Industry Acquisdata SnapShots€¦ · positive HL and ALCL - 18/1/2014 Media Releases • Biogen Idec And Sangamo Biosciences Announce Global Collaboration To Develop Treatments For

This Week’s News• PharmaceuticalBusinessReview-Amgen,MGH,BroadInstitutetodiscovernewdrugstotreatinflammatoryboweldisease-16/1/2014

Amgen, Massachusetts General Hospital (MGH) and the Broad Institute have entered inot a strategic collaboration.

For the complete story see: (http://drugdiscovery.pharmaceutical-business-review.com/news/amgen-mgh-broad-institute-to-discover-new-drugs-to-treat-ibd-

patients-160114-4160821)•SeekingAlpha-GileadIsNotDone;ThereIsPotentially50%MoreUpsideThisYear-17/1/2014

Gilead Sciences has been a star performer, raising a total of 281% in two years, since the end of 2011.

For the complete story see: (http://seekingalpha.com/article/1953081-gilead-is-not-done-there-is-potentially-50-percent-more-upside-this-year?source=google_

news)• Investor’sBusinessDaily-SeveralIBD50MedicalCompaniesSeenPostingStrongQ4ProfitGains-17/1/2014

HealthcarecompaniesareexpectedtopostsomeofthehighestprofitgainsintheIBD50. For the complete story see: (http://news.investors.com/investing-inside-the-50/011714-686864-best-earnings-estimates-for-ibd-50.htm)

Other Stories•DailyFinance-3ReasonsRegeneronCanKeepRisingin2014-17/1/2014•News-Medical.net -JapaneseMHLWapprovesADCETRIS for relapsedor refractoryCD30-positiveHLandALCL-18/1/2014

MediaReleases•BiogenIdecAndSangamoBiosciencesAnnounceGlobalCollaborationToDevelopTreatments

For Hemoglobinopathies – 9/1/2014•VertexReviewsCorporateStrategy andOutlinesKey 2014BusinessPriorities at the 32ndAnnualJ.P.MorganHealthcareConference–13/1/2014

•Seattle Genetics Highlights Key 2014 Milestones andActivities at J.P. Morgan HealthcareConference–13/1/2014

•AmericanCollege ofMedicalGenetics andGenomicsPracticeGuidelinesSupport LifelongTherapytoManagePhenylketonuria(PKU)–13/1/2014

•BioMarinDosesFirstPatientinPhase2TrialwithBMN111fortheTreatmentofChildrenwithAchondroplasia – 14/1/2014

•SeattleGeneticsAnnouncesADCETRIS® (BrentuximabVedotin)Approval in Japan for theTreatmentofRelapsedorRefractoryHodgkinLymphomaandAnaplasticLargeCellLymphoma– 17/1/2014

•Mass.General,BroadInstituteandAmgenWillWorktoDiscoverNewDrugsforInflammatoryBowelDisease–15/1/2014

LatestResearch•USbiofuelssubsidiesandCO2emissions:Anempirical test foraweakandastronggreen

paradox•ByR.QuentinGrafton,TomKompas,NgoVanLong,HangTo

Industry Overview

OverviewsofLeadingCompaniesAlexionPharmaceuticals(NASDAQ:ALXN)Amgen(NASDAQ:AMGN)BiogenIdec(NASDAQ:BIIB)BioMarinPharmaceuticalInc.(NASDAQ:BMRN)GileadSciences(NASDAQ:GILD)CelgeneCorporation(NASDAQ:CELG)RegeneronPharmaceuticals,Inc.NASDAQ:REGNSeattleGenetics(NASDAQ:SGEN)ShirePharmaceuticalsVertexPharmaceuticals(NASDAQ:VRTX)

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United States – Biotechnology

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News and Commentary Pharmaceutical Business Review - Amgen, MGH, Broad Institute to discover new drugs to treat inflammatory bowel disease - 16/1/2014 Amgen, Massachusetts General Hospital (MGH) and the Broad Institute have entered inot a strategic collaboration. For the complete story see: (http://drugdiscovery.pharmaceutical-business-review.com/news/amgen-mgh-broad-institute-to-discover-new-drugs-to-treat-ibd-patients-160114-4160821) Seeking Alpha - Gilead Is Not Done; There Is Potentially 50% More Upside This Year - 17/1/2014 Gilead Sciences has been a star performer, raising a total of 281% in two years, since the end of 2011. For the complete story see: (http://seekingalpha.com/article/1953081-gilead-is-not-done-there-is-potentially-50-percent-more-upside-this-year?source=google_news) Investor's Business Daily - Several IBD 50 Medical Companies Seen Posting Strong Q4 Profit Gains - 17/1/2014 Health care companies are expected to post some of the highest profit gains in the IBD 50. For the complete story see: (http://news.investors.com/investing-inside-the-50/011714-686864-best-earnings-estimates-for-ibd-50.htm) DailyFinance - 3 Reasons Regeneron Can Keep Rising in 2014 - 17/1/2014 Large cap biotech Regeneron has had a spectacular past twelve months. For the complete story see: (http://www.dailyfinance.com/2014/01/17/3-reasons-regeneron-can-keep-rising-in-2014/) News-Medical.net - Japanese MHLW approves ADCETRIS for relapsed or refractory CD30-positive HL and ALCL - 18/1/2014 Seattle Genetics announced that its collaborator Takeda has received approval of ADCETRIS from the Japanese Ministry of Health. For the complete story see: (http://www.news-medical.net/news/20140118/Japanese-MHLW-approves-ADCETRIS-for-relapsed-or-refractory-CD30-positive-HL-and-ALCL.aspx)


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Media Releases

Biogen Idec And Sangamo Biosciences Announce Global Collaboration To Develop Treatments For Hemoglobinopathies – 9/1/2014

Cambridge, Mass and Richmond, Calif. – January 9, 2014 – Biogen Idec (NASDAQ:BIIB) and Sangamo BioSciences, Inc. (NASDAQ: SGMO) announced today an exclusive worldwide collaboration and license agreement focused on the development of therapeutics for hemoglobinopathies, inherited conditions that result from the abnormal structure or underproduction of hemoglobin. The agreement will enable Biogen Idec to further enhance its expertise in non-malignant hematology by leveraging Sangamo’s proprietary genome-editing technology platform to develop treatments targeting sickle cell disease (SCD) and beta-thalassemia.

“Our collaboration with Sangamo is expected to help us expand our capabilities to develop treatments for people with serious, inherited hematologic conditions,” said Douglas E. Williams, Ph.D., Biogen Idec's executive vice president of research and development. “Building upon emerging science related to fetal hemoglobin regulation, we intend to develop Sangamo’s novel gene-editing technology to create a single approach that has the potential to functionally cure both sickle cell disease and beta-thalassemia.”

Sangamo’s proprietary zinc finger nuclease (ZFN) genome-editing technology enables multiple pathways to treat SCD and beta-thalassemia. The technology can be used to precisely target and knock out key regulators of gene expression, or can be used to precisely insert a new corrective gene to replace the defective copy.

“We are delighted to partner our hemoglobinopathies programs with Biogen Idec,” said Edward Lanphier, Sangamo’s president and chief executive officer. “Biogen Idec is a leader in drug development and has a history of successfully translating cutting edge science into treatments that provide life-changing clinical benefit for patients. This alliance is further validation of our ZFP platform as a transformative technology and accelerates our goal of developing a novel class of therapeutics which has the potential to revolutionize the treatment of genetic diseases.”

Under the terms of the agreement, Sangamo is responsible for all research and development activities through the first clinical proof of concept trial in beta-thalassemia, and both companies will perform activities to enable submission of an Investigational New Drug (IND) application for SCD. Biogen Idec will be responsible for subsequent worldwide clinical development and commercialization of products arising from the alliance. Sangamo retains an option to co-promote any licensed product to treat SCD and beta-thalassemia in the United States.

Biogen Idec will provide Sangamo with an upfront payment of $20 million and will reimburse Sangamo for its internal and external research and development program-related costs. Sangamo may also receive additional payments of approximately $300 million based on the achievement of certain development, regulatory, commercialization and sales milestones, as well as double digit royalties on product sales.

The transaction has been approved by the boards of directors of both companies and is subject to customary closing conditions including expiration of the applicable waiting period under the Hart–Scott–Rodino Antitrust Improvements Act of 1976 in the United States.

About Sangamo’s ZFN Therapeutic Approach to Hemoglobinopathies

Sangamo’s proprietary ZFN genome-editing technology enables multiple approaches to the correction of SCD and beta-thalassemia. Both diseases manifest after birth, when patients switch from producing functional fetal gamma-globin to a mutant form of adult beta-globin, which results in their condition. Naturally occurring increased levels of therapeutic fetal hemoglobin have been shown to reduce the severity of both SCD and beta-thalassemia disorders in adulthood. In hematopoietic stem cells (HSCs), Sangamo’s genome editing can be used to precisely disrupt key transcriptional regulators to reverse the switch from expression of the mutant adult beta-globin back to the production of functional fetal gamma-globin, or the technology can be used to precisely insert a new corrected beta-globin gene


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to replace the defective copy. Data from this program were recently presented at the 55th Annual Meeting of the American Society of Hematology (ASH).

A bone marrow transplant (BMT), of HSCs from a “matched” related donor (allogeneic BMT) is curative for both diseases. However, this therapy is limited due to the scarcity of matched donors and the significant risk of Graft versus Host Disease (GvHD) after transplantation of the foreign cells. By performing genome editing in HSCs that are isolated from and subsequently returned to the same patient, an autologous HSC transplant, Sangamo's approach eliminates both the need for a matched donor and the risk of acute and chronic GvHD. The ultimate goal of this approach is to develop a one-time curative treatment for SCD and beta-thalassemia.

In May 2013, Sangamo was awarded a $6.4 million Strategic Partnership Award from the California Institute for Regenerative Medicine (CIRM) to develop this potentially curative ZFP Therapeutic for beta-thalassemia. The four-year grant provides matching funds for preclinical work that will support an IND application and a Phase 1 clinical trial in transfusion-dependent beta-thalassemia patients, which will be carried out at Children’s Hospital & Research Center Oakland, and City of Hope.

About Hemoglobinopathies

Mutations in the genes encoding beta-globin, a subunit of the oxygen-carrying protein of red blood cells, lead to the hemoglobinopathies SCD and beta-thalassemia. The mutation in beta-globin that gives rise to SCD causes the red blood cells to form an abnormal sickle or crescent shape making them adherent, fragile and less able to deliver oxygen to tissues, and they can become lodged in small blood vessels and interrupt healthy blood flow. These problems further decrease the amount of oxygen flowing to body tissues. Almost all patients with SCD have painful episodes (called crises), which can last from hours to days, and have progressive organ damage, resulting in shortened lifespan. Current standard of care is to manage and control symptoms, and to limit the number of crises. Current treatments, including blood transfusions, iron-chelation therapy and administration of hydroxyurea, pain medications and antibiotics, do not address the underlying cause of disease, and life expectancy remains substantially reduced in patients with SCD. The CDC estimates that there are currently 90,000 to 100,000 Americans living with SCD which occurs in approximately 1 out of every 500 African-American births and 1 out of every 36,000 Hispanic-American births.

There are several forms of beta-thalassemia caused by mutations in the beta-globin gene; broadly the disorder results in excessive destruction of red blood cells leading to life-threatening anemia, enlarged spleen, liver and heart, and bone abnormalities. Beta-thalassemia major is a severe form of thalassemia that requires regular, often monthly, blood transfusions and subsequent iron-chelation therapy to treat iron overload. The CDC estimates that 2,000 people have beta-thalassemia in the United States, and an unknown number carry the genetic trait and can pass it on to their children. Thalassemia is most common among people of Mediterranean descent and is also found among people from the Arabian Peninsula, Iran, Africa, Southeast Asia and Southern China.

(http://www.biogenidec.com/press_release_details.aspx?ID=14712&Action=1&NewsId=2276&M=NewsV2&PID=61997)

Vertex Reviews Corporate Strategy and Outlines Key 2014 Business Priorities at the 32nd Annual J.P. Morgan Healthcare Conference – 13/1/2014

SAN FRANCISCO--(BUSINESS WIRE)-- Vertex Pharmaceuticals Incorporated (Nasdaq:VRTX) today outlined key 2014 business priorities aimed at supporting investment in future opportunities in cystic fibrosis (CF) and other high-potential research and development programs. Jeffrey Leiden, M.D., Ph.D., Chair, President and Chief Executive Officer of Vertex, will discuss the company's corporate strategy and 2014 business priorities as part of a webcast presentation at the 32nd Annual J.P. Morgan Healthcare Conference in San Francisco on Tuesday, January 14 at 8:30 a.m. PT (11:30 a.m. ET). The presentation will be available on Vertex's website, www.vrtx.com. In


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conjunction with the conference, Vertex today provided updates to its development programs in CF and other early research and development programs and provided a financial outlook for 2014.

"Throughout 2013, we made significant progress across all parts of our company, and I am pleased that our strategy to focus investment in key research and development programs and to maintain financial strength has positioned us well to further advance our pipeline and our business in 2014," said Dr. Leiden. "Over the coming year, we expect important data from multiple studies across our cystic fibrosis pipeline that may allow us to help many people with this disease."

Cystic Fibrosis (CF)

"Today, nearly all eligible patients with the G551D mutation have started treatment with KALYDECO in the United States and Europe. As we advance through 2014, our goal is to increase the number of people eligible for KALYDECO by achieving public reimbursement for this important medicine in additional countries, including Australia and Canada, and through regulatory approvals for additional mutations.

"Also this year, we will obtain results from our two Phase 3 studies of lumacaftor and ivacaftor in people with two copies of the F508del mutation, which will help define the role that these potential medicines may play for the more than 28,000 people ages 6 and older with the most common form of the disease," continued Dr. Leiden.

KALYDECO (ivacaftor)

Global Availability of KALYDECO (ivacaftor)

KALYDECO is currently available to eligible patients in the United States, England, Scotland, Northern Ireland, Wales, the Republic of Ireland, France,Germany, the Netherlands, Austria, Denmark, Sweden, Norway, Greece, and Italy. KALYDECO is also approved in Australia and Canada, and Vertex is in active discussions with relevant agencies in these countries to expand access to KALYDECO for eligible patients through public reimbursement. There are approximately 300 people age six years and older who have the G551D mutation in Australia and Canada.

Additional Studies Aimed at Increasing the Number of People Eligible for Ivacaftor

Multiple additional studies of ivacaftor are designed to evaluate whether additional people with CF may benefit from treatment with ivacaftor alone, including:

• Gating Mutations Study: In December 2013, the U.S. Food and Drug Administration (FDA) accepted Vertex's supplemental New Drug Application (sNDA) for ivacaftor in people with CF ages 6 and older who have non-G551D gating mutations and granted the company's request for Priority Review. A target review date of March 27, 2014 was set under the Prescription Drug User Fee Act (PDUFA) for the FDA's approval decision. Vertex has also submitted a Marketing Authorization Application (MAA) variation in Europe for ivacaftor in people with CF ages 6 years and older who have non-G551D gating mutations. Approximately 400 people ages 6 years and older have non-G551D gating mutations in North America,Australia and Europe.

• R117H Study: Vertex recently announced data from a Phase 3 study of people ages 6 years and older with one copy of the R117H mutation. The company plans to meet with the FDA in early 2014 to discuss these data and the potential submission of an sNDA for people with the R117H mutation. R117H is the most common residual function mutation. In North America, Europe and Australia, approximately 1,100 people with CF ages 6 and older have at least one copy of an R117H mutation. Detailed information regarding this study was provided in a separate press release issued on December 19, 2013.


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• Study in Children Ages 2 to 5 with Gating Mutations: A Phase 3 study of ivacaftor in children with CF ages 2 to 5 with a gating mutation is ongoing and fully enrolled. Data from this study are expected in the second quarter of 2014 to support a potential NDA submission in the second half of 2014. In North America, Europe and Australia, approximately 300 children ages 2 to 5 have a gating mutation.

• Residual Function Study: Enrollment is complete in a Phase 2 proof-of-concept study evaluating ivacaftor in people with CF who have clinical evidence of residual CFTR function. Data from this study are expected in the second quarter of 2014. In North America, Europe and Australia, more than 3,000 people ages 6 and older have non-R117H mutations that result in residual function.

Lumacaftor in Combination with Ivacaftor

Phase 3 Program in People with Two Copies (homozygous) of the F508del Mutation

• Phase 3 TRAFFIC and TRANSPORT Studies: Vertex completed enrollment in October 2013 for the global Phase 3 TRAFFIC and TRANSPORT studies evaluating lumacaftor (VX-809) in combination with ivacaftor in people with CF ages 12 and older who have two copies (homozygous) of the F508del mutation. Vertex began dosing in TRAFFIC and TRANSPORT in June and May 2013, respectively, and expects data from these studies to be available in mid-2014 to support the potential submission of an NDA and MAA for the combination therapy in people homozygous for the F508del mutation in the second half of 2014.

• Two additional studies of lumacaftor in combination with ivacaftor are being conducted as part of the Phase 3 program, including a study in children with CF ages 6 to 11 who have two copies of the F508del mutation and a study in people 18 and older with one copy (heterozygous)of the F508del mutation on one allele and a second mutation on the other allele that is not expected to respond to either ivacaftor or lumacaftor alone. The second part of the study in children is expected to begin in the second half of 2014 and will be used for potential subsequent registration of the combination in children ages 6 to 11. The study in people with one copy of the F508del mutation is ongoing and intended to provide additional safety and lung function data on the combination in heterozygous patients.

• More than 28,000 people ages 6 and older have two copies of the F508del mutation in North America, Europe and Australia, including approximately 22,000 ages 12 and older.

VX-661 in Combination with Ivacaftor

• 12-Week Phase 2 Study of VX-661 and Ivacaftor in People with Two Copies of the F508del Mutation: Vertex is preparing to conduct a 12-week study of VX-661 in combination with ivacaftor in people with CF who have two copies of the F508del mutation. The study is designed to evaluate safety, efficacy and pharmacokinetics to characterize VX-661 for further clinical development. Vertex has submitted a protocol to theFDA for this study and expects enrollment to begin in the first quarter of 2014.

• 4-Week Phase 2 Study of VX-661 in Combination with KALYDECO in People with One Copy of the G551D and F508del mutation:Enrollment is complete in a Phase 2 study evaluating a 4-week regimen of VX-661 in combination with KALYDECO in people with one copy of the G551D mutation and one copy of the F508del mutation. This study is intended to explore whether the addition of a corrector to treatment with KALYDECO can provide greater clinical benefit than treatment with KALYDECO alone in people with the G551D and F508del mutations. Data from this study are expected in the first half of 2014.


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Early Research and Development Programs

"In addition to our late-stage efforts in cystic fibrosis, we continue to advance multiple early-stage research and development programs, including VX-135 as part of potential all-oral regimens for hepatitis C. Vertex was built upon innovative science, and our commitment to research will continue to be our growth engine for the future as we seek to create new transformative medicines for cystic fibrosis, cancer, multiple sclerosis and other serious and rare diseases," concluded Dr. Leiden.

Next-Generation Correctors for Cystic Fibrosis:

• Vertex's goal is to advance a next-generation corrector into clinical development by the end of 2014. Next-generation correctors could be evaluated as part of potential dual-corrector regimens. The proposed use of a dual-corrector combination regimen is supported by in vitro data that showed a combination of two correctors with ivacaftor increased chloride transport in human bronchial epithelial cells with one or two copies of the F508del mutation, as compared to the use of a single corrector in combination with ivacaftor.

Hepatitis C:

• Study of VX-135 in Combination with Daclatasvir: Vertex and Bristol Myers Squibb Company (BMS) recently announced sustained viral response (SVR4) rate and safety data from the initial cohorts of a Phase 2a study of VX-135 in combination with daclatasvir, an NS5A replication complex inhibitor being developed by BMS, in New Zealand. Vertex is currently evaluating these data with BMS to determine the potential next steps for this combination in people with hepatitis C.

• VX-135 in Combination with Simeprevir: A drug-drug interaction study of VX-135 in combination with simeprevir in healthy volunteers is complete. Simeprevir (TMC435) is a once-daily investigational hepatitis C protease inhibitor being jointly developed by Janssen R&D Ireland and Medivir AB. Vertex and Janssen are currently discussing the potential next steps for further evaluation of VX-135 in combination with simeprevir.

Research Activities:

• Early-stage research and development programs are ongoing in cystic fibrosis, cancer, multiple sclerosis and other serious and rare diseases. Vertex expects to advance one or more compounds for the treatment of these diseases into clinical development in 2014.

Financial Guidance and Outlook

"Entering 2014, we have aligned our business and investment with the future potential we see within our cystic fibrosis program and other high-potential research and development programs," said Ian Smith, Executive Vice President and Chief Financial Officer for Vertex. "We believe there is the potential for significant future growth in revenues from KALYDECO and that we may achieve further revenue growth from the potential combination regimen of lumacaftor and ivacaftor in people with two copies of the F508del mutation. As we progress over the coming months, we remain committed to maintaining balance sheet strength to support continued investment in our business as we receive data from multiple clinical studies, including our Phase 3 studies in CF."

Vertex today provided the following financial outlook and will provide complete financial guidance on its year-end conference call on January 29, 2014:


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• Vertex ended 2013 with approximately $1.47 billion in cash, cash equivalents and marketable securities.

• Vertex expects total 2014 net revenues of $570 to $600 million, including KALYDECO net revenues of $470 to $500 million for 2014. Total revenues include net product revenues for KALYDECO and INCIVEK, as well as royalty and collaborative revenues.

• Vertex expects that its 2014 non-GAAP operating expenses will be in the range of $900 to $950 million. The company's planned 2014 investment includes approximately $40 to $50 million of expense related to development of an all-oral treatment regimen for hepatitis C. Additionally, the company expects to record approximately $60 million in effective interest expense in 2014 related to the accounting treatment for the leases of the company's corporate headquarters. Vertex's expected non-GAAP operating expense excludes cost of revenues, stock-based compensation expense, restructuring charges, transition costs related to the relocation of our corporate headquarters, Alios expenses related to the accounting for the collaboration with Vertex and any similar expenses incurred in 2014.

(http://investors.vrtx.com/releasedetail.cfm?ReleaseID=818727) Seattle Genetics Highlights Key 2014 Milestones and Activities at J.P. Morgan Healthcare Conference – 13/1/2014 BOTHELL, Wash.--(BUSINESS WIRE)--Jan. 13, 2014-- Seattle Genetics, Inc. (Nasdaq: SGEN) today highlighted several anticipated 2014 milestones related to ADCETRIS (brentuximab vedotin) and its antibody-drug conjugate (ADC) pipeline programs in a presentation at the 32nd J.P. Morgan Healthcare Conference on Monday, January 13, 2014 at 9:30 a.m. Pacific Time. Highlights include:

• The company announced that it has aligned with collaborator Takeda Pharmaceutical Company Limited (Takeda), as well as with the U.S. Food and Drug Administration (FDA) and European Union regulators, on a protocol amendment to unblind the phase 3 AETHERA clinical trial in the second half of 2014.

• Under the collaboration with Takeda, ADCETRIS recently received marketing authorization in Australia andSingapore, and regulatory approvals are being pursued in multiple other countries globally during 2014, includingJapan.

• ADCETRIS was recently added to the National Comprehensive Cancer Network (NCCN) guidelines for the treatment of relapsed CD30-positive peripheral T-cell lymphoma (PTCL).

• Seattle Genetics reviewed anticipated 2014 data presentations and program milestones from its portfolio of ADC programs, including a broad clinical development program evaluating ADCETRIS for the treatment of CD30-positive malignancies and progress with ADC candidates SGN-CD19A, SGN-CD33A and SGN-CD70A.

“Our leadership in the field of antibody-drug conjugates, or ADCs, is exemplified by our substantial progress in developing and commercializing ADCETRIS and advancing our pipeline of five other ADC candidates in clinical trials,” said Clay B. Siegall, Ph.D., President and Chief Executive Officer at Seattle Genetics. “We anticipate significant milestones during 2014, including data from the ADCETRIS phase 3 AETHERA clinical trial as well as from phase 2 clinical trials in diffuse large B-cell lymphoma (DLBCL) and salvage Hodgkin lymphoma (HL). We also anticipate reporting additional data from phase 1 clinical trials evaluating SGN-CD19A in acute lymphocytic leukemia (ALL) and non-Hodgkin lymphoma, as well as the first clinical data from a phase 1 clinical trial evaluating SGN-CD33A in acute myeloid leukemia (AML). Lastly, we anticipate advancing SGN-CD70A, our sixth ADC pipeline program, into clinical evaluation during 2014.” ADCETRIS 2014 Milestones ADCETRIS is being evaluated in more than 30 ongoing clinical trials, including four phase 3 trials, designed to establish it as the foundation of therapy for CD30-positive malignancies. The phase 3 AETHERA trial is evaluating ADCETRIS versus placebo for the treatment of patients at high risk of residual HL following autologous stem cell transplant (ASCT) to determine if ADCETRIS can extend progression-free survival in a consolidation or maintenance-


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type setting for these post-ASCT HL patients. Based on current estimates of progression events from pooled, blinded data from the ongoing trial, the study has been amended to enable a time point-driven progression-free survival analysis after patients have completed all required scans, which is anticipated to occur in the second half of 2014. The AETHERA trial is not being conducted under a Special Protocol Assessment (SPA) agreement from the FDA and has not been designated as a confirmatory trial to convert either accelerated approval or conditional marketing authorization to regular approval. This trial will provide drug safety data analyses that fulfill one of the company’s FDApost-approval requirements. In addition, data presentations from several ongoing ADCETRIS studies are expected at medical forums in 2014, including data from:

• a phase 1/2 study in combination with bendamustine in second-line HL; • clinical trials in relapsed B-cell non-Hodgkin lymphoma, including DLBCL; and • follow-up from a phase 2 trial in frontline HL patients age 60 and above.

ADCETRIS is currently approved for only two indications: (1) the treatment of patients with HL after failure of ASCT or after failure of at least two prior multi-agent chemotherapy regimens in patients who are not ASCT candidates, and (2) the treatment of patients with systemic anaplastic large-cell lymphoma (sALCL) after failure of at least one prior multi-agent chemotherapy regimen. ADC Pipeline Program 2014 Milestones Seattle Genetics has a robust pipeline of ADC programs in ongoing clinical trials, including SGN-CD19A, SGN-CD33A, SGN-LIV1A, ASG-22ME and ASG-15ME. SGN-CD19A is an ADC targeting CD19, a protein expressed uniformly on most B-cell malignancies, which is being evaluated in phase 1 clinical trials for the treatment of ALL and non-Hodgkin lymphoma. Data presented at the 55thAmerican Society of Hematology (ASH) Annual Meeting in December 2013 demonstrated encouraging early antitumor activity and a generally well-tolerated safety profile among heavily pretreated patients with ALL. In addition, multiple complete remissions have been observed in a parallel phase 1 study evaluating SGN-CD19A in aggressive non-Hodgkin lymphoma. Additional data from both ongoing phase 1 clinical trials are expected to be presented in 2014. SGN-CD33A is a novel CD33-directed ADC utilizing Seattle Genetics’ next generation technology. The CD33 antibody is attached to a highly potent cytotoxic agent called a pyrrolobenzodiazepine (PBD) dimer via a proprietary site-specific conjugate technology to a monoclonal antibody with engineered cysteines (EC-mAb). SGN-CD33A is being evaluated in a phase 1 clinical trial for patients with AML. The first presentation of clinical data from SGN-CD33A is expected during 2014. Seattle Genetics is also advancing SGN-LIV1A, ASG-22ME and ASG-15ME in ongoing phase 1 clinical trials for a variety of solid tumor types. The company also plans to advance SGN-CD70A, a novel CD70-directed ADC utilizing its proprietary PBD dimer and EC-mAb technologies, into phase 1 clinical trials during 2014. SGN-CD70A will be the company’s sixth ADC pipeline program currently in clinical evaluation. About ADCs Antibody-drug conjugates (ADCs) are monoclonal antibodies that are designed to selectively deliver cytotoxic agents to tumor cells. This approach is intended to spare non-targeted cells and thus reduce many of the toxic effects of traditional chemotherapy while enhancing antitumor activity. ADCETRIS is an ADC directed to CD30, a defining marker of classical HL and known to be expressed in some types of non-Hodgkin lymphoma.


