NOVARTIS

ZALBIN™ (albinterferon alfa-2b)

We entered into an exclusive worldwide agreement with Novartis in 2006 for the co-development and commercialization of ZALBIN (also known as JOULFERON®). Novartis is a global leader in the pharmaceutical industry and has demonstrated its commitment to leadership in infectious diseases. We have successfully completed Phase 3 development of ZALBIN for the treatment of patients with chronic hepatitis C. In two pivotal Phase 3 studies, with half as many injections, ZALBIN achieved a rate of sustained virologic response comparable to Pegasys, the current market leader. We have submitted a Biologics License Application to the FDA for ZALBIN in the United States and have received confirmation that our submission was accepted for filing with a PDUFA target date of October 4, 2010. Novartis has submitted a Marketing Authorization Application to the EMEA in Europe under the brand name JOULFERON®.

HGS and Novartis will co-commercialize albinterferon alfa-2b in the United States under the brand name ZALBIN, and will share clinical development costs, U.S. commercialization costs and U.S. profits equally. Novartis will be responsible for commercialization of albinterferon alfa-2b in the rest of the world under the brand name JOULFERON®, and will pay HGS a royalty on those sales. We have primary responsibility for the bulk manufacture of albinterferon alfa-2b, and Novartis has 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 $207.5 million received to date.

BENLYSTA™ (belimumab)

We entered into an agreement with GSK in 2006 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. We have successfully completed Phase 3 development of BENLYSTA in systemic lupus. BENLYSTA has met the primary efficacy endpoint in two pivotal Phase 3 trials, as specified by Special Protocol Assessment agreement with FDA. The efficacy of treatment with BENLYSTA plus standard of care was superior to standard of care alone in both trials, with overall adverse event rates comparable to placebo plus standard of care. We expect the submission of marketing applications in the United States, Europe and other regions in the first half of 2010.

HGS and GSK will share equally in Phase 3 and 4 development costs, sales and marketing expenses, and profits associated with BENLYSTA.

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 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.

In the first half of 2009, we achieved our first product sales by delivering 20,000 doses of raxibacumab to the U.S. Strategic National Stockpile for use in the event of an emergency to treat inhalation anthrax. In July 2009, we secured a new purchase order for 45,000 additional doses to be delivered over a three-year period. We delivered approximately 5,600 doses under the new order in fourth quarter 2009.