ACHN 2017 Annual Report

Segment Reporting We are engaged solely in the discovery and development of innovative small molecule drug therapies for immune system disorders. Accordingly, we have determined that we operate in one operating segment. Revenue We had no revenue for the year ended December 31, 2017. For the years ended December 31, 2016 and 2015, payments of $15.0 million and $66.1 million from Janssen represented 100% and 100% of our revenue, respectively, all of which were related to payments under the Janssen Agreement and its exclusive license of worldwide rights to develop and commercialize products that contain one or more of our drug candidates for the treatment of HCV. Research and Development Expense For the years ended December 31, 2017, 2016 and 2015, company-sponsored research and development expenses were $65.0 million, $59.2 million and $56.6 million, respectively. Employees As of February 20, 2018, we had 88 full-time employees, 35 of whom hold doctoral degrees. Approximately 62 of our employees are engaged in research and development, with the remainder engaged in administration, finance and business development functions. In February 2018, we implemented a restructuring plan that will reduce employee headcount by approximately 20% across several functional areas to approximately 70 employees by March 2018. None of our employees is represented by a labor union or covered by collective bargaining agreements. We believe our relations with our employees are good. Information Available on the Internet Our Internet address is www.achillion.com . We are not including the information contained in our website as part of, or incorporating it by reference into, this Annual Report on Form 10-K. We make available free of charge through our website our Annual Reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, as soon as reasonably practicable after we electronically file such materials with the Securities and Exchange Commission, or the SEC. We also make available on our website our corporate governance guidelines, the charters for our audit committee, nominating and corporate governance committee, compensation committee, compliance committee, and strategy committee, and our code of business conduct and ethics, which applies to our directors, officers and employees, and such information is available in print and free of charge to any of our stockholders who requests it. In addition, we intend to disclose on our website any amendments to, or waivers from, our code of business conduct and ethics that are required to be publicly disclosed pursuant to rules of the SEC. Executive Officers of the Registrant Name Age Position Milind S. Deshpande, Ph.D. . . . . . . . 61 Chief Executive Officer, Director Mary Kay Fenton . . . . . . . . . . . . . . . 53 Executive Vice President and Chief Financial Officer Martha Manning, Esq. . . . . . . . . . . . 63 Executive Vice President, General Counsel and Corporate Secretary Joseph Truitt . . . . . . . . . . . . . . . . . . . 53 President and Chief Operating Officer Milind S. Deshpande, Ph.D., Chief Executive Officer. Dr. Deshpande has served as our Chief Executive Officer since May 2013, at which time he was also elected to our board of directors. Dr. Deshpande also served 31