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About ADCETRIS ADCETRIS (brentuximab vedotin) is an ADC comprising an anti-CD30 monoclonal antibody attached by a protease-cleavable linker to a microtubule disrupting agent, monomethyl auristatin E (MMAE), utilizing Seattle Genetics’ proprietary technology. The ADC employs a linker system that is designed to be stable in the bloodstream but to release MMAE upon internalization into CD30-expressing tumor cells. ADCETRIS for intravenous injection received accelerated approval from the FDA and approval with conditions fromHealth Canada for two indications: (1) the treatment of patients with HL after failure of ASCT or after failure of at least two prior multi-agent chemotherapy regimens in patients who are not ASCT candidates, and (2) the treatment of patients with sALCL after failure of at least one prior multi-agent chemotherapy regimen. The indications for ADCETRIS are based on response rate. There are no data available demonstrating improvement in patient-reported outcomes or survival with ADCETRIS. ADCETRIS was granted conditional marketing authorization by the European Commission in October 2012 for two indications: (1) for the treatment of adult patients with relapsed or refractory CD30-positive HL following autologous stem cell transplant (ASCT), or following at least two prior therapies when ASCT or multi-agent chemotherapy is not a treatment option, and (2) the treatment of adult patients with relapsed or refractory sALCL. ADCETRIS has received marketing authorization by regulatory authorities in more than 35 countries. See important safety information below. Seattle Genetics and Takeda are jointly developing ADCETRIS. Under the terms of the collaboration agreement, Seattle Genetics has U.S. and Canadian commercialization rights and Takeda has rights to commercialize ADCETRIS in the rest of the world. Seattle Genetics and Takeda are funding joint development costs for ADCETRIS on a 50:50 basis, except in Japan where Takeda will be solely responsible for development costs. (http://investor.seattlegenetics.com/phoenix.zhtml?c=124860&p=irol-newsArticle&ID=1890287&highlight=) American College of Medical Genetics and Genomics Practice Guidelines Support Lifelong Therapy to Manage Phenylketonuria (PKU) – 13/1/2014 SAN RAFAEL, Calif., Jan. 13, 2014 (GLOBE NEWSWIRE) -- BioMarin Pharmaceutical Inc. (Nasdaq:BMRN) announced today that new practice guidelines issued by the American College of Medical Genetics and Genomics (ACMG) support the need for lifelong management of PHE levels in patients with phenylketonuria or PKU. The new diagnosis and management guidelines were published online in Genetics In Medicine's Advance Online Publication (AOP) service and provide the first update to recommendations for therapy of PKU since the 2001 National Institutes of Health Consensus statement. The new guidelines state that treatment of PKU should be initiated as early as possible and must be continued throughout adulthood and "lifelong," with a goal of maintaining blood levels of phenylalanine (PHE) for all patients between 120-360 umol/L. Patients treated from the early weeks of life with initial good metabolic control, but who lose that control in later childhood or adult life, may experience both reversible and irreversible neuropsychiatric consequences. The guidelines also recommend changing the name of the disease from PKU to phenylalanine hydroxylase deficiency (PAH deficiency), a unifying nomenclature that reflects the continuous spectrum of disease severity. The guidelines specifically note that for, appropriate patients, use of Kuvan® (sapropterin dihydrochloride) should be considered to help lower PHE. According to the new guidelines, "The primary goal of therapy is to lower blood PHE, and any interventions, including medications, or combination of therapies that help to achieve that goal in an individual, without other negative consequences, should be considered appropriate therapy." Kuvan, the first and only prescription medication that helps patients lower blood PHE levels, is recognized for its potential benefits with 25-50 percent of PKU or PAH deficient patients cited as responsive to treatment with Kuvan. PEG PAL is an experimental therapy in Phase 3 of clinical development with a primary endpoint of PHE lowering, and a secondary endpoint of neurocognitive benefit. The guidelines state that "an improvement in neuropsychiatric


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symptoms or increase in PHE tolerance, without a decrease in blood PHE levels in any patient, constitutes sufficient justification to continue therapy." "We have made great strides in recent years in the understanding and management of PKU. Thanks to the American College of Medical Genetics and Genomics, we now know just how important it is for patients with PAH deficiency to continue lifelong management of their condition," said Hank Fuchs, M.D., Chief Medical Officer of BioMarin. "BioMarin is committed to the PKU community and is developing PEG PAL, a potential treatment option for patients age 16 and older who are struggling to achieve and maintain blood PHE levels within the recommended ranges. Treatments like Kuvan and the development of new therapies are critical to helping patients with PKU or PAH deficiency lead long, fulfilling lives." About PKU or PAH Deficiency Phenylketonuria (PKU) or phenylalanine hydroxylase (PAH) deficiency is a genetic disorder affecting approximately 50,000 diagnosed patients in the developed world and is caused by a deficiency of the enzyme phenylalanine hydroxylase (PAH), this enzyme is required for the metabolism of phenylalanine (PHE), an essential amino acid found in most protein-containing foods. If the active enzyme is not present in sufficient quantities, PHE accumulates to abnormally high levels in the blood and becomes toxic to the brain, resulting in a variety of complications including severe intellectual disability, seizures, tremors, behavioral problems and psychiatric symptoms. As a result of newborn screening efforts implemented in the 1960s and early 1970s, virtually all individuals with PKU or PAH deficiency under the age of 40 in developed countries are diagnosed at birth and treatment is implemented soon after. PAH deficiency can be managed with a PHE-restricted diet, which is supplemented by low-protein modified foods and PHE-free medical foods; however, the strict diet is difficult for most patients to adhere to the extent needed for achieving adequate control of blood PHE levels. Kuvan, the first and only prescription medicine of its kind, may help individuals with PAH deficiency lower blood PHE levels when used in conjunction with a PHE-restricted diet, more than the use of diet alone. To learn more about PAH deficiency, please visit www.PKU.com. Information on this website is not incorporated by reference into this press release. Some of the signs and symptoms of high blood PHE include: For infants and children: severe intellectual disability and developmental delay, skin rash (eczema), light-colored skin, eyes and hair (hypopigmentation) For teens and adults: lower intelligence, psychological and psychiatric symptoms like anxiety, depression and phobias, problems with memory and performing tasks (executive function), poor concentration and irritable mood among other things. For pregnant women: increased risk for the baby's growing brain, including risk of intellectual disability, increased risk for a small head (microcephaly) and other problems such as a heart malformation (congenital heart defect) and poor overall growth (intrauterine growth retardation). This teratogenic effect of PHE on the developing fetus is called Maternal PKU syndrome. (http://investors.bmrn.com/releasedetail.cfm?ReleaseID=818850) BioMarin Doses First Patient in Phase 2 Trial With BMN 111 for the Treatment of Children With Achondroplasia – 14/1/2014 SAN RAFAEL, Calif., Jan. 14, 2014 (GLOBE NEWSWIRE) -- BioMarin Pharmaceutical Inc. (Nasdaq:BMRN) announced today that it has dosed the first child in the Phase 2 trial with BMN 111, an analog of C-type Natriuretic Peptide (CNP), for the treatment of children with achondroplasia. Achondroplasia is the most common form of disproportionate short stature or dwarfism. "BMN 111 is representative of BioMarin's core competency of developing life-altering therapies that address unmet medical needs," stated Hank Fuchs, M.D., Chief Medical Officer of BioMarin. "In this Phase 2 study, we hope to see improvements in bone growth similar to what was observed in our preclinical models, and resulting improvements in


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the medical complications of achondroplasia that occur as a result of disproportionate bone growth. We believe treatment with BMN 111 for achondroplastic children will be well-tolerated and could potentially address the underlying cause of this condition and lead to benefits in the lives of these patients." The Phase 2 study is an open-label, sequential cohort, dose-escalation study of BMN 111 in children who are 5-14 years old. The primary objective of this study is to assess the safety and tolerability of daily subcutaneous doses of BMN 111 administered for 6 months. The secondary objectives will include an evaluation of change in annualized growth velocity, changes in absolute growth parameters, changes in body proportions and other medically relevant and functional aspects of achondroplasia, such as sleep apnea and joint range of motion. Prior to enrolling in the Phase 2 study, all patients will have participated in a 6 month natural history study to determine baseline growth velocity data. This is an international study that will enroll approximately 24 subjects for a treatment duration of 6 months. About Achondroplasia Achondroplasia is the most common form of human dwarfism and is characterized by failure of normal conversion of cartilage into bone. It is caused by an autosomal dominant activating mutation in the fibroblast growth factor receptor 3 (FGFR3) gene, a negative regulator of bone growth. Eighty percent of cases are the result of a spontaneous mutation, and ninety-eight percent of those cases have a G380R mutation. Clinical manifestations of the disease include short stature, cervico-medullary compression, sleep apnea, bowed legs, frontal bossing and mid-face hypoplasia, permanent sway of the lower back, spinal stenosis, recurrent ear infections and obesity, all of which are related to the disproportionate growth which is characteristic of the condition.The rate of incidence of achondroplasia is one in 15,000 to one in 40,000 live births, with approximately 18,000 to 24,000 people in the U.S. and Europe combined. (http://files.shareholder.com/downloads/ABEA-3W276N/2892564795x0x718366/a7379492-b20c-46b9-873c-38352d7e6d37/BMRN_News_2014_1_14_General_Releases.pdf) Mass. General, Broad Institute and Amgen Will Work to Discover New Drugs for Inflammatory Bowel Disease – 15/1/2014 THOUSAND OAKS, Calif., Jan. 15, 2014 /PRNewswire/ -- Massachusetts General Hospital (MGH), the Broad Institute, and Amgen (NASDAQ:AMGN) announced today that they have launched a strategic collaboration to jointly discover and validate new therapeutic targets and develop novel therapies for inflammatory bowel disease (IBD), a chronic disorder that affects millions worldwide. The MGH-Broad-Amgen collaboration brings together scientists with expertise in clinical medicine, IBD biology, human genetics, genomic technology, and drug discovery to work together to help create a new world of therapeutic options for IBD patients. "We are thrilled to be working together with our Amgen colleagues in this visionary collaboration," said Ramnik Xavier, chief of gastroenterology and director of the Center for the Study of Inflammatory Bowel Disease at Massachusetts General Hospital and a senior associate member of the Broad Institute. "I look forward to a fruitful collaboration, translating discoveries of IBD genes and biology into novel drugs for IBD patients." IBD is well known to run in families, suggesting that genes play a significant role in the development and progression of disease. However, until recently, almost nothing was known about the specific genes and mechanisms that predispose — or protect — someone from developing the disorder. Scientists have now pinpointed more than 150 regions of the genome — up from two just a decade ago — that place a person at risk for developing IBD. Despite the recent progress in understanding the biology of IBD, there remains a critical need: treatments that make use of scientists' new knowledge are urgently needed. While drugs developed over the last decade have led to some marked improvements in IBD treatment, the drugs are not always effective and can cause significant side effects in some patients.


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"Current IBD treatment options are limited," said Sean E. Harper, M.D., executive vice president of Research and Development at Amgen. "We believe this collaboration with Massachusetts General Hospital and the Broad Institute will help identify improved treatment options for these patients." The MGH-Broad-Amgen collaboration will leverage the shared expertise of its participating scientists and partner institutions to discover and develop novel therapies for IBD. The effort will include collection and analysis of patient DNA samples to identify and further validate genetic targets, biological assays to probe gene function, and subsequent drug discovery and development activities. A joint steering committee will be formed to select and guide projects. Financial terms of the agreement were not disclosed. About Massachusetts General Hospital Massachusetts General Hospital, founded in 1811, is the original and largest teaching hospital of Harvard Medical School. The MGH conducts the largest hospital-based research program in the United States, with an annual research budget of more than $775 million and major research centers in AIDS, cardiovascular research, cancer, computational and integrative biology, cutaneous biology, human genetics, medical imaging, neurodegenerative disorders, regenerative medicine, reproductive biology, systems biology, transplantation biology and photomedicine. About the Broad Institute of MIT and Harvard The Eli and Edythe L. Broad Institute of MIT and Harvard was founded in 2003 to empower this generation of creative scientists to transform medicine with new genome-based knowledge. The Broad Institute seeks to describe all the molecular components of life and their connections; discover the molecular basis of major human diseases; develop effective new approaches to diagnostics and therapeutics; and disseminate discoveries, tools, methods and data openly to the entire scientific community. Founded by MIT, Harvard and its affiliated hospitals, and the visionary Los Angeles philanthropists Eli and Edythe L. Broad, the Broad Institute includes faculty, professional staff and students from throughout the MIT and Harvard biomedical research communities and beyond, with collaborations spanning over a hundred private and public institutions in more than 40 countries worldwide. For further information about the Broad Institute, go to www.broadinstitute.org. (http://wwwext.amgen.com/media/media_pr_detail.jsp?year=2014&releaseID=1891013) Seattle Genetics Announces ADCETRIS® (Brentuximab Vedotin) Approval in Japan for the Treatment of Relapsed or Refractory Hodgkin Lymphoma and Anaplastic Large Cell Lymphoma – 17/1/2014

BOTHELL, Wash.--(BUSINESS WIRE)--Jan. 17, 2014-- Seattle Genetics, Inc. (Nasdaq: SGEN) today announced that its collaborator, Takeda Pharmaceutical Company Limited (Takeda), has received approval of ADCETRIS (brentuximab vedotin) from the Japanese Ministry of Health, Labour and Welfare (MHLW) for the treatment of patients with CD30-positive relapsed or refractory Hodgkin lymphoma (HL) and anaplastic large cell lymphoma (ALCL). As a result, Seattle Genetics will receive two milestone payments from Takeda totaling $9 million upon final pricing agreement in Japan. ADCETRIS is an antibody-drug conjugate (ADC) directed to CD30, a defining marker of classical HL and known to be expressed in some types of non-Hodgkin lymphoma, including ALCL

“Until now, patients in Japan with relapsed or refractory Hodgkin lymphoma or ALCL had few therapeutic treatment options, and the approval of ADCETRIS represents a significant milestone in making this innovative targeted therapy available to these patients in need,” said Clay B. Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. “ADCETRIS is now approved in 39 countries, and we continue to work with our collaborator, Takeda, to expand regulatory approvals globally. Through both our regulatory activities and robust clinical development program, our goal is to establish ADCETRIS as the foundation of therapy worldwide for patients with CD30-positive malignancies.”


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The approval of the new drug application was based on two global pivotal phase 2 clinical trials of ADCETRIS, as well as a phase 1/2 clinical trial conducted in Japan, for patients with relapsed or refractory CD30-positive HL and ALCL. In March 2012, the Japanese MHLW granted ADCETRIS orphan drug designation for the treatment of patients with HL and ALCL, which triggered priority review in Japan.

About ADCETRIS

ADCETRIS (brentuximab vedotin) is an ADC comprising an anti-CD30 monoclonal antibody attached by a protease-cleavable linker to a microtubule disrupting agent, monomethyl auristatin E (MMAE), utilizing Seattle Genetics’ proprietary technology. The ADC employs a linker system that is designed to be stable in the bloodstream but to release MMAE upon internalization into CD30-expressing tumor cells.

ADCETRIS for intravenous injection received accelerated approval from the U.S. Food and Drug Administration (FDA) and approval with conditions from Health Canada for two indications: (1) the treatment of patients with HL after failure of autologous stem cell transplant (ASCT) or after failure of at least two prior multi-agent chemotherapy regimens in patients who are not ASCT candidates, and (2) the treatment of patients with sALCL after failure of at least one prior multi-agent chemotherapy regimen. The indications for ADCETRIS are based on response rate. There are no data available demonstrating improvement in patient-reported outcomes or survival with ADCETRIS.

ADCETRIS was granted conditional marketing authorization by the European Commission in October 2012 for two indications: (1) for the treatment of adult patients with relapsed or refractory CD30-positive HL following autologous stem cell transplant (ASCT), or following at least two prior therapies when ASCT or multi-agent chemotherapy is not a treatment option, and (2) the treatment of adult patients with relapsed or refractory sALCL. ADCETRIS has received marketing authorization by regulatory authorities in more than 35 countries. See important safety information below.

Seattle Genetics and Takeda are jointly developing ADCETRIS. Under the terms of the collaboration agreement, Seattle Genetics has U.S. and Canadian commercialization rights and Takeda has rights to commercialize ADCETRIS in the rest of the world. Seattle Genetics and Takeda are funding joint development costs for ADCETRIS on a 50:50 basis, except in Japan where Takeda will be solely responsible for development costs. Seattle Genetics is entitled to royalties based on a percentage of Takeda's net sales in its territory at rates that range from the mid-teens to the mid-twenties based on sales volume, subject to offsets for royalties paid by Takeda to third parties.

(http://investor.seattlegenetics.com/phoenix.zhtml?c=124860&p=irol-newsArticle&ID=1891733&highlight=)

Latest Research US biofuels subsidies and CO2 emissions: An empirical test for a weak and a strong green paradox R.Quentin Grafton, Tom Kompas, Ngo Van Long, Hang To Abstract Using energy data over the period 1981–2011 we find that US biofuels subsidies and production have provided a perverse incentive for US fossil fuel producers to increase their rate of extraction that has generated a weak green paradox. Further, in the short-run if the reduction in the CO2 emissions from a one-to-one substitution between biofuels and fossil fuels is less than 26 percent, or less than 57 percent if long run effect is taken into account, then US biofuels production is likely to have resulted in a strong green paradox. These results indicate that subsidies for first generation biofuels, which yield a low level of per unit CO2 emission reduction compared to fossil fuels, might have contributed to additional net CO2 emissions over the study period. (http://www.sciencedirect.com/science/article/pii/S0301421513011129)


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The Industry The United States is the largest market and leading consumer of biotechnology products in the world, and home to more than 1,300 firms involved in the industry. Between 2001 and 2010, the U.S. bioscience industry grew by 6.4 percent, adding more than 96,000 jobs. By comparison, total employment for all private sector industries in the United States fell by 2.9 percent, losing more than 3 million jobs (source: Battelle/BIO State Bioscience Initiatives, published June 2012). There are more than 5.5 million scientists, engineers and technicians in the United States; 1.3 million people directly involved in biosciences; and another 5.8 million workers in related industry sectors. Business opportunities in this field for small and medium-sized enterprises, universities and research institutions are extensive. Research and development in the U.S. biotechnology sector drives the commercialization of products for domestic consumption and international trade. With the world’s largest scientific research base and longstanding government support for biomedical and other biotechnology research and development, the United States maintains a competitive environment for the development and commercialization of biotechnology. Industry Subsectors Medical Biotechnology: This is the largest component of the biotechnology industry. Key product areas include biological drugs, vaccines, and in-vitro diagnostics. Principal targets for research and development are treatments for cancers, infectious diseases, auto-immune conditions, HIV/AIDS, and other diseases for which no effective treatments exist. During the past decade, research, testing, and medical lab jobs have increased in the United States by 24 percent—translating into nearly 87,000 new jobs. The gains have continued during and through the recent recession, with the subsector adding 6 percent to its employment base since 2007 (source: Battelle/BIO State Bioscience Initiatives, published June 2012). Agricultural Biotechnology: Key products include biotech crops such as corn, soybeans, cotton and canola, crop seeds, and related products. According to the International Service for the Acquisition of Agri-Biotech Applications (ISAAA) the United States accounts for more than half of all biotech crops in the world. The global value of biotech seed alone was US$13.2 billion in 2011, with the end product of commercial grain from biotech maize, soybean grain and cotton valued at roughlyUS$160 billion per year and is projected to increase 10 - 15 percent annually. Industrial Biotechnology: Key products in this subsector include a large number of industrial applications that cut across other industry sectors. Primary product categories are nanotechnology, enzymes, and biofuels. One of the main drivers of demand for biofuels in the United States is the Renewable Fuel Standard (RFS). The Energy Independence and Security Act of 2007 set yearly RFS volume requirements for each renewable fuel category. The EPA updates volume requirements each year based on fuel availability. While the conventional (starch ethanol) levels will be capped at 15 percent by 2015, and current supply already exceeds the domestic demand, there is significant room for expansion of biodiesel, cellulosic, and other advanced biofuels under the RFS. In the biotechnology sector, U.S. companies are working to develop, scale up, and commercialize fuels that will meet these needs. (http://selectusa.commerce.gov/industry-snapshots/biotechnology-industry-united-states) Leading Companies Alexion Pharmaceuticals NASDAQ: ALXN Alexion Reports Third Quarter 2013 Results Soliris® (eculizumab) Net Product Sales Increased 36 Percent to $400.4 million Steady Soliris Growth in PNH Worldwide aHUS Launch Progresses in US and Europe; Japan Launch Begins in Q4


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Guidance Revised Upward for 2013 Revenues and Non-GAAP EPS Strong Progress in Pipeline Programs, cPMP Replacement Therapy Receives FDA Breakthrough Therapy Designation Third Quarter 2013 Financial Highlights: - Q3 2013 net product sales increased 36 percent to $400.4 million, compared to $294.1 million in Q3 2012. - Q3 2013 GAAP net income increased to $93.8 million, or $0.47 per share, compared to net income of $92.2 million, or $0.46 per share, in Q3 2012. Q3 2013 GAAP EPS included a decrease of $0.10 per share related to expenses from both a license agreement and a litigation settlement. Q3 2012 GAAP EPS included an increase of $0.13 per share related to the net effect of an intellectual property settlement and an impairment loss. - Q3 2013 non-GAAP net income increased 39 percent to $167.9 million, or $0.83 per share, compared to Q3 2012 non-GAAP net income of $120.7 million, or $0.60 per share. CHESHIRE, Conn.--(BUSINESS WIRE)--Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) today announced financial results for the three and nine months ended September 30, 2013. The Company reported net product sales of Soliris® (eculizumab) of $400.4 million in the third quarter of 2013, an increase of 36 percent from the same period in 2012. Revenue performance for the quarter reflected steady additions of new patients with paroxysmal nocturnal hemoglobinuria (PNH) globally, and an increasing number of new patients with atypical hemolytic uremic syndrome (aHUS) commencing Soliris treatment in the US and Europe. “In the third quarter, we continued our strong and ongoing global performance with Soliris in PNH and were pleased to provide Soliris to a steadily growing number of new patients with aHUS in the United States as well as an increasing number of patients with aHUS in Europe. In addition, we were pleased to receive our aHUS approval in Japan,” said Leonard Bell, M.D., Chief Executive Officer of Alexion. “Key pipeline initiatives, including our asfotase alfa program in HPP, our Soliris programs in kidney transplant and our cPMP replacement therapy program, reached new milestones in Q3. In Q4, we are further expanding our commercial and clinical initiatives as we prepare for further growth in 2014.” Third Quarter 2013 Financial Results: Alexion's non-GAAP operating results are GAAP operating results adjusted for the impact of certain items described below. A full reconciliation of GAAP to non-GAAP financial results is included later in this press release. Third Quarter 2013 Non-GAAP Financial Results: The Company reported non-GAAP net income of $167.9 million, or $0.83 per share, in the third quarter of 2013, compared to non-GAAP net income of $120.7 million, or $0.60 per share, in the third quarter of 2012. Alexion's non-GAAP operating expenses for Q3 2013 were $178.8 million, compared to $130.9 million for Q3 2012. Non-GAAP research and development (R&D) expenses for Q3 2013 were $68.9 million, compared to $50.6 million for Q3 2012. Non-GAAP selling, general and administrative (SG&A) expenses for Q3 2013 were $109.9 million, compared to $80.3 million for Q3 2012. Third Quarter 2013 GAAP Financial Results: Alexion reported GAAP net income of $93.8 million, or $0.47 per share, in the third quarter of 2013, compared to GAAP net income of $92.2 million, or $0.46 per share, in the third quarter of 2012. Q3 2013 GAAP results included a decrease of $20.7 million, or $0.10 per share, related to expenses from both a license agreement and a litigation settlement. Q3 2012 GAAP results included an increase of $27.1 million, or $0.13 per share, related to the net effect of an intellectual property settlement and an impairment loss.


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On a GAAP basis, operating expenses for Q3 2013 were $213.8 million, compared to $171.6 million for Q3 2012. GAAP R&D expenses for Q3 2013 were $88.2 million, compared to $54.3 million for Q3 2012. GAAP SG&A expenses were $122.9 million for Q3 2013, compared to $90.0 million for Q3 2012. Balance Sheet: As of September 30, 2013, the Company had $1.30 billion in cash, cash equivalents and marketable securities compared to $1.12 billion at June 30, 2013. Research and Development Progress: Alexion currently has development programs underway with its five highly innovative therapeutic candidates: eculizumab (Soliris) and four additional novel therapeutic candidates that have the potential to become first-in-class therapies for patients with severe and ultra-rare disorders. Ultra-Rare Disease Programs With Eculizumab

• Neurology: Neuromyelitis Optica (NMO) – Alexion will commence a single, multinational, placebo-controlled, registration trial in relapsing NMO.

• Neurology: Myasthenia Gravis (MG) – Alexion will commence a single, multinational, placebo-controlled, registration trial in severe, refractory MG.

• Transplant: Antibody-Mediated Rejection (AMR) – During the quarter, researchers presented preliminary data from the Company-sponsored, multinational deceased-donor kidney transplant trial in patients at elevated risk of AMR. Enrollment in the Company-sponsored, multinational living-donor kidney transplant trial in patients at elevated risk of AMR is ongoing.

• Transplant: Delayed Graft Function (DGF) – Based on recent regulatory discussions, Alexion now plans to conduct a single multinational, placeo-controlled, registration trial in patients at risk for DGF.

• Nephrology: STEC-HUS – The Company continues to analyze longer-term control clinical outcome data from an epidemiologic study in approximately 400 STEC-HUS patients who received only best supportive care during the earlier German epidemic.

Ultra-Rare Disease Programs with Additional Highly Innovative Therapeutics • Asfotase Alfa: Alexion is developing asfotase alfa as a treatment for pediatric-onset hypophosphatasia

(HPP), an ultra-rare, inherited and life-threatening metabolic disease. During the quarter, researchers presented data from the ongoing study of asfotase alfa in infants and young children with HPP. The Company completed its initial analysis of its natural history study in infants with HPP. The Company received Breakthrough Therapy designation for asfotase alfa in pediatric-onset HPP in Q2 2013.

• cPMP Replacement Therapy (ALXN 1101): Alexion is developing cPMP as a treatment for patients with Molybdenum Cofactor Deficiency (MoCD) Type A, a severe, ultra-rare and genetic metabolic disorder that causes catastrophic and irreversible neurologic damage within the first few weeks of life. Alexion has initiated a natural history study in patients with MoCD Type A and has also completed dosing with the synthetic cPMP in a study in healthy volunteers. The Company received Breakthrough Therapy designation for cPMP replacement therapy for patients with MoCD Type A, as announced earlier today.

• ALXN1007: Alexion has commenced a multi-dose Phase I clinical study of ALXN1007, a novel anti-inflammatory antibody, in healthy volunteers. The Company is preparing to commence a multi-dose Phase II proof-of-concept study of ALXN1007.

• ALXN1102/1103: Enrollment continues in a Phase I study to characterize the mechanism of action and develop initial safety data for ALXN1102 and ALXN1103, different formulations of one of Alexion's novel complement inhibitors.

