ACHN 2017 Annual Report

Achillion Pharmaceuticals, Inc. Notes to Financial Statements—(Continued) (in thousands, except per share amounts) 15. Related Party Transactions Nicole Vitullo In connection with Domain Associates, LLC’s (“Domain”) agreement to invest in the Company, the board of directors of the Company elected Nicole Vitullo of Domain as a Class II member of the board of directors on September 30, 2010 to serve until her successor is duly elected and qualified. Ms. Vitullo is a partner at Domain. In August 2010, Domain purchased 8,032 shares of common stock and warrants to purchase 2,811 shares of common stock for an aggregate purchase price of $20.4 million. In August 2017, Domain exercised the 2,811 warrants purchased in August 2010 by means of a cashless exercise of the warrants, resulting in the issuance of 1,084 shares of common stock. As of December 31, 2017, Domain was the beneficial owner of approximately 2.5% of the Company’s total issued and outstanding shares of common stock. 16. Unaudited Quarterly Results The following tables summarize unaudited quarterly financial data for the years ended December 31, 2017 and 2016. This data has been derived from unaudited financial statements that, in the Company’s opinion, include all adjustments necessary for a fair statement of such information. The operating results for any quarter are not necessarily indicative of results for any future period. 2017 Quarters First Second Third Fourth Total operating revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ — $ — Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,143 23,616 20,463 24,354 Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,152) (22,543) (19,338) (23,203) Net income (loss) per share—basic and diluted . . . . . . . . . . . . . . . $ (0.15) $ (0.16) $ (0.14) $ (0.17) Weighted average number of shares outstanding—basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136,722 136,736 137,375 137,870 2016 Quarters First Second Third Fourth (1) Total operating revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ — $ 15,000 Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,718 19,309 21,549 20,289 Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,054) (18,493) (20,730) (4,429) Net income (loss) per share—basic and diluted . . . . . . . . . . . . . . . $ (0.13) $ (0.14) $ (0.15) $ (0.03) Weighted average number of shares outstanding—basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136,640 136,680 136,681 136,693 (1) In May 2015, the Company entered into an exclusive collaboration and license agreement with Janssen, and its affiliate, Johnson & Johnson Innovation-JJDC, Inc., or JJDC, which we refer to as the Janssen Agreement for the further clinical advancement of a portfolio of antivirals the Company discovered and developed for the treatment of HCV. In addition, upon the closing of the transactions contemplated by the Janssen Agreement, the Company entered into a stock purchase agreement with JJDC. Pursuant to the JJDC Stock Purchase Agreement, on July 1, 2015, the Company issued 18,367 shares of common stock to JJDC at a price of $12.25 per share for F-28