ACHN 2017 Annual Report

Achillion Pharmaceuticals, Inc. Notes to Financial Statements (in thousands, except per share amounts) 1. Nature of the Business Achillion Pharmaceuticals, Inc. (the “Company”) was incorporated on August 17, 1998 in Delaware. The Company is a science-driven, patient-focused biopharmaceutical company seeking to leverage its believed strengths across the continuum from discovery through commercialization by discovering and developing small molecule therapeutics to meet the needs of patients with complement-mediated diseases. The Company is devoting substantially all of its efforts towards product research and development. The Company incurred losses of $588,793 from inception through December 31, 2017 and had an accumulated deficit of $602,654 at December 31, 2017, which includes preferred stock dividends recognized until the Company’s initial public offering in 2006. The Company has funded its operations primarily through the sale of equity securities. Based on the Company’s current development plan, the Company believes that its existing cash, cash equivalents and marketable securities will be sufficient to meet its current projected operating requirements for at least the next 12 months. However, the Company’s future capital requirements may change and will depend upon numerous factors, including but not limited to: • the scope, progress, results and costs of drug discovery, preclinical development, laboratory testing and clinical trials for the Company’s drug candidates; • the Company’s ability to realize the planned cost savings benefits of the restructuring it implemented in February 2018, which included a significant reduction in its workforce; • the Company’s ability to enter into and the terms and timing of any collaborations, licensing or other arrangements that it may establish; • the number of future drug candidates that the Company pursues and their development requirements; • the outcome, timing and costs of seeking regulatory approvals; • the costs of commercialization activities for any of the Company’s drug candidates that receive marketing approval to the extent such costs are not the responsibility of any collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities; • subject to receipt of marketing approval, revenue, if any, received from commercial sales of the Company’s drug candidates; • the Company’s headcount growth and associated costs as it seeks to expand its research and development and establish a commercial infrastructure; • the costs involved in preparing, filing, prosecuting, maintaining, enforcing and defending patent and other intellectual property rights and defending against intellectual property-related claims; • the Company’s ability to raise debt or equity capital, including any changes in the credit or equity markets that may impact its ability to obtain capital in the future; • the costs associated with, and the outcome of, lawsuits against the Company, if any; • the Company’s acquisition and development of new technologies and drug candidates; and • competing technological and market developments, including those currently unknown to the Company. F-8