2013 Financial Guidance: Alexion today announced that it is raising its 2013 revenue guidance from the previous range of $1.520 to $1.530 billion, now to the higher and narrower range of $1.535 to $1.540 billion. The upward revision reflects continued global growth of Soliris in PNH and growth from the ongoing launch of Soliris in aHUS. Guidance for 2013 non-GAAP EPS is also being revised upward, from the previous range of $2.97 to $3.02, now to the higher and narrower range of $3.02 to $3.04, based on a forecast of approximately 203 million diluted shares outstanding. Guidance for R&D is


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being narrowed from the previous range of $275 to $285 million now to $280 to $285 million. SG&A is also being narrowed from the previous range of $435 to $445 million now to $440 to $445 million. Other items of 2013 guidance provided in the Company's press release of July 25, 2013 are being reiterated today. The Company’s non-GAAP effective tax rate, reported on a cash tax liability basis, is expected to be 6 to 8 percent. The Company’s GAAP effective tax rate is expected to be in the range of 29 to 31 percent. The Company's share-based compensation expense for the year is expected to be $76 to $78 million. Cost of sales is expected to be approximately 10 percent of net product sales. The Company’s GAAP effective tax rate is expected to be in the range of 29 to 31 percent. Conference Call/Webcast Information: Alexion will host a conference call/audio webcast to discuss matters mentioned in this release. The call is scheduled for today, October 24, at 10:00 a.m., Eastern Time. To participate in this call, dial 800-289-0438 (USA) or 913-312-0706 (International), passcode 3882932, shortly before 10:00 a.m., Eastern Time. A replay of the call will be available for a limited period following the call, beginning at 1:00 PM, Eastern Time. The replay number is 888-203-1112 (USA) or 719-457-0820 (International), passcode 3882932. The audio webcast can be accessed at www.alexionpharma.com. About Soliris: Soliris is a first-in-class terminal complement inhibitor developed from the laboratory through regulatory approval and commercialization by Alexion. Soliris is approved in the US, European Union, Japan and other countries as the first and only treatment for patients with paroxysmal nocturnal hemoglobinuria (PNH), a debilitating, ultra-rare and life-threatening blood disorder, characterized by complement-mediated hemolysis (destruction of red blood cells). Soliris is indicated to reduce hemolysis. Soliris is also approved in the US, European Union, and Japan as the first and only treatment for patients with atypical hemolytic uremic syndrome (aHUS), a debilitating, ultra-rare and life-threatening genetic disorder characterized by complement-mediated thrombotic microangiopathy, or TMA (blood clots in small vessels). Soliris is indicated to inhibit complement-mediated TMA. The effectiveness of Soliris in aHUS is based on the effects on TMA and renal function. Prospective clinical trials in additional patients are ongoing to confirm the benefit of Soliris in patients with aHUS. Soliris is not indicated for the treatment of patients with Shiga toxin E. coli related hemolytic uremic syndrome (STEC-HUS). For the breakthrough innovation in complement inhibition, Alexion and Soliris have received the pharmaceutical industry's highest honors: the 2008 Prix Galien USA Award for Best Biotechnology Product with broad implications for future biomedical research and the 2009 Prix Galien France Award in the category of Drugs for Rare Diseases. More information including the full prescribing information on Soliris is available at www.soliris.net. About Alexion: Alexion Pharmaceuticals, Inc. is a biopharmaceutical company focused on serving patients with severe and ultra-rare disorders through the innovation, development and commercialization of life-transforming therapeutic products. Alexion is the global leader in complement inhibition and has developed and markets Soliris® (eculizumab) as a treatment for patients with PNH and aHUS, two debilitating, ultra-rare and life-threatening disorders caused by chronic uncontrolled complement activation. Soliris is currently approved in nearly 50 countries for the treatment of PNH, and in the United States, European Union, Japan and other countries for the treatment of aHUS. Alexion is evaluating other potential indications for Soliris in additional severe and ultra-rare disorders beyond PNH and aHUS, and is developing other highly innovative biotechnology product candidates across multiple therapeutic areas. This press release and further information about Alexion Pharmaceuticals, Inc. can be found at: www.alexionpharma.com. [ALXN-E] This news release contains forward-looking statements, including statements related to guidance regarding anticipated financial results for 2013, assessment of the Company's financial position and commercialization efforts, medical benefits and commercial potential for Soliris for PNH and aHUS and other potential indications, medical and commercial potential of Alexion's complement-inhibition technology and other technologies, and plans for clinical programs for each of our product candidates. Forward-looking statements are subject to factors that may cause Alexion's results and plans to differ from those expected, including for example, decisions of regulatory authorities regarding marketing approval or material limitations on the marketing of Soliris for PNH and aHUS and other potential


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indications, delays, interruptions or failures in the manufacture and supply of Soliris and our product candidates, progress in establishing and developing commercial infrastructure, failure to satisfactorily address the issues raised by the FDA in the Warning Letter received by Alexion in March 2013, the possibility that results of clinical trials are not predictive of safety and efficacy results of Soliris in broader patient populations in the disease studied or other diseases, the risk that acquisitions will not result in short-term or long-term benefits, the possibility that current results of commercialization are not predictive of future rates of adoption of Soliris in PNH, aHUS or other diseases, the possibility that clinical trials of our product candidates could be delayed or that additional research and testing is required by regulatory agencies, the risk that third party payors (including governmental agencies) will not reimburse or continue to reimburse for the use of Soliris at acceptable rates or at all, the risk that estimates regarding the number of patients with PNH, aHUS or other diseases are inaccurate, and a variety of other risks set forth from time to time in Alexion's filings with the US Securities and Exchange Commission, including but not limited to the risks discussed in Alexion's Quarterly Report on Form 10-Q for the period ended June 30, 2013 and in our other filings with the US Securities and Exchange Commission. Alexion does not intend to update any of these forward-looking statements to reflect events or circumstances after the date hereof, except when a duty arises under law.

ALEXION PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

Three months ended Nine months ended

September 30 September 30

2013 2012 2013 2012

Net product sales $ 400,405 $ 294,136 $ 1,109,437 $ 813,588 Cost of sales: Cost of sales 42,177 33,186 116,823 93,067 Change in contingent liability from intellectual property settlements

9,181 (53,377 ) 9,181 (53,377 )

Total cost of sales 51,358 (20,191 ) 126,004 39,690 Operating expenses: Research and development 88,209 54,280 231,308 159,323 Selling, general and administrative 122,886 89,957 354,901 272,054 Acquisition-related costs 2,573 967 6,974 19,447 Impairment of intangible asset - 26,300 - 26,300 Amortization of purchased intangible assets 104 104 312 312 Total operating expenses 213,772 171,608 593,495 477,436 Operating income 135,275 142,719 389,938 296,462


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Other income and expense (987 ) (1,954 ) (1,646 ) (6,165 ) Income before income taxes 134,288 140,765 388,292 290,297 Income tax provision 40,503 48,586 116,405 116,446 Net Income $ 93,785 $ 92,179 $ 271,887 $ 173,851 Earnings per common share Basic $ 0.48 $ 0.48 $ 1.40 $ 0.92 Diluted $ 0.47 $ 0.46 $ 1.37 $ 0.88 Shares used in computing earnings per common share Basic 195,662 193,353 194,520 189,219 Diluted 199,711 201,142 198,655 197,635

ALEXION PHARMACEUTICALS, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(in thousands, except per share amounts) (unaudited)

Three months ended Nine months ended September 30 September 30 2013 2012 2013 2012 Net income reconciliation: GAAP net income $ 93,785 $ 92,179 $ 271,887 $ 173,851 Share-based compensation expense 21,597 14,015 56,409 40,322 Acquisition-related costs (1) 2,573 967 6,974 19,447 Amortization of purchased intangible assets 104 104 312 312 Change in contingent liability from intellectual property settlements (2)

9,181 (53,377 ) 9,181 (53,377 )

Upfront and milestone payments related to license and collaboration agreements (3)

11,500 - 14,500 -

Impairment of intangible asset (4) - 26,300 - 26,300 Non-cash taxes (5) 29,173 40,550 87,194 74,207 Tax related to acquisition structuring (6) - - - 21,812 Non-GAAP net income $ 167,913 $ 120,738 $ 446,457 $ 302,874 GAAP earnings per share - diluted $ 0.47 $ 0.46 $ 1.37 $ 0.88 Non-GAAP earnings per share - diluted $ 0.83 $ 0.60 $ 2.21 $ 1.52 Shares used in computing diluted earnings per share (GAAP) 199,711 201,142 198,655 197,635 Shares used in computing diluted earnings per share (non-GAAP) 202,988 202,377 201,886 198,953


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Cost of sales reconciliation: GAAP cost of sales $ 51,358 $ (20,191 ) $ 126,004 $ 39,690 Share-based compensation expense (757 ) (664 ) (2,349 ) (1,939 ) Change in contingent liability from intellectual property settlements (2)

(9,181 ) 53,377 (9,181 ) 53,377

Non-GAAP cost of sales $ 41,420 $ 32,522 $ 114,474 $ 91,128 Research and development reconciliation: GAAP research and development $ 88,209 $ 54,280 $ 231,308 $ 159,323 Share-based compensation expense (7,803 ) (3,643 ) (17,961 ) (10,373 ) Upfront and milestone payments related to license and collaboration agreements (3)

(11,500 ) - (14,500 ) -

Non-GAAP research and development $ 68,906 $ 50,637 $ 198,847 $ 148,950 Selling, general and administrative reconciliation: GAAP selling, general and administrative $ 122,886 $ 89,957 $ 354,901 $ 272,054 Share-based compensation expense (13,037 ) (9,708 ) (36,099 ) (28,010 ) Non-GAAP selling, general and administrative $ 109,849 $ 80,249 $ 318,802 $ 244,044 Income tax provision reconciliation: GAAP income tax provision $ 40,503 $ 48,586 $ 116,405 $ 116,446 Non-cash taxes (5) (29,173 ) (40,550 ) (87,194 ) (74,207 ) Tax related to acquisition structuring (6) - - - (21,812 ) Non-GAAP income tax provision $ 11,330 $ 8,036 $ 29,211 $ 20,427 Three months ended Nine months ended

September 30 September 30

2013 2012 2013 2012

Acquisition-related costs:

Separately-identifiable employee costs $ - $ 457 $ 248 $ 3,552

Professional fees - 1,052 775 11,562

Changes in fair value of contingent consideration 2,573 (542 ) 5,951 4,333

$ 2,573 $ 967 $ 6,974 $ 19,447


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ALEXION PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

September 30, December 31,

2013 2012

Cash and cash equivalents $ 910,411 $ 989,501

Marketable securities 392,344 -

Trade accounts receivable, net 404,956 295,598

Inventories 105,196 94,521

Deferred tax assets, current 23,820 26,086

Other current assets 78,775 89,894

Property, plant and equipment, net 178,842 165,629

Deferred tax assets, noncurrent 9,743 13,954

Intangible assets, net 646,138 646,678

Goodwill 254,073 253,645

Other noncurrent assets 45,497 38,054

Total assets $ 3,049,795 $ 2,613,560

Accounts payable and accrued expenses $ 280,200 $ 271,275

Current portion of long-term debt 48,000 48,000

Other current liabilities 67,256 40,814

Long-term debt, less current portion 77,000 101,000 Contingent consideration 144,621 139,002 Other noncurrent liabilities 77,952 42,619 Total liabilities 695,029 642,710 Total stockholders' equity 2,354,766 1,970,850 Total liabilities and stockholders' equity $ 3,049,795 $ 2,613,560


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Contact: Alexion Pharmaceuticals, Inc. Irving Adler, 203-271-8210 Executive Director, Corporate Communications or Kim Diamond, 203-439-9600 Senior Director, Corporate Communications or Investors Rx Communications Rhonda Chiger, 917-322-2569 (http://news.alexionpharma.com/press-release/financial-news/alexion-reports-third-quarter-2013-results) Amgen Amgen's Third Quarter 2013 Revenues Increased 10 Percent To $4.7 Billion And Adjusted Earnings Per Share (EPS) Increased 16 Percent To $1.94 Third Quarter 2013 GAAP EPS Were $1.79 2013 Total Revenues and Adjusted EPS Guidance Increased to $18.3-$18.5 Billion and $7.35-$7.45

THOUSAND OAKS, Calif., Oct. 22, 2013 /PRNewswire/ -- Amgen (NASDAQ:AMGN) today announced results for the third quarter of 2013. Key financial results for the quarter include:

§ Total revenues increased 10 percent to $4,748 million, with 11 percent product sales growth driven by strong performance across the portfolio, particularly from Neulasta® (pegfilgrastim), Enbrel®(etanercept), Prolia® (denosumab) and XGEVA® (denosumab). Product sales included a $155 million order for NEUPOGEN® (filgrastim) from the U.S. government.

§ Adjusted EPS grew 16 percent to $1.94, with higher revenues and a lower tax rate partially offset by increased Research & Development (R&D) investment. Adjusted net income increased 13 percent to $1,481 million.

§ GAAP EPS were $1.79 compared to $1.41 and GAAP net income was $1,368 million compared to$1,107 million.

§ The Company generated approximately $1.6 billion of free cash flow.

Year-over-Year $Millions, except EPS and percentages Q3 '13 Q3 '12 YOY Δ

Total Revenues $ 4,748 $ 4,319 10% Adjusted Net Income $ 1,481 $ 1,311 13% Adjusted EPS $ 1.94 $ 1.67 16%

GAAP Net Income $ 1,368 $ 1,107 24% GAAP EPS $ 1.79 $ 1.41 27%

The Company also noted significant progress on key strategic priorities:

§ The acquisition of Onyx Pharmaceuticals closed on Oct. 1, 2013. Kyprolis sales grew 6 percent sequentially in the third quarter to $65 million.


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§ Amgen advanced its efforts to develop a presence in cardiovascular disease by acquiring U.S. commercial rights to ivabradine, an innovative product already approved in over 100 countries for heart failure and angina.

§ In Japan, the Amgen-Astellas strategic alliance began operations on Oct. 1, 2013, and will develop and launch five Phase 3 molecules, starting with evolocumab (AMG 145).

§ In China, the joint venture with Betta Pharma Co. Ltd. to commercialize Vectibix® (panitumumab) also began operations, and Amgen announced a R&D partnership with ShanghaiTech University.

§ In emerging growth markets, Amgen repurchased rights to Neulasta and NEUPOGEN from Roche. Effective Jan. 1, 2014, Amgen will assume responsibility for these products in markets outside the U.S. and Europe with annual sales of approximately $200 million.

Product Sales Performance

§ Total product sales increased 11 percent driven by strong year-over-year performance from NEUPOGEN, Neulasta, ENBREL, Prolia and XGEVA.

§ Combined Neulasta and NEUPOGEN sales increased 18 percent year-over-year.

§ Global Neulasta sales increased 9 percent driven mainly by price.

§ Global NEUPOGEN sales increased 50 percent including a $155 million order from the U.S. government.

§ Enbrel sales increased 7 percent year-over-year driven mainly by price.

§ Aranesp® (darbepoetin alfa) sales decreased 10 percent year-over-year.

§ EPOGEN® (epoetin alfa) sales were flat year-over-year.

§ Sensipar®/Mimpara® (cinacalcet) sales increased 7 percent year-over-year driven by increases in unit demand.

§ Combined sales of Vectibix and Nplate® (romiplostim) increased 19 percent year-over-year mainly due to unit growth.

§ XGEVA sales increased 30 percent year-over-year and 5 percent on a sequential basis, reflecting increased segment share.

§ Prolia sales increased 62 percent year-over-year due to increased segment share and decreased 5 percent on a sequential basis impacted by seasonality.

Product Sales Detail by Product and Geographic Region

$Millions, except percentages Q3 '13 Q3 '12 YOY Δ US ROW TOTAL TOTAL TOTAL

Neulasta®/ NEUPOGEN® $1,314 $287 $1,601 $1,355 18%

Neulasta® 905 230 1,135 1,044 9% NEUPOGEN® 409 57 466 311 50%

Enbrel® 1,073 82 1,155 1,079 7% Aranesp® 171 278 449 497 (10%)

EPOGEN® 491 0 491 491 0% Sensipar® / Mimpara® 183 76 259 243 7%

Vectibix® 32 75 107 88 22% Nplate® 58 48 106 91 16%

XGEVA®/ Prolia® 303 136 439 311 41% XGEVA® 194 67 261 201 30%


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Prolia® 109 69 178 110 62% Other 0 40 40 46 (13%)

Total product sales $3,625 $1,022 $4,647 $4,201 11%

Operating Expense and Tax Rate Analysis, on an Adjusted Basis

§ Cost of Sales margin decreased 0.6 points.

§ R&D expenses increased 14 percent in the third quarter of 2013 primarily in support of our later-stage clinical programs, particularly evolocumab (AMG 145) and the $50 million upfront payment to Servier for the U.S. rights to ivabradine.

§ Selling, General & Administrative (SG&A) expenses increased 10 percent driven primarily by higher ENBREL profit share expenses and the U.S. healthcare reform federal excise fee. ENBREL profit share expenses increased 12 percent to $432 million.

$Millions, except percentages On an Adjusted Basis Q3 '13 Q3 '12 YOY Δ

Cost of Sales $715 $674 6% % of sales 15.4% 16.0% (0.6) pts % of sales (Excluding PR excise tax) 13.4% 14.0% (0.6) pts

Research & Development $966 $849 14% % of sales 20.8% 20.2% 0.6 pts

Selling, General & Administrative $1,218 $1,110 10% % of sales 26.2% 26.4% (0.2) pts

TOTAL Operating Expenses $2,899 $2,633 10% pts: percentage points

§ Adjusted Tax Rate for the third quarter of 2013 reflects the favorable tax impacts of changes in the jurisdictional mix of income and expenses and the current year benefit from the federal R&D credit.

On an Adjusted Basis Q3 '13 Q3 '12 YOY Δ

Tax Rate 12.1% 16.0% (3.9) pts Tax Rate (Excluding PR excise tax credits) 16.3% 20.2% (3.9) pts pts: percentage points

Cash Flow and Balance Sheet Discussion

§ The Company generated $1.6 billion of free cash flow in the third quarter of 2013, in-line with the third quarter of 2012.

§ Debt outstanding and cash as of Sept. 30, 2013, included $3.1 billion from bank loans to fund the acquisition of Onyx Pharmaceuticals, which closed on Oct. 1, 2013. The Company received an additional $5 billion of bank loans on Oct. 1, 2013, to complete the acquisition financing.

§ The Company's fourth quarter dividend of $0.47 per share declared on Oct. 16, 2013, will be paid on Dec. 6, 2013, to all stockholders of record as of the close of business on Nov. 14, 2013.


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§ The Company did not repurchase shares in the quarter and has $1.6 billion remaining under its stock repurchase authorization.

$Billions, except shares Q3 '13 Q3 '12 YOY Δ

Operating Cash Flow $1.8 $1.7 0.1 Capital Expenditures (0.2) (0.2) 0.0 Free Cash Flow 1.6 1.6 0.1 Dividend Paid 0.4 0.3 0.1 Cost of Shares Repurchased 0.0 0.8 (0.8) Adjusted Avg. Diluted Shares (millions) 765 783 (18)

Cash and Investments* 26.5 25.4 1.1 Debt Outstanding 27.2 26.5 0.7 Stockholders' Equity 21.7 19.9 1.8

Includes cash, cash equivalents and marketable securities, receivable from sale of investments, and long-term restricted investments

2013 Guidance

For the full year 2013, the Company expects:

§ Total revenues to be in the range of $18.3 billion to $18.5 billion.

§ Adjusted EPS to be in the range of $7.35 to $7.45.

§ Adjusted tax rate to be in the range of 9 percent to 10 percent, unchanged from previous guidance. Excluding the Puerto Rico excise tax, Amgen expects the adjusted tax rate for 2013 to be in the range of 13 percent to 14 percent.

§ Capital expenditures to be approximately $700 million, unchanged from previous guidance.

Third Quarter Pipeline Update

The Company provided the following information on selected clinical programs:

Evolocumab (AMG 145):

§ The Company announced that all of the pivotal lipid lowering studies of evolocumab have completed enrollment and the data are expected in the first quarter of 2014.

Trebananib:

§ The Company announced that the primary analysis of the event-driven overall survival secondary endpoint from the ongoing pivotal Phase 3 study in recurrent ovarian cancer (TRINOVA-1) is projected to occur in the second half of 2014.

§ The Company announced that enrollment has been closed in a Phase 3 study in recurrent ovarian cancer (TRINOVA-2) due to DOXIL® (doxorubicin HCl liposome injection) supply issues.


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Brodalumab:

§ The Company announced that all Phase 3 studies in subjects with psoriasis have completed enrollment and data are expected in 2014.

Biosimilars:

§ The Company announced that it has commenced a pivotal study in subjects with psoriasis for its biosimilar Humira® (adalimumab).

Non-GAAP Financial Measures

The Adjusted non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures included above for the third quarters of 2013 and 2012 exclude, for the applicable periods, certain expenses related to acquisitions, cost-savings initiatives, various legal proceedings, non-cash interest expense associated with our convertible notes and certain other adjustments, as applicable. These adjustments and other items are presented on the attached reconciliations.

Management has presented its operating results in accordance with GAAP and on an "adjusted" (or non-GAAP) basis and Free Cash Flow which is a non-GAAP financial measure for the third quarters of 2013 and 2012. In addition, management has presented its full year 2013 EPS and tax rate guidance in accordance with GAAP and on an "adjusted" (or non-GAAP) basis. The Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. The Company uses these non-GAAP financial measures in connection with its own budgeting and financial planning. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in conformity with GAAP.

About Amgen

Amgen is committed to unlocking the potential of biology for patients suffering from serious illnesses by discovering, developing, manufacturing and delivering innovative human therapeutics. This approach begins by using tools like advanced human genetics to unravel the complexities of disease and understand the fundamentals of human biology.

Amgen focuses on areas of high unmet medical need and leverages its biologics manufacturing expertise to strive for solutions that improve health outcomes and dramatically improve people's lives. A biotechnology pioneer since 1980, Amgen has grown to be the world's largest independent biotechnology company, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential.

Forward-Looking Statements

This news release contains forward-looking statements that involve significant risks and uncertainties, including those discussed below and others that can be found in our Form 10-K for the year ended Dec. 31, 2012, and in any subsequent periodic reports on Form 10-Q and Form 8-K. Amgen is providing this information as of the date of this news release and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

No forward-looking statement can be guaranteed and actual results may differ materially from those we project. The Company's results may be affected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments (domestic or foreign) involving current and future products, sales growth of recently launched products, competition from other products (domestic or foreign), and difficulties or delays in manufacturing our products. In addition, sales of our products are affected by reimbursement policies imposed by third-party payors, including governments, private insurance plans and managed care providers and may


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be affected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment as well as U.S. legislation affecting pharmaceutical pricing and reimbursement. Government and others' regulations and reimbursement policies may affect the development, usage and pricing of our products. Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. We or others could identify safety, side effects or manufacturing problems with our products after they are on the market. Our business may be impacted by government investigations, litigation and product liability claims. If we fail to meet the compliance obligations in the corporate integrity agreement between us and the U.S. government, we could become subject to significant sanctions. Further, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors. We depend on third parties for a significant portion of our manufacturing capacity for the supply of certain of our current and future products and limits on supply may constrain sales of certain of our current products and product candidate development. In addition, we compete with other companies with respect to some of our marketed products as well as for the discovery and development of new products. Discovery or identification of new product candidates cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate will be successful and become a commercial product. Further, some raw materials, medical devices and component parts for our products are supplied by sole third-party suppliers. Our business performance could affect or limit the ability of our Board of Directors to declare a dividend or our ability to pay a dividend or repurchase our common stock.

Amgen Inc Condensed Consolidated Statements of Income - GAAP

(In millions, except per share data) (Unaudited)


September 30, September 30, 2013 2012 2013 2012

Revenues: Product sales $ 4,647 $ 4,201 $ 13,393 $ 12,302 Other revenues 101 118 272 542

Total revenues 4,748 4,319 13,665 12,844

Operating expenses: Cost of sales 788 775 2,317 2,277 Research and development 989 880 2,834 2,442 Selling, general and administrative 1,249 1,131 3,663 3,441 Other 34 110 171 195

Total operating expenses 3,060 2,896 8,985 8,355

Operating income 1,688 1,423 4,680 4,489

Interest expense, net 257 271 761 762 Interest and other income, net 72 111 332 359

Income before income taxes 1,503 1,263 4,251 4,086


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Provision for income taxes 135 156 191 529

Net income $ 1,368 $ 1,107 $ 4,060 $ 3,557

Earnings per share: Basic $ 1.81 $ 1.44 $ 5.40 $ 4.57 Diluted $ 1.79 $ 1.41 $ 5.31 $ 4.51

Average shares used in calculation of earnings per share:

Basic 754 771 752 779 Diluted 766 783 764 789

Amgen Inc Condensed Consolidated Balance Sheets - GAAP

(In millions) (Unaudited)

September 30, December 31, 2013 2012

Assets Current assets: Cash, cash equivalents and marketable securities $ 22,558 $ 24,061 Receivable from sale of investments 560 - Trade receivables, net 2,670 2,518 Inventories 2,838 2,744 Other current assets 2,049 1,886 Total current assets 30,675 31,209 Property, plant and equipment, net 5,283 5,326 Intangible assets, net 3,682 3,968 Goodwill 12,572 12,662 Restricted investments 3,411 - Other assets 1,450 1,133 Total assets $ 57,073 $ 54,298

Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 4,832 $ 5,696 Current portion of long-term debt 11 2,495 Total current liabilities 4,843 8,191 Long-term debt 27,178 24,034 Other non-current liabilities 3,324 3,013 Stockholders' equity 21,728 19,060 Total liabilities and stockholders' equity $ 57,073 $ 54,298

Shares outstanding 754 756


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Amgen Inc. GAAP to "Adjusted" Reconciliations



September 30, September 30, 2013 2012 2013 2012

GAAP cost of sales $ 788 $ 775 $ 2,317 $ 2,277 Adjustments to cost of sales:

Stock option expense (a) (3) (3) (6) (9) Acquisition-related expenses (b) (70) (77) (211) (218)

Certain charges pursuant to our efforts to improve cost efficiencies in our operations related to accelerated depreciation of a manufacturing facility - (21) - (42)

Total adjustments to cost of sales (73) (101) (217) (269) Adjusted cost of sales $ 715 $ 674 $ 2,100 $ 2,008

GAAP research and development expenses $ 989 $ 880 $ 2,834 $ 2,442

Adjustments to research and development expenses:

Stock option expense (a) (2) (5) (10) (17) Acquisition-related expenses (c) (21) (14) (63) (34)

Certain charges pursuant to our efforts to improve cost efficiencies in our operations related to a lease abandonment - (12) - (12)

Total adjustments to research and development expenses (23) (31) (73) (63)

Adjusted research and development expenses $ 966 $ 849 $ 2,761 $ 2,379

GAAP selling, general and administrative expenses $ 1,249 $ 1,131 $ 3,663 $ 3,441

Adjustments to selling, general and administrative expenses:

Stock option expense (a) (3) (6) (10) (20) Acquisition-related expenses (d) (28) (15) (54) (55)

Total adjustments to selling, general and administrative expenses (31) (21) (64) (75)

Adjusted selling, general and administrative expenses $ 1,218 $ 1,110 $ 3,599 $ 3,366


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GAAP operating expenses $ 3,060 $ 2,896 $ 8,985 $ 8,355 Adjustments to operating expenses:

Adjustments to cost of sales (73) (101) (217) (269)

Adjustments to research and development expenses (23) (31) (73) (63)

Adjustments to selling, general and administrative expenses (31) (21) (64) (75)

Expense resulting from changes in the estimated fair values of the contingent consideration obligations related to a prior year business combination - (2) (111) (5)

Write-off of a non-key contract asset acquired in a prior year business combination - (19) - (19)

Certain charges pursuant to our efforts to improve cost efficiencies in our operations (e) (35) (36) (46) (106)

Benefit/(Expense) related to various legal proceedings 1 (53) (14) (65)

Total adjustments to operating expenses (161) (263) (525) (602)

Adjusted operating expenses $ 2,899 $ 2,633 $ 8,460 $ 7,753

GAAP income before income taxes $ 1,503 $ 1,263 $ 4,251 $ 4,086

Adjustments to income before income taxes: Adjustments to operating expenses 161 263 525 602 Adjustments to other income/(expense) 22 35 34 104

Total adjustments to income before income taxes 183 298 559 706 Adjusted income before income taxes $ 1,686 $ 1,561 $ 4,810 $ 4,792

GAAP provision for income taxes $ 135 $ 156 $ 191 $ 529 Adjustments to provision for income taxes:

Income tax effect of the above adjustments (f) 60 94 148 232 Other income tax adjustments (g) 10 - 48 -

Total adjustments to provision for income taxes 70 94 196 232 Adjusted provision for income taxes $ 205 $ 250 $ 387 $ 761

GAAP net income $ 1,368 $ 1,107 $ 4,060 $ 3,557 Adjustments to net income:

Adjustments to income before income taxes, net of the tax effect of the above adjustments 123 204 411 474 Other income tax adjustments (g) (10) - (48) - Total adjustments to net income 113 204 363 474 Adjusted net income $ 1,481 $ 1,311 $ 4,423 $ 4,031


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Amgen Inc GAAP to "Adjusted" Reconciliations (In millions, except per share data)

(Unaudited)

The following table presents the computations for GAAP and "Adjusted" diluted EPS, computed under the treasury stock method.

"Adjusted" EPS presented below excludes stock option expense: Three months ended Three months ended September 30, 2013 September 30, 2012 GAAP "Adjusted" GAAP "Adjusted"

Income (Numerator):

Net income for basic and diluted EPS $ 1,368 $ 1,481 $ 1,107 $ 1,311

Shares (Denominator):

Weighted-average shares for basic EPS 754 754 771 771 Effect of dilutive securities 12 11 (*) 12 12 (*)

Weighted-average shares for diluted EPS 766 765 783 783

Diluted EPS $ 1.79 $ 1.94 $ 1.41 $ 1.67

Nine months ended Nine months ended September 30, 2013 September 30, 2012 GAAP "Adjusted" GAAP "Adjusted"

Income (Numerator):

Net income for basic and diluted EPS $ 4,060 $ 4,423 $ 3,557 $ 4,031

Shares (Denominator):

Weighted-average shares for basic EPS 752 752 779 779 Effect of dilutive securities 12 12 (*) 10 10 (*)

Weighted-average shares for diluted EPS 764 764 789 789

Diluted EPS $ 5.31 $ 5.79 $ 4.51 $ 5.11

For the three and nine months ended September 30, 2013, the total pre-tax expense for employee stock options was $8 million and $26 million, respectively, compared with $14 million and $46 million for the corresponding periods of the prior year.


