fact that they use words such as "expects," "anticipates," "intends," "estimates," "believes" or similar expressions are used in connection with any discussion of future financial and operating performance. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this Form 10-Q. Any forward-looking statements contained herein are based on current plans and expectations and involve risks and uncertainties that could cause actual outcomes and results to differ materially from current expectations including, but not limited to, global economic trends, pharmaceutical outsourcing trends, competitive pricing or product developments, government legislation and regulations (particularly environmental issues), tax rate, interest rate, technology, manufacturing and legal issues, including the outcome of outstanding litigation disclosed in the Company's public filings, changes in foreign exchange rates, uncollectible receivables, loss on disposition of assets, cancellation or delays in renewal of contracts, lack of suitable raw materials or packaging materials, the Company's ability to receive regulatory approvals for its products and the accuracy of the Company's current estimates with respect to its earnings and profits for tax purposes in 2007. Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time and it is not possible for us to predict which will arise. In addition, the Company cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

For further details and a discussion of these and other risks and uncertainties, investors are cautioned to review the Cambrex 2007 Annual Report on Form 10-K, including the Forward-Looking Statement section therein, and other filings with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.