NOVARTIS

Albuferon® (albinterferon alfa-2b)

In June 2006, we entered into an exclusive worldwide agreement with Novartis for the co-development and commercialization of Albuferon. Novartis is a global leader in the pharmaceutical industry and has demonstrated its commitment to leadership in infectious diseases. HGS has reported the positive results of two pivotal Phase 3 trials to evaluate Albuferon in the treatment of patients with chronic hepatitis C. In these studies, with half as many injections, Albuferon achieved a rate of sustained virologic response comparable to Pegasys, the current market leader. HGS and Novartis plan to file global marketing applications for Albuferon in fall 2009.

HGS and Novartis will co-commercialize Albuferon in the United States, and will share clinical development costs, U.S. commercialization costs and U.S. profits equally. Novartis will be responsible for commercialization in the rest of the world and will pay us a royalty on those sales. We have primary responsibility for the bulk manufacture of Albuferon, and Novartis will have primary responsibility for commercial manufacturing of the finished drug product. Clinical development, commercial milestone and other payments to HGS could total as much as $507.5 million, including $132.5 million received to date.

GLAXOSMITHKLINE

BENLYSTA™ (belimumab, formerly LymphoStat-B®)

In August 2006, we entered into an agreement with GSK for the co-development and commercialization of BENLYSTA. GSK is a world leader that brings global pharmaceutical development and marketing capabilities to the BENLYSTA program. Two Phase 3 trials of BENLYSTA are ongoing to evaluate it in the treatment of systemic lupus erythematosus (SLE), with results expected in July and November 2009.

We and GSK will share equally in Phase 3 and 4 development costs, sales and marketing expenses, and profits associated with BENLYSTA. Under the agreement, we have the right to book sales in the U.S. and GSK has the right to book sales outside the U.S. We have responsibility for Phase 3 clinical trials with assistance from GSK, and will have primary responsibility for bulk manufacturing.

Darapladib

Darapladib, a small-molecule Lp-PLA2 inhibitor discovered by GSK based on HGS technology, is in Phase 3 development by GSK for the treatment of coronary heart disease. We will receive a 10% royalty on worldwide sales of darapladib if it is commercialized, and we have a 20% co-promotion option in North America and Europe, under which we would pay 20% of commercialization costs in exchange for 20% of darapladib profits. We are also entitled to receive a milestone payment if darapladib moves through clinical development into registration.

Syncria® (albiglutide)

Syncria, an albumin-fusion protein created by HGS using our proprietary albumin-fusion technology, is in Phase 3 development by GSK for the treatment of type 2 diabetes. We licensed Syncria to GSK in October 2004, and are entitled to fees and milestone payments that could amount to as much as $183 million, some of which has already been received, in addition to royalties on worldwide sales if Syncria is commercialized.

UNITED STATES GOVERNMENT

Raxibacumab

In September 2005, we entered into a contract with the Biomedical Advanced Research and Development Authority (BARDA) of the Office of the Assistant Secretary for Preparedness and Response (ASPR) of the U.S. Department of Health and Human Services (HHS) to supply raxibacumab (ABthrax™) to the U.S. Strategic National Stockpile for emergency use in the treatment of inhalation anthrax.

Under the first phase of our contract, we supplied ten grams of raxibacumab to HHS for comparative in vitro and in vivo testing. In June 2006, under the second phase of our contract, the U.S. Government exercised its option to purchase raxibacumab and we agreed to manufacture and deliver 20,001 doses to Stockpile.

We achieved our first product sales by completing delivery to the Stockpile in April 2009. We recognized $153.8 million in raxibacumab revenue in the first quarter of 2009, including $127.8 million in product sales. We expect to recognize at least $8 million in additional raxibacumab revenue in the second quarter of 2009. In May 2009, we submitted a Biologics License Application (BLA) to the U.S. Food and Drug Administration for raxibacumab for the treatment of inhalation anthrax, and we will receive $10 million from the U.S. Government upon FDA licensure of ABthrax.