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"Adjusted" diluted EPS including the impact of stock option expense were as follows: Three months ended Nine months ended September 30, September 30, 2013 2012 2013 2012

"Adjusted" diluted EPS, excluding stock option expense $ 1.94 $ 1.67 $ 5.79 $ 5.11

Impact of stock option expense (net of tax) (0.01) (0.01) (0.02) (0.04)

"Adjusted" diluted EPS, including stock option expense $ 1.93 $ 1.66 $ 5.77 $ 5.07

The adjustments related to non-cash amortization of product technology rights acquired in a prior year business combination. The adjustments in 2012 also included $7 million of other costs. The adjustments in 2013 related primarily to non-cash amortization of intangible assets acquired in prior year business combinations. The adjustments in 2012 related primarily to non-cash amortization of intangible assets as well as retention and severance expenses. The adjustments in 2013 related primarily to non-cash amortization of intangible assets acquired in prior year business combinations as well as $15 million of transaction costs associated with the Onyx business combination which closed in the fourth quarter of 2013. For the three months ended September 30, 2012, the adjustments related primarily to non-cash amortization of intangible assets. For the nine months ended September 30, 2012, the adjustments related primarily to transaction costs as well as non-cash amortization of intangible assets. The adjustments in 2013 related primarily to severance expenses. The adjustments in 2012 related primarily to lease abandonment costs. The tax effect of the adjustments between our GAAP and "Adjusted" results takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). Generally, this results in a tax impact at the U.S. marginal tax rate for certain adjustments, including the majority of amortization of intangible assets and non-cash interest expense associated with our convertible notes, whereas the tax impact of other adjustments, including stock option expense, depends on whether the amounts are deductible in the tax jurisdictions where the expenses are incurred or the asset is located and the applicable tax rate(s) in those jurisdictions. Due to these factors, the effective tax rates for the adjustments to our GAAP income before income taxes, for the three and nine months ended September 30, 2013, were 32.8% and 26.5%, respectively, compared with 31.5% and 32.9% for the corresponding periods of the prior year. The income tax impact from resolving certain non-routine transfer-pricing and acquisition-related issues with tax authorities as well as the impact related to certain prior period items excluded from adjusted earnings.


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Amgen Inc Reconciliation of Free Cash Flow


Three months ended September 30, 2013 2012

Cash Flows from Operations $ 1,807 $ 1,723 Capital Expenditures (175) (173)

Free Cash Flow $ 1,632 $ 1,550

Reconciliation of GAAP EPS Guidance to "Adjusted" EPS Guidance for the Year Ending December 31, 2013

(Unaudited) 2013

GAAP diluted EPS guidance $ 6.79 - $ 6.89

Known adjustments to arrive at "Adjusted" earnings*:

Acquisition-related expenses (a) 0.53

Charges associated with cost savings initiatives 0.04

Stock option expense 0.02

Expense related to various legal proceedings 0.02

Non-cash interest expense associated with our convertible notes 0.01

Other tax adjustments (b) (0.06)

"Adjusted" diluted EPS guidance $ 7.35 - $ 7.45 To exclude acquisition-related expenses related primarily to non-cash amortization of intangible assets and expense resulting from changes in the estimated fair values of the contingent consideration obligations related to prior year business combinations. To exclude the income tax impact from resolving certain non-routine transfer-pricing and acquisition-related issues with tax authorities as well as the impact related to certain prior period items excluded from adjusted earnings. On October 1, 2013, we acquired Onyx Pharmaceuticals. Many of the adjustments from this transaction have not been determined. As a result, we expect significantly more adjustments in the fourth quarter that are not included in the table above.


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Reconciliation of GAAP Tax Rate Guidance to "Adjusted"

Tax Rate Guidance for the Year Ending December 31, 2013 (Unaudited)

2013 with PR excise tax

credit 2013 without

PR excise tax credit

GAAP tax rate guidance 6% - 7% 11% - 12%

Tax rate effect of known adjustments discussed above 3% 2%

"Adjusted" tax rate guidance 9% - 10% 13% - 14%

(http://www.amgen.com/media/media_pr_detail.jsp?year=2013&releaseID=1866944)

Biogen Idec (NASDAQ: BIIB)


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Business Overview Biogen Idec is a global biotechnology company focused on discovering, developing, manufacturing and marketing therapies for the treatment of multiple sclerosis and other autoimmune disorders, neurodegenerative diseases and hemophilia. We also collaborate on the development and commercialization of RITUXAN and anti-CD20 product candidates for the treatment of non-Hodgkin's lymphoma and other conditions. Basis of Presentation In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of our financial statements for interim periods in accordance with accounting principles generally accepted in the United States (U.S. GAAP). The information included in this quarterly report on Form 10-Q should be read in conjunction with our consolidated financial statements and the accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2012 (2012 Form 10-K). Our accounting policies are described in the “ Notes to Consolidated Financial Statements ” in our 2012 Form 10-K and updated, as necessary, in this Form 10- Q. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from our audited financial statements, but does not include all disclosures required by U.S. GAAP. The results of operations for the three and


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nine months ended September 30, 2013 are not necessarily indicative of the operating results for the full year or for any other subsequent interim period. Consolidation Our condensed consolidated financial statements reflect our financial statements, those of our wholly-owned subsidiaries and those of certain variable interest entities where we are the primary beneficiary. For consolidated entities where we own or are exposed to less than 100% of the economics, we record net income (loss) attributable to noncontrolling interests in our condensed consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. Intercompany balances and transactions are eliminated in consolidation. In determining whether we are the primary beneficiary of an entity and therefore required to consolidate, we apply a qualitative approach that determines whether we have both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. These considerations impact the way we account for our existing collaborative relationships and other arrangements. We continuously assess whether we are the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in us consolidating or deconsolidating our partner(s) to collaborations and other arrangements. Use of Estimates The preparation of our condensed consolidated financial statements requires us to make estimates, judgments, and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates and judgments and methodologies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. (http://www.biogenidec.com/financial_reports.aspx?ID=5915) BioMarin Pharmaceutical Inc. BioMarin Announces Third Quarter 2013 Financial Results Total Revenue Grows 6.9% in the Quarter and 8.9% for First Three Quarters of 2013 Advisory Committee Meeting for Vimizim Scheduled for November 19, 2013 Conference Call and Webcast to Be Held Today at 5:00 p.m. ET Financial Highlights ($ in millions, except per share data, unaudited)

Q3 2013

Q3 2012

Percent Change

Total BioMarin Revenue $ 136.9 $ 128.1 6.9%

Total BioMarin Revenue (excluding Aldurazyme Net Product Transfer Revenue) - non-GAAP

134.0 124.0 8.1%

Naglazyme Net Product Revenue 63.2 62.5 1.1%

Aldurazyme BioMarin Net Product Revenue 23.4 23.8 -1.7%

Aldurazyme Royalty Revenue (excluding Net Product Transfer Revenue) - non-GAAP 20.5 19.7 4.1%

Kuvan Net Product Revenue 43.6 36.4 19.8%

Firdapse Net Product Revenue 4.1 3.6 13.9%

Net Loss (53.0) (5.4)

Net Loss per Share (basic and diluted) $ (0.38) $ (0.04)


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Adjusted EBITDA Income (Loss) - non-GAAP $ (16.7) $ 11.1

Cash, cash equivalents and short and long-term investments $ 527.5 $ 533.2 -1.1%

SAN RAFAEL, Calif., Oct. 24, 2013 (GLOBE NEWSWIRE) -- BioMarin Pharmaceutical Inc. (Nasdaq:BMRN) today announced financial results for the third quarter ended September 30, 2013. GAAP net loss was $53.0 million ($0.38 per diluted share) for the third quarter of 2013, compared to GAAP net loss of $5.4 million ($0.04 per share) for the third quarter of 2012. GAAP net loss for the nine months ended September 30, 2013 was $114.4 million ($0.84 per diluted share), as compared to GAAP net loss of $61.3 million ($0.52 per diluted share) for the nine months ended September 30, 2012. Non-GAAP adjusted EBITDA loss was $16.7 million for the third quarter of 2013, compared to non-GAAP adjusted EBITDA income of $11.1 million for the third quarter of 2012. Non-GAAP adjusted EBITDA was a loss of $24.6 million for the nine months ended September 30, 2013, as compared to income of $3.9 million for the nine months ended September 30, 2012. The increased GAAP and non-GAAP adjusted EBITDA loss for the third quarter of 2013 compared to the third quarter of 2012 was primarily due to increased R&D expenses from advancing our late stage clinical programs (PEG-PAL, BMN 673 and BMN 701), from increased SG&A expenses, primarily due to increased pre-commercialization expenses for Vimizim and commercialization expenses for Naglazyme and Kuvan, and from increased contingent consideration expense also due to progress on some of our acquired clinical programs (BMN 673 and BMN 701), partially offset by increased gross profit from total revenues. As of September 30, 2013, BioMarin had cash, cash equivalents and short and long-term investments totaling $527.5 million, as compared to $524.4 million on June 30, 2013. "During the third quarter we saw continued steady growth of our development pipeline. We announced the advancement of two important programs, the decision to advance BMN 673 for the treatment of gBRCA breast cancer into Phase 3 and the initiation of a Phase 1/2 trial of BMN 190 for the treatment of Batten Disease," said Jean-Jacques Bienaimé, Chief Executive Officer of BioMarin. "The next major inflection point for the company is the potential market approval of Vimizim in the U.S. and Europe. We have been working diligently to prepare for the launch of this drug and look forward to the Advisory Committee meeting November 19 and potential CHMP opinion, which we expect near the end of the year or early 2014." Net Product Revenue

Total Revenue Growth, excluding Aldurazyme Net Product Transfer Revenues (in millions)

Three Months Ended September 30, Nine Months Ended September 30,

2013 2012 $ Change

% Change 2013 2012

$ Change

% Change

Naglazyme (1) $ 63.2 $ 62.5 $ 0.7 1.1% $ 202.5 $ 193.9 $ 8.6 4.4%

Kuvan 43.6 36.4 7.2 19.8% 122.1 103.1 19.0 18.4%

Firdapse 4.1 3.6 0.5 13.9% 11.8 10.8 1.0 9.3%

Aldurazyme 23.4 23.8 (0.4) -1.7% 57.7 57.7 -- 0.0%

Net product revenue 134.3 126.3 8.0 6.3% 394.1 365.5 28.6 7.8%

Collaborative agreement revenue 1.8 1.2 0.6 2.8 1.7 1.1


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Royalty and license revenue 0.8 0.6 0.2 4.7 1.5 3.2

Total BioMarin revenue - GAAP 136.9 128.1 8.8 6.9% 401.6 368.7 32.9 8.9%

Less: Aldurazyme net product transfer revenue

2.9 4.1 (1.2) -3.3 1.1 (4.4)

Total BioMarin revenues (excluding Aldurazyme net product transfer revenue) - Non-GAAP (2)

$ 134.0 $ 124.0 10.0 8.1% $ 404.9 $ 367.6 37.3 10.1%

Reconciliation of Aldurazyme Revenues (in millions)

Three Months Ended September 30, Nine Months Ended September 30,

2013 2012 $ Change

% Change 2013 2012

$ Change

% Change

Aldurazyme revenue reported by Genzyme $ 50.8 $ 48.3 $ 2.5 5.2% $ 152.9 $ 140.0 $ 12.9 9.2%

Aldurazyme Royalties due from Genzyme - Non-GAAP (2)

$ 20.5 $ 19.7 $ 0.8 $ 61.0 $ 56.6 $ 4.4

Incremental net product transfer revenue (3)

2.9 4.1 (1.2) (3.3) 1.1 (4.4)

Total Aldurazyme net product revenue - GAAP

$ 23.4 $ 23.8 $ (0.4) $ 57.7 $ 57.7 --

2013 Full Year Financial Guidance

Unchanged with the exception of cash balance which reflects lower cash burn in 2013 and net proceeds of $696.6 million from the Convertible Debt offering that closed on October 15, 2013.

Revenue Guidance ($ in millions)

Item 2013 Guidance

Total BioMarin Revenues $530 to $555

Naglazyme Net Product Revenue $265 to $285

Kuvan Net Product Revenue $155 to $170

Selected Income Statement Guidance ($ in millions)

Item 2013 Guidance

Cost of Sales (% of Total Revenue) 17% to 18%


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Selling, General and Admin. Expense $220 to $240

Research and Development Expense $340 to $380

GAAP Net Loss $(185) to $(160)

Non-GAAP Adjusted EBITDA (loss) $(65) to $(40)

Cash Balance* Over $1,180

Anticipated Upcoming Milestones 4Q 2013: First patient in Phase 3 with BMN 673 for the treatment of gBRCA breast cancer 4Q 2013/1Q 2014: Initiation of Phase 2/3 switching trial for BMN 701 for Pompe disease 4Q 2013/1Q 2014: Potential CHMP opinion for Vimizim for Morquio A 4Q 2013/ 1Q 2014: Initiation of Phase 1/2 trial for BMN 111 for achondroplasia 1Q 2014: PDUFA date for Vimizim for Morquio A 1Q 2014: Potential launch of Vimizim for Morquio A 4Q 2014: Top-line results for Phase 3 trial for PEG-PAL for PKU Research and Development Programs BioMarin continues to make significant investments in research and development to ensure a strong and profitable pipeline for the company. The current pipeline includes programs in various stages of development that focus on treating a range of rare and serious unmet medical needs. Programs Under Regulatory Review for Approval • Vimizim for Morquio A: Regulatory applications for marketing authorization for Vimizim are under active

review. The company has an FDA Advisory Committee meeting scheduled for November 19, 2013. The FDA has granted Vimizim priority review designation and assigned a PDUFA date of February 28, 2014. The EMA recently changed the review status for Vimizim from accelerated to standard assessment, which implies a possible CHMP opinion in either late 2013 or early 2014. Both the FDA and EMA have conducted and completed all pre-approval inspections associated with the review of the marketing applications.

Advanced Clinical Programs • PEG-PAL for PKU: Enrollment in the pivotal Phase 3 program, which opened in the second quarter of 2013, is

progressing. The Phase 3 program includes: (1) an open-label Phase 3 study to evaluate safety and blood Phe levels in naïve patients; and, (2) a randomized controlled study of the Phase 2 extension study patients and patients from the open label trial to evaluate blood Phe levels and neurocognitive endpoints. The company expects top-line results for the Phase 3 study in the fourth quarter of 2014.

• BMN 701 for Pompe Disease: During the third quarter, regulatory authorities indicated that Maximal Inspiratory Pressure ("MIP") is a potentially approvable primary endpoint and that a single arm switchstudy could support registration if the magnitude of benefit is meaningful and if the data can satisfy health authorities that patient outcomes can be reliably predicted. A phase 2/3 trial of patients previously treated with alglucosidase alfa and switched to a treatment of BMN 701 at 20 mg/kg administered every other week for 24 weeks is being prepared to start in Q4 2013/Q1 2014. The primary endpoint of the study will be the respiratory parameter MIP. The company has completed a full scale production campaign using its new cell line and has verified the production yields. Characterization testing is currently ongoing, and it is expected that regulatory filings to support the introduction of this material into clinical studies will be submitted in the fourth quarter of 2013.

• BMN 673 (PARP inhibitor): The Phase 3 trial to study its poly ADP-ribose polymerase (PARP) inhibitor, BMN 673, in the treatment of deleterious germline BRCA mutation metastatic breast cancer is open for enrollment. The Phase 3 trial is an open-label, 2:1 randomized, parallel, two-arm study of BMN 673 as compared to monotherapy physicians' choice (capecitabine, eribulin, gemcitabine or vinorelbine) in germline BRCA mutation subjects with locally advanced and/or metastatic breast cancer who have received no more than two prior chemotherapy


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regimens for metastatic disease. The study will enroll approximately 429 subjects and will be conducted globally. The primary objective of the study is to compare progression-free survival (PFS) of subjects treated with BMN 673 as a monotherapy relative to those treated with protocol-specific physicians' choice. The company also announced that it will use Myriad Genetics' BRCAnalysis® test as a diagnostic in the pivotal trial.

Early-Stage Clinical Programs • BMN 111 for Achondroplasia: The company announced that U.S. and European Regulatory Authorities have

agreed that a Phase 2 study in Achondroplasia can start without additional data. BioMarin previously completed a Phase 1 study in adult healthy volunteers. The company expects to initiate its first study in pediatric patients in the fourth quarter of 2013 or the first quarter of 2014.

• BMN 190 for LINCL (Batten disease): The company announced that the first patient had been dosed in the Phase 1/2 trial for BMN 190, a recombinant human tripeptidyl peptidase 1 (rhTPP1) for the treatment of patients with neuronal ceroid lipofuscinosis type 2 (NCL-2), a form of Batten disease. This is the first time that a patient with Batten Disease has been treated with an enzyme replacement therapy in a clinical trial setting. The Phase 1/2 study is an open-label, dose-escalation study in patients with NCL-2. The primary objectives are to evaluate the safety and tolerability of BMN 190 and to evaluate effectiveness using an NCL-2-specific rating scale score in comparison with natural history data after 48 weeks of treatment. Secondary objectives are to evaluate the impact of treatment on brain atrophy in comparison with NCL-2 natural history after 48 weeks of treatment and to characterize pharmacokinetics and immunogenicity. The study will enroll approximately 22 subjects for a treatment duration of 48 weeks.

Preclinical Programs • Other early stage programs: BioMarin is working on multiple additional early development opportunities, including

two new lead optimization programs gained through the acquisition of Zacharon Pharmaceuticals: inhibition of heparan sulfate synthesis for MPS III and inhibition of ganglioside synthesis for diseases such as Tay Sachs and Sandhoff. The company also has an ongoing Factor VIII gene therapy research program for Hemophilia A from University College London and St. Jude Children's Research Hospital.

Financing Update • Convertible Debt Offering: On October 15, 2013, the company completed a Convertible Debt Offering of $750.0

million of its senior subordinated convertible notes consisting of $375.0 million 0.75% Senior Subordinated Convertible Notes due 2018 (the "2018 Notes") and $375.0 million 1.50% Senior Subordinated Convertible Notes due 2020 (the "2020 Notes" and together with the 2018 Notes, the "Notes").

The Notes will be convertible, under certain circumstances, into cash, shares of BioMarin's common stock or a combination of cash and common stock at BioMarin's election. The initial conversion rate will be 10.6213 shares of common stock per $1,000 principal amount of Notes (representing an initial conversion price of approximately $94.15 per common share), subject to customary adjustments. The initial conversion rate represents approximately a 40% premium to the last reported sale price of the common stock on the NASDAQ Global Select Market on October 8, 2013. The company entered into privately-negotiated capped call transactions with respect to 50% of the principal amount of the Notes with three of the underwriters or their affiliates (the "hedge counterparties"). The capped call transactions are generally expected to reduce potential dilution to BioMarin's common stock upon conversion of the relevant Notes in excess of the principal amount of such converted Notes. The cap price of the capped call transactions entered into with respect to 50% of the Notes will initially be, in each case, approximately $121.05, which represents a premium of approximately 80% over the NASDAQ closing price of a share of BioMarin's common stock on October 8, 2013 and is subject to certain adjustments under the terms of such capped call transactions. The company received net proceeds after fees, transaction costs and the purchase of the capped call of approximately $696.6 million, which the company intends to use for general corporate purposes.


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In order to preserve flexibility and to potentially further minimize future dilution, on conversion, the Notes may be settled in cash, shares of BioMarin's common stock or a combination of cash and common stock at BioMarin's election. Under GAAP, convertible debt instruments that may be settled in cash are required to be accounted for by separating the instrument into separate debt and equity components based on our non-convertible debt borrowing rate. For GAAP purposes the equity component is treated as a discount to the notes, and this discount is amortized to interest expense using the effective interest method over the life of the notes as the they accrete to face value at maturity. This estimated additional GAAP interest expense does not have a current, past or future impact on cash flows. The table below shows the estimated future interest expense and associated GAAP tax benefits for the Notes due to the cash interest coupon payments and the cash issuance costs as well as the non cash debt discount accretion.

Estimated Convertible Note Interest Expense and Estimated Tax Benefits ($ in millions)

For the Year Ended

2013 2014 2015 2016 2017 2018 2019 2020

Coupon Interest (Cash) $ 1.4 $ 8.4 $ 8.4 $ 8.4 $ 8.4 $ 8.0 $ 5.6 $ 4.7

Amortization of Issuance Costs (Cash) 0.5 3.2 3.2 3.2 3.2 2.9 1.3 1.1

Amortization of Debt Discount (Non-Cash) 3.9 23.8 25.1 26.5 28.0 26.8 14.5 12.7

Total Estimated GAAP Interest Expense $ 5.8 $ 35.5 $ 36.8 $ 38.1 $ 39.6 $ 37.6 $ 21.4 $ 18.5

Total Estimated GAAP Tax Benefit $ (2.1) $ (12.8) $ (13.3) $ (13.8) $ (14.3) $ (13.6) $ (7.7) $ (6.7)

Estimated After Tax Interest Expense of Cash Items (Coupon + Issuance Costs)

$ 1.2 7.4 7.4 7.4 7.4 6.9 4.4 3.7

Estimated After Tax Interest Expense of Non-Cash Items (Discount Amortization)

2.5 15.2 16.1 16.9 17.9 17.1 9.2 8.1

Total Estimated After Tax GAAP Net Interest Expense

$ 3.7 $ 22.7 $ 23.5 $ 24.4 $ 25.3 $ 24.1 $ 13.7 $ 11.8

Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA Income (Loss)

(in millions)

(unaudited)

Three Months Ended September 30,

Nine Months EndedSeptember 30,

Year Ending December 31, 2013

2013 2012 2013 2012 Guidance

GAAP Net Loss $ (53.0) $ (5.4) $ (114.4) $ (61.3) $(185.0) - $(160.0)

Interest expense, net -- 1.1 1.0 3.9 6.2

Provision for (benefit from) 0.7 (6.4) (2.8) (6.8) (7.2)


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income taxes

Depreciation expense 6.3 6.4 19.0 21.0 25.0

Amortization expense 2.6 2.7 8.9 14.5 10.5

EBITDA Loss (43.4) (1.6) (88.3) (28.7) (150.5) - (125.5)

Stock-based compensation expense

16.2 12.1 41.7 35.9 59.5

Contingent consideration expense (1)

8.8 0.6 9.8 (3.3) 13.8

Material non-recurring:

Debt conversion expense (2) 1.7 -- 12.2 -- 12.2

Non-GAAP Adjusted EBITDA Income (Loss) $ (16.7) $ 11.1 $ (24.6) $ 3.9 $(65.0) - $(40.0)

About BioMarin BioMarin develops and commercializes innovative biopharmaceuticals for serious diseases and medical conditions. The company's product portfolio comprises four approved products and multiple clinical and pre-clinical product candidates. Approved products include Naglazyme® (galsulfase) for mucopolysaccharidosis VI (MPS VI), a product wholly developed and commercialized by BioMarin; Aldurazyme® (laronidase) for mucopolysaccharidosis I (MPS I), a product which BioMarin developed through a 50/50 joint venture with Genzyme Corporation; Kuvan® (sapropterin dihydrochloride) Tablets, for phenylketonuria (PKU), developed in partnership with Merck Serono, a division of Merck KGaA of Darmstadt, Germany; and Firdapse™ (amifampridine), which has been approved by the European Commission for the treatment of Lambert Eaton Myasthenic Syndrome (LEMS). Product candidates include GALNS (N-acetylgalactosamine 6-sulfatase), which is currently in Phase III clinical development for the treatment of MPS IVA, amifampridine phosphate (3,4-diaminopyridine phosphate), which is currently in Phase III clinical development for the treatment of LEMS in the U.S., PEG-PAL (PEGylated recombinant phenylalanine ammonia lyase), which is currently in Phase II clinical development for the treatment of PKU, BMN-701, a novel fusion protein of insulin-like growth factor 2 and acid alpha glucosidase (IGF2-GAA), which is currently in Phase I/II clinical development for the treatment of Pompe disease, BMN-673, a poly ADP-ribose polymerase (PARP) inhibitor, which is currently in Phase I/II clinical development for the treatment of genetically-defined cancers, and BMN-111, a modified C-nutriuretic peptide, which is currently in Phase I clinical development for the treatment of achondroplasia. For additional information, please visit www.BMRN.com. Information on BioMarin's website is not incorporated by reference into this press release. Forward-Looking Statement This press release contains forward-looking statements about the business prospects of BioMarin Pharmaceutical Inc., including, without limitation, statements about: the expectations of revenue and sales related to Naglazyme, Kuvan, Firdapse, and Aldurazyme; the financial performance of the BioMarin as a whole; the timing of BioMarin's clinical trials of GALNS, PEG-PAL, BMN-673, BMN-701, BMN-111, BMN-190 and other product candidates; the continued clinical development and commercialization of Aldurazyme, Naglazyme, Kuvan, Firdapse, and its product candidates; and actions by regulatory authorities. These forward-looking statements are predictions and involve risks and uncertainties such that actual results may differ materially from these statements. These risks and uncertainties include, among others: our success in the continued commercialization of Naglazyme, Kuvan, and Firdapse; Genzyme Corporation's success in continuing the commercialization of Aldurazyme; results and timing of current and planned preclinical studies and clinical trials, particularly with respect to GALNS, PEG-PAL, BMN-673, BMN-701, BMN-111 and BMN-190; our ability to successfully manufacture our products and product candidates; the content and timing of decisions by the U.S. Food and Drug Administration, the European Commission and other regulatory authorities concerning each of the described products and product candidates; the market for each of these products and particularly Aldurazyme, Naglazyme, Kuvan and Firdapse; actual sales of Aldurazyme, Naglazyme Kuvan and


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Firdapse; Merck Serono's activities related to Kuvan; and those factors detailed in BioMarin's filings with the Securities and Exchange Commission, including, without limitation, the factors contained under the caption "Risk Factors" in BioMarin's 2012 Annual Report on Form 10-K, and the factors contained in BioMarin's reports on Form 10-Q. Stockholders are urged not to place undue reliance on forward-looking statements, which speak only as of the date hereof. BioMarin is under no obligation, and expressly disclaims any obligation to update or alter any forward-looking statement, whether as a result of new information, future events or otherwise.

BIOMARIN PHARMACEUTICAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2013 and December 31, 2012

(In thousands of U.S. dollars, except share and per share amounts)

September 30,

December 31,

2013 2012(1)

ASSETS (unaudited)

Current assets:

Cash and cash equivalents $ 181,565 $ 180,527

Short-term investments 198,086 270,211

Accounts receivable, net (allowance for doubtful accounts: $376 and $348, respectively) 124,745 109,066

Inventory 148,684 128,695

Current deferred tax assets 32,238 29,454

Other current assets 28,161 25,509

Total current assets 713,479 743,462

Noncurrent assets:

Investment in BioMarin/Genzyme LLC 854 1,080

Long-term investments 147,771 115,993

Property, plant and equipment, net 285,664 284,473

Intangible assets, net 165,791 162,980

Goodwill 54,258 51,543

Long-term deferred tax assets 238,703 225,501

Other assets $ 14,010 16,611

Total assets $ 1,620,530 $ 1,601,643

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities $ 167,633 $ 147,068

Convertible debt -- 23,365

Total current liabilities 167,633 170,433

Noncurrent liabilities:

Long-term convertible debt 78,310 324,859


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Long-term contingent acquisition consideration payable 26,500 30,618

Long-term deferred tax liabilities 37,190 33,296

Other long-term liabilities 34,411 26,674

Total liabilities 344,044 585,880

Stockholders' equity:

Common stock, $0.001 par value: 250,000,000 shares authorized at September 30, 2013 and December 31, 2012; 142,200,995 and 125,809,162 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively.

142 126

Additional paid-in capital 1,926,133 1,561,890

Company common stock held by Nonqualified Deferred Compensation Plan (7,451) (6,603)

Accumulated other comprehensive income (loss) 11,473 (202)

Accumulated deficit (653,811) (539,448)

Total stockholders' equity 1,276,486 1,015,763

Total liabilities and stockholders' equity $ 1,620,530 $ 1,601,643

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Three and Nine Months Ended September 30, 2013 and 2012

(In thousands of U.S. dollars, except per share amounts)

(Unaudited)


Nine Months Ended September 30,

2013 2012 2013 2012

REVENUES:

Net product revenues $ 134,330 $ 126,310 $ 394,074 $ 365,540

Collaborative agreement revenues 1,754 1,210 2,778 1,729

Royalty and license revenues 790 597 4,760 1,516

Total revenues 136,874 128,117 401,612 368,785

OPERATING EXPENSES:

Cost of sales (excludes amortization of certain acquired intangible assets)

28,054 24,619 71,121 65,298

Research and development 88,064 66,209 257,468 217,855

Selling, general and administrative 61,841 46,337 163,547 143,124

Intangible asset amortization and contingent consideration 9,639 1,443 13,173 5,819

Total operating expenses 187,598 138,608 505,309 432,096

LOSS FROM OPERATIONS (50,724) (10,491) (103,697) (63,311)

Equity in the loss of BioMarin/Genzyme LLC (147) (336) (711) (968)

Interest income 574 778 1,942 1,819

Interest expense (526) (1,837) (2,854) (5,709)


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Debt conversion expense (1,732) -- (12,152) --

Other income (expense) 239 125 344 (15)

LOSS BEFORE INCOME TAXES (52,316) (11,761) (117,128) (68,184)

Provision for (benefit from) income taxes 704 (6,404) (2,765) (6,849)

NET LOSS $ (53,020) $ (5,357) $ (114,363) $ (61,335)

NET LOSS PER SHARE, BASIC AND DILUTED $ (0.38) $ (0.04) $ (0.84) $ (0.52)

Weighted average common shares outstanding, basic and diluted 140,796 123,434 136,102 118,810

COMPREHENSIVE LOSS $ (43,988) $ (7,674) $ (102,688) $ (63,889)

STOCK-BASED COMPENSATION EXPENSE

Total stock-based compensation expense included in the Condensed Consolidated Statements of Comprehensive Loss is as follows (unaudited):


Nine Months Ended September 30,

2013 2012 2013 2012

Cost of Sales $ 1,489 $ 1,327 $ 3,663 $ 3,535

Research and development 7,116 5,060 18,821 15,351

Selling, general and administrative 7,600 5,752 19,214 17,021

$ 16,205 $ 12,139 $ 41,698 $ 35,907

(http://investors.bmrn.com/releasedetail.cfm?ReleaseID=800324) Gilead Sciences (NASDAQ: GILD) - Total Revenues of $2.78 billion, Up 15 percent over Third Quarter 2012 - Revised Full Year 2013 Guidance

FOSTER CITY, Calif.--(BUSINESS WIRE)--Oct. 29, 2013-- Gilead Sciences, Inc. (Nasdaq: GILD) announced today its results of operations for the quarter ended September 30, 2013. Total revenues for the third quarter of 2013 increased 15 percent to $2.78 billion, from $2.43 billion for the third quarter of 2012. Product sales increased 15 percent to $2.71 billion for the third quarter of 2013 compared to $2.36 billion for the third quarter of 2012. Net income for the third quarter of 2013 was $788.6 million, or $0.47 per diluted share compared to $675.5 million, or $0.43 per diluted share for the third quarter of 2012. Non-GAAP net income for the third quarter of 2013, which excludes acquisition-related, restructuring and stock-based compensation expenses, was $879.1 million, or $0.52 per diluted share compared to $788.9 million, or $0.50 per diluted share for the third quarter of 2012.


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Three Months Ended Nine Months Ended September 30, September 30, (In thousands, except per share amounts) 2013 2012 2013 2012 Product sales $ 2,709,652 $ 2,357,978 $ 7,760,505 $ 6,887,560 Royalty, contract and other revenues 73,181 68,619 321,357 226,672 Total revenues $ 2,782,833 $ 2,426,597 $ 8,081,862 $ 7,114,232 Net income attributable to Gilead $ 788,606 $ 675,505 $ 2,283,397 $ 1,829,025 Non-GAAP net income attributable to Gilead $ 879,081 $ 788,940 $ 2,520,749 $ 2,260,606 Diluted EPS $ 0.47 $ 0.43 $ 1.35 $ 1.17 Non-GAAP diluted EPS $ 0.52 $ 0.50 $ 1.49 $ 1.44

Product Sales

Product sales were driven primarily by growth in Gilead's antiviral franchise during the third quarter of 2013. Significantly contributing to the increase were sales of Stribild® (elvitegravir 150 mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir disoproxil fumarate 300 mg) which launched in the third quarter of 2012 and sales of Complera®/Eviplera® (emtricitabine 200 mg/rilpivirine 25 mg/tenofovir disoproxil fumarate 300 mg). Product sales for the third quarter increased 20 percent in the U.S. and 5 percent in Europe compared to the third quarter of 2012.

Antiviral Product Sales

Antiviral product sales increased 14 percent to $2.33 billion for the third quarter of 2013, up from $2.04 billion for the third quarter of 2012, reflecting sales growth of 19 percent in the U.S. and 6 percent in Europe. The increase reflects strong underlying demand for our new single tablet regimen products, specifically Stribild and Complera/Eviplera.

Three Months Ended Nine Months Ended September 30, September 30, (In thousands, except percentages) 2013 2012 % Change 2013 2012 % Change Antiviral product sales $ 2,326,727 $ 2,035,833 14 % $ 6,700,052 $ 5,973,922 12 % Atripla 899,669 865,378 4 % 2,714,850 2,656,997 2 % Truvada 813,652 804,190 1 % 2,321,673 2,348,386 (1 )% Viread 231,555 214,909 8 % 692,075 622,016 11 % Complera/Eviplera 210,736 99,297 112 % 547,608 224,386 144 % Stribild 143,953 17,511 722 % 335,495 17,511 1,816 %

Cardiovascular Product Sales

Cardiovascular product sales increased 25 percent to $250.9 million for the third quarter of 2013

Three Months Ended Nine Months Ended September 30, September 30, (In thousands, except percentages) 2013 2012 % Change 2013 2012 % Change Cardiovascular product sales $ 250,887 $ 200,120 25 % $ 700,134 $ 567,798 23 % Letairis 135,072 105,054 29 % 381,436 293,976 30 % Ranexa 115,815 95,066 22 % 318,698 273,822 16 %

Operating Expenses and Other


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Non-GAAP research and development (R&D) expenses increased due to the progression of Gilead's clinical studies, particularly in oncology and HIV. Non-GAAP selling, general and administrative (SG&A) expenses increased primarily due to the ongoing growth and expansion of Gilead's business in preparation for the anticipated launch of sofosbuvir.

Interest expense decreased primarily due to the maturity of the May 2013 convertible senior notes and the repayment of $850.0 million in bank debt issued in connection with the acquisition of Pharmasset Inc.

Three Months Ended Nine Months Ended September 30, September 30, (In thousands, except percentages) 2013 2012 2013 2012 Non-GAAP research and development expenses $ 488,535 $ 383,553 $ 1,436,282 $ 1,086,289 Non-GAAP selling, general and administrative expenses $ 376,841 $ 287,205 $ 1,086,241 $ 893,677 Non-GAAP Interest expense $ (73,949 ) $ (89,322 ) $ (233,744 ) $ (267,677 )

Net Foreign Currency Exchange Impact

The net foreign currency exchange impact on third quarter 2013 product sales and pre-tax earnings was an unfavorable $17.5 million and $15.9 million, respectively, compared to the third quarter of 2012.

Cash, Cash Equivalents and Marketable Securities

As of September 30, 2013, Gilead had $2.76 billion of cash, cash equivalents and marketable securities compared to $2.58 billion as of December 31, 2012. During the first nine months of 2013, Gilead generated $2.38 billion in operating cash flow.

Full Year 2013 Guidance

Gilead revised its full year 2013 guidance, which it initially provided on February 4, 2013 and reiterated on July 25, 2013:

(In millions, except percentages and per share amounts)

Initially provided February 4, 2013;

Reiterated July 25, 2013

Updated

October 29, 2013

Net Product Sales $10,000 - $10,200 $10,300 - $10,400

Non-GAAP* Product Gross Margin 74% - 76% 74% - 76%

R&D $1,800 - $1,900 $1,950 - $2,000

SG&A $1,550 - $1,650 $1,500 - $1,550

Effective Tax Rate 26% - 28% 26% - 27% Diluted EPS Impact of Acquisition-Related, Restructuring and Stock-Based Compensation Expenses

$0.21 - $0.24 $0.21 - $0.24


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Product & Pipeline Updates Announced by Gilead During the Third Quarter of 2013 Include: Antiviral Program Results from a Phase 2 study (Study 102) evaluating an investigational once-daily single tablet regimen containing tenofovir alafenamide (TAF) for the treatment of HIV-1 infection. At 48 weeks, a regimen of elvitegravir 150 mg/cobicistat 150 mg/emtricitabine 200 mg/TAF 10 mg was found to be similar to Stribild based on the percentage of patients with HIV RNA levels less than 50 copies/mL, and was associated with more favorable renal and bone safety markers. These results were presented at the 53rd Interscience Conference on Antimicrobial Agents and Chemotherapy in Denver. Granting of marketing authorization by the European Commission for once-daily Tybost®, a pharmacokinetic enhancer that boosts blood levels of certain HIV medicines. Tybost is indicated as a boosting agent for the HIV protease inhibitors atazanavir 300 mg once daily and darunavir 800 mg once daily as part of antiretroviral combination therapy in adults with HIV-1 infection. This approval allows for the marketing of Tybost in all 28 countries of the European Union. Oncology Program Submission of a New Drug Application to the U.S. Food and Drug Administration for marketing approval to support the use of idelalisib, an investigational, targeted, oral inhibitor of PI3K delta, for the treatment of indolent non-Hodgkin’s lymphoma (iNHL) for patients with iNHL that is refractory (non-responsive) to rituximab and to alkylating-agent-containing chemotherapy. Conference Call At 4:30 p.m. Eastern Time today, Gilead's management will host a conference call and a simultaneous webcast to discuss results from its third quarter 2013 as well as provide a general business update. To access the webcast live via the internet, please connect to the company's website at www.gilead.com 15 minutes prior to the conference call to ensure adequate time for any software download that may be needed to hear the webcast. Alternatively, please call 1-866-825-3209 (U.S.) or 1-617-213-8061 (international) and dial the participant passcode 95755257 to access the call. A replay of the webcast will be archived on the company's website for one year, and a phone replay will be available approximately two hours following the call through November 1, 2013. To access the phone replay, please call 1-888-286-8010 (U.S.) or 1-617-801-6888 (international) and dial the participant passcode 81078378. About Gilead Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes innovative therapeutics in areas of unmet medical need. The company's mission is to advance the care of patients suffering from life-threatening diseases worldwide. Headquartered in Foster City, California, Gilead has operations in North America, Europe and Asia-Pacific. Non-GAAP Financial Information Gilead has presented certain financial information in accordance with U.S. generally accepted accounting principles (GAAP) and also on a non-GAAP basis. Management believes this non-GAAP information is useful for investors, when considered in conjunction with Gilead's GAAP financial statements, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Gilead's operating results as reported under GAAP. A reconciliation between GAAP and non-GAAP financial information is provided in the table on pages 7 and 8. Forward-looking Statements


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Statements included in this press release that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Gilead cautions readers that forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: Gilead's ability to achieve its anticipated full year 2013 financial results; Gilead's ability to sustain growth in revenues for its antiviral, cardiovascular and respiratory programs; availability of funding for state AIDS Drug Assistance Programs (ADAPs); continued fluctuations in ADAP purchases driven by federal and state grant cycles which may not mirror patient demand and may cause fluctuations in Gilead's earnings; the possibility of unfavorable results from clinical trials involving sofosbuvir, the fixed-dose combination of sofosbuvir/ledipasvir, TAF and idelalisib; the levels of inventory held by wholesalers and retailers which may cause fluctuations in Gilead's earnings; Gilead's ability to submit NDAs for new product candidates in the timelines currently anticipated, including the fixed-dose combination of sofosbuvir/ledipasvir for the treatment of HCV; Gilead's ability to receive regulatory approvals in a timely manner or at all, for new and current products, including sofosbuvir for the treatment of HCV and idelalisib for iNHL; Gilead's ability to successfully commercialize its products, including Stribild and Tybost; Gilead's ability to successfully develop its respiratory, cardiovascular and oncology/inflammation programs; safety and efficacy data from clinical studies may not warrant further development of Gilead's product candidates, including sofosbuvir, the fixed-dose combination of sofosbuvir/ledipasvir, TAF and idelalisib; the potential for additional austerity measures in European countries that may increase the amount of discount required on Gilead's products; fluctuations in the foreign exchange rate of the U.S. dollar that may cause an unfavorable foreign currency exchange impact on Gilead's future revenues and pre-tax earnings; and other risks identified from time to time in Gilead's reports filed with the U.S. Securities and Exchange Commission (SEC). In addition, Gilead makes estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. Gilead bases its estimates on historical experience and on various other market-specific and other relevant assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates. You are urged to consider statements that include the words may, will, would, could, should, might, believes, estimates, projects, potential, expects, plans, anticipates, intends, continues, forecast, designed, goal, or the negative of those words or other comparable words to be uncertain and forward-looking. Gilead directs readers to its press releases, Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 and other subsequent disclosure documents filed with the SEC. Gilead claims the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. All forward-looking statements are based on information currently available to Gilead, and Gilead assumes no obligation to update any such forward-looking statements. Gilead owns or has rights to various trademarks, copyrights and trade names used in our business, including the following: GILEAD®, GILEAD SCIENCES®, STRIBILD®, COMPLERA®, EVIPLERA®, TRUVADA®, VIREAD®, TYBOST®, HEPSERA®, EMTRIVA®, LETAIRIS®, RANEXA®, AMBISOME®, CAYSTON® and VISTIDE®. ATRIPLA® is a registered trademark belonging to Bristol-Myers Squibb & Gilead Sciences, LLC.

GILEAD SCIENCES, INC. CONSOLIDATED STATEMENTS OF INCOME

(unaudited) (in thousands, except per share amounts)

Three Months Ended Nine Months Ended September 30, September 30, 2013 2012 2013 2012 Revenues: Product sales $ 2,709,652 $ 2,357,978 $ 7,760,505 $ 6,887,560 Royalty, contract and other revenues 73,181 68,619 321,357 226,672


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Total revenues 2,782,833 2,426,597 8,081,862 7,114,232 Costs and expenses: Cost of goods sold 681,868 597,269 2,000,979 1,795,545 Research and development 546,244 465,831 1,567,778 1,320,286 Selling, general and administrative 406,860 319,583 1,186,147 1,095,209 Total costs and expenses 1,634,972 1,382,683 4,754,904 4,211,040 Income from operations 1,147,861 1,043,914 3,326,958 2,903,192 Interest expense (73,949 ) (89,322 ) (233,744 ) (275,010 ) Other income (expense), net 5,777 (3,505 ) 2,222 (38,665 ) Income before provision for income taxes 1,079,689 951,087 3,095,436 2,589,517 Provision for income taxes 294,473 280,052 824,892 774,877 Net income 785,216 671,035 2,270,544 1,814,640 Net loss attributable to noncontrolling interest 3,390 4,470 12,853 14,385 Net income attributable to Gilead $ 788,606 $ 675,505 $ 2,283,397 $ 1,829,025 Net income per share attributable to Gilead common stockholders

- basic $ 0.51 $ 0.45 $ 1.50 $ 1.21

Net income per share attributable to Gilead common stockholders

- diluted $ 0.47 $ 0.43 $ 1.35 $ 1.17

Shares used in per share calculation - basic 1,532,105 1,514,770 1,526,847 1,514,064 Shares used in per share calculation - diluted 1,691,898 1,584,608 1,689,647 1,567,648

GILEAD SCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(unaudited) (in thousands, except percentages and per share amounts)

Three Months Ended Nine Months Ended September 30, September 30, 2013 2012 2013 2012 Cost of goods sold reconciliation: GAAP cost of goods sold $ 681,868 $ 597,269 $ 2,000,979 $ 1,795,545 Stock-based compensation expenses (1,823 ) (1,864 ) (6,296 ) (6,084 ) Acquisition related-amortization of purchased intangibles

(21,264 ) (15,837 ) (63,792 ) (47,509 )

Non-GAAP cost of goods sold $ 658,781 $ 579,568 $ 1,930,891 $ 1,741,952 Product gross margin reconciliation: GAAP product gross margin 74.8 % 74.7 % 74.2 % 74.0 % Stock-based compensation expenses 0.1 % 0.1 % 0.1 % 0.1 % Acquisition related-amortization of purchased intangibles

0.8 % 0.7 % 0.8 % 0.7 %

Non-GAAP product gross margin(1) 75.7 % 75.5 % 75.1 % 74.8 %


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Research and development expenses reconciliation: GAAP research and development expenses $ 546,244 $ 465,831 $ 1,567,778 $ 1,320,286 Stock-based compensation expenses (27,740 ) (23,236 ) (79,261 ) (162,214 ) Restructuring expenses 31 (232 ) (4,793 ) (7,322 ) Acquisition related-transaction costs — — — (345 ) Acquisition related-contingent consideration remeasurement

(30,000 ) (58,810 ) (47,442 ) (64,116 )

Non-GAAP research and development expenses $ 488,535 $ 383,553 $ 1,436,282 $ 1,086,289 Selling, general and administrative expenses reconciliation:

GAAP selling, general and administrative expenses $ 406,860 $ 319,583 $ 1,186,147 $ 1,095,209 Stock-based compensation expenses (33,010 ) (29,364 ) (94,736 ) (177,237 ) Restructuring expenses 2,972 (2,792 ) 2,534 (13,199 ) Acquisition related-transaction costs 300 (222 ) (6,860 ) (11,096 ) Acquisition related-amortization of purchased intangibles

(281 ) — (844 ) —

Non-GAAP selling, general and administrative expenses

$ 376,841 $ 287,205 $ 1,086,241 $ 893,677

Operating margin reconciliation: GAAP operating margin 41.2 % 43.0 % 41.2 % 40.8 % Stock-based compensation expenses 2.2 % 2.2 % 2.2 % 4.9 % Restructuring expenses (0.1 )% 0.1 % 0.0 % 0.3 % Acquisition related-transaction costs 0.0 % 0.0 % 0.1 % 0.2 % Acquisition related-amortization of purchased intangibles

0.8 % 0.7 % 0.8 % 0.7 %

Acquisition related-contingent consideration remeasurement

1.1 % 2.4 % 0.6 % 0.9 %

Non-GAAP operating margin(1) 45.2 % 48.5 % 44.9 % 47.7 % Interest expense reconciliation: GAAP interest expense $ (73,949 ) $ (89,322 ) $ (233,744 ) $ (275,010 ) Acquisition related-transaction costs — — — 7,333 Non-GAAP interest expense $ (73,949 ) $ (89,322 ) $ (233,744 ) $ (267,677 ) Net income attributable to Gilead reconciliation: GAAP net income attributable to Gilead, net of tax $ 788,606 $ 675,505 $ 2,283,397 $ 1,829,025 Stock-based compensation expenses 46,576 39,442 132,335 304,282 Restructuring expenses (2,076 ) 2,165 3,048 14,937 Acquisition related-transaction costs (300 ) 123 6,860 13,665 Acquisition related-amortization of purchased intangibles

16,275 11,462 47,667 34,581


30,000 60,243 47,442 64,116

Non-GAAP net income attributable to Gilead, net of tax

$ 879,081 $ 788,940 $ 2,520,749 $ 2,260,606


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GILEAD SCIENCES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION - (Continued) (unaudited)

(in thousands, except percentages and per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2013 2012 2013 2012 Diluted earnings per share reconciliation: GAAP diluted earnings per share $ 0.47 $ 0.43 $ 1.35 $ 1.17 Stock-based compensation expenses 0.03 0.02 0.08 0.19 Restructuring expenses (0.00 ) 0.00 0.00 0.01 Acquisition related-transaction costs (0.00 ) 0.00 0.00 0.01 Acquisition related-amortization of purchased intangibles

0.01 0.01 0.03 0.02


0.02 0.04 0.03 0.04

Non-GAAP diluted earnings per share(1) $ 0.52 $ 0.50 $ 1.49 $ 1.44 Shares used in per share calculation (diluted) reconciliation:

GAAP shares used in per share calculation (diluted) 1,691,898 1,584,608 1,689,647 1,567,648 Share impact of current stock-based compensation rules

(1,139 ) (2,620 ) (1,281 ) (2,854 )

Non-GAAP shares used in per share calculation (diluted) 1,690,759 1,581,988 1,688,366 1,564,794

Non-GAAP adjustment summary: Cost of goods sold adjustments $ 23,087 $ 17,701 $ 70,088 $ 53,593 Research and development expenses adjustments 57,709 82,278 131,496 233,997 Selling, general and administrative expenses adjustments

30,019 32,378 99,906 201,532

Interest expense adjustments — — — 7,333 Total non-GAAP adjustments before tax 110,815 132,357 301,490 496,455 Income tax effect (20,340 ) (18,922 ) (64,138 ) (64,874 ) Total non-GAAP adjustments after tax $ 90,475 $ 113,435 $ 237,352 $ 431,581

GILEAD SCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands) September 30, December 31, 2013 2012(1) (unaudited) Cash, cash equivalents and marketable securities $ 2,755,557 $ 2,582,086 Accounts receivable, net 1,971,926 1,751,388 Inventories 1,946,048 1,744,982


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Property, plant and equipment, net 1,133,032 1,100,259 Intangible assets, net 12,034,457 11,736,393 Goodwill 1,188,157 1,060,919 Other assets 1,439,251 1,263,811 Total assets $ 22,468,428 $ 21,239,838 Current liabilities $ 4,895,124 $ 4,270,020 Long-term liabilities 6,380,831 7,418,949 Stockholders’ equity(2) 11,192,473 9,550,869 Total liabilities and stockholders’ equity $ 22,468,428 $ 21,239,838 (1) Derived from the audited consolidated financial statements as of December 31, 2012. (2) As of September 30, 2013, there were 1,534,028 shares of common stock issued and outstanding.

GILEAD SCIENCES, INC. PRODUCT SALES SUMMARY

(unaudited) (in thousands)

Three Months Ended Nine Months Ended September 30, September 30, 2013 2012 2013 2012 Antiviral products: Atripla – U.S. $ 575,533 $ 539,797 $ 1,740,689 $ 1,672,676 Atripla – Europe 256,853 270,273 805,848 821,094 Atripla – Other International 67,283 55,308 168,313 163,227 899,669 865,378 2,714,850 2,656,997 Truvada – U.S. 430,173 414,452 1,153,575 1,180,791 Truvada – Europe 313,963 329,936 970,982 980,626 Truvada – Other International 69,516 59,802 197,116 186,969 813,652 804,190 2,321,673 2,348,386 Viread – U.S. 108,718 98,969 305,311 282,737 Viread – Europe 86,177 81,962 262,425 250,955 Viread – Other International 36,660 33,978 124,339 88,324 231,555 214,909 692,075 622,016 Complera / Eviplera – U.S. 126,888 82,099 350,372 195,742 Complera / Eviplera – Europe 74,025 14,306 172,288 24,771 Complera / Eviplera – Other 9,823 2,892 24,948 3,873 210,736 99,297 547,608 224,386 Stribild – U.S. 134,700 17,511 323,639 17,511 Stribild – Europe 7,911 — 9,759 — Stribild – Other International 1,342 — 2,097 — 143,953 17,511 335,495 17,511


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Hepsera – U.S. 8,578 12,615 31,399 33,596 Hepsera – Europe 9,760 11,999 30,251 41,384 Hepsera – Other International 1,978 2,705 6,545 7,827 20,316 27,319 68,195 82,807 Emtriva – U.S. 5,127 4,717 14,424 13,580 Emtriva – Europe 1,560 1,617 4,895 5,169 Emtriva – Other International 159 895 837 3,070 6,846 7,229 20,156 21,819 Total Antiviral products – U.S. 1,389,717 1,170,160 3,919,409 3,396,633 Total Antiviral products – Europe 750,249 710,093 2,256,448 2,123,999 Total Antiviral products – Other International 186,761 155,580 524,195 453,290 2,326,727 2,035,833 6,700,052 5,973,922 Letairis 135,072 105,054 381,436 293,976 Ranexa 115,815 95,066 318,698 273,822 AmBisome 97,812 87,448 258,224 255,865 Other products 34,226 34,577 102,095 89,975 382,925 322,145 1,060,453 913,638 Total product sales $ 2,709,652 $ 2,357,978 $ 7,760,505 $ 6,887,560

(http://www.gilead.com/news/press-releases/2013/10/gilead-sciences-announces-third-quarter-2013-financial-results)

Celgene Corporation (NASDAQ: CELG)

Celgene Reports Strong Third Quarter 2013 Operating and Financial Results

- Total 2013 Net Product Sales for the Year Now Expected to Exceed $6.2 Billion

- Revised 2013 Adjusted Diluted Earnings Per Share of $5.90 to $5.95; 2013 GAAP Earnings Per Share Expected to Be $3.77 to $3.90

- Over 160 Abstracts Highlighting Celgene Products and Research at Major Medical Meetings Expected by Year-End

SUMMIT, N.J.--(BUSINESS WIRE)--Celgene Corporation (NASDAQ:CELG) reported third quarter 2013 total revenue of $1,674 million compared to $1,419 million in the third quarter 2012. Net product sales were $1,644 million, an 18 percent increase from the same period in 2012. Adjusted net income for the third quarter of 2013 increased 19 percent to $669 million compared to $561 million in the third quarter of 2012. For the same period, adjusted diluted earnings per share (EPS) increased 21 percent to $1.56 from $1.29.

Based on U.S. GAAP (Generally Accepted Accounting Principles), Celgene reported third quarter 2013 net income of $372 million or $0.87 per diluted share. For the third quarter of 2012, net income was $424 million, or $0.97 per diluted share.

“Celgene had an exceptional third quarter with continued operating momentum across our global businesses highlighted by approvals for IMNOVID® for relapsed and refractory multiple myeloma in Europe and ABRAXANE® for pancreatic cancer in the U.S.,” said Bob Hugin, Chairman and Chief Executive Officer of Celgene Corporation. “In


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the fourth quarter we will present new data on apremilast in psoriatic arthritis at ACR and on REVLIMID® in newly diagnosed multiple myeloma at ASH.”

2013 Guidance Updated

Total Net Product Sales are now expected to exceed $6,200 million

REVLIMID® Net Product Sales are expected to be in the mid-to-upper end of the range of $4,200 million to $4,300 million

Adjusted diluted EPS guidance is raised to a range of $5.90 to $5.95 from the previous range of $5.80 to $5.90

GAAP diluted EPS is expected to be in the range of $3.77 to $3.90

Third Quarter 2013 Financial Highlights

Unless otherwise stated, all comparisons are for the third quarter of 2013 compared to the third quarter of 2012. The adjusted operating expense categories presented below exclude share-based employee compensation expense, IPR&D impairments, if any, and upfront collaboration payments. See the attached Reconciliation of GAAP to Adjusted Net Income for further information.

Net Product Sales Performance

• REVLIMID® sales for the third quarter increased 12 percent to $1,090 million and were driven by increased duration of therapy and overall market share gains. U.S. sales of $633 million and international sales of $457 million increased 16 percent and 8 percent, respectively.

• ABRAXANE® sales for the third quarter were $170 million, a 60 percent increase. U.S. sales of $132 million and international sales of $38 million increased 64 percent and 47 percent, respectively. The increase in U.S. sales was primarily driven by use in non-small cell lung cancer and new patient starts in pancreatic cancer.

• VIDAZA® third quarter sales were $220 million, flat compared to the same period in 2012. U.S. sales decreased 6 percent to $77 million and were impacted by the introduction of a generic to the market in September. International sales increased 4 percent to $143 million. VIDAZA® has orphan drug exclusivity in Europe until 2018 and in Japan until 2019.

• POMALYST®/IMNOVID® third quarter sales were $90 million, a 35 percent increase over the second quarter of 2013. U.S. sales were $77 million, a 33 percent increase over the second quarter of 2013. The Company received U.S. Food and Drug Administration (FDA) approval for pomalidomide under the trade name POMALYST® in February 2013. International sales for the third quarter were $13 million. The European Commission (EC) approval for pomalidomide was granted on August 5; the trade name is IMNOVID®.

• THALOMID® sales were $60 million in the third quarter.

Research and Development (R&D)

Adjusted R&D expenses were $372 million compared to $328 million for the third quarter of 2012. The increase in R&D expenses was primarily due to increased investment in clinical trials. On a GAAP basis, R&D expenses were $585 million for the third quarter of 2013 and $442 million for the same period in 2012. GAAP R&D expenses increased primarily due to higher upfront payments for collaborations.


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Selling, General, and Administrative (SG&A)

Adjusted SG&A expenses were $405 million for the third quarter of 2013 compared to $323 million for the third quarter of 2012. The increase was primarily due to the IMNOVID® European launch in relapsed and refractory multiple myeloma (RRMM), the ABRAXANE® U.S. launch in pancreatic cancer and continued investments in the Company’s Inflammation & Immunology franchise. On a GAAP basis, SG&A expenses were $449 million for the third quarter of 2013 compared to $355 million for the same period in 2012.

Cash, Cash Equivalents, and Marketable Securities

Operating cash flow was $571.1 million in the third quarter of 2013. Celgene purchased approximately 1.5 million shares during the third quarter of 2013 at a total cost of approximately $211 million. Year-to-date, Celgene repurchased approximately $2,048 million of its common stock. Celgene ended the quarter with $5,847 million in cash and marketable securities. During the third quarter of 2013, Celgene issued an aggregate of $1,500 million in senior notes in tranches of five-, ten- and thirty-years.

Product and Pipeline Updates

Hematology

REVLIMID® (lenalidomide): In July, the Company announced the FIRST® (Frontline Investigation of REVLIMID® and Dexamethasone versus Standard Thalidomide) trial (MM-020/IFM 07-01), a phase III trial of REVLIMID® in combination with dexamethasone in newly-diagnosed multiple myeloma (NDMM), achieved the primary endpoint of progression-free survival (PFS). The MM-020 abstract was accepted for the Plenary Scientific Session on December 8 at the 55th American Society of Hematology (ASH) annual meeting.

Celgene expects to submit regulatory applications in the U.S. and in Europe for REVLIMID® in NDMM in the first quarter of 2014 with submissions in additional geographies to follow.

Enrollment in the REMARC trial of REVLIMID® maintenance versus placebo in patients with diffuse large B-cell lymphoma (DLBCL) responding to R-CHOP is expected to complete in the fourth quarter while enrollment in the phase III RELEVANCE® trial of REVLIMID®/rituximab in newly diagnosed follicular lymphoma (FL) continues.

Additional phase III trials evaluating the combination of REVLIMID®/rituximab compared to rituximab in relapsed or refractory indolent non-Hodgkin’s lymphoma (iNHL) and REVLIMID®maintenance in post REVLIMID®/rituximab therapy in relapsed or refractory iNHL are expected to begin enrollment by year end.

POMALYST®/IMNOVID® (pomalidomide): In August, the EC granted approval of IMNOVID® in combination with dexamethasone for the treatment of RRMM in adult patients who have received at least two prior therapies including both lenalidomide and bortezomib and have demonstrated disease progression on the last therapy.

American Society of Hematology Meeting

There were over 150 abstracts across Celgene’s hematology portfolio submitted to the upcoming ASH annual meeting in December. In addition to the MM-020 trial data, Celgene expects presentations on:

• Meta-analysis of REVLIMID® maintenance therapy in NDMM • Update to the REVLIMID® maintenance arm in the GIMEMA trial in NDMM • Analysis of PFS2 in the MM-015 trial in NDMM • Interim data from a phase Ib trial of selective HDAC 6 inhibitor ACY-1215 in combination with REVLIMID® in

RRMM


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• Analysis of patient subtypes in the MM-003 trial comparing POMALYST®/IMNOVID® in combination with low-dose dexamethasone to high-dose dexamethasone in RRMM

• Final phase II results of REVLIMID® in combination with R-CHOP21 in elderly untreated DLBCL • Phase II data of REVLIMID® and REVLIMID®/rituximab as maintenance in DLBCL • Phase I study of single agent CC-292 in relapsed or refractory chronic lymphocytic leukemia

Oncology

ABRAXANE® (paclitaxel protein-bound particles for injectable suspension): On September 6, the U.S. FDA approved ABRAXANE® in combination with gemcitabine as a first-line treatment in patients with metastatic adenocarcinoma of the pancreas. An opinion from the European Medicine Agency’s Committee for Medicinal Products for Human Use (CHMP) is expected in the fourth quarter.

The results of the MPACT (Metastatic Pancreatic Adenocarcinoma Clinical Trial) phase III clinical trial of ABRAXANE® in combination with gemcitabine were published online in the October 16thedition of the New England Journal of Medicine.

A phase II/III trial of ABRAXANE® in triple negative breast cancer began enrolling patients in the third quarter. Additional trials of ABRAXANE® in solid tumors expected to begin by year-end include a phase III trial of ABRAXANE® in adjuvant pancreatic cancer and a phase III trial of ABRAXANE® maintenance after ABRAXANE®/cisplatin treatment in patients with squamous non-small cell lung cancer. In the fourth quarter, final overall survival data from a phase III clinical trial of ABRAXANE® in metastatic melanoma are expected.

Inflammation & Immunology

Apremilast: The phase III POSTURE trial of apremilast in active ankylosing spondylitis completed enrollment during the third quarter. The trial randomized approximately 500 patients to receive 20 mg apremilast, 30 mg apremilast, or placebo twice daily. In this 24-week study, the primary endpoint is the proportion of patients achieving an ASAS 20 score at week 16. A number of secondary endpoints will also be evaluated. Top-line data are expected in the first half of 2014.

A New Drug Application (NDA) to the U.S. FDA for apremilast in psoriasis, in addition to a combined psoriatic arthritis and psoriasis Marketing Authorization Application in Europe are on-track for the fourth quarter of 2013. The Company previously announced it submitted a separate NDA for psoriatic arthritis in the U.S. and a New Drug Submission (NDS) in Canada in the first quarter of 2013 and the second quarter of 2013, respectively. The PDUFA date for the U.S. psoriatic arthritis submission is March 21, 2014.

American College of Rheumatology/Association of Rheumatology Health Professionals Meeting

At the 2013 American College of Rheumatology/Association of Rheumatology Health Professionals (ACR/ARHP) annual meeting in late October, data presentations on apremilast will include:

• 52-week data from the PALACE 4 trial in DMARD-naïve psoriatic arthritis (PsA) – Late Breaker • 52-week data of the phase III PALACE 2 trial in PsA • 52-week data of the phase III PALACE 3 trial in PsA • Pooled safety data from the PALACE 1-3 trials in PsA • Pooled data from the secondary endpoints enthesitis/dactylitis, HAQ-DI and tender and swollen joints from

the PALACE 1-3 trials in PsA • Data from the phase II trial in patients with Behçet's disease with active oral ulcers – Plenary Session


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Third Quarter 2013 Conference Call and Webcast Information

Celgene will host a conference call to discuss the third quarter of 2013 operating and financial performance on Thursday, October 24, 2013, at 9 a.m. ET. The conference call will be available by webcast at www.celgene.com. An audio replay of the call will be available from noon ET October 24, 2013, until midnight ET October 31, 2013. To access the replay, in the U.S. dial (855) 859-2056 or for outside the U.S. dial (404) 537-3406. The participant pass code is 22908643. The Company’s fourth quarter of 2013 and full year 2013 financial and operational results are expected to be reported on January 30, 2014.

About REVLIMID®

In the U.S., REVLIMID® (lenalidomide) in combination with dexamethasone is indicated for the treatment of multiple myeloma (MM) patients who have received at least one prior therapy. REVLIMID® is indicated for patients with transfusion-dependent anemia due to Low- or Intermediate-1-risk myelodysplastic syndromes (MDS) associated with a deletion 5q cytogenetic abnormality with or without additional cytogenetic abnormalities. REVLIMID® is approved in the U.S. for the treatment of patients with mantle cell lymphoma (MCL) whose disease has relapsed or progressed after two prior therapies, one of which included bortezomib.

About ABRAXANE®

In the U.S., ABRAXANE® for Injectable Suspension (paclitaxel protein-bound particles for injectable suspension) (albumin-bound) is indicated for the treatment of breast cancer after failure of combination chemotherapy for metastatic disease or relapse within six month of adjuvant chemotherapy. Prior therapy should have included an anthracycline unless clinically contraindicated.

ABRAXANE® is indicated for the first-line treatment of locally advanced or metastatic non-small cell lung cancer, in combination with carboplatin, in patients who are not candidates for curative surgery or radiation therapy.

ABRAXANE® is also indicated for the first-line treatment of metastatic adenocarcinoma of the pancreas in combination with gemcitabine.

About POMALYST®

In the U.S., POMALYST® (pomalidomide) is indicated for patients with multiple myeloma who have received at least two prior therapies including lenalidomide and bortezomib and have demonstrated disease progression on or within 60 days of completion of the last therapy. Approval is based on response rate. Clinical benefit such as improvement in survival or symptoms has not been verified.

About Celgene

Celgene Corporation, headquartered in Summit, New Jersey, is an integrated global biopharmaceutical company engaged primarily in the discovery, development and commercialization of novel therapies for the treatment of cancer and inflammatory diseases through gene and protein regulation. For more information about Celgene and the Company’s products, please visit www.celgene.com.


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Celgene Corporation and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

(In millions, except per share data)

Three-Month Periods Ended Nine-Month Periods Ended

September 30, September 30,

2013 2012 2013 2012

Net product sales $ 1,644.0 $ 1,388.0 $ 4,637.4 $ 3,970.1

Other revenue 30.4 31.2 100.6 89.2

Total revenue 1,674.4 1,419.2 4,738.0 4,059.3

Cost of goods sold (excluding amortization of

acquired intangible assets) 86.2 74.6 247.6 219.0

Research and development 584.5 441.5 1,495.0 1,250.7

Selling, general and administrative 448.7 354.6 1,235.8 1,003.4

Amortization of acquired intangible assets 65.7 46.2 197.1 132.1

Acquisition related charges and restructuring, net 33.7 0.7 79.4 28.9

Total costs and expenses 1,218.8 917.6 3,254.9 2,634.1

Operating income 455.6 501.6 1,483.1 1,425.2

Other income (expense), net (13.6 ) (25.1 ) (34.9 ) (34.0 )

Income before income taxes 442.0 476.5 1,448.2 1,391.2

Income tax provision 69.5 52.3 212.7 198.1

Net income $ 372.5 $ 424.2 $ 1,235.5 $ 1,193.1

Net income per common share:

Basic $ 0.90 $ 0.99 $ 2.98 $ 2.75

Diluted $ 0.87 $ 0.97 $ 2.87 $ 2.69

Weighted average shares:

Basic 412.3 427.2 414.7 434.1

Diluted 428.8 436.3 430.5 443.4


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September 30, December 31,

2013 2012

Balance sheet items:

Cash, cash equivalents & marketable securities $ 5,847.3 $ 3,900.3

Total assets 13,629.1 11,734.3

Short-term borrowings 405.9 308.5

Long-term debt 4,228.3 2,771.3

Total stockholders' equity 5,894.7 5,694.5


Reconciliation of GAAP to Adjusted Net Income


Three-Month Periods Ended Nine-Month Periods Ended

September 30, September 30,

2013 2012 2013 2012

Net income - GAAP $ 372.5 $ 424.2 $ 1,235.5 $ 1,193.1

Before tax adjustments:

Cost of goods sold (excluding amortization

of acquired intangible assets):

Products exited or to be exited -Pharmion (1 ) - - - (2.0 )

Share-based compensation expense (2 ) 6.1 3.3 12.6 9.2

Research and development:


IPR&D impairments (3 ) - 31.2 - 53.4

Upfront collaboration payments (4 ) 171.3 55.0 348.8 130.0

Selling, general and administrative:


Amortization of acquired intangible assets (5 ) 65.7 46.2 197.1 132.1

Acquisition related charges and restructuring, net:

Change in fair value of contingent consideration (6 ) 33.7 0.7 79.4 26.3


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Acquisition and restructuring costs (6 ) - - - 2.6

Net income tax adjustments (7 ) (65.7 ) (58.5 ) (174.1 ) (116.1 )

Net income - Adjusted $ 669.5 $ 561.3 $ 1,914.1 $ 1,590.3

Net income per common share - Adjusted

Basic $ 1.62 $ 1.31 $ 4.62 $ 3.66

Diluted $ 1.56 $ 1.29 $ 4.45 $ 3.59


Reconciliation of Full-Year 2013 Projected GAAP to Adjusted Net Income


Range

Low High

Projected net income - GAAP (1 ) $ 1,619.0 $ 1,676.6

Before tax adjustments:

Cost of goods sold (excluding amortization

of acquired intangible assets):

Share-based compensation expense 15.5 14.9

Research and development:


Upfront collaboration payments 410.3 410.3

Selling, general and administrative:


Amortization of acquired intangible assets 265.4 262.8

Acquisition related charges and restructuring, net:

Change in fair value of contingent consideration 142.5 131.5

Net income tax adjustments (222.7 ) (232.6 )

Projected net income - Adjusted $ 2,537.0 $ 2,558.5

Projected net income per diluted common share - GAAP $ 3.77 $ 3.90

Projected net income per diluted common share - Adjusted $ 5.90 $ 5.95

Projected weighted average diluted shares 430.0 430.0


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Contact:

Celgene Corporation Investors: Patrick E. Flanigan III, 908-673-9969 Vice President Investor Relations or Media: Brian P. Gill, 908-673-9530 Vice President Corporate Communications

(http://celgene.newshq.businesswire.com/press-release/corporate/celgene-reports-strong-third-quarter-2013-operating-and-financial-results)

Regeneron Pharmaceuticals, Inc. NASDAQ: REGN

Regeneron Reports Third Quarter 2013 Financial and Operating Results

-- Third quarter 2013 EYLEA® (aflibercept) Injection global net sales of $488 million, including $363 million in the U.S. and $125 million in rest of world(1) -- Estimated full year 2013 EYLEA U.S. net sales forecast raised to $1.35 billion - $1.375 billion -- EYLEA supplemental BLA submitted to the FDA for treatment of Diabetic Macular Edema -- Third quarter 2013 non-GAAP net income(2) of $277 million or $2.40 per diluted share

TARRYTOWN, N.Y., Nov. 5, 2013 /PRNewswire/ -- Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced financial and operating results for the third quarter of 2013 and provided an update on development programs.

The Company reported total revenues of $597 million in the third quarter and $1.494 billion in the first nine months of 2013, compared to $428 million in the third quarter and $964 million in the first nine months of 2012. EYLEA U.S. net product sales grew 49% to $363 million in the third quarter of 2013 from $244 million in the third quarter of 2012. EYLEA U.S. net product sales grew 79% to $1.007 billion in the first nine months of 2013 from $562 million in the first nine months of 2012. The Company's total revenues in both the third quarter and first nine months of 2013 included $45 million of milestone payments from Bayer HealthCare in connection with the companies' EYLEA collaboration outside the United States. These were comprised of a $15 million development milestone and two $15 million sales milestones. Total revenues in both the third quarter and first nine months of 2012 included a $50 million milestone payment from Sanofi and a $15 million milestone payment from Bayer HealthCare in connection with regulatory approvals of ZALTRAP and EYLEA, respectively.

The Company reported non-GAAP net income of $277 million, or $2.40 per diluted share, in the third quarter and $676 million, or $5.92 per diluted share, in the first nine months of 2013, compared to $217 million, or $1.89 per diluted share, in the third quarter and $359 million, or $3.19 per diluted share, in the first nine months of 2012. The Company reported GAAP net income of $141 million, or $1.25 per diluted share, in the third quarter and $328 million, or $2.95 per diluted share, in the first nine months of 2013, compared to $191 million, or $1.72 per diluted share, in the third quarter and $280 million, or $2.55 per diluted share, in the first nine months of 2012. The decrease in third quarter 2013 GAAP net income resulted primarily from higher operating expenses and because the Company began recording an income tax provision in 2013.

"We are pleased with our quarterly financial performance, which continues to be driven by both the U.S. and ex-U.S. growth of EYLEA. Moreover, our late stage clinical pipeline continues to have strong momentum. Importantly, today


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we announced that we recently submitted to the FDA a supplemental BLA in the diabetic macular edema (DME) indication, and are encouraged that we were able to accomplish this approximately one-year ahead of our original plan. In the third quarter, we previously reported positive Phase 3 data for EYLEA in DME. We also announced two additional positive Phase 3 trials last month - the VIBRANT trial for EYLEA in macular edema following branch retinal vein occlusion (BRVO) and the ODYSSEY MONO trial for alirocumab in patients with elevated cholesterol," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "Finally, we expect to report results from the Phase 3 MOBILITY trial for sarilumab in patients with rheumatoid arthritis before the end of the year."

Business Highlights

EYLEA® (aflibercept) Injection for Intravitreal Injection

• EYLEA is currently approved in the United States for the treatment of neovascular age-related macular degeneration (wet AMD) and macular edema following central retinal vein occlusion (CRVO). In the third quarter of 2013, net sales of EYLEA in the United States were $363 million, compared to $244 million in the third quarter of 2012.

• Bayer HealthCare commenced sales of EYLEA for the treatment of wet AMD in the fourth quarter of 2012 following receipt of regulatory approvals in the European Union, Japan, Australia, and other countries. In the third quarter of 2013, net sales of EYLEA outside of the United States(1) were $125 million, compared to $102 million in the second quarter of 2013. Regeneron's share of the profits on these EYLEA net sales (including royalties on sales in Japan) was $46 million in the third quarter of 2013, and after repaying $14 million in development expenses, the Company recognized $32 million in net profit from EYLEA sales outside the United States in the quarter.

• The European Commission approved EYLEA for the treatment of visual impairment due to macular edema secondary to CRVO in the third quarter of 2013.

• EYLEA is approved for the treatment of wet AMD in approximately 50 countries. Additional approvals and launches are anticipated to continue through 2014.

• In August 2013, the Company and Bayer HealthCare reported positive, top line, one-year results from the Phase 3 VISTA-DME and VIVID-DME trials in DME. Data from these studies were presented at the Retina Society and EURETINA medical conferences in September 2013. Additionally, we have recently submitted a supplemental BLA for U.S. regulatory approval of EYLEA in DME, and applications for regulatory approval in the European Union are expected to be submitted for this indication by the end of 2013.

• In October 2013, the Company reported positive, top line results from the Phase 3 VIBRANT trial for the treatment of macular edema following branch retinal vein occlusion (BRVO).

ZALTRAP® (ziv-aflibercept) Injection for Intravenous Infusion

• ZALTRAP is currently approved in over 30 countries, including the United States and the European Union. Marketing authorization applications for ZALTRAP are currently under review by additional regulatory agencies worldwide.

• ZALTRAP net product sales commenced in the United States in August 2012 and in Europe in the first quarter of 2013. In the third quarter of 2013, Sanofi's worldwide net sales of ZALTRAP were $18 million, compared to $8 million in the third quarter of 2012.

Monoclonal Antibodies

• Regeneron has thirteen fully human monoclonal antibodies based on the Company's VelocImmune® technology in clinical development, including seven in collaboration with Sanofi.

• ODYSSEY, a large, global Phase 3 program with alirocumab, an antibody targeting PCSK9 to reduce LDL cholesterol, was initiated in June 2012. The ODYSSEY program includes eleven clinical trials evaluating the effect of alirocumab dosed every two weeks. All of these trials are fully enrolled with the exception of the


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18,000 patient ODYSSEY OUTCOMES study. In addition, a trial of alirocumab dosed every four weeks (ODYSSEY CHOICE) is expected to begin enrollment by the end of 2013. In October, positive top-line results were reported from the Phase 3 ODYSSEY MONO trial. These were the first Phase 3 data to be reported from the PCSK9 inhibitor class of investigational drugs. Alirocumab is being developed in collaboration with Sanofi.

• In the second quarter of 2013, Phase 2b trials of dupilumab in asthma and atopic dermatitis were initiated and are currently enrolling patients. Additionally, in the third quarter of 2013, a Phase 2 trial of dupilumab in nasal polyposis was initiated. Dupilumab is being developed in collaboration with Sanofi.

• The Phase 3 program with sarilumab in rheumatoid arthritis includes multiple trials. SARIL-RA-MOBILITY has completed enrollment and data are expected by the end of 2013. SARIL-RA-TARGET continues to enroll patients. SARIL-RA-COMPARE and SARIL-RA-ASCERTAIN were initiated during the second quarter of 2013. Additionally, a Phase 2 study, SARIL-NIU-SATURN, in non-infectious uveitis is expected to commence in the fourth quarter of 2013. Sarilumab is being developed in collaboration with Sanofi.

• REGN1908-1909, an antibody combination against an undisclosed target, entered clinical development during the third quarter of 2013.

Third Quarter 2013 Financial Results

Product Revenues: Net product sales were $367 million in the third quarter of 2013, compared to $249 million in the third quarter of 2012. EYLEA net product sales in the United States were $363 million in the third quarter of 2013, compared to $244 million in the third quarter of 2012. ARCALYST net product sales were $4 million in the third quarter of 2013, compared to $5 million in the third quarter of 2012.

Total Revenues: Total revenues increased by 40% to $597 million in the third quarter of 2013, compared to $428 million in the third quarter of 2012. Total revenues include collaboration revenues of $223 million in the third quarter of 2013, compared to $172 million in the third quarter of 2012. Collaboration revenue in the third quarter of 2013 included $45 million of milestone payments earned from Bayer HealthCare. Collaboration revenue in the third quarter 2012 included a $50 million milestone payment from Sanofi and a $15 million milestone payment from Bayer HealthCare.

Research and Development (R&D) Expenses: GAAP R&D expenses were $224 million in the third quarter of 2013, compared to $158 million in the third quarter of 2012. The increase was principally due to increased R&D activities, primarily related to the Company's antibody collaboration with Sanofi, higher R&D headcount, and higher non-cash share-based compensation expense. In the third quarter of 2013, R&D related non-cash share-based compensation expense was $28 million, compared to $13 million in the third quarter of 2012.

Selling, General, and Administrative (SG&A) Expenses: GAAP SG&A expenses were $98 million in the third quarter of 2013, compared to $47 million in the third quarter of 2012. The increase was primarily due to higher expenses in connection with commercialization of EYLEA and higher non-cash share-based compensation expense. In the third quarter of 2013, SG&A related non-cash share-based compensation expense was $17 million, compared to $7 million in the third quarter of 2012.

Cost of Goods Sold (COGS): GAAP COGS was $28 million in the third quarter of 2013, compared to $20 million in the third quarter of 2012. The increase was due to higher EYLEA sales in 2013.

Cost of Collaboration Manufacturing: GAAP cost of collaboration manufacturing, which was $10 million in the third quarter of 2013, primarily consisted of third-party royalties, as well as costs in connection with producing commercial supplies of EYLEA for Bayer HealthCare and ZALTRAP for Sanofi.

Interest Expense: GAAP interest expense was $12 million in the third quarter of 2013, compared to $11 million in the third quarter of 2012. In connection with the Company's convertible senior notes, which were issued in October 2011, the Company incurred interest expense of $8 million in the third quarter of 2013 and $7 million in the third


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quarter of 2012. Non-cash interest expense related to the convertible senior notes was $6 million in the third quarter of 2013 and $5 million in the third quarter of 2012.

Income Tax Expense: GAAP income tax expense was $84 million in the third quarter of 2013. The effective tax rate was 37.4% for the quarter.

In the third quarter of 2012, the Company did not recognize any income tax provision because it continued to recognize a full valuation allowance against its net operating loss carry-forward and other deferred tax assets. In the fourth quarter of 2012, the Company recorded an income tax benefit attributable to the release of substantially all of the valuation allowance against the Company's deferred tax assets. Starting in 2013, the Company has recorded income taxes on GAAP income using an estimated effective tax rate. Non-GAAP net income excludes non-cash income tax expense. The Company does not currently pay, or expect to pay in the near future, significant cash income taxes.

Non-GAAP and GAAP Net Income: The Company reported non-GAAP net income of $277 million, or $2.82 per basic share and $2.40 per diluted share, in the third quarter of 2013, compared to non-GAAP net income of $217 million, or $2.29 per basic share and $1.89 per diluted share, in the third quarter of 2012.

The Company reported GAAP net income of $141 million, or $1.44 per basic share and $1.25 per diluted share, in the third quarter of 2013, compared to GAAP net income of $191 million, or $2.02 per basic share and $1.72 per diluted share, in the third quarter of 2012. The decrease in third quarter 2013 GAAP net income resulted primarily from higher operating expenses and because the Company began recording an income tax provision in 2013.

Cash Position: At September 30, 2013, cash, cash equivalents, and marketable securities totaled $775 million, compared to $588 million (including $8 million of restricted cash and marketable securities) at December 31, 2012. In addition, accounts receivable related to sales of EYLEA totaled $854 million at September 30, 2013, compared to $592 million at December 31, 2012.

(1) Regeneron records net product sales of EYLEA in the United States. Outside the United States, EYLEA net product sales comprise sales by Bayer HealthCare in countries other than Japan and sales by Santen Pharmaceuticals in Japan under a co-promotion agreement with a Japanese subsidiary of Bayer HealthCare. The Company recognizes its share of the profits (including royalties on sales in Japan) from EYLEA sales outside the United States within "Bayer HealthCare collaboration revenue" in its Statement of Operations.

(2) This press release uses non-GAAP net income and non-GAAP net income per share, which are financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The Company believes that the presentation of these non-GAAP measures is useful to investors because they exclude (i) non-cash share-based compensation expense which fluctuates from period to period based on factors that are not within the Company's control, such as the Company's stock price on the dates share-based grants are issued, (ii) non-cash interest expense related to the Company's convertible senior notes since this is not deemed useful in evaluating the Company's operating performance, and (iii) non-cash income tax expense, since the Company does not currently pay, or expect to pay in the near future, significant cash income taxes due primarily to the utilization of net operating loss and tax credit carry-forwards; therefore, non-cash income tax expense is not deemed useful in evaluating the Company's operating performance. In addition, management uses these non-GAAP measures for planning, budgeting, forecasting, assessing historical performance, and making financial and operational decisions, and also provides forecasts to investors on this basis. However, there are limitations in the use of these and other non-GAAP financial measures as they exclude certain expenses that are recurring in nature. Furthermore, the Company's non-GAAP financial measures may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented by Regeneron should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of the Company's GAAP to non-GAAP results is included in Table 3 of this press release.


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Conference Call Information

Regeneron will host a conference call and simultaneous webcast to discuss its third quarter 2013 financial and operating results on Tuesday, November 5, 2013, at 8:30 AM. To access this call, dial (888) 660-6127 (U.S.) or (973) 890-8355 (International). A link to the webcast may be accessed from the 'Events and Presentations' page of Regeneron's website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company's website and will be available for 30 days.

About Regeneron Pharmaceuticals

Regeneron is a leading science-based biopharmaceutical company based in Tarrytown, New York that discovers, invents, develops, manufactures, and commercializes medicines for the treatment of serious medical conditions. Regeneron markets medicines for eye diseases, colorectal cancer, and a rare inflammatory condition and has product candidates in development in other areas of high unmet medical need, including hypercholesterolemia, oncology, rheumatoid arthritis, asthma, and atopic dermatitis. For additional information about the company, please visit www.regeneron.com.

Forward-Looking Statement

This press release includes forward-looking statements that involve risks and uncertainties relating to future events and the future financial performance of Regeneron, and actual events or results may differ materially from these forward-looking statements. Words such as "anticipate," "expect," "intend," "plan," "believe," "seek," "estimate," variations in such words, and similar expressions are intended to identify such forward-looking statements, although not all forward-looking statements contain these identifying words. These statements concern, and these risks and uncertainties include, among others, the nature, timing, and possible success and therapeutic applications of EYLEA®, ZALTRAP®, and ARCALYST®, and Regeneron's product candidates, potential new indications for marketed products, and research and clinical programs now underway or planned; unforeseen safety issues resulting from the administration of products and product candidates in patients; the likelihood and timing of possible regulatory approval and commercial launch of Regeneron's late-stage product candidates and new indications for marketed products; ongoing regulatory obligations and oversight impacting Regeneron's research and clinical programs and business; determinations by regulatory and administrative governmental authorities which may delay or restrict Regeneron's ability to continue to develop or commercialize EYLEA, ZALTRAP, and ARCALYST and other product candidates and possible new indications for marketed products; Regeneron's ability to manufacture and manage supply chains for multiple products and product candidates; competing drugs and product candidates that may be superior to EYLEA, ZALTRAP, and ARCALYST and other product candidates and possible new indications for marketed products; uncertainty of market acceptance of Regeneron's products and product candidates; coverage and reimbursement determinations by third-party payers, including Medicare and Medicaid; unforeseen safety issues resulting from the administration of products and product candidates in patients, including serious complications or side effects in connection with the use of Regeneron product candidates in clinical trials; unanticipated expenses; the costs of developing, producing, and selling products; the ability of Regeneron to meet any of its sales or other financial projections or guidance and changes to the assumptions underlying those projections or guidance; the potential for any license or collaboration agreement, including Regeneron's agreements with Sanofi and Bayer HealthCare LLC, to be canceled or terminated without any further product success; and risks associated with intellectual property of other parties and pending or future litigation relating thereto. A more complete description of these and other material risks can be found in Regeneron's filings with the United States Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2012 and its Form 10-Q for the quarterly period ended September 30, 2013. These statements are made by Regeneron based on management's current beliefs and judgment, and Regeneron does not undertake any obligation to update publicly any forward-looking statement, including without limitation any financial projection or guidance, whether as a result of new information, future events, or otherwise.


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REGENERON PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands) September 30, December 31, 2013 2012 Assets: Cash, restricted cash, and marketable securities $ 775,186 $ 587,511 Accounts receivable - trade, net 855,844 593,207 Accounts receivable from Sanofi 136,980 99,913 Deferred tax assets 257,266 340,156 Property, plant, and equipment, net 453,891 379,940 Other assets 161,248 79,763 Total assets $ 2,640,415 $ 2,080,490 Liabilities and stockholders' equity: Accounts payable, accrued expenses, and other liabilities $ 229,711 $ 118,604 Deferred revenue 238,358 259,173 Facility lease obligations 168,013 160,810 Convertible senior notes 314,162 296,518 Stockholders' equity 1,690,171 1,245,385 Total liabilities and stockholders' equity $ 2,640,415 $ 2,080,490

REGENERON PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)

Three months ended

September 30, Nine months ended

September 30, 2013 2012 2013 2012 Revenue: Net product sales $ 367,118 $ 249,172 $ 1,019,751 $ 576,622 Sanofi collaboration revenue 134,359 145,042 319,161 319,035 Bayer HealthCare collaboration revenue 88,583 26,701 134,594 48,308 Technology licensing 5,893 5,893 17,679 17,679 Other revenue 1,074 879 3,148 2,231 597,027 427,687 1,494,333 963,875 Expenses: Research and development 224,045 158,295 591,807 444,530 Selling, general, and administrative 97,607 46,883 247,330 153,016 Cost of goods sold 28,253 20,145 83,557 54,286 Cost of collaboration manufacturing 10,320 23,684 360,225 225,323 946,378 651,832 Income from operations 236,802 202,364 547,955 312,043 Other income (expenses): Investment income 618 517 2,028 1,628 Interest expense (11,736) (11,413) (34,776) (33,809) (11,118) (10,896) (32,748) (32,181)


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Income before income taxes 225,684 191,468 515,207 279,862 Income tax expense (84,378) (187,651) Net income $ 141,306 $ 191,468 $ 327,556 $ 279,862 Net income per share - basic $ 1.44 $ 2.02 $ 3.36 $ 2.97 Net income per share - diluted $ 1.25 $ 1.72 $ 2.95 $ 2.55 Weighted average shares outstanding - basic 98,226 95,012 97,602 94,349 Weighted average shares outstanding - diluted 116,713 115,830 115,554 109,780

REGENERON PHARMACEUTICALS, INC. RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME (Unaudited)

(In thousands, except per share data)

Three months ended

September 30, Nine months ended

September 30, 2013 2012 2013 2012 GAAP net income $ 141,306 $ 191,468 $ 327,556 $ 279,862 Adjustments: R&D: Non-cash share-based compensation expense 28,258 13,337 82,741 35,335 SG&A: Non-cash share-based compensation expense 17,114 7,030 59,244 27,398 COGS: Non-cash share-based compensation expense 373 150 1,232 652 Interest expense: Non-cash interest related to convertible senior notes 5,823 5,499 17,139 16,033

Income taxes: Non-cash income tax expense 84,378 187,651 Non-GAAP net income $ 277,252 $ 217,484 $ 675,563 $ 359,280 Non-GAAP net income per share - basic $ 2.82 $ 2.29 $ 6.92 $ 3.81 Non-GAAP net income per share - diluted (1) $ 2.40 $ 1.89 $ 5.92 $ 3.19 Shares used in calculating: Non-GAAP net income per share - basic 98,226 95,012 97,601 94,349 Non-GAAP net income per share - diluted (2) 116,068 115,830 114,970 114,541

(http://investor.regeneron.com/releasedetail.cfm?ReleaseID=804313)

Seattle Genetics (NASDAQ: SGEN)

Seattle Genetics is a biotechnology company focused on the development and commercialization of monoclonal antibody-based therapies for cancer. Our marketed product ADCETRIS , or brentuximab vedotin, received accelerated approval in the United States in August 2011 and approval with conditions in Canada in February 2013 for patients with relapsed Hodgkin lymphoma or relapsed systemic anaplastic large cell lymphoma, or sALCL. ADCETRIS is an antibody-drug conjugate, or ADC, comprising an anti-CD30 monoclonal antibody attached by a protease-cleavable linker to a microtubule disrupting agent, monomethyl auristatin E (MMAE), utilizing our proprietary technology. We have a broad development strategy for ADCETRIS evaluating its potential application in earlier lines


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of therapy for patients with Hodgkin lymphoma or mature T-cell lymphoma, or MTCL, and in other CD30-positive malignancies. In July 2013 we received notification from the U.S. Food and Drug Administration, or FDA, regarding a supplemental Biologics License Application, or sBLA, that we submitted in March 2013. The 16-cycle limitation on duration of use of ADCETRIS was removed from the U.S. prescribing information as a result of this sBLA. However, a requested label claim for retreatment that we submitted as part of the sBLA was not approved.

We are collaborating with Millennium: the Takeda Oncology Company, or Takeda, to develop and commercialize ADCETRIS on a global basis. Under this collaboration, Seattle Genetics has retained commercial rights for ADCETRIS in the United States and its territories and in Canada, and Takeda has commercial rights in the rest of the world. ADCETRIS was granted conditional marketing authorization in the European Union in October 2012 for patients with relapsed Hodgkin lymphoma or relapsed sALCL.

Takeda has also received and continues to pursue marketing approvals in multiple other countries. In addition, we have five clinicalstage ADC programs, which consist of SGN-CD19A, SGN-CD33A, SGN-LIV1A, ASG-22ME, and ASG-15ME. We recently determined to discontinue development of SGN-75, an ADC targeted to CD70; however, we plan to advance a novel ADC that also targets CD70, SGN-CD70A, into phase 1 clinical development during 2014. We also have collaborations for our ADC technology with a number of biotechnology and pharmaceutical companies, including AbbVie Biotechnology Ltd. (formerly part of Abbott Laboratories), or AbbVie; Bayer Pharma AG, or Bayer; Celldex Therapeutics, Inc., or Celldex; Daiichi Sankyo Co., Ltd., or Daiichi Sankyo; Genentech, Inc., a member of the Roche Group, or Genentech; GlaxoSmithKline LLC, or GSK; Pfizer, Inc., or Pfizer, PSMA Development Company LLC, a subsidiary of Progenics Pharmaceuticals Inc., or Progenics; and Takeda; as well as ADC codevelopment agreements with Agensys, Inc., an affiliate of Astellas Pharma, Inc., or Agensys, Genmab A/S, or Genmab, and Oxford BioTherapeutics Ltd., or OBT.

The commercial potential of ADCETRIS and the ability to realize that potential by us and Takeda remains uncertain. Our success in commercializing ADCETRIS will require, among other things, effective sales, marketing, manufacturing, distribution, information systems and pricing strategies, our ability to demonstrate in the medical community the safety and efficacy of ADCETRIS and its potential advantages, and our ability to comply with applicable laws and regulations. Our success could be unfavorably impacted by adverse events or competition. The FDA granted accelerated approval of ADCETRIS which means that we are, among other things, obligated to conduct specific post-approval clinical studies to confirm patient benefit as a condition of that approval. In addition, we are exploring the use of ADCETRIS in earlier lines of therapy in patients with Hodgkin lymphoma and MTCL, including sALCL, and in other CD30-positive malignancies. In order to do this, we are required to conduct additional extensive clinical studies and, if these studies are successful, we intend to seek additional regulatory approvals.


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Basis of presentation and summary of significant accounting policies

Basis of presentation

The accompanying unaudited condensed consolidated financial statements reflect the accounts of Seattle Genetics, Inc. and its wholly-owned subsidiary, Seattle Genetics UK, Ltd. (collectively “Seattle Genetics” or the “Company”). The condensed consolidated balance sheet data as of December 31, 2012 were derived from audited financial statements not included in this quarterly report on Form 10-Q. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and generally accepted accounting principles in the United States of America, or GAAP, for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and results of its operations, as of and for the periods presented. Management has determined that the Company operates in one segment: the development and sale of pharmaceutical products on its own behalf or in collaboration with others.

Unless indicated otherwise, all amounts presented in financial tables are presented in thousands, except for per share and par value amounts. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, as filed with the SEC.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

The results of the Company’s operations for the three and nine month periods ended September 30, 2013 are not necessarily indicative of the results to be expected for the full year.

Non-cash investing activities

The Company had $3.2 million of accrued capital expenditures as of September 30, 2013. This amount has been treated as a non-cash investing activity and, accordingly, has not been included in the statement of cash flows for the nine month period ended September 30, 2013.

Revenue recognition

The Company’s revenues are comprised of ADCETRIS net product sales, amounts earned under its collaboration and licensing agreements and royalties. Revenue recognition is predicated upon persuasive evidence of an agreement existing, delivery of products or services being rendered, amounts payable being fixed or determinable, and collectibility being reasonably assured.

Net product sales

The Company sells ADCETRIS through a limited number of pharmaceutical distributors in the U.S. and Canada. Customers order ADCETRIS through these distributors and the Company typically ships product directly to the customer. The Company records product sales when title and risk of loss pass, which generally occurs upon delivery of the product to the customer. Product sales are recorded net of estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns and other deductions. Accruals are established for these deductions and actual amounts incurred are offset against applicable accruals. The Company reflects these accruals as either a reduction in the related account receivable from the distributor, or as an accrued liability depending on the nature of the sales deduction. Sales deductions are based on management’s estimates that consider payer mix in


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target markets, industry benchmarks and experience to date. These estimates involve a substantial degree of judgment.

Government-mandated rebates and chargebacks: The Company has entered into a Medicaid Drug Rebate Agreement, or MDRA, with the Centers for Medicare & Medicaid Services. This agreement provides for a rebate to participating states based on covered purchases of ADCETRIS. Medicaid rebates are invoiced to the Company by participating states. The Company estimates Medicaid rebates based on a third party study of the payer mix for ADCETRIS, information on utilization by Medicaid-eligible patients who received assistance through SeaGen Secure , the Company’s patient assistance program, and experience to date. The Company has also completed a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive a discount on eligible purchases of ADCETRIS. The Company has entered into a Pharmaceutical Pricing Agreement with the Secretary of Health and Human Services, which enables certain entities that qualify for government pricing under the Public Health Services Act, or PHS, to receive discounts on their qualified purchases of ADCETRIS. Under these agreements, distributors process a chargeback to the Company for the difference between wholesale acquisition cost and the applicable discounted price. As a result of the Company’s direct-ship distribution model, it can determine the entities purchasing ADCETRIS and this information enables the Company to estimate expected chargebacks for FSS and PHS purchases based on each entity’s eligibility for the FSS and PHS programs. The Company also reviews historical rebate and chargeback information to further refine these estimates.

Distribution fees, product returns and other deductions: The Company’s distributors charge a fee for distribution services that they perform on behalf of the Company which is determined based on sales volume to each distributor. The Company allows for the return of product that is within 30 days of its expiration date or that is damaged. The Company estimates product returns based on its experience to date and historical industry information of return rates for other specialty pharmaceutical products. In addition, the Company considers its direct-ship distribution model, its belief that product is typically not held in the distribution channel, and the expected rapid use of the product by healthcare providers. The Company provides financial assistance to qualifying patients that are underinsured or cannot cover the cost of commercial coinsurance amounts through SeaGen Secure. SeaGen Secure is available to patients in the U.S. and its territories who meet various financial need criteria. Estimated contributions for commercial coinsurance under SeaGen Secure are deducted from gross sales and are based on an analysis of expected plan utilization. These estimates are adjusted as necessary to reflect the Company’s actual experience.

Collaboration and license agreement revenues

The Company licenses its intellectual property to third parties that use the intellectual property to develop product candidates. If there are continuing performance obligations, the Company uses a time-based proportional performance model to recognize revenue over the Company’s performance period for the related agreement. Collaboration and license agreements are evaluated to determine whether the multiple elements and associated deliverables can be considered separate units of accounting. To date, the deliverables under the Company’s collaboration and license agreements have not qualified as separate units of accounting. The assessment of multiple element arrangements requires judgment in order to determine the appropriate point in time, or period of time, that revenue should be recognized. The Company believes that the development period used in each agreement is a reasonable estimate of the performance obligation period of such agreement. Accordingly, all amounts received or due, including any upfront payments, maintenance fees, development and regulatory milestone payments and reimbursement payments, are recognized as revenue over the performance obligation periods of each agreement, which range from two to fourteen years for the Company’s current agreements. When no performance obligations are required of the Company, or following the completion of the performance obligation period, such amounts will be recognized as revenue when collectibility is reasonably assured.

We and Takeda are conducting four phase 3 clinical trials of ADCETRIS, one in relapsed Hodgkin lymphoma patients following autologous stem cell transplant, or ASCT, called the AETHERA trial, one in relapsed cutaneous T-cell lymphoma, or CTCL, called the ALCANZA trial, one in frontline advanced classical Hodgkin lymphoma, called the ECHELON-1 trial, and one in frontline MTCL, including sALCL, called the ECHELON-2 trial. The FDA has agreed to special protocol assessment, or SPA, agreements for the ALCANZA, ECHELON-1 and ECHELON-2 clinical trials. An


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SPA is an agreement with the FDA regarding the design of the clinical trial, including size and clinical endpoints, to support an efficacy claim in a BLA submission to the FDA if the trial achieves its primary endpoints. The primary endpoint in the AETHERA trial is progression free survival versus placebo following ASCT. The primary end point in the ECHELON-1 and ECHELON-2 trials is progression free survival per independent review facility assessment in patients treated with ADCETRIS compared to that achieved with therapy in the control arm. The primary endpoint in the ALCANZA trial is overall response rate, lasting at least 4 months, in patients treated with ADCETRIS compared to that achieved with therapy in the control arm.

We have an agreement with Ventana Medical Systems, Inc., a member of the Roche Group, or Ventana, under which Ventana is working to develop, manufacture and commercialize a molecular companion diagnostic test with the goal of identifying patients who might respond to treatment with ADCETRIS based on CD30 expression levels in their tissue specimens. A molecular companion diagnostic is not required for the current approved indications for ADCETRIS; however, we expect that a molecular companion diagnostic may be required by regulatory authorities to support regulatory approval of ADCETRIS in other CD30-positive malignancies.

All of these activities will require substantial amounts of capital and may not ultimately prove successful. Our other product candidates are in relatively early stages of development. These product candidates will require significant further development, financial resources and personnel to obtain regulatory approval and develop into commercially viable products, if at all. Accordingly, over the next several years, we expect that we will incur substantial expenses, primarily as a result of activities related to the commercialization and continued development of ADCETRIS. We will also continue to invest in research, development and manufacturing of our other product candidates. Our commitment of resources to the continuing development, regulatory and commercialization activities for ADCETRIS and the research, continued development and manufacturing of our other product candidates may require us to raise substantial amounts of additional capital and our operating expenses will fluctuate as a result of such activities. In addition, we may incur significant milestone payment obligations as our product candidates progress through clinical trials towards potential commercialization.

Although we recognize revenue from ADCETRIS product sales in the United States and Canada, we have only limited experience commercializing ADCETRIS and our future ADCETRIS product sales will be difficult to accurately predict from period to period. In this regard, our product sales may vary significantly from period to period and may be affected by a variety of factors, including customer ordering patterns, the level of demand for ADCETRIS, the duration of therapy for patients receiving ADCETRIS, and the extent to which coverage and reimbursement for ADCETRIS is available from government and other third-party payers, particularly in an increasingly challenging environment due to, among other things, the attention being paid to healthcare cost containment and other austerity measures in the U.S. and worldwide. In addition, we believe that our initial sales of ADCETRIS in the United States have depleted the prevalence pool of patients in its approved indications and therefore, our ongoing sales of ADCETRIS will be primarily dependent on the incidence rate of new patients who have recently failed earlier lines of cancer therapy and become eligible for ADCETRIS within the current approved indications.

Accordingly, we believe that the level of our ongoing ADCETRIS sales in the United States is now largely subject to the incidence flow of patients eligible for treatment with ADCETRIS, which could vary significantly from period to period. Moreover, while the incidence rate of newly relapsing patients in ADCETRIS’ approved indications has not been definitely determined, we believe that the incidence rate is relatively low. For these and other reasons, we expect that future ADCETRIS sales growth, if any, will be primarily dependent on future price increases and our ability to expand the labeled indications of use. Our efforts to expand ADCETRIS’ labeled indications of use will require additional time and investment in clinical trials to complete and we may not be successful. Our ability to successfully commercialize

ADCETRIS and to expand its labeled indications of use are subject to a number of risks and uncertainties, including those discussed in Part II, Item 1A of this Quarterly Report on Form 10-Q. We also expect that amounts earned from our collaboration agreements will continue to be an important source of our revenues and cash flows. These revenues will be impacted by future development funding and the achievement of development, clinical and commercial milestones by our collaborators under our existing collaboration and license agreements, including, in


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particular, our ADCETRIS collaboration with Takeda, as well as entering into new collaboration and license agreements. Our results of operations may vary substantially from year to year and from quarter to quarter and, as a result, we believe that period to period comparisons of our operating results may not be meaningful and should not be relied upon as being indicative of our future performance.

Financial summary

For the nine months ended September 30, 2013, total revenues increased to $201.9 million, compared to $146.9 million for the same period in 2012. This increase was primarily due to growth in collaboration revenue. Net product sales of ADCETRIS were $106.1 million for the nine months ended September 30, 2013 compared to $102.8 million for the nine months ended September 30, 2012. For the nine months ended September 30, 2013, total costs and expenses increased to $249.0 million, compared to $193.4 million for the same period in 2012.

This primarily reflects increases in ADCETRIS collaboration activities, including product supply to Takeda and clinical development efforts to explore additional potential applications of ADCETRIS, as well as investment in our ADC pipeline programs. As of September 30, 2013, we had $373.8 million in cash and short-term investments, and $234.4 million in total stockholders’ equity.

(http://www.seattlegenetics.com/pdf/SGEN_10Q_3Q13.pdf)

Shire Pharmaceuticals

Strong third quarter and increased Non GAAP earnings expectations

October 24, 2013 – Shire (LSE: SHP, NASDAQ: SHPG) announces results for the three months to September 30, 2013.

Financial Highlights Q3 2013 Growth(1)

Product sales $1,195 million +13%

Total revenues $1,237 million +12%

Non GAAP operating income $422 million +30%

US GAAP operating income $341 million +25%

Non GAAP diluted earnings per ADS

$1.77 +30%

US GAAP diluted earnings per ADS

$1.46 +23%

Non GAAP cash generation $482 million +36%

Non GAAP free cash flow $388 million +49%

US GAAP net cash provided by operating activities

$434 million +50%


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The Non GAAP financial measures included within this release are explained on page 24, and are reconciled to the most directly comparable financial measures prepared in accordance with US GAAP on pages 19 - 23.

STRONG RESULTS DEMONSTRATING GOOD PROGRESS

• Product sales +13% – with eight of our products delivering double digit growth in the quarter – including VYVANSE® (+21%), LIALDA®/MEZAVANT® (+36%) and FIRAZYR® (+107%)

• Non GAAP operating income +30% reflecting strong operating leverage

• Non GAAP earnings per ADS +30%

• Non GAAP cash generation +36%

• Guidance increased to mid-to-high teens Non GAAP earnings growth for the full year in 2013

STRATEGY EXECUTION

• Focused on growth: excellence in commercial execution and investment in newly prioritized pipeline

• ‘One Shire’ reorganization well underway driving greater efficiencies and resetting cost base to deliver sustainable improved operating leverage

• Revenue growth and effective cost management underpins increased guidance for 2013

Flemming Ornskov, M.D., Chief Executive Officer, commented:

“This has been a strong quarter with good growth in revenues, earnings and cash generation.

We’re demonstrating execution of our strategy, which is putting Shire on a path of sustainable growth. Our focus on commercial excellence is improving product sales and we’re excited about the opportunities in our pipeline.

We're confident in our prospects for the longer term as we continue to execute on commercial delivery, progress our prioritized pipeline and focus on targeted M&A. The benefits of our ‘One Shire’ reorganization are already evident in our year to date performance, we have a simpler, more efficient business and now expect Non GAAP R&D and SG&A spend to be lower than current consensus expectations for this year and in 2014 and 20151

I am delighted to be increasing our 2013 full year earnings guidance to delivering mid-to-high teens Non GAAP earnings growth and guiding to continuing operating leverage for 2014 and 2015, This strong performance has been overseen by a management team with long term tenure at Shire, supplemented by some recent new senior appointments."

Third Quarter 2013 Unaudited Results

Q3 2013 Q3 2012

US GAAP Adjustments Non GAAP US GAAP Adjustments Non GAAP

$M $M $M $M $M $M


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Total revenues 1,237 - 1,237 1,100 - 1,100

Operating income 341 81 422 273 52 325

Diluted earnings per ADS $1.46 $0.31 $1.77 $1.19 $0.17 $1.36

• Product sales in Q3 2013 grew strongly (up 13% to $1,195 million). On a Constant Exchange Rate (“CER”) basis, which is a Non GAAP measure, product sales were up 13%.

Eight of our products delivered double digit growth including VYVANSE (up 21% to $299 million), LIALDA/MEZAVANT (up 36% to $142 million), ELAPRASE® (up 17% to $129 million), VPRIV® (up 17% to $88 million), INTUNIV® (up 17% to $81 million) and FIRAZYR (up 107% to $63 million). LIALDA/MEZAVANT sales in Q3 2013 were particularly strong, primarily due to growth in US market share.

Growth in total product sales was moderated by DERMAGRAFT®(down 29% to $24 million), ADDERALL XR®(down 20% to $81 million) and REPLAGAL®(down 11% to $109 million). REPLAGAL product sales continue to be impacted by the return of competition to the Fabry market.

• Total revenues were up 12% to $1,237 million (Q3 2012: $1,100 million) as the growth in product sales was partially offset by lower royalties.

• On a Non GAAP basis:

Operating income was up 30% to $422 million (Q3 2012: $325 million), as total operating costs in Q3 2013 increased at a lower rate (up 5%) than total revenues (up 12%) demonstrating our focus on delivering efficient growth. Research and Development expenditure was up 2% and Selling, General and Administrative expenditure was up 1%.

On a US GAAP basis:

Operating income was up 25% to $341 million (Q3 2012: $273 million), a lower rate of increase than on a Non GAAP basis as Q3 2013 included higher acquisition and integration costs as compared to Q3 2012 and reorganization costs of $14 million not incurred in Q3 2012. Research and Development expenditure was up 2% and Selling, General and Administrative expenditure was up 1%.

• Non GAAP diluted earnings per American Depository Share (“ADS”) increased 30% to $1.77 (Q3 2012: $1.36) primarily due to higher Non GAAP operating income.

On a US GAAP basis, diluted earnings per ADS increased 23% to $1.46 (Q3 2012: $1.19), primarily due to higher US GAAP operating income.

• Cash generation, a Non GAAP measure, increased by 36% to $482 million (Q3 2012: $355 million) due to both higher cash receipts from product sales and lower operating expense payments in Q3 2013 as compared to Q3 2012. Cash generation partially benefited from the timing of some receipts from large distributors in the US.

Free cash flow, also a Non GAAP measure, increased by 49% to $388 million (Q3 2012: $261 million) primarily due to higher cash generation and lower tax payments, partially offset by higher capital expenditure payments in Q3 2013 as compared to Q3 2012.

On a US GAAP basis, net cash provided by operating activities was up 50% to $434 million (Q3 2012: $288 million).


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• Net cash, which is a Non GAAP measure, was $577 million at September 30, 2013 (December 31, 2012: $373 million).

On a US GAAP basis, cash and cash equivalents were $1,686 million at September 30, 2013 (December 31, 2012: $1,482 million).

September 30, December 31, 2013 2012 $M $M ASSETS Current assets: Cash and cash equivalents 1,686.1 1,482.2 Restricted cash 16.6 17.1 Accounts receivable, net 1,037.8 824.2 Inventories 480.5 436.9 Deferred tax asset 210.6 229.9 Prepaid expenses and other current assets

282.3 221.8

Total current assets 3,713.9 3,212.1 Non-current assets:

Investments 36.7 38.7 Property, plant and equipment ("PP&E"), net

965.1 955.8

Goodwill 621.3 644.5 Other intangible assets, net 2,976.0 2,388.1 Deferred tax asset 40.4 46.5 Other non-current assets 34.5 31.5 Total assets 8,387.9 7,317.2

LIABILITIES AND EQUITY Current liabilities:

Accounts payable and accrued expenses

1,581.6 1,501.5

Convertible bonds 1,100.0 - Other current liabilities 163.2 144.1 Total current liabilities 2,844.8 1,645.6

Non-current liabilities: Convertible bonds - 1,100.0 Deferred tax liability 722.0 520.8 Other non-current liabilities 652.3 241.6 Total liabilities 4,219.1 3,508.0

Equity: Common stock of 5p par value; 1,000 million shares authorized; and 562.9 million shares issued and outstanding (2012: 1,000 million shares authorized; and

55.8 55.7


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562.5 million shares issued and outstanding)

Additional paid-in capital 3,045.6 2,981.5 Treasury stock: 14.5 million shares (2012: 10.7 million)

(466.6) (310.4)

Accumulated other comprehensive income

101.3 86.9

Retained earnings 1,432.7 995.5 Total equity 4,168.8 3,809.2 Total liabilities and equity 8,387.9 7,317.2

September 30, December 31, 2013 2012 $M $M ASSETS Current assets: Cash and cash equivalents 1,686.1 1,482.2 Restricted cash 16.6 17.1 Accounts receivable, net 1,037.8 824.2 Inventories 480.5 436.9 Deferred tax asset 210.6 229.9 Prepaid expenses and other current assets

282.3 221.8

Total current assets 3,713.9 3,212.1 Non-current assets:

Investments 36.7 38.7 Property, plant and equipment ("PP&E"), net

965.1 955.8

Goodwill 621.3 644.5 Other intangible assets, net 2,976.0 2,388.1 Deferred tax asset 40.4 46.5 Other non-current assets 34.5 31.5 Total assets 8,387.9 7,317.2

LIABILITIES AND EQUITY Current liabilities:

Accounts payable and accrued expenses

1,581.6 1,501.5

Convertible bonds 1,100.0 - Other current liabilities 163.2 144.1 Total current liabilities 2,844.8 1,645.6

Non-current liabilities: Convertible bonds - 1,100.0 Deferred tax liability 722.0 520.8 Other non-current liabilities 652.3 241.6


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Total liabilities 4,219.1 3,508.0 Equity:

Common stock of 5p par value; 1,000 million shares authorized; and 562.9 million shares issued and outstanding (2012: 1,000 million shares authorized; and 562.5 million shares issued and outstanding)

55.8 55.7

Additional paid-in capital 3,045.6 2,981.5 Treasury stock: 14.5 million shares (2012: 10.7 million)

(466.6) (310.4)

Accumulated other comprehensive income

101.3 86.9

Retained earnings 1,432.7 995.5 Total equity 4,168.8 3,809.2 Total liabilities and equity 8,387.9 7,317.2

(http://www.shire.com/shireplc/uploads/report/Shire_Q32013_EarningsRelease_24Oct2013.pdf)

Vertex Pharmaceuticals

Vertex Reports Third Quarter 2013 Financial Results and Provides Financial Outlook for 2014

-Third quarter 2013 total revenues of $222 million, including net product revenues of $101 million for KALYDECO in cystic fibrosis and $86 million for INCIVEK in hepatitis C- -Cash, cash equivalents and marketable securities of approximately $1.42 billion on September 30, 2013- -Company reduces workforce and focuses investment on future opportunities in cystic fibrosis and other research and early development programs, including all-oral regimens in hepatitis C; expected reduction of $150 million to $200 million in 2014 non-GAAP operating expenses compared to expected 2013 non-GAAP operating expenses of approximately $1.1 billion-

CAMBRIDGE, Mass.--(BUSINESS WIRE)-- Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today reported consolidated financial results for the quarter ended September 30, 2013. Vertex reported total third quarter 2013 revenues of $222 million, including net product revenues of $101 million from KALYDECOTM (ivacaftor) and $86 million from INCIVEK® (telaprevir). The GAAP net loss attributable to Vertex was $(124.1) million, or $(0.54) per share, for the third quarter of 2013, including certain charges of $49.7 million, comprised primarily of stock-based compensation expense and restructuring charges. Non-GAAP net loss attributable to Vertex for the third quarter of 2013 was $(74.4) million, or $(0.32) per diluted share. The company reported $1.42 billion in cash, cash equivalents and marketable securities as of September 30, 2013. The company also today provided updated financial guidance for 2013.

Vertex also announced that it would focus its investment on future opportunities in cystic fibrosis (CF) and other research and early development programs, including VX-135 as part of all-oral regimens for hepatitis C. The company is reducing its workforce related to the support of INCIVEK following the continued and rapid decline in the number of people being treated with INCIVEK as other new medicines for hepatitis C near approval. These changes are expected to generate a reduction in 2014 non-GAAP operating expenses of approximately $150 million to $200 million compared to anticipated 2013 non-GAAP operating expenses of approximately $1.1 billion.


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"Our business is at a unique point in its evolution. We have a tremendous opportunity ahead of us to further transform the treatment of cystic fibrosis, which continues to be the company's highest priority development program," commented Jeffrey Leiden, M.D., Ph.D., Chairman, President and Chief Executive Officer of Vertex. "Following the continued decline in the number of people starting treatment with INCIVEK, we today took the difficult step to reduce our workforce supporting this medicine, enabling us to focus our investment on key programs in cystic fibrosis and other diseases to position the company for future growth."

Vertex continues to advance key development programs for the treatment of CF and for all-oral regimens for hepatitis C and has multiple ongoing and planned studies for these programs. The company today provided the following updates:

Cystic Fibrosis

Vertex is conducting multiple studies aimed at helping more people with CF and enhancing the clinical benefit for these patients with our approved and investigational medicines. The company recently provided a comprehensive overview of its ongoing and planned studies in CF, including multiple ongoing label-expansion studies for ivacaftor, ongoing and planned Phase 2 and Phase 3 combination studies of lumacaftor (VX-809) and ivacaftor, and VX-661 and ivacaftor, and research efforts aimed at beginning clinical development of a next-generation corrector. The company's two Phase 3 studies evaluating a combination of ivacaftor and lumacaftor in people with CF who have two copies of the F508del mutation are now fully enrolled. Data from these studies are expected in mid-2014, and Vertex plans to submit a New Drug Application (NDA) in the U.S. and a Marketing Authorization Application (MAA) in Europe in the second half of 2014 for the combination of lumacaftor and ivacaftor. These and other updates were made as part of a press release issued on October 17, 2013.

Hepatitis C

Vertex's strategy in hepatitis C is to develop new all-oral treatment regimens of 12 weeks or less in duration with a goal of providing a high viral cure rate and improved tolerability for multiple hepatitis C genotypes. Vertex is conducting the following studies of VX-135, its nucleotide analogue hepatitis C virus (HCV) polymerase inhibitor:

• Study of VX-135 in Combination with Daclatasvir: Vertex and Bristol Myers Squibb Company (BMS) are conducting a Phase 2 study of VX-135 in combination with daclatasvir, an NS5A replication complex inhibitor being developed by BMS, in New Zealand. Safety and efficacy results from the first part of the study are expected to be available in early 2014 to inform future development plans for this combination.

• VX-135 in Combination with Simeprevir: A drug-drug interaction study of VX-135 in combination with simeprevir in healthy volunteers is complete. Simeprevir (TMC435) is a once-daily investigational hepatitis C protease inhibitor being jointly developed by Janssen R&D Ireland and Medivir AB. Vertex and Janssen are currently discussing the design of additional studies of VX-135 in combination with simeprevir in patients with genotype 1 hepatitis C.

• Studies of VX-135 in Combination with Ribavirin: Dosing of VX-135 in combination with ribavirin is complete in two Phase 2 studies. These studies were conducted to generate safety data for VX-135 in combination with ribavirin and were not intended to evaluate the combination of VX-135 and ribavirin as a therapeutic regimen.

o Vertex recently completed a 12-week Phase 2 study of VX-135 dosed at 100 mg and 200 mg in combination with ribavirin being conducted in Europe. Ten patients with genotype 1 hepatitis C were enrolled in each dose group and all 20 patients completed 12 weeks of treatment. Both the 100 mg and 200 mg doses were well tolerated, no serious adverse events were reported and no liver or cardiac safety issues were identified. As previously reported, 70 percent and 80 percent of patients in the 100 mg and 200 mg dosing arms, respectively, had undetectable HCV RNA within four weeks of initiating treatment. SVR12 rates were 10 percent and 50 percent for the 100 mg and 200 mg groups, respectively. These data will be presented as a poster at the 64th American Association for the Study of Liver Diseases Annual Meeting (AASLD), November 1-5, 2013 in Washington, D.C.


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o Dosing of 100 mg of VX-135 in combination with ribavirin as part of a 12-week Phase 2 study in the United States is complete. Ten patients with genotype 1 hepatitis C were enrolled in this dose group, and all 10 patients completed 12 weeks of treatment. The 100 mg dose was well tolerated, no serious adverse events were reported and no liver or cardiac safety issues were identified. All patients achieved undetectable HCV RNA during the 12-week dosing period, and 60 percent of patients had undetectable HCV RNA within four weeks of initiating treatment. The SVR4 rate was 10 percent.

o Further evaluation of VX-135 in the U.S. is subject to resolution with the FDA regarding the partial clinical hold on VX-135. The company intends to provide further data to the FDA, including SVR data from ongoing studies of VX-135 dosed at 100 mg and 200 mg in combination with ribavirin and with daclatasvir, through the first quarter of 2014.

Autoimmune Diseases

Vertex's strategy in autoimmune diseases is to maximize the value of VX-509, an investigational oral, selective Janus kinase 3 (JAK3) inhibitor, across multiple autoimmune diseases globally. Vertex is actively pursuing collaborative opportunities to support further global development of VX-509. In a press release issued on October 18, 2013, Vertex announced 12-week results from an ongoing Phase 2b study of VX-509 dosed once or twice daily in people with active rheumatoid arthritis (RA) taking methotrexate. The study met its primary endpoints of both the proportion of people who achieved at least a 20 percent improvement in signs and symptoms of RA, as measured by the ACR improvement criteria (ACR20), and the change from baseline in Disease Activity Score for 28 joints (DAS28). These results were accepted for presentation at the ACR annual meeting, being held October 25-30 in San Diego, CA. The presentation of the results will take place today in the "ACR Late-Breaking Abstract Oral Session" from 2:30 to 4:00 p.m. PT.

Workforce Reduction and Investment Focus on Future Opportunities in Cystic Fibrosis and Other Key Research and Development Programs

As part of a reduction in Vertex's global workforce and the resulting investment focus on future opportunities in cystic fibrosis and other high-potential research and development programs, Vertex expects to incur total restructuring charges of approximately $35 million to $45 million in 2013, including a restructuring charge of approximately $11 million in the third quarter of 2013. Vertex anticipates a reduction in 2014 non-GAAP operating expenses of approximately $150 million to $200 million compared to anticipated 2013 non-GAAP operating expenses of approximately $1.1 billion. The company is eliminating 370 positions, primarily related to the support of INCIVEK, representing an approximately 15 percent reduction in the company's global workforce. Approximately 175 positions are being eliminated in Massachusetts.

Third Quarter 2013 Financial Results

Total Revenues: Total revenues for the third quarter of 2013 were $221.7 million, compared with $336.0 million in total revenues for the third quarter of 2012.

• Net Product Revenues from INCIVEK

Vertex's third quarter 2013 net product revenues from INCIVEK were $85.6 million, compared to $254.3 million for the third quarter of 2012. The reduced revenues from INCIVEK were due to fewer HCV patients initiating treatment in the third quarter of 2013 compared to the third quarter of 2012 as well as a reduction in channel inventory and a reduced realized price due to changes in the payer mix. Vertex expects a continued decline in INCIVEK revenues as people with hepatitis C await new treatment options.


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• Net Product Revenues from KALYDECO

Vertex's third quarter 2013 net product revenues from KALYDECO were $101.1 million, compared to $49.2 million for the third quarter of 2012. The increased revenues, compared to the third quarter of 2012, resulted primarily from the rapid uptake of KALYDECO in eligible patients in Europe following the conclusion of reimbursement discussions. Nearly all eligible patients with the G551D mutation in the United States and Europe have started treatment with KALYDECO. In 2014, further growth in KALYDECO revenues is dependent on completion of reimbursement discussions in Australia and Canada for eligible patients with the G551D mutation and on the potential approval of ivacaftor for use in people with non-G551D gating mutations, as well as in people with CF who have the R117H mutation.

• Royalty Revenues from INCIVO®

Vertex recognized $21.0 million in INCIVO royalty revenues for the third quarter of 2013 from our collaborator Janssen, compared to $20.0 million in INCIVO royalty revenues for the third quarter of 2012.

Cost of Product Revenues: Cost of product revenues was $20.0 million for the third quarter of 2013, compared to cost of product revenues of $30.7 million for the third quarter of 2012.

Research and Development (R&D) Expenses: R&D expenses were $228.6 million for the third quarter of 2013, including $26.9 million of Vertex stock-based compensation expense and Alios expenses related to the accounting for the collaboration with Vertex, compared to $200.2 million for the third quarter of 2012, including $21.3 million of Vertex stock-based compensation expense and Alios expenses related to the accounting for the collaboration with Vertex. The increase in Vertex's R&D investment is principally due to progression and expansion of clinical development programs in cystic fibrosis and development of all-oral hepatitis C treatment regimens, including initiation of a pivotal program for a combination of lumacaftor and ivacaftor.

Sales, General and Administrative (SG&A) Expenses: SG&A expenses were $87.8 million for the third quarter of 2013, including $13.4 million of Vertex stock-based compensation expense and Alios expenses related to the accounting for the collaboration with Vertex, compared to $97.7 million for the third quarter of 2012, including $10.9 million of Vertex stock-based compensation expense and Alios expenses related to the accounting for the collaboration with Vertex. This decrease in SG&A expenses resulted primarily from reduced HCV marketing and commercial expenses, partially offset by increased investment to support the expanded global use of KALYDECO.

GAAP Net Loss Attributable to Vertex: Vertex's third quarter 2013 GAAP net loss was $(124.1) million, or $(0.54) per share, including certain charges of $49.7 million, comprised primarily of stock-based compensation expense and a restructuring charge. Vertex's GAAP net loss for the third quarter of 2012 was $(57.5) million, or $(0.27) per diluted share, including $85.7 million in certain charges.

Non-GAAP Net Income (Loss) Attributable to Vertex: Vertex's third quarter 2013 non-GAAP net loss was $(74.4) million, or $(0.32) per diluted share. Vertex's non-GAAP net income for the third quarter of 2012 was $28.2 million, or $0.13 per diluted share. The decrease in the company's third quarter 2013 non-GAAP net income (loss), compared to the third quarter of 2012, is primarily attributable to a decrease in total revenues, specifically decreased INCIVEK revenues due to fewer HCV patients initiating treatment. Total non-GAAP operating expenses for the third quarter of 2013 were consistent with the third quarter of 2012.

Cash Position: As of September 30, 2013, Vertex had $1.42 billion in cash, cash equivalents and marketable securities compared to $1.32 billion in cash, cash equivalents and marketable securities as of December 31, 2012.

2013 Financial Guidance

This section contains forward-looking guidance about the financial outlook for Vertex Pharmaceuticals.


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Vertex today updated its financial guidance for 2013 total net revenues and 2013 KALYDECO net revenues. The company now expects lower 2013 total net revenues in the range of $1.0 billion to $1.05 billion. The company also now expects higher total 2013 KALYDECO net revenues in the range of $360 million to $365 million.

The company also today updated its financial guidance for total 2013 non-GAAP operating expenses, excluding cost of revenues, stock-based compensation expense, restructuring charges, intangible asset impairment charges, certain interest expenses related to the 2015 Notes, transition costs related to the relocation of our corporate headquarters and Alios expenses related to the accounting for the collaboration with Vertex. Vertex now expects total 2013 non-GAAP operating expenses of approximately $1.1 billion, which is within the range provided previously for total 2013 non-GAAP operating expenses.

Vertex expects to end 2013 with a cash position of approximately $1.3 billion. Based on the reduction in global workforce and the resulting investment focus announced today in a separate press release, the company anticipates a reduction in 2014 non-GAAP operating expenses of approximately $150 million to $200 million compared to anticipated 2013 non-GAAP operating expenses of approximately $1.1 billion.

Non-GAAP Financial Measures

In this press release, Vertex's financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. In particular, Vertex provides its non-GAAP net income (loss) for the periods ending September 30, 2013 and 2012 excluding stock-based compensation expense, restructuring expense, inventory reserves, intangible asset impairment charges, net of tax, certain interest expenses related to the 2015 Notes and charges related to changes in the fair value of expected future payments under Vertex's collaboration with Alios. These results are provided as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help indicate underlying trends in the company's business, are important in comparing current results with prior period results and provide additional information regarding its financial position. Management also uses these non-GAAP financial measures to establish budgets and operational goals that are communicated internally and externally, and to manage the company's business and to evaluate its performance. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial statements.

Vertex Pharmaceuticals Incorporated Third Quarter and Nine Month Results

Condensed Consolidated Statements of Operations Data (in thousands, except per share amounts)

(unaudited)

Three Months Ended

September 30, Nine Months Ended

September 30, 2013 2012 2013 2012 Revenues: Product revenues, net $ 186,653 $ 303,501 $ 708,823 $ 1,052,149 Royalty revenues 27,012 25,586 119,705 98,047 Collaborative revenues 8,035 6,919 32,290 42,852

Total revenues 221,700 336,006 860,818 1,193,048 Costs and expenses: Cost of product revenues (Note 1) 20,048 30,680 75,698 161,147 Royalty expenses 7,291 7,856 32,315 31,023


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Research and development expenses (R&D) 228,567 200,161 669,117 593,076 Sales, general and administrative expenses (SG&A) 87,804 97,684 287,204 326,344 Restructuring expense (Note 2) 12,048 696 12,863 1,650 Intangible asset impairment charge (Note 3) — — 412,900 —

Total costs and expenses 355,758 337,077 1,490,097 1,113,240 Income (loss) from operations (134,058 ) (1,071 ) (629,279 ) 79,808 Other income (expense), net (Note 4) 4,652 (4,041 ) (6,578 ) (11,417 ) Income (loss) before provision for (benefit from) income taxes (129,406 ) (5,112 ) (635,857 ) 68,391 Provision for (benefit from) income taxes (Note 3) (751 ) 21,355 (132,863 ) 41,450 Net income (loss) (128,655 ) (26,467 ) (502,994 ) 26,941 Net loss (income) attributable to noncontrolling interest (Note 5) 4,530 (31,076 ) 13,688 (57,825 ) Net income (loss) attributable to Vertex $ (124,125 ) $ (57,543 ) $ (489,306 ) $ (30,884 )

Net loss per share attributable to Vertex common shareholders: Basic $ (0.54 ) $ (0.27 ) $ (2.20 ) $ (0.15 ) Diluted $ (0.54 ) $ (0.27 ) $ (2.20 ) $ (0.15 ) Shares used in per share calculations: Basic 230,505 213,767 222,764 211,053 Diluted 230,505 213,767 222,764 211,053

Consolidated Revenues (in millions) (unaudited)

Three Months Ended

September 30, 2013

June 30, 2013

March 31, 2013

December 31, 2012

September 30, 2012

Product revenues, net INCIVEK revenues, net $ 85.6 $ 155.8 $ 205.6 $ 222.8 $ 254.3

KALYDECO revenues, net 101.1 99.0 61.8 58.5 49.2 Total product revenues, net 186.7 254.8 267.4 281.3 303.5 Royalty revenues

Royalty revenues from INCIVO 21.0 44.1 39.0 36.8 20.0 Other royalty revenues 6.0 5.0 4.5 6.7 5.6

Total royalty revenues 27.0 49.1 43.6 43.5 25.6 Collaborative revenues 8.0 6.8 17.4 9.2 6.9 Total revenues $ 221.7 $ 310.8 $ 328.4 $ 334.0 $ 336.0


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Reconciliation of GAAP to Non-GAAP Financial Information-Third Quarter (in thousands, except per share amounts)

Three Months Ended September 30, 2013 Adjustments

GAAP

Alios

Transaction

Stock-based

Compensation Expense

Inventory Write-off and Restructuring

Expenses

Non-

GAAP Income (loss) from operations $ (134,058 ) $ 9,052 $ 31,197 $ 17,324 $ (76,485 ) Other income (expense), net 4,652 4 — — 4,656 Income (loss) before provision for (benefit from) income taxes

(129,406 )

9,056

31,197

17,324

(71,829 )

Provision for (benefit from) income taxes (751 ) 3,306 — — 2,555 Net income (loss) (128,655 ) 5,750 31,197 17,324 (74,384 ) Net loss (income) attributable to noncontrolling interest (Alios)

4,530

(4,530 )

—

—

—

Net income (loss) attributable to Vertex $ (124,125 ) $ 1,220 $ 31,197 $ 17,324 $ (74,384 )

Net income (loss) per diluted share attributable to Vertex common shareholders (Note 6) $ (0.54 ) $ (0.32 ) Three Months Ended September 30, 2012

Adjustments

GAAP

Alios Transaction

Stock-based

Compensation Expense

Restructuring Expenses

Non-GAAP

Income (loss) from operations (1,071 ) 4,624 27,484 696 31,733 Other income (expense), net (4,041 ) 466 — — (3,575 ) Income (loss) before provision for (benefit from) income taxes (5,112 ) 5,090 27,484 696 28,158

Provision for (benefit from) income taxes 21,355 (21,394 ) — — (39 ) Net income (loss) (26,467 ) 26,484 27,484 696 28,197 Net loss (income) attributable to noncontrolling interest (Alios)

(31,076 )

31,076

—

—

—

Net income (loss) attributable to Vertex (57,543 ) 57,560 27,484 696 28,197

Net income (loss) per diluted share attributable to Vertex common shareholders (Note 6) $ (0.27 ) $ 0.13


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Reconciliation of GAAP to Non-GAAP Financial Information-Third Quarter (in thousands)

(unaudited) Three Months Ended September 30, 2013 2012 GAAP total costs and expenses $ 355,758 $ 337,077 Adjustments: Cost of product revenues (Note 1) and royalty expenses (27,339 ) (38,536 ) Stock-based compensation expense (31,197 ) (27,484 ) Alios transaction (Note 5) (9,052 ) (4,624 ) Restructuring expenses (Note 2) (12,048 ) (696 ) Non-GAAP total costs and expenses $ 276,122 $ 265,737 GAAP research and development expenses $ 228,567 $ 200,161 Adjustments: Stock-based compensation expense (19,137 ) (17,396 ) Alios transaction (Note 5) (7,725 ) (3,862 ) Non-GAAP research and development expenses $ 201,705 $ 178,903 GAAP sales, general, and administrative expenses $ 87,804 $ 97,684 Adjustments: Stock-based compensation expense (12,060 ) (10,088 ) Alios transaction (Note 5) (1,327 ) (762 ) Non-GAAP sales, general, and administrative expenses $ 74,417 $ 86,834

Nine Months Ended September 30, 2012 Adjustments

GAAP

Alios

Transaction

Stock-based Compensation

Expense

Inventory Write-off and

Restructuring Charges

Non-

GAAP Income (loss) from operations $ 79,808 $ 14,356 $ 86,280 $ 79,650 $ 260,094 Other income (expense), net (11,417 ) 225 — — (11,192 ) Income (loss) before provision for (benefit from) income taxes

68,391

14,581

86,280

79,650

248,902

Provision for (benefit from) income taxes 41,450 (40,354 ) — 1,239 2,335 Net income (loss) 26,941 54,935 86,280 78,411 246,567 Net loss (income) attributable to noncontrolling interest (Alios) (57,825 ) 57,825 — — —

Net income (loss) attributable to Vertex $ (30,884 ) $ 112,760 $ 86,280 $ 78,411 $ 246,567

Net income (loss) per diluted share attributable to Vertex common shareholders (Note 6)

$ (0.15 )

$ 1.15


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Reconciliation of GAAP to Non-GAAP Financial Information-Nine Month (in thousands)

(unaudited) Nine Months Ended September 30, 2013 2012 GAAP total costs and expenses $ 1,490,097 $ 1,113,240 Adjustments: Cost of product revenues (Note 1) and royalty expenses (108,013 ) (192,170 ) Stock-based compensation expense (103,613 ) (86,280 ) Alios transaction (Note 5) (21,348 ) (14,356 ) Intangible asset impairment charge (Note 3) and restructuring expenses (Note 2) (425,763 )

(1,650 )

Non-GAAP total costs and expenses $ 831,360 $ 818,784 GAAP research and development expenses $ 669,117 $ 593,076 Adjustments: Stock-based compensation expense (64,110 ) (54,223 ) Alios transaction (Note 5) (17,339 ) (11,480 ) Non-GAAP research and development expenses $ 587,668 $ 527,373 GAAP sales, general, and administrative expenses $ 287,204 $ 326,344 Adjustments: Stock-based compensation expense (39,503 ) (32,057 ) Alios transaction (Note 5) (4,009 ) (2,876 ) Non-GAAP sales, general, and administrative expenses $ 243,692 $ 291,411

Condensed Consolidated Balance Sheets Data (in thousands)

(unaudited) September 30, 2013 December 31, 2012 Assets Cash, cash equivalents and marketable securities $ 1,422,650 $ 1,321,215 Restricted cash and cash equivalents (Alios) (Note 5) 51,059 69,983 Accounts receivable, net 120,281 143,250 Inventories (Note 1) 13,543 30,464 Other current assets 41,105 24,673 Restricted cash 127 31,934 Property and equipment, net 648,924 433,609 Intangible assets (Note 3) 250,600 663,500 Goodwill 30,992 30,992 Other non-current assets 3,474 9,668 Total assets $ 2,582,755 $ 2,759,288


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Liabilities and Shareholders' Equity Other liabilities $ 418,798 $ 429,372 Accrued restructuring expense (Note 2) 26,138 23,328 Deferred tax liability (Note 3) 150,203 280,367 Deferred revenues 108,361 123,808 Construction financing lease obligation 392,569 268,031 Convertible notes (due 2015) (Note 4) — 400,000 Noncontrolling interest (Alios) (Note 5) 221,792 235,202 Shareholders' equity (Vertex) 1,264,894 999,180 Total liabilities and shareholders' equity $ 2,582,755 $ 2,759,288

Common shares outstanding 233,592 217,287

INDICATION AND IMPORTANT SAFETY INFORMATION FOR KALYDECO™ (ivacaftor)

Ivacaftor (150mg tablets) is indicated for the treatment of cystic fibrosis (CF) in patients age 6 years and older who have a G551D mutation in the CFTR gene.

Ivacaftor is not for use in people with CF due to other mutations in the CFTR gene. It is not effective in patients with CF with 2 copies of the F508del mutation (F508del/F508del) in the CFTR gene. The efficacy and safety of ivacaftor in children younger than 6 years of age have not been evaluated.

Elevated liver enzymes (transaminases; ALT and AST) have been reported in patients receiving ivacaftor. It is recommended that ALT and AST be assessed prior to initiating ivacaftor, every 3 months during the first year of treatment, and annually thereafter. Patients who develop increased transaminase levels should be closely monitored until the abnormalities resolve. Dosing should be interrupted in patients with ALT or AST of greater than 5 times the upper limit of normal. Following resolution of transaminase elevations, consider the benefits and risks of resuming ivacaftor dosing.

Use of ivacaftor with medicines that are strong CYP3A inducers, such as the antibiotics rifampin and rifabutin; seizure medications (phenobarbital, carbamazepine, or phenytoin); and the herbal supplement St. John's Wort, substantially decreases exposure of ivacaftor which may diminish effectiveness. Therefore, co-administration is not recommended.

The dose of ivacaftor must be adjusted when used concomitantly with potent and moderate CYP3A inhibitors. The dose of ivacaftor must be adjusted when used in patients with moderate or severe hepatic disease.

Ivacaftor can cause serious adverse reactions including abdominal pain and high liver enzymes in the blood. The most common side effects associated with ivacaftor include headache; upper respiratory tract infection (the common cold), including sore throat, nasal or sinus congestion, and runny nose; stomach (abdominal) pain; diarrhea; rash; and dizziness. These are not all the possible side effects of ivacaftor. A list of the adverse reactions can be found in the product labeling for each country where ivacaftor is approved. Patients should tell their healthcare providers about any side effect that bothers them or does not go away.

Please see full U.S. Prescribing Information for KALYDECO at www.KALYDECO.com, the EU Summary of Product Characteristics for KALYDECO at http://goo.gl/N3Tz4, the Canadian Product Monograph for KALYDECO at www.vrtx.ca and the Australian Consumer Medical Information and Product Information for KALYDECO at http://bit.ly/18wlMld.


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INDICATION AND IMPORTANT SAFETY INFORMATION FOR INCIVEK (telaprevir)

INCIVEK® (telaprevir) is a prescription medicine used with the medicines peginterferon alfa and ribavirin to treat chronic (lasting a long time) hepatitis C genotype 1 infection in adults with stable liver problems, who have not been treated before or who have failed previous treatment. It is not known if INCIVEK is safe and effective in children under 18 years of age.

Important Safety Information

INCIVEK® (telaprevir) should always be used in combination with peginterferon alfa and ribavirin. INCIVEK combination treatment may cause serious side effects including skin rash and serious skin reactions, anemia (low red blood cell count) that can be severe, and birth defects or death of an unborn baby.

Skin rashes are common with INCIVEK combination treatment. Sometimes these skin rashes and other skin reactions can become serious, require treatment in a hospital, and may lead to death. Patients should call their healthcare provider right away if they develop any skin changes or itching during treatment with INCIVEK. Their healthcare provider will decide if they need treatment or if they need to stop INCIVEK or any of their other medicines. Patients should not stop taking INCIVEK combination treatment without talking with their healthcare provider first.

Patients' healthcare providers will do blood tests regularly to check for anemia. If anemia is severe, the healthcare providers may tell them to stop taking INCIVEK.

INCIVEK combined with peginterferon alfa and ribavirin may cause birth defects or death of an unborn baby. Therefore, a patient should not take INCIVEK combination treatment if she is pregnant or may become pregnant, or if he is a man with a sexual partner who is pregnant. Females who can become pregnant and females whose male partner takes these medicines must have a negative pregnancy test before starting treatment, every month during treatment, and for 6 months after treatment ends. Patients must use two forms of effective birth control during treatment and for 6 months after all treatment has ended. These two forms of birth control should not contain hormones, as these may not work during treatment with INCIVEK.

INCIVEK and other medicines can affect each other and can also cause side effects that can be serious or life-threatening. There are certain medicines patients cannot take with INCIVEK combination treatment. Patients should tell their healthcare providers about all the medicines they take, including prescription and over-the-counter medicines, vitamins and herbal supplements.

The most common side effects of INCIVEK combination treatment include itching, nausea, diarrhea, vomiting, anal or rectal problems (including hemorrhoids, discomfort, burning or itching around or near the anus), taste changes and tiredness. There are other possible side effects of INCIVEK, and side effects associated with peginterferon alfa and ribavirin also apply to INCIVEK combination treatment. Patients should tell their healthcare provider about any side effect that bothers them or doesn't go away.

Please see full Prescribing Information including Boxed Warning, and the Medication Guide for INCIVEK available at www.INCIVEK.com.

About Vertex

Vertex is a global biotechnology company that aims to discover, develop and commercialize innovative medicines so people with serious diseases can lead better lives. Vertex scientists and our collaborators are working on new medicines to cure or significantly advance the treatment of cystic fibrosis, hepatitis C, rheumatoid arthritis and other life-threatening diseases. In addition to our clinical development programs, Vertex has more than a dozen ongoing preclinical programs aimed at other serious and life-threatening diseases.


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Founded in 1989 in Cambridge, Mass., Vertex today has research and development sites and commercial offices in the United States, Europe, Canada and Australia. For four years in a row, Science magazine has named Vertex one of its Top Employers in the life sciences. For additional information and the latest updates from the company, please visit www.vrtx.com.

Special Note Regarding Forward-looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including, without limitation, Dr. Leiden's statements in the third paragraph of the press release, the information provided in the sections captioned "Workforce Reduction and Investment Focus on Future Opportunities in Cystic Fibrosis and Other Key Research and Development Programs" and "2013 Financial Guidance" and statements regarding (i) expected non-GAAP operating expense in 2013 and 2014; (ii) the company focusing its investment on future opportunities in cystic fibrosis and other research and development programs, including VX-135; (iii) the timing of receipt of data from studies, including the Phase 3 studies of lumacaftor and ivacaftor and studies of VX-135 in combination with daclatasvir; (iv) the research efforts aimed at beginning clinical development of a next generation corrector; (v) the timing of potential regulatory submissions to the FDA and in Europe; (vi) the company's intent to provide further data to the FDA regarding VX-135; (vii) Vertex pursuing collaborative opportunities to support further global development of VX-509; (viii) expectations regarding the restructuring charges and (ix) expectations regarding future KALYDECO and INCIVEK revenues. While Vertex believes the forward-looking statements contained in this press release are accurate, there are a number of factors that could cause actual events or results to differ materially from those indicated by such forward-looking statements. Those risks and uncertainties include, among other things, that the company's expectations regarding its 2013 revenues and financial results, and its 2013 and 2014 non-GAAP operating expenses may be incorrect (including because one or more of the company's assumptions underlying its revenue or expense expectations may not be realized), that the outcomes of Vertex's ongoing and planned clinical studies may be delayed or may not support registration or further development of its compounds due to safety, efficacy, or other reasons, and other risks listed under Risk Factors in Vertex's annual report and quarterly reports filed with the Securities and Exchange Commission and available through the company's website at www.vrtx.com. Vertex disclaims any obligation to update the information contained in this press release as new information becomes available.

Conference Call and Webcast

The company will host a conference call and webcast at 8:30 a.m. ET. To access this call, dial (866) 501-1537 (U.S.) or +1 (720) 545-0001 (International). The conference call will be webcast live, and a link to the webcast may be accessed from the "Vertex Events" page of Vertex's website at www.vrtx.com.

A replay of the conference call and webcast will be archived on the company's website until November 5, 2013. To ensure a timely connection, it is recommended that users register at least 15 minutes prior to the scheduled webcast.

(VRTX-GEN)

Vertex Pharmaceuticals Incorporated Investors: Michael Partridge, 617-341-6108 or Kelly Lewis, 617-961-7530 or Media: Zach Barber or Nikki Levy, 617-341-6992 [email protected]

(http://investors.vrtx.com/releasedetail.cfm?ReleaseID=801143